Public Utilities Reg Policy Act 1978 (PURPA)

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PUBLIC UTILITY REGULATORY POLICIES ACT OF 1978

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PUBLIC UTILITY REGULATORY POLICIES ACT OF 19781
[As Amended Through P.L. 111–5, Enacted February 17, 2009]
AN ACT To suspend until the close of June 30, 1980, the duty on certain
doxorubicin hydrochloride antibiotics.

Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the

‘‘Public Utility

Regulatory Policies Act of 1978’’.
(b) TABLE OF CONTENTS.—
Sec.
Sec.
Sec.
Sec.

1.
2.
3.
4.

Short title and table of contents.
Findings.
Definitions.
Relationship to antitrust laws.

TITLE I—RETAIL REGULATORY POLICIES FOR ELECTRIC UTILITIES
Subtitle A—General Provisions
Sec. 101. Purposes.
Sec. 102. Coverage.
Sec. 103. Federal contracts.
Subtitle B—Standards for Electric Utilities
Sec. 111. Consideration and determination respecting certain ratemaking standards.
Sec. 112. Obligations to consider and determine.
Sec. 113. Adoption of certain standards.
Sec. 114. Lifeline rates.
Sec. 115. Special rules for standards.
Sec. 116. Reports respecting standards.
Sec. 117. Relationship to State law.
Sec.
Sec.
Sec.
Sec.

121.
122.
123.
124.

Subtitle C—Intervention and Judicial Review
Intervention in proceedings.
Consumer representation.
Judicial review and enforcement.
Prior and pending proceedings.

Sec.
Sec.
Sec.
Sec.

131.
132.
133.
134.

Subtitle D—Administrative Provisions
Voluntary guidelines.
Responsibilities of Secretary of Energy.
Gathering information on costs of service.
Relationship to other authority.

Subtitle E—State Utility Regulatory Assistance
Sec. 141. Grants to carry out titles I and III.
Sec. 142. Authorizations.
Sec. 143. Conforming amendments.
1 This Act was enacted on November 9, 1978 as Public Law 95–617 (92 Stat. 3117) and appears generally in 16 U.S.C. 2601 and following. Various provisions appear elsewhere in the
United States Code.

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TITLE II—CERTAIN FEDERAL ENERGY REGULATORY COMMISSION AND
DEPARTMENT OF ENERGY AUTHORITIES
Sec. 201. Definitions.
Sec. 202. Interconnection.
Sec. 203. Wheeling.
Sec. 204. General provisions regarding certain interconnection and wheeling authority.
Sec. 205. Pooling.
Sec. 206. Continuance of service.
Sec. 207. Consideration of proposed rate increases.
Sec. 208. Automatic adjustment clauses.
Sec. 209. Reliability.
Sec. 210. Cogeneration and small power production.
Sec. 211. Interlocking directorates.
Sec. 212. Public participation before Federal Energy Regulatory Commission.
Sec. 213. Conduit hydroelectric facilities.
Sec. 214. Prior action; effect on other authorities.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.

TITLE III—RETAIL POLICIES FOR NATURAL GAS UTILITIES
301. Purposes; coverage.
302. Definitions.
303. Adoption of certain standards.
304. Special rules for standards.
305. Federal participation.
306. Gas utility rate design proposals.
307. Judicial review and enforcement.
308. Relationship to other applicable law.
309. Reports respecting standards.
310. Prior and pending proceedings.
311. Relationship to other authority.

Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.

401.
402.
403.
404.
405.
406.
407.
408.

TITLE IV—SMALL HYDROELECTRIC POWER PROJECTS
Establishment of program.
Loans for feasibility studies.
Loans for project costs.
Loan rates and repayment.
Simplified and expeditious licensing procedures.
New impoundments.
Authorizations.
Definitions.

TITLE V—CRUDE OIL TRANSPORTATION SYSTEMS
Findings.
Statement of purposes.
Definitions.
Applications for approval of proposed crude oil transportation systems.
Review schedule.
Environmental impact statements.
Decision of the President.
Procedures for waiver of Federal law.
Expedited procedures for issuance of permits: enforcement of rights-ofway.
Sec. 510. Negotiations with the Government of Canada.
Sec. 511. Judicial review.
Sec. 512. Authorization for appropriation.

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Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.

501.
502.
503.
504.
505.
506.
507.
508.
509.

Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.

601.
602.
603.
604.
605.
606.
607.
608.

TITLE VI—MISCELLANEOUS PROVISIONS
Study concerning electric rates of State utility agencies.
Seasonal diversity electricity exchange.
Utility regulatory institute.
Coal research laboratories.
Conserved natural gas.
Voluntary conversion of natural gas users to heavy fuel oil users.
Emergency conversion of utilities and other facilities.
Natural gas transportation policies. 1

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PURPA

Sec. 3

SEC. 2. FINDINGS.

The Congress finds that the protection of the public health,
safety, and welfare, the preservation of national security, and the
proper exercise of congressional authority under the Constitution to
regulate interstate commerce require—
(1) a program providing for increased conservation of electric energy, increased efficiency in the use of facilities and resources by electric utilities, and equitable retail rates for electric consumers,
(2) a program to improve the wholesale distribution of electric energy, the reliability of electric service, the procedures
concerning consideration of wholesale rate applications before
the Federal Energy Regulatory Commission, the participation
of the public in matters before the Commission, and to provide
other measures with respect to the regulation of the wholesale
sale of electric energy,
(3) a program to provide for the expeditious development
of hydroelectric potential at existing small dams to provide
needed hydroelectric power,
(4) a program for the conservation of natural gas while insuring that rates to natural gas consumers are equitable,
(5) a program to encourage the development of crude oil
transportation systems, and
(6) the establishment of certain other authorities as provided in title VI of this Act.
(16 U.S.C. 2601)
SEC. 3. DEFINITIONS.

As used in this Act, except as otherwise specifically provided—
(1) The term ‘‘antitrust laws’’ includes the Sherman Antitrust Act (15 U.S.C. 1 and following), the Clayton Act (15
U.S.C. 12 and following), the Federal Trade Commission Act
(15 U.S.C. 14 and following), the Wilson Tariff Act (15 U.S.C.
8 and 9), and the Act of June 19, 1936, chapter 592 (15 U.S.C.
13, 13a, 13b, and 21A).
(2) The term ‘‘class’’ means, with respect to electric consumers, any group of such consumers who have similar characteristics of electric energy use.
(3) The term ‘‘Commission’’ means the Federal Energy
Regulatory Commission.
(4) The term ‘‘electric utility’’ means any person, State
agency, or Federal agency, which sells electric energy.
(5) The term ‘‘electric consumer’’ means any person, State
agency, or Federal agency, to which electric energy is sold
other than for purposes of resale.
(6) The term ‘‘evidentiary hearing’’ means—
(A) in the case of a State agency, a proceeding which
(i) is open to the public, (ii) includes notice to participants
and an opportunity for such participants to present direct
and rebuttal evidence and to cross-examine witnesses, (iii)
1 Section 209 of Public Law 109–58 (119 Stat. 657) amends title VI by adding at the end a
section 609 (relating to rural and remote communities electrification grants) to the Public Utility
Regulatory Policies Act of 1978 without including a conforming amendment to add a new item
for such section in the table of contents in section 1(b).

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includes a written decision, based upon evidence appearing
in a written record of the proceeding, and (iv) is subject to
judicial review.
(B) in the case of a Federal agency, a proceeding conducted as provided in sections 554, 556, and 557 of title 5,
United States Code; and
(C) in the case of a proceeding conducted by any entity
other than a State or Federal agency, a proceeding which
conforms, to the extent appropriate, with the requirements
of subparagraph (A).
(7) The term ‘‘Federal agency’’ means an executive agency
(as defined in section 105 of title 5 of the United States Code).
(8) The term ‘‘load management technique’’ means any
technique (other than a time-of-day or seasonal rate) to reduce
the maximum kilowatt demand on the electric utility, including ripple or radio control mechanisms, and other types of interruptible electric service, energy storage devices, and loadlimiting devices.
(9) The term ‘‘nonregulated electric utility’’ means any
electric utility other than a State regulated electric utility.
(10) The term ‘‘rate’’ means (A) any price, rate, charge, or
classification made, demanded, observed, or received with respect to sale of electric energy by an electric utility to an electric consumer, (B) any rule, regulation, or practice respecting
any such rate, charge, or classification, and (C) any contract
pertaining to the sale of electric energy to an electric consumer.
(11) The term ‘‘ratemaking authority’’ means authority to
fix, modify, approve, or disapprove rates.
(12) The term ‘‘rate schedule’’ means the designation of the
rates which an electric utility charges for electric energy.
(13) The term ‘‘sale’’ when used with respect to electric energy includes any exchange of electric energy.
(14) The term ‘‘Secretary’’ means the Secretary of Energy.
(15) The term ‘‘State’’ means a State, the District of Columbia, and Puerto Rico.
(16) The term ‘‘State agency’’ means a State, political subdivision thereof, and any agency or instrumentality of either.
(17) The term ‘‘State regulatory authority’’ means any
State agency which has ratemaking authority with respect to
the sale of electric energy by any electric utility (other than
such State agency), and in the case of an electric utility with
respect to which the Tennessee Valley Authority has ratemaking authority, such term means the Tennessee Valley Authority.
(18) The term ‘‘State regulated electric utility’’ means any
electric utility with respect to which a State regulatory authority has ratemaking authority.
(19) The term ‘‘integrated resource planning’’ means, in
the case of an electric utility, a planning and selection process
for new energy resources that evaluates the full range of alternatives, including new generating capacity, power purchases,
energy conservation and efficiency, cogeneration and district
heating and cooling applications, and renewable energy reApril 24, 2013

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PURPA

Sec. 4

sources, in order to provide adequate and reliable service to its
electric customers at the lowest system cost. The process shall
take into account necessary features for system operation, such
as diversity, reliability, dispatchability, and other factors of
risk; shall take into account the ability to verify energy savings
achieved through energy conservation and efficiency and the
projected durability of such savings measured over time; and
shall treat demand and supply resources on a consistent and
integrated basis.
(20) The term ‘‘system cost’’ means all direct and quantifiable net costs for an energy resource over its available life, including the cost of production, distribution, transportation, utilization, waste management, and environmental compliance.
(21) The term ‘‘demand side management’’ includes load
management techniques.
(16 U.S.C. 2602)
SEC. 4. RELATIONSHIP TO ANTITRUST LAWS.

Nothing in this Act or in any amendment made by this Act affects—
(1) the applicability of the antitrust laws to any electric
utility or gas utility (as defined in section 302), or
(2) any authority of the Secretary or of the Commission
under any other provision of law (including the Federal Power
Act and the Natural Gas Act) respecting unfair methods of
competition or anticompetitive acts or practices.
(16 U.S.C. 2603)

TITLE I—RETAIL REGULATORY
POLICIES FOR ELECTRIC UTILITIES
Subtitle A—General Provisions
SEC. 101. PURPOSES.

The purposes of this title are to encourage—
(1) conservation of energy supplied by electric utilities;
(2) the optimization of the efficiency of use of facilities and
resources by electric utilities; and
(3) equitable rates to electric consumers.
(16 U.S.C. 2611)
SEC. 102. COVERGE.
(a) VOLUME OF

TOTAL RETAIL SALES.—This title applies to each
utility in any calendar year, and to each proceeding relating to
each electric utility in such year, if the total sales of electric energy
by such utility for purposes other than resale exceeded 500 million
kilowatt-hours during any calendar year beginning after December
31, 1975, and before the immediately preceding calendar year.
(b) EXCLUSION OF WHOLESALE SALES.—The requirements of
this title do not apply to the operations of an electric utility, or to
proceedings respecting such operations, to the extent that such operations or proceedings relate to sales of electric energy for purposes of resale.
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(c) LIST OF COVERED UTILITIES.—Before the beginning of each
calendar year, the Secretary shall publish a list identifying each
electric utility to which this title applies during such calendar year.
Promptly after publication of such list each State regulatory authority shall notify the Secretary of each electric utility on the list
for which such State regulatory authority has ratemaking authority.
(16 U.S.C. 2612)
SEC. 103. FEDERAL CONTRACTS.

Notwithstanding the limitation contained in section 102(b), 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 or renewed after the date of the enactment of this Act
may contain any provision which will have the effect of preventing
the implementation of any requirement of subtitle B or C. Any provision in any such contract which has such effect shall be null and
void.
(16 U.S.C. 2613)

Subtitle B—Standards For Electric
Utilities
SEC. 111. CONSIDERATION AND DETERMINATION RESPECTING CERTAIN RATEMAKING STANDARDS.
(a) CONSIDERATION AND DETERMINATION.—Each State regu-

latory authority (with respect to each electric utility for which it
has ratemaking authority) and each nonregulated electric utility
shall consider each standard established by subsection (d) and
make a determination concerning whether or not it is appropriate
to implement such standard to carry out the purposes of this title.
For purposes of such consideration and determination in accordance with subsections (b) and (c), and for purposes of any review
of such consideration and determination in any court in accordance
with section 123, the purposes of this title supplement otherwise
applicable State law. Nothing in this subsection prohibits any State
regulatory authority or nonregulated electric utility from making
any determination that it is not appropriate to implement any such
standard, pursuant to its authority under otherwise applicable
State law.
(b) PROCEDURAL REQUIREMENTS FOR CONSIDERATION AND DETERMINATION.—(1) The consideration referred to in subsection (a)
shall be made after public notice and hearing. The determination
referred to in subsection (a) shall be—
(A) in writing,
(B) based upon findings included in such determination
and upon the evidence presented at the hearing, and
(C) available to the public.
(2) Except as otherwise provided in paragraph (1), in the second sentence of section 112(a), and in sections 121 and 122, the
procedures for the consideration and determination referred to in
subsection (a) shall be those established by the State regulatory authority or the nonregulated electric utility.
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Sec. 111

(c) IMPLEMENTATION.—(1) The State regulatory authority (with
respect to each electric utility for which it has ratemaking authority) or nonregulated electric utility may, to the extent consistent
with otherwise applicable State law—
(A) implement any such standard determined under subsection (a) to be appropriate to carry out the purposes of this
title, or
(B) decline to implement any such standard.
(2) If a State regulatory authority (with respect to each electric
utility for which it has ratemaking authority) or nonregulated electric utility declines to implement any standard established by subsection (d) which is determined under subsection (a) to be appropriate to carry out the purposes of this title, such authority or nonregulated electric utility shall state in writing the reasons therefor.
Such statement of reasons shall be available to the public.
(3) 1 If a State regulatory authority implements a standard
established by subsection (d)(7) or (8), such authority shall—
(A) consider the impact that implementation of such
standard would have on small businesses engaged in the
design, sale, supply, installation or servicing of energy conservation, energy efficiency or other demand side management measures, and
(B) implement such standard so as to assure that utility actions would not provide such utilities with unfair
competitive advantages over such small businesses.
(d) ESTABLISHMENT.—The following Federal standards are
hereby established:
(1) COST OF SERVICE.—Rates charged by any electric utility
for providing electric service to each class of electric consumers
shall be designed, to the maximum extent practicable, to reflect the cost of providing electric service to such class, as determined under section 115(a).
(2) DECLINING BLOCK RATES.—The energy component of a
rate, or the amount attributable to the energy component in a
rate, charged by any electric utility for providing electric service during any period to any class of electric consumers may
not decrease as kilowatt-hour consumption by such class increases during such period except to the extent that such utility demonstrates that the costs to such utility of providing electric service to such class, which costs are attributable to such
energy component, decrease as such consumption increases
during such period.
(3) TIME-OF-DAY RATES.—The rates charged by any electric
utility for providing electric service to such class of electric consumers shall be on a time-of-day basis which reflects the costs
of providing electric service to such class of electric consumers
at different times of the day unless such rates are not cost-effective with respect to such class, as determined under section
115(b).
(4) SEASONAL RATES.—The rates charged by an electric
utility for providing electric service to each class of electric consumers shall be on a seasonal basis which reflects the costs of
1 Indentation

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so in law; Public Law 102–486, sec. 111(b), 106 Stat. 2795.

