88R3415 JXC-F
 
  By: Schwertner S.B. No. 1095
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the recovery of fuel and purchased power costs by
  electric utilities.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 36.203, Utilities Code, is amended to
  read as follows:
         Sec. 36.203.  FUEL AND PURCHASED POWER COST RECOVERY;
  ADJUSTMENT OF FUEL FACTOR. (a) Section 36.201 does not prohibit
  the commission from reviewing and providing for adjustments of an
  electric [a] utility's fuel factor.
         (b)  The commission by rule shall implement procedures that
  provide for the timely adjustment of an electric [a] utility's fuel
  factor[, with or without a hearing].  The rules must ensure that:
               (1)  the utility collects as contemporaneously as
  reasonably possible the electric fuel and purchased power costs
  that the utility incurs; and
               (2)  the utility's under-collected or over-collected
  balance of electric fuel and purchased power costs is collected
  from or refunded to customers through adjustment of the utility's
  fuel factor not later than the 90th day after the date the balance
  is accrued.
         (c)  Notwithstanding Subsection (b), on a finding that an
  electric utility has an under-collected balance that is the result
  of extraordinary electric fuel and purchased power costs that are
  unlikely to continue, the commission by order may direct the
  utility to adjust the utility's fuel factor to defer recovery to
  take place over a period not to exceed two years, with the utility
  receiving on the balance during the recovery period a return set at
  the utility's most recently established weighted average cost of
  capital set in a base rate case.
         (d)  The commission is not required to hold a hearing on the
  adjustment of an electric utility's fuel factor under this section.  
  If the commission holds a hearing, the commission may consider at
  the hearing any evidence that is appropriate and in the public
  interest.
         (e)  A customer of the electric utility, a municipality with
  original jurisdiction over the utility, or the office may protest a
  fuel factor established under this section. The sole issue that may
  be considered on a protest is whether the factor reasonably
  reflects costs the electric utility has incurred or will incur so
  that the utility is not substantially over-collecting or
  under-collecting the utility's reasonably stated fuel and
  purchased power costs on an ongoing basis, including the true-up of
  any over- or under-collected balance.  The prudence of the costs may
  be considered only in a fuel reconciliation proceeding under
  Subsection (f). If the commission finds that the electric utility
  is substantially over-collecting or under-collecting the utility's
  reasonably stated fuel and purchased power costs on an ongoing
  basis, the commission shall order the utility to modify the
  utility's fuel factor to more accurately reflect the utility's
  costs and attempt to remedy any over-collected or under-collected
  position before the 90th day after the date the commission issues
  the order.
         (f)  An electric utility shall apply to reconcile the
  utility's electric fuel and purchased power costs at least once
  every two years. The application must be made not later than the
  180th day after the last day of the period to be reconciled. The
  commission may by rule establish the calendar year timing of the
  reconciliation period for each electric utility subject to this
  section to facilitate efficient work by the commission.  To the
  extent a reconciliation results in a change to the electric
  utility's under-collected or over-collected fuel balance, that
  change must be incorporated into the utility's fuel factor to
  eliminate any resulting under-collected or over-collected balance
  in commensurate increments over a three-month period.  The
  commission may extend the three-month period for a reasonable time
  if the electric utility demonstrates that the change in the fuel
  balance will impact the financial integrity of the utility.
         (g)  The rules adopted under this section [procedures] must
  require that[:
               [(1)]  the findings required by Section 36.058
  regarding fuel transactions with affiliated interests be [are] made
  in a fuel reconciliation proceeding or in a rate case filed under
  Subchapter C or D[; and
               [(2)  an affected party receive notice and have the
  opportunity to request a hearing before the commission].
         (h) [(c)   The commission may adjust a utility's fuel factor
  without a hearing if the commission determines that a hearing is not
  necessary. If the commission holds a hearing, the commission may
  consider at the hearing any evidence that is appropriate and in the
  public interest.
         [(d)  The commission shall render a timely decision
  approving, disapproving, or modifying the adjustment to the
  utility's fuel factor.
         [(e)  The commission by rule shall provide for the
  reconciliation of a utility's fuel costs on a timely basis.
         [(f)]  A proceeding under this section is not a rate case
  under Subchapter C.
         SECTION 2.  An electric utility shall, the first time the
  utility applies to reconcile the utility's fuel costs and purchased
  power costs under Section 36.203(f), Utilities Code, as added by
  this Act, after the Public Utility Commission of Texas adopts the
  rules required to implement that subsection, include in the
  application any previous periods that have not been addressed in a
  prior reconciliation proceeding.
         SECTION 3.  This Act takes effect September 1, 2023.