S. 1273 (106th): Federal Power Act Amendments of 1999

106th Congress, 1999–2000. Text as of Jun 24, 1999 (Introduced).

Status & Summary | PDF | Source: GPO

S 1273 IS

106th CONGRESS

1st Session

S. 1273

To amend the Federal Power Act, to facilitate the transition to more competitive and efficient electric power markets, and for other purposes.

IN THE SENATE OF THE UNITED STATES

June 24, 1999

Mr. BINGAMAN introduced the following bill; which was read twice and referred to the Committee on Energy and Natural Resources


A BILL

To amend the Federal Power Act, to facilitate the transition to more competitive and efficient electric power markets, 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 ‘Federal Power Act Amendments of 1999’.

SEC. 2. CLARIFICATION OF JURISDICTION.

    (a) DECLARATION OF POLICY- Section 201(a) of the Federal Power Act (16 U.S.C. 824(a)) is amended by--

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

      (2) striking ‘such Federal regulation, however, to extend only to those matters which are not subject to regulation by the States.’ and inserting the following: ‘such Federal regulation shall not extend, however, to the bundled retail sale of electric energy or to unbundled local distribution service, which are subject to regulation by the States.’.

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

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

      (2) adding at the end the following:

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

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

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

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

      (2) adding at the end the following:

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

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

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

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

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

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

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

    (e) DEFINITIONS OF PUBLIC UTILITY- Section 201 of the Federal Power Act (16 U.S.C. 824) is amended by striking subsection (e) and inserting the following:

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

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

      ‘(2) any electric utility or Federal power marketing agency not otherwise subject to the jurisdiction of the Commission under this Part, including--

        ‘(A) the Tennessee Valley Authority,

        ‘(B) a Federal power marketing agency,

        ‘(C) a State or any political subdivision of a State, or any agency, authority, or instrumentality of a State or political subdivision,

        ‘(D) a corporation or association that has ever received a loan for the purpose of providing electric service from the Administrator of the Rural Electrification Administration or the Rural Utilities Service under the Rural Electrification Act of 1936; or

        ‘(E) any corporation or association which is wholly owned, directly or indirectly, by any one or more of the foregoing,

      but only with respect to determining, fixing, and otherwise regulating the rates, terms, and conditions for the transmission of electric energy under this Part (including sections 217, 218, and 219).’.

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

    (g) DEFINITION OF TRANSMITTING UTILITY- Section 3 of the Federal Power Act (16 U.S.C. 796) is amended by striking paragraph (23) and inserting the following:

      ‘(23) TRANSMITTING UTILITY- The term ‘transmitting utility’ means any electric utility, qualifying cogeneration facility, qualifying small power production facility, Federal power marketing agency, or any public utility, as defined in section 201(e)(2), that owns or operates electric power transmission facilities which are used for the sale of electric energy.’.

SEC. 3. FEDERAL WHEELING AUTHORITY.

    (a) Commission Authority To Order Retail Wheeling-

      (1) Section 211(a) of the Federal Power Act (16 U.S.C. 824j(a)) is amended by striking ‘for resale’.

      (2) Section 212(a) of the Federal Power Act (16 U.S.C. 824k(a)) is amended by striking ‘wholesale transmission services’ each place it appears and inserting ‘transmission services’.

      (3) Section 212(g) of the Federal Power Act (16 U.S.C. 824k(g)) is repealed.

    (b) LIMITATION ON COMMISSION AUTHORITY TO ORDER RETAIL WHEELING- Section 212 of the Federal Power Act (16 U.S.C. 824k) is further amended by striking subsection (h) and inserting the following:

    ‘(h) LIMITATION ON COMMISSION AUTHORITY TO ORDER RETAIL WHEELING- No rule or order issued under this Act shall require or be conditioned upon the transmission of electric energy:

      ‘(1) directly to an ultimate consumer in connection with a sale of electric energy to the consumer unless the seller of such energy is permitted or required under applicable State law to make such sale to such consumer, or

      ‘(2) to, or for the benefit of, an electric utility if such electric energy would be sold by such utility directly to an ultimate consumer, unless the utility is permitted or required under applicable State law to sell electric energy to such ultimate consumer.’.