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providing service to each class of consumers at different seasons of the year to the extent that such costs vary seasonally
for such utility.
(5) INTERRUPTIBLE RATES.—Each electric utility shall offer
each industrial and commercial electric consumer an interruptible rate which reflects the cost of providing interruptible service to the class of which such consumer is a member.
(6) LOAD MANAGEMENT TECHNIQUES.—Each electric utility
shall offer to its electric consumers such load management
techniques as the State regulatory authority (or the nonregulated electric utility) has determined will—
(A) be practicable and cost-effective, as determined
under section 115(c),
(B) be reliable, and
(C) provide useful energy or capacity management advantages to the electric utility.
(7) INTEGRATED RESOURCE PLANNING.—Each electric utility
shall employ integrated resource planning. All plans or filings
before a State regulatory authority to meet the requirements
of this paragraph must be updated on a regular basis, must
provide the opportunity for public participation and comment,
and contain a requirement that the plan be implemented.
(8) INVESTMENTS IN CONSERVATION AND DEMAND MANAGEMENT.—The rates allowed to be charged by a State regulated
electric utility shall be such that the utility’s investment in
and expenditures for energy conservation, energy efficiency resources, and other demand side management measures are at
least as profitable, giving appropriate consideration to income
lost from reduced sales due to investments in and expenditures
for conservation and efficiency, as its investments in and expenditures for the construction of new generation, transmission, and distribution equipment. Such energy conservation, energy efficiency resources and other demand side management measures shall be appropriately monitored and evaluated.
(9) ENERGY EFFICIENCY INVESTMENTS IN POWER GENERATION AND SUPPLY.—The rates charged by any electric utility
shall be such that the utility is encouraged to make investments in, and expenditures for, all cost-effective improvements
in the energy efficiency of power generation, transmission and
distribution. In considering regulatory changes to achieve the
objectives of this paragraph, State regulatory authorities and
nonregulated electric utilities shall consider the disincentives
caused by existing ratemaking policies, and practices, and consider incentives that would encourage better maintenance, and
investment in more efficient power generation, transmission
and distribution equipment.
(10) 1 CONSIDERATION OF THE EFFECTS OF WHOLESALE
POWER PURCHASES ON UTILITY COST OF CAPITAL; EFFECTS OF LEVERAGED CAPITAL STRUCTURES ON THE RELIABILITY OF WHOLE1 Section 712 of the Energy Policy Act of 1992 (P.L. 102–486) instructed that section 111 of
the Public Utility Regulatory Policies Act of 1978 is amended by inserting this paragraph (10)
after paragraph (9). The amendment probably should have been made to section 111(d) as
shown in the text.

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Sec. 111

SALE POWER SELLERS; AND ASSURANCE OF ADEQUATE FUEL SUPPLIES.—(A) To the extent that a State regulatory authority re-

quires or allows electric utilities for which it has ratemaking
authority to consider the purchase of long-term wholesale
power supplies as a means of meeting electric demand, such
authority shall perform a general evaluation of:
(i) the potential for increases or decreases in the costs
of capital for such utilities, and any resulting increases or
decreases in the retail rates paid by electric consumers,
that may result from purchases of long-term wholesale
power supplies in lieu of the construction of new generation facilities by such utilities;
(ii) whether the use by exempt wholesale generators
(as defined in section 32 of the Public Utility Holding Company Act of 1935) of capital structures which employ proportionally greater amounts of debt than the capital structures of such utilities threatens reliability or provides an
unfair advantage for exempt wholesale generators over
such utilities;
(iii) whether to implement procedures for the advance
approval or disapproval of the purchase of a particular
long-term wholesale power supply; and
(iv) whether to require as a condition for the approval
of the purchase of power that there be reasonable assurances of fuel supply adequacy.
(B) For purposes of implementing the provisions of this
paragraph, any reference contained in this section to the date
of enactment of the Public Utility Regulatory Policies Act of
1978 shall be deemed to be a reference to the date of enactment of this paragraph.
(C) Notwithstanding any other provision of Federal law,
nothing in this paragraph shall prevent a State regulatory authority from taking such action, including action with respect
to the allowable capital structure of exempt wholesale generators, as such State regulatory authority may determine to be
in the public interest as a result of performing evaluations
under the standards of subparagraph (A).
(D) Notwithstanding section 124 and paragraphs (1) and
(2) of section 112(a), each State regulatory authority shall consider and make a determination concerning the standards of
subparagraph (A) in accordance with the requirements of subsections (a) and (b) of this section, without regard to any proceedings commenced prior to the enactment of this paragraph.
(E) Notwithstanding subsections (b) and (c) of section 112,
each State regulatory authority shall consider and make a determination concerning whether it is appropriate to implement
the standards set out in subparagraph (A) not later than one
year after the date of enactment of this paragraph.
(11) NET METERING.—Each electric utility shall make
available upon request net metering service to any electric consumer that the electric utility serves. For purposes of this
paragraph, the term ‘‘net metering service’’ means service to an
electric consumer under which electric energy generated by
that electric consumer from an eligible on-site generating facilApril 24, 2013

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ity and delivered to the local distribution facilities may be used
to offset electric energy provided by the electric utility to the
electric consumer during the applicable billing period.
(12) FUEL SOURCES.—Each electric utility shall develop a
plan to minimize dependence on 1 fuel source and to ensure
that the electric energy it sells to consumers is generated using
a diverse range of fuels and technologies, including renewable
technologies.
(13) FOSSIL FUEL GENERATION EFFICIENCY.—Each electric
utility shall develop and implement a 10-year plan to increase
the efficiency of its fossil fuel generation.
(14) TIME-BASED METERING AND COMMUNICATIONS.—(A)
Not later than 18 months after the date of enactment of this
paragraph, each electric utility shall offer each of its customer
classes, and provide individual customers upon customer request, a time-based rate schedule under which the rate
charged by the electric utility varies during different time periods and reflects the variance, if any, in the utility’s costs of
generating and purchasing electricity at the wholesale level.
The time-based rate schedule shall enable the electric consumer to manage energy use and cost through advanced metering and communications technology.
(B) The types of time-based rate schedules that may be offered under the schedule referred to in subparagraph (A) include, among others—
(i) time-of-use pricing whereby electricity prices are
set for a specific time period on an advance or forward
basis, typically not changing more often than twice a year,
based on the utility’s cost of generating and/or purchasing
such electricity at the wholesale level for the benefit of the
consumer. Prices paid for energy consumed during these
periods shall be pre-established and known to consumers
in advance of such consumption, allowing them to vary
their demand and usage in response to such prices and
manage their energy costs by shifting usage to a lower cost
period or reducing their consumption overall;
(ii) critical peak pricing whereby time-of-use prices are
in effect except for certain peak days, when prices may reflect the costs of generating and/or purchasing electricity
at the wholesale level and when consumers may receive
additional discounts for reducing peak period energy consumption;
(iii) real-time pricing whereby electricity prices are set
for a specific time period on an advanced or forward basis,
reflecting the utility’s cost of generating and/or purchasing
electricity at the wholesale level, and may change as often
as hourly; and
(iv) credits for consumers with large loads who enter
into pre-established peak load reduction agreements that
reduce a utility’s planned capacity obligations.
(C) Each electric utility subject to subparagraph (A) shall
provide each customer requesting a time-based rate with a
time-based meter capable of enabling the utility and customer
to offer and receive such rate, respectively.
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Sec. 111

(D) For purposes of implementing this paragraph, any reference contained in this section to the date of enactment of the
Public Utility Regulatory Policies Act of 1978 shall be deemed
to be a reference to the date of enactment of this paragraph.
(E) In a State that permits third-party marketers to sell
electric energy to retail electric consumers, such consumers
shall be entitled to receive the same time-based metering and
communications device and service as a retail electric consumer of the electric utility.
(F) Notwithstanding subsections (b) and (c) of section 112,
each State regulatory authority shall, not later than 18 months
after the date of enactment of this paragraph conduct an investigation in accordance with section 115(i) and issue a decision
whether it is appropriate to implement the standards set out
in subparagraphs (A) and (C).
(15) INTERCONNECTION.—Each electric utility shall make
available, upon request, interconnection service to any electric
consumer that the electric utility serves. For purposes of this
paragraph, the term ‘‘interconnection service’’ means service to
an electric consumer under which an on-site generating facility
on the consumer’s premises shall be connected to the local distribution facilities. Interconnection services shall be offered
based upon the standards developed by the Institute of Electrical and Electronics Engineers: IEEE Standard 1547 for
Interconnecting Distributed Resources with Electric Power Systems, as they may be amended from time to time. In addition,
agreements and procedures shall be established whereby the
services are offered shall promote current best practices of
interconnection for distributed generation, including but not
limited to practices stipulated in model codes adopted by associations of state regulatory agencies. All such agreements and
procedures shall be just and reasonable, and not unduly discriminatory or preferential.
(16) INTEGRATED RESOURCE PLANNING.—Each electric utility shall—
(A) integrate energy efficiency resources into utility,
State, and regional plans; and
(B) adopt policies establishing cost-effective energy efficiency as a priority resource.
(17) RATE DESIGN MODIFICATIONS TO PROMOTE ENERGY EFFICIENCY INVESTMENTS.—
(A) IN GENERAL.—The rates allowed to be charged by
any electric utility shall—
(i) align utility incentives with the delivery of costeffective energy efficiency; and
(ii) promote energy efficiency investments.
(B) POLICY OPTIONS.—In complying with subparagraph
(A), each State regulatory authority and each nonregulated
utility shall consider—
(i) removing the throughput incentive and other
regulatory and management disincentives to energy
efficiency;
(ii) providing utility incentives for the successful
management of energy efficiency programs;
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(iii) including the impact on adoption of energy efficiency as 1 of the goals of retail rate design, recognizing that energy efficiency must be balanced with
other objectives;
(iv) adopting rate designs that encourage energy
efficiency for each customer class;
(v) allowing timely recovery of energy efficiencyrelated costs; and
(vi) offering home energy audits, offering demand
response programs, publicizing the financial and environmental benefits associated with making home energy efficiency improvements, and educating homeowners about all existing Federal and State incentives,
including the availability of low-cost loans, that make
energy efficiency improvements more affordable.
(18) CONSIDERATION OF SMART GRID INVESTMENTS.—
(A) IN GENERAL.—Each State shall consider requiring
that, prior to undertaking investments in nonadvanced
grid technologies, an electric utility of the State demonstrate to the State that the electric utility considered an
investment in a qualified smart grid system based on appropriate factors, including—
(i) total costs;
(ii) cost-effectiveness;
(iii) improved reliability;
(iv) security;
(v) system performance; and
(vi) societal benefit.
(B) RATE RECOVERY.—Each State shall consider authorizing each electric utility of the State to recover from
ratepayers any capital, operating expenditure, or other
costs of the electric utility relating to the deployment of a
qualified smart grid system, including a reasonable rate of
return on the capital expenditures of the electric utility for
the deployment of the qualified smart grid system.
(C) OBSOLETE EQUIPMENT.—Each State shall consider
authorizing any electric utility or other party of the State
to deploy a qualified smart grid system to recover in a
timely manner the remaining book-value costs of any
equipment rendered obsolete by the deployment of the
qualified smart grid system, based on the remaining depreciable life of the obsolete equipment.
(19) SMART GRID INFORMATION.—
(A) STANDARD.—All electricity purchasers shall be provided direct access, in written or electronic machine-readable form as appropriate, to information from their electricity provider as provided in subparagraph (B).
(B) INFORMATION.—Information provided under this
section, to the extent practicable, shall include:
(i) PRICES.—Purchasers and other interested persons shall be provided with information on—
(I) time-based electricity prices in the wholesale electricity market; and
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(II) time-based electricity retail prices or rates
that are available to the purchasers.
(ii) USAGE.—Purchasers shall be provided with the
number of electricity units, expressed in kwh, purchased by them.
(iii) INTERVALS AND PROJECTIONS.—Updates of information on prices and usage shall be offered on not
less than a daily basis, shall include hourly price and
use information, where available, and shall include a
day-ahead projection of such price information to the
extent available.
(iv) SOURCES.—Purchasers and other interested
persons shall be provided annually with written information on the sources of the power provided by the
utility, to the extent it can be determined, by type of
generation, including greenhouse gas emissions associated with each type of generation, for intervals during
which such information is available on a cost-effective
basis.
(C) ACCESS.—Purchasers shall be able to access their
own information at any time through the Internet and on
other means of communication elected by that utility for
Smart Grid applications. Other interested persons shall be
able to access information not specific to any purchaser
through the Internet. Information specific to any purchaser shall be provided solely to that purchaser.
(16 U.S.C. 2621)
SEC. 112. OBLIGATIONS TO CONSIDER AND DETERMINE.
(a) REQUEST FOR CONSIDERATION AND DETERMINATION.—Each

