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A BILL TO BE ENTITLED
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AN ACT
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relating to periodic rate adjustments by water and sewer utilities. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter F, Chapter 13, Water Code, is amended |
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by adding Section 13.194 to read as follows: |
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Sec. 13.194. RATE ADJUSTMENTS FOR INFRASTRUCTURE PROJECTS. |
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(a) In this section, "infrastructure improvement project" means an |
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engineering project to construct, improve, or renovate a facility |
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used and useful for: |
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(1) the production, transmission, storage, |
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distribution, or provision of potable or recycled water to the |
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public; or |
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(2) the collection, transportation, treatment, or |
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disposal of sewage. |
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(b) The commission, on the petition of a water and sewer |
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utility, may approve a tariff or rate schedule that includes an |
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adjustable rate or charge designed to increase or decrease, without |
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the necessity of a contested case hearing, in proportion to the |
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utility's amount of invested capital committed to infrastructure |
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improvement projects to serve the utility's certificated service |
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area. |
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(c) To be eligible for a tariff or rate schedule under this |
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section, or to increase or decrease an adjustable rate or charge |
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approved as part of a tariff or rate schedule under this section, a |
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water and sewer utility, not later than the 60th day before the |
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proposed effective date, as applicable, of the tariff or rate |
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schedule or of the increase or decrease of the adjustable rate or |
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charge, must file with the executive director for review and |
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approval a written petition that contains: |
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(1) the amount of the proposed rate or charge; |
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(2) the proposed implementation date for the proposed |
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rate or charge; |
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(3) a list of completed, eligible capital projects and |
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the depreciation and return on investment on the projects for which |
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the utility seeks reimbursement through the proposed rate or |
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charge; |
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(4) a computation of the projected total annual |
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increase or decrease in revenue expected from the proposed rate or |
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charge; and |
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(5) the cumulative annual amount the utility expects |
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to recover from the proposed rate or charge. |
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(d) The executive director may not approve a rate or charge |
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that allows a water and sewer utility to recover more than five |
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percent of the utility's annual revenue. If a water and sewer |
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utility regionalizes or consolidates into a single tariff under |
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Section 13.145, the executive director may not approve a rate or |
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charge that exceeds five percent of the utility's annual revenue |
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from the region or single tariff. |
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(e) A water and sewer utility may not implement a rate or |
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charge or an increase in a rate or charge under this section more |
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than once in a calendar year. |
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(f) The commission by rule shall require the water and sewer |
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utility: |
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(1) to apply a rate or charge to each customer included |
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in the utility's tariff or rate schedule; and |
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(2) to provide to each customer written notice of the |
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rate or charge on the initial tariff filing that proposes to |
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implement the rate or charge. |
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(g) A water and sewer utility may not recover expenses |
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related to the maintenance and operation of an infrastructure |
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improvement project through a rate or charge under this section. |
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(h) A rate or charge approved by the commission under this |
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section is subject to a true-up or reconciliation at the water and |
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sewer utility's next general rate case under Section 13.187. |
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(i) A water and sewer utility that has filed four petitions |
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under this section since the utility's most recent general rate |
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case under Section 13.187 may not file another petition until after |
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the utility's next general rate case under that section. |
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(j) Notwithstanding any other provision of this code, the |
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implementation of a utility facilities construction and |
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improvement charge or an increase in a utility facilities |
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construction and improvement charge is not subject to a contested |
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case hearing. |
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(k) The commission shall adopt rules to implement this |
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section. |
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(l) A regulatory authority other than the commission shall |
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allow a water and sewer utility to use an adjustable rate or charge |
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in a manner consistent with this section and rules adopted under |
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this section. |
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SECTION 2. The commission or regulatory authority shall |
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adopt all rules necessary to implement Section 13.194, Water Code, |
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as added by this Act, not later than September 1, 2015. |
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SECTION 3. This Act takes effect September 1, 2013. |