S.B. No. 403
AN ACT
relating to the consideration of pension and other postemployment
benefits in establishing the rates of a gas utility.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter B, Chapter 104, Utilities Code, is
amended by adding Section 104.059 to read as follows:
Sec. 104.059. PENSION AND OTHER POSTEMPLOYMENT BENEFITS.
(a) In establishing a gas utility's rates, the regulatory
authority shall allow recovery of the gas utility's costs of
pensions and other postemployment benefits, as determined by
actuarial or other similar studies in accordance with generally
accepted accounting principles, in amounts the regulatory
authority finds reasonable and necessary.
(b) If a gas utility establishes one or more reserve
accounts for the purpose of tracking changes in the costs of
pensions and other postemployment benefits, the gas utility shall
periodically record in a reserve account any difference between:
(1) the annual amount of pension and other
postemployment benefits approved and included in the gas utility's
then current rates or, if that annual amount cannot be determined
from the regulatory authority's order, the amount recorded for
pension and other postemployment benefits under generally accepted
accounting principles during the first year that rates from the gas
utility's last general rate proceeding were in effect; and
(2) the annual amount of costs of pensions and other
postemployment benefits as determined by actuarial or other similar
studies that would otherwise be recorded by the gas utility were
this provision not applicable.
(c) The gas utility must:
(1) establish separate reserve accounts for pensions
and for other postemployment benefits; and
(2) apply the same methodology to allocate pension and
other postemployment benefits between capital and expense as in the
gas utility's last rate case.
(d) A surplus in a reserve account exists if the amount of
pension and other postemployment benefits under Subsection (b)(1)
is greater than the amount determined under Subsection (b)(2). A
shortage in a reserve account exists if the amount of pension and
other postemployment benefits under Subsection (b)(1) is less than
the amount determined under Subsection (b)(2).
(e) If the gas utility establishes reserve accounts for the
costs of pensions and other postemployment benefits, the regulatory
authority at a subsequent general rate proceeding shall:
(1) review the amounts recorded to each reserve
account to determine whether the amounts are reasonable and
necessary;
(2) determine in accordance with Subsection (d)
whether each reserve account has a surplus or shortage; and
(3) subtract any surplus from or add any shortage to
the gas utility's rate base, with the surplus or shortage amortized
over a reasonable time.
SECTION 2. Subsections (b) through (e), Section 104.059,
Utilities Code, as added by this Act, apply only in relation to a
reserve account established by a gas utility on or after January 1,
2012.
SECTION 3. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2011.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 403 passed the Senate on
April 7, 2011, by the following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 403 passed the House on
May 13, 2011, by the following vote: Yeas 138, Nays 0, one
present not voting.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor