[Congressional Record Volume 143, Number 155 (Friday, November 7, 1997)]
[Senate]
[Pages S11968-S11977]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BUMPERS (for himself and Mr. Gorton):
  S. 1401. A bill to provide for the transition to competition around 
electric energy suppliers for the benefit and protection of consumers, 
and for other purposes; to the Committee on Energy and Natural 
Resources.


           the transition to electric competition act of 1997

  Mr. BUMPERS. Mr. President, I rise to day to introduce the Transition 
to Electric Competition Act of 1997 along with my colleague from the 
State of Washington, Senator Gorton. This bill provides for the 
transition toward deregulation and competition in the electric utility 
industry.
  While few people find a discussion of the electric utility industry 
and the many laws and regulations governing the industry exciting, the 
fact is that electricity is an extremely important commodity which 
affects everyone on a daily basis. Any event that increases or reduces 
electric rates can impact: First, the lives of the poor and those on 
fixed incomes that depend on electricity to heat their homes in the 
winter and cool them in the summer; second, the price of goods we buy 
every day; as well as third, the competitiveness of our factories. In 
addition, decisions made by electric generators often have a direct 
effect on our environment as well as our energy security.
  It is not at all inconsequential that the electric utility industry, 
which has remained relatively static for the last 60 years, is 
undergoing a fundamental change. Instead of the traditional vertically 
integrated local utility, which generates power at its own plants, 
transmits that power over its own lines and sells that power to all 
consumers in a particular area, consumers in some States are starting 
to be bombarded with all sorts of offers from companies competing to 
become their power supplier, and other entrepreneurs will be seeking to 
buy large blocks of power to serve certain kinds of consumers. 
Naturally, these changes are bound to create considerable apprehension 
among both utilities and consumers.
  Mr. President, in January I introduced S. 237, the Electric Consumers 
Protection Act, because I believed that retail electric competition was 
inevitable and Federal legislation was necessary to ensure that certain 
consumers were not disadvantaged in the process. Several States were 
proceeding to introduce competition in their jurisdictions and a number 
of others were examining the matter. Since that time I have become even 
more convinced that competition is on the horizon. Eleven States have 
now enacted legislation or issued regulations requiring retail 
competition by a time certain. Almost every other State currently has 
the matter under review.
  Some argue that there is no need for the Federal Government to 
intervene; that the States are doing just fine on their own and they 
should decide when and how to proceed with retail electric competition. 
Mr. President, I couldn't disagree more.
  A State-by-State approach will likely produce a lot of unintended 
consequences which will limit the benefits associated with retail 
competition and could disadvantage certain consumers. Electric 
generation markets are becoming increasingly regional and even multi-
regional. What happens in one State can have direct and indirect 
impacts on consumers and utilities located in another State. Utilities 
operating in more than one State can be subjected to conflicting 
regulatory regimes which could impact the way they operate their 
systems and the electric rates paid by consumers.
  This phenomenon is best illustrated by the multistate utility holding 
companies registered under the Public Utility Holding Company [PUHCA]. 
I have had a lot of experience with registered holding companies 
because two of them serve my home State of Arkansas. These holding 
companies generally plan for and operate generating facilities on a 
system-wide basis for the benefit of customers in the entire region

[[Page S11969]]

served by the company. If restructuring proceeds on a State-by-State 
basis, these holding companies would find themselves subjected to 
different requirements which could negatively impact consumers.
  A State-by-State approach to retail competition also present problems 
where utilities operate entirely within a single State. It would make 
no sense for a utility in a State that does not require retail 
competition, to be able to sell power at retail in an adjoining State 
that requires retail competition, while a utility subjected to retail 
competition is unable to mitigate its losses by competing for customers 
in the adjoining State. Such a result both increases stranded costs and 
distorts the generation marketplace.
  Moreover, the States can't adequately address issues associated with 
the use of transmission lines that provide for the transportation 
across a number of States or the ability of a utility with significant 
market power to dominate electricity generation in an entire region. 
Clearly these are issues that need to be resolved at the Federal level.
  When I introduced S. 237 there weren't many calling for Federal 
action. However, interested observers are increasingly coming to the 
conclusion that Federal electric restructuring legislation is not only 
helpful, but is necessary. Even some of the States are calling on the 
Federal Government to act.
  The legislation we are introducing today is an updated version of S. 
237. The bill includes the following provisions: All consumers would 
have the right to choose their power supplier by January 1, 2002. 
States could choose an earlier date for their residents if they wish. 
Utilities would be able to recover their legitimate, prudent and 
verifiable costs that they would have been able to recover from 
ratepayers if retail competition had not been implemented. Consumers 
located in States that currently have low cost electricity would be 
protected from rate increases by ensuring that utilities can't use 
their existing assets to sell power in more lucrative markets to the 
disadvantage of their existing customers. All utilities selling retail 
power would be required to generate a portion of that power using 
renewable resources. All of the interstate transmission facilities 
throughout the country would be managed by independent system operators 
to ensure that electricity flows in an efficient manner and that 
markets are competitive. FERC would be given greater authority to 
protect against the use of market power by utilities to inhibit 
competition. Both the Public Utility Holding Company Act [PUHCA] and 
the Public Utility Regulatory Policies Act [PURPA] would be repealed in 
conjunction with the implementation of retail electric competition.
  In addition, Mr. President, the legislation attempts to address some 
of the issues that relate to the impact of retail electric competition 
on two Federal entities--the Bonneville Power Administration [BPA] and 
the Tennessee Valley Authority [TVA]. Senator Gorton is especially 
knowledgeable about the special problems facing BPA and I expect that 
he will work closely with the other Members of the Senate from the 
Pacific Northwest in developing a consensus approach.
  With regard to TVA, our bill attempts to develop an approach that 
will enable retail competition to be smoothly introduced in the 
Tennessee Valley and will help TVA pay off its tremendous debt. The 
bill also requires the TVA board to prepare a study examining whether 
TVA should be privatized. I know that some observers may be concerned 
that this could be a first step toward the privatization of the Federal 
Power Marketing Administration [PMA's]. Mr. President, there is no 
connection whatsoever between TVA and the PMA's. The PMA's market power 
generated at hydroelectric facilities located at Federal dams. These 
dams perform a variety of public services and cannot be privatized. 
TVA, on the other hand, generates the bulk of its power from coal and 
nuclear plants that serve no public purposes. In addition, the Federal 
PMA's pay for themselves through power sales. TVA, on the other hand, 
has an enormous level of privately held debt which it must find a way 
to pay off, since the Federal Government is not responsible for it.
  Mr. President, I am especially pleased that Senator Gorton has 
decided to join with me in the effort to enact comprehensive electric 
restructuring legislation. He has a reputation as a very bright and 
thoughtful Member of this body and is a distinguished member of the 
Energy and Natural Resources Committee, which has jurisdiction over the 
matter. I know that he shares my desire to move this legislation 
through Congress quickly next year.
  Senator Murkowski, the chairman of the Senate Energy Committee, 
recently indicated that he expects the committee to mark up electric 
restructuring legislation next year. Both Senator Gorton and I want to 
work with him and the other members of the committee in moving forward. 
I look forward to undertaking this important task.
  Mr. President, I want to say how honored I am to have one of our most 
distinguished Senators, Senator Gorton of Washington, as my chief 
cosponsor on this bill.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  Mr. President, I ask unanimous consent that a section-by-section 
analysis of the Transition to Electric Competition Act of 1997 be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1401

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

     SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

       (a) Short title. This Act may be cited as the ``Transition 
     to Electric Competition Act of 1997''.
       (b) Table of Contents.--The table of contents is as 
     follows:

Sec. 1. Short title and table of contents.
Sec. 2. Findings.
Sec. 3. Definitions.
Sec. 4. Severability.
Sec. 5. Enforcement.

                      TITLE I--RETAIL COMPETITION

Sec. 101. Mandatory retail access.
Sec. 102. Aggregation.
Sec. 103. Prior implementation.
Sec. 104. State regulation.
Sec. 105. Retail stranded cost recovery.
Sec. 106. Wholesale stranded cost recovery.
Sec. 107. Lost retail benefits.
Sec. 108. Universal service.
Sec. 109. Public benefits.
Sec. 110. Renewable energy.
Sec. 111. Determination of local distribution facilities.
Sec. 112. Transmission.
Sec. 113. Competitive generation markets.
Sec. 114. Nuclear decommissioning costs.
Sec. 115. Right to know.
Sec. 116. Exemption of Alaska and Hawaii.

               TITLE II--PUBLIC UTILITY HOLDING COMPANIES

Sec. 201. Repeal of the Public Utility Holding Company Act of 1935.
Sec. 202. Exemptions.
Sec. 203. Federal access to books and records.
Sec. 204. State access to books and records.
Sec. 205. Affiliate transactions.
Sec. 206. Clarification of regulatory authority.
Sec. 207. Effect on other regulation.
Sec. 208. Enforcement.
Sec. 209. Savings provision.
Sec. 210. Implementation.
Sec. 211. Resources.

           TITLE III--PUBLIC UTILITY REGULATORY POLICIES ACT

Sec. 301. Definition.
Sec. 302. Facilities.
Sec. 303. Contracts.
Sec. 304. Savings clause.
Sec. 305. Effective date.

                   TITLE IV--ENVIRONMENTAL PROTECTION

Sec. 401. Study.

                TITLE V--BONNEVILLE POWER ADMINISTRATION

Sec. 501. Findings and purposes.
Sec. 502. Columbia River fish and wildlife coordination and governance.
Sec. 503. Pacific Northwest federal transmission access.
Sec. 504. Transition cost mechanism.
Sec. 505. Independent system operator participation.
Sec. 506. Financial obligations.
Sec. 507. Prohibition on retail sales.
Sec. 508. Clarification of Commission authority.
Sec. 509. Repealed statute.