State regulatory authority (with respect to each electric utility for
which it has ratemaking authority) and each nonregulated electric
utility may undertake the consideration and make the determination referred to in section 111 with respect to any standard established by section 111(d) in any proceeding respecting the rates of
the electric utility. Any participant or intervenor (including an intervenor referred to in section 121) in such a proceeding may request, and shall obtain, such consideration and determination in
such proceeding. In undertaking such consideration and making
such determination in any such proceeding with respect to the application to any electric utility of any standard established by section 111(d), a State regulatory authority (with respect to an electric
utility for which it has ratemaking authority) or nonregulated electric utility may take into account in such proceeding—
(1) any appropriate prior determination with respect to
such standard—
(A) which is made in a proceeding which takes place
after the date of the enactment of this Act, or
(B) which was made before such date (or is made in
a proceeding pending on such date) and complies, as provided in section 124, with the requirements of this title;
and
(2) the evidence upon which such prior determination was
based (if such evidence is referenced in such proceeding).
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(b) TIME LIMITATIONS.—(1) Not later than 2 years after the
date of the enactment of this Act (or after the enactment of the
Comprehensive National Energy Policy Act in the case of standards
under paragraphs (7), (8), and (9) of section 111(d)), each State regulatory authority (with respect to each electric utility for which it
has ratemaking authority) and each nonregulated electric utility
shall commence the consideration referred to in section 111, or set
a hearing date for such consideration, with respect to each standard established by section 111(d).
(2) Not later than three years after the date of the enactment
of this Act (or after the enactment of the Comprehensive National
Energy Policy Act in the case of standards under paragraphs (7),
(8), and (9) of section 111(d)), each State regulatory authority (with
respect to each electric utility for which it has ratemaking authority), and each nonregulated electric utility, shall complete the consideration, and shall make the determination, referred to in section
111 with respect to each standard established by section 111(d).
(3)(A) Not later than 2 years after the enactment of this paragraph, each State regulatory authority (with respect to each electric utility for which it has ratemaking authority) and each nonregulated electric utility shall commence the consideration referred
to in section 111, or set a hearing date for such consideration, with
respect to each standard established by paragraphs (11) through
(13) of section 111(d).
(B) Not later than 3 years after the date of the enactment of
this paragraph, each State regulatory authority (with respect to
each electric utility for which it has ratemaking authority), and
each nonregulated electric utility, shall complete the consideration,
and shall make the determination, referred to in section 111 with
respect to each standard established by paragraphs (11) through
(13) of section 111(d).
(4)(A) Not later than 1 year after the enactment of this
paragraph, each State regulatory authority (with respect to
each electric utility for which it has ratemaking authority) and
each nonregulated electric utility shall commence the consideration referred to in section 111, or set a hearing date for such
consideration, with respect to the standard established by
paragraph (14) of section 111(d).
(B) Not later than 2 years after the date of the enactment
of this paragraph, each State regulatory authority (with respect to each electric utility for which it has ratemaking authority), and each nonregulated electric utility, shall complete
the consideration, and shall make the determination, referred
to in section 111 with respect to the standard established by
paragraph (14) of section 111(d).
(5)(A) Not later than 1 year after the enactment of this
paragraph, each State regulatory authority (with respect to
each electric utility for which it has ratemaking authority) and
each nonregulated utility shall commence the consideration referred to in section 111, or set a hearing date for consideration,
with respect to the standard established by paragraph (15) of
section 111(d).
(B) Not later than two years after the date of the enactment of the this paragraph, each State regulatory authority
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(with respect to each electric utility for which it has ratemaking authority), and each nonregulated electric utility, shall
complete the consideration, and shall make the determination,
referred to in section 111 with respect to each standard established by paragraph (15) of section 111(d).
(6)(A) Not later than 1 year after the enactment of this
paragraph, each State regulatory authority (with respect to
each electric utility for which it has ratemaking authority) and
each nonregulated utility shall commence the consideration referred to in section 111, or set a hearing date for consideration,
with respect to the standards established by paragraphs (16)
through (19) of section 111(d).
(B) Not later than 2 years after the date of the enactment
of this paragraph, each State regulatory authority (with respect to each electric utility for which it has ratemaking authority), and each nonregulated electric utility, shall complete
the consideration, and shall make the determination, referred
to in section 111 with respect to each standard established by
paragraphs (16) through (19) of section 111(d).
(c) FAILURE TO COMPLY.—Each State regulatory authority
(with respect to each electric utility for which it has ratemaking
authority) and each nonregulated electric utility shall undertake
the consideration, and make the determination, referred to in section 111 with respect to each standard established by section
111(d) in the first rate proceeding commenced after the date three
years after the date of enactment of this Act respecting the rates
of such utility if such State regulatory authority or nonregulated
electric utility has not, before such date, complied with subsection
(b)(2) with respect to such standard. In the case of each standard
established by paragraphs (11) through (13) of section 111(d), the
reference contained in this subsection to the date of enactment of
this Act shall be deemed to be a reference to the date of enactment
of such paragraphs (11) through (13). In the case of the standard
established by paragraph (14) of section 111(d), the reference contained in this subsection to the date of enactment of this Act shall
be deemed to be a reference to the date of enactment of such paragraph (14). In the case of the standard established by paragraph
(15), the reference contained in this subsection to the date of enactment of this Act shall be deemed to be a reference to the date of
enactment of paragraph (15). 1 In the case of the standards established by paragraphs (16) through (19) of section 111(d), the reference contained in this subsection to the date of enactment of this
Act shall be deemed to be a reference to the date of enactment of
such paragraphs.
(d) PRIOR STATE ACTIONS.—Subsections (b) and (c) of this section shall not apply to the standards established by paragraphs
(11) through (13) and paragraphs (16) through (19) of section
111(d) in the case of any electric utility in a State if, before the enactment of this subsection—
1 The penultimate sentence in subsection (c) was added by section 1254(b)(2) of Public Law
109–58. The amendment instuction provides to insert this sentence at the end of subsection (d).
The insertion of such language at the end of subsection (c) was executed to reflect the probable
intent of Congress.

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(1) the State has implemented for such utility the standard
concerned (or a comparable standard);
(2) the State regulatory authority for such State or relevant nonregulated electric utility has conducted a proceeding
to consider implementation of the standard concerned (or a
comparable standard) for such utility; or
(3) the State legislature has voted on the implementation
of such standard (or a comparable standard) for such utility.
(e) PRIOR STATE ACTIONS.—Subsections (b) and (c) of this section shall not apply to the standard established by paragraph (14)
of section 111(d) in the case of any electric utility in a State if, before the enactment of this subsection—
(1) the State has implemented for such utility the standard
concerned (or a comparable standard);
(2) the State regulatory authority for such State or relevant nonregulated electric utility has conducted a proceeding
to consider implementation of the standard concerned (or a
comparable standard) for such utility within the previous 3
years; or
(3) the State legislature has voted on the implementation
of such standard (or a comparable standard) for such utility
within the previous 3 years.
(f) PRIOR STATE ACTIONS.—Subsections (b) and (c) of this section shall not apply to the standard established by paragraph (15)
of section 111(d) in the case of any electric utility in a State if, before the enactment of this subsection—
(1) the State has implemented for such utility the standard
concerned (or a comparable standard);
(2) the State regulatory authority for such State or relevant nonregulated electric utility has conducted a proceeding
to consider implementation of the standard concerned (or a
comparable standard) for such utility; or
(3) the State legislature has voted on the implementation
of such standard (or a comparable standard) for such utility.
(16 U.S.C. 2622)
SEC. 113. ADOPTION OF CERTAIN STANDARDS.
(a) ADOPTION OF STANDARDS.—Not later

than two years after
the date of the enactment of this Act, each State regulatory authority (with respect to each electric utility for which it has ratemaking
authority), and each nonregulated electric utility, shall provide
public notice and conduct a hearing respecting the standards established by subsection (b) and, on the basis of such hearing, shall—
(1) adopt the standards established by subsection (b) (other
than paragraph (4) thereof), if, and to the extent, such authority or nonregulated electric utility determines that such adoption is appropriate to carry out the purposes of this title, is
otherwise appropriate, and is consistent with otherwise applicable State law, and
(2) adopt the standard established by subsection (b)(4) if,
and to the extent, such authority or nonregulated electric utility determines that such adoption is appropriate and consistent
with otherwise applicable State law.

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For purposes of any determination under paragraphs (1) or (2) and
any review of such determination in any court in accordance with
section 123, the purposes of this title supplement otherwise applicable State law. Nothing in this subsection prohibits any State regulatory authority or nonregulated electric utility from making any
determination that it is not appropriate to adopt any such standard, pursuant to its authority under otherwise applicable State
law.
(b) ESTABLISHMENT.—The following Federal standards are
hereby established:
(1) MASTER METERING.—To the extent determined appropriate under section 115(d), master metering of electric service
in the case of new buildings shall be prohibited or restricted
to the extent necessary to carry out the purposes of this title.
(2) AUTOMATIC ADJUSTMENT CLAUSES.—No electric utility
may increase any rate pursuant to an automatic adjustment
clause unless such clause meets the requirements of section
115(e).
(3) INFORMATION TO CONSUMERS.—Each electric utility
shall transmit to each of its electric consumers information regarding rate schedules in accordance with the requirements of
section 115(f).
(4) PROCEDURES FOR TERMINATION OF ELECTRIC SERVICE.—
No electric utility may terminate electric service to any electric
consumer except pursuant to procedures described in section
115(g).
(5) ADVERTISING.—No electric utility may recover from any
person other than the shareholders (or other owners) of such
utility any direct or indirect expenditure by such utility for
promotional or political advertising as defined in section
115(h).
(c) PROCEDURAL REQUIREMENTS.—Each State regulatory authority (with respect to each electric utility for which it has ratemaking authority) and each nonregulated electric utility, within
the two-year period specified in subsection (a), shall (1) adopt, pursuant to subsection (a), each of the standards established by subsection (b) or, (2) with respect to any such standard which is not
adopted, such authority or nonregulated electric utility shall state
in writing that it has determined not to adopt such standard, to-

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20

gether with the reasons for such determination. Such statement of reasons shall be available to the public.
(16 U.S.C. 2623)
SEC. 114. LIFELINE RATES.
(a) LOWER RATES.—No

provision of this title prohibits a State
regulatory authority (with respect to an electric utility for which it
has ratemaking authority) or a nonregulated electric utility from
fixing, approving, or allowing to go into effect a rate for essential
needs (as defined by the State regulatory authority or by the nonregulated electric utility, as the case may be) of residential electric
consumers which is lower than a rate under the standard referred
to in section 111(d)(1).
(b) DETERMINATION.—If any State regulated electric utility or
nonregulated electric utility does not have a lower rate as described
in subsection (a) in effect two years after the date of the enactment
of this Act, the State regulatory authority having ratemaking authority with respect to such State regulated electric utility or the
nonregulated electric utility, as the case may be, shall determine,
after an evidentiary hearing, whether such a rate should be implemented by such utility.
(c) PRIOR PROCEEDINGS.—Section 124 shall not apply to the requirements of this section.
(16 U.S.C. 2624)
SEC. 115. SPECIAL RULES FOR STANDARDS.
(a) COST OF SERVICE.—In undertaking

the consideration and
making the determination under section 111 with respect to the
standard concerning cost of service established by section 111(d)(1),
the costs of providing electric service to each class of electric consumers shall, to the maximum extent practicable, be determined on
the basis of methods prescribed by the State regulatory authority
(in the case of a State regulated electric utility) or by the electric
utility (in the case of a nonregulated electric utility). Such methods
shall to the maximum extent practicable—
(1) permit identification of differences in cost-incurrence,
for each such class of electric consumers, attributable to daily
and seasonal time of use of service and
(2) permit identification of differences in cost-incurrence
attributable to differences in customer demand, and energy
components of cost. In prescribing such methods, such State
regulatory authority or nonregulated electric utility shall take
into account the extent to which total costs to an electric utility
are likely to change if—
(A) additional capacity is added to meet peak demand
relative to base demand; and
(B) additional kilowatt-hours of electric energy are delivered to electric consumers.
(b) TIME-OF-DAY RATES.—In undertaking the consideration and
making the determination required under section 111 with respect
to the standard for time-of-day rates established by section
111(d)(3) and the standard for time-based metering and communications established by section 111(d)(14), a time-of-day rate
charged by an electric utility for providing electric service to each
class of electric consumers shall be determined to be cost-effective
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with respect to each such class if the long-run benefits of such rate
to the electric utility and its electric consumers in the class concerned are likely to exceed the metering and communications costs
and other costs associated with the use of such rates.
(c) LOAD MANAGEMENT TECHNIQUES.—In undertaking the consideration and making the determination required under section
111 with respect to the standard for load management techniques
established by section 111(d)(6), a load management technique
shall be determined, by the State regulatory authority or nonregulated electric utility, to be cost-effective if—
(1) such technique is likely to reduce maximum kilowatt
demand on the electric utility, and
(2) the long-run cost-savings to the utility of such reduction are likely to exceed the long-run costs to the utility associated with implementation of such technique.
(d) MASTER METERING.—Separate metering shall be determined appropriate for any new building for purposes of section
113(b)(1) if—
(1) there is more than one unit in such building,
(2) the occupant of each such unit has control over a portion of the electric energy used in such unit, and
(3) with respect to such portion of electric energy used in
such unit, the long-run benefits to the electric consumers in
such building exceed the costs of purchasing and installing separate meters in such building.
(e) AUTOMATIC ADJUSTMENT CLAUSES.—(1) An automatic adjustment clause of an electric utility meets the requirements of this
subsection if—
(A) such clause is determined, not less often than every
four years, by the State regulatory authority (with respect to
an electric utility for which it has ratemaking authority) or by
the electric utility (in the case of a nonregulated electric utility), after an evidentiary hearing, to provide incentives for efficient use of resources (including incentives for economical purchase and use of fuel and electric energy) by such electric utility, and
(B) such clause is reviewed not less often than every two
years, in the manner described in paragraph (2), by the State
regulatory authority having ratemaking authority with respect
to such utility (or by the electric utility in the case of a nonregulated electric utility), to insure the maximum economies in
those operations and purchases which affect the rates to which
such clause applies.
(2) In making a review under subparagraph (B) of paragraph
(1) with respect to an electric utility, the reviewing authority shall
examine and, if appropriate, cause to be audited the practices of
such electric utility relating to costs subject to an automatic adjustment clause, and shall require such reports as may be necessary
to carry out such review (including a disclosure of any ownership
or corporate relationship between such electric utility and the seller to such utility of fuel, electric energy, or other items).
(3) As used in this subsection and section 113(b), the term
‘‘automatic adjustment clause’’ means a provision of a rate schedule
which provides for increases or decreases (or both), without prior
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22

hearing, in rates reflecting increases or decreases (or both) in costs
incurred by an electric utility. Such term does not include an interim rate which takes effect subject to a later determination of the
appropriate amount of the rate.
(f) INFORMATION TO CONSUMERS.—(1) For purposes of the
standard for information to consumers established by section
113(b)(3), each electric utility shall transmit to each of its electric
consumers a clear and concise explanation of the existing rate
schedule and any rate schedule applied for (or proposed by a nonregulated electric utility) applicable to such consumer. Such statement shall be transmitted to each such consumer—
(A) not later than sixty days after the date of commencement of service to such consumer or ninety days after the
standard established by section 113(b)(3) is adopted with respect to such electric utility, whichever last occurs, and
(B) not later than thirty days (sixty days in the case of an
electric utility which uses a bimonthly billing system) after
such utility’s application for any change in a rate schedule applicable to such consumer (or proposal of such a change in the
case of a nonregulated utility).
(2) For purposes of the standard for information to consumers
established by section 113(b)(3), each electric utility shall transmit
to each of its electric consumers not less frequently than once each
year—
(A) a clear and concise summary of the existing rate schedules applicable to each of the major classes of its electric consumers for which there is a separate rate, and
(B) an identification of any classes whose rates are not
summarized.
Such summary may be transmitted together with such consumer’s
billing or in such other manner as the State regulatory authority
or non-regulated electric utility deems appropriate.
(3) For purposes of the standard for information to consumers
established by section 113(b)(3), each electric utility, on request of
an electric consumer of such utility, shall transmit to such consumer a clear and concise statement of the actual consumption (or
degree-day adjusted consumption) of electric energy by such consumer for each billing period during the prior year (unless such
consumption data is not reasonably ascertainable by the utility).
(g) PROCEDURES FOR TERMINATION OF ELECTRIC SERVICE.—The
procedures for termination of service referred to in section 113(b)(4)
are procedures prescribed by the State regulatory authority (with
respect to electric utilities for which it has ratemaking authority)
or by the nonregulated electric utility which provide that—
(1) no electric service to an electric consumer may be terminated unless reasonable prior notice (including notice of
rights and remedies) is given to such consumer and such consumer has a reasonable opportunity to dispute the reasons for
such termination, and
(2) during any period when termination of service to an
electric consumer would be especially dangerous to health, as
determined by the State regulatory authority (with respect to
an electric utility for which it has ratemaking authority) or
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nonregulated electric utility, and such consumer establishes
that—
(A) he is unable to pay for such service in accordance
with the requirements of the utility’s billing, or
(B) he is able to pay for such service but only in installments,
such service may not be terminated.
Such procedures shall take into account the need to include reasonable provisions for elderly and handicapped consumers.
(h) ADVERTISING.—(1) For purposes of this section and section
113(b)(5)—
(A) The term ‘‘advertising’’ means the commercial use, by
an electric utility, of any media, including newspaper, printed
matter, radio, and television, in order to transmit a message
to a substantial number of members of the public or to such
utility’s electric consumers.
(B) The term ‘‘political advertising’’ means any advertising
for the purpose of influencing public opinion with respect to
legislative, administrative, or electoral matters, or with respect
to any controversial issue of public importance.
(C) The term ‘‘promotional advertising’’ means any advertising for the purpose of encouraging any person to select or
use the service or additional service of an electric utility or the
selection or installation of any appliance or equipment designed to use such utility’s service.
(2) For purposes of this subsection and section 113(b)(5), the
terms ‘‘political advertising’’ and ‘‘promotional advertising’’ do not
include—
(A) advertising which informs electric consumers how they
can conserve energy or can reduce peak demand for electric energy,
(B) advertising required by law or regulation, including advertising required under part 1 of title II of the National Energy Conservation Policy Act,
(C) advertising regarding service interruptions, safety
measures, or emergency conditions,
(D) advertising concerning employment opportunities with
such utility,
(E) advertising which promotes the use of energy efficient
appliances, equipment or services, or
(F) any explanation or justification of existing or proposed
rate schedules, or notifications of hearings thereon.
(i) TIME-BASED METERING AND COMMUNICATIONS.—In making
a determination with respect to the standard established by section
111(d)(14), the investigation requirement of section 111(d)(14)(F)
shall be as follows: Each State regulatory authority shall conduct
an investigation and issue a decision whether or not it is appropriate for electric utilities to provide and install time-based meters
and communications devices for each of their customers which enable such customers to participate in time-based pricing rate schedules and other demand response programs.
(16 U.S.C. 2625)
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SEC. 116. REPORTS RESPECTING STANDARDS.
(a) STATE AUTHORITIES AND NONREGULATED

UTILITIES.—Not
later than one year after the date of the enactment of this Act and
annually thereafter for ten years, each State regulatory authority
(with respect to each State regulated electric utility for which it
has ratemaking authority), and each nonregulated electric utility,
shall report to the Secretary, in such manner as the Secretary shall
prescribe, respecting its consideration of the standards established
by sections 111(d) and 113(b). Such report shall include a summary
of the determinations made and actions taken with respect to each
such standard on a utility-by-utility basis.
(b) SECRETARY.—Not later than eighteen months after the date
of the enactment of this Act and annually thereafter for ten years,
the Secretary shall submit a report to the President and the Congress containing—
(1) a summary of the reports submitted under subsection
(a),
(2) his analysis of such reports, and
(3) his actions under this title, and his recommendations
for such further Federal actions, including any legislation, regarding retail electric utility rates (and other practices) as may
be necessary to carry out the purposes of this title.
(16 U.S.C. 2626)
SEC. 117. RELATIONSHIP TO STATE LAW.
(a) REVENUE AND RATE OF RETURN.—Nothing

in this title shall
authorize or require the recovery by an electric utility of revenues,
or of a rate of return, in excess of, or less than, the amount of revenues or the rate of return determined to be lawful under any other
provision of law.
(b) STATE AUTHORITY.—Nothing in this title prohibits any
State regulatory authority or nonregulated electric utility from
adopting, pursuant to State law, any standard or rule affecting
electric utilities which is different from any standard established
by this subtitle.
(c) FEDERAL AGENCIES.—With respect to any electric utility
which is a Federal agency, and with respect to the Tennessee Valley Authority when it is treated as a State regulatory authority as
provided in section 3(17), any reference in section 111 or 113 to
State law shall be treated as a reference to Federal law.
(16 U.S.C. 2627)

Subtitle C—Intervention and Judicial
Review
SEC. 121. INTERVENTION IN PROCEEDINGS.
(a) AUTHORITY TO INTERVENE AND PARTICIPATE.—In

order to
initiate and participate in the consideration of one or more of the
standards established by subtitle B or other concepts which contribute to the achievement of the purposes of this title, the Secretary, any affected electric utility, or any electric consumer of an
affected electric utility may intervene and participate as a matter
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latory proceeding relating to rates or rate design which is conducted by a State regulatory authority (with respect to an electric
utility for which it has ratemaking authority) or by a nonregulated
electric utility.
(b) ACCESS TO INFORMATION.—Any intervenor or participant in
a proceeding described in subsection (a) shall have access to information available to other parties to the proceeding if such information is relevant to the issues to which his intervention or participation in such proceeding relates. Such information may be obtained
through reasonable rules relating to discovery of information prescribed by the State regulatory authority (in the case of proceedings concerning electric utilities for which it has ratemaking
authority) or by the nonregulated electric utility (in the case of a
proceeding conducted by a nonregulated electric utility).
(c) EFFECTIVE DATE; PROCEDURES.—Any intervention or participation under this section, in any proceeding commenced before
the date of the enactment of this Act but not completed before such
date, shall be permitted under this section only to the extent such
intervention or participation is timely under otherwise applicable
law.
(16 U.S.C. 2631)
SEC. 122. CONSUMER REPRESENTATION.
(a) COMPENSATION FOR COSTS OF PARTICIPATION OR INTERVENTION.—(1) If no alternative means for assuring representation of

electric consumers is adopted in accordance with subsection (b) and
if an electric consumer of an electric utility substantially contributed to the approval, in whole or in part, of a position advocated
by such consumer in a proceeding concerning such utility, and relating to any standard set forth in subtitle B, such utility shall be
liable to compensate such consumer (pursuant to paragraph (2)) for
reasonable attorneys’ fees, expert witness fees, and other reasonable costs incurred in preparation and advocacy of such position in
such proceeding (including fees and costs of obtaining judicial review of any determination made in such proceeding with respect to
such position).
(2) A consumer entitled to fees and costs under paragraph (1)
may collect such fees and costs from an electric utility by bringing
a civil action in any State court of competent jurisdiction, unless
the State regulatory authority (in the case of a proceeding concerning a State regulated electric utility) or nonregulated electric
utility (in the case of a proceeding concerning such nonregulated
electric utility) has adopted a reasonable procedure pursuant to
which such authority or nonregulated electric utility—
(A) determines the amount of such fees and costs, and
(B) includes an award of such fees and costs in its order
in the proceeding.
(3) The procedure adopted by such State regulatory authority
or nonregulated utility under paragraph (2) may include a preliminary proceeding to require that—
(A) as a condition of receiving compensation under such
procedure such consumer demonstrate that, but for the ability
to receive such award, participation or intervention in such
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proceeding may be a significant financial hardship for such
consumer, and
(B) persons with the same or similar interests have a common legal representative in the proceeding as a condition to receiving compensation.
(b) ALTERNATIVE MEANS.—Compensation shall not be required
under subsection (a) if the State, the State regulatory authority (in
the case of a proceeding concerning a State regulated electric utility), or the nonregulated electric utility (in the case of a proceeding
concerning such nonregulated electric utility) has provided an alternative means for providing adequate compensation to persons—
(1) who have, or represent, an interest—
(A) which would not otherwise be adequately represented in the proceeding, and
(B) representation of which is necessary for a fair determination in the proceeding, and
(2) who are, or represent an interest which is, unable to
effectively participate or intervene in the proceeding because
such persons cannot afford to pay reasonable attorneys’ fees,
expert witness fees, and other reasonable costs of preparing
for, and participating or intervening in, such proceeding (including fees and costs of obtaining judicial review of such proceeding).
(c) TRANSCRIPTS.—The State regulatory authority or nonregulated electric utility, as the case may be, shall make transcripts of
the proceeding available, at cost of reproduction, to parties or intervenors in any ratemaking proceeding, or other regulatory proceeding relating to rates or rate design, before a State regulatory
authority or nonregulated electric utility.
(d) FEDERAL AGENCIES.—Any claim under this section against
any Federal agency shall be subject to the availability of appropriated funds.
(e) RIGHTS UNDER OTHER AUTHORITY.—Nothing in this section
affects or restricts any rights of any participant or intervenor in
any proceeding under any other applicable law or rule of law.
(16 U.S.C. 2632)
SEC. 123. JUDICIAL REVIEW AND ENFORCEMENT.
(a) LIMITATION OF FEDERAL JURISDICTION.—Notwithstanding

any other provision of law, no court of the United States shall have
jurisdiction over any action arising under any provision of subtitle
A or B or of this subtitle except for—
(1) an action over which a court of the United States has
jurisdiction under subsection (b) or (c)(2); and
(2) review of any action in the Supreme Court of the
United States in accordance with sections 1257 and 1258 of
title 28 of the United States Code.
(b) ENFORCEMENT OF INTERVENTION RIGHT.—(1) The Secretary
may bring an action in any appropriate court of the United States
to enforce his right to intervene and participate under section
121(a), and such court shall have jurisdiction to grant appropriate
relief.
(2) If any electric utility or electric consumer having a right to
intervene under section 121(a) is denied such right by any State
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court, such electric utility or electric consumer may bring an action
in the appropriate United States district court to require the State
regulatory authority or nonregulated electric utility to permit such
intervention and participation, and such court shall have jurisdiction to grant appropriate relief.
(3) Nothing in this subsection prohibits any person bringing
any action under this subsection in a court of the United States
from seeking review and enforcement at any time in any State
court of any rights he may have with respect to any motion to intervene or participate in any proceeding.
(c) REVIEW AND ENFORCEMENT.—(1) Any person (including the
Secretary) may obtain review of any determination made under
subtitle A or B or under this subtitle with respect to any electric
utility (other than a utility which is a Federal agency) in the appropriate State court if such person (or the Secretary) intervened or
otherwise participated in the original proceeding or if State law
otherwise permits such review. Any person (including the Secretary) may bring an action to enforce the requirements of this title
in the appropriate State court, except that no such action may be
brought in a State court with respect to a utility which is a Federal
agency. Such review or action in a State court shall be pursuant
to any applicable State procedures.
(2) Any person (including the Secretary) may obtain review in
the appropriate court of the United States of any determination
made under subtitle A or B or this subtitle by a Federal agency if
such person (or the Secretary) intervened or otherwise participated
in the original proceeding or if otherwise applicable law permits
such review. Such court shall have jurisdiction to grant appropriate
relief. Any person (including the Secretary) may bring an action to
enforce the requirements of subtitle A or B or this subtitle with respect to any Federal agency in the appropriate court of the United
States and such court shall have jurisdiction to grant appropriate
relief.
(3) In addition to his authority to obtain review under paragraph (1) or (2), the Secretary may also participate as an amicus
curiae in any review by any court of an action arising under the
provisions of subtitle A or B or this subtitle.
(d) OTHER AUTHORITY OF THE SECRETARY.—Nothing in this
section prohibits the Secretary from—
(1) intervening and participating in any proceeding, or
(2) intervening and participating in any review by any
court of any action
under section 204 of the Energy Conservation and Production Act.
(16 U.S.C. 2633)
SEC. 124. PRIOR AND PENDING PROCEEDINGS.

For purposes of subtitle A and B, and this subtitle, proceedings
commenced by State regulatory authorities (with respect to electric
utilities for which it has ratemaking authority) and nonregulated
electric utilities before the date of the enactment of this Act and
actions taken before such date in such proceedings shall be treated
as complying with the requirements of subtitles A and B, and this
subtitle if such proceedings and actions, substantially conform to
such requirements. For purposes of subtitles A and B, and this subApril 24, 2013

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title, any such proceeding or action commenced before the date of
enactment of this Act, but not completed before such date, shall
comply with the requirements of subtitles A and B, and this subtitle, to the maximum extent practicable, with respect to so much
of such proceeding or action as takes place after such date, except
as otherwise provided in section 121(c). In the case of each standard established by paragraphs (11) through (13) of section 111(d),
the reference contained in this subsection to the date of enactment
of this Act shall be deemed to be a reference to the date of enactment of such paragraphs (11) through (13). In the case of the
standard established by paragraph (14) of section 111(d), the reference contained in this subsection to the date of enactment of this
Act shall be deemed to be a reference to the date of enactment of
such paragraph (14). In the case of each standard established by
paragraph (15) of section 111(d), the reference contained in this
subsection to the date of enactment of the Act shall be deemed to
be a reference to the date of enactment of paragraph (15).
(16 U.S.C. 2634)

Subtitle D—Administrative Provisions
SEC. 131. VOLUNTARY GUIDELINES.

The Secretary may prescribe voluntary guidelines respecting
the standards established by sections 111(d) and 113(b). Such
guidelines may not expand the scope or legal effect of such standards or establish additional standards respecting electric utility
rates.
(16 U.S.C. 2641)
SEC. 132. RESPONSIBILITIES OF SECRETARY OF ENERGY.
(a) AUTHORITY.—The Secretary may periodically

notify the
State regulatory authorities, and electric utilities identified pursuant to section 102(c)—
(1) load management techniques and the results of studies
and experiments concerning load management techniques;
(2) developments and innovations in electric utility rate
making throughout the United States, including the results of
studies and experiments in rate structure and rate reform;
(3) methods for determining cost of service;
(4) any other data or information which the Secretary determines would assist such authorities and utilities in carrying
out the provisions of this title; and
(5) technologies, techniques, and rate-making methods related to advanced metering and communications and the use
of these technologies, techniques and methods in demand response programs.
(b) TECHNICAL ASSISTANCE.—The Secretary may provide such
technical assistance as he determines appropriate to assist the
State regulatory authorities in carrying out their responsibilities
under subtitle B and as is requested by any State regulatory authority relating to the standards established by subtitle B.

