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 (c) 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 (c) 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.