                  TITLE VI--TENNESSEE VALLEY AUTHORITY

Sec. 601. Competition in service territory.
Sec. 602. Ability to sell electric energy.
Sec. 603. Termination of contracts.
Sec. 604. Rates for electric energy.
Sec. 605. Privatization study.

     SEC. 2. FINDINGS.

       The Congress finds that:
       (a) Congress has the authority to enact laws, under the 
     Commerce Clause of the

[[Page S11970]]

     United States Constitution, regarding the wholesale and 
     retail generation, transmission, distribution, and sale of 
     electric energy in interstate commerce.
       (b) Several States have taken steps to require competition 
     among retail electric supplies and a large number of other 
     States are expected to act.
       (c) It has been the policy of Congress and the Commission 
     to promote competition among wholesale electric suppliers.
       (d) It is in the public interest that the transition 
     towards competition in electric service ensures that all 
     consumers receive reliable and competitively-priced electric 
     service.
       (e) Electric utility companies that prudently incurred 
     costs pursuant to a regulatory structure that required them 
     to provide electricity to consumers should not be penalized 
     during the transition to competition.
       (f) Consumers will not benefit from the introduction of 
     competition among electric energy suppliers if certain 
     suppliers have undue market power.
       (g) It is important to encourage conservation and the use 
     of renewable resources to reduce reliance on fossil fuels, 
     promote domestic energy security and protect the environment.
       (h) Competition among electric energy suppliers should not 
     degrade reliability nor cause consumers to lose electric 
     service.

     SEC. 3. DEFINITIONS.

       For purposes of this Act:
       (a) The term ``affiliate'' of a specific company means any 
     company 5 percent or more of whose outstanding voting 
     securities are owned, controlled, or held with power to vote, 
     directly or indirectly, by such specific company.
       (b) The term ``aggregator'' means any person that purchases 
     or acquires retail electric energy on behalf of two or more 
     consumers.
       (c) The term ``ancillary services'' shall have the same 
     meaning assigned to it by the Commission.
       (d) The term ``associate company'' of a company means any 
     company in the same holding company system with such company.
       (e) The term ``Commission'' means the Federal Energy 
     Regulatory Commission.
       (f) The term ``company'' means a corporation, joint stock 
     company, partnership, association, business trust, organized 
     group of persons, whether incorporated or not, or a receiver 
     or receivers, trustee or trustees of any of the foregoing.
       (g) The term ``corporation'' means any corporation, joint-
     stock company, partnership, association, rural electric 
     cooperative, municipal utility, business trust, organized 
     group of persons, whether incorporated or not, or a receiver 
     or receivers, trustee or trustees of any of the foregoing.
       (h) The term ``electric utility company'' means any company 
     that owns or operates facilities used for the generation, 
     transmission or distribution of electric energy for sale.
       (i) The term ``gas utility company'' means any company that 
     owns or operates facilities used for distribution at retail 
     (other than the distribution only in enclosed portable 
     containers) of natural or manufactured gas for heat, light or 
     power.
       (j) The term ``holding company system'' means a holding 
     company together with its subsidiary companies.
       (k) The term ``large hydroelectric facility'' means a 
     facility which has a power production capacity which, 
     together with any other facilities located at the same site, 
     is greater than 80 megawatts.
       (l) The term ``local distribution facilities'' means 
     facilities used to provide retail electric energy for 
     ultimate consumption.
       (m) The term ``lost retail benefits'' means the increased 
     cost of retail electric energy in a retail electric energy 
     provider's service territory resulting from the sale 
     subsequent to the implementation of retail electric 
     competition, outside such service territory, of electric 
     energy generated at facilities the cost of which were 
     included in the retail rate base of the retail electric 
     energy provider prior to the implementation of retail 
     electric competition.
       (n) The term ``mitigation'' means any widely accepted 
     business practice used by an electric utility company to 
     dispose of or reduce uneconomic assets or costs.
       (o) The term ``municipal utility'' means a city, county, 
     irrigation district, drainage district, or other political 
     subdivision or agency of a State competent under the laws 
     thereof to carry on the business of a retail electric energy 
     provider and/or a retail electric energy supplier.
       (p) The term ``person'' means an individual or corporation.
       (q) The term ``public utility company'' means an electric 
     utility company or gas utility company but does not mean a 
     qualifying facility as defined in the Public Utility 
     Regulatory Policies Act, or an exempt wholesale generator or 
     a foreign utility company defined in the Energy Policy Act of 
     1992.
       (r) The term ``public utility holding company'' means (A) 
     any company that directly or indirectly owns, controls, or 
     holds with power to vote, 10 percent or more of the 
     outstanding voting securities of a public utility company or 
     of a holding company of any public utility company; and (B) 
     any person, determined by the Securities and Exchange 
     Commission, after notice and opportunity for hearing, to 
     exercise directly or indirectly (either alone or pursuant to 
     an arrangement or understanding with one or more persons) 
     such a controlling influence over the management or policies 
     of any public utility or holding company as to make it 
     necessary or appropriate for the protection of consumers with 
     respect to rates that such person be subject to the 
     obligations, duties, and liabilities imposed in this title 
     upon holding companies.
       (s) The term ``renewable energy'' means electricity 
     generated from solar, wind, waste, including municipal solid 
     waste, biomass, hydroelectric or geothermal resources.
       (t) The term ``Renewable Energy Credit'' means a tradable 
     certificate of proof that one unit (as determined by the 
     Commission) of renewable energy was generated by any person.
       (u) The term ``retail electric competition'' means the 
     ability of each consumer in a particular State to purchase 
     retail electric energy from any person seeking to sell 
     electric energy to such consumer.
       (v) The term ``retail electric energy'' means electric 
     energy and ancillary services sold for ultimate consumption.
       (w) The term ``retail electric energy provider'' means any 
     person who distributes retail electric energy to consumers 
     regardless of whether the consumers purchase such energy from 
     the provider or an alternative supplier. A retail electric 
     energy provider may also be a retail electric energy 
     supplier.
       (x) The term ``retail electric energy supplier'' means any 
     person which sells retail electric energy to consumers.
       (y) The term ``retail stranded costs'' means all 
     legitimate, prudent, verifiable and non-mitigatable costs 
     incurred by an electric utility company in all of its 
     generation assets which would have been recoverable in retail 
     rates but for the implementation of retail electric 
     competition, less the total market value of these assets 
     after retail electric competition is implemented. Binding 
     power purchase contracts and regulatory assets, the costs of 
     which would have been recovered but for the implementation of 
     retail electric competition, shall be considered generation 
     assets for purposes of this subsection.
       (z) The term ``rural electric cooperative'' means a 
     corporation that is currently paying off a loan for the 
     purposes of providing electric service from the Administrator 
     of the Rural Electrification Administration or the Rural 
     Utilities Service under the Rural Electrification Act of 
     1936.
       (aa) The term ``State'' means any State or the District of 
     Columbia.
       (bb) The term ``State regulatory authority'' means the 
     regulatory body of a State or municipality having sole 
     jurisdiction to regulate rates and charges for the 
     distribution of electric energy to consumers within the State 
     or municipality.
       (cc) The term ``subsidiary company'' of a holding company 
     means--
       (1) any company 10 percent or more of the outstanding 
     voting securities of which are directly or indirectly owned, 
     controlled, or held with power to vote, by such holding 
     company; and
       (2) any person the management or policies of which the 
     Securities and Exchange Commission, after notice and 
     opportunity for hearing, determines to be subject to a 
     controlling influence, directly or indirectly, by such 
     holding company (either alone or pursuant to an arrangement 
     or understanding with one or more other persons) so as to 
     make it necessary for the protection of consumers that such 
     person be subject to the obligations, duties, and liabilities 
     imposed upon subsidiary companies of public utility holding 
     companies.
       (dd) The term ``transmission system'' means all facilities, 
     including federally-owned facilities, transmitting 
     electricity in interstate commerce in a particular region, 
     including all facilities transmitting electricity in the 
     State of Texas and those providing international 
     interconnections, but does not include local distribution 
     facilities as determined by the Commission.
       (ee) The term ``wholesale electric energy'' means electric 
     energy and ancillary services sold for resale.
       (ff) The term ``wholesale electric energy supplier'' means 
     any person which sells wholesale electric energy.
       (gg) The term ``wholesale stranded costs'' shall have the 
     same meaning as in the Commission's Order No. 888.
       (hh) The term ``voting security'' means any security 
     presently entitling the owner or holder thereof to vote in 
     the direction or management of the affairs of a company.

     SEC. 4. SEVERABILITY.

       If any provision of this Act, or the application of such 
     provision to any person or circumstance, shall be held 
     invalid, the remainder of the Act, and the application of 
     such provision to persons or circumstances other than those 
     as to which it is held invalid, shall not be affected 
     thereby.

     SEC. 5. ENFORCEMENT.

       (a) Violation of the Act.--If any individual or corporation 
     or any other retail electric energy supplier or provider 
     fails to comply with the requirements of this Act, any 
     aggrieved person may bring an action against such entity to 
     enforce the requirements of this Act in the appropriate 
     Federal district court.
       (b) State or Commission Action.--Notwithstanding any other 
     provision of law, any person seeking redress from an action 
     taken by a State regulatory authority, the Commission or a 
     regulatory board pursuant to this Act shall bring such action 
     in the appropriate circuit of the United States Court of 
     Appeals.

[[Page S11971]]

                     TITLE I--ELECTRIC COMPETITION

     SEC. 101. MANDATORY RETAIL ACCESS.

