HR 4603
FAIR Act
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Bill overview
The FAIR Act amends the Public Utility Regulatory Policies Act of 1978 to prevent state regulatory authorities from approving electric utility rates if the utility engages in diversity, equity, or inclusion (DEI) practices or considers environmental, social, or governance (ESG) factors. Specifically, it prohibits approving rates based on DEI practices that could discriminate or promote systemic bias, and limits consideration of ESG factors to those directly tied to financial impacts like cost reduction or legal compliance. The bill aims to prevent state regulators from influencing utility rates through DEI and ESG initiatives.
Key provisions
- Prohibits state regulatory approval of electric utility rates based on DEI practices.
- Defines prohibited DEI practices, including training asserting inherent superiority/inferiority of groups.
- Restricts consideration of environmental, social, and governance factors in rate setting.
- Allows compliance with federal or state laws requiring ESG factors only to the extent of fulfilling the legal obligation.
- Clarifies that ESG factors cannot be considered beyond legal requirements.
- Defines ‘environmental, social, or governance factor’ to exclude factors unrelated to financial impacts.
- Specifically prohibits quotas based on race, color, ethnicity, sex, or national origin.
- Limits supplier diversity programs based on protected characteristics to those required by law.
Who is affected
- Electric Utilities
- State Regulatory Authorities
- Electric Consumers
Sponsors
Official sponsors from legislative records.
Primary sponsor
John J. McGuire
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119th CONGRESS — 1st Session
H. R. 4603
IN THE HOUSE OF REPRESENTATIVES
A BILL
To amend the Public Utility Regulatory Policies Act of 1978 to prohibit State regulatory authorities from approving rates charged by electric utilities that engage in certain diversity, equity, or inclusion practices, or that consider environmental, social, or governance factors, and for other purposes.
This Act may be cited as the Fair, Affordable and Inclusive Rates Act FAIR Act
or the
.
Section 111(d) of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2621) is amended by adding at the end the following:
No State regulatory authority shall approve the rate of a State regulated electric utility if such State regulated electric utility engages in, or retains or employs a consultant or an advisor to promote or enforce, a diversity, equity, or inclusion practice, such as a practice—
discriminating for or against any person on the basis of race, color, ethnicity, religion, biological sex, or national origin; or
requiring, as a condition of employment, promotion, advancement, or the ability to speak, make presentations, or submit written materials, that an employee—
undergo training, education, coursework, or other pedagogy asserting that any particular race, color, ethnicity, religion, biological sex, or national origin is inherently or systemically superior or inferior, oppressive or oppressed, or privileged or unprivileged; or
Subject to subparagraph (B), no State regulatory authority shall approve the rate of a State regulated electric utility if such State regulated electric utility considers environmental, social, or governance factors in establishing rates or making operational decisions that affect rates.
Nothing in this paragraph shall be construed to prohibit a State regulated electric utility from complying with—
a Federal law or regulation requiring specific ESG factors if complying with such Federal law or regulation—
is limited to fulfilling the direct legal obligation of such Federal law or regulation; and
does not involve discretionary consideration of ESG factors beyond such direct legal obligation; or
a State law or regulation that require such State regulated electric utility to purchase from certain types of generation sources if complying with such State law or regulation—
is limited to fulfilling the direct legal obligation; and
does not involve discretionary consideration of ESG factors beyond such obligation.
The term environmental, social, or governance factor
or ESG factor
means any factor relating to—
environmental considerations, including climate change policies, carbon emissions reductions, or environmental justice initiatives, unless directly tied to pecuniary impacts such as cost reduction, reliability enhancement, or compliance with Federal or State law or regulation;
social considerations, including—
corporate board or workforce composition quotas based on race, color, ethnicity, sex, or national origin; or
supplier diversity programs that grant preferences based on race, color, ethnicity, sex, or national origin, unless such programs are required by applicable Federal or State law; or
governance considerations, including the adoption of corporate governance policies primarily for the purpose of advancing political, ideological, or social objectives unrelated to pecuniary outcomes relevant to State regulated electric utility operations, customer service, or ratepayer cost impacts.