16 Usc 824

§ 824

TITLE 16—CONSERVATION

applicable law, the Commission may refer the
dispute to the Commission’s Dispute Resolution
Service. The Dispute Resolution Service shall
consult with the Secretary and the Commission
and issue a non-binding advisory within 90 days.
The Secretary may accept the Dispute Resolution Service advisory unless the Secretary finds
that the recommendation will not adequately
protect the fish resources. The Secretary shall
submit the advisory and the Secretary’s final
written determination into the record of the
Commission’s proceeding.
(June 10, 1920, ch. 285, pt. I, § 33, as added Pub. L.
109–58, title II, § 241(c), Aug. 8, 2005, 119 Stat. 675.)
SUBCHAPTER II—REGULATION OF ELECTRIC UTILITY COMPANIES ENGAGED IN
INTERSTATE COMMERCE
§ 824. Declaration of policy; application of subchapter
(a) Federal regulation of transmission and sale
of electric energy
It is declared that the business of transmitting
and selling electric energy for ultimate distribution to the public is affected with a public interest, and that Federal regulation of matters relating to generation to the extent provided in
this subchapter and subchapter III of this chapter and of that part of such business which consists of the transmission of electric energy in
interstate commerce and the sale of such energy
at wholesale in interstate commerce is necessary in the public interest, such Federal regulation, however, to extend only to those matters
which are not subject to regulation by the
States.
(b) Use or sale of electric energy in interstate
commerce
(1) The provisions of this subchapter shall
apply to the transmission of electric energy in
interstate commerce and to the sale of electric
energy at wholesale in interstate commerce, but
except as provided in paragraph (2) shall not
apply to any other sale of electric energy or deprive a State or State commission of its lawful
authority now exercised over the exportation of
hydroelectric energy which is transmitted
across a State line. The Commission shall have
jurisdiction over all facilities for such transmission or sale of electric energy, but shall not
have jurisdiction, except as specifically provided
in this subchapter and subchapter III of this
chapter, over facilities used for the generation
of electric energy or over facilities used in local
distribution or only for the transmission of electric energy in intrastate commerce, or over facilities for the transmission of electric energy
consumed wholly by the transmitter.
(2) Notwithstanding subsection (f) of this section, the provisions of sections 824b(a)(2), 824e(e),
824i, 824j, 824j–1, 824k, 824o, 824p, 824q, 824r, 824s,
824t, 824u, and 824v of this title shall apply to
the entities described in such provisions, and
such entities shall be subject to the jurisdiction
of the Commission for purposes of carrying out
such provisions and for purposes of applying the
enforcement authorities of this chapter with respect to such provisions. Compliance with any

Page 1318

order or rule of the Commission under the provisions of section 824b(a)(2), 824e(e), 824i, 824j,
824j–1, 824k, 824o, 824p, 824q, 824r, 824s, 824t, 824u,
or 824v of this title, shall not make an electric
utility or other entity subject to the jurisdiction of the Commission for any purposes other
than the purposes specified in the preceding sentence.
(c) Electric energy in interstate commerce
For the purpose of this subchapter, electric
energy shall be held to be transmitted in interstate commerce if transmitted from a State and
consumed at any point outside thereof; but only
insofar as such transmission takes place within
the United States.
(d) ‘‘Sale of electric energy at wholesale’’ defined
The term ‘‘sale of electric energy at wholesale’’ when used in this subchapter, means a sale
of electric energy to any person for resale.
(e) ‘‘Public utility’’ defined
The term ‘‘public utility’’ when used in this
subchapter and subchapter III of this chapter
means any person who owns or operates facilities subject to the jurisdiction of the Commission under this subchapter (other than facilities
subject to such jurisdiction solely by reason of
section 824e(e), 824e(f),1 824i, 824j, 824j–1, 824k,
824o, 824p, 824q, 824r, 824s, 824t, 824u, or 824v of
this title).
(f) United States, State, political subdivision of a
State, or agency or instrumentality thereof
exempt
No provision in this subchapter shall apply to,
or be deemed to include, the United States, a
State or any political subdivision of a State, an
electric cooperative that receives financing
under the Rural Electrification Act of 1936 (7
U.S.C. 901 et seq.) or that sells less than 4,000,000
megawatt hours of electricity per year, or any
agency, authority, or instrumentality of any
one or more of the foregoing, or any corporation
which is wholly owned, directly or indirectly, by
any one or more of the foregoing, or any officer,
agent, or employee of any of the foregoing acting as such in the course of his official duty, unless such provision makes specific reference
thereto.
(g) Books and records
(1) Upon written order of a State commission,
a State commission may examine the books, accounts, memoranda, contracts, and records of—
(A) an electric utility company subject to its
regulatory authority under State law,
(B) any exempt wholesale generator selling
energy at wholesale to such electric utility,
and
(C) any electric utility company, or holding
company thereof, which is an associate company or affiliate of an exempt wholesale generator which sells electric energy to an electric
utility company referred to in subparagraph
(A),
wherever located, if such examination is required for the effective discharge of the State
1 So in original. Section 824e of this title does not contain a
subsec. (f).

Page 1319

TITLE 16—CONSERVATION

§ 824a

Subsec. (g)(5). Pub. L. 109–58, § 1277(b)(1), substituted
‘‘2005’’ for ‘‘1935’’.
1992—Subsec. (g). Pub. L. 102–486 added subsec. (g).
1978—Subsec. (b). Pub. L. 95–617, § 204(b)(1), designated
existing provisions as par. (1), inserted ‘‘except as provided in paragraph (2)’’ after ‘‘in interstate commerce,
but’’, and added par. (2).
Subsec. (e). Pub. L. 95–617, § 204(b)(2), inserted ‘‘(other
than facilities subject to such jurisdiction solely by
reason of section 824i, 824j, or 824k of this title)’’ after
‘‘under this subchapter’’.

commission’s regulatory responsibilities affecting the provision of electric service.
(2) Where a State commission issues an order
pursuant to paragraph (1), the State commission
shall not publicly disclose trade secrets or sensitive commercial information.
(3) Any United States district court located in
the State in which the State commission referred to in paragraph (1) is located shall have
jurisdiction to enforce compliance with this subsection.
(4) Nothing in this section shall—
(A) preempt applicable State law concerning
the provision of records and other information; or
(B) in any way limit rights to obtain records
and other information under Federal law, contracts, or otherwise.

Amendment by section 1277(b)(1) of Pub. L. 109–58 effective 6 months after Aug. 8, 2005, with provisions relating to effect of compliance with certain regulations
approved and made effective prior to such date, see section 1274 of Pub. L. 109–58, set out as an Effective Date
note under section 16451 of Title 42, The Public Health
and Welfare.

(5) As used in this subsection the terms ‘‘affiliate’’, ‘‘associate company’’, ‘‘electric utility
company’’, ‘‘holding company’’, ‘‘subsidiary
company’’, and ‘‘exempt wholesale generator’’
shall have the same meaning as when used in
the Public Utility Holding Company Act of 2005
[42 U.S.C. 16451 et seq.].

Nothing in amendment by Pub. L. 102–486 to be construed as affecting or intending to affect, or in any way
to interfere with, authority of any State or local government relating to environmental protection or siting
of facilities, see section 731 of Pub. L. 102–486, set out
as a note under section 796 of this title.

(June 10, 1920, ch. 285, pt. II, § 201, as added Aug.
26, 1935, ch. 687, title II, § 213, 49 Stat. 847; amended Pub. L. 95–617, title II, § 204(b), Nov. 9, 1978, 92
Stat. 3140; Pub. L. 102–486, title VII, § 714, Oct. 24,
1992, 106 Stat. 2911; Pub. L. 109–58, title XII,
§§ 1277(b)(1), 1291(c), 1295(a), Aug. 8, 2005, 119 Stat.
978, 985.)
REFERENCES IN TEXT
The Rural Electrification Act of 1936, referred to in
subsec. (f), is act May 20, 1936, ch. 432, 49 Stat. 1363, as
amended, which is classified generally to chapter 31
(§ 901 et seq.) of Title 7, Agriculture. For complete classification of this Act to the Code, see section 901 of
Title 7 and Tables.
The Public Utility Holding Company Act of 2005, referred to in subsec. (g)(5), is subtitle F of title XII of
Pub. L. 109–58, Aug. 8, 2005, 119 Stat. 972, which is classified principally to part D (§ 16451 et seq.) of subchapter
XII of chapter 149 of Title 42, The Public Health and
Welfare. For complete classification of this Act to the
Code, see Short Title note set out under section 15801
of Title 42 and Tables.
AMENDMENTS
2005—Subsec. (b)(2). Pub. L. 109–58, § 1295(a)(1), substituted ‘‘Notwithstanding subsection (f) of this section, the provisions of sections 824b(a)(2), 824e(e), 824i,
824j, 824j–1, 824k, 824o, 824p, 824q, 824r, 824s, 824t, 824u,
and 824v of this title’’ for ‘‘The provisions of sections
824i, 824j, and 824k of this title’’ and ‘‘Compliance with
any order or rule of the Commission under the provisions of section 824b(a)(2), 824e(e), 824i, 824j, 824j–1, 824k,
824o, 824p, 824q, 824r, 824s, 824t, 824u, or 824v of this
title’’ for ‘‘Compliance with any order of the Commission under the provisions of section 824i or 824j of this
title’’.
Subsec. (e). Pub. L. 109–58, § 1295(a)(2), substituted
‘‘section 824e(e), 824e(f), 824i, 824j, 824j–1, 824k, 824o, 824p,
824q, 824r, 824s, 824t, 824u, or 824v of this title’’ for ‘‘section 824i, 824j, or 824k of this title’’.
Subsec. (f). Pub. L. 109–58, § 1291(c), which directed
amendment of subsec. (f) by substituting ‘‘political
subdivision of a State, an electric cooperative that receives financing under the Rural Electrification Act of
1936 (7 U.S.C. 901 et seq.) or that sells less than 4,000,000
megawatt hours of electricity per year,’’ for ‘‘political
subdivision of a state,’’, was executed by making the
substitution for ‘‘political subdivision of a State,’’ to
reflect the probable intent of Congress.

EFFECTIVE DATE OF 2005 AMENDMENT

STATE AUTHORITIES; CONSTRUCTION

PRIOR ACTIONS; EFFECT ON OTHER AUTHORITIES
Section 214 of Pub. L. 95–617 provided that:
‘‘(a) PRIOR ACTIONS.—No provision of this title [enacting sections 823a, 824i to 824k, 824a–1 to 824a–3 and
825q–1 of this title, amending sections 796, 824, 824a,
824d, and 825d of this title and enacting provisions set
out as notes under sections 824a, 824d, and 825d of this
title] or of any amendment made by this title shall
apply to, or affect, any action taken by the Commission [Federal Energy Regulatory Commission] before
the date of the enactment of this Act [Nov. 9, 1978].
‘‘(b) OTHER AUTHORITIES.—No provision of this title
[enacting sections 823a, 824i to 824k, 824a–1 to 824a–3 and
825q–1 of this title, amending sections 796, 824, 824a,
824d, and 825d of this title and enacting provisions set
out as notes under sections 824a, 824d, and 825d of this
title] or of any amendment made by this title shall
limit, impair or otherwise affect any authority of the
Commission or any other agency or instrumentality of
the United States under any other provision of law except as specifically provided in this title.’’

§ 824a. Interconnection and coordination of facilities; emergencies; transmission to foreign
countries
(a) Regional districts; establishment; notice to
State commissions
For the purpose of assuring an abundant supply of electric energy throughout the United
States with the greatest possible economy and
with regard to the proper utilization and conservation of natural resources, the Commission
is empowered and directed to divide the country
into regional districts for the voluntary interconnection and coordination of facilities for the
generation, transmission, and sale of electric energy, and it may at any time thereafter, upon
its own motion or upon application, make such
modifications thereof as in its judgment will
promote the public interest. Each such district
shall embrace an area which, in the judgment of
the Commission, can economically be served by
such interconnection and coordinated electric
facilities. It shall be the duty of the Commission
to promote and encourage such interconnection
and coordination within each such district and

§ 824a

TITLE 16—CONSERVATION

between such districts. Before establishing any
such district and fixing or modifying the boundaries thereof the Commission shall give notice
to the State commission of each State situated
wholly or in part within such district, and shall
afford each such State commission reasonable
opportunity to present its views and recommendations, and shall receive and consider such
views and recommendations.
(b) Sale or exchange of energy; establishing
physical connections
Whenever the Commission, upon application of
any State commission or of any person engaged
in the transmission or sale of electric energy,
and after notice to each State commission and
public utility affected and after opportunity for
hearing, finds such action necessary or appropriate in the public interest it may by order direct a public utility (if the Commission finds
that no undue burden will be placed upon such
public utility thereby) to establish physical connection of its transmission facilities with the facilities of one or more other persons engaged in
the transmission or sale of electric energy, to
sell energy to or exchange energy with such persons: Provided, That the Commission shall have
no authority to compel the enlargement of generating facilities for such purposes, nor to compel such public utility to sell or exchange energy when to do so would impair its ability to
render adequate service to its customers. The
Commission may prescribe the terms and conditions of the arrangement to be made between
the persons affected by any such order, including the apportionment of cost between them and
the compensation or reimbursement reasonably
due to any of them.
(c) Temporary connection and exchange of facilities during emergency
During the continuance of any war in which
the United States is engaged, or whenever the
Commission determines that an emergency exists by reason of a sudden increase in the demand for electric energy, or a shortage of electric energy or of facilities for the generation or
transmission of electric energy, or of fuel or
water for generating facilities, or other causes,
the Commission shall have authority, either
upon its own motion or upon complaint, with or
without notice, hearing, or report, to require by
order such temporary connections of facilities
and such generation, delivery, interchange, or
transmission of electric energy as in its judgment will best meet the emergency and serve
the public interest. If the parties affected by
such order fail to agree upon the terms of any
arrangement between them in carrying out such
order, the Commission, after hearing held either
before or after such order takes effect, may prescribe by supplemental order such terms as it
finds to be just and reasonable, including the
compensation or reimbursement which should
be paid to or by any such party.
(d) Temporary connection during emergency by
persons without jurisdiction of Commission
During the continuance of any emergency requiring immediate action, any person engaged
in the transmission or sale of electric energy
and not otherwise subject to the jurisdiction of

Page 1320

the Commission may make such temporary connections with any public utility subject to the
jurisdiction of the Commission or may construct
such temporary facilities for the transmission of
electric energy in interstate commerce as may
be necessary or appropriate to meet such emergency, and shall not become subject to the jurisdiction of the Commission by reason of such
temporary connection or temporary construction: Provided, That such temporary connection
shall be discontinued or such temporary construction removed or otherwise disposed of upon
the termination of such emergency: Provided further, That upon approval of the Commission permanent connections for emergency use only
may be made hereunder.
(e) Transmission of electric energy to foreign
country
After six months from August 26, 1935, no person shall transmit any electric energy from the
United States to a foreign country without first
having secured an order of the Commission authorizing it to do so. The Commission shall issue
such order upon application unless, after opportunity for hearing, it finds that the proposed
transmission would impair the sufficiency of
electric supply within the United States or
would impede or tend to impede the coordination in the public interest of facilities subject to
the jurisdiction of the Commission. The Commission may by its order grant such application
in whole or in part, with such modifications and
upon such terms and conditions as the Commission may find necessary or appropriate, and may
from time to time, after opportunity for hearing
and for good cause shown, make such supplemental orders in the premises as it may find
necessary or appropriate.
(f) Transmission or sale at wholesale of electric
energy; regulation
The ownership or operation of facilities for the
transmission or sale at wholesale of electric energy which is (a) generated within a State and
transmitted from the State across an international boundary and not thereafter transmitted into any other State, or (b) generated in a
foreign country and transmitted across an international boundary into a State and not thereafter transmitted into any other State, shall not
make a person a public utility subject to regulation as such under other provisions of this subchapter. The State within which any such facilities are located may regulate any such transaction insofar as such State regulation does not
conflict with the exercise of the Commission’s
powers under or relating to subsection (e) of this
section.
(g) Continuance of service
In order to insure continuity of service to customers of public utilities, the Commission shall
require, by rule, each public utility to—
(1) report promptly to the Commission and
any appropriate State regulatory authorities
any anticipated shortage of electric energy or
capacity which would affect such utility’s capability of serving its wholesale customers,
(2) submit to the Commission, and to any appropriate State regulatory authority, and periodically revise, contingency plans respecting—

Page 1321

§ 824a–2

TITLE 16—CONSERVATION

(A) shortages of electric energy or capacity, and
(B) circumstances which may result in
such shortages, and
(3) accommodate any such shortages or circumstances in a manner which shall—
(A) give due consideration to the public
health, safety, and welfare, and
(B) provide that all persons served directly
or indirectly by such public utility will be
treated, without undue prejudice or disadvantage.
(June 10, 1920, ch. 285, pt. II, § 202, as added Aug.
26, 1935, ch. 687, title II, § 213, 49 Stat. 848; amended Aug. 7, 1953, ch. 343, 67 Stat. 461; Pub. L.
95–617, title II, § 206(a), Nov. 9, 1978, 92 Stat. 3141.)
AMENDMENTS
1978—Subsec. (g). Pub. L. 95–617 added subsec. (g).
1953—Subsec. (f). Act Aug. 7, 1953, added subsec. (f).
EFFECTIVE DATE OF 1978 AMENDMENT
Section 206(b) of Pub. L. 95–617 provided that: ‘‘The
amendment made by subsection (a) [adding subsec. (g)
of this section] shall not affect any proceeding of the
Commission [Federal Energy Regulatory Commission]
pending on the date of the enactment of this Act [Nov.
9, 1978] or any case pending on such date respecting a
proceeding of the Commission.’’
DELEGATION OF FUNCTIONS
Functions of President respecting certain facilities
constructed and maintained on United States borders
delegated to Secretary of State, see Ex. Ord. No. 11423,
Aug. 16, 1968. 33 F.R. 11741, set out as a note under section 301 of Title 3, The President.
PERFORMANCE OF FUNCTIONS RESPECTING ELECTRIC
POWER AND NATURAL GAS FACILITIES LOCATED ON
UNITED STATES BORDERS
For provisions relating to performance of functions
by Secretary of Energy respecting electric power and
natural gas facilities located on United States borders,
see Ex. Ord. No. 10485, Sept. 8, 1953, 18 F.R. 5397, as
amended by Ex. Ord. No. 12038, Feb. 3, 1978, 43 F.R. 4957,
set out as a note under section 717b of Title 15, Commerce and Trade.

§ 824a–1. Pooling
(a) State laws
The Commission may, on its own motion, and
shall, on application of any person or governmental entity, after public notice and notice to
the Governor of the affected State and after affording an opportunity for public hearing, exempt electric utilities, in whole or in part, from
any provision of State law, or from any State
rule or regulation, which prohibits or prevents
the voluntary coordination of electric utilities,
including any agreement for central dispatch, if
the Commission determines that such voluntary
coordination is designed to obtain economical
utilization of facilities and resources in any
area. No such exemption may be granted if the
Commission finds that such provision of State
law, or rule or regulation—
(1) is required by any authority of Federal
law, or
(2) is designed to protect public health, safety, or welfare, or the environment or conserve
energy or is designed to mitigate the effects of
emergencies resulting from fuel shortages.

(b) Pooling study
(1) The Commission, in consultation with the
reliability councils established under section
202(a) of the Federal Power Act [16 U.S.C. 824a],
the Secretary, and the electric utility industry
shall study the opportunities for—
(A) conservation of energy,
(B) optimization in the efficiency of use of
facilities and resources, and
(C) increased reliability,
through pooling arrangements. Not later than 18
months after November 9, 1978, the Commission
shall submit a report containing the results of
such study to the President and the Congress.
(2) The Commission may recommend to electric utilities that such utilities should voluntarily enter into negotiations where the opportunities referred to in paragraph (1) exist. The
Commission shall report annually to the President and the Congress regarding any such recommendations and subsequent actions taken by
electric utilities, by the Commission, and by the
Secretary under this Act, the Federal Power Act
[16 U.S.C. 791a et seq.], and any other provision
of law. Such annual reports shall be included in
the Commission’s annual report required under
the Department of Energy Organization Act [42
U.S.C. 7101 et seq.].
(Pub. L. 95–617, title II, § 205, Nov. 9, 1978, 92 Stat.
3140.)
REFERENCES IN TEXT
This Act, referred to in subsec. (b)(2), means Pub. L.
95–617, Nov. 9, 1978, 92 Stat. 3117, known as the ‘‘Public
Utility Regulatory Policies Act of 1978’’. For complete
classification of this Act to the Code, see Short Title
note set out under section 2601 of this title and Tables.
The Federal Power Act, referred to in subsec. (b)(2),
is act June 10, 1920, ch. 285, 41 Stat. 1063, as amended,
which is classified generally to this chapter. For complete classification of this Act to the Code, see section
791a of this title and Tables.
The Department of Energy Organization Act, referred
to in subsec. (b)(2), is Pub. L. 95–91, Aug. 4, 1977, 91 Stat.
565, as amended, which is classified principally to chapter 84 (§ 7101 et seq.) of Title 42, The Public Health and
Welfare. For complete classification of this Act to the
Code, see Short Title note set out under section 7101 of
Title 42 and Tables.
CODIFICATION
Section was enacted as part of the Public Utility
Regulatory Policies Act of 1978, and not as part of the
Federal Power Act which generally comprises this
chapter.
DEFINITIONS
For definitions of terms used in this section, see section 2602 of this title.

