Electric Utility Policy: Comparison of House-Passed H.R. 6 and S.Amdt. 1412

CRS Report for Congress
Electric Utility Policy: Comparison of
House-Passed H.R. 6 and S.Amdt. 1412,
108 Congress
Updated August 26, 2003
Amy Abel
Specialist in Energy Policy
Resources, Science, and Industry Division

Congressional Research Service ˜ The Library of Congress

Electric Utility Policy: Comparison of House-Passed
H.R. 6 and S.Amdt. 1412, 108th Congress
Electric utility provisions are included in comprehensive energy legislation that
has passed both the House and Senate. The House passed H.R. 6 on April 11, 2003.
On July 31, 2003, the Senate suspended debate on S. 14, the comprehensive energy
bill that had been reported by the Energy and Natural Resources Committee. It then
passed H.R. 6 with the text of the Senate-passed version of H.R. 4 from the 107th
Congress. For a comparison of the House- and Senate-passed versions of H.R. 6, see
CRS Report RL32033, Omnibus Energy Legislation (H.R. 6): Side-by-Side
Comparison of Non-Tax Provisions.
Before debate on S. 14 was suspended, Senator Domenici proposed S.Amdt.
1412 on July 29, 2003, to completely replace the electricity title of S. 14 as
introduced in the Senate. The proposed amendment was withdrawn on July 31, 2003.
Although S.Amdt. 1412 is not included in the Senate-passed bill that will be
considered in conference, there are indications that provisions of the amendment
might be brought up.
Both the House-passed electricity provisions in H.R. 6 and those in S.Amdt.
1412 would give limited rate authority to the Federal Energy Regulatory Commission
(FERC) over municipal and cooperative transmission systems; create an electric
reliability organization; repeal the Public Utility Holding Company Act (PUHCA)
and give FERC and state public utility commissions access to books and records;
prospectively repeal the mandatory purchase requirement of the Public Utility
Regulatory Policies Act (PURPA); explicitly prohibit round-trip trading; establish
market transparency rules; protect native load consumers (existing customers); and
increase criminal penalties under the Federal Power Act.
Title VI of the House-passed H.R. 6 would, in part, provide for incentive-based
transmission rates, allow transmission owners in certain instances to exercise the
right of eminent domain to site new transmission lines, create an electric reliability
organization, and clarify the right of transmission owners to serve existing customers
(native load). Unlike the House-passed H.R. 6, S.Amdt. 1412 does not contain
provisions that would allow transmission owners to exercise the right of eminent
domain to site new transmission lines.
S.Amdt. 1412 contains provisions that are not included in the House-passed
H.R. 6. These include provisions that prohibit FERC from requiring utilities to
transfer operational control of transmission facilities to a regional transmission
organization (RTO), give authority to power marketing administrations and the
Tennessee Valley Authority (TVA) to join RTOs, remand the FERC Standard Market
Design (SMD) notice of proposed rulemaking, and strengthen FERC’s merger review
This report will not be updated.

In troduction ......................................................1
Definitions .......................................................3
Transmission Capacity..............................................3
Transmission Operation.............................................8
Reliability .......................................................13
Public Utility Holding Company Act Amendments......................15
Public Utility Regulatory Policies Act (PURPA) Amendments.............21
Renewable Energy................................................24
Market Transparency, Round Trip Trading Prohibition, and Enforcement.....26
Consumer Protections.............................................29
Merger Review Reform and Accountability............................34
Study of Economic Dispatch........................................35

Electric Utility Policy: Comparison of
House-Passed H.R. 6 and S.Amdt. 1412,
108 Congress
Historically, electric utilities have been regarded as natural monopolies requiring
regulation at the state and federal levels. The Energy Policy Act of 1992 (EPACT,
P.L. 102-486) removed a number of regulatory barriers to electricity generation in an
effort to increase supply and introduce competition, and further legislation has been
introduced and debated to resolve remaining issues affecting transmission, reliability,
and other restructuring concerns.
Electric utility provisions are included in comprehensive energy legislation that
has passed both the House and Senate. The House passed H.R. 6 on April 11, 2003.
On July 31, 2003, the Senate suspended debate on S. 14, the comprehensive energy
bill that had been drafted by the Energy and Natural Resources Committee, and
instead passed H.R. 6 with the text of the Senate-passed version of H.R. 4 from the

107th Congress. For a comparison of the House- and Senate-passed versions of H.R.

6, see CRS Report RL32033, Omnibus Energy Legislation (H.R. 6): Side-by-Side
Comparison of Non-Tax Provisions.
Before debate on S. 14 was suspended, Senator Domenici proposed S.Amdt.
1412 on July 29, 2003, to completely replace the electricity title of S. 14 as
introduced in the Senate. The proposed amendment was withdrawn on July 31, 2003,
and is not included in the Senate-passed energy bill. However, majority staff of the
Senate Energy and Natural Resources Committee have indicated that provisions of
the amendment might be brought up in conference.1
Title VI of the House-passed H.R. 6 would, in part, provide for incentive-based
transmission rates, allow transmission owners in certain instances to exercise the
right of eminent domain to site new transmission lines, create an electric reliability
organization, give new, but limited, authority to the Federal Energy Regulatory
Commission (FERC) over municipal and cooperative transmission systems, and
clarify the right of transmission owners to serve existing customers (native load).
In addition, the House bill would repeal the Public Utility Holding Company
Act (PUHCA) and give FERC and state public utility commissions access to books
and records, prospectively repeal the mandatory purchase requirement of the Public
Utility Regulatory Policies Act of 1978 (PURPA), and require utilities to provide

