[Congressional Record Volume 144, Number 80 (Thursday, June 18, 1998)]
[Senate]
[Pages S6564-S6565]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. NICKLES:
  S. 2187. A bill to amend the Federal Power Act to ensure that no 
State may establish, maintain, or enforce on behalf of any electric 
utility an exclusive right to sell electric energy or otherwise unduly 
discriminate against any consumer who seeks to purchase electric energy 
in interstate commerce from any supplier; to the Committee on Energy 
and Natural Resources.


                    the electric consumer choice act

  Mr. NICKLES. Mr. President, I rise today to introduce the Electric 
Consumer Choice Act. For the last two years hearings and workshops have 
been held in both the House and Senate examining the issue of 
restructuring the electric industry. Many bills have been introduced on 
this issue by both Congressmen and Senators, some comprehensive and 
some dealing with more discreet issues such as repeal of the Public 
Utility Holding Company (PUHCA) or repeal of the Public Utility 
Regulatory Policies Act of 1978 (PURPA). The bill that I am introducing 
today cuts to the heart of the issue: do we or don't we support 
allowing consumers to choose their electric supplier? Do we or don't we 
support a national competitive market in electricity? I believe the 
answer to these questions is a resounding ``yes''! This Congress 
believes competition is good, that free markets work and that every 
American will benefit from a competitive electric industry.

[[Page S6565]]

  The Electric Consumer Choice Act is intended to begin the process of 
achieving a national, competitive electricity market. It will establish 
consumer choice of electric suppliers as a goal this Congress firmly 
supports. It achieves this in a simple, straight-forward method. First, 
it eliminates electric monopolies by prohibiting the granting of 
exclusive rights to sell to electric utilities. Second, it prohibits 
undue discrimination against consumers purchasing electricity in 
interstate commerce. Third, it provides for access to local 
distribution facilities and finally, it allows a state to impose 
reciprocity requirements on out-of-state utilities. The bill also makes 
it clear that nothing in this act expands the authority of the Federal 
Energy Regulatory Commission (FERC) or limits the authority of a state 
to continue to regulate retail sales and distribution of electric 
energy in a manner consistent with the Commerce Clause of the United 
States Constitution.
  The premise of this bill is that all attributes of today's electric 
energy market--generation, transmission, distribution and both 
wholesale and retail sales--are either in or affect interstate 
commerce. Therefore, any State regulation of these attributes that 
unduly discriminates against the interstate market for electric power 
violates the Commerce Clause unless such State action is protected by 
an act of Congress.
  The Supreme Court has interpreted Part II of the Federal Power Act 
(FPA) as protecting State regulation of generation, local distribution, 
intrastate transmission and retail sales that unduly discriminates 
against the interstate market for electric power. The Court has 
reasoned that Congress, in the FPA, determined that the federal 
government needed only to regulate wholesale sales and interstate 
transmission in order to adequately protect interstate commerce in 
electric energy. Thus, all other aspects of the electric energy market 
were reserved to the States and protected from challenges under the 
Commerce Clause. The Electric Consumer Choice Act amends the FPA to 
eliminate the protection provided for State regulation that 
establishes, maintains, or enforces an exclusive right to sell electric 
energy or that unduly discriminates against any consumer who seeks to 
purchase electric energy in interstate commerce.
  This bill provides consumers and electric energy suppliers with the 
means to achieve retail choice in all States by January 1, 2002. It 
does not impose a federal statutory mandate on the States. It does not 
preempt the States' traditional jurisdiction to regulate the aspects of 
the electric power market in the reserved realm--generation, local 
distribution, intrastate transmission, or retail sales--it merely 
limits the scope of what the States can do in that realm. It does not 
expand or extend FERC jurisdiction into the aspects of traditional 
State authority.
  As I stated earlier, this bill is intended to provide every consumer 
a choice when it comes to electricity suppliers. It is intended to 
establish that this Congress supports national competition when it 
comes to the generation of electricity. It is intended to be the 
beginning, not the end of the process. There are many other issues that 
need to be addressed at the federal level to facilitate a national 
market for electricity. Some of these issues include repeal of PURPA 
and PUHCA, taxation differences between various electric providers, 
clarification of jurisdiction over transmission, ensuring reliability, 
providing for inclusion of Power Marketing Administrations and the 
Tennessee Valley Authority in a national market, and other issues that 
can only be addressed at the Federal level. These issues need to be 
addressed and should be addressed. But while these issues are being 
debated we should ensure that progress towards customer choice 
proceeds.
  I am proud to say that my state of Oklahoma has been in the forefront 
of opening up it's electricity markets to competition. Seventeen other 
states have also moved to open their markets. It is my hope that the 
Electric Consumer Choice Act will facilitate this process nationally. 
To that end, I am introducing this bill today.
  Mr. President, I ask unanimous consent that the Electric Consumer 
Choice Act be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2187

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

     SEC. 1. SHORT TITLE.

