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.