       (a) Customer Choice.--Beginning on January 1, 2002, each 
     consumer shall have the right to purchase retail electric 
     energy from any person offering to sell retail electric 
     energy to such consumer, subject to any limitations imposed 
     pursuant to section 104(a) of this Act.
       (b) Local Distribution and Retail Transmission 
     Facilities.--Beginning on January 1, 2002, all persons 
     seeking to sell retail electric energy shall have reasonable 
     and nondiscriminatory access, on an unbundled basis, to the 
     local distribution and retail transmission facilities of all 
     retail electric energy providers and all ancillary 
     services.

     SEC. 102. AGGREGATION.

       Subject to any limitations imposed pursuant to section 
     104(a) of this Act, a group of consumers or any person acting 
     on behalf of such group may purchase or acquire retail 
     electric energy for the members of the group if they are 
     located in a State or States where there is retail electric 
     competition.

     SEC. 103. PRIOR IMPLEMENTATION.

       (a) State Action.--Nothing in the Federal Power Act (16 
     U.S.C. 824 et seq.) shall be deemed to prohibit a State or 
     State regulatory authority, if authorized under State law, 
     from requiring retail electric energy providers selling 
     retail electric energy to consumers in such State to provide 
     reasonable and nondiscriminatory access, on an unbundled 
     basis, to its local distribution facilities and all ancillary 
     services to any retail electric energy supplier prior to 
     January 1, 2002.
       (b) Grandfather.--Legislation enacted by a State or a 
     regulation issued by a State regulatory authority which has 
     the effect of providing all consumers in such State the 
     opportunity to purchase retail electric energy from any 
     retail electric energy supplier by January 1, 2002 and 
     provides electric utility companies with the opportunity to 
     recover their retail stranded costs as defined by this Act 
     (unless there is an agreement between a State or State 
     regulatory authority and a retail electric energy provider 
     which provides for a different level of recovery), shall be 
     deemed to be in compliance with the requirements of sections 
     101 and 105 of this Act.
       (c) Reciprocity.--A State or State regulatory authority 
     that provides for retail electric competition may preclude 
     any retail electric energy provider selling retail electric 
     energy to consumers in another State and their affiliates 
     from selling retail electric energy to consumers in the State 
     with retail electric competition if the retail electric 
     energy provider does not provide reasonable and 
     nondiscriminatory access, on an unbundled basis, to its local 
     distribution facilities to any retail electric energy 
     supplier.

     SEC. 104. STATE REGULATION.

       (a) State Requirements.--A State or a State regulatory 
     authority may impose requirements on persons seeking to sell 
     retail electric energy to consumers in that State which are 
     intended to promote the public interest, including 
     requirements related to generation reliability and the 
     provision of information to consumers and other retail 
     electric energy suppliers. Any such requirements must be 
     applied on a nondiscriminatory basis and may not be used to 
     exclude any class of potential suppliers, such as retail 
     electric energy providers, from the opportunity to sell 
     retail electric energy.
       (b) Maintenance of State Authority.--Nothing in this Act is 
     intended to prohibit a State from enacting laws or imposing 
     regulations related to retail electric energy service that 
     are consistent with the requirements of this Act.
       (c) Continued State Authority Over Distribution.--A State 
     or State regulatory authority may continue to regulate local 
     distribution service currently subject to State regulation, 
     including billing and metering in any manner consistent with 
     this Act.

     SEC. 105. RETAIL STRANDED COST RECOVERY.

       (a) Application for Determination.--Except as provided in 
     subsection (b), an electric utility company subject to the 
     ratemaking jurisdiction of a State regulatory authority prior 
     to the date of enactment of this Act may submit an 
     application to the State regulatory authority seeking a 
     determination of its total stranded costs in that State if:
       (1) the State regulatory authority has issued a regulation 
     or the State has enacted legislation requiring retail 
     electric competition which does not provide for the full 
     recovery of retail stranded costs; or
       (2) the electric utility company's retail distribution 
     customers have access to retail competition as a result of 
     the requirements of Section 101 of this Act.
       (3) If a State regulatory authority fails to determine the 
     electric utility company's retail stranded costs within 18 
     months after the date upon which the company applied for a 
     determination of its stranded costs, the Commission shall 
     determine the company's retail stranded costs.
       (b) Nonregulated Utilities.--A municipal or rural electric 
     cooperative that seeks to recover its retail stranded costs 
     may determine its total retail stranded costs.
       (c) Right of Recovery.--(1) An electric utility company, 
     municipal utility or retail electric cooperative shall be 
     entitled to full recovery of its retail stranded costs, as 
     determined pursuant to subsection (a) or (b), over a 
     reasonable period of time through a non-bypassable Stranded 
     Cost Recovery Charge imposed on its customers.
       (2) A rural electric cooperative which sells wholesale 
     electric energy to rural electric cooperative retail electric 
     energy providers or a joint action agency which sells 
     wholesale electric energy to municipal retail electric energy 
     providers may recover wholesale stranded costs from such 
     rural electric cooperative or municipal retail electric 
     energy providers. Such cost recovery shall be deemed a retail 
     stranded cost of the rural electric cooperative or municipal 
     retail energy provider.
       (d) Prohibition on Cost-Shifting.--(1) No class of 
     consumers in a State shall be assessed a Stranded Cost 
     Recovery Charge that a State regulatory authority or the 
     Commission, whichever is applicable, determines is in excess 
     of the class' proportional responsibility for the retail 
     electric energy provider's costs that existed prior to the 
     implementation of retail electric competition in such State.
       (2) Customers of a retail electric energy provider that 
     serves consumers in more than one State or that is affiliated 
     with another retail electric energy provider shall only be 
     responsible for stranded costs associated with retail 
     electric competition in the State or area in which such 
     customers are located.
       (e) Prior Prudence Determinations.--Nothing in this Act is 
     intended to affect or modify or permit the modification of a 
     final determination made by the Commission or a State 
     regulatory authority or an agreement entered into by the 
     Commission or a State regulatory authority with regard to the 
     prudence of any costs associated with a particular generating 
     facility or contract.

     SEC. 106. WHOLESALE STRANDED COST RECOVERY.

       (a) Commission Regulation.--The Commission shall have sole 
     jurisdiction to determine and provide for the recovery of 
     wholesale stranded costs associated with wholesale electric 
     competition with regard to public utilities subject to the 
     jurisdiction of the Commission pursuant to the Federal Power 
     Act.
       (b) Regional Generating Facilities.--
       (1) The consent of Congress is given for the creation of a 
     regional board if--
       (A) each State regulatory authority regulating an affiliate 
     of a public utility holding company with affiliate retail 
     electric energy providers serving customers in more than one 
     state elects to join such a board;
       (B) an affiliate of the public utility holding company owns 
     and/or operates a generating facility and sells power from 
     that facility to two or more affiliates of the same holding 
     company and did not sell retail electric energy prior to 
     January 30, 1997 (hereinafter referred to as the ``wholesale 
     generating company''); and
       (C) the public utility holding company notifies each State 
     regulatory authority which regulates a retail electric energy 
     provider affiliated with the holding company that it intends 
     to seek recovery of the wholesale stranded costs associated 
     with the generating facility or facilities (described in 
     subsection (b)(1)(B)) owned by the wholesale generating 
     company affiliated with such holding company.
       (2) The regional board shall be formed if each State 
     regulatory authority elects to create the board within six 
     months after receiving the notification described in 
     subsection (b)(1)(C). If such elections are not made within 
     the requisite time period, the Commission shall assume the 
     responsibilities of the board as described in this section.
       (3) The regional board shall have 18 months after the date 
     it is formed to determine, on a unanimous basis, the 
     wholesale stranded costs associated with the generating 
     facility which is the subject of the proceeding and to 
     allocate such costs among the retail electric energy provider 
     affiliates of the public utility holding company on a just 
     and reasonable and nondiscriminatory basis.
       (4) If the regional board fails to make either or both 
     determinations, as described in subsection (b)(3) in the 
     requisite time period, the Commission shall make the 
     determination or determinations that have yet to be made.
       (5) After its level of wholesale stranded costs is 
     determined pursuant to this subsection, the wholesale 
     generating company affiliate of the holding company shall be 
     entitled to fully recover its stranded costs, over a 
     reasonable period of time, from the retail electric energy 
     provider affiliates to which it sells electric energy 
     pursuant to the procedures established by this subsection.
       (6) A retail electric energy provider's wholesale stranded 
     cost payment obligations pursuant to this subsection shall be 
     deemed retail stranded costs for the purposes of section 105 
     of this Act.

     SEC. 107. LOST RETAIL BENEFITS.

       A State may require a retail electric energy provider to 
     compensate its retail customers for lost retail benefits if, 
     after retail competition is implemented, the market value of 
     all of the provider's generating assets in the rate base 
     prior to the implementation of retail electric competition is 
     greater than the total costs of these assets that would have 
     been recoverable in retail rates but for the implementation 
     of retail electric competition. No retail electric energy 
     provider shall be required to compensate its customers in an 
     amount that exceeds the increased market value of its 
     generating assets resulting from the implementation of retail 
     electric competition.

