Fair Allocation of Interstate Rates Act

This bill prohibits transmission providers from allocating costs for certain transmission facilities to consumers in states that did not consent to those facilities. It amends the Federal Power Act to add a new section on rate and charges.

Sec. 2, Rate and charges: This section adds a new prohibition to the Federal Power Act. Generally, a transmission provider serving consumers in two or more states cannot allocate costs for a covered transmission facility to a consumer if the facility is built partly to implement a state's covered policy and the consumer does not live in that state. An exception allows cost allocation if the consumer's state or its designated public official expressly consents. The section creates presumptions that benefits accrue only to cost causers, that only consumers in the state with the covered policy are cost causers, and that consumers outside that state are not cost causers. The Federal Energy Regulatory Commission must issue implementing rules within six months of enactment. It defines "covered policy" as any state policy, including local policies, and "covered transmission facility" as any interstate transmission facility planned or operated partly to implement a covered policy.