Enrolled Bill Summary

            Senate Bill 1271 amends the Gas Utility Regulatory Act to authorize a gas utility that has filed a rate case in the last two years to file with its regulatory authority--either a municipality or the Railroad Commission of Texas--a tariff or rate schedule that provides for an interim adjustment in its monthly customer charge or initial block rate to recover the cost of investment changes. The bill requires notice to affected customers within 45 days of filing and that the adjustment must be allocated among customer classes in the same manner as the utility's cost of service. Filing must occur at least 60 days before the proposed implementation date, and during that interval the regulatory authority may suspend implementation. All amounts collected under the tariff or rate schedule before the next filing of a rate case are subject to potential refund, but once a final order or decision is issued in a subsequent rate case, the investment change included in an interim adjustment is no longer subject to review for reasonableness or prudence. The bill establishes methods for calculating the interim adjustment and requires that it be recalculated on an annual basis. The gas utility must file with the regulatory authority an annual report describing investment projects completed and placed in service and investments retired or abandoned and addressing issues of cost, need, and customer benefit. The utility must also file with the regulatory authority an annual earnings monitoring report and, if the return on invested capital is above a certain threshold, a statement must accompany the report giving reasons why the utility's rates are not unreasonable or in violation of law. Other provisions specify when the utility must next file a rate case and provide for reimbursement by a utility of its share of railroad commission costs in administering the interim rate adjustment mechanism.