85R5603 GRM-F
By: Hancock S.B. No. 735
A BILL TO BE ENTITLED
AN ACT
relating to periodic rate adjustment by electric utilities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 35.004, Utilities Code, is amended by
amending Subsection (d) and adding Subsection (d-1) to read as
follows:
(d) The commission shall price wholesale transmission
services within ERCOT based on the postage stamp method of pricing
under which a transmission-owning utility's rate is based on the
ERCOT utilities' combined annual costs of transmission divided by
the total demand placed on the combined transmission systems of all
such transmission-owning utilities within a power region. An
electric utility subject to the freeze period imposed by Section
39.052 may treat transmission costs in excess of transmission
revenues during the freeze period as an expense for purposes of
determining annual costs in the annual report filed under Section
39.257. Notwithstanding Section 36.201, the commission may approve
wholesale rates that may be periodically adjusted to ensure timely
recovery of transmission investment and shall establish a schedule
that requires an electric utility to make periodic filings with the
commission to modify or review a rate charge by the electric
utility. The schedule may be established on the basis of the period
since the electric commission last reviewed the electric utility's
rate, whether the electric utility has earned materially more than
the utility's authorized rate of return as demonstrated by earnings
monitoring reports, or other criteria that the commission
determines is in the public interest. Notwithstanding Section
36.054(a), if the commission determines that conditions warrant the
action, the commission may authorize the inclusion of construction
work in progress in the rate base for transmission investment
required by the commission under Section 39.203(e).
(d-1) The commission shall adopt rules establishing rate
adjustments, on a periodic basis determined by the commission, to
reflect changed transmission cost for:
(1) depreciation;
(2) plant retirement; and
(3) other factors that reduce rates.
SECTION 2. The heading to Section 36.060, Utilities Code,
is amended to read as follows:
Sec. 36.060. UTILITY [CONSOLIDATED] INCOME TAX EXPENSES
[RETURNS].
SECTION 3. Section 36.060, Utilities Code, is amended by
adding Subsection (d) to read as follows:
(d) Notwithstanding any other provision of this chapter, if
the income of an electric utility is not subject to corporate
federal income tax because of the corporate organization of the
utility and the utility's upstream owners, the commission may not
include federal tax on the income as an expense in setting the
utility's rates.
SECTION 4. Subchapter D, Chapter 36, Utilities Code, is
amended by adding Section 36.157 to read as follows:
Sec. 36.157. RATE REVIEW SCHEDULE. Notwithstanding any
other provision of this title, the commission shall establish a
schedule that requires an electric utility to make periodic filings
with the commission to modify or review a rate charged by the
electric utility. The schedule may be established on the basis of:
(1) the period since the electric commission last
reviewed the electric utility's rate;
(2) whether the electric utility has earned materially
more than the utility's authorized rate of return as demonstrated
by earnings monitoring reports; or
(3) other criteria that the commission determines is
in the public interest.
SECTION 5. Section 39.262(m), Utilities Code, is amended to
read as follows:
(m) The commission shall approve a transaction under
Subsection (l) if the commission finds that the transaction is in
the public interest. In making its determination, the commission
shall consider whether the transaction will adversely affect the
reliability of service, availability of service, or cost of service
of the electric utility or transmission and distribution
utility. The commission shall make the determination concerning a
transaction under this subsection not later than the 180th day
after the date the commission receives the relevant report. The
commission may extend the deadline provided by this subsection for
not more than 60 days if the commission determines the extension is
needed to evaluate additional information, to consider actions
taken by other jurisdictions concerning the transaction, to provide
for administrative efficiency, or for other good cause. If the
commission has not made a determination before the expiration of
the deadline provided by or extended under this subsection [181st
day after that date], the transaction is considered approved.
SECTION 6. Section 39.915(b), Utilities Code, is amended to
read as follows:
(b) The commission shall approve a transaction under
Subsection (a) if the commission finds that the transaction is in
the public interest. In making its determination, the commission
shall consider whether the transaction will adversely affect the
reliability of service, availability of service, or cost of service
of the electric utility or transmission and distribution
utility. The commission shall make the determination concerning a
transaction under this subsection not later than the 180th day
after the date the commission receives the relevant report. The
commission may extend the deadline provided by this subsection for
not more than 60 days if the commission determines the extension is
needed to evaluate additional information, to consider actions
taken by other jurisdictions concerning the transaction, to provide
for administrative efficiency, or for other good cause. If the
commission has not made a determination before the expiration of
the deadline provided by or extended under this subsection [181st
day after that date], the transaction is considered approved.
SECTION 7. Sections 36.210(h), (h-1), and (i), Utilities
Code, are repealed.
SECTION 8. 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, 2017.