     SEC. 108. UNIVERSAL SERVICE

       (a) State Universal Service Programs.--A State may 
     establish a Universal Service

[[Page S11972]]

     Program that ensures that all consumers have access to 
     purchase retail electric energy from at least one retail 
     electric energy supplier at a just and reasonable rate.
       (b) Service Obligation.--(1) After January 1, 2002, each 
     retail electric energy provider located in a State that has 
     not yet established a Universal Service Program described in 
     subsection (a) shall be obligated to sell retail electric 
     energy to, or purchase retail electric energy on behalf of, 
     any of its customers in a particular geographic area in which 
     a State regulatory authority or the Commission, if the State 
     regulatory authority fails to make a determination pursuant 
     to a request by an affected person, determines that there is 
     not effective retail electric competition in such area and 
     the consumer has not affirmatively chosen a retail electric 
     energy supplier.
       (2) The retail electric energy provider performing the 
     service described in subsection (b)(1) is entitled to a just 
     and reasonable rate from the consumer receiving such service.
       (c) Universal Service Fund.--A State or a State regulatory 
     authority, if authorized by the State, may impose a 
     nonbypassable Universal Service Charge on all customers of 
     every retail electric energy provider in such State to fund 
     all or part of the costs of a Universal Service Program, 
     including the partial or full payment of the charges a 
     provider may recover pursuant to subsection (b)(2).

     SEC. 109. PUBLIC BENEFITS.

       Nothing in this Act shall prohibit a State or State 
     regulatory authority from assessing charges on retail 
     consumers of energy to fund public benefits programs such as 
     those designed to aid low-income energy consumers, promote 
     energy research and development or achieve energy efficiency 
     and conservation.

     SEC. 110. RENEWABLE ENERGY.

       (a) Minimum Renewable Requirement.--Beginning on January 1, 
     2004 and each year thereafter, every retail electric energy 
     supplier shall submit to the Commission Renewable Energy 
     Credits in an amount equal to the required annual percentage 
     of the total retail electric energy sold by such supplier in 
     the preceding calendar year.
       (b) State Renewable Energy Programs.--Nothing in this 
     section shall be construed to prohibit any State or any State 
     regulatory authority from requiring additional renewable 
     energy generation in that State under any program adopted by 
     the State.
       (c) Required Annual Percentage.--Beginning in calendar year 
     2003, the required annual percentage for each retail electric 
     energy supplier shall be 5 percent. Thereafter, the required 
     annual percentage for each such supplier shall be 9 percent 
     beginning in calendar year 2008 and 12 percent beginning in 
     calendar year 2013.
       (d) Submission of Credits.--A retail electric energy 
     supplier may satisfy the requirements of subsection (a) 
     through the submission of--
       (1) Renewable Energy Credits issued by the Commission under 
     this section for renewable energy sold by such supplier in 
     such calendar year.
       (2) Renewable Energy Credits issued by the Commission under 
     this section to any other retail electric energy supplier for 
     renewable energy sold in such calendar year by such other 
     supplier and acquired by such retail electric energy 
     supplier.
       (3) Any combination of the foregoing.

     A Renewable Energy Credit that is submitted to the Commission 
     for any year may not be used for any other purposes 
     thereafter.
       (e) Issuance of Renewable Energy Credits.--
       (1) The Commission shall establish by rule after notice and 
     opportunity for hearing but not later than one year after the 
     date of enactment of this Act, a National Renewable Energy 
     Trading Program to issue Renewable Energy Credits to retail 
     electric suppliers. Renewable Energy Credits shall be 
     identified by type of generation and the State in which the 
     facility is located. Under such program, the Commission shall 
     issue--
       (A) one-half of one Renewable Energy Credit to any retail 
     electric energy supplier who sells one unit of renewable 
     energy generated at a large hydroelectric facility;
       (B) one Renewable Energy Credit to any retail electric 
     energy supplier who sells one unit of renewable energy 
     generated at a facility, other than a large hydroelectric 
     facility, built prior to the date of enactment of this Act; 
     and
       (C) two Renewable Energy Credits to any retail electric 
     supplier who sells one unit of renewable energy generated at 
     a facility, other than a large hydroelectric facility, built 
     on or after the date of enactment of this Act.
       (2) The Commission shall impose and collect a fee on 
     recipients of Renewable Energy Credits in an amount equal to 
     the administrative costs of issuing, recording, monitoring 
     the sale or exchange, and tracking such Credits.
       (f) Sale or Exchange.--Renewable Energy Credits may be sold 
     or exchanged by the person issued or the person who acquires 
     the Credit. A Renewable Energy Credit for any year that is 
     not used to satisfy the minimum renewable sales requirement 
     of this section for that year may not be carried forward for 
     use in another year. The Commission shall promulgate 
     regulations to provide for the issuance, recording, 
     monitoring the sale or exchange, and tracking of such 
     Credits. The Commission shall maintain records of all sales 
     and exchanges of Credits. No such sale or exchange shall be 
     valid unless recorded by the Commission.
       (g) Use of Proceeds by BPA.--The Administrator of the 
     Bonneville Power Administration shall use the proceeds from 
     the sale of any Renewable Energy Credit issued to the 
     Bonneville Power Administration under this section for its 
     retail electric energy sales to repay the Administration's 
     outstanding debt to the United States Treasury and 
     bondholders of securities backed by the Bonneville Power 
     Administration.
       (h) Rules and Regulations.--The Commission shall promulgate 
     such rules and regulations as may be necessary to carry out 
     this section, including such rules and regulations requiring 
     the submission of such information as may be necessary to 
     verify the annual electric generation and renewable energy 
     generation which is supplied by any person applying for 
     Renewable Energy Credits under this section or to verify and 
     audit the validity of Renewable Energy Credits submitted by 
     any person to the Commission.
       (i) Annual Reports.--The Commission shall gather available 
     data and measure compliance with the requirements of this 
     section and the success of the National Renewable Energy 
     Trading Program established under this section. On an annual 
     basis not later than May 31 of each year, the Commission 
     shall publish a report for the previous year that includes 
     compliance data, National Renewable Energy Trading Program 
     results, and steps taken to improve the Program results.
       (j) Sunset.--The requirements of this section shall cease 
     to apply on December 31, 2019.

     SEC. 111. DETERMINATION OF LOCAL DISTRIBUTION FACILITIES.

       (a) Application by State Regulatory Authority.--A State 
     regulatory authority may apply to the Commission for a 
     determination whether a particular facility used for the 
     transportation of electric energy located in such State is a 
     local distribution facility subject to the jurisdiction of 
     that State regulatory authority or is a transmission facility 
     subject to the jurisdiction of the Commission.
       (b) Commission Findings.--If an application is submitted 
     pursuant to subsection (a) the Commission shall make a 
     determination giving the maximum practicable deference to the 
     position taken by the State regulatory authority, in 
     accordance with the following factors associated with the 
     facility:
       (1) function and purpose;
       (2) size;
       (3) location;
       (4) voltage level and other technical characteristics;
       (5) historic, current and planned usage patterns;
       (6) interconnection and coordination with other facilities; 
     and
       (7) any other factor the Commission deems relevant.

     SEC. 112. TRANSMISSION.

       (a) Transmission Regions.--Within two years after the date 
     of enactment of this Act, the Commission shall establish the 
     broadest feasible transmission regions and designate an 
     Independent System Operator to manage and operate the 
     transmission system in each region beginning on January 1, 
     2002. In establishing transmission regions and designating 
     Independent System Operators the Commission shall give 
     deference to Independent System Operators approved by the 
     Commission prior to the date of enactment of this Act, if it 
     would be consistent with the requirements of this section.
       (b) Independent System Operators.--A person designated as 
     an Independent System Operator shall not be subject to the 
     control of--
       (1) any person owning any transmission facilities located 
     in the region in which the Independent System Operator will 
     operate; or
       (2) any retail electric energy supplier selling retail 
     electric energy to consumers in the region in which the 
     Independent System Operator will operate.
       (c) Transmission Regulation.--
       (1) The Commission shall continue to have authority over 
     the transmission of electric energy in interstate commerce by 
     the Independent System Operator within the transmission 
     region designated by the Commission.
       (2) The Commission shall have authority over the 
     transmission of electric energy in interstate commerce 
     between two or more transmission regions designated by the 
     Commission.
       (3) Sections 212(f) and 212(j) of the Federal Power Act (16 
     U.S.C. 824k(f) and 824k(j)) are repealed effective January 1, 
     2002.
       (4) Section 212(g) of the Federal Power Act (16 U.S.C. 
     824k(g)) is amended by adding ``prior to January 1, 2002'' 
     immediately following ``utilities''.
       (5) Section 212(h) of the Federal Power Act (16 U.S.C. 
     824k(h))--
       (A) shall not apply after the date of enactment of this Act 
     where a retail electric energy supplier is seeking access to 
     a transmission facility for the purpose of selling retail 
     electric energy to a consumer located in a State that has 
     authorized retail electric competition prior to January 1, 
     2002; or
       (B) is repealed effective January 1, 2002.
       (f) Rules.--On or before January 1, 2001, the Commission 
     shall issue binding rules governing oversight of the 
     Independent System Operators and designed to promote 
     transmission reliability and efficiency and competition among 
     retail and wholesale electric energy suppliers, including 
     rules related to transmission rates that inhibit competition 
     and efficiency.

[[Page S11973]]

     SEC. 113. COMPETITIVE GENERATION MARKETS.

       (a) Mergers.--
       (1) Section 203(a) of the Federal Power Act (16 U.S.C. 
     824b(a)) is amended by adding ``including the promotion of 
     competitive wholesale and retail electric generation 
     markets,'' immediately following ``public interest''.
       (2) Section 203 of the Federal Power Act (16 U.S.C. 824b) 
     is further amended by adding at the end the following:
       ``(c) Acquisition of Natural Gas Utility Company.--No 
     public utility shall acquire the facilities or securities of 
     a natural gas utility company unless the Commission finds 
     that such acquisition is in the public interest.
       ``(d) Definition.--For purposes of this section, the term 
     ``natural gas utility company'' means any company that owns 
     or operates facilities used for the transportation at 
     wholesale, or the distribution at retail (other than the 
     distribution only in enclosed portable containers) of natural 
     or manufactured gas for heat, light, or power.''.
       (b) Market Power.--The Commission may take such actions as 
     it determines are necessary, including the following:
       (1) ordering the physical connection of generating or 
     transmission facilities,
       (2) ordering a transmitting utility (as defined in section 
     3(23) of the Federal Power Act (16 U.S.C. 796(23)) to provide 
     transmission services (including any enlargement of 
     transmission capacity (consistent with applicable state law) 
     necessary to provide such services), or
       (3) requiring the divestiture of generating or transmission 
     facilities,
     in order to prohibit any retail or wholesale electric energy 
     supplier or retail electric energy provider or any affiliate 
     thereof, from using its ownership or control of resources to 
     maintain a situation inconsistent with effective competition 
     among retail and wholesale electric suppliers.

