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.