§ 824a–2. Reliability
(a) Study
(1) The Secretary, in consultation with the
Commission, shall conduct a study with respect
to—
(A) the level of reliability appropriate to
adequately serve the needs of electric consumers, taking into account cost effectiveness and
the need for energy conservation,
(B) the various methods which could be used
in order to achieve such level of reliability and
the cost effectiveness of such methods, and

§ 824a–3

TITLE 16—CONSERVATION

(C) the various procedures that might be
used in case of an emergency outage to minimize the public disruption and economic loss
that might be caused by such an outage and
the cost effectiveness of such procedures.
Such study shall be completed and submitted to
the President and the Congress not later than 18
months after November 9, 1978. Before such submittal the Secretary shall provide an opportunity for public comment on the results of such
study.
(2) The study under paragraph (1) shall include
consideration of the following:
(A) the cost effectiveness of investments in
each of the components involved in providing
adequate and reliable electric service, including generation, transmission, and distribution
facilities, and devices available to the electric
consumer;
(B) the environmental and other effects of
the investments considered under subparagraph (A);
(C) various types of electric utility systems
in terms of generation, transmission, distribution and customer mix, the extent to which
differences in reliability levels may be desirable, and the cost-effectiveness of the various
methods which could be used to decrease the
number and severity of any outages among the
various types of systems;
(D) alternatives to adding new generation facilities to achieve such desired levels of reliability (including conservation);
(E) the cost-effectiveness of adding a number
of small, decentralized conventional and nonconventional generating units rather than a
small number of large generating units with a
similar total megawatt capacity for achieving
the desired level of reliability; and
(F) any standards for electric utility reliability used by, or suggested for use by, the
electric utility industry in terms of cost-effectiveness in achieving the desired level of reliability, including equipment standards, standards for operating procedures and training of
personnel, and standards relating the number
and severity of outages to periods of time.
(b) Examination of reliability issues by reliability councils
The Secretary, in consultation with the Commission, may, from time to time, request the reliability councils established under section
202(a) of the Federal Power Act [16 U.S.C. 824a(a)
of this title] or other appropriate persons (including Federal agencies) to examine and report
to him concerning any electric utility reliability issue. The Secretary shall report to the Congress (in its annual report or in the report required under subsection (a) of this section if appropriate) the results of any examination under
the preceding sentence.
(c) Department of Energy recommendations
The Secretary, in consultation with the Commission, and after opportunity for public comment, may recommend industry standards for
reliability to the electric utility industry, including standards with respect to equipment,
operating procedures and training of personnel,
and standards relating to the level or levels of

Page 1322

reliability appropriate to adequately and reliably serve the needs of electric consumers. The
Secretary shall include in his annual report—
(1) any recommendations made under this
subsection or any recommendations respecting
electric utility reliability problems under any
other provision of law, and
(2) a description of actions taken by electric
utilities with respect to such recommendations.
(Pub. L. 95–617, title II, § 209, Nov. 9, 1978, 92 Stat.
3143.)
CODIFICATION
Section was enacted as part of the Public Utility
Regulatory Policies Act of 1978, and not as part of the
Federal Power Act which generally comprises this
chapter.
DEFINITIONS
For definitions of terms used in this section, see section 2602 of this title.

§ 824a–3. Cogeneration and small power production
(a) Cogeneration and small power production
rules
Not later than 1 year after November 9, 1978,
the Commission shall prescribe, and from time
to time thereafter revise, such rules as it determines necessary to encourage cogeneration and
small power production, and to encourage geothermal small power production facilities of not
more than 80 megawatts capacity, which rules
require electric utilities to offer to—
(1) sell electric energy to qualifying cogeneration facilities and qualifying small power
production facilities 1 and
(2) purchase electric energy from such facilities.
Such rules shall be prescribed, after consultation with representatives of Federal and State
regulatory agencies having ratemaking authority for electric utilities, and after public notice
and a reasonable opportunity for interested persons (including State and Federal agencies) to
submit oral as well as written data, views, and
arguments. Such rules shall include provisions
respecting minimum reliability of qualifying cogeneration facilities and qualifying small power
production facilities (including reliability of
such facilities during emergencies) and rules respecting reliability of electric energy service to
be available to such facilities from electric utilities during emergencies. Such rules may not authorize a qualifying cogeneration facility or
qualifying small power production facility to
make any sale for purposes other than resale.
(b) Rates for purchases by electric utilities
The rules prescribed under subsection (a) of
this section shall insure that, in requiring any
electric utility to offer to purchase electric energy from any qualifying cogeneration facility
or qualifying small power production facility,
the rates for such purchase—
(1) shall be just and reasonable to the electric consumers of the electric utility and in
the public interest, and
1 So

in original. Probably should be followed by a comma.

Page 1323

TITLE 16—CONSERVATION

(2) shall not discriminate against qualifying
cogenerators or qualifying small power producers.
No such rule prescribed under subsection (a) of
this section shall provide for a rate which exceeds the incremental cost to the electric utility
of alternative electric energy.
(c) Rates for sales by utilities
The rules prescribed under subsection (a) of
this section shall insure that, in requiring any
electric utility to offer to sell electric energy to
any qualifying cogeneration facility or qualifying small power production facility, the rates
for such sale—
(1) shall be just and reasonable and in the
public interest, and
(2) shall not discriminate against the qualifying cogenerators or qualifying small power
producers.
(d) ‘‘Incremental cost of alternative electric energy’’ defined
For purposes of this section, the term ‘‘incremental cost of alternative electric energy’’
means, with respect to electric energy purchased from a qualifying cogenerator or qualifying small power producer, the cost to the electric utility of the electric energy which, but for
the purchase from such cogenerator or small
power producer, such utility would generate or
purchase from another source.
(e) Exemptions
(1) Not later than 1 year after November 9,
1978, and from time to time thereafter, the Commission shall, after consultation with representatives of State regulatory authorities, electric
utilities, owners of cogeneration facilities and
owners of small power production facilities, and
after public notice and a reasonable opportunity
for interested persons (including State and Federal agencies) to submit oral as well as written
data, views, and arguments, prescribe rules
under which geothermal small power production
facilities of not more than 80 megawatts capacity, qualifying cogeneration facilities, and
qualifying small power production facilities are
exempted in whole or part from the Federal
Power Act [16 U.S.C. 791a et seq.], from the Public Utility Holding Company Act,2 from State
laws and regulations respecting the rates, or respecting the financial or organizational regulation, of electric utilities, or from any combination of the foregoing, if the Commission determines such exemption is necessary to encourage
cogeneration and small power production.
(2) No qualifying small power production facility (other than a qualifying small power production facility which is an eligible solar, wind,
waste, or geothermal facility as defined in section 3(17)(E) of the Federal Power Act [16 U.S.C.
796(17)(E)]) which has a power production capacity which, together with any other facilities located at the same site (as determined by the
Commission), exceeds 30 megawatts, or 80 megawatts for a qualifying small power production
facility using geothermal energy as the primary
energy source, may be exempted under rules
2 See

References in Text note below.

§ 824a–3

under paragraph (1) from any provision of law or
regulation referred to in paragraph (1), except
that any qualifying small power production facility which produces electric energy solely by
the use of biomass as a primary energy source,
may be exempted by the Commission under such
rules from the Public Utility Holding Company
Act 2 and from State laws and regulations referred to in such paragraph (1).
(3) No qualifying small power production facility or qualifying cogeneration facility may be
exempted under this subsection from—
(A) any State law or regulation in effect in
a State pursuant to subsection (f) of this section,
(B) the provisions of section 210, 211, or 212 of
the Federal Power Act [16 U.S.C. 824i, 824j, or
824k] or the necessary authorities for enforcement of any such provision under the Federal
Power Act [16 U.S.C. 791a et seq.], or
(C) any license or permit requirement under
part I of the Federal Power Act [16 U.S.C. 791a
et seq.] any provision under such Act related
to such a license or permit requirement, or the
necessary authorities for enforcement of any
such requirement.
(f) Implementation of rules for qualifying cogeneration and qualifying small power production facilities
(1) Beginning on or before the date one year
after any rule is prescribed by the Commission
under subsection (a) of this section or revised
under such subsection, each State regulatory
authority shall, after notice and opportunity for
public hearing, implement such rule (or revised
rule) for each electric utility for which it has
ratemaking authority.
(2) Beginning on or before the date one year
after any rule is prescribed by the Commission
under subsection (a) of this section or revised
under such subsection, each nonregulated electric utility shall, after notice and opportunity
for public hearing, implement such rule (or revised rule).
(g) Judicial review and enforcement
(1) Judicial review may be obtained respecting
any proceeding conducted by a State regulatory
authority or nonregulated electric utility for
purposes of implementing any requirement of a
rule under subsection (a) of this section in the
same manner, and under the same requirements,
as judicial review may be obtained under section
2633 of this title in the case of a proceeding to
which section 2633 of this title applies.
(2) Any person (including the Secretary) may
bring an action against any electric utility,
qualifying small power producer, or qualifying
cogenerator to enforce any requirement established by a State regulatory authority or nonregulated electric utility pursuant to subsection
(f) of this section. Any such action shall be
brought only in the manner, and under the requirements, as provided under section 2633 of
this title with respect to an action to which section 2633 of this title applies.
(h) Commission enforcement
(1) For purposes of enforcement of any rule
prescribed by the Commission under subsection
(a) of this section with respect to any operations

§ 824a–3

TITLE 16—CONSERVATION

of an electric utility, a qualifying cogeneration
facility or a qualifying small power production
facility which are subject to the jurisdiction of
the Commission under part II of the Federal
Power Act [16 U.S.C. 824 et seq.], such rule shall
be treated as a rule under the Federal Power Act
[16 U.S.C. 791a et seq.]. Nothing in subsection (g)
of this section shall apply to so much of the operations of an electric utility, a qualifying cogeneration facility or a qualifying small power
production facility as are subject to the jurisdiction of the Commission under part II of the Federal Power Act.
(2)(A) The Commission may enforce the requirements of subsection (f) of this section
against any State regulatory authority or nonregulated electric utility. For purposes of any
such enforcement, the requirements of subsection (f)(1) of this section shall be treated as a
rule enforceable under the Federal Power Act [16
U.S.C. 791a et seq.]. For purposes of any such action, a State regulatory authority or nonregulated electric utility shall be treated as a person
within the meaning of the Federal Power Act.
No enforcement action may be brought by the
Commission under this section other than—
(i) an action against the State regulatory
authority or nonregulated electric utility for
failure to comply with the requirements of
subsection (f) of this section 3 or
(ii) an action under paragraph (1).
(B) Any electric utility, qualifying cogenerator, or qualifying small power producer may petition the Commission to enforce the requirements of subsection (f) of this section as provided in subparagraph (A) of this paragraph. If
the Commission does not initiate an enforcement action under subparagraph (A) against a
State regulatory authority or nonregulated
electric utility within 60 days following the date
on which a petition is filed under this subparagraph with respect to such authority, the petitioner may bring an action in the appropriate
United States district court to require such
State regulatory authority or nonregulated
electric utility to comply with such requirements, and such court may issue such injunctive
or other relief as may be appropriate. The Commission may intervene as a matter of right in
any such action.
(i) Federal contracts
No contract between a Federal agency and any
electric utility for the sale of electric energy by
such Federal agency for resale which is entered
into after November 9, 1978, may contain any
provision which will have the effect of preventing the implementation of any rule under this
section with respect to such utility. Any provision in any such contract which has such effect
shall be null and void.
(j) New dams and diversions
Except for a hydroelectric project located at a
Government dam (as defined in section 3(10) of
the Federal Power Act [16 U.S.C. 796(10)]) at
which non-Federal hydroelectric development is
permissible, this section shall not apply to any
hydroelectric project which impounds or diverts
3 So

in original. Probably should be followed by a comma.

Page 1324

the water of a natural watercourse by means of
a new dam or diversion unless the project meets
each of the following requirements:
(1) No substantial adverse effects
At the time of issuance of the license or exemption for the project, the Commission finds
that the project will not have substantial adverse effects on the environment, including
recreation and water quality. Such finding
shall be made by the Commission after taking
into consideration terms and conditions imposed under either paragraph (3) of this subsection or section 10 of the Federal Power Act
[16 U.S.C. 803] (whichever is appropriate as required by that Act [16 U.S.C. 791a et seq.] or
the Electric Consumers Protection Act of 1986)
and compliance with other environmental requirements applicable to the project.
(2) Protected rivers
At the time the application for a license or
exemption for the project is accepted by the
Commission (in accordance with the Commission’s regulations and procedures in effect on
January 1, 1986, including those relating to environmental consultation), such project is not
located on either of the following:
(A) Any segment of a natural watercourse
which is included in (or designated for potential inclusion in) a State or national wild
and scenic river system.
(B) Any segment of a natural watercourse
which the State has determined, in accordance with applicable State law, to possess
unique natural, recreational, cultural, or
scenic attributes which would be adversely
affected by hydroelectric development.
(3) Fish and wildlife terms and conditions
The project meets the terms and conditions
set by fish and wildlife agencies under the
same procedures as provided for under section
30(c) of the Federal Power Act [16 U.S.C.
823a(c)].
(k) ‘‘New dam or diversion’’ defined
For purposes of this section, the term ‘‘new
dam or diversion’’ means a dam or diversion
which requires, for purposes of installing any
hydroelectric power project, any construction,
or enlargement of any impoundment or diversion structure (other than repairs or reconstruction or the addition of flashboards or similar adjustable devices) 4
(l) Definitions
For purposes of this section, the terms ‘‘small
power production facility’’, ‘‘qualifying small
power production facility’’, ‘‘qualifying small
power producer’’, ‘‘primary energy source’’, ‘‘cogeneration facility’’, ‘‘qualifying cogeneration
facility’’, and ‘‘qualifying cogenerator’’ have the
respective meanings provided for such terms
under section 3(17) and (18) of the Federal Power
Act [16 U.S.C. 796(17), (18)].
(m) Termination of mandatory purchase and sale
requirements
(1) Obligation to purchase
After August 8, 2005, no electric utility shall
be required to enter into a new contract or ob4 So

in original. Probably should be followed by a period.

Page 1325

TITLE 16—CONSERVATION

ligation to purchase electric energy from a
qualifying cogeneration facility or a qualifying small power production facility under this
section if the Commission finds that the qualifying cogeneration facility or qualifying small
power production facility has nondiscriminatory access to—
(A)(i) independently administered, auction-based day ahead and real time wholesale markets for the sale of electric energy;
and (ii) wholesale markets for long-term
sales of capacity and electric energy; or
(B)(i) transmission and interconnection
services that are provided by a Commissionapproved regional transmission entity and
administered pursuant to an open access
transmission tariff that affords nondiscriminatory treatment to all customers; and (ii)
competitive wholesale markets that provide
a meaningful opportunity to sell capacity,
including long-term and short-term sales,
and electric energy, including long-term,
short-term and real-time sales, to buyers
other than the utility to which the qualifying facility is interconnected. In determining whether a meaningful opportunity to
sell exists, the Commission shall consider,
among other factors, evidence of transactions within the relevant market; or
(C) wholesale markets for the sale of capacity and electric energy that are, at a
minimum, of comparable competitive quality as markets described in subparagraphs
(A) and (B).
(2) Revised purchase and sale obligation for
new facilities
(A) After August 8, 2005, no electric utility
shall be required pursuant to this section to
enter into a new contract or obligation to purchase from or sell electric energy to a facility
that is not an existing qualifying cogeneration
facility unless the facility meets the criteria
for qualifying cogeneration facilities established by the Commission pursuant to the
rulemaking required by subsection (n) of this
section.
(B) For the purposes of this paragraph, the
term ‘‘existing qualifying cogeneration facility’’ means a facility that—
(i) was a qualifying cogeneration facility
on August 8, 2005; or
(ii) had filed with the Commission a notice
of self-certification, self recertification or
an application for Commission certification
under 18 CFR 292.207 prior to the date on
which the Commission issues the final rule
required by subsection (n) of this section.
(3) Commission review
Any electric utility may file an application
with the Commission for relief from the mandatory purchase obligation pursuant to this
subsection on a service territory-wide basis.
Such application shall set forth the factual
basis upon which relief is requested and describe why the conditions set forth in subparagraph (A), (B), or (C) of paragraph (1) of this
subsection have been met. After notice, including sufficient notice to potentially affected qualifying cogeneration facilities and
qualifying small power production facilities,

§ 824a–3

and an opportunity for comment, the Commission shall make a final determination within
90 days of such application regarding whether
the conditions set forth in subparagraph (A),
(B), or (C) of paragraph (1) have been met.
(4) Reinstatement of obligation to purchase
At any time after the Commission makes a
finding under paragraph (3) relieving an electric utility of its obligation to purchase electric energy, a qualifying cogeneration facility,
a qualifying small power production facility, a
State agency, or any other affected person
may apply to the Commission for an order reinstating the electric utility’s obligation to
purchase electric energy under this section.
Such application shall set forth the factual
basis upon which the application is based and
describe why the conditions set forth in subparagraph (A), (B), or (C) of paragraph (1) of
this subsection are no longer met. After notice, including sufficient notice to potentially
affected utilities, and opportunity for comment, the Commission shall issue an order
within 90 days of such application reinstating
the electric utility’s obligation to purchase
electric energy under this section if the Commission finds that the conditions set forth in
subparagraphs (A), (B) or (C) of paragraph (1)
which relieved the obligation to purchase, are
no longer met.
(5) Obligation to sell
After August 8, 2005, no electric utility shall
be required to enter into a new contract or obligation to sell electric energy to a qualifying
cogeneration facility or a qualifying small
power production facility under this section if
the Commission finds that—
(A) competing retail electric suppliers are
willing and able to sell and deliver electric
energy to the qualifying cogeneration facility or qualifying small power production facility; and
(B) the electric utility is not required by
State law to sell electric energy in its service territory.
(6) No effect on existing rights and remedies
Nothing in this subsection affects the rights
or remedies of any party under any contract
or obligation, in effect or pending approval before the appropriate State regulatory authority or non-regulated electric utility on August
8, 2005, to purchase electric energy or capacity
from or to sell electric energy or capacity to
a qualifying cogeneration facility or qualifying small power production facility under this
Act (including the right to recover costs of
purchasing electric energy or capacity).
(7) Recovery of costs
(A) The Commission shall issue and enforce
such regulations as are necessary to ensure
that an electric utility that purchases electric
energy or capacity from a qualifying cogeneration facility or qualifying small power production facility in accordance with any legally
enforceable obligation entered into or imposed
under this section recovers all prudently incurred costs associated with the purchase.
(B) A regulation under subparagraph (A)
shall be enforceable in accordance with the

§ 824a–3

TITLE 16—CONSERVATION

provisions of law applicable to enforcement of
regulations under the Federal Power Act (16
U.S.C. 791a et seq.).
(n) Rulemaking for new qualifying facilities
(1)(A) Not later than 180 days after August 8,
2005, the Commission shall issue a rule revising
the criteria in 18 CFR 292.205 for new qualifying
cogeneration facilities seeking to sell electric
energy pursuant to this section to ensure—
(i) that the thermal energy output of a new
qualifying cogeneration facility is used in a
productive and beneficial manner;
(ii) the electrical, thermal, and chemical
output of the cogeneration facility is used fundamentally for industrial, commercial, or institutional purposes and is not intended fundamentally for sale to an electric utility, taking into account technological, efficiency, economic, and variable thermal energy requirements, as well as State laws applicable to
sales of electric energy from a qualifying facility to its host facility; and
(iii) continuing progress in the development
of efficient electric energy generating technology.
(B) The rule issued pursuant to paragraph
(1)(A) of this subsection shall be applicable only
to facilities that seek to sell electric energy pursuant to this section. For all other purposes, except as specifically provided in subsection
(m)(2)(A) of this section, qualifying facility
status shall be determined in accordance with
the rules and regulations of this Act.
(2) Notwithstanding rule revisions under paragraph (1), the Commission’s criteria for qualifying cogeneration facilities in effect prior to the
date on which the Commission issues the final
rule required by paragraph (1) shall continue to
apply to any cogeneration facility that—
(A) was a qualifying cogeneration facility on
August 8, 2005, or
(B) had filed with the Commission a notice
of self-certification, self-recertification or an
application for Commission certification
under 18 CFR 292.207 prior to the date on which
the Commission issues the final rule required
by paragraph (1).
(Pub. L. 95–617, title II, § 210, Nov. 9, 1978, 92 Stat.
3144; Pub. L. 96–294, title VI, § 643(b), June 30,
1980, 94 Stat. 770; Pub. L. 99–495, § 8(a), Oct. 16,
1986, 100 Stat. 1249; Pub. L. 101–575, § 2, Nov. 15,
1990, 104 Stat. 2834; Pub. L. 109–58, title XII,
§ 1253(a), Aug. 8, 2005, 119 Stat. 967.)
REFERENCES IN TEXT
The Federal Power Act, referred to in subsecs. (e),
(h), (j)(1), and (m)(7)(B), is act June 10, 1920, ch. 285, 41
Stat. 1063, as amended, which is classified generally to
this chapter (§ 791a et seq.). Part I of the Federal Power
Act is classified generally to subchapter I (§ 791a et
seq.) of this chapter. Part II of the Federal Power Act
is classified generally to this subchapter (§ 824 et seq.).
For complete classification of this Act to the Code, see
section 791a of this title and Tables.
The Public Utility Holding Company Act, referred to
in subsec. (e), probably means the Public Utility Holding Company Act of 1935, title I of act Aug. 26, 1935, ch.
687, 49 Stat. 803, as amended, which was classified generally to chapter 2C (§ 79 et seq.) of Title 15, Commerce
and Trade, prior to repeal by Pub. L. 109–58, title XII,
§ 1263, Aug. 8, 2005, 119 Stat. 974. For complete classification of this Act to the Code, see Tables.