1 CRS communication with majority senior staff of the Senate Energy and Natural Resources
Committee, Aug. 19, 2003.

real-time rates and time-of-use metering. The House version of H.R. 6 would
establish market transparency rules, explicitly prohibit round-trip trading, and
increase criminal penalties under the Federal Power Act.
Like the House-passed electricity provisions of H.R. 6, S.Amdt. 1412 would,
in a more limited fashion, give FERC rate authority over municipal and cooperative
transmission systems, create an electric reliability organization, repeal PUHCA and
give FERC and state public utility commissions access to books and records,
prospectively repeal the mandatory purchase requirement of PURPA, clarify the right
of transmission owners to serve native load, explicitly prohibit round-trip trading,
establish market transparency rules, and increase criminal penalties under the Federal
Power Act.
Unlike the House-passed H.R. 6, S.Amdt. 1412 does not contain provisions that
would allow transmission owners to exercise the right of eminent domain to site new
transmission lines.
S.Amdt. 1412 contains provisions that are not included in the House-passed
H.R. 6. These include provisions that prohibit FERC from requiring utilities to
transfer operational control of transmission facilities to a regional transmission
organization (RTO), give authority to power marketing administrations and the
Tennessee Valley Authority to join RTOs, remand FERC’s Standard Market Design
(SMD) notice of proposed rulemaking, and strengthen FERC’s merger review
For additional information, see CRS Report RL32728, Electric Utility
Regulatory Reform: Issues for the 109th Congress.

ionCurrent LawHouseS.Amdt. 1412Comments
nsThe Federal Power Act (FPA) No similar provision.Sec. 1101. In part, modifies
does not include any federaldefinition ofelectric utility to
power marketing agency in theinclude federal power marketing
definition ofelectric utility.’ agencies. Changes definition of
The Federal Power Act does nottransmitting utility to include
include municipalities andthe Tennessee Valley Authority.
states, (entities described inDefines unregulated transmitting
201(f)) in the definition ofutility, electric cooperative,
transmitting utility (16 U.S.C.Regional Transmission
796).Organization, and Independent
System Operator.
s.orTransmission Capacity
://wikiionCurrent LawHouseS.Amdt. 1412Comments
httpansmission infrastructureFERC must approveSec. 16011. FERC is required toSec. 1133. Requires FERC to
provement rulemakingtransmission rates charged byestablish a rule to create promulgate rules within 180
ntinued on next row).utilities. These rates must beincentive-based transmissiondays of enactment to establish
just and reasonable (16 U.S.C.rates. Under the rule, FERCpricing policies for the
824d).must approve a transmissionconstruction of new interstate
organization’s request that newtransmission facilities or for
transmission facilities thatexpansion and upgrades of the
increase the transfer capabilityexisting transmission
of the system be participant-infrastructure. (continued on
funded.next row)

ionCurrent LawHouseS.Amdt. 1412Comments
ansmission infrastructure(see row above)(see row above)(continued from row above)
provement rulemaking.The regulation is to promote
economic capital investment in
transmission, encourage
construction and operation of
generation and transmission to
minimize risk and provide just
and reasonable rates to
consumers, encourage use of
transmission technologies that
increase the transfer capacity of
existing lines, and ensure that
transmission expansion costs are
iki/CRS-RL32041allocated in a fair manner. RTOs or ISOs are required to
g/wsubmit a plan to FERC that
s.ordetermines how costs will be
leakallocated for transmission
expansion. This section allows
://wikicosts to be: 1) directly assigned;
http2) participant funded; or 3)
rolled into regional or sub-
regional rates. RTOs or ISOs
could also propose other
methods for cost allocation.

ionCurrent LawHouseS.Amdt. 1412Comments
tate electricalTransmission siting is theSec. 16012. The Secretary ofNo similar provision.Under House proposed FPA
nsmission facilitiesresponsibility of the states.Energy is required to conduct asection 216(d) there is no
ntinued in next row).study of electric transmissionspecific comment period
Federal Land Policy andcongestion every three years. required. New FPA section
Management Act (43 U.S.C.Based on the findings, the216(e) appears to be exercising
1763).Secretary of Energy mayfederal power of eminent
designate a geographic area asdomain to cross private land.
being congested. Under certainNew FPA section 216(g) does
conditions, FERC is authorizednot clearly state whether
to issue construction permits. companies using condemnation
Permit holders will be allowedauthority to cross private land
to petition in District Court tomust comply with the National
acquire rights-of-way through Environmental Policy Act of
iki/CRS-RL32041the exercise of the right ofeminent domain. Any exercise1969 (NEPA). New section216(h) does not state whether
g/wof eminent domain authority isproperty owners will be required
s.orconsidered to be takings ofto reimburse compensation if
leakprivate property for which justland is transferred back to the
compensation is due. Thisowner. New FPA section
://wikisection does not apply to the216(j)(1) gives the Department
httpElectric Reliability Council ofof Energy (DOE) new authority
Texas (ERCOT). An applicantto prepare environmental
for federal authorization to sitedocuments and appears to give
transmission facilities on federalDOE additional decision-
lands may request that themaking authority for rights-of-
Department of Energy be theway and siting on federal lands.
lead agency to coordinateThis would appear to give DOE
environmental review and otherinput into the decision process
federal authorization. for creating rights-of-way. New
(continued in next row)FPA section 216(l) would not
apply to monuments that are not
managed by the National Park

ionCurrent LawHouseS.Amdt. 1412Comments
tate electrical(See row above.)Sec. 16012 (continued from(See row above.)(See row above.)

