79R7212 CBH-F
By: Armbrister S.B. No. 1169
A BILL TO BE ENTITLED
AN ACT
relating to the authority and financing of the Railroad Commission
of Texas in relation to gas utilities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 102.001(a), Utilities Code, is amended
to read as follows:
(a) The railroad commission has exclusive original
jurisdiction over the rates and services of a gas utility:
(1) that distributes natural gas or synthetic natural
gas in:
(A) areas outside a municipality; [and]
(B) areas inside a municipality that surrenders
its jurisdiction to the railroad commission under Section 103.003;
and
(C) areas inside a municipality to the extent the
gas utility has established a purchased gas adjustment clause under
Section 104.059; and
(2) that transmits, transports, delivers, or sells
natural gas or synthetic natural gas to a gas utility that
distributes the gas to the public.
SECTION 2. Chapter 102, Utilities Code, is amended by
adding Subchapter G to read as follows:
SUBCHAPTER G. REGULATORY FEES
Sec. 102.301. GAS UTILITY REGULATORY FEE IMPOSED. (a) A
regulatory fee is imposed on each investor-owned gas utility and
each natural gas master meter operator subject to this subtitle.
(b) The fee is equal to 20 cents for each customer bill
rendered by the utility or operator.
Sec. 102.302. PAYMENT OF FEE. On or before the last day of
the month following the end of each calendar quarter, each
investor-owned gas utility and each natural gas master meter
operator shall send to the comptroller the amount of fees collected
under this subchapter for the preceding calendar quarter.
Sec. 102.303. REPORTS. (a) On or before the last day of the
month following the end of each calendar quarter, each
investor-owned gas utility and each natural gas master meter
operator shall file with the comptroller and the railroad
commission a report stating the number of customer bills rendered
during the preceding calendar quarter.
(b) The investor-owned gas utility and the natural gas
master meter operator shall file the report required by this
section using forms prescribed by the comptroller.
Sec. 102.304. RECOVERY OF FEE. An investor-owned gas
utility and a natural gas master meter operator shall recover the
fee by adding the fee as a surcharge to its existing rates.
Sec. 102.305. FEE EXCLUDED IN DETERMINING CERTAIN OTHER
PAYMENTS. (a) The amount of a fee collected under this subchapter
may not be included in the revenue or gross receipts of an
investor-owned gas utility or natural gas master meter operator for
the purpose of computing:
(1) a municipal franchise fee; or
(2) a tax imposed under Subchapter B, Chapter 182, Tax
Code, or under Chapter 122 of this code.
(b) The amount of a fee collected under this subchapter is
not subject to a sales and use tax imposed by Chapter 151, Tax Code,
or Subtitle C, Title 3, Tax Code.
Sec. 102.306. PENALTY. Sections 182.102 and 182.103, Tax
Code, apply to the fee imposed under this subchapter.
Sec. 102.307. ALLOCATION OF REVENUE. A fee collected under
this subchapter shall be deposited to the credit of the general
revenue fund and may be appropriated only to the railroad
commission for use in regulating gas utilities subject to this
subtitle.
SECTION 3. Subchapter B, Chapter 104, Utilities Code, is
amended by adding Sections 104.059 and 104.060 to read as follows:
Sec. 104.059. RECOVERY OF COST OF PURCHASED GAS BY GAS
DISTRIBUTION UTILITIES. (a) In this chapter, "cost of purchased
gas" includes the cost of natural gas or synthetic natural gas, and
the associated costs of transportation, fuel, and storage, other
costs required to deliver the gas to the distribution utility, and
the cost of natural gas or synthetic gas purchased for company use.
The term includes gas that is lost or for which the utility cannot
account. The term may include the cost of financial hedging
transactions, associated taxes, handling charges, and other
expenses associated with the acquisition and delivery of natural
gas to the distribution utility, and the cost of recovering bad debt
expenses relating to the cost of purchased gas.