Page 1326

The Electric Consumers Protection Act of 1986, referred to in subsec. (j)(1), is Pub. L. 99–495, Oct. 16, 1986,
100 Stat. 1243. For complete classification of this Act to
the Code, see Short Title of 1986 Amendment note set
out under section 791a of this title and Tables.
This Act, referred to in subsecs. (m)(6) and (n)(1)(B),
is Pub. L. 95–617, Nov. 9, 1978, 92 Stat. 3117, as amended,
known as the Public Utility Regulatory Policies Act of
1978. For complete classification of this Act to the
Code, see Short Title note set out under section 2601 of
this title and Tables.
CODIFICATION
Section was enacted as part of the Public Utility
Regulatory Policies Act of 1978, and not as part of the
Federal Power Act which generally comprises this
chapter.
August 8, 2005, referred to in subsec. (n)(1)(A), was in
the original ‘‘the date of enactment of this section’’,
which was translated as meaning the date of enactment
of Pub. L. 109–58, which enacted subsecs. (m) and (n) of
this section, to reflect the probable intent of Congress.
AMENDMENTS
2005—Subsecs. (m), (n). Pub. L. 109–58 added subsecs.
(m) and (n).
1990—Subsec. (e)(2). Pub. L. 101–575 inserted ‘‘(other
than a qualifying small power production facility
which is an eligible solar, wind, waste, or geothermal
facility as defined in section 3(17)(E) of the Federal
Power Act)’’ after first reference to ‘‘facility’’.
1986—Subsecs. (j) to (l). Pub. L. 99–495 added subsecs.
(j) and (k) and redesignated former subsec. (j) as (l).
1980—Subsec. (a). Pub. L. 96–294, § 643(b)(1), inserted
provisions relating to encouragement of geothermal
small power production facilities.
Subsec. (e)(1). Pub. L. 96–294, § 643(b)(2), inserted provisions relating to applicability to geothermal small
power production facilities.
Subsec. (e)(2). Pub. L. 96–294, § 643(b)(3), inserted provisions respecting a qualifying small power production
facility using geothermal energy as the primary energy
source.
EFFECTIVE DATE OF 1986 AMENDMENT
Section 8(b) of Pub. L. 99–495 provided that:
‘‘(1) Subsection (j) of section 210 of the Public Utility
Regulatory Policies Act of 1978 (as amended by subsection (a) of this section) [16 U.S.C. 824a–3(j)] shall
apply to any project for which benefits under section
210 of the Public Utility Regulatory Policies Act of 1978
are sought and for which a license or exemption is issued by the Federal Energy Regulatory Commission
after the enactment of this Act [Oct. 16, 1986], except as
otherwise provided in paragraph (2), (3) or (4) of this
subsection.
‘‘(2) Subsection (j) shall not apply to the project if
the application for license or exemption for the project
was filed, and accepted for filing by the Commission,
before the enactment of this Act [Oct. 16, 1986].
‘‘(3) Paragraphs (1) and (3) of such subsection (j) shall
not apply if the application for the license or exemption for the project was filed before the enactment of
this Act [Oct. 16, 1986] and accepted for filing by the
Commission (in accordance with the Commission’s regulations and procedures in effect on January 1, 1986, including those relating to the requirement for environmental consultation) within 3 years after such enactment.
‘‘(4)(A) Paragraph (3) of subsection (j) shall not apply
for projects where the license or exemption application
was filed after enactment of this Act [Oct. 16, 1986] if,
based on a petition filed by the applicant for such
project within 18 months after such enactment, the
Commission determines (after public notice and opportunity for public comment of at least 45 days) that the
applicant has demonstrated that he had committed
(prior to the enactment of this Act) substantial monetary resources directly related to the development of

Page 1327

TITLE 16—CONSERVATION

the project and to the diligent and timely completion
of all requirements of the Commission for filing an acceptable application for license or exemption. Such petition shall be publicly available and shall be filed in
such form as the Commission shall require by rule issued within 120 days after the enactment of this Act.
The public notice required under this subparagraph
shall include written notice by the petitioner to affected Federal and State agencies.
‘‘(B) In the case of any petition referred to in subparagraph (A), if the applicant had a preliminary permit and had completed environmental consultations
(required by Commission regulations and procedures in
effect on January 1, 1986) prior to enactment, there
shall be a rebuttable presumption that such applicant
had committed substantial monetary resources prior to
enactment.
‘‘(C) The applicant for a license or exemption for a
project described in subparagraph (A) may petition the
Commission for an initial determination under paragraph (1) of section 210(j) of the Public Utility Regulatory Policies Act of 1978 [16 U.S.C. 824a–3(j)(1)] prior
to the time the license or exemption is issued. If the
Commission initially finds that the project will have
substantial adverse effects on the environment within
the meaning of such paragraph (1), prior to making a
final finding under that paragraph the Commission
shall afford the applicant a reasonable opportunity to
provide for mitigation of such adverse effects. The
Commission shall make a final finding under such paragraph (1) at the time the license or exemption is issued.
If the Federal Energy Regulatory Commission has notified the State of its initial finding and the State has
not taken any action described in paragraph (2) of section 210(j) before such final finding, the failure to take
such action shall be the basis for a rebuttable presumption that there is not a substantial adverse effect on
the environment related to natural, recreational, cultural, or scenic attributes for purposes of such finding.
‘‘(D) If a petition under subparagraph (A) is denied,
all provisions of section 210(j) of the Public Utility Regulatory Policies Act of 1978 [16 U.S.C. 824a–3(j)] shall
apply to the project regardless of when the license or
exemption is issued.’’
Amendment by Pub. L. 99–495 effective with respect
to each license, permit, or exemption issued under this
chapter after Oct. 16, 1986, see section 18 of Pub. L.
99–495, set out as a note under section 797 of this title.
CALCULATION OF AVOIDED COST
Pub. L. 102–486, title XIII, § 1335, Oct. 24, 1992, 106 Stat.
2984, provided that: ‘‘Nothing in section 210 of the Public Utility Regulatory Policies Act of 1978 (Public Law
95–617) [16 U.S.C. 824a–3] requires a State regulatory authority or nonregulated electric utility to treat a cost
reasonably identified to be incurred or to have been incurred in the construction or operation of a facility or
a project which has been selected by the Department of
Energy and provided Federal funding pursuant to the
Clean Coal Program authorized by Public Law 98–473
[see Tables for classification] as an incremental cost of
alternative electric energy.’’
APPLICABILITY OF 1980 AMENDMENT TO FACILITIES
USING SOLAR ENERGY AS PRIMARY ENERGY SOURCE
Pub. L. 100–202, § 101(d) [title III, § 310], Dec. 22, 1987,
101 Stat. 1329–104, 1329–126, provided that:
‘‘(a) The amendments made by section 643(b) of the
Energy Security Act (Public Law 96–294) [amending
this section] and any regulations issued to implement
such amendment shall apply to qualifying small power
production facilities (as such term is defined in the
Federal Power Act [16 U.S.C. 791a et seq.]) using solar
energy as the primary energy source to the same extent such amendments and regulations apply to qualifying small power production facilities using geothermal energy as the primary energy source, except
that nothing in this Act [see Tables for classification]
shall preclude the Federal Energy Regulatory Commis-

§ 824a–3

sion from revising its regulations to limit the availability of exemptions authorized under this Act as it
determines to be required in the public interest and
consistent with its obligations and duties under section
210 of the Public Utility Regulatory Policies Act of 1978
[this section].
‘‘(b) The provisions of subsection (a) shall apply to a
facility using solar energy as the primary energy
source only if either of the following is submitted to
the Federal Energy Regulatory Commission during the
two-year period beginning on the date of enactment of
this Act [Dec. 22, 1987]:
‘‘(1) An application for certification of the facility
as a qualifying small power production facility.
‘‘(2) Notice that the facility meets the requirements
for qualification.’’
STUDY AND REPORT TO CONGRESSIONAL COMMITTEES ON
APPLICATION OF PROVISIONS RELATING TO COGENERATION, SMALL POWER PRODUCTION, AND INTERCONNECTION AUTHORITY TO HYDROELECTRIC POWER FACILITIES

Section 8(d) of Pub. L. 99–495 provided that:
‘‘(1) The Commission shall conduct a study (in accordance with section 102(2)(C) of the National Environmental Policy Act of 1969 [42 U.S.C. 4332(2)(C)]) of
whether the benefits of section 210 of the Public Utility
Regulatory Policies Act of 1978 [16 U.S.C. 824a–3] and
section 210 of the Federal Power Act [16 U.S.C. 824i]
should be applied to hydroelectric power facilities utilizing new dams or diversions (within the meaning of
section 210(k) of the Public Utility Regulatory Policies
Act of 1978).
‘‘(2) The study under this subsection shall take into
consideration the need for such new dams or diversions
for power purposes, the environmental impacts of such
new dams and diversions (both with and without the
application of the amendments made by this Act to sections 4, 10, and 30 of the Federal Power Act [16 U.S.C.
797, 803, 823a] and section 210 of the Public Utility Regulatory Policies Act of 1978 [16 U.S.C. 824a–3]), the environmental effects of such facilities alone and in combination with other existing or proposed dams or diversions on the same waterway, the intent of Congress to
encourage and give priority to the application of section 210 of Public Utility Regulatory Policies Act of
1978 to existing dams and diversions rather than such
new dams or diversions, and the impact of such section
210 on the rates paid by electric power consumers.
‘‘(3) The study under this subsection shall be initiated within 3 months after enactment of this Act [Oct.
16, 1986] and completed as promptly as practicable.
‘‘(4) A report containing the results of the study conducted under this subsection shall be submitted to the
Committee on Energy and Commerce of the United
States House of Representatives and the Committee on
Energy and Natural Resources of the United States
Senate while both Houses are in session.
‘‘(5) The report submitted under paragraph (4) shall
include a determination (and the basis thereof) by the
Commission, based on the study and a public hearing
and subject to review under section 313(b) of the Federal Power Act [16 U.S.C. 825l(b)], whether any of the
benefits referred to in paragraph (1) should be available
for such facilities and whether applications for preliminary permits (or licenses where no preliminary permit
has been issued) for such small power production facilities utilizing new dams or diversions should be accepted by the Commission after the moratorium period
specified in subsection (e). The report shall include
such other administrative and legislative recommendations as the Commission deems appropriate.
‘‘(6) If the study under this subsection has not been
completed within 18 months after its initiation, the
Commission shall notify the Committees referred to in
paragraph (4) of the reasons for the delay and specify a
date when it will be completed and a report submitted.’’

§ 824a–4

TITLE 16—CONSERVATION

MORATORIUM ON APPLICATION OF THIS SECTION TO NEW
DAMS
Section 8(e) of Pub. L. 99–495 provided that: ‘‘Notwithstanding the amendments made by subsection (a)
of this section [amending section 824a–3 of this title], in
the case of a project for which a license or exemption
is issued after the enactment of this Act [Oct. 16, 1986],
section 210 of the Public Utility Regulatory Policies
Act of 1978 [16 U.S.C. 824a–3] shall not apply during the
moratorium period if the project utilizes a new dam or
diversion (as defined in section 210(k) of such Act) unless the project is either—
‘‘(1) a project located at a Government dam (as defined in section 3(10) of the Federal Power Act [16
U.S.C. 796(10)]) at which non-Federal hydroelectric
development is permissible, or
‘‘(2) a project described in paragraphs (2), (3), or (4)
of subsection (b) [set out as a note above].
For purposes of this subsection, the term ‘moratorium
period’ means the period beginning on the date of the
enactment of this Act and ending at the expiration of
the first full session of Congress after the session during which the report under subsection (d) [set out as a
note above] has been submitted to the Congress.’’
DEFINITIONS
For definitions of terms used in this section, see section 2602 of this title.

§ 824a–4. Seasonal diversity electricity exchange
(a) Authority
The Secretary may acquire rights-of-way by
purchase, including eminent domain, through
North Dakota, South Dakota, and Nebraska for
transmission facilities for the seasonal diversity
exchange of electric power to and from Canada
if he determines—
(1) after opportunity for public hearing—
(A) that the exchange is in the public interest and would further the purposes referred to in section 2611(1) and (2) of this
title and that the acquisition of such rightsof-way and the construction and operation of
such transmission facilities for such purposes is otherwise in the public interest,
(B) that a permit has been issued in accordance with subsection (b) of this section
for such construction, operation, maintenance, and connection of the facilities at the
border for the transmission of electric energy between the United States and Canada
as is necessary for such exchange of electric
power, and
(C) that each affected State has approved
the portion of the transmission route located in each State in accordance with applicable State law, or if there is no such applicable State law in such State, the Governor has approved such portion; and
(2) after consultation with the Secretary of
the Interior and the heads of other affected
Federal agencies, that the Secretary of the Interior and the heads of such,1 other agencies
concur in writing in the location of such portion of the transmission facilities as crosses
Federal land under the jurisdiction of such
Secretary or such other Federal agency, as the
case may be.
The Secretary shall provide to any State such
cooperation and technical assistance as the
1 So

in original. Comma probably should be deleted.

Page 1328

State may request and as he determines appropriate in the selection of a transmission route.
If the transmission route approved by any State
does not appear to be feasible and in the public
interest, the Secretary shall encourage such
State to review such route and to develop a
route that is feasible and in the public interest.
Any exercise by the Secretary of the power of
eminent domain under this section shall be in
accordance with other applicable provisions of
Federal law. The Secretary shall provide public
notice of his intention to acquire any right-ofway before exercising such power of eminent domain with respect to such right-of-way.
(b) Permit
Notwithstanding any transfer of functions
under the first sentence of section 301(b) of the
Department of Energy Organization Act [42
U.S.C. 7151(b)], no permit referred to in subsection (a)(1)(B) may be issued unless the Commission has conducted hearings and made the
findings required under section 202(e) of the Federal Power Act [16 U.S.C. 824a(e)] and under the
applicable execution order respecting the construction, operation, maintenance, or connection at the borders of the United States of facilities for the transmission of electric energy between the United States and a foreign country.
Any finding of the Commission under an applicable executive order referred to in this subsection shall be treated for purposes of judicial
review as an order issued under section 202(e) of
the Federal Power Act.
(c) Timely acquisition by other means
The Secretary may not acquire any rights-ofday 2 under this section unless he determines
that the holder or holders of a permit referred to
in subsection (a)(1)(B) of this section are unable
to acquire such rights-of-way under State condemnation authority, or after reasonable opportunity for negotiation, without unreasonably delaying construction, taking into consideration
the impact of such delay on completion of the
facilities in a timely fashion.
(d) Payments by permittees
(1) The property interest acquired by the Secretary under this section (whether by eminent
domain or other purchase) shall be transferred
by the Secretary to the holder of a permit referred to in subsection (b) of this section if such
holder has made payment to the Secretary of
the entire costs of the acquisition of such property interest, including administrative costs.
The Secretary may accept, and expend, for purposes of such acquisition, amounts from any
such person before acquiring a property interest
to be transferred to such person under this section.
(2) If no payment is made by a permit holder
under paragraph (1), within a reasonable time,
the Secretary shall offer such rights-of-way to
the original owner for reacquisition at the original price paid by the Secretary. If such original
owner refuses to reacquire such property after a
reasonable period, the Secretary shall dispose of
such property in accordance with applicable provisions of law governing disposal of property of
the United States.
2 So

in original. Probably should be ‘‘rights-of-way’’.

Page 1329

§ 824b

TITLE 16—CONSERVATION

(e) Federal law governing Federal lands
This section shall not affect any Federal law
governing Federal lands.
(Pub. L. 95–617, title VI, § 602, Nov. 9, 1978, 92
Stat. 3164.)
CODIFICATION
Subsection (f), which required the Secretary to report
annually to Congress on actions taken pursuant to this
section, terminated, effective May 15, 2000, pursuant to
section 3003 of Pub. L. 104–66, as amended, set out as a
note under section 1113 of Title 31, Money and Finance.
See, also, page 90 of House Document No. 103–7.
Section was enacted as part of the Public Utility
Regulatory Policies Act of 1978, and not as part of the
Federal Power Act which generally comprises this
chapter.
DEFINITIONS
For definitions of terms used in this section, see section 2602 of this title.

§ 824b. Disposition of property; consolidations;
purchase of securities
(a) Authorization
(1) No public utility shall, without first having
secured an order of the Commission authorizing
it to do so—
(A) sell, lease, or otherwise dispose of the
whole of its facilities subject to the jurisdiction of the Commission, or any part thereof of
a value in excess of $10,000,000;
(B) merge or consolidate, directly or indirectly, such facilities or any part thereof with
those of any other person, by any means whatsoever;
(C) purchase, acquire, or take any security
with a value in excess of $10,000,000 of any
other public utility; or
(D) purchase, lease, or otherwise acquire an
existing generation facility—
(i) that has a value in excess of $10,000,000;
and
(ii) that is used for interstate wholesale
sales and over which the Commission has jurisdiction for ratemaking purposes.
(2) No holding company in a holding company
system that includes a transmitting utility or
an electric utility shall purchase, acquire, or
take any security with a value in excess of
$10,000,000 of, or, by any means whatsoever, directly or indirectly, merge or consolidate with,
a transmitting utility, an electric utility company, or a holding company in a holding company system that includes a transmitting utility, or an electric utility company, with a value
in excess of $10,000,000 without first having secured an order of the Commission authorizing it
to do so.
(3) Upon receipt of an application for such approval the Commission shall give reasonable notice in writing to the Governor and State commission of each of the States in which the physical property affected, or any part thereof, is situated, and to such other persons as it may deem
advisable.
(4) After notice and opportunity for hearing,
the Commission shall approve the proposed disposition, consolidation, acquisition, or change
in control, if it finds that the proposed trans-

action will be consistent with the public interest, and will not result in cross-subsidization of
a non-utility associate company or the pledge or
encumbrance of utility assets for the benefit of
an associate company, unless the Commission
determines that the cross-subsidization, pledge,
or encumbrance will be consistent with the public interest.
(5) The Commission shall, by rule, adopt procedures for the expeditious consideration of applications for the approval of dispositions, consolidations, or acquisitions, under this section.
Such rules shall identify classes of transactions,
or specify criteria for transactions, that normally meet the standards established in paragraph (4). The Commission shall provide expedited review for such transactions. The Commission shall grant or deny any other application
for approval of a transaction not later than 180
days after the application is filed. If the Commission does not act within 180 days, such application shall be deemed granted unless the Commission finds, based on good cause, that further
consideration is required to determine whether
the proposed transaction meets the standards of
paragraph (4) and issues an order tolling the
time for acting on the application for not more
than 180 days, at the end of which additional period the Commission shall grant or deny the application.
(6) For purposes of this subsection, the terms
‘‘associate company’’, ‘‘holding company’’, and
‘‘holding company system’’ have the meaning
given those terms in the Public Utility Holding
Company Act of 2005 [42 U.S.C. 16451 et seq.].
(b) Orders of Commission
The Commission may grant any application
for an order under this section in whole or in
part and upon such terms and conditions as it
finds necessary or appropriate to secure the
maintenance of adequate service and the coordination in the public interest of facilities subject
to the jurisdiction of the Commission. The Commission may from time to time for good cause
shown make such orders supplemental to any
order made under this section as it may find
necessary or appropriate.
(June 10, 1920, ch. 285, pt. II, § 203, as added Aug.
26, 1935, ch. 687, title II, § 213, 49 Stat. 849; amended Pub. L. 109–58, title XII, § 1289(a), Aug. 8, 2005,
119 Stat. 982.)
REFERENCES IN TEXT
The Public Utility Holding Company Act of 2005, referred to in subsec. (a)(6), is subtitle F of title XII of
Pub. L. 109–58, Aug. 8, 2005, 119 Stat. 972, which is classified principally to part D (§ 16451 et seq.) of subchapter
XII of chapter 149 of Title 42, The Public Health and
Welfare. For complete classification of this Act to the
Code, see Short Title note set out under section 15801
of Title 42 and Tables.
AMENDMENTS
2005—Subsec. (a). Pub. L. 109–58 amended subsec. (a)
generally. Prior to amendment, subsec. (a) read as follows: ‘‘No public utility shall sell, lease, or otherwise
dispose of the whole of its facilities subject to the jurisdiction of the Commission, or any part thereof of a
value in excess of $50,000, or by any means whatsoever,
directly or indirectly, merge or consolidate such facilities or any part thereof with those of any other person,
or purchase, acquire, or take any security of any other

§ 824c

TITLE 16—CONSERVATION

public utility, without first having secured an order of
the Commission authorizing it to do so. Upon application for such approval the Commission shall give reasonable notice in writing to the Governor and State
commission of each of the States in which the physical
property affected, or any part thereof, is situated, and
to such other persons as it may deem advisable. After
notice and opportunity for hearing, if the Commission
finds that the proposed disposition, consolidation, acquisition, or control will be consistent with the public
interest, it shall approve the same.’’
EFFECTIVE DATE OF 2005 AMENDMENT
Pub. L. 109–58, title XII, § 1289(b), (c), Aug. 8, 2005, 119
Stat. 983, provided that:
‘‘(b) EFFECTIVE DATE.—The amendments made by this
section [amending this section] shall take effect 6
months after the date of enactment of this Act [Aug. 8,
2005].
‘‘(c) TRANSITION PROVISION.—The amendments made
by subsection (a) [amending this section] shall not
apply to any application under section 203 of the Federal Power Act (16 U.S.C. 824b) that was filed on or before the date of enactment of this Act [Aug. 8, 2005].’’

