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A BILL TO BE ENTITLED
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AN ACT
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relating to electric rates imposed on residential customers by |
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certain electric utilities in the ERCOT region. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter D, Chapter 36, Utilities Code, is |
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amended by adding Section 36.157 to read as follows: |
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Sec. 36.157. RATE EQUITY FOR RESIDENTIAL CUSTOMERS OF |
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CERTAIN ELECTRIC UTILITIES IN ERCOT. (a) To the extent of any |
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conflict between this section and another provision of this |
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chapter, this section controls. |
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(b) If the commission finds that an electric utility that |
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operates in the ERCOT region charges nonbypassable distribution |
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rates for residential customers that are equal to or more than 175 |
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percent of the average of the residential distribution rates for |
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all transmission and distribution utilities operating in the ERCOT |
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region, the rates of the utility are considered to be unreasonable |
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and the commission shall initiate an inquiry under this subchapter. |
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(c) In any rate proceeding for an electric utility after the |
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commission finds that the utility's rates are unreasonable as |
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described by Subsection (b), the commission shall: |
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(1) ensure that the utility's expenses for |
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federal income tax are limited to only that income of the utility |
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that is subject to the federal tax, after accounting for tax |
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deductions associated with distributions of income from the |
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utility; |
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(2) ensure that the expenses of the utility are |
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reasonable and necessary, including expenses charged to the utility |
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by an affiliate; |
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(3) ensure that utility's invested capital is used and |
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useful in providing service to the public; and |
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(4) allocate a sufficient portion of the utility's |
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invested capital related to the distribution function to the |
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postage stamp method of pricing under Section 35.004(d) in a manner |
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that allows the utility to recover a reasonable return on the |
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utility's invested capital as described by Section 36.051, except |
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that the utility's residential distribution rates may not exceed |
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133 percent of the average of the residential rates for all |
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transmission and distribution utilities operating in the ERCOT |
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region. |
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(d) The commission shall require an electric utility |
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described by Subsection (b) to file annual plans with the |
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commission describing future planned additions to invested |
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capital, including an analysis of the impact of the additions on |
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customer rates. |
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SECTION 2. Section 37.059(a), Utilities Code, is amended to |
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read as follows: |
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(a) The commission may revoke or amend a certificate after |
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notice and hearing if the commission finds that: |
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(1) the certificate holder has never provided or is no |
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longer providing service in all or any part of the certificated |
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area; or |
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(2) the certificate holder operates in the ERCOT |
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region and charges nonbypassable distribution rates for |
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residential customers that are equal to or more than 175 percent of |
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the average of the residential distribution rates for all |
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transmission and distribution utilities operating in the ERCOT |
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region. |
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SECTION 3. This Act takes effect September 1, 2017. |