| 1 | 1 | | 88R3414 JXC-F |
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| 2 | 2 | | By: Price H.B. No. 2061 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to the recovery of purchased power costs by electric |
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| 8 | 8 | | utilities. |
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| 9 | 9 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 10 | 10 | | SECTION 1. Section 36.206, Utilities Code, is amended to |
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| 11 | 11 | | read as follows: |
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| 12 | 12 | | Sec. 36.206. MARK-UPS. (a) A cost recovery factor |
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| 13 | 13 | | established for the recovery of purchased power costs must [may] |
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| 14 | 14 | | include: |
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| 15 | 15 | | (1) the cost the electric utility incurs in purchasing |
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| 16 | 16 | | capacity and energy; and |
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| 17 | 17 | | (2) a mark-up added to the cost or another mechanism |
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| 18 | 18 | | the commission determines will: |
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| 19 | 19 | | (A) reasonably compensate the utility for any |
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| 20 | 20 | | administrative costs, financing costs, and financial risk |
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| 21 | 21 | | associated with purchased power obligations so that the mark-up is |
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| 22 | 22 | | sufficient to ensure that the utility has financial incentives to |
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| 23 | 23 | | procure purchased power rather than rely solely on utility-owned |
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| 24 | 24 | | generation; and |
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| 25 | 25 | | (B) allow the utility to retain a reasonable |
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| 26 | 26 | | portion of [(3)] the value added by the utility in making the |
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| 27 | 27 | | purchased power available to customers. |
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| 28 | 28 | | (b) The mark-ups and cost recovery factors: |
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| 29 | 29 | | (1) must [, if allowed, may] be retained by the |
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| 30 | 30 | | electric utility; and |
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| 31 | 31 | | (2) may not be less than an amount sufficient [those |
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| 32 | 32 | | necessary] to encourage the [electric] utility to include |
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| 33 | 33 | | economical purchased power as part of the utility's energy and |
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| 34 | 34 | | capacity resource supply plan. |
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| 35 | 35 | | (c) An electric utility's rate of return established in the |
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| 36 | 36 | | utility's base rate may not be reduced in connection with the |
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| 37 | 37 | | implementation of this section. |
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| 38 | 38 | | SECTION 2. Section 36.207, Utilities Code, is repealed. |
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| 39 | 39 | | SECTION 3. Section 36.206, Utilities Code, as amended by |
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| 40 | 40 | | this Act, applies only to a proceeding for the establishment of |
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| 41 | 41 | | rates that begins on or after the effective date of this Act. A |
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| 42 | 42 | | proceeding that begins before that date is governed by the law in |
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| 43 | 43 | | effect immediately before the effective date of this Act, and that |
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| 44 | 44 | | law is continued in effect for that purpose. |
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| 45 | 45 | | SECTION 4. This Act takes effect September 1, 2023. |
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