[Congressional Record Volume 145, Number 91 (Thursday, June 24, 1999)]
[Senate]
[Pages S7603-S7604]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. NICKLES:
  S. 1284. 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.
  Mr. NICKLES. Mr. President, I rise today to introduce the Electric 
Consumer Choice Act. For the last three 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''! I believe 
competition is good, that free markets work and that every American 
will benefit from a competitive electric industry.
  The Electric Consumer Choice Act is intended to begin the process of 
achieving a national, competitive electricity market. It achieves this 
in a simple, straight-forward method. Primarily, it eliminates electric 
monopolies by prohibiting the granting of exclusive rights to sell to 
electric utilities. It prohibits undue discrimination against consumers 
purchasing electricity in interstate commerce. It provides for access 
to local distribution facilities and it allows a state to impose 
reciprocity requirements on out-of-state utilities. The bill before you 
today also includes a straight repeal of PUHCA and the prospective 
repeal of the mandatory purchase provisions of PURPA. 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

[[Page S7604]]

choice when it comes to electricity suppliers. 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 taxation 
differences between various electric providers, clarification of 
jurisdiction over transmission, ensuring reliability, providing for 
inclusion of the 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. Nineteen 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. 1284

       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 ``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 the supplier of choice 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 
     the supplier of its choice constitutes 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 the supplier of 
     its choice; and,
       (d) the electric energy transmission and local distribution 
     facilities of all of the nation's 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 the supplier of their choice.

     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 the supplier of 
     its choice.

     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. REPEAL OF THE PUBLIC UTILITY HOLDING COMPANY ACT OF 
                   1935

       The Public Utility Holding Company Act of 1935 (15 U.S.C. 
     79a et seq.) is repealed, effective on and after the 
     enactment of this Act.

     SEC. 8 PROSPECTIVE REPEAL OF SECTION 210 OF THE PUBLIC 
                   UTILITY REGULATORY POLICIES ACT OF 1978.

       (a) New Contracts.--No electric utility shall be required 
     to enter into a new contract or obligation to purchase or to 
     sell electricity or capacity under section 210 of the Public 
     Utility Regulatory Policies Act of 1978 (16 U.S.C. 824a-3).
       (b) Existing Rights and Remedies.--Nothing in this section 
     affects the rights or remedies of any party with respect to 
     the purchase or sale of electricity or capacity from or to a 
     facility determined to be a qualifying small power production 
     facility or a qualifying cogeneration facility under section 
     210 of the Public Utility Regulatory Policies Act of 1978 (16 
     U.S.C. 824a-3) under any contract or obligation to purchase 
     or to sell electricity or capacity in effect on the date of 
     enactment of this Act, including the right to recover the 
     costs of purchasing the electricity or capacity.

     SEC. 9. 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. 10. 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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