§ 824c. Issuance of securities; assumption of liabilities
(a) Authorization by Commission
No public utility shall issue any security, or
assume any obligation or liability as guarantor,
indorser, surety, or otherwise in respect of any
security of another person, unless and until, and
then only to the extent that, upon application
by the public utility, the Commission by order
authorizes such issue or assumption of liability.
The Commission shall make such order only if it
finds that such issue or assumption (a) is for
some lawful object, within the corporate purposes of the applicant and compatible with the
public interest, which is necessary or appropriate for or consistent with the proper performance by the applicant of service as a public utility and which will not impair its ability to perform that service, and (b) is reasonably necessary or appropriate for such purposes. The provisions of this section shall be effective six
months after August 26, 1935.
(b) Application approval or modification; supplemental orders
The Commission, after opportunity for hearing, may grant any application under this section in whole or in part, and with such modifications and upon such terms and conditions as it
may find necessary or appropriate, and may
from time to time, after opportunity for hearing
and for good cause shown, make such supplemental orders in the premises as it may find
necessary or appropriate, and may by any such
supplemental order modify the provisions of any
previous order as to the particular purposes,
uses, and extent to which, or the conditions
under which, any security so theretofore authorized or the proceeds thereof may be applied, subject always to the requirements of subsection (a)
of this section.
(c) Compliance with order of Commission
No public utility shall, without the consent of
the Commission, apply any security or any proceeds thereof to any purpose not specified in the
Commission’s order, or supplemental order, or
to any purpose in excess of the amount allowed

Page 1330

for such purpose in such order, or otherwise in
contravention of such order.
(d) Authorization of capitalization not to exceed
amount paid
The Commission shall not authorize the capitalization of the right to be a corporation or of
any franchise, permit, or contract for consolidation, merger, or lease in excess of the amount
(exclusive of any tax or annual charge) actually
paid as the consideration for such right, franchise, permit, or contract.
(e) Notes or drafts maturing less than one year
after issuance
Subsection (a) of this section shall not apply
to the issue or renewal of, or assumption of liability on, a note or draft maturing not more
than one year after the date of such issue, renewal, or assumption of liability, and aggregating (together with all other then outstanding
notes and drafts of a maturity of one year or
less on which such public utility is primarily or
secondarily liable) not more than 5 per centum
of the par value of the other securities of the
public utility then outstanding. In the case of
securities having no par value, the par value for
the purpose of this subsection shall be the fair
market value as of the date of issue. Within ten
days after any such issue, renewal, or assumption of liability, the public utility shall file with
the Commission a certificate of notification, in
such form as may be prescribed by the Commission, setting forth such matters as the Commission shall by regulation require.
(f) Public utility securities regulated by State not
affected
The provisions of this section shall not extend
to a public utility organized and operating in a
State under the laws of which its security issues
are regulated by a State commission.
(g) Guarantee or obligation on part of United
States
Nothing in this section shall be construed to
imply any guarantee or obligation on the part of
the United States in respect of any securities to
which the provisions of this section relate.
(h) Filing duplicate reports with the Securities
and Exchange Commission
Any public utility whose security issues are
approved by the Commission under this section
may file with the Securities and Exchange Commission duplicate copies of reports filed with the
Federal Power Commission in lieu of the reports, information, and documents required
under sections 77g, 78l, and 78m of title 15.
(June 10, 1920, ch. 285, pt. II, § 204, as added Aug.
26, 1935, ch. 687, title II, § 213, 49 Stat. 850.)
TRANSFER OF FUNCTIONS
Executive and administrative functions of Securities
and Exchange Commission, with certain exceptions,
transferred to Chairman of such Commission, with authority vested in him to authorize their performance
by any officer, employee, or administrative unit under
his jurisdiction, by Reorg. Plan No. 10 of 1950, §§ 1, 2, eff.
May 24, 1950, 15 F.R. 3175, 64 Stat. 1265, set out in the
Appendix to Title 5, Government Organization and Employees.

Page 1331

TITLE 16—CONSERVATION

§ 824d. Rates and charges; schedules; suspension
of new rates; automatic adjustment clauses
(a) Just and reasonable rates
All rates and charges made, demanded, or received by any public utility for or in connection
with the transmission or sale of electric energy
subject to the jurisdiction of the Commission,
and all rules and regulations affecting or pertaining to such rates or charges shall be just and
reasonable, and any such rate or charge that is
not just and reasonable is hereby declared to be
unlawful.
(b) Preference or advantage unlawful
No public utility shall, with respect to any
transmission or sale subject to the jurisdiction
of the Commission, (1) make or grant any undue
preference or advantage to any person or subject
any person to any undue prejudice or disadvantage, or (2) maintain any unreasonable difference in rates, charges, service, facilities, or in
any other respect, either as between localities
or as between classes of service.
(c) Schedules
Under such rules and regulations as the Commission may prescribe, every public utility shall
file with the Commission, within such time and
in such form as the Commission may designate,
and shall keep open in convenient form and
place for public inspection schedules showing all
rates and charges for any transmission or sale
subject to the jurisdiction of the Commission,
and the classifications, practices, and regulations affecting such rates and charges, together
with all contracts which in any manner affect or
relate to such rates, charges, classifications, and
services.
(d) Notice required for rate changes
Unless the Commission otherwise orders, no
change shall be made by any public utility in
any such rate, charge, classification, or service,
or in any rule, regulation, or contract relating
thereto, except after sixty days’ notice to the
Commission and to the public. Such notice shall
be given by filing with the Commission and
keeping open for public inspection new schedules stating plainly the change or changes to be
made in the schedule or schedules then in force
and the time when the change or changes will go
into effect. The Commission, for good cause
shown, may allow changes to take effect without requiring the sixty days’ notice herein provided for by an order specifying the changes so
to be made and the time when they shall take
effect and the manner in which they shall be
filed and published.
(e) Suspension of new rates; hearings; five-month
period
Whenever any such new schedule is filed the
Commission shall have authority, either upon
complaint or upon its own initiative without
complaint, at once, and, if it so orders, without
answer or formal pleading by the public utility,
but upon reasonable notice, to enter upon a
hearing concerning the lawfulness of such rate,
charge, classification, or service; and, pending
such hearing and the decision thereon, the Commission, upon filing with such schedules and de-

§ 824d

livering to the public utility affected thereby a
statement in writing of its reasons for such suspension, may suspend the operation of such
schedule and defer the use of such rate, charge,
classification, or service, but not for a longer period than five months beyond the time when it
would otherwise go into effect; and after full
hearings, either completed before or after the
rate, charge, classification, or service goes into
effect, the Commission may make such orders
with reference thereto as would be proper in a
proceeding initiated after it had become effective. If the proceeding has not been concluded
and an order made at the expiration of such five
months, the proposed change of rate, charge,
classification, or service shall go into effect at
the end of such period, but in case of a proposed
increased rate or charge, the Commission may
by order require the interested public utility or
public utilities to keep accurate account in detail of all amounts received by reason of such increase, specifying by whom and in whose behalf
such amounts are paid, and upon completion of
the hearing and decision may by further order
require such public utility or public utilities to
refund, with interest, to the persons in whose
behalf such amounts were paid, such portion of
such increased rates or charges as by its decision shall be found not justified. At any hearing
involving a rate or charge sought to be increased, the burden of proof to show that the increased rate or charge is just and reasonable
shall be upon the public utility, and the Commission shall give to the hearing and decision of
such questions preference over other questions
pending before it and decide the same as speedily as possible.
(f) Review of automatic adjustment clauses and
public utility practices; action by Commission; ‘‘automatic adjustment clause’’ defined
(1) Not later than 2 years after November 9,
1978, and not less often than every 4 years thereafter, the Commission shall make a thorough review of automatic adjustment clauses in public
utility rate schedules to examine—
(A) whether or not each such clause effectively provides incentives for efficient use of
resources (including economical purchase and
use of fuel and electric energy), and
(B) whether any such clause reflects any
costs other than costs which are—
(i) subject to periodic fluctuations and
(ii) not susceptible to precise determinations in rate cases prior to the time such
costs are incurred.
Such review may take place in individual rate
proceedings or in generic or other separate proceedings applicable to one or more utilities.
(2) Not less frequently than every 2 years, in
rate proceedings or in generic or other separate
proceedings, the Commission shall review, with
respect to each public utility, practices under
any automatic adjustment clauses of such utility to insure efficient use of resources (including
economical purchase and use of fuel and electric
energy) under such clauses.
(3) The Commission may, on its own motion or
upon complaint, after an opportunity for an evidentiary hearing, order a public utility to—
(A) modify the terms and provisions of any
automatic adjustment clause, or

§ 824e

TITLE 16—CONSERVATION

(B) cease any practice in connection with
the clause,
if such clause or practice does not result in the
economical purchase and use of fuel, electric energy, or other items, the cost of which is included in any rate schedule under an automatic
adjustment clause.
(4) As used in this subsection, the term ‘‘automatic adjustment clause’’ means a provision of
a rate schedule which provides for increases or
decreases (or both), without prior hearing, in
rates reflecting increases or decreases (or both)
in costs incurred by an electric utility. Such
term does not include any rate which takes effect subject to refund and subject to a later determination of the appropriate amount of such
rate.
(June 10, 1920, ch. 285, pt. II, § 205, as added Aug.
26, 1935, ch. 687, title II, § 213, 49 Stat. 851; amended Pub. L. 95–617, title II, §§ 207(a), 208, Nov. 9,
1978, 92 Stat. 3142.)
AMENDMENTS
1978—Subsec. (d). Pub. L. 95–617, § 207(a), substituted
‘‘sixty’’ for ‘‘thirty’’ in two places.
Subsec. (f). Pub. L. 95–617, § 208, added subsec. (f).
STUDY OF ELECTRIC RATE INCREASES UNDER FEDERAL
POWER ACT
Section 207(b) of Pub. L. 95–617 directed chairman of
Federal Energy Regulatory Commission, in consultation with Secretary, to conduct a study of legal requirements and administrative procedures involved in
consideration and resolution of proposed wholesale
electric rate increases under Federal Power Act, section 791a et seq. of this title, for purposes of providing
for expeditious handling of hearings consistent with
due process, preventing imposition of successive rate
increases before they have been determined by Commission to be just and reasonable and otherwise lawful,
and improving procedures designed to prohibit anticompetitive or unreasonable differences in wholesale
and retail rates, or both, and that chairman report to
Congress within nine months from Nov. 9, 1978, on results of study, on administrative actions taken as a result of this study, and on any recommendations for
changes in existing law that will aid purposes of this
section.

§ 824e. Power of Commission to fix rates and
charges; determination of cost of production
or transmission
(a) Unjust or preferential rates, etc.; statement of
reasons for changes; hearing; specification of
issues
Whenever the Commission, after a hearing
held upon its own motion or upon complaint,
shall find that any rate, charge, or classification, demanded, observed, charged, or collected
by any public utility for any transmission or
sale subject to the jurisdiction of the Commission, or that any rule, regulation, practice, or
contract affecting such rate, charge, or classification is unjust, unreasonable, unduly discriminatory or preferential, the Commission
shall determine the just and reasonable rate,
charge, classification, rule, regulation, practice,
or contract to be thereafter observed and in
force, and shall fix the same by order. Any complaint or motion of the Commission to initiate
a proceeding under this section shall state the
change or changes to be made in the rate,

Page 1332

charge, classification, rule, regulation, practice,
or contract then in force, and the reasons for
any proposed change or changes therein. If, after
review of any motion or complaint and answer,
the Commission shall decide to hold a hearing,
it shall fix by order the time and place of such
hearing and shall specify the issues to be adjudicated.
(b) Refund effective date; preferential proceedings; statement of reasons for delay; burden
of proof; scope of refund order; refund orders in cases of dilatory behavior; interest
Whenever the Commission institutes a proceeding under this section, the Commission
shall establish a refund effective date. In the
case of a proceeding instituted on complaint,
the refund effective date shall not be earlier
than the date of the filing of such complaint nor
later than 5 months after the filing of such complaint. In the case of a proceeding instituted by
the Commission on its own motion, the refund
effective date shall not be earlier than the date
of the publication by the Commission of notice
of its intention to initiate such proceeding nor
later than 5 months after the publication date.
Upon institution of a proceeding under this section, the Commission shall give to the decision
of such proceeding the same preference as provided under section 824d of this title and otherwise act as speedily as possible. If no final decision is rendered by the conclusion of the 180-day
period commencing upon initiation of a proceeding pursuant to this section, the Commission
shall state the reasons why it has failed to do so
and shall state its best estimate as to when it
reasonably expects to make such decision. In
any proceeding under this section, the burden of
proof to show that any rate, charge, classification, rule, regulation, practice, or contract is
unjust, unreasonable, unduly discriminatory, or
preferential shall be upon the Commission or
the complainant. At the conclusion of any proceeding under this section, the Commission may
order refunds of any amounts paid, for the period subsequent to the refund effective date
through a date fifteen months after such refund
effective date, in excess of those which would
have been paid under the just and reasonable
rate, charge, classification, rule, regulation,
practice, or contract which the Commission orders to be thereafter observed and in force: Provided, That if the proceeding is not concluded
within fifteen months after the refund effective
date and if the Commission determines at the
conclusion of the proceeding that the proceeding
was not resolved within the fifteen-month period primarily because of dilatory behavior by
the public utility, the Commission may order refunds of any or all amounts paid for the period
subsequent to the refund effective date and prior
to the conclusion of the proceeding. The refunds
shall be made, with interest, to those persons
who have paid those rates or charges which are
the subject of the proceeding.
(c) Refund considerations; shifting costs; reduction in revenues; ‘‘electric utility companies’’
and ‘‘registered holding company’’ defined
Notwithstanding subsection (b) of this section,
in a proceeding commenced under this section
involving two or more electric utility companies

Page 1333

of a registered holding company, refunds which
might otherwise be payable under subsection (b)
of this section shall not be ordered to the extent
that such refunds would result from any portion
of a Commission order that (1) requires a decrease in system production or transmission
costs to be paid by one or more of such electric
companies; and (2) is based upon a determination that the amount of such decrease should be
paid through an increase in the costs to be paid
by other electric utility companies of such registered holding company: Provided, That refunds,
in whole or in part, may be ordered by the Commission if it determines that the registered
holding company would not experience any reduction in revenues which results from an inability of an electric utility company of the
holding company to recover such increase in
costs for the period between the refund effective
date and the effective date of the Commission’s
order. For purposes of this subsection, the terms
‘‘electric utility companies’’ and ‘‘registered
holding company’’ shall have the same meanings
as provided in the Public Utility Holding Company Act of 1935, as amended.1
(d) Investigation of costs
The Commission upon its own motion, or upon
the request of any State commission whenever
it can do so without prejudice to the efficient
and proper conduct of its affairs, may investigate and determine the cost of the production
or transmission of electric energy by means of
facilities under the jurisdiction of the Commission in cases where the Commission has no authority to establish a rate governing the sale of
such energy.
(e) Short-term sales
(1) In this subsection:
(A) The term ‘‘short-term sale’’ means an
agreement for the sale of electric energy at
wholesale in interstate commerce that is for a
period of 31 days or less (excluding monthly
contracts subject to automatic renewal).
(B) The term ‘‘applicable Commission rule’’
means a Commission rule applicable to sales
at wholesale by public utilities that the Commission determines after notice and comment
should also be applicable to entities subject to
this subsection.
(2) If an entity described in section 824(f) of
this title voluntarily makes a short-term sale of
electric energy through an organized market in
which the rates for the sale are established by
Commission-approved tariff (rather than by contract) and the sale violates the terms of the tariff or applicable Commission rules in effect at
the time of the sale, the entity shall be subject
to the refund authority of the Commission under
this section with respect to the violation.
(3) This section shall not apply to—
(A) any entity that sells in total (including
affiliates of the entity) less than 8,000,000
megawatt hours of electricity per year; or
(B) an electric cooperative.
(4)(A) The Commission shall have refund authority under paragraph (2) with respect to a
voluntary short term sale of electric energy by
1 See

References in Text note below.

§ 824e

TITLE 16—CONSERVATION

the Bonneville Power Administration only if the
sale is at an unjust and unreasonable rate.
(B) The Commission may order a refund under
subparagraph (A) only for short-term sales made
by the Bonneville Power Administration at
rates that are higher than the highest just and
reasonable rate charged by any other entity for
a short-term sale of electric energy in the same
geographic market for the same, or most nearly
comparable, period as the sale by the Bonneville
Power Administration.
(C) In the case of any Federal power marketing agency or the Tennessee Valley Authority,
the Commission shall not assert or exercise any
regulatory authority or power under paragraph
(2) other than the ordering of refunds to achieve
a just and reasonable rate.
(June 10, 1920, ch. 285, pt. II, § 206, as added Aug.
26, 1935, ch. 687, title II, § 213, 49 Stat. 852; amended Pub. L. 100–473, § 2, Oct. 6, 1988, 102 Stat. 2299;
Pub. L. 109–58, title XII, §§ 1285, 1286, 1295(b), Aug.
8, 2005, 119 Stat. 980, 981, 985.)
REFERENCES IN TEXT
The Public Utility Holding Company Act of 1935, referred to in subsec. (c), is title I of act Aug. 26, 1935, ch.
687, 49 Stat. 803, as amended, which was classified generally to chapter 2C (§ 79 et seq.) of Title 15, Commerce
and Trade, prior to repeal by Pub. L. 109–58, title XII,
§ 1263, Aug. 8, 2005, 119 Stat. 974. For complete classification of this Act to the Code, see Tables.
AMENDMENTS
2005—Subsec. (a). Pub. L. 109–58, § 1295(b)(1), substituted ‘‘hearing held’’ for ‘‘hearing had’’ in first sentence.
Subsec. (b). Pub. L. 109–58, § 1295(b)(2), struck out ‘‘the
public utility to make’’ before ‘‘refunds of any amounts
paid’’ in seventh sentence.
Pub. L. 109–58, § 1285, in second sentence, substituted
‘‘the date of the filing of such complaint nor later than
5 months after the filing of such complaint’’ for ‘‘the
date 60 days after the filing of such complaint nor later
than 5 months after the expiration of such 60-day period’’, in third sentence, substituted ‘‘the date of the
publication’’ for ‘‘the date 60 days after the publication’’ and ‘‘5 months after the publication date’’ for ‘‘5
months after the expiration of such 60-day period’’, and
in fifth sentence, substituted ‘‘If no final decision is
rendered by the conclusion of the 180-day period commencing upon initiation of a proceeding pursuant to
this section, the Commission shall state the reasons
why it has failed to do so and shall state its best estimate as to when it reasonably expects to make such decision’’ for ‘‘If no final decision is rendered by the refund effective date or by the conclusion of the 180-day
period commencing upon initiation of a proceeding pursuant to this section, whichever is earlier, the Commission shall state the reasons why it has failed to do so
and shall state its best estimate as to when it reasonably expects to make such decision’’.
Subsec. (e). Pub. L. 109–58, § 1286, added subsec. (e).
1988—Subsec. (a). Pub. L. 100–473, § 2(1), inserted provisions for a statement of reasons for listed changes,
hearings, and specification of issues.
Subsecs. (b) to (d). Pub. L. 100–473, § 2(2), added subsecs. (b) and (c) and redesignated former subsec. (b) as
(d).
EFFECTIVE DATE OF 1988 AMENDMENT
Section 4 of Pub. L. 100–473 provided that: ‘‘The
amendments made by this Act [amending this section]
are not applicable to complaints filed or motions initiated before the date of enactment of this Act [Oct. 6,
1988] pursuant to section 206 of the Federal Power Act
[this section]: Provided, however, That such complaints
may be withdrawn and refiled without prejudice.’’

§ 824f

TITLE 16—CONSERVATION
LIMITATION ON AUTHORITY PROVIDED

Section 3 of Pub. L. 100–473 provided that: ‘‘Nothing
in subsection (c) of section 206 of the Federal Power
Act, as amended (16 U.S.C. 824e(c)) shall be interpreted
to confer upon the Federal Energy Regulatory Commission any authority not granted to it elsewhere in such
Act [16 U.S.C. 791a et seq.] to issue an order that (1) requires a decrease in system production or transmission
costs to be paid by one or more electric utility companies of a registered holding company; and (2) is based
upon a determination that the amount of such decrease
should be paid through an increase in the costs to be
paid by other electric utility companies of such registered holding company. For purposes of this section,
the terms ‘electric utility companies’ and ‘registered
holding company’ shall have the same meanings as provided in the Public Utility Holding Company Act of
1935, as amended [15 U.S.C. 79 et seq.].’’

