| 1 | 1 | | 88R7673 JXC-F |
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| 2 | 2 | | By: Hughes S.B. No. 1049 |
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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 gas utility alternative gas expenses and infrastructure |
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| 8 | 8 | | investments. |
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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. Subchapter B, Chapter 104, Utilities Code, is |
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| 11 | 11 | | amended by adding Section 104.061 to read as follows: |
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| 12 | 12 | | Sec. 104.061. CONSIDERATION OF ALTERNATIVE GAS EXPENSES AND |
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| 13 | 13 | | INFRASTRUCTURE INVESTMENTS. (a) In this section, "alternative |
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| 14 | 14 | | gas" means: |
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| 15 | 15 | | (1) any pipeline-compatible gaseous fuel that is |
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| 16 | 16 | | derived from: |
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| 17 | 17 | | (A) the anaerobic digestion of biomass, |
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| 18 | 18 | | gasification of biomass, or another biomass conversion process; |
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| 19 | 19 | | (B) agricultural waste; or |
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| 20 | 20 | | (C) landfill gas; |
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| 21 | 21 | | (2) hydrogen produced using: |
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| 22 | 22 | | (A) carbon capture and storage; |
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| 23 | 23 | | (B) renewable energy to break down water into |
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| 24 | 24 | | hydrogen and oxygen through electrolysis; or |
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| 25 | 25 | | (C) the breakdown of methane into hydrogen and |
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| 26 | 26 | | solid carbon through pyrolysis; |
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| 27 | 27 | | (3) gas certified in a manner approved by the railroad |
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| 28 | 28 | | commission under Subsection (b); or |
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| 29 | 29 | | (4) another gaseous fuel designated by the railroad |
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| 30 | 30 | | commission under Subsection (b). |
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| 31 | 31 | | (b) The railroad commission by rule may: |
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| 32 | 32 | | (1) approve a certification process used by an |
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| 33 | 33 | | organization to certify that a type of gas has a lower carbon |
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| 34 | 34 | | content than natural gas; and |
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| 35 | 35 | | (2) designate a gaseous fuel as an alternative gas if |
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| 36 | 36 | | the fuel has a lower carbon content than natural gas. |
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| 37 | 37 | | (c) A gas utility may include one or more forms of purchased |
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| 38 | 38 | | alternative gas in its gas supply portfolio used for the provision |
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| 39 | 39 | | of gas service to the public. When establishing a gas utility's |
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| 40 | 40 | | rates, the regulatory authority shall allow a gas utility to |
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| 41 | 41 | | recover as a cost or expense expenditures associated with |
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| 42 | 42 | | purchasing the alternative gas. |
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| 43 | 43 | | (d) When reviewing a gas utility's expenses, the regulatory |
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| 44 | 44 | | authority shall presume that purchases of alternative gas under |
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| 45 | 45 | | Subsection (c) are prudent, reasonable, and necessary gas expenses. |
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| 46 | 46 | | (e) A gas utility may invest in infrastructure to acquire, |
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| 47 | 47 | | interconnect with, or produce alternative gas supply for its |
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| 48 | 48 | | customers. When establishing a gas utility's rates, the regulatory |
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| 49 | 49 | | authority shall allow a gas utility to include in its invested |
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| 50 | 50 | | capital the infrastructure costs. |
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| 51 | 51 | | (f) The regulatory authority shall presume that an |
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| 52 | 52 | | infrastructure investment under Subsection (e) is used and useful |
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| 53 | 53 | | in providing service to the public and a prudent, reasonable, and |
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| 54 | 54 | | necessary investment. |
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| 55 | 55 | | SECTION 2. This Act takes effect September 1, 2023. |
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