85R12223 JXC-F
By: Flynn H.B. No. 2910
A BILL TO BE ENTITLED
AN ACT
relating to electric rates imposed on residential customers by
certain electric utilities in the ERCOT region.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter D, Chapter 36, Utilities Code, is
amended by adding Section 36.157 to read as follows:
Sec. 36.157. RATE EQUITY FOR RESIDENTIAL CUSTOMERS OF
CERTAIN ELECTRIC UTILITIES IN ERCOT. (a) To the extent of any
conflict between this section and another provision of this
chapter, this section controls.
(b) If the commission finds that an electric utility that
operates in the ERCOT region charges nonbypassable distribution
rates for residential customers that are equal to or more than 175
percent of the average of the residential distribution rates for
all transmission and distribution utilities operating in the ERCOT
region, the rates of the utility are considered to be unreasonable
and the commission shall initiate an inquiry under this subchapter.
(c) In any rate proceeding for an electric utility after the
commission finds that the utility's rates are unreasonable as
described by Subsection (b), the commission shall:
(1) ensure that the utility's expenses for
federal income tax are limited to only that income of the utility
that is subject to the federal tax, after accounting for tax
deductions associated with distributions of income from the
utility;
(2) ensure that the expenses of the utility are
reasonable and necessary, including expenses charged to the utility
by an affiliate;
(3) ensure that utility's invested capital is used and
useful in providing service to the public; and
(4) allocate a sufficient portion of the utility's
invested capital related to the distribution function to the
postage stamp method of pricing under Section 35.004(d) in a manner
that allows the utility to recover a reasonable return on the
utility's invested capital as described by Section 36.051, except
that the utility's residential distribution rates may not exceed
133 percent of the average of the residential rates for all
transmission and distribution utilities operating in the ERCOT
region.
(d) The commission shall require an electric utility
described by Subsection (b) to file annual plans with the
commission describing future planned additions to invested
capital, including an analysis of the impact of the additions on
customer rates.
SECTION 2. Section 37.059(a), Utilities Code, is amended to
read as follows:
(a) The commission may revoke or amend a certificate after
notice and hearing if the commission finds that:
(1) the certificate holder has never provided or is no
longer providing service in all or any part of the certificated
area; or
(2) the certificate holder operates in the ERCOT
region and charges nonbypassable distribution rates for
residential customers that are equal to or more than 175 percent of
the average of the residential distribution rates for all
transmission and distribution utilities operating in the ERCOT
region.
SECTION 3. This Act takes effect September 1, 2017.