By Madla                                              S.B. No. 1571

         75R9370 DWS-F                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to pricing methodology for wheeling.

 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-4           SECTION 1.  Section 2.057(c), Public Utility Regulatory Act

 1-5     of 1995 (Article 1446c-0, Vernon's Texas Civil Statutes), is

 1-6     amended to read as follows:

 1-7           (c)  To the extent a utility provides transmission of

 1-8     electric energy at the request of a third party, the commission

 1-9     shall ensure that the costs of the transmission are not borne by

1-10     the utility's other customers by requiring the utility to recover

1-11     from the entity for which the transmission is provided all

1-12     reasonable costs incurred by the utility in providing transmission

1-13     services necessary for the transaction.  In addition, the

1-14     commission shall ensure that prices for transmission use do not

1-15     result in a disproportionate shifting of cost responsibility among

1-16     Electric Reliability Council of Texas transmission owning

1-17     utilities, or any others using a utility's transmission system,

1-18     when measured by a utility's use of transmission facilities owned

1-19     by others in comparison to others' use of its transmission system.

1-20           SECTION 2.  Section 2.105, Public Utility Regulatory Act of

1-21     1995 (Article 1446c-0, Vernon's Texas Civil Statutes), is amended

1-22     by adding Subsection (d) to read as follows:

1-23           (d)  Notwithstanding any other provisions of this Act to the

1-24     contrary, in any ratemaking proceeding pertaining to a municipally

 2-1     owned utility with revenue bonds or other debt payable from

 2-2     revenues issued and outstanding, the commission shall apply

 2-3     ratemaking principles based on the flow of funds set forth in the

 2-4     municipality's revenue bond ordinance and other debt ordinances to

 2-5     allow for a cash flow level sufficient to cover all items required

 2-6     to be paid from revenues, including the annual cost of operating

 2-7     and maintaining the systems, annual payments of debt service,

 2-8     reserve requirements and debt expense on long-term and short-term

 2-9     debt, annual payments for transfers to the city's general fund, and

2-10     annual payments to provide adequate internally generated funds for

2-11     construction deposited in the construction or the repair and

2-12     replacement fund.  The commission may not consider historic test

2-13     year, rate base, rate of return, depreciation accounting, or other

2-14     cost-of-service ratemaking principles applicable to investor-owned

2-15     utilities.  In its implementation of this subsection, the

2-16     commission shall specifically acknowledge that provisions contained

2-17     in Sections 2.151, 2.203, 2.205, 2.206, and 2.208 of this Act do

2-18     not apply to municipally owned utilities.

2-19           SECTION 3.  This Act takes effect September 1, 1997.

2-20           SECTION 4.  The importance of this legislation and the

2-21     crowded condition of the calendars in both houses create an

2-22     emergency and an imperative public necessity that the

2-23     constitutional rule requiring bills to be read on three several

2-24     days in each house be suspended, and this rule is hereby suspended.