def authorization

Attached herewith is the filed Conference Report statutory and report
language for the Department of Defense Reauthorization. Today, at 5:00 p.m.
EST, The House Rules Committee will meet to formulate a rule on H.R. 4205,
The Floyd Spence National Defense Authorization Act for FY2001--Conference
Report . The plan is to then vote on both the Rule and the Conference Report
on the House floor tomorrow, October 11th. The Senate also plans
consideration this week, but they have not yet announced their exact date for
floor consideration (and they are still seeking resolution of the price cap
concerns which could result in a possible filibuster.)

The Conference statutory language and report language is a victory for Enron
Federal Solutions which had been threatened with House language which would
have required a sole source by the local franchise utility. The House
receded to the Senate language (translation: the Hefley language was
killed.) Further, the political compromise reached does not support state
franchise rights; nor does it challenge Federal sovereignty; nor does it
challenge bundling; but it does affirm the competitive rights for non-utility
bidders.

Given the resources employed by EEI and their member companies plus employed
by APPA, NRECA and NARUC, this is a major victory for EFS and the DOD. By
close of business today, we need to determine whether or not to proceed with
a possible floor Colloquy.

Congratulations to all involved with this successful team effort!

SEC. 2813. CONVEYANCE AUTHORITY REGARDING UTILITY SYSTEMS OF
MILITARY DEPARTMENTS.

(a) Selection of Conveyee.--Subsection (b) of section 2688 of title
10, United States Code, is amended--
(1) by inserting ``(1)'' before ``If more than one''; and

(2) by adding at the end the following new paragraphs:

``(2) Notwithstanding paragraph (1), the Secretary concerned may use
procedures other than competitive procedures, but only in accordance
with subsections © through (f) of section 2304 of this title, to
select the conveyee of a utility system (or part of a utility system)
under subsection (a).
``(3) With respect to the solicitation process used in connection
with the conveyance of a utility system (or part of a utility system)
under subsection (a), the Secretary concerned shall ensure that the
process is conducted in a manner consistent with the laws and
regulations of the State in which the utility system is located to the
extent necessary to ensure that all interested regulated and unregulated
utility companies and other interested entities receive an opportunity
to acquire and operate the utility system to be conveyed.''.
(b) Applicability of Regulatory Requirements.--Subsection (f) of such
section is amended--
(1) by inserting ``(1)'' before ``The Secretary''; and

(2) by adding at the end the following new paragraph:

``(2) The Secretary concerned shall require in any contract for the
conveyance of a utility system (or part of a utility system) under
subsection (a) that the conveyee manage and operate the utility system
in a manner consistent with applicable Federal and State regulations
pertaining to health, safety, fire, and environmental requirements.''.

Conveyance authority regarding utility systems of
military

departments (sec. 2813)

The House bill contained a provision (sec. 2813) that would amend
section 2688 of title 10, United States Code, to require the secretary
concerned to comply with the competition requirements of section 2304 of
title 10, United States Code, in the conveyance of utility system
infrastructure. The provision would also require that the secretary
concerned carry out a conveyance or award only if he determines that the
conveyance or award complies with State laws, regulations, rulings, and
policies governing the provision of utility systems.
The Senate amendment contained a provision (sec. 2813) that would
amend section 2688 of title 10, United States Code, to clarify that the
secretary concerned may use procedures other than competitive procedures
only under the circumstances specified in section 2304 © through (f)
of title 10, United States Code.
The House recedes with an amendment that would require the secretary
concerned to structure the solicitation process for the privatization of
utility systems on military installations in such a manner that would
allow, to the maximum extent possible, all interested regulated and
unregulated entities the opportunity to acquire and operate utility
systems on military installations regardless of franchise rights in the
area of the installation concerned. The amendment would also direct the
secretary concerned to require the conveyee or awardee of the utility
system to manage and operate the utility system consistent with federal
and state regulations pertaining to health safety, fire, and
environmental requirements.