Page 1334

§ 824h. References to State boards by Commission

(a) Investigation of property costs
The Commission may investigate and ascertain the actual legitimate cost of the property
of every public utility, the depreciation therein,
and, when found necessary for rate-making purposes, other facts which bear on the determination of such cost or depreciation, and the fair
value of such property.
(b) Request for inventory and cost statements
Every public utility upon request shall file
with the Commission an inventory of all or any
part of its property and a statement of the original cost thereof, and shall keep the Commission
informed regarding the cost of all additions, betterments, extensions, and new construction.

(a) Composition of boards; force and effect of
proceedings
The Commission may refer any matter arising
in the administration of this subchapter to a
board to be composed of a member or members,
as determined by the Commission, from the
State or each of the States affected or to be affected by such matter. Any such board shall be
vested with the same power and be subject to
the same duties and liabilities as in the case of
a member of the Commission when designated
by the Commission to hold any hearings. The
action of such board shall have such force and
effect and its proceedings shall be conducted in
such manner as the Commission shall by regulations prescribe. The board shall be appointed by
the Commission from persons nominated by the
State commission of each State affected or by
the Governor of such State if there is no State
commission. Each State affected shall be entitled to the same number of representatives on
the board unless the nominating power of such
State waives such right. The Commission shall
have discretion to reject the nominee from any
State, but shall thereupon invite a new nomination from that State. The members of a board
shall receive such allowances for expenses as the
Commission shall provide. The Commission
may, when in its discretion sufficient reason exists therefor, revoke any reference to such a
board.
(b) Cooperation with State commissions
The Commission may confer with any State
commission regarding the relationship between
rate structures, costs, accounts, charges, practices, classifications, and regulations of public
utilities subject to the jurisdiction of such State
commission and of the Commission; and the
Commission is authorized, under such rules and
regulations as it shall prescribe, to hold joint
hearings with any State commission in connection with any matter with respect to which the
Commission is authorized to act. The Commission is authorized in the administration of this
chapter to avail itself of such cooperation, services, records, and facilities as may be afforded
by any State commission.
(c) Availability of information and reports to
State commissions; Commission experts
The Commission shall make available to the
several State commissions such information and
reports as may be of assistance in State regulation of public utilities. Whenever the Commission can do so without prejudice to the efficient
and proper conduct of its affairs, it may upon request from a State make available to such State
as witnesses any of its trained rate, valuation,
or other experts, subject to reimbursement to
the Commission by such State of the compensation and traveling expenses of such witnesses.
All sums collected hereunder shall be credited to
the appropriation from which the amounts were
expended in carrying out the provisions of this
subsection.

(June 10, 1920, ch. 285, pt. II, § 208, as added Aug.
26, 1935, ch. 687, title II, § 213, 49 Stat. 853.)

(June 10, 1920, ch. 285, pt. II, § 209, as added Aug.
26, 1935, ch. 687, title II, § 213, 49 Stat. 853.)

STUDY
Section 5 of Pub. L. 100–473 directed that, no earlier
than three years and no later than four years after Oct.
6, 1988, Federal Energy Regulatory Commission perform
a study of effect of amendments to this section, analyzing (1) impact, if any, of such amendments on cost of
capital paid by public utilities, (2) any change in average time taken to resolve proceedings under this section, and (3) such other matters as Commission may
deem appropriate in public interest, with study to be
sent to Committee on Energy and Natural Resources of
Senate and Committee on Energy and Commerce of
House of Representatives.

§ 824f. Ordering furnishing of adequate service
Whenever the Commission, upon complaint of
a State commission, after notice to each State
commission and public utility affected and after
opportunity for hearing, shall find that any
interstate service of any public utility is inadequate or insufficient, the Commission shall determine the proper, adequate, or sufficient service to be furnished, and shall fix the same by its
order, rule, or regulation: Provided, That the
Commission shall have no authority to compel
the enlargement of generating facilities for such
purposes, nor to compel the public utility to sell
or exchange energy when to do so would impair
its ability to render adequate service to its customers.
(June 10, 1920, ch. 285, pt. II, § 207, as added Aug.
26, 1935, ch. 687, title II, § 213, 49 Stat. 853.)
§ 824g. Ascertainment of cost of property and depreciation

Page 1335

§ 824j

TITLE 16—CONSERVATION

§ 824i. Interconnection authority
(a) Powers of Commission; application by State
regulatory authority
(1) Upon application of any electric utility,
Federal power marketing agency, geothermal
power producer (including a producer which is
not an electric utility), qualifying cogenerator,
or qualifying small power producer, the Commission may issue an order requiring—
(A) the physical connection of any cogeneration facility, any small power production facility, or the transmission facilities of any
electric utility, with the facilities of such applicant,
(B) such action as may be necessary to make
effective any physical connection described in
subparagraph (A), which physical connection
is ineffective for any reason, such as inadequate size, poor maintenance, or physical unreliability,
(C) such sale or exchange of electric energy
or other coordination, as may be necessary to
carry out the purposes of any order under subparagraph (A) or (B), or
(D) such increase in transmission capacity
as may be necessary to carry out the purposes
of any order under subparagraph (A) or (B).
(2) Any State regulatory authority may apply
to the Commission for an order for any action
referred to in subparagraph (A), (B), (C), or (D)
of paragraph (1). No such order may be issued by
the Commission with respect to a Federal power
marketing agency upon application of a State
regulatory authority.
(b) Notice, hearing and determination by Commission
Upon receipt of an application under subsection (a) of this section, the Commission
shall—
(1) issue notice to each affected State regulatory authority, each affected electric utility, each affected Federal power marketing
agency, each affected owner or operator of a
cogeneration facility or of a small power production facility, and to the public.
(2) afford an opportunity for an evidentiary
hearing, and
(3) make a determination with respect to the
matters referred to in subsection (c) of this
section.
(c) Necessary findings
No order may be issued by the Commission
under subsection (a) of this section unless the
Commission determines that such order—
(1) is in the public interest,
(2) would—
(A) encourage overall conservation of energy or capital,
(B) optimize the efficiency of use of facilities and resources, or
(C) improve the reliability of any electric
utility system or Federal power marketing
agency to which the order applies, and
(3) meets the requirements of section 824k of
this title.
(d) Motion of Commission
The Commission may, on its own motion,
after compliance with the requirements of para-

graphs (1) and (2) of subsection (b) of this section, issue an order requiring any action described in subsection (a)(1) of this section if the
Commission determines that such order meets
the requirements of subsection (c) of this section. No such order may be issued upon the Commission’s own motion with respect to a Federal
power marketing agency.
(e) Definitions
(1) As used in this section, the term ‘‘facilities’’ means only facilities used for the generation or transmission of electric energy.
(2) With respect to an order issued pursuant to
an application of a qualifying cogenerator or
qualifying small power producer under subsection (a)(1) of this section, the term ‘‘facilities
of such applicant’’ means the qualifying cogeneration facilities or qualifying small power production facilities of the applicant, as specified
in the application. With respect to an order issued pursuant to an application under subsection (a)(2) of this section, the term ‘‘facilities
of such applicant’’ means the qualifying cogeneration facilities, qualifying small power production facilities, or the transmission facilities
of an electric utility, as specified in the application. With respect to an order issued by the
Commission on its own motion under subsection
(d) of this section, such term means the qualifying cogeneration facilities, qualifying small
power production facilities, or the transmission
facilities of an electric utility, as specified in
the proposed order.
(June 10, 1920, ch. 285, pt. II, § 210, as added Pub.
L. 95–617, title II, § 202, Nov. 9, 1978, 92 Stat. 3135;
amended Pub. L. 96–294, title VI, § 643(a)(2), June
30, 1980, 94 Stat. 770.)
AMENDMENTS
1980—Subsec. (a)(1). Pub. L. 96–294 added applicability
to geothermal power producers.
STUDY AND REPORT TO CONGRESSIONAL COMMITTEES ON
APPLICATION OF PROVISIONS RELATING TO COGENERATION, SMALL POWER PRODUCTION, AND INTERCONNECTION AUTHORITY TO HYDROELECTRIC POWER FACILITIES

For provisions requiring the Federal Energy Regulatory Commission to conduct a study and report to
Congress on whether the benefits of this section and
section 824a–3 of this title should be applied to hydroelectric power facilities utilizing new dams or diversions, within the meaning of section 824a–3(k) of this
title, see section 8(d) of Pub. L. 99–495, set out as a note
under section 824a–3 of this title.

§ 824j. Wheeling authority
(a) Transmission service by any electric utility;
notice, hearing and findings by Commission
Any electric utility, Federal power marketing
agency, or any other person generating electric
energy for sale for resale, may apply to the
Commission for an order under this subsection
requiring a transmitting utility to provide
transmission services (including any enlargement of transmission capacity necessary to provide such services) to the applicant. Upon receipt of such application, after public notice and
notice to each affected State regulatory authority, each affected electric utility, and each affected Federal power marketing agency, and

§ 824j

TITLE 16—CONSERVATION

after affording an opportunity for an evidentiary hearing, the Commission may issue
such order if it finds that such order meets the
requirements of section 824k of this title, and
would otherwise be in the public interest. No
order may be issued under this subsection unless
the applicant has made a request for transmission services to the transmitting utility that
would be the subject of such order at least 60
days prior to its filing of an application for such
order.
(b) Reliability of electric service
No order may be issued under this section or
section 824i of this title if, after giving consideration to consistently applied regional or national reliability standards, guidelines, or criteria, the Commission finds that such order
would unreasonably impair the continued reliability of electric systems affected by the order.
(c) Replacement of electric energy
No order may be issued under subsection (a) or
(b) of this section which requires the transmitting utility subject to the order to transmit,
during any period, an amount of electric energy
which replaces any amount of electric energy—
(1) required to be provided to such applicant
pursuant to a contract during such period, or
(2) currently provided to the applicant by
the utility subject to the order pursuant to a
rate schedule on file during such period with
the Commission: Provided, That nothing in
this subparagraph shall prevent an application
for an order hereunder to be filed prior to termination or modification of an existing rate
schedule: Provided, That such order shall not
become effective until termination of such
rate schedule or the modification becomes effective.
(d) Termination or modification of order; notice,
hearing and findings of Commission; contents of order; inclusion in order of terms
and conditions agreed upon by parties
(1) Any transmitting utility ordered under
subsection (a) or (b) of this section to provide
transmission services may apply to the Commission for an order permitting such transmitting
utility to cease providing all, or any portion of,
such services. After public notice, notice to each
affected State regulatory authority, each affected Federal power marketing agency, each affected transmitting utility, and each affected
electric utility, and after an opportunity for an
evidentiary hearing, the Commission shall issue
an order terminating or modifying the order issued under subsection (a) or (b) of this section,
if the transmitting utility providing such transmission services has demonstrated, and the
Commission has found, that—
(A) due to changed circumstances, the requirements applicable, under this section and
section 824k of this title, to the issuance of an
order under subsection (a) or (b) of this section
are no longer met, or 1
(B) any transmission capacity of the utility
providing transmission services under such
order which was, at the time such order was
issued, in excess of the capacity necessary to
1 So

in original. The word ‘‘or’’ probably should not appear.

Page 1336

serve its own customers is no longer in excess
of the capacity necessary for such purposes, or
(C) the ordered transmission services require
enlargement of transmission capacity and the
transmitting utility subject to the order has
failed, after making a good faith effort, to obtain the necessary approvals or property
rights under applicable Federal, State, and
local laws.
No order shall be issued under this subsection
pursuant to a finding under subparagraph (A)
unless the Commission finds that such order is
in the public interest.
(2) Any order issued under this subsection terminating or modifying an order issued under
subsection (a) or (b) of this section shall—
(A) provide for any appropriate compensation, and
(B) provide the affected electric utilities
adequate opportunity and time to—
(i) make suitable alternative arrangements for any transmission services terminated or modified, and
(ii) insure that the interests of ratepayers
of such utilities are adequately protected.
(3) No order may be issued under this subsection terminating or modifying any order issued under subsection (a) or (b) of this section if
the order under subsection (a) or (b) of this section includes terms and conditions agreed upon
by the parties which—
(A) fix a period during which transmission
services are to be provided under the order
under subsection (a) or (b) of this section, or
(B) otherwise provide procedures or methods
for terminating or modifying such order (including, if appropriate, the return of the transmission capacity when necessary to take into
account an increase, after the issuance of such
order, in the needs of the transmitting utility
subject to such order for transmission capacity).
(e) ‘‘Facilities’’ defined
As used in this section, the term ‘‘facilities’’
means only facilities used for the generation or
transmission of electric energy.
(June 10, 1920, ch. 285, pt. II, § 211, as added Pub.
L. 95–617, title II, § 203, Nov. 9, 1978, 92 Stat. 3136;
amended Pub. L. 96–294, title VI, § 643(a)(3), June
30, 1980, 94 Stat. 770; Pub. L. 99–495, § 15, Oct. 16,
1986, 100 Stat. 1257; Pub. L. 102–486, title VII,
§ 721, Oct. 24, 1992, 106 Stat. 2915; Pub. L. 109–58,
title XII, § 1295(c), Aug. 8, 2005, 119 Stat. 985.)
AMENDMENTS
2005—Subsec. (c). Pub. L. 109–58, § 1295(c)(1), struck
out par. (2) designation before introductory provisions,
redesignated former subpars. (A) and (B) as pars. (1) and
(2), respectively, and in par. (2) substituted ‘‘termination or modification’’ for ‘‘termination of modification’’.
Subsec. (d)(1). Pub. L. 109–58, § 1295(c)(2), substituted
‘‘if the transmitting utility providing’’ for ‘‘if the electric utility providing’’ in introductory provisions.
1992—Subsec. (a). Pub. L. 102–486, § 721(1), amended
first sentence generally. Prior to amendment, first sentence read as follows: ‘‘Any electric utility, geothermal
power producer (including a producer which is not an
electric utility), or Federal power marketing agency
may apply to the Commission for an order under this
subsection requiring any other electric utility to pro-

Page 1337

TITLE 16—CONSERVATION

vide transmission services to the applicant (including
any enlargement of transmission capacity necessary to
provide such services).’’
Pub. L. 102–486, § 721(2), in second sentence, substituted ‘‘the Commission may issue such order if it
finds that such order meets the requirements of section
824k of this title, and would otherwise be in the public
interest. No order may be issued under this subsection
unless the applicant has made a request for transmission services to the transmitting utility that would
be the subject of such order at least 60 days prior to its
filing of an application for such order.’’ for ‘‘the Commission may issue such order if it finds that such
order—
‘‘(1) is in the public interest,
‘‘(2) would—
‘‘(A) conserve a significant amount of energy,
‘‘(B) significantly promote the efficient use of facilities and resources, or
‘‘(C) improve the reliability of any electric utility
system to which the order applies, and
‘‘(3) meets the requirements of section 824k of this
title.’’
Subsec. (b). Pub. L. 102–486, § 721(3), amended subsec.
(b) generally, substituting provisions relating to reliability of electric service for provisions which related
to transmission service by sellers of electric energy for
resale and notice, hearing, and determinations by Commission.
Subsec. (c). Pub. L. 102–486, § 721(4), struck out pars.
(1), (3), and (4), and substituted ‘‘which requires the
transmitting’’ for ‘‘which requires the electric’’ in introductory provisions of par. (2). Prior to amendment,
pars. (1), (3), and (4) read as follows:
‘‘(1) No order may be issued under subsection (a) of
this section unless the Commission determines that
such order would reasonably preserve existing competitive relationships.
‘‘(3) No order may be issued under the authority of
subsection (a) or (b) of this section which is inconsistent with any State law which governs the retail marketing areas of electric utilities.
‘‘(4) No order may be issued under subsection (a) or
(b) of this section which provides for the transmission
of electric energy directly to an ultimate consumer.’’
Subsec. (d). Pub. L. 102–486, § 721(5), in first sentence
substituted ‘‘transmitting’’ for ‘‘electric’’ before ‘‘utility’’ in two places, in second sentence inserted ‘‘each
affected transmitting utility,’’ before ‘‘and each affected electric utility’’, in par. (1) substituted ‘‘, or’’
for period at end of subpar. (B) and added subpar. (C),
and in par. (3)(B) substituted ‘‘transmitting’’ for ‘‘electric’’ before ‘‘utility’’.
1986—Subsec. (c)(2)(B). Pub. L. 99–495 inserted provisions that nothing in this subparagraph shall prevent
an application for an order hereunder to be filed prior
to termination or modification of an existing rate
schedule, provided that such order shall not become effective until termination of such rate schedule or the
modification becomes effective.
1980—Subsec. (a). Pub. L. 96–294 added applicability to
geothermal power producers.
EFFECTIVE DATE OF 1986 AMENDMENT
Amendment by Pub. L. 99–495 effective with respect
to each license, permit, or exemption issued under this
chapter after Oct. 16, 1986, see section 18 of Pub. L.
99–495, set out as a note under section 797 of this title.
STATE AUTHORITIES; CONSTRUCTION
Nothing in amendment by Pub. L. 102–486 to be construed as affecting or intending to affect, or in any way
to interfere with, authority of any State or local government relating to environmental protection or siting
of facilities, see section 731 of Pub. L. 102–486, set out
as a note under section 796 of this title.

§ 824j–1

§ 824j–1. Open access by unregulated transmitting utilities
(a) Definition of unregulated transmitting utility
In this section, the term ‘‘unregulated transmitting utility’’ means an entity that—
(1) owns or operates facilities used for the
transmission of electric energy in interstate
commerce; and
(2) is an entity described in section 824(f) of
this title.
(b) Transmission operation services
Subject to section 824k(h) of this title, the
Commission may, by rule or order, require an
unregulated transmitting utility to provide
transmission services—
(1) at rates that are comparable to those
that the unregulated transmitting utility
charges itself; and
(2) on terms and conditions (not relating to
rates) that are comparable to those under
which the unregulated transmitting utility
provides transmission services to itself and
that are not unduly discriminatory or preferential.
(c) Exemption
The Commission shall exempt from any rule
or order under this section any unregulated
transmitting utility that—
(1) sells not more than 4,000,000 megawatt
hours of electricity per year;
(2) does not own or operate any transmission
facilities that are necessary for operating an
interconnected transmission system (or any
portion of the system); or
(3) meets other criteria the Commission determines to be in the public interest.
(d) Local distribution facilities
The requirements of subsection (b) of this section shall not apply to facilities used in local
distribution.
(e) Exemption termination
If the Commission, after an evidentiary hearing held on a complaint and after giving consideration to reliability standards established
under section 824o of this title, finds on the basis
of a preponderance of the evidence that any exemption granted pursuant to subsection (c) of
this section unreasonably impairs the continued
reliability of an interconnected transmission
system, the Commission shall revoke the exemption granted to the transmitting utility.
(f) Application to unregulated transmitting utilities
The rate changing procedures applicable to
public utilities under subsections (c) and (d) of
section 824d of this title are applicable to unregulated transmitting utilities for purposes of
this section.
(g) Remand
In exercising authority under subsection (b)(1)
of this section, the Commission may remand
transmission rates to an unregulated transmitting utility for review and revision if necessary
to meet the requirements of subsection (b) of
this section.
(h) Other requests
The provision of transmission services under
subsection (b) of this section does not preclude

§ 824k

TITLE 16—CONSERVATION

a request for transmission services under section 824j of this title.
(i) Limitation
The Commission may not require a State or
municipality to take action under this section
that would violate a private activity bond rule
for purposes of section 141 of title 26.
(j) Transfer of control of transmitting facilities
Nothing in this section authorizes the Commission to require an unregulated transmitting
utility to transfer control or operational control
of its transmitting facilities to a Transmission
Organization that is designated to provide nondiscriminatory transmission access.
(June 10, 1920, ch. 285, pt. II, § 211A, as added Pub.
L. 109–58, title XII, § 1231, Aug. 8, 2005, 119 Stat.
955.)
§ 824k. Orders
wheeling

requiring

interconnection

or

(a) Rates, charges, terms, and conditions for
wholesale transmission services
An order under section 824j of this title shall
require the transmitting utility subject to the
order to provide wholesale transmission services
at rates, charges, terms, and conditions which
permit the recovery by such utility of all the
costs incurred in connection with the transmission services and necessary associated services, including, but not limited to, an appropriate share, if any, of legitimate, verifiable and
economic costs, including taking into account
any benefits to the transmission system of providing the transmission service, and the costs of
any enlargement of transmission facilities. Such
rates, charges, terms, and conditions shall promote the economically efficient transmission
and generation of electricity and shall be just
and reasonable, and not unduly discriminatory
or preferential. Rates, charges, terms, and conditions for transmission services provided pursuant to an order under section 824j of this title
shall ensure that, to the extent practicable,
costs incurred in providing the wholesale transmission services, and properly allocable to the
provision of such services, are recovered from
the applicant for such order and not from a
transmitting utility’s existing wholesale, retail,
and transmission customers.
(b) Repealed. Pub. L. 102–486, title VII, § 722(1),
Oct. 24, 1992, 106 Stat. 2916
(c) Issuance of proposed order; agreement by
parties to terms and conditions of order; approval by Commission; inclusion in final
order; failure to agree
(1) Before issuing an order under section 824i
of this title or subsection (a) or (b) of section
824j of this title, the Commission shall issue a
proposed order and set a reasonable time for
parties to the proposed interconnection or
transmission order to agree to terms and conditions under which such order is to be carried
out, including the apportionment of costs between them and the compensation or reimbursement reasonably due to any of them. Such proposed order shall not be reviewable or enforceable in any court. The time set for such parties

