Energy PRICE Act of 2021
Bill: H.R.4556 | Sponsor: Rep. Casten, Sean (D-IL)
Policy area: Energy

Summary:
Energy Prices Require Including Climate Externalities Act of 2021 or the Energy PRICE Act of 2021
This bill requires the Federal Energy Regulatory Commission (FERC) to direct electric utilities to take greenhouse gas emissions into account when they set their rates for the wholesale sale of electricity. Specifically, if FERC determines that the rates do not incorporate the cost of such emissions to public health, safety, or welfare, then FERC must find that the rates are unjust, unreasonable, unduly discriminatory, or preferential.

To direct the Federal Energy Regulatory Commission to find that certain 
 rates for electricity are inherently unjust and unreasonable, and for 
                            other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Energy Prices Require Including 
Climate Externalities Act of 2021'' or as the ``Energy PRICE Act of 
2021''.

SEC. 2. PURPOSE.

    The purpose of this Act is to clarify the intent of Congress when 
passing the Federal Power Act and to provide 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, Congress required 
        the Federal Energy Regulatory Commission (``the Commission'') 
        to ensure that the rates charged by electric utilities for, or 
        in connection with, wholesale electricity rates are ``just and 
        reasonable'', a process which necessarily includes the 
        evaluation of all factors affecting wholesale market rates, 
        including environmental externalities.
            (2) The Federal Power Act requires the Commission to ensure 
        that public utilities do not grant undue preference or 
        advantage to, or discriminate against, any person when making 
        wholesale electricity sales.
            (3) Section 206(a) of the Federal Power Act authorizes the 
        Commission to change any rates that the Commission determines 
        to be ``unjust, unreasonable, 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'' published on December 15, 2009 (74 Fed. 
        Reg. 66496), 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 Company, 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 benefits when 
        setting rates, including access to energy, rate equity between 
        different classes of customers, and environmental concerns.
            (9) According to the Environmental Protection Agency, in 
        2019, 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 resulting 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 between electric 
        generating units with above-average greenhouse gas emissions 
        and those with little to no greenhouse gas emissions provides a 
        significant competitive advantage for high greenhouse gas 
        emitting energy generating units over their competitors.
            (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 Commission determines that a rate for the wholesale sale of 
electricity does not incorporate the cost of externalized greenhouse 
gas emissions to public health, safety, or welfare, then the Federal 
Energy Regulatory Commission shall find that such rate is unjust, 
unreasonable, unduly discriminatory, or preferential.
    (b) Greenhouse Gas Defined.--In this subsection, 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, hydrofluorocarbons, 
        methane, nitrous oxide, perfluorocarbons, and sulfur 
        hexafluoride; and
            (2) nitrogen trifluoride.
    (c) Rule of Construction.--Nothing in this section may be construed 
to affect or modify the existing authorities of the Federal Energy 
Regulatory Commission.
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