Sponsors
The bill increases local control and lowers federal regulatory burdens for consumer-regulated utilities—potentially speeding deployment and cutting compliance costs—at the trade-off of creating reliability, planning, oversight, and competition risks that could raise outage exposure, shift costs, and weaken protections for consumers and critical services.
Homeowners and small businesses located on consumer-regulated electric utility (CREU) premises can receive a defined pathway to dedicated local retail service from an islanded CREU, allowing local control over their electricity supply without using the bulk-power grid.
Local consumer-regulated utilities gain regulatory autonomy from certain federal rules, enabling faster deployment of community-controlled generation, storage, and distribution and reducing federal compliance burdens for those utilities.
Utilities and their parent holding companies face lower compliance and administrative costs when operating as or owning CREUs exempt from some federal regulation, which may reduce operating expenses and—if passed through—lower future rate increases for customers.
Customers served by islanded CREUs (including homeowners and small businesses) would be barred from accessing primary or backup supply from the bulk-power system, raising their outage and reliability risk.
Exempting CREUs from federal reliability rules and fragmenting jurisdiction could undermine regional grid planning and transmission coordination, complicate cost-allocation, and shift reliability or upgrade costs onto other utilities and their ratepayers.
Removing or limiting federal obligations (including PURPA interconnection/purchase requirements) could reduce market opportunities for independent and small generators, weaken competition, limit access to distributed renewables, and risk higher prices or worse terms for electricity customers.
Based on analysis of 7 sections of legislative text.
Creates a legal carve-out for physically islanded, customer-controlled electric systems (CREUs), exempting them and related holding companies from FERC, DOE, PUHCA, PURPA section 210, and ERO reliability rules while islanded.
Introduced January 7, 2026 by Thomas Bryant Cotton · Last progress January 7, 2026
Creates a new legal category for small, customer-owned, physically islanded electric systems (called consumer-regulated electric utilities, or CREUs) and exempts those systems and related holding companies from nearly all federal oversight so long as they remain disconnected from the bulk-power system. CREUs are allowed to build and operate in public rights-of-way subject to standard permitting and restoration rules but face limited local review and lose the federal exemption immediately if they ever connect to the bulk-power system for primary or backup supply. The measure removes CREUs from Federal Power Act jurisdiction (including rate, interconnection, transmission planning, merger review, and reliability rules), exempts them from certain provisions of the Public Utility Regulatory Policies Act and PUHCA, and says they are not part of the bulk-power system or required to register with or follow standards set by the Electric Reliability Organization while islanded.