nsmission facilitiesrow above). Once a completed
tinued from row above).application is submitted, all
related environmental reviews
must be completed within 1 year
unless existing federal law
environmental review document
is to be used for all decisions on
the proposed project. Review
under section 503 of the Federal
Land Policy and Management
Act may be streamlined by
relying on prior analyses. Any
iki/CRS-RL32041denial of federal rights-of-waymay be appealed by the
g/wapplicant or relevant state to the
s.orSecretary of Energy. The
leakSecretary of Energy must issue a
decision within 90 days of the
://wikiappeal’s filing. States may enter
httpinto interstate compacts for the
purposes of siting transmission
facilities and the Secretary of
Energy may provide technical

ionCurrent LawHouseS.Amdt. 1412Comments
ansmission technologies.The Federal Power Act (16Sec. 16013. FERC is to exerciseNo similar provision.Investment in the transmission
U.S.C. 791a and following)its authority under the Federalsystem has not kept pace with
gives FERC authority to orderPower Act to encourageincreases in generation. This
interconnections with thetechnologies that will increasesection is intended to increase
transmission system andthe efficiency and transferthe capacity of existing lines
transmission capacity additionscapability of transmissionthrough the implementation of
necessary to support thenetworks.technology.

interconnection (Section 210).
Section 212 allows the costs of
transmission system
enlargement to be included in
the rates for wholesale
transmission services.

Transmission Operation
ionCurrent LawHouseS.Amdt. 1412Comments
en access transmission byThe Federal Power Act (SectionSec. 16021. FERC is authorized,Sec. 1132. FERC is authorized,Both provisions are often
in utilities.201(f)) does not apply to federalby rule or order, to requireby rule or order, to requirereferred to as “FERC-lite.”

power marketingunregulated transmitting utilitiesunregulated transmitting utilities
administrations, state entities, or(power marketing(power marketing
rural electric cooperatives (16administrations, state entities,administrations, state entities,
U.S.C. 824).and rural electric cooperatives)and rural electric cooperatives)
to charge rates comparable toto charge rates comparable to
what they charge themselves,what they charge themselves
and also require that the termsand requires that the terms and
and conditions of the sales areconditions of the sales are
comparable to those required ofcomparable to those required of
iki/CRS-RL32041other utilities. Exemptions areother utilities. Exemptions are
g/westablished for utilities sellingestablished for utilities selling
s.orless than 4 million megawatt-less than 4 million mwh of
leakhours (mwh) of electricity perelectricity per year, for
year, for distribution utilities,distribution utilities, and for
://wikiand for utilities that own orutilities that own or operate
httpoperate transmission facilitiestransmission facilities that are
that are not necessary tonot necessary to facilitate a
facilitate a nationwidenationwide interconnected
interconnected transmissiontransmission system. FERC is
system. FERC may remandnot authorized to order states or
transmission rates to anmunicipalities to take action
unregulated transmitting utilityunder this section if it
if the rates do not comply withconstitutes a private use under
this section.section 141 of the Internal
Revenue Code of 1986. FERC
is not authorized to require
unregulated transmitting utilities
to join a transmission

ionCurrent LawHouseS.Amdt. 1412Comments
nse of Congress on RegionalNo current law.Sec. 16022. It is the sense of theSec. 1122. It is the sense of the
ansmission Organizations.Congress that utilities shouldCongress that utilities should
voluntarily become members ofvoluntarily become members of
regional transmissionregional transmission
organizations (RTO). It is theorganizations.
sense of the Congress that FERC
should provide incentive rates
for transmission for those
utilities that join regional
transmission organizations.
FERC is required to report to
Congress within 120 days of
enactment the status of all
iki/CRS-RL32041regional transmissionorganization applications.
g/wFederal utilities (power
s.ormarketing administrations or
leakTennessee Valley Authority) are
authorized to participate in
://wikiregional transmission
rticipation in RegionalSection 202 (a) of the FederalNo similar Provision.Sec. 1123. FERC may not
ansmission Organizations.Power Act directs FERC torequire a transmitting utility to
promote and encourage regionaltransfer operational control of
districts for the voluntaryits transmitting facilities to an
interconnection andRTO or Independent System
coordination of transmissionOperator (ISO).

facilities by public utilities and
non-public utilities for the
purpose of assuring an abundant
supply of electric energy
throughout the United States
with the greatest possible
econo my.

ionCurrent LawHouseS.Amdt. 1412Comments
l utility participation inEnabling statutes for powerNo similar Provision.Sec. 1124. Federal entities, such
ional transmissionmarketing administrations mayas the power marketing
izations.restrict participation in RTOs.administrations and the
(16 U.S.C. 832 (BonnevilleTennessee Valley Authority, are
Power Administration), 16allowed to enter into a contract
U.S.C. 460(Southeastern andto transfer control and use of all
Southwestern Power Marketingor part of a federal utilitys
Administration), and 43 U.S.C.transmission system to an RTO.

