By: Eltife  S.B. No. 403
         (In the Senate - Filed January 24, 2011; February 2, 2011,
  read first time and referred to Committee on Natural Resources;
  March 28, 2011, reported adversely, with favorable Committee
  Substitute by the following vote:  Yeas 9, Nays 0; March 28, 2011,
  sent to printer.)
 
  COMMITTEE SUBSTITUTE FOR S.B. No. 403 By:  Eltife
 
 
A BILL TO BE ENTITLED
 
AN ACT
 
  relating to the consideration of pension and other postemployment
  benefits in establishing the rates of a gas utility.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subchapter B, Chapter 104, Utilities Code, is
  amended by adding Section 104.059 to read as follows:
         Sec. 104.059.  PENSION AND OTHER POSTEMPLOYMENT BENEFITS.
  (a)  In establishing a gas utility's rates, the regulatory
  authority shall allow recovery of the gas utility's costs of
  pensions and other postemployment benefits, as determined by
  actuarial or other similar studies in accordance with generally
  accepted accounting principles, in amounts the regulatory
  authority finds reasonable and necessary.
         (b)  If a gas utility establishes one or more reserve
  accounts for the purpose of tracking changes in the costs of
  pensions and other postemployment benefits, the gas utility shall
  periodically record in a reserve account any difference between:
               (1)  the annual amount of pension and other
  postemployment benefits approved and included in the gas utility's
  then current rates or, if that annual amount cannot be determined
  from the regulatory authority's order, the amount recorded for
  pension and other postemployment benefits under generally accepted
  accounting principles during the first year that rates from the gas
  utility's last general rate proceeding were in effect; and
               (2)  the annual amount of costs of pensions and other
  postemployment benefits as determined by actuarial or other similar
  studies that would otherwise be recorded by the gas utility were
  this provision not applicable.
         (c)  The gas utility must:
               (1)  establish separate reserve accounts for pensions
  and for other postemployment benefits; and
               (2)  apply the same methodology to allocate pension and
  other postemployment benefits between capital and expense as in the
  gas utility's last rate case.
         (d)  A surplus in a reserve account exists if the amount of
  pension and other postemployment benefits under Subsection (b)(1)
  is greater than the amount determined under Subsection (b)(2). A
  shortage in a reserve account exists if the amount of pension and
  other postemployment benefits under Subsection (b)(1) is less than
  the amount determined under Subsection (b)(2).
         (e)  If the gas utility establishes reserve accounts for the
  costs of pensions and other postemployment benefits, the regulatory
  authority at a subsequent general rate proceeding shall:
               (1)  review the amounts recorded to each reserve
  account to determine whether the amounts are reasonable and
  necessary;
               (2)  determine in accordance with Subsection (d)
  whether each reserve account has a surplus or shortage; and
               (3)  subtract any surplus from or add any shortage to
  the gas utility's rate base, with the surplus or shortage amortized
  over a reasonable time.
         SECTION 2.  Subsections (b) through (e), Section 104.059,
  Utilities Code, as added by this Act, apply only in relation to a
  reserve account established by a gas utility on or after January 1,
  2012.
         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.
 
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