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(c) APPROPRIATIONS.—There are authorized to be appropriated
to carry out the purposes of subsection (b) not to exceed $1,000,000
for each of the fiscal years 1979 and 1980.
(d) DEMAND RESPONSE.—The Secretary shall be responsible
for—
(1) educating consumers on the availability, advantages,
and benefits of advanced metering and communications technologies, including the funding of demonstration or pilot
projects;
(2) working with States, utilities, other energy providers
and advanced metering and communications experts to identify
and address barriers to the adoption of demand response programs; and
(3) not later than 180 days after the date of enactment of
the Energy Policy Act of 2005, providing Congress with a report that identifies and quantifies the national benefits of demand response and makes a recommendation on achieving specific levels of such benefits by January 1, 2007.
(16 U.S.C. 2642)
SEC. 133. GATHERING INFORMATION ON COSTS OF SERVICE.
(a) INFORMATION REQUIRED TO BE GATHERED.—Each

electric
utility shall periodically gather information under such rules (promulgated by the Commission) as the Commission determines necessary to allow determination of the costs associated with providing
electric service. For purposes of this section, and for purposes of
any consideration and determination respecting the standard established by section 111(d)(2), such costs shall be separated, to the
maximum extent practicable, into the following components: customer cost component, demand cost component, and energy cost
component. Rules under this subsection shall include requirements
for the gathering of the following information with respect to each
electric utility—
(1) the costs of serving each electric consumer class, including costs of serving different consumption patterns within
such class, based on voltage level, time of use, and other appropriate factors;
(2) daily kilowatt demand load curves for all electric consumer classes combined representative of daily and seasonal
differences in demand, and daily kilowatt demand load curves
for each electric consumer class for which there is a separate
rate, representative of daily and seasonal differences in demand;
(3) annual capital, operating, and maintenance costs—
(A) for transmission and distribution services, and
(B) for each type of generating unit; and
(4) costs of purchased power, including representative
daily and seasonal differences in the amount of such costs.
Such rules shall provide that information required to be gathered
under this section shall be presented in such categories and such
detail as may be necessary to carry out the purposes of this section.
(b) COMMISSION RULES.—The Commission shall, within 180
days after the date of enactment of this Act, by rule, prescribe the
methods, procedure, and format to be used by electric utilities in
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gathering the information described in this section. Such rules may
provide for the exemption by the Commission of an electric utility
or class of electric utilities from gathering all or part of such information, in cases where such utility or utilities show and the Commission finds, after public notice and opportunity for the presentation of written data, views, and arguments, that gathering such
information is not likely to carry out the purposes of this section.
The Commission shall periodically review such findings and may
revise such rules.
(c) FILING AND PUBLICATION.—Not later than two years after
the date of enactment of this Act, and periodically, but not less frequently than every two years thereafter, each electric utility shall
file with—
(1) the Commission, and
(2) any State regulatory authority which has ratemaking
authority for such utility,
the information gathered pursuant to this section and make such
information available to the public in such form and manner as the
Commission shall prescribe. In addition, at the time of application
for, or proposal of, any rate increase, each electric utility shall
make such information available to the public in such form and
manner as the Commission shall prescribe. The two-year period
after the date of the enactment specified in this subsection may be
extended by the Commission for a reasonable additional period in
the case of any electric utility for good cause shown.
(d) ENFORCEMENT.—For purposes of enforcement, any violation
of a requirement of this section shall be treated as a violation of
a provision of the Energy Supply and Environmental Coordination
Act of 1974 enforceable under section 12 of such Act (notwithstanding any expiration date in such Act) except that in applying
the provisions of such section 12 any reference to the Federal Energy Administrator shall be treated as a reference to the Commission.
(16 U.S.C. 2643)
SEC. 134. RELATIONSHIP TO OTHER AUTHORITY.

Nothing in this title shall be construed to limit or affect any
authority of the Secretary or the Commission under any other provision of law.
(16 U.S.C. 2644)

Subtitle E—State Utility Regulatory
Assistance
SEC. 141. GRANTS TO CARRY OUT TITLES I AND III.

[Amends section 207 of the Energy Conservation and Production Act.]
SEC. 142. AUTHORIZATIONS.

[Amends title II of the Energy Conservation and Production
Act.]
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SEC. 143. CONFORMING AMENDMENTS.
(a) ADMINISTRATOR.—Title II of the

Energy Conservation and
Production Act is amended by striking out ‘‘Administrator’’ in each
place it appears and substituting ‘‘Secretary’’. Section 202(1) of the
Energy Conservation and Production Act is amended to read as follows:
‘‘(b) DEFINITION.—
‘‘(1) The term ‘Secretary’ means the Secretary of Energy.’’.

TITLE II—CERTAIN FEDERAL ENERGY
REGULATORY COMMISSION AND DEPARTMENT OF ENERGY AUTHORITIES
SEC. 201. DEFINITIONS.

[Amends section 3 of the Federal Power Act which appears in
this compilation by adding new paragraphs (17)–(22).]
SEC. 202. INTERCONNECTION.

[Amends part II of the Federal Power Act, which appears in
this compilation, by adding a new section 210.]
SEC. 203. WHEELING.

[Amends part II of the Federal Power Act, which appears in
this compilation, by adding a new section 211.]
SEC. 204. GENERAL PROVISIONS REGARDING CERTAIN INTERCONNECTION AND WHEELING AUTHORITY.

[Amends part II of the Federal Power Act, which appears in
this compilation.]
SEC. 205. 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, 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,
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through pooling arrangements. Not later than 18 months after the
date of the enactment of this Act, 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, 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.
(16 U.S.C. 824a–1)
SEC. 206. CONTINUANCE OF SERVICE.

(a) [Amends section 202 of the Federal Power Act, which appears in this compilation, by adding a new subsection (g).]
(b) EFFECTIVE DATE.—The amendment made by subsection (a)
shall not affect any proceeding of the Commission pending on the
date of the enactment of this Act or any case pending on such date
respecting a proceeding of the Commission.
(16 U.S.C. 824a nt)
SEC. 207. CONSIDERATION OF PROPOSED RATE INCREASES.
(a) NOTICE PERIOD.—Section 205 of the Federal Power

Act is
amended by striking out ‘‘thirty’’ each place it appears and substituting ‘‘sixty’’.
(b) STUDY.—The Chairman of the Federal Energy Regulatory
Commission, in consultation with the Secretary, is directed to conduct a study of the legal requirements and administrative procedures involved in the consideration and resolution of proposed
wholesale electric rate increases under the Federal Power Act for
the purposes of (1) providing for expeditious handling of hearings
consistent with due process, (2) preventing the imposition of successive rate increases before they have been determined by the Commission to be just and reasonable and otherwise lawful, and (3) improving procedures designed to prohibit anticompetitive or unreasonable differences in wholesale and retail rates, or both. The
Chairman shall report to Congress within nine months from the
date of enactment of this Act on the results of the study required
under this section, on the Administrative actions taken as a result
of this study, and on any recommendations for changes in existing
law that will aid the purposes of this section.
(16 U.S.C. 824d nt)
SEC. 208. AUTOMATIC ADJUSTMENT CLAUSES.

[Amends section 205 of the Federal Power Act, which appears
in this compilation, by adding a new subsection (f).]
SEC. 209. RELIABILITY.
(a) STUDY.—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,

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(B) the various methods which could be used in order to
achieve such level of reliability and the cost effectiveness of
such methods, and
(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 the date of the enactment of this Act. 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 investment 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 or 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 use 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 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) 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 reliability approApril 24, 2013

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priate 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.
(16 U.S.C. 824a–2)
SEC. 210. COGENERATION AND SMALL, POWER PRODUCTION.
(a) COGENERATION AND SMALL POWER PRODUCTION RULES.—

Not later than 1 year after the date of enactment of this Act, 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 congeneration 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 or purposes other than resale.
(b) RATES FOR PURCHASES BY ELECTRIC UTILITIES.—The rules
prescribed under subsection (a) 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
(2) shall not discriminate against qualifying cogenerators
or qualifying small power producers.
No such rule prescribed under subsection (a) 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) 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
1 So

April 24, 2013

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(2) shall not discriminate against the qualifying cogenerators or qualifying small power producers.
(d) DEFINITION.—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 the date of enactment of this Act 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, from the Public Utility Holding
Company Act, 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) 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 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 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),
(B) the provisions of section 210, 211, or 212 of the Federal
Power Act or the necessary authorities for enforcement of any
such provision under the Federal Power Act, or
(C) any license or permit requirement under part I of the
Federal Power Act, 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) BeApril 24, 2013

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ginning on or before the date one year after any rule is prescribed
by the Commission under subsection (a) 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) 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) in the
same manner, and under the same requirements, as judicial review
may be obtained under section 123 in the case of a proceeding to
which section 123 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). Any such action shall be brought only in the manner, and under the requirements, as provided under section 123
with respect to an action to which section 123 applies.
(h) COMMISSION ENFORCEMENT.—(1) For purposes of enforcement of any rule prescribed by the Commission under subsection
(a) with respect to any operations 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, such rule shall be treated as a rule
under the Federal Power Act. Nothing in subsection (g) 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) against any State regulatory authority or nonregulated
electric utility. For purposes of any such enforcement, the requirements of subsection (f)(1) shall be treated as a rule enforceable
under the Federal Power Act. 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) 1 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) as provided in subparagraph (A) of
this paragraph. If the Commission does not initiate an enforcement
1 So

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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 the date of the
enactment of this Act 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) at which non-Federal hydroelectric development is permissible, this section shall not apply to any hydroelectric project which impounds or diverts 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 (whichever is appropriate as required by that
Act 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.
(k) DEFINITION OF NEW DAM OR DIVERSION.—For purposes of
this section, the term ‘‘new dam or diversion’’ means a dam or diApril 24, 2013

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version 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 devices) 1
(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’’,
‘‘congeneration 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.
(m) TERMINATION OF MANDATORY PURCHASE AND SALE REQUIREMENTS.—
(1) OBLIGATION TO PURCHASE.—After the date of enactment of this subsection, no electric utility shall be required to
enter into a new contract or obligation 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 Commission-approved 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 the date of enactment of this subsection,
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).
(B) For the purposes of this paragraph, the term ‘‘existing
qualifying cogeneration facility’’ means a facility that—
1 So

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(i) was a qualifying cogeneration facility on the date of
enactment of subsection (m); 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).
(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, 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 the date of enactment of
this subsection, 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
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non-regulated electric utility on the date of enactment of this
subsection, 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 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 the date of enactment of this section, 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 section 210 of this Act 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 section 210 of this Act. For all other purposes,
except as specifically provided in subsection (m)(2)(A), 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 the date of enactment of subsection (m), 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).
(16 U.S.C. 824a–3)
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SEC. 211. INTERLOCKING DIRECTORATES.

(a) [Amends section 305 of the Federal Power Act, which appears in this compilation, by adding a new subsection (c).]
(b) EFFECTIVE DATE.—No person shall be required to file a
statement under section 305(c)(1) of the Federal Power Act before
April 30 of the second calendar year which begins after the date
of the enactment of this Act and no public utility shall be required
to publish a list under section 305(c)(2) of such Act before January
31 of such second calendar year.
(16 U.S.C. 825d nt)
SEC. 212. PUBLIC PARTICIPATION BEFORE FEDERAL ENERGY REGULATORY COMMISSION.

[Amends the Federal Power Act, which appears in this compilation, by adding a new section 318, and by redesignating sections 319 and 320 as 320 and 321, respectively.]
SEC. 213. CONDUIT HYDROELECTRIC FACILITIES.

[Amends Part I of the Federal Power Act, which appears in
this compilation, by adding a new section 30.]
SEC. 214. PRIOR ACTION; EFFECT ON OTHER AUTHORITIES.
(a) PRIOR ACTIONS.—No provision of this title or of any

amendment made by this title shall apply to, or affect, any action taken
by the Commission before the date of the enactment of this Act.
(b) OTHER AUTHORITIES.—No provision 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.
(16 U.S.C. 824 nt)

TITLE III—RETAIL POLICIES FOR
NATURAL GAS UTILITIES
SEC. 301. PURPOSES; COVERAGE.
(a) PURPOSES.—The purposes

of this title are to encourage—
(1) conservation of energy supplied by gas utilities;
(2) the optimization of the efficiency of use of facilities and
resources by gas utility systems; and
(3) equitable rates to gas consumers of natural gas.
(b) VOLUME OF TOTAL RETAIL SALES.—This title applies to each
gas utility in any calendar year, and to each proceeding relating to
each gas utility in such year, if the total sales of natural gas by
such utility for purposes other than resale exceeded 10 billion cubic
feet during any calendar year beginning after December 31, 1975,
and before the immediately preceding calendar year.
(c) EXCLUSION OF WHOLESALE SALES.—The requirements of
this title do not apply to the operations of a gas utility, or to proceedings respecting such operations, to the extent that such operations or proceedings relate to sales of natural gas for purposes of
resale.
(d) LIST OF COVERED UTILITIES.—Before the beginning of each
calendar year, the Secretary shall publish a list identifying each
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gas utility to which this title applies during such calendar year.
Promptly after publication of such list, each State regulatory authority shall notify the Secretary of each gas utility on the list for
which such State regulatory authority has ratemaking authority.
(15 U.S.C. 3201)
SEC. 302. DEFINITIONS.

