88R3415 JXC-F
By: Schwertner S.B. No. 1095
A BILL TO BE ENTITLED
AN ACT
relating to the recovery of fuel and purchased power costs by
electric utilities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 36.203, Utilities Code, is amended to
read as follows:
Sec. 36.203. FUEL AND PURCHASED POWER COST RECOVERY;
ADJUSTMENT OF FUEL FACTOR. (a) Section 36.201 does not prohibit
the commission from reviewing and providing for adjustments of an
electric [a] utility's fuel factor.
(b) The commission by rule shall implement procedures that
provide for the timely adjustment of an electric [a] utility's fuel
factor[, with or without a hearing]. The rules must ensure that:
(1) the utility collects as contemporaneously as
reasonably possible the electric fuel and purchased power costs
that the utility incurs; and
(2) the utility's under-collected or over-collected
balance of electric fuel and purchased power costs is collected
from or refunded to customers through adjustment of the utility's
fuel factor not later than the 90th day after the date the balance
is accrued.
(c) Notwithstanding Subsection (b), on a finding that an
electric utility has an under-collected balance that is the result
of extraordinary electric fuel and purchased power costs that are
unlikely to continue, the commission by order may direct the
utility to adjust the utility's fuel factor to defer recovery to
take place over a period not to exceed two years, with the utility
receiving on the balance during the recovery period a return set at
the utility's most recently established weighted average cost of
capital set in a base rate case.
(d) The commission is not required to hold a hearing on the
adjustment of an electric utility's fuel factor under this section.
If the commission holds a hearing, the commission may consider at
the hearing any evidence that is appropriate and in the public
interest.
(e) A customer of the electric utility, a municipality with
original jurisdiction over the utility, or the office may protest a
fuel factor established under this section. The sole issue that may
be considered on a protest is whether the factor reasonably
reflects costs the electric utility has incurred or will incur so
that the utility is not substantially over-collecting or
under-collecting the utility's reasonably stated fuel and
purchased power costs on an ongoing basis, including the true-up of
any over- or under-collected balance. The prudence of the costs may
be considered only in a fuel reconciliation proceeding under
Subsection (f). If the commission finds that the electric utility
is substantially over-collecting or under-collecting the utility's
reasonably stated fuel and purchased power costs on an ongoing
basis, the commission shall order the utility to modify the
utility's fuel factor to more accurately reflect the utility's
costs and attempt to remedy any over-collected or under-collected
position before the 90th day after the date the commission issues
the order.
(f) An electric utility shall apply to reconcile the
utility's electric fuel and purchased power costs at least once
every two years. The application must be made not later than the
180th day after the last day of the period to be reconciled. The
commission may by rule establish the calendar year timing of the
reconciliation period for each electric utility subject to this
section to facilitate efficient work by the commission. To the
extent a reconciliation results in a change to the electric
utility's under-collected or over-collected fuel balance, that
change must be incorporated into the utility's fuel factor to
eliminate any resulting under-collected or over-collected balance
in commensurate increments over a three-month period. The
commission may extend the three-month period for a reasonable time
if the electric utility demonstrates that the change in the fuel
balance will impact the financial integrity of the utility.
(g) The rules adopted under this section [procedures] must
require that[:
[(1)] the findings required by Section 36.058
regarding fuel transactions with affiliated interests be [are] made
in a fuel reconciliation proceeding or in a rate case filed under
Subchapter C or D[; and
[(2) an affected party receive notice and have the
opportunity to request a hearing before the commission].
(h) [(c) The commission may adjust a utility's fuel factor
without a hearing if the commission determines that a hearing is not
necessary. If the commission holds a hearing, the commission may
consider at the hearing any evidence that is appropriate and in the
public interest.
[(d) The commission shall render a timely decision
approving, disapproving, or modifying the adjustment to the
utility's fuel factor.
[(e) The commission by rule shall provide for the
reconciliation of a utility's fuel costs on a timely basis.
[(f)] A proceeding under this section is not a rate case
under Subchapter C.
SECTION 2. An electric utility shall, the first time the
utility applies to reconcile the utility's fuel costs and purchased
power costs under Section 36.203(f), Utilities Code, as added by
this Act, after the Public Utility Commission of Texas adopts the
rules required to implement that subsection, include in the
application any previous periods that have not been addressed in a
prior reconciliation proceeding.
SECTION 3. This Act takes effect September 1, 2023.