| 1 | 1 | | By: Birdwell S.B. No. 2780 |
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| 2 | 2 | | |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | |
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| 6 | 6 | | A BILL TO BE ENTITLED |
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| 7 | 7 | | AN ACT |
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| 8 | 8 | | relating to the recovery of a gas utility's gross plant placed in |
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| 9 | 9 | | service not yet being recovered in rates. |
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| 10 | 10 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 11 | 11 | | SECTION 1. Chapter 104, Utilities Code, is amended by |
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| 12 | 12 | | adding Section 104.302 to read as follows: |
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| 13 | 13 | | Sec. 104.302. RECOVERY OF CERTAIN COSTS FOR GROSS PLANT. |
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| 14 | 14 | | (a) In this section: |
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| 15 | 15 | | (1) "Gross plant" means a gas utility's plant, |
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| 16 | 16 | | facilities, or equipment that has been placed in service. |
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| 17 | 17 | | (2) "Post in-service carrying costs" means the product |
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| 18 | 18 | | of unrecovered gross plant multiplied by a gas utility's pre-tax |
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| 19 | 19 | | weighted average cost of capital established in the railroad |
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| 20 | 20 | | commission's final order in the gas utility's most recent general |
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| 21 | 21 | | rate proceeding, compounded at the gas utility's pre-tax weighted |
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| 22 | 22 | | average cost of capital until recovery. |
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| 23 | 23 | | (3) "Unrecovered gross plant" means gross plant whose |
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| 24 | 24 | | cost is not yet being recovered in a gas utility's rates and not |
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| 25 | 25 | | already being deferred to a regulatory asset. |
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| 26 | 26 | | (b) A gas utility may defer for future recovery as a |
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| 27 | 27 | | regulatory asset the following: |
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| 28 | 28 | | (1) post in-service carrying costs ; |
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| 29 | 29 | | (2) depreciation associated with unrecovered gross |
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| 30 | 30 | | plant; |
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| 31 | 31 | | (3) ad valorem taxes associated with the unrecovered |
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| 32 | 32 | | gross plant; and |
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| 33 | 33 | | (4) incremental operations and maintenance expense |
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| 34 | 34 | | associated with the unrecovered gross plant and that is not being |
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| 35 | 35 | | recovered in rates. |
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| 36 | 36 | | (c) The regulatory asset established under Subsection (b) |
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| 37 | 37 | | shall be included in the railroad commission authorized cost |
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| 38 | 38 | | recovery mechanism under Section 104.301. |
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| 39 | 39 | | (d) Upon recovery in rates of the regulatory asset |
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| 40 | 40 | | established by a gas utility under Subsection (b), the gas utility |
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| 41 | 41 | | shall make appropriate accounting adjustments to reflect recovery |
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| 42 | 42 | | in rates. |
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| 43 | 43 | | (e) The costs included in the regulatory asset established by |
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| 44 | 44 | | a gas utility under Subsection (b) shall be reviewed by the railroad |
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| 45 | 45 | | commission in a general rate proceeding and are subject to refund to |
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| 46 | 46 | | the extent the railroad commission orders a disallowance. |
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| 47 | 47 | | SECTION 2. The Railroad Commission of Texas shall adopt |
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| 48 | 48 | | rules to implement Section 104.302, Utilities Code, as added by |
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| 49 | 49 | | this Act, not later than the 180th day after the effective date of |
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| 50 | 50 | | this Act. |
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| 51 | 51 | | SECTION 3. This Act applies only to a cost recovery |
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| 52 | 52 | | proceeding commenced on or after the effective date of this Act. A |
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| 53 | 53 | | cost recovery proceeding commenced before the effective date of |
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| 54 | 54 | | this Act is governed by the law in effect on the date the cost |
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| 55 | 55 | | recovery proceeding was commenced, and the former law is continued |
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| 56 | 56 | | in effect for that purpose. |
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| 57 | 57 | | SECTION 4. This Act takes effect immediately if it receives |
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| 58 | 58 | | a vote of two-thirds of all the members elected to each house, as |
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| 59 | 59 | | provided by Section 39, Article III, Texas Constitution. If this |
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| 60 | 60 | | Act does not receive the vote necessary for immediate effect, this |
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| 61 | 61 | | Act takes effect September 1, 2025. |
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