< Back to H.R. 2786 (106th Congress, 1999–2000)

Text of the Interstate Transmission Act

This bill was introduced on August 5, 1999, in a previous session of Congress, but was not enacted. The text of the bill below is as of Aug 5, 1999 (Introduced).

Source: GPO

HR 2786 IH

106th CONGRESS

1st Session

H. R. 2786

To provide for expansion of electricity transmission networks in order to support competitive electricity markets and to bring the benefits of less regulation of such markets to the public, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

August 5, 1999

Mr. SAWYER introduced the following bill; which was referred to the Committee on Commerce


A BILL

To provide for expansion of electricity transmission networks in order to support competitive electricity markets and to bring the benefits of less regulation of such markets to the public, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ‘Interstate Transmission Act’.

SEC. 2. FINDINGS.

    Congress finds as follows:

      (1) Transmission networks are the backbone of competitive power markets and increased interstate commerce in electricity.

      (2) To support competitive power markets and to bring the benefits of less regulation of such markets to transmission customers, consumers, businesses, and the public, both today and in the future, transmission networks must be expanded, enhanced, and improved.

      (3) The expansion, enhancement, and improvement of transmission facilities also are necessary to maintain and improve reliability of electric service.

      (4) The regulation of transmission service must be reformed.

SEC. 3. CLARIFICATION OF JURISDICTION.

    (a) DECLARATION OF POLICY- Section 201(a) of the Federal Power Act (16 U.S.C. 824(a)) is amended by inserting after ‘transmission of electric energy in interstate commerce’ the following: ‘, including the unbundled transmission of electric energy sold at retail,’.

    (b) APPLICATION OF PART- Section 201(b)(1) of the Federal Power Act (16 U.S.C. 824(b)(1)) is amended by--

      (1) inserting after ‘the transmission of electric energy in interstate commerce’ the following: ‘, including the unbundled transmission of electric energy sold at retail,’; and

      (2) adding at the end of subsection (b) the following new paragraph:

      ‘(3) After consulting with the appropriate State regulatory authorities, the Commission shall determine by rule or order which facilities used for the transmission and delivery of electric energy are used for transmission in interstate commerce subject to the jurisdiction of the Commission under this part, and which are used for local distribution subject to State jurisdiction.’.

    (c) DEFINITION OF INTERSTATE COMMERCE- Section 201(c) of the Federal Power Act (16 U.S.C. 824(c)) is amended after ‘outside thereof’ by inserting ‘(including consumption in a foreign country)’.

    (d) DEFINITIONS OF TYPES OF SALES- Section 201(d) of the Federal Power Act (16 U.S.C. 824(d)) is amended by--

      (1) inserting ‘(1)’ after the subsection designation; and

      (2) adding at the end the following:

    ‘(2) The term ‘bundled retail sale of electric energy’ means the sale of electric energy to an ultimate consumer in which the generation and transmission service are not sold separately.

    ‘(3) The term ‘unbundled local distribution service’ means the delivery of electric energy to an ultimate consumer if--

      ‘(A) the electric energy and the service of delivering it are sold separately; and

      ‘(B) the delivery uses facilities for local distribution as determined by the Commission under subsection (b)(3).

    ‘(4) The term ‘unbundled transmission of electric energy sold at retail’ means the transmission of electric energy to an ultimate consumer if--

      ‘(A) the electric energy and the service of transmitting it are sold separately, and

      ‘(B) the transmission uses facilities for transmission in interstate commerce as determined by the Commission under subsection (b)(3).’.

    (e) DEFINITION OF PUBLIC UTILITY- Section 201(e) of the Federal Power Act (16 U.S.C. 824(e)) is amended to read as follows:

    ‘(e) The term ‘public utility’, when used in this part or in the part next following means--

      ‘(1) any person who owns or operates facilities subject to the jurisdiction of the Commission under this part (other than facilities subject to such jurisdiction solely by reason of section 210, 211, or 212); and

      ‘(2) any transmitting utility that is not a public utility under paragraph (1), but only with respect to determining, fixing, and otherwise regulating the rates, terms, and conditions for the transmission of electric energy under this part.’.

    (f) APPLICATION OF PART TO GOVERNMENT UTILITIES- Section 201(f) of the Federal Power Act (16 U.S.C. 824(f)) is amended by striking ‘No provision’ and inserting in lieu thereof ‘Except as provided in subsection (e)(2) and section 3(23), no provision’.

SEC. 4. DISPOSITION OF PROPERTY.

    Section 203 of the Federal Power Act (16 U.S.C. 824b) is repealed.

SEC. 5. ECONOMICALLY EFFICIENT TRANSMISSION SERVICE AND EXPANSION OF TRANSMISSION NETWORKS.

    Part II of the Federal Power Act is amended by adding at the end thereof the following new section:

‘SEC. 215. STANDARDS FOR ESTABLISHING RATES, CHARGES, TERMS, AND CONDITIONS FOR TRANSMISSION SERVICE.

    ‘(a) RECOVERY OF COSTS- In reviewing rates, charges, terms, and conditions for transmission services under this Act, the Commission shall permit a transmitting utility to recover all of the costs incurred by the utility in connection with the transmission services and necessary associated services, including, but not limited to, the costs of any enlargement of transmission facilities.

    ‘(b) CONSIDERATION OF COST AND BENEFIT- In reviewing the rates, charges, terms, and conditions of transmission services that are provided by a regional transmission organization and that make use of facilities constructed after the date of enactment of this section, the Commission shall take into account the incremental cost and the benefit to interconnected transmission systems of such facilities.

