S.B. No. 1693
  relating to periodic rate adjustments by electric utilities.
         SECTION 1.  Subchapter E, Chapter 36, Utilities Code, is
  amended by adding Section 36.210 to read as follows:
         Sec. 36.210.  PERIODIC RATE ADJUSTMENTS.  (a)  The
  commission or a regulatory authority, on the petition of an
  electric utility, may approve a tariff or rate schedule in which a
  nonfuel rate may be periodically adjusted upward or downward, based
  on changes in the parts of the utility's invested capital, as
  described by Section 36.053, that are categorized as distribution
  plant, distribution-related intangible plant, and
  distribution-related communication equipment and networks in
  accordance with commission rules adopted after consideration of the
  uniform system of accounts prescribed by the Federal Energy
  Regulatory Commission.  A periodic rate adjustment must:
               (1)  be approved or denied in accordance with an
  expedited procedure that:
                     (A)  provides for appropriate updates of
                     (B)  allows for participation by the office and
  affected parties; and
                     (C)  extends for not less than 60 days;
               (2)  take into account changes in the number of an
  electric utility's customers and the effects, on a
  weather-normalized basis, that energy consumption and energy
  demand have on the amount of revenue recovered through the electric
  utility's base rates;
               (3)  be consistent with the manner in which costs for
  invested capital described by this subsection were allocated to
  each rate class, as approved by the commission, in an electric
  utility's most recent base rate statement of intent proceeding with
  changes to residential and commercial class rates reflected in
  volumetric charges to the extent that residential and commercial
  class rates are collected in that manner based on the electric
  utility's most recent base rate statement of intent proceeding;
               (4)  not diminish the ability of the commission or a
  regulatory authority, on its own motion or on complaint by an
  affected person as provided by Subchapter D, after reasonable
  notice and hearing, to change the existing rates of an electric
  utility for a service after finding that the rates are unreasonable
  or in violation of law;
               (5)  be applied by an electric utility on a system-wide
  basis; and
               (6)  be supported by the sworn statement of an
  appropriate employee of the electric utility that affirms that:
                     (A)  the filing is in compliance with the
  provisions of the tariff or rate schedule; and
                     (B)  the filing is true and correct to the best of
  the employee's knowledge, information, and belief.
         (b)  An electric utility in the ERCOT power region, or an
  unbundled electric utility outside the ERCOT power region in whose
  service area retail competition is available, that requests a
  periodic rate adjustment under this section shall:
               (1)  except as provided by Subsection (f)(3) and to the
  extent possible, implement simultaneously all nonfuel rates to be
  adjusted in a 12-month period that are charged by the utility to
  retail electric providers; and
               (2)  provide notice to retail electric providers of the
  approved rates not later than the 45th day before the date the rates
  take effect