(Sec. 2) Amends the Tennessee Valley Authority Act of 1933 to repeal restrictions placed upon the Tennessee Valley Authority (TVA) to sell or deliver power beyond the area for which it was the primary source of power on July 1, 1957.
(Sec. 3) Authorizes TVA to sell electric power at retail to electric consumers that either already have a contract with TVA or consume the electric power within a distributor service area in which a non-TVA regulatory authority permits other suppliers to sell electric power to retail consumers. Waives application of certain requirements to any TVA sale of excess electric power for use outside the Tennessee Valley Region.
(Sec. 4) Requires TVA to furnish distributors with detailed information on plans and projections for the potential acquisition of new electric generating facilities and to grant them notice and opportunity to comment.
(Sec. 5) Directs TVA and its distributors make good faith efforts to renegotiate existing long-term contracts. Prescribes guidelines for a distributor, in the event negotiations fail, to: (1) terminate the existing contract to purchase wholsesale electric energy from TVA; or (2) reduce the quantity of wholesale power requirements under the existing contract by up to ten percent. Prohibits TVA from discriminating unduly against a distributor for exercising such rights or for being a partial requirements customer.
(Sec. 6) Subjects TVA transmission and local distribution of electric power to FPA jurisdiction to the same extent as a public utility transmission of electric power in interstate commerce is subject to such jurisdiction.
(Sec. 7) Permits a distributor to elect to avoid certain TVA regulatory authority regarding certain future TVA wholesale electric power sales.
Replaces TVA regulatory authority over distributors with that of the distributor's own governing body.
Amends the Public Utilities Regulatory Policies Act to redefine "State regulatory authority" so as to remove TVA as a State agency with ratemaking authority over sales of electric energy by any electric utility.
(Sec. 8) Prescribes procedural guidelines for Federal Energy Regulatory Commission (FERC) approval of TVA plans for recovery of its stranded costs. Authorizes TVA to recover wholesale stranded costs that may arise from renegotiation of power contracts with distributors to the extent authorized by FERC. Prohibits recovery of any such costs related to loss of sales revenues. Bars TVA use of such recovered proceeds to pay for additions to TVA generating capacity. Requires TVA stranded cost recovery charges to be stated separately on customer billing.
Mandates that the annual TVA management report to Congress include: (1) long-range financial plans; (2) source of funds used for TVA capacity additions; and (3) reduction of publicly-held TVA debt.
(Sec. 9) Subjects TVA to Federal antitrust jurisdiction with respect to its electric power and transmission systems.
[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 2570 Introduced in Senate (IS)]
106th CONGRESS
2d Session
S. 2570
To provide for the fair and equitable treatment of the Tennessee Valley
Authority and its ratepayers in the event of restructuring of the
electric utility industry.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
May 16, 2000
Mr. Frist (for himself, Mr. Thompson, and Mr. Cochran) introduced the
following bill; which was read twice and referred to the Committee on
Environment and Public Works
_______________________________________________________________________
A BILL
To provide for the fair and equitable treatment of the Tennessee Valley
Authority and its ratepayers in the event of restructuring of the
electric utility industry.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. DEFINITIONS.
In this Act:
(1) Commission.--The term ``Commission'' means the Federal
Energy Regulatory Commission.
(2) Distributor.--The term ``distributor'' means a
cooperative organization, municipal, or other publicly owned
electric power system that, on December 31, 1997, purchased all
or substantially all of its wholesale power requirements from
the Tennessee Valley Authority under a long-term power sales
agreement.
(3) Distributor service area.--The term ``distributor
service area'' means a geographic area within which a
distributor is authorized by State law to sell electric power
to retail electric consumers on the date of enactment of this
Act.
(4) Electric utility.--The term ``electric utility'' has
the meaning given the term in section 3 of the Federal Power
Act (16 U.S.C. 796).
