[Congressional Record Volume 142, Number 138 (Monday, September 30, 1996)]
[Extensions of Remarks]
[Pages E1849-E1851]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 ELECTRIC UTILITY DEREGULATION WILL SAVE AMERICAN FAMILIES BILLIONS OF 
                             DOLLARS A YEAR

                                 ______
                                 

                             HON. TOM DeLAY

                                of texas

                    in the house of representatives

                      Saturday, September 28, 1996

  Mr. DeLAY. Mr. Speaker, I rise today, the last day of the historic 
104th Congress, to introduce legislation that I believe will bring 
about a historic change in the way American families think about 
electricity. Now I know that electricity service isn't necessarily an 
exciting issue to most Americans, but I think when they learn about the 
hundreds of dollars a year they stand to save, they will sit up and pay 
attention.
  What most American families don't realize when they get their 
electricity bill every month is that they could be paying a lot less. 
There are companies that are ready, willing, and able to sell them 
electricity for a lot less money, but are prevented from doing that by 
outdated laws. In the vast majority of cases, the current system forces 
consumers to buy electricity from only one company, and actually 
encourages those companies to charge consumers for services they don't 
need, want or use.
  There are no logistical barriers preventing Americans from buying 
electricity for their homes and businesses in a competitive 
marketplace. The obstacles are political and legal, and it is our 
historic opportunity as legislators to remove these barriers for the 
common good. Electricity service in the United States is a $200 billion 
a year industry, and deregulation can save $60 to $80 billion a year, 
much of which will end up in the pockets of my constituents in Texas 
and families throughout America.
  The bill that I am introducing today, the Consumers Electric Power 
Act, will put an end to the archaic electricity delivery system in the 
United States and will allow American families to purchase their 
electricity from any electric service provider in the country. The 
competition that this legislation will introduce to the electricity 
market will cause prices to plummet, improve the reliability of 
electricity service, and spur innovation in the electric service 
industry.
  I know that deregulation is happening on a piecemeal basis at the 
State level, and that is good. But there is no reason that American 
families in one State, city, town or neighborhood should be forced to 
pay more of their hard-earned money than families in the next town over 
or down the street who have the ability to choose their electric 
service provider. The Federal interest in free and open competition 
requires that jurisdiction over the terms and conditions of access to 
the customer be Federal and not State--it is the only way that every 
American will see the benefits of competition in the electric service 
industry. The free market is a national system, one that will benefit 
every American family, no matter where they live.
  Specifically Mr. Speaker, the Consumers Electric Power Act will 
guarantee that every customer has the right to choose their electricity 
service provider by January 1, 1998; ensure that electric service 
providers are allowed access to compete on a level playing field; 
preserve and strengthen the State authority with regard to universal 
service for consumers, universal access for electric service providers, 
and the promotion of conservation and economic development programs; 
outline the performance objectives of competitive transmission and 
distribution systems; and prospectively repeal the Public Utility 
Holding Company Act of 1935 and section 210 of the Public Utility 
Regulatory Policies Act 1978 after competition is affirmatively 
achieved.
  This bill very clearly shows the direction that I believe 
deregulation of the electricity industry should take. I realize that 
this bill I am dropping today is by no means the last word on this 
subject. An issue this complex and important must harness the 
experience and expertise of those individuals who have spent years 
studying this issue and working in this industry--and who realized 
years ago that we must deregulate the electricity industry because it 
is the right thing to do for American families. Input from those 
Members of Congress who realize the importance of this subject is both 
expected and welcome.
  Mr. Speaker, this Commerce Committee will be the forum for shaping 
this legislation and I look forward to working with Members of the 
Committee over the next year to shape a bill that will provide the 
maximum benefits for consumers. In particular, I want to recognize the 
importance of two Members of the House of Representatives who have 
opened the way for electricity deregulation. The Honorable Dan 
Schaefer, my colleague from Colorado, and the Chairman of the Energy 
and Power Subcommittee, has already introduced an excellent electricity 
deregulation bill, and I look forward to working with him on behalf of 
American families. His knowledge of this subject will be invaluable to 
Members of Congress as they craft electricity deregulation legislation. 
In addition, the Honorable Tom Bliley of Virginia, the Chairman of the 
Commerce Committee, and the Member who will be responsible for bringing 
this legislation to the floor of the House, has already made this issue 
his highest priority for the 105th Congress. His determination and 
ability are sure to serve American families well in the coming years.
  Mr. Speaker, by opening this industry to competition, we will not 
only implement the economic equivalent of a major tax cut, we will 
unleash a new era of productivity and creativity in this huge and vital 
industry to lead America into the new millennium.
  At this time Mr. Speaker, I would like to submit the text of the 
Consumers Electric Power Act for inclusion in the Record. I hope that 
my colleagues will study the legislation in the coming months as they 
prepare to address this important issue in the next Congress.

