118 HR 5075 IH: Ethics in Energy Act of 2023
U.S. House of Representatives
2023-07-28
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I
118th CONGRESS
1st Session
H. R. 5075
IN THE HOUSE OF REPRESENTATIVES
July 28, 2023
Ms. Castor of Florida (for herself, Mr. Casten, and Mr. Bowman) introduced the following bill; which was referred to the Committee on Energy and Commerce
A BILL
To direct the Federal Energy Regulatory Commission to prohibit covered utilities from recovering covered expenses from ratepayers, and for other purposes.
1.

Short title
This Act may be cited as the “Ethics in Energy Act of 2023”.
2.

Definitions
In this Act:
(1)

Centralized service company
The term centralized service company has the meaning given the term in section 367.1(a) of title 18, Code of Federal Regulations (or a successor regulation).
(2)

Commission
The term Commission means the Federal Energy Regulatory Commission.
(3)

Covered expense
The term covered expense means a direct or indirect expense paid by a covered utility to—
(A)
an external entity to perform political influence activities;
(B)
a centralized service company, parent company, or other corporate affiliate—
(i)
to perform a political influence activity; and
(ii)
that invoices that covered utility for the expenses related to that political influence activity; or
(C)
an employee of that covered utility, in the form of a salary, that performs a political influence activity.
(4)

Covered utility
The term covered utility means—
(A)
an electric utility company (as defined in section 367.1(a) of title 18, Code of Federal Regulations (or a successor regulation)) that had, in each of the 3 previous calendar years, sales or transmission services that exceeded—
(i)
1,000,000 megawatt-hours of total annual sales;
(ii)
100 megawatt-hours of annual sales for resale;
(iii)
500 megawatt-hours of annual power exchanges delivered; or
(iv)
500 megawatt-hours of annual wheeling;
(B)
a major natural gas company; and
(C)
a centralized service company.
(5)

Major natural gas company
The term major natural gas company means a natural-gas company (as defined in section 2 of the Natural Gas Act (15 U.S.C. 717a)) whose combined gas transported or stored for a fee exceed 50,000,000 Dth in each of the 3 previous calendar years.
(6)

Political influence activity
The term political influence activity includes—
(A)
any expense for the purpose of directly or indirectly influencing the possible—
(i)
adoption of Federal, State, or local regulations, legislation, or ordinances; or
(ii)
repeal or modification of existing Federal, State, or local regulations, legislation, or ordinances;
(B)
any expense for the purpose of directly or indirectly influencing elections or appointments of public officials or referenda;
(C)
any expense for the purpose of directly or indirectly influencing the approval, modification, or revocation of utility franchises;
(D)
any expense for the purpose of directly or indirectly influencing the public opinion with respect to Federal, State, or local—
(i)
regulations, legislation, or ordinances;
(ii)
elections;
(iii)
referenda; or
(iv)
utility rate setting;
(E)
any expense for the purpose of directly or indirectly influencing the decisions of Federal, State, or local government officials;
(F)
any expense relating to attendance or participation in, preparation for, or appeal of any formal proceeding before a regulatory commission;
(G)
dues or fees paid to trade associations or industry associations;
(H)
any contributions or other payments to an organization described in paragraph (3) or (4) of section 501(c) of the Internal Revenue Code of 1986; and
(I)
advertising, marketing, or public relations expenses designed for the purpose of—
(i)
influencing public opinion;
(ii)
increasing goodwill toward a covered utility from the public or from public officials;
(iii)
improving the reputation of a covered utility; or
(iv)
promoting or retaining the service provided by a covered utility.
3.

Prohibition against recovering political activity expenses from ratepayers
(a)

Regulations
Not later than 18 months after the date of enactment of this Act, the Commission shall promulgate regulations—
(1)
to prohibit covered utilities from recovering covered expenses from ratepayers in proceedings before the Commission, in accordance with this section; and
(2)
to amend the applicable Uniform System of Accounts in title 18, Code of Federal Regulations (or successor regulations), to instruct covered utilities to place covered expenses in accounts that are presumptively not recoverable from ratepayers, in accordance with this section.
(b)

Report
(1)

In general
The Commission shall require that, not later than 18 months after the date of enactment of this Act, and annually thereafter, each covered utility shall submit to the Commission a report containing—
(A)
an itemized list of expenses of the preceding year recorded in accounts relating to—
(i)
covered expenses;
(ii)
outside services or vendors; and
(iii)
the operations of the covered utility with respect to administrative and general expenses; and
(B)
for each expense or cost described in clauses (i) through (iii) of subparagraph (A), unredacted information with respect to each of the matters described in paragraph (2) that are applicable to that expense or cost.
(2)

Matters described
The matters referred to in paragraph (1)(B) for the expenses and costs described in clauses (i) through (iii) of paragraph (1)(A) are the following:
(A)
Billing amounts.
(B)
Billing dates.
(C)
The identity of each payee for any external consultants or contracts.
(D)
In the case of a payment made to a third-party vendor by a centralized service company, parent company, or other corporate affiliate of the covered utility, the identity of that third-party vendor.
(E)
The job title, portion of salaries, and expenses of covered utility staff with respect to any work performed relating to a covered expense.
(F)
An explanation of the expense or cost that is sufficient to describe the purpose of the expense or cost.
(3)

Reporting minimum removed
With respect to any annual form that a covered utility submits to the Commission having a reporting threshold of $250,0000, the Commission shall remove that reporting threshold for the reporting of transactions with associated or affiliated companies on that annual form.
(c)

Enforcement
(1)

In general
The Commission shall monitor and investigate compliance and noncompliance with the regulations promulgated under this section.
(2)

Penalty
(A)

In general
In addition to any refunds that the Commission orders a covered utility to pay ratepayers, the Commission shall assess a penalty in accordance with subparagraph (B) against a covered utility that violates or fails or refuses to comply with the regulations promulgated under this section by charging a ratepayer a covered expense.
(B)

Amount of penalty
(i)

In general
Subject to clause (ii), a penalty assessed under subparagraph (A) shall be—
(I)
for a covered expense charged to ratepayers in an amount less than $1,000,000, not less than the amount of that covered expense;
(II)
for a covered expense charged to ratepayers in an amount not less than $1,000,000 and not more than $10,000,000, not less than double the amount of that covered expense; and
(III)
for a covered expense charged to ratepayers in an amount more than $10,000,000, not less than triple the amount of that covered expense.
(ii)

Limitation
The amount of a penalty assessed under subparagraph (A) shall be not more than 20 times the amount of the applicable covered expense.
(3)

No recovery from ratepayers
Covered utilities that are subject to a penalty under this subsection may not recover that penalty from ratepayers.
(4)

Penalty distribution
With respect to each penalty assessed and collected under this subsection—
(A)
½ of that penalty shall be distributed to ratepayers, through a rebate; and
(B)
½ of that penalty shall be distributed to the Commission for the purpose of increasing resources for enforcing this section.
(5)

Rule of construction
Nothing in this Act prevents the Commission from issuing refunds or rebates to ratepayers for a covered expense that was recovered by a covered utility on a date before the date of enactment of this Act.