[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 2236 Placed on Calendar Senate (PCS)]
Calendar No. 465
108th CONGRESS
2d Session
S. 2236
To enhance the reliability of the electric system.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
March 25, 2004
Ms. Cantwell (for herself, Mr. Bingaman, Mrs. Clinton, Mr. Jeffords,
Mr. Schumer, Mr. Reid, and Mr. Daschle) introduced the following bill;
which was read the first time
March 26, 2004
Read the second time and placed on the calendar
_______________________________________________________________________
A BILL
To enhance the reliability of the electric system.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Electric Reliability Act of 2004''.
SEC. 2. ELECTRIC RELIABILITY STANDARDS.
(a) In General.--Part II of the Federal Power Act (16 U.S.C. 824 et
seq.) is amended by adding at the end the following:
``SEC. 215. ELECTRIC RELIABILITY.
``(a) Definitions.--For purposes of this section:
``(1) The term `bulk-power system' means--
``(A) facilities and control systems necessary for
operating an interconnected electric energy
transmission network (or any portion thereof); and
``(B) electric energy from generation facilities
needed to maintain transmission system reliability.
The term does not include facilities used in the local
distribution of electric energy.
``(2) The terms `Electric Reliability Organization' and
`ERO' mean the organization certified by the Commission under
subsection (c) the purpose of which is to establish and enforce
reliability standards for the bulk-power system, subject to
Commission review.
``(3) The term `reliability standard' means a requirement,
approved by the Commission under this section, to provide for
reliable operation of the bulk-power system. The term includes
requirements for the operation of existing bulk-power system
facilities and the design of planned additions or modifications
to such facilities to the extent necessary to provide for
reliable operation of the bulk-power system, but the term does
not include any requirement to enlarge such facilities or to
construct new transmission capacity or generation capacity.
``(4) The term `reliable operation' means operating the
elements of the bulk-power system within equipment and electric
system thermal, voltage, and stability limits so that
instability, uncontrolled separation, or cascading failures of
such system will not occur as a result of a sudden disturbance
or unanticipated failure of system elements.
``(5) The term `Interconnection' means a geographic area in
which the operation of bulk-power system components is
synchronized such that the failure of 1 or more of such
components may adversely affect the ability of the operators of
other components within the system to maintain reliable
operation of the facilities within their control.
``(6) The term `transmission organization' means a Regional
Transmission Organization, Independent System Operator,
independent transmission provider, or other transmission
organization finally approved by the Commission for the
operation of transmission facilities.
``(7) The term `regional entity' means an entity having
enforcement authority pursuant to subsection (e)(4).
``(b) Jurisdiction and Applicability.--(1) The Commission shall
have jurisdiction, within the United States, over the ERO certified by
the Commission under subsection (c), any regional entities, and all
users, owners and operators of the bulk-power system, including but not
limited to the entities described in section 201(f), for purposes of
approving reliability standards established under this section and
enforcing compliance with this section. All users, owners and operators
of the bulk-power system shall comply with reliability standards that
take effect under this section.
``(2) The Commission shall issue a final rule to implement the
requirements of this section not later than 180 days after the date of
enactment of this section.
``(c) Certification.--Following the issuance of a Commission rule
under subsection (b)(2), any person may submit an application to the
Commission for certification as the Electric Reliability Organization.
The Commission may certify 1 such ERO if the Commission determines that
such ERO--
``(1) has the ability to develop and enforce, subject to
subsection (e)(2), reliability standards that provide for an
adequate level of reliability of the bulk-power system; and
``(2) has established rules that--
``(A) assure its independence of the users and
owners and operators of the bulk-power system, while
assuring fair stakeholder representation in the
selection of its directors and balanced decisionmaking
in any ERO committee or subordinate organizational
structure;
``(B) allocate equitably reasonable dues, fees, and
other charges among end users for all activities under
this section;
``(C) provide fair and impartial procedures for
enforcement of reliability standards through the
imposition of penalties in accordance with subsection
(e) (including limitations on activities, functions, or
operations, or other appropriate sanctions);
``(D) provide for reasonable notice and opportunity
for public comment, due process, openness, and balance
of interests in developing reliability standards and
otherwise exercising its duties; and
``(E) provide for taking, after certification,
appropriate steps to gain recognition in Canada and
Mexico.
