No Utility Junk Fees Act
- Sponsor
- Rep. Vindman, Eugene Simon [D-VA-7]
- Committees
- Energy and Commerce Committee (primary)
- Last action
- Aug 10, 2026
Bottom line
The bill aims to reduce or eliminate certain fees charged by electric utilities to residential consumers by leveraging federal energy program funding as an incentive for state-level regulatory action.
What it actually does
This bill, the "No Utility Junk Fees Act," conditions federal State Energy Program (SEP) financial assistance on states implementing regulations to prohibit "spurious charges" by regulated electric utilities on residential consumers. It defines spurious charges broadly to include fees exceeding 150% of the utility's direct cost of acceptance or $3.00, fees for cost-free payment channels, and charges imposed without clear prior disclosure. States must also ensure fee-free payment options and enforce these prohibitions to receive their full federal energy assistance.
Proponents argue
Proponents argue that regulated electric utilities, as stewards of public infrastructure, have an obligation to keep energy bills affordable and that "junk fees" are an unjustified extraction of profit from residential consumers. They contend that these fees increase the total cost of energy, undermining efforts to expand access to reliable energy, and that conditioning federal assistance ensures federal investments benefit consumers rather than subsidizing utility fee extraction.
Opponents contend
Opponents might argue that utilities incur legitimate costs for payment processing, and restricting their ability to recover these costs through fees could force them to raise base rates for all consumers, including those who do not incur such fees. They might also contend that this bill represents federal overreach into state utility regulation, potentially creating an unfunded mandate or administrative burden for states and utilities.
The bill is concise and clearly written, allowing a reader to understand its core mechanisms and implications within a short timeframe.
Section 1
Short Title
This section establishes the official short title of the Act as the "No Utility Junk Fees Act," providing a common and easily recognizable name for the legislation.
Supporters argue
Supporters would argue that a clear and descriptive short title helps communicate the bill's purpose to the public and facilitates legislative discourse.
Critics contend
No specific opposition is typically raised against the short title of a bill.
Section 2
Congressional Findings on Utility Junk Fees
This section outlines Congress's rationale for the bill, asserting that regulated electric utilities have a public interest obligation to keep bills affordable, that "spurious charges" are unjustified profit extraction, and that these fees increase energy costs. It also states that conditioning federal assistance is a reasonable exercise of Congress's spending power.
Section 3(6)
Defining Prohibited "Spurious Charges"
This crucial definition specifies what constitutes a "spurious charge" that states must prohibit. It includes any payment acceptance fee exceeding 150% of the utility's direct cost or $3.00, any fee for payment channels with no documented cost (like mail or direct ACH), and any charge imposed without clear, prior disclosure of its amount, reason, total due, and information on a fee-free alternative.
Section 4(a)
Withholding of State Energy Program Funds for Non-Compliance
This section mandates that the Secretary of Energy shall withhold 10 percent of State Energy Program (SEP) financial assistance from any state that does not comply with the bill's requirements. These requirements include prohibiting spurious charges, mandating disclosures, ensuring a fee-free payment channel, and banning fees on automatic recurring payments.
Section 4(a)(1)-(5)
Mandated State Utility Regulation Reforms
This specifies the five core requirements states must meet to avoid losing SEP funds: (1) prohibiting spurious charges, (2) requiring detailed payment charge disclosures, (3) ensuring at least one fee-free payment channel accessible without internet, (4) prohibiting fees on automatic recurring payments and electronic fund transfers, and (5) actively enforcing these rules through investigations, penalties, and consumer recovery.
Section 4(b), (c), (d), (f)
Federal Oversight and State Compliance Procedures
This section details the administrative framework, including annual state documentation submission, the Secretary's 60-day determination period, a 90-day cure period for non-compliance, and restoration of withheld funds if compliance is achieved. It also tasks the Secretary with establishing procedures, maintaining a public database of state compliance, providing technical assistance, issuing guidance, creating an appeal process, and annually reporting to Congress. Initial regulations must be promulgated within 9 months.
The definition of "cost of acceptance" explicitly excludes "general overhead, profit margins, or operational costs incurred by the regulated electric utility, or its third-party service provider, that are not directly tied to payment processing."
Section 3(1)(B)
Why it matters:This is standard legislative practice for precise definitions, but its impact is significant for utilities.
Case for: Proponents would argue this ensures utilities only recover direct, attributable costs for payment processing, preventing them from bundling unrelated overhead into "junk fees" and extracting additional profit from consumers.
Case against: Opponents might contend that separating "direct" costs from "general overhead" is difficult in practice and that some overhead is legitimately associated with maintaining payment systems. They might argue this exclusion could force utilities to absorb legitimate costs, potentially leading to higher base rates.
Estimated impact: This provision could significantly reduce the amount utilities can charge for payment processing fees, potentially saving residential consumers billions annually across the nation if widely adopted by states.
States must require electric utilities to make available "at least one fee-free payment channel that is accessible without internet access."
Section 4(a)(3)
Why it matters:This is a specific policy detail within a list of requirements.
Case for: Proponents would argue this ensures equitable access to fee-free payment options for all residential consumers, particularly those in rural areas, low-income households, or elderly populations who may lack reliable internet access or digital literacy. It prevents digital exclusion.
Case against: Opponents might argue that maintaining non-internet-based payment channels (e.g., physical offices, mail processing) can be more costly for utilities than digital options, and mandating a fee-free option for these could increase overall operational costs that must be recovered elsewhere.
Estimated impact: This could ensure millions of consumers without internet access or who prefer traditional methods are not penalized with fees, potentially increasing utility operational costs for these channels.