Consumers Electric Power Act of 1996

Consumers Electric Power Act of 1996 - Declares that each person has the right to purchase electric service from any electric service provider. Prohibits a governmental authority from: (1) denying or limiting a person's right to purchase such energy from an electric service provider at a price and on terms and conditions freely arrived at; (2) discriminating or authorizing discrimination against any person exercising the right to purchase such energy; or (3) granting any preference or protection from competition to any electric service provider (including subsidies, exit fees, and other penalties on exercising choice of electric purchases). Permits electric energy purchasers to choose alternative arrangements for the delivery of electric energy.

(Sec. 4) Prohibits any State from establishing discriminatory requirements or other obligations for certification of electric service providers within that State. Authorizes a State to establish rules for initial, nondiscriminatory assignment of retail customers who fail to select an electric service provider.

(Sec. 5) Enumerates objectives to be achieved through the operation of transmission and distribution systems.

Grants the Federal Energy Regulatory Commission (FERC) authority to provide for nondiscriminatory prices and conditions to transmission and distribution services.

(Sec. 6) Sets a deadline by which FERC must promulgate and make effective rules for nondiscriminatory access to transmission and distribution service, and which eliminate barriers to competitive electric service presented by existing contracts and arrangements involving transmitting utilities and distribution facilities.

Directs FERC to: (1) ensure that existing electric utilities are not permitted to exercise market power in the sale of electric service; (2) initiate proceedings to determine the extent to which existing utilities have such market power; and (3) determine the means for mitigating it. Authorizes FERC to enforce such determinations by: (1) restricting the ability of an electric utility to sell such services at market-determined rates; and (2) order the divestiture of assets and functions which are the source of market power.

(Sec. 7) Declares that the Public Utility Holding Company Act of 1935, as well as the Public Utility Regulatory Policies Act of 1978 requirement that electric utilities offer to purchase electric energy from qualifying cogeneration facilities and qualifying small power production facilities at incremental cost to the utility of alternative electric energy, shall cease to apply to an electric utility under this Act if each State in which it is providing electric services notifies FERC of its determination that its retail customers can purchase such services in accordance with this Act.

(Sec. 9) Terminates Federal, State, and local governmental regulatory authority over pricing, terms, or conditions of service offerings by electric service providers, including the authority to regulate who may engage in selling electric energy.