HR 3616 — Reliable Power Act

changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, and existing law in which no 
change is proposed is shown in roman):

 FEDERAL POWER ACT

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 PART II--REGULATION OF ELECTRIC UTILITY COMPANIES
 ENGAGED IN INTERSTATE COMMERCE

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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, 
 including cybersecurity protection, 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, including a 
 cybersecurity incident, 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 one 
 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).
 (8) The term ``cybersecurity incident'' means a 
 malicious act or suspicious event that disrupts, or was 
 an attempt to disrupt, the operation of those 
 programmable electronic devices and communication 
 networks including hardware, software and data that are 
 essential to the reliable operation of the bulk power 
 system.
 (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 one 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 propose 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]
 (1) In general._The ERO shall conduct periodic 
 assessments of the reliability and adequacy of the 
 bulk-power system in North America.
 (2) Annual long-term assessment.--The assessments 
 under paragraph (1) shall include an annual long-term 
 assessment, which shall include--
 (A) an analysis of the ability of the bulk-
 power system to supply sufficient electric 
 energy necessary to maintain an adequate level 
 of reliability, taking into account generation 
 resource mix, transmission development, and 
 electric energy demand trends;
 (B) an analysis of the risk of future 
 electric energy supply shortfalls under normal 
 and extreme weather conditions, and the risk of 
 any such shortfalls within each region of the 
 bulk-power system; and
 (C) a determination of whether additional 
 generation resources are necessary to supply 
 sufficient electric energy to maintain an 
 adequate level of reliability during the 
 assessment period.
 (3) Notice of generation inadequacy.--In conducting a 
 long-term assessment under paragraph (2), if the ERO 
 finds that the bulk-power system is at risk of not 
 having adequate generation resources to supply 
 sufficient electric energy to maintain an adequate 
 level of reliability, the ERO shall publicly notify the 
 Commission that the bulk-power system is in a state of 
 generation inadequacy.
 (4) Data collection.--To conduct a long-term 
 assessment under paragraph (2), the ERO may collect 
 information and data from users, owners, and operators 
 of the bulk-power system.
 (h) Commission Review and Comment for Covered Agency 
Actions.--
 (1) Notice to federal agencies.--If the ERO notifies 
 the Commission under subsection (g)(3) that the bulk-
 power system is in a state of generation inadequacy, 
 the Commission shall promptly notify the Department of 
 Energy, the Environmental Protection Agency, and any 
 other Federal agency the Commission determines 
 appropriate of such state of generation inadequacy.
 (2) Submission.--Upon receiving notice under 
 paragraph (1), the head of each Federal agency that 
 received such notice shall provide to the Commission 
 for review and comment any covered agency action by the 
 Federal agency--
 (A) on the first date on which such covered 
 agency action is provided to the Office of 
 Management and Budget or any other Federal 
 agency for review and comment; or
 (B) if such covered agency action is not 
 provided to the Office of Management and Budget 
 or any other Federal agency for review and 
 comment, not later than 90 days before the date 
 on which the covered agency action is published 
 in the Federal Register or is otherwise made 
 available for public inspection or comment.
 (3) Commission comments.--The Commission, in 
 consultation with the ERO and transmission 
 organizations, shall, by order, provide to the agency 
 head that provided to the Commission a covered agency 
 action under paragraph (2)--
 (A) comments on such covered agency action, 
 which such comments may include an assessment 
 of the effect of the covered agency action on 
 rates, terms, and conditions for services 
 pursuant to the authority of the Commission 
 under sections 201 and 206; and
 (B) if applicable, recommendations for 
 modifications to the covered agency action to 
 prevent a significant negative impact on the 
 ability of the bulk-power system to supply 
 sufficient electric energy necessary to 
 maintain an adequate level of reliability.
 (4) Agency response.--The head of a Federal agency 
 may not finalize a covered agency action that is 
 provided to the Commission under paragraph (2) until--
 (A) the agency head responds in writing to 
 the Commission with an explanation of how the 
 agency head modified, or why the agency head 
 determined not to modify, such covered agency 
 action in response to any comments and 
 recommendations provided by the Commission 
 under paragraph (3); and
 (B) the Commission finds that the covered 
 agency action will not be likely to have a 
 significant negative impact on the ability of 
 the bulk-power system to supply sufficient 
 electric energy necessary to maintain an 
 adequate level of reliability.
 (5) Public availability of comments and responses.--
 An agency head shall include any comments, 
 recommendations, and responses for the covered agency 
 action when--
 (A) submitting the covered agency action to 
 the Federal Register for publication; or
 (B) otherwise making the covered agency 
 action available for public inspection or 
 comment.
 (6) Definitions.--In this subsection:
 (A) Covered agency action.--The term 
 ``covered agency action'' means a regulation 
 that--
 (i) relates to, or otherwise directly 
 affects, any generation resource in the 
 bulk-power system; and
 (ii) is under development to be 
 proposed or otherwise under 
 consideration in a rulemaking prior to 
 finalization on the date on which the 
 Federal agency receives notice from the 
 Commission under paragraph (1).
 (B) Federal agency.--The term ``Federal 
 agency'' means an Executive department (as that 
 term is defined in section 101 of title 5, 
 United States Code) or any other Executive 
 agency that is in the President's cabinet.
 [(h)] (i) 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)] (j) 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, except that the State of New York may 
establish rules that result in greater reliability within that 
State, as long as such action does not result in lesser 
reliability outside the State than that provided by the 
reliability standards.
 (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)] (k) Regional Advisory Bodies.--The Commission shall 
establish a regional advisory body on the petition of at least 
two-thirds of the States within a region that have more than 
one-half of their electric load served within the region. A 
regional advisory body shall be composed of one 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 
requested 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)] (l) Alaska and Hawaii.--The provisions of this section 
do not apply to Alaska or Hawaii.

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