[Congressional Record (Bound Edition), Volume 149 (2003), Part 15]
[Senate]
[Pages 20073-20084]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           TEXT OF AMENDMENTS

  SA 1410. Mr. BINGAMAN proposed an amendment to amendment SA 1386 
proposed by Mr. Bond (for himself, Mr. Levin, Mr. Domenici, and Ms. 
Stabenow) to the bill S. 14, to enhance the energy security of the 
United States, and for other purposes; as follows:

       On page 5, strike lines 14 through 18 and insert the 
     following:
       (c) Clarification of Authority To Amend Passenger 
     Automobile Standard.--Section 32902 of title 49, United 
     States Code, is amended--
       (1) in subsection (b), by inserting before the period at 
     the end the following: ``, or such other number as the 
     Secretary prescribes under subsection (c)''; and
       (2) in subsection (c)(2), by striking ``The procedures of 
     section 551'' and all that follows and inserting the 
     following: ``The amendment shall be considered to be a major 
     rule that is subject to chapter 8 of title 5, United States 
     Code (relating to congressional review of agency 
     rulemaking).''.
                                 ______
                                 
  SA 1411. Mr. MILLER submitted an amendment intended to be proposed by 
him to the bill S. 14, to enhance the energy security of the United 
States, and for other purposes; which was ordered to lie on the table; 
as follows:

       On page 260, between lines 7 and 8, insert the following:

     SEC. 712. AVERAGE FUEL ECONOMY STANDARDS FOR PICKUP TRUCKS

       (a) In General.--Section 32902(a) of title 49, United 
     States Code, is amended--
       (1) by inserting ``(1)'' after ``Automobiles.--''; and
       (2) by adding at the end the following new paragraph:
       ``(2) The average fuel economy standard for pickup trucks 
     manufactured by a manufacturer in a model year after model 
     year 2005 shall be 20.7 miles per gallon. No average fuel 
     economy standard prescribed under another provision of this 
     section shall apply to pickup trucks.''.
       (b) Definition Of Pickup Truck.--Section 32901(a) of such 
     title is amended by adding at the end the following new 
     paragraph:
       ``(17) `pickup truck' has the meaning given that term in 
     regulations prescribed by the Secretary for the 
     administration of this chapter, as such regulations are in 
     effect on January 1, 2003, except that such term shall also 
     include any additional vehicle that the Secretary defines as 
     a pickup truck in regulations prescribed for the 
     administration of this chapter after such date.''.
                                 ______
                                 
  SA 1412. Mr. DOMENICI (for himself, Ms. Landrieu, Mr. Thomas, Ms. 
Murkowksi, Mr. Campbell, Mr. Smith, Mr. Alexander, Mr. Kyl, Mr. Nelson 
of Nebraska, Mr. Hagel, Mr. Talent, Mr. Bunning, and Mr. Coleman) 
proposed an amendment to the bill S. 14, to enhance the energy security 
of the United States, and for other purposes; as follows:

       Beginning on page 405, strike line 18 and all that follows 
     through page 467, line 16, and insert the following:

                         TITLE XI--ELECTRICITY

     SEC. 1101. DEFINITIONS.

       (a) Electric Utility.--Section 3(22) of the Federal Power 
     Act (16 U.S.C. 796(22)) is amended to read as follows:
       ``(22) `electric utility' means any person or Federal or 
     State agency (including any entity described in section 
     201(f)) that sells electric energy; such term includes the 
     Tennessee Valley Authority and each Federal power marketing 
     agency;''.
       (b) Transmitting Utility.--Section 3(23) of the Federal 
     Power Act (16 U.S.C. 796(23)) is amended to read as follows:
       ``(23) `transmitting utility' means an entity, including 
     any entity described in section 201(f), that owns or operates 
     facilities used for the transmission of electric energy--
       ``(A) in interstate commerce; or
       ``(B) for the sale of electric energy at wholesale;''.
       (c) Additional Definitions.--Section 3 of the Federal Power 
     Act (16 U.S.C. 796) is amended by adding at the end the 
     following:
       ``(26) `unregulated transmitting utility' means an entity 
     that--
       ``(A) owns or operates facilities used for the transmission 
     of electric energy in interstate commerce, and
       ``(B) is an entity described in section 201(f);
       ``(27) `electric cooperative' means a cooperatively owned 
     electric utility;
       ``(28) `Regional Transmission Organization' or `RTO' means 
     an entity of sufficient regional scope approved by the 
     Commission to exercise operational or functional control of 
     facilities used for the transmission of electric energy in 
     interstate commerce and to ensure non-discriminatory access 
     to such facilities; and
       ``(29) `Independent System Operator' or `ISO' means an 
     entity used for the transmission of electric energy and which 
     has been approved by the Commission to exercise operational 
     or functional control of facilities used for the transmission 
     of electric energy in interstate commerce and to ensure 
     nondiscriminatory access to such facilities.''.
       (d) Additional Modifications.--
       (1) Section 201(b)(2) of the Federal Power Act (16 U.S.C. 
     824(b)(2)) is amended by striking ``The'' the first time it 
     appears and inserting, ``Notwithstanding section 201(f), 
     the''.

[[Page 20074]]

       (2) Section 201(f) of the Federal Power Act (16 U.S.C. 
     824(f)) is amended by adding after ``political subdivision of 
     a state,'' ``an electric cooperative that has financing under 
     the Rural Electrification Act of 1936 (7 U.S.C. 901 et seq.) 
     or sells less than 4,000,000 megawatt hours of electricity 
     per year,''.
       (e) For the purposes of this title, the term ``Commission'' 
     means the Federal Energy Regulatory Commission.

                        Subtitle A--Reliability

     SEC. 1111. ELECTRIC RELIABILITY STANDARDS.

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


                         ``ELECTRIC RELIABILITY

       ``Sec. 215. (a) For the purposes of this section:
       ``(1) The term `bulk-power system' means--
       ``(A) facilities and control systems necessary for 
     operating an interconnected electric energy transmission 
     network (or any portion thereof); and
       ``(B) electric energy from generation facilities needed to 
     maintain transmission system reliability.
       The term does not include facilities used in the local 
     distribution of electric energy.
       ``(2) The terms `Electric Reliability Organization' and 
     `ERO' mean the organization certified by the Commission under 
     subsection (c), the purpose of which is to establish and 
     enforce reliability standards for the bulk-power system, 
     subject to Commission review.
       ``(3) The term `reliability standard' means a requirement, 
     approved by the Commission under this section, to provide for 
     reliable operation of the bulk-power system. The term 
     includes requirements for the operation of existing bulk-
     power system components and the design of planned additions 
     or modifications to such components to the extent necessary 
     to provide for reliable operation of the bulk-power system, 
     but the term does not include any requirement to enlarge such 
     components or to construct new transmission capacity or 
     generation capacity.
       ``(4) The term `reliable operation' means operating the 
     components of the bulk-power system within equipment and 
     electric system thermal, voltage, and stability limits so 
     that instability, uncontrolled separation, or cascading 
     failures of such system will not occur as a result of a 
     sudden disturbance or unanticipated failure of system 
     components.
       ``(5) The term `Interconnection' means a geographic area in 
     which the operation of bulkpower system components is 
     synchronized such that the failure of one or more of such 
     components may adversely affect the ability of the operators 
     of other components within the system to maintain reliable 
     operation of the portion of the system within their control.
       ``(6) The term `transmission organization' means an RTO or 
     other transmission organization finally approved by the 
     Commission for the operation of transmission facilities.
       ``(7) The term `regional entity' means an entity having 
     enforcement authority pursuant to subsection (e)(4).
       ``(b) The Commission shall have jurisdiction, within the 
     United States, over the ERO certified by the Commission under 
     subsection (c), any regional entities, and all users, owners 
     and operators of the bulk-power system, including the 
     entities described in section 201(f), for purposes of 
     approving reliability standards established under this 
     section and enforcing compliance with this section. All 
     users, owners and operators of the bulk-power system shall 
     comply with reliability standards that take effect under this 
     section. The Commission shall issue a final rule to implement 
     the requirements of this section not later than 180 days 
     after the date of enactment of this section.
       ``(c) Following the issuance of a Commission rule under 
     subsection (b), any person may submit an application to the 
     Commission for certification as the Electric Reliability 
     Organization. The Commission may certify one such ERO if the 
     Commission determines that such ERO--
       ``(1) has the ability to develop and enforce, subject to 
     subsection (d)(2), reliability standards that provide for an 
     adequate level of reliability of the bulk-power system; and
       ``(2) has established rules that--
       ``(A) assure its independence of the users and owners and 
     operators of the bulk-power system, while assuring fair 
     stakeholder representation in the selection of its directors 
     and balanced decisionmaking in any ERO committee or 
     subordinate organizational structure;
       ``(B) allocate equitably reasonable dues, fees, and other 
     charges among end users for all activities under this 
     section;
       ``(C) provide fair and impartial procedures for enforcement 
     of reliability standards through the imposition of penalties 
     in accordance with subsection (e) (including limitations on 
     activities, functions, or operations, or other appropriate 
     sanctions);
       ``(D) provide for reasonable notice and opportunity for 
     public comment, due process, openness, and balance of 
     interests in developing reliability standards and otherwise 
     exercising its duties; and
       ``(E) provide for taking, after certification, appropriate 
     steps to gain recognition in Canada and Mexico.
       ``(d)(1) The ERO shall file each reliability standard or 
     modification to a reliability standard that it proposes to be 
     made effective under this section with the Commission.
       ``(2) The Commission may approve by rule or order a 
     proposed reliability standard or modification to a 
     reliability standard if it determines that the standard is 
     just, reasonable, not unduly discriminatory or preferential, 
     and in the public interest. The Commission shall give due 
     weight to the technical expertise of the ERO with respect to 
     the content of a proposed standard or modification to a 
     reliability standard and to the technical expertise of a 
     regional entity organized on an Interconnection-wide basis 
     with respect to a reliability standard to be applicable 
     within that Interconnection, but shall not defer with respect 
     to the effect of a standard on competition. A proposed 
     standard or modification shall take effect upon approval by 
     the Commission.
       ``(3) The ERO shall rebuttably presume that a proposal from 
     a regional entity organized on an Interconnection-wide basis 
     for a reliability standard or modification to a reliability 
     standard to be applicable on an Interconnection-wide basis is 
     just, reasonable, and not unduly discriminatory or 
     preferential, and in the public interest.
       ``(4) The Commission shall remand to the ERO for further 
     consideration a proposed reliability standard or a 
     modification to a reliability standard that the Commission 
     disapproves in whole or in part.
       ``(5) The Commission, upon its own motion or upon 
     complaint, may order the ERO to submit to the Commission a 
     proposed reliability standard or a modification to a 
     reliability standard that addresses a specific matter if the 
     Commission considers such a new or modified reliability 
     standard appropriate to carry out this section.
       ``(6) The final rule adopted under subsection (b) shall 
     include fair processes for the identification and timely 
     resolution of any conflict between a reliability standard and 
     any function, rule, order, tariff, rate schedule, or 
     agreement accepted, approved, or ordered by the Commission 
     applicable to a transmission organization. Such transmission 
     organization shall continue to comply with such function, 
     rule, order, tariff, rate schedule or agreement accepted 
     approved, or ordered by the Commission until--
       ``(A) the Commission finds a conflict exists between a 
     reliability standard and any such provision;
       ``(B) the Commission orders a change to such provision 
     pursuant to section 206 of this Part; and
       ``(C) the ordered change becomes effective under this Part.
       If the Commission determines that a reliability standard 
     needs to be changed as a result of such a conflict, it shall 
     order the ERO to develop and file with the Commission a 
     modified reliability standard under paragraph (4) or (5) of 
     this subsection.
       ``(e)(1) The ERO may impose, subject to paragraph (2), a 
     penalty on a user or owner or operator of the bulk-power 
     system for a violation of a reliability standard approved by 
     the Commission under subsection (d) if the ERO, after notice 
     and an opportunity for a hearing--
       ``(A) finds that the user or owner or operator has violated 
     a reliability standard approved by the Commission under 
     subsection (d); and
       ``(B) files notice and the record of the proceeding with 
     the Commission.
       ``(2) A penalty imposed under paragraph (1) may take effect 
     not earlier than the 31st day after the ERO files with the 
     Commission notice of the penalty and the record of 
     proceedings. Such penalty shall be subject to review by the 
     Commission, on its own motion or upon application by the 
     user, owner or operator that is the subject of the penalty 
     filed within 30 days after the date such notice is filed with 
     the Commission. Application to the Commission for review, or 
     the initiation of review by the Commission on its own motion, 
     shall not operate as a stay of such penalty unless the 
     Commission otherwise orders upon its own motion or upon 
     application by the user, owner or operator that is the 
     subject of such penalty. In any proceeding to review a 
     penalty imposed under paragraph (1), the Commission, after 
     notice and opportunity for hearing (which hearing may consist 
     solely of the record before the ERO and opportunity for the 
     presentation of supporting reasons to affirm, modify, or set 
     aside the penalty), shall by order affirm, set aside, 
     reinstate, or modify the penalty, and, if appropriate, remand 
     to the ERO for further proceedings. The Commission shall 
     implement expedited procedures for such hearings.
       ``(3) On its own motion or upon complaint, the Commission 
     may order compliance with a reliability standard and may 
     impose a penalty against a user or owner or operator of the 
     bulk-power system, if the Commission finds, after notice and 
     opportunity for a hearing, that the user or owner or operator 
     of the bulk-power system has engaged or is about to engage in 
     any acts or practices that constitute or will constitute a 
     violation of a reliability standard.
       ``(4) The Commission shall establish regulations 
     authorizing the ERO to enter into an agreement to delegate 
     authority to a regional entity for the purpose of proposing 
     reliability standards to the ERO and enforcing reliability 
     standards under paragraph (1) if--

