| 1 | 1 | | 89R14642 CXP-D |
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| 2 | 2 | | By: Darby H.B. No. 4427 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | |
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| 6 | 6 | | |
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| 7 | 7 | | A BILL TO BE ENTITLED |
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| 8 | 8 | | AN ACT |
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| 9 | 9 | | relating to the recovery of certain expenses by an electric utility |
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| 10 | 10 | | or a water and sewer utility in a rate proceeding. |
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| 11 | 11 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 12 | 12 | | SECTION 1. Section 36.061, Utilities Code, is amended by |
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| 13 | 13 | | adding Subsection (b-1) to read as follows: |
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| 14 | 14 | | (b-1) For purposes of Subsection (b)(2), the regulatory |
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| 15 | 15 | | authority may not allow as a cost or expense legal expenses incurred |
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| 16 | 16 | | by an electric utility for participating in a rate proceeding under |
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| 17 | 17 | | this title that exceed the greater of $50,000 or 50 percent of the |
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| 18 | 18 | | total legal expenses incurred by the electric utility to |
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| 19 | 19 | | participate in the proceeding. |
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| 20 | 20 | | SECTION 2. Section 13.185(h), Water Code, is amended to |
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| 21 | 21 | | read as follows: |
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| 22 | 22 | | (h) The regulatory authority may not include for ratemaking |
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| 23 | 23 | | purposes: |
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| 24 | 24 | | (1) legislative advocacy expenses, whether made |
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| 25 | 25 | | directly or indirectly, including legislative advocacy expenses |
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| 26 | 26 | | included in trade association dues; |
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| 27 | 27 | | (2) costs of processing a refund or credit under this |
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| 28 | 28 | | subchapter; [or] |
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| 29 | 29 | | (3) any expenditure found by the regulatory authority |
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| 30 | 30 | | to be unreasonable, unnecessary, or not in the public interest, |
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| 31 | 31 | | including executive salaries, advertising expenses, [legal |
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| 32 | 32 | | expenses,] and civil penalties or fines; or |
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| 33 | 33 | | (4) legal expenses for a rate proceeding that exceed |
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| 34 | 34 | | the greater of $50,000 or 50 percent of the total legal expenses |
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| 35 | 35 | | incurred by the utility for the proceeding or any other legal |
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| 36 | 36 | | expenses found by the regulatory authority to be unreasonable, |
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| 37 | 37 | | unnecessary, or not in the public interest. |
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| 38 | 38 | | SECTION 3. The changes in law made by this Act apply only to |
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| 39 | 39 | | a rate proceeding under Chapter 36, Utilities Code, or Chapter 13, |
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| 40 | 40 | | Water Code, as applicable, that begins on or after the effective |
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| 41 | 41 | | date of this Act. A rate proceeding that begins before the |
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| 42 | 42 | | effective date of this Act is governed by the law in effect on the |
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| 43 | 43 | | date the rate proceeding began, and the former law is continued in |
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| 44 | 44 | | effect for that purpose. |
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| 45 | 45 | | SECTION 4. This Act takes effect September 1, 2025. |
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