Page 1338

to agree to such terms and conditions may be
shortened if the Commission determines that
delay would jeopardize the attainment of the
purposes of any proposed order. Any terms and
conditions agreed to by the parties shall be subject to the approval of the Commission.
(2)(A) If the parties agree as provided in paragraph (1) within the time set by the Commission
and the Commission approves such agreement,
the terms and conditions shall be included in
the final order. In the case of an order under section 824i of this title, if the parties fail to agree
within the time set by the Commission or if the
Commission does not approve any such agreement, the Commission shall prescribe such
terms and conditions and include such terms
and conditions in the final order.
(B) In the case of any order applied for under
section 824j of this title, if the parties fail to
agree within the time set by the Commission,
the Commission shall prescribe such terms and
conditions in the final order.
(d) Statement of reasons for denial
If the Commission does not issue any order applied for under section 824i or 824j of this title,
the Commission shall, by order, deny such application and state the reasons for such denial.
(e) Savings provisions
(1) No provision of section 824i, 824j, 824m of
this title, or this section shall be treated as requiring any person to utilize the authority of
any such section in lieu of any other authority
of law. Except as provided in section 824i, 824j,
824m of this title, or this section, such sections
shall not be construed as limiting or impairing
any authority of the Commission under any
other provision of law.
(2) Sections 824i, 824j, 824l, 824m of this title,
and this section, shall not be construed to modify, impair, or supersede the antitrust laws. For
purposes of this section, the term ‘‘antitrust
laws’’ has the meaning given in subsection (a) of
the first sentence of section 12 of title 15, except
that such term includes section 45 of title 15 to
the extent that such section relates to unfair
methods of competition.
(f) Effective date of order; hearing; notice; review
(1) No order under section 824i or 824j of this
title requiring the Tennessee Valley Authority
(hereinafter in this subsection referred to as the
‘‘TVA’’) to take any action shall take effect for
60 days following the date of issuance of the
order. Within 60 days following the issuance by
the Commission of any order under section 824i
or of section 824j of this title requiring the TVA
to enter into any contract for the sale or delivery of power, the Commission may on its own
motion initiate, or upon petition of any aggrieved person shall initiate, an evidentiary
hearing to determine whether or not such sale
or delivery would result in violation of the third
sentence of section 15d(a) of the Tennessee Valley Authority Act of 1933 (16 U.S.C. 831n–4), hereinafter in this subsection referred to as the TVA
Act [16 U.S.C. 831 et seq.].
(2) Upon initiation of any evidentiary hearing
under paragraph (1), the Commission shall give
notice thereof to any applicant who applied for

Page 1339

TITLE 16—CONSERVATION

and obtained the order from the Commission, to
any electric utility or other entity subject to
such order, and to the public, and shall promptly
make the determination referred to in paragraph (1). Upon initiation of such hearing, the
Commission shall stay the effectiveness of the
order under section 824i or 824j of this title until
whichever of the following dates is applicable—
(A) the date on which there is a final determination (including any judicial review thereof under paragraph (3)) that no such violation
would result from such order, or
(B) the date on which a specific authorization of the Congress (within the meaning of
the third sentence of section 15d(a) of the TVA
Act [16 U.S.C. 831n–4(a)]) takes effect.
(3) Any determination under paragraph (1)
shall be reviewable only in the appropriate court
of the United States upon petition filed by any
aggrieved person or municipality within 60 days
after such determination, and such court shall
have jurisdiction to grant appropriate relief.
Any applicant who applied for and obtained the
order under section 824i or 824j of this title, and
any electric utility or other entity subject to
such order shall have the right to intervene in
any such proceeding in such court. Except for
review by such court (and any appeal or other
review by an appellate court of the United
States), no court shall have jurisdiction to consider any action brought by any person to enjoin
the carrying out of any order of the Commission
under section 824i or section 824j of this title requiring the TVA to take any action on the
grounds that such action requires a specific authorization of the Congress pursuant to the
third sentence of section 15d(a) of the TVA Act
[16 U.S.C. 831n–4(a)].
(g) Prohibition on orders inconsistent with retail
marketing areas
No order may be issued under this chapter
which is inconsistent with any State law which
governs the retail marketing areas of electric
utilities.
(h) Prohibition on mandatory retail wheeling
and sham wholesale transactions
No order issued under this chapter shall be
conditioned upon or require the transmission of
electric energy:
(1) directly to an ultimate consumer, or
(2) to, or for the benefit of, an entity if such
electric energy would be sold by such entity
directly to an ultimate consumer, unless:
(A) such entity is a Federal power marketing agency; the Tennessee Valley Authority;
a State or any political subdivision of a
State (or an agency, authority, or instrumentality of a State or a political subdivision); a corporation or association that has
ever received a loan for the purposes of providing electric service from the Administrator of the Rural Electrification Administration under the Rural Electrification Act
of 1936 [7 U.S.C. 901 et seq.]; a person having
an obligation arising under State or local
law (exclusive of an obligation arising solely
from a contract entered into by such person)
to provide electric service to the public; or
any corporation or association which is

§ 824k

wholly owned, directly or indirectly, by any
one or more of the foregoing; and
(B) such entity was providing electric service to such ultimate consumer on October 24,
1992, or would utilize transmission or distribution facilities that it owns or controls
to deliver all such electric energy to such
electric consumer.
Nothing in this subsection shall affect any authority of any State or local government under
State law concerning the transmission of electric energy directly to an ultimate consumer.
(i) Laws applicable to Federal Columbia River
Transmission System
(1) The Commission shall have authority pursuant to section 824i of this title, section 824j of
this title, this section, and section 824l of this
title to (A) order the Administrator of the Bonneville Power Administration to provide transmission service and (B) establish the terms and
conditions of such service. In applying such sections to the Federal Columbia River Transmission System, the Commission shall assure
that—
(i) the provisions of otherwise applicable
Federal laws shall continue in full force and
effect and shall continue to be applicable to
the system; and
(ii) the rates for the transmission of electric
power on the system shall be governed only by
such otherwise applicable provisions of law
and not by any provision of section 824i of this
title, section 824j of this title, this section, or
section 824l of this title, except that no rate
for the transmission of power on the system
shall be unjust, unreasonable, or unduly discriminatory or preferential, as determined by
the Commission.
(2) Notwithstanding any other provision of
this chapter with respect to the procedures for
the determination of terms and conditions for
transmission service—
(A) when the Administrator of the Bonneville Power Administration either (i) in response to a written request for specific transmission service terms and conditions does not
offer the requested terms and conditions, or
(ii) proposes to establish terms and conditions
of general applicability for transmission service on the Federal Columbia River Transmission System, then the Administrator may
provide opportunity for a hearing and, in so
doing, shall—
(I) give notice in the Federal Register and
state in such notice the written explanation
of the reasons why the specific terms and
conditions for transmission services are not
being offered or are being proposed;
(II) adhere to the procedural requirements
of paragraphs (1) through (3) of section
839e(i) of this title, except that the hearing
officer shall, unless the hearing officer becomes unavailable to the agency, make a
recommended decision to the Administrator
that states the hearing officer’s findings and
conclusions, and the reasons or basis thereof, on all material issues of fact, law, or discretion presented on the record; and
(III) make a determination, setting forth
the reasons for reaching any findings and

§ 824k

TITLE 16—CONSERVATION

conclusions which may differ from those of
the hearing officer, based on the hearing
record, consideration of the hearing officer’s
recommended decision, section 824j of this
title and this section, as amended by the Energy Policy Act of 1992, and the provisions of
law as preserved in this section; and
(B) if application is made to the Commission
under section 824j of this title for transmission
service under terms and conditions different
than those offered by the Administrator, or
following the denial of a request for transmission service by the Administrator, and
such application is filed within 60 days of the
Administrator’s final determination and in accordance with Commission procedures, the
Commission shall—
(i) in the event the Administrator has conducted a hearing as herein provided for (I)
accord parties to the Administrator’s hearing the opportunity to offer for the Commission record materials excluded by the Administrator from the hearing record, (II) accord such parties the opportunity to submit
for the Commission record comments on appropriate terms and conditions, (III) afford
those parties the opportunity for a hearing if
and to the extent that the Commission finds
the Administrator’s hearing record to be inadequate to support a decision by the Commission, and (IV) establish terms and conditions for or deny transmission service based
on the Administrator’s hearing record, the
Commission record, section 824j of this title
and this section, as amended by the Energy
Policy Act of 1992, and the provisions of law
as preserved in this section, or
(ii) in the event the Administrator has not
conducted a hearing as herein provided for,
determine whether to issue an order for
transmission service in accordance with section 824j of this title and this section, including providing the opportunity for a
hearing.
(3) Notwithstanding those provisions of section 825l(b) of this title which designate the
court in which review may be obtained, any
party to a proceeding concerning transmission
service sought to be furnished by the Administrator of the Bonneville Power Administration
seeking review of an order issued by the Commission in such proceeding shall obtain a review
of such order in the United States Court of Appeals for the Pacific Northwest, as that region is
defined by section 839a(14) of this title.
(4) To the extent the Administrator of the
Bonneville Power Administration cannot be required under section 824j of this title, as a result
of the Administrator’s other statutory mandates, either to (A) provide transmission service
to an applicant which the Commission would
otherwise order, or (B) provide such service
under rates, terms, and conditions which the
Commission would otherwise require, the applicant shall not be required to provide similar
transmission services to the Administrator or to
provide such services under similar rates, terms,
and conditions.
(5) The Commission shall not issue any order
under section 824i of this title, section 824j of

Page 1340

this title, this section, or section 824l of this
title requiring the Administrator of the Bonneville Power Administration to provide transmission service if such an order would impair
the Administrator’s ability to provide such
transmission service to the Administrator’s
power and transmission customers in the Pacific
Northwest, as that region is defined in section
839a(14) of this title, as is needed to assure adequate and reliable service to loads in that region.
(j) Equitability within territory restricted electric systems
With respect to an electric utility which is
prohibited by Federal law from being a source of
power supply, either directly or through a distributor of its electric energy, outside an area
set forth in such law, no order issued under section 824j of this title may require such electric
utility (or a distributor of such electric utility)
to provide transmission services to another entity if the electric energy to be transmitted will
be consumed within the area set forth in such
Federal law, unless the order is in furtherance of
a sale of electric energy to that electric utility:
Provided, however, That the foregoing provision
shall not apply to any area served at retail by
an electric transmission system which was such
a distributor on October 24, 1992, and which before October 1, 1991, gave its notice of termination under its power supply contract with
such electric utility.
(k) ERCOT utilities
(1) Rates
Any order under section 824j of this title requiring provision of transmission services in
whole or in part within ERCOT shall provide
that any ERCOT utility which is not a public
utility and the transmission facilities of which
are actually used for such transmission service is entitled to receive compensation based,
insofar as practicable and consistent with subsection (a) of this section, on the transmission
ratemaking methodology used by the Public
Utility Commission of Texas.
(2) Definitions
For purposes of this subsection—
(A) the term ‘‘ERCOT’’ means the Electric
Reliability Council of Texas; and
(B) the term ‘‘ERCOT utility’’ means a
transmitting utility which is a member of
ERCOT.
(June 10, 1920, ch. 285, pt. II, § 212, as added Pub.
L. 95–617, title II, § 204(a), Nov. 9, 1978, 92 Stat.
3138; amended Pub. L. 102–486, title VII, § 722,
Oct. 24, 1992, 106 Stat. 2916.)
REFERENCES IN TEXT
The TVA Act, referred to in subsec. (f)(1), means act
May 18, 1933, ch. 32, 48 Stat. 58, as amended, known as
the Tennessee Valley Authority Act of 1933, which is
classified generally to chapter 12A (§ 831 et seq.) of this
title. For complete classification of this Act to the
Code, see section 831 of this title and Tables.
The Rural Electrification Act of 1936, referred to in
subsec. (h)(2)(A), is act May 20, 1936, ch. 432, 49 Stat.
1363, as amended, which is classified generally to chapter 31 (§ 901 et seq.) of Title 7, Agriculture. For complete
classification of this Act to the Code, see section 901 of
Title 7 and Tables.

Page 1341

§ 824o

TITLE 16—CONSERVATION

The Energy Policy Act of 1992, referred to in subsec.
(i)(2)(A)(III), (B)(i), is Pub. L. 102–486, Oct. 24, 1992, 106
Stat. 2776. For complete classification of this Act to
the Code, see Short Title note set out under section
13201 of Title 42, The Public Health and Welfare and
Tables.
AMENDMENTS
1992—Subsec. (a). Pub. L. 102–486, § 722(1), added subsec. (a) and struck out former subsec. (a) which related
to determinations by Commission.
Subsec. (b). Pub. L. 102–486, § 722(1), struck out subsec.
(b) which required applicants for orders to be ready,
willing, and able to reimburse parties subject to such
orders.
Subsec. (e). Pub. L. 102–486, § 722(2), amended subsec.
(e) generally. Prior to amendment, subsec. (e) related
to utilization of interconnection or wheeling authority
in lieu of other authority and limitation of Commission
authority.
Subsecs. (g) to (k). Pub. L. 102–486, § 722(3), added subsecs. (g) to (k).
STATE AUTHORITIES; CONSTRUCTION
Nothing in amendment by Pub. L. 102–486 to be construed as affecting or intending to affect, or in any way
to interfere with, authority of any State or local government relating to environmental protection or siting
of facilities, see section 731 of Pub. L. 102–486, set out
as a note under section 796 of this title.

§ 824m. Sales by exempt wholesale generators
No rate or charge received by an exempt
wholesale generator for the sale of electric energy shall be lawful under section 824d of this
title if, after notice and opportunity for hearing,
the Commission finds that such rate or charge
results from the receipt of any undue preference
or advantage from an electric utility which is an
associate company or an affiliate of the exempt
wholesale generator. For purposes of this section, the terms ‘‘associate company’’ and ‘‘affiliate’’ shall have the same meaning as provided in
section 16451 of title 42.1
(June 10, 1920, ch. 285, pt. II, § 214, as added Pub.
L. 102–486, title VII, § 724, Oct. 24, 1992, 106 Stat.
2920; amended Pub. L. 109–58, title XII,
§ 1277(b)(2), Aug. 8, 2005, 119 Stat. 978.)
REFERENCES IN TEXT
Section 16451 of title 42, referred to in text, was in the
original ‘‘section 2(a) of the Public Utility Holding
Company Act of 2005’’ and was translated as reading
‘‘section 1262’’ of that Act, meaning section 1262 of subtitle F of title XII of Pub. L. 109–58, to reflect the probable intent of Congress, because subtitle F of title XII
of Pub. L. 109–58 does not contain a section 2 and section 1262 of subtitle F of title XII of Pub. L. 109–58 defines terms.

§ 824l. Information requirements
(a) Requests for wholesale transmission services
Whenever any electric utility, Federal power
marketing agency, or any other person generating electric energy for sale for resale makes a
good faith request to a transmitting utility to
provide wholesale transmission services and requests specific rates and charges, and other
terms and conditions, unless the transmitting
utility agrees to provide such services at rates,
charges, terms and conditions acceptable to
such person, the transmitting utility shall,
within 60 days of its receipt of the request, or
other mutually agreed upon period, provide such
person with a detailed written explanation, with
specific reference to the facts and circumstances
of the request, stating (1) the transmitting utility’s basis for the proposed rates, charges,
terms, and conditions for such services, and (2)
its analysis of any physical or other constraints
affecting the provision of such services.
(b) Transmission capacity and constraints
Not later than 1 year after October 24, 1992,
the Commission shall promulgate a rule requiring that information be submitted annually to
the Commission by transmitting utilities which
is adequate to inform potential transmission
customers, State regulatory authorities, and the
public of potentially available transmission capacity and known constraints.
(June 10, 1920, ch. 285, pt. II, § 213, as added Pub.
L. 102–486, title VII, § 723, Oct. 24, 1992, 106 Stat.
2919.)
STATE AUTHORITIES; CONSTRUCTION
Nothing in this section to be construed as affecting
or intending to affect, or in any way to interfere with,
authority of any State or local government relating to
environmental protection or siting of facilities, see section 731 of Pub. L. 102–486, set out as a note under section 796 of this title.

AMENDMENTS
2005—Pub. L. 109–58 substituted ‘‘section 16451 of title
42’’ for ‘‘section 79b(a) of title 15’’.
EFFECTIVE DATE OF 2005 AMENDMENT
Amendment by Pub. L. 109–58 effective 6 months after
Aug. 8, 2005, with provisions relating to effect of compliance with certain regulations approved and made effective prior to such date, see section 1274 of Pub. L.
109–58, set out as an Effective Date note under section
16451 of Title 42, The Public Health and Welfare.
STATE AUTHORITIES; CONSTRUCTION
Nothing in this section to be construed as affecting
or intending to affect, or in any way to interfere with,
authority of any State or local government relating to
environmental protection or siting of facilities, see section 731 of Pub. L. 102–486, set out as a note under section 796 of this title.

§ 824n. Repealed. Pub. L. 109–58, title
§ 1232(e)(3), Aug. 8, 2005, 119 Stat. 957

XII,

Section, Pub. L. 106–377, § 1(a)(2) [title III, § 311], Oct.
27, 2000, 114 Stat. 1441, 1441A–80, related to authority regarding formation and operation of regional transmission organizations.

§ 824o. Electric reliability
(a) Definitions
For purposes of this section:
(1) The term ‘‘bulk-power system’’ means—
(A) facilities and control systems necessary for operating an interconnected electric energy transmission network (or any
portion thereof); and
(B) electric energy from generation facilities needed to maintain transmission system
reliability.
The term does not include facilities used in
the local distribution of electric energy.
1 See

References in Text note below.

§ 824o

TITLE 16—CONSERVATION

(2) The terms ‘‘Electric Reliability Organization’’ and ‘‘ERO’’ mean the organization certified by the Commission under subsection (c)
of this section the purpose of which is to establish and enforce reliability standards for
the bulk-power system, subject to Commission
review.
(3) The term ‘‘reliability standard’’ means a
requirement, approved by the Commission
under this section, to provide for reliable operation of the bulk-power system. The term includes requirements for the operation of existing bulk-power system facilities, including
cybersecurity protection, and the design of
planned additions or modifications to such facilities to the extent necessary to provide for
reliable operation of the bulk-power system,
but the term does not include any requirement
to enlarge such facilities or to construct new
transmission capacity or generation capacity.
(4) The term ‘‘reliable operation’’ means operating the elements of the bulk-power system
within equipment and electric system thermal, voltage, and stability limits so that instability, uncontrolled separation, or cascading failures of such system will not occur as a
result of a sudden disturbance, including a
cybersecurity incident, or unanticipated failure of system elements.
(5) The term ‘‘Interconnection’’ means a geographic area in which the operation of bulkpower system components is synchronized
such that the failure of one or more of such
components may adversely affect the ability
of the operators of other components within
the system to maintain reliable operation of
the facilities within their control.
(6) The term ‘‘transmission organization’’
means a Regional Transmission Organization,
Independent System Operator, independent
transmission provider, or other transmission
organization finally approved by the Commission for the operation of transmission facilities.
(7) The term ‘‘regional entity’’ means an entity having enforcement authority pursuant to
subsection (e)(4) of this section.
(8) The term ‘‘cybersecurity incident’’ means
a malicious act or suspicious event that disrupts, or was an attempt to disrupt, the operation of those programmable electronic devices and communication networks including
hardware, software and data that are essential
to the reliable operation of the bulk power
system.
(b) Jurisdiction and applicability
(1) The Commission shall have jurisdiction,
within the United States, over the ERO certified
by the Commission under subsection (c) of this
section, any regional entities, and all users,
owners and operators of the bulk-power system,
including but not limited to the entities described in section 824(f) of this title, for purposes
of approving reliability standards established
under this section and enforcing compliance
with this section. All users, owners and operators of the bulk-power system shall comply with
reliability standards that take effect under this
section.
(2) The Commission shall issue a final rule to
implement the requirements of this section not
later than 180 days after August 8, 2005.

Page 1342

(c) Certification
Following the issuance of a Commission rule
under subsection (b)(2) of this section, any person may submit an application to the Commission for certification as the Electric Reliability
Organization. The Commission may certify one
such ERO if the Commission determines that
such ERO—
(1) has the ability to develop and enforce,
subject to subsection (e)(2) of this section, reliability standards that provide for an adequate level of reliability of the bulk-power
system; and
(2) has established rules that—
(A) assure its independence of the users
and owners and operators of the bulk-power
system, while assuring fair stakeholder representation in the selection of its directors
and balanced decisionmaking in any ERO
committee or subordinate organizational
structure;
(B) allocate equitably reasonable dues,
fees, and other charges among end users for
all activities under this section;
(C) provide fair and impartial procedures
for enforcement of reliability standards
through the imposition of penalties in accordance with subsection (e) of this section
(including limitations on activities, functions, or operations, or other appropriate
sanctions);
(D) provide for reasonable notice and opportunity for public comment, due process,
openness, and balance of interests in developing reliability standards and otherwise exercising its duties; and
(E) provide for taking, after certification,
appropriate steps to gain recognition in Canada and Mexico.
(d) Reliability standards
(1) The Electric Reliability Organization shall
file each reliability standard or modification to
a reliability standard that it proposes to be
made effective under this section with the Commission.
(2) The Commission may approve, by rule or
order, a proposed reliability standard or modification to a reliability standard if it determines
that the standard is just, reasonable, not unduly
discriminatory or preferential, and in the public
interest. The Commission shall give due weight
to the technical expertise of the Electric Reliability Organization with respect to the content
of a proposed standard or modification to a reliability standard and to the technical expertise
of a regional entity organized on an Interconnection-wide basis with respect to a reliability standard to be applicable within that Interconnection, but shall not defer with respect to
the effect of a standard on competition. A proposed standard or modification shall take effect
upon approval by the Commission.
(3) The Electric Reliability Organization shall
rebuttably presume that a proposal from a regional entity organized on an Interconnectionwide basis for a reliability standard or modification to a reliability standard to be applicable on
an Interconnection-wide basis is just, reasonable, and not unduly discriminatory or preferential, and in the public interest.

