H.R. 3632 would authorize the Federal Energy Regulatory Commission (FERC) to require electricity-generating facilities to continue operating under certain conditions to ensure reliable service on the bulk power system. The bill also would require facility owners to notify FERC at least five years before any planned retirement of a facility except in cases of emergencies. Finally, H.R. 3632 would exempt actions taken to comply with FERC orders from federal, state, and local environmental laws and regulations.

CBO expects that implementing H.R. 3632 could have a small effect on FERC’s workload. Because FERC is authorized to collect fees to recover its costs (which are controlled through annual appropriation acts), CBO estimates that net costs for FERC would be negligible over the 2025-2030 period.

H.R. 3632 would impose intergovernmental and private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA). CBO cannot determine if the aggregate cost of the mandates would exceed the thresholds established in UMRA for intergovernmental and private-sector mandates ($103 million and $206 million in 2025, respectively, adjusted annually for inflation).

If FERC issues orders or regulations requiring the owners of electricity-generating facilities to continue in operation, CBO expects that the cost to do so would be recovered through rates assessed on utilities and consumers that purchase the power. The bill would authorize FERC to set those rates. If electricity rates increase as a result of FERC’s orders, there would be an additional mandate on the purchasers of the power. Because the cost of the mandate would depend on actions yet to be announced, CBO cannot determine whether the cost to comply with the mandate would exceed the thresholds established in UMRA.

If FERC increases their fees to offset the costs of implementing the bill, it would increase the cost of an existing mandate on public and private entities required to pay those fees. The bill also would impose a mandate by requiring owners of power generating plants to notify FERC and other entities if they plan to retire large generators. CBO expects the cost of compliance for those mandates would be small.

The bill also would preempt any state or local environmental laws if an entity violates them while complying with an order or regulation made using the bill’s authority. CBO estimates that preemption would not result in a direct increase in expenditures or decrease in revenues.

The CBO staff contacts for this estimate are Aaron Krupkin (for federal costs) and Brandon Lever (for mandates). The estimate was reviewed by H. Samuel Papenfuss, Deputy Director of Budget Analysis.