Ratepayer protection

(a) FERC pricing policy for transmission services provided by public utilities and transmitting utilities (1) Findings Congress finds that— (A) it is not just and reasonable within the meaning of sections 205 and 206 of the Federal Power Act (16 U.S.C. 824d, 824e) for any public utility or transmitting utility to maintain rates, terms, or conditions of service that, by their terms, charge less than the embedded costs and incremental expansion costs to eligible customers seeking transmission service from computational load owners and computational load operators; (B) transmission service costs should be fully assigned to computational load owners and computational load operators so as to minimize or avoid the cost burden on other customers; and (C) computational load owners and computational load operators should incur the full cost of the transmission service they require. (2) Definitions In this subsection: (A) 1994 transmission pricing policy statement The term 1994 transmission pricing policy statement means the policy statement issued by the Commission on October 26, 1994, and published in the Federal Register on November 3, 1994, relating to Inquiry Concerning the Commission’s Pricing Policy for Transmission Services Provided by Public Utilities Under the Federal Power Act; Policy Statement (59 Fed. Reg. 55031). (B) Commission The term Commission means the Federal Energy Regulatory Commission. (C) Computational load operator The term computational load operator means the entity that operates a computational load site. (D) Computational load owner The term computational load owner means the entity that owns a computational load site. (E) Computational load site The term computational load site means 1 or more buildings, structures, or installations at a single location that— (i) primarily contain information technology infrastructure used for— (I) creating, executing, and delivering software applications and services; (II) artificial intelligence training, deployment, and delivery; (III) cryptocurrency mining; or (IV) other computational activities at a data center; and (ii) are supplied through electrical equipment that is connected to the bulk-power system (as defined in section 215(a) of the Federal Power Act (16 U.S.C. 824o(a))). (F) Public utility The term public utility has the meaning given the term in section 201(e) of the Federal Power Act (16 U.S.C. 824(e)). (G) Transmitting utility The term transmitting utility has the meaning given the term in section 3 of the Federal Power Act (16 U.S.C. 796). (3) Revision of policy statement (A) In general Not later than 270 days after the date of enactment of this Act, the Commission shall revise the 1994 transmission pricing policy statement— (i) to require public utilities and transmitting utilities to charge eligible customers seeking transmission service on behalf of computational load owners and computational load operators the embedded cost and the incremental cost of transmission service; and (ii) to ensure that any incremental costs paid are credited to the annual transmission revenue requirement of the applicable public utility or transmitting utility to prevent double recovery from other customers. (B) Requirement In revising the 1994 transmission pricing policy statement under subparagraph (A), the Commission shall provide for a lower cost of transmission service for eligible customers seeking transmission service on behalf of computational load owners and computational load operators that elect non-firm transmission service. (4) Rulemaking (A) Notice of proposed rulemaking Not later than 270 days after the date on which a revised transmission pricing policy statement is published in the Federal Register under paragraph (3), the Commission shall issue a notice of proposed rulemaking requiring public utilities and transmitting utilities— (i) to establish or revise transmission rates for eligible customers seeking transmission service for computational load owners and computational load operators in accordance with that revised transmission pricing policy statement; and (ii) to require standardized analysis to identify upgrades for a computational load site and cost reduction options, as the Commission may require by rule. (B) Final rule Not later than 1 year after the date on which the notice of proposed rulemaking described in subparagraph (A) is issued, the Commission shall issue a final rule requiring public utilities and transmitting utilities to establish or revise transmission rates for eligible customers seeking transmission service for computational load owners and computational load operators. (b) Ratepayer protection for data center and high-Density computing load Part II of the Federal Power Act (16 U.S.C. 824 et seq.) (as amended by section 2105) is amended by adding at the end the following: 228. Ratepayer protection for data center and high-density computing load (a) Definitions In this section: (1) Commission The term Commission means the Federal Energy Regulatory Commission. (2) Covered load The term covered load means electric load that— (A) is attributable to 1 or more data centers or high-density computing facilities located at a single site, or at multiple sites under common ownership or control; and (B) equals or exceeds 20 megawatts or, in the case of data centers or high-density computing facilities developed in phases, is reasonably expected to equal or exceed 20 megawatts at full buildout. (3) Data center or high-density computing facility (A) In general The term data center or high-density computing facility means a facility, or group of co-located facilities, the primary purpose of which is to house computing, networking, or data storage equipment used to process, store, or transmit digital data, including equipment used for— (i) artificial intelligence training or inference; (ii) cloud computing or data hosting; or (iii) cryptocurrency mining or other distributed-ledger or digital-asset computation. (B) Exclusion The term data center or other high-density computing facility does not include computing or data storage equipment that is ancillary to a facility the primary purpose of which is a commercial or industrial activity other than an activity described in subparagraph (A). (4) Embedded average cost The term embedded average cost means the average cost of service reflected in the rates otherwise in effect for the customer class that would apply to the applicable covered load. (5) Incremental cost The term incremental cost means the cost that would be avoided had a specific covered load