[[Page 20075]]

       ``(A) the regional entity is governed by an independent 
     board, a balanced stakeholder board, or a combination 
     independent and balanced stakeholder board;
       ``(B) the regional entity otherwise satisfies the 
     provisions of subsection (c)(1) and (2); and
       ``(C) the agreement promotes effective and efficient 
     administration of bulk-power system reliability.
       The Commission may modify such delegation. The ERO and the 
     Commission shall rebuttably presume that a proposal for 
     delegation to a regional entity organized on an 
     Interconnection-wide basis promotes effective and efficient 
     administration of bulk-power system reliability and should be 
     approved. Such regulation may provide that the Commission may 
     assign the ERO's authority to enforce reliability standards 
     under paragraph (1) directly to a regional entity consistent 
     with the requirements of this paragraph.
       ``(5) The Commission may take such action as is necessary 
     or appropriate against the ERO or a regional entity to ensure 
     compliance with a reliability standard or any Commission 
     order affecting the ERO or a regional entity.
       ``(6) Any penalty imposed under this section shall bear a 
     reasonable relation to the seriousness of the violation and 
     shall take into consideration the efforts of such user, 
     owner, or operator to remedy the violation in a timely 
     manner.
       ``(f) The ERO shall file with the Commission for approval 
     any proposed rule or proposed rule change, accompanied by an 
     explanation of its basis and purpose. The Commission, upon 
     its own motion or complaint, may propose a change to the 
     rules of the ERO. A proposed rule or proposed rule change 
     shall take effect upon a finding by the Commission, after 
     notice and opportunity for comment, that the change is just, 
     reasonable, not unduly discriminatory or preferential, is in 
     the public interest, and satisfies the requirements of 
     subsection (c).
       ``(g) The ERO shall conduct periodic assessments of the 
     reliability and adequacy of the bulk-power system in North 
     America.
       ``(h) The President is urged to negotiate international 
     agreements with the governments of Canada and Mexico to 
     provide for effective compliance with reliability standards 
     and the effectiveness of the ERO in the United States and 
     Canada or Mexico.
       ``(i)(1) The ERO shall have authority to develop and 
     enforce compliance with reliability standards for only the 
     bulk-power system.
       ``(2) This section does not authorize the ERO or the 
     Commission to order the construction of additional generation 
     or transmission capacity or to set and enforce compliance 
     with standards for adequacy or safety of electric facilities 
     or services.
       ``(3) Nothing in this section shall be construed to preempt 
     any authority of any State to take action to ensure the 
     safety, adequacy, and reliability of electric service within 
     that State, as long as such action is not inconsistent with 
     any reliability standard.
       ``(4) Within 90 days of the application of the ERO or other 
     affected party, and after notice and opportunity for comment, 
     the Commission shall issue a final order determining whether 
     a State action is inconsistent with a reliability standard, 
     taking into consideration any recommendation of the ERO.
       ``(5) The Commission, after consultation with the ERO, may 
     stay the effectiveness of any State action, pending the 
     Commission's issuance of a final order.
       ``(j) The Commission shall establish a regional advisory 
     body on the petition of at least two-thirds of the States 
     within a region that have more than one-half of their 
     electric load served within the region. A regional advisory 
     body shall be composed of one member from each participating 
     State in the region, appointed by the Governor of each State, 
     and may include representatives of agencies, States, and 
     provinces outside the United States. A regional advisory body 
     may provide advice to the ERO, a regional entity, or the 
     Commission regarding the governance of an existing or 
     proposed regional entity within the same region; whether a 
     standard proposed to apply within the region is just, 
     reasonable, not unduly discriminatory or preferential, and in 
     the public interest; whether fees proposed to be assessed 
     within the region are just, reasonable, not unduly 
     discriminatory or preferential, and in the public interest, 
     and any other responsibilities requested by the Commission. 
     The Commission may give deference to the advice of any such 
     regional advisory body if that body is organized on an 
     Interconnection-wide basis.
       ``(k) The provisions of this section do not apply to Alaska 
     or Hawaii.''.
       (b) The electric reliability organization certified by the 
     Commission under section 215(c) of the Federal Power Act and 
     any regional entity delegated enforcement authority pursuant 
     to section 215(e) of the Federal Power Act are not 
     departments, agencies, or instrumentalities of the United 
     States Government.

                      Subtitle B--Regional Markets

     SEC. 1121. IMPLEMENTATION DATE FOR PROPOSED RULEMAKING ON 
                   STANDARD MARKET DESIGN.

       The Commission's proposed rulemaking entitled ``Remedying 
     Undue Discrimination through Open Access Transmission Service 
     and Standard Electricity Market Design'' (Docket No. RM01-
     12000) is remanded to the Commission for reconsideration. No 
     final rule pursuant to the proposed rulemaking, including any 
     rule or order of general applicability within the scope of 
     the proposed rulemaking, may be issued before July 1, 2005. 
     Any final rule issued by the Commission pursuant to the 
     proposed rulemaking, including any rule or order of general 
     applicability within the scope of the proposed rulemaking, 
     shall be preceded by a notice of proposed rulemaking issued 
     after the date of enactment of this Act and an opportunity 
     for public comment.

     SEC. 1122. SENSE OF THE CONGRESS ON REGIONAL TRANSMISSION 
                   ORGANIZATIONS.

       It is the sense of Congress that, in order to promote fair, 
     open access to electric transmission service, benefit retail 
     consumers, facilitate wholesale competition, improve 
     efficiencies in transmission grid management, promote grid 
     reliability, remove opportunities for unduly discriminatory 
     or preferential transmission practices, and provide for the 
     efficient development of transmission infrastructure needed 
     to meet the growing demands of competitive wholesale power 
     markets, all transmitting utilities in interstate commerce 
     should voluntarily become members of independently 
     administered Regional Transmission Organizations (``RTO'') 
     that have operational or functional control of facilities 
     used for the transmission of electric energy in interstate 
     commerce and do not own or have a financial interest in 
     generation facilities used to supply electric energy for sale 
     at wholesale.

     SEC. 1123. PARTICIPATION IN REGIONAL TRANSMISSION 
                   ORGANIZATIONS.

       Nothing in this Act authorizes the Commission to require a 
     transmitting utility to transfer control or operational 
     control of its transmitting facilities to an RTO or any other 
     Commission-approved organization designated to provide non-
     discriminatory transmission access.

     SEC. 1124. FEDERAL UTILITY PARTICIPATION IN REGIONAL 
                   TRANSMISSION ORGANIZATIONS.

       (a) Definitions.--For purposes of this section:
       (1) The term ``appropriate Federal regulatory authority'' 
     means--
       (A) with respect to a Federal power marketing agency, the 
     Secretary of Energy, except that the Secretary may designate 
     the Administrator of a Federal power marketing agency to act 
     as the appropriate Federal regulatory authority with respect 
     to the transmission system of that Federal power marketing 
     agency; and
       (B) with respect to the Tennessee Valley Authority, the 
     Board of Directors of the Tennessee Valley Authority.
       (2) The term ``Federal utility'' means a Federal power 
     marketing agency or the Tennessee Valley Authority.
       (3) The term ``transmission system'' means electric 
     transmission facilities owned, leased, or contracted for by 
     the United States and operated by a Federal utility.
       (b) Transfer.--
       (1) The appropriate Federal regulatory authority is 
     authorized to enter into a contract, agreement, or other 
     arrangement transferring control and use of all or part of 
     the Federal utility's transmission system to a Regional 
     Transmission Organization (``RTO''), as defined in the 
     Federal Power Act. Such contract, agreement or arrangement 
     shall be voluntary and include--
       (A) performance standards for operation and use of the 
     transmission system that the head of the Federal utility 
     determines necessary or appropriate, including standards that 
     assure recovery of all the Federal utility's costs and 
     expenses related to the transmission facilities that are the 
     subject of the contract, agreement, or other arrangement; 
     consistency with existing contracts and third-party financing 
     arrangements; and consistency with said Federal utility's 
     statutory authorities, obligations, and limitations;
       (B) provisions for monitoring and oversight by the Federal 
     utility of the RTO fulfillment of the terms and conditions of 
     the contract, agreement or other arrangement, including a 
     provision that may provide for the resolution of disputes 
     through arbitration or other means with the RTO or with other 
     participants, notwithstanding the obligations and limitations 
     of any other law regarding arbitration; and
       (C) a provision that allows the Federal utility to withdraw 
     from the RTO and terminate the contract, agreement, or other 
     arrangement in accordance with its terms.
       (2) Neither this section, actions taken pursuant to it, nor 
     any other transaction of a Federal utility using an RTO shall 
     serve to confer upon the Commission jurisdiction or authority 
     over the Federal utility's electric generation assets, 
     electric capacity or energy that the Federal utility is 
     authorized by law to market, or the Federal utility's power 
     sales activities.
       (c) Existing Statutory and Other Obligations.--
       (1) Any statutory provision requiring or authorizing a 
     Federal utility to transmit electric power, or to construct, 
     operate, or

[[Page 20076]]

     maintain its transmission system shall not be construed to 
     prohibit a transfer of control and use of its transmission 
     system pursuant to, and subject to all requirements of 
     subsection (b).
       (2) This subsection shall not be construed to--
       (A) suspend, or exempt any Federal utility from any 
     provision of existing Federal law, including but not limited 
     to any requirement or direction relating to the use of the 
     Federal utility's transmission system, environmental 
     protection, fish and wildlife protection, flood control, 
     navigation, water delivery, or recreation; or
       (B) authorize abrogation of any contract or treaty 
     obligation.

     SEC. 1125. REGIONAL CONSIDERATION OF COMPETITIVE WHOLESALE 
                   MARKETS.

