This bill would change how regulators and investor-owned utilities set and report the return on equity (ROE) used to set electricity and gas rates. It adds new rules for transmission providers and for investor-owned utilities. Regulators or utilities would build a 3-point "range of reasonableness" for ROE using averages of 5-year estimates from three types of sources (financial academics, large financial institutions, and global systemically important banks). The regulator must set the authorized ROE at the lowest point in that range unless the utility shows clear and convincing evidence that a higher ROE is needed to attract capital. The bill lets regulators adjust the range downward to reflect reduced risk from certain actions (for example, formula rates, regulatory assets, federal loan guarantees, or operating as a regulated monopoly).
The bill also bans utilities from recovering many specific costs from customer rates. Those banned items include many lobbying and political expenses, certain advertising or communications intended to influence public opinion, board travel and entertainment, investor relations, some rate proceeding costs, nonregulated business costs, penalties and fines, and certain outside attorney or expert costs in rate proceedings. For transmission projects, the bill says regulators should only find a project prudently incurred if the utility prioritized grid-enhancing and lower-cost alternatives and the project went through a regional planning process that complies with Commission orders. The bill would require the Federal Energy Regulatory Commission to issue regulations to implement the transmission-provider section and would repeal section 219 of the Federal Power Act. The Public Utility Regulatory Policies Act would be amended to add similar rules for investor-owned utilities. The bill includes definitions and enforcement instructions and was referred to the House Energy and Commerce Committee on April 29, 2026.
If this bill became law, regulators and investor-owned electric and gas utilities would generally use a lower default ROE number when calculating rates, unless a higher ROE is shown to be clearly needed. Utilities would not be allowed to pass certain listed expenses onto customers through rates. The bill applies to investor-owned utilities and transmission providers; it excludes electric and gas cooperatives and utilities owned or operated by a State or local government.
The bill prohibits recovery through customer rates of specified direct or indirect costs, including:
No publicly available information.
No publicly available information.