,i #aaith ,,congress #b;d ,session ,h4 ,r4 #hefh ,,in ,,the ,,house ,,of ,,representatives ,april #bi1 #bjbf,mr4 ,casar 7for himself1 ,mr4 ,riley of ,new ,york1 ,mr4 ,ryan1 ,ms4 ,ansari1 ,mrs4 ,foushee1 ,mr4 ,garca of ,illinois1 ,mr4 ,goldman of ,new ,york1 ,ms4 ,goodlander1 ,mr4 ,green of ,texas1 ,mrs4 ,grijalva1 ,ms4 ,norton1 ,mr4 ,johnson of ,georgia1 ,mr4 ,mannion1 ,mrs4 ,mc,clain ,delaney1 ,mr4 ,menefee1 ,mr4 ,mfume1 ,mr4 ,mrvan1 ,ms4 ,simon1 ,mr4 ,subramanyam1 ,mr4 ,thanedar1 ,ms4 ,tlaib1 and ,mrs4 ,watson ,coleman7 introduced the following bill2 which was referred to the ,committee on ,energy and ,commerce ,a ,,bill ,to amend the ,federal ,power ,act and the ,public ,utility ,regulatory ,policies ,act of #aigh to require investor owned electric utilities and gas utilities and transmission providers to1 when establishing or calculating a return on equity1 establish or calculate the return on equity at the lowest return on equity in an established range of reasonableness1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,lowering ,utility ,bills ,act4 #b4 ,requirements for and relating to transmission providers 7a7 ,in general ,the ,federal ,power ,act is amended by inserting after section #bjf 7#af ,u4,s4,c4 #hbd;e7 the following3 #bjf;,a4 ,requirements for and relating to transmission providers 7a7 ,return on ,equity 7#a7 ,range of reasonableness for return on equity 7,a7 ,establishment ,when establishing an authorized return on equity for a transmission provider for purposes of any change to be made by such transmission provider in any rate or charge1 the ,commission shall1 subject to subparagraph 7,c71 establish a range of reasonableness for the return on equity that is comprised of three data points1 each of which represent a return on equity represented by a current average expected #aj-year total or large-cap ,united ,states equity market return or equivalent measure determined in accordance with subparagraph 7,b74 7,b7 ,data point determinations 7i7 ,data point #a ,the ,commission shall determine one data point to be included in a range of reasonableness established under subparagraph 7,a7 by-- 7,i7 identifying the midpoint expected #aj-year total or large-cap ,united ,states equity market return or equivalent measure as estimated by financial academics for each of the previous #e years2 and 7,,ii7 using the average of such midpoints4 7ii7 ,data point #b ,the ,commission shall determine one data point to be included in a range of reasonableness established under subparagraph 7,a7 by-- 7,i7 identifying the midpoint expected #aj-year total or large-cap ,united ,states equity market return or equivalent measure as estimated by financial institutions for each of the previous #e years2 and 7,,ii7 using the average of such midpoints4 7iii7 ,data point #c ,the ,commission shall determine one data point to be included in a range of reasonableness established under subparagraph 7,a7 by-- 7,i7 identifying the midpoint expected #aj-year total or large-cap ,united ,states equity market return or equivalent measure as estimated by ,global ,systemically ,important ,banks for each of the previous #e years2 and 7,,ii7 using the average of such midpoints4 7,c7 ,adjustment ,the ,commission shall adjust a range of reasonableness established under subparagraph 7,a7 to account for the reduced risks of the applicable transmission provider due to1 as applicable-- 7i7 not participating in a regional planning process2 and 7ii7 any applicable ,federal action1 including-- 7,i7 the approval of any regulatory assets of the transmission provider2 7,,ii7 the use of a formula ratemaking process2 7,,iii7 the provision to the transmission provider of any ,federal loans or guarantees for assets in the rate base2 or 7,,iv7 approval or allowance of any other measure that reduces the risks of the transmission provider that it will not recover prudently incurred capital investments4 7#b7 ,authorized rate of return on equity 7,a7 ,in general ,except as provided in subparagraph 7,b71 when establishing an authorized return on equity for a transmission provider for purposes of any change to be made by such transmission provider in any rate or charge1 the ,commission shall establish the authorized return on equity at the lowest return on equity in the applicable range of reasonableness established pursuant to paragraph 7#a74 7,b7 ,exception ,when establishing an authorized return on equity for a transmission provider for purposes of any change to be made by such transmission provider in any rate or charge1 the ,commission may establish an authorized return on equity that is in the applicable range of reasonableness established pursuant to paragraph 7#a7 but is not the lowest return on equity in such range only if such transmission provider provides the ,commission clear and convincing evidence that a higher return on equity is required to attract needed capital and to maintain the financial integrity of the transmission provider4 7b7 ,corrupt rate recovery ban ,no transmission provider may recover through customer rates or charges any direct or indirect cost associated with-- 7#a7 membership dues or sponsorship fees paid1 or contributions made1 to an organization described in section #eja7;c77#f7 of the ,internal ,revenue ,code of #aihf2 7#b7 lobbying or legislative action1 including-- 7,a7 any expense for the purpose of directly or indirectly influencing the possible-- 7i7 adoption of ,federal1 ,state1 or local regulations1 legislation1 or ordinances2 or 7ii7 repeal or modification of existing ,federal1 ,state1 or local regulations1 legislation1 or ordinances2 7,b7 any expense for the purpose of directly or indirectly influencing elections or appointments of public officials or referenda2 7,c7 any expense for the purpose of directly or indirectly influencing the approval1 modification1 or revocation of utility franchises2 7,d7 any expense for the purpose of directly or indirectly influencing the public opinion with respect to ,federal1 ,state1 or local-- 7i7 regulations1 legislation1 or ordinances2 7ii7 elections2 7iii7 referenda2 or 7iv7 utility rate setting2 and 7,e7 any expense for the purpose of directly or indirectly influencing the decisions of ,federal1 ,state1 or local government officials2 7#c7 advertising1 marketing1 or communications that seek to influence public opinion or any other related costs1 unless such marketing1 advertising1 communications1 or related costs are specifically approved or ordered by the ,commission1 the ,secretary of ,energy1 or the ,administrator of the ,environmental ,protection ,agency2 7#d7 travel1 lodging1 or food and beverage expenses for the board of directors or officers of-- 7,a7 such transmission provider2 or 7,b7 such transmission provider's holding company or any associated company or affiliate2 7#e7 entertainment or gifts2 7#f7 any owned1 leased1 or chartered aircraft for the board of directors or officers of-- 7,a7 such transmission provider2 or 7,b7 such transmission provider's holding company or any associated company or affiliate2 7#g7 investor relations2 7#h7 attendance in1 participation in1 preparation for1 or appeal of any rate proceeding conducted before the ,commission pursuant to section #bje or section #bjf1 including costs for attorneys' fees1 fees to engage expert witnesses or consultants1 the portion of employee salaries associated with such attendance1 participation1 preparation1 or appeal of a rate proceeding and related costs identified by the ,commission2 7#i7 contributions made to an organization described in paragraph 7#c7 or 7#d7 of section #eja7;c7 of the ,internal ,revenue ,code of #aihf2 7#aj7 contributions to political candidates1 political parties1 campaign committees1 issue committees1 or independent expenditure committees1 or other political expenses2 7#aa7 products or services not regulated by the ,commission1 including marketing1 administration1 or customer service2 or 7#ab7 penalties or fines1 including tax penalties or fines1 issued against the transmission provider4 7c7 ,prioritizing ,cost ,saving ,investments ,the ,commission shall consider a capital expenditure by a transmission provider for a transmission project prudent only if-- 7#a7 the transmission provider provides to the ,commission substantial evidence that the transmission provider prioritized grid enhancing technologies and other lower cost alternatives in its planning process for the transmission project2 and 7#b7 the transmission project was subject to a regional planning process that is determined by the ,commission to be in compliance with applicable orders of the ,commission4 7d7 ,regulations ,not later than #abj days after the date of enactment of this section1 the ,commission shall issue regulations to carry out this section4 7e7 ,definitions ,in this section3 7#a7 ,affiliate2 associate company2 holding company ,the terms affiliate1 associate company1 and holding company have the meaning given such terms in section #cff4a of title #ah1 ,code of ,federal ,regulations 7or any successor regulations74 7#b7 ,financial academic ,the term financial academic means an accredited1 full-time finance teaching program with over #ej years of teaching experience that regularly publishes ,united ,states equity market expected return data and that provides a curriculum in business administration or finance4 7#c7 ,financial institution ,the term financial institution means an entity that manages not less than #b1jjj1jjj1jjj1jjj in combined assets and regularly publishes ,united ,states equity market expected return data4 7#d7 ,global ,systemically ,important ,bank ,the term ,global ,systemically ,important ,bank means an entity classified as a ,global ,systemically ,important ,bank by the ,financial ,stability ,board that regularly publishes ,united ,states equity market expected return data4 7#e7 ,transmission provider ,the term transmission provider means any public utility that owns1 operates1 or controls facilities used for the transmission of electric energy in interstate commerce4 4 7b7 ,eliminating ,,ferc ,candy 7#a7 ,repeal ,the ,federal ,power ,act is amended by striking section #bai 7#af ,u4,s4,c4 #hbds74 7#b7 ,conforming amendments ,the ,federal ,power ,act is amended-- 7,a7 in section #bja7;b77#b71 by striking #bai1 each place it appears2 and 7,b7 in section #bja7;e71 by striking #bai14 #c4 ,requirements for investor owned utilities 7a7 ,in general ,title ,,vi of the ,public ,utility ,regulatory ,policies ,act of #aigh is amended by adding at the end the following3 #faj4 ,requirements