     SEC. 114. NUCLEAR DECOMMISSIONING COSTS.

       To ensure safety with regard to the public health and safe 
     decommissioning of nuclear generating units, any retail and 
     wholesale electric energy supplier owning nuclear generating 
     units prior to the date of enactment of this Act shall 
     recover all reasonable costs (as determined by the Commission 
     and relevant State regulatory authorities) associated with 
     Federal and State requirements for the decommissioning of 
     such nuclear generating units pursuant to a non-bypassable 
     charge imposed on all consumers located in the service 
     territories purchasing power, or that had purchased power, 
     from such nuclear generating units. In overseeing the non-
     bypassable charge, a State regulatory authority may take 
     into account the greater cost responsibility of those 
     consumers which continue to purchase power generated at a 
     nuclear unit.

     SEC. 115. RIGHT TO KNOW.

       Beginning on January 1, 2002, the Commission shall ensure 
     that each retail electric energy supplier discloses to the 
     public information on the types of fuel used to generate the 
     electricity sold by the supplier, including the percentage of 
     the electric energy sold by the supplier that is generated by 
     each fuel type.

     SEC. 116. EXEMPTION OF ALASKA AND HAWAII.

       This title shall not apply to any person located in Alaska 
     or Hawaii with regard to any activity or transaction 
     occurring in Alaska or Hawaii.

               TITLE II--PUBLIC UTILITY HOLDING COMPANIES

     SEC. 201. REPEAL OF THE PUBLIC UTILITY HOLDING COMPANY ACT OF 
                   1935.

       The Public Utility Holding Company Act of 1935, as amended, 
     15 U.S.C. 79 et seq., is hereby repealed, effective one year 
     from the date of enactment of this Act.

     SEC. 202. EXEMPTIONS.

       (a) Federal and State Agencies.--No provision of this title 
     shall apply to: (1) the United States, (2) a State or any 
     political subdivision of a State, (3) any foreign 
     governmental authority not operating in the United States, 
     (4) any agency, authority, or instrumentality of any of the 
     foregoing, or (5) any officer, agent, or employee of any of 
     the foregoing acting as such in the course of his official 
     duty.
       (b) Unnecessary Provisions.--The Commission, by rule or 
     order, may conditionally or unconditionally exempt any person 
     or transaction, or any class or classes of persons or 
     transactions, from any provision or provisions of this title 
     or of any rule or regulation thereunder, if the Commission 
     finds that regulation of such person or transaction is not 
     relevant to the rates of a public utility company. The 
     Commission shall not grant such an exemption, except with 
     regard to section 204 of this Act, unless all affected State 
     regulatory authorities consent.
       (c) Retail Competition.--The provisions of this title shall 
     not apply to a holding company and every associate company of 
     such holding company if the Commission certifies that the 
     retail customers of every public utility subsidiary of such 
     holding company have access to retail electric competition 
     and each State regulatory authority regulating the retail 
     electric energy provider subsidiaries of the holding company 
     certify that they will have sufficient access to the holding 
     company's books and records relevant to their regulatory 
     responsibilities.

     SEC. 203. FEDERAL ACCESS TO BOOKS AND RECORDS.

       (a) Provision of Books and Records.--Every holding company 
     and associate company thereof shall maintain, and make 
     available to the Commission, such books, records, accounts, 
     and other documents as the Commission deems relevant to costs 
     incurred by a public utility company that is an associate 
     company of such holding company and necessary or appropriate 
     for the protection of consumers with respect to rates.
       (b) Examination of Books and Records.--The Commission may 
     examine the books and records of any company in a holding 
     company system, or any affiliate thereof, as the Commission 
     deems relevant to costs incurred by a public utility company 
     within such holding company system and necessary or 
     appropriate for the protection of consumers with respect to 
     rates.
       (c) Protected Information.--No member, officer, or employee 
     of the Commission shall divulge any fact or information that 
     may come to his knowledge during the course of examination of 
     books, accounts, or other information as hereinbefore 
     provided, except insofar as he may be directed by the 
     Commission or by a court.

     SEC. 204. STATE ACCESS TO BOOKS AND RECORDS.

       (a) Provision of Books and Records.--Every holding company 
     and associate company thereof, shall maintain, and make 
     available to each State regulatory authority regulating the 
     rates of any public utility subsidiary of such holding 
     company, such books, records, accounts, and other documents 
     as the State regulatory authority deems relevant to costs 
     incurred by a public utility company that is an associate 
     company of such holding company and necessary or 
     appropriate for the protection of consumers with respect 
     to rates.
       (b) Protected Information.--No member, officer, or employee 
     of a State regulatory authority shall divulge any fact or 
     information that may come to his knowledge during the course 
     of examination of books, accounts, or other information as 
     hereinbefore provided, except insofar as he may be directed 
     by the State regulatory authority or a court.

     SEC. 205. AFFILIATE TRANSACTIONS.

       (a) Interaffiliate Transactions.--Both the Commission, with 
     regard to wholesale rates, and State regulatory authorities, 
     with regard to retail rates, shall have the authority to 
     determine whether a public utility company may recover in 
     rates any costs of goods and services acquired by such public 
     utility company from an associate company after the date of 
     enactment regardless of when the contract for the acquisition 
     of such goods and services was entered into.
       (b) Associate Companies.--Both the Commission, with regard 
     to wholesale rates, and State regulatory authorities, with 
     regard to retail rates, shall have the authority to determine 
     whether a public utility company may recover in rates any 
     costs associated with an activity performed by an associate 
     company.
       (c) Interaffiliate Power Transactions.--
       (1) Each State regulatory authority shall have the 
     authority to examine the prudence of a wholesale electric 
     power purchase made by a public utility, which is not an 
     associate company of a public utility holding company, 
     providing retail electric service subject to regulation by 
     the State regulatory authority.
       (2) Each State regulatory authority shall have the 
     authority to examine the prudence of a wholesale electric 
     power purchase made by a public utility, which is an 
     associate company of a public utility holding company, 
     providing retail electric service subject to regulation by 
     the State regulatory authority, provided that the costs 
     related to such purchase have not been allocated among two or 
     more associated companies of such public utility holding 
     company, by the Commission prior to the date of enactment and 
     there is no subsequent reallocation after the date of 
     enactment.

     SEC. 206. CLARIFICATION OF REGULATORY AUTHORITY.

       No public utility which is an associate company of a 
     holding company may recover in rates from wholesale or retail 
     customers any costs (other than wholesale or retail stranded 
     costs) not associated with the provision of electric service 
     to such customers, including those direct and indirect costs 
     related to investments not associated with the provision of 
     electric service to those customers, unless the Commission, 
     with regard to wholesale rates, or a State regulatory 
     authority, with regard to retail rates, explicitly consents.

     SEC. 207. EFFECT ON OTHER REGULATION.

       Nothing in this Act shall preclude a State regulatory 
     authority from exercising its jurisdiction under otherwise 
     application law to protect utility consumers.

     SEC. 208. ENFORCEMENT.

       The Commission shall have the same powers as set forth in 
     sections 306 through 317 of the Federal Power Act (16 U.S.C. 
     825d-825p) to enforce the provisions of this title.

     SEC. 209. SAVINGS PROVISION.

       Nothing in this title prohibits a person from engaging in 
     activities in which it is legally engaged or authorized to 
     engage on the date of enactment of this title provided that 
     it continues to comply with the terms of any authorization, 
     whether by rule or by order.

     SEC. 210. IMPLEMENTATION.

       The Commission shall promulgate regulations necessary or 
     appropriate to implement this title not later than six months 
     after the date of enactment of this Act.

     SEC. 211. RESOURCES.

       All books and records that relate primarily to the function 
     hereby vested in the Commission shall be transferred from the 
     Securities

[[Page S11974]]

     and Exchange Commission to the Commission.

           TITLE III--PUBLIC UTILITY REGULATORY POLICIES ACT

     SEC. 301. DEFINITION.

       For purposes of this title, the term ``facility'' means a 
     facility for the generation of electric energy or an addition 
     to or expansion of the generating capacity of such a 
     facility.

     SEC. 302. FACILITIES.

       Section 210 of the Public Utility Regulatory Policies Act 
     of 1978 (16 U.S.C. 824a-3) shall not apply to any facility 
     which begins commercial operation after the effective date of 
     this title, except a facility for which a power purchase 
     contract entered into under such section was in effect on 
     such effective date.

     SEC. 303. CONTRACTS.

       After the effective date of this title or after the date on 
     which retail electric competition, as defined in title I of 
     this Act, is implemented in all of its service territories, 
     whichever is earlier, no public utility company shall be 
     required to enter into a new contract or obligation to 
     purchase or sell electric energy pursuant to section 210 of 
     the Public Utility Regulatory Policies Act of 1978.

     SEC. 304. SAVINGS CLAUSE.