485 (Western Area Power
16 U.S.C. 831. The Tennessee
Valley Authority Act prohibits
iki/CRS-RL32041the Tennessee Valley Authority(TVA) from performing any
g/wtransmission service that would
s.orresult in the delivery of power
leakgenerated by TVA outside of its
service territory (thefence”).

ionCurrent LawHouseS.Amdt. 1412Comments
ate regulatory authorities.No current law.No similar provision.Sec. 1125. FERC is required to
convene regional discussions
with state regulatory authorities
to determine whether wholesale
electric markets in the region are
being effective in providing
reliable service at the lowest
reasonable cost. These
discussions, in part, are required
to consider whether an RTO is
needed, the process to consider
planning for multi-state
transmission facilities, whether
iki/CRS-RL32041economic dispatch should beimplemented, a method to
g/wprovide proper price signals so
s.ornew transmission and generation
leakfacilities alleviate congestion on
the transmission system, and
://wikiwhether a new transmission
httppricing system is necessary to
enhance efficiency and
reliability of the transmission
grid. FERC is required to report
to Congress within one year of
enactment its progress with
implementing this section.

ionCurrent LawHouseS.Amdt. 1412Comments
tive load.Section 201 of the FederalSec. 16023. A load-servingSec. 1131. Similar provision.This section is intended to
Power Act gives FERCentity is entitled to use itsclarify that reserving
jurisdiction overthetransmission facilities ortransmission for existing
transmission of electric energytransmission rights to serve itscustomers (native load) is not
in interstate commerce and theexisting customers before it isconsidered unduly
sale of such energy at wholesaleobligated to make itsdiscriminatory.
in interstate commerce.” Sectiontransmission capacity available
205 of the Federal Power Actfor other uses.
prohibits utilities from granting
undue preference or advantage
to any person or subject any
person to any undue prejudice or
disadvantage” (16 U.S.C. 824).
iki/CRS-RL32041arket Design.No current law.No similar provision.Section 1121. This section
g/wwould remand the Standard
s.orMarket Design
leak (SMD) notice of proposed
rulemaking back to FERC.
://wikiFERC would not be able to issue
httpa final rule on standard market
design before July 1, 2005.

ionCurrent LawHouseS.Amdt. 1412Comments
ric reliability standards.No current law.Sec. 16031. Requires FERC toSection 1111. Similar provision.

promulgate rules within 180
days of enactment to create a
FERC-certified electric
reliability organization (ERO).
The ERO would develop and
enforce reliability standards for
the bulk-power system. All ERO
standards must be approved by
FERC. Under this title, the
ERO could impose penalties on
iki/CRS-RL32041a user, owner, or operator of the
g/wbulk-power system that violates
s.orany FERC-approved reliability
leakstandard. In addition, FERC
could order compliance with a
://wikireliability standard and could
httpimpose a penalty if FERC finds
that a user, owner, or operator of
the bulk-power system has
engaged in or is about to engage
in a violation of a reliability
standard. This provision does
not give an ERO or FERC
authorization to order
construction of additional
generation or transmission
capacity. (continued on next

ionCurrent LawHouseS.Amdt. 1412Comments
ric reliability standards(See row above.)(Continued from row above)(See row above.)(See row above.)

tinued from row above).This provision also requires that
FERC establish a regional
advisory body if at least two-
thirds of the states within a
region petition FERC. The
advisory body would be
composed of one member from
each participating state in the
region, appointed by the
Governor of each state, and
could provide advice to the ERO
or FERC on reliability
iki/CRS-RL32041standards, proposed regionalentities, proposed fees, and any
g/wother responsibilities requested
s.orby FERC. The entire reliability
leakprovision would not apply to
Alaska or Hawaii.

Public Utility Holding Company Act Amendments
ionCurrent LawHouseS.Amdt. 1412Comments
ort title.The Public Utility HoldingSec. 16041. This subtitle may be Subtitle E. This subtitle may be
Company Act of 1935 (PUHCA,cited as the Public Utilitycited as the Public Utility
15 U.S.C. 79 et seq.).Holding Company Act of 2003.Holding Company Act of 2003.
ns.Various terms are defined at 15Sec. 16042. The following termsSec. 1151. The following terms
U.S.C. 79b.are defined: affiliates; associateare defined: holding company,
company; Commission;holding company system,
company; electric utilityjurisdictional rates, natural gas
company; exempt wholesalecompany, person, public utility,
generator; gas utility company;public-utility company,
holding company; holdingsubsidiary company, voting
iki/CRS-RL32041company system; jurisdictionalsecurity.

g/wrates; natural gas company;
s.orperson; public utility; public
leakutility company; State
commission; subsidiary
://wikicompany; and voting security.

ionCurrent LawHouseS.Amdt. 1412Comments
l of the Public UtilityIn general, the Public UtilitySec. 16043. The Public UtilitySec. 1152. Similar provision.

ding Company Act ofHolding Company Act of 1935Holding Company Act of 1935
regulates the structure ofis repealed.
holding companies by
prohibiting all holding
companies that are more than
twice removed from their
operating subsidiaries, federally
regulates holding companies of
investor-owned utilities, and
provides for Securities and
Exchange Commission (SEC)
regulation of mergers and
iki/CRS-RL32041diversification proposals. Registered holding companies
g/wof subsidiaries are required to
s.orhave SEC approval prior to
leakissuing securities; all loans and
intercompany financial
://wikitransactions are regulated by the
httpSEC. A holding company can
be exempt from PUHCA if its
business operations and those of
its subsidiaries occur within one
state or within contiguous states
(15 U.S.C. 79 et seq.).