``(d) Reliability Standards.--(1) The Electric Reliability
Organization shall file each reliability standard or modification to a
reliability standard that it proposes to be made effective under this
section with the Commission.
``(2) The Commission may approve, by rule or order, a proposed
reliability standard or modification to a reliability standard if it
determines that the standard is just, reasonable, not unduly
discriminatory or preferential, and in the public interest. The
Commission shall give due weight to the technical expertise of the
Electric Reliability Organization with respect to the content of a
proposed standard or modification to a reliability standard and to the
technical expertise of a regional entity organized on an
Interconnection-wide basis with respect to a reliability standard to be
applicable within that Interconnection, but shall not defer with
respect to the effect of a standard on competition. A proposed standard
or modification shall take effect upon approval by the Commission.
``(3) The Electric Reliability Organization shall rebuttably
presume that a proposal from a regional entity organized on an
Interconnection-wide basis for a reliability standard or modification
to a reliability standard to be applicable on an Interconnection-wide
basis is just, reasonable, and not unduly discriminatory or
preferential, and in the public interest.
``(4) The Commission shall remand to the Electric Reliability
Organization for further consideration a proposed reliability standard
or a modification to a reliability standard that the Commission
disapproves in whole or in part.
``(5) The Commission, upon its own motion or upon complaint, may
order the Electric Reliability Organization to submit to the Commission
a proposed reliability standard or a modification to a reliability
standard that addresses a specific matter if the Commission considers
such a new or modified reliability standard appropriate to carry out
this section.
``(6) The final rule adopted under subsection (b)(2) shall include
fair processes for the identification and timely resolution of any
conflict between a reliability standard and any function, rule, order,
tariff, rate schedule, or agreement accepted, approved, or ordered by
the Commission applicable to a transmission organization. Such
transmission organization shall continue to comply with such function,
rule, order, tariff, rate schedule or agreement accepted approved, or
ordered by the Commission until--
``(A) the Commission finds a conflict exists between a
reliability standard and any such provision;
``(B) the Commission orders a change to such provision
pursuant to section 206 of this part; and
``(C) the ordered change becomes effective under this part.
If the Commission determines that a reliability standard needs to be
changed as a result of such a conflict, it shall order the ERO to
develop and file with the Commission a modified reliability standard
under paragraph (4) or (5) of this subsection.
``(e) Enforcement.--(1) The ERO may impose, subject to paragraph
(2), a penalty on a user or owner or operator of the bulk-power system
for a violation of a reliability standard approved by the Commission
under subsection (d) if the ERO, after notice and an opportunity for a
hearing--
``(A) finds that the user or owner or operator has violated
a reliability standard approved by the Commission under
subsection (d); and
``(B) files notice and the record of the proceeding with
the Commission.
``(2) A penalty imposed under paragraph (1) may take effect not
earlier than the 31st day after the ERO files with the Commission
notice of the penalty and the record of proceedings. Such penalty shall
be subject to review by the Commission, on its own motion or upon
application by the user, owner or operator that is the subject of the
penalty filed within 30 days after the date such notice is filed with
the Commission. Application to the Commission for review, or the
initiation of review by the Commission on its own motion, shall not
operate as a stay of such penalty unless the Commission otherwise
orders upon its own motion or upon application by the user, owner or
operator that is the subject of such penalty. In any proceeding to
review a penalty imposed under paragraph (1), the Commission, after
notice and opportunity for hearing (which hearing may consist solely of
the record before the ERO and opportunity for the presentation of
supporting reasons to affirm, modify, or set aside the penalty), shall
by order affirm, set aside, reinstate, or modify the penalty, and, if
appropriate, remand to the ERO for further proceedings. The Commission
shall implement expedited procedures for such hearings.
``(3) On its own motion or upon complaint, the Commission may order
compliance with a reliability standard and may impose a penalty against
a user or owner or operator of the bulk-power system if the Commission
finds, after notice and opportunity for a hearing, that the user or
owner or operator of the bulk-power system has engaged or is about to
engage in any acts or practices that constitute or will constitute a
violation of a reliability standard.
``(4) The Commission shall issue regulations authorizing the ERO to
enter into an agreement to delegate authority to a regional entity for
the purpose of proposing reliability standards to the ERO and enforcing
reliability standards under paragraph (1) if--
``(A) the regional entity is governed by--
``(i) an independent board;
``(ii) a balanced stakeholder board; or
``(iii) a combination independent and balanced
stakeholder board.
