What Happened?
Ever wonder who really sets the price on your monthly electric bill, and what say D.C. gets? Since 1935, state regulators have mostly set the rates you pay for electricity, and a new Congressional Research Service report looks at how far Congress can go to change those rates.
Federal law split the job in 1935: the federal government oversees wholesale power sold between utilities, while state regulators set the rates homes and businesses pay.
Why Does it Matter to Me?
The rates on your electric bill are shaped by decisions made at the state level, and this report maps out whether Congress could step in to change them.
Congress has already tried one approach: a 1978 energy law called PURPA, which the report calls "perhaps the federal government's most substantial effort" to shape electricity rates. Under that law, Congress has set 21 standards for state regulators to consider, but states can choose not to adopt any of them.
The report is unsure whether cutting the profit utilities earn on their investments, called return on equity (ROE), would save consumers money over time, since investors might then charge utilities more interest on their debt.
Both Sides, Now
The report lays out five options for Congress: take over setting electricity rates, use the PURPA approach again, pass laws covering only the rates the federal energy regulator (FERC) controls, direct federal agencies to gather information, or offer incentives to utilities that voluntarily lower their ROE.
Supporters of more federal involvement argue that the Constitution gives Congress room to act. The report notes that broader Supreme Court rulings on the Commerce Clause, the constitutional power over interstate trade, "may have removed some of the constitutional barriers to congressional regulation of retail electricity services and rates," though they did not change what the Federal Power Act covers.
Opponents warn that stepping into state territory could lead to legal fights. In 2016, the U.S. Supreme Court ruled in Hughes v. Talen Energy Marketing that Maryland's electricity program was overridden by federal law because it effectively set prices for power sold across state lines, showing how state actions can trigger legal conflict.
Two Democratic House members have introduced bills dealing with the profit utilities earn on their investments. Rep. Greg Casar (D-TX-35) sponsored the Lowering Utility Bills Act, which would direct the Federal Energy Regulatory Commission (FERC) to set a reasonable range for ROE based on financial market data. Rep. Sean Casten (D-IL-6) sponsored the Energy Bills Relief Act, which would direct FERC to collect and publish data on utilities' profits and how they are financed.
What Happens Next?
Both bills remain in committee with no further action recorded. The report warns that laws covering only the rates FERC controls might have limited impact, since those costs make up a small share of what people pay, and that voluntary incentives may not work well because utilities do not get much federal funding.
For any of these ideas to change what Americans pay for electricity, Congress would first have to pass a law and work around the long-standing split between state and federal power.
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