ionCurrent LawHouseS.Amdt. 1412Comments
s to books andRegistered holding companiesSec. 16044. Federal access isSec. 1153. Similar provision.
.and subsidiary companies areprovided to books and records
required to preserve accounts,of holding companies and their
cost-accounting procedures,affiliates. Affiliate companies
correspondence, memoranda,must make available to the
papers, and books that FERCCommission the books and
deems necessary or appropriaterecords of affiliate transactions.
in the public interest or forFederal officials must maintain
protection of investors andthe confidentiality of such books
consumers (15 U.S.C. 79o).and records.
ate access to books andUnder the Federal Power Act,Sec. 16045. A jurisdictionalSec. 1154. Similar provision.
.state commissions may examinestate commission may make a
iki/CRS-RL32041the books, accounts,memoranda, contracts, andreasonably detailed writtenrequest to a holding company or
g/wrecords of a jurisdictionalany associate company for
s.orelectric utility company, anaccess to specific books and
leakexempt wholesale generator thatrecords, which must be kept
sells to such electric utility, andconfidential. This section does
://wikiany electric utility company ornot apply to a holding company
httpolding company that is anthat is such solely by reason of
associate company or affiliate ofownership of one or more
an exempt wholesale generatorqualifying facilities. Response
(16 U.S.C. 824).to such requests is mandatory.
Compliance with this section is
enforceable in U.S. District
Co ur t.
emption authority.No current law.Sec. 16046. FERC is directed toSec. 1155. FERC is directed to
promulgate rules to exemptpromulgate rules to exempt
qualifying facilities, exemptqualifying facilities, exempt
wholesale generators, andwholesale generators, and
foreign utility companies fromforeign utility companies from
the requirements of Sectionthe requirements of Section
16044. 1153.

ionCurrent LawHouseS.Amdt. 1412Comments
filiate transactions.The Federal Power Act requiresSec. 16047. FERC retains theSec. 1156. FERC and state
that jurisdictional rates are justauthority to prevent cross-commissions retain authority to
and reasonable and prohibitssubsidization and to assure thatdetermine if a public-utility
cross-subsidization (16 U.S.C.jurisdictional rates are just andcompany, public utility, or
791a et seq.).reasonable. FERC and statenatural gas company may
commissions retain jurisdictionrecover in rates the costs of
to determine whether associategoods or services acquired from
company activities may bean affiliate company.
recovered in rates.
bility.No specific provision.Sec. 16048. Except asSec. 1157. Similar provision.
specifically noted, this subtitle
does not apply to the U.S.
iki/CRS-RL32041Government, a state or anypolitical subdivision of a state,
g/wor a foreign governmental
s.orauthority operating outside the
leakUnited States.
://wikifect on other regulations.No specific provision.Sec. 16049. FERC or a stateSec. 1158. Similar provision.
httpcommission is not precluded
from exercising its jurisdiction
under otherwise applicable laws
to protect utility customers.
forcement.15 U.S.C. 79r. The SecuritiesSec. 16050. FERC has authoritySec. 1159. Similar provision.

and Exchange Commission hasto enforce this provision under
authority to investigate andsections 306-317 of the Federal
enforce provisions of the PublicPower Act.
Utility Holding Company Act of

ionCurrent LawHouseS.Amdt. 1412Comments
ngs provisions. Not applicable.Sec. 16051. Persons maySec. 1160. Similar provision.
continue to engage in legal
activities in which they have
been engaged or are authorized
to engage in on the effective
date of the Act. The subtitle
does not limit the authority of
the Federal Energy Regulatory
Commission under the Federal
Power Act or the Natural Gas
Ac t .
plementation.Not applicable.Sec. 16052. Not later than 12Sec. 1161. Similar provision.
iki/CRS-RL32041months after enactment, FERCwill promulgate regulations
g/wnecessary to implement this
s.orsubtitle and submit to Congress
leakrecommendations for technical
or conforming amendments to
://wikifederal law that might be
httpnecessary to carry out this
sub title.
ansfer of resources.The Securities and ExchangeSec.16053. The Securities andSec. 1162. Similar provision.No time frame for transfer of
Commission maintains booksExchange Commission willbooks and records is provided.
and records and regulatestransfer all applicable books and
security transactions (15 U.S.C.records to FERC.
79 et seq.).
fective date.Not applicable.Sec. 16054. Twelve monthsSec. 1163. Similar provision.
after enactment, this subtitle will
take effect.
thorization ofNot applicable.Sec. 16055. Necessary funds toNo similar provision.

propriations.carry out this subtitle are
authorized to be appropriated.

ionCurrent LawHouseS.Amdt. 1412Comments
nforming amendments toThe current jurisdiction of theSec. 16056. The Federal PowerSec. 1164. Similar provision.

er Act.Securities and ExchangeAct is amended to reflect the
Commission under the Publicchanges to the Public Utility
Utility Holding Company Act ofHolding Company Act of 1935.
1935 is referenced by 16 U.S.C.
825q; 16 U.S.C. 824(g)(5); 16
U.S.C. 824m.

