What does Preamble of SURGE Act of 2026 do?

This bill proposes to amend the Federal Power Act. The amendment would require the issuance of rules relating to shared savings frameworks for certain transmitting utilities. The bill's purpose is 'to amend the Federal Power Act to require the issuance of rules relating to shared savings frameworks for certain transmitting utilities, and for other purposes.'

What does AMENDMENTS TO THE FEDERAL POWER ACT. of SURGE Act of 2026 do?

This section amends the Federal Power Act. It modifies rules related to the Commission's authority to establish rules for ensuring reliability and improving efficiency. Changes are made to subsections (a), (b), and (c) of Section 219. The amendments include insertions and deletions of specific phrases to clarify language and expand scope. Paragraphs within subsection (b) are revised to include considerations for operational improvements, incentive mechanisms, and performance-based measures. Subsection (b) now allows for shared savings frameworks and other incentive mechanisms. Subsection (c) is modified to refer to 'a rule' instead of 'the rule'.

What does RULEMAKING ON SHARED SAVINGS FRAMEWORK FOR TRANSMITTING of SURGE Act of 2026 do?

This section requires the Commission to issue a final rule within one year establishing a 'shared savings framework' for covered transmitting utilities. The framework allows utilities to recover a portion of verified cost savings resulting from 'qualifying actions' as an incentive. The rule must include standardized methodologies for determining baseline performance, cost savings, and recoverable percentages and rate recovery timelines. Methodologies for baseline performance consider direct metering or estimations consistent with Commission modeling. Cost savings methodologies must account for factors like baseline performance and price proxies. Utilities must submit an initial filing with the Commission, verified by an independent evaluator, to be considered for incentives. Annual reports are required, detailing performance data, cost savings, and claims for incentives. The Commission will provide rate adjustments to utilities based on initial filings and annual reports. If cost savings exceed recovered amounts, the excess must be credited to ratepayers. Congress intends for the Commission to expand the shared savings framework to additional categories of transmission actions.

What does GUIDANCE FOR ELECTRIC UTILITIES NOT SUBJECT TO FEDERAL ENERGY of SURGE Act of 2026 do?

This section directs the Secretary of Energy to develop and publish guidance within two years of the Act's enactment. The guidance aims to support state regulatory authorities in establishing frameworks for electric utilities to recover cost savings resulting from specific actions. The guidance must include elements for determining baseline performance, measuring cost savings, and potential recovery mechanisms like rate adjustments. The Secretary must consult with various entities, including state regulatory authorities and independent evaluators, when developing the guidance. The guidance should account for factors like weather and demand variability when establishing baselines. National Laboratories will provide technical support as needed. The guidance must ensure consistent treatment across different categories of electric utilities. Separate guidance will be developed for vertically integrated utilities, and those owning transmission, distribution, or both, but not generation. The Secretary will review and potentially revise the guidance based on reports published under section 6.

What does GRANT PROGRAM FOR STATE REGULATORY AUTHORITIES. of SURGE Act of 2026 do?

This section establishes a grant program administered by the Secretary to support State regulatory authorities. The grants are intended to facilitate the development, implementation, and oversight of frameworks allowing covered electric utilities to recover cost savings. Funds can be used for framework development (including methodologies, data systems, regulations, and stakeholder engagement) and implementation/oversight. Funds cannot be used to directly pay covered electric utilities. Grant recipients must submit annual reports detailing activities funded by the grants. Failure to submit required reports will result in ineligibility for future grant awards. The Secretary will provide technical assistance to grant recipients and maintain a public registry of program activities. The Secretary must also submit reports to Congress summarizing program activities, assessing framework effectiveness, and identifying barriers. Funding allocations are capped: up to 70% for development activities, a minimum of 30% for implementation/oversight, and up to 5% for federal administrative expenses.

What does STUDIES ON EFFECTS OF CERTAIN RATE TREATMENTS AND ALTERNATIVE of SURGE Act of 2026 do?

This section requires the Secretary of Energy, in consultation with the Commission, to conduct studies on the effects of existing rate treatments for electric energy transmission. Studies must be conducted within three years of the Act's enactment and every five years thereafter. The studies should examine inefficiencies in the electric power sector incentivized by current rate treatments and their economic, environmental, and societal effects. The studies must also evaluate alternative frameworks for incentive-based rate treatments, including performance-based models. The Secretary is required to publish a report of the study's findings and recommendations on a publicly available website and submit it to congressional committees. Recommendations should focus on aligning rate treatments to lower costs for customers, enhance grid reliability, reduce congestion, and encourage cost-effective grid technologies. Examples of alternative frameworks include shared savings, revenue decoupling, return on equity adjustments, multi-year rate plans, earnings sharing, total expenditure models, and performance scorecards. The Secretary must ensure the studies are informed by reports filed with the Commission and the National Laboratories, as well as other relevant data sources.

What does DEFINITIONS. of SURGE Act of 2026 do?

This section defines terms used throughout the Act. "Advanced conductor" is defined as a conductor that improves electrical or mechanical performance, achieving criteria like increased current-carrying capacity or reduced electrical resistance. "Appropriate congressional committees" are specified as the Committee on Energy and Commerce of the House of Representatives and the Committee on Energy and Natural Resources of the Senate. Several terms, including 'bulk-power system,' 'electric utility,' and 'Independent System Operator,' are given the meanings defined in section 3 of the Federal Power Act. A "covered electric utility" is an electric utility not subject to Commission ratemaking jurisdiction under Part II of the Federal Power Act. "Covered action" refers to actions that generate cost savings for ratepayers and does not include new or complete reconstruction of facilities. "Covered transmission action" involves improving transmission facility efficiency, capacity, reliability, or resilience, potentially through advanced conductor replacement or grid-enhancing technology. "Qualifying action" specifically refers to a covered transmission action achieved through the reduction of transmission physical losses. "Transmission segment" is defined as a functionally distinct portion of an interconnected transmission system for which energy transmission and loss can be independently measured.

Back to bills

SURGE Act of 2026

Last updated: 2/26/2026 · Introduced: 2/26/2026

Author: Sean Casten (D-IL)

TL;DR (AI)

The bill amends the Federal Power Act to establish a shared savings framework, incentivizing transmitting utilities to implement actions that reduce costs and improve efficiency.
The Federal Energy Secretary must develop guidance for state regulatory authorities to support the creation of similar cost-saving frameworks for electric utilities not directly regulated by the Federal Energy Regulatory Commission (FERC).
A grant program is created to provide funding to state regulatory authorities for developing, implementing, and overseeing frameworks that allow electric utilities to recover cost savings.
The Secretary of Energy will conduct studies, in consultation with FERC, to evaluate existing rate treatments for electric energy transmission and explore alternative incentive-based models.
The bill defines key terms such as 'covered transmission action' and 'qualifying action,' focusing on improvements to transmission facilities that reduce losses and benefit ratepayers.

119th Congressin committeeOfficial page

Verified Votes

No verified votes yet.

Community Votes

No community votes yet. Be the first!

Voting as guest · Sign in for verified votes

Other Sections

Includes provisions on preamble, amendments to the federal power act., and 5 more.

7 sections

Click "Show details" to explore individual sections. Use the community vote above or visit All Sections to vote per section.

Read official text

Want the full experience?

Create a free account to cast verified votes on each section, get a personalized summary, and track your voting history.

Create Free Account