Federal Electricity Restructuring Legislation

Bill Number: S. 2098
Short Title: Electric Power Market Competition and Reliability Act, Nuclear Decommissioning Assurance Act, and Public Utility Holding Company Act of 1999
Introduced: February 24, 2000
Sponsor: Senator Frank Murkowski (R-AK)

Purpose: To facilitate the transition to more competitive and efficient electric power markets, and to ensure electric reliability.

Summary: Title I: Amendments to the Federal Power Act - Amends the Federal Power Act to: (1) place within the ambit of Federal regulation unbundled interstate transmission of electric energy sold at retail; and (2) place within the jurisdiction of the State within which the energy is consumed the bundled retail sale of electric energy, unbundled local distribution service, and unbundled retail sale of electric energy and attendant facilities. (Sec. 101) Directs the Federal Energy Regulatory Commission (FERC) to determine which electric energy delivery and transmission facilities fall within either Federal or State jurisdictions. (Sec. 102) Repeals the prohibition against mandatory retail wheeling and sham wholesale transactions. Precludes FERC authority to issue promulgations that require or are conditioned upon the transmission of electric energy directly to an ultimate consumer, or to or for the benefit of an electric or other utility if such electric energy would be sold directly to an ultimate consumer, unless applicable State law requires or permits the relevant seller to sell it to such consumer. (Sec. 103) Identifies areas within the ambit of State jurisdiction to impose public interest requirements, including: (1) distribution system reliability; (2) universal service; (3) assured service to low-income, rural, and remote consumers; (4) recovery of industry transition costs; and (5) transition costs of electricity workers adversely affected by restructuring. (Sec. 104) Prescribes procedural guidelines for FERC approval of: (1) regional transmission organizations; (2) transmission construction and expansion planning proposals; and (3) pricing policies for regional transmission organizations. (Sec. 105) Recognizes State authority to impose reciprocity requirements on an electric utility selling electric energy to an ultimate consumer in such State if the utility or any of its affiliates owns or controls transmission or local distribution facilities and is not itself providing unbundled local distribution service in a State in which it owns or operates a facility used for electric energy generation. (Sec. 107) Expresses the sense of Congress that public utilities are entitled to fully recover all prudently incurred wholesale and retail costs that become stranded as a result of changes in public policy with respect to competition and industry structure. Title II: Repeal of PURPA Mandatory Purchase Requirement - States that, with respect to new contracts, no electric utility shall be required to enter into a new contract or obligation to purchase or sell electricity or capacity under the Public Utility Regulatory Policies Act of 1978 (PURPA). Preserves existing contract rights and remedies under such Act. (Sec. 202) Requires FERC to promulgate and enforce regulations to ensure that an electric utility shall not be required to absorb costs associated with PURPA-mandated purchases of electricity or capacity from a qualifying cogeneration or small power production facility prior to the date of enactment of this Act. Title III: Electric Reliability - Amends the FPA to provide for the establishment and enforcement of mandatory reliability standards to ensure the reliable operation of the bulk-power system. Grants FERC jurisdiction over: (1) the Electric Reliability Organization; (2) all Affiliated Regional Reliability Entities (entities to which authority has been delegated to enforce compliance with reliability standards); (3) all System Operators, and all Users of the Bulk-Power System for purposes of approving and enforcing compliance with standards in the United States. Provides that, before establishment of the Electric Reliability Organization (Organization), any person (including the North American Electric Reliability Council and its member Regional Reliability Councils) shall file a proposed reliability standard, guidance, or practice which, subject to FERC approval, shall be mandatory and enforceable. (Sec. 301) Prescribes procedural guidelines for FERC approval of: (1) applications competing for status as the Electric Reliability Council; and (2) Organization Standards. Requires all Users of the Bulk-Power System to comply with such standards. Mandates that: (1) the Organization take all appropriate steps to gain recognition in Canada and Mexico; and (2) the United States use its best efforts to enter into international agreements with the governments of Canada and Mexico to effectuate compliance