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A BILL TO BE ENTITLED
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AN ACT
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relating to retail public utilities that provide water or sewer |
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service. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 13.002, Water Code, is amended by |
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amending Subdivisions (4-b) and (4-c) and adding Subdivision (4-d) |
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to read as follows: |
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(4-b) "Class B utility" means a public utility that |
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provides retail water or sewer utility service through 2,300 [500] |
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or more taps or connections but fewer than 10,000 taps or |
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connections. |
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(4-c) "Class C utility" means a public utility that |
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provides retail water or sewer utility service through 500 or more |
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taps or connections but fewer than 2,300 [500] taps or connections. |
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(4-d) "Class D utility" means a public utility that |
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provides retail water or sewer utility service through fewer than |
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500 taps or connections. |
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SECTION 2. Section 13.041, Water Code, is amended by |
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amending Subsection (d) and adding Subsections (h), (i), and (j) to |
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read as follows: |
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(d) In accordance with Subchapter K-1, the utility |
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commission may issue emergency orders, with or without a hearing: |
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(1) to compel a retail public utility [water or sewer
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service provider] that has obtained or is required to obtain a |
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certificate of public convenience and necessity to provide |
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continuous and adequate water service, sewer service, or both, if |
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the discontinuance of the service is imminent or has occurred |
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because of the retail public utility's [service provider's] actions |
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or failure to act; and |
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(2) to compel a retail public utility to provide an |
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emergency interconnection with a neighboring retail public utility |
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for the provision of temporary water or sewer service, or both, for |
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not more than 90 days if service discontinuance or serious |
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impairment in service is imminent or has occurred. |
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(h) In accordance with Subchapter L, Chapter 5, the |
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commission may issue emergency orders, with or without a hearing: |
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(1) to compel a retail public utility that has |
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obtained a certificate of public convenience and necessity to |
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provide water or sewer service, or both, that complies with all |
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statutory and regulatory requirements of the commission if |
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necessary to ensure safe drinking water or environmental |
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protection; and |
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(2) to compel a retail public utility to provide an |
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emergency interconnection with a neighboring retail public utility |
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for the provision of temporary water or sewer service, or both, for |
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not more than 90 days if necessary to ensure safe drinking water or |
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environmental protection. |
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(i) On request by the commission, the utility commission |
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may, on an expedited basis, establish reasonable compensation for |
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the temporary service required under Subsection (h)(2) and may |
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allow the retail public utility receiving the service to make a |
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temporary adjustment to its rate structure to ensure proper |
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payment. |
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(j) If an order is issued under Subsection (h) without a |
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hearing, notice of a hearing under Section 5.504 to affirm, modify, |
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or set aside the order is adequate if the notice is mailed or hand |
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delivered to the last known address of the retail public utility's |
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headquarters. |
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SECTION 3. Section 13.046, Water Code, is amended by adding |
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Subsection (d) to read as follows: |
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(d) At the time the utility commission approves the |
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acquisition of a nonfunctioning retail water or sewer utility |
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service provider under Section 13.301, the utility commission |
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shall: |
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(1) determine the duration of the temporary rates for |
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the retail public utility, which must be for a reasonable period; |
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and |
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(2) rule on the reasonableness of the temporary rates |
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under Subsection (b) if the utility commission did not make a ruling |
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before the application was filed under Section 13.301. |
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SECTION 4. Section 13.183(c), Water Code, is amended to |
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read as follows: |
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(c) To ensure that retail customers receive a higher |
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quality, more affordable, or more reliable water or sewer service, |
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to encourage regionalization, or to maintain financially stable and |
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technically sound utilities, the regulatory authority, by rule or |
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ordinance, as appropriate, may adopt specific alternative |
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ratemaking methodologies for water or sewer rates to allow for more |
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timely and efficient cost recovery. Appropriate alternative |
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ratemaking methodologies are the introduction of new customer |
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classes, the cash needs method, and phased and multi-step rate |
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changes. The regulatory authority may also adopt system |
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improvement charges that may be periodically adjusted to ensure |
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timely recovery of infrastructure investment. The utility |
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commission by rule shall establish a schedule that requires all |
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utilities that have implemented a system improvement charge |
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approved by the utility commission to make periodic filings with |
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the utility commission to modify or review base rates charged by the |
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utility [based on factors other than rate of return and those
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specified in Section 13.185]. Overall revenues determined |
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according to an alternative ratemaking methodology adopted under |
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this section must provide revenues to the utility that satisfy the |
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requirements of Subsection (a). The regulatory authority may not |
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approve rates under an alternative ratemaking methodology unless |
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the regulatory authority adopts the methodology before the date the |
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rate application was administratively complete. |
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SECTION 5. Section 13.187(a-1), Water Code, is amended to |
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read as follows: |
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(a-1) A utility may not make changes in its rates except by |
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sending by mail or e-mail a statement of intent to each ratepayer |
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and to the regulatory authority having original jurisdiction at |
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least 35 days before the effective date of the proposed change. The |
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utility may send the statement of intent to a ratepayer by e-mail |
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only if the ratepayer has agreed to receive communications |
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electronically. The effective date of the new rates must be the |
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first day of a billing period, and the new rates may not apply to |
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service received before the effective date of the new rates. The |
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statement of intent must include: |
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(1) the information required by the regulatory |
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authority's rules; |
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(2) a billing comparison regarding the existing water |
