H.R. 9340: Ratepayer Protection Act

This bill would add a new federal rule under the Public Utility Regulatory Policies Act that applies to large-load customers, meaning non-residential electric customers that request service for one or more facilities with a combined peak demand of 100 megawatts or more at a single site or campus.

What the new rule would require

Electric utilities would have to set rates and service terms so that these large customers pay for the full, incremental cost of any generation, transmission, or distribution upgrades needed to serve them. In other words, if a new large facility requires the utility to build or upgrade infrastructure, the bill says the cost of those upgrades should be recovered from that large customer rather than spread broadly across other ratepayers.

The bill also says that before a utility makes those upgrades, it must require the large-load customer to provide financial assurances or contributions to cover the upgrade costs. This is meant to reduce the risk that a utility or its other customers would be left paying for improvements if the large customer later leaves or stops buying power.

Who would be covered

The rule would apply to large non-residential customers that, on or after the date of enactment, enter into or request an electric service contract for a facility or campus with at least 100 megawatts of peak demand.

What states and utilities would have to do

The bill would require state utility regulators, and nonregulated electric utilities, to consider this standard within 1 year of enactment and complete that consideration within 2 years. It also updates existing federal law so that states that have already implemented a similar rule, considered one in a proceeding, or had their legislature vote on one would not need to repeat that process for this standard.

Practical effect

In practical terms, the bill is aimed at making sure that very large new electricity users pay for the extra grid and power-plant infrastructure they require, instead of those costs being shifted to other customers. It would also give utilities a clearer basis to ask for upfront payment or guarantees before investing in major upgrades for such customers.

Relevant Companies

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