Texas 2025 - 89th Regular

Texas Senate Bill SB740 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	By: Perry, et al. S.B. No. 740
2		-	(Spiller)
	1	+	By: Perry, Eckhardt, West S.B. No. 740
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7	6		A BILL TO BE ENTITLED
8	7		AN ACT
9	8		relating to certain proceedings by the Public Utility Commission of
10	9		Texas regarding water or sewer service.
11	10		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	11		SECTION 1. Section 13.002, Water Code, is amended by adding
13	12		Subdivision (16-a) to read as follows:
14	13		(16-a) "Public utility agency" means a public utility
15	14		agency created under Chapter 572, Local Government Code.
16	15		SECTION 2. Section 13.183, Water Code, is amended by
17	16		amending Subsection (c) and adding Subsections (c-1), (c-2), (c-3),
18	17		and (c-4) to read as follows:
19	18		(c) To ensure that retail customers receive a higher
20	19		quality, more affordable, or more reliable water or sewer service,
21	20		to encourage regionalization, or to maintain financially stable and
22	21		technically sound utilities, the regulatory authority, by rule or
23	22		ordinance, as appropriate, may adopt specific alternative
24	23		ratemaking methodologies for water or sewer rates to allow for more
25	24		timely and efficient cost recovery. Appropriate alternative
26	25		ratemaking methodologies are the introduction of new customer
27	26		classes, the cash needs method, and phased and multi-step rate
28	27		changes. The regulatory authority may also adopt system
29	28		improvement charges that may be periodically adjusted to ensure
30	29		timely recovery of infrastructure investment. If the utility
31	30		commission is the appropriate regulatory authority, the utility
32	31		commission shall enter a final order on a request for a system
33	32		improvement charge under this subsection not later than the 60th
34	33		day after the date the utility commission determines that a
35	34		complete application for a system improvement charge has been
36	35		filed. The utility commission may extend the deadline for not more
37	36		than 15 days for good cause. The utility commission by rule shall
38	37		establish a schedule that requires all utilities that have
39	38		implemented a system improvement charge approved by the utility
40	39		commission to make periodic filings with the utility commission to
41	40		modify or review base rates charged by the utility. Overall
42	41		revenues determined according to an alternative ratemaking
43	42		methodology adopted under this section must provide revenues to the
44	43		utility that satisfy the requirements of Subsection (a). The
45	44		regulatory authority may not approve rates under an alternative
46	45		ratemaking methodology unless the regulatory authority adopts the
47	46		methodology before the date the rate application was
48	47		administratively complete.
49	48		(c-1) The utility commission shall by rule:
50	49		(1) establish the information required for an
51	50		application for a system improvement charge to be considered
52	51		complete by the utility commission under this section, which must
53	52		include the documentation listed in Subsection (c-2); and
54	53		(2) prescribe a standard form for an application to
55	54		the utility commission for a system improvement charge under
56	55		Subsection (c).
57	56		(c-2) An application for a system improvement charge under
58	57		Subsection (c) may not be considered complete by the utility
59	58		commission unless, to substantiate each claimed eligible cost of a
60	59		utility's eligible plant that is not already included in the
61	60		applying utility's rates, the application includes:
62	61		(1) receipts;
63	62		(2) invoices;
64	63		(3) contracts; or
65	64		(4) other documentation of eligible costs.
66	65		(c-3) An application for a system improvement charge under
67	66		Subsection (c) may not be considered complete by the utility
68	67		commission before the 30th day after the date the application is
69	68		filed with the utility commission.
70	69		(c-4) At the time an applicant files an application for a
71	70		system improvement charge under Subsection (c) with the utility
72	71		commission, the applicant shall provide a copy of the application
73	72		to the Office of Public Utility Counsel. The utility commission
74	73		shall allow the office to comment on the application not later than
75	74		the 30th day after the date the application is filed. The utility
76	75		commission shall provide to the office, at no cost and in electronic
77	76		form, any data related to the application held by the commission.
