[Congressional Record Volume 144, Number 50 (Wednesday, April 29, 1998)]
[Senate]
[Pages S3785-S3788]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. REID:

[[Page S3785]]

  S. 2003. A bill to amend title II of the Social Security Act to allow 
workers who attain age 65 after 1981 and before 1992 to choose either 
lump sum payments over four years totalling $5,000 or an improved 
benefit computation formula under a new 10-year rule governing the 
transition to the changes in benefit computation rules enacted in the 
Social Security Amendments of 1977, and for other purposes; to the 
Committee on Finance.


                       notch fairness act of 1998

  Mr. REID. Mr. President, I rise today to introduce legislation that 
would correct a problem which plagues a special group of older 
Americans. I am speaking on behalf of those affected by the Social 
Security notch.
  For my colleagues who may not be aware, the Social Security notch 
causes 11 million Americans born between the years 1917-1926 to receive 
less in Social Security benefits than Americans born outside the notch 
years due to changes made in the 1977 Social Security benefit formula.
  I have felt compelled over the years to speak out about this issue 
and the injustice it imposes on millions of Americans. The notch issue 
has been debated and debated, studied and studied, yet to date, no 
solution to it has been found. Because of this, many older Americans 
born during this period must scrimp to afford the most basic of 
necessities.
  Mr. President, I am the first to acknowledge that with any projected 
budget surplus we must save Social Security. In many ways, my 
legislation does just this. It restores confidence to the many notch 
victims around the country and will show them that we in Congress will 
accept responsibility for any error that was made. We should not ask 
them to accept less as a result of our mistake. While we must save 
Social Security for the future, we have an obligation to those, who 
through no fault of their own, receive less than those that were 
fortunate enough to be born just days before or after the notch period.
  I believe we owe a debt to notch babies. Like any American family, we 
must first pay the bills before we invest in the future. With a surplus 
projected for this fiscal year, we have the resources to make good on 
our debt to notch babies. We should come forward and honor our 
commitment.
  Mr. President, the ``notch'' situation had its origins in 1972, when 
Congress decided to create automatic cost-of-living adjustments to help 
Social Security benefits keep pace with inflation. Previously, each 
adjustment had to await legislation, causing beneficiaries' monthly 
payments to lag behind inflation. When Congress took this action, it 
was acting under the best of intentions.
  Unfortunately, this new benefit adjustment method was flawed. To 
function properly, it required that the economy behave in much the same 
fashion that it had in the 1950s and 1960s, with annual wage increases 
outpacing prices, and inflation remaining relatively low. As we all 
know, that did not happen. The rapid inflation and high unemployment of 
the 1970s generated increases in benefits. In an effort to end this 
problem, in 1977 Congress revised the way that benefits were computed. 
In making its revisions, Congress decided that it was not proper to 
reduce benefits for persons already receiving them; it did, however, 
decide that benefits for all future retirees should be reduced. As a 
result, those born after January 1, 1917 would, by design, receive 
benefits that were, in many cases, far less. In an attempt to ease the 
transition to the new, lower benefit levels, Congress designed a 
special ``transitional computation method'' for use by beneficiaries 
born between 1917 and 1921.

