HB8568, titled the Lowering Utility Bills Act, would change how returns on equity (ROE) are set or calculated for investor-owned electric utilities, gas utilities, and transmission providers. For transmission providers under the Federal Power Act, the bill directs FERC to establish a range of reasonable ROEs using three benchmark data points tied to expected 10-year U.S. equity market returns from financial academics, financial institutions, and global systemically important banks. FERC would then generally have to set the authorized ROE at the lowest point in that range, unless the utility proves by clear and convincing evidence that a higher ROE is needed to attract capital and preserve financial integrity. The bill also requires FERC to adjust the range downward for certain reduced-risk conditions, such as regional planning exclusions, regulatory assets, formula rates, federal loans or guarantees, or other risk-reducing federal actions.
For investor-owned utilities, the bill creates a similar ROE framework under the Public Utility Regulatory Policies Act of 1978. Covered utilities would have to use the lowest ROE in the applicable range for official business, including reports, financial disclosures, and rate applications, unless a state regulatory authority requests or requires a different rate schedule. If a higher ROE is used, the utility must publicly justify it and quantify the effect on revenue requirements and average residential bills. The bill also requires downward adjustments to the ROE range for various state actions that reduce utility risk, such as formula rates, performance-based regulation, regulatory assets, riders, securitization, and other cost-recovery mechanisms.
The bill further bars both transmission providers and covered utilities from recovering through customer rates a broad list of costs associated with lobbying, political spending, trade association dues, certain advertising and public relations, executive travel and entertainment, aircraft use, investor relations, participation in rate cases, and some nonregulated products or services. It also prohibits recovery of penalties and fines, and for investor-owned utilities it specifically bars recovery of outside attorney and expert costs in Commission proceedings. The bill directs FERC to issue implementing regulations within 120 days and includes an enforcement provision treating violations as violations of the Federal Power Act. It also repeals section 219 of the Federal Power Act and makes conforming amendments.
The overall sentiment reflected by the bill’s sponsorship is strongly consumer-focused and cost-reduction oriented, with the stated aim of lowering utility bills by limiting utility earnings and excluding certain expenses from rate recovery. The bill was introduced by a large group of House Democrats and referred to the House Committee on Energy and Commerce, but no committee transcript or vote history is available here, so there is no recorded debate or formal vote outcome in the provided materials.
The main points of contention likely concern the bill’s mandatory use of the lowest ROE in a reasonableness range, the evidentiary burden required to justify a higher return, and the broad prohibition on recovering lobbying, political, and certain litigation-related costs from ratepayers. Utilities and their advocates may argue that the bill could make it harder to attract capital, could interfere with state ratemaking flexibility, and could limit recovery of legitimate business expenses. Supporters are likely to emphasize consumer protection, reduced utility bills, and tighter limits on costs they view as unrelated to providing service.
The bill would amend the Federal Power Act and the Public Utility Regulatory Policies Act of 1978 to impose new federal rules on how investor-owned utilities and transmission providers calculate and justify returns on equity, and to restrict which costs may be recovered through rates. It would also repeal FPA section 219, require new FERC regulations within 120 days, and create enforceable federal standards affecting rate-setting, cost recovery, and utility financial disclosures for investor-owned electric and gas utilities and interstate transmission providers.
The bill’s stated purpose and sponsorship suggest a generally favorable, pro-consumer sentiment centered on lowering utility bills and curbing utility earnings and ratepayer-funded expenses. No committee discussion or vote record is provided, so there is no evidence of formal opposition or support in the available legislative history beyond the bill’s introduction and referral.
Likely areas of contention include the requirement that FERC and utilities use the lowest ROE in a calculated range, the narrow exception allowing a higher ROE only with clear and convincing evidence, and the bill’s broad ban on recovering lobbying, political, advertising, executive travel, investor relations, and rate-case costs from customers. Utilities, holding companies, and industry groups may object that these provisions could reduce investment incentives, interfere with ratemaking discretion, and prevent recovery of expenses they consider legitimate, while consumer advocates are likely to support the restrictions as protections against overcharging ratepayers.