78	77		Information provided to the office under this subsection that is
79	78		confidential and not subject to disclosure by the utility
80	79		commission under Chapter 552, Government Code, or other law is
81	80		confidential and not subject to disclosure by the office.
82	81		SECTION 3. Section 13.301(l), Water Code, is amended to
83	82		read as follows:
84	83		(l) Notwithstanding any other provision of this section or
85	84		Section 13.302, the utility commission by rule shall adopt a [an
86	85		expedited] process to expedite an application for the acquisition
87	86		of the stock or ownership interest under Section 13.302, or of
88	87		assets under this section, of a utility in receivership under
89	88		Section 13.412, a utility in supervision under Section 13.4131, or
90	89		a utility in temporary management under Section 13.4132, and, if
91	90		applicable, its certificated service area, by a Class A or Class B
92	91		utility. The applicant must have been appointed as a temporary
93	92		manager or supervisor for the utility by the utility commission or
94	93		commission or have been appointed as a receiver for the utility at
95	94		the request of the utility commission or commission before filing
96	95		the application [that allows a person appointed by the utility
97	96		commission or commission under Section 13.4132 as a temporary
98	97		manager of a utility, utility in receivership, or utility in
99	98		supervision, who is also an operator of a Class A or Class B utility
100	99		to apply for utility commission approval of the person's
101	100		acquisition of the stock, ownership interest, or assets of the
102	101		temporarily managed and operated utility, utility in receivership,
103	102		or utility in supervision, its facilities, and, if applicable, its
104	103		certificated service area]. The [expedited] process must:
105	104		(1) waive public notice requirements regardless of
106	105		whether the applicant [person] elects to charge initial rates in
107	106		accordance with Section 13.3011 or use a voluntary valuation
108	107		determined under Section 13.305;
109	108		(2) require approval of the acquisition transaction if
110	109		the transaction is considered to be in the public interest; and
111	110		(3) provide that:
112	111		(A) the applicant's [person's] appointment is
113	112		considered sufficient to demonstrate adequate financial,
114	113		managerial, and technical capability for providing continuous and
115	114		adequate service to the service area to be acquired and any areas
116	115		currently certificated to the applicant [person]; and
117	116		(B) all used and useful invested capital and just
118	117		and reasonable operations and maintenance costs incurred by the
119	118		applicant [person] during the applicant's [person's] appointment as
120	119		temporary manager and operator of the utility, utility in
121	120		receivership, or utility in supervision to be acquired are
122	121		considered to be a regulatory asset for the applicant [person] and
123	122		are recoverable in the applicant's [person's] next comprehensive
124	123		rate proceeding or system improvement charge application.
125	124		SECTION 4. Subchapter H, Chapter 13, Water Code, is amended
126	125		by adding Section 13.3021 to read as follows:
127	126		Sec. 13.3021. SALES, TRANSFERS, AND MERGERS FOR CERTAIN
128	127		RETAIL PUBLIC UTILITIES. (a) The utility commission by rule shall
129	128		adopt an expedited process to authorize a municipally owned
130	129		utility, a county, a water supply or sewer service corporation, a
131	130		public utility agency, or a district or authority created under
132	131		Section 52, Article III, or Section 59, Article XVI, Texas
133	132		Constitution, to acquire the stock or ownership interest under
134	133		Section 13.302, or assets under Section 13.301, of a utility in
135	134		receivership under Section 13.412, a utility in supervision under
136	135		Section 13.4131, or a utility in temporary management under Section
137	136		13.4132, and, if applicable, its certificated service area, in the
138	137		manner provided by Sections 13.301 and 13.302.
139	138		(b) The municipally owned utility, county, water supply or
140	139		sewer service corporation, public utility agency, district, or
141	140		authority must have been appointed as a temporary manager or
142	141		supervisor for the utility by the utility commission or commission
143	142		or as a receiver for the utility at the request of the utility
144	143		commission or commission before filing an acquisition application
145	144		under this section.