with Organization standards, and to provide for the effectiveness of the Organization's mission. Requires every System Operator to be a member of the Electric Reliability Organization, and of any Affiliated Regional Reliability Entity operating under an agreement applicable to the region in which the System Operator operates or is responsible for the operation of a Bulk-Power System facility. Empowers the Organization to take disciplinary and enforcement action. Directs the Organization to assess periodically the reliability and adequacy of the inter-connected Bulk-Power System in North America, and to report its findings and recommendations annually to FERC and to the Secretary. Provides for the assessment and recovery of implementation and enforcement costs incurred by the Organization and each Affiliated Regional Reliability Entity, respectively. (Sec. 302) Establishes a rebuttable presumption that activities undertaken pursuant to this Act by either the Electric Reliability Organization, its members, or members of an Affiliated Regional Reliability Entity to be in compliance with the antitrust laws. (Sec. 304) Instructs the Secretary of Energy, upon the petition of the Governors of at least two-thirds of the States within a region that have more than one-half of their electrical loads serviced within the region, to establish a regional advisory body to provide advice to an Affiliated Regional Reliability Entity, the Electric Reliability Organization, or FERC. Declares this title inapplicable to Alaska or Hawaii. Title IV: Repeal of the Public Utility Holding Company Act of 1935 and Enactment of the Public Utility Holding Company Act of 1999 - Public Utility Holding Company Act of 1999 - Repeals the Public Utility Holding Company Act of 1935 effective one year after enactment of this title. (Sec. 405) Prescribes procedural guidelines for: (1) FERC access to records of a public utility or natural gas holding company (including subsidiaries, associates and affiliates); and (2) and State access to records of a public utility in a holding company system. (Sec. 407) Instructs FERC to promulgate a final rule to exempt from such Federal access requirements any holding company with respect to one or more: (1) qualifying facilities under PURPA; (2) exempt wholesale generators; or (3) foreign utility companies. Requires FERC to exempt any person or transaction from such access requirements if it finds that their regulation is irrelevant to the jurisdictional rates of a public utility or natural gas company. (Sec. 408) Retains the jurisdiction of FERC and State commissions to determine whether a public utility company or natural gas company may recover in rates any costs of affiliate transactions. (Sec. 409) Declares this Act inapplicable to: (1) the United States; (2) a State or its political subdivision; and (3) a foreign governmental authority not operating in the United States. (Sec. 411) Grants FERC certain FPA enforcement powers. (Sec. 414) Transfers from the Securities and Exchange Commission to FERC all books and records that relate primarily to the functions vested in FERC by this Act. (Sec. 415) Authorizes appropriations. (Sec. 416) Amends the FPA to repeal its conflict of jurisdiction guidelines. Title V: Nuclear Decommissioning - Nuclear Decommissioning Assurance Act - Permits a nuclear power facility licensee to petition the Nuclear Regulatory Commission (NRC) for a determination of whether: (1) adequate amounts are deposited in its nuclear decommissioning trust fund; and (2) future funding for any nuclear power plant is assured for any nuclear power plant owned in whole or in part by such licensee. (Sec. 503) Sets a timeframe by which the NRC must issue a determination whether the nuclear decommissioning trust fund and the currently approved decommissioning recovery cost rates are adequate to ensure full and safe facility decommissioning. Details mandatory NRC considerations. (Sec. 504) Amends the Federal Power Act to authorize any entity, including a public power entity, responsible for decommissioning a nuclear power facility in whole or in part, which has obtained an NRC finding under this title, to petition FERC for an order approving rates and charges in connection with the transmission or wholesale sale of electric energy to collect all or part of the revenues necessary to ensure adequate funding to satisfy its decommissioning obligations. Instructs FERC to: (1) find certain decommissioning costs and revenue requirements, determined necessary by the NRC, to be just and reasonable, prudently incurred, and recoverable in transaction or wholesale rates; (2) find the remainder of such costs which are not recovered to be just and reasonable, prudently incurred, and recoverable through a nonbypassable charge or rate; and (3) enforce any rule or order designed to ensure collection of adequate decommissioning revenues.