text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Energy Price and Economic Stability 
  Act of 2001''.
  
  SEC. 2. FINDINGS.
  
      The Congress finds that:
              (1) Reliable and affordable energy is necessary to ensure 
          economic health and public safety.
              (2) The western states have historically worked well 
          together to ensure that energy is sufficient to meet demand at 
          a reasonable cost.
              (3) Despite the best efforts of the western states, an 
          emergency energy situation now exists.
              (4) The Federal government should augment the states' 
          response to the emergency by protecting consumers from 
          excessive wholesale rates.
              (5) Several factors have led to the existing emergency, 
          including the following: a flawed deregulation plan in the 
          State of California, the existence of market power among 
          generators in the western region, increased natural gas costs, 
          drought in the Northwest, rapid increases in the populations of 
          western states, poor regional and national forecasting of 
          energy needs, decreased operating reserves due to a lack of 
          investment in new generation.
              (6) Federal and State efforts to protect the environment 
          have not significantly contributed to these problems.
              (7) The region's energy needs can be met while protecting 
          the environment and public health.
              (8) On November 1, 2000, and again on December 15, 2000, 
          the Federal Energy Regulatory Commission found that wholesale 
          electricity rates in the State of California were and have the 
          potential to be unjust and unreasonable under the Federal Power 
          Act.
              (9) The Federal Energy Regulatory Commission issued orders 
          on March 9, 2001, March 14, 2001, and March 16, 2001 alleging 
          that generators had overcharged California utilities more than 
          $130 million.
              (10) The Federal Energy Regulatory Commission orders only 
          reflect a fraction of total overcharges and do not reflect the 
          full period during which overcharges may have occurred.
              (11) The California Independent System Operator reports 
          that generators may have overcharged California utilities by 
          more than $6 billion in the period between May 2000 and 
          February 2001.
              (12) The market conditions that have existed in California, 
          Washington, and Oregon for months now exist in neighboring 
          states, where electricity costs are also rising.
              (13) Unless the Federal Energy Regulatory Commission 
          intervenes in the western wholesale electricity market, nothing 
          will constrain the wholesale price of electricity and the 
          situation this coming summer may worsen by orders of magnitude.
              (14) On March 9, 2001, the Governors of California, Oregon, 
          and Washington wrote to the Chairman and Commissioners of the 
          Federal Energy Regulatory Commission to request that cost-of-
          service based rates be imposed in the western region.
              (15) The Federal Energy Regulatory Commission has failed to 
          fulfill its obligations under the Federal Power Act to act in 
          the best interest of consumers by mandating just and reasonable 
          wholesale rates in the western energy market.
  
  SEC. 3. WHOLESALE ELECTRICITY RATES IN THE WESTERN UNITED STATES.
  
      (a) Definitions.--For purposes of this Act:
              (1) The term ``Commission'' means the Federal Energy 
          Regulatory Commission.
              (2) The term ``cost-of-service-based rate'' means a rate, 
          charge, or classification for the sale of electric energy that 
          is equal to the sum of the following:
                      (A) All variable and fixed costs of generating such 
                  electric energy.
                      (B) Either--
                              (i) a reasonable risk premium, or
                              (ii) a return on invested capital used to 
                          generate and transmit such electric energy that 
                          reflects customary returns during the period 
                          1994 through 1999.
                      (C) Other reasonable costs associated with the 
                  acquisition, conservation, and transmission of such 
                  electric energy.
              (3) The term ``new generation facility'' means any facility 
          generating electric energy that did not generate electric 
          energy at any time prior to January 1, 2001.
      (b) Exercise of Authority To Establish Cost-Based Rates.--Within 30 
  days after the enactment of this Act, the Commission shall issue an 
  order establishing cost-of-service-based rates for electric energy sold 
  at wholesale subject to the jurisdiction of the Commission under the 
  Federal Power Act for use in that portion of the United States that is 
  covered by the Western Systems Coordinating Council of the North 
  American Electric Reliability Council.
      (c) Sunset.--Subsection (b) shall not apply to sales of electric 
  energy after March 1, 2003.
      (d) New Facilities Not Covered.--The rates required under 
  subsection (b) shall not apply to any sale of electric energy generated 
  by any new generation facility.
      (e) Enforcement.--
              (1) State cause of action.--If a State determines that a 
          wholesale rate applicable to delivery of electricity within the 
          State is not in compliance with subsection (b) or is not just 
          and reasonable, the State may bring an action in the 
          appropriate United States district court. Upon adequate showing 
          that a rate is not in compliance with subsection (b) or is not 
          just and reasonable, the court shall order refunds or other 
          relief as appropriate.
              (2) Civil penalties.--Any person who violates any 
          requirement of this section shall be subject to civil penalties 
          equal to 3 times the value of the amount involved in such 
          violation. The Commission shall assess such penalties, after 
          notice and opportunity for public hearing, in accordance with 
          the same provisions as are applicable under section 31(d) of 
          the Federal Power Act in the case of civil penalties assessed 
          under such section 31.
      (f) Refunds.--In the case of sales of electric energy for use in 
  that portion of the United States that is covered by the Western 
  Systems Coordinating Council of the North American Electric Reliability 
  Council the Commission shall order the refund of any rates and charges 
  that were not just and reasonable and that applied to sales between 
  June 1, 2000 and the enactment of this Act. Any affected State may 
  bring an action in the appropriate United States district court to 
  enforce this subsection.
      (g) Savings Provisions.--Nothing in this section shall affect any 
  authority of the Commission existing before the enactment of this 
  section.
  
  SEC. 4. GUARANTEE OF PAYMENT REQUIRED FOR CERTAIN EMERGENCY POWER 
                SALES.
  
      Section 202(c) of the Federal Power Act (16 U.S.C. 825(c)) is 
  amended by adding the following at the end thereof: ``Except during the 
  continuance of any war, no order may be issued under this subsection 
  unless the payment of compensation or reimbursement to the person 
  subject to such order is fully guaranteed by the United States 
  Government or by a State government.''.
  
  SEC. 5. SEVERABILITY.
  
      If any provision of this Act is found to be unenforceable or 
  invalid, no other provision of this Act shall be invalidated thereby.
target: Energy Price and Economic Stability Act of 2001 - Instructs the Federal Energy Regulatory Commission to establish cost-of-service-based rates for electric energy (unless generated by a new generation facility) that is sold at wholesale, through April 30, 2003, for use in the area covered by the Western Systems Coordinating Council of the North American Electric Reliability Council.Provides for State enforcement of this Act.Instructs FERC to order refunds of rates and charges in the area covered by the Coordinating Council if electric energy sales were not just and reasonable.Amends the Federal Power Act to prohibit any FERC order for emergency connection or exchange of facilities unless the person subject to such order has been guaranteed full payment or reimbursement by either the Federal or State government.
feat_title: To stabilize the dysfunctional wholesale power market in the Western United States, and for other purposes.