Req. No. 13197 Page 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 STATE OF OKLAHOMA 1st Session of the 60th Legislature (2025) COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 1737 By: Moore COMMITTEE SUBSTITUTE [ Natural Gas Utility Infrastructure Cost Recovery Act of 2025 - cost recovery rules - cost assessment request - promulgation of certain rules – codification - effective date ] BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA: SECTION 1. NEW LAW A new section of law to be codified in the Oklahoma Statutes as Section 810 of Title 17, un less there is created a duplication in numbering, reads as follows: This act shall be known and may be cited as the "Natural Gas Utility Infrastructure Cost Recovery Act of 2025 ". SECTION 2. NEW LAW A new section of law to be codifi ed in the Oklahoma Statutes as Section 811 of Title 17, unless there is created a duplication in numbering, reads as follows: A. As used in this section : 1. "Energy Infrastructure Facility " refers to any physical asset or system involved in the productio n, processing, storage, Req. No. 13197 Page 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 transportation, distribution, or delivery of energy by a natural gas utility, including renewable natural gas (RNG), hydrogen, other alternative fuels, and emerging technologies such as carbon capture and sequestration; and 2. "Public interest" is defined as including, but not limited to, projects that enhance energy reliability and energy security, promote economic development and job creation, increase systemwide capacity, accelerate the commercialization of advanced emerging technologies, or provide environmental benefits. B. A natural gas utility subject to rate regulation by the Corporation Commission may elect to file an application seeking pre - approval by the Commission to construct or invest in an energy infrastructure facil ity, to purchase an energy infrastructure facility, to construct or invest in an interconnect for the purposes of connecting its system to an energy infrastructure facility, or enter into a contract for purchased gas supply or engage in fuel generation, including renewable natural gas (RNG), hydrogen, or other alternative fuels as well as transportation capacity, fuel storage, or other infrastructure and technologies that support system innovation, subject to the provisions of this section. If, and to the extent that, the Commission determines that the future construction or purchase of the energy infrastructure facility or gas supply contract serves the public interest, the facility or contract shall be considered used and useful and its costs shall be Req. No. 13197 Page 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 subject to cost recovery rules promulgated by the Commission. Any costs that exceed the amount approved by the Commission by more than ten percent (10%), shall be subject to prudency review as part of the utility's next general rate filing. The Commission shall enter an order on an application filed pursuant to this subsection within two hundred forty (240) days of the filing of the application, following notice and hearing. C. Following receipt of an application filed pursuant to this section, the Corporat ion Commission staff may file a request to assess the specific costs, to be paid by the natural gas utility and which shall be deemed to be recoverable, for the costs associated with conducting the analysis or investigation of the application including, but not limited to, the cost of acquiring expert witnesses, consultants, and analytical services. The request shall be filed at and heard by the Corporation Commissioners in the docket opened by the natural gas utility pursuant to this section. After notice and hearing, the Commission shall decide the request. D. Additionally, following receipt of an application filed pursuant to this section, the Office of the Attorney General may file a request with the Corporation Commission for the assessment of specific costs, to be paid by the natural gas utility and which shall be deemed to be recoverable, associated with the performance of the Attorney General 's duties as provided by law. Those costs may include, but are not limited to, the cost of acquiring expert Req. No. 13197 Page 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 witnesses, consultants and analytical services. The request shall be filed at and heard by the Corporation Commissioners in the docket opened by the natural gas utility pursuant to this section. After notice and hearing, the Commission shall decide the request. E. The Commission shall promulgate rules to implement the provisions of this section. The rules shall be transmitted to the Legislature on or before April 1, 2026. In promulgating rules to implement the provisions of this section, the Commissio n shall consider, among other things, rules which would: 1. Permit contemporaneous utility recovery from its customers, the amount necessary to cover the Corporation Commission staff and Attorney General assessments as authorized by this section ; 2. Establish how the cost of facilities approved pursuant to this section shall be timely reviewed, approved, and recovered or disapproved; and 3. Establish the information which a natural gas utility shall provide when filing an application pursuant to this sec tion. F. The Commission shall also consider rules which may permit a natural gas utility to begin to recover return on or return of Construction-Work-In-Progress expenses prior to commercial operation of a newly constructed energy infrastructure facility. SECTION 3. This act shall become effective November 1, 2025. 60-1-13197 GRS 03/05/25 Req. No. 13197 Page 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24