                                H.R. --

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

[[Page E1850]]

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Consumers 
     Electric Power Act of 1996''.
       (b) Table of Contents.--The table of Contents is as 
     follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Consumer choice.
Sec. 4. State authority.
Sec. 5. Reliable and nondiscriminatory operation of transmission and 
              distribution systems.
Sec. 6. Federal transmission tariff reform.
Sec. 7. Application of Public Utility Holding Company Act and Public 
              Utility Regulatory Policies Act.
Sec. 8. Transition planning.
Sec. 9. Generating sources free to serve consumers and resellers.
Sec. 10. Applicability.
Sec. 11. Antitrust laws.
Sec. 12. Judicial review.
Sec. 13. Definitions.
Sec. 14. Federal power act.
Sec. 15. Effective date; savings provisions.
Sec. 16. Evaluation of effectiveness.

     SEC. 2. FINDINGS.

       The Congress finds the following:
       (1) Low-cost and reliable electric service is integral to 
     the vitality of the United States economy, the 
     competitiveness of domestically made goods, and the quality 
     of life of all Americans.
       (2) Americans consume electricity worth more than 
     $200,000,000,000 a year, approximately half of which is for 
     residential purposes, making the monthly electric bill one of 
     the largest expenses for most households.
       (3) The cost of electric service has a direct effect on the 
     price, profitability, and competitiveness of goods and 
     services produced in the United States.
       (4) Lower priced electric service can be realized by giving 
     all American consumers the right to choose among suppliers of 
     electric service in a competitive market, while maintaining, 
     if not improving the reliability of service those consumers 
     have come to expect.
       (5) The development of vibrant competition in the retail 
     market for electric energy will--
       (A) reduce the costs of electric service to even the 
     smallest consumers of electricity;
       (B) reduce the costs to consumers benefiting from today's 
     lowest regulated rates;
       (C) create jobs as American businesses are able to lower 
     costs and better compete in world markets and against foreign 
     competition here at home;
       (D) result in a more efficient utility industry; and
       (E) reduce environmental impacts.
       (6) Monopoly cost-of-service regulation of electricity has 
     failed. It has stifled competition, resulting in high 
     electric service rates for many consumers and few incentives 
     for technological innovation and good customer service by 
     utilities.
       (7) High electric service rates are regressive, placing a 
     disproportionate burden on poor ratepayers.
       (8) High electric service rates divert consumer dollars 
     that would otherwise be spent for purchasing necessary goods 
     and services, savings, or investments that benefit the 
     economy as a whole.
       (9) Congress has authority to enact laws, under the 
     Commerce Clause of the United States Constitution, regarding 
     the generation, transmission, distribution, and sale of 
     electric energy in interstate commerce at the wholesale and 
     retail level. Only Congress can ensure that a competitive 
     retail market is established throughout the United States on 
     an expeditious but orderly basis.
       (10) Regional and State variations require that State 
     regulatory authorities should receive deference in certain 
     decisions relating to electric service.
       (11) Consumers of all utilities, whether served by 
     regulated or nonregulated electric utilities (such as 
     municipally owned utilities or rural cooperatives), should 
     have the same rights to receive the benefits of competition 
     and consumer choice.
       (12) Consumer choice needed to produce renewable energy 
     development that is market driven fulfills customer desires 
     for clean energy supplies and encourages competition among 
     different renewable technologies. Subjecting renewable energy 
     technologies to the discipline of the free market will better 
     allocate renewable resources and speed the commercialization 
     of renewable technologies than traditional centralized 
     government resource planning.

     SEC. 3. CONSUMER CHOICE.