for investor owned utilities 7a7 ,calculation of ,return on ,equity 7#a7 ,range of reasonableness for return on equity 7,a7 ,establishment ,except as provided in paragraph 7#b71 when calculating a return on equity for a covered utility for purposes of any official business1 including reports1 financial disclosures1 and rate applications1 such covered utility shall1 subject to subparagraph 7,c71 establish a range of reasonableness for the return on equity that is comprised of three data points1 each of which represent a return on equity represented by a current average expected #aj-year total or large-cap ,united ,states equity market return or equivalent measure determined in accordance with subparagraph 7,b74 7,b7 ,data point determinations 7i7 ,data point #a ,a covered utility shall determine one data point to be included in a range of reasonableness established under subparagraph 7,a7 by-- 7,i7 identifying the midpoint expected #aj-year total or large-cap ,united ,states equity market return or equivalent measure as estimated by financial academics for each of the previous #e years2 and 7,,ii7 using the average of such midpoints4 7ii7 ,data point #b ,a covered utility shall determine one data point to be included in a range of reasonableness established under subparagraph 7,a7 by-- 7,i7 identifying the midpoint expected #aj-year total or large-cap ,united ,states equity market return or equivalent measure as estimated by financial institutions for each of the previous #e years2 and 7,,ii7 using the average of such midpoints4 7iii7 ,data point #c ,a covered utility shall determine one data point to be included in a range of reasonableness established under subparagraph 7,a7 by-- 7,i7 identifying the midpoint expected #aj-year total or large-cap ,united ,states equity market return or equivalent measure as estimated by ,global ,systemically ,important ,banks for each of the previous #e years2 and 7,,ii7 using the average of such midpoints4 7,c7 ,adjustment 7i7 ,in general ,a covered utility shall1 in accordance with clause 7ii71 adjust a range of reasonableness established under subparagraph 7,a7 to account for the reduced risks of the covered utility due to1 as applicable-- 7,i7 operating as a regulated monopoly2 and 7,,ii7 any applicable ,state action1 including-- 7aa7 the approval of any alternative to traditional cost of service ratemaking1 including formula rates1 performance-based regulation1 or contemporaneous cost recovery mechanisms2 7bb7 the approval of any regulatory assets of the covered utility2 7cc7 the allowance of operating cost riders and nonbypassable fees2 7dd7 the allowance of recovery for any customer bad debt or under-collections2 7ee7 the approval of any securitization or bond revenue related to the provision of services by the covered utility2 and 7ff7 approval or allowance of any other measure that reduces the risks of the covered utility relative to an entity operating in a competitive market4 7ii7 ,specific adjustment ,a covered utility shall adjust a range of reasonableness established under subparagraph 7,a7 down by #e basis points for each of the factors in subclause 7,i71 7,,ii77aa71 7,,ii77bb71 7,,ii77cc71 7,,ii77dd71 7,,ii77ee71 and 7,,ii77ff7 of clause 7i7 that apply4 7#b7 ,use 7,a7 ,in general ,except as otherwise provided in this paragraph1 when using a return on equity for purposes of any official business1 a covered utility shall use the lowest return on equity in the applicable range of reasonableness established pursuant to paragraph 7#a74 7,b7 ,state requirement or request ,nothing in this section precludes an applicable ,state regulatory authority from requesting or requiring alternative rate schedules that rely on a return on equity that is not the return on equity required under subparagraph 7,a74 7,c7 ,information to make publicly available ,if a covered utility uses a return on equity that is not the return on equity required under subparagraph 7,a7 for purposes of any alternative rate schedule described in subparagraph 7,b71 such covered utility shall make publically available-- 7i7 a justification outlining why the higher return on equity is required to attract needed capital and to maintain the financial integrity of the covered utility2 7ii7 an explanation of the difference in the return on equity used in comparison to return on equity required under subparagraph 7,a72 7iii7 a quantification of the different impacts on the covered utility's revenue requirement requested in its rate application using the return on equity used compared to the return on equity required under subparagraph 7,a72 and 7iv7 a quantification of the different impacts of using the return on equity used compared to the return on equity required under subparagraph 7,a7 on the average residential monthly bill4 7b7 ,corrupt rate recovery ban ,no covered utility may recover through rates any direct or indirect cost associated with-- 7#a7 membership dues or sponsorship fees paid1 or contributions made1 to an organization described in section #eja7;c77#f7 of the ,internal ,revenue ,code of #aihf2 7#b7 lobbying or legislative action1 including-- 7,a7 any expense for the purpose of directly or indirectly influencing the possible-- 7i7 adoption of ,federal1 ,state1 or local regulations1 