Bill Text: TX SB841 | 2015-2016 | 84th Legislature | Introduced


Bill Title: Relating to rates of and certificates of convenience and necessity for certain non-ERCOT electric utilities.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2015-03-04 - Referred to Natural Resources & Economic Development [SB841 Detail]

Download: Texas-2015-SB841-Introduced.html
  84R7275 JXC-F
 
  By: Creighton S.B. No. 841
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to rates of and certificates of convenience and necessity
  for certain non-ERCOT electric utilities.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 36.209, Utilities Code, is amended to
  read as follows:
         Sec. 36.209.  COST RECOVERY AND RATE ADJUSTMENT STANDARDS
  AND PROCEDURES FOR [BY] CERTAIN NON-ERCOT UTILITIES [OF CERTAIN
  TRANSMISSION COSTS]. (a) This section applies only to an electric
  utility that operates solely outside of ERCOT [in areas of this
  state included in the Southeastern Electric Reliability Council,
  the Southwest Power Pool, or the Western Electricity Coordinating
  Council and that owns or operates transmission facilities].
         (b)  The commission, after notice and opportunity for
  hearing, shall [may] allow an electric utility to adjust its rates
  to ensure timely recovery of the utility's [recover on an annual
  basis its] reasonable and necessary costs [expenditures] for
  transmission investment [infrastructure improvement costs] and
  changes in wholesale transmission charges to the [electric] utility
  under a tariff approved by a federal regulatory authority, to the
  extent that the costs or charges have not otherwise been recovered.  
  The commission may allow the electric utility to recover only the
  costs and charges allocable to retail customers in the state and may
  not allow the [electric] utility to over-recover costs or charges.
  The standards and procedures described in Subsections (c)-(e)
  exclusively govern a rate adjustment described by this subsection.
         (c)  An electric utility may apply to adjust the utility's
  transmission rates on an interim basis not more than twice each
  calendar year to reflect changes in the utility's invested capital
  and wholesale transmission charges since the test year in the
  utility's most recent base rate case before the commission. An
  application is eligible for informal disposition under commission
  rules and Section 2001.056, Government Code. If the requirements
  for informal disposition are met, the presiding officer shall issue
  a notice of approval not later than the 60th day after the date a
  materially sufficient application is filed, unless good cause
  exists to extend the deadline or the presiding officer determines
  that the proceeding should be considered by the commission.
         (d)  If an electric utility elects to adjust the utility's
  transmission rates under this section, the new rates must reflect
  the addition and retirement of transmission facilities, including
  associated depreciation, federal income tax and other associated
  taxes, and the commission-authorized rate of return on the
  facilities. The commission shall use load growth during this
  process only for the purpose of establishing billing determinants
  to set new rates.
         (e)  An adjustment of an electric utility's transmission
  rates under this section is subject to reconciliation at the next
  complete review of the utility's transmission cost of service. As
  part of the complete review, the commission shall review the costs
  of the interim transmission plant additions to determine if the
  costs were reasonable and necessary. Any amounts resulting from an
  adjustment, including amounts associated with capital investment
  expenditures or transmission charges, that are found to have been
  unreasonable or unnecessary, plus the corresponding return and
  taxes, shall be refunded with carrying costs. For the period
  beginning on the date the over-recovery is determined to have begun
  and ending on the effective date of the electric utility's rates set
  in the complete review of the utility's transmission cost of
  service, carrying costs shall be calculated using the same rate of
  return that was applied to the transmission investments included in
  the adjustment. For the time period that begins on the effective
  date of the electric utility's rates set in the complete review of
  the utility's transmission cost of service, carrying costs shall be
  calculated using the utility's rate of return authorized in the
  complete review.
         (f)  In establishing the base rates of an electric utility
  under Subchapter C, or rates governed by Subsections (b)-(e) or  by
  Section 36.204, 36.205, or 36.210, the regulatory authority
  otherwise provided with jurisdiction over those rate proceedings
  shall determine the utility's revenue requirement based on, at the
  election of the utility:
               (1)  information submitted for a test year or other
  applicable historical period for rate proceedings described by this
  subsection; or
               (2)  updated information that reflects actual or
  estimated information for a period ending not later than the
  earlier of:
                     (A)  the last day of the seventh month after the
  end of the test year or other applicable historical period for rate
  proceedings described by this subsection; or
                     (B)  the 35th day after the date the applicable
  rate proceeding is filed.
         (g)  An electric utility that elects to update information as
  authorized by Subsection (f) is not precluded from proposing other
  known and measurable changes to the utility's historical rate
  information. If the utility proposes a known and measurable change
  to the information, the utility must provide a reasonable estimate
  or projection of the annualized effects of the change on the
  utility's operating expenses, invested capital, and revenues
  during the first 12 months the rates are expected to be in effect.
  For the purposes of this subsection, a known and measurable change
  is:
               (1)  anticipated to occur not later than during the
  first 12 months the rates are expected to be in effect;
               (2)  a change in the level of an electric utility's
  operating expenses, invested capital, or revenues; and
               (3)  a change whose existence is known, is reflected in
  a reasonable budget estimate, or is otherwise the subject of a
  reasonable estimate or projection.
         (h)  In a rate proceeding authorized by this subchapter or
  Subchapter C, notwithstanding Section 36.109(a), the regulatory
  authority with jurisdiction shall establish temporary rates on the
  application of the electric utility at a level that is 70 percent of
  the utility's requested increase, effective for consumption on and
  after the 35th day after the date the utility files to initiate the
  rate proceeding. The temporary rates shall remain in effect during
  any applicable suspension period until final rates become
  effective. On issuance of a final order that establishes new rates:
               (1)  money collected under the temporary rates in
  excess of the rate finally ordered is subject to refund; and
               (2)  the electric utility may surcharge bills to