    (c) CONFORMING AMENDMENT- Section 3 of the Federal Power Act (16 U.S.C. 796) is amended by striking paragraph (24) and inserting the following:

      ‘(24) TRANSMISSION SERVICES- The term ‘transmission services’ means the transmission of electric energy in interstate commerce.’.

SEC. 4. STATE AUTHORITY TO ORDER RETAIL ACCESS.

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

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

    ‘(a) STATE AUTHORITY- Neither silence on the part of Congress nor any Act of Congress shall be construed to preclude a State or State commission, acting under authority of state law, from requiring an electric utility subject to its jurisdiction to provide unbundled local distribution service to any electric consumer within such State.

    ‘(b) NONDISCRIMINATORY SERVICE- If a State or State commission permits or requires an electric utility subject to its jurisdiction to provide unbundled local distribution service to any electric consumer within such State, the electric utility shall provide such service on a not unduly discriminatory basis. Any law, regulation, or order of a State or State commission that results in unbundled local distribution service that is unjust, unreasonable, unduly discriminatory, or preferential is hereby preempted.

    ‘(c) RECIPROCITY- Notwithstanding subsection (b), a State or state commission may bar an electric utility from selling electric energy to an ultimate consumer using local distribution facilities in such State if such utility or any of its affiliates owns or controls local distribution facilities and is not itself providing unbundled local distribution service.

    ‘(d) STATE CHARGES- Nothing in this Act shall prohibit a State or State regulatory authority from assessing a nondiscriminatory charge on unbundled local distribution service within the State, the retail sale of electric energy within the State, or the generation of electric energy for consumption by the generator within the State.’.

SEC. 5. UNIVERSAL AND AFFORDABLE SERVICE.

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

‘SEC. 216. UNIVERSAL AND AFFORDABLE SERVICE.

    ‘(a) SENSE OF THE CONGRESS- It is the sense of the Congress that--

      ‘(1) every consumer of electric energy should have access to electric energy at reasonable and affordable rates, and

      ‘(2) the Commission and the States should ensure that competition in the electric energy business does not result in the loss of service to rural, residential, or low-income consumers.

    ‘(b) CONSIDERATION AND REPORTS- Any State or State commission that requires an electric utility subject to its jurisdiction to provide unbundled local distribution service shall--

      ‘(1) consider adopting measures to--

        ‘(A) ensure that every consumer of electric energy within such State shall have access to electric energy at reasonable and affordable rates, and

        ‘(B) prevent the loss of service to rural, residential, or low-income consumers; and

      ‘(2) report to the Commission on any measures adopted under paragraph (1).’.

SEC. 6. NATIONAL ELECTRIC RELIABILITY STANDARDS.

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

‘SEC. 217. NATIONAL ELECTRIC RELIABILITY STANDARDS.

    ‘(a) RELIABILITY STANDARDS- The Commission shall establish and enforce national electric reliability standards to ensure the reliability of the electric transmission system.

    ‘(b) Designation of National and Regional Councils-

      ‘(1) For purposes of establishing and enforcing national electric reliability standards under subsection (a), the Commission may designate an appropriate number of regional electric reliability councils composed of electric utilities or transmitting utilities, and one national electric reliability council composed of designated regional electric reliability councils, whose mission is to promote the reliability of electric transmission system.

      ‘(2) The Commission shall not designate a regional electric reliability council unless the Commission determines that the council--

        ‘(A) permits open access to membership from all entities engaged in the business of selling, generating, transmitting, or delivering electric energy within its region;

        ‘(B) provides fair representation of its members in the selection of its directors and the management of its affairs; and

        ‘(C) adopts and enforces appropriate standards of operation designed to promote the reliability of the electric transmission system.