not been served by the electric utility, including all costs to construct, own, and operate power generation or storage resources and electric transmission and distribution services associated with serving the covered load, based on costs estimated by the electric utility at or around the time that the covered load becomes operational and subject to approval by the Commission or a State, as appropriate. (6) State The term State includes the applicable State commission and any other State authority having jurisdiction over retail electric service. (7) Transmission service category The term transmission service category means a class of transmission service provided under a tariff on file with the Commission, including— (A) network integration transmission service; (B) point-to-point transmission service; and (C) any interim, non-firm, contract demand, or other service that limits— (i) the quantity of energy a load may withdraw from the transmission system; or (ii) the conditions under which the load may withdraw energy from the transmission system. (b) Ratepayer protection floor (1) No subsidy of covered load No portion of the incremental cost may be allocated to, or recovered in the rates of, any customer other than a covered load, subject to the limitations described in subsection (e). (2) Surplus permitted Paragraph (1) does not limit the authority of the Commission or a State under subsection (c) to recover from covered loads amounts in excess of incremental cost and to credit those amounts to other customers as a rebate or a reduction to the utility costs that are used as a basis for the calculation of customer rates. (3) Continuing recovery on exit A rate, charge, or agreement for service to a covered load shall be designed to recover from the covered load the full incremental cost of the electric utility, and such recovery shall continue notwithstanding the termination by the covered load of a contract or other agreement pertaining to the sale of electric energy, or the cessation by the covered load of the purchase of electric energy, before that incremental cost has been fully recovered. (4) Financial assurance Before constructing, or making an upgrade to, a generation, transmission, or distribution facility necessary to serve a covered load, an electric utility shall require the covered load to provide financial assurances or contributions sufficient to cover the cost of the facility or upgrade, subject to the condition that any financial assurances or contributions provided by the applicable covered load to a public utility or Transmission Organization for the same facility or upgrade shall be credited against the requirement of this paragraph. (c) State authority To hold open seasons and set covered-Load rates (1) In general Notwithstanding any other provision of this Act or any rule or order of the Commission, and consistent with subsection (b)(3), a State may, with respect to retail electric service to covered loads— (A) establish rates, charges, or contract terms that recover more than the embedded average cost, and more than the incremental cost, of serving a covered load; (B) require that revenue collected from a covered load in excess of incremental cost be credited or applied to reduce the rates of other retail customers; (C) in effectuating the policy described in this subsection, use an open season or competitive solicitation to allocate among covered loads the opportunity to obtain and contract for retail electric service, making awards in such manner as returns the greatest benefit to other ratepayers on a present value basis, notwithstanding the order in which applications or requests for service are received from covered loads or any other basis for making such awards, subject to the condition that each award under such an open season or competitive solicitation shall specify the maximum quantity of firm demand awarded, in megawatts, and the transmission service category on the basis of which the covered load is to be served; (D) condition the provision of retail electric service to a covered load on the procurement, construction, or contracting by the covered load for new generation resources sufficient to serve the demand of the covered load; and (E) condition the provision of retail electric service to a covered load on the covered load taking, or agreeing to take, a transmission service category that limits— (i) the quantity of energy the covered load may withdraw from the transmission system; or (ii) the conditions under which the covered load may withdraw energy from the transmission system. (2) Priority of State competitive solicitations (A) Broad discretion For purposes of an open solicitation, a State shall, with respect to retail electric service to a covered load, be afforded broad discretion to conduct, to authorize an electric utility to conduct, or to require an electric utility to conduct, a competitive solicitation or open season to allocate the opportunity to interconnect, or to obtain service for, a covered load. (B) Electric utility filing An electric utility may file to conduct a solicitation or open season described in subparagraph (A). (C) Authority to require A State may require an electric utility to conduct an open season described in subparagraph (A). (d) Protection of American industry A State may treat covered loads as a separate class of service, and may establish rates, charges, terms, conditions, and interconnection or service priorities for covered loads that differ from, and that are less favorable than, those applicable to other large industrial, manufacturing, or commercial loads. (e) Rules of construction (1) State and Federal authority Except as expressly provided in subsection (c), nothing in this section expands or diminishes the jurisdiction of the Commission or of any State, including State authority over retail electric service, rate design, and resource planning. (2) Recognition of reserved State authority (A) In general The authority described in subsection (c)(1) is an attribute of the reserved authority of the States over retail electric service. (B) Clarification This section— (i) recognizes and confirms the authority described in subparagraph (A); and (ii) is not the source of that authority. (f) Applicability (1) Prospective application Subsections (b) and (c) apply to a covered load that interconnects on or after the date of enactment of this section. (2) Existing arrangements An arrangement to serve a covered load that was approved by the Commission or by a State before the date of enactment of this section shall remain in effect..