  recover the amount by which the money collected under the temporary
  rates is less than the money that would have been collected under
  the rate finally ordered.
         (i)  If the electric utility does not apply for temporary
  rates under Subsection (h), the final rate set in a rate proceeding
  under this subchapter or Subchapter C shall be made effective for
  consumption on and after the 35th day after the date the utility
  filed to initiate the rate proceeding. The regulatory authority
  shall:
               (1)  require the electric utility to refund to
  customers money collected in excess of the rate finally ordered on
  or after the 35th day after the date the utility filed to initiate
  the rate proceeding; or
               (2)  authorize the electric utility to surcharge bills
  to recover the amount by which the money collected on or after the
  35th day after the date the utility filed to initiate the rate
  proceeding is less than the money that would have been collected
  under the rate finally ordered.
         (j)  An electric utility is entitled to file an application
  with the commission to recover, through a rate rider mechanism, a
  return of and on the prudent and reasonable capital expenditures,
  the reasonable and necessary operation and maintenance expenses,
  and the taxes associated with either the acquisition of an existing
  generating facility or the construction of a new generating
  facility. A rate proceeding under Subchapter C is not required to
  establish or adjust the rider. In a proceeding brought under this
  subsection to establish the initial rider, the commission shall
  issue a final order before the 181st day after the date the electric
  utility files the application with the commission. If the
  commission does not issue a final order before that date, the
  application is considered approved. An approved rider becomes
  effective on the date the generating facility begins to provide
  service to the electric utility's retail customers in this state,
  and continues in effect until the effective date of new base rates
  that allow the utility to recover the costs of the new generating
  facility from the utility's retail customers in this state. The
  electric utility may use both actual historical cost information
  and reasonable cost estimates as the basis for recovery under the
  initial rider. The rider must use the return on equity most
  recently approved by the commission in the electric utility's base
  rate proceedings. 
         (k)  In the case of the acquisition of an existing generating
  facility, an electric utility may file the application for approval
  of a rider described by Subsection (j) in the same proceeding in
  which it seeks issuance of a certificate of convenience and
  necessity for the facility under Chapter 37. Notwithstanding
  Section 36.053, the utility's recoverable invested capital shall be
  based on the purchase price for the newly acquired facility.  In the
  case of a newly constructed generating facility, the utility may
  file its application for approval of a rider described by
  Subsection (j) not earlier than 180 days before the expected
  commercial operation date of the new facility.
         (l)  Once established, a rider described by Subsection (j) is
  subject to annual adjustment, so that the rider reflects historical
  costs from the most recent 12-month period available before the
  filing of an application to make the adjustment. An adjustment
  under the rider takes effect as a temporary rate, subject to refund
  based on the final commission decision, not later than the 35th day
  after the date of filing of an application to make the adjustment.
  The commission shall take final action on an application to make an
  adjustment not later than the 90th day after the date of filing. If
  the commission does not take final action before that date, the
  application is considered approved.
         (m)  A rider described by Subsection (j) is subject to a
  periodic true-up. A true-up must cover at least a 12-month period.
  In a true-up proceeding, the electric utility shall reconcile the
  revenues recovered by the utility under the rider with the actual
  prudent, reasonable, and necessary level of costs, and the rider
  shall be further adjusted as necessary to reflect the outcome of the
  reconciliation.
         SECTION 2.  Subchapter B, Chapter 37, Utilities Code, is
  amended by adding Section 37.058 to read as follows:
         Sec. 37.058.  CERTIFICATE AND DETERMINATION ISSUED TO
  CERTAIN NON-ERCOT UTILITIES FOR GENERATING FACILITY. (a) This
  section applies only to an electric utility that operates solely
  outside of ERCOT.
         (b)  An electric utility may file with the commission a
  request that the commission:
               (1)  grant a certificate for an electric generating
  facility; 
               (2)  make a public interest determination for the
  purchase of an existing electric generating facility under Section
  14.101; or 
               (3)  both grant a certificate and make a determination.
         (c)  The commission may grant a request described by
  Subsection (b). 
         (d)  Notwithstanding any other law, in a proceeding
  involving the purchase of an existing electric generating facility,
  the commission shall issue a final order on a certificate for the
  facility or making a determination on the facility required by
  Section 14.101, as applicable, not later than the 181st day after
  the date a request for the certificate or determination is filed
  with the commission under Subsection (b). If the commission does
  not issue a final order before that date, the application is
  considered approved. For generating facilities granted a
  certificate under this subsection, notwithstanding Section 36.053,
  the utility's recoverable invested capital included in rates shall
  be based on the purchase price for the newly acquired facility.
         (e)  Notwithstanding any other law, in a proceeding
  involving a newly constructed generating facility, the commission
  shall issue a final order on a certificate for the facility not
  later than the 366th day after the date a request for the
  certificate is filed with the commission under Subsection (b). If
  the commission does not issue a final order before that date, the
  application is considered approved.
         SECTION 3.  The changes in law made by this Act apply only to
  a proceeding before the Public Utility Commission of Texas or other
  regulatory authority described by Section 11.003, Utilities Code,
  that commences on or after the effective date of this Act. A
  proceeding before the Public Utility Commission of Texas or other
  regulatory authority described by Section 11.003, Utilities Code,
  that commenced before the effective date of this Act is governed by
  the law in effect on the date the proceeding commenced, and that law
  is continued in effect for that purpose.
         SECTION 4.  This Act takes effect immediately if it receives
  a vote of two-thirds of all the members elected to each house, as
  provided by Section 39, Article III, Texas Constitution.  If this
  Act does not receive the vote necessary for immediate effect, this
  Act takes effect September 1, 2015.
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