legislation1 or ordinances2 or 7ii7 repeal or modification of existing ,federal1 ,state1 or local regulations1 legislation1 or ordinances2 7,b7 any expense for the purpose of directly or indirectly influencing elections or appointments of public officials or referenda2 7,c7 any expense for the purpose of directly or indirectly influencing the approval1 modification1 or revocation of utility franchises2 7,d7 any expense for the purpose of directly or indirectly influencing the public opinion with respect to ,federal1 ,state1 or local-- 7i7 regulations1 legislation1 or ordinances2 7ii7 elections2 7iii7 referenda2 or 7iv7 utility rate setting2 and 7,e7 any expense for the purpose of directly or indirectly influencing the decisions of ,federal1 ,state1 or local government officials2 7#c7 advertising1 marketing1 or communications that seek to influence public opinion or any other related costs identified by the ,commission1 unless such marketing1 advertising1 communications1 or related costs are specifically approved or ordered by the relevant ,state regulatory authority1 ,state energy office1 or ,state environmental agency2 7#d7 travel1 lodging1 or food and beverage expenses for the board of directors or officers of-- 7,a7 such covered utility2 or 7,b7 such covered utility's holding company or any associated company or affiliate2 7#e7 entertainment or gifts2 7#f7 any owned1 leased1 or chartered aircraft for the board of directors or officers of-- 7,a7 such covered utility2 or 7,b7 such covered utility's holding company or any associated company or affiliate2 7#g7 investor relations2 7#h7 attendance in1 participation in1 preparation for1 or appeal of any rate proceeding conducted before the applicable ,state regulatory authority or the ,commission1 including costs for attorneys' fees1 fees to engage expert witnesses or consultants1 the portion of employee salaries associated with such attendance1 participation1 preparation1 or appeal of a rate proceeding and related costs identified by the ,commission2 7#i7 contributions made to an organization described in paragraph 7#c7 or 7#d7 of section #eja7;c7 of the ,internal ,revenue ,code of #aihf2 7#aj7 contributions to political candidates1 political parties1 campaign committees1 issue committees1 or independent expenditure committees1 or other political expenses2 7#aa7 products or services not regulated by the applicable ,state regulatory authority1 including marketing1 administration1 or customer service2 7#ab7 penalties or fines1 including tax penalties or fines1 issued against the covered utility2 or 7#ac7 payments to outside attorneys representing the covered utility in any ,commission proceeding or experts testifying on behalf of1 or otherwise supporting the participation by1 utilities in any ,commission proceeding4 7c7 ,enforcement ,a violation of this section shall be treated as a violation of a provision of part ,,ii of the ,federal ,power ,act and enforced in accordance with section #caf;,a of such ,act4 7d7 ,regulations ,not later than #abj days after the date of enactment of this section1 the ,commission shall issue regulations to carry out this section4 7e7 ,rule of construction ,nothing in this section shall be construed to preempt1 diminish1 or interfere with a collective bargaining agreement that is in place on the date of the enactment of this section4 7e7 ,definitions ,in this section3 7#a7 ,affiliate2 associate company2 holding company ,the terms affiliate1 associate company1 and holding company have the meaning given such terms in section #cff4a of title #ah1 ,code of ,federal ,regulations 7or any successor regulations74 7#b7 ,covered utility 7,a7 ,in general ,subject to subparagraph 7,b71 the term covered utility means an investor-owned utility enterprise engaged in the production or distribution of electricity or natural gas for use by the public4 7,b7 ,exclusions ,the term covered utility does not include-- 7i7 an electric cooperative2 7ii7 a gas cooperative2 7iii7 an electric utility that is owned or operated by a ,state or political subdivision thereof2 or 7iv7 a gas utility that is owned or operated by a ,state or political subdivision thereof4 7#c7 ,financial academic ,the term financial academic means an accredited1 full-time finance teaching program with over #ej years of teaching experience that regularly publishes ,united ,states equity market expected return data and that provides a curriculum in business administration or finance4 7#d7 ,financial institution ,the term financial institution means an entity that manages not less than #b1jjj1jjj1jjj1jjj in combined assets and regularly publishes ,united ,states equity market expected return data4 7#e7 ,global ,systemically ,important ,bank ,the term ,global ,systemically ,important ,bank means an entity classified as a ,global ,systemically ,important ,bank by the ,financial ,stability ,board that regularly publishes ,united ,states equity market expected return data4 4 7b7 ,table of contents ,the table of contents in section #a7;b7 of the ,public ,utility ,regulatory ,policies ,act of #aigh is amended by inserting after the item relating to section #fjh the following3 ,sec4 #fji4 ,rural and remote communities electrification grants4 ,sec4 #faj4 ,requirements for investor owned utilities4 4