| |
| |
|
|
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. |