I 

116TH CONGRESS 

2D SESSION H. R. 5742 

To direct the Federal Energy Regulatory Commission to find that certain 

rates for electricity are inherently unjust and unreasonable, and for 

other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 3, 2020 

Mr. CASTEN of Illinois (for himself, Mr. LEVIN of California, Mr. HUFFMAN, 

and Mr. KENNEDY) introduced the following bill; which was referred to 

the Committee on Energy and Commerce 

A BILL 

To direct the Federal Energy Regulatory Commission to 

find that certain rates for electricity are inherently unjust and unreasonable, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Energy Prices Require 

5 Including Climate Externalities Act’’ or as the ‘‘Energy 

6 PRICE Act’’. 

7 SEC. 2. PURPOSE. 

8 The purpose of this Act is to clarify the intent of Con9 gress when passing the Federal Power Act and to provide 


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1 direction to the Federal Energy Regulatory Commission 

2 with respect to wholesale electricity rates. 

3 SEC. 3. FINDINGS. 

4 Congress makes the following findings: 

5 (1) When passing the Federal Power Act, Con6 gress required the Federal Energy Regulatory Com7 mission (‘‘the Commission’’) to ensure that the rates 

8 charged by electric utilities for, or in connection 

9 with, wholesale electricity rates are ‘‘just and rea10 sonable’’, a process which necessarily includes the 

11 evaluation of all factors affecting wholesale market 

12 rates, including environmental externalities. 

13 (2) The Federal Power Act requires the Com14 mission to ensure that public utilities do not grant 

15 undue preference or advantage to, or discriminate 

16 against, any person when making wholesale elec17 tricity sales. 

18 (3) Section 206(a) of the Federal Power Act 

19 authorizes the Commission to change any rates that 

20 the Commission determines to be ‘‘unjust, unreason21 able, unduly discriminatory or preferential’’. 

22 (4) In its final rule titled ‘‘Endangerment and 

23 Cause or Contribute Findings for Greenhouse Gases 

24 Under Section 202(a) of the Clean Air Act’’ pub25 lished on December 15, 2009 (74 Fed. Reg. 66496), 


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1 the Environmental Protection Agency found that the 

2 emissions of greenhouse gases ‘‘endanger both the 

3 public health and the public welfare of current and 

4 future generations’’. 

5 (5) The failure of markets to internalize the 

6 costs of greenhouse gas pollution into the cost of 

7 products, including electricity, led to a misallocation 

8 of capital, and therefore to the emission of a greater 

9 volume of these pollutants. 

10 (6) In 1956, the Supreme Court held in Federal 

11 Power Commission v. Sierra Pacific Power Com12 pany, 350 U.S. 348 (1956), that the Commission 

13 must ensure protection of the public interest when 

14 exercising its authority to set just and reasonable 

15 rates. 

16 (7) The restructuring of the electricity industry 

17 in the Federal Power Act was intended to promote 

18 competition among electricity providers, resulting in 

19 lower electricity rates to consumers, higher quality 

20 services, and a more robust national economy. 

21 (8) Prior to restructuring, utility commissions 

22 were frequently asked to consider other societal ben23 efits when setting rates, including access to energy, 

24 rate equity between different classes of customers, 

25 and environmental concerns. 


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1 (9) According to the Environmental Protection 

2 Agency, in 2017, emissions from the power sector 

3 contributed the second highest share of greenhouse 

4 gas emissions by economic sector. 

5 (10) The benefits of competition will not be 

6 achieved if some competitors enjoy an advantage re7 sulting from externalization of environmental costs, 

8 permitting them to charge prices for electricity that 

9 do not reflect the full economic and environmental 

10 cost of production. 

11 (11) Despite the Environmental Protection 

12 Agency’s finding of endangerment, emissions of 

13 greenhouse gases into the air, which endanger public 

14 health and threaten the quality of the air, land, and 

15 water of the United States, are externalities that are 

16 not frequently or uniformly reflected in the price 

17 charged for products such as electricity across the 

18 United States. 

19 (12) The disparity in regulatory treatment be20 tween electric generating units with above-average 

21 greenhouse gas emissions and those with little to no 

22 greenhouse gas emissions provides a significant com23 petitive advantage for high greenhouse gas emitting 

24 energy generating units over their competitors. 


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1 (13) States and State commissions should be 

2 encouraged to incorporate the cost of greenhouse gas 

3 emissions into wholesale rates for electricity. 

4 SEC. 4. CERTAIN RATES UNJUST, UNREASONABLE, UNDULY 

5 DISCRIMINATORY, OR PREFERENTIAL. 

6 (a) IN GENERAL.—For the purposes of section 205 

7 and section 206 of the Federal Power Act (16 U.S.C. 

8 824d, 824e), if the Federal Energy Regulatory Commis9 sion determines that a rate for the wholesale sale of elec10 tricity does not incorporate the cost of externalized green11 house gas emissions to public health, safety, or welfare, 

12 then the Federal Energy Regulatory Commission shall 

13 find that such rate is unjust, unreasonable, unduly dis14 criminatory, or preferential. 

15 (b) GREENHOUSE GAS DEFINED.—In this sub16 section, the term ‘‘greenhouse gas’’ includes— 

17 (1) any gas identified by the Environmental 

18 Protection Agency in the final rule titled 

19 ‘‘Endangerment and Cause or Contribute Findings 

20 for Greenhouse Gases Under Section 202(a) of the 

21 Clean Air Act’’ published on December 15, 2009 (74 

22 Fed. Reg. 66496), including carbon dioxide, hydro23 fluorocarbons, methane, nitrous oxide, perfluorocar24 bons, and sulfur hexafluoride; and 

25 (2) nitrogen trifluoride. 


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1 (c) RULE OF CONSTRUCTION.—Nothing in this sec2 tion may be construed to affect or modify the existing au3 thorities of the Federal Energy Regulatory Commission. 

Æ 


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