  Mr. President, we have an obligation to convey to our constituents 
that Social Security is a fair system. In town hall meetings back home 
in Nevada, I have a hard time trying to tell that to a notch victim. 
They feel slighted by their government and if I were in their situation 
I would too. Through no fault of their own, they receive less, 
sometimes as much as $200 less, than their neighbors.
  The legislation I am offering today is my proposal to right the 
wrong. I propose using any projected budget surplus to pay the lump sum 
benefit to notch babies. While we have a surplus, let's fix the notch 
problem once and for all and restore the confidence of the ten million 
notch babies across this land.
  Government has an obligation to be fair. I don't think we have been 
in the case of notch babies. My support of notch babies is 
longstanding. I introduced the only notch amendment in April 1991 that 
ever passed in Congress as part of the fiscal year 1992 Budget 
Resolution. Unfortunately, it did not become the law of the land as it 
was dropped in Conference with the House of Representatives. I have 
cosponsored numerous pieces of legislation over the years to address 
this issue. With this legislation, my effort continues.
  Mr. President, it is unfortunate that these measures have not seen 
the light of day. Many who have written to me think Congress is waiting 
for notch babies to die rather than honor this debt. I must tell you it 
concerns me when our constituents have this perception of their elected 
representatives. Unfortunately, the truth is that today a number of 
notch babies will die. We will not have to worry about those notch 
babies, or honor our debt to them. This is the wrong approach.
  Each day a grave injustice is perpetrated when these people pass 
away. We have to do something to make sure Americans believe that 
Social Security is a fair system. Passage of my legislation provides us 
that chance. I invite members to join me in cosponsoring this important 
legislation.
  I acknowledge that the battle for notch reform suffered a major 
setback when on December 31, 1994, the Commission on the Social 
Security ``Notch'' issue released its final report. It concluded that 
the ``benefits paid to those in the `Notch' years are equitable, and no 
remedial legislation is in order.'' The National Committee to Preserve 
Social Security and Medicare strongly disagreed with the Committee's 
methodology and conclusions. Although they have stopped advocating for 
this issue due to the political and fiscal climate, their disagreement 
with the outcome is nonetheless significant.

  The Commission's report also stated ``in retrospect'' Congress 
``Probably should have'' limited the benefits of those who were 
grandfathered, but that it is too late now to do so given their 
advanced age. Since we did not do the right thing then, I propose that 
we do the right thing now. Let's show we have the courage to correct a 
mistake when we have made one. The Commission report provided political 
cover for those who were opposed to notch reform legislation. I have 
long opposed ``political'' solutions to problems such as this.
  My legislation is intended to make good on what this government 
should have done long ago. I propose that workers who attain the age of 
65 after 1981 and before 1992 be allowed to choose either lump sum 
payment over four years totaling $5,000 or an improved benefit 
computation formula under a new 10-year rule governing the transition 
to the changes in benefit computation rules enacted in the Social 
Security Amendments of 1977.
  As of December 1996, there were 11,637,390 recipients born between 
1917 and 1926 who were receiving Social Security retirement benefits. 
By providing each with a $5,000 lump sum payment or an improved benefit 
computation formula, maximum costs would be $60 billion spread over 
four years or $15 billion annually.
  There are some who would say there are ``bigger fish to fry'' such as 
Social Security solvency and Medicare's long term solvency. While I am 
in full agreement that these are very important issues that I intend to 
work on, we should include in our discussion concerning uses of any 
budget surplus, to repair the damage that has been done as a result of 
notch. Living on a fixed income is not easy. Many notch babies have 
difficulty making ends meet. This one time lump sum payment would 
provide much needed financial support for some of this nation's most 
needy citizens.
  Mr. President, it is time to return these dollars to the hands of 
those who earned them. It is time to show our support for notch reform. 
All of our offices have staff to help us answer the mail. We tell our 
constituents what bills have been offered and that we will lend our 
support if their issue comes to a vote.
  Well, here is our change. I am introducing this legislation because 
actions speak louder than words. The ``Notch

[[Page S3786]]

Fairness Act of 1998'' that I am introducing on behalf of notch victims 
today, is intended to put my words into action. I ask all my colleagues 
to join me in support of this important and long overdue legislation.
                                 ______
                                 
      By Mr. McCONNELL:
  S. 2005. A bill to amend the Federal Power Act to ensure that certain 
Federal power customers are provided protection by the Federal Energy 
Regulatory Commission, and for other purposes; to the Committee on 
Energy and Natural Resources.


                  TVA CUSTOMER PROTECTION ACT OF 1998

  Mr. McCONNELL. Mr. President, I have come to the Senate floor today 
to introduce a bill that is long overdue. Known as the TVA Customer 
Protection Act, this legislation will implement a number of consumer 
reforms to make TVA accountable to ratepayers and better prepare TVA to 
compete in a restructured electricity market.

