Texas 2025 - 89th Regular

Texas Senate Bill SB1977 Compare Versions

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Version 2 (New)

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1	1	By: Kolkhorst S.B. No. 1977
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6	6	A BILL TO BE ENTITLED
7	7	AN ACT
8	8	relating to the recovery and reimbursement of certain expenses by
9	9	an electric utility or a water and sewer utility in a rate
10	10	proceeding.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Section 33.023, Utilities Code, is amended by
13	13	adding Subsection (c) to read as follows:
14	14	(c) For purposes of Subsection (b), the electric utility may
15	15	not reimburse the governing body of a municipality for any legal
16	16	expenses that the regulatory authority determines were incurred due
17	17	to the municipality:
18	18	(1) filing a frivolous or groundless discovery motion;
19	19	or
20	20	(2) engaging in:
21	21	(A) an act intended to harass, delay, or
22	22	needlessly increase the expense incurred for participating in the
23	23	proceeding; or
24	24	(B) conduct not in the public interest.
25	25	SECTION 2. Section 36.061, Utilities Code, is amended by
26	26	adding Subsections (b-1), (b-2), and (b-3) to read as follows:
27	27	(b-1) For purposes of Subsection (b)(2), the regulatory
28	28	authority may not allow as a cost or expense legal expenses incurred
29	29	by an electric utility for participating in a rate proceeding under
30	30	this title that exceed a total of:
31	31	(1) $500,000; and
32	32	(2) 50 percent of the legal expenses incurred by the
33	33	electric utility to participate in the proceeding that exceed
34	34	$500,000.
35	35	(b-2) For purposes of Subsection (b)(2), the regulatory
36	36	authority may not allow as a cost or expense legal expenses incurred
37	37	by an electric utility for participating in a rate proceeding under
38	38	this title that the regulatory authority determines are
39	39	attributable to the following conduct by the utility:
40	40	(1) filing a frivolous or groundless discovery motion;
41	41	or
42	42	(2) engaging in:
43	43	(A) an act intended to harass, delay, or
44	44	needlessly increase the expense incurred for participating in the
45	45	proceeding; or
46	46	(B) conduct not in the public interest.
47	47	(b-3) Notwithstanding Subsection (b-1), the regulatory
48	48	authority shall allow as a cost or expense legal expenses incurred
49	49	by an electric utility in a rate proceeding under this title in any
50	50	amount if the expenses were:
51	51	(1) attributable to conduct described by Subsection
52	52	(b-2) by a party to the rate proceeding who was a non-utility
53	53	intervenor; and
54	54	(2) reasonable.
55	55	SECTION 3. Section 13.084, Water Code, is amended to read as
56	56	follows:
57	57	Sec. 13.084. AUTHORITY OF GOVERNING BODY; COST
58	58	REIMBURSEMENT. (a) The governing body of any municipality or the
59	59	commissioners court of an affected county shall have the right to
60	60	select and engage rate consultants, accountants, auditors,
61	61	attorneys, engineers, or any combination of these experts to
62	62	conduct investigations, present evidence, advise and represent the
63	63	governing body, and assist with litigation on water and sewer
64	64	utility ratemaking proceedings. The water and sewer utility
65	65	engaged in those proceedings shall be required to reimburse the
66	66	governing body or the commissioners court for the reasonable costs
67	67	of those services and shall be allowed to recover those expenses
68	68	through its rates with interest during the period of recovery.
69	69	(b) For purposes of Subsection (a), the water and sewer
70	70	utility may not reimburse the governing body of a municipality for
71	71	any legal expenses that the regulatory authority determines were
72	72	incurred due to the municipality:
73	73	(1) filing a frivolous or groundless discovery motion;
74	74	or
75	75	(2) engaging in:
76	76	(A) an act intended to harass, delay, or
77	77	needlessly increase the expense incurred for participating in the
78	78	proceeding; or
79	79	(B) conduct not in the public interest.
80	80	SECTION 4. Section 13.185, Water Code, is amended by
81	81	amending Subsection (h) and adding Subsections (h-1) and (h-2) to
82	82	read as follows:
83	83	(h) The regulatory authority may not include for ratemaking
84	84	purposes:
85	85	(1) legislative advocacy expenses, whether made
86	86	directly or indirectly, including legislative advocacy expenses
87	87	included in trade association dues;
88	88	(2) costs of processing a refund or credit under this
89	89	subchapter; [or]
90	90	(3) any expenditure found by the regulatory authority
91	91	to be unreasonable, unnecessary, or not in the public interest,
92	92	including executive salaries, advertising expenses, [legal
93	93	expenses,] and civil penalties or fines; or
94	94	(4) legal expenses for a rate proceeding found by the
95	95	regulatory authority to be unreasonable, unnecessary, or not in the
96	96	public interest or that exceed a total of:
97	97	(A) $500,000; and
98	98	(B) 50 percent of the legal expenses incurred by
99	99	the utility for the proceeding that exceed $500,000.
100	100	(h-1) An expense is not considered to be in the public
101	101	interest under Subsection (h)(4) if the expense is attributable to
102	102	the following conduct by the utility:
103	103	(1) filing a frivolous or groundless discovery motion;
104	104	or
105	105	(2) engaging in an act intended to harass, delay, or
106	106	needlessly increase the expense incurred for participating in the
107	107	ratemaking proceeding.
108	108	(h-2) Notwithstanding Subsection (h)(4), the regulatory
109	109	authority shall allow for ratemaking purposes expenses incurred by
110	110	a utility in a ratemaking proceeding in any amount if the expenses
111	111	were:
112	112	(1) attributable to conduct described by Subsection
113	113	(h-1) by a party to the ratemaking proceeding who was a non-utility
114	114	intervenor; and
115	115	(2) reasonable.
116	116	SECTION 5. The changes in law made by this Act apply only to
117	117	a rate proceeding under Title 2, Utilities Code, or Chapter 13,
118	118	Water Code, as applicable, that begins on or after the effective
119	119	date of this Act. A rate proceeding that begins before the
120	120	effective date of this Act is governed by the law in effect on the
121	121	date the rate proceeding began, and the former law is continued in
122	122	effect for that purpose.
123	123	SECTION 6. This Act takes effect September 1, 2025.