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A BILL TO BE ENTITLED
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AN ACT
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relating to periodic rate adjustment by electric utilities. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 35.004, Utilities Code, is amended by |
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amending Subsection (d) and adding Subsection (d-1) to read as |
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follows: |
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(d) The commission shall price wholesale transmission |
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services within ERCOT based on the postage stamp method of pricing |
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under which a transmission-owning utility's rate is based on the |
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ERCOT utilities' combined annual costs of transmission divided by |
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the total demand placed on the combined transmission systems of all |
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such transmission-owning utilities within a power region. An |
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electric utility subject to the freeze period imposed by Section |
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39.052 may treat transmission costs in excess of transmission |
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revenues during the freeze period as an expense for purposes of |
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determining annual costs in the annual report filed under Section |
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39.257. Notwithstanding Section 36.201, the commission may approve |
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wholesale rates that may be periodically adjusted to ensure timely |
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recovery of transmission investment and shall establish a schedule |
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that requires an electric utility to make periodic filings with the |
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commission to modify or review a rate charge by the electric |
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utility. The schedule may be established on the basis of the period |
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since the electric commission last reviewed the electric utility's |
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rate, whether the electric utility has earned materially more than |
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the utility's authorized rate of return as demonstrated by earnings |
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monitoring reports, or other criteria that the commission |
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determines is in the public interest. Notwithstanding Section |
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36.054(a), if the commission determines that conditions warrant the |
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action, the commission may authorize the inclusion of construction |
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work in progress in the rate base for transmission investment |
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required by the commission under Section 39.203(e). |
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(d-1) The commission shall adopt rules establishing rate |
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adjustments, on a periodic basis determined by the commission, to |
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reflect changed transmission cost for: |
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(1) depreciation; |
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(2) plant retirement; and |
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(3) other factors that reduce rates. |
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SECTION 2. The heading to Section 36.060, Utilities Code, |
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is amended to read as follows: |
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Sec. 36.060. UTILITY [CONSOLIDATED] INCOME TAX EXPENSES |
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[RETURNS]. |
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SECTION 3. Section 36.060, Utilities Code, is amended by |
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adding Subsection (d) to read as follows: |
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(d) Notwithstanding any other provision of this chapter, if |
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the income of an electric utility is not subject to corporate |
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federal income tax because of the corporate organization of the |
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utility and the utility's upstream owners, the commission may not |
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include federal tax on the income as an expense in setting the |
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utility's rates. |
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SECTION 4. Subchapter D, Chapter 36, Utilities Code, is |
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amended by adding Section 36.157 to read as follows: |
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Sec. 36.157. RATE REVIEW SCHEDULE. Notwithstanding any |
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other provision of this title, the commission shall establish a |
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schedule that requires an electric utility to make periodic filings |
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with the commission to modify or review a rate charged by the |
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electric utility. The schedule may be established on the basis of: |
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(1) the period since the electric commission last |
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reviewed the electric utility's rate; |
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(2) whether the electric utility has earned materially |
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more than the utility's authorized rate of return as demonstrated |
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by earnings monitoring reports; or |
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(3) other criteria that the commission determines is |
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in the public interest. |
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SECTION 5. Section 39.262(m), Utilities Code, is amended to |
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read as follows: |
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(m) The commission shall approve a transaction under |
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Subsection (l) if the commission finds that the transaction is in |
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the public interest. In making its determination, the commission |
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shall consider whether the transaction will adversely affect the |
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reliability of service, availability of service, or cost of service |
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of the electric utility or transmission and distribution |
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utility. The commission shall make the determination concerning a |
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transaction under this subsection not later than the 180th day |
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after the date the commission receives the relevant report. The |
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commission may extend the deadline provided by this subsection for |
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not more than 60 days if the commission determines the extension is |
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needed to evaluate additional information, to consider actions |
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taken by other jurisdictions concerning the transaction, to provide |
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for administrative efficiency, or for other good cause. If the |
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commission has not made a determination before the expiration of |
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the deadline provided by or extended under this subsection [181st
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day after that date], the transaction is considered approved. |
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SECTION 6. Section 39.915(b), Utilities Code, is amended to |
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read as follows: |
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(b) The commission shall approve a transaction under |
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Subsection (a) if the commission finds that the transaction is in |
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the public interest. In making its determination, the commission |
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shall consider whether the transaction will adversely affect the |
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reliability of service, availability of service, or cost of service |
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of the electric utility or transmission and distribution |
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utility. The commission shall make the determination concerning a |
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transaction under this subsection not later than the 180th day |
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after the date the commission receives the relevant report. The |
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commission may extend the deadline provided by this subsection for |
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not more than 60 days if the commission determines the extension is |
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needed to evaluate additional information, to consider actions |
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taken by other jurisdictions concerning the transaction, to provide |
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for administrative efficiency, or for other good cause. If the |
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commission has not made a determination before the expiration of |
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the deadline provided by or extended under this subsection [181st
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day after that date], the transaction is considered approved. |
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SECTION 7. Sections 36.210(h), (h-1), and (i), Utilities |
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Code, are repealed. |
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SECTION 8. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2017. |