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A BILL TO BE ENTITLED
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AN ACT
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relating to interim rates charged by electric utilities during a |
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rate suspension period. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 36.062, Utilities Code, is amended to |
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read as follows: |
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Sec. 36.062. CONSIDERATION OF CERTAIN EXPENSES. The |
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regulatory authority may not consider for ratemaking purposes: |
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(1) an expenditure for legislative advocacy, made |
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directly or indirectly, including legislative advocacy expenses |
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included in trade association dues; |
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(2) a payment made to cover costs of an accident, |
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equipment failure, or negligence at a utility facility owned by a |
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person or governmental entity not selling power in this state, |
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other than a payment made under an insurance or risk-sharing |
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arrangement executed before the date of loss; |
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(3) an expenditure for costs of processing a refund or |
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credit under Section 36.1091 or 36.110, as applicable; or |
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(4) any other expenditure, including an executive |
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salary, advertising expense, legal expense, or civil penalty or |
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fine, the regulatory authority finds to be unreasonable, |
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unnecessary, or not in the public interest. |
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SECTION 2. Section 36.109, Utilities Code, is amended by |
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adding Subsection (c) to read as follows: |
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(c) This section does not apply to an electric utility that |
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operates solely inside ERCOT. |
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SECTION 3. Subchapter C, Chapter 36, Utilities Code, is |
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amended by adding Section 36.1091 to read as follows: |
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Sec. 36.1091. INTERIM RATES. (a) This section applies only |
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to an electric utility that operates solely inside ERCOT. |
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(b) If the regulatory authority orders a rate suspension |
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under Section 36.108, on the 90th day after the date the electric |
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utility files a statement of intent under Section 36.102, and |
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subject to Subsection (e), the utility shall put an interim rate |
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into effect throughout the area in which the utility sought to |
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change its rates. The interim rate must be calculated using: |
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(1) the utility's proposed test year cost of debt, rate |
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base, and expenses, including depreciation expense at the current |
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authorized depreciation rates; |
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(2) the return on equity, or debt service coverage, |
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for the utility established in the commission's final order in the |
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utility's most recent base rate proceeding; |
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(3) rate base or expense items the same in nature and |
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kind as established in the commission's final order in the utility's |
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most recent base rate proceeding; and |
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(4) the utility's current class cost allocation |
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methodology and rate design. |
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(c) An electric utility that implements an interim rate for |
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distribution services under this section must give notice to each |
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retail electric provider in the utility's service area at least 45 |
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days before the effective date of the interim rate required by |
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Subsection (b). |
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(d) The electric utility shall refund money collected under |
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the interim rates in excess of the rate finally ordered with |
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interest on that money at the utility's last approved rate of |
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return. |
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(e) The commission may modify or deny an interim rate |
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charged under this section on a finding of exigent circumstances. |
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SECTION 4. Section 36.110, Utilities Code, is amended by |
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adding Subsection (e) to read as follows: |
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(e) This section does not apply to an electric utility that |
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operates solely inside ERCOT. |
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SECTION 5. Section 36.211(b), Utilities Code, is amended to |
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read as follows: |
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(b) In a rate proceeding under Subchapter D, or if requested |
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by an electric utility in the utility's statement of intent |
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initiating a rate proceeding under Subchapter C, notwithstanding |
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Section 36.109(a) or 36.1091, as applicable, the final rate set in |
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the proceeding, whether a rate increase or rate decrease, shall be |
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made effective for consumption on and after the 155th day after the |
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date the rate-filing package is filed. |
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SECTION 6. The changes in law made by this Act apply only to |
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a rate proceeding initiated on or after the effective date of this |
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Act. A rate proceeding initiated before the effective date of this |
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Act is governed by the law in effect on the date the proceeding was |
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initiated, and the former law is continued in effect for that |
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purpose. |
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SECTION 7. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2025. |