       (a) State Regulatory Authorities.--Not later than 90 days 
     after the date of enactment of this Act, the Commission shall 
     convene regional discussions with State regulatory 
     authorities, as defined in section 3(21) of the Federal Power 
     Act. The regional discussions should address whether 
     wholesale electric markets in each region are working 
     effectively to provide reliable service to electric consumers 
     in the region at the lowest reasonable cost. Priority should 
     be given to discussions in regions that do not have, as of 
     the date of enactment of this Act, a Regional Transmission 
     Organization (``RTO'') or an Independent System Operator 
     (``ISO''), as defined in the Federal Power Act. The regional 
     discussions shall consider--
       (1) the need for an RTO or other organizations in the 
     region to provide nondiscriminatory transmission access and 
     generation interconnection;
       (2) a process for regional planning of transmission 
     facilities with State regulatory authority participation and 
     for consideration of multi-state projects;
       (3) a means for ensuring that costs for all electric 
     consumers, as defined in section 3(5) of the Public Utility 
     Regulatory Policies Act of 1978 (16 U.S.C. 2602(5)), and 
     buyers of wholesale energy or capacity are reasonable and 
     economically efficient;
       (4) a means for ensuring that all electric consumers, as 
     defined in section 3(5) of the Public Utility Regulatory 
     Policies Act of 1978 (16 U.S.C. 2602(5)), within the region 
     maintain their ability to use the existing transmission 
     system without incurring unreasonable additional costs in 
     order to expand the transmission system for new customers;
       (5) whether the integrated transmission and electric power 
     supply system can and should be operated in a manner that 
     schedules and economically prioritizes all available electric 
     generation resources, so as to minimize the costs of electric 
     energy to all consumers (``economic dispatch'') and maintain 
     system reliability;
       (6) a means to provide transparent price signals to promote 
     proper location and utilization of generation and the 
     efficient expansion of transmission in a manner that does not 
     result in collection of transmission rents that do not 
     relieve congestion;
       (7) eliminating in a reasonable manner, consistent with 
     applicable State and Federal law, multiple, cumulative 
     charges for transmission service across successive locations 
     within a region (``pancaked rates'');
       (8) resolution of seams issues with neighboring regions and 
     inter-regional coordination;
       (9) a means of providing information electronically to 
     potential users of the transmission system;
       (10) implementation of a market monitor for the region with 
     State regulatory authority and Commission oversight and 
     establishment of rules and procedures that ensure that State 
     regulatory authorities are provided access to market 
     information and that provides for expedited consideration by 
     the Commission of any complaints concerning exercise of 
     market power and the operation of wholesale markets;
       (11) a process by which to phase-in any proposed RTO or 
     other organization designated to provide non-discriminatory 
     transmission access, including the formulation of 
     transmission pricing methodologies, so as to best meet the 
     needs of a region, and, if relevant, shall take into account 
     the special circumstances that may be found in the Western 
     Interconnection related to the existence of transmission 
     congestion, the existence of significant hydroelectric 
     capacity, the participation of unregulated transmitting 
     utilities, and the distances between generation and load;
       (12) the need to submit regional studies, within one year 
     of enactment of this Act, to the Commission outlining 
     possible methodologies that will ensure that the amount of 
     energy produced in any region will be equal to at least 50 
     percent of the amount of energy consumed in that region by 
     2013;
       (13) the potential value of developing a uniform system-
     wide average rate for transmission pricing as a way to 
     enhance the efficiency and reliability of the transmission 
     grid; and
       (14) a timetable to meet the objectives of this section.
       (b) Report.--Not later than 1 year after the date of 
     enactment of this Act, the Commission shall report to 
     Congress on the progress made in addressing the issues in 
     subsection (a) of this section in discussions with the 
     States.
       (c) Savings.--Nothing in this section shall affect any 
     discussions between the Commission and State or other retail 
     regulatory authorities that are on-going prior to enactment 
     of this Act.

   Subtitle C--Improving Transmission Access and Protecting Service 
                              Obligations

     SEC. 1131. SERVICE OBLIGATION SECURITY AND PARITY.

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

                ``Service Obligation Security and Parity

       ``SEC. 216. (a)(1) Any load-serving entity that, as of the 
     date of enactment of this section--
       ``(A) owns generation facilities, markets the output of 
     federal generation facilities, or holds rights under one or 
     more wholesale contracts to purchase electric energy, for the 
     purpose of meeting a service obligation, and
       ``(B) by reason of ownership of transmission facilities, or 
     one or more contracts or service agreements for firm 
     transmission service, holds firm transmission rights for 
     delivery of the output of such generation facilities or such 
     purchased energy to meet such service obligation, is entitled 
     to use such firm transmission rights, or, at its election, 
     equivalent tradeable or financial transmission rights, in 
     order to deliver such output or purchased energy, or the 
     output of other generating facilities or purchased energy to 
     the extent deliverable using such rights, to the extent 
     required to meet its service obligation.
       ``(2) To the extent that all or a portion of the service 
     obligation covered by such firm transmission rights or 
     equivalent tradeable or financial transmission rights is 
     transferred to another load-serving entity, the successor 
     load-serving entity shall be entitled to use the firm 
     transmission rights or equivalent tradeable or financial 
     transmission rights associated with the transferred service 
     obligation. Subsequent transfers to another load-serving 
     entity, or back to the original load-serving entity, shall be 
     entitled to the same rights.
       ``(3) The Commission shall exercise its authority under 
     this Act in a manner that facilitates the planning and 
     expansion of transmission facilities to meet the reasonable 
     needs of load-serving entities to satisfy their service 
     obligations.
       ``(b) Nothing in this section shall affect any methodology, 
     approved by the Commission prior to the date of enactment of 
     this section, for the allocation of transmission rights by an 
     RTO or ISO that has been authorized by the Commission to 
     allocate transmission rights.
       ``(c) Nothing in this Act shall relieve a load-serving 
     entity from any obligation under State or local law to build 
     transmission or distribution facilities adequate to meet its 
     service obligations.
       ``(d) Nothing in this section shall provide a basis for 
     abrogating any contract or service agreement for firm 
     transmission service or rights in effect as of the date of 
     the enactment of this subsection.
       ``(e) For purposes of this section:
       ``(1) The term `distribution utility' means an electric 
     utility that has a service obligation to end-users or to a 
     State utility or electric cooperative that, directly or 
     indirectly, through one or more additional State utilities or 
     electric cooperatives, provides electric service to end-
     users.
       ``(2) The term 'load-serving entity' means a distribution 
     utility or an electric utility that has a service obligation.
       ``(3) The term `service obligation' means a requirement 
     applicable to, or the exercise of authority granted to, an 
     electric utility under Federal, State or local law or under 
     long-term contracts to provide electric service to end-users 
     or to a distribution utility.
       ``(4) The term `State utility' means a State or any 
     political subdivision of a State, or any agency, authority, 
     or instrumentality of any one or more of the foregoing, or a 
     corporation which is wholly owned, directly or indirectly, by 
     any one or more of the foregoing, competent to carry on the 
     business of developing, transmitting, utilizing or 
     distributing power.
       ``(5) A transmitting utility that is a water district or 
     water agency to which section 201(f) applies and that has a 
     right under state law to provide water shall be treated as a 
     load-serving entity. Such water district or water agency's 
     right to provide water should be treated as a service 
     obligation.
       ``(f) Nothing in the section shall apply to an entity 
     located in an area referred to in section 212(k)(2)(A).
       ``(g) This section does not authorize the Commission to 
     take any action not otherwise within its jurisdiction under 
     other provisions of this Act.''

     SEC. 1132. OPEN NON-DISCRIMINATORY ACCESS.

       Part II of the Federal Power Act (16 U.S.C. 824 et seq.) is 
     amended by inserting after section 211 (16 U.S.C. 824j) the 
     following:


          ``open access by unregulated transmitting utilities

       

[[Page 20077]]



     ``SEC. 211A. (A) SUBJECT TO SECTION 212(H), THE COMMISSION 
                   MAY, BY RULE OR ORDER, REQUIRE AN UNREGULATED 
                   TRANSMITTING UTILITY TO PROVIDE TRANSMISSION 
                   SERVICES

       ``(1) at rates that are comparable to those that the 
     unregulated transmitting utility charges itself; and
       ``(2) on terms and conditions (not relating to rates) that 
     are comparable to those under which such unregulated 
     transmitting utility provides transmission services to itself 
     and that are not unduly discriminatory or preferential.
       ``(b) The Commission shall exempt from any rule or order 
     under this section any unregulated transmitting utility that
       ``(1) sells no more than 4,000,000 megawatt hours of 
     electricity per year; or
       ``(2) does not own or operate any transmission facilities 
     that are necessary for operating an interconnected 
     transmission system (or any portion thereof); or
       ``(3) meets other criteria the Commission determines to be 
     in the public interest.
       ``(c) The requirements of subsection (a) shall not apply to 
     facilities used in local distribution.
       ``(d) if an unregulated transmitting utility exempted 
     pursuant to subsection (b) no longer meets any of the 
     criteria for exemption, the exemption shall expire.
       ``(e) The rate changing procedures applicable to public 
     utilities under subsections (c) and (d) of section 205 are 
     applicable to unregulated transmitting utilities for purposes 
     of this section.
       ``(f) In exercising its authority under paragraph (1) of 
     subsection (a), the Commission may remand transmission rates 
     to an unregulated transmitting utility for review and 
     revision where necessary to meet the requirements of 
     subsection (a).
       ``(g) The provision of transmission services under 
     subsection (a) does not preclude a request for transmission 
     services under section 211.
       ``(h) The Commission may not require a State or 
     municipality to take action under this section that 
     constitutes a private business use for purposes of section 
     141 of the Internal Revenue Code of 1986 (26 U.S.C. 141).
       ``(i) Nothing in this Act authorizes the Commission to 
     require an unregulated transmitting utility to transfer 
     control or operational control of its transmitting facilities 
     to an RTO or any other Commission approved organization 
     designated to provide non-discriminatory transmission 
     access.''.

     SEC. 1133. TRANSMISSION INFRASTRUCTURE INVESTMENT.

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


                         ``participant funding

       

     ``SEC. 217. (A) IN GENERAL.--NOT LATER THAN 180 DAYS AFTER 
                   THE DATE OF ENACTMENT OF THIS SECTION, THE 
                   COMMISSION SHALL PROMULGATE FINAL REGULATIONS 
                   ESTABLISHING TRANSMISSION PRICING POLICIES 
                   APPLICABLE TO ALL PUBLIC UTILITIES ASSOCIATED 
                   WITH THE CONSTRUCTION OF NEW INTERSTATE 
                   TRANSMISSION FACILITIES AND EXPANSION, 
                   MODIFICATION, OR UPGRADING OF EXISTING 
                   INTERSTATE TRANSMISSION FACILITIES 
                   (``TRANSMISSION EXPANSION'').

       ``(b) Contents.--Consistent with section 205, the 
     regulation under subsection (a) shall, to the maximum extent 
     practicable--
       ``(1) promote economic capital investment in efficient 
     transmission systems;
       ``(2) encourage the construction and use of transmission 
     facilities and generation facilities that reduce risk and 
     provide just and reasonable rates to consumers;
       ``(3) encourage improved operation of generation and 
     transmission facilities and deployment of transmission 
     technologies designed to increase capacity and efficiency of 
     existing networks; and
       ``(4) ensure that the costs of any transmission expansion 
     are assigned or allocated in a fair manner, meaning that 
     those who benefit from the transmission expansion pay an 
     appropriate share of the associated costs.
       ``(c) Plan.
       ``(1) In general.--An RTO or ISO may submit to the 
     Commission a plan containing the criteria for determining the 
     person or persons who will be required to pay for any 
     transmission expansion. Nothing herein diminishes or alters 
     the rights of individual members of an RTO or ISO under the 
     Act.
       ``(2) Requirements.--The Commission shall approve a plan 
     submitted under paragraph (1) if the Commission determines 
     that the plan--
       ``(A) meets all the requirements of this Act and is 
     consistent with the regulation promulgated under subsection 
     (a);
       ``(B) specifies the method or methods by which costs may be 
     allocated or assigned. Such methods may include, but are not 
     limited to:
       ``(i) directly assigned;
       ``(ii) participant funded; or
       ``(iii) rolled into regional or sub-regional rates; and
       ``(C) ensures that the party or parties who pay for 
     facilities necessary for the transmission expansion receive 
     appropriate compensation for those facilities, considering 
     among other factors the economic benefits associated with the 
     transmission expansion.
       ``(3) Deference.--In exercising its jurisdiction under this 
     section, the Commission shall give substantial deference to 
     the comments filed with the Commission by State regulatory 
     authorities, other appropriate State officials, and 
     stakeholders of the RTO or ISO.
       ``(4) Effect of section.--Nothing in this section shall 
     affect an RTO or ISO's allocation methodology for 
     transmission expansion approved by the Commission prior to 
     the date of enactment of this section.''.

Subtitle D--Amendments to the Public Utility Regulatory Policies Act of 
                                  1978

     SEC. 1141. NET METERING.

