By Bailey H.B. No. 3154 A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to certain procedures for the investigation of utility 1-3 rates and the refund of excess earnings. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. The Public Utility Regulatory Act (Art. 1446c, 1-6 V.T.C.S.) is amended by the addition of Sec. 42A to read as 1-7 follows: 1-8 Sec. 42A. (a) This section applies to public utility rates 1-9 and tariffs of investor-owned public utilities charged subsequent 1-10 to January 1, 1988. 1-11 (b) The Commission, after reasonable notice, on its own 1-12 motion or on complaint by any affected person or agency, shall 1-13 determine whether a public utility has charged rates or tariffs 1-14 which were designed to produce a revenue requirement which was 1-15 based upon a hypothetical tax liability or interest expense. 1-16 Upon determination that the rates were designed on a basis 1-17 which did not take into account the actual deductions, expenses, 1-18 and tax savings which would have been reasonably anticipated to 1-19 affect the utility's tax liability and interest expenses, or the 1-20 tax liability of an affiliate if an affiliate pays taxes on behalf 1-21 of the utility, the Commission shall conduct a hearing to 1-22 investigate the earnings during the period that such rates were in 1-23 effect. 2-1 Upon finding that the utility earned a rate of return on 2-2 common equity, during any calendar year when the rates were in 2-3 effect, which exceeds a fair and reasonable return consistent with 2-4 that time period, the Commission shall order the utility to refund 2-5 the accumulated excess revenues to ratepayers. 2-6 (c) Any refunds ordered under this section shall be 2-7 distributed to customer classes in proportion to the base revenues 2-8 collected from each class during a recent representative 12 month 2-9 period. Depending upon the size of the refund balance, the 2-10 Commission can vary the length of time over which the refunds are 2-11 made to ratepayers. 2-12 SECTION 2. The importance of this legislation and the 2-13 crowded condition of the calendars in both houses create an 2-14 emergency and an imperative public necessity that the 2-15 constitutional rule requiring bills to be read on three several 2-16 days in each house be suspended, and this rule is hereby suspended, 2-17 and that this Act take effect and be in force from and after its 2-18 passage, and it is so enacted.