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rate and the new water rate computed for the use of: |
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(A) 5,000 [10,000] gallons of water; and |
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(B) 10,000 [30,000] gallons of water; |
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(3) a billing comparison regarding the existing sewer |
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rate and the new sewer rate computed for the use of 5,000 [10,000] |
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gallons, unless the utility proposes a flat rate for sewer |
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services; and |
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(4) a description of the process by which a ratepayer |
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may intervene in the ratemaking proceeding. |
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SECTION 6. Sections 13.1871(a), (b), and (d), Water Code, |
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are amended to read as follows: |
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(a) Except as provided by Sections 13.18715 and [Section] |
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13.1872, this section applies only to a Class B utility. |
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(b) A utility may not make changes in its rates except by |
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sending by mail or e-mail a statement of intent to each ratepayer |
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and to the regulatory authority having original jurisdiction at |
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least 35 days before the effective date of the proposed change. The |
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utility may send the statement of intent to a ratepayer by e-mail |
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only if the ratepayer has agreed to receive communications |
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electronically. The effective date of the new rates must be the |
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first day of a billing period, and the new rates may not apply to |
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service received before the effective date of the new rates. The |
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statement of intent must include: |
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(1) the information required by the regulatory |
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authority's rules; |
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(2) a billing comparison regarding the existing water |
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rate and the new water rate computed for the use of: |
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(A) 5,000 [10,000] gallons of water; and |
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(B) 10,000 [30,000] gallons of water; |
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(3) a billing comparison regarding the existing sewer |
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rate and the new sewer rate computed for the use of 5,000 [10,000] |
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gallons, unless the utility proposes a flat rate for sewer |
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services; and |
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(4) a description of the process by which a ratepayer |
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may file a complaint under Subsection (i). |
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(d) When the statement of intent is delivered, the utility |
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shall file with the regulatory authority an application to change |
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rates. The application must include information the regulatory |
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authority requires by rule and any appropriate cost and rate |
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schedules supporting the requested rate increase. [In adopting
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rules relating to the information required in the application, the
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utility commission shall ensure that a utility can file a less
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burdensome and complex application than is required of a Class A
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utility.] If the utility fails to provide within a reasonable time |
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after the application is filed the necessary documentation or other |
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evidence that supports the costs and expenses that are shown in the |
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application, the regulatory authority may disallow the |
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nonsupported costs or expenses. |
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SECTION 7. Subchapter F, Chapter 13, Water Code, is amended |
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by adding Section 13.18715 to read as follows: |
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Sec. 13.18715. CLASS C UTILITIES: STATEMENT OF INTENT TO |
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CHANGE RATES; HEARING; DETERMINATION OF RATE LEVEL. (a) This |
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section applies only to a Class C utility. |
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(b) A utility may not make changes in its rates except by |
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complying with the procedures to change rates described by Section |
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13.1871. |
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(c) Notwithstanding Section 13.1871(n), the utility may |
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send the notice required by that subsection by mail or e-mail or may |
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deliver a copy of the notice to the ratepayers. |
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SECTION 8. The heading to Section 13.1872, Water Code, is |
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amended to read as follows: |
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Sec. 13.1872. CLASS D [C] UTILITIES: RATE ADJUSTMENT. |
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SECTION 9. Section 13.1872, Water Code, is amended by |
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amending Subsections (a) and (e) and adding Subsection (c-1) to |
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read as follows: |
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(a) This section applies only to a Class D [C] utility. |
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(c-1) A utility that chooses to comply with Section 13.1871 |
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as authorized under Subsection (c)(2) of this section may send the |
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notice required by Section 13.1871(n) by mail or e-mail or may |
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deliver a copy of the notice to the ratepayers. |
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(e) The utility commission by rule shall adopt procedures to |
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allow a utility to receive without a hearing an annual rate |
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adjustment [based on changes in the price index]. The rules must: |
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(1) include standard language to be included in the |
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notice described by Subsection (c)(1) describing the rate |
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adjustment process; and |
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(2) provide that an annual rate adjustment described |
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by this section may not result in a rate increase to any class or |
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category of ratepayer of more than [the lesser of:
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[(A)] five percent[; or
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[(B)
the percentage increase in the price index
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between the year preceding the year in which the utility requests
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the adjustment and the year in which the utility requests the
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adjustment]. |
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SECTION 10. Subchapter F, Chapter 13, Water Code, is |
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amended by adding Section 13.1873 to read as follows: |
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Sec. 13.1873. APPLICATION RULES. In adopting rules |
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relating to the information required in an application for a Class |
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B, Class C, or Class D utility to change rates, the utility |
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commission shall ensure that a: |
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(1) Class B utility can file a less burdensome and |
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complex application than is required of a Class A utility; and |
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(2) Class C or Class D utility can file a less |
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burdensome and complex application than is required of a Class A or |
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Class B utility. |
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SECTION 11. Section 13.258(a), Water Code, is amended to |
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read as follows: |
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(a) Notwithstanding any other provision of this chapter, a |
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Class A utility may apply to the utility commission for an amendment |
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of a certificate of convenience and necessity held by a municipal |
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utility district to allow the utility to have the same rights and |
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powers under the certificate as the municipal utility district. |
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SECTION 12. The change in law made by this Act applies only |
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to an application for an amendment of a certificate of public |
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convenience and necessity or an application for a rate change or |
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adjustment filed on or after the effective date of this Act. An |
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application filed before the effective date of this Act is governed |
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by the law in effect on the date the application is filed, and the |
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former law is continued in effect for that purpose. |
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SECTION 13. Section 13.1872(b), Water Code, is repealed. |
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SECTION 14. This Act takes effect September 1, 2019. |
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