(b) The railroad commission has exclusive jurisdiction over
the recovery by a gas distribution utility of the utility's cost of
purchased gas and all related taxes and fees. The railroad
commission shall provide for that recovery through a purchased gas
adjustment clause in the utility's tariffs.
(c) The railroad commission shall ensure that the purchased
gas adjustment clause is designed and administered to permit full
recovery of those costs to the extent they are reasonable and
necessary.
Sec. 104.060. ESTABLISHMENT AND ADMINISTRATION OF
PURCHASED GAS ADJUSTMENT CLAUSES IN RATES. (a) Each gas
distribution utility requesting or maintaining a purchased gas
adjustment clause in the utility's rate schedule shall file with
the commission an annual gas purchase plan and any supporting
information that the commission may require by rule. The
commission shall, for each gas distribution utility, accept,
reject, or require modification of each annual gas purchase plan
with or without a hearing. If the railroad commission accepts a
plan, with or without modification, the railroad commission shall:
(1) establish a purchased gas adjustment clause;
(2) establish the level of the cost of purchased gas;
and
(3) use that level as the basis for evaluating
subsequent changes to the level of the cost of purchased gas.
(b) The railroad commission shall adopt rules to protect
confidential business information, including gas contracts,
internal strategies for purchasing gas, prices paid for specific
purchases from specific suppliers, and other information that the
railroad commission determines might put a gas distribution utility
at a competitive disadvantage if the information is made available
to competitors or suppliers. Access to that confidential
information may be restricted to the extent consistent with Chapter
552, Government Code, and by protective orders in any regulatory
proceeding in which that information is found to be relevant.
(c) The railroad commission shall determine the
reasonableness and necessity of a gas distribution utility's cost
of purchased gas in accordance with the utility's annual gas
purchase plan. A gas distribution utility has the burden of proof
regarding those matters in any hearing, investigation, or audit by
the commission.
(d) The railroad commission by rule shall prescribe the
necessary reporting, filing, and other procedures to be followed by
a gas distribution utility with regard to the utility's purchased
gas adjustment clause.
(e) The railroad commission on its own motion may institute
an audit or investigation of a gas distribution utility's gas
purchase plan and purchased gas adjustment clause. If the railroad
commission decides a hearing is necessary and appropriate in
conjunction with an investigation or audit, the railroad commission
may, after notice, convene a hearing to address any cost of
purchased gas issues and to receive any evidence that the railroad
commission considers appropriate.
(f) The railroad commission shall render a timely decision
in relation to an investigation or audit of an annual gas purchase
plan and may require any modifications the commission considers
just, reasonable, and necessary to achieve the purposes of this
chapter. A modification required in an annual gas purchase plan or
in an associated purchased gas adjustment clause takes effect on
the date the final order in the investigation or audit takes effect.
The modification may apply only in a prospective manner.
(g) A finding required by Section 104.055(b) regarding a
transaction with an affiliate may be made either in a proceeding
under this section or in a rate case filed under another provision
of this chapter.
(h) This section may not be construed to impair in any
manner the rights of a gas customer under an existing contract
except as otherwise provided by law.
(i) A proceeding under this section is not a ratemaking
proceeding for purposes of Section 103.022.
SECTION 4. Section 104.202, Utilities Code, is repealed.
SECTION 5. (a) The Railroad Commission of Texas shall
establish a schedule for submitting annual gas purchase plans as
required by Section 104.060, Utilities Code, as added by this Act,
so that the first plans are submitted on or after July 1, 2006.
(b) A purchased gas adjustment clause included in a gas
distribution utility rate schedule that is in effect on the
effective date of this Act remains in effect until the Railroad
Commission of Texas establishes initial levels of gas costs and
purchased gas adjustment clauses for the utility under Section
104.060, Utilities Code, as added by this Act.
SECTION 6. This Act takes effect September 1, 2005.