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By:  Chisum                                                       H.B. No. 989

Substitute the following for H.B. No. 989:                                    

By:  Baxter                                                   C.S.H.B. No. 989



A BILL TO BE ENTITLED

AN ACT

relating to a mechanism to provided for recovery of certain 
transmission investments of electric utilities.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 36.201, Utilities Code, is amended to 
read as follows:   
	Sec. 36.201.  AUTOMATIC ADJUSTMENT FOR CHANGES IN COSTS.  
Except as permitted by Section 36.204 or 36.209, the commission may 
not establish a rate or tariff that authorizes an electric utility 
to automatically adjust and pass through to the utility's customers 
a change in the utility's fuel or other costs.
	SECTION 2.  Subchapter E, Chapter 36, Utilities Code, is 
amended by adding Section 36.209 to read as follows:
	Sec. 36.209.  RECOVERY BY CERTAIN NON-ERCOT UTILITIES OF 
CERTAIN TRANSMISSION COSTS.  (a)  This section applies only to an 
electric utility that operates solely outside of ERCOT in areas of 
this state not included in the Southeastern Electric Reliability 
Council on January 1, 2005, and that owns or operates transmission 
facilities.
	(b)  The commission may establish a mechanism to permit an 
electric utility to which this section applies to timely and 
periodically recover transmission infrastructure improvement costs 
and changes in wholesale transmission charges to the electric 
utility under a tariff approved by a federal regulatory authority.  
A mechanism adopted under this subsection may allow the utility to 
recover only the costs allocable to retail customers in this state 
and may not allow the utility to over-recover costs.
	SECTION 3.  This Act takes effect immediately if it receives 
a vote of two-thirds of all the members elected to each house, as 
provided by Section 39, Article III, Texas Constitution.  If this 
Act does not receive the vote necessary for immediate effect, this 
Act takes effect September 1, 2005.