[Congressional Record Volume 145, Number 91 (Thursday, June 24, 1999)]
[Senate]
[Pages S7591-S7593]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BINGAMAN:
  S. 1273. A bill to amend the Federal Power Act, to facilitate the 
transition to more competitive and efficient electric power markets, 
and for other purposes; to the Committee on Energy and Natural 
Resources.


                FEDERAL POWER ACT OF AMENDMENTS OF 1999

  Mr. BINGAMAN. Mr. President, I rise to introduce the electricity 
restructuring bill I introduced in the last Congress. I offer the bill 
today because the Energy and Natural Resources Committee will be 
holding two legislative hearings next week on the pending electricity 
restructuring bills, and I want this bill to be included in the 
discussions. With the exception of two typographical corrections, the 
text of the bill is identical to S. 1276, which I introduced in the 
last Congress.
  The bill has three principal legislative objectives: (1) clarifying 
the line between state and federal jurisdiction, (2) strengthening the 
reliability of the transmission system, and (3) ensuring fair access to 
the interstate transmission grid. When I introduced the bill in the 
last Congress it received wide support as the nucleus of the most 
critical issues that Congress must address in any restructuring 
legislation.
  As many Senators are aware, I am working with the chairman of the 
Energy and Natural Resources Committee, my good friend Senator 
Murkowski, on developing a consensus electricity bill that can be 
marked up and reported to the full Senate. Although I had expected that 
we would be further along in the process by now, I remain fully 
committed to following this bi-partisan course. My introduction of this 
bill should not impeded that process.
  Much has happened in the electric utility industry since this bill 
was first drafted nearly two years ago. There are now six approved 
regional transmission operators, and several more are on the drawing 
boards. Twenty-two states, including New Mexico, have implemented some 
form of electric competition and two more may pass legislation this 
year. And there is now industry-wide consensus on the importance of 
federal legislation to assure the continued security and reliability of 
the nation's high-tension transmission grid.
  Mr. President, I continue to see a strong need for federal 
electricity legislation so that states that have elected retail 
competition can fully enjoy all of the benefits that completion brings. 
In addition, improvements in federal regulation will streamline 
wholesale markets in every state. At the same time, I believe Congress 
should not enact federal legislation that disrupts existing state laws 
or that forces unwilling states to restructure.
  I also have increasing concern about the mounting cloud of litigation 
pending in the federal courts that could frustrate the development of 
healthy wholesale and retail markets. Only Congress can clear up 
jurisdictional issues and let competitive markets fully develop. 
Interstate transmission must be a federal responsibility.
  Mr. President, I believe we now have a consensus on the core issues 
that Congress must address. The Energy Committee held an oversight 
hearing last month on the status of restructuring in the states. There 
was nearly universal agreement among the witnesses on the need for 
federal legislation addressing interstate transmission and federal-
state jurisdiction
  I look forward to the legislative hearings next week on this and 
other bills and to reporting bi-partisan electricity legislation that 
can pass the Senate this year.
  Mr. President, I ask unanimous consent that a copy 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. 1273

       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 ``Federal Power Act Amendments 
     of 1999''.

     SEC. 2. CLARIFICATION OF JURISDICTION.

