Bill Summary
The "Fair Allocation of Interstate Rates Act" is a legislative proposal aimed at regulating the allocation of costs associated with certain electric transmission facilities. Specifically, the bill seeks to prohibit the allocation of costs for these facilities to consumers in states where public officials have not explicitly consented to the facility's construction or implementation.
Key provisions of the bill include:
1. **Definitions**: The bill defines "covered policy" as any policy adopted by a state or local entity that impacts the construction or use of electric transmission facilities. A "covered transmission facility" refers to any infrastructure used for transmitting electric energy that is connected to such a policy.
2. **Cost Allocation Prohibition**: Transmission providers serving consumers in multiple states cannot allocate costs for a covered transmission facility to consumers who do not reside in the state whose policy necessitated the facility, unless there is explicit consent from the consumer's home state or its officials.
3. **Exceptions**: The bill allows for cost allocations to these consumers only if their state explicitly agrees to such arrangements.
4. **Presumptions**: The legislation presumes that the benefits of a covered transmission facility primarily accrue to residents of the state that implemented the policy driving the facility's construction.
5. **Implementation Timeline**: The Federal Energy Regulatory Commission (FERC) is tasked with developing necessary rules and regulations to implement these provisions within 180 days of the bill's enactment.
Overall, this act seeks to ensure that consumers are only responsible for the costs of transmission facilities that benefit them directly, thereby promoting fairness in the allocation of electric transmission costs across state lines.
Possible Impacts
The "Fair Allocation of Interstate Rates Act" could affect people in several ways. Here are three examples:
1. **Consumer Cost Implications**: The legislation prohibits the allocation of costs for certain electric transmission facilities to consumers in states whose public officials did not consent to the costs. This means that consumers in states where these facilities are built will not be financially burdened by the costs associated with projects that benefit other states. As a result, residents of non-consenting states could see lower electric bills, as they won't have to pay for infrastructure that is not intended to serve their needs.
2. **State Policy Influence**: The act empowers state officials to have more control over the costs associated with electric transmission facilities. If a state does not agree with a transmission project aligned with another state's policy, it can effectively protect its residents from bearing the financial burden of that project. This could lead to increased political engagement and advocacy among state officials and residents, as they may seek to influence decisions that affect their electricity rates and services.
3. **Investment in Local Infrastructure**: The act may encourage states to invest more in their own electric transmission infrastructure. Knowing that they won't be subsidizing costs for projects benefiting other states, local governments might prioritize the development of their own facilities that align with their policies and needs. This could lead to improved electric service reliability and potentially lower rates for residents, as investments are directed toward infrastructure that directly benefits them.
Overall, this legislation could lead to significant changes in how electricity transmission projects are funded and who ultimately bears the costs, with varied implications for consumers, state policymakers, and regional energy investment strategies.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 3287 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
1st Session
S. 3287
To prohibit the allocation of costs for certain electric transmission
facilities to consumers in a State the public officials of which did
not expressly consent to the transmission facility, and for other
purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
December 1, 2025
Mr. Cramer (for himself and Mr. Hoeven) introduced the following bill;
which was read twice and referred to the Committee on Energy and
Natural Resources
_______________________________________________________________________
A BILL
To prohibit the allocation of costs for certain electric transmission
facilities to consumers in a State the public officials of which did
not expressly consent to the transmission facility, 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 ``Fair Allocation of Interstate Rates
Act''.
SEC. 2. RATES AND CHARGES.
Section 205 of the Federal Power Act (16 U.S.C. 824d) is amended by
adding at the end the following:
``(h) Prohibition on Allocation of Certain Costs.--
``(1) Definitions.--In this subsection:
``(A) Covered policy.--The term `covered policy'
means a policy of a State, including any policy of a
local political entity of a State.
``(B) Covered transmission facility.--The term
`covered transmission facility' means any facility,
line, equipment, or system used for the transmission of
electric energy in interstate commerce that is planned,
constructed, or operated in whole or in part to
implement a covered policy.
``(2) Prohibition.--Except as provided in paragraph (3), a
transmission provider providing electric service to consumers
in 2 or more States may not allocate costs for a covered
transmission facility to a consumer served by that transmission
provider if--
``(A) the basis for construction or implementation
of the covered transmission facility is, in whole or in
part, to implement a covered policy of a State; and
``(B) the consumer is not a resident of the State
the covered policy of which is the basis for
constructing or implementing the covered transmission
facility.
``(3) Exception.--A transmission provider providing
electric service to consumers in 2 or more States may allocate
costs for a covered transmission facility to a consumer
described in paragraph (2)(B) if the State in which that
consumer is a resident, or a designated public official of that
State, expressly consents to such allocation of costs.
``(4) Presumptions.--It shall be presumed that--
``(A) the benefits of a covered transmission
facility accrue solely to the cost causers of that
covered transmission facility;
``(B) any consumer who is a resident of a State
that implements a covered policy that is, in whole or
in part, the basis for constructing or implementing a
covered transmission facility is a cost causer for
purposes of subparagraph (A); and
``(C) any consumer that does not reside in the
State described in subparagraph (B) is not a cost
causer for purposes of subparagraph (A).
``(5) Implementation.--Not later than 180 days after the
date of enactment of this subsection, the Commission shall
issue such rules and regulations as are necessary to implement
this subsection.''.
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