Public Utility Regulatory Policies Act (PURPA) Amendments
ionCurrent LawHouseS.Amdt. 1412Comments
l-time pricing andStates are required to considerSec. 16061. Not later than oneSec. 1142. Not later than one
e-of-use meteringwhether to implement standardsyear after enactment, each stateyear after enactment, each state
ndards.for the purchase of long-termregulatory authority is requiredregulatory body is required to
wholesale power supplies (16to consider implementing thedetermine if it will adopt a
U.S.C. 2621(d)).following standards: (1) ifstandard for time-based
requested by an electricmetering. The standard could
consumer, each electric utilityimplement time-of-use pricing,
must provide customers with acritical peak pricing, and real-
real-time rate schedule; and (2)time pricing. Utilities are to be
if requested by an electricrequired to provide customers
consumer, each electric utility iswith meters necessary to
iki/CRS-RL32041required to provide time-of-useimplement time-based metering.
g/wmetering technology.
s.orThe Secretary of Energy is
leakrequired to prepare an annual
report to Congress that assesses
://wikidemand response resources on a
httpregional basis. The report will
assess the use of advanced
meters and communications
systems, existing demand
response programs, and the
potential use of demand
response for regional planning
purposes. This section
establishes that it is the policy of
the United States to encourage
time-based pricing and other
forms of demand response.

ionCurrent LawHouseS.Amdt. 1412Comments
eration and small powerSection 210 of the Public UtilitySec. 16062. Mandatory powerSec. 1145. Mandatory power
duction purchase and saleRegulatory Policies Act of 1978purchase requirements underpurchase requirements under
ents.(PURPA) requires utilities to§210 of PURPA will not apply§210 of the Public Utility
purchase power from qualifyingto new contracts after the date ofRegulatory Policies Act of 1978
facilities and small powerenactment if FERC finds that a(PURPA) will not apply to new
producers at a rate of thecompetitive electric marketcontracts after the date of
utilities’ avoided cost (16 U.S.C.exists and a qualifying facilityenactment if FERC finds that a
824a-3).(QF) has access tocompetitive electric market
independently administered,provides meaningful
auction-based day-ahead andopportunity to sell capacity to
real-time wholesale markets andbuyers other than the utility to
long-term wholesale markets. which the QF is interconnectd,
FERC may enforce recovery ofand a QF has access to
iki/CRS-RL32041stranded costs incurred byutilities because of PURPA-independently administered,auction-based day-ahead and
g/wmandated cogeneration andreal-time wholesale markets and
s.orsmall power purchases.long-term wholesale markets.
leakOwnership limitations underFERC would be required to
PURPA are repealed. FERC ispromulgate and enforce
://wikirequired to issue a rule to ensureregulations for the recovery of
httpthat the electrical, thermal, andstranded costs incurred by
chemical outputs of new QFsutilities because of PURPA-
are intended for industrial,mandated cogeneration and
commercial, or institutional usesmall power purchases.
and not for sale to an electricOwnership limitations under
utility.PURPA are repealed. FERC is
required to issue a rule to ensure
that the electrical, thermal, and
chemical outputs of new QFs
are intended for industrial,
commercial, or institutional use
and not for sale to an electric

ionCurrent LawHouseS.Amdt. 1412Comments
art metering.No current law.Sec. 16063. States must considerSec. 1142. As described above,
whether to implement time-each state regulatory body is
based rate schedules and time-required to determine if it will
based metering.adopt a standard for time-based
metering that could implement
time-of-use pricing, critical peak
pricing, and real-time pricing.
option of additionalNo current law.No similar provisionSec. 1143. States must consider
ndards.whether to implement a standard
that would require that utilities
provide interconnection for
distributed generation,
iki/CRS-RL32041combined heat and power, anddistrict heating and cooling
g/wsystems that have a generation
s.orcapacity of 250 kilowatts (kW)
leakor less if the owner or operator
of the generating facility
://wikicomplies with technical
httpstandards adopted by the state
regulatory authority. In
addition, the generating facility
is required to pay the cost
established by the state
regulatory authority for
sistance forNo current law.No similar provision.Sec. 1144. The Secretary of
in responsibilities.Energy is required to offer
technical assistance to assist the
regulatory authorities with
developing and implementing
technical standards required
under this section.

Renewable Energy
ionCurrent LawHouseS.Amdt. 1412Comments
etering.No current law. Sec. 16071. Each state publicSec. 1141. Similar provision.
utility commission is authorized
to decide if net metering will be
implemented. All utilities are
required to provide net
metering for eligible generating
facilities that conform to size
and fuel requirements. Size
limits are 500 kilowattts (kw)
for commercial systems and 10
kw for residential systems.
iki/CRS-RL32041Residential generators are
g/wlimited to solar energy, wind
s.orenergy or fuel cells.
leakCommercial facilities are limited
to solar, wind, biomass,
://wikigeothermal, fuel cells or
httpcombined heat and power.
able energy productionEPACT Sec. 1212 provides aSec. 16072. Eligibility isNo similar provision.

1.5 cent/kwh incentive forextended through 2023 and
power produced from wind andexpanded to include electric
biomass by state and localcooperatives and tribal
governments and non-profitgovernments. Qualifying
electrical cooperatives. Fundedresources are expanded to
by appropriations, it was createdinclude landfill gas.
to parallel the renewable energy
production tax credit for
businesses (Title XIX).

ionCurrent LawHouseS.Amdt. 1412Comments
able energy on FederalNo existing requirement.Sec. 16073. The Secretary of theNo similar provision.
Interior, assisted by the
Secretary of Agriculture, is
required to study the potential
for solar and wind energy
resources on federal lands. Also,
the National Academy of
Sciences (NAS) is directed to
study the potential for solar,
wind, and ocean energy on the
Outer Continental Shelf.
sessment of renewableNo existing requirement.Sec. 16074. DOE is required toNo similar provision.

iki/CRS-RL32041ources.report annually on resourcepotential, including solar, wind,
g/wbiomass, ocean, geothermal, and
s.or hydro.