(5) Excess electric power.--The term ``excess electric
power'' means the amount of the electric power and capacity
that--
(A) is available to the Tennessee Valley Authority;
and
(B) exceeds the Tennessee Valley Authority's power
supply obligations to distributors and any Tennessee
Valley Authority retail electric consumers (or
predecessors in interest) that had a contract for the
purchase of electric power from the Tennessee Valley
Authority on the date of enactment of this Act.
(6) Public utility.--The term ``public utility'' has the
meaning given the term in section 201 of the Federal Power Act
(16 U.S.C. 824).
(7) Retail electric consumer.--The term ``retail electric
consumer'' has the meaning given the term in section 3 of the
Federal Power Act (16 U.S.C. 796).
(8) Tennessee valley region.--The term ``Tennessee Valley
Region'' means the geographic area in which the Tennessee
Valley Authority or its distributors were the primary source of
electric power on December 31, 1997.
SEC. 2. WHOLESALE COMPETITION IN THE TENNESSEE VALLEY REGION.
(a) Amendments to the Federal Power Act.--
(1) Wheeling orders.--Section 212(f) of the Federal Power
Act (16 U.S.C. 824k(f)) is repealed.
(2) Transmission.--Section 212(j) of the Federal Power Act
(16 U.S.C. 824k(j)) is repealed.
(b) Amendments to the Tennessee Valley Authority Act.--
(1) Sale or delivery of electric power.--The third sentence
of the first undesignated paragraph of section 15d(a) of the
Tennessee Valley Authority Act of 1933 (16 U.S.C. 831n-4(a)) is
repealed.
(2) Additional amendments.--The second and third
undesignated paragraphs of section 15d(a) of the Tennessee
Valley Authority Act of 1933 (16 U.S.C. 831n-4(a)) are
repealed.
SEC. 3. TENNESSEE VALLEY AUTHORITY POWER SALES.
(a) Limit on Retail Sales by Tennessee Valley Authority.--
Notwithstanding sections 10, 11, and 12 of the Tennessee Valley
Authority Act (16 U.S.C. 831i, 831j, 831k), the Tennessee Valley
Authority may sell electric power at retail only to--
(1) a retail electric consumer (or predecessor in interest)
that had a contract for the purchase of electric power from the
Tennessee Valley Authority on the date of enactment of this
Act; or
(2) a retail electric consumer that consumes the electric
power within a distributor service area, if the applicable
regulatory authority (other than the Tennessee Valley
Authority) permits any other power supplier to sell electric
power to the retail electric consumer.
(b) Construction of Retail Electric Service Facilities.--No person
shall construct or modify a facility in the service area of a
distributor for the purpose of serving a retail electric consumer
within the distributor service area without the consent of the
distributor, except when the electric consumer is already being served
by such a person.
(c) Wholesale Power Sales.--
(1) Existing sales.--Nothing in this title shall modify or
alter the existing obligations of the Tennessee Valley
Authority under the first sentence of section 10 of the
Tennessee Valley Authority Act (16 U.S.C. 831i) to sell power
to a distributor, provided that this paragraph shall not apply
to access to power being supplied to another entity under an
existing contract with a term of 1 year or longer by a
distributor that--
(A) has made a prior election under section 5(b);
and
(B) requests to increase its power purchases from
the Tennessee Valley Authority.
(2) Sales of excess electric power.--
(A) In general.--Notwithstanding sections 10, 11,
and 12, or any other provision of the Tennessee Valley
Authority Act of 1933 (16 U.S.C. 831i, 831j, 831k), the
sale of electric power at wholesale by the Tennessee
Valley Authority for use outside the Tennessee Valley
Region shall be limited to excess electric power.
(B) No excess electric power.--The Tennessee Valley
Authority shall not offer excess electric power under a
firm power agreement with a term of 3 or more years to
any new wholesale customer at rates, terms, and
conditions more favorable than those offered to any
distributor for comparable electric power, taking into
account such factors as the amount of electric power
sold, the firmness of such power, and the length of the
contract term, unless the distributor or distributors
that are purchasing electric power under equivalent
firm power contracts agree to the sale to the new
customer.
