Congress bans utilities from charging ratepayers for smart grid upgrades
H.R. 1148 — SMARTER Act · Filed by Jefferson Van Drew (R-NJ) · Introduced Feb 7, 2025 · Referred to committee
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What it does
This bill amends federal utility law to prohibit electric utilities from recovering smart grid deployment costs from ratepayers. It requires states to consider and decide within two years whether to adopt this prohibition, with exemptions for states that have already acted on smart grid cost recovery. The operative effect is a ban on utilities passing smart grid infrastructure expenses to consumers through their electric bills.
Why we flagged it
The bill's core mechanism is a direct prohibition on utilities recovering smart grid costs from ratepayers, enforced through state regulatory review. This is a rate-limiting measure, not a subsidy or carve-out.
What the text implies
- Utilities may respond by deferring or canceling smart grid projects, potentially delaying grid modernization, renewable energy integration, and demand-response capabilities that improve reliability and lower long-term costs.
- The prohibition may shift smart grid investment burden to government grants or bonds, effectively socializing infrastructure costs while privatizing the operational benefits utilities derive from grid data and efficiency gains.
The full analysis lists 4 implications of this text.
Who stands to gain
residential and commercial ratepayers (direct rate relief); state regulatory authorities (expanded ratemaking discretion)