Market Transparency, Round Trip Trading Prohibition, and Enforcement
ionCurrent LawHouseS.Amdt. 1412Comments
arket transparency rules.In part, Commodity ExchangeSec. 16081. Within 180 daysSec. 1171. Within 180 days
Act (7 U.S.C. 1 et seq.) after enactment, FERC isafter enactment, FERC is
required to issue rules torequired to issue rules to
establish an electronic systemestablish an electronic system
that provides information aboutthat provides information about
the availability and price ofthe availability and price of
wholesale electric energy andwholesale electric energy and
transmission services. transmission services.
Commercial or financialCommercial or financial
information that FERCinformation that FERC
determines to be privileged,determines to be privileged,
iki/CRS-RL32041confidential, or otherwiseconfidential, or otherwise
g/wsensitive is exempt fromsensitive is exempt from
s.ordisclosure. disclosure. FERC is to ensure
leakthat markets are protected from
possible collusion or other anti-
://wikicompetitive actions that could
httpoccur with public disclosure of
transaction-specific information.
The section does not affect the
jurisdiction of the Commodity
Futures Trading Commission
with respect to accounts,
agreements, contracts, or
transactions in commodities
under the Commodity Exchange
Ac t .

ionCurrent LawHouseS.Amdt. 1412Comments
arket transparency.Commodity Exchange Act (7No similar provision.Sec. 1173. Paragraph (a) makesIt appears that the broad anti-
U.S.C. 1 et seq.). it a violation of the Commodityfraud authority granted to the
Exchange Act to knowinglyCommodity Futures Trading
provide false information to aCommission (CFTC) in section
government entity or other data4b (in current law or under the
compiler in an attempt toproposed amendment) may
manipulate reports relating toalready encompass the type of
natural gas or electricitymanipulative behavior specified
markets. The section alsoin paragraph (a).

changes the wording of Section
4b of the Commodity Exchange
Act. Clarifies CFTC authority to
bring administrative or civil
iki/CRS-RL32041actions against violators of theCommodity Exchange Act. For
g/wFY2004 such funds as necessary
s.orto carry out this section are
leak authorized.

ionCurrent LawHouseS.Amdt. 1412Comments
ohibition on round trip18 U.S.C. 1341 (mail fraud):Sec. 16082. It is unlawful forSec. 1172. It is a violation ofThis section explicitly applies
ing.This in part applies to use of theany individual, corporation, orthis Act to knowingly andexisting fraud statutes to round-
mail for the purpose ofany government entitywillfully report falsetrip electricity trading.
executing, or attempting to(municipality, state, powerinformation relating to the price
execute, a scheme or artifice tomarketing administration) toof electricity sold at wholesale
defraud or for obtaining moneyengage in round-trip electricityor the availability of
or property by false ortrading. Round-trip trading istransmission capacity. It is
fraudulent pretenses,defined to include contractsunlawful for any individual,
representations, or promises.where purchase and salecorporation, or any government
transactions have no specificentity (municipality, state,
18 U.S.C. 1343 (wire fraud):financial gain or loss and arepower marketing administration)
Covers use of wire, radio, orentered into with the intent toto engage in round-trip
television communication indistort reported revenues,electricity trading. Round-trip
iki/CRS-RL32041interstate or foreign commerceto transmit or to cause to betrading volumes, or prices.trading includes contractswhere purchase and sale
g/wtransmitted any writings, signs,transactions have no specific
s.orsignals, pictures, or sounds, forfinancial gain or loss and are
leakthe purpose of executing aentered into with the intent to
scheme or artifice to defraud ordistort reported revenues,
://wikifor obtaining money or propertytrading volumes, or prices.
httpby means of false or fraudulent
pretenses, representations, or
nforming changes.16 U.S.C. 824.Sec. 16083. Changes reflectNo similar provision.

amendments to the Federal
Power Act.

ionCurrent LawHouseS.Amdt. 1412Comments
nforcement.Criminal penalties may notSec. 16084. The Federal PowerSec. 1174. Similar provisionIn the House version, Section
exceed $5,000 and/or 2 yearsAct is amended to allow electric(see comment.)16084(b) clarifies that all
imprisonment. A civil penaltyutilities to file a complaint withentities that have filed
not exceeding $10,000 per dayFERC and to allow complaintscomplaints may request a
of violation may be assessed forto be filed against transmittingrehearing if FERC denies a
violations of Sections 211, 212,utilities. Criminal and civilpetition. S.Amdt 1412 includes
213, or 214 of the Federalpenalties under the Federala provision to increase penalties
Power Act (16 U.S.C. 825e andPower Act are increased.under the Natural Gas Act (15
16 U.S.C. 825o). U.S.C. 717t). This is not
included in S.Amdt. 1412.
Consumer Protections
g/wionCurrent LawHouseS.Amdt. 1412Comments
s.orund effective date.Refunds for rates that FERCSec. 16091. Section 206(b) ofSec. 1175. Similar provision.

leakfinds to be unjust, unreasonable,the Federal Power Act is
://wikiunduly discriminatory, orpreferential begin a minimum ofamended to allow the effectivedate for refunds to begin at the
http60 days after a complaint is filedtime of the filing of a complaint
(16 U.S.C. 824e(b)).with FERC but not later than 5
months after filing of a
co mp laint.