For purposes of this title—
(1) The term ‘‘gas consumer’’ means any person, State
agency, or Federal agency, to which natural gas is sold other
than for purposes of resale.
(2) The term ‘‘gas utility’’ means any person, State agency,
or Federal agency, engaged in the local distribution of natural
gas, and the sale of natural gas to any ultimate consumer of
natural gas.
(3) The term ‘‘State regulated gas utility’’ means any gas
utility with respect to which a State regulatory authority has
ratemaking authority.
(4) The term ‘‘nonregulated gas utility’’ means any gas
utility other than a State regulated gas utility.
(5) The term ‘‘rate’’ means any (A) price, rate, charge, or
classification made, demanded, observed, or received with respect to sale of natural gas to a gas consumer, (B) any rule,
regulation, or practice respecting any such rate, charge, or
classification, and (C) any contract pertaining to the sale of
natural gas to a gas consumer.
(6) The term ‘‘ratemaking authority’’ means authority to
fix, modify, approve, or disapprove rates.
(7) The term ‘‘sale’’, when used with respect to natural gas,
includes an exchange of natural gas.
(8) The term ‘‘State regulatory authority’’ means any State
agency which has ratemaking authority with respect to the
sale of natural gas by any gas utility (other than by such State
agency).
(9) The term ‘‘integrated resource planning’’ means, in the
case of a gas utility, planning by the use of any standard, regulation, practice, or policy to undertake a systematic comparison
between demand-side management measures and the supply of
gas by a gas utility to minimize life-cycle costs of adequate and
reliable utility services to gas consumers. Integrated resource
planning shall take into account necessary features for system
operation such as diversity, reliability, dispatchability, and
other factors of risk and shall treat demand and supply to gas
consumers on a consistent and integrated basis.
(10) The term ‘‘demand-side management’’ includes energy
conservation, energy efficiency, and load management techniques.
(15 U.S.C. 3202)
SEC. 303. ADOPTION OF CERTAIN STANDARDS.
(a) ADOPTION OF STANDARDS.—Not later

than 2 years after the
date of the enactment of this Act (or after the enactment of the Energy Policy Act of 1992 in the case of standards under paragraphs
(3), (4), (5), and (6) of subsection (b)), each State regulatory authority (with respect to each gas utility for which it has ratemaking au-

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thority) and each nonregulated gas utility shall provide public notice and conduct a hearing respecting the standards established by
subsection (b) and, on the basis of such hearing, shall—
(1) adopt the standard established by subsection (b)(1) if,
and to the extent, such authority or nonregulated utility determines that such adoption is appropriate and is consistent with
otherwise applicable State law, and
(2) adopt the standards established by paragraphs (2), (3)
and (4) of subsection (b) if, and to the extent, such authority
or nonregulated utility determines that such adoption is appropriate to carry out the purposes of this title, is otherwise appropriate, and is consistent with otherwise applicable State
law.
For purposes of any determination under paragraphs (1) and (2)
and any review of such determination in any court under section
307, the purposes of this title supplement State law. Nothing in
this subsection prohibits any State regulatory authority or nonregulated utility from making any determination that it is not appropriate to implement any such standard, pursuant to its authority under otherwise applicable State law.
(b) ESTABLISHMENT.—The following Federal standards are
hereby established:
(1) PROCEDURES FOR TERMINATION OF NATURAL GAS SERVICE.—No gas utility may terminate natural gas service to any
gas consumer except pursuant to procedures described in section 304(a).
(2) ADVERTISING.—No gas utility may recover from any
person other than the shareholders (or other owners) of such
utility any direct or indirect expenditure by such utility for
promotional or political advertising as defined in section
304(b).
(3) INTEGRATED RESOURCE PLANNING.—Each gas utility
shall employ, in order to provide adequate and reliable service
to its gas customers at the lowest system cost. All plans or filings of a State regulated gas utility before a State regulatory
authority to meet the requirements of this paragraph shall (A)
be updated on a regular basis, (B) provide the opportunity for
public participation and comment, (C) provide for methods of
validating predicted performance, and (D) contain a requirement that the plan be implemented after approval of the State
regulatory authority. Subsection (c) shall not apply to this
paragraph to the extent that it could be construed to require
the State regulatory authority to extend the record of a State
proceeding in submitting reports to the Federal Government.
(4) INVESTMENTS IN CONSERVATION AND DEMAND MANAGEMENT.—The rates charged by any State regulated gas utility
shall be such that the utility’s prudent investments in, and expenditures for, energy conservation and load shifting programs
and for other demand-side management measures which are
consistent with the findings and purposes of the Energy Policy
Act of 1992 are at least as profitable (taking into account the
income lost due to reduced sales resulting from such programs)
as prudent investments in, and expenditures for, the acquisition or construction of supplies and facilities. This objective reApril 24, 2013

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quires that (A) regulators link the utility’s net revenues, at
least in part, to the utility’s performance in implementing costeffective programs promoted by this section; and (B) regulators
ensure that, for purposes of recovering fixed costs, including its
authorized return, the utility’s performance is not affected by
reductions in its retail sales volumes.
(5) ENERGY EFFICIENCY.—Each natural gas utility shall—
(A) integrate energy efficiency resources into the plans
and planning processes of the natural gas utility; and
(B) adopt policies that establish energy efficiency as a
priority resource in the plans and planning processes of
the natural gas utility.
(6) RATE DESIGN MODIFICATIONS TO PROMOTE ENERGY EFFICIENCY INVESTMENTS.—
(A) IN GENERAL.—The rates allowed to be charged by
a natural gas utility shall align utility incentives with the
deployment of cost-effective energy efficiency.
(B) POLICY OPTIONS.—In complying with subparagraph
(A), each State regulatory authority and each nonregulated
utility shall consider—
(i) separating fixed-cost revenue recovery from the
volume of transportation or sales service provided to
the customer;
(ii) providing to utilities incentives for the successful management of energy efficiency programs, such as
allowing utilities to retain a portion of the cost-reducing benefits accruing from the programs;
(iii) promoting the impact on adoption of energy
efficiency as 1 of the goals of retail rate design, recognizing that energy efficiency must be balanced with
other objectives; and
(iv) adopting rate designs that encourage energy
efficiency for each customer class.
For purposes of applying the provisions of this subtitle to
this paragraph, any reference in this subtitle to the date
of enactment of this Act shall be treated as a reference to
the date of enactment of this paragraph.
(c) PROCEDURAL REQUIREMENTS.—Each State regulatory authority (with respect to each gas utility for which it has ratemaking
authority) and each nonregulated gas utility, within the 2-year period specified in subsection (a), shall adopt, pursuant to subsection
(a), each of the standards established by subsection (b) or, with respect to any such standard which is not adopted, such authority or
nonregulated gas utility shall state in writing that it has determined not to adopt such standard, together with the reasons for
such determination. Such statement of reasons shall be available
to the public.
(d) SMALL BUSINESS IMPACTS.—If a State regulatory authority
implements a standard established by subsection (b) (3) or (4), such
authority shall—
(1) consider the impact that implementation of such standard would have on small businesses engaged in the design,
sale, supply, installation, or servicing of energy conservation,
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energy efficiency, or other demand-side management measures,
and
(2) implement such standard so as to assure that utility
actions would not provide such utilities with unfair competitive
advantages over such small businesses.
(15 U.S.C. 3203)
SEC. 304. SPECIAL RULES FOR STANDARDS.
(a) PROCEDURES FOR TERMINATION OF

GAS SERVICE.—The procedures for termination of service referred to in section 303(b)(1)
are procedures prescribed by the State regulatory authority (with
respect to gas utilities for which it has ratemaking authority) or
the nonregulated gas utility which provide that—
(1) no gas service to a gas consumer may be terminated
unless reasonable prior notice (including notice of rights and
remedies) is given to such consumer and such consumer has a
reasonable opportunity to dispute the reasons for such termination, and
(2) during any period when termination of service to a gas
consumer would be especially dangerous to health, as determined by the State regulatory authority (with respect to each
gas utility for whom it has ratemaking authority) or nonregulated gas utility, and such consumer establishes that—
(A) he is unable to pay for such service in accordance
with the requirements of the utility’s billing, or
(B) he is able to pay for such service but only in installments,
such service may not be terminated.
Such procedures shall take into account the need to include reasonable provisions for elderly and handicapped consumers.
(b) ADVERTISING.—(1) For purposes of this section and section
303—
(A) The term ‘‘advertising’’ means the commercial use, by
a gas utility, of any media, including newspaper, printed matter, radio, and television, in order to transmit a message to a
substantial number of members of the public or to such utility’s gas consumers.
(B) The term ‘‘political advertising’’ means any advertising
for the purpose of influencing public opinion with respect to
legislative, administrative, or electoral matters, or with respect
to any controversial issue of public importance.
(C) The term ‘‘promotional advertising’’ means any advertising for the purpose of encouraging any person to select or
use the service or additional service of a gas utility or the selection or installation of any appliance or equipment designed
to use such utility’s service.
(2) For purposes of this section and section 303, the terms ‘‘political advertising’’ and ‘‘promotional advertising’’ do not include—
(A) advertising which informs natural gas consumers how
they can conserve natural gas or can reduce peak demand for
natural gas,
(B) advertising required by law or regulations, including
advertising required under part 1 of title II of the National Energy Conservation Policy Act,
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(C) advertising regarding service interruptions, safety
measures, or emergency conditions,
(D) advertising concerning employment opportunities with
such utility,
(E) advertising which promotes the use of energy efficient
appliances, equipment or services, or
(F) any explanation or justification of existing or proposed
rate schedules, or notification of hearings thereon.
(15 U.S.C. 3204)
SEC. 305. FEDERAL PARTICIPATION.
(a) INTERVENTION.—In addition

to the authorities vested in the
Secretary pursuant to any other provision of law, the Secretary, on
his own motion, may intervene as a matter of right in any proceeding before a State regulatory authority which relates to gas
utility rates or rate design. Such intervention shall be solely for the
purpose of advocating policies or methods which carry out the purposes set forth in section 301 of this title.
(b) RIGHTS.—The Secretary shall have the same rights as any
other party to a proceeding before a State regulatory authority
which relates to gas utility rates or rate design.
(c) NONREGULATED GAS UTILITIES.—The Secretary, on his own
motion, may, to the same extent as provided in subsections (a)
through (b), intervene as a matter of right in any proceeding which
relates to rates or rate design of nonregulated gas utilities.
(15 U.S.C. 3205)
SEC. 306. GAS UTILITY RATE DESIGN PROPOSALS.
(a) STUDY.—(1) The Secretary, in consultation

with the Commission and, after affording an opportunity for consultation and
comment by representatives of the State regulatory commissions,
gas utilities, and gas consumers, shall study and report to Congress
on gas utility rate design within 18 months after the date of the
enactment of this Act. Such study shall address the effect (both
separately and in combination) of the following factors upon the
items listed in paragraph (2): incremental pricing; marginal cost
pricing; end user gas consumption taxes; wellhead natural gas pricing policies; demand-commodity rate design; declining block rates;
interruptible service; seasonal rate differentials; and end user rate
schedules.
(2) The items referred to in paragraph (1) are as follows:
(A) natural gas pipeline and local distribution company
load factors;
(B) rates to each class of user, including residential commercial, and industrial users;
(C) the change in total costs resulting from gas utility designs (including capital and operating costs) to gas consumers
or classes thereof;
(D) demand for, and consumption of, natural gas;
(E) end use profiles or natural gas pipelines and local distribution companies; and
(F) competition with alternative fuels.
(b) PROPOSALS.—Based upon the study prepared pursuant to
subsection (a), the Secretary shall develop proposals to improve gas
utility rate design and to encourage conservation of natural gas.
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Such proposals shall include any comments and recommendations
of the Commission.
(c) TRANSMISSION TO CONGRESS.—The proposals prepared
under subsection (b) shall be transmitted, together with any legislative recommendations, to each House of Congress not later than
6 months after the date of submission of the study under subsection (a). Such proposals shall be accompanied by an analyses 1
of—
(1) the projected savings (if any) in consumption of natural
gas, and other energy resources,
(2) changes (if any) in the cost of natural gas to consumers,
which are likely to result from the implementation nationally
of each of such proposals, and
(3) the effects of the proposals on other provisions of this
Act on gas utility rate structures.
(d) PUBLIC PARTICIPATION.—The Secretary shall provide for
public participation in the conduct of the study under subsection
(a) and the preparation of proposals under subsection (b).
(15 U.S.C. 3206)
SEC. 307. JUDICIAL REVIEW AND ENFORCEMENT.
(a) LIMITATION OF FEDERAL JURISDICTION.—(1)

Notwithstanding any other provision of law, no court of the United States
shall have jurisdiction over any action arising under any provision
of this title except for—
(A) an action over which a court of the United States has
jurisdiction under paragraph (2), or
(B) review in the Supreme Court of the United States in
accordance with sections 1257 and 1258 of title 28 of the
United States Code.
(2) The Secretary may bring an action in an appropriate court
of the United States to enforce his right to intervene under section
305 and such court shall have jurisdiction to grant appropriate relief.
(b) ENFORCEMENT.—(1) Any person may bring an action to enforce the requirements of this title in the appropriate State court.
Such action in a State court shall be pursuant to applicable State
procedures.
(2) Nothing in this title shall authorize the Secretary to appeal
or otherwise seek judicial review of the decisions of a State regulatory authority or nonregulated gas utility or to become a party
to any action to obtain such review or appeal. The Secretary may
participate as an amicus curiae in any judicial review of an action
arising under the provisions of this title.
(15 U.S.C. 3207)
SEC. 308. RELATIONSHIP TO OTHER APPLICABLE LAW.

Nothing in this title prohibits any State regulatory authority
or nonregulated gas utility from adopting, pursuant to State law,
any standard or rule affecting gas utilities which is different from
any standard established by this title.
(15 U.S.C. 3208)
1 So

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SEC. 309. REPORTS RESPECTING STANDARDS.
(a) STATE AUTHORITIES AND NONREGULATED

UTILITIES.—Not
later than 1 year after the date of the enactment of this Act and
annually thereafter for 10 years, each State regulatory authority
(with respect to each gas utility for which it has ratemaking authority), and each nonregulated gas utility, shall report to the Secretary in such manner as the Secretary shall prescribe, respecting
its consideration of the standards established by this title. Such report shall include a summary of the determinations made and actions taken with respect to each of such standards on a utility-byutility basis.
(b) SECRETARY.—Not later than 18 months after the date of the
enactment of this Act and annually thereafter for 10 years, the Secretary shall submit a report to the President and the Congress containing—
(1) a summary of the reports submitted under subsection
(a),
(2) his analysis of such reports, and
(3) his actions under this title, and his recommendations
for such further Federal actions, including any legislation, regarding retail gas utility rates (and other practices) as may be
necessary to carry out the purposes of this title.
(15 U.S.C. 3209)
SEC. 310. PRIOR AND PENDING PROCEEDINGS.

For purposes of this title, proceedings commenced by any State
regulatory authority (with respect to gas utilities for which it has
ratemaking authority) and any nonregulated gas utility before the
date of the enactment of this Act and actions taken before such
date in such proceedings shall be treated as complying with the requirements of this title if such proceedings and actions substantially conform to such requirements. For purposes of this title, any
such proceeding or action commenced before the date of enactment
of this Act but not completed before such date shall comply with
the requirements of this title, to the maximum extent practicable,
with respect to so much of such proceeding or action as takes place
after such date.
(15 U.S.C. 3210)
SEC. 311. RELATIONSHIP TO OTHER AUTHORITY.

Nothing in this title shall be construed to limit or affect any
authority of the Secretary or the Commission under any other provision of law.
(15 U.S.C. 3211)

TITLE IV—SMALL HYDROELECTRIC
POWER PROJECTS
SEC. 401. ESTABLISHMENT OF PROGRAM.