       (a) Adoption of Standard.--Section 111(d) of the Public 
     Utility Regulatory Policies Act of 1978 (16 U.S.C. 2621(d)) 
     is amended by adding at the end the following:
       ``(11) Net metering.--
       ``(A) Each electric utility shall make available upon 
     request net metering service to any electric consumer that 
     the electric utility serves.
       ``(B) For purposes of implementing this paragraph, any 
     reference contained in this section to the date of enactment 
     of the Public Utility Regulatory Policies Act of 1978 shall 
     be deemed to be a reference to the date of enactment of this 
     paragraph.
       ``(C) Notwithstanding subsections (b) and (c) of section 
     112, each State regulatory authority shall consider and make 
     a determination concerning whether it is appropriate to 
     implement the standard set out in subparagraph (A) not later 
     than 1 year after the date of enactment of this paragraph.''.
       (b) Special Rules for Net Metering.--Section 115 of the 
     Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 
     2625) is further amended by adding at the end the following:
       ``(i) Net Metering.--In undertaking the consideration and 
     making the determination under section 111 with respect to 
     the standard concerning net metering established by section 
     III (d)(11), the term net metering service shall mean a 
     service provided in accordance with the following standards:
       ``(1) An electric utility--
       ``(A) shall charge the owner or operator of an on-site 
     generating facility rates and charges that are identical to 
     those that would be charged other electric consumers of the 
     electric utility in the same rate class; and
       ``(B) shall not charge the owner or operator of an on-site 
     generating facility any additional standby, capacity, 
     interconnection, or other rate or charge.
       ``(2) An electric utility that sells electric energy to the 
     owner or operator of an on-site generating facility shall 
     measure the quantity of electric energy produced by the on-
     site facility and the quantity of electric energy consumed by 
     the owner or operator of an on-site generating facility 
     during a billing period in accordance with reasonable 
     metering practices.
       ``(3) If the quantity of electric energy sold by the 
     electric utility to an on-site generating facility exceeds 
     the quantity of electric energy supplied by the on-site 
     generating facility to the electric utility during the 
     billing period, the electric utility may bill the owner or 
     operator for the net quantity of electric energy sold, in 
     accordance with reasonable metering practices.
       ``(4) If the quantity of electric energy supplied by the 
     on-site generating facility to the electric utility exceeds 
     the quantity of electric energy sold by the electric utility 
     to the on-site generating facility during the billing 
     period--
       ``(A) the electric utility may bill the owner or operator 
     of the on-site generating facility for the appropriate 
     charges for the billing period in accordance with paragraph 
     (2); and
       ``(B) the owner or operator of the on-site generating 
     facility shall be credited for the excess kilowatt-hours 
     generated during the billing period, with the kilowatt-hour 
     credit appearing on the bill for the following billing 
     period.
       ``(5) An eligible on-site generating facility and net 
     metering system used by an electric consumer shall meet all 
     applicable safety, performance, reliability, and 
     interconnection standards established by the National 
     Electrical Code, the Institute of Electrical and Electronics 
     Engineers, and Underwriters Laboratories.
       ``(6) The Commission, after consultation with State 
     regulatory authorities and unregulated electric utilities and 
     after notice and opportunity for comment, may adopt, by rule, 
     additional control and testing requirements for on-site 
     generating facilities and net metering systems that the 
     Commission determines are necessary to protect public safety 
     and system reliability.
       ``(7) For purposes of this subsection--
       ``(A) The term `eligible on-site generating facility' means 
     a facility on the site of a residential electric consumer 
     with a maximum generating capacity of 10 kilowatts or less 
     that is fueled by solar energy, wind energy, or fuel cells; 
     or a facility on the site of a commercial electric consumer 
     with a maximum generating capacity of 500 kilowatts or less 
     that is fueled solely by a renewable energy resource, 
     landfill gas, or a high efficiency system.
       ``(B) The term `renewable energy resource' means solar, 
     wind, biomass, or geothermal energy.
       ``(C) The term `high efficiency system' means fuel cells or 
     combined heat and power.
       ``(D) The term `net metering service' means service to an 
     electric consumer under

[[Page 20078]]

     which electric energy generated by that electric consumer 
     from an eligible on-site generating facility and delivered to 
     the local distribution facilities may be used to offset 
     electric energy provided by the electric utility to the 
     electric consumer during the applicable billing period.''.

     SEC. 1142. SMART METERING.

       (a) In General.--Section 111(d) of the Public Utilities 
     Regulatory Policies Act of 1978 (16 U.S.C. 2621(d)) is 
     amended by adding at the end the following:
       ``(12) Time-based metering and communications.--
       ``(A) Each electric utility shall offer each of its 
     customer classes, and provide individual customers upon 
     customer request, a time-based rate schedule under which the 
     rate charged by the electric utility varies during different 
     time periods and reflects the variance in the costs of 
     generating and purchasing electricity at the wholesale level. 
     The time-based rate schedule shall enable the electric 
     consumer to manage energy use and cost through advanced 
     metering and communications technology.
       ``(B) The types of time-based rate schedules that may be 
     offered under the schedule referred to in subparagraph (A) 
     include, among others--
       ``(i) time-of-use pricing whereby electricity prices are 
     set for a specific time period on an advance or forward 
     basis, typically not changing more often than twice a year. 
     Prices paid for energy consumed during these periods shall be 
     pre-established and known to consumers in advance of such 
     consumption, allowing them to vary their demand and usage in 
     response to such prices and manage their energy costs by 
     shifting usage to a lower cost period or reducing their 
     consumption overall;
       ``(ii) critical peak pricing whereby time-of-use prices are 
     in effect except for certain peak days, when prices may 
     reflect the costs of generating and purchasing electricity at 
     the wholesale level and when consumers may receive additional 
     discounts for reducing peak period energy consumption; and
       ``(iii) real-time pricing whereby electricity prices are 
     set for a specific time period on an advanced or forward 
     basis and may change as often as hourly.
       ``(C) Each electric utility subject to subparagraph (A) 
     shall provide each customer requesting a time-based rate with 
     a time-based meter capable of enabling the utility and 
     customer to offer and receive such rate, respectively.
       ``(D) For purposes of implementing this paragraph, any 
     reference contained in this section to the date of enactment 
     of the Public Utility Regulatory Policies Act of 1978 shall 
     be deemed to be a reference to the date of enactment of this 
     paragraph.
       ``(E) In a State that permits third-party marketers to sell 
     electric energy to retail electric consumers, such consumers 
     shall be entitled to receive that same time-based metering 
     and communications device and service as a retail electric 
     consumer of the electric utility.
       ``(F) Notwithstanding subsections (b) and (c) of section 
     112, each State regulatory authority shall, not later than 12 
     months after the date of enactment of this paragraph conduct 
     an investigation in accordance with section 115(I) and issue 
     a decision whether it is appropriate to implement the 
     standards set out in subparagraphs (A) and (C).''.
       (b) State Investigation of Demand Response and Time-Based 
     Metering.--Section 115 of the Public Utilities Regulatory 
     Policies Act of 1978 (16 U.S.C. 2625) is amended by adding at 
     the end the following:
       ``(j) Time-Based Metering and Communications.--Each State 
     regulatory authority shall conduct an investigation and issue 
     a decision whether or not it is appropriate for electric 
     utilities to provide and install time-based meters and 
     communications devices for each of their customers which 
     enable such customers to participate in time-based pricing 
     rate schedules and other demand response programs.''.
       (c) Federal Assistance on Demand Response.--Section 132(a) 
     of the Public Utility Regulatory Policies Act of 1978 (16 
     U.S.C. 2642(a)) is amended by striking ``and'' at the end of 
     paragraph (3), striking the period at the end of paragraph 
     (4) and inserting ``; and'', and by adding the following at 
     the end thereof:
       ``(5) technologies, techniques, and rate-making methods 
     related to advanced metering and communications and the use 
     of these technologies, techniques and methods in demand 
     response programs.''.
       (d) Federal Guidance.--Section 132 of the Public Utility 
     Regulatory Policies Act of 1978 (16 U.S.C. 2643) is amended 
     by adding the following at the end thereof:
       ``(d) Demand Response.--The Secretary shall be responsible 
     for--
       ``(1) educating consumers on the availability, advantages, 
     and benefits of advanced metering and communications 
     technologies, including the funding of demonstration or pilot 
     projects;
       ``(2) working with States, utilities, other energy 
     providers and advanced metering and communications experts to 
     identify and address barriers to the adoption of demand 
     response programs; and
       ``(3) not later than 180 days after the date of enactment 
     of the Energy Policy Act of 2003, providing the Congress with 
     a report that identifies and quantifies the national benefits 
     of demand response and makes a recommendation on achieving 
     specific levels of such benefits by January 1, 2005.
       ``(e) Demand Response and Regional Coordination.--
       ``(1) It is the policy of the United States to encourage 
     States to coordinate, on a regional basis, State energy 
     policies to provide reliable and affordable demand response 
     services to the public.
       ``(2) The Secretary of Energy shall provide technical 
     assistance to States and regional organizations formed by two 
     or more States to assist them in--
       ``(A) identifying the areas with the greatest demand 
     response potential;
       ``(B) identifying and resolving problems in transmission 
     and distribution networks, including through the use of 
     demand response; and
       ``(C) developing plans and programs to use demand response 
     to respond to peak demand or emergency needs.
       ``(3) Not later than 1 year after the date of enactment of 
     the Energy Policy Act of 2003, the Commission shall prepare 
     and publish an annual report, by appropriate region, that 
     assesses demand response resources, including those available 
     from all consumer classes, and which identifies and reviews--
       ``(A) saturation and penetration rate of advanced meters 
     and communications technologies, devices and systems;
       ``(B) existing demand response programs and time-based rate 
     programs;
       ``(C) the annual resource contribution of demand resources;
       ``(D) the potential for demand response as a quantifiable, 
     reliable resource for regional planning purposes; and
       ``(E) steps taken to ensure that, in regional transmission 
     planning and operations, demand resources are provided 
     equitable treatment as a quantifiable, reliable resource 
     relative to the resource obligations of any load-serving 
     entity, transmission provider, or transmitting party.
       ``(f) Federal Encouragement of Demand Response Devices.--It 
     is the policy of the United States that time-based pricing 
     and other forms of demand response, whereby electricity 
     customers are provided with electricity price signals and the 
     ability to benefit by responding to them, shall be 
     encouraged, and the deployment of such technology and devices 
     that enable electricity customers to participate in such 
     pricing and demand response systems shall be facilitated.''.

     SEC. 1143. ADOPTION OF ADDITIONAL STANDARDS.

       (a) Adoption of Standards.--Section 113(b) of the Public 
     Utility Regulatory Policies Act of 1978 (16 U.S.C. 2623(b)) 
     is amended by adding at the end the following:
       ``(6) Each electric utility shall provide distributed 
     generation, combined heat and power, and district heating and 
     cooling systems competitive access to the local distribution 
     grid and competitive pricing of service, and shall use 
     simplified standard contracts for the interconnection of 
     generating facilities that have a power production capacity 
     of 250 kilowatts or less.
       ``(7) No electric utility may refuse to interconnect a 
     generating facility with the distribution facilities of the 
     electric utility if the owner or operator of the generating 
     facility complies with technical standards adopted by the 
     State regulatory authority and agrees to pay the costs 
     established by such State regulatory authority.
       ``(8) Each electric utility shall develop a plan to 
     minimize dependence on one fuel source and to ensure that the 
     electric energy it sells to consumers is generated using a 
     diverse range of fuels and technologies, including renewable 
     technologies.
       ``(9) Each electric utility shall develop and implement a 
     10-year plan to increase the efficiency of its fossil fuel 
     generation.''.
       (b) Time for Adopting Standards.--Section 113 of the Public 
     Utility Regulatory Policies Act of 1978 (16 U.S.C. 2623) is 
     further amended by adding at the end the following:
       ``(d) Special Rule.--For purposes of implementing 
     paragraphs (6), (7), (8), and (9) of subsection (b), any 
     reference contained in this section to the date of enactment 
     of the Public Utility Regulatory Policies Act of 1978 shall 
     be deemed to be a reference to the date of enactment of this 
     subsection.''.

     SEC. 1144. TECHNICAL ASSISTANCE.

       Section 132(c) of the Public Utility Regulatory Policies 
     Act of 1978 (16 U.S.C. 2642(c)) is amended to read as 
     follows:
       ``(c) Technical Assistance for Certain Responsibilities.--
     The Secretary may provide such technical assistance as 
     determined appropriate to assist State regulatory authorities 
     and electric utilities in carrying out their responsibilities 
     under section 111(d)(11) and paragraphs (6), (7), (8), and 
     (9) of section 113(b).''.

     SEC. 1145. COGENERATION AND SMALL POWER PRODUCTION PURCHASE 
                   AND SALE REQUIREMENTS.

