79R13960 CBH-F


By:  Cook of Colorado                                             H.B. No. 2244

Substitute the following for H.B. No. 2244:                                   

By:  Elkins                                                   C.S.H.B. No. 2244



A BILL TO BE ENTITLED

AN ACT

relating to the payment and recovery of municipal charges and costs 
by providers of electricity.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 33.008, Utilities Code, is amended by 
amending Subsection (c) and adding Subsections (b-1), (b-2), (b-3), 
and (g-1) to read as follows:
	(b-1)  On the termination, expiration, or extension of a 
franchise agreement existing on September 1, 2005, a municipality 
may change the per kilowatt hour charge otherwise prescribed by 
Subsection (b).
	(b-2)  On or after September 1, 2007, a municipality may 
change the per kilowatt hour charge provided by a franchise 
agreement existing on September 1, 2007, regardless of the 
termination or expiration date of the agreement, after providing to 
the affected entity written notice of the change at least 90 days 
before the date the change is scheduled to take effect.
	(b-3)  A per kilowatt hour charge adopted under Subsection 
(b-1) or (b-2) may not exceed $.0045 per kilowatt hour.
	(c)  The municipal franchise charges authorized by this 
section shall be considered a reasonable and necessary operating 
expense of each electric utility, transmission and distribution 
utility, municipally owned utility, or electric cooperative that is 
subject to a charge under this section.  The charge shall be 
included in the nonbypassable delivery charges that a customer's 
retail electric provider must pay under Section 39.107 to the 
utility serving the customer.  Notwithstanding any other provision 
of this title, the regulatory authority shall allow an electric 
utility or transmission and distribution utility to adjust the 
utility's rates or nonbypassable charges to permit the timely 
recovery of any change in municipal franchise fees.  The utility 
shall recover the change in municipal franchise fees from the 
customers residing in the municipality or, if applicable, from the 
retail electric providers serving those customers.
	(g-1)  This section may not be construed to interfere with or 
abrogate the rights or obligations of any party to a franchise 
agreement in effect on September 1, 2005, except to the extent 
authorized by Subsection (b-2).
	SECTION 2.  Section 36.201, Utilities Code, is amended to 
read as follows:   
	Sec. 36.201.  AUTOMATIC ADJUSTMENT FOR CHANGES IN COSTS. 
Except as permitted by Sections 33.008 and [Section] 36.204, 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 3.  Section 39.202, Utilities Code, is amended by 
adding Subsection (q) to read as follows:
	(q)  The commission shall adjust the price to beat as 
necessary to reflect any change in the nonbypassable charges of a 
transmission and distribution utility made under Section 33.008.
	SECTION 4.  Section 33.023, Utilities Code, is amended by 
amending Subsection (b) and adding Subsections (c) and (d) to read 
as follows:
	(b)  Except as provided by Subsection (c), the [The] electric 
utility in the ratemaking proceeding shall reimburse the governing 
body of the municipality for the reasonable cost of the services of 
a person engaged under Subsection (a) to the extent the applicable 
regulatory authority determines is reasonable.
	(c)  The electric utility in the ratemaking proceeding shall 
reimburse the governing body of the municipality for 50 percent of 
the reasonable cost of the services of a person engaged under 
Subsection (a) to the extent the applicable regulatory authority 
determines is reasonable if:
		(1)  the electric utility has offered to terminate a 
franchise agreement existing at that time; or
		(2)  the ratemaking proceeding is brought after 
September 1, 2007.   
	(d)  Subsection (c) does not apply to a proceeding:                     
		(1)  brought under Section 39.262 that includes a power 
generation company requesting a true-up of stranded costs; or
		(2)  in relation to which an agreement existing on 
September 1, 2005, concerning reimbursement of municipal rate case 
expenses, applies.
	SECTION 5.  Section 33.008(f), Utilities Code, is repealed.                    
	SECTION 6.  This Act applies only to franchise fees imposed 
on or after the effective date of this Act.  Franchise fees imposed 
before the effective date of this Act are governed by the law in 
effect on the date the fees are imposed, and that law is continued 
in effect for that purpose.
	SECTION 7.  This Act takes effect September 1, 2005.