II 111th CONGRESS 1st Session S. 672 IN THE SENATE OF THE UNITED STATES March 24, 2009 Ms. Cantwell introduced the following bill; which was read twice and referred to the Committee on Energy and Natural Resources A BILL To amend the Natural Gas Act, the Natural Gas Policy Act of 1978, and the Federal Power Act to modify provisions relating to enforcement and judicial review and to modify the procedures for proposing changes in natural gas rates.

1.

Short title

This Act may be cited as the Natural Gas and Electricity Review and Enforcement Act.

2.

Natural Gas Act

(a)

In general

Section 20 of the Natural Gas Act (15 U.S.C. 717s) is amended by adding at the end the following: (e)

Cease-and-desist proceedings

(1)

In general

If the Commission determines that any entity may be violating, may have violated, or may be about to violate any provision of this Act, or any regulation promulgated by, or any restriction, condition, or order made or imposed by, the Commission under this Act, and if the Commission finds that the alleged violation or threatened violation, or the continuation of the violation, is likely to result in significant harm to natural gas consumers or significant harm to the public interest, the Commission may issue a temporary order requiring the respondent— (A)to cease and desist from the violation or threatened violation; (B)to take such action as is necessary to prevent the violation or threatened violation; and (C)to prevent, as the Commission determines to be appropriate— (i)significant harm to natural gas consumers; (ii)significant harm to the public interest; and (iii)frustration of the ability of the Commission to conduct the proceedings or to redress the violation at the conclusion of the proceedings. (2)

Timing of entry

An order issued under this subsection shall be entered only after notice and opportunity for a hearing, unless the Commission determines that notice and hearing prior to entry would be impracticable or contrary to the public interest. (3)

Effective date

A temporary order issued under this subsection shall— (A)become effective upon service upon the respondent; and (B)unless set aside, limited, or suspended by the Commission or a court of competent jurisdiction, remain effective and enforceable pending the completion of the proceedings. (f)

Proceedings regarding dissipation or conversion of assets

(1)

In general

In a proceeding involving an alleged violation of a regulation or order promulgated or issued by the Commission in accordance with section 4A, if the Commission determines that the alleged violation or related circumstances are likely to result in significant dissipation or conversion of assets, the Commission may issue a temporary order requiring the respondent to take such action as is necessary to prevent the dissipation or conversion of assets. (2)

Timing of entry

An order issued under this subsection shall be entered only after notice and opportunity for a hearing, unless the Commission determines that notice and hearing prior to entry would be impracticable or contrary to the public interest. (3)

Effective date

A temporary order issued under this subsection shall— (A)become effective upon service upon the respondent; and (B)unless set aside, limited, or suspended by the Commission or a court of competent jurisdiction, remain effective and enforceable pending the completion of the proceedings. (g)

Review of temporary orders

(1)

Application for review

At any time after a respondent has been served with a temporary cease-and-desist order pursuant to subsection (e) or order regarding the dissipation or conversion of assets pursuant to subsection (f), the respondent may apply to the Commission to have the order set aside, limited, or suspended. (2)

No prior hearing

If a respondent has been served with a temporary order entered without a prior hearing of the Commission— (A)the respondent may, not later than 10 days after the date on which the order was served, request a hearing on the application; and (B)the Commission shall hold a hearing and render a decision on the application at the earliest practicable time. (3)

Judicial review

(A)

In general

An entity shall not be required to submit a request for rehearing of a temporary order prior to seeking judicial review in accordance with section 19(a). (B)

Timing of review

Not later than 10 days after the date on which a respondent was served with a temporary cease-and-desist order entered with a prior hearing of the Commission, or 10 days after the date on which the Commission renders a decision on an application and hearing under paragraph (1) with respect to any temporary order entered without a prior hearing of the Commission— (i)a respondent may obtain a review of the order in a United States circuit court having jurisdiction over the circuit in which the respondent resides or has a principal place of business, or in the United States Court of Appeals for the District of Columbia Circuit, for an order setting aside, limiting, or suspending the effectiveness or enforcement of the order; and (ii)the court shall have jurisdiction to enter such an order. (C)

No prior hearing

A respondent served with a temporary order entered without a prior hearing of the Commission may not apply to the applicable court described in subparagraph (B) except after a hearing and decision by the Commission on the application of the respondent under paragraphs (1) and (2). (4)

Procedures

Section 19(b) shall apply to— (A)an application for review of an order under paragraph (1); and (B)an order subject to review under paragraph (3). (5)