  The bill I am introducing provides Tennessee Valley ratepayers a 
number of consumer protections against unchecked and unjustified 
increases in their power rates. This bill will put an end to TVA's 
ability to compete unfairly with its regional distributors. This bill 
will prohibit TVA from sticking ratepayers with the bill for TVA's 
international forays that have no relevance to TVA's responsibility to 
provide low cost power to the Tennessee Valley. Finally, this bill also 
codifies an agreement between TVA and several industry associations to 
limit TVA's authority as a government entity to compete with small 
businesses in non-electric services.
  Mr. President, TVA is a federal corporation that was first formed in 
1933, to tame the Tennessee River, our nation's fifth largest river, 
and to bring economic development to this once poverty stricken region. 
Over the years as the Valley has developed, TVA has evolved in their 
role as a river steward to become the largest power producer in the 
nation. Today, TVA provides power to all of Tennessee and to parts of 
six other states covering over 80,000 square miles and serving eight 
million consumers. The bulk of TVA's power sales are made through 
municipal and cooperative distributors, which in turn are responsible 
for delivering that power to every home, office and farm in the Valley. 
TVA has exclusive power contracts with its distributors and the three 
member TVA board sets the retail rates offered by distributors. TVA 
also has the authority to compete directly with distributors to make 
retail sales to large industrial customers.
  Mr. President, over the past 65 years, TVA has accumulated an 
enormous debt of nearly $28 billion, despite being a monopoly power 
provider. TVA is also carrying $6.3 billion in deferred assets that 
will eventually force electricity rates higher in the future. By 
deferring these charges, TVA's financing costs will continue to mount. 
I have real concerns about how this debt load will affect rates as well 
as the overall economic health of the region.
  In 1997, GAO found that TVA paid over 35 percent of its power revenue 
to servicing its debt. In other words, TVA pays an astronomical 35 
cents of every $1 earned to interest. Compare that to a public utility 
which paid a mere 7 percent in finance costs. In a 1994 study, GAO 
found that 69 percent of TVA's total debt is tied to the nuclear 
facilities, yet they generated only 14 percent of TVA's total power 
production in 1994. This study concluded that TVA's financial condition 
``threatens its long-term viability and places the federal government 
at risk.''
  Only through years of unaccountability and fiscal irresponsibility 
could a power company have ever reached this level of debt despite the 
fact that TVA is a monopoly provider of electricity. Therefore, I have 
come to the conclusion that TVA needs to be made more accountable for 
their actions. Not more accountable to Congress or the President, but 
the people they were charged to serve--the TVA customers.
  Mr. President, it is my desire to provide TVA customers with a clear 
picture of TVA's financial situation including TVA's rates, charges and 
costs. The Federal Energy Regulatory Commission (FERC) is authorized 
under the Federal Power Act with regulating electric utilities.
  FERC provides regulatory oversight to over 200 utilities for 
wholesale and transmission power rates to ensure that their electric 
rates and charges are ``just and reasonable and not unduly 
discriminatory or preferential.'' At present, TVA is entirely exempt 
from these necessary regulations allowing it to operate as a self-
regulating monopoly, with no such mandate for openness fairness or 
oversight.
  Requiring TVA to comply with FERC regulations will serve two 
purposes. First, it will allow customers to accurately evaluate TVA's 
wholesale and transmission pricing and terms to ensure the rates 
charged are ``just and reasonable'' and to provide customers with a 
forum for challenging future rate increases just as every other 
regulated utility does.
  Second, this information will provide FERC with a better 
understanding of the stranded costs TVA has accumulated. Understanding 
the full scope of these costs will be critical in an open transmission 
and wholesale market. It will also have a significant impact in 
determining how competitive TVA will be in the future.
  Last year, former FERC Chair Elizabeth Moler testified before the 
Senate Energy Committee regarding nationwide open access in the 
transmission and wholesale markets. She stated that, ``like Swiss 
cheese, nationwide open access has some holes. Federal legislation is 
necessary to fill in these holes.'' It was her belief that TVA's large 
transmission system must be included within FERC's open access program.
  Recently, I read an article written by Carlos Smith, the General 
Counsel to TVPPA, an association which represents TVA distributors. Mr. 
Smith made the case that investor-owned utilities should be regulated, 
``because only in this way can the captive ratepayers learn the 
underlying basis for the retail utility rates and require justification 
for the charges made for services.''

