Bill Summary
The "Energy Prices Require Including Climate Externalities Act" (also known as the "Energy PRICE Act") is a bill aimed at addressing the impact of greenhouse gas emissions on electricity rates. It directs the Federal Energy Regulatory Commission (FERC) to determine that certain electricity rates are unjust and unreasonable due to the failure to include the cost of externalities, such as environmental impacts, in the cost of production. This bill aims to clarify Congress' intent when passing the Federal Power Act and provide direction to FERC in setting wholesale electricity rates. It also emphasizes the importance of protecting the public interest, promoting competition, and addressing environmental concerns in the electricity industry. The bill defines "greenhouse gas" to include specific gases identified by the Environmental Protection Agency and states that FERC must consider these costs when determining the fairness of electricity rates. This legislation does not affect or modify FERC's current authorities.
Possible Impacts
1. The legislation could affect people by potentially leading to higher electricity prices due to the inclusion of environmental externalities in the cost of production. This could impact low-income households and businesses that heavily rely on electricity for daily operations.
2. The legislation could also affect people by promoting competition among electricity providers, potentially leading to lower electricity rates and higher quality services for consumers. This could benefit households and businesses that are looking to save on their electricity bills.
3. The legislation could also impact individuals who live in areas with high levels of greenhouse gas emissions, as it aims to address the externalization of environmental costs and promote the incorporation of these costs into wholesale electricity rates. This could lead to a more comprehensive and accurate reflection of the true cost of electricity production, potentially reducing the negative impacts on public health and welfare in these areas.
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5742 Introduced in House (IH)]
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116th CONGRESS
2d Session
H. R. 5742
To direct the Federal Energy Regulatory Commission to find that certain
rates for electricity are inherently unjust and unreasonable, and for
other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 3, 2020
Mr. Casten of Illinois (for himself, Mr. Levin of California, Mr.
Huffman, and Mr. Kennedy) introduced the following bill; which was
referred to the Committee on Energy and Commerce
_______________________________________________________________________
A BILL
To direct the Federal Energy Regulatory Commission to find that certain
rates for electricity are inherently unjust and unreasonable, and for
other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Energy Prices Require Including
Climate Externalities Act'' or as the ``Energy PRICE Act''.
SEC. 2. PURPOSE.
The purpose of this Act is to clarify the intent of Congress when
passing the Federal Power Act and to provide direction to the Federal
Energy Regulatory Commission with respect to wholesale electricity
rates.
SEC. 3. FINDINGS.
Congress makes the following findings:
(1) When passing the Federal Power Act, Congress required
the Federal Energy Regulatory Commission (``the Commission'')
to ensure that the rates charged by electric utilities for, or
in connection with, wholesale electricity rates are ``just and
reasonable'', a process which necessarily includes the
evaluation of all factors affecting wholesale market rates,
including environmental externalities.
(2) The Federal Power Act requires the Commission to ensure
that public utilities do not grant undue preference or
advantage to, or discriminate against, any person when making
wholesale electricity sales.
(3) Section 206(a) of the Federal Power Act authorizes the
Commission to change any rates that the Commission determines
to be ``unjust, unreasonable, unduly discriminatory or
preferential''.
(4) In its final rule titled ``Endangerment and Cause or
Contribute Findings for Greenhouse Gases Under Section 202(a)
of the Clean Air Act'' published on December 15, 2009 (74 Fed.
Reg. 66496), the Environmental Protection Agency found that the
emissions of greenhouse gases ``endanger both the public health
and the public welfare of current and future generations''.
(5) The failure of markets to internalize the costs of
greenhouse gas pollution into the cost of products, including
electricity, led to a misallocation of capital, and therefore
to the emission of a greater volume of these pollutants.
(6) In 1956, the Supreme Court held in Federal Power
Commission v. Sierra Pacific Power Company, 350 U.S. 348
(1956), that the Commission must ensure protection of the
public interest when exercising its authority to set just and
reasonable rates.
(7) The restructuring of the electricity industry in the
Federal Power Act was intended to promote competition among
electricity providers, resulting in lower electricity rates to
consumers, higher quality services, and a more robust national
economy.
(8) Prior to restructuring, utility commissions were
frequently asked to consider other societal benefits when
setting rates, including access to energy, rate equity between
different classes of customers, and environmental concerns.
(9) According to the Environmental Protection Agency, in
2017, emissions from the power sector contributed the second
highest share of greenhouse gas emissions by economic sector.
(10) The benefits of competition will not be achieved if
some competitors enjoy an advantage resulting from
externalization of environmental costs, permitting them to
charge prices for electricity that do not reflect the full
economic and environmental cost of production.
(11) Despite the Environmental Protection Agency's finding
of endangerment, emissions of greenhouse gases into the air,
which endanger public health and threaten the quality of the
air, land, and water of the United States, are externalities
that are not frequently or uniformly reflected in the price
charged for products such as electricity across the United
States.
(12) The disparity in regulatory treatment between electric
generating units with above-average greenhouse gas emissions
and those with little to no greenhouse gas emissions provides a
significant competitive advantage for high greenhouse gas
emitting energy generating units over their competitors.
(13) States and State commissions should be encouraged to
incorporate the cost of greenhouse gas emissions into wholesale
rates for electricity.
SEC. 4. CERTAIN RATES UNJUST, UNREASONABLE, UNDULY DISCRIMINATORY, OR
PREFERENTIAL.
(a) In General.--For the purposes of section 205 and section 206 of
the Federal Power Act (16 U.S.C. 824d, 824e), if the Federal Energy
Regulatory Commission determines that a rate for the wholesale sale of
electricity does not incorporate the cost of externalized greenhouse
gas emissions to public health, safety, or welfare, then the Federal
Energy Regulatory Commission shall find that such rate is unjust,
unreasonable, unduly discriminatory, or preferential.
(b) Greenhouse Gas Defined.--In this subsection, the term
``greenhouse gas'' includes--
(1) any gas identified by the Environmental Protection
Agency in the final rule titled ``Endangerment and Cause or
Contribute Findings for Greenhouse Gases Under Section 202(a)
of the Clean Air Act'' published on December 15, 2009 (74 Fed.
Reg. 66496), including carbon dioxide, hydrofluorocarbons,
methane, nitrous oxide, perfluorocarbons, and sulfur
hexafluoride; and
(2) nitrogen trifluoride.
(c) Rule of Construction.--Nothing in this section may be construed
to affect or modify the existing authorities of the Federal Energy
Regulatory Commission.
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