This bill would prohibit electric utilities from recovering costs related to smart grid projects from ratepayers. It amends the Public Utility Regulatory Policies Act of 1978 to establish a new requirement that states must consider and decide whether to adopt this prohibition. States and non-regulated utilities would be required to begin considering the standard within one year of the bill's enactment and complete their consideration and make a determination within two years. States that have already addressed smart grid cost recovery through prior legislation, regulatory proceedings, or legislative votes within the previous three years would be exempt from these timelines. The bill applies to all electric utilities under state ratemaking authority as well as non-regulated utilities.