  Mr. President, I wholeheartedly concur with Mr. Smith's conclusion 
that ratepayers, including the distributors Mr. Smith represents, 
should know what their rates are based on and have a justification for 
such rates. Further, ratepayers should be able to challenge, through 
FERC, any rate increase they find unreasonable.
  Mr. President, let me point out one very important provision in this 
legislation. I have included a provision that makes it explicitly clear 
that nothing in this bill would change the law applying to TVA 
distributors. Unlike TVA, distributors are directly accountable to the 
customers they serve. Cooperatives, for example, are operated by a 
board elected by the customers to represent their own member interests. 
I don't believe we need to change this policy, except to make TVA more 
accountable to the people they serve.
  Mr. President, I expect TVA to complain that this legislation somehow 
treats them unfairly. They will attempt to blame me for unfairly 
burdening them with new accountability standards and claim that a rate 
increase will be a direct result.
  Mr. President, I don't believe Valley residents will be fooled by 
TVA's rhetoric when they recall TVA's track record. It's hard to argue 
that the TVA Board has kept ratepayers' interests foremost in mind as 
they ran up $28 billion in debt, while serving a captive customer base. 
It's hard to argue it was in the ratepayers' interest to try to hide 
million dollar bonuses to a select cadre of high level staff. It is 
hard to argue that it was in the ratepayers' interest to zero out all 
federal appropriations, which could add millions to TVA's annual 
operating costs.
  Mr. President, I have carefully compared the rates of regulated 
utilities in Kentucky against TVA's rates to determine if applying 
these regulations would drive rates higher. Much to my surprise, I have 
found that not only are regulated utilities rates very competitive, but 
lower than rates offered by TVA. This confirms my assumption that the 
underlying financial health of TVA--and its $28 billion debt--has a far 
greater impact on its electric rates than any other factor.
  Mr. President, since 1988, wholesale power rates of regulated 
utilities in Kentucky have steadily fallen, while TVA has maintained 
the same level, until last year when TVA raised rates by 7 percent. It 
is appearent to me that due to TVA's past financial mismanagement, 
thousands of Kentucky resident are not able to take advantage

[[Page S3787]]

