Texas 2015 - 84th Regular

Texas Senate Bill SB841 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	84R7275 JXC-F
2	2	By: Creighton S.B. No. 841
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to rates of and certificates of convenience and necessity
8	8	for certain non-ERCOT electric utilities.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Section 36.209, Utilities Code, is amended to
11	11	read as follows:
12	12	Sec. 36.209. COST RECOVERY AND RATE ADJUSTMENT STANDARDS
13	13	AND PROCEDURES FOR [BY] CERTAIN NON-ERCOT UTILITIES [OF CERTAIN
14	14	TRANSMISSION COSTS]. (a) This section applies only to an electric
15	15	utility that operates solely outside of ERCOT [in areas of this
16	16	state included in the Southeastern Electric Reliability Council,
17	17	the Southwest Power Pool, or the Western Electricity Coordinating
18	18	Council and that owns or operates transmission facilities].
19	19	(b) The commission, after notice and opportunity for
20	20	hearing, shall [may] allow an electric utility to adjust its rates
21	21	to ensure timely recovery of the utility's [recover on an annual
22	22	basis its] reasonable and necessary costs [expenditures] for
23	23	transmission investment [infrastructure improvement costs] and
24	24	changes in wholesale transmission charges to the [electric] utility
25	25	under a tariff approved by a federal regulatory authority, to the
26	26	extent that the costs or charges have not otherwise been recovered.
27	27	The commission may allow the electric utility to recover only the
28	28	costs and charges allocable to retail customers in the state and may
29	29	not allow the [electric] utility to over-recover costs or charges.
30	30	The standards and procedures described in Subsections (c)-(e)
31	31	exclusively govern a rate adjustment described by this subsection.
32	32	(c) An electric utility may apply to adjust the utility's
33	33	transmission rates on an interim basis not more than twice each
34	34	calendar year to reflect changes in the utility's invested capital
35	35	and wholesale transmission charges since the test year in the
36	36	utility's most recent base rate case before the commission. An
37	37	application is eligible for informal disposition under commission
38	38	rules and Section 2001.056, Government Code. If the requirements
39	39	for informal disposition are met, the presiding officer shall issue
40	40	a notice of approval not later than the 60th day after the date a
41	41	materially sufficient application is filed, unless good cause
42	42	exists to extend the deadline or the presiding officer determines
43	43	that the proceeding should be considered by the commission.
44	44	(d) If an electric utility elects to adjust the utility's
45	45	transmission rates under this section, the new rates must reflect
46	46	the addition and retirement of transmission facilities, including
47	47	associated depreciation, federal income tax and other associated
48	48	taxes, and the commission-authorized rate of return on the
49	49	facilities. The commission shall use load growth during this
50	50	process only for the purpose of establishing billing determinants
51	51	to set new rates.
52	52	(e) An adjustment of an electric utility's transmission
53	53	rates under this section is subject to reconciliation at the next
54	54	complete review of the utility's transmission cost of service. As
55	55	part of the complete review, the commission shall review the costs
56	56	of the interim transmission plant additions to determine if the
57	57	costs were reasonable and necessary. Any amounts resulting from an
58	58	adjustment, including amounts associated with capital investment
59	59	expenditures or transmission charges, that are found to have been
60	60	unreasonable or unnecessary, plus the corresponding return and
61	61	taxes, shall be refunded with carrying costs. For the period
62	62	beginning on the date the over-recovery is determined to have begun
63	63	and ending on the effective date of the electric utility's rates set
64	64	in the complete review of the utility's transmission cost of
65	65	service, carrying costs shall be calculated using the same rate of
66	66	return that was applied to the transmission investments included in
67	67	the adjustment. For the time period that begins on the effective
68	68	date of the electric utility's rates set in the complete review of
69	69	the utility's transmission cost of service, carrying costs shall be
70	70	calculated using the utility's rate of return authorized in the
71	71	complete review.
