82R22939 ALL-F
 
  By: Thompson, Harless, Reynolds, Chisum, H.B. No. 3610
      Miller of Comal, et al.
 
  Substitute the following for H.B. No. 3610:
 
  By:  Cook C.S.H.B. No. 3610
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to periodic rate adjustments by electric utilities.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subchapter E, Chapter 36, Utilities Code, is
  amended by adding Section 36.210 to read as follows:
         Sec. 36.210.  PERIODIC RATE ADJUSTMENTS.  (a)  The
  commission or a regulatory authority, on the petition of an
  electric utility, may approve a tariff or rate schedule in which a
  nonfuel rate may be periodically adjusted upward or downward, based
  on changes in the parts of the utility's invested capital, as
  described by Section 36.053, that are categorized as distribution
  plant, distribution-related intangible plant, and
  distribution-related communication equipment and networks in
  accordance with commission rules adopted after consideration of the
  uniform system of accounts prescribed by the Federal Energy
  Regulatory Commission.  A periodic rate adjustment must:
               (1)  be approved or denied in accordance with an
  expedited procedure that:
                     (A)  provides for appropriate updates of
  information;
                     (B)  allows for participation by the office and
  affected parties; and
                     (C)  extends for not less than 60 days;
               (2)  take into account changes in the number of an
  electric utility's customers and the effects, on a
  weather-normalized basis, that energy consumption and energy
  demand have on the amount of revenue recovered through the electric
  utility's base rates;
               (3)  be consistent with the manner in which costs were
  allocated to each rate class, as approved by the commission, in an
  electric utility's most recent base rate statement of intent
  proceeding with changes to residential and commercial class rates
  reflected in volumetric charges, to the extent that residential and
  commercial class rates are collected in that manner based on the
  utility's most recent base rate statement of intent proceeding;
               (4)  not diminish the ability of the commission or a
  regulatory authority, on its own motion or on complaint by an
  affected person as provided by Subchapter D, after reasonable
  notice and hearing, to change the existing rates of an electric
  utility for a service after finding that the rates are unreasonable
  or in violation of law;
               (5)  be applied by an electric utility on a system-wide
  basis; and
               (6)  be supported by the sworn statement of an
  appropriate employee of the electric utility that affirms that:
                     (A)  the filing is in compliance with the
  provisions of the tariff or rate schedule; and
                     (B)  the filing is true and correct to the best of
  the employee's knowledge, information, and belief.
         (b)  An electric utility in the ERCOT power region, or an
  unbundled electric utility outside the ERCOT power region in whose
  service area retail competition is available, that requests a
  periodic rate adjustment under this section shall:
               (1)  except as provided by Subsection (e)(3) and to the
  extent possible, implement simultaneously all nonfuel rates to be
  adjusted in a 12-month period that are charged by the utility to
  retail electric providers; and
               (2)  provide notice to retail electric providers of the
  approved rates not later than the 45th day before the date the rates
  take effect.
         (c)  A periodic rate adjustment approved under this section
  may not be used to adjust the portion of a nonfuel rate relating to
  the generation of electricity.
         (d)  An electric utility may adjust the utility's rates under
  this section not more than once per year and not more than four
  times between comprehensive base rate proceedings.
         (e)  Nothing in this section is intended to:
               (1)  conflict with a provision contained in a financing
  order issued under Subchapter I of this chapter or Subchapter G or
  J, Chapter 39;
               (2)  affect the limitation on the commission's
  jurisdiction under Section 32.002;
               (3)  include in a periodic rate adjustment authorized
  by this section costs adjusted under a transmission cost-of-service
  adjustment approved under Section 35.004(d);
               (4)  limit the jurisdiction of a municipality over the
  rates, operations, and services of an electric utility as provided
  by Section 33.001;
               (5)  limit the ability of a municipality to obtain a
  reimbursement under Section 33.023 for the reasonable cost of
  services of a person engaged in an activity described by that
  section; or
               (6)  prevent the commission from:
                     (A)  reviewing the investment costs included in a
  periodic rate adjustment or in the following comprehensive base
  rate proceeding to determine whether the costs were prudent,
  reasonable, and necessary; or
                     (B)  refunding to customers any amount improperly
  recovered through the periodic rate adjustments, with appropriate
  carrying costs.
         (f)  The commission shall adopt rules necessary to implement
  this section. The rules must provide for:
               (1)  a procedure by which a tariff or rate schedule is
  to be reviewed and approved;
               (2)  filing requirements and discovery consistent with
  the expedited procedure described by Subsection (a)(1);
               (3)  an earnings monitoring report that allows the
  commission or regulatory authority to reasonably determine whether
  a utility is earning in excess of the utility's allowed return on
  investment as normalized for weather;
               (4)  denial of the electric utility's filing if the
  electric utility is earning more than the utility's authorized rate
  of return on investment, on a weather-normalized basis, at the time
  the periodic rate adjustment request is filed; and
               (5)  a mechanism by which the commission may refund
  customers any amounts determined to be improperly recovered through
  a periodic rate adjustment, including any appropriate carrying
  costs.
         (g)  This section expires August 31, 2017.
         SECTION 2.  The Public Utility Commission of Texas shall
  adopt rules as necessary to implement Section 36.210, Utilities
  Code, as added by this Act, not later than the 120th day after the
  effective date of this Act.
         SECTION 3.  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, 2011.