direction to the Federal Energy Regulatory Commission 
with respect to wholesale electricity rates. 
SEC. 3. FINDINGS. 
Congress makes the following findings: 
(1) When passing the Federal Power Act, Con-
gress required the Federal Energy Regulatory Com-
mission (‘‘the Commission’’) to ensure that the rates 
charged by electric utilities for, or in connection 
with, wholesale electricity rates are ‘‘just and rea-
sonable’’, a process which necessarily includes the 
evaluation of all factors affecting wholesale market 
rates, including environmental externalities. 
(2) The Federal Power Act requires the Com-
mission to ensure that public utilities do not grant 
undue preference or advantage to, or discriminate 
against, any person when making wholesale elec-
tricity sales. 
(3) Section 206(a) of the Federal Power Act 
authorizes the Commission to change any rates that 
the Commission determines to be ‘‘unjust, unreason-
able, unduly discriminatory or preferential’’. 
(4) In its final rule titled ‘‘Endangerment and 
Cause or Contribute Findings for Greenhouse Gases 
Under Section 202(a) of the Clean Air Act’’ pub-
lished on December 15, 2009 (74 Fed. Reg. 66496), 
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the Environmental Protection Agency found that the 
emissions of greenhouse gases ‘‘endanger both the 
public health and the public welfare of current and 
future generations’’. 
(5) The failure of markets to internalize the 
costs of greenhouse gas pollution into the cost of 
products, including electricity, led to a misallocation 
of capital, and therefore to the emission of a greater 
volume of these pollutants. 
(6) In 1956, the Supreme Court held in Federal 
Power Commission v. Sierra Pacific Power Com-
pany, 350 U.S. 348 (1956), that the Commission 
must ensure protection of the public interest when 
exercising its authority to set just and reasonable 
rates. 
(7) The restructuring of the electricity industry 
in the Federal Power Act was intended to promote 
competition among electricity providers, resulting in 
lower electricity rates to consumers, higher quality 
services, and a more robust national economy. 
(8) Prior to restructuring, utility commissions 
were frequently asked to consider other societal ben-
efits when setting rates, including access to energy, 
rate equity between different classes of customers, 
and environmental concerns. 
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(9) According to the Environmental Protection 
Agency, in 2017, emissions from the power sector 
contributed the second highest share of greenhouse 
gas emissions by economic sector. 
(10) The benefits of competition will not be 
achieved if some competitors enjoy an advantage re-
sulting from externalization of environmental costs, 
permitting them to charge prices for electricity that 
do not reflect the full economic and environmental 
cost of production. 
(11) Despite the Environmental Protection 
Agency’s finding of endangerment, emissions of 
greenhouse gases into the air, which endanger public 
health and threaten the quality of the air, land, and 
water of the United States, are externalities that are 
not frequently or uniformly reflected in the price 
charged for products such as electricity across the 
United States. 
(12) The disparity in regulatory treatment be-
tween electric generating units with above-average 
greenhouse gas emissions and those with little to no 
greenhouse gas emissions provides a significant com-
petitive advantage for high greenhouse gas emitting 
energy generating units over their competitors. 
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(13) States and State commissions should be 
encouraged to incorporate the cost of greenhouse gas 
emissions into wholesale rates for electricity. 
SEC. 4. CERTAIN RATES UNJUST, UNREASONABLE, UNDULY 
DISCRIMINATORY, OR PREFERENTIAL. 
(a) IN GENERAL.—For the purposes of section 205 
and section 206 of the Federal Power Act (16 U.S.C. 
824d, 824e), if the Federal Energy Regulatory Commis-
sion determines that a rate for the wholesale sale of elec-
tricity does not incorporate the cost of externalized green-
house gas emissions to public health, safety, or welfare, 
then the Federal Energy Regulatory Commission shall 
find that such rate is unjust, unreasonable, unduly dis-
criminatory, or preferential. 
(b) GREENHOUSE
GAS
DEFINED.—In this sub-
section, the term ‘‘greenhouse gas’’ includes— 
(1) any gas identified by the Environmental 
Protection 
Agency 
in 
the 
final 
rule 
titled 
‘‘Endangerment and Cause or Contribute Findings 
for Greenhouse Gases Under Section 202(a) of the 
Clean Air Act’’ published on December 15, 2009 (74 
Fed. Reg. 66496), including carbon dioxide, hydro-
fluorocarbons, methane, nitrous oxide, perfluorocar-
bons, and sulfur hexafluoride; and 
(2) nitrogen trifluoride. 
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(c) RULE OF CONSTRUCTION.—Nothing in this sec-
tion may be construed to affect or modify the existing au-
thorities of the Federal Energy Regulatory Commission. 
Æ 
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