       (a) Declaration of Policy.--Section 201(a) of the Federal 
     Power Act (16 U.S.C. 824(a)) is amended by--
       (1) inserting after ``transmission of electric energy in 
     interstate commerce'' the following: ``, including the 
     unbundled transmission of electric energy sold at retail,''; 
     and
       (2) striking ``such Federal regulation, however, to extend 
     only to those matters which are not subject to regulation by 
     the States.'' and inserting the following: ``such Federal 
     regulation shall not extend, however, to the bundled retail 
     sale of electric energy or to unbundled local distribution 
     service, which are subject to regulation by the States.''.
       (b) Application of Part.--Section 201(b) of the Federal 
     Power Act (16 U.S.C. 824(b)(1)) is amended by--
       (1) inserting after ``the transmission of electric energy 
     in interstate commerce'' the following: ``, including the 
     unbundled transmission of electric energy sold at retail,''; 
     and
       (2) adding at the end the following:
       ``(3) The Commission, after consulting with the appropriate 
     State regulatory authorities, shall determine, by rule or 
     order, which facilities used for the transmission and 
     delivery of electric energy are used for transmission in 
     interstate commerce subject to the jurisdiction of the 
     Commission under this Part, and which are used for local 
     distribution subject to State jurisdiction.''.
       (c) Definition of Interstate Commerce.--Section 201(c) of 
     the Federal Power Act (16 U.S.C. 824(c)) is amended by 
     inserting after ``outside thereof '' the following: 
     ``(including consumption in a foreign country)''.
       (d) Definitions of Types of Sales.--Section 201(d) of the 
     Federal Power Act (16 U.S.C. 824(d)) is amended by--
       (1) inserting ``(1) after the subsection designation;
       (2) adding at the end the following:
       ``(2) The term `bundled retail sale of electric energy' 
     means the sale of electric energy to an ultimate consumer in 
     which the generation and transmission service are not sold 
     separately.
       ``(3) The term `unbundled local distribution service' means 
     the delivery of electric energy to an ultimate consumer if--
       ``(A) the electric energy and the service of delivering it 
     are sold separately, and
       ``(B) the delivery uses facilities for local distribution 
     as determined by the Commission under subsection (b)(3).
       ``(4) The term `unbundled transmission of electric energy 
     sold at retail' means the transmission of electric energy to 
     an ultimate consumer if--
       ``(A) the electric energy and the service of transmitting 
     it are sold separately, and
       ``(B) the transmission uses facilities for transmission in 
     interstate commerce as determined by the Commission under 
     subsection (b)(3).''.
       (e) Definitions of Public Utility.--Section 201 of the 
     Federal Power Act (16 U.S.C. 824) is amended by striking 
     subsection (e) and inserting the following:
       ``(e) The term `public utility' when used in this Part or 
     in the Part next following means--
       ``(1) any person who owns or operates facilities subject to 
     the jurisdiction of the Commission under this Part (other 
     than facilities subject to such jurisdiction solely by reason 
     of section 210, 211, or 212); or
       ``(2) any electric utility or Federal power marketing 
     agency not otherwise subject to the jurisdiction of the 
     Commission under this Part, including--
       ``(A) the Tennessee Valley Authority,
       ``(B) a Federal power marketing agency,
       ``(C) a State or any political subdivision of a State, or 
     any agency, authority, or instrumentality of a State or 
     political subdivision,
       ``(D) a corporation or association that has ever received a 
     loan for the purpose of providing electric service from the 
     Administrator of the Rural Electrification Administration or 
     the Rural Utilities Service under the Rural Electrification 
     Act of 1936; or
       ``(E) any corporation or association which is wholly owned, 
     directly or indirectly, by any one or more of the foregoing,

     but only with respect to determining, fixing, and otherwise 
     regulating the rates, terms, and conditions for the 
     transmission of electric energy under this Part (including 
     sections 217, 218, and 219).''.
       (f) Application of Part to Government Utilities.--Section 
     201(f) of the Federal Power Act (16 U.S.C. 824(f)) is amended 
     by striking ``No provision'' and inserting ``Except as 
     provided in subsection (e)(2) and section 3(23), no 
     provision''.
       (g) Definition of Transmitting Utility.--Section 3 of the 
     Federal Power Act (16 U.S.C. 796) is amended by striking 
     paragraph (23) and inserting the following:
       ``(23) Transmitting utility.--The term `transmitting 
     utility' means any electric utility, qualifying cogeneration 
     facility, qualifying small power production facility, Federal 
     power marketing agency, or any public utility, as defined in 
     section 201(e)(2), that owns or operates electric power 
     transmission facilities which are used for the sale of 
     electric energy.''.

     SEC. 3. FEDERAL WHEELING AUTHORITY.

       (a) Commission Authority To Order Retail Wheeling.--
       (1) Section 211(a) of the Federal Power Act (16 U.S.C. 
     824j(a)) is amended by striking ``for resale''.
       (2) Section 212(a) of the Federal Power Act (16 U.S.C. 
     824k(a)) is amended by striking

[[Page S7592]]

     ``wholesale transmission services'' each place it appears and 
     inserting ``transmission services''.
       (3) Section 212(g) of the Federal Power Act (16 U.S.C. 
     824k(g)) is repealed.
       (b) Limitation on Commission Authority To Order Retail 
     Wheeling.--Section 212 of the Federal Power Act (16 U.S.C. 
     824k) is further amended by striking subsection (h) and 
     inserting the following:
       ``(h) Limitation on Commission Authority To Order Retail 
     Wheeling.--No rule or order issued under this Act shall 
     require or be conditioned upon the transmission of electric 
     energy:
       ``(1) directly to an ultimate consumer in connection with a 
     sale of electric energy to the consumer unless the seller of 
     such energy is permitted or required under applicable State 
     law to make such sale to such consumer, or
       ``(2) to, or for the benefit of, an electric utility if 
     such electric energy would be sold by such utility directly 
     to an ultimate consumer, unless the utility is permitted or 
     required under applicable State law to sell electric energy 
     to such ultimate consumer.''.
       (c) Conforming Amendment.--Section 3 of the Federal Power 
     Act (16 U.S.C. 796) is amended by striking paragraph (24) and 
     inserting the following:
       ``(24) Transmission services.--The term `transmission 
     services' means the transmission of electric energy in 
     interstate commerce.''.

