H.R. 4785 — Ethics in Energy Act of 2025

This section defines terms for purposes of the Act, including: (1) "centralized service company," as defined in 18 CFR 367.1(a) (or successor regulation); (2) "Commission," meaning the Federal Energy Regulatory Commission; (3) "covered expense," meaning direct or indirect expenses paid by a covered utility for political influence activities performed by external entities, invoiced affiliates, or salaried employees; (4) "covered utility," meaning electric utility companies (as defined in 18 CFR 367.1(a)) with specified sales or transmission volumes exceeding thresholds (i.e., 1,000,000 megawatt-hours of total annual sales; 100 megawatt-hours of annual sales for resale; 500 megawatt-hours of annual power exchanges delivered; or 500 megawatt-hours of annual wheeling) in each of the prior three calendar years, major natural gas companies, or centralized service companies; (5) "major natural gas company," meaning a natural-gas company (as defined in 15 U.S.C. 717a) with combined gas transported or stored for a fee exceeding 50,000,000 dekatherms in each of the prior three calendar years; and (6) "political influence activity," including expenses to influence legislation or regulations, elections, public officials, utility franchises, public opinion, regulatory proceedings, trade association dues, payments to specified 501(c) organizations, or certain advertising and public relations.

This section directs the Commission to promulgate regulations within 18 months of enactment (1) prohibiting covered utilities from recovering covered expenses (i.e., political activity expenses) from ratepayers in Commission proceedings and (2) amending the Uniform System of Accounts (18 C.F.R., or successor regulations) to place such expenses in presumptively non-recoverable accounts. It further requires covered utilities to submit to the Commission, within 18 months of enactment and annually thereafter, unredacted reports itemizing the prior year's covered expenses, outside services or vendors, and administrative/general expenses—including billing amounts and dates, payee identities (including third-party vendors paid by affiliates), staff job titles/salaries/account codes for related work, and expense explanations—and directs removal of any $250,000 reporting threshold for affiliate transactions on relevant annual forms. For enforcement, the section requires Commission monitoring and investigation of compliance, with tiered civil penalties (in addition to any customer refunds) for ratepayer recovery of covered expenses—not less than 1x the amount for expenses under $1 million, 2x for $1 million to $10 million, and 3x for over $10 million (up to 20x maximum)—that covered utilities may not recover from ratepayers; half of penalties go to ratepayers as rebates and half to the Commission for enforcement resources. (Thus, the provision does not preclude refunds for pre-enactment recoveries.)