of the declining rates. Mr. President, I ask that this chart be printed 
in the record at this point.
  Mr. President, in addition to applying FERC regulation to TVA I have 
included a number of other important customer reforms. As I mentioned 
earlier, this bill prohibits TVA from continuing to subsidize their 
foreign endeavors at ratepayers expense. Quarter million dollar 
conferences in China and other points on the globe are not consistent 
with either TVA's deficit reduction goals or its mission to be a low 
cost power provider to the valley.
  Another provision that I have included is a measure proposed by the 
TVA distributors. Section Five in the bill protects distributors from 
unfair competition by ending TVA's ability to directly serve large 
industrial customers. In the past, TVA has been able to directly serve 
some of the valley's largest industrial customers. Through this 
loophole, TVA is able to use it considerable market power to unfairly 
compete with distributors. This provision also facilitates the 
transition from TVA to FERC regulation. To protect the sanctity of the 
existing contracts, FERC is directed to accept the terms and conditions 
of those contracts without initial review.
  Section Seven of this bill will increase TVA's level of 
accountability by applying all federal antitrust laws and penalties. I 
have included this provision in response to heavy-handed tactics used 
by TVA to punish the City of Bristol, Virginia for signing a contract 
with another energy provider. Last year, Bristol Virginia Utilities 
Board signed an agreement with Cinergy Corporation to provide its 
wholesale power, which yielded a savings of $70 million for Bristol 
after fulfilling the terms of the contract with TVA. What Bristol 
didn't expect was the backlash from TVA and effort to punish Bristol 
for leaving the TVA family.
  In testimony before the Senate Energy Committee, the Chairman of the 
Bristol Utility Board, David Fletcher, outlined the anti-competitive 
practices employed by TVA to undermine Bristol's new contract. TVA 
applied scare tactics by predicting unreliable electricity services as 
a discouragement to leaving. TVA also sought to recover tens of 
millions invested by TVA to provide power to Bristol, despite the fact 
that Bristol had fulfilled the terms of their contract. Finally, TVA 
attempted to steal Bristol's industrial customers by offering direct-
serve power contracts at 2 percent below any rate offered by Bristol. I 
find these predatory practices to be entirely unacceptable, especially 
for an entity of the federal government. It is my belief that since 
TVA's activities were performed in a commercial endeavor, they should 
be held to the same standards as any other corporation under the 
antitrust laws.
  Recently, I was informed that TVA willing to subject themselves to 
the federal antitrust laws, so long as they weren't subject to any 
penalties.
  Mr. President, I have some advice for TVA. If you can't pay the fine, 
don't do the crime.
  My bill's final provision regards TVA's ability to branch out into 
other businesses beyond power generation and transmission. TVA's has 
attempted to diversify into equipment leasing as well as engineering 
and other contracting services in direct competition with other valley 
businesses.
  Mr. President, I hope these reforms will offer TVA customers--both 
distributors and individuals alike--the means to make TVA more 
accountable. I am very concerned, however, that these reforms may be 
too late to avert a gradual increase in power rates within the TVA 
region. Last year, for the first time in 10 years, TVA raised rates on 
households and business by over 7 percent in order to prepare for a 
more open electricity market. This can be contrasted with a 15 percent 
decline in rates over the past ten years in Kentucky--outside the TVA 
fence.
  I remain hopeful that with these reforms, TVA's Board will be more 
accountable to ratepayers and will help ensure that the economic 
potential of the Tennessee Valley, which was mortgaged by years of 
fiscal unaccountability, will not be diminished.
  Mr. President, I ask unanimous consent that the full text of the bill 
be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2005

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``TVA Customer Protection Act 
     of 1998''.

     SEC. 2. INCLUSION IN DEFINITION OF PUBLIC UTILITY.

       (a) In General.--Section 201(e) of the Federal Power Act 
     (16 U.S.C. 824(e)) is amended by inserting before the period 
     at the end the following: ``, and includes the Tennessee 
     Valley Authority''.
       (b) Conforming Amendment.--Section 201(f) of the Federal 
     Power Act (16 U.S.C. 824(f)) is amended by striking 
     ``foregoing, or any corporation'' and inserting ``foregoing 
     (other than the Tennessee Valley Authority) or any 
     corporation''.

     SEC. 3. DISPOSITION OF PROPERTY.

       Section 203 of the Federal Power Act (16 U.S.C. 824b) is 
     amended by adding at the end the following:
       ``(c) TVA Exception.--This section does not apply to a 
     disposition of the whole or any part of the facilities of the 
     Tennessee Valley Authority if--
       ``(1) the Tennessee Valley Authority discloses to the 
     Commission (on a form, and to the extent, that the Commission 
     shall prescribe by regulation) the sale, lease, or other 
     disposition of any part of its facilities that--
       ``(A) is subject to the jurisdiction of the Commission 
     under this Part; and
       ``(B) has a value of more than $50,000; and
       ``(2) all proceeds of the sale, lease, or other disposition 
     under paragraph (1) are applied by the Tennessee Valley 
     Authority to the reduction of debt of the Tennessee Valley 
     Authority.''.

     SEC. 4. FOREIGN OPERATIONS; PROTECTIONS.