    ‘(c) CERTAIN REQUIREMENTS- Rates, charges, terms and conditions established pursuant to subsections (a) and (b) shall--

      ‘(1) promote the economically efficient transmission of electricity, the expansion of transmission networks, the introduction of new transmission technologies, and the provision of transmission services by regional transmission organizations;

      ‘(2) prevent the shifting of costs to the rates for services outside the jurisdiction of the Commission; and

      ‘(3) be just and reasonable and not unduly discriminatory or preferential.

    ‘(d) VOLUNTARY INNOVATIVE PRICING POLICIES- Notwithstanding subsection (a) of this section, the Commission shall encourage innovative pricing policies voluntarily filed by transmitting utilities. Innovative pricing policies include policies that--

      ‘(1) provide incentives to transmitting utilities to promote the voluntary participation in and formation of regional transmission organizations, without having the effect of forcing transmitting utilities to join regional transmission organizations and extend such incentives to transmitting utilities that already have formed a regional transmission organization;

      ‘(2) limit the charging of multiple rates for transmission service over the transmission facilities operated by the regional transmission organization, provided, however, that a reasonable transition mechanism or period may be used before eliminating such rates;

      ‘(3) minimize the shifting of costs among existing customers of the transmitting utilities within the regional transmission organization;

      ‘(4) encourage the efficient and reliable operation of the transmission grid and supply of transmission services through congestion management, performance-based or incentive ratemaking, and other measures; and

      ‘(5) encourage efficient and adequate investment in and expansion of the transmission facilities owned or controlled by the regional transmission organization.

    ‘(e) NEGOTIATED RATES- Notwithstanding subsection (a) of this section, the Commission may permit the charging of negotiated rates for transmission services without regard to costs whenever an individual company or companies are willing to pay such negotiated rates, provided, however, that such costs shall not be recovered from other transmission customers.

    ‘(f) EFFECTIVE COMPETITION- Notwithstanding subsection (a) of this section, in reviewing rates, charges, terms, and conditions for transmission rates under this Act, the Commission may permit the recovery of market-based rates for transmission services where it finds that relevant geographic and product markets for transmission services or for delivered wholesale power are subject to effective competition.

    ‘(g) RULEMAKING- Within 180 days after enactment of this section, the Commission shall establish by rule definitions and standards that it shall determine are necessary to give effect to subsections (d) and (e) of this section. Within 2 years of enactment of this section, the Commission shall establish by rule definitions and standards that it shall determine are required to give effect to subsection (f) of this section.’.

SEC. 6. ELECTRIC RELIABILITY STANDARDS.

    Part II of the Federal Power Act is amended by adding at the end thereof the following new section:

‘SEC. 216. ELECTRIC RELIABILITY STANDARDS.

    ‘(a) POLICIES AND STANDARDS- A transmitting utility may require its transmission customers and any other transmitting utility with which it is either directly or indirectly interconnected to observe, as a condition of receiving transmission service, policies, or standards duly adopted by an electric reliability organization approved by the Commission. A transmitting utility may require its transmission customers and any other transmitting utility

to which it is either directly or indirectly interconnected to observe, as a condition of receiving transmission service, policies, or standards duly adopted by a regional affiliate of such electric reliability organization.

    ‘(b) COMMISSION AUTHORITY- Whenever the Commission, after a hearing had upon its own motion or upon complaint, shall find that any policy or standard adopted by an electric reliability organization approved by the Commission, or by any affiliate of such electric reliability organization, or the application of such policy or standard by a transmitting utility, is unjust, unreasonable, unduly discriminatory or preferential, the Commission may disapprove, and prohibit the application of, such policy or standard, and shall remand the matter to the electric reliability organization for further consideration.’.

SEC. 7. PROMOTION OF VOLUNTARY DEVELOPMENT OF REGIONAL TRANSMISSION ORGANIZATIONS.

    Part II of the Federal Power Act is amended by inserting at the end thereof the following new section:

‘SEC. 217. PROMOTION OF VOLUNTARY DEVELOPMENT OF REGIONAL TRANSMISSION ORGANIZATIONS.

    ‘(a) IN GENERAL- The Commission may approve and may encourage the formation of regional transmission organizations for the purpose of enhancing the transmission of electric energy in interstate commerce. Among options for the formation of regional transmission organizations, the Commission shall prefer those in which--

      ‘(1) participation in the regional transmission organization by transmitting utilities is voluntary;

      ‘(2) the form, structure, and operating entity of the regional transmission organization are approved of by participating transmitting utilities; and

      ‘(3) market incentives exist to promote investment for expansion of transmission facilities and for the introduction of new transmission technologies within the territory of the regional transmission organization.

    ‘(b) CONDITIONS- No order issued under this Act shall be conditioned upon or require a transmitting utility to transfer operational control of jurisdictional facilities to an independent system operator or other regional transmission organization.

    ‘(c) COMPLAINT- In addition to any other rights or remedies it may have under this Act, any entity serving electric load that is denied services by a regional transmission organization that the regional transmission organization makes available to other load serving entities shall be entitled to file a complaint with the Commission concerning the denial of such services. If the Commission shall find, after an evidentiary hearing on the record, that the denial of services complained of was unjust, unreasonable, unduly discriminatory or preferential, or contrary to the public interest, the Commission may order the provision of such services at rates and on terms and conditions that shall be in accordance with section 215 of this Act.’.