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A BILL TO BE ENTITLED
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AN ACT
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relating to the rates charged by a water and sewer utility. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Sections 13.043(e) and (h), Water Code, are |
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amended to read as follows: |
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(e) In an appeal under Subsection (b) of this section, the |
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commission shall hear the appeal de novo and shall fix in its final |
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order the rates the governing body should have fixed in the action |
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from which the appeal was taken. The commission may establish the |
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effective date for the commission's rates at the original effective |
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date as proposed by the service provider and[,] may order refunds or |
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allow a surcharge to recover lost revenues. The commission[, and] |
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may not allow recovery of any rate case [reasonable] expenses |
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incurred by the retail public utility in the appeal proceedings. |
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The commission may consider only the information that was available |
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to the governing body at the time the governing body made its |
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decision [and evidence of reasonable expenses incurred by the
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retail public utility in the appeal proceedings]. The rates |
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established by the commission in an appeal under Subsection (b) of |
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this section remain in effect until the first anniversary of the |
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effective date proposed by the retail public utility for the rates |
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being appealed or until changed by the service provider, whichever |
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date is later, unless the commission determines that a financial |
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hardship exists. |
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(h) The commission or executive director may[, on a motion
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by the executive director or by the appellant under Subsection (a),
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(b), or (f) of this section,] establish interim rates to be in |
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effect until a final decision is made in an appeal filed under |
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Subsection (a), (b), or (f). |
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SECTION 2. Section 13.185(h), Water Code, is amended to |
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read as follows: |
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(h) The regulatory authority may not include for ratemaking |
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purposes: |
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(1) legislative advocacy expenses, whether made |
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directly or indirectly, including legislative advocacy expenses |
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included in trade association dues; |
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(2) costs of processing a refund or credit under |
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Section 13.187 [of this chapter]; [or] |
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(3) rate case expenses incurred during the hearing |
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process; or |
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(4) any expenditure found by the regulatory authority |
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to be unreasonable, unnecessary, or not in the public interest, |
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including executive salaries, advertising expenses, legal |
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expenses, and civil penalties or fines. |
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SECTION 3. Sections 13.187(a), (d), (d-1), (e), (f), (k), |
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(l), and (o), Water Code, are amended to read as follows: |
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(a) A utility may not make changes in its rates except by |
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delivering a statement of intent to each ratepayer and with the |
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regulatory authority having original jurisdiction at least 120 [60] |
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days before the proposed effective date of the proposed change. The |
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proposed effective date of the new rates must be the first day of a |
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billing period, and the new rates may not apply to service received |
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before the proposed effective date of the new rates. The statement |
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of intent must include: |
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(1) the information required by the regulatory |
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authority's rules; |
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(2) a billing comparison regarding the existing water |
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rate and the new water rate computed for the use of: |
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(A) 10,000 gallons of water; and |
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(B) 30,000 gallons of water; and |
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(3) a billing comparison regarding the existing sewer |
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rate and the new sewer rate computed for the use of 10,000 gallons, |
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unless the utility proposes a flat rate for sewer services. |
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(d) Except as provided by Subsection (d-1), if the |
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application or the statement of intent is not substantially |
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complete or does not comply with the regulatory authority's rules, |
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it may be rejected and the proposed effective date of the rate |
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change may be suspended until a properly completed application is |
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accepted by the regulatory authority and a proper statement of |
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intent is provided. The commission may also suspend the proposed |
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effective date of any rate change if the utility does not have a |
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certificate of public convenience and necessity or a completed |
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application for a certificate or to transfer a certificate pending |
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before the commission or if the utility is delinquent in paying the |
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assessment and any applicable penalties or interest required by |
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Section 5.701(n) of this code. |
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(d-1) Subject to Subsection (k), after [After] written |
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notice to the utility, a local regulatory authority may suspend the |
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proposed effective date of a rate change for not more than 90 days |
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from the proposed effective date[, except that the suspension shall
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be extended by two days for each day a hearing exceeds 15 days. If
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the local regulatory authority does not make a final determination
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on the proposed rate before the expiration of the applicable
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suspension period, the proposed rate shall be considered approved.
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The approval is subject to the local regulatory authority's
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continuation of a hearing in progress]. |
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(e) The regulatory authority shall hold a hearing on the |
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proposed rate increase if, [If,] before the 91st day after the |
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[effective] date the statement of intent was provided to the |
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authority and each ratepayer under Subsection (a) [of the rate
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change], the regulatory authority receives a complaint from any |
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affected municipality, or from the lesser of 1,000 or 10 percent of |
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the ratepayers of the utility over whose rates the regulatory |
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authority has original jurisdiction[, the regulatory authority
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shall set the matter for hearing]. |
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(f) The regulatory authority may set the matter for hearing |
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on its own motion at any time within 120 days after the [effective] |
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date the statement of intent was provided to the authority and each |
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ratepayer under Subsection (a) [of the rate change]. If more than |
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half of the ratepayers of the utility receive service in a county |
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with a population of more than 2.5 million, the hearing must be held |
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at a location in that county. |
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(k) If the regulatory authority sets the matter for |
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[receives at least the number of complaints from ratepayers
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required for the regulatory authority to set] a hearing under |
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Subsection (e), the regulatory authority shall [may], pending the |
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hearing and a decision, suspend the date the rate change would |
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otherwise be effective until the date the regulatory authority |
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issues a final decision on the matter. [Except as provided by
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Subsection (d-1), the proposed rate may not be suspended for longer
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than:
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[(1)90 days by a local regulatory authority; or
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[(2)150 days by the commission.] |
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(l) At any time during the pendency of the rate proceeding |
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the regulatory authority or the executive director may fix interim |
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rates to remain in effect until a final determination is made on the |
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proposed rate. |
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(o) If the [a] regulatory authority does not set a hearing |
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on the proposed rate increase under Subsection (e) or (f), [other
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than the commission establishes interim rates or an escrow account,
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the regulatory authority must make a final determination on the
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rates not later than the first anniversary of the effective date of
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the interim rates or escrowed rates or] the rates are automatically |
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approved as requested by the utility. |
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SECTION 4. Sections 13.187(i), (j), and (n), Water Code, |
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are repealed. |
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SECTION 5. This Act applies only to a statement of intent |
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filed on or after the effective date of this Act. A rate change to |
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which a statement of intent filed before the effective date of this |
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Act applies is governed by the law in effect on the date the |
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statement was filed, and that law is continued in effect for that |
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purpose. |
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SECTION 6. This Act takes effect September 1, 2007. |