     SEC. 4. STATE AUTHORITY TO ORDER RETAIL ACCESS.

       Part II of the Federal Power Act is further amended by 
     adding at the end the following:

     ``SEC. 215. STATE AUTHORITY TO ORDER RETAIL ACCESS.

       ``(a) State Authority.--Neither silence on the part of 
     Congress nor any Act of Congress shall be construed to 
     preclude a State or State commission, acting under authority 
     of state law, from requiring an electric utility subject to 
     its jurisdiction to provide unbundled local distribution 
     service to any electric consumer within such State.
       ``(b) Nondiscriminatory Service.--If a State or State 
     commission permits or requires an electric utility subject to 
     its jurisdiction to provide unbundled local distribution 
     service to any electric consumer within such State, the 
     electric utility shall provide such service on a not unduly 
     discriminatory basis. Any law, regulation, or order of a 
     State or State commission that results in unbundled local 
     distribution service that is unjust, unreasonable, unduly 
     discriminatory, or preferential is hereby preempted.
       ``(c) Reciprocity.--Notwithstanding subsection (b), a State 
     or state commission may bar an electric utility from selling 
     electric energy to an ultimate consumer using local 
     distribution facilities in such State if such utility or any 
     of its affiliates owns or controls local distribution 
     facilities and is not itself providing unbundled local 
     distribution service.
       ``(d) State Charges.--Nothing in this Act shall prohibit a 
     State or State regulatory authority from assessing a 
     nondiscriminatory charge on unbundled local distribution 
     service within the State, the retail sale of electric energy 
     within the State, or the generation of electric energy for 
     consumption by the generator within the State.''.

     SEC. 5. UNIVERSAL AND AFFORDABLE SERVICE.

       Part II of the Federal Power Act is further amended by 
     adding at the end the following:

     ``SEC. 216. UNIVERSAL AND AFFORDABLE SERVICE.

       ``(a) Sense of the Congress.--It is the sense of the 
     Congress that--
       ``(1) every consumer of electric energy should have access 
     to electric energy at reasonable and affordable rates, and
       ``(2) the Commission and the States should ensure that 
     competition in the electric energy business does not result 
     in the loss of service to rural, residential, or low-income 
     consumers.
       ``(b) Consideration and Reports.--Any State or State 
     commission that requires an electric utility subject to its 
     jurisdiction to provide unbundled local distribution service 
     shall--
       ``(1) consider adopting measures to--
       ``(A) ensure that every consumer of electric energy within 
     such State shall have access to electric energy at reasonable 
     and affordable rates, and
       ``(B) prevent the loss of service to rural, residential, or 
     low-income consumers; and
       ``(2) report to the Commission on any measures adopted 
     under paragraph (1).''.

     SEC. 6. NATIONAL ELECTRIC RELIABILITY STANDARDS.

       Part II of the Federal Power Act is further amended by 
     adding at the end the following:

     ``SEC. 217. NATIONAL ELECTRIC RELIABILITY STANDARDS.

       ``(a) Reliability Standards.--The Commission shall 
     establish and enforce national electric reliability standards 
     to ensure the reliability of the electric transmission 
     system.
       ``(b) Designation of National and Regional Councils.--
       ``(1) For purposes of establishing and enforcing national 
     electric reliability standards under subsection (a), the 
     Commission may designate an appropriate number of regional 
     electric reliability councils composed of electric utilities 
     or transmitting utilities, and one national electric 
     reliability council composed of designated regional electric 
     reliability councils, whose mission is to promote the 
     reliability of electric transmission system.
       ``(2) The Commission shall not designate a regional 
     electric reliability council unless the Commission determines 
     that the council--
       ``(A) permits open access to membership from all entities 
     engaged in the business of selling, generating, transmitting, 
     or delivering electric energy within its region;
       ``(B) provides fair representation of its members in the 
     selection of its directors and the management of its affairs; 
     and
       ``(C) adopts and enforces appropriate standards of 
     operation designed to promote the reliability of the electric 
     transmission system.
       ``(c) Incorporation of Council Standards.--The Commission 
     may incorporate, in whole or in part, the standards of 
     operation adopted by the regional and national electric 
     reliability councils in the national electric reliability 
     standards adopted by the Commission under subsection (a).
       ``(d) Enforcement.--The Commission may, by rule or order, 
     require any public utility or transmitting utility to comply 
     with any standard adopted by the Commission under this 
     section.

