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S.516
Electric Utility Restructuring Empowerment and Competitiveness Act of
1999 (Introduced in the Senate)
SEC. 3. STATE PROMOTION OF RETAIL COMPETITION.
(a) RETAINED STATE JURISDICTION- Part II of the Federal Power Act (16
U.S.C. 824 et seq.) is amended by adding at the end the following:
`SEC. 215. STATE PROMOTION OF RETAIL COMPETITION.
`(a) DEFINITIONS- In this section:
`(1) NONREGULATED ELECTRIC
UTILITY- The term `nonregulated electric utility' has the meaning
given the term in section 3 of the Public Utility Regulatory Policies Act of
1978 (16 U.S.C. 2602).
`(2) RETAIL ELECTRIC
SUPPLY-
`(A) IN GENERAL- The term `retail electric supply' means the
production, generation, manufacture, aggregation, retail marketing, retail
brokering, retail selling, or other retail supplying of
electricity.
`(B) EXCLUSION- The term `retail electric supply' does not include
the transmission of electricity in interstate commerce.
`(3) RETAIL SALE- The term `retail sale' means any sale of electric energy for ultimate
consumption.
`(4) STATE REGULATED ELECTRIC UTILITY- The term `State
regulated electric utility'
has the meaning given the term in section 3 of the Public Utility Regulatory
Policies Act of 1978 (16 U.S.C. 2602).
`(b) JURISDICTION- A State may regulate the provision of any retail electric supply (including
self-generation) or any local distribution service provided to an ultimate
consumer of electricity in the State.
`(c) PERFORMANCE STANDARDS- A State may establish and enforce performance
standards for the retail sale, marketing, or delivery of electric energy to ensure system
reliability, protect human health and public safety, and protect retail
consumers from unfair business practices.
`(d) STATE AUTHORITY OVER RETAIL TRANSACTIONS- Notwithstanding any other
provision of this Act, a State or a nonregulated electric utility may require, as a
condition of the purchase by any person or municipality located in the State
or service area of the nonregulated electric utility, as appropriate, of a
retail electric supply or local
distribution service, the payment of a charge determined by the State or
nonregulated electric utility to
further public policy goals, including--
`(1) recover electric
industry transition costs;
`(2) ensure that adequate electric service is available to all
customers served by a retail electricity distribution system;
`(3) ensure and enhance the reliability of retail electric service;
`(4) fund assistance to low-income consumers of electricity;
`(5) encourage environmental programs, renewable-energy programs,
energy-efficiency programs, or conservation programs;
`(6) provide for transition costs of electric utility workers adversely
affected by restructuring; and
`(7) encourage research and development on electric technologies.
`(e) WHOLESALE RECIPROCITY- An electric utility may not provide any
wholesale electric supply in
commerce using open and nondiscriminatory transmission access unless the electric utility, and every affiliate
of the electric utility,
provides comparable open and nondiscriminatory transmission access over any
facility owned, controlled, or operated by the person or affiliate.
`(f) RETAIL RECIPROCITY- A State may provide that a nonregulated electric utility, a State regulated
electric utility, or a
cooperative utility in the State may deny local distribution access to any
other nonregulated electric
utility, State regulated electric utility, or cooperative
utility (or affiliate of any such utility) that is offering electric energy for sale (referred to
in this subsection as the `seller') to a customer of the in-State utility if
the seller or an affiliate of the seller is not providing comparable access to
any local distribution facility owned, controlled, or operated by the seller
or affiliate.'.
(b) STATE AUTHORITY OVER SALES OF ELECTRICITY TO FEDERAL FACILITIES-
Section 201 of the Federal Power Act (16 U.S.C. 824) is amended by adding at
the end the following:
`(h) STATE AUTHORITY OVER SALES OF ELECTRICITY TO FEDERAL FACILITIES- The
purchase of electricity for ultimate consumption by a Federal department,
agency, authority, instrumentality, facility, enclave, installation,
establishment, or mixed-ownership government corporation shall be subject to
the laws (including regulations) of the State in which the consumption of
electricity occurs with respect to the choice of supplier and rules, rates,
terms and conditions, if any, applicable to such a purchase.'.
(c) UNIVERSAL SERVICE- Section 201(b) of the Federal Power Act (16 U.S.C.
824(b)) is amended by adding at the end the following:
`(3) UNIVERSAL SERVICE- Nothing in this Act deprives a State of the
authority to require, in accordance with State law, all electricity
providers that sell electricity to retail customers in the State to assist
in providing universal service.'.
