Fair Allocation of Interstate Rates Act

Bill Number

H.R. 6336

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Energy

Status

Introduced

Latest Action

2025-12-01: Referred to the House Committee on Energy and Commerce.

Last Updated

2026-03-27T08:06:18Z

AI-Generated Summary

Summary of H.R. 6336: Fair Allocation of Interstate Rates Act

Purpose

This bill aims to prevent the costs of certain interstate electric transmission facilities from being passed on to electricity consumers in states that did not explicitly agree to the project. It targets facilities built, at least in part, to carry out specific state policies, ensuring that only benefiting states or consenting parties bear the financial burden.

Key Provisions

• Prohibition on Cost Allocation: Transmission providers serving customers in multiple states cannot charge consumers outside the state driving the project for a "covered transmission facility" unless the consumer's state or its officials explicitly consent.
• Covered Transmission Facility: Defined as any electric transmission line, equipment, or system used in interstate commerce that is planned, built, or operated wholly or partly to implement a "covered policy" (a state or local policy, such as energy mandates).
• Presumptions for Cost Allocation:
• Benefits of the facility go only to the "cost causers" (those in the state with the policy that necessitated the facility).
• Only residents of that state are presumed to be cost causers and thus responsible for costs.
• Out-of-state consumers are presumed not to be cost causers.
• Implementation Requirement: The Federal Energy Regulatory Commission (FERC) must issue rules and regulations to enforce this within six months of the bill's enactment.
• Exception: Costs can be allocated to out-of-state consumers if their state or a designated official expressly agrees.

Significant Changes to Existing Law

This bill amends Section 205 of the Federal Power Act (which governs rates and charges for electric services) by adding a new subsection (h). It introduces a presumption-based framework that shifts the default from broad interstate cost-sharing to state-specific responsibility, unless consent is given. Previously, FERC had flexibility in approving cost allocations for transmission projects across state lines, often based on regional benefits; this limits that by tying costs more directly to state-driven policies.

Potential Impacts

• On Citizens: Protects electricity consumers in states not involved in a project's policy from unexpected rate increases, potentially lowering bills for those not benefiting from the facility (e.g., transmission lines for out-of-state renewable energy goals).
• On Government Agencies: FERC gains a mandate to regulate cost allocations more stringently, requiring new rulemaking that could slow or alter approval processes for transmission projects.
• On International Relations: Minimal direct impact, as the bill focuses on domestic interstate electricity transmission; however, it could indirectly affect cross-border energy projects if they involve U.S. states near Canada or Mexico.
• Broader Effects: May discourage or reshape multi-state transmission builds by making funding more contentious, potentially delaying grid expansions needed for national energy goals like reliability or clean energy transitions.

Main Stakeholders Affected

• Electricity Consumers: Particularly those in states without the driving policy, who could avoid cost burdens.
• Transmission Providers and Utilities: Companies operating interstate lines must adjust billing practices and seek state consents, facing compliance costs.
• State Governments and Officials: Gain influence over cost allocations for projects tied to their policies (e.g., renewable portfolio standards); states without such policies benefit from protections.
• Federal Energy Regulatory Commission (FERC): Responsible for enforcement and rulemaking, impacting its oversight of the national grid.

Notable Legal, Constitutional, or Political Implications

• Legal: Reinforces federal authority over interstate commerce (under the Commerce Clause) while empowering state consent, potentially leading to more litigation over what constitutes a "covered policy" or "express consent." The presumptions create a rebuttable framework that could standardize FERC decisions but invite challenges from utilities seeking broader cost recovery.
• Constitutional: Balances federal regulation of energy markets with state sovereignty, avoiding direct conflicts but possibly raising questions about interstate equity if it fragments the national grid.
• Political: Could spark debates on energy policy fairness, especially in contexts like transitioning to renewables, where one state's climate goals might impose costs on others; it promotes cooperative federalism by requiring explicit agreements, but might hinder unified national infrastructure efforts.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Fedorchak, Julie [R-ND-At Large]

Cosponsors (7)

Rep. Weber, Randy K. Sr. [R-TX-14], Rep. Downing, Troy [R-MT-2], Rep. Harris, Andy [R-MD-1], Rep. Hamadeh, Abraham J. [R-AZ-8], Rep. Crenshaw, Dan [R-TX-2], Rep. Barr, Andy [R-KY-6], Rep. Bice, Stephanie I. [R-OK-5]

Recent Actions

• 2025-12-01: Referred to the House Committee on Energy and Commerce.
• 2025-12-01: Introduced in House
• 2025-12-01: Introduced in House

Bill Versions

• Fair Allocation of Interstate Rates Act — issued 2025-12-01 — PDF (4 pages)