       (a) Termination of Mandatory Purchase and Sale 
     Requirements.--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) Termination of Mandatory Purchase and Sale 
     Requirements.--
       ``(1) Obligation to Purchase.--After the date of enactment 
     of this subsection, no electric utility shall be required to 
     enter into a

[[Page 20079]]

     new contract or obligation to purchase electric energy from a 
     qualifying cogeneration facility or a qualifying small power 
     production facility under this section if the Commission 
     finds that the qualifying cogeneration facility or qualifying 
     small power production facility has nondiscriminatory access 
     to--
       ``(A)(i) independently administered, auction-based day 
     ahead and real time wholesale markets for the sale of 
     electric energy; and
       (ii) wholesale markets for longterm sales of capacity and 
     electric energy; or
       ``(B)(i) transmission and interconnection services that are 
     provided by a Commission-approved regional transmission 
     entity and administered pursuant to an open access 
     transmission tariff that affords nondiscriminatory treatment 
     to all customers; and
       ``(ii) competitive wholesale markets that provide a 
     meaningful opportunity to sell capacity, including long-term 
     and short-term sales, and electric energy, including long-
     term, short-term and real-time sales, to buyers other than 
     the utility to which the qualifying facility is 
     interconnected. In determining whether a meaningful 
     opportunity to sell exists, the Commission shall consider, 
     among other factors, evidence of transactions within the 
     relevant market; or
       ``(C) wholesale markets for the sale of capacity and 
     electric energy that are, at a minimum, of comparable 
     competitive quality as markets described in subparagraphs (A) 
     and (B).
       ``(2) Revised purchase and sale obligation for new 
     facilities.--
       ``(A) After the date of enactment of this subsection, no 
     electric utility shall be required pursuant to this section 
     to enter into a new contract or obligation to purchase from 
     or sell electric energy to a facility that is not an existing 
     qualifying cogeneration facility unless the facility meets 
     the criteria for qualifying cogeneration facilities 
     established by the Commission pursuant to the rulemaking 
     required by subsection (n).
       ``(B) For the purposes of this paragraph, the term 
     `existing qualifying cogeneration facility' means a facility 
     that--
       ``(i) was a qualifying cogeneration facility on the date of 
     enactment of subsection (m); or
       ``(ii) had filed with the Commission a notice of self-
     certification, self-recertification or an application for 
     Commission certification under 18 C.F.R. 292.207 prior to the 
     date on which the Commission issues the final rule required 
     by subsection (n).
       ``(3) Commission review.--Any electric utility may file an 
     application with the Commission for relief from the mandatory 
     purchase obligation pursuant to this subsection on a service 
     territory-wide basis. Such application shall set forth the 
     factual basis upon which relief is requested and describe why 
     the conditions set forth in subparagraphs (A), (B) or (C) of 
     paragraph (1) of this subsection have been met. After notice, 
     including sufficient notice to potentially affected 
     qualifying cogeneration facilities and qualifying small power 
     production facilities, and an opportunity for comment, the 
     Commission shall make a final determination within 90 days of 
     such application regarding whether the conditions set forth 
     in subparagraphs (A), (B) or (C) of paragraph (1) have been 
     met.
       ``(4) Reinstatement of obligation to purchase.--At any time 
     after the Commission makes a finding under paragraph (3) 
     relieving an electric utility of its obligation to purchase 
     electric energy, a qualifying cogeneration facility, a 
     qualifying small power production facility, a State agency, 
     or any other affected person may apply to the Commission for 
     an order reinstating the electric utility's obligation to 
     purchase electric energy under this section. Such application 
     shall set forth the factual basis upon which the application 
     is based and describe why the conditions set forth in 
     subparagraphs (A), (B) or (C) of paragraph (1) of this 
     subsection are no longer met. After notice, including 
     sufficient notice to potentially affected utilities, and 
     opportunity for comment, the Commission shall issue an order 
     within 90 days of such application reinstating the electric 
     utility's obligation to purchase electric energy under this 
     section if the Commission finds that the conditions set forth 
     in subparagraphs (A), (B) or (C) of paragraph (1) which 
     relieved the obligation to purchase, are no longer met.
       ``(5) Obligation to sell.--After the date of enactment of 
     this subsection, no electric utility shall be required to 
     enter into a new contract or obligation to sell electric 
     energy to a qualifying cogeneration facility or a qualifying 
     small power production facility under this section if the 
     Commission finds that--
       ``(A) competing retail electric suppliers are willing and 
     able to sell and deliver electric energy to the qualifying 
     cogeneration facility or qualifying small power production 
     facility; and
       ``(B) the electric utility is not required by State law to 
     sell electric energy in its service territory.
       ``(6) No effect on existing rights and remedies.--Nothing 
     in this subsection affects the rights or remedies of any 
     party under any contract or obligation, in effect or pending 
     approval before the appropriate State regulatory authority or 
     non-regulated electric utility on the date of enactment of 
     this subsection, to purchase electric energy or capacity from 
     or to sell electric energy or capacity to a qualifying 
     cogeneration facility or qualifying small power production 
     facility under this Act (including the right to recover costs 
     of purchasing electric energy or capacity).
       ``(7) Recovery of Costs.--
       ``(A) The Commission shall promulgate and enforce such 
     regulations as are necessary to ensure that an electric 
     utility that purchases electric energy or capacity from a 
     qualifying cogeneration facility or qualifying small power 
     production facility in accordance with any legally 
     enforceable obligation entered into or imposed under this 
     section recovers all prudently incurred costs associated with 
     the purchase.
       ``(B) A regulation under subparagraph (A) shall be 
     enforceable in accordance with the provisions of law 
     applicable to enforcement of regulations under the Federal 
     Power Act (16 U.S.C. 791 a et seq.).
       ``(n) Rulemaking for New Qualifying Facilities.--
       ``(1)(A) Not later than 180 days after the date of 
     enactment of this section, the Commission shall issue a rule 
     revising the criteria in 18 C.F.R. 292.205 for new qualifying 
     cogeneration facilities seeking to sell electric energy 
     pursuant to section 210 of this Act to ensure
       ``(i) that the thermal energy output of a new qualifying 
     cogeneration facility is used in a productive and beneficial 
     manner;
       ``(ii) the electrical, thermal, and chemical output of the 
     cogeneration facility is used fundamentally for industrial, 
     commercial, or institutional purposes and is not intended 
     fundamentally for sale to an electric utility, taking into 
     account technological, efficiency, economic, and variable 
     thermal energy requirements, as well as state laws applicable 
     to sales of electric energy from a qualifying facility to its 
     host facility; and
       ``(iii) continuing progress in the development of efficient 
     electric energy generating technology.
       ``(B) The rule promulgated pursuant to section (n)(1)(A) 
     shall be applicable only to facilities that seek to sell 
     electric energy pursuant to section 210 of this Act. For all 
     other purposes, except as specifically provided in section 
     (m)(2)(A), qualifying facility status shall be determined in 
     accordance with the rules and regulations of this Act.
       ``(2) Rules for Existing Facilities.--Notwithstanding rule 
     revisions under paragraph (1), the Commission's criteria for 
     qualifying cogeneration facilities in effect prior to the 
     date on which the Commission issues the final rule required 
     by paragraph (1) shall continue to apply to any cogeneration 
     facility that--
       ``(A) was a qualifying cogeneration facility on the date of 
     enactment of subsection (m), or
       ``(B) had filed with the Commission a notice of self-
     certification, self-recertification or an application for 
     Commission certification under 18 C.F.R. 292.207 prior to the 
     date on which the Commission issues the final rule required 
     by paragraph (1).''.
       (b) Elimination of Ownership Limitations.--
       (1) Section 3(17)(C) of the Federal Power Act (16 U.S.C. 
     796(17)(C)) is amended to read as follows:
       ``(C) `qualifying small power production facility' means a 
     small power production facility that the Commission 
     determines, by rule, meets such requirements (including 
     requirements respecting fuel use, fuel efficiency, and 
     reliability) as the Commission may, by rule, prescribe.''.
       (2) Section 3(18)(B) of the Federal Power Act (16 U.S.C. 
     796(18)(B)) is amended to read as follows:
       ``(B) `qualifying cogeneration facility' means a 
     cogeneration facility that the Commission determines, by 
     rule, meets such requirements (including requirements 
     respecting minimum size, fuel use, and fuel efficiency) as 
     the Commission may, by rule, prescribe.''.

Subtitle E--Provisions Regarding the Public Utility Holding Company Act 
                                of 1935

       This subtitle may be cited as the ``Public Utility Holding 
     Company Act of 2003.''

     SEC. 1151. DEFINITIONS.

       For the purposes of this subtitle:
       (1) The term ``affiliate'' of a company means any company 5 
     percent or more of the outstanding voting securities of which 
     are owned, controlled, or held with power to vote, directly 
     or indirectly, by such company.
       (2) The term ``associate company'' of a company means any 
     company in the same holding company system with such company.
       (3) The term ``Commission'' means the Federal Energy 
     Regulatory Commission.
       (4) The term ``company'' means a corporation, partnership, 
     association, joint stock company, business trust, or any 
     organized group of persons, whether incorporated or not, or a 
     receiver, trustee, or other liquidating agent of any of the 
     foregoing.
       (5) 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.
       (6) The terms ``exempt wholesale generator'' and ``foreign 
     utility company'' have

[[Page 20080]]

     the same meanings as in sections 32 and 33, respectively, of 
     the Public Utility Holding Company Act of 1935 (15 U.S.C. 
     79z-5, 79z-5b), as those sections existed on the day before 
     the effective date of this subtitle.
       (7) 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 or distribution to tenants or employees of the 
     company operating such facilities for their own use and not 
     for resale) of natural or manufactured gas for heat, light, 
     or power.
       (8) The term ``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 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 company or holding company as to make it necessary or 
     appropriate for the rate protection of utility customers with 
     respect to rates that such person be subject to the 
     obligations, duties, and liabilities imposed by this subtitle 
     upon holding companies.
       (9) The term ``holding company system'' means a holding 
     company, together with its subsidiary companies.
       (10) The term ``jurisdictional rates'' means rates 
     established by the Commission for the transmission of 
     electric energy in interstate commerce, the sale of electric 
     energy at wholesale in interstate commerce, the 
     transportation of natural gas in interstate commerce, and the 
     sale in interstate commerce of natural gas for resale for 
     ultimate public consumption for domestic, commercial, 
     industrial, or any other use.
       (11) The term ``natural gas company'' means a person 
     engaged in the transportation of natural gas in interstate 
     commerce or the sale of such gas in interstate commerce for 
     resale.
       (12) The term ``person'' means an individual or company.
       (13) The term ``public utility'' means any person who owns 
     or operates facilities used for transmission of electric 
     energy in interstate commerce or sales of electric energy at 
     wholesale in interstate commerce.
       (14) The term ``public-utility company'' means an electric 
     utility company or a gas utility company.
       (15) The term ``State commission'' means any commission, 
     board, agency, or officer, by whatever name designated, of a 
     State, municipality, or other political subdivision of a 
     State that, under the laws of such State, has jurisdiction to 
     regulate public-utility companies.
       (16) The term ``subsidiary company'' of a holding company 
     means
       (A) 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
       (B) any person, the management or policies of which the 
     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 rate 
     protection of utility customers with respect to rates that 
     such person be subject to the obligations, duties, and 
     liabilities imposed by this subtitle upon subsidiary 
     companies of holding companies.
       (17) 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. 1152. 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 12 months after the date 
     of enactment of this Act.

     SEC. 1153. FEDERAL ACCESS TO BOOKS AND RECORDS.

       (a) In General.--Each holding company and each associate 
     company thereof shall maintain, and shall make available to 
     the Commission, such books, accounts, memoranda, and other 
     records as the Commission determines are relevant to costs 
     incurred by a public utility or natural gas company that is 
     an associate company of such holding company and necessary or 
     appropriate for the protection of utility customers with 
     respect to jurisdictional rates.
       (b) Affiliate Companies.--Each affiliate of a holding 
     company or of any subsidiary company of a holding company 
     shall maintain, and make available to the Commission, such 
     books, accounts, memoranda, and other records with respect to 
     any transaction with another affiliate, as the Commission 
     determines are relevant to costs incurred by a public utility 
     or natural gas company that is an associate company of such 
     holding company and necessary or appropriate for the 
     protection of utility customers with respect to 
     jurisdictional rates.
       (c) Holding Company Systems.--The Commission may examine 
     the books, accounts, memoranda, and other records of any 
     company in a holding company system, or any affiliate 
     thereof, as the Commission determines are relevant to costs 
     incurred by a public utility or natural gas company within 
     such holding company system and necessary or appropriate for 
     the protection of utility customers with respect to 
     jurisdictional rates.
       (d) Confidentiality.--No member, officer, or employee of 
     the Commission shall divulge any fact or information that may 
     come to his or her knowledge during the course of examination 
     of books, accounts, memoranda, or other records as provided 
     in this section, except as may be directed by the Commission 
     or by a court of competent jurisdiction.

     SEC. 1154. STATE ACCESS TO BOOKS AND RECORDS.

       (a) In General.--Upon the written request of a State 
     commission having jurisdiction to regulate a public-utility 
     company in a holding company system, and subject to such 
     terms and conditions as may be necessary and appropriate to 
     safeguard against unwarranted disclosure to the public of any 
     trade secrets or sensitive commercial information, a holding 
     company or any associate company or affiliate thereof, 
     wherever located, shall produce for inspection books, 
     accounts, memoranda, and other records that--
       (1) have been identified in reasonable detail in a 
     proceeding before the State commission;
       (2) the State commission determines are relevant to costs 
     incurred by such public-utility company; and
       (3) are necessary for the effective discharge of the 
     responsibilities of the State commission with respect to such 
     proceeding.
       (b) Effect on State Law.--Nothing in this section shall 
     preempt applicable State law concerning the provision of 
     books, accounts, memoranda, or other records, or in any way 
     limit the rights of any State to obtain books, accounts, 
     memoranda, or other records, under Federal law, contract, or 
     otherwise.
       (c) Court Jurisdiction.--Any United States district court 
     located in the State in which the State commission referred 
     to in subsection (a) is located shall have jurisdiction to 
     enforce compliance with this section.

