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.