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A BILL TO BE ENTITLED
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AN ACT
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relating to the consideration of pension and other postemployment |
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benefits in establishing the rates of a gas utility. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter B, Chapter 104, Utilities Code, is |
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amended by adding Section 104.059 to read as follows: |
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Sec. 104.059. PENSION AND OTHER POSTEMPLOYMENT BENEFITS. |
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(a) In establishing a gas utility's rates, the regulatory |
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authority shall allow recovery of the gas utility's costs of |
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pensions and other postemployment benefits, as determined by |
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actuarial or other similar studies in accordance with generally |
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accepted accounting principles, in amounts the regulatory |
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authority finds reasonable and necessary. |
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(b) If a gas utility establishes one or more reserve |
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accounts for the purpose of tracking changes in the costs of |
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pensions and other postemployment benefits, the gas utility shall |
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periodically record in a reserve account any difference between: |
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(1) the annual amount of pension and other |
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postemployment benefits approved and included in the gas utility's |
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then current rates or, if that annual amount cannot be determined |
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from the regulatory authority's order, the amount recorded for |
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pension and other postemployment benefits under generally accepted |
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accounting principles during the first year that rates from the gas |
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utility's last general rate proceeding were in effect; and |
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(2) the annual amount of costs of pensions and other |
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postemployment benefits as determined by actuarial or other similar |
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studies that would otherwise be recorded by the gas utility were |
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this provision not applicable. |
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(c) The gas utility must: |
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(1) establish separate reserve accounts for pensions |
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and for other postemployment benefits; and |
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(2) apply the same methodology to allocate pension and |
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other postemployment benefits between capital and expense as in the |
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gas utility's last rate case. |
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(d) A surplus in a reserve account exists if the amount of |
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pension and other postemployment benefits under Subsection (b)(1) |
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is greater than the amount determined under Subsection (b)(2). A |
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shortage in a reserve account exists if the amount of pension and |
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other postemployment benefits under Subsection (b)(1) is less than |
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the amount determined under Subsection (b)(2). |
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(e) If the gas utility establishes reserve accounts for the |
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costs of pensions and other postemployment benefits, the regulatory |
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authority at a subsequent general rate proceeding shall: |
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(1) review the amounts recorded to each reserve |
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account to determine whether the amounts are reasonable and |
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necessary; |
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(2) determine in accordance with Subsection (d) |
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whether each reserve account has a surplus or shortage; and |
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(3) subtract any surplus from or add any shortage to |
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the gas utility's rate base, with the surplus or shortage amortized |
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over a reasonable time. |
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SECTION 2. Subsections (b) through (e), Section 104.059, |
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Utilities Code, as added by this Act, apply only in relation to a |
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reserve account established by a gas utility on or after January 1, |
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2012. |
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SECTION 3. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2011. |
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