[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 1031 Introduced in Senate (IS)]
1st Session
S. 1031
To enhance the reliability of the electric system.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
May 12, 2005
Ms. Cantwell (for herself, Mr. Jeffords, and Mrs. Clinton) introduced
the following bill; which was read twice and referred to the Committee
on Energy and Natural Resources
_______________________________________________________________________
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 title may be cited as the ``Electric Reliability Act of
2005''.
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.--In this section:
``(1)(A) The term `bulk-power system' means--
``(i) facilities and control systems necessary for
operating an interconnected electric energy
transmission network (or any portion thereof); and
``(ii) electric energy from generation facilities
needed to maintain transmission system reliability.
``(B) The term `bulk-power system' 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 `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.
``(4) The term `regional entity' means an entity having
enforcement authority pursuant to subsection (e)(4).
``(5)(A) The term `reliability standard' means a
requirement, approved by the Commission under this section, to
provide for reliable operation of the bulk-power system.
``(B) The term `reliability standard' includes requirements
for the operation of existing bulk-power system facilities and
the design of planned additions or modifications to those
facilities to the extent necessary to provide for reliable
operation of the bulk-power system.
``(C) The term `reliability standard' does not include any
requirement to enlarge a facility described in subparagraph (B)
or to construct new transmission capacity or generation
capacity.
``(6) 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.
``(7) 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.
``(b) Jurisdiction and Applicability.--(1)(A) 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 the
entities described in section 201(f), for purposes of approving
reliability standards established under this section and enforcing
compliance with this section.
``(B) All users, owners, and operators of the bulk-power system
shall comply with reliability standards that take effect under this
section.
``(2) Not later than 180 days after the date of enactment of this
section, the Commission shall issue a final rule to implement this
section.
``(c) Certification.--(1) 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.
``(2) The Commission may certify an ERO described in paragraph (1)
if the Commission determines that the ERO--
``(A) 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
``(B) has established rules that--
``(i) ensure the independence of the ERO from the
users and owners and operators of the bulk-power
system, while ensuring fair stakeholder representation
in the selection of directors of the ERO and balanced
decisionmaking in any ERO committee or subordinate
organizational structure;
``(ii) allocate equitably reasonable dues, fees,
and other charges among end users for all activities
under this section;
``(iii) 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);
``(iv) provide for reasonable notice and
opportunity for public comment, due process, openness,
and balance of interests in developing reliability
standards and otherwise exercising the duties of the
ERO; and
``(v) 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 the Electric Reliability Organization
proposes to be made effective under this section with the Commission.
``(2)(A) The Commission may approve, by rule or order, a proposed
reliability standard or modification to a reliability standard if the
Commission determines that the standard is just, reasonable, not unduly
discriminatory or preferential, and in the public interest.
``(B) The Commission--
``(i) 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
``(ii) shall not defer with respect to the effect of a
standard on competition.
``(C) 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 a motion of the Commission 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)(A) 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.
``(B) The transmission organization shall continue to comply with
such function, rule, order, tariff, rate schedule, or agreement as is
accepted, approved, or ordered by the Commission until--
``(i) the Commission finds a conflict exists between a
reliability standard and any such provision;
``(ii) the Commission orders a change to the provision
pursuant to section 206; and
``(iii) the ordered change becomes effective under this
part.
``(C) If the Commission determines that a reliability standard
needs to be changed as a result of such a conflict, the Commission
shall order the ERO to develop and file with the Commission a modified
reliability standard under paragraph (4) or (5).
``(e) Enforcement.--(1) Subject to paragraph (2), the ERO may
impose 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) A penalty imposed under paragraph (1) may take effect not
earlier than the 31st day after the date on which the ERO files with
the Commission notice of the penalty and the record of proceedings.
``(B) The penalty shall be subject to review by the Commission
upon--
``(i) a motion by the Commission; or
``(ii) application by the user, owner, or operator that is
the subject of the penalty filed not later than 30 days after
the date on which the notice is filed with the Commission.
``(C) Application to the Commission for review, or the initiation
of review by the Commission upon a motion of the Commission, shall not
operate as a stay of the penalty unless the Commission orders otherwise
upon a motion of the Commission or upon application by the user, owner,
or operator that is the subject of the penalty.
``(D) 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.
``(E) The Commission shall implement expedited procedures for
hearings described in subparagraph (D).
``(3) Upon a motion of the Commission 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 act or practice that
constitutes or will constitute a violation of a reliability standard.
``(4)(A) 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--
``(i) the regional entity is governed by an independent
board, a balanced stakeholder board, or a combination of an
independent and balanced stakeholder board;
``(ii) the regional entity otherwise meets the requirements
of paragraphs (1) and (2) of subsection (c); and
``(iii) the agreement promotes effective and efficient
administration of bulk-power system reliability.
``(B) The Commission may modify a delegation under this paragraph.
``(C) 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.
``(D) The regulations issued under this paragraph may provide that
the Commission may assign the authority of the ERO to enforce
reliability standards under paragraph (1) directly to a regional entity
in accordance with this paragraph.
``(5) The Commission may take such action as the Commission
determines to be 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 the user, owner, or operator to
remedy the violation in a timely manner.
``(f) Changes in Electric Reliability Organization Rules.--(1) The
Electric Reliability Organization shall file with the Commission for
approval any proposed rule or proposed rule change, accompanied by an
explanation of the basis and purpose of the rule and proposed rule
change.
``(2) The Commission, upon a motion of the Commission or upon
complaint, may propose a change to the rules of the ERO.
``(3) 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 meets 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 may develop and enforce
compliance with reliability standards for only the bulk-power system.
``(2) Nothing in this section authorizes 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 preempts 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) Not later than 90 days after the date of 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 issuance by the Commission of a final order.
``(j) Regional Advisory Bodies.--(1) 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 the electric load
of the States served within the region.
``(2) A regional advisory body--
``(A) shall be composed of 1 member from each participating
State in the region, appointed by the Governor of the State;
and
``(B) may include representatives of agencies, States, and
provinces outside the United States.
``(3) A regional advisory body may provide advice to the Electric
Reliability Organization, a regional entity, or the Commission
regarding--
``(A) the governance of an existing or proposed regional
entity within the same region;
``(B) whether a standard proposed to apply within the
region is just, reasonable, not unduly discriminatory or
preferential, and in the public interest;
``(C) whether fees proposed to be assessed within the
region are just, reasonable, not unduly discriminatory or
preferential, and in the public interest; and
``(D) any other responsibilities requested by the
Commission.
``(4) The Commission may give deference to the advice of a regional
advisory body if that body is organized on an interconnection-wide
basis.
``(k) Alaska and Hawaii.--This section does 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 (as added by subsection (a)) and any regional entity
delegated enforcement authority pursuant to section 215(e)(4) of that
Act (as so added) are not departments, agencies, or instrumentalities
of the United States Government.
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