Relating to the recovery of a gas utility's gross plant placed in service not yet being recovered in rates.
Impact
The implications of SB2780 on state laws are significant in that it establishes a mechanism for gas utilities to recover various costs related to their gross plant that have not yet been passed on to consumers. This includes carrying costs, depreciation, and certain operational expenses. It presents a structured approach for utilities to manage their rate recovery processes, which may ultimately affect how rates are set for consumers in the long term. The bill mandates that these costs be reviewed by the Railroad Commission, reinforcing the regulatory framework governing utility rates in Texas.
Summary
Senate Bill 2780 (SB2780) is legislation that addresses the recovery of costs associated with a gas utility's gross plant that has been placed in service but is not yet being recovered through customer rates. The bill introduces a new section to the Utilities Code, specifically Sec. 104.302, defining terms such as 'gross plant' and 'unrecovered gross plant'. Additionally, it outlines provisions that allow gas utilities to defer certain costs as regulatory assets which are critical for their financial management and rate-making processes.
Contention
Notably, the bill highlights a shift towards providing gas utilities with more leeway in financial recovery, which may raise concerns among consumer advocacy groups about potential rate increases. The provision allowing for the accumulation of regulatory assets raises questions about accountability and transparency in how utilities manage their costs. There may be contention surrounding the effectiveness of the Railroad Commission in overseeing these regulatory asset evaluations, especially with regard to protecting consumer interests while balancing the operational needs of gas utilities.
Relating to the establishment of the Texas Energy Insurance Program and other funding mechanisms to support the construction and operation of electric generating facilities.