The Secretary shall establish a program in accordance with
this title to encourage municipalities, electric cooperatives, industrial development agencies, nonprofit organizations, and other persons to undertake the development of small hydroelectric power
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Sec. 403

projects in connection with existing dams which are not being used
to generate electric power.
(16 U.S.C. 2701)
SEC. 402. LOANS FOR FEASIBILITY STUDIES.
(a) LOAN AUTHORITY.—The Secretary,

after consultation with
the Commission, is authorized to make a loan to any municipality,
electric cooperative, industrial development agency, nonprofit organization, or other person to assist such person in defraying up to
90 percent of the costs of—
(1) studies to determine the feasibility of undertaking a
small hydroelectric power project at any existing dam or dams
and
(2) preparing any application for a necessary license or
other Federal, State, and local approval respecting such a
project at any existing dam or dams and of participating in any
administrative proceeding regarding any such application.
(b) CANCELLATION.—The Secretary may cancel the unpaid balance and any accrued interest on any loan granted pursuant to this
section if he determines on the basis of the study that the small
hydroelectric power project would not be technically or economically feasible.
(16 U.S.C. 2702)
SEC. 403. LOANS FOR PROJECT COSTS.
(a) AUTHORITY.—The Secretary is

authorized to make loans to
any municipality, electric cooperative, industrial development agency, nonprofit organization, or other person of up to 75 percent of
the project costs of a small hydroelectric power project. No such
loan may be made unless the Secretary finds that—
(1) the project will be constructed in connection with an existing dam or dams,
(2) all licenses and other required Federal, State, and local
approvals necessary for construction of the project have been
issued,
(3) the project will have no significant adverse environmental effects, including significant adverse effects on fish and
wildlife, on recreational use of water, and on stream flow, and
(4) the project will not have a significant adverse effect on
any other use of the water used by such project.
The Secretary may make a commitment to make a loan under this
subsection to an applicant who has not met the requirements of
paragraph (2), pending compliance by such applicant with such requirements. Such commitment shall be for 1 period of not to exceed
3 years unless the Secretary in consultation with the Commission,
extends such period for good cause shown. Notwithstanding any
such commitment no such loan shall be made before such person
has complied with such requirements.
(b) PREFERENCE.—The Secretary shall give preference to applicants under this section who do not have available alternative financing which the Secretary deems appropriate to carry out the
project and whose projects will provide useful information as to the
technical and economic feasibility of—
1 So

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(1) the generation of electric energy by such projects, and
(2) the use of energy produced by such projects.
(c) INFORMATION.—Every applicant for a license for a small hydroelectric power project receiving loans pursuant to this section
shall furnish the Secretary with such information as the Secretary
may require regarding equipment and services proposed to be used
in the design, construction, and operation of such project. The Secretary shall have the right to forbid the use in such project of any
equipment or services he finds inappropriate for such project by
reason of cost, performance, or failure to carry out the purposes of
this section. The Secretary shall make information which he obtains under this subsection available to the public, other than information described as entitled to confidentiality under section
11(d) of the Energy Supply and Environmental Coordination Act of
1974.
(d) JOINT PARTICIPATION.—In making loans for small hydroelectric power projects under this section, the Secretary shall encourage joint participation, to the extent permitted by law, by applicants eligible to receive loans under this section with respect to
the same project.
(16 U.S.C. 2703)
SEC. 404. LOAN RATES AND REPAYMENT.
(a) INTEREST.—Each loan made pursuant

to this title shall
bear interest at the discount or interest rate used at the time the
loan is made for water resources planning projects under section 80
of the Water Resources Development Act of 1974 (42 U.S.C. 1962–
17(a)). Each such loan shall be for such term, as the Secretary
deems appropriate, but not in excess of—
(1) 10 years (in the case of a loan under section 402) or
(2) 30 years (in the case of a loan under section 403).
(b) REPAYMENTS.—Amounts repaid on loans made pursuant to
this title shall be deposited into the United States Treasury as miscellaneous receipts.
(16 U.S.C. 2704)
SEC. 405. SIMPLIFIED AND EXPEDITIOUS LICENSING PROCEDURES.
(a) ESTABLISHMENT OF PROGRAM.—The Commission shall es-

tablish, in such manner as the Commission deems appropriate,
consistent with the applicable provisions of law, a program to use
simple and expeditious licensing procedures under the Federal
Power Act for small hydroelectric power projects in connection with
existing dams.
(b) PREREQUISITES.—Before issuing any license under the Federal Power Act for the construction or operation of any small hydroelectric power project the Commission—
(1) shall assess the safety of existing structures in any proposed project (including possible consequences associated with
failure of such structures), and
(2) shall provide an opportunity for consultation with the
Council on Environmental Quality and the Environmental Protection Agency with respect to the environmental effects of
such project.
Nothing in this subsection exempts any such project from any requirement applicable to any such project under the National EnviApril 24, 2013

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ronmental Policy Act of 1969, the Fish and Wildlife Coordination
Act, the Endangered Species Act, or any other provision of Federal
law.
(c) FISH AND WILDLIFE FACILITIES.—The Commission shall encourage applicants for licenses for small hydroelectric power
projects to make use of public funds and other assistance for the
design and construction of fish and wildlife facilities which may be
required in connection with any development of such project.
(d) EXEMPTIONS FROM LICENSING REQUIREMENTS IN CERTAIN
CASES.—The Commission may in its discretion (by rule or order)
grant an exemption in whole or in part from the requirements (including the licensing requirements) of part I of the Federal Power
Act to small hydroelectric power projects having a proposed installed capacity of 5,000 kilowatts or less, on a case-by-case basis
or on the basis of classes or categories of projects, subject to the
same limitations (to ensure protection for fish and wildlife as well
as other environmental concerns) as those which are set forth in
subsections (c) and (d) of section 30 of the Federal Power Act with
respect to determinations made and exemptions granted under subsection (a) of such section 30; and subsections (c) and (d) of such
section 30 shall apply with respect to actions taken and exemptions
granted under this subsection. Except as specifically provided in
this subsection, the granting of an exemption to a project under
this subsection shall in no case have the effect of waiving or limiting the application (to such project) of the second sentence of subsection (b) of this section.
(16 U.S.C. 2705)
SEC. 406. NEW IMPOUNDMENTS.

Nothing in this title authorizes (1) the loan of funds for construction of any new dam or other impoundment, or (2) the simple
and expeditious licensing of any such new dam or other impoundment.
(16 U.S.C. 2706)
SEC. 407. AUTHORIZATIONS.

There are hereby authorized to be appropriated for each of the
fiscal years ending September 30, 1978, September 30, 1979, and
September 30, 1980, not to exceed $10,000,000 for loans to be made
pursuant to section 402, such funds to remain available until expended. There are hereby authorized to be appropriated for each of
the fiscal years ending September 30, 1978, September 30, 1979,
September 30, 1980, not to exceed $100,000,000 for loans to be
made pursuant to section 403, such funds to remain available until
expended.
(16 U.S.C. 2707)
SEC. 408. DEFINITIONS.

(a) For purposes of this title, the term—
(1) ‘‘small hydroelectric power project’’ means any hydroelectric power project which is located at the site of any existing dam, which uses the water power potential of such dam,
and which has not more than 30,000 kilowatts of installed capacity;
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(2) ‘‘electric cooperative’’ means any cooperative association
eligible to receive loans under section 4 of the Rural Electrification Act of 1936 (7 U.S.C. 904);
(3) ‘‘industrial development agency’’ means any agency
which is permitted to issue obligations the interest on which
is excludable from gross income under section 103 of the Internal Revenue Code of 1954;
(4) ‘‘project costs’’ means the cost of acquisiiton 1 or construction of all facilities and services and the cost of acquisition
of all land and interest in land used in the design and construction and operation of a small hydroelectric power project;
(5) ‘‘nonprofit organization’’ means any organization described in section 501(c)(3) or 501(c)(4) of the Internal Revenue
Code of 1954 and exempt from tax under section 501(a) of such
Code (but only with respect to a trade or business carried on
by such organization which is not an unrelated trade or business, determined by applying section 513(a) to such organization);
(6) ‘‘existing dam’’ means any dam, the construction of
which was completed on or before July 22, 2005, and which
does not require any construction or enlargement of impoundment structures (other than repairs or reconstruction) in connection with the installation of any small hydroelectric power
project;
(7) ‘‘municipality’’ has the meaning provided in section 3 of
the Federal Power Act; and
(8) ‘‘person’’ has the meaning provided in section 3 of the
Federal Power Act.
(b) The requirement in subsection (a)(1) that a project be located at the site of an existing dam in order to qualify as a small
hydroelectric power project, and the other provisions of this title
which require that a project be at or in connection with an existing
dam (or utilize the potential of such dam) in order to be assisted
under or included within such provisions, shall not be construed to
exclude—
(1) from the definition contained in such subsection
(a)(1),or
(2) from any other provision of this title,
any project which utilizes or proposes to utilize natural water features for the generation of electricity, without the need for any dam
or impoundment, in a manner which (as determined by the Commission) will achieve the purposes of this title and will do so without any adverse effect upon such natural water features.
(16 U.S.C. 2708)

TITLE V—CRUDE OIL TRANSPORTATION
SYSTEMS
[Title V is not included in this compilation.]
1 So

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Sec. 602

TITLE VI—MISCELLANEOUS
PROVISIONS
SEC. 601. STUDY CONCERNING ELECTRIC RATES OF STATE UTILITY
AGENCIES.
(a) STUDY AND REPORT.—The Secretary, in consultation with

the Commission and appropriate State regulatory authorities and
other persons, shall conduct a study concerning the effects of provisions of Federal law on rate established by State utility agencies.
The Secretary shall submit a report to Congress containing the results of such study not later than 1 year after the date of the enactment of this Act.
(b) DEFINITION.—The term ‘‘State utility agency’’ means an
agency of a State (not including any political subdivision or agency
thereof or any public power district) which is an electric utility.
(16 U.S.C. 2621 nt)
SEC. 602. 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 101 (1)
and (2) of this Act 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) 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 State may request and as he determines appropriate in the selection of a transmission route. If the trans1So

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mission 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-of-way 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, 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
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-of-day 2 under this section unless he determines that the holder or holders of a permit referred to in subsection (a)(1)(B) 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) 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 rightsof-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.
(e) FEDERAL LAW GOVERNING FEDERAL LANDS.—This section
shall not affect any Federal law governing Federal lands.
(f) REPORTS.—The Secretary shall report annually to the Congress on the actions, if any, taken pursuant to this section.
(16 U.S.C. 824a–4)
2 So

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

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Sec. 605

SEC. 603. UTILITY REGULATORY INSTITUTE.
(a) MATCHING GRANTS.—The Secretary

may make grants
under this section to an institute established by the National Association of Regulatory Utility Commissioners to enable such institute to—
(1) conduct research on electric and gas utility regulatory
policy issues,
(2) develop data processing and retrieval methods for electric and gas utility ratemaking, and
(3) perform other functions directly related to assisting
State regulatory authorities in carrying out their functions
under State law and this Act.
(b) FEDERAL SHARE.—Grants under this section shall not be
used to provide more than the following percentages of the cost to
the institute of carrying out the activities specified in subsection
(a):
(1) 80 percent from the fiscal year 1979; and
(2) 60 percent for the fiscal year 1980.
The remaining amounts expended by the institute may not be provided from Federal sources.
(c) RESTRICTIONS.—Grants under this section may not be made
subject to terms and conditions other than those the Secretary
deems necessary for purposes of administering this section and for
purposes of assuring that—
(1) all information gathered by the institute is available to
the Secretary, the Commission, and the public, and
(2) no portion of any such grant is used to support or oppose any legislative proposal except by means of testimony by
representatives of the institute provided by invitation to a committee of Congress or of a State legislature.
(d) AUTHORIZATION OF APPROPRIATIONS.—There is authorized
to be appropriated not more than $2,000,000 for each of the fiscal
years 1979 and 1980 for purposes of making grants under this section. No amounts may be appropriated for any fiscal year after the
fiscal year 1980 to carry out the purposes of this section without
a specific authorization of Congress.
(16 U.S.C. 2645)
SEC. 604. COAL RESEARCH LABORATORIES.

øSection 604 amended section 801 and section 806 of the Surface Mining Control and Reclamation Act of 1977.¿
SEC. 605. CONSERVED NATURAL GAS.
(a) GENERAL RULE.—(1) For purposes

of determining the natural gas entitlement of any local distribution company under any
curtailment plan, if the Commission revises any base period established under such plan, the volumes of natural gas which such
local distribution company demonstrates—
(A) were sold by the local distribution company, for a priority use immediately before the implementation of conservation measures, and
(B) were conserved by reason of the implementation of
such conservation measures,
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shall be treated by the Commission following such revision as continuing to be used for the priority use referred to in subparagraph
(A).
(2) The Commission shall, by rule, prescribe methods for measurement of volumes of natural gas to which subparagraphs (A) and
(B) of paragraph (1) apply.
(b) CONDITIONS, LIMITATIONS, ETC.—Subsection (a) shall not
limit or otherwise affect any provision of any curtailment plan, or
any other provision of law or regulation, under which natural gas
may be diverted or allocated to respond to emergency situations or
to protect public health, safety, and welfare.
(c) DEFINITIONS.—For purposes of this section—
(1) The term ‘‘conservation measures’’ means such energy
conservation measures, as determined by the Commission, as
were implemented after the base period established under the
curtailment plan in effect on the date of the enactment of this
Act.
(2) The term ‘‘local distribution company’’ means any person engaged in the transportation, or local distribution, of natural gas and the sale of natural gas for ultimate consumption.
(3) The term ‘‘curtailment plan’’ means a plan (including
any modification of such plan required by the Natural Gas Policy Act of 1978) in effect under the Natural Gas Act which provides for recognizing and implementing priorities of service
during periods of curtailed deliveries.
(15 U.S.C. 717x)
SEC. 606. VOLUNTARY CONVERSION OF NATURAL GAS USERS TO
HEAVY FUEL OIL.
(a) IN GENERAL.—(1) In order to facilitate voluntary conversion

of facilities from the use of natural gas to the use of heavy petroleum fuel oil, the Commission shall, by rule, provide a procedure
for the approval by the Commission of any transfer to any person
described in paragraph 2(B) (i), (ii), or (iii) of contractual interests
involving the receipt of natural gas described in paragraph 2(A).
(2)(A) The rule required under paragraph (1) shall apply to—
(i) natural gas—
(I) received by the user pursuant to a contract entered
into before September 1, 1977, not including any renewal
or extension thereof entered into on or after such date
other than any such extension or renewal pursuant to the
exercise by such user of an option to extend or renew such
contract;
(II) other than natural gas the sale for resale or the
transportation of which was subject to the jurisdiction of
the Federal Power Commission under the Natural Gas Act
as of September 1, 1977;
(III) which was used as a fuel in any facility in existence on September 1, 1977.
(ii) natural gas subject to a prohibition order issued under
section 607.
(B) The rule required under paragraph (1) shall permit the
transfer of contractual interests—
(i) to any interstate pipeline;
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Sec. 606