72	72	(f) In establishing the base rates of an electric utility
73	73	under Subchapter C, or rates governed by Subsections (b)-(e) or by
74	74	Section 36.204, 36.205, or 36.210, the regulatory authority
75	75	otherwise provided with jurisdiction over those rate proceedings
76	76	shall determine the utility's revenue requirement based on, at the
77	77	election of the utility:
78	78	(1) information submitted for a test year or other
79	79	applicable historical period for rate proceedings described by this
80	80	subsection; or
81	81	(2) updated information that reflects actual or
82	82	estimated information for a period ending not later than the
83	83	earlier of:
84	84	(A) the last day of the seventh month after the
85	85	end of the test year or other applicable historical period for rate
86	86	proceedings described by this subsection; or
87	87	(B) the 35th day after the date the applicable
88	88	rate proceeding is filed.
89	89	(g) An electric utility that elects to update information as
90	90	authorized by Subsection (f) is not precluded from proposing other
91	91	known and measurable changes to the utility's historical rate
92	92	information. If the utility proposes a known and measurable change
93	93	to the information, the utility must provide a reasonable estimate
94	94	or projection of the annualized effects of the change on the
95	95	utility's operating expenses, invested capital, and revenues
96	96	during the first 12 months the rates are expected to be in effect.
97	97	For the purposes of this subsection, a known and measurable change
98	98	is:
99	99	(1) anticipated to occur not later than during the
100	100	first 12 months the rates are expected to be in effect;
101	101	(2) a change in the level of an electric utility's
102	102	operating expenses, invested capital, or revenues; and
103	103	(3) a change whose existence is known, is reflected in
104	104	a reasonable budget estimate, or is otherwise the subject of a
105	105	reasonable estimate or projection.
106	106	(h) In a rate proceeding authorized by this subchapter or
107	107	Subchapter C, notwithstanding Section 36.109(a), the regulatory
108	108	authority with jurisdiction shall establish temporary rates on the
109	109	application of the electric utility at a level that is 70 percent of
110	110	the utility's requested increase, effective for consumption on and
111	111	after the 35th day after the date the utility files to initiate the
112	112	rate proceeding. The temporary rates shall remain in effect during
113	113	any applicable suspension period until final rates become
114	114	effective. On issuance of a final order that establishes new rates:
115	115	(1) money collected under the temporary rates in
116	116	excess of the rate finally ordered is subject to refund; and
117	117	(2) the electric utility may surcharge bills to
118	118	recover the amount by which the money collected under the temporary
119	119	rates is less than the money that would have been collected under
120	120	the rate finally ordered.
121	121	(i) If the electric utility does not apply for temporary
122	122	rates under Subsection (h), the final rate set in a rate proceeding
123	123	under this subchapter or Subchapter C shall be made effective for
124	124	consumption on and after the 35th day after the date the utility
125	125	filed to initiate the rate proceeding. The regulatory authority
126	126	shall:
127	127	(1) require the electric utility to refund to
128	128	customers money collected in excess of the rate finally ordered on
129	129	or after the 35th day after the date the utility filed to initiate
130	130	the rate proceeding; or
131	131	(2) authorize the electric utility to surcharge bills
132	132	to recover the amount by which the money collected on or after the
133	133	35th day after the date the utility filed to initiate the rate
134	134	proceeding is less than the money that would have been collected
135	135	under the rate finally ordered.
136	136	(j) An electric utility is entitled to file an application
137	137	with the commission to recover, through a rate rider mechanism, a
138	138	return of and on the prudent and reasonable capital expenditures,
139	139	the reasonable and necessary operation and maintenance expenses,
140	140	and the taxes associated with either the acquisition of an existing
141	141	generating facility or the construction of a new generating
142	142	facility. A rate proceeding under Subchapter C is not required to
143	143	establish or adjust the rider. In a proceeding brought under this
144	144	subsection to establish the initial rider, the commission shall
145	145	issue a final order before the 181st day after the date the electric
146	146	utility files the application with the commission. If the
147	147	commission does not issue a final order before that date, the
148	148	application is considered approved. An approved rider becomes
149	149	effective on the date the generating facility begins to provide
150	150	service to the electric utility's retail customers in this state,
151	151	and continues in effect until the effective date of new base rates
152	152	that allow the utility to recover the costs of the new generating
153	153	facility from the utility's retail customers in this state. The
154	154	electric utility may use both actual historical cost information
155	155	and reasonable cost estimates as the basis for recovery under the
156	156	initial rider. The rider must use the return on equity most
157	157	recently approved by the commission in the electric utility's base
158	158	rate proceedings.