ionCurrent LawHouseS.Amdt. 1412Comments
diction over interstateSection 201(f) of the FederalSec. 16092. Any entity that is No similar provision.As engrossed in the House, this
les.Power Act exempts governmentnot a public utility (including ansection is intended to exempt
entities from FERC rateentity referred to under §201(f)any coop or an entity described
regulation (16 U.S.C. 824).of the Federal Power Act) andin §201(f) of the Federal Power
that enters into spot marketAct that does not sell more that
transactions will be subject to4 million megawatt-hours of
FERC refund authority. Thiselectricity in one year.
section does not apply toHowever, as drafted, this section
cooperatives or governmentcould be interpreted as
entities (power marketingexempting all §201(f) entities
administrations, state-ownedfrom FERC refund authority.

utilities, municipalities) that sell
no more than 4 million
iki/CRS-RL32041megawatt-hours of electricityper year. Upon finding that
g/waction is necessary to protect the
s.orpublic interest, FERC may
leakmodify or abrogate any contract
entered into after enactment of
://wikithis section unless the contract
httpexpressly provides for a
different standard of review.

ionCurrent LawHouseS.Amdt. 1412Comments
nsumer privacy.No current law.Sec. 16093. The Federal TradeSec. 1184. Similar provisionThe House version includes a
Commission (FTC) is required(see comments.)provision that the FTC
to issue rules to protect thepromulgate rules in accordance
privacy of electric consumerswith 5 U.S.C. 553. This is not
for the disclosure of consumerincluded in S. Amdt. 1412.
information obtained in
connection with the sale or
delivery of electric energy to
consumers. If the Federal Trade
Commission finds that a state’s
regulations provide equivalent
or greater protection than the
rules issued under this section,
iki/CRS-RL32041then state regulations will applyrather than federal rules.
s.orfair trade practices.No current law.Sec. 16094. The Federal TradeSec. 1185. Similar provision.S.Amdt. 1412 would allow a
leakCommission is required to issuestate to approve a change of
rules to prohibit slamming andelectric provider only to prevent
://wikicramming. If the Federal Tradethe loss of service. The House
httpCommission determines that aversion does not place this limit.
state’s regulations provide equalThe House version includes a
or greater protection than theprovision that the FTC
federal rule, then a state’spromulgate rules in accordance
regulations on slamming andwith
cramming will apply.5 U.S.C. 553.
Slamming occurs when an
electric utility switches a
customer’s electric provider
without the consumers
knowledge. Cramming occurs
when an electric utility adds
additional services and charges
to a customer’s account without
the permission of the customer.

ionCurrent LawHouseS.Amdt. 1412Comments
endments.Federal Power Act. 16 U.S.C.No similar provision.Sec. 1191. RedesignatesSection 721(4) of the Energy
824j.subsections of Section 211 ofPolicy Act of 1992 (P.L. 102-
the Federal Power Act. 486) struck paragraphs (1), (3),
Provides for technicaland (4) without redesignating
corrections.paragraph (2). This section also
replaces the word “of that
appears in this section with the
wordor,” to conform with the
original intent of the Energy
Policy Act of 1992.
arket-based policy.FERC approves wholesale ratesNo similar provision.Sec. 1182. FERC is required to
for the sale of electric energy. issue a policy statement that
iki/CRS-RL32041These rates must be just andreasonable.establishes when utilities maycharge market-based rates for
g/welectric energy. The policy must
s.orconsider consumer protections
leakand market power.


ionCurrent LawHouseS.Amdt. 1412Comments
ter-agency review ofNo current law.No similar provision.Sec. 1183. Creates the “Electric
petition in the wholesaleEnergy Market Competition
arkets for electricTask Force” consisting of one
member from the Department of
Justice, one member from
FERC, one member from the
Federal Trade Commission, one
member from the Department of
Energy, and one member from
the Rural Utilities Service.
Within one year of enactment,
the task force will complete a
study and analysis of
iki/CRS-RL32041competition within thewholesale and retail markets for
g/welectric energy in the United
s.orStates and issue a report to
leak Co ngr e ss.


Merger Review Reform and Accountability
ionCurrent LawHouseS.Amdt. 1412Comments
erger review reform andUnder Section 203(a) of theSec. 16101. Within 180 days ofSec. 1181. FERC is required to
untability.Federal Power Act, FERCenactment, the Secretary ofapprove any merger, sale, lease,
review of asset transfers appliesEnergy shall transmit toor disposition of entire electric
to transactions valued atCongress a study on whetherfacilities with a value in excess
$50,000 or more (16 U.S.C.FERCs merger review authorityof $10,000,000. FERC is
824b).is duplicative with otherrequired to notify the Governor
agencies authority andand state regulatory body if the
recommendations that wouldaction would affect physical
eliminate any unnecessaryproperty in the state. FERC is
duplication. FERC is requiredrequired to approve the
to issue an annual report toproposed disposition,
iki/CRS-RL32041Congress describing allconsolidation, acquisition or
g/wconditions placed on mergerschange of control if the
s.orunder Section 203(b) of thetransaction is in the public
leakFederal Power Act. FERC isinterest. These changes are
also required to include in itseffective 12 months after
://wikireport whether such a conditionenactment.

httpcould have been imposed under
any other provision of the
Federal Power Act.

Study of Economic Dispatch
ionCurrent LawHouseS.Amdt. 1412Comments
udy on the benefits ofNo current law.Sec. 16111. The Secretary ofNo similar provision.

ic dispatch.Energy, in consultation with the
states, will issue an annual
report to Congress and the states
on the current status of
economic dispatch. Economic
dispatch is defined asthe
operation of generation facilities
to produce energy at the lowest
cost to reliably serve consumers,
recognizing any operational
iki/CRS-RL32041limits of generation transmission