No automatic stay of temporary order

The commencement of proceedings under paragraph (3) shall not, unless specifically ordered by the court, operate as a stay of the order of the Commission. (h)

Regulations and orders

The Commission may promulgate such regulations and issue such orders as the Commission determines to be necessary to carry out this section. . (b)

Procedure for proposing changes in natural gas rates

Section 5(a) of the Natural Gas Act (15 U.S.C. 717d(a)) is amended— (1)in the first sentence— (A)by striking Whenever and inserting the following: (1)

In general

If ; (B)by striking had and inserting held; (C)by striking the colon and inserting a period; and (D)by striking Provided, however, That the and inserting the following: (2)

Limitation

Notwithstanding paragraph (1), the ; and (2)by adding at the end the following: (3)

Procedures

(A)

Complaints; motions

Any complaint or motion of the Commission to initiate a proceeding under this subsection shall identify— (i)any proposed changes to the rate, charge, classification, rule, regulation, practice, or contract; and (ii)the reasons for the proposed changes. (B)

Hearings

If, after review of a motion or complaint and answer under this subsection, the Commission decides to hold a hearing, the Commission shall— (i)by order, establish the time and place of the hearing; and (ii)specify the issues to be adjudicated in the hearing. (4)

Refund effective date

(A)

In general

In accordance with subparagraphs (B) and (C), the Commission shall establish a refund effective date for any proceeding initiated under this subsection. (B)

Complaints

In the case of a proceeding initiated by a complaint, the refund effective date shall be— (i)not earlier than the date on which the complaint is submitted to the Commission; and (ii)not later than 150 days after the date on which the complaint was submitted to the Commission. (C)

Commission motion

In the case of a proceeding initiated on motion of the Commission, the refund effective date shall be— (i)not earlier than the date on which the Commission publishes notice of the intention of the Commission to initiate the proceeding; and (ii)not later than 150 days after the date on which the notice under clause (i) is published. (5)

Preferential proceedings

On initiation of a proceeding under this subsection, the Commission shall— (A)give the proceeding the same preference provided under section 4(e); and (B)act on the complaint or motion as soon as practicable after the complaint or motion is initiated. (6)

Failure to issue decision

If no final decision is issued by the date that is 180 days after the date on which a proceeding is initiated under this subsection, the Commission shall state in writing— (A)the reasons why the Commission has failed to issue a decision; and (B)the best estimate of the Commission for the date by which the Commission expects to issue a decision. (7)

Burden of proof

In any hearing under this subsection, the burden of proof to show that any rate, charge, classification, rule, regulation, practice, or contract is unjust, unreasonable, unduly discriminatory, or preferential shall be on— (A)if the proceeding is initiated by the Commission, the Commission; or (B)if the proceeding is initiated by a complaint, the complainant. (8)

Issuance of refunds

(A)

In general

At the conclusion of any hearing under this section, the Commission may order, for the period beginning on the refund effective date and ending on a date 15 months after the refund effective date, refunds of any amounts paid in excess of the amounts that would have been paid under the just and reasonable rate, charge, classification, rule, regulation, practice, or contract that the Commission orders that would be in effect after the hearing. (B)

Exception

Notwithstanding subparagraph (A), the Commission may order refunds of any or all amounts paid for the period beginning on the refund effective date and ending on the date on which the hearing concludes— (i)if the proceeding is not concluded by the date that is 15 months after the refund effective date; and (ii)if the Commission determines at the conclusion of the proceeding that the proceeding was not resolved within the 15-month period primarily because of dilatory behavior by the natural gas company. (C)

Interest

Refunds under this subsection shall be issued in an amount determined by the proceeding, plus interest, to the persons that paid the rates or charges. .

3.

Natural Gas Policy Act of 1978

Section 504 of the Natural Gas Policy Act of 1978 (15 U.S.C. 3414) is amended by adding at the end the following: (d)

Cease-and-desist proceedings

(1)

In general

If the Commission determines that any entity may be violating, may have violated, or may be about to violate any provision of this Act, or any regulation promulgated by, or any restriction, condition, or order made or imposed by, the Commission under this Act, and if the Commission finds that the alleged violation or threatened violation, or the continuation of the violation, is likely to result in significant harm to natural gas consumers or significant harm to the public interest, the Commission may issue a temporary order requiring the respondent— (A)to cease and desist from the violation or threatened violation; (B)to take such action as is necessary to prevent the violation or threatened violation; and (C)to prevent, as the Commission determines to be appropriate— (i)significant harm to natural gas consumers; (ii)significant harm to the public interest; and (iii)frustration of the ability of the Commission to conduct the proceedings or to redress the violation at the conclusion of the proceedings. (2)

