S.Amdt. 865

1. Adds SEC. 1278. CONSUMER PROTECTION, FAIR COMPETITION, AND FINANCIAL INTEGRITY on page 706, between lines 20 and 21

   Adds a sectionPrinted page

   Inserted: SEC. 1278. CONSUMER PROTECTION, FAIR COMPETITION, AND FINANCIAL INTEGRITY.

   Inserted: Section 204 of the Federal Power Act (16 U.S.C. 824c) is amended by adding at the end the following:

   Inserted: "(i)(1) In this subsection, the terms 'affiliate', 'associate company', and 'public-utility company' have the meanings given those terms in section 1272 of the Energy Policy Act of 2005.

   Inserted: "(2)(A) Not later than 1 year after the date of enactment of this subsection, the Commission shall issue regulations to regulate transactions between public-utility companies and affiliates and associate companies of the public-utility companies.

   Inserted: "(B) At a minimum, the regulations under subparagraph (A) shall require, with respect to a transaction between a public-utility company and an affiliate or associate company of the public-utility company, that--

   Inserted: "(i) any business activity other than public-utility company business shall be conducted through 1 or more affiliates or associate companies, which shall be independent, separate, and distinct entities from the public-utility company;

   Inserted: "(ii) the affiliate or associate company shall--

   Inserted: "(I) maintain separate books, accounts, memoranda, and other records; and

   Inserted: "(II) prepare separate financial statements;

   Inserted: "(iii)(I) the public-utility company shall conduct the transaction in a manner that is consistent with the transactions among nonaffiliated and nonassociated companies; and

   Inserted: "(II) the public-utility company shall not use its status as a monopoly franchise to confer on its affiliate, or associate company, any unfair competitive advantage;

   Inserted: "(iv) the public-utility company shall not declare or pay any dividend on any security of the public-utility company in contravention of such regulations as the Commission considers appropriate to protect the financial integrity of the public-utility company;

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   Inserted: "(v) the public-utility company shall have at least 1 independent director on its board of directors;

   Inserted: "(vi) the affiliate or associate company shall not structure its governance nor shall it acquire any loan, loan guarantee, or other indebtedness in a manner that would permit creditors to have recourse against the tangible or intangible assets of the public-utility company;

   Inserted: "(vii) the public-utility company shall not--

   Inserted: "(I) commingle any tangible or intangible assets or liabilities of the public-utility company with any assets or liabilities of an affiliate, or associate company, of the public-utility company; or

   Inserted: "(II) pledge or encumber any assets of the public-utility company on behalf of an affiliate, or associate company, of the public-utility company;

   Inserted: "(viii)(I) the public-utility company shall not cross-subsidize or shift costs from an affiliate, or associate company, of the public-utility company to the public-utility company; and

   Inserted: "(II) the public-utility company shall disclose and fully value, at the market value or other value specified by the Commission, any tangible or intangible assets or services by the public-utility company that, directly or indirectly, are transferred to, or otherwise provided for the benefit of, an affiliate, or associate company of the public-utility company; and

   Inserted: "(ix) electricity and natural gas consumers and investors--

   Inserted: "(I) shall be protected against the financial risks of public-utility company diversification and transactions with and among affiliates and associate companies of public-utility companies; and

   Inserted: "(II) shall not be subject to rates or charges that are not reasonably related to the provision of electricity or natural gas service.

   Inserted: "(3) This subsection does not preclude or deny the right of any State or political subdivision of a State to adopt and enforce standards for the corporate and financial separation of public-utility companies that are more stringent than those provided under the regulations issued under paragraph (2).

   Inserted: "(4) It shall be unlawful for a public-utility company to enter into or take any action in the performance of any transaction with any affiliate, or associate company, of a public-utility company in violation of the regulations issued under paragraph (2).".

   Original wording

   On page 706, between lines 20 and 21, insert the following:

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As printed