     SEC. 1155. EXEMPTION AUTHORITY.

       (a) Rulemaking.--Not later than 90 days after the date of 
     enactment of this title, the Commission shall promulgate a 
     final rule to exempt from the requirements of section 1153 
     any person that is a holding company, solely with respect to 
     one or more--
       (1) qualifying facilities under the Public Utility 
     Regulatory Policies Act of 1978 (16 U.S.C. 2601 et seq.);
       (2) exempt wholesale generators; or
       (3) foreign utility companies.
       (b) Other Authority.--If, upon application or upon its own 
     motion, the Commission finds that the books, accounts, 
     memoranda, and other records of any person are not relevant 
     to the jurisdictional rates of a public-utility company or 
     natural gas company, or if the Commission finds that any 
     class of transactions is not relevant to the jurisdictional 
     rates of a public-utility company, the Commission shall 
     exempt such person or transaction from the requirements of 
     section 1153.

     SEC. 1156. AFFILIATE TRANSACTIONS.

       Nothing in this subtitle shall preclude the Commission or a 
     State commission from exercising its jurisdiction under 
     otherwise applicable law to determine whether a public-
     utility company, public utility, or natural gas company may 
     recover in rates any costs of an activity performed by an 
     associate company, or any costs of goods or services acquired 
     by such public-utility company, public utility, or natural 
     gas company from an associate company.

     SEC. 1157. APPLICABILITY.

       No provision of this subtitle shall apply to, or be deemed 
     to include--
       (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 entity 
     referred to in paragraph (1), (2), or (3); or
       (5) any officer, agent, or employee of any entity referred 
     to in paragraph (1), (2), or (3) acting as such in the course 
     of such officer, agent, or employee's official duty.

     SEC. 1158. EFFECT ON OTHER REGULATIONS.

       Nothing in this subtitle precludes the Commission or a 
     State commission from exercising its jurisdiction under 
     otherwise applicable law to protect utility customers.

     SEC. 1159. 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. 
     825e-825p) to enforce the provisions of this subtitle.

     SEC. 1160. SAVINGS PROVISIONS.

       (a) In General.--Nothing in this subtitle prohibits a 
     person from engaging in or continuing to engage in activities 
     or transactions in which it is legally engaged or authorized 
     to engage on the date of enactment of this Act, if that 
     person continues to comply with the terms of any such 
     authorization, whether by rule or by order.
       (b) Effect on Other Commission Authority.--Nothing in this 
     subtitle limits the authority of the Commission under the 
     Federal

[[Page 20081]]

     Power Act (16 U.S.C. 791a et seq.) (including section 301 of 
     that Act) or the Natural Gas Act (15 U.S.C. 717 et seq.) 
     (including section 8 of that Act).

     SEC. 1161. IMPLEMENTATION.

       Not later than 12 months after the date of enactment of 
     this title, the Commission shall--
       (1) promulgate such regulations as may be necessary or 
     appropriate to implement this subtitle; and
       (2) submit to Congress detailed recommendations on 
     technical and conforming amendments to Federal law necessary 
     to carry out this subtitle and the amendments made by this 
     subtitle.

     SEC. 1162. TRANSFER OF RESOURCES.

       All books and records that relate primarily to the 
     functions transferred to the Commission under this subtitle 
     shall be transferred from the Securities and Exchange 
     Commission to the Commission.

     SEC. 1163. EFFECTIVE DATE.

       This subtitle shall take effect 12 months after the date of 
     enactment of this title.

     SEC. 1164. CONFORMING AMENDMENT TO THE FEDERAL POWER ACT.

       Section 318 of the Federal Power Act (16 U.S.C. 825q) is 
     repealed.

   Subtitle F--Market Transparency, Anti-Manipulation and Enforcement

     SEC. 1171. MARKET TRANSPARENCY RULES.

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


                      ``MARKET TRANSPARENCY RULES

       ``Sec. 218. (a) Not later than 180 days after the date of 
     enactment of this section, the Commission shall issue rules 
     establishing an electronic information system to provide the 
     Commission and the public with access to such information as 
     is necessary or appropriate to facilitate price transparency 
     and participation in markets subject to the Commission's 
     jurisdiction. Such systems shall provide information about 
     the availability and market price of wholesale electric 
     energy and transmission services to the Commission, State 
     commissions, buyers and sellers of wholesale electric energy, 
     users of transmission services, and the public. The 
     Commission shall have authority to obtain such information 
     from any electric and transmitting utility, including any 
     entity described in section 201(f).
       ``(b) The Commission shall exempt from disclosure 
     information it determines would, if disclosed, be detrimental 
     to the operation of an effective market or jeopardize system 
     security. This section shall not apply to an entity described 
     in section 212(k)(2)(B) with respect to transactions for the 
     purchase or sale of wholesale electric energy and 
     transmission services within the area described in section 
     212(k)(2)(A). In determining the information to be made 
     available under this section and time to make such 
     information available, the Commission shall seek to ensure 
     that consumers and competitive markets are protected from the 
     adverse effects of potential collusion or other anti-
     competitive behaviors that can be facilitated by untimely 
     public disclosure of transaction-specific information.
       ``(c) This section shall not affect the exclusive 
     jurisdiction of the Commodity Futures Trading Commission with 
     respect to accounts, agreements, contracts, or transactions 
     in commodities under the Commodity Exchange Act (7 U.S.C. 1 
     et seq.). Any request for information to a designated 
     contract market, registered derivatives transaction execution 
     facility, board of trade, exchange, or market involving 
     accounts, agreements, contracts, or transactions in 
     commodities (including natural gas, electricity and other 
     energy commodities) within the exclusive jurisdiction of the 
     Commodity Futures Trading Commission shall be directed to the 
     Commodity Futures Trading Commission.''.

     SEC. 1172. MARKET MANIPULATION.

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


               ``PROHIBITION ON FILING FALSE INFORMATION

       ``Sec. 219. It shall be a violation of this Act for any 
     person or any other entity (including entities described in 
     section 201(f) knowingly and willfully to report any 
     information relating to the price of electricity sold at 
     wholesale or availability of transmission capacity, which 
     information the person or any other entity knew to be false 
     at the time of the reporting, to any governmental entity with 
     the intent to manipulate the data being compiled by such 
     governmental entity.


                  ``PROHIBITION ON ROUND TRIP TRADING

       ``Sec. 220. (a) It shall be a violation of this Act for any 
     person or any other entity (including entities described in 
     section 201(f) knowingly and willfully to enter into any 
     contract or other arrangement to execute a `round trip trade' 
     for the purchase or sale of electric energy at wholesale.
       ``(b) For the purposes of this section, the term `round 
     trip trade' means a transaction, or combination of 
     transactions, in which a person or any other entity--
       ``(1) enters into a contract or other arrangement to 
     purchase from, or sell to, any other person or other entity 
     electric energy at wholesale;
       ``(2) simultaneously with entering into the contract or 
     arrangement described in paragraph (1), arranges a 
     financially offsetting trade with such other person or entity 
     for the same such electric energy, at the same location, 
     price, quantity and terms so that, collectively, the purchase 
     and sale transactions in themselves result in no financial 
     gain or loss; and
       ``(3) enters into the contract or arrangement with the 
     intent to deceptively affect reported revenues, trading 
     volumes, or prices.''.

     SEC. 1173. MARKET TRANSPARENCY.

       (a) In General.--It shall be a violation of the Commodity 
     Exchange Act (7 U.S.C. 1 et seq.) for a person or entity to 
     knowingly report or manipulate any information relating to 
     the price, quantity, sale or purchase, and counter party of 
     any agreement, contract or transaction related to natural gas 
     or electricity in interstate commerce, which the person or 
     entity knew to be false at the time of reporting to any 
     governmental entity or any person or entity engaged in the 
     business of collecting and disseminating information.
       (b) Clarification of Existing CFTC Authority.--Section 9 of 
     the Commodity Exchange Act (7 U.S.C. 13) is amended by 
     designating subsection (f) as subsection (e), and adding:
       ``(f) Commission Administrative and Civil Authority.--The 
     Commission may bring administrative or civil action as 
     provided in this Act against any person for a violation of 
     any provision of this section including, but not limited to, 
     false reporting under subsection (a)(2). This applies to any 
     action pending on or commenced after the date of enactment of 
     the Energy Policy Act of 2003.''.
       (c) Fraud Authority.--Section 4b of the Commodity Exchange 
     Act (7 U.S.C. 6b) is amended by striking subsection (a) and 
     inserting the following:
       ``(a) Prohibition.--It shall be unlawful for any person, 
     directly or indirectly in or in connection with any account, 
     or any offer to enter into, the entry into, or the 
     confirmation of the execution of, any agreement contract, or 
     transaction subject to regulation or this Act--
       ``(1) to cheat or defraud or attempt to cheat or defraud 
     any person;
       ``(2) to willfully make or cause to be made to any person 
     any false report or statement, or to willfully enter or cause 
     to be entered for any person any false record;
       ``(3) to willfully deceive or attempt to deceive any person 
     by any means whatsoever; or
       ``(4) except as permitted in written rules of a designated 
     contract market or registered derivative transaction 
     execution facility which the agreement, contract, or 
     transaction is traded and executed--
       ``(A) to bucket an order;
       ``(B) to fill an order by offsetting against 1 or more 
     orders of another person; or
       ``(C) willfully and knowingly, for or on behalf of any 
     other person and without the prior consent of such person, to 
     become--
       ``(i) the buyer with respect to any selling order of the 
     person; or
       ``(ii) the seller with respect to any buying order of the 
     person.''.
       (d) Technical Corrections.--Section 8(e) of the Commodity 
     Exchange Act (7 U.S.C. 12(e)) is amended by adding at the end 
     the following:
       ``Any request by any Federal, State or foreign government 
     department, agency, or political subdivision, or foreign 
     futures authority, for information to a designated contract 
     market, registered derivatives transaction execution 
     facility, board of trade, exchange, or market involving 
     accounts, agreements, contracts, or transactions in 
     commodities (including natural gas and electricity) within 
     the exclusive jurisdiction of the Commission shall be 
     directed to the Commission.''.
       (e) Authorization.--There are authorized to be appropriated 
     to the Commission for fiscal year 2004 such sums as may be 
     necessary to carry out the additional responsibilities and 
     obligations of the Commission under this section.

     SEC. 1174. ENFORCEMENT.

       (a) Complaints.--Section 306 of the Federal Power Act (16 
     U.S.C. 825e) is amended by--
       (1) inserting ``electric utility,'' after ``Any person,''; 
     and
       (2) inserting ``, transmitting utility,'' after 
     ``licensee'' each place it appears.
       (b) Investigations.--Section 307(a) of the Federal Power 
     Act (16 U.S.C. 825f(a)) is amended by inserting ``or 
     transmitting utility'' after ``any person'' in the first 
     sentence.
       (c) Review of Commission Orders.--Section 313(a) of the 
     Federal Power Act (16 U.S.C. 8251) is amended by inserting 
     ``electric utility,'' after ``Any person,'' in the first 
     sentence.
       (d) Criminal Penalties.--Section 316 of the Federal Power 
     Act (16 U.S.C. 825o) is amended--
       (1) in subsection (a), by striking ``$5,000'' and inserting 
     ``$1,000,000'', and by striking ``two years'' and inserting 
     ``five years'';
       (2) in subsection (b), by striking ``$500'' and inserting 
     ``$25,000''; and
       (3) by striking subsection (c).
       (e) Civil Penalties.--Section 316A of the Federal Power Act 
     (16 U.S.C. 825o-1) is amended--
       (1) in subsections (a) and (b), by striking ``section 211, 
     212, 213, or 214'' each place it appears and inserting ``Part 
     II''; and

[[Page 20082]]

       (2) in subsection (b), by striking ``$10,000'' and 
     inserting ``$1,000,000''.
       (f) General Penalties.--Section 21 of the Natural Gas Act 
     (15 U.S.C. 717t) is amended--
       (1) in subsection (a), by striking ``$5,000'' and inserting 
     ``$1,000,000'', and by striking ``two years'' and inserting 
     ``five years''; and
       (2) in subsection (b), by striking ``$500'' and inserting 
     ``$50,000''.

     SEC. 1175. REFUND EFFECTIVE DATE.