146	145		(c) The process must:
147	146		(1) be based on the expedited process adopted under
148	147		Section 13.301(l), except for any aspects of the process that
149	148		cannot be applied to an entity over which the utility commission
150	149		does not have original rate jurisdiction;
151	150		(2) waive public notice requirements;
152	151		(3) require approval of the acquisition transaction if
153	152		the transaction is considered to be in the public interest; and
154	153		(4) provide that the municipally owned utility's,
155	154		county's, water supply or sewer service corporation's, public
156	155		utility agency's, district's, or authority's appointment is
157	156		considered sufficient to demonstrate adequate financial,
158	157		managerial, and technical capability for providing continuous and
159	158		adequate service to the service area to be acquired and any areas
160	159		currently certificated to the municipally owned utility, county,
161	160		corporation, public utility agency, district, or authority.
162	161		SECTION 5. Section 13.412(g), Water Code, is amended to
163	162		read as follows:
164	163		(g) Notwithstanding Section 64.021, Civil Practice and
165	164		Remedies Code, a receiver appointed under this section may:
166	165		(1) be a person, a municipally owned utility, a
167	166		county, a water supply or sewer service corporation, a public
168	167		utility agency, or a district or authority created under Section
169	168		52, Article III, or Section 59, Article XVI, Texas Constitution;
170	169		and
171	170		(2) seek approval from the utility commission and the
172	171		commission to acquire the water or sewer utility's facilities and
173	172		transfer the utility's certificate of convenience and necessity.
174	173		The receiver must apply in accordance with Subchapter H.
175	174		SECTION 6. Section 13.4132, Water Code, is amended by
176	175		amending Subsection (a) and adding Subsection (a-1) to read as
177	176		follows:
178	177		(a) The utility commission or the commission, after
179	178		providing to the utility notice and an opportunity to be heard by
180	179		the commissioners at a utility commission or commission meeting,
181	180		may authorize a willing person, municipally owned utility, county,
182	181		water supply or sewer service corporation, public utility agency,
183	182		or district or authority created under Section 52, Article III, or
184	183		Section 59, Article XVI, Texas Constitution, to temporarily manage
185	184		and operate a utility if the utility:
186	185		(1) has discontinued or abandoned operations or the
187	186		provision of services;
188	187		(2) has been or is being referred to the attorney
189	188		general for the appointment of a receiver under Section 13.412; or
190	189		(3) provides retail water or sewer utility service
191	190		through fewer than 10,000 taps or connections and violates a final
192	191		order of the commission by failing to:
193	192		(A) provide system capacity that is greater than
194	193		the required raw water or groundwater production rate or the
195	194		anticipated daily demand of the system;
196	195		(B) provide a minimum pressure of 35 pounds per
197	196		square inch throughout the distribution system under normal
198	197		operating conditions; or
199	198		(C) maintain accurate or properly calibrated
200	199		testing equipment or other means of monitoring the effectiveness of
201	200		a chemical treatment or pathogen inactivation or removal process.
202	201		(a-1) For the purposes of this section, a reference to a
203	202		person includes a municipally owned utility, county, water supply
204	203		or sewer service corporation, public utility agency, or district or
205	204		authority created under Section 52, Article III, or Section 59,
206	205		Article XVI, Texas Constitution.
207	206		SECTION 7. (a) The Public Utility Commission of Texas shall
208	207		adopt the rules required by Section 13.183(c-1), Water Code, as
209	208		added by this Act, not later than September 1, 2026.
210	209		(b) Section 13.183(c), Water Code, as amended by this Act,
211	210		and Section 13.183(c-2), Water Code, as added by this Act, apply
212	211		only to an application for system improvement charges received by
213	212		the Public Utility Commission of Texas on or after September 1,
214	213		2026. An application for system improvement charges received
215	214		before September 1, 2026, is governed by the law in effect on the
216	215		date the application is filed, and the former law is continued in
217	216		effect for that purpose.
218	217		SECTION 8. This Act takes effect September 1, 2025.