16 U.S.C. § 824s — Transmission infrastructure investment

(a) Rulemaking requirement Not later than 1 year after August 8, 2005 , the Commission must establish, by rule, incentive-based (including performance-based) rate treatments for the transmission of electric energy in interstate commerce by public utilities for the purpose of benefitting consumers by ensuring reliability and reducing the cost^* of delivered power by reducing transmission congestion.

(b) Contents The rule must— (1) promote reliable and economically efficient transmission and generation of electricity by promoting capital investment in the enlargement, improvement, maintenance, and operation of all facilities for the transmission of electric energy in interstate commerce, regardless of the ownership of the facilities; (2) provide a return on equity that attracts new investment in transmission facilities (including related transmission technologies); (3) encourage deployment of transmission technologies and other measures to increase the capacity and efficiency of existing transmission facilities and improve the operation of the facilities; and (4) allow recovery of— (A) all prudently incurred costs necessary to comply with mandatory reliability standards issued under section 824 o of this title; and (B) all prudently incurred costs related to transmission infrastructure development under section 824p of this title .

(c) Incentives In the rule issued under this section, the Commission must, to the extent within its jurisdiction, provide for incentives to each transmitting utility^* or electric utility^* that joins a Transmission Organization^*. The Commission must ensure that any costs recoverable under this subsection may be recovered by such utility through the transmission rates charged by such utility or through the transmission rates charged by the Transmission Organization that provides transmission service to such utility.

(d) Just and reasonable rates All rates approved under the rules adopted under this section, including any revisions to the rules, are subject to the requirements of sections 824d and 824e of this title that all rates, charges, terms, and conditions be just and reasonable and not unduly discriminatory or preferential.