Title 42, The Public Health and WelfareRelease 119-73not60

§16421 Third-party Finance

Title 42 › Chapter 149— NATIONAL ENERGY POLICY AND PROGRAMS › Subchapter XII— ELECTRICITY › Part A— Transmission Infrastructure Modernization › § 16421

Last updated Apr 5, 2026|Official source

Summary

Allows the Secretary of Energy, through the Western or Southwestern Power Administrations (WAPA or SWPA), to plan, build, own, operate, or join others in projects that upgrade or add electric transmission lines when the Secretary finds the project is needed. A project must be in a national interest corridor and cut interstate congestion or be needed for higher demand; it must match regional transmission plans and help the grid run efficiently and reliably; and it must be run using sound utility practices. New projects must follow the rules of the local Transmission Organization or regional reliability group and must not duplicate existing or approved projects. The Secretary may take money from other groups to pay for these projects. Money given can be spent without a yearly limit and treated as if it were specially provided. Any remaining costs must be paid through rates charged to customers who use the new capacity and shared fairly among them. Projects still must follow environmental and siting laws and other existing authorizations. Decisions must use the best available data. From fiscal years 2006 through 2015, no more than $100,000,000 in such contributions may be accepted.

Full Legal Text

Title 42, §16421

The Public Health and Welfare, Source: USLM XML via OLRC

(a)The Secretary, acting through the Administrator of the Western Area Power Administration (hereinafter in this section referred to as “WAPA”), or through the Administrator of the Southwestern Power Administration (hereinafter in this section referred to as “SWPA”), or both, may design, develop, construct, operate, maintain, or own, or participate with other entities in designing, developing, constructing, operating, maintaining, or owning, an electric power transmission facility and related facilities (“Project”) needed to upgrade existing transmission facilities owned by SWPA or WAPA if the Secretary, in consultation with the applicable Administrator, determines that the proposed Project—
(1)(A)is located in a national interest electric transmission corridor designated under section 216(a) of the Federal Power Act [16 U.S.C. 824p(a)] and will reduce congestion of electric transmission in interstate commerce; or
(B)is necessary to accommodate an actual or projected increase in demand for electric transmission capacity;
(2)is consistent with—
(A)transmission needs identified, in a transmission expansion plan or otherwise, by the appropriate Transmission Organization (as defined in the Federal Power Act [16 U.S.C. 791a et seq.]), if any, or approved regional reliability organization; and
(B)efficient and reliable operation of the transmission grid; and
(3)would be operated in conformance with prudent utility practice.
(b)The Secretary, acting through WAPA or SWPA, or both, may design, develop, construct, operate, maintain, or own, or participate with other entities in designing, developing, constructing, operating, maintaining, or owning, a new electric power transmission facility and related facilities (“Project”) located within any State in which WAPA or SWPA operates if the Secretary, in consultation with the applicable Administrator, determines that the proposed Project—
(1)(A)is located in an area designated under section 216(a) of the Federal Power Act [16 U.S.C. 824p(a)] and will reduce congestion of electric transmission in interstate commerce; or
(B)is necessary to accommodate an actual or projected increase in demand for electric transmission capacity;
(2)is consistent with—
(A)transmission needs identified, in a transmission expansion plan or otherwise, by the appropriate Transmission Organization (as defined in the Federal Power Act [16 U.S.C. 791a et seq.]) if any, or approved regional reliability organization; and
(B)efficient and reliable operation of the transmission grid;
(3)will be operated in conformance with prudent utility practice;
(4)will be operated by, or in conformance with the rules of, the appropriate (A) Transmission Organization, if any, or (B) if such an organization does not exist, regional reliability organization; and
(5)will not duplicate the functions of existing transmission facilities or proposed facilities which are the subject of ongoing or approved siting and related permitting proceedings.
(c)(1)In carrying out a Project under subsection (a) or (b), the Secretary may accept and use funds contributed by another entity for the purpose of carrying out the Project.
(2)The contributed funds shall be available for expenditure for the purpose of carrying out the Project—
(A)without fiscal year limitation; and
(B)as if the funds had been appropriated specifically for that Project.
(3)In carrying out a Project under subsection (a) or (b), any costs of the Project not paid for by contributions from another entity shall be collected through rates charged to customers using the new transmission capability provided by the Project and allocated equitably among these project beneficiaries using the new transmission capability.
(d)Nothing in this section affects any requirement of—
(1)any Federal environmental law, including the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.);
(2)any Federal or State law relating to the siting of energy facilities; or
(3)any existing authorizing statutes.
(e)Nothing in this section shall constrain or restrict an Administrator in the utilization of other authority delegated to the Administrator of WAPA or SWPA.
(f)Any determination made pursuant to subsection 11 So in original. Probably should be “subsection”. (a) or (b) shall be based on findings by the Secretary using the best available data.
(g)The Secretary shall not accept and use more than $100,000,000 under subsection (c)(1) for the period encompassing fiscal years 2006 through 2015.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

References in Text

The Federal Power Act, referred to in subsecs. (a)(2)(A) and (b)(2)(A), is act June 10, 1920, ch. 285, 41 Stat. 1063, which is classified generally to chapter 12 (§ 791a et seq.) of Title 16, Conservation. For complete classification of this Act to the Code, see section 791a of Title 16 and Tables. The National Environmental Policy Act of 1969, referred to in subsec. (d)(1), is Pub. L. 91–190, Jan. 1, 1970, 83 Stat. 852, which is classified generally to chapter 55 (§ 4321 et seq.) of this title. For complete classification of this Act to the Code, see

Short Title

note set out under section 4321 of this title and Tables.

Statutory Notes and Related Subsidiaries

Short Title

For

Short Title

of title XII of Pub. L. 109–58, which enacted this subchapter, as the “Electricity Modernization Act of 2005”, see section 1201 of Pub. L. 109–58, set out as a note under section 15801 of this title.

Reference

Citations & Metadata

Citation

42 U.S.C. § 16421

Title 42, The Public Health and Welfare

Last Updated

Apr 5, 2026

Release point: 119-73not60