81R11636 CBH-D
By: Rose H.B. No. 3366
A BILL TO BE ENTITLED
AN ACT
relating to the rates charged by a water and sewer utility.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 13.043(e) and (h), Water Code, are
amended to read as follows:
(e) In an appeal under Subsection (b) of this section, the
commission shall hear the appeal de novo and shall fix in its final
order the rates the governing body should have fixed in the action
from which the appeal was taken. The commission may establish the
effective date for the commission's rates at the original effective
date as proposed by the service provider and[,] may order refunds or
allow a surcharge to recover lost revenues. The commission[, and]
may not allow recovery of any rate case [reasonable] expenses
incurred by the retail public utility in the appeal proceedings.
The commission may consider only the information that was available
to the governing body at the time the governing body made its
decision [and evidence of reasonable expenses incurred by the
retail public utility in the appeal proceedings]. The rates
established by the commission in an appeal under Subsection (b) of
this section remain in effect until the first anniversary of the
effective date proposed by the retail public utility for the rates
being appealed or until changed by the service provider, whichever
date is later, unless the commission determines that a financial
hardship exists.
(h) The commission or executive director may[, on a motion
by the executive director or by the appellant under Subsection (a),
(b), or (f) of this section,] establish interim rates to be in
effect until a final decision is made in an appeal filed under
Subsection (a), (b), or (f).
SECTION 2. (a) Section 13.145(a), Water Code, is amended to
read as follows:
(a) A utility may consolidate more than one system under a
single tariff only if:
(1) the regulatory authority finds that at the time
the utility applies for a uniform tariff, all of the systems under
the tariff are substantially similar in terms of facilities,
quality of service, and cost of service; and
(2) the tariff provides for rates that promote water
conservation for single-family residences and landscape
irrigation.
(b) The changes in law made to Section 13.145(a), Water
Code, as amended by this section, apply only to applications for a
uniform tariff filed on or after the effective date of this Act. An
application filed before the effective date of this Act is governed
by the law in effect on the date the application is filed, and that
law is continued in effect for that purpose.
SECTION 3. (a) Section 13.184, Water Code, is amended by
adding Subsection (d) to read as follows:
(d) A utility may file with the commission an application to
increase the utility's rates not more than one time in a 36-month
period. A rate increase under this section may not exceed 20
percent of the cost of the utility's rates at the time of the
application.
(b) The changes in law made to Section 13.184, Water Code,
as amended by this section, apply only to an application for a rate
increase that is filed on or after the effective date of this Act.
An application that is filed before the effective date of this Act
is subject to the law in effect at that time, and that law is
continued in effect for that purpose.
SECTION 4. Section 13.185(h), Water Code, is amended to
read as follows:
(h) The regulatory authority may not include for ratemaking
purposes:
(1) legislative advocacy expenses, whether made
directly or indirectly, including legislative advocacy expenses
included in trade association dues;
(2) legal expenses, including attorney, consultant,
and expert witness fees and court costs, incurred by a water and
sewer utility in a contested proceeding under Section 13.187 or in
an appeal of that proceeding, other than legal expenses described
by Section 13.084 [costs of processing a refund or credit under
Section 13.187 of this chapter]; or
(3) any expenditure found by the regulatory authority
to be unreasonable, unnecessary, or not in the public interest,
including executive salaries, advertising expenses, legal expenses
not described by Subdivision (2), and civil penalties or fines.
SECTION 5. Sections 13.187(a), (b), (d), (d-1), (e), (f),
(k), (l), and (o), Water Code, are amended to read as follows:
(a) A utility may not make changes in its rates except by
delivering a statement of intent to each ratepayer and with the
regulatory authority having original jurisdiction at least 120 [60]
days before the proposed effective date of the proposed change. The
proposed effective date of the new rates must be the first day of a
billing period, and the new rates may not apply to service received
before the proposed effective date of the new rates. The statement
of intent must include:
(1) the information required by the regulatory
authority's rules;
(2) a billing comparison regarding the existing water
rate and the new water rate computed for the use of:
(A) 10,000 gallons of water; and
(B) 30,000 gallons of water; and
(3) a billing comparison regarding the existing sewer
rate and the new sewer rate computed for the use of 10,000 gallons,
unless the utility proposes a flat rate for sewer services.