(C) No effect on exchange power arrangements.--
Nothing in this subsection precludes the Tennessee
Valley Authority from making exchange power
arrangements with other electric utilities when
economically feasible.
(d) Application of Tennessee Valley Authority Act to Sales Outside
Tennessee Valley Region.--The third proviso of section 10 of the
Tennessee Valley Authority Act of 1933 (16 U.S.C. 831i) and the second
and third provisos of section 12 of the Tennessee Valley Authority Act
of 1933 (16 U.S.C. 831k) shall not apply to any sale of excess electric
power by the Tennessee Valley Authority for use outside the Tennessee
Valley Region.
SEC. 4. TENNESSEE VALLEY AUTHORITY ELECTRIC GENERATION FACILITIES.
Section 15d(a) of the Tennessee Valley Authority Act of 1933 (16
U.S.C. 831n-4(a)) is amended--
(1) in the second sentence, by inserting before the period
at the end the following: ``, if the Corporation determines
that the construction, acquisition, enlargement, improvement,
or replacement of any plant or facility used or to be used for
the generation of electric power is necessary to supply the
demands of distributors and retail electric consumers of the
Corporation''; and
(2) by inserting after the second sentence the following:
``Commencing on the date of enactment of this sentence, the
Tennessee Valley Authority shall provide to distributors and
their duly authorized representatives, on a confidential basis,
detailed information on its projections and plans regarding the
potential acquisition of new electric generating facilities,
and, not less than 45 days before a decision by the Tennessee
Valley Authority to make such an acquisition, shall provide
distributors an opportunity to comment on the acquisition.
Notwithstanding any other provision of law, confidential
information described in the preceding sentence shall not be
disclosed by a distributor to a source other than the Tennessee
Valley Authority, except (1) in response to process validly
issued by any court or governmental agency having jurisdiction
over the distributor; (2) to any officer, agent, employee, or
duly authorized representative of a distributor who agrees to
the same confidentiality and non-disclosure obligation
applicable to distributor; (3) in any judicial or
administrative proceeding initiated by distributor contesting
action by the Tennessee Valley Authority to cause the
construction of new electric generation facilities; or (4) on
or after a date that is at least 3 years after the commercial
operating date of the electric generating facilities.''.
SEC. 5. RENEGOTIATION OF POWER CONTRACTS.
(a) Renegotiation.--The Tennessee Valley Authority and the
distributors shall make good faith efforts to renegotiate their power
contracts in effect on and after the date of enactment of this Act.
(b) Distributor Contract Termination or Reduction Right.--If a
distributor and the Tennessee Valley Authority are unable by
negotiation to arrive at a mutually acceptable replacement contract to
govern their post-enactment relationship, the Tennessee Valley
Authority shall allow the distributor to give notice 1 time each
calendar year, within the 60-day period beginning on the date of
enactment of this Act or on any anniversary of that date, of the
distributor's decision to (1) terminate the contract to purchase
wholesale electric energy from the Tennessee Valley Authority that was
in effect on the date of enactment of this Act, to take effect on the
date that is 3 years after the date on which notice is given under this
subsection; or (2) reduce the quantity of wholesale power requirements
under the contract to purchase wholesale electric energy from the
Tennessee Valley Authority that was in effect on the date of enactment
of this Act by up to 10 percent of its requirements, to take effect on
the date that is 2 years after the date on which notice is given under
this subsection, or more than 10 percent of its requirements, to take
effect on the date that is 3 years after the date on which notice is
given under this subsection, and to negotiate with the Tennessee Valley
Authority to amend the contract that was in effect on the date of
enactment to reflect a partial requirements relationship.
(c) Partial Requirements Notice.--As part of a notice under
subsection (b), a distributor shall identify--
(1) the annual quantity of electric energy that the
distributor will acquire from a source other than the Tennessee
Valley Authority as the result of an election by the
distributor; and
(2) the times of the day and year that specified amounts of
the energy will be received by the distributor.
(d) Nondiscrimination.--The Tennessee Valley Authority shall not
unduly discriminate against any distributor as the result of--
(1) the exercise of notice under paragraph (1) or (2) of
subsection (b) by the distributor; or
(2) the status of the distributor as a partial requirements
customer.
