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


Office of House Bill AnalysisC.S.H.B. 1985
By: Lewis, Ron
Energy Resources
3/25/1999
Committee Report (Substituted)


BACKGROUND AND PURPOSE 

Recently, many cities have 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. C.S.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. 

 

COMPARISON OF ORIGINAL TO SUBSTITUTE

The substitute modifies the original in SECTION 1, by amending Sections
104.112(b), (c), and (d), Utilities Code, as follows: 

(b)  Authorizes a gas utility to recover its relocation costs by applying
to each appropriate regulatory authority for a new rate schedule or tariff,
rather than by filing a new rate schedule with the appropriate regulatory
authority.  Specifies that recovery of relocation costs involves a
surcharge on gas volumes sold and transported to customers in the service
area, rather than in the jurisdiction, where the relocation occurred.
Makes conforming and nonsubstantive changes. 

(c)  Sets forth the documentation to be included in the application.  

(d)  Redesignated from Subsection (c).  Establishes the time frame for
which the regulatory authority is required to grant or deny the
application.  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, or the utility did not
pursue reimbursement from the entity requiring the relocation if
applicable.  Those three findings complement the other two findings in the
proposed new language of the original.  Redesignates Subdivisions (1)(2) to
(4)-(5). Makes conforming and nonsubstantive changes.   

The substitute modifies the original in SECTION 2, to add a prospective
clause.