       (a) Freedom of Choice.--(1) Each person has the right to 
     purchase electric service from any electric service provider, 
     notwithstanding any other law.
       (2) A Federal, State, or local authority may not deny or 
     limit any person's right to purchase such energy from an 
     electric service provider at a price and on terms and 
     conditions freely arrived at.
       (3) A Federal, State, or local authority may not 
     discriminate, or authorize the discrimination, against any 
     person who exercises that person's right to purchase such 
     energy, subject to subsection (b).
       (b) Ban on Exit Fees, Subsidies, or Other Penalties on 
     Exercising Right of Choice.--A Federal, State, or local 
     authority may not grant any preference or protection from 
     competition to any electric service provider. For purposes of 
     this subsection, the terms ``preference'' and ``protection 
     from competition'' include--
       (1) any direct or indirect subsidy; and
       (2) any exit fee or other levy imposed in connection with 
     any purchaser who terminates a purchasing relationship with 
     any seller, other than--
       (A) a charge levied pursuant to provisions of a service 
     contract that were specifically and freely negotiated and 
     agreed upon by both parties (or generally applicable contract 
     law) to such contract; or
       (B) a nondiscriminatory access charge for funding service 
     continuations under section 4(b) (relating to lifeline 
     source).
       (c) Effective Date.--The provisions of this section shall 
     take effect on January 1, 1998.
       (d) Alternative Choices.--Nothing in this Act shall be 
     construed to prohibit or otherwise restrict any electric 
     energy purchaser from having that electric energy delivered 
     through arrangements of the purchaser's choice. Any such 
     alternative shall be consistent with regional or national 
     reliability standards.

     SEC. 4. STATE AUTHORITY.

       (a) Local Distribution Service.--Nothing in this Act shall 
     affect the authority and responsibility of any State or local 
     government concerning the obligation to connect consumers to 
     the local distribution system and to ensure the adequate 
     maintenance, safety, and reliability of such local 
     distribution system.
       (b) Lifeline Service.--The authority under subsection (a) 
     includes the authority to provide for the continuation of 
     service to residential customers unable to afford electric 
     energy service, including the authority to establish 
     nondiscriminatory local distribution access charges on any 
     power delivered sufficient to cover the cost of such 
     continuation.
       (c) Certification of Electric Service Providers.--No State 
     may establish discriminatory requirements or other 
     obligations for certification of electric service providers 
     within that State. Nothing in this subsection shall affect 
     the ability of a State to impose requirements necessary to 
     preserve universal service, protect the public safety and 
     welfare, ensure the continued reliability of the distribution 
     system, and safeguard the rights of consumers.
       (d) If Consumers Make No Selection of An Electric Service 
     Provider.--In the case of a retail customer who fails to 
     select an electric service provider, the State may establish 
     rules under which the customer shall be initially assigned on 
     a nondiscriminatory basis to one of a variety of electric 
     service providers that have filed service terms with an 
     appropriate State authority and met any requirements 
     described in subsection (c).
       (e) Assurance of Appropriate Rates for Transition to 
     Competition.--In order to ensure uninterrupted local 
     distribution service, if nondiscriminatory unbundled rates 
     are not in effect by the effective date of this section, 
     interim rates prescribed in the transition plan under section 
     7 shall apply for any local distribution service until such 
     time as State rates take effect.
       (f) Additional State Authority.--State and local 
     governments shall retain authority over any specific matter 
     not otherwise addressed in this Act, including--
       (1) the continuation of universal service;
       (2) conservation programs and initiatives;
       (3) consumer choice with regard to renewable energy;
       (4) research and development programs and initiatives; and
       (5) any other matter deemed appropriate by a State or local 
     government.

     SEC. 5. RELIABLE AND NONDISCRIMINATORY OPERATION OF 
                   TRANSMISSION AND DISTRIBUTION SYSTEMS.

       (a) Operation of Transmission and Distribution Systems.--
     The Nation's transmission and distribution systems shall be 
     operated to achieve the following objectives:
       (1) Organizational separation within remaining vertically 
     integrated firms, between individuals, assets, and systems 
     dedicated to the operation of transmission and distribution 
     systems and those involved in the provision of electric 
     service.
       (2) Nondiscriminatory access to the transmission and 
     distribution systems whether for wholesale or retail sale of 
     electric service.
       (3) The prevention of preferential treatment (or protection 
     from competition) by system operators toward affiliated 
     service providers.
       (4) Access to information on a nondiscriminatory basis 
     concerning--
       (A) availability of transmission and distribution service;
       (B) operating conditions on transmission and distribution 
     systems; and
       (C) rates, terms, and conditions of any arrangement 
     between, or information provided from, the transmission and 
     distribution system operators and their affiliated electric 
     service provider, if any.
       (5) Ensuring that the transmission and distribution system 
     operator--
       (A) receives adequate and timely information from electric 
     service providers regarding physical flows and physical 
     transactions on the transmission and distribution system;
       (B) has access to assets and resources it needs to maintain 
     system balance in the event of unanticipated events or the 
     failure of an electric service provider to perform; and
       (C) has authority to implement Commission approved 
     sanctions and penalties for the failure of electric service 
     providers to conform to the tariffs governing access to the 
     transmission and distribution system.
       (b) Commission Authority.--In order to ensure consumers' 
     ability to access competing