    ‘(c) INCORPORATION OF COUNCIL STANDARDS- The Commission may incorporate, in whole or in part, the standards of operation adopted by the regional and national electric reliability councils in the national electric reliability standards adopted by the Commission under subsection (a).

    ‘(d) ENFORCEMENT- The Commission may, by rule or order, require any public utility or transmitting utility to comply with any standard adopted by the Commission under this section.

SEC. 7. SITING NEW INTERSTATE TRANSMISSION FACILITIES.

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

‘SEC. 218. SITING NEW INTERSTATE TRANSMISSION FACILITIES.

    ‘(a) COMMISSION AUTHORITY- Whenever the Commission, after notice and opportunity for hearing, finds such action necessary or desirable in the public interest, it may order a transmitting utility to enlarge, extend, or improve its facilities for the interstate transmission of electric energy.

    ‘(b) PROCEDURE- The Commission may commence a proceeding for the issuance of an order under subsection (a) upon the application of an electric utility, transmitting utility, or state regulatory authority, or upon its own motion.

    ‘(c) COMPLIANCE WITH OTHER LAWS- Commission action under this section shall be subject to the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) and all other applicable state and federal laws.

    ‘(d) USE OF JOINT BOARDS- Before issuing an order under subsection (a), the Commission shall refer the matter to a joint board appointed under section 209(a) for advice and recommendations on the need for, design of, and location of the proposed enlargement, extension, or improvement. The Commission shall consider the advice and recommendations of the Board before ordering such enlargement, extension, or improvement.

    ‘(e) LIMITATION ON AUTHORITY- The Commission shall have no authority to compel a transmitting utility to extend or improve its transmission facilities if such enlargement, extension, or improvement would unreasonably impair the ability of the transmitting utility to render adequate service to its customers.’.

SEC. 8. REGIONAL INDEPENDENT SYSTEM OPERATORS.

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

‘SEC. 219. REGIONAL INDEPENDENT SYSTEM OPERATORS.

    ‘(a) REGIONAL TRANSMISSION SYSTEMS- Whenever the Commission finds such action necessary or desirable in the public interest to ensure the fair and non-discriminatory access to transmission services within a region, the Commission may order the formation of a regional transmission system and may order any transmitting utility operating within such region to participate in the regional transmission system.

    ‘(b) OVERSIGHT BOARD- The Commission shall appoint a regional oversight board to oversee the operation of the regional transmission system. Such oversight board shall be composed of a fair representation of all of the transmitting utilities participating in the regional transmission system, electric utilities and consumers served by the system, and State regulatory authorities within the region. The regional oversight board shall ensure that the independent system operator formulates policies, operates the system, and resolves disputes in a fair and non-discriminatory manner.

    ‘(c) INDEPENDENT SYSTEM OPERATOR- The regional oversight board shall appoint an independent system operator to operate the regional transmission system. No independent system operator shall--

      ‘(1) own generating facilities or sell electric energy, or

      ‘(2) be subject to the control of, or have a financial interest in, any electric utility or transmitting utility within the region served by the independent system operator.

    ‘(d) COMMISSION RULES- The Commission shall establish rules necessary to implement this section.’.

SEC. 9. ENFORCEMENT.

    ‘(a) GENERAL PENALTIES- Section 316(c) of the Federal Power Act (16 U.S.C. 825o(c)) is amended by--

      (1) striking ‘subsection’ and inserting ‘section’; and

      (2) striking ‘or 214’ and inserting: ‘214, 217, 218, or 219’.

    ‘(b) CIVIL PENALTIES- Section 316A of the Federal Power Act (16 U.S.C. 825o-1) is amended by striking ‘or 214’ each place it appears and inserting: ‘214, 217, 218, or 219’.

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

    Section 210 of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 824a-3) is amended by adding at the end the following:

    ‘(m) PROTECTION OF EXISTING WHOLESALE POWER PURCHASE CONTRACTS- No State or State regulatory authority may bar a State regulated electric utility from recovering the cost of electric energy the utility is required to purchase from a qualifying cogeneration facility or qualifying small power production facility under this section.’.