Page 1343

TITLE 16—CONSERVATION

(4) The Commission shall remand to the Electric Reliability Organization for further consideration a proposed reliability standard or a
modification to a reliability standard that the
Commission disapproves in whole or in part.
(5) The Commission, upon its own motion or
upon complaint, may order the Electric Reliability Organization to submit to the Commission a proposed reliability standard or a modification to a reliability standard that addresses
a specific matter if the Commission considers
such a new or modified reliability standard appropriate to carry out this section.
(6) The final rule adopted under subsection
(b)(2) of this section shall include fair processes
for the identification and timely resolution of
any conflict between a reliability standard and
any function, rule, order, tariff, rate schedule,
or agreement accepted, approved, or ordered by
the Commission applicable to a transmission organization. Such transmission organization
shall continue to comply with such function,
rule, order, tariff, rate schedule or agreement
accepted, approved, or ordered by the Commission until—
(A) the Commission finds a conflict exists
between a reliability standard and any such
provision;
(B) the Commission orders a change to such
provision pursuant to section 824e of this title;
and
(C) the ordered change becomes effective
under this subchapter.
If the Commission determines that a reliability
standard needs to be changed as a result of such
a conflict, it shall order the ERO to develop and
file with the Commission a modified reliability
standard under paragraph (4) or (5) of this subsection.
(e) Enforcement
(1) The ERO may impose, subject to paragraph
(2), a penalty on a user or owner or operator of
the bulk-power system for a violation of a reliability standard approved by the Commission
under subsection (d) of this section if the ERO,
after notice and an opportunity for a hearing—
(A) finds that the user or owner or operator
has violated a reliability standard approved by
the Commission under subsection (d) of this
section; and
(B) files notice and the record of the proceeding with the Commission.
(2) A penalty imposed under paragraph (1) may
take effect not earlier than the 31st day after
the ERO files with the Commission notice of the
penalty and the record of proceedings. Such penalty shall be subject to review by the Commission, on its own motion or upon application by
the user, owner or operator that is the subject of
the penalty filed within 30 days after the date
such notice is filed with the Commission. Application to the Commission for review, or the initiation of review by the Commission on its own
motion, shall not operate as a stay of such penalty unless the Commission otherwise orders
upon its own motion or upon application by the
user, owner or operator that is the subject of
such penalty. In any proceeding to review a penalty imposed under paragraph (1), the Commis-

§ 824o

sion, after notice and opportunity for hearing
(which hearing may consist solely of the record
before the ERO and opportunity for the presentation of supporting reasons to affirm, modify,
or set aside the penalty), shall by order affirm,
set aside, reinstate, or modify the penalty, and,
if appropriate, remand to the ERO for further
proceedings. The Commission shall implement
expedited procedures for such hearings.
(3) On its own motion or upon complaint, the
Commission may order compliance with a reliability standard and may impose a penalty
against a user or owner or operator of the bulkpower system if the Commission finds, after notice and opportunity for a hearing, that the user
or owner or operator of the bulk-power system
has engaged or is about to engage in any acts or
practices that constitute or will constitute a
violation of a reliability standard.
(4) The Commission shall issue regulations authorizing the ERO to enter into an agreement to
delegate authority to a regional entity for the
purpose of proposing reliability standards to the
ERO and enforcing reliability standards under
paragraph (1) if—
(A) the regional entity is governed by—
(i) an independent board;
(ii) a balanced stakeholder board; or
(iii) a combination independent and balanced stakeholder board.
(B) the regional entity otherwise satisfies
the provisions of subsection (c)(1) and (2) of
this section; and
(C) the agreement promotes effective and efficient administration of bulk-power system
reliability.
The Commission may modify such delegation.
The ERO and the Commission shall rebuttably
presume that a proposal for delegation to a regional entity organized on an Interconnectionwide basis promotes effective and efficient administration of bulk-power system reliability
and should be approved. Such regulation may
provide that the Commission may assign the
ERO’s authority to enforce reliability standards
under paragraph (1) directly to a regional entity
consistent with the requirements of this paragraph.
(5) The Commission may take such action as is
necessary or appropriate against the ERO or a
regional entity to ensure compliance with a reliability standard or any Commission order affecting the ERO or a regional entity.
(6) Any penalty imposed under this section
shall bear a reasonable relation to the seriousness of the violation and shall take into consideration the efforts of such user, owner, or operator to remedy the violation in a timely manner.
(f) Changes in Electric Reliability Organization
rules
The Electric Reliability Organization shall
file with the Commission for approval any proposed rule or proposed rule change, accompanied
by an explanation of its basis and purpose. The
Commission, upon its own motion or complaint,
may propose a change to the rules of the ERO.
A proposed rule or proposed rule change shall
take effect upon a finding by the Commission,
after notice and opportunity for comment, that

§ 824p

TITLE 16—CONSERVATION

the change is just, reasonable, not unduly discriminatory or preferential, is in the public interest, and satisfies the requirements of subsection (c) of this section.
(g) Reliability reports
The ERO shall conduct periodic assessments of
the reliability and adequacy of the bulk-power
system in North America.
(h) Coordination with Canada and Mexico
The President is urged to negotiate international agreements with the governments of
Canada and Mexico to provide for effective compliance with reliability standards and the effectiveness of the ERO in the United States and
Canada or Mexico.
(i) Savings provisions
(1) The ERO shall have authority to develop
and enforce compliance with reliability standards for only the bulk-power system.
(2) This section does not authorize the ERO or
the Commission to order the construction of additional generation or transmission capacity or
to set and enforce compliance with standards for
adequacy or safety of electric facilities or services.
(3) Nothing in this section shall be construed
to preempt any authority of any State to take
action to ensure the safety, adequacy, and reliability of electric service within that State, as
long as such action is not inconsistent with any
reliability standard, except that the State of
New York may establish rules that result in
greater reliability within that State, as long as
such action does not result in lesser reliability
outside the State than that provided by the reliability standards.
(4) Within 90 days of the application of the
Electric Reliability Organization or other affected party, and after notice and opportunity
for comment, the Commission shall issue a final
order determining whether a State action is inconsistent with a reliability standard, taking
into consideration any recommendation of the
ERO.
(5) The Commission, after consultation with
the ERO and the State taking action, may stay
the effectiveness of any State action, pending
the Commission’s issuance of a final order.
(j) Regional advisory bodies
The Commission shall establish a regional advisory body on the petition of at least twothirds of the States within a region that have
more than one-half of their electric load served
within the region. A regional advisory body
shall be composed of one member from each participating State in the region, appointed by the
Governor of each State, and may include representatives of agencies, States, and provinces
outside the United States. A regional advisory
body may provide advice to the Electric Reliability Organization, a regional entity, or the
Commission regarding the governance of an existing or proposed regional entity within the
same region, whether a standard proposed to
apply within the region is just, reasonable, not
unduly discriminatory or preferential, and in
the public interest, whether fees proposed to be
assessed within the region are just, reasonable,

Page 1344

not unduly discriminatory or preferential, and
in the public interest and any other responsibilities requested by the Commission. The Commission may give deference to the advice of any
such regional advisory body if that body is organized on an Interconnection-wide basis.
(k) Alaska and Hawaii
The provisions of this section do not apply to
Alaska or Hawaii.
(June 10, 1920, ch. 285, pt. II, § 215, as added Pub.
L. 109–58, title XII, § 1211(a), Aug. 8, 2005, 119
Stat. 941.)
STATUS OF ERO
Pub. L. 109–58, title XII, § 1211(b), Aug. 8, 2005, 119
Stat. 946, provided that: ‘‘The Electric Reliability Organization certified by the Federal Energy Regulatory
Commission under section 215(c) of the Federal Power
Act [16 U.S.C. 824o(c)] and any regional entity delegated
enforcement authority pursuant to section 215(e)(4) of
that Act [16 U.S.C. 824o(e)(4)] are not departments,
agencies, or instrumentalities of the United States
Government.’’
ACCESS APPROVALS BY FEDERAL AGENCIES
Pub. L. 109–58, title XII, § 1211(c), Aug. 8, 2005, 119
Stat. 946, provided that: ‘‘Federal agencies responsible
for approving access to electric transmission or distribution facilities located on lands within the United
States shall, in accordance with applicable law, expedite any Federal agency approvals that are necessary
to allow the owners or operators of such facilities to
comply with any reliability standard, approved by the
[Federal Energy Regulatory] Commission under section
215 of the Federal Power Act [16 U.S.C. 824o], that pertains to vegetation management, electric service restoration, or resolution of situations that imminently
endanger the reliability or safety of the facilities.’’

§ 824p. Siting of interstate electric transmission
facilities
(a) Designation of national interest electric
transmission corridors
(1) Not later than 1 year after August 8, 2005,
and every 3 years thereafter, the Secretary of
Energy (referred to in this section as the ‘‘Secretary’’), in consultation with affected States,
shall conduct a study of electric transmission
congestion.
(2) After considering alternatives and recommendations from interested parties (including
an opportunity for comment from affected
States), the Secretary shall issue a report, based
on the study, which may designate any geographic area experiencing electric energy transmission capacity constraints or congestion that
adversely affects consumers as a national interest electric transmission corridor.
(3) The Secretary shall conduct the study and
issue the report in consultation with any appropriate regional entity referred to in section 824o
of this title.
(4) In determining whether to designate a national interest electric transmission corridor
under paragraph (2), the Secretary may consider
whether—
(A) the economic vitality and development
of the corridor, or the end markets served by
the corridor, may be constrained by lack of
adequate or reasonably priced electricity;
(B)(i) economic growth in the corridor, or
the end markets served by the corridor, may

Page 1345

TITLE 16—CONSERVATION

be jeopardized by reliance on limited sources
of energy; and
(ii) a diversification of supply is warranted;
(C) the energy independence of the United
States would be served by the designation;
(D) the designation would be in the interest
of national energy policy; and
(E) the designation would enhance national
defense and homeland security.
(b) Construction permit
Except as provided in subsection (i) of this section, the Commission may, after notice and an
opportunity for hearing, issue one or more permits for the construction or modification of
electric transmission facilities in a national interest electric transmission corridor designated
by the Secretary under subsection (a) of this
section if the Commission finds that—
(1)(A) a State in which the transmission facilities are to be constructed or modified does
not have authority to—
(i) approve the siting of the facilities; or
(ii) consider the interstate benefits expected to be achieved by the proposed construction or modification of transmission facilities in the State;
(B) the applicant for a permit is a transmitting utility under this chapter but does not
qualify to apply for a permit or siting approval for the proposed project in a State because the applicant does not serve end-use customers in the State; or
(C) a State commission or other entity that
has authority to approve the siting of the facilities has—
(i) withheld approval for more than 1 year
after the filing of an application seeking approval pursuant to applicable law or 1 year
after the designation of the relevant national interest electric transmission corridor, whichever is later; or
(ii) conditioned its approval in such a manner that the proposed construction or modification will not significantly reduce transmission congestion in interstate commerce
or is not economically feasible;
(2) the facilities to be authorized by the permit will be used for the transmission of electric energy in interstate commerce;
(3) the proposed construction or modification is consistent with the public interest;
(4) the proposed construction or modification will significantly reduce transmission
congestion in interstate commerce and protects or benefits consumers;
(5) the proposed construction or modification is consistent with sound national energy
policy and will enhance energy independence;
and
(6) the proposed modification will maximize,
to the extent reasonable and economical, the
transmission capabilities of existing towers or
structures.
(c) Permit applications
(1) Permit applications under subsection (b) of
this section shall be made in writing to the
Commission.
(2) The Commission shall issue rules specifying—

§ 824p

(A) the form of the application;
(B) the information to be contained in the
application; and
(C) the manner of service of notice of the
permit application on interested persons.
(d) Comments
In any proceeding before the Commission
under subsection (b) of this section, the Commission shall afford each State in which a transmission facility covered by the permit is or will
be located, each affected Federal agency and Indian tribe, private property owners, and other
interested persons, a reasonable opportunity to
present their views and recommendations with
respect to the need for and impact of a facility
covered by the permit.
(e) Rights-of-way
(1) In the case of a permit under subsection (b)
of this section for electric transmission facilities to be located on property other than property owned by the United States or a State, if
the permit holder cannot acquire by contract, or
is unable to agree with the owner of the property to the compensation to be paid for, the necessary right-of-way to construct or modify the
transmission facilities, the permit holder may
acquire the right-of-way by the exercise of the
right of eminent domain in the district court of
the United States for the district in which the
property concerned is located, or in the appropriate court of the State in which the property
is located.
(2) Any right-of-way acquired under paragraph
(1) shall be used exclusively for the construction
or modification of electric transmission facilities within a reasonable period of time after the
acquisition.
(3) The practice and procedure in any action or
proceeding under this subsection in the district
court of the United States shall conform as
nearly as practicable to the practice and procedure in a similar action or proceeding in the
courts of the State in which the property is located.
(4) Nothing in this subsection shall be construed to authorize the use of eminent domain
to acquire a right-of-way for any purpose other
than the construction, modification, operation,
or maintenance of electric transmission facilities and related facilities. The right-of-way cannot be used for any other purpose, and the rightof-way shall terminate upon the termination of
the use for which the right-of-way was acquired.
(f) Compensation
(1) Any right-of-way acquired pursuant to subsection (e) of this section shall be considered a
taking of private property for which just compensation is due.
(2) Just compensation shall be an amount
equal to the fair market value (including applicable severance damages) of the property taken
on the date of the exercise of eminent domain
authority.
(g) State law
Nothing in this section precludes any person
from constructing or modifying any transmission facility in accordance with State law.
(h) Coordination of Federal authorizations for
transmission facilities
(1) In this subsection:

§ 824p

TITLE 16—CONSERVATION

(A) The term ‘‘Federal authorization’’ means
any authorization required under Federal law
in order to site a transmission facility.
(B) The term ‘‘Federal authorization’’ includes such permits, special use authorizations, certifications, opinions, or other approvals as may be required under Federal law
in order to site a transmission facility.
(2) The Department of Energy shall act as the
lead agency for purposes of coordinating all applicable Federal authorizations and related environmental reviews of the facility.
(3) To the maximum extent practicable under
applicable Federal law, the Secretary shall coordinate the Federal authorization and review
process under this subsection with any Indian
tribes, multistate entities, and State agencies
that are responsible for conducting any separate
permitting and environmental reviews of the facility, to ensure timely and efficient review and
permit decisions.
(4)(A) As head of the lead agency, the Secretary, in consultation with agencies responsible for Federal authorizations and, as appropriate, with Indian tribes, multistate entities,
and State agencies that are willing to coordinate their own separate permitting and environmental reviews with the Federal authorization
and environmental reviews, shall establish
prompt and binding intermediate milestones and
ultimate deadlines for the review of, and Federal
authorization decisions relating to, the proposed
facility.
(B) The Secretary shall ensure that, once an
application has been submitted with such data
as the Secretary considers necessary, all permit
decisions and related environmental reviews
under all applicable Federal laws shall be completed—
(i) within 1 year; or
(ii) if a requirement of another provision of
Federal law does not permit compliance with
clause (i), as soon thereafter as is practicable.
(C) The Secretary shall provide an expeditious
pre-application mechanism for prospective applicants to confer with the agencies involved to
have each such agency determine and communicate to the prospective applicant not later
than 60 days after the prospective applicant submits a request for such information concerning—
(i) the likelihood of approval for a potential
facility; and
(ii) key issues of concern to the agencies and
public.
(5)(A) As lead agency head, the Secretary, in
consultation with the affected agencies, shall
prepare a single environmental review document, which shall be used as the basis for all decisions on the proposed project under Federal
law.
(B) The Secretary and the heads of other agencies shall streamline the review and permitting
of transmission within corridors designated
under section 503 of the Federal Land Policy and
Management Act 1 (43 U.S.C. 1763) by fully tak1 So

in original. Probably should be followed by ‘‘of 1976’’.

Page 1346

ing into account prior analyses and decisions relating to the corridors.
(C) The document shall include consideration
by the relevant agencies of any applicable criteria or other matters as required under applicable law.
(6)(A) If any agency has denied a Federal authorization required for a transmission facility,
or has failed to act by the deadline established
by the Secretary pursuant to this section for deciding whether to issue the authorization, the
applicant or any State in which the facility
would be located may file an appeal with the
President, who shall, in consultation with the
affected agency, review the denial or failure to
take action on the pending application.
(B) Based on the overall record and in consultation with the affected agency, the President may—
(i) issue the necessary authorization with
any appropriate conditions; or
(ii) deny the application.
(C) The President shall issue a decision not
later than 90 days after the date of the filing of
the appeal.
(D) In making a decision under this paragraph,
the President shall comply with applicable requirements of Federal law, including any requirements of—
(i) the National Forest Management Act of
1976 (16 U.S.C. 472a et seq.);
(ii) the Endangered Species Act of 1973 (16
U.S.C. 1531 et seq.);
(iii) the Federal Water Pollution Control Act
(33 U.S.C. 1251 et seq.);
(iv) the National Environmental Policy Act
of 1969 (42 U.S.C. 4321 et seq.); and
(v) the Federal Land Policy and Management Act of 1976 (43 U.S.C. 1701 et seq.).
(7)(A) Not later than 18 months after August 8,
2005, the Secretary shall issue any regulations
necessary to implement this subsection.
(B)(i) Not later than 1 year after August 8,
2005, the Secretary and the heads of all Federal
agencies with authority to issue Federal authorizations shall enter into a memorandum of understanding to ensure the timely and coordinated review and permitting of electricity transmission facilities.
(ii) Interested Indian tribes, multistate entities, and State agencies may enter the memorandum of understanding.
(C) The head of each Federal agency with authority to issue a Federal authorization shall
designate a senior official responsible for, and
dedicate sufficient other staff and resources to
ensure, full implementation of the regulations
and memorandum required under this paragraph.
(8)(A) Each Federal land use authorization for
an electricity transmission facility shall be issued—
(i) for a duration, as determined by the Secretary, commensurate with the anticipated
use of the facility; and
(ii) with appropriate authority to manage
the right-of-way for reliability and environmental protection.
(B) On the expiration of the authorization (including an authorization issued before August 8,

Page 1347

TITLE 16—CONSERVATION

2005), the authorization shall be reviewed for renewal taking fully into account reliance on such
electricity infrastructure, recognizing the importance of the authorization for public health,
safety, and economic welfare and as a legitimate
use of Federal land.
(9) In exercising the responsibilities under this
section, the Secretary shall consult regularly
with—
(A) the Federal Energy Regulatory Commission;
(B) electric reliability organizations (including related regional entities) approved by the
Commission; and
(C) Transmission Organizations approved by
the Commission.
(i) Interstate compacts
(1) The consent of Congress is given for three
or more contiguous States to enter into an
interstate compact, subject to approval by Congress, establishing regional transmission siting
agencies to—
(A) facilitate siting of future electric energy
transmission facilities within those States;
and
(B) carry out the electric energy transmission siting responsibilities of those States.
(2) The Secretary may provide technical assistance to regional transmission siting agencies
established under this subsection.
(3) The regional transmission siting agencies
shall have the authority to review, certify, and
permit siting of transmission facilities, including facilities in national interest electric transmission corridors (other than facilities on property owned by the United States).
(4) The Commission shall have no authority to
issue a permit for the construction or modification of an electric transmission facility within a
State that is a party to a compact, unless the
members of the compact are in disagreement
and the Secretary makes, after notice and an
opportunity for a hearing, the finding described
in subsection (b)(1)(C) of this section.
(j) Relationship to other laws
(1) Except as specifically provided, nothing in
this section affects any requirement of an environmental law of the United States, including
the National Environmental Policy Act of 1969
(42 U.S.C. 4321 et seq.).
(2) Subsection (h)(6) of this section shall not
apply to any unit of the National Park System,
the National Wildlife Refuge System, the National Wild and Scenic Rivers System, the National Trails System, the National Wilderness
Preservation System, or a National Monument.
(k) ERCOT
This section shall not apply within the area
referred to in section 824k(k)(2)(A) of this title.
(June 10, 1920, ch. 285, pt. II, § 216, as added Pub.
L. 109–58, title XII, § 1221(a), Aug. 8, 2005, 119
Stat. 946.)
REFERENCES IN TEXT
The National Forest Management Act of 1976, referred to in subsec. (h)(6)(D)(i), is Pub. L. 94–588, Oct. 22,
1976, 90 Stat. 2949, as amended, which enacted sections
472a, 521b, 1600, and 1611 to 1614 of this title, amended
sections 500, 515, 516, 518, 576b, and 1601 to 1610 of this

§ 824q

title, repealed sections 476, 513, and 514 of this title, and
enacted provisions set out as notes under sections 476,
513, 528, 594–2, and 1600 of this title. For complete classification of this Act to the Code, see Short Title of 1976
Amendment note set out under section 1600 of this title
and Tables.
The Endangered Species Act of 1973, referred to in
subsec. (h)(6)(D)(ii), is Pub. L. 93–205, Dec. 28, 1973, 87
Stat. 884, as amended, which is classified principally to
chapter 35 (§ 1531 et seq.) of this title. For complete
classification of this Act to the Code, see Short Title
note set out under section 1531 of this title and Tables.
The Federal Water Pollution Control Act, referred to
in subsec. (h)(6)(D)(iii), is act June 30, 1948, ch. 758, as
amended generally by Pub. L. 92–500, § 2, Oct. 18, 1972, 86
Stat. 816, which is classified generally to chapter 26
(§ 1251 et seq.) of Title 33, Navigation and Navigable Waters. For complete classification of this Act to the
Code, see Short Title note set out under section 1251 of
Title 33 and Tables.
The National Environmental Policy Act of 1969, referred to in subsecs. (h)(6)(D)(iv) and (j), is Pub. L.
91–190, Jan. 1, 1970, 83 Stat. 852, as amended, which is
classified generally to chapter 55 (§ 4321 et seq.) of Title
42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note
set out under section 4321 of Title 42 and Tables.
The Federal Land Policy and Management Act of
1976, referred to in subsec. (h)(6)(D)(v), is Pub. L. 94–579,
Oct. 21, 1976, 90 Stat. 2743, as amended, which is classified principally to chapter 35 (§ 1701 et seq.) of Title 43,
Public Lands. For complete classification of this Act to
the Code, see Short Title note set out under section
1701 of Title 43 and Tables.