SEC. 6. REGULATION OF TENNESSEE VALLEY AUTHORITY TRANSMISSION SYSTEM.
Notwithstanding sections 201(b)(1) and 201(f) of the Federal Power
Act (16 U.S.C. 824(b)(1), 824(f)), sections 202(h), 205, 206, 208, 210
through 213, 301 through 304, 306, 307 (except the last sentence of
307(c)), 308, 309, 313, and 317 of that Act (16 U.S.C. 824a(h), 824d,
824e, 824g, 824i-824l, 825-825c, 825e, 825f, 825g, 825h, 825l, 825p)
apply to the transmission and local distribution of electric power by
the Tennessee Valley Authority to the same extent and in the same
manner as the provisions apply to the transmission of electric power in
interstate commerce by a public utility otherwise subject to the
jurisdiction of the Commission under part II of that Act (16 U.S.C. 824
et seq.).
SEC. 7. REGULATION OF TENNESSEE VALLEY AUTHORITY DISTRIBUTORS.
(a) Election To Repeal Tennessee Valley Authority Regulation of
Distributors.--On the election of a distributor, the third proviso of
section 10 of the Tennessee Valley Authority Act of 1933 (16 U.S.C.
831i) and the second and third provisos of section 12 of the Tennessee
Valley Authority Act of 1933 (16 U.S.C. 831k) shall not apply to a
wholesale sale of electric power by the Tennessee Valley Authority in
the Tennessee Valley Region after the date of enactment of this Act,
and the Tennessee Valley Authority shall not be authorized to regulate,
by means of a rule, contract provision, resale rate schedule, contract
termination right, or any other method, any rate, term, or condition
that is--
(1) imposed on the resale of the electric power by the
distributor; or
(2) for the use of a local distribution facility.
(b) Authority of Governing Bodies of Distributors.--
(1) In general.--Any regulatory authority exercised by the
Tennessee Valley Authority over any distributor making an
election under subsection (a) shall be exercised by the
governing body of the distributor in accordance with the laws
of the State in which the distributor is organized.
(2) No election.--If a distributor does not make an
election under subsection (a), the third proviso of section 10
of the Tennessee Valley Authority Act of 1933 (16 U.S.C. 831i)
and the second and third provisos of section 12 of the
Tennessee Valley Authority Act of 1933 (16 U.S.C. 831k) shall
continue to apply for the duration of any wholesale power
contract between the Tennessee Valley Authority and the
distributor, in accordance with the terms of the contract.
(c) Use of Funds.--In any contract between the Tennessee Valley
Authority and a distributor for the purchase of at least 70 percent of
the distributor's requirements for the sale of electric power, the
Tennessee Valley Authority shall include such terms and conditions as
may be reasonably necessary to ensure that the financial benefits of a
distributor's electric system operations are allocated to the
distributor's retail electric consumers.
(d) Removal of PURPA Ratemaking Authority.--Section 3(17) of the
Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2602(17)) is
amended by striking ``, 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''.
SEC. 8. STRANDED COST RECOVERY.
(a) Commission Jurisdiction.--
(1) Recovery of costs.--
(A) In general.--Subject to subparagraph (B),
notwithstanding the absence of 1 or more provisions
addressing wholesale stranded cost recovery in a power
sales agreement between the Tennessee Valley Authority
and a distributor that is executed after the date of
enactment of this Act, the Tennessee Valley Authority
may recover any wholesale stranded costs that may arise
from the exercise of rights by a distributor under
section 5, to the extent authorized by the Commission
based on application of the rules and principles that
the Commission applies to wholesale stranded cost
recovery by other electric utilities within its
jurisdiction.
(B) No recovery of costs related to loss of sales
revenues.--In any recovery under subparagraph (A), the
Tennessee Valley Authority shall not be authorized to
recover from any distributor any wholesale stranded
costs related to loss of sales revenues by the
Tennessee Valley Authority, or its expectation of
continuing to sell electric energy, for any period
after September 30, 2007.
