By Patterson                                    S.B. No. 1374

      75R9020 JJT-F                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to the allowance of certain expenses of an electric

 1-3     utility in ratemaking proceedings.

 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-5           SECTION 1.  Subtitle D, Title II, Public Utility Regulatory

 1-6     Act of 1995 (Article 1446c-0, Vernon's Texas Civil Statutes), is

 1-7     amended by adding Section 2.1525 to read as follows:

 1-8           Sec. 2.1525.  DISALLOWED EXPENSES FOR INVESTOR-OWNED UTILITY.

 1-9     (a)  Notwithstanding Sections 2.152 and 2.208(d) of this Act, the

1-10     regulatory authority may not allow as a cost or expense for

1-11     ratemaking  for an investor-owned utility:

1-12                 (1)  an expenditure for advertising or public

1-13     relations;

1-14                 (2)  an expenditure for participating in a proceeding

1-15     under this Act in which the utility is attempting to increase a

1-16     rate charged to customers;

1-17                 (3)  legislative advocacy expenses, whether incurred

1-18     directly or indirectly, including an expenditure included in trade

1-19     association dues;

1-20                 (4)  an expenditure for processing a refund or credit

1-21     under Section 2.212(e) of this Act;

1-22                 (5)  a payment, except a payment made under an

1-23     insurance or risk-sharing arrangement executed before the date of

1-24     loss, made to cover costs of an accident, equipment failure, or

 2-1     negligence at a utility facility owned by a person or governmental

 2-2     body not selling power in this state; or

 2-3                 (6)  an expenditure found by the regulatory authority

 2-4     to be unreasonable, unnecessary, or not in the public interest,

 2-5     including executive salaries, legal expenses, and civil penalties

 2-6     or fines.

 2-7           (b)  The regulatory authority may require an annual reporting

 2-8     from each investor-owned utility of all expenditures for  business

 2-9     gifts and entertainment and for institutional,

2-10     consumption-inducing, and other advertising or public relations

2-11     expenses.

2-12           SECTION 2.  This Act takes effect September 1, 1997, and

2-13     applies only to an expense incurred by an investor-owned utility on

2-14     or after that date.

2-15           SECTION 3.  The importance of this legislation and the

2-16     crowded condition of the calendars in both houses create an

2-17     emergency and an imperative public necessity that the

2-18     constitutional rule requiring bills to be read on three several

2-19     days in each house be suspended, and this rule is hereby suspended.