       Section 206(b) of the Federal Power Act (16 U.S.C. 824e(b)) 
     is amended by--
       (1) striking ``the date 60-days after the filing of such 
     complaint nor later than 5 months after the expiration of 
     such 60-day period'' in the second sentence and inserting 
     ``the date of the filing of such complaint nor later than 5 
     months after the filing of such complaint'';
       (2) striking ``60 days after'' in the third sentence and 
     inserting ``of'';
       (3) striking ``expiration of such 60-day period'' in the 
     third sentence and inserting ``publication date''; and
       (4) striking the fifth sentence and inserting the 
     following: ``If no final decision is rendered by the 
     conclusion of the 180-day period commencing upon initiation 
     of a proceeding pursuant to this section, the Commission 
     shall state the reasons why it has failed to do so and shall 
     state its best estimate as to when it reasonably expects to 
     make such decision.''.

                    Subtitle G--Consumer Protections

     SEC. 1181. ELECTRIC UTILITY MERGERS.

       (a) Section 203(a) of the Federal Power Act (16 U.S.C. 
     824(b)) is amended to read as follows:
       ``(a)(1) No public utility shall, without first having 
     secured an order of the Commission authorizing it to do so--
       ``(A) sell, lease, or otherwise dispose of the whole of its 
     facilities subject to the jurisdiction of the Commission, or 
     any part thereof of a value in excess of $10,000,000,
       ``(B) merge or consolidate, directly or indirectly, such 
     facilities or any part thereof with those of any other 
     persons, by any means whatsoever, or
       ``(C) purchase, acquire, or take any security of any other 
     public utility of a value in excess of $10,000,000.
       ``(2) No holding company in a holding company system that 
     includes an electric utility company shall purchase, acquire, 
     or take any security of, or, by any means whatsoever, 
     directly or indirectly, merge or consolidate with an electric 
     utility company, a gas utility company, or a holding company 
     in a holding company system that includes a public-utility 
     company of value in excess of $10,000,000 without first 
     having secured an order of the Commission authorizing it to 
     do so.
       ``(3) Upon application for such approval the Commission 
     shall give reasonable notice in writing to the Governor and 
     State commission of each of the States in which the physical 
     property affected, or any part thereof, is situated, and to 
     such other persons as it may deem advisable.
       ``(4) After notice and opportunity for hearing, the 
     Commission shall approve the proposed disposition, 
     consolidation, acquisition, or change in control, if it finds 
     that the proposed transaction will be consistent with the 
     public interest. In evaluating whether a transaction will be 
     consistent with the public interest, the Commission shall 
     consider whether the proposed transaction--
       ``(A) will adequately protect consumer interests,
       ``(B) will be consistent with competitive wholesale 
     markets,
       ``(C) will not impair the ability of the Commission or the 
     ability of a State commission having jurisdiction following 
     the completion of the transaction over any public utility 
     that is a party to the transaction or an associate company of 
     any party to the transaction to protect the interests of 
     consumers or the public,
       ``(D) will not impair the financial integrity of any public 
     utility that is a party to the transaction or an associate 
     company of any party to the transaction, and
       ``(E) satisfies such other criteria as the Commission 
     considers consistent with the public interest.
       ``(5) The Commission shall, by rule, adopt procedures for 
     the expeditious consideration of applications for the 
     approval of dispositions, consolidations, or acquisitions 
     under this section. Such rules shall identify classes of 
     transactions, or specify criteria for transactions, that 
     normally meet the standards established in paragraph (4). The 
     Commission shall provide expedited review for such 
     transactions. The Commission shall grant or deny any other 
     application for approval of a transaction within 90 days 
     after the conclusion of the hearing or opportunity to comment 
     under paragraph (4). If the Commission does not act within 90 
     days, such application shall be deemed granted unless the 
     Commission finds, based on good cause, that further 
     consideration is required to determine whether the proposed 
     transaction meets the standards of paragraph (4) and issues 
     one or more orders tolling the time for acting on the 
     application.
       ``(6) For purposes of this subsection, the terms 
     ``associate company'', ``electric utility company'', ``gas 
     utility company'', ``holding company'', ``holding company 
     system'', and ``public-utility company'' have the meaning 
     given those terns in the Public Utility Holding Company Act 
     of 2003.''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect 12 months after the date of enactment of 
     this section.

     SEC. 1182. MARKET-BASED POLICY.

       Within six months of the enactment of this section, the 
     Commission shall issue a policy statement establishing the 
     conditions under which public utilities may charge market-
     based rates for the sale of electric energy subject to the 
     jurisdiction of the Commission. Such policy statement should 
     consider consumer protections and market power, as well as 
     any other factors the Commission may deem necessary, to 
     ensure that such rates are just and reasonable.

     SEC. 1183. INTER-AGENCY REVIEW OF COMPETITION IN THE 
                   WHOLESALE AND RETAIL MARKETS FOR ELECTRIC 
                   ENERGY.

       (a) Task Force.--There is established an inter-agency task 
     force, to be known as the ``Electric Energy Market 
     Competition Task Force'' (referred to in this section as the 
     ``task force''), which shall consist of--
       (1) one member each from--
       (A) the Department of Justice, to be appointed by the 
     Attorney General of the United States;
       (B) the Federal Energy Regulatory Commission, to be 
     appointed by the chairman of that Commission;
       (C) the Federal Trade Commission, to be appointed by the 
     chairman of that Commission;
       (D) the Department of Energy, to be appointed by the 
     Secretary of Energy; and
       (E) the Rural Utilities Service, to be appointed by the 
     Secretary of Agriculture.
       (b) Study and Report.--
       (1) Study.--The task force shall perform a study and 
     analysis of competition within the wholesale and retail 
     market for electric energy in the United States.
       (2) Report.--
       (A) Final report.--Not later than 1 year after the 
     effective date of this subtitle, the task force shall submit 
     a final report of its findings under paragraph (1) to the 
     Congress.
       (B) Public comment.--At least 60 days before submission of 
     a final report to the Congress under subparagraph (A), the 
     task force shall publish a draft report in the Federal 
     Register to provide for public comment.
       (c) Consultation.--In performing the study required by this 
     section, the task force shall consult with and solicit 
     comments from its advisory members, the States, 
     representatives of the electric power industry, and the 
     public.

     SEC. 1184. CONSUMER PRIVACY.

       The Federal Trade Commission shall issue rules protecting 
     the privacy of electric consumers from the disclosure of 
     consumer information in connection with the sale or delivery 
     of electric energy to a retail electric consumer. If the 
     Federal Trade Commission determines that a State's 
     regulations provide equivalent or greater protection than the 
     provisions of this section, such State regulations shall 
     apply in that State in lieu of the regulations issued by the 
     Commission under this section.

     SEC. 1185. UNFAIR TRADE PRACTICES.

       (a) Slamming.--The Federal Trade Commission shall issue 
     rules prohibiting the change of selection of an electric 
     utility except with the informed consent of the electric 
     consumer or if determined by the appropriate State regulatory 
     authority to be necessary to prevent loss of service.
       (b) Cramming.--The Federal Trade Commission shall issue 
     rules prohibiting the sale of goods and services to an 
     electric consumer unless expressly authorized by law or the 
     electric consumer.
       (c) State Authority.--If the Federal Trade Commission 
     determines that a State's regulations provide equivalent or 
     greater protection than the provisions of this section, such 
     State regulations shall apply in that State in lieu of the 
     regulations issued by the Commission under this section.

     SEC. 1186. DEFINITIONS.

       For purposes of this subtitle--
       (1) the term ``State regulatory authority'' has the meaning 
     given that term in section 3(21) of the Federal Power Act (16 
     U.S.C. 796(21)).
       (2) the term ``electric consumer'' and ``electric utility'' 
     have the meanings given those terms in section 3 of the 
     Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 
     2602).

                    Subtitle H--Technical Amendments

     SEC. 1191. TECHNICAL AMENDMENTS.

       (a) Section 211 (c) of the Federal Power Act (16 U.S.C. 
     824j(c)) is amended by--
       (1) striking ``(2)';
       (2) striking ``(A)'' and inserting ``(1)'''
       (3) striking ``(B)'' and inserting ``(2)''; and
       (4) striking ``termination of modification'' and inserting 
     ``termination or modification''.
       (b) Section 211(d)(1) of the Federal Power Act (16 U.S.C. 
     824j(d)) is amended by striking ``electric utility'' the 
     second time it appears and inserting ``transmitting 
     utility''.
       (c) Section 315 (c) of the Federal Power Act (16 U.S.C. 
     825n(c)) is amended by striking ``subsection'' and inserting 
     ``section''.
                                 ______
                                 
  SA 1413. Mr. BINGAMAN proposed an amendment to the bill S. 14, to 
enhance

[[Page 20083]]

the energy security of the United States, and for other purposes; as 
follows:

       On page 41, after line 17 strike all that follows through 
     p. 43, line 10, and insert the following:

     SEC. ELECTRIC UTILITY MERGERS.

       Section 203(a) of the Federal Power Act (16 U.S.C. 824b) is 
     amended to read as follows:
       ``(a)(1) No public utility shall, without first having 
     secured an order of the Commission authorizing it to do so--
       ``(A) sell, lease, or otherwise dispose of the whole of its 
     facilities subject to the jurisdiction of the Commission, or 
     any part thereof of a value in excess of $10,000,000,
       ``(B) merge or consolidate, directly or indirectly, such 
     facilities or any part thereof with the facilities of any 
     other person, by any means whatsoever,
       ``(C) purchase, acquire, or take any security of any other 
     public utility, or
       ``(D) purchase, lease, or otherwise acquire existing 
     facilities for the generation of electric energy unless such 
     facilities will be used exclusively for the sale of electric 
     energy at retail.
       ``(2) No holding company in holding company system that 
     includes a transmitting utility or an electric utility 
     company shall purchase, acquire, or take any security of, or, 
     by any means whatsoever, directly or indirectly, merge or 
     consolidate with a transmitting utility, an electric utility 
     company, a gas utility company, or a holding company in 
     holding company system that includes a transmitting utility, 
     an electric utility company, or a gas utility company, 
     without first having secured an order of the Commission 
     authorizing it to do so.
       ``(3) Upon application for such approval the Commission 
     shall give reasonable notice in writing to the Governor and 
     State commission of each of the States in which the physical 
     property affected, or any part thereof, is situated, and to 
     such other persons as it may deem advisable.
       ``(4) After notice and opportunity for hearing, the 
     Commission shall approve the proposed disposition, 
     consolidation, acquisition, or control, if it finds that the 
     proposed transaction--
       ``(A) will be consistent with the public interest;
       ``(B) will not adversely affect the interests of consumers 
     of electric energy of any public utility that is a party to 
     the transaction or is an associate company of any party to 
     the transaction;
       ``(C) will not impair the ability of the Commission or any 
     State commission having jurisdiction over any public utility 
     that is a party to the transaction or an associate company of 
     any party to the transaction to protect their interest of 
     consumers or the public; and
       ``(D) will not lead to cross-subsidization of associate 
     companies or encumber any utility assets for the benefit of 
     an associate company.
       ``(5) The Commission shall, by rule, adopt procedures for 
     the expeditious consideration of applications for the 
     approval of dispositions, consolidations, or acquisitions 
     under this section. Such rules shall identify classes of 
     transactions, or specify criteria for transactions, that 
     normally meet the standards established in paragraph (4), and 
     shall require the Commission to grant or deny an application 
     for approval of a transaction of such type within 90 days 
     after the conclusion of the hearing or opportunity to comment 
     under paragraph (4). If the Commission does not act within 90 
     days, such application shall be deemed granted unless the 
     Commission Finds that the proposed transaction does not meet 
     the standards of paragraph (4) and issues one or more orders 
     tolling the time for acting on the application for an 
     additional 90 days.
       ``(6) For purposes of this subsection, the terms `associate 
     company', `electric utility company', `gas utility company', 
     `holding company', and `holding company system' have the 
     meaning given those terms in section 1151 of the Energy 
     Policy Act of 1003.''.
                                 ______
                                 
  SA 1414. Mr. INHOFE submitted an amendment intended to be proposed by 
him to the bill S. 14, to enhance the energy security of the United 
States, and for other purposes; which was ordered to lie on the table; 
as follows:

       Beginning on page 197, strike line 3 and all that follows 
     through page 202, line 9, and insert the following:

     SEC. 607. INCREASED USE OF RECOVERED MINERAL COMPONENT IN 
                   FEDERALLY FUNDED PROJECTS INVOLVING PROCUREMENT 
                   OF CEMENT OR CONCRETE.

       (a) Amendment.--Subtitle F of the Solid Waste Disposal Act 
     (42 U.S.C. 6961 et seq.) is amended by adding at the end the 
     following:

     ``SEC. 6005. INCREASED USE OF RECOVERED MINERAL COMPONENT IN 
                   FEDERALLY FUNDED PROJECTS INVOLVING PROCUREMENT 
                   OF CEMENT OR CONCRETE.