       Notwithstanding sections 302 and 303, nothing in this title 
     shall be construed:
       (a) as granting authority to the Commission, a State 
     regulatory authority, electric utility company, or electric 
     consumer, to reopen, force, the renegotiation of, or 
     interfere with the enforcement of power purchase contracts or 
     arrangements in effect on the effective date of this Act 
     between a qualifying small power producer and any electric 
     utility or electric consumer, or any qualifying cogenerator 
     and any electric utility or electric consumer.
       (b) To affect the rights and remedies of any party with 
     respect to such a power purchase contract or arrangement, or 
     any requirement in effect on the effective date of this Act 
     to purchase or to sell electric energy from or to a 
     qualifying small power production facility or qualifying 
     cogeneration facility.

     SEC. 305. EFFECTIVE DATE.

       This title shall take effect on January 1, 2002.

                   TITLE IV--ENVIRONMENTAL PROTECTION

     SEC. 401. STUDY.

       The Environmental Protection Agency, in consultation with 
     other relevant Federal agencies, shall prepare and submit a 
     report to Congress by January 1, 2000, which examines the 
     implications of differences in applicable air pollution 
     emissions standards for wholesale and retail electric 
     generation competition and for public health and the 
     environment. The report shall recommend changes to Federal 
     law, if any are necessary, to protect public health and the 
     environment.

                TITLE V--BONNEVILLE POWER ADMINISTRATION

     SEC. 501. FINDINGS AND PURPOSES.

       (a) FINDINGS.--The Congress finds that:
       (1) The multi-purpose Federal Columbia River Power System's 
     Federal and non-Federal dams have provided immeasurable 
     benefits to the Pacific Northwest by providing flood control, 
     renewable hydroelectric power, irrigation, navigation, and 
     recreation;
       (2) The dams provide the Northwest with a continuing source 
     of clean and renewable power but, along with over-fishing and 
     other natural and human impacts on the ecosystem, have 
     adversely affected the Columbia Basin's fish and wildlife;
       (3) Enactment of the Energy Policy Act of 1992 established 
     competition for the wholesale supply of electricity, and 
     market forces have driven the cost of power down nationally, 
     the Northwest included, and has allowed utilities and large 
     users to buy power at rates below those offered by the 
     Bonneville Power Administration;
       (4) Realizing the new economic forces impacting 
     electricity, the four Northwest State Governors undertook a 
     year-long review in 1996 of the regional electricity 
     system and made recommendations for the future of the 
     system;
       (5) Among these recommendations is the separation of the 
     transmission and power marketing functions of the Bonneville 
     Power Administration, with Commission oversight of access to 
     Bonneville's transmission system, and undertaking this 
     separation in a way that does not impair Bonneville's ability 
     to meet its obligations to the U.S. Treasury, fish and 
     wildlife programs, and bondholders of the Washington Public 
     Power Supply System;
       (6) There are ongoing efforts by Bonneville to reduce its 
     costs and require accountability of its funds, including 
     those of its funds used for salmon recovery; and
       (7) There is a need to provide a regional process involving 
     the Federal Government, state governments, tribal 
     governments, utilities and other users of the water of the 
     Columbia and Snake River System, to balance the multiple 
     objectives of the river system.
       (b) Purposes.--The purposes of this title are:
       (1) To establish authority in a consolidated regional 
     governing body that will balance the multiple uses of the 
     Columbia and Snake river system, for hydroelectric 
     production, for irrigation, for recreation, for the 
     protection and enhancement of fish and wildlife populations, 
     and for flood control, with that body to be responsible and 
     accountable for spending funds for these purposes;
       (2) To facilitate the maintenance of an open transmission 
     system in the Northwest based on Commission rules and to 
     ensure its reliability; and
       (3) To assure that the Bonneville Power Administration 
     retains the ability to meet its unique financial obligations 
     to the U.S. Treasury, to fish and wildlife projects, to the 
     bondholders of the Washington Public Power Supply System, and 
     to remain a competitive wholesale supplier of electricity.

     SEC. 502. COLUMBIA RIVER FISH AND WILDLIFE COORDINATION AND 
                   GOVERNANCE.

       This section is reserved.

     SEC. 503. PACIFIC NORTHWEST FEDERAL TRANSMISSION ACCESS.

       The Commission's rules on nondiscriminatory open access to 
     transmission services provided by public utilities, including 
     its rules on standards of conduct, shall also apply to 
     transmission services provided by the Bonneville Power 
     Administration, except as otherwise provided by the 
     Commission by rule if it is in the public interest, or except 
     as necessitated by the requirements of section 504 or 506 of 
     this Act. Except as provided in sections 504 and 508 of this 
     Act, rates for transmission imposed by the Administrator 
     shall continue to be established and reviewed and approved in 
     accordance with the provisions of otherwise applicable 
     Federal laws.

     SEC. 504. TRANSITION COST MECHANISM.

       If the Bonneville Power Administration proposes a charge to 
     recover its transition costs resulting from this Act, the 
     Energy Policy Act, or the Commission's Order No. 888, a 
     transition cost recovery mechanism shall be developed and 
     adopted by the Commission within 180 days of the filing of 
     the proposal with the Commission.

     SEC. 505. INDEPENDENT SYSTEM OPERATOR PARTICIPATION.

       Notwithstanding any other provision of law, the 
     Administrator of the Bonneville Power Administration may 
     participate in a regulated Independent System Operator 
     subject to the jurisdiction of the Commission pursuant to 
     section 112 of this Act.

     SEC. 506. FINANCIAL OBLIGATIONS.

       Sections 503, 504 and 505 of this Act shall be interpreted 
     and implemented in a manner that does not adversely affect 
     the security of the Bonneville Power Administration's 
     Washington Public Power Supply System net-billing and other 
     third-party financing arrangements.

     SEC. 507. PROHIBITION ON RETAIL SALES.

       Except as provided in section 5(d) of the Northwest Power 
     Act (16 U.S.C. 839c(d)), the Administrator shall not market, 
     sell or dispose of electric power to any end use or retail 
     customers that did not have a contract for the purchase of 
     electric power with the Administrator for services to 
     specific facilities as of October 1, 1997.

     SEC. 508. CLARIFICATION OF COMMISSION AUTHORITY.

       Section 7(a)(2) of the Pacific Northwest Electric Power 
     Planning and Conservation Act (16 U.S.C. 839e(a)(2)) is 
     amended--
       (1) by deleting the word ``costs,'' in paragraph (B);
       (2) by striking the period at the end of paragraph (C) and 
     inserting in lieu thereof ``, and''; and
       (3) by adding at the end thereof the following new 
     paragraph:
       ``(D) insofar as transmission rates are concerned, the 
     rates do not discriminate between transmission users or 
     classes of users in a manner that has the effect of 
     unreasonably denying transmission access under section 503 of 
     this Act.''

     SEC. 509. REPEALED STATUTE.

       Section 6 of the Federal Columbia River Transmission System 
     Act (16 U.S.C. 838d) is hereby repealed.

                  TITLE VI--TENNESSEE VALLEY AUTHORITY

     SEC. 601. COMPETITION IN SERVICE TERRITORY.

       Notwithstanding any other provision of law, beginning on 
     January 1, 2002, all retail and wholesale electric energy 
     suppliers shall have the right to sell retail and wholesale 
     electric energy to persons that currently purchase retail or 
     wholesale electric energy either directly from the Tennessee 
     Valley Authority or persons purchasing electric energy from 
     the Tennessee Valley Authority.

     SEC. 602. ABILITY TO SELL ELECTRIC ENERGY.

       (a) TVA.--Notwithstanding any other provision of law, the 
     Tennessee Valley Authority may sell wholesale electric energy 
     to any person, subject to any restrictions imposed pursuant 
     to Section 104(a) of this Act, beginning on January 1, 2002.
       (b) Power Customers.--Notwithstanding any other provision 
     of law, persons that currently purchase wholesale electric 
     energy from the Tennessee Valley Authority may sell wholesale 
     and retail electric energy to any persons subject to any 
     restrictions imposed pursuant to section 104(a) of this Act, 
     beginning on January 1, 2002.

     SEC. 603. TERMINATION OF CONTRACTS.

       (a) Notice.--Beginning on January 1, 2001, the Tennessee 
     Valley Authority shall allow any person that has executed a 
     contract to purchase retail or wholesale electric energy from 
     it to terminate such contract upon one year's notice.
       (b) Stranded Costs.--Each person holding a contract that is 
     terminated pursuant to subsection (a) shall be responsible 
     for retail or wholesale stranded costs as determined by the 
     Commission.

[[Page S11975]]

     SEC. 604. RATES FOR ELECTRIC ENERGY.

       (a) Establishment.--Notwithstanding any other provision of 
     law, the Board of Directors of the Tennessee Valley Authority 
     shall establish, and periodically review and revise, rates 
     for the sale and disposition of wholesale and retail electric 
     energy and for the transmission of electric energy by the 
     Tennessee Valley Authority. Such rates shall be established 
     and, as appropriate, revised to recover, in accordance with 
     sound business principles, the costs associated with the 
     generation, acquisition, conservation, transmission, and 
     distribution of electric energy, including the payment of 
     principal and interest on the Authority's bonds over a 
     reasonable period.
       (b) Commission Review.--Rates established under this 
     section shall become effective only upon confirmation and 
     approval by the Commission, upon a finding by the Commission 
     that such rates are sufficient to ensure repayment of the 
     Authority's bonds over a reasonable number of years after 
     first meeting the Authority's legitimate, prudent, and 
     verifiable costs.

     SEC. 605. PRIVATIZATION STUDY.

