HBA-SEB H.B. 1985 76(R)BILL ANALYSIS


Office of House Bill AnalysisH.B. 1985
By: Lewis, Ron
Energy Resources
6/28/1999
Enrolled


BACKGROUND AND PURPOSE 

Prior to the 76th Legislature, many cities had undertaken renovations and
improvements to existing infrastructure. Such projects often require the
relocation of natural gas pipes, and the local distribution companies
(LDCs) owning the pipes are not directly reimbursed by the city for costs
incurred in moving them.  H.B. 1985 authorizes a natural gas LDC, over a
period of one to three years, to recover the unreimbursed costs of a
mandated facility relocation through a surcharge on gas volumes sold and
transported to customers in the service area where the relocation occurred.
Since the surcharge is a visible cost to customers, LDCs and the
municipalities may be more inclined to cooperate in order to fully plan
facility relocations.  

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Subchapter C, Chapter 104, Utilities Code, by adding
Section 104.112, as follows: 

Sec. 104.112.  SURCHARGE TO RECOVER RELOCATION COSTS.  (a)  Provides that
this section applies to a gas utility's costs of relocating a facility to
accommodate construction or improvement of a highway, road, street, public
way, or other public work by or on behalf of the United States, this state,
a political subdivision of this state, or another entity having the power
of eminent domain if the costs are not reimbursed by a source other than as
provided by this section. 

(b)  Authorizes a gas utility to recover its relocation costs through a
surcharge on gas volumes sold and transported to customers in the service
area where the relocation occurred by applying to each appropriate
regulatory authority for a new rate schedule or tariff.  Establishes that
the gas utility is not required to file a statement of intent to increase
rates to institute the surcharge.  Provides that the other provisions of
this subchapter (Rate Changes Proposed by Utility), other than appeal
rights, do not apply to the institution of the surcharge. 

(c)  Provides that an application must include sufficient documentation to
demonstrate the requirement for each relocation, the entity requiring the
relocation, costs incurred for relocation of comparable facilities,
surcharge computations, and that reasonable efforts have been made to
receive reimbursement from the entity requiring the relocation, if
applicable.   

(d)  Requires the regulatory authority to administratively grant or deny
the application not later than the 30th day after receiving the
documentation.  Provides that denial of the application must be based on a
finding that the relocation was not necessary or required, the costs of the
relocation were excessive or not supported, the utility did not pursue
reimbursement from the entity requiring the relocation, if applicable, the
surcharge is unduly discriminatory among customers or classes of customers
located in the service area, or the period over which the relocation costs
are designed to be recovered is less  than one or more than three years. 

SECTION 2.  Effective date: September 1, 1999.  
            Makes application of this Act prospective.

SECTION 3.  Emergency clause.