       ``(a) Definitions.--In this section:
       ``(1) Agency head.--The term `agency head' means--
       ``(A) the Secretary of Transportation; and
       ``(B) the head of each other Federal agency that, on a 
     regular basis, procures, or provides Federal funds to pay or 
     assist in paying the cost of procuring, material for cement 
     or concrete projects.
       ``(2) Cement or concrete project.--The term `cement or 
     concrete project' means a project for the construction or 
     maintenance of a highway or other transportation facility or 
     a Federal, State, or local government building or other 
     public facility that--
       ``(A) involves the procurement of cement or concrete; and
       ``(B) is carried out, in whole or in part, using Federal 
     funds.
       ``(3) Recovered mineral component.--The term `recovered 
     mineral component' means--
       ``(A) ground-granulated blast furnace slag;
       ``(B) coal combustion fly ash; and
       ``(C) any other waste material or byproduct recovered or 
     diverted from solid waste that the Administrator, in 
     consultation with an agency head, determines should be 
     treated as recovered mineral component under this section for 
     use in cement or concrete projects paid for, in whole or in 
     part, by the agency head.
       ``(b) Implementation of Requirements.--
       ``(1) In general.--Not later than 1 year after the date of 
     enactment of this section, the Administrator and each agency 
     head shall take such actions as are necessary to implement 
     fully all procurement requirements and incentives in effect 
     as of the date of enactment of this section (including 
     guidelines under section 6002) that provide for the use of 
     cement and concrete incorporating recovered mineral component 
     in cement or concrete projects.
       ``(2) Priority.--In carrying out paragraph (1), an agency 
     head shall give priority to achieving greater use of 
     recovered mineral component in cement or concrete projects 
     for which recovered mineral components historically have not 
     been used or have been used only minimally.
       ``(3) Conformance.--The Administrator and each agency head 
     shall carry out this subsection in accordance with section 
     6002.
       ``(c) Full Implementation Study.--
       ``(1) In general.--The Administrator, in cooperation with 
     the Secretary of Transportation and the Secretary of Energy, 
     shall conduct a study to determine the extent to which 
     current procurement requirements, when fully implemented in 
     accordance with subsection (b), may realize energy savings 
     and environmental benefits attainable with substitution of 
     recovered mineral component in cement used in cement or 
     concrete projects.
       ``(2) Matters to be addressed.--The study shall--
       ``(A) quantify the extent to which recovered mineral 
     components are being substituted for Portland cement, 
     particularly as a result of current procurement requirements, 
     and the energy savings and environmental benefits associated 
     with that substitution;
       ``(B) identify all barriers in procurement requirements to 
     greater realization of energy savings and environmental 
     benefits, including barriers resulting from exceptions from 
     current law; and
       ``(C)(i) identify potential mechanisms to achieve greater 
     substitution of recovered mineral component in types of 
     cement or concrete projects for which recovered mineral 
     components historically have not been used or have been used 
     only minimally;
       ``(ii) evaluate the feasibility of establishing guidelines 
     or standards for optimized substitution rates of recovered 
     mineral component in those cement or concrete projects; and
       ``(iii) identify any potential environmental or economic 
     effects that may result from greater substitution of 
     recovered mineral component in those cement or concrete 
     projects.
       ``(3) Report.--Not later than 30 months after the date of 
     enactment of this section, the Administrator shall submit to 
     the Committee on Appropriations and Committee on Environment 
     and Public Works of the Senate and the Committee on 
     Appropriations, Committee on Energy and Commerce, and 
     Committee on Transportation and Infrastructure of the House 
     of Representatives a report on the study.
       ``(d) Additional Procurement Requirements.--Unless the 
     study conducted under subsection (c) identifies any effects 
     or other difficulties described in subsection (c)(2)(C)(iii) 
     that warrant further review or delay, the Administrator and 
     each agency head shall, not later than 1 year after the date 
     of submission of the report under subsection (c)(3), take 
     additional actions authorized under this Act to establish 
     procurement requirements and incentives that provide for the 
     use of cement and concrete with increased substitution of 
     recovered mineral component in the construction and 
     maintenance of cement or concrete projects, so as to--
       ``(1) realize more fully the energy savings and 
     environmental benefits associated with increased 
     substitution; and
       ``(2) eliminate barriers identified under subsection (c).

     ``SEC. 6006. USE OF GRANULAR MINE TAILINGS.

       ``(a) Mine Tailings.--
       ``(1) In general.--Not later than 180 days after the date 
     of enactment of this section, the Administrator, in 
     consultation with the Secretary of Transportation and heads 
     of other Federal agencies, shall establish criteria 
     (including an evaluation of whether to

[[Page 20084]]

     establish a numerical standard for concentration of lead and 
     other hazardous substances) for the safe and environmentally 
     protective use of granular mine tailings from the Tar Creek, 
     Oklahoma Mining District, known as `chat', for--
       ``(A) cement or concrete projects; and
       ``(B) transportation construction projects (including 
     transportation construction projects involving the use of 
     asphalt) that are carried out, in whole or in part, using 
     Federal funds.
       ``(2) Requirements.--In establishing criteria under 
     paragraph (1), the Administrator shall consider--
       ``(A) the current and previous uses of granular mine 
     tailings as an aggregate for asphalt; and
       ``(B) any environmental and public health risks and 
     benefits derived from the removal, transportation, and use in 
     transportation projects of granular mine tailings.
       ``(3) Public participation.--In establishing the criteria 
     under paragraph (1), the Administrator shall solicit and 
     consider comments from the public.
       ``(4) Applicability of criteria.--On the establishment of 
     the criteria under paragraph (1), any use of the granular 
     mine tailings described in paragraph (1) in a transportation 
     project that is carried out, in whole or in part, using 
     Federal funds, shall meet the criteria established under 
     paragraph (1).
       ``(b) Effect of Sections.--Nothing in this section or 
     section 6005 affects any requirement of any law (including a 
     regulation) in effect on the date of enactment of this 
     section.''.
       (b) Conforming Amendment.--The table of contents of the 
     Solid Waste Disposal Act (42 U.S.C. prec. 6901) is amended by 
     adding at the end of the items relating to subtitle F the 
     following:

``Sec. 6005. Increased use of recovered mineral component in federally 
              funded projects involving procurement of cement or 
              concrete.
``Sec. 6006. Use of granular mine tailings.''.

     SEC. 608. UTILITY ENERGY SERVICE CONTRACTS.

                                 ______
                                 
  SA 1415. Mr. INOUYE submitted an amendment intended to be proposed by 
him to the bill S. 14, to enhance the energy security of the United 
States, and for other purposes; which was ordered to lie on the table; 
as follows:

       In Division B, on page 263, after line 18, add the 
     following:

     SEC. __. TREATMENT OF FACILITIES USING BAGASSE TO PRODUCE 
                   ENERGY AS SOLID WASTE DISPOSAL FACILITIES 
                   ELIGIBLE FOR TAX-EXEMPT FINANCING.

       (a) In General.--Section 142 (relating to exempt facility 
     bond) is amended by adding at the end the following:
       ``(l) Solid Waste Disposal Facilities.--For purposes of 
     subsection (a)(6), the term `solid waste disposal facilities' 
     includes property located in Hawaii and used for the disposal 
     of bagasse.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to bonds issued after the date of the enactment 
     of this Act.
                                 ______
                                 
  SA 1416. Mr. FEINGOLD (for himself and Mr. Wyden) submitted an 
amendment intended to be proposed to amendment SA 1412 proposed by Mr. 
Domenici (for himself, Ms. Landrieu, Mr. Thomas, Ms. Murkowski, Mr. 
Campbell, Mr. Smith, Mr. Alexander, Mr. Kyl, Mr. Nelson of Nebraska, 
Mr. Hagel, Mr. Talent, Mr. Bunning, and Mr. Coleman) to the bill S. 14, 
to enhance the energy security of the United States, and for other 
purposes; which was ordered to lie on the table; as follows:

       Beginning on page 35, strike line 10 and all that follows 
     through page 35, line 10, and insert the following:

     SEC. 1156. AFFILIATE, ASSOCIATE COMPANY, AND SUBSIDIARY 
                   COMPANY TRANSACTIONS.

       Section 204 of the Federal Power Act (16 U.S.C. 824c) is 
     amended by adding at the end the following:
       ``(i) Transactions With Affiliates and Associated 
     Companies.--
       ``(1) Definitions.--In this subsection, the terms 
     `affiliate', `associate company', `public utility', and 
     `subsidiary company' have the meanings given the terms in 
     section 1151 of the Energy Policy Act of 2003.
       ``(2) Regulations.--
       ``(A) In general.--The Commission shall promulgate 
     regulations that shall apply in the case of a transaction 
     between a public utility and an affiliate, associate company, 
     or subsidiary company of the public utility.
       ``(B) Contents.--At a minimum, the regulations under 
     subparagraph (A) shall require, with respect to a transaction 
     between a public utility and an affiliate, associate company, 
     or subsidiary company of the public utility, that--
       ``(i) the affiliate, associate company, or subsidiary 
     company shall be an independent, separate, and distinct 
     entity from the public utility;
       ``(ii) the affiliate, associate company, or subsidiary 
     company shall maintain separate books, accounts, memoranda, 
     and other records and shall prepare separate financial 
     statements;
       ``(iii)(I) the public utility shall conduct the transaction 
     in a manner that is consistent with transactions among 
     nonaffiliated and nonassociated companies; and
       ``(II) shall not use its status as a monopoly franchise to 
     confer on the affiliate, associate company, or subsidiary 
     company any unfair competitive advantage;
       ``(iv) the public utility shall not declare or pay any 
     dividend on any security of the public utility in 
     contravention of such rules as the Commission considers 
     appropriate to protect the financial integrity of the public 
     utility;
       ``(v) the public utility shall have at least 1 independent 
     director on its board of directors;
       ``(vi) the affiliate, associate company, or subsidiary 
     company shall not acquire any loan, loan guarantee, or other 
     indebtedness, and shall not structure its governance, in a 
     manner that would permit creditors to have recourse against 
     the assets of the public utility; and
       ``(vii) the public utility shall not--

       ``(I) commingle any assets or liabilities of the public 
     utility with any assets or liabilities of the affiliate, 
     associate company, or subsidiary company; or
       ``(II) pledge or encumber any assets of the public utility 
     on behalf of the affiliate, associate company, or subsidiary 
     company;

       ``(viii)(I) the public utility shall not cross-subsidize or 
     shift costs from the affiliate, associate company, or 
     subsidiary company to the public utility; and
       ``(II) the public utility shall disclose and fully value, 
     at the market value or other value specified by the 
     Commission, any assets or services by the public utility 
     that, directly or indirectly, are transferred to, or 
     otherwise provided for the benefit of, the affiliate, 
     associate company, or subsidiary company, in a manner that is 
     consistent with transfers among nonaffiliated and 
     nonassociated companies; and
       ``(ix) electricity and natural gas consumers and investors 
     shall be protected against the financial risks of public 
     utility diversification and transactions with and among 
     affiliates and associate companies.
       ``(3) No preemption.--This subsection does not preclude or 
     deny the right of any State or political subdivision of a 
     State to adopt and enforce standards for the corporate and 
     financial separation of public utilities that are more 
     stringent that those provided under the regulations under 
     paragraph (2).
       ``(4) Prohibition.--It shall be unlawful for a public 
     utility to enter into or take any step in the performance of 
     any transaction with any affiliate, associate company, or 
     subsidiary company in violation of the regulations under 
     paragraph (2).''.
                                 ______
                                 
  SA 1417. Mr. DAYTON (for himself, Ms. Cantwell, and Mrs. Boxer) 
submitted an amendment intended to be proposed to amendment SA 1412 
proposed by Mr. Domenici (for himself, Ms. Landrieu, Mr. Thomas, Ms. 
Murkowski, Mr. Campbell, Mr. Smith, Mr. Alexander, Mr. Kyl, Mr. Nelson 
of Nebraska, Mr. Hagel, Mr. Talent, Mr. Bunning, and Mr. Coleman) to 
the bill S. 14, to enhance the energy security of the United States, 
and for other purposes; which was ordered to lie on the table; as 
follows:

       On page 30 of the amendment, strike line 24 and all that 
     follows through page 36, line 24.
                                 ______
                                 
  SA 1418. Mr. BINGAMAN proposed an amendment to the bill S. 14, to 
enhance the energy security of the United States, and for other 
purposes; as follows:

       On page 9, line 23 through 24, strike ``including any rule 
     or order of general applicability within the scope of the 
     proposed rulemaking,'' and insert: ``nor any final rule or 
     order of general applicability establishing a standard market 
     design,''.

                          ____________________