H.R. 8568 — Lowering Utility Bills Act

This section amends the Federal Power Act to add section 206A, which establishes requirements for the Federal Energy Regulatory Commission's (FERC) determination of return on equity (ROE) for transmission providers (i.e., public utilities that own, operate, or control facilities for transmitting electric energy in interstate commerce) and prohibits such providers from recovering specified costs through customer rates or charges. **Return on Equity.** FERC must establish a range of reasonableness for a transmission provider's ROE—used in setting or changing rates—comprised of three data points, each the average midpoint expected 10-year total or large-cap U.S. equity market return (or equivalent) over the prior five years as estimated by (1) financial academics, (2) financial institutions, and (3) Global Systemically Important Banks. FERC must adjust the range downward to account for the provider's reduced risks due to nonparticipation in regional transmission planning or specified federal actions (e.g., approval of regulatory assets, formula rates, federal loans or guarantees, or other risk-reducing measures). FERC must set the authorized ROE at the lowest point in the range unless the provider provides clear and convincing evidence that a higher ROE within the range is required to attract capital and maintain financial integrity. **Prohibited Rate Recoveries.** Transmission providers are barred from recovering costs associated with (1) 501(c)(6) organization dues, sponsorships, or contributions; (2) lobbying or legislative action (e.g., influencing legislation, elections, public opinion, or government decisions); (3) unapproved advertising, marketing, or communications seeking to influence public opinion; (4) board or officer travel, lodging, or food/beverage expenses (including for holding companies or affiliates); (5) entertainment or gifts; (6) owned, leased, or chartered aircraft for board or officers (including for holding companies or affiliates); (7) investor relations; or (8) attendance, participation, preparation for, or appeals of FERC rate proceedings under sections 205 or 206.

This section establishes requirements for investor-owned utilities (covered utilities) under new section 610 of Title VI of the Public Utility Regulatory Policies Act of 1978 (PURPA). First, it requires a covered utility, when calculating return on equity (ROE) for official purposes (e.g., reports, disclosures, rate applications), to establish a range of reasonableness using three data points—each the average of midpoint expected 10-year total or large-cap U.S. equity market returns (or equivalent) over the previous five years, as estimated by (1) financial academics, (2) financial institutions, and (3) Global Systemically Important Banks—and to adjust the range downward by 5 basis points for each applicable risk-reducing factor (e.g., regulated monopoly status; state-approved formula rates, performance-based regulation, regulatory assets, cost riders, bad debt recovery, securitization, or similar measures); the utility must use the lowest ROE in the range unless a state regulatory authority requires otherwise, in which case the utility must publicly disclose justifications, explanations, and quantified revenue and residential bill impacts of any higher ROE. Second, it prohibits covered utilities from recovering through rates any costs for (1) dues, fees, or contributions to 501(c)(6) organizations or (2) lobbying or legislative action (e.g., influencing legislation, regulations, elections, referenda, franchises, public opinion on rates, or similar matters).