The Shared Utility Rewards for Grid Efficiency Act of 2026, or SURGE Act, would amend the Federal Power Act to direct the Federal Energy Regulatory Commission (FERC) to create a new shared-savings incentive framework for certain transmitting utilities under FERC jurisdiction. The framework would allow utilities to recover a portion of verified cost savings attributable to qualifying transmission actions, with the bill specifically focusing on actions that improve transmission efficiency, capacity, reliability, or resilience by reducing physical losses. The bill also expands the Federal Power Act’s rate-incentive language to explicitly include efficiency improvements, operational improvements, performance-based measures, and shared-savings or other incentive mechanisms.
For FERC-regulated transmission utilities, the bill requires a final rule within one year establishing standardized methodologies for measuring baseline performance, calculating cost savings, and setting the percentage of savings utilities may recover. The recoverable share must fall between 10 percent and 60 percent of attributable savings, and the recovery period must be between two and five years. Utilities would need to submit an initial filing, use independent evaluators for verification, and provide annual reports; FERC would then issue rate adjustments to allow recovery, with reconciliation back to ratepayers if over-collections occur. The bill also directs the Secretary of Energy to publish guidance for state-regulated utilities outside FERC jurisdiction, create a grant program for state regulatory authorities, and conduct recurring studies on rate treatments and alternative regulatory frameworks.
The bill’s impact on state and federal law is primarily regulatory rather than appropriations-based. At the federal level, it changes the Federal Power Act to broaden FERC’s authority and impose new rulemaking duties, reporting requirements, and incentive mechanisms for transmission utilities. At the state level, it does not directly mandate state ratemaking changes, but it creates DOE guidance and grants intended to help state regulators develop comparable shared-savings frameworks for utilities not subject to FERC ratemaking jurisdiction. It also contemplates separate guidance for different utility market structures, including vertically integrated utilities and utilities that own only transmission or distribution assets.
Overall sentiment appears favorable toward encouraging grid efficiency, lower costs, and better use of existing transmission infrastructure, though no committee transcript or vote history is available to show formal debate or opposition. The bill’s findings and structure suggest a policy preference for performance-based regulation, cost savings, and deployment of grid-enhancing technologies rather than new construction. Its emphasis on consumer savings, reliability, and emissions reductions indicates broad pro-efficiency intent.
The main points of potential contention are likely to center on how savings are measured, how much of those savings utilities should be allowed to keep, and whether the framework could overcompensate utilities or shift too much risk to ratepayers. The bill’s reliance on baseline calculations, price proxies, independent verification, and reconciliation mechanisms reflects concern about gaming or inaccurate estimates. Another possible area of debate is federal involvement in state ratemaking practices, especially because the bill encourages state frameworks and grants while also setting detailed federal standards for FERC-regulated utilities.
The bill would amend section 219 of the Federal Power Act to require FERC to issue rules establishing shared-savings and other performance-based incentives for transmission utilities, and it would add new statutory concepts tied to efficiency, operational improvements, and recoverable savings. It would also create new DOE guidance, grant support for state regulators, and recurring studies that could influence future ratemaking and transmission policy for both federally regulated and state-regulated utilities.
The available record shows no committee debate or votes, so there is no documented partisan or stakeholder split in the provided materials. Based on the bill text, the measure is framed positively around efficiency, consumer savings, reliability, and grid modernization, suggesting an overall pro-reform and pro-efficiency orientation. The absence of recorded opposition or amendments means sentiment cannot be assessed beyond the bill’s own policy framing.
Likely points of contention include the methodology for establishing baselines and calculating savings, the 10 percent to 60 percent recoverable range, and whether utilities should receive incentives for actions that may already be economically justified. Critics could also question the administrative burden of verification, reporting, and reconciliation, while supporters may argue these safeguards are necessary to protect ratepayers and ensure measurable savings. A further issue is the bill’s indirect pressure on state regulators through federal guidance and grant incentives, which may raise federalism concerns.