Timing of entry

An order issued under this subsection shall be entered only after notice and opportunity for a hearing, unless the Commission determines that notice and hearing prior to entry would be impracticable or contrary to the public interest. (3)

Effective date

A temporary order issued under this subsection shall— (A)become effective upon service upon the respondent; and (B)unless set aside, limited, or suspended by the Commission or a court of competent jurisdiction, remain effective and enforceable pending the completion of the proceedings. (e)

Proceedings regarding dissipation or conversion of assets

(1)

In general

In a proceeding involving an alleged violation of a regulation or order promulgated or issued by the Commission in accordance with section 4A of the Natural Gas Act (15 U.S.C. 717c), if the Commission determines that the alleged violation or related circumstances are likely to result in significant dissipation or conversion of assets, the Commission may issue a temporary order requiring the respondent to take such action as is necessary to prevent the dissipation or conversion of assets. (2)

Timing of entry

An order issued under this subsection shall be entered only after notice and opportunity for a hearing, unless the Commission determines that notice and hearing prior to entry would be impracticable or contrary to the public interest. (3)

Effective date

A temporary order issued under this subsection shall— (A)become effective upon service upon the respondent; and (B)unless set aside, limited, or suspended by the Commission or a court of competent jurisdiction, remain effective and enforceable pending the completion of the proceedings. (f)

Review of temporary orders

(1)

Application for review

At any time after a respondent has been served with a temporary cease-and-desist order pursuant to subsection (d) or order regarding the dissipation or conversion of assets pursuant to subsection (e), the respondent may apply to the Commission to have the order set aside, limited, or suspended. (2)

No prior hearing

If a respondent has been served with a temporary order entered without a prior hearing of the Commission— (A)the respondent may, not later than 10 days after the date on which the order was served, request a hearing on the application; and (B)the Commission shall hold a hearing and render a decision on the application at the earliest practicable time. (3)

Judicial review

(A)

In general

An entity shall not be required to submit a request for rehearing of a temporary order prior to seeking judicial review in accordance with section 506(a)(2). (B)

Timing of review

Not later than 10 days after the date on which a respondent was served with a temporary cease-and-desist order entered with a prior hearing of the Commission, or 10 days after the date on which the Commission renders a decision on an application and hearing under paragraph (1) with respect to any temporary order entered without a prior hearing of the Commission— (i)a respondent may obtain a review of the order in a United States circuit court having jurisdiction over the circuit in which the respondent resides or has a principal place of business, or in the United States Court of Appeals for the District of Columbia Circuit, for an order setting aside, limiting, or suspending the effectiveness or enforcement of the order; and (ii)the court shall have jurisdiction to enter such an order. (C)

No prior hearing

A respondent served with a temporary order entered without a prior hearing of the Commission may not apply to the applicable court described in subparagraph (B) except after a hearing and decision by the Commission on the application of the respondent under paragraphs (1) and (2). (4)

Procedures

Section 506(a)(4) shall apply to— (A)an application for review of an order under paragraph (1); and (B)an order subject to review under paragraph (3). (5)

No automatic stay of temporary order

The commencement of proceedings under paragraph (3) shall not, unless specifically ordered by the court, operate as a stay of the order of the Commission. (g)

Regulations and orders

The Commission may promulgate such regulations and issue such orders as the Commission determines to be necessary to carry out this section. .

4.

Federal Power Act

(a)

Regulation of electric utility companies engaged in interstate commerce

Section 202 of the Federal Power Act (16 U.S.C. 824a) is amended by adding at the end the following: (h)

Emergency authority

(1)

In general

Subject to paragraphs (2) and (3), if necessary in the case of an emergency to ensure continued reliability of service to electric consumers or to protect electric customers from potential abuse of market power or market manipulation in wholesale markets regulated by the Commission, the Commission, upon petition or upon a motion of the Commission, and before providing public notice and an opportunity for comment, shall have emergency authority to change or suspend temporarily the rates, terms, or conditions of service on file with the Commission pursuant to this Act. (2)

Duration

A temporary change or suspension under paragraph (1) may remain in effect for a period of not more than 30 days unless the Commission, during that period— (A)provides formal public notice and an opportunity for comment in accordance with section 206; and (B)determines that the a change or suspension shall remain in effect pursuant to that section. (3)

