S. 3287: Fair Allocation of Interstate Rates Act

This bill, titled the Fair Allocation of Interstate Rates Act, aims to change how costs for certain electric transmission facilities are allocated to consumers in different states. Here are the key points of the bill:

Definitions

• Covered policy: Refers to any policy of a state or local government within that state.
• Covered transmission facility: Refers to facilities, lines, equipment, or systems used for interstate electric transmission that are built or operated to implement a covered state policy.

Prohibition on Cost Allocation

The bill states that transmission providers (the companies that deliver electricity) are not allowed to charge consumers in other states for the costs associated with a covered transmission facility if:

• The facility is built in whole or in part to support a specific state policy.
• The consumer does not reside in the state whose policy is guiding the construction of that facility.

Exceptions

However, there is an exception: If the state where the consumer lives, or a designated official from that state, gives express consent, then costs can be allocated to those consumers.

Presumptions

The bill establishes certain presumptions about cost allocation:

• It is presumed that only those who cause the costs of a covered facility are responsible for those costs.
• Consumers living in a state that benefits from the covered policy are seen as cost causers.
• Consumers from states that do not benefit from the covered policy are not considered cost causers.

Implementation Timeline

The bill mandates that the responsible commission must create necessary rules and regulations to implement these changes within 180 days of the bill's enactment.

Relevant Companies

• NEE (NextEra Energy, Inc.): Likely affected if they are involved in building transmission facilities tied to specific state policies.
• DUK (Duke Energy Corporation): May be impacted by the limitations on cost allocations from states where they operate.
• EXC (Exelon Corporation): Could face changes in how they allocate costs for transmission facilities linked to state policies.