Fair Allocation of Interstate Rates Act
Summary
The Fair Allocation of Interstate Rates Act aims to prevent consumers in one state from bearing the costs of electric transmission facilities primarily benefiting another state, unless their state's officials expressly consent. It amends the Federal Power Act to prohibit cost allocation for 'covered transmission facilities' to consumers residing outside the state that initiated the policy driving the facility's construction. The bill establishes presumptions regarding who benefits from and causes the need for such facilities.
Expected Effects
This act would change how the costs of interstate electric transmission lines are allocated. It shifts the financial burden away from consumers in states that did not consent to the projects. This could lead to more localized cost responsibility for infrastructure projects.
Potential Benefits
- Potentially lower electricity costs for consumers in states that do not benefit from specific interstate transmission projects.
- Increased accountability for state policies driving the need for new transmission infrastructure.
- May encourage states to cooperate and negotiate agreements regarding interstate transmission projects.
- Could lead to more efficient allocation of resources by ensuring that costs are borne by those who directly benefit.
- Empowers state officials to protect their constituents from bearing costs associated with other states' energy policies.
Most Benefited Areas:
Potential Disadvantages
- Could hinder the development of new interstate transmission projects if states are unwilling to consent to cost allocation.
- May lead to increased electricity costs for consumers in states that initiate policies requiring new transmission infrastructure.
- Potential for disputes between states regarding the allocation of costs and benefits of interstate transmission projects.
- The definition of 'covered policy' and 'covered transmission facility' could be subject to interpretation and legal challenges.
- May create disincentives for states to pursue ambitious clean energy policies if they fear bearing the full cost of associated transmission infrastructure.
Constitutional Alignment
The bill appears to align with the principles of federalism, allowing states to retain control over their energy policies and protect their consumers from undue financial burdens. Congress's power to regulate interstate commerce (Article I, Section 8, Clause 3) provides the basis for federal regulation of electric transmission facilities. The bill does not appear to infringe on any specific constitutional rights or limitations.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).