§ 824q. Native load service obligation
(a) Definitions
In this section:
(1) The term ‘‘distribution utility’’ means an
electric utility that has a service obligation to
end-users or to a State utility or electric cooperative that, directly or indirectly, through
one or more additional State utilities or electric cooperatives, provides electric service to
end-users.
(2) The term ‘‘load-serving entity’’ means a
distribution utility or an electric utility that
has a service obligation.
(3) The term ‘‘service obligation’’ means a
requirement applicable to, or the exercise of
authority granted to, an electric utility under
Federal, State, or local law or under long-term
contracts to provide electric service to endusers or to a distribution utility.
(4) The term ‘‘State utility’’ means a State
or any political subdivision of a State, or any
agency, authority, or instrumentality of any
one or more of the foregoing, or a corporation
that is wholly owned, directly or indirectly, by
any one or more of the foregoing, competent
to carry on the business of developing, transmitting, utilizing, or distributing power.
(b) Meeting service obligations
(1) Paragraph (2) applies to any load-serving
entity that, as of August 8, 2005—
(A) owns generation facilities, markets the
output of Federal generation facilities, or
holds rights under one or more wholesale contracts to purchase electric energy, for the purpose of meeting a service obligation; and
(B) by reason of ownership of transmission
facilities, or one or more contracts or service
agreements for firm transmission service,

§ 824q

TITLE 16—CONSERVATION

holds firm transmission rights for delivery of
the output of the generation facilities or the
purchased energy to meet the service obligation.
(2) Any load-serving entity described in paragraph (1) is entitled to use the firm transmission
rights, or, equivalent tradable or financial
transmission rights, in order to deliver the output or purchased energy, or the output of other
generating facilities or purchased energy to the
extent deliverable using the rights, to the extent required to meet the service obligation of
the load-serving entity.
(3)(A) To the extent that all or a portion of the
service obligation covered by the firm transmission rights or equivalent tradable or financial transmission rights is transferred to another load-serving entity, the successor loadserving entity shall be entitled to use the firm
transmission rights or equivalent tradable or financial transmission rights associated with the
transferred service obligation.
(B) Subsequent transfers to another load-serving entity, or back to the original load-serving
entity, shall be entitled to the same rights.
(4) The Commission shall exercise the authority of the Commission under this chapter in a
manner that facilitates the planning and expansion of transmission facilities to meet the reasonable needs of load-serving entities to satisfy
the service obligations of the load-serving entities, and enables load-serving entities to secure
firm transmission rights (or equivalent tradable
or financial rights) on a long-term basis for
long-term power supply arrangements made, or
planned, to meet such needs.
(c) Allocation of transmission rights
Nothing in subsections (b)(1), (b)(2), and (b)(3)
of this section shall affect any existing or future
methodology employed by a Transmission Organization for allocating or auctioning transmission rights if such Transmission Organization was authorized by the Commission to allocate or auction financial transmission rights on
its system as of January 1, 2005, and the Commission determines that any future allocation
or auction is just, reasonable and not unduly
discriminatory or preferential, provided, however, that if such a Transmission Organization
never allocated financial transmission rights on
its system that pertained to a period before January 1, 2005, with respect to any application by
such Transmission Organization that would
change its methodology the Commission shall
exercise its authority in a manner consistent
with the 1 chapter and that takes into account
the policies expressed in subsections (b)(1),
(b)(2), and (b)(3) of this section as applied to firm
transmission rights held by a load-serving entity as of January 1, 2005, to the extent the associated generation ownership or power purchase
arrangements remain in effect.
(d) Certain transmission rights
The Commission may exercise authority under
this chapter to make transmission rights not
used to meet an obligation covered by subsection (b) of this section available to other en1 So

in original. Probably should be ‘‘this’’.

Page 1348

tities in a manner determined by the Commission to be just, reasonable, and not unduly discriminatory or preferential.
(e) Obligation to build
Nothing in this chapter relieves a load-serving
entity from any obligation under State or local
law to build transmission or distribution facilities adequate to meet the service obligations of
the load-serving entity.
(f) Contracts
Nothing in this section shall provide a basis
for abrogating any contract or service agreement for firm transmission service or rights in
effect as of August 8, 2005. If an ISO in the Western Interconnection had allocated financial
transmission rights prior to August 8, 2005, but
had not done so with respect to one or more
load-serving entities’ firm transmission rights
held under contracts to which the preceding sentence applies (or held by reason of ownership or
future ownership of transmission facilities),
such load-serving entities may not be required,
without their consent, to convert such firm
transmission rights to tradable or financial
rights, except where the load-serving entity has
voluntarily joined the ISO as a participating
transmission owner (or its successor) in accordance with the ISO tariff.
(g) Water pumping facilities
The Commission shall ensure that any entity
described in section 824(f) of this title that owns
transmission facilities used predominately to
support its own water pumping facilities shall
have, with respect to the facilities, protections
for transmission service comparable to those
provided to load-serving entities pursuant to
this section.
(h) ERCOT
This section shall not apply within the area
referred to in section 824k(k)(2)(A) of this title.
(i) Jurisdiction
This section does not authorize the Commission to take any action not otherwise within the
jurisdiction of the Commission.
(j) TVA area
(1) Subject to paragraphs (2) and (3), for purposes of subsection (b)(1)(B) of this section, a
load-serving entity that is located within the
service area of the Tennessee Valley Authority
and that has a firm wholesale power supply contract with the Tennessee Valley Authority shall
be considered to hold firm transmission rights
for the transmission of the power provided.
(2) Nothing in this subsection affects the requirements of section 824k(j) of this title.
(3) The Commission shall not issue an order on
the basis of this subsection that is contrary to
the purposes of section 824k(j) of this title.
(k) Effect of exercising rights
An entity that to the extent required to meet
its service obligations exercises rights described
in subsection (b) of this section shall not be considered by such action as engaging in undue discrimination or preference under this chapter.
(June 10, 1920, ch. 285, pt. II, § 217, as added Pub.
L. 109–58, title XII, § 1233(a), Aug. 8, 2005, 119
Stat. 957.)

Page 1349

TITLE 16—CONSERVATION

FERC RULEMAKING ON LONG-TERM TRANSMISSION
RIGHTS IN ORGANIZED MARKETS
Pub. L. 109–58, title XII, § 1233(b), Aug. 8, 2005, 119
Stat. 960, provided that: ‘‘Within 1 year after the date
of enactment of this section [Aug. 8, 2005] and after notice and an opportunity for comment, the [Federal Energy Regulatory] Commission shall by rule or order,
implement section 217(b)(4) of the Federal Power Act
[16 U.S.C. 824q(b)(4)] in Transmission Organizations, as
defined by that Act [16 U.S.C. 791a et seq.] with organized electricity markets.’’

§ 824r. Protection of transmission contracts in
the Pacific Northwest
(a) Definition of electric utility or person
In this section, the term ‘‘electric utility or
person’’ means an electric utility or person
that—
(1) as of August 8, 2005, holds firm transmission rights pursuant to contract or by reason of ownership of transmission facilities;
and
(2) is located—
(A) in the Pacific Northwest, as that region is defined in section 839a of this title; or
(B) in that portion of a State included in
the geographic area proposed for a regional
transmission organization in Commission
Docket Number RT01–35 on the date on
which that docket was opened.
(b) Protection of transmission contracts
Nothing in this chapter confers on the Commission the authority to require an electric utility or person to convert to tradable or financial
rights—
(1) firm transmission rights described in subsection (a) of this section; or
(2) firm transmission rights obtained by exercising contract or tariff rights associated
with the firm transmission rights described in
subsection (a) of this section.
(June 10, 1920, ch. 285, pt. II, § 218, as added Pub.
L. 109–58, title XII, § 1235, Aug. 8, 2005, 119 Stat.
960.)
§ 824s. Transmission infrastructure investment
(a) Rulemaking requirement
Not later than 1 year after August 8, 2005, the
Commission shall establish, by rule, incentivebased (including performance-based) rate treatments for the transmission of electric energy in
interstate commerce by public utilities for the
purpose of benefitting consumers by ensuring reliability and reducing the cost of delivered
power by reducing transmission congestion.
(b) Contents
The rule shall—
(1) promote reliable and economically efficient transmission and generation of electricity by promoting capital investment in the
enlargement, improvement, maintenance, and
operation of all facilities for the transmission
of electric energy in interstate commerce, regardless of the ownership of the facilities;
(2) provide a return on equity that attracts
new investment in transmission facilities (including related transmission technologies);
(3) encourage deployment of transmission
technologies and other measures to increase

§ 824t

the capacity and efficiency of existing transmission facilities and improve the operation of
the facilities; and
(4) allow recovery of—
(A) all prudently incurred costs necessary
to comply with mandatory reliability standards issued pursuant to section 824o of this
title; and
(B) all prudently incurred costs related to
transmission infrastructure development
pursuant to section 824p of this title.
(c) Incentives
In the rule issued under this section, the Commission shall, to the extent within its jurisdiction, provide for incentives to each transmitting
utility or electric utility that joins a Transmission Organization. The Commission shall ensure that any costs recoverable pursuant to this
subsection may be recovered by such utility
through the transmission rates charged by such
utility or through the transmission rates
charged by the Transmission Organization that
provides transmission service to such utility.
(d) Just and reasonable rates
All rates approved under the rules adopted
pursuant to this section, including any revisions
to the rules, are subject to the requirements of
sections 824d and 824e of this title that all rates,
charges, terms, and conditions be just and reasonable and not unduly discriminatory or preferential.
(June 10, 1920, ch. 285, pt. II, § 219, as added Pub.
L. 109–58, title XII, § 1241, Aug. 8, 2005, 119 Stat.
961.)
§ 824t. Electricity market transparency rules
(a) In general
(1) The Commission is directed to facilitate
price transparency in markets for the sale and
transmission of electric energy in interstate
commerce, having due regard for the public interest, the integrity of those markets, fair competition, and the protection of consumers.
(2) The Commission may prescribe such rules
as the Commission determines necessary and appropriate to carry out the purposes of this section. The rules shall provide for the dissemination, on a timely basis, of information about the
availability and prices of wholesale electric energy and transmission service to the Commission, State commissions, buyers and sellers of
wholesale electric energy, users of transmission
services, and the public.
(3) The Commission may—
(A) obtain the information described in paragraph (2) from any market participant; and
(B) rely on entities other than the Commission to receive and make public the information, subject to the disclosure rules in subsection (b) of this section.
(4) In carrying out this section, the Commission shall consider the degree of price transparency provided by existing price publishers
and providers of trade processing services, and
shall rely on such publishers and services to the
maximum extent possible. The Commission may
establish an electronic information system if it
determines that existing price publications are

§ 824u

TITLE 16—CONSERVATION

not adequately providing price discovery or
market transparency. Nothing in this section,
however, shall affect any electronic information
filing requirements in effect under this chapter
as of August 8, 2005.
(b) Exemption of information from disclosure
(1) Rules described in subsection (a)(2) of this
section, if adopted, shall exempt from disclosure
information the Commission determines would,
if disclosed, be detrimental to the operation of
an effective market or jeopardize system security.
(2) In determining the information to be made
available under this section and time to make
the information available, the Commission shall
seek to ensure that consumers and competitive
markets are protected from the adverse effects
of potential collusion or other anticompetitive
behaviors that can be facilitated by untimely
public disclosure of transaction-specific information.
(c) Information sharing
(1) Within 180 days of August 8, 2005, the Commission shall conclude a memorandum of understanding with the Commodity Futures Trading
Commission relating to information sharing,
which shall include, among other things, provisions ensuring that information requests to
markets within the respective jurisdiction of
each agency are properly coordinated to minimize duplicative information requests, and provisions regarding the treatment of proprietary
trading information.
(2) Nothing in this section may be construed
to limit or affect the exclusive jurisdiction of
the Commodity Futures Trading Commission
under the Commodity Exchange Act (7 U.S.C. 1
et seq.).
(d) Exemption from reporting requirements
The Commission shall not require entities who
have a de minimis market presence to comply
with the reporting requirements of this section.
(e) Penalties for violations occurring before notice
(1) Except as provided in paragraph (2), no person shall be subject to any civil penalty under
this section with respect to any violation occurring more than 3 years before the date on which
the person is provided notice of the proposed
penalty under section 825o–1 of this title.
(2) Paragraph (1) shall not apply in any case in
which the Commission finds that a seller that
has entered into a contract for the sale of electric energy at wholesale or transmission service
subject to the jurisdiction of the Commission
has engaged in fraudulent market manipulation
activities materially affecting the contract in
violation of section 824v of this title.
(f) ERCOT utilities
This section shall not apply to a transaction
for the purchase or sale of wholesale electric energy or transmission services within the area
described in section 824k(k)(2)(A) of this title.
(June 10, 1920, ch. 285, pt. II, § 220, as added Pub.
L. 109–58, title XII, § 1281, Aug. 8, 2005, 119 Stat.
978.)
REFERENCES IN TEXT
The Commodity Exchange Act, referred to in subsec.
(c)(2), is act Sept. 21, 1922, ch. 369, 42 Stat. 998, as

Page 1350

amended, which is classified generally to chapter 1 (§ 1
et seq.) of Title 7, Agriculture. For complete classification of this Act to the Code, see section 1 of Title 7 and
Tables.

§ 824u. Prohibition on filing false information
No entity (including an entity described in
section 824(f) of this title) shall willfully and
knowingly report any information relating to
the price of electricity sold at wholesale or the
availability of transmission capacity, which information the person or any other entity knew
to be false at the time of the reporting, to a Federal agency with intent to fraudulently affect
the data being compiled by the Federal agency.
(June 10, 1920, ch. 285, pt. II, § 221, as added Pub.
L. 109–58, title XII, § 1282, Aug. 8, 2005, 119 Stat.
979.)
§ 824v. Prohibition of energy market manipulation
(a) In general
It shall be unlawful for any entity (including
an entity described in section 824(f) of this title),
directly or indirectly, to use or employ, in connection with the purchase or sale of electric energy or the purchase or sale of transmission
services subject to the jurisdiction of the Commission, any manipulative or deceptive device
or contrivance (as those terms are used in section 78j(b) of title 15), in contravention of such
rules and regulations as the Commission may
prescribe as necessary or appropriate in the public interest or for the protection of electric ratepayers.
(b) No private right of action
Nothing in this section shall be construed to
create a private right of action.
(June 10, 1920, ch. 285, pt. II, § 222, as added Pub.
L. 109–58, title XII, § 1283, Aug. 8, 2005, 119 Stat.
979.)
§ 824w. Joint boards on economic dispatch
(a) In general
The Commission shall convene joint boards on
a regional basis pursuant to section 824h of this
title to study the issue of security constrained
economic dispatch for the various market regions. The Commission shall designate the appropriate regions to be covered by each such
joint board for purposes of this section.
(b) Membership
The Commission shall request each State to
nominate a representative for the appropriate
regional joint board, and shall designate a member of the Commission to chair and participate
as a member of each such board.
(c) Powers
The sole authority of each joint board convened under this section shall be to consider issues relevant to what constitutes ‘‘security constrained economic dispatch’’ and how such a
mode of operating an electric energy system affects or enhances the reliability and affordability of service to customers in the region concerned and to make recommendations to the
Commission regarding such issues.

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TITLE 16—CONSERVATION

(d) Report to the Congress
Within 1 year after August 8, 2005, the Commission shall issue a report and submit such report to the Congress regarding the recommendations of the joint boards under this section and
the Commission may consolidate the recommendations of more than one such regional joint
board, including any consensus recommendations for statutory or regulatory reform.
(June 10, 1920, ch. 285, pt. II, § 223, as added Pub.
L. 109–58, title XII, § 1298, Aug. 8, 2005, 119 Stat.
986.)
SUBCHAPTER III—LICENSEES AND PUBLIC
UTILITIES; PROCEDURAL AND ADMINISTRATIVE PROVISIONS
§ 825. Accounts and records
(a) Duty to keep
Every licensee and public utility shall make,
keep, and preserve for such periods, such accounts, records of cost-accounting procedures,
correspondence, memoranda, papers, books, and
other records as the Commission may by rules
and regulations prescribe as necessary or appropriate for purposes of the administration of this
chapter, including accounts, records, and memoranda of the generation, transmission, distribution, delivery, or sale of electric energy, the furnishing of services or facilities in connection
therewith, and receipts and expenditures with
respect to any of the foregoing: Provided, however, That nothing in this chapter shall relieve
any public utility from keeping any accounts,
memoranda, or records which such public utility
may be required to keep by or under authority
of the laws of any State. The Commission may
prescribe a system of accounts to be kept by licensees and public utilities and may classify
such licensees and public utilities and prescribe
a system of accounts for each class. The Commission, after notice and opportunity for hearing, may determine by order the accounts in
which particular outlays and receipts shall be
entered, charged, or credited. The burden of
proof to justify every accounting entry questioned by the Commission shall be on the person
making, authorizing, or requiring such entry,
and the Commission may suspend a charge or
credit pending submission of satisfactory proof
in support thereof.
(b) Access to and examination by the Commission
The Commission shall at all times have access
to and the right to inspect and examine all accounts, records, and memoranda of licensees and
public utilities, and it shall be the duty of such
licensees and public utilities to furnish to the
Commission, within such reasonable time as the
Commission may order, any information with
respect thereto which the Commission may by
order require, including copies of maps, contracts, reports of engineers, and other data,
records, and papers, and to grant to all agents of
the Commission free access to its property and
its accounts, records, and memoranda when requested so to do. No member, officer, or employee of the Commission shall divulge any fact
or information which may come to his knowl-

§ 825b

edge during the course of examination of books
or other accounts, as hereinbefore provided, except insofar as he may be directed by the Commission or by a court.
(c) Controlling individual
The books, accounts, memoranda, and records
of any person who controls, directly or indirectly, a licensee or public utility subject to the
jurisdiction of the Commission, and of any other
company controlled by such person, insofar as
they relate to transactions with or the business
of such licensee or public utility, shall be subject to examination on the order of the Commission.
(June 10, 1920, ch. 285, pt. III, § 301, as added Aug.
26, 1935, ch. 687, title II, § 213, 49 Stat. 854.)
§ 825a. Rates of depreciation; notice to State authorities before fixing
(a) The Commission may, after hearing, require licensees and public utilities to carry a
proper and adequate depreciation account in accordance with such rules, regulations, and forms
of account as the Commission may prescribe.
The Commission may, from time to time, ascertain and determine, and by order fix, the proper
and adequate rates of depreciation of the several
classes of property of each licensee and public
utility. Each licensee and public utility shall
conform its depreciation accounts to the rates
so ascertained, determined, and fixed. The licensees and public utilities subject to the jurisdiction of the Commission shall not charge to
operating expenses any depreciation charges on
classes of property other than those prescribed
by the Commission, or charge with respect to
any class of property a percentage of depreciation other than that prescribed therefor by the
Commission. No such licensee or public utility
shall in any case include in any form under its
operating or other expenses any depreciation or
other charge or expenditure included elsewhere
as a depreciation charge or otherwise under its
operating or other expenses. Nothing in this section shall limit the power of a State commission
to determine in the exercise of its jurisdiction,
with respect to any public utility, the percentage rate of depreciation to be allowed, as to any
class of property of such public utility, or the
composite depreciation rate, for the purpose of
determining rates or charges.
(b) The Commission, before prescribing any
rules or requirements as to accounts, records, or
memoranda, or as to depreciation rates, shall
notify each State commission having jurisdiction with respect to any public utility involved,
and shall give reasonable opportunity to each
such commission to present its views, and shall
receive and consider such views and recommendations.
(June 10, 1920, ch. 285, pt. III, § 302, as added Aug.
26, 1935, ch. 687, title II, § 213, 49 Stat. 855.)
§ 825b. Requirements applicable to agencies of
United States
All agencies of the United States engaged in
the generation and sale of electric energy for ultimate distribution to the public shall be subject, as to all facilities used for such generation