83R21281 RWG-F
By: Lucio III H.B. No. 3857
Substitute the following for H.B. No. 3857:
By: Lucio III C.S.H.B. No. 3857
A BILL TO BE ENTITLED
AN ACT
relating to periodic rate adjustments by water and sewer utilities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter F, Chapter 13, Water Code, is amended
by adding Section 13.194 to read as follows:
Sec. 13.194. RATE ADJUSTMENTS FOR INFRASTRUCTURE PROJECTS.
(a) In this section, "infrastructure improvement project" means an
engineering project to construct, improve, or renovate a facility
used and useful for:
(1) the production, transmission, storage,
distribution, or provision of potable or recycled water to the
public; or
(2) the collection, transportation, treatment, or
disposal of sewage.
(b) The commission, on the petition of a water and sewer
utility, may approve a tariff or rate schedule that includes an
adjustable rate or charge designed to increase or decrease, without
the necessity of a contested case hearing, in proportion to the
utility's amount of invested capital committed to infrastructure
improvement projects to serve the utility's certificated service
area.
(c) To be eligible for a tariff or rate schedule under this
section, or to increase or decrease an adjustable rate or charge
approved as part of a tariff or rate schedule under this section, a
water and sewer utility, not later than the 60th day before the
proposed effective date, as applicable, of the tariff or rate
schedule or of the increase or decrease of the adjustable rate or
charge, must file with the executive director for review and
approval a written petition that contains:
(1) the amount of the proposed rate or charge;
(2) the proposed implementation date for the proposed
rate or charge;
(3) a list of completed, eligible capital projects and
the depreciation and return on investment on the projects for which
the utility seeks reimbursement through the proposed rate or
charge;
(4) a computation of the projected total annual
increase or decrease in revenue expected from the proposed rate or
charge; and
(5) the cumulative annual amount the utility expects
to recover from the proposed rate or charge.
(d) The executive director may not approve a rate or charge
that allows a water and sewer utility to recover more than five
percent of the utility's annual revenue. If a water and sewer
utility regionalizes or consolidates into a single tariff under
Section 13.145, the executive director may not approve a rate or
charge that exceeds five percent of the utility's annual revenue
from the region or single tariff.
(e) A water and sewer utility may not implement a rate or
charge or an increase in a rate or charge under this section more
than once in a calendar year.
(f) The commission by rule shall require the water and sewer
utility:
(1) to apply a rate or charge to each customer included
in the utility's tariff or rate schedule; and
(2) to provide to each customer written notice of the
rate or charge on the initial tariff filing that proposes to
implement the rate or charge.
(g) A water and sewer utility may not recover expenses
related to the maintenance and operation of an infrastructure
improvement project through a rate or charge under this section.
(h) A rate or charge approved by the commission under this
section is subject to a true-up or reconciliation at the water and
sewer utility's next general rate case under Section 13.187.
(i) A water and sewer utility that has filed four petitions
under this section since the utility's most recent general rate
case under Section 13.187 may not file another petition until after
the utility's next general rate case under that section.
(j) Notwithstanding any other provision of this code, the
implementation of a utility facilities construction and
improvement charge or an increase in a utility facilities
construction and improvement charge is not subject to a contested
case hearing.
(k) The commission shall adopt rules to implement this
section.
(l) A regulatory authority other than the commission shall
allow a water and sewer utility to use an adjustable rate or charge
in a manner consistent with this section and rules adopted under
this section.
SECTION 2. The commission or regulatory authority shall
adopt all rules necessary to implement Section 13.194, Water Code,
as added by this Act, not later than September 1, 2015.
SECTION 3. This Act takes effect September 1, 2013.