159	159	(k) In the case of the acquisition of an existing generating
160	160	facility, an electric utility may file the application for approval
161	161	of a rider described by Subsection (j) in the same proceeding in
162	162	which it seeks issuance of a certificate of convenience and
163	163	necessity for the facility under Chapter 37. Notwithstanding
164	164	Section 36.053, the utility's recoverable invested capital shall be
165	165	based on the purchase price for the newly acquired facility. In the
166	166	case of a newly constructed generating facility, the utility may
167	167	file its application for approval of a rider described by
168	168	Subsection (j) not earlier than 180 days before the expected
169	169	commercial operation date of the new facility.
170	170	(l) Once established, a rider described by Subsection (j) is
171	171	subject to annual adjustment, so that the rider reflects historical
172	172	costs from the most recent 12-month period available before the
173	173	filing of an application to make the adjustment. An adjustment
174	174	under the rider takes effect as a temporary rate, subject to refund
175	175	based on the final commission decision, not later than the 35th day
176	176	after the date of filing of an application to make the adjustment.
177	177	The commission shall take final action on an application to make an
178	178	adjustment not later than the 90th day after the date of filing. If
179	179	the commission does not take final action before that date, the
180	180	application is considered approved.
181	181	(m) A rider described by Subsection (j) is subject to a
182	182	periodic true-up. A true-up must cover at least a 12-month period.
183	183	In a true-up proceeding, the electric utility shall reconcile the
184	184	revenues recovered by the utility under the rider with the actual
185	185	prudent, reasonable, and necessary level of costs, and the rider
186	186	shall be further adjusted as necessary to reflect the outcome of the
187	187	reconciliation.
188	188	SECTION 2. Subchapter B, Chapter 37, Utilities Code, is
189	189	amended by adding Section 37.058 to read as follows:
190	190	Sec. 37.058. CERTIFICATE AND DETERMINATION ISSUED TO
191	191	CERTAIN NON-ERCOT UTILITIES FOR GENERATING FACILITY. (a) This
192	192	section applies only to an electric utility that operates solely
193	193	outside of ERCOT.
194	194	(b) An electric utility may file with the commission a
195	195	request that the commission:
196	196	(1) grant a certificate for an electric generating
197	197	facility;
198	198	(2) make a public interest determination for the
199	199	purchase of an existing electric generating facility under Section
200	200	14.101; or
201	201	(3) both grant a certificate and make a determination.
202	202	(c) The commission may grant a request described by
203	203	Subsection (b).
204	204	(d) Notwithstanding any other law, in a proceeding
205	205	involving the purchase of an existing electric generating facility,
206	206	the commission shall issue a final order on a certificate for the
207	207	facility or making a determination on the facility required by
208	208	Section 14.101, as applicable, not later than the 181st day after
209	209	the date a request for the certificate or determination is filed
210	210	with the commission under Subsection (b). If the commission does
211	211	not issue a final order before that date, the application is
212	212	considered approved. For generating facilities granted a
213	213	certificate under this subsection, notwithstanding Section 36.053,
214	214	the utility's recoverable invested capital included in rates shall
215	215	be based on the purchase price for the newly acquired facility.
216	216	(e) Notwithstanding any other law, in a proceeding
217	217	involving a newly constructed generating facility, the commission
218	218	shall issue a final order on a certificate for the facility not
219	219	later than the 366th day after the date a request for the
220	220	certificate is filed with the commission under Subsection (b). If
221	221	the commission does not issue a final order before that date, the
222	222	application is considered approved.
223	223	SECTION 3. The changes in law made by this Act apply only to
224	224	a proceeding before the Public Utility Commission of Texas or other
225	225	regulatory authority described by Section 11.003, Utilities Code,
226	226	that commences on or after the effective date of this Act. A
227	227	proceeding before the Public Utility Commission of Texas or other
228	228	regulatory authority described by Section 11.003, Utilities Code,
229	229	that commenced before the effective date of this Act is governed by
230	230	the law in effect on the date the proceeding commenced, and that law
231	231	is continued in effect for that purpose.
232	232	SECTION 4. This Act takes effect immediately if it receives
233	233	a vote of two-thirds of all the members elected to each house, as
234	234	provided by Section 39, Article III, Texas Constitution. If this
235	235	Act does not receive the vote necessary for immediate effect, this
236	236	Act takes effect September 1, 2015.