       This Act may be cited as the ``Electric Consumer Choice 
     Act''.

     SEC. 2. FINDINGS.

       The Congress finds that--
       (a) the opportunity for all consumers to purchase electric 
     energy in interstate commerce from any supplier is essential 
     to a dynamic, fully integrated and competitive national 
     market for electric energy.
       (b) the establishment, maintenance or enforcement of 
     exclusive rights to sell electric energy and other State 
     action which unduly discriminates against any consumer who 
     seeks to purchase electric energy in interstate commerce from 
     any supplier constitute an unwarranted and unacceptable 
     discrimination against and burden on interstate commerce;
       (c) in today's technologically driven marketplace there is 
     no justification for the discrimination against and burden 
     imposed on interstate commerce by exclusive rights to sell 
     electric energy or other State action which unduly 
     discriminates against any consumer who seeks to purchase 
     electric energy in interstate commerce from any supplier; 
     and,
       (d) the electric energy transmission and local distribution 
     facilities of the nation's federally-owned, investor-owned 
     and self-regulated utilities are essential facilities for the 
     conduct of a competitive interstate retail market in electric 
     energy in which all consumers have the opportunity to 
     purchase electric energy in interstate commerce from any 
     supplier.

     SEC. 3. DECLARATION OF PURPOSE.

       The purpose of this Act is to ensure that nothing in the 
     Federal Power Act or any other federal law exempts or 
     protects from Article I, Section 8, Clause 3 of the 
     Constitution of the United States exclusive rights to sell 
     electric energy or any other State actions which unduly 
     discriminate against any consumer who seeks to purchase 
     electric energy in interstate commerce from any supplier.

     SEC. 4. SCOPE OF STATE AUTHORITY UNDER THE FEDERAL POWER ACT.

       Section 201 of the Federal Power Act (16 U.S.C. Sec. 824) 
     is amended by adding at the end the following:
       ``(h) Notwithstanding any other provision of this section, 
     nothing in this Part or any other federal law shall be 
     construed to authorize a State to--
       ``(1) establish, maintain, or enforce on behalf of any 
     electric utility an exclusive right to sell electric energy; 
     or,
       ``(2) otherwise unduly discriminate against any consumer 
     who seeks to purchase electric energy in interstate commerce 
     from any supplier.''.

     SEC. 5. ACCESS TO TRANSMISSION AND LOCAL DISTRIBUTION 
                   FACILITIES.

       No supplier of electric energy, who would otherwise have a 
     right of access to a transmission or local distribution 
     facility because such facility is an essential facility for 
     the conduct of interstate commerce in electric energy, shall 
     be denied access to such facility or precluded from engaging 
     in the retail sale of electric energy on the grounds that 
     such denial or preclusion is authorized or required by State 
     action establishing, maintaining, or enforcing an exclusive 
     right to sell, transmit, or locally distribute electric 
     energy.

     SEC. 6. STATE AUTHORITY TO IMPOSE RECIPROCITY REQUIREMENTS.

       Part II of the Federal Power Act (16 U.S.C. Sec. 824) is 
     amended by adding at the end the following:

     ``SEC. 215. STATE AUTHORITY TO IMPOSE RECIPROCITY 
                   REQUIREMENTS.

       ``A State or state commission may prohibit an electric 
     utility from selling electric energy to an ultimate consumer 
     in such State if such electric utility or any of its 
     affiliates owns or controls transmission or local 
     distribution facilities and is not itself providing unbundled 
     local distribution service in a State in which such electric 
     utility owns or operates a facility used for the generation 
     of electric energy.''.

     SEC. 7. SAVINGS CLAUSE.

       Nothing in this Act shall be construed to--
       (a) authorize the Federal Energy Regulatory Commission to 
     regulate retail sales or local distribution of electric 
     energy or otherwise expand the jurisdiction of the 
     Commission, or,
       (b) limit the authority of a State to regulate retail sales 
     and local distribution of electric energy in a manner 
     consistent with Article I, Section 8, Clause 3 of the 
     Constitution of the United States.

     SEC. 8. EFFECTIVE DATES.

       Section 5 and the amendment made by section 4 of this Act 
     take effect on January 1, 2002. The amendment made by section 
     6 of this Act takes effect on the date of enactment of this 
     Act.
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