SEC. 4. DEREGULATION OF
WHOLESALE SALES OF ELECTRIC
ENERGY.
(a) DEREGULATION OF
WHOLESALE SALES OF ELECTRIC
ENERGY- Section 205 of the Federal Power Act (16 U.S.C. 824d) is amended by
adding at the end the following:
`(g) DEREGULATION OF
WHOLESALE SALES OF ELECTRIC
ENERGY-
`(1) IN GENERAL- A contract or agreement for the sale of electric energy for resale made
after the date of enactment of this subsection shall be exempt from
regulation of rates and charges under parts II and III of this Act.
`(2) STATE AUTHORITY OVER RETAIL SALES UNAFFECTED- Nothing in this
subsection affects the authority of a State or State commission to regulate
sales to an ultimate customer.'.
(b) OPEN ACCESS TRANSMISSION FROM ALL TRANSMITTING UTILITIES- Part II of
the Federal Power Act (16 U.S.C. 824 et seq.) (as amended by section 3(a)) is
amended by adding at the end the following:
`SEC. 216. OPEN ACCESS TRANSMISSION FROM ALL TRANSMITTING UTILITIES.
`A transmitting utility and any other entity that owns, operates, or
controls transmission of electricity in interstate commerce--
`(1) shall be subject to the jurisdiction of the Commission under this
Act regarding any wholesale transmission service; and
`(2) shall comply with all requirements applicable to a public utility
regarding the provision of any wholesale transmission service.'.
SEC. 5. TAX BENEFITS TO
UTILITIES.
Not later than 1 year after the date of enactment of this Act, the
Inspector General of the Treasury shall submit to Congress a report detailing
whether and how Internal Revenue Code provisions relating to the following
benefits should be addressed in order to foster a competitive retail
electricity market:
(1) Benefits received as a result of the Internal Revenue Code by an
investor-owned electric
utility that is not received by other nonutility private corporations under
the Internal Revenue Code.
(2) Benefits received as a result of the Internal Revenue Code by a
utility providing electric
service to the public that is--
(A) an instrumentality of a State;
(B) a political subdivision of a State;
(C) a corporation that has at any time received a loan from the Rural
Utilities Service or the Rural Electrification Administration under the
Rural Electrification Act of 1936 (17 U.S.C. 901 et seq.) for the purposes
of providing electric
service; or
(D) an entity that is owned, directly or indirectly, by an entity
described in subparagraph (A), (B), or (C).
SEC. 6. PURPA REFORM.
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) LIMITATION ON RULES-
`(1) DEFINITION OF FACILITY- In this subsection, the term `facility'
means a facility for the generation of electric energy or an addition to or
expansion of the generating capacity of a facility for the generation of
electric energy.
`(2) LIMITATION- This section shall not apply to a facility that begins
commercial operation after the date of enactment of this subsection, except
for a facility for which a power purchase contract was entered into under
this section before the date of enactment of this subsection.
`(3) CONTRACTS- After the date of enactment of this subsection, an electric utility shall not be
required to enter into a new contract or obligation to purchase or sell
electric energy under this
section.'.
SEC. 7. REPEAL OF PUHCA.
(a) FINDINGS AND PURPOSES-
(1) FINDINGS- Congress finds that--
(A) the Public Utility Holding Company Act of 1935 (15 U.S.C. 79a et
seq.) was intended to facilitate the work of Federal and State regulators
by placing certain constraints on the activities of holding company
systems;
(B) developments since 1935, including changes in other regulation and
in the electric and gas
industries, have called into question the continued relevance of the model
of regulation established by that Act;
(C) there is a continuing need for State regulation in order to ensure
the rate protection of utility customers; and
(D) limited Federal regulation is necessary to supplement the work of
State commissions for continued rate protection for electric and gas utility
customers.
(2) PURPOSES- The purposes of this section are--
(A) to eliminate unnecessary regulation, yet continue to provide for
consumer protection by facilitating existing rate regulatory authority
through improved Federal and State commission access to books and records
of all companies in a holding company system, to the extent that such
information is relevant to rates paid by utility customers, while
affording companies the flexibility required to compete in the energy
markets; and
(B) to address protection of electric and gas utility customers
by providing for Federal and State access to books and records of all
companies in a holding company system that are relevant to utility
rates.
(b) DEFINITIONS- In this section:
(1) AFFILIATE- The term `affiliate' 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 a parent company.
(2) ASSOCIATE COMPANY- The term `associate company' means any company in
the same holding company system with another company.
(3) COMMISSION- The term `Commission' means the Federal Energy
Regulatory Commission.
