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S.B. No. 1447
AN ACT
relating to including pension and other postemployment benefits in
the computation of rates for electric utilities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter B, Chapter 36, Utilities Code, is
amended by adding Section 36.065 to read as follows:
Sec. 36.065. PENSION AND OTHER POSTEMPLOYMENT BENEFITS.
(a) The regulatory authority shall include in the rates of an
electric utility expenses for pension and other postemployment
benefits, as determined by actuarial or other similar studies in
accordance with generally accepted accounting principles, in an
amount the regulatory authority finds reasonable. Expenses for
pension and other postemployment benefits include, in an amount
found reasonable by the regulatory authority, the benefits
attributable to the service of employees who were employed by the
predecessor integrated electric utility of an electric utility
before the utility's unbundling under Chapter 39 irrespective of
the business activity performed by the employee or the affiliate to
which the employee was transferred on or after the unbundling.
(b) Effective January 1, 2005, an electric utility may
establish one or more reserve accounts for expenses for pension and
other postemployment benefits. An electric utility shall
periodically record in the reserve account any difference between:
(1) the annual amount of pension and other
postemployment benefits approved as an operating expense in the
electric utility's last general rate proceeding or, if that amount
cannot be determined from the regulatory authority's order, the
amount recorded for pension and other postemployment benefits under
generally accepted accounting principles during the first year that
rates from the electric utility's last general rate proceeding are
in effect; and
(2) the annual amount of pension and other
postemployment benefits as determined by actuarial or other similar
studies that are chargeable to the electric utility's operating
expense.
(c) A surplus in the reserve account exists if the amount of
pension and other postemployment benefits under Subsection (b)(1)
is greater than the amount determined under Subsection (b)(2). A
shortage in the reserve account exists if the amount of pension and
other postemployment benefits under Subsection (b)(1) is less than
the amount determined under Subsection (b)(2).
(d) If a reserve account for pension and other
postemployment benefits is established, the regulatory authority
at a subsequent general rate proceeding shall:
(1) review the amounts recorded to the reserve account
to determine whether the amounts are reasonable expenses;
(2) determine whether the reserve account has a
surplus or shortage under Subsection (c); and
(3) subtract any surplus from or add any shortage to
the electric utility's rate base with the surplus or shortage
amortized over a reasonable time.
SECTION 2. 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, 2005.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 1447 passed the Senate on
April 14, 2005, by the following vote: Yeas 31, Nays 0; and that
the Senate concurred in House amendment on May 19, 2005, by the
following vote: Yeas 29, Nays 0.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 1447 passed the House, with
amendment, on May 13, 2005, by the following vote: Yeas 142,
Nays 0, two present not voting.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor