Lowering Utility Bills Act

Key Points

• The bill forces investor-owned electric and gas utilities to set their return on equity (profit rate) at the lowest point in a reasonable range, rather than at the midpoint or higher. This directly targets how much profit utilities can build into the prices customers pay each month.
• Utilities would be banned from passing a long list of costs onto customers, including lobbying expenses, political donations, executive travel and entertainment, private aircraft use, advertising meant to influence public opinion, and trade association dues.
• The allowed profit range must be adjusted downward when a utility faces less financial risk, such as operating as a regulated monopoly, getting federal loans, or using formula ratemaking. Each qualifying risk-reduction factor lowers the range by 5 basis points.
• If a state allows a utility to use a higher profit rate than the federal minimum, the company must publicly disclose exactly how much more the average household pays each month as a result.
• Transmission companies must show they considered cheaper grid-enhancing technologies before regulators can approve expensive new transmission projects as prudent investments.
• The bill repeals Section 219 of the Federal Power Act, which currently allows FERC to grant incentive-based rate treatments (sometimes called "FERC candy") that can increase transmission rates above baseline levels.