``(B) the regional entity otherwise satisfies the
provisions of subsection (c)(1) and (2); and
``(C) the agreement promotes effective and efficient
administration of bulk-power system reliability.
The Commission may modify such delegation. The ERO and the Commission
shall rebuttably presume that a proposal for delegation to a regional
entity organized on an Interconnection-wide basis promotes effective
and efficient administration of bulk-power system reliability and
should be approved. Such regulation may provide that the Commission may
assign the ERO's authority to enforce reliability standards under
paragraph (1) directly to a regional entity consistent with the
requirements of this paragraph.
``(5) The Commission may take such action as is necessary or
appropriate against the ERO or a regional entity to ensure compliance
with a reliability standard or any Commission order affecting the ERO
or a regional entity.
``(6) Any penalty imposed under this section shall bear a
reasonable relation to the seriousness of the violation and shall take
into consideration the efforts of such user, owner, or operator to
remedy the violation in a timely manner.
``(f) Changes in Electric Reliability Organization Rules.--The
Electric Reliability Organization shall file with the Commission for
approval any proposed rule or proposed rule change, accompanied by an
explanation of its basis and purpose. The Commission, upon its own
motion or complaint, may proposed a change to the rules of the ERO. A
proposed rule or proposed rule change shall take effect upon a finding
by the Commission, after notice and opportunity for comment, that the
change is just, reasonable, not unduly discriminatory or preferential,
is in the public interest, and satisfies the requirements of subsection
(c).
``(g) Reliability Reports.--The ERO shall conduct periodic
assessments of the reliability and adequacy of the bulk-power system in
North America.
``(h) Coordination With Canada and Mexico.--The President is urged
to negotiate international agreements with the governments of Canada
and Mexico to provide for effective compliance with reliability
standards and the effectiveness of the ERO in the United States and
Canada or Mexico.
``(i) Savings Provisions.--(1) The ERO shall have authority to
develop and enforce compliance with reliability standards for only the
bulk-power system.
``(2) This section does not authorize the ERO or the Commission to
order the construction of additional generation or transmission
capacity or to set and enforce compliance with standards for adequacy
or safety of electric facilities or services.
``(3) Nothing in this section shall be construed to preempt any
authority of any State to take action to ensure the safety, adequacy,
and reliability of electric service within that State, as long as such
action is not inconsistent with any reliability standard.
``(4) Within 90 days of the application of the Electric Reliability
Organization or other affected party, and after notice and opportunity
for comment, the Commission shall issue a final order determining
whether a State action is inconsistent with a reliability standard,
taking into consideration any recommendation of the ERO.
``(5) The Commission, after consultation with the ERO and the State
taking action, may stay the effectiveness of any State action, pending
the Commission's issuance of a final order.
``(j) Regional Advisory Bodies.--The Commission shall establish a
regional advisory body on the petition of at least \2/3\ of the States
within a region that have more than \1/2\ of their electric load served
within the region. A regional advisory body shall be composed of 1
member from each participating State in the region, appointed by the
Governor of each State, and may include representatives of agencies,
States, and provinces outside the United States. A regional advisory
body may provide advice to the Electric Reliability Organization, a
regional entity, or the Commission regarding the governance of an
existing or proposed regional entity within the same region, whether a
standard proposed to apply within the region is just, reasonable, not
unduly discriminatory or preferential, and in the public interest,
whether fees proposed to be assessed within the region are just,
reasonable, not unduly discriminatory or preferential, and in the
public interest and any other responsibilities request by the
Commission. The Commission may give deference to the advice of any such
regional advisory body if that body is organized on an Interconnection-
wide basis.
``(k) Alaska and Hawaii.--The provisions of this section do not
apply to Alaska or Hawaii.''.
(b) Status of ERO.--The Electric Reliability Organization certified
by the Federal Energy Regulatory Commission under section 215(c) of the
Federal Power Act and any regional entity delegated enforcement
authority pursuant to section 215(e)(4) of that Act are not
departments, agencies, or instrumentalities of the United States
Government.
Calendar No. 465
108th CONGRESS
2d Session
S. 2236
_______________________________________________________________________
A BILL
To enhance the reliability of the electric system
_______________________________________________________________________
March 26, 2004
Read the second time and placed on the calendar