Ratepayer Protection Act of 1985 - Amends the Federal Power Act to permit State regulatory bodies to determine for themselves whether a State-regulated utility may pass on to its retail customers federally approved rates in cases where: (1) the State regulatory body has not approved the generating facilities construction upon which the rates are based; and (2) the rates are due to electricity purchases between utility companies within a public utility holding company system. (Currently, some State regulatory bodies must pass such holding company's increased rates to its retail customers.)