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A BILL TO BE ENTITLED
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AN ACT
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relating to the recovery of purchased power costs by electric |
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utilities. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 36.206, Utilities Code, is amended to |
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read as follows: |
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Sec. 36.206. MARK-UPS. (a) A cost recovery factor |
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established for the recovery of purchased power costs must [may] |
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include: |
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(1) the cost the electric utility incurs in purchasing |
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capacity and energy; and |
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(2) a mark-up added to the cost or another mechanism |
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the commission determines will: |
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(A) reasonably compensate the utility for any |
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administrative costs, financing costs, and financial risk |
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associated with purchased power obligations so that the mark-up is |
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sufficient to ensure that the utility has financial incentives to |
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procure purchased power rather than rely solely on utility-owned |
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generation; and |
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(B) allow the utility to retain a reasonable |
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portion of [(3)] the value added by the utility in making the |
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purchased power available to customers. |
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(b) The mark-ups and cost recovery factors: |
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(1) must [, if allowed, may] be retained by the |
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electric utility; and |
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(2) may not be less than an amount sufficient [those |
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necessary] to encourage the [electric] utility to include |
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economical purchased power as part of the utility's energy and |
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capacity resource supply plan. |
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(c) An electric utility's rate of return established in the |
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utility's base rate may not be reduced in connection with the |
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implementation of this section. |
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SECTION 2. Section 36.207, Utilities Code, is repealed. |
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SECTION 3. Section 36.206, Utilities Code, as amended by |
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this Act, applies only to a proceeding for the establishment of |
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rates that begins on or after the effective date of this Act. A |
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proceeding that begins before that date is governed by the law in |
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effect immediately before the effective date of this Act, and that |
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law is continued in effect for that purpose. |
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SECTION 4. This Act takes effect September 1, 2023. |