By: Averitt S.B. No. 1447
(In the Senate - Filed March 10, 2005; March 21, 2005, read
first time and referred to Committee on Business and Commerce;
April 6, 2005, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 9, Nays 0; April 6, 2005,
sent to printer.)
COMMITTEE SUBSTITUTE FOR S.B. No. 1447 By: Averitt
A BILL TO BE ENTITLED
AN ACT
relating to including pension and other postemployment benefits in
the computation of rates for electric utilities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter B, Chapter 36, Utilities Code, is
amended by adding Section 36.065 to read as follows:
Sec. 36.065. PENSION AND OTHER POSTEMPLOYMENT BENEFITS.
(a) The regulatory authority shall include in the rates of an
electric utility the utility's expense for pension and other
postemployment benefits, as determined by actuarial or similar
studies of these obligations, in an amount found reasonable by the
regulatory authority. An electric utility's rates shall include
pension and other postemployment benefits expense attributable to
service of employees of the electric utility's predecessor
integrated electric utility before the utility's unbundling under
Chapter 39, irrespective of the business activity performed by the
employees or the affiliate to which the employees were transferred
on or after unbundling.
(b) Effective January 1, 2005, an electric utility may
establish one or more reserve accounts for pension and other
postemployment benefits expense. The purpose of the reserve
account or accounts is to allow an electric utility to periodically
record any difference between:
(1) the annual amounts of pension and other
postemployment benefits expense approved in the electric utility's
last general rate proceeding as an operating expense; and
(2) the annual amounts of pension and other
postemployment benefits expense determined by actuarial or similar
studies that are chargeable to the electric utility's operating
expense.
(c) A surplus in the reserve account exists if the amount of
pension and other postemployment benefits expense under Subsection
(b)(1) is greater than the amount determined under Subsection
(b)(2). A shortage in the reserve account exists if the amount of
pension and other postemployment benefits expense under Subsection
(b)(1) is less than the amount determined under Subsection (b)(2).
(d) If one or more reserve accounts for pension and other
postemployment benefits expense are established by an electric
utility under Subsection (b), the regulatory authority in
subsequent general rate proceedings shall:
(1) review the amounts booked by the electric utility
to the reserve account or accounts to determine whether the amounts
are reasonable expenses;
(2) determine whether the reserve account or accounts
has a surplus or shortage under Subsection (c); and
(3) subtract any surplus from or add any shortage to
the electric utility's rate base, with the surplus or shortage
amortized over a reasonable time.
SECTION 2. 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.
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