(2) No effect on claim.--The exercise of rights by a
distributor under section 5 shall not affect any claim by the
Tennessee Valley Authority that the Tennessee Valley Authority
may have for the recovery of stranded costs before October 1,
2007.
(b) Debt.--
(1) In general.--Stranded costs recovered by the Tennessee
Valley Authority under subsection (a) shall be used to pay down
the debt of the Tennessee Valley Authority, to the extent
determined by the Tennessee Valley Authority to be consistent
with proper financial management.
(2) Generation capacity.--The Tennessee Valley Authority
shall not use any amount recovered under paragraph (1) to pay
for additions to the generation capacity of the Tennessee
Valley Authority.
(c) Unbundling.--
(1) In general.--Any stranded cost recovery charge to a
customer authorized by the Commission to be assessed by the
Tennessee Valley Authority shall be--
(A) unbundled from the otherwise applicable rates
and charges to the customer; and
(B) separately stated on the bill of the customer.
(2) No wholesale stranded cost recovery.--The Tennessee
Valley Authority shall not recover wholesale stranded costs
from any customer through any rate, charge, or mechanism.
(d) Report.--Beginning in fiscal year 2001, as part of the annual
management report submitted by the Tennessee Valley Authority to
Congress, the Tennessee Valley Authority shall include in the report--
(1) the status of the Tennessee Valley Authority's long-
range financial plans and the progress toward its goal of
competitively priced electric power (including a general
discussion of the Tennessee Valley Authority's prospects on
meeting the objectives of the Ten Year Business Outlook issued
on July 22, 1997);
(2) any changes in assumptions since the previous report
that may have a material effect on the Tennessee Valley
Authority's long-range financial plans;
(3) the source of funds used for any generation and
transmission capacity additions;
(4) the use or other disposition of amounts recovered by
the Tennessee Valley Authority under the Tennessee Valley
Authority Act of 1933 (16 U.S.C. 831 et seq.) and this Act;
(5) the amount by which the Tennessee Valley Authority's
publicly held debt was reduced; and
(6) the projected amount by which the Tennessee Valley
Authority's publicly held debt will be reduced.
SEC. 9. APPLICATION OF ANTITRUST LAW
(a) In General.--
(1) Definition of antitrust laws.--
(A) In general.--Except as provided in subparagraph
(B), in this section, the term ``antitrust laws'' has
the meaning given the term in subsection (a) of the
first section of the Clayton Act (15 U.S.C. 12(a)).
(B) Inclusion.--In this section, the term
``antitrust laws'' includes section 5 of the Federal
Trade Commission Act (15 U.S.C. 45), to the extent that
section 5 applies to unfair methods of competition.
(2) Applicability of antitrust law.--Except as provided in
subsection (b), the Tennessee Valley Authority shall be subject
to the antitrust laws with respect to the operation of its
electric power and transmission systems.
(b) Damages.--No damages, interest on damages, costs, or attorneys'
fees may be recovered under section 4, 4A, or 4C of the Clayton Act (15
U.S.C. 15, 15a, 15c) from the Tennessee Valley Authority.
(c) Effect on Other Rights.--Nothing in this Act diminishes or
impairs any privilege, immunity, or exemption in effect on the day
before the date of enactment of this Act that would have been accorded
any person by virtue of the association of the person together in
advocating a cause or point of view to--
(1) the Tennessee Valley Authority; or
(2) any other agency or branch of Federal, State or local
government.
SEC. 10. SAVINGS PROVISION.
Nothing in this Act shall affect section 15d(b) of the Tennessee
Valley Authority Act of 1933 (16 U.S.C. 831n-4(b)), providing that
bonds issued by the Tennessee Valley Authority shall not be obligations
of, nor shall payment of the principal thereof or interest thereon be
guaranteed by, the United States.
<all>
Introduced in Senate
Read twice and referred to the Committee on Environment and Public Works. (text of measure as introduced: CR S4021-4023)
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