Casten Introduces Bill to Ensure Energy Prices Reflect the Full Cost of Greenhouse Gas Emissions
Washington, D.C. – Today, U.S. Representative Sean Casten (IL-06) introduced the Energy Prices Require Including Climate Externalities (Energy PRICE) Act. The bill would clarify that the Federal Energy Regulatory Commission (FERC) has the responsibility to ensure that public electric utilities take into account greenhouse gas emissions when setting their utility rates.
Under the Federal Power Act (FPA), Congress granted FERC the authority and responsibility to ensure that the rates charged by electric utilities for wholesale rates are "just and reasonable." However, due to restructuring of the power markets, FERC failed to consider the full economic and environmental cost of greenhouse gas emissions. When we properly take into account the entire cost of greenhouse gas emissions, it makes it clear that dirty energy sources are more expensive and it facilitates the transition to clean energy sources, reducing emissions and tackling the climate crisis.
This bill clarifies that FERC has the responsibility to incorporate the entire cost of greenhouse gas emissions in their ratemaking decisions, which they have failed to do. It reaffirms the Congressional intent behind the Federal Power Act and recognizes the importance of these considerations in ensuring fair market competition between electric generators.
The legislation is cosponsored by U.S. Representatives Joe Kennedy III (MA-04), Mike Levin (CA-49), and Jared Huffman (CA-02).
Casten said, "While climate deniers and delayers have focused on the pain of converting to a clean energy system, markets have consistently made economic decisions to invest in clean energy. That's good news, but it has created its own challenges as we think about how to allocate the gains from cheaper, cleaner energy. In recent decades, FERC has focused almost exclusively on consumer prices, with the result that in many markets, the price of electricity is falling below the level that is necessary to attract crucial and continuing investment. Left unchecked, this will make it impossible to maintain the clean, reliable grid that consumers and businesses have come to expect. This bill serves a critical and necessary function to remind FERC that they have an affirmative obligation to structure rules and markets to ensure that the needs of all stakeholders – consumers, investors, and the environment – are met. We cannot get to a zero carbon economy under the current regulatory regime, and this bill is a critical and necessary step to achieve that goal."
Kennedy said, "If federal regulators fail to consider the cost of increased greenhouse gas emissions, all Americans will be forced to pay for an ever-increasing price of climate change and environmental destruction without their knowledge. By passing the Energy PRICE Act, we will make clear that FERC has the legal authority and moral obligation to consider greenhouse gas emissions when determining energy rates and considering new utility projects."
In 2017, the Environmental Protection Agency (EPA) found that the power sector contributed the second highest share of greenhouse gas emissions.