(4) COMPANY- 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 such entity.
(5) ELECTRIC UTILITY
COMPANY- 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) EXEMPT WHOLESALE GENERATOR- The term `exempt wholesale generator'
has the meaning given the term in section 32(a) of the Public Utility
Holding Company Act of 1935 (15 U.S.C. 79z-5a(a)), as in effect on the day
before the effective date of this section.
(7) FOREIGN UTILITY COMPANY- The term `foreign utility company' has the
meaning given the term in section 33(a) of the Public Utility Holding
Company Act of 1935 (15 U.S.C. 79z-5b(a)), as in effect on the day before
the effective date of this section.
(8) GAS UTILITY COMPANY- The term `gas utility company' means any
company that owns or operates facilities used for retail distribution (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.
(9) HOLDING COMPANY- The term `holding company' means--
(A) a 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 under an arrangement or understanding with 1 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 rate protection for utility customers with respect to rates that such
person be subject to the obligations, duties, and liabilities imposed by
this Act upon holding companies.
(10) HOLDING COMPANY SYSTEM- The term `holding company system' means a
holding company and all subsidiary companies of the holding company.
(11) JURISDICTIONAL RATE- The term `jurisdictional rate' means a rate
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.
(12) NATURAL GAS COMPANY- The term `natural gas company' means a person
engaged in the transportation of natural gas in interstate commerce or the
sale of natural gas in interstate commerce for resale.
(13) PERSON- The term `person' means an individual or company.
(14) PUBLIC UTILITY- The term `public utility' means any person that
owns or operates facilities used for transmission of electric energy in interstate
commerce or sales of electric
energy at wholesale in interstate commerce.
(15) PUBLIC UTILITY COMPANY- The term `public utility company' means an
electric utility company or a
gas utility company.
(16) STATE COMMISSION- 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.
(17) SUBSIDIARY COMPANY- The term `subsidiary company', in reference to
a subsidiary company of a holding company, means--
(A) a 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 the 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 the holding company
(either alone or under an arrangement or understanding with 1 or more
other persons) so as to make it necessary for the rate protection of
utility customers with respect to rates that the person be subject to the
obligations, duties, and liabilities imposed by this section on subsidiary
companies of holding companies.
(18) VOTING SECURITY- The term `voting security' means any security
entitling the owner or holder of the security to vote in the direction or
management of the affairs of a company.
(c) 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.
(d) FEDERAL ACCESS TO BOOKS AND RECORDS-
(1) IN GENERAL- Each holding company and each associate company of a
holding company shall maintain, and shall make available to the Commission,
such books, accounts, memoranda, and other records as the Commission
considers to be relevant to costs incurred by a public utility or natural
gas company that is an associate company of the holding company and
necessary or appropriate for the protection of utility customers with
respect to jurisdictional rates 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 other use.
(2) 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
considers relevant to costs incurred by a public utility or natural gas
company that is an associate company of the holding company and necessary or
appropriate for the protection of utility customers with respect to
jurisdictional rates.
(3) 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 of a company in a holding company system, as the
Commission considers relevant to costs incurred by a public utility or
natural gas company in the holding company system and necessary or
appropriate for the protection of utility customers with respect to
jurisdictional rates.
(4) CONFIDENTIALITY- No member, officer, or employee of the Commission
shall divulge any fact or information that may come to the knowledge of the
member, officer, or employee during the course of examination of a book,
account, memorandum, or other record under this section, except as may be
directed by the Commission or by a court of competent jurisdiction.
(e) STATE ACCESS TO BOOKS AND RECORDS-
(1) IN GENERAL- On the written request of a State commission having
jurisdiction to regulate a public utility company in a holding company
system, a holding company or an associate or affiliate of a holding company,
wherever located, shall produce for inspection any book, account,
memorandum, or other record that--
(A) has been identified in reasonable detail in a proceeding before
the State commission;
(B) the State commission considers relevant to costs incurred by the
company; and
(C) is necessary for the effective discharge of the responsibilities
of the State commission with respect to the proceeding.
(2) LIMITATION- Paragraph (1) does not apply to any person that is a
holding company solely by reason of ownership of 1 or more qualifying
facilities under the Public Utility Regulatory Policies Act of 1978 (16
U.S.C. 2601 et seq.).
(3) CONFIDENTIALITY OF INFORMATION- The production of books, accounts,
memoranda, and other records under paragraph (1) shall be subject to such
terms and conditions as are necessary to safeguard against unwarranted
disclosure to the public of any trade secrets or sensitive commercial
information.
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