Lowering Utility Bills Act

This bill amends the Federal Power Act and the Public Utility Regulatory Policies Act of 1978 to require investor-owned electric and gas utilities and transmission providers to set their authorized return on equity at the lowest point in a newly defined range of reasonableness, and to ban recovery of certain costs through customer rates.

Sec. 2, Requirements for transmission providers: The Federal Energy Regulatory Commission (FERC) must establish a range of reasonableness for a transmission provider's return on equity using three data points: the average midpoint expected 10-year U.S. equity market return from financial academics, financial institutions, and Global Systemically Important Banks over the previous five years. The range must be adjusted downward for reduced risks from not participating in regional planning or from federal actions like regulatory asset approval or formula ratemaking. The authorized return on equity must be the lowest in that range, unless the provider shows clear and convincing evidence a higher return is needed to attract capital. Transmission providers cannot recover through rates costs for lobbying, political contributions, investor relations, certain travel, entertainment, gifts, aircraft, rate proceeding costs, unregulated products, penalties, or contributions to certain tax-exempt organizations. FERC must consider a capital expenditure prudent only if the provider shows it prioritized grid enhancing technologies and lower-cost alternatives, and the project underwent compliant regional planning. FERC must issue regulations within 120 days. Section 219 of the Federal Power Act (FERC candy) is repealed.

Sec. 3, Requirements for investor owned utilities: Investor-owned electric or gas utilities (excluding cooperatives and publicly owned utilities) must calculate their return on equity using the same three-data-point range of reasonableness, adjusted downward by 5 basis points for each applicable risk-reducing factor such as operating as a regulated monopoly or state actions like formula rates, regulatory assets, or securitization. They must use the lowest return in that range for official business, unless a state regulatory authority requests or requires an alternative rate schedule, in which case the utility must publicly justify the higher return and quantify its impact on revenue requirements and average residential bills. They cannot recover through rates the same categories of costs as transmission providers, plus payments to outside attorneys for FERC proceedings. Violations are treated as violations of the Federal Power Act. FERC must issue regulations within 120 days. The section does not preempt collective bargaining agreements in place on enactment.