86R4652 GRM-F
By: Geren H.B. No. 1587
A BILL TO BE ENTITLED
AN ACT
relating to the regulation of certain classes of retail public
water utilities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 13.002, Water Code, is amended by
amending Subdivisions (4-b) and (4-c) and adding Subdivision (4-d)
to read as follows:
(4-b) "Class B utility" means a public utility that
provides retail water or sewer utility service through 2,300 [500]
or more taps or connections but fewer than 10,000 taps or
connections.
(4-c) "Class C utility" means a public utility that
provides retail water or sewer utility service through 500 or more
taps or connections but fewer than 2,300 [500] taps or connections.
(4-d) "Class D utility" means a public utility that
provides retail water or sewer utility service through fewer than
500 taps or connections.
SECTION 2. Section 13.046, Water Code, is amended by adding
Subsection (d) to read as follows:
(d) At the time the utility commission approves the
acquisition of a nonfunctioning retail water or sewer utility
service provider under Section 13.301, the utility commission
shall:
(1) determine the duration of the temporary rates for
the retail public utility, which must be for a reasonable period;
and
(2) rule on the reasonableness of the temporary rates
under Subsection (b) if the utility commission did not make a ruling
before the application was filed under Section 13.301.
SECTION 3. Section 13.183(c), Water Code, is amended to
read as follows:
(c) To ensure that retail customers receive a higher
quality, more affordable, or more reliable water or sewer service,
to encourage regionalization, or to maintain financially stable and
technically sound utilities, the regulatory authority, by rule or
ordinance, as appropriate, may adopt specific alternative
ratemaking methodologies for water or sewer rates [based on factors
other than rate of return and those specified in Section 13.185].
Overall revenues determined according to an alternative ratemaking
methodology adopted under this section must provide revenues to the
utility that satisfy the requirements of Subsection (a). The
regulatory authority may not approve rates under an alternative
ratemaking methodology unless the regulatory authority adopts the
methodology before the date the rate application was
administratively complete.
SECTION 4. Section 13.187(a-1), Water Code, is amended to
read as follows:
(a-1) A utility may not make changes in its rates except by
sending by mail or e-mail a statement of intent to each ratepayer
and to the regulatory authority having original jurisdiction at
least 35 days before the effective date of the proposed change. The
utility may send the statement of intent to a ratepayer by e-mail
only if the ratepayer has agreed to receive communications
electronically. The effective date of the new rates must be the
first day of a billing period, and the new rates may not apply to
service received before the effective date of the new rates. The
statement of intent must include:
(1) the information required by the regulatory
authority's rules;
(2) a billing comparison regarding the existing water
rate and the new water rate computed for the use of:
(A) 5,000 [10,000] gallons of water; and
(B) 10,000 [30,000] gallons of water;
(3) a billing comparison regarding the existing sewer
rate and the new sewer rate computed for the use of 5,000 [10,000]
gallons, unless the utility proposes a flat rate for sewer
services; and
(4) a description of the process by which a ratepayer
may intervene in the ratemaking proceeding.
SECTION 5. Sections 13.1871(a), (b), and (d), Water Code,
are amended to read as follows:
(a) Except as provided by Sections 13.18715 and [Section]
13.1872, this section applies only to a Class B utility.
(b) A utility may not make changes in its rates except by
sending by mail or e-mail a statement of intent to each ratepayer
and to the regulatory authority having original jurisdiction at
least 35 days before the effective date of the proposed change. The
utility may send the statement of intent to a ratepayer by e-mail
only if the ratepayer has agreed to receive communications
electronically. The effective date of the new rates must be the
first day of a billing period, and the new rates may not apply to
service received before the effective date of the new rates. The
statement of intent must include:
(1) the information required by the regulatory
authority's rules;
(2) a billing comparison regarding the existing water
rate and the new water rate computed for the use of:
(A) 5,000 [10,000] gallons of water; and
(B) 10,000 [30,000] gallons of water;
(3) a billing comparison regarding the existing sewer
rate and the new sewer rate computed for the use of 5,000 [10,000]
gallons, unless the utility proposes a flat rate for sewer
services; and
(4) a description of the process by which a ratepayer
may file a complaint under Subsection (i).
(d) When the statement of intent is delivered, the utility
shall file with the regulatory authority an application to change
rates. The application must include information the regulatory
authority requires by rule and any appropriate cost and rate
schedules supporting the requested rate increase. [In adopting
rules relating to the information required in the application, the
utility commission shall ensure that a utility can file a less
burdensome and complex application than is required of a Class A
utility.] If the utility fails to provide within a reasonable time
after the application is filed the necessary documentation or other
evidence that supports the costs and expenses that are shown in the
application, the regulatory authority may disallow the
nonsupported costs or expenses.
SECTION 6. Subchapter F, Chapter 13, Water Code, is amended
by adding Section 13.18715 to read as follows:
Sec. 13.18715. CLASS C UTILITIES: STATEMENT OF INTENT TO
CHANGE RATES; HEARING; DETERMINATION OF RATE LEVEL. (a) This
section applies only to a Class C utility.
(b) A utility may not make changes in its rates except by
complying with the procedures to change rates described by Section
13.1871.
(c) Notwithstanding Section 13.1871(n), the utility may
send the notice required by that subsection by mail or e-mail or may
deliver a copy of the notice to the ratepayers.
SECTION 7. The heading to Section 13.1872, Water Code, is
amended to read as follows:
Sec. 13.1872. CLASS D [C] UTILITIES: RATE ADJUSTMENT.
SECTION 8. Section 13.1872, Water Code, is amended by
amending Subsection (a) and adding Subsection (c-1) to read as
follows:
(a) This section applies only to a Class D [C] utility.
(c-1) A utility that chooses to comply with Section 13.1871
as authorized under Subsection (c)(2) of this section may send the
notice required by Section 13.1871(n) by mail or e-mail or may
deliver a copy of the notice to the ratepayers.
SECTION 9. Subchapter F, Chapter 13, Water Code, is amended
by adding Section 13.1873 to read as follows:
Sec. 13.1873. APPLICATION RULES. In adopting rules
relating to the information required in an application for a Class
B, Class C, or Class D utility to change rates, the utility
commission shall ensure that a:
(1) Class B utility can file a less burdensome and
complex application than is required of a Class A utility; and
(2) Class C or Class D utility can file a less
burdensome and complex application than is required of a Class A or
Class B utility.
SECTION 10. Section 13.258(a), Water Code, is amended to
read as follows:
(a) Notwithstanding any other provision of this chapter, a
Class A utility may apply to the utility commission for an amendment
of a certificate of convenience and necessity held by a municipal
utility district to allow the utility to have the same rights and
powers under the certificate as the municipal utility district.
SECTION 11. The change in law made by this Act applies only
to an application for an amendment of a certificate of public
convenience and necessity filed on or after the effective date of
this Act. An application filed before the effective date of this Act
is governed by the law in effect on the date the application is
filed, and the former law is continued in effect for that purpose.
SECTION 12. This Act takes effect September 1, 2019.