Power Marketing Administration Reform Act of 1998

Power Marketing Administration Reform Act of 1998 - Requires the Secretary of Energy to develop and implement procedures to ensure that the Federal Power Marketing Administrations (FPMAs) and the Tennessee Valley Authority (TVA) utilize the same accounting principles and requirements as the Federal Energy Regulatory Commission (FERC) applies to the electric operations of public utilities.

(Sec. 3) Requires each FPMA and the TVA to submit periodically for FERC review rates proposed for the sale or disposition of Federal energy that will ensure recovery of all costs in generating and marketing such energy.

Prescribes rate mechanism and pricing guidelines.

Establishes within the Treasury the Fund for Environmental Mitigation and Restoration to: (1) mitigate damage to fish, wildlife, and other environmental resources attributable to power generation and sales facilities; and (2) restore the health of such fish, wildlife, and resources. Mandates project-specific mitigation plans for each power generation project.

Establishes within the Treasury a Fund for Renewable Resources, to be administered by the Secretary of Energy. Prescribes expenditure guidelines.

Mandates that public bodies and cooperatives be given a preference for future power allocations or reallocations of Federal power through a right of first refusal at market prices.

Instructs the Secretary of Energy to require each FPMA to: (1) assign personnel and incur expenses solely for authorized power marketing, reclamation, and flood control activities, and not for ancillary activities; and (2) make annual public disclosures of its activities, including the full costs of power projects and marketing.

Precludes an FPMA from entering into or renewing any power marketing contract for a term exceeding five years.

(Sec. 4) Requires provision of FPMA transmission services on an open access basis, and at FERC-approved rates in the same manner as provided by any public utility under FERC jurisdiction.

(Sec. 5) Grants FERC rate-making approval authority until a full transition is made to market-based rates, for: (1) rate schedules recommended by the Secretary of Energy; and (2) rate schedules for FPMA power sales.

(Sec. 6) Amends: (1) the Department of Energy Organization Act to reflect the changes made by this Act; and (2) specified Federal law to repeal the prohibition against the use of appropriated funds for purposes relating to the possibility of changing from an "at cost" to a "market rate" or any other noncost-based method for pricing Federal hydroelectric power.