Texas 2023 - 88th Regular

Texas Senate Bill SB1111 Compare Versions

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1	1	88R3204 JXC-F
2	2	By: Schwertner S.B. No. 1111
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to transmission and distribution system resiliency
8	8	planning by and cost recovery for electric utilities.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. The legislature finds that:
11	11	(1) extreme weather conditions, including high winds,
12	12	lightning, flooding, and freezes, can cause extraordinary damage to
13	13	electrical transmission and distribution facilities, resulting in
14	14	power outages;
15	15	(2) it is in the state's interest to promote the use of
16	16	resiliency measures to enable electrical transmission and
17	17	distribution infrastructure to withstand extreme weather
18	18	conditions, including hardening electrical transmission and
19	19	distribution facilities, undergrounding certain electrical
20	20	distribution lines, lightning mitigation measures, flood
21	21	mitigation measures, information technology and cyber security
22	22	measures, vegetation management, and wildfire mitigation and
23	23	response;
24	24	(3) protecting electrical transmission and
25	25	distribution infrastructure from extreme weather conditions can
26	26	effectively reduce system restoration costs to and outage times for
27	27	customers and improve system resiliency and overall service
28	28	reliability for customers;
29	29	(4) it is in the state's interest for each electric
30	30	utility to seek to mitigate system restoration costs to and outage
31	31	times for customers when developing plans to enhance electrical
32	32	transmission and distribution infrastructure storm resiliency; and
33	33	(5) all customers benefit from reduced system
34	34	restoration costs.
35	35	SECTION 2. Subchapter D, Chapter 38, Utilities Code, is
36	36	amended by adding Section 38.078 to read as follows:
37	37	Sec. 38.078. TRANSMISSION AND DISTRIBUTION SYSTEM
38	38	RESILIENCY PLAN AND COST RECOVERY. (a) In this section, "plan"
39	39	means a transmission and distribution system resiliency plan
40	40	described by Subsection (b).
41	41	(b) An electric utility may file, in a manner authorized by
42	42	commission rule, a plan to enhance the resiliency of the utility's
43	43	transmission and distribution system through at least one of the
44	44	following methods:
45	45	(1) hardening electrical transmission and
46	46	distribution facilities;
47	47	(2) undergrounding certain electrical distribution
48	48	lines;
49	49	(3) lightning mitigation measures;
50	50	(4) flood mitigation measures;
51	51	(5) information technology and cyber security
52	52	measures;
53	53	(6) vegetation management; or
54	54	(7) wildfire mitigation and response.
55	55	(c) A plan must explain the systematic approach the electric
56	56	utility will use to carry out the plan during at least a three-year
57	57	period.
58	58	(d) In determining whether to approve a plan filed under
59	59	this section, the commission shall consider:
60	60	(1) the extent to which the plan is expected to enhance
61	61	system resiliency, including whether the plan prioritizes areas of
62	62	lower performance; and
63	63	(2) the estimated costs of implementing the measures
64	64	proposed in the plan.
65	65	(e) Not later than the 180th day after an electric utility
66	66	files a plan under Subsection (b) that complies with any applicable
67	67	commission rules, the commission shall by order approve, approve
68	68	with modification, or deny the plan. The commission may not approve
69	69	a plan if the commission determines that approving the plan is not
70	70	in the public interest. If the commission does not issue an order
71	71	by the 180th day, the plan and any associated rider described by
72	72	Subsection (i) are considered to have been approved.
73	73	(f) If the commission denies the plan, the denial is not
74	74	considered to be a finding of the prudence or imprudence of a
75	75	measure or cost in the plan for the purposes of Chapter 36 or this
76	76	chapter.
77	77	(g) An electric utility for which the commission has
78	78	approved a plan under this section may request that the commission
79	79	review an updated plan submitted by the electric utility. The
80	80	updated plan must comply with any applicable commission rules and
81	81	take effect on a date that is not earlier than the third anniversary
82	82	of the approval of the utility's most recently approved plan. The
83	83	commission shall review and approve, modify, or deny the updated
84	84	plan in the manner provided by Subsections (d), (e), and (f).
85	85	(h) An electric utility's implementation of a plan approved
86	86	under this section may not be considered imprudent for the purposes
87	87	of Chapter 36 or this chapter. If the commission determines that
88	88	the costs to implement an approved plan were prudently incurred,
89	89	those costs are not subject to disallowance for exceeding the
90	90	estimates in the plan.
91	91	(i) Notwithstanding any other law, an electric utility may
92	92	file with a plan an application for a rider to recover all or a
93	93	portion of the estimated costs relating to the electric utility's
94	94	implementation of the plan. If the commission approves the plan,
95	95	the commission shall determine the appropriate terms of the rider
96	96	in the approval order. A rider approved under this subsection must
97	97	allow the electric utility to begin recovering the levelized cost
98	98	of implementing the approved plan at the time the plan is first
99	99	implemented.
100	100	(j) As part of a review described by Subsection (g), the
101	101	commission shall reconcile the rider to determine the electric
102	102	utility's reasonably and prudently incurred plan costs.
103	103	(k) If an electric utility that files a plan with the
104	104	commission does not apply for a rider under Subsection (i), the
105	105	utility may defer all or a portion of the costs relating to the
106	106	implementation of the plan for future recovery as a regulatory
107	107	asset, including carrying costs at the utility's weighted average
108	108	cost of capital established in the commission's final order in the
109	109	utility's most recent base rate proceeding, and use commission
110	110	authorized cost recovery alternatives under Sections 35.004,
111	111	36.209, and 36.210 or another general rate proceeding.
112	112	(l) Plan costs considered by the commission to be reasonable
113	113	and prudent may not include costs recovered through the electric
114	114	utility's base rates and must be allocated to customer classes
115	115	pursuant to the rate design most recently approved by the
116	116	commission. If a capital investment is recoverable as a plan cost,
117	117	the electric utility may recover all reasonable and prudent costs
118	118	associated with the investment, including the annual depreciation
119	119	expense related to the investment calculated at the utility's
120	120	currently approved depreciation rates, the after-tax return on the
121	121	undepreciated balance of the investment calculated using the rate
122	122	of return approved by the commission in the utility's last
123	123	comprehensive base rate proceeding, and federal income tax and
124	124	other taxes related to the investment.
125	125	(m) An electric utility for which the commission has
126	126	approved a plan under this section is not required to submit to the
127	127	commission during the period in which the plan is in effect any
128	128	annual report required by Section 38.005 or 38.101 or by commission
129	129	rule adopted under those sections. This subsection does not apply
130	130	to an annual service quality report required by commission rule.
131	131	SECTION 3. The Public Utility Commission of Texas shall
132	132	adopt rules to implement Section 38.078, Utilities Code, as added
133	133	by this Act, not later than the 180th day after the effective date
134	134	of this Act.
135	135	SECTION 4. This Act takes effect immediately if it receives
136	136	a vote of two-thirds of all the members elected to each house, as
137	137	provided by Section 39, Article III, Texas Constitution. If this
138	138	Act does not receive the vote necessary for immediate effect, this
139	139	Act takes effect September 1, 2023.