S.B. No. 735
 
 
 
 
AN ACT
  relating to periodic rate adjustment by and to certain transactions
  involving electric utilities.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subchapter D, Chapter 36, Utilities Code, is
  amended by adding Section 36.157 to read as follows:
         Sec. 36.157.  RATE REVIEW SCHEDULE.  (a)  This section
  applies only to an electric utility, other than a river authority,
  that operates solely inside ERCOT.
         (b)  Notwithstanding any other provision of this title, not
  later than June 1, 2018, the commission by rule shall establish a
  schedule that requires an electric utility to make periodic filings
  with the commission to modify or review base rates charged by the
  electric utility.  The schedule may be established on the basis of:
               (1)  the period since the commission entered the
  commission's final order in the electric utility's most recent base
  rate proceeding;
               (2)  whether the electric utility has earned materially
  more than the utility's authorized rate of return on equity as
  demonstrated by earnings monitoring reports; or
               (3)  other criteria that the commission determines is
  in the public interest.
         (c)  The commission shall extend the date for the proceeding
  required by Subsection (b) by one year on a year-to-year basis if,
  180 days before the date the proceeding is required, the electric
  utility's most recent earnings monitoring report shows the electric
  utility is earning, on a weather-normalized basis, less than 50
  basis points above:
               (1)  for a transmission and distribution utility, the
  average of the most recent commission-approved rate of return on
  equity for each transmission and distribution utility with 175,000
  or more metered customers; and
               (2)  for a transmission-only utility, the average of
  the most recent commission-approved rate of return on equity for
  each transmission-only utility.
         (d)  The commission may extend the date for the proceeding
  required by Subsection (b) for good cause shown or because of
  resource constraints of the commission.
         (e)  This section does not limit the ability of a regulatory
  authority to initiate a base rate proceeding at any time under this
  title.
         SECTION 2.  Section 36.210, Utilities Code, is amended by
  amending Subsection (d) and adding Subsection (d-1) to read as
  follows:
         (d)  Except as provided by Subsection (d-1), an [An] electric
  utility may adjust the utility's rates under this section not more
  than once per year and not more than four times between
  comprehensive base rate proceedings.
         (d-1)  For an electric utility subject to Section 36.157,
  beginning on the effective date of the schedule adopted by the
  commission under Section 36.157(b), the electric utility may adjust
  the utility's rates under this section more than four times between
  base rate proceedings.
         SECTION 3.  Section 39.262(m), Utilities Code, is amended to
  read as follows:
         (m)  The commission shall approve a transaction under
  Subsection (l) if the commission finds that the transaction is in
  the public interest. In making its determination, the commission
  shall consider whether the transaction will adversely affect the
  reliability of service, availability of service, or cost of service
  of the electric utility or transmission and distribution utility.  
  The commission shall make the determination concerning a
  transaction under this subsection not later than the 180th day
  after the date the commission receives the relevant report. The
  commission may extend the deadline provided by this subsection for
  not more than 60 days if the commission determines the extension is
  needed to evaluate additional information, to consider actions
  taken by other jurisdictions concerning the transaction, to provide
  for administrative efficiency, or for other good cause. If the
  commission has not made a determination before the expiration of
  the deadline provided by or extended under this subsection [181st
  day after that date], the transaction is considered approved.
         SECTION 4.  Section 39.915(b), Utilities Code, is amended to
  read as follows:
         (b)  The commission shall approve a transaction under
  Subsection (a) if the commission finds that the transaction is in
  the public interest. In making its determination, the commission
  shall consider whether the transaction will adversely affect the
  reliability of service, availability of service, or cost of service
  of the electric utility or transmission and distribution utility.  
  The commission shall make the determination concerning a
  transaction under this subsection not later than the 180th day
  after the date the commission receives the relevant report. The
  commission may extend the deadline provided by this subsection for
  not more than 60 days if the commission determines the extension is
  needed to evaluate additional information, to consider actions
  taken by other jurisdictions concerning the transaction, to provide
  for administrative efficiency, or for other good cause. If the
  commission has not made a determination before the expiration of
  the deadline provided by or extended under this subsection [181st
  day after that date], the transaction is considered approved.
         SECTION 5.  Sections 36.210(h), (h-1), and (i), Utilities
  Code, are repealed.
         SECTION 6.  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, 2017.
 
 
 
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
         I hereby certify that S.B. No. 735 passed the Senate on
  April 19, 2017, by the following vote:  Yeas 31, Nays 0.
 
 
  ______________________________
  Secretary of the Senate    
 
         I hereby certify that S.B. No. 735 passed the House on
  May 17, 2017, by the following vote:  Yeas 142, Nays 1, two
  present not voting.
 
 
  ______________________________
  Chief Clerk of the House   
 
 
 
  Approved:
 
  ______________________________ 
              Date
 
 
  ______________________________ 
            Governor