       Section 208 of the Federal Power Act (16 U.S.C. 824g) is 
     amended by adding at the end the following:
       ``(c) Tennessee Valley Authority.--
       ``(1) Limit on charges.--
       ``(A) No authorization or permit.--The Commission shall 
     issue no order under this Act that has the effect of 
     authorizing or permitting the Tennessee Valley Authority to 
     make, demand, or receive any rate or charge, or impose any 
     rule or regulation pertaining to a rate or charge, that 
     includes any costs incurred by or for the Tennessee Valley 
     Authority in the conduct of any activities or operations 
     outside the United States.
       ``(B) Unlawful rate.--
       ``(i) In general.--Any rate, charge, rule, or regulation 
     described in subparagraph (A) shall be deemed for the 
     purposes of this Act to be unjust, unreasonable, and 
     unlawful.
       ``(ii) No limitation on authority.--Clause (i) does not 
     limit the authority of the Commission under any other 
     provision of law to regulate and establish just and 
     reasonable rates and charges for the Tennessee Valley 
     Authority.
       ``(2) Annual report.--The Tennessee Valley Authority shall 
     annually--
       ``(A) prepare and file with the Commission, in a form that 
     the Commission shall prescribe by regulation, a report 
     setting forth in detail any activities or operations engaged 
     in outside the United States by or on behalf of the Tennessee 
     Valley Authority; and
       ``(B) certify to the Commission that the Tennessee Valley 
     Authority has neither recovered nor sought to recover the 
     costs of activities or operations engaged in outside the 
     United States by or on behalf of the Tennessee Valley 
     Authority in any rate, charge, rule, or regulation on file 
     with the Commission.''.

     SEC. 5. TVA POWER SALES.

       (a) In General.--Part II of the Federal Power Act (16 
     U.S.C. 824 et seq.) is amended by adding at the end the 
     following:

     ``SEC. 215. TVA POWER SALES.

       ``(a) In General.--The Tennessee Valley Authority shall not 
     sell electric power to a retail customer that will consume 
     the power within the area that, on the date of enactment of 
     this section, is assigned by law as the distributor service 
     area, unless--
       ``(1) the customer (or predecessor in interest to the 
     customer) was purchasing electric power directly from the 
     Tennessee Valley Authority as a retail customer on that date;
       ``(2) the distributor is purchasing firm power from the 
     Tennessee Valley Authority in an amount that is equal to not 
     more than 50 percent of the total retail sales of the 
     distributor; or
       ``(3) the distributor agrees that the Tennessee Valley 
     Authority may sell power to the customer.
       ``(b) Retail Sales.--Notwithstanding any other provision of 
     law, the rates, terms, and conditions of retail sales of 
     electric power by the Tennessee Valley Authority that are not 
     prohibited by this section shall be subject to regulation 
     under State law applicable to public utilities in the manner 
     and to the extent that a State commission or other regulatory 
     authority determines appropriate.''.
       (b) Transition.--
       (1) Filing requirement.--Not later than 180 days after the 
     date of enactment of this Act, the Tennessee Valley Authority 
     shall file all rates and charges for the transmission or sale 
     of electric energy and the classifications, practices, and 
     regulations affecting those rates and charges, together with 
     all contracts that in any manner affect or relate to 
     contracts that are required to be filed under Part II of the 
     Federal Power Act

[[Page S3788]]

     (16 U.S.C. 824 et seq.), as amended by subsection (a), and 
     that are in effect as of the date of enactment of this Act.
       (2) No initial review.--A filing under this section that is 
     timely made under subsection (a) shall be accepted for filing 
     without initial review by the Federal Energy Regulatory 
     Commission.

     SEC. 6. FILING AND FULL DISCLOSURE OF TVA DOCUMENTS.

       Part III of the Federal Power Act (16 U.S.C. 825 et seq.) 
     is amended--
       (1) by redesignating sections 319 through 321 as sections 
     320 through 322, respectively; and
       (2) by inserting after section 318 the following:

     ``SEC. 319. FILING AND FULL DISCLOSURE OF TVA DOCUMENTS.

       ``(a) In General.--The Tennessee Valley Authority shall 
     file and disclose the same documents and other information 
     that other public utilities are required to file under this 
     Act, as the Commission shall require by regulation.
       ``(b) Regulation.--
       ``(1) Timing.--The regulation under subsection (a) shall be 
     promulgated not later than 1 year after the date of enactment 
     of this section.
       ``(2) Considerations.--In promulgating the regulation under 
     subsection (a), the Commission shall take into consideration 
     the practices of the Commission with respect to public 
     utilities other than the Tennessee Valley Authority.''.