     SEC. 7. SITING NEW INTERSTATE TRANSMISSION FACILITIES.

       Part II of the Federal Power Act is further amended by 
     adding at the end the following:

     ``SEC. 218. SITING NEW INTERSTATE TRANSMISSION FACILITIES.

       ``(a) Commission Authority.--Whenever the Commission, after 
     notice and opportunity for hearing, finds such action 
     necessary or desirable in the public interest, it may order a 
     transmitting utility to enlarge, extend, or improve its 
     facilities for the interstate transmission of electric 
     energy.
       ``(b) Procedure.--The Commission may commence a proceeding 
     for the issuance of an order under subsection (a) upon the 
     application of an electric utility, transmitting utility, or 
     state regulatory authority, or upon its own motion.
       ``(c) Compliance With Other Laws.--Commission action under 
     this section shall be subject to the National Environmental 
     Policy Act of 1969 (42 U.S.C. 4321 et seq.) and all other 
     applicable state and federal laws.
       ``(d) Use of Joint Boards.--Before issuing an order under 
     subsection (a), the Commission shall refer the matter to a 
     joint board appointed under section 209(a) for advice and 
     recommendations on the need for, design of, and location of 
     the proposed enlargement, extension, or improvement. The 
     Commission shall consider the advice and recommendations of 
     the Board before ordering such enlargement, extension, or 
     improvement.
       ``(e) Limitation on Authority.--The Commission shall have 
     no authority to compel a transmitting utility to extend or 
     improve its transmission facilities if such enlargement, 
     extension, or improvement would unreasonably impair the 
     ability of the transmitting utility to render adequate 
     service to its customers.''.

     SEC. 8. REGIONAL INDEPENDENT SYSTEM OPERATORS.

       Part II of the Federal Power Act is further amended by 
     adding at the end the following:

     ``SEC. 219. REGIONAL INDEPENDENT SYSTEM OPERATORS.

       ``(a) Regional Transmission Systems.--Whenever the 
     Commission finds such action necessary or desirable in the 
     public interest to ensure the fair and non-discriminatory 
     access to transmission services within a region, the 
     Commission may order the formation of a regional transmission 
     system and may order any transmitting utility operating 
     within such region to participate in the regional 
     transmission system.
       ``(b) Oversight Board.--The Commission shall appoint a 
     regional oversight board to oversee the operation of the 
     regional transmission system. Such oversight board shall be 
     composed of a fair representation of all of the transmitting 
     utilities participating in the regional transmission system, 
     electric utilities and consumers served by the system, and 
     State regulatory authorities within the region. The regional 
     oversight board shall ensure that the independent system 
     operator formulates policies, operates the system, and 
     resolves disputes in a fair and non-discriminatory manner.
       ``(c) Independent System Operator.--The regional oversight 
     board shall appoint an independent system operator to operate 
     the regional transmission system. No independent system 
     operator shall--
       ``(1) own generating facilities or sell electric energy, or
       ``(2) be subject to the control of, or have a financial 
     interest in, any electric utility or transmitting utility 
     within the region served by the independent system operator.
       ``(d) Commission Rules.--The Commission shall establish 
     rules necessary to implement this section.''.

     SEC. 9. ENFORCEMENT.

       ``(a) General Penalties.--Section 316(c) of the Federal 
     Power Act (16 U.S.C. 825o(c)) is amended by--
       (1) striking ``subsection'' and inserting ``section''; and
       (2) striking ``or 214'' and inserting: ``214, 217, 218, or 
     219''.
       ``(b) Civil Penalties.--Section 316A of the Federal Power 
     Act (16 U.S.C. 825o-1) is amended by striking ``or 214'' each 
     place it appears and inserting: ``214, 217, 218, or 219''.

     SEC. 10. AMENDMENT TO THE PUBLIC UTILITY REGULATORY POLICIES 
                   ACT.

       Section 210 of the Public Utility Regulatory Policies Act 
     of 1978 (16 U.S.C. 824a-3) is amended by adding at the end 
     the following:
       ``(m) Protection of Existing Wholesale Power Purchase 
     Contracts.--No State or

[[Page S7593]]

     State regulatory authority may bar a State regulated electric 
     utility from recovering the cost of electric energy the 
     utility is required to purchase from a qualifying 
     cogeneration facility or qualifying small power production 
     facility under this section.''.
                                 ______