(ii) to any local distribution company served by an interstate pipeline; and
(iii) to any person served by an interstate pipeline for a
high priority use by such person.
(3) The rule required under paragraph (1) shall provide that
any transfer of contractual interests pursuant to such rule shall be
under such terms and conditions as the Commission may prescribe.
Such rule shall include a requirement for refund of any consideration, received by the person transferring contractual interests pursuant to such rule, to the extent such consideration exceeds the
amount by which the costs actually incurred, during the remainder
of the period of the contract with respect to which such contractual
interests are transferred, in direct association with the use of
heavy petroleum fuel oil as a fuel in the applicable facility exceeds
the price under such contract for natural gas, subject to such contract, delivered during such period.
(4) In prescribing the rule required under paragraph (1), and
in determining whether to approve any transfer of contractual interests, the Commission shall consider whether such transfer of
contractual interests is likely to increase demand for imported refined petroleum products.
(b) COMMISSION APPROVAL.—(1) No transfer of contractual interests authorized by the rule required under subsection (a)(1) may
take effect unless the Commission issues a certificate of public convenience and necessity for such transfer if such natural gas is to
be resold by the person to whom such contractual interests are to
be transferred. Such certificate shall be issued by the Commission
in accordance with the requirements of this subsection and those
of section 7 of the Natural Gas Act, and the provisions of such Act
applicable to the determination of satisfaction of the public convenience and necessity requirements of such section.
(2) The rule required under subsection (a)(1) shall set forth
guidelines for the application on a regional or national basis (as the
Commission determines appropriate) of the criteria specified in
subsection (e) (2) and (3) to determine the maximum consideration
permitted as just compensation under this section.
(c) RESTRICTIONS ON TRANSFERS UNENFORCEABLE.—Any provision of any contract, which provision prohibits any transfer of any
contractual interests thereunder, or any commingling or transportation of natural gas subject to such contract with natural gas the
sale for resale or transportation of which is subject to the jurisdiction of the Commission under the Natural Gas Act, or terminates
such contract on the basis of any such transfer, commingling, or
transportation, shall be unenforceable in any court of the United
States and in any court of any State if applied with respect to any
transfer approved under the rule required under subsection (a)(1).
(d) CONTRACTUAL OBLIGATIONS UNAFFECTED.—The person acquiring contractual interests transferred pursuant to the rule required under subsection (a)(1) shall assume the contractual obligations which the person transferring such contractual interests has
under such contract. This section shall not relieve the person transferring such contractual interests from any contractual obligation
of such person under such contract if such obligation is not performed by the person acquiring such contractual interests.
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(e) DEFINITIONS.—For purposes of this section—
(1) The term ‘‘natural gas’’ has the same meaning as provided by section 2(5) of the Natural Gas Act.
(2) The term ‘‘just compensation’’, when used with respect
to any contractual interests pursuant to the rule required
under subsection (a)(1), means the maximum amount of, or
method of determining, consideration which does not exceed
the amount by which—
(A) the reasonable costs (not including capital costs)
incurred, during the remainder of the period of the contract with respect to which contractual interests are transferred pursuant to the rule required under subsection
(a)(1), in direct association with the use of heavy petroleum fuel oil as a fuel in the applicable facility, exceeds
(B) the price under such contract for natural gas, subject to such contract, delivered during such period.
For purposes of subparagraph (A), the reasonable costs directly
associated with the use of heavy petroleum fuel oil as a fuel
shall include an allowance for the amortization, over the remaining useful life, of the undepreciated value of the depreciable assets located on the premises containing such facility,
which assets were directly associated with the use of natural
gas and are not usable in connection with the use of such
heavy petroleum fuel oil.
(3) The term ‘‘just compensation’’, when used with respect
to any intrastate pipeline which would have transported or distributed natural gas with respect to which contractual interests are transferred pursuant to the rule required under subsection (a)(1), means an amount equal to any loss of revenue,
during the remaining period of the contract with respect to
which contractual interests are transferred pursuant to the
rule required under subsection (a)(1), to the extent such loss—
(A) is directly incurred by reason of the discontinuation of the transportation or distribution of natural gas
resulting from the transfer of contractual interests pursuant to the rule required under subsection (a)(1); and
(B) is not offset by—
(i) a reduction in expenses associated with such
discontinuation; and
(ii) revenues derived from other transportation or
distribution which would not have occurred if such
contractual interests had not been transferred.
(4) The term ‘‘contractual interests’’ means the right to receive natural gas under contract as affected by an applicable
curtailment plan filed with the Commission or the appropriate
State regulatory authority.
(5) The term ‘‘interstate pipeline’’ means any person engaged in natural gas transportation subject to the jurisdiction
of the Commission under the Natural Gas Act.
(6) The term ‘‘high-priority use’’ means any use of natural
gas (other than its use for the generation of steam for industrial purposes or electricity) identified by the Commission as a
high priority use for which the Commission determines a substitute fuel is not reasonably available.
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(7) The term ‘‘heavy petroleum fuel oil’’ means number 4,
5, or 6 fuel oil which is domestically refined.
(8) The term ‘‘local distribution company’’ means any person, other than any intrastate pipeline or any interstate pipeline, engaged in the transportation, or local distribution, of natural gas and the sale of natural gas for ultimate consumption.
(9) The term ‘‘intrastate pipeline’’ means any person engaged in natural gas transportation (not including gathering)
which is not subject to the jurisdiction of the Commission
under the Natural Gas Act.
(10) The term ‘‘facility’’ means any electric powerplant, or
major fuel burning installation, as such terms are defined in
the Powerplant and Industrial Fuel Use Act of 1978.
(11) The term ‘‘curtailment plan’’ means a plan (including
any modification of such plan required by the Natural Gas Policy Act of 1978), in effect under the Natural Gas Act or State
law, which provides for recognizing and implementing priorities of service during periods of curtailed deliveries by any
local distribution company, intrastate pipeline, or interstate
pipeline.
(12) The term ‘‘interstate commerce’’ has the same meaning as such term has under the Natural Gas Act.
(f) COORDINATION WITH THE NATURAL GAS ACT.—(1) Consideration in any transfer of contractual interests pursuant to the rule
required under subsection (a)(1) of this section shall be deemed just
and reasonable for purposes of sections 4 and 5 of the Natural Gas
Act if such consideration does not exceed just compensation.
(2) No person shall be subject to the jurisdiction of the Commission under the Natural Gas Act as a natural gas-company
(within the meaning of such Act) or to regulation as a common carrier under any provision of Federal or State law solely by reason
of making any sale, or engaging in any transportation, of natural
gas with respect to which contractual interests are transferred pursuant to the rule required under subsection (a)(1).
(3) Nothing in this section shall exempt from the jurisdiction
of the Commission under the Natural Gas Act any transportation
in interstate commerce of natural gas, any sale in interstate commerce for resale of natural gas, or any person engaged in such
transportation or such sale to the extent such transportation, sale,
or person is subject to the jurisdiction of the Commission under
such Act without regard to the transfer of contractual interests
pursuant to the rule required under subsection (a)(1).
(4) Nothing in this section shall exempt any person from any
obligation to obtain a certificate of public convenience and necessity
for the sale in interstate commerce for resale or the transportation
in interstate commerce of natural gas with respect to which contractual interests are transferred pursuant to the rule required
under subsection (a)(1).
(g) VOLUME LIMITATION.—No supplier of natural gas under any
contract, with respect to which contractual interests have been
transferred pursuant to the rule required under subsection (a)(1),
shall be required to supply natural gas during any relevant period
in volume amounts which exceed the lesser of—
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(1) the volume determined by reference to the maximum
delivery obligations specified in such contract;
(2) the volume which such supplier would have been required to supply, under the curtailment plan in effect for such
supplier, to the person, who transferred contractual interests
pursuant to the rule required under subsection (a)(1), if no
such transfer had occurred; and
(3) the volume actually delivered or for which payment
would have been made pursuant to such contract during the
12-calendar-month period ending immediately before such
transfer of contractual interests.
(15 U.S.C. 717y)
SEC. 607. EMERGENCY CONVERSION OF UTILITIES AND OTHER FACILITIES.
(a) PRESIDENTIAL DECLARATION.—The President may declare a

natural gas supply emergency (or extend a previously declared
emergency) if he finds that—
(1) a severe natural gas shortage, endangering the supply
of natural gas for high-priority uses, exists or is imminent in
the United States or in any region thereof; and
(2) the exercise of authorities under this section is reasonably necessary, having exhausted other alternatives (not including section 303 of the Natural Gas Policy Act of 1978) to
the maximum extent practicable, to assist in meeting natural
gas requirements for such high-priority uses.
(b) LIMITATION.—(1) Any declaration of a natural gas supply
emergency (or extension thereof) under subsection (a), shall terminate at the earlier of—
(A) the date on which the President finds that any shortage described in subsection (a) does not exist or is not imminent; or
(B) 120 days after the date of such declaration of emergency (or extension thereof).
(2) Nothing in this subsection shall prohibit the President from
extending, under subsection (a), any emergency (or extension thereof) previously declared under subsection (a), upon the expiration of
such declaration of emergency (or extension thereof) under paragraph (1)(B).
(c) PROHIBITIONS.—During a natural gas emergency declared
under this section, the President may, by order, prohibit the burning of natural gas by any electric powerplant or major fuel-burning
installation if the President determines that—
(1) such powerplant or installation had on September 1,
1977 (or at any time thereafter) the capability to burn petroleum products without damage to its facilities or equipment
and without interference with operational requirements;
(2) significant quantities of natural gas which would otherwise be burned by such powerplant or installation could be
made available before the termination of such emergency to
any person served by an interstate pipeline for use by such
person in a high-priority use; and
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(3) petroleum products will be available for use by such
powerplant or installation throughout the period the order is
in effect.
(d) LIMITATIONS.—The President may specify in any order
issued under this section the periods of time during which such
order will be in effect and the quantity (or rate of use) of natural
gas that may be burned by an electric powerplant or major fuelburning installation during such period, including the burning of
natural gas by an electric powerplant to meet peak load requirements. No such order may continue in effect after the termination
or expiration of such natural gas supply emergency.
(e) EXEMPTION FOR SECONDARY USES.—The President shall exempt from any order issued under this section the burning of natural gas for the necessary processes of ignition, startup, testing,
and flame stabilization by an electric powerplant or major fuelburning installation.
(f) EXEMPTION FOR AIR-QUALITY EMERGENCIES.—The President
shall exempt any electric powerplant or major fuel-burning installation in whole or in part, from any order issued under this section
for such period and to such extent as the President determines necessary to alleviate any imminent and substantial endangerment to
the health of persons within the meaning of section 303 of the
Clean Air Act.
(g) LIMITATION ON INJUNCTIVE RELIEF.—(1) Except as provided
in paragraph (2), no court shall have jurisdiction to grant any injunctive relief to stay or defer the implementation of any order
issued under this section unless such relief is in connection with
a final judgment entered with respect to such order.
(2)(A) On the petition of any person aggrieved by an order
issued under this section, the United States District Court for the
District of Columbia may, after an opportunity for a hearing before
such court and on an appropriate showing, issue a preliminary injunction temporarily enjoining, in whole or in part, the implementation of such order.
(B) For purposes of this paragraph, subpenas for witnesses
who are required to attend the District Court for the District of Columbia may be served in any judicial district of the United States,
except that no writ of subpena under the authority of this section
shall issue for witnesses outside of the District of Columbia at a
greater distance than 100 miles from the place of holding court unless the permission of the District Court for the District of Columbia has been granted after proper application and cause shown.
(h) DEFINITIONS.—For purposes of this section—
(1) The terms ‘‘electric powerplant’’, ‘‘powerplant’’, ‘‘major
fuel-burning installation’’, and ‘‘installation’’ shall have the
same meanings as such terms have under section 103 of the
Powerplant and Industrial Fuel Use Act of 1978.
(2) The term ‘‘petroleum products’’ means crude oil, or any
product derived from crude oil other than propane.
(3) The term ‘‘high priority use’’ means any—
(A) use of natural gas in a residence;
(B) use of natural gas in a commercial establishment
in amounts less than 50 Mcf on a peak day; or
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(C) any use of natural gas the curtailment of which
the President determines would endanger life, health, or
maintenance of physical property.
(4) The term ‘‘Mcf’’, when used with respect to natural gas,
means 1,000 cubic feet of natural gas measured at a pressure
of 14.73 pounds per square inch (absolute) and a temperature
of 60 degrees Fahrenheit.
(i) USE OF CERTAIN TERMS.—In applying the provisions of this
section in the case of natural gas subject to a prohibition order
issued under this section, the term ‘‘petroleum products’’ (as defined in subsection (h)(2) of this section) shall be substituted for the
term ‘‘heavy petroleum fuel oil’’ (as defined in section 606(e)(7)) if
the person subject to any order under this section demonstrates to
the Commission that the acquisition and use of heavy petroleum
fuel oil is not technically or economically feasible.
(15 U.S.C. 717z)
SEC. 608. NATURAL GAS TRANSPORTATION POLICIES.

[Section 608 amended section 7 of the Natural Gas Act.]
SEC. 609. RURAL AND REMOTE COMMUNITIES ELECTRIFICATION
GRANTS.
(a) DEFINITIONS.—In this section:

(1) The term ‘‘eligible grantee’’ means a local government
or municipality, peoples’ utility district, irrigation district, and
cooperative, nonprofit, or limited-dividend association in a
rural area.
(2) The term ‘‘incremental hydropower’’ means additional
generation achieved from increased efficiency after January 1,
2005, at a hydroelectric dam that was placed in service before
January 1, 2005.
(3) The term ‘‘renewable energy’’ means electricity generated from—
(A) a renewable energy source; or
(B) hydrogen, other than hydrogen produced from a
fossil fuel, that is produced from a renewable energy
source.
(4) The term ‘‘renewable energy source’’ means—
(A) wind;
(B) ocean waves;
(C) biomass;
(D) solar;
(E) landfill gas;
(F) incremental hydropower;
(G) livestock methane; or
(H) geothermal energy.
(5) The term ‘‘rural area’’ means a city, town, or unincorporated area that has a population of not more than 10,000 inhabitants.
(b) GRANTS.—The Secretary, in consultation with the Secretary
of Agriculture and the Secretary of the Interior, may provide grants
under this section to eligible grantees for the purpose of—
(1) increasing energy efficiency, siting or upgrading transmission and distribution lines serving rural areas; or
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(2) providing or modernizing electric generation facilities
that serve rural areas.
(c) GRANT ADMINISTRATION.—(1) The Secretary shall make
grants under this section based on a determination of cost-effectiveness and the most effective use of the funds to achieve the purposes described in subsection (b).
(2) For each fiscal year, the Secretary shall allocate grant
funds under this section equally between the purposes described in
paragraphs (1) and (2) of subsection (b).
(3) In making grants for the purposes described in subsection
(b)(2), the Secretary shall give preference to renewable energy facilities.
(d) AUTHORIZATION OF APPROPRIATIONS.—There is authorized
to be appropriated to the Secretary to carry out this section
$20,000,000 for each of fiscal years 2006 through 2012.
(7 U.S.C. 918c)

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