     SEC. 7. APPLICABILITY OF THE ANTITRUST LAWS.

       The Tennessee Valley Authority Act of 1933 (16 U.S.C. 831 
     et seq.) is amended by inserting after section 16 the 
     following:

     ``SEC. 17. APPLICABILITY OF THE ANTITRUST LAWS.

       ``(a) Definition of Antitrust Laws.--In this section, the 
     term `antitrust laws' means--
       ``(1) an antitrust law (within the meaning of section (1) 
     of the Clayton Act (15 U.S.C. 12));
       ``(2) the Act of June 19, 1936 (commonly known as the 
     `Robinson Patman Act') (49 Stat. 1526, chapter 323; 15 U.S.C. 
     13 et seq.); and
       ``(3) section 5 of the Federal Trade Commission Act (15 
     U.S.C. 45), to the extent that the section relates to unfair 
     methods of competition.
       ``(b) Applicability.--Nothing in this Act modifies, 
     impairs, or supersedes the antitrust laws.
       ``(c) Antitrust Laws.--
       ``(1) TVA deemed a person.--The Tennessee Valley Authority 
     shall be deemed to be a person, and not government, for 
     purposes of the antitrust laws.
       ``(2) Applicability.--Notwithstanding any other provision 
     of law, the antitrust laws (including the availability of any 
     remedy for a violation of an antitrust law) shall apply to 
     the Tennessee Valley Authority notwithstanding any 
     determination that the Tennessee Valley Authority is a 
     corporate agency or instrumentality of the United States or 
     is otherwise engaged in governmental functions.''.

     SEC. 8. SAVINGS PROVISION.

       (a) Definition of TVA Distributor.--In this section, the 
     term ``TVA distributor'' means a cooperative organization or 
     publicly owned electric power system that, on January 2, 
     1998, purchased electric power at wholesale from the 
     Tennessee Valley Authority under an all-requirements power 
     contract.
       (b) Effect of Act.--Nothing in this Act or any amendment 
     made by this Act--
       (1) subjects any TVA distributor to regulation by the 
     Federal Energy Regulatory Commission; or
       (2) abrogates or affects any law in effect on the date of 
     enactment of this Act that applies to a TVA distributor.

     SEC. 9. PROVISION OF CONSTRUCTION EQUIPMENT, CONTRACTING, AND 
                   ENGINEERING SERVICES.

       Section 4 of the Tennessee Valley Authority Act of 1933 (16 
     U.S.C. 831c) is amended by adding at the end the following:
       ``(m) Provision of Construction Equipment, Contracting, and 
     Engineering Services.--
       ``(1) In general.--Notwithstanding any other provision of 
     this Act, except as provided in this subsection, the 
     Corporation shall not have power to--
       ``(A) rent or sell construction equipment;
       ``(B) provide a construction equipment maintenance or 
     repair service;
       ``(C) perform contract construction work; or
       ``(D) provide a construction engineering service;
     to any private or public entity.
       ``(2) Electrical contractors.--The Corporation may provide 
     equipment or a service described in subparagraph (1) to a 
     private contractor that is engaged in electrical utility work 
     on an electrical utility project of the Corporation.
       ``(3) Customers, distributors, and governmental entities.--
     The Corporation may provide equipment or a service described 
     in subparagraph (1) to--
       ``(A) a power customer served directly by the Corporation;
       ``(B) a distributor of Corporation power; or
       ``(C) a Federal, State, or local government entity;
     that is engaged in work specifically related to an electrical 
     utility project of the Corporation.
       ``(4) Used construction equipment.--
       ``(A) Definition of used construction equipment.--In this 
     paragraph, the term `used construction equipment' means 
     construction equipment that has been in service for more than 
     2,500 hours.
       ``(B) In general.--The Corporation may dispose of used 
     construction equipment by means of a public auction conducted 
     by a private entity that is independent of the Corporation.
       ``(C) Debt reduction.--The Corporation shall apply all 
     proceeds of a disposition of used construction equipment 
     under subparagraph (B) to the reduction of debt of the 
     Corporation.''.
                                 ______