[[Page E1851]]

     electric service providers, the Commission shall have the 
     authority, by rule, order, or decision, to provide for 
     nondiscriminatory prices, terms and conditions to 
     transmission and distribution services. With respect to 
     distribution services, the Commission shall defer to State 
     authorities with respect to the matter reserved to the States 
     in section 4. The Commission shall also have the authority, 
     by rule, order, or decision, to take the actions necessary to 
     fulfill the obligations imposed on it by this Act.

     SEC. 6. FEDERAL TRANSMISSION TARIFF REFORM.

       (a) Initial Tariff Reform.--By January 1, 1999, the 
     Commission shall promulgate and make effective, rules which 
     provide for nondiscriminatory access to transmission and 
     distribution service as provided in this Act and which 
     eliminate the barriers to competitive electric service 
     presented by existing contracts and arrangements--
       (1) between and among transmitting utilities governing the 
     pricing, terms, and conditions of access to transmission and 
     distribution facilities; and
       (2) between transmitting utilities and any other entities 
     (directly connected to such transmitting utility's 
     transmission system) providing for the sale of power by such 
     transmitting utilities to any other entities.
       (b) Continuing Reform.--The Commission shall by rule, 
     order, or decision ensure that the existing electric 
     utilities are not permitted to exercise market power in the 
     sale of electric service. The Commission shall initiate 
     proceedings following enactment, to be concluded on or before 
     January 1, 1999, in order to determine the extent to which 
     existing utilities have market power in the sale of electric 
     services; and to consider and determine the means for 
     mitigating such market power. In making and enforcing such 
     determinations, the Commission shall have the authority to--
       (1) restrict the ability of the electric utility, or its 
     affiliates, to sell such services at market-determined rates, 
     provided that such restrictions shall be limited to those 
     areas and services where the electric utility has market 
     power; and
       (2) order the divestiture of assets and functions which are 
     the source of market power, to the extent reasonably 
     necessary to mitigate such market power, provided that such 
     divestiture may include a variety of alternatives including 
     outright sale, lease, or output contracts.

     SEC. 7. APPLICATION OF PUBLIC UTILITY HOLDING COMPANY ACT AND 
                   PUBLIC UTILITY REGULATORY POLICIES ACT .

       (a) PUHCA.--The Public Utility Holding Company Act of 1935 
     shall cease to apply to an electric utility subject to this 
     Act or to any holding company (as defined in such Act) of 
     such utility if each State in which such utility is providing 
     electric energy services--
       (1) determines that the retail customers served by such 
     utility and its affiliates have the ability to purchase 
     electric energy services in accordance with the provisions of 
     section 3 of this Act; and
       (2) notifies the Commission and the Securities and Exchange 
     Commission of such determination.
       (b) PURPA.--The provisions of section 210 of the Public 
     Utility Regulatory Policies Act of 1978 requiring electric 
     utilities to offer to purchase electric energy from 
     qualifying cogeneration facilities and qualifying small power 
     production facilities at the incremental cost to the utility 
     of alternative electric energy shall cease to apply to an 
     electric utility if each State in which such utility is 
     providing electric services--
       (1) determines that the retail customers served by such 
     utility have the ability to purchase electric energy services 
     in accordance with the provisions of section 3 of this Act; 
     and
       (2) notifies the Commission of such determination.
     Nothing in this subsection shall be construed to affect any 
     obligation under a binding contract to purchase electric 
     energy entered into before the date of enactment of this Act.

     SEC. 8. TRANSITION PLANNING.