       (a) Requirement for Preparation of Study.--The Board of 
     Directors the Tennessee Valley Authority shall prepare a 
     study for selling its electric power program (excluding dams 
     and appurtenant works and structures) to private investors 
     and, not later than two years after the date of enactment of 
     this Act, shall submit such plan to the Congress.
       (b) Contents of Study.--The study shall consider the 
     following--
       (1) both the sale of the authority's electric power program 
     as a whole and the sale of some or all of its component 
     parts;
       (2) alternative means of selling the Authority's electric 
     power program or its component parts, including a public 
     stock offering, a private placement of stock, or the sale of 
     assets; and
       (3) the effect of any sale on--
       (A) electric rates and competition in the regional 
     electricity market,
       (B) the operation of the Authority's nonpower programs, and
       (C) the repayment of the Authority's debt.
       (c) Additional Elements.--The study shall also include--
       (1) An estimate of the amount of revenue that the United 
     States Treasury would receive under each of the alternatives 
     considered;
       (2) the Board's analysis of the feasibility of each of the 
     alternatives considered and its recommendation either for 
     retaining the Authority's power program under federal 
     ownership or the preferred alternative for selling it to 
     private investors; and
       (3) the Board's recommendation of whether the Authority's 
     dams should--
       (A) be transferred to the Department of the Army Corps of 
     Engineers and responsibility for marketing electric energy 
     produced by such dams assigned to the Southeastern Power 
     Marketing Administration, or
       (B) continue to be controlled by, and the electric energy 
     they produce continue to be marketed by the Tennessee Valley 
     Authority.
       (d) Further Action.--The Board of Directors shall take no 
     action to implement the sale of the Authority's power program 
     without further legislation authorizing such action.
                                  ____


  Transition to Electric Competition Act of 1997--Section-by-Section 
                                Analysis


                     title i--electric competition

     Section 101--Mandatory Retail Access
       All consumers (including current customers of investor-
     owned municipal and rural cooperative electric utilities) 
     have the right to purchase retail electric energy beginning 
     on January 1, 2002.
       All retail electric energy suppliers (entities selling 
     retail electric energy) have access to local distribution 
     facilities and all ancillary services beginning on January 1, 
     2002.
     Section 102--Aggregation
       A group of consumers or any entity acting on behalf of such 
     group is authorized to aggregate to purchase retail electric 
     energy for the members of the group if they live in a State 
     where retail electric competition exists.
     Section 103--Prior Implementation
       Nothing in the Federal Power Act shall prohibit States from 
     requiring retail electric competition prior to January 1, 
     2002.
       A State requiring retail electric competition prior to 
     January 1, 2002 and providing utilities with the opportunity 
     to recover stranded costs is exempt from the Act's 
     requirements related to retail competition and stranded 
     costs.
       A State may impose reciprocity requirements if it has 
     provided for retail competition to prevent utilities that 
     aren't subject to retail competition from selling power to 
     retail customers in its state.
     Section 104--State Regulation
       States may impose requirements on retail electric energy 
     suppliers to protect the public interest.
       No class of potential retail electric energy suppliers can 
     be excluded from selling retail electric energy.
       States may continue to regulate local distribution and 
     retail transmission service provided by retail electric 
     energy providers.
     Section 105--Retail Stranded Cost Recovery
       An investor-owned utility providing retail electric service 
     prior to the date of enactment which is seeking recovery of 
     its stranded costs must request the State regulatory 
     authority to determine the amount of its stranded costs 
     associated with the implementation of retail electric 
     competition.
       If a State regulatory authority fails to determine the 
     amount of stranded costs within 18 months of the request, 
     FERC will determine the amount.
       A municipal electric utility or a rural electric 
     cooperative may determine the amount of its stranded costs.
       A utility is entitled to recover its stranded costs from 
     its customers pursuant to a nonbypassable Stranded Cost 
     Recovery Charge.
       A rural electric cooperative or municipal joint action 
     agency that sells wholesale power to rural electric 
     cooperative or municipal distribution companies may recover 
     its stranded costs from the distribution companies.
       No class of customers (such as a utility's residential 
     customers) can be required to pay a Stranded Cost Recovery 
     Charge in excess of its proportional responsibility for 
     utility costs prior to the implementation of retail electric 
     competition.
       Customers served by utility companies operating in more 
     than one state either directly or through an affiliate are 
     only responsible for stranded costs arising from retail 
     electric competition in the state they reside.
       For purposes of determining stranded cost amounts, prior 
     prudence determinations are binding.
     Section 106--Wholesale Stranded Cost Recovery
       FERC has sole jurisdiction to determine and provide for the 
     recovery of the wholesale stranded costs associated with 
     utilities subject to the Federal Power Act.
       All of the states regulating utility subsidiaries of a 
     multistate utility holding company may form a regional board 
     to calculate the stranded costs of a wholesale electric 
     supplier subsidiary of the holding company that does not sell 
     any retail electric energy and to allocate such costs among 
     the utility subsidiaries of the holding company.
       If the regional board is not formed or if the members of 
     the regional board fail to produce a consensus on either 
     determination required of the board, FERC shall perform the 
     board's responsibilities.
       Once the wholesale subsidiary's stranded costs have been 
     determined, the subsidiary is entitled to recover such costs 
     from its affiliated utility companies in the manner allocated 
     by the board or FERC and the utility companies are entitled 
     to recover such costs from its customers.
     Section 107--Lost Retail Benefits
       A state may require a retail electric energy provider to 
     compensate its customers for any increase in power costs 
     resulting from the implementation of retail electric 
     competition if the market value of the provider's generating 
     assets increase and the provider sells power elsewhere due to 
     the implementation of retail electric competition.
     Section 108--Universal Service
       A state may establish a Universal Service Program to ensure 
     that all consumers have access to electric service at a just 
     and reasonable rate.
       If a state has not established a Universal Service Program 
     prior to January 1, 2002, each retail electric energy 
     provider located in that state is obligated to sell power to 
     or purchase power on behalf of consumers that do not have 
     sufficient access to competing retail electric energy 
     suppliers.
       The retail electric energy provider is entitled to just and 
     reasonable compensation for the service performed.
       States may impose a nonbypassable Universal Service Charge 
     to help pay for the retail electric energy provider's 
     compensation.
     Section 109--Public Benefits
       States may impose charges on retail electric energy 
     consumers to fund public benefit programs (i.e. low-income 
     and energy efficiency).
     Section 110--Renewable Energy
       Beginning of 2003, all retail electric energy suppliers are 
     required to either (1) sell at least a minimum amount of 
     renewable energy as part of the total amount of energy it 
     sells or (2) purchase credits from retail electric energy 
     suppliers that sell renewable energy in excess of the minimum 
     requirements.
       \1/2\ of one Renewable Energy Credit will be provided to 
     retail electric energy suppliers selling power generated from 
     a large hydroelectric facility (more than 80 MW). One 
     Renewable Energy Credit will be provided to retail electric 
     energy suppliers selling power generated at all other 
     renewable electric facilities built prior to the date of 
     enactment. Two Renewable Energy Credits will be provided to 
     retail electric energy suppliers selling power generated at 
     all other renewable electric facilities built subsequent to 
     the date of enactment.
       Retail electric energy suppliers are required to have 
     Credits worth 5% of its generation beginning in 2003, 9% of 
     its generation beginning in 2008 and 12% of its generation 
     beginning in 2013.
       The Bonneville Power Administration must use proceeds from 
     the sale of Credits issued to it to repay the 
     Administration's outstanding debt to the U.S. Treasury and 
     the Washington Public Power supply System Bondholders.
     Section 111--Determination of Local Distribution Facilities
       A State regulatory authority may apply with FERC for a 
     determination of whether a

[[Page S11976]]

     particular facility constitutes a local distribution 
     facility.
       FERC will give the position of the State regulatory 
     authority maximum practicable deference.
     Section 112--Transmission
       Within two years of the date of enactment FERC must 
     establish transmission regions and designate an Independent 
     System Operator (ISO) to manage and operate all of the 
     transmission facilities in each region beginning on January 
     1, 2002.
       The ISO can't be affiliated with any person owning 
     transmission facilities in the region or any retail electric 
     energy supplier selling retail electric energy in the region.
       FERC is required to issue rules by January 1, 2001 
     applicable to its oversight of the ISO's to promote 
     transmission reliability and efficiency and competition among 
     retail and wholesale electric energy suppliers.
       The Federal Power Act prohibition on FERC requiring 
     transmission access for the purposes of retail wheeling is 
     repealed on January 1, 2002 or at an earlier date for a 
     particular retail wheeling request in a State that retail 
     electric competition prior to January 1, 2002.
     Section 113--Competitive Generation Markets
       FERC's authority over utility mergers pursuant to the 
     Federal Power Act is extended to electric utility mergers 
     with natural gas utility companies.
       FERC review of mergers must take into account the impact of 
     a merger on competitive wholesale and retail electric 
     generation markets.
       FERC has authority to take actions necessary to prohibit 
     retail electric energy suppliers and providers from using 
     their control of resources to inhibit retail and wholesale 
     electric competition.
     Sectioin 114--Nuclear Decommissioning Costs
       Utilities owning nuclear power plants prior to the date of 
     enactment are entitled to recover costs to fund 
     decommissioning of the plants from their customers pursuant 
     to a non-bypassable charge.
     Section 115--Right to Know
       Each retail electric energy supplier must publicly disclose 
     information on the types of fuel used to generate the 
     electricity sold by the supplier.
     Section 116--Exemption of Alaska and Hawaii
       Title I does not apply to any transaction occurring in 
     Alaska or Hawaii.