(b) A copy of the statement of intent shall be mailed or
delivered to the appropriate offices of each affected municipality,
to the executive director, and to any [other] affected persons as
required by the regulatory authority's rules.
(d) Except as provided by Subsection (d-1), if the
application or the statement of intent is not substantially
complete or does not comply with the regulatory authority's rules,
it may be rejected and the proposed effective date of the rate
change may be suspended until a properly completed application is
accepted by the regulatory authority and a proper statement of
intent is provided. The commission may also suspend the proposed
effective date of any rate change if the utility does not have a
certificate of public convenience and necessity or a completed
application for a certificate or to transfer a certificate pending
before the commission or if the utility is delinquent in paying the
assessment and any applicable penalties or interest required by
Section 5.701(n) of this code.
(d-1) Subject to Subsection (k), after [After] written
notice to the utility, a local regulatory authority may suspend the
proposed effective date of a rate change for not more than 90 days
from the proposed effective date[, except that the suspension shall
be extended by two days for each day a hearing exceeds 15 days. If
the local regulatory authority does not make a final determination
on the proposed rate before the expiration of the applicable
suspension period, the proposed rate shall be considered approved.
The approval is subject to the local regulatory authority's
continuation of a hearing in progress].
(e) The regulatory authority shall hold a hearing on the
proposed rate increase if, [If,] before the 91st day after the
[effective] date the statement of intent was provided to the
authority and each ratepayer under Subsection (a) [of the rate
change], the regulatory authority receives a complaint from any
affected municipality, or from the lesser of 1,000 or 10 percent of
the ratepayers of the utility over whose rates the regulatory
authority has original jurisdiction[, the regulatory authority
shall set the matter for hearing].
(f) The regulatory authority may set the matter for hearing
on its own motion at any time within 120 days after the [effective]
date the statement of intent was provided to the authority and each
ratepayer under Subsection (a) [of the rate change]. If more than
half of the ratepayers of the utility receive service in a county
with a population of more than 2.5 million, the hearing must be held
at a location in that county.
(k) If the regulatory authority sets the matter for
[receives at least the number of complaints from ratepayers
required for the regulatory authority to set] a hearing under
Subsection (e), the regulatory authority shall [may], pending the
hearing and a decision, suspend the date the rate change would
otherwise be effective until the date the regulatory authority
issues a final decision on the matter. [Except as provided by
Subsection (d-1), the proposed rate may not be suspended for longer
than:
[(1) 90 days by a local regulatory authority; or
[(2) 150 days by the commission.]
(l) At any time during the pendency of the rate proceeding
the regulatory authority or, if the regulatory authority is the
commission, the executive director may fix interim rates to remain
in effect until a final determination is made on the proposed rate.
(o) If the [a] regulatory authority does not set a hearing
on the proposed rate increase under Subsection (e) or (f), [other
than the commission establishes interim rates or an escrow account,
the regulatory authority must make a final determination on the
rates not later than the first anniversary of the effective date of
the interim rates or escrowed rates or] the rates are automatically
approved as requested by the utility.
SECTION 6. Sections 13.187(i), (j), and (n), Water Code,
are repealed.
SECTION 7. Except as otherwise provided by this Act, this
Act applies only to a statement of intent filed on or after the
effective date of this Act. A rate change to which a statement of
intent filed before the effective date of this Act applies is
governed by the law in effect on the date the statement was filed,
and that law is continued in effect for that purpose.
SECTION 8. This Act takes effect September 1, 2009.