       (a) Commission Recommendations.--Within 3 months of 
     enactment, the Commission shall make a report to Congress 
     providing its plan for effectuating its obligations under 
     this Act, including any potential obstacles it identifies 
     that could inhibit full and reasonably expeditious 
     implementation.
       (b) Commission Guidelines.--The Commission may publish 
     preliminary, nonbinding guidelines to facilitate timely 
     compliance with this Act by electric utilities. Such 
     guidelines shall be calculated to give notice of the 
     direction and substance of the Commission's implementation of 
     this Act to facilitate orderly transition and timely 
     compliance, but need not be entirely incorporated in the 
     Commission's final rules.
       (c) Utility Compliance.--Nothing in this Act shall prevent 
     utilities from submitting filings in advance of final 
     Commission rules, nor prevent the Commission from making 
     determinations on such filings subject to the final rules.

     SEC. 9. GENERATING SOURCES FREE TO SERVE CONSUMERS AND 
                   RESELLERS.

       No Federal, State, or local government authority may--
       (1) regulate the pricing, terms, or conditions of service 
     offerings by electric service providers; or
       (2) except as provided in this Act, regulate who may engage 
     in selling electric energy.

     SEC. 10. APPLICABILITY.

       This Act shall apply with respect to electric energy sold 
     for use or resale within the 50 States and the District of 
     Columbia.

     SEC. 11. ANTITRUST LAWS.

       Nothing in this Act shall be construed to modify, impair, 
     or supersede the applicability of the Sherman Antitrust Act 
     (15 U.S.C. 1 and following) and amendments thereto, the 
     Clayton Act (15 U.S.C. 12 and following), and amendments 
     thereto, regulations promulgated under such laws, and United 
     States court decisions interpreting such laws.

     SEC. 12. JUDICIAL REVIEW.

       Judicial review of this Act, or any rule or order under 
     this Act, within the meaning of section 551(4) of title 5, 
     United States Code, may be obtained in the United States 
     Court of Appeals for any appropriate circuit pursuant to the 
     provisions of chapter 7 of title 5, United States Code, 
     except that the second sentence of section 705 thereof shall 
     not apply.

     SEC. 13. DEFINITIONS.

       For purposes of this Act--
       (1) Commission.--The term ``Commission'' means the Federal 
     Energy Regulatory Commission.
       (2) Electric service.--The term ``electric service'' shall 
     mean the provision or sale of electric energy and related 
     goods and services including but not limited to billing, 
     metering, equipment for monitoring, controlling, or managing 
     the consumption or quality of electric energy, generation of 
     electric energy, ancillary services, and other competitively 
     provided goods and services, but shall not include 
     transmission and distribution service.
       (3) Transmitting utility.--The term ``transmitting 
     utility'' has the meaning given such term in the Federal 
     Power Act, including any Federal power marketing agency, and 
     any other person, engaged in the business of electric energy 
     transmission.
       (4) Utility or electric utility.--The terms ``utility'' and 
     ``electric utility'' shall mean any entity which, as of the 
     date of enactment, owns assets for the transmission or 
     distribution of electric energy.
       (5) Transmission and distribution system operator.--The 
     term ``transmission and distribution system operator'' shall 
     mean the entity or part thereof with responsibility for 
     monitoring, contracting, and operating the transmission and 
     distribution system.

     SEC. 14. FEDERAL POWER ACT.

       This Act shall supersede any provisions of part II of the 
     Federal Power Act that are inconsistent with the provisions 
     of this Act.

     SEC. 15. EFFECTIVE DATE; SAVINGS PROVISIONS.

       (a) Effective Date.--The provisions of this Act shall take 
     effect 30 days after the date of enactment of this Act, 
     except to the extent expressly provided otherwise in this 
     Act.
       (b) Existing Contracts.--Nothing in this Act shall alter, 
     diminish, or otherwise affect any rights or obligations under 
     any contract existing as of the date of the enactment of this 
     Act.

     SEC. 16. EVALUATION OF EFFECTIVENESS.

       Not later than 30 months after the date of the enactment of 
     this Act, the Commission shall conduct, by rule, an 
     evaluation of this Act and submit a report on such evaluation 
     to the Congress. Such evaluation shall include each of the 
     following:
       (1) The extent to which electric energy rates have been 
     reduced, and the combined cost of electric energy delivered 
     to consumers, including the transmission costs.
       (2) The level of service reliability provided to purchasers 
     of electric energy.
       (3) The extent of competition in the electric energy 
     market.

                          ____________________