Effective date

Any temporary change or suspension of a filed rate, term, or condition of service under paragraph (1) shall take effect only upon the date of issuance by the Commission of written public notice stating the findings of the Commission in support of the temporary change or suspension. . (b)

Licensees and public utilities; procedural and administrative provisions

Section 314 of the Federal Power Act (16 U.S.C. 825m) is amended by adding at the end the following: (e)

Cease-and-desist proceedings

(1)

In general

If the Commission determines that any entity may be violating, may have violated, or may be about to violate any provision of this Act, or any regulation promulgated by, or any restriction, condition, or order made or imposed by, the Commission under this Act, and if the Commission finds that the alleged violation or threatened violation, or the continuation of the violation, is likely to result in significant harm to electricity consumers or significant harm to the public interest, the Commission may issue a temporary order requiring the respondent— (A)to cease and desist from the violation or threatened violation; (B)to take such action as is necessary to prevent the violation or threatened violation; and (C)to prevent, as the Commission determines to be appropriate— (i)significant harm to electricity consumers; (ii)significant harm to the public interest; and (iii)frustration of the ability of the Commission to conduct the proceedings or to redress the violation at the conclusion of the proceedings. (2)

Timing of entry

An order issued under this subsection shall be entered only after notice and opportunity for a hearing, unless the Commission determines that notice and hearing prior to entry would be impracticable or contrary to the public interest. (3)

Effective date

A temporary order issued under this subsection shall— (A)become effective upon service upon the respondent; and (B)unless set aside, limited, or suspended by the Commission or a court of competent jurisdiction, remain effective and enforceable pending the completion of the proceedings. (f)

Proceedings regarding dissipation or conversion of assets

(1)

In general

In a proceeding involving an alleged violation of a regulation or order promulgated or issued by the Commission in accordance with section 222, if the Commission determines that the alleged violation or related circumstances are likely to result in significant dissipation or conversion of assets, the Commission may issue a temporary order requiring the respondent to take such action as is necessary to prevent the dissipation or conversion of assets. (2)

Timing of entry

An order issued under this subsection shall be entered only after notice and opportunity for a hearing, unless the Commission determines that notice and hearing prior to entry would be impracticable or contrary to the public interest. (3)

Effective date

A temporary order issued under this subsection shall— (A)become effective upon service upon the respondent; and (B)unless set aside, limited, or suspended by the Commission or a court of competent jurisdiction, remain effective and enforceable pending the completion of the proceedings. (g)

Review of temporary orders

(1)

Application for review

At any time after a respondent has been served with a temporary cease-and-desist order pursuant to subsection (e) or order regarding the dissipation or conversion of assets pursuant to subsection (f), the respondent may apply to the Commission to have the order set aside, limited, or suspended. (2)

No prior hearing

If a respondent has been served with a temporary order entered without a prior hearing of the Commission— (A)the respondent may, not later than 10 days after the date on which the order was served, request a hearing on the application; and (B)the Commission shall hold a hearing and render a decision on the application at the earliest practicable time. (3)

Judicial review

(A)

In general

An entity shall not be required to submit a request for rehearing of a temporary order prior to seeking judicial review in accordance with section 313(a). (B)

Timing of review

Not later than 10 days after the date on which a respondent was served with a temporary cease-and-desist order entered with a prior hearing of the Commission, or 10 days after the date on which the Commission renders a decision on an application and hearing under paragraph (1) with respect to any temporary order entered without a prior hearing of the Commission— (i)a respondent may obtain a review of the order in a United States circuit court having jurisdiction over the circuit in which the respondent resides or has a principal place of business, or in the United States Court of Appeals for the District of Columbia Circuit, for an order setting aside, limiting, or suspending the effectiveness or enforcement of the order; and (ii)the court shall have jurisdiction to enter such an order. (C)

No prior hearing

A respondent served with a temporary order entered without a prior hearing of the Commission may not apply to the applicable court described in subparagraph (B) except after a hearing and decision by the Commission on the application of the respondent under paragraphs (1) and (2). (4)

Procedures

Section 313(a) shall apply to— (A)an application for review of an order under paragraph (1); and (B)an order subject to review under paragraph (3). (5)

No automatic stay of temporary order

The commencement of proceedings under paragraph (3) shall not, unless specifically ordered by the court, operate as a stay of the order of the Commission. (h)

Regulations and orders

The Commission may promulgate such regulations and issue such orders as the Commission determines to be necessary to carry out this section. .