88R3414 JXC-F
By: Schwertner S.B. No. 1094
A BILL TO BE ENTITLED
AN ACT
relating to the recovery of purchased power costs by electric
utilities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 36.206, Utilities Code, is amended to
read as follows:
Sec. 36.206. MARK-UPS. (a) A cost recovery factor
established for the recovery of purchased power costs must [may]
include:
(1) the cost the electric utility incurs in purchasing
capacity and energy; and
(2) a mark-up added to the cost or another mechanism
the commission determines will:
(A) reasonably compensate the utility for any
administrative costs, financing costs, and financial risk
associated with purchased power obligations so that the mark-up is
sufficient to ensure that the utility has financial incentives to
procure purchased power rather than rely solely on utility-owned
generation; and
(B) allow the utility to retain a reasonable
portion of [(3)] the value added by the utility in making the
purchased power available to customers.
(b) The mark-ups and cost recovery factors:
(1) must [, if allowed, may] be retained by the
electric utility; and
(2) may not be less than an amount sufficient [those
necessary] to encourage the [electric] utility to include
economical purchased power as part of the utility's energy and
capacity resource supply plan.
(c) An electric utility's rate of return established in the
utility's base rate may not be reduced in connection with the
implementation of this section.
SECTION 2. Section 36.207, Utilities Code, is repealed.
SECTION 3. Section 36.206, Utilities Code, as amended by
this Act, applies only to a proceeding for the establishment of
rates that begins on or after the effective date of this Act. A
proceeding that begins before that date is governed by the law in
effect immediately before the effective date of this Act, and that
law is continued in effect for that purpose.
SECTION 4. This Act takes effect September 1, 2023.