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Requires the Federal Energy Regulatory Commission to issue a final rule under section 219(b)(3) of the Federal Power Act establishing a shared savings framework allowing covered transmitting utilities to recover a portion of verified cost savings as an incentive; specifies methodologies, filing, reporting, recovery mechanisms, and timelines.
Amends subsection (a) to remove the statutory one-year deadline for the Commission to establish rules and replaces the phrase requiring establishment "by rule" within one year with a general requirement that the Commission issue necessary rules; multiple amendments in subsection (b) alter phrasing from singular to plural "rule" to "rules", adjust punctuation, and add a new subparagraph (C) to paragraph (4) allowing recovery of amounts determined pursuant to shared savings frameworks or other incentive mechanisms; subsection (c) wording changed from "In the rule" to "In a rule."
This section incorporates the meanings of several terms by reference to section 3 of the Federal Power Act (16 U.S.C. 796); it does not itself amend that statute but relies on its definitions for certain terms.
This section defines 'covered electric utility' and 'covered transmitting utility' by reference to jurisdictional concepts under Part II of the Federal Power Act (16 U.S.C. 824 et seq.); it does not amend that statute but uses its jurisdictional framework.
Requires federal and state regulatory changes to let electric utilities keep a share of verified cost savings from transmission and grid upgrades as a performance incentive. It directs FERC to write a shared‑savings rule, directs DOE to publish guidance for state regulators, creates a DOE grant program to help states build these regulatory frameworks, mandates a DOE/FERC study on transmission rate inefficiencies, and provides definitions to support implementation.
The bill aims to spur utility investment and faster deployment of grid‑saving, reliability‑enhancing actions by authorizing shared‑savings incentives, standardized M&V, and federal support to states—trading off the potential for lower long‑run costs and better reliability against risks of higher up‑
Ratepayers and households could see lower long‑run electricity costs when utilities implement verified cost‑saving actions and investments that reduce transmission inefficiencies.
All electricity consumers and communities (especially disaster‑prone areas) could get improved grid reliability and faster restoration because incentives and qualifying actions encourage deployment of grid‑enhancing technologies and situational‑awareness tools.
Consumers, regulators, and utilities will benefit from standardized measurement, verification (M&V) methods and technical support (including DOE national lab input), which increase transparency, reduce disputes, and make incentive awards more predictable.
FERC and state regulators gain clearer authority and flexible, phased rulemaking tools to design targeted incentive frameworks that can adapt to changing technologies and market conditions.
Ratepayers (including low‑income households) may face higher near‑term utility bills while utilities recover incentive payments or increased revenues tied to investments and shared‑savings arrangements.
Utilities could capture a disproportionate share of verified savings or structure incentives (via baselines, price proxies, or lenient methodologies) to benefit their earnings more than consumers, reducing the net consumer gain.
Ongoing and multiple rounds of rulemaking and evolving methodologies create regulatory uncertainty for utilities, investors, and developers and can increase administrative complexity and costs that are ultimately passed to consumers.
Complex measurement, verification, reconciliation processes and new staffing or contracting needs raise administrative costs for states and utilities, which may be borne by consumers and strain smaller or rural utilities' capacity to participate.
Replace one‑year deadline phrasing by requiring the Commission to "issue such rules as may be necessary to establish" instead of mandating establishment "Not later than 1 year after the date of enactment."
Change singular ‘‘rule’’ language to plural ‘‘rules’’ in subsection (b) so that the provision governs multiple rules issued under Section 219.
Insert multiple punctuation/text adjustments across paragraphs (b)(1)–(4) and (c) to conform phrasing, including changing instances of ‘‘In the rule’’ to ‘‘In a rule’’ and adding semicolons/permissive connective language.
Add an explicit new subparagraph allowing incentive payments to include amounts determined under shared savings frameworks or other incentive mechanisms prescribed in the rules.
Harmonize punctuation and list structure in subsection (b)(4) by converting prior subparagraph (A)/(B) punctuation and inserting the new subparagraph (C) to complete the list of permissible incentive items.
Who is affected and how:
Utilities & Energy Companies: Utilities (both those under FERC jurisdiction and those regulated by states) are the primary beneficiaries. They can recover a portion of verified cost savings from qualifying transmission and operational changes, creating a new revenue incentive to deploy grid‑enhancing technologies and make efficiency improvements. Utilities will need systems to measure, verify, and report savings.
State Governments: Public utility commissions must create or adapt regulatory frameworks to allow non‑FERC utilities to retain shared savings. The bill provides grants and DOE guidance to help, but states will face administrative work to design verification methods, rate‑adjustment processes, and oversight practices.
Federal Agencies and Laboratories: FERC must craft a formal shared‑savings rule and DOE must publish guidance, run a grants program, and lead a study with periodic updates. National Laboratories are tapped for technical support.
Ratepayers (Middle‑Class Families and Low‑Income Individuals): Customers could benefit if incentives accelerate cost‑reducing upgrades, lower operating costs, and reduce congestion. However, outcomes depend on program design—poorly structured incentives could shift costs to customers or fail to deliver net savings. Consumer advocates and regulators will need to monitor net benefits.
Grid‑Enhancing Technology Suppliers and Researchers: Companies that supply advanced conductors, sensors, power electronics, and software may see increased demand. Researchers and National Labs will be engaged for verification methods and technical assistance.
Regulators and Stakeholders: New measurement, verification, and reporting requirements will increase workload for regulators, utilities, and third‑party verifiers. Stakeholder processes are required under the grant program to ensure transparency.
Potential risks and tradeoffs:
Overall, the legislation shifts regulatory policy toward performance‑based incentives for transmission, aiming to align utility incentives with systemwide cost savings while providing federal support to states for implementation.
Referred to the House Committee on Energy and Commerce.
Introduced February 26, 2026 by Sean Casten · Last progress February 26, 2026
Expand sections to see detailed analysis
Referred to the House Committee on Energy and Commerce.
Introduced in House