               title ii--public utility holding companies

     Section 201--Repeal of PUHCA
       PUHCA is repealed one year from the date of enactment of 
     the Act.
     Section 202--Exemption
       Title II does not apply to federal or state agencies or 
     foreign governmental authorities not operating in the U.S.
       FERC may exempt anyone from any of the requirements of the 
     Title if the Commission finds the particular regulation not 
     relevant to public utility company rates and the affected 
     States consent.
       The provisions of the Title don't apply to a particular 
     holding company when retail electric competition exists in 
     the service territory of each utility subsidiary of the 
     holding company.
     Section 203--Federal Access to Books and Records
       Each holding company and associate company of the holding 
     company must make its books and records available to FERC.
     Section 204--State Access to Books and Records
       Each holding company and associate company of the holding 
     company must make its books and records available to each 
     State regulatory authority regulating a utility subsidiary of 
     the holding company.
     Section 205--Affiliate Transactions
       FERC, with regard to wholesale rates and States, with 
     regard to retail rates, have the authority to determine 
     whether a public utility affiliate of a holding company may 
     recover its costs associated with a non-power transaction 
     with an affiliated company if such costs arose after the date 
     of enactment.
       State regulatory authorities have the authority to review 
     the prudence of a utility's wholesale power purchases form 
     nonaffiliated sellers.
       State regulatory authorities have the authority to review 
     the prudence of a utility's wholesale power purchase from an 
     affiliated seller in the same holding company system unless 
     FERC has allocated the costs of the purchase among two or 
     more utility subsidiaries of the holding company prior to the 
     date of enactment and there is no subsequent reallocation.
     Section 206--Clarification of Regulatory Authority
       FERC, with regard to wholesale rates, and State regulatory 
     authorities, with regard to retail rates, must explicitly 
     consent, before a utility affiliate of a utility holding 
     company can recover costs in rates that are not directly 
     related to the provision of electric service to its 
     customers.
     Section 207--Effect on Other Regulation
       State regulatory authorities can exercise their 
     jurisdiction under otherwise applicable law to protect 
     utility consumers.
     Section 208--Enforcement
       FERC has the same enforcement authority under this Title as 
     it does under the Federal Power Act.
     Section 209--Savings Provision
       A person engaging in an activity it was legally entitled to 
     engage in on the date of enactment may continue to be 
     entitled to engage in the activity.
     Section 210--Implementation
       FERC must promulgate regulations to implement the Title 
     within 6 months of the date of enactment.
     Section 211--Resources
       The SEC must transfer its books and records related to 
     holding company regulation to the FERC.


           Title iii--public utility regulatory policies act

     Section 301--Definition
     Section 302--Facilities
       Section 210 of PURPA doesn't apply to facilities beginning 
     commercial operation after the effective date of this Title 
     unless the power purchase contract related to the facility 
     was in effect on the effective date.
     Section 303--Contracts
       Public utilities are no longer required to enter into new 
     purchase contracts under Section 210 of PURPA once there is 
     retail electric competition in their service territories.
     Section 304--Savings Clause
       This Title does not affect existing power purchase 
     contracts under PURPA.
     Section 305--Effective Date
       The effective date of this Title is January 1, 2002.


                   title iv--environmental protection

     Section 401--Study
       EPA must submit a study to Congress by January 1, 2002, 
     which examines the implications of wholesale and retail 
     electric competition on the emission of pollutants and 
     recommends changes to law, if any are necessary to protect 
     public health and the environment.


                title v--bonneville power administration

     Section 501--Findings and Purposes
     Section 502--Columbia River Fish and Wildlife Coordination 
         and Governance
       This section is reserved for future versions of the bill.
     Section 503--Pacific Northwest Federal Transmission Access
       BPA is subject to FERC's open access transmission 
     requirements unless FERC determines it is not in the public 
     interest or it would prevent BPA from paying its debt.
     Section 504--Transition Cost Mechanism
       FERC is required to develop a transition cost recovery 
     mechanism for BPA if BPA makes a proposal.
     Section 505--Independent System Operator Participation
       BPA is not prohibited from participating in an Independent 
     System Operator.
     Section 506--Financial Obligations
       The use of BPA's transmission facilities for competitive 
     generation transmission shall not adversely affect BPA's 
     ability to pay its debt.
     Section 507--Prohibition on Retail Sales
       BPA is prohibited from selling retail electric energy to 
     customers that did not have a contract with BPA as of October 
     1, 1997.
     Section 508--Clarification of Commission Authority
       Pacific Northwest transmission rates can't be used to 
     unreasonably deny transmission access.
     Section 509--Repealed Statute
       Section 6 of the Federal Columbia River Transmission System 
     is repealed.


                  Title VI--Tennessee Valley Authority

     Section 601--Competition in Service Territory
       Beginning on January 1, 2002, TVA's retail and wholesale 
     customers are permitted to purchase power from other sellers.
     Section 602--Ability to Sell Electric Energy
       Beginning on January 1, 2002, TVA may sell wholesale 
     electric energy outside of its current service territory.
     Section 603--Termination of Contracts
       Any person that currently holds a wholesale or retail 
     contract with TVA may cancel the contract with one year 
     notice beginning on January 1, 2001.
     Section 604--Rates for Electric Energy
       TVA's Board of Directors will establish the rates for the 
     sale and transmission of electric energy by TVA.
       The rates must be sufficient to recover TVA's costs, 
     including the payment of principal and interest on its bonds 
     over a reasonable period.
       FERC must review and approve the Board's rates if they are 
     sufficient to ensure the repayment of TVA's legitimate, 
     prudent and verifiable costs over a reasonable period of time 
     and ensure the recovery of TVA's stranded retail and 
     wholesale costs.
     Section 605--Privatization Plan
       TVA's Board of Directors must prepare a plan within two 
     years of the date of enactment for selling its electric power 
     program to private investors.
       No action on the sale of TVA may occur without subsequent 
     congressional actions.

  Mr. GORTON. Mr. President, the Senator from Arkansas has eloquently 
and adequately described the bill which we are introducing jointly 
today. He is a leader in this field, and introduced the bill on this 
subject early this year. He and I, and the occupant of the Chair, have 
had the opportunity to go

[[Page S11977]]

through seven workshops on electric power marketing restructuring. 
During the course of this time, the Senator from Arkansas and I found 
that we thought very similarly in this field, and we are here together 
on the floor today to introduce a bill that modifies somewhat, but not 
in its general philosophy, the proposal that he introduced almost a 
year ago.
  The goal that we set in this bill is to provide for competition for 
choice, and ultimately for lower prices for electric power consumers 
from the largest industry to the individual homeowner all across the 50 
States of the United States. We set a deadline for that competition to 
exist on the 1st of January of the year 2002. We encourage States, 
several of which have already acted, to provide for their own free and 
open competition by allowing States that have met the general 
requirements of this bill before 2002 to do it in their own way--in the 
way in which their legislatures have decided or may have decided.
  We cover, as the Senator from Arkansas pointed out, the legitimate 
stranded costs of utilities that have been required to build 
facilities, some of which may not be completely competitive in an 
entirely free and open market. We set up a system of independent system 
operators so that the entire transmission system of the United States 
will be free and open on equal terms to all potential competitors.
  We encourage the increased use of renewable energy sources by 
requiring certain minimums increasing in three steps throughout the 
course of the next 15 years or so but providing credit for those who 
already have renewable resources--hydropower, solar power, and the 
other forms of renewable resources which exist at the present time and 
may exist in the future, and allow the sale of credit from those who 
already meet or exceed the renewable requirements of the bill--credits 
that they can sell to others.
  Senator Bumpers has been a true leader in this field, and I am 
honored and delighted to now join with him in what I believe is the 
first bipartisan approach to this subject, a bipartisan approach which 
is going to be absolutely essential to any success.
  At the same time that he has been working with his constituents 
across the country, I have been listening to my own, and my privately 
owned and public utility districts, those that produce electricity and 
those that do not, and the wide range of other existing utilities or 
potential competitors in the Northwest.
  I represent a State that already has very low power charges. We want 
to be a part of this process, not so that we can slow down the benefits 
to others--the entire American economy must and will benefit from this 
bill--but so that my constituents and consumers will benefit as well 
from the advent of competition. I am convinced that the outline of this 
bill does just exactly that.
  We must deal with the peculiar challenges of the largest power 
marketing authority, the Bonneville Power Administration. We do so in a 
way that reflects the regional review sponsored by the four Governors 
of the four Pacific Northwest States during the course of last year. We 
also call in general terms for a more effective and broad-based 
management of the Columbia River State System, reflecting all of the 
multitude of uses of water in that system, and calling for a far more 
effective use of the billions of dollars that we are spending on salmon 
recovery.
  So I believe for my own region that we can provide lower power costs, 
greater competition, better salmon recovery, and a more rational 
management of the Columbia-Snake River System.
  I believe for the people of the United States as a whole that we can 
provide for lower power costs, a greater use of renewable energy, more 
competition, and a better America.
  For those reasons, I am delighted to have been a part at this point 
of a joint operation with my friend from Arkansas.
  Mr. BUMPERS addressed the Chair.
  The PRESIDING OFFICER. The Senator from Arkansas.
  Mr. BUMPERS. Mr. President, I thank my distinguished colleague from 
Washington State for his eloquent remarks. I just wanted to say how 
honored I am to have him join me on this bill, and reiterate one other 
thing because Senator Gorton and I want to be totally honest to the 
people of this country as we go forward with this bill.
  I think one thing that I must say is that, in my opinion, this $220 
billion industry can cope with this bill--not only cope with it, but 
that industry, business, and the consumers of this country will all 
benefit from this, and the Nation will benefit because it is a global 
economy where we are competing so strenuously with the other nations of 
the world.
  Electricity is such a big part of our producing industry, and the 
less they pay the more competitive we become. That ought to be a real 
incentive for the people of this body to look very seriously at this 
bill.
                                 ______