| 1 | 1 | | 88R3451 ANG-F |
|---|
| 2 | 2 | | By: Spiller H.B. No. 3042 |
|---|
| 3 | 3 | | |
|---|
| 4 | 4 | | |
|---|
| 5 | 5 | | A BILL TO BE ENTITLED |
|---|
| 6 | 6 | | AN ACT |
|---|
| 7 | 7 | | relating to the consideration of the proportion of long-term debt |
|---|
| 8 | 8 | | and equity capitalization in establishing the rates of electric |
|---|
| 9 | 9 | | utilities. |
|---|
| 10 | 10 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|---|
| 11 | 11 | | SECTION 1. Subchapter B, Chapter 36, Utilities Code, is |
|---|
| 12 | 12 | | amended by adding Section 36.067 to read as follows: |
|---|
| 13 | 13 | | Sec. 36.067. CONSIDERATION OF PROPORTION OF LONG-TERM DEBT |
|---|
| 14 | 14 | | AND EQUITY CAPITALIZATION. (a) Except as provided by Subsection |
|---|
| 15 | 15 | | (b), when establishing an electric utility's rates, the regulatory |
|---|
| 16 | 16 | | authority shall calculate the return on invested capital using the |
|---|
| 17 | 17 | | utility's actual proportion of long-term debt and equity |
|---|
| 18 | 18 | | capitalization as reported on the utility's most recent financial |
|---|
| 19 | 19 | | statement issued before the initiation of the applicable rate |
|---|
| 20 | 20 | | proceeding. |
|---|
| 21 | 21 | | (b) If the electric utility's actual proportion of equity |
|---|
| 22 | 22 | | capitalization exceeds 60 percent, the regulatory authority shall |
|---|
| 23 | 23 | | calculate the return on invested capital using an equity |
|---|
| 24 | 24 | | capitalization of 60 percent. |
|---|
| 25 | 25 | | SECTION 2. (a) Section 36.067, Utilities Code, as added by |
|---|
| 26 | 26 | | this Act, applies only to a proceeding for the establishment of |
|---|
| 27 | 27 | | rates for which the regulatory authority has not issued a final |
|---|
| 28 | 28 | | order or decision before the effective date of this Act. |
|---|
| 29 | 29 | | (b) A proceeding for which the regulatory authority has |
|---|
| 30 | 30 | | issued a final order or decision before the effective date of this |
|---|
| 31 | 31 | | Act is governed by the law in effect immediately before that date, |
|---|
| 32 | 32 | | and that law is continued in effect for that purpose. |
|---|
| 33 | 33 | | SECTION 3. This Act takes effect immediately if it receives |
|---|
| 34 | 34 | | a vote of two-thirds of all the members elected to each house, as |
|---|
| 35 | 35 | | provided by Section 39, Article III, Texas Constitution. If this |
|---|
| 36 | 36 | | Act does not receive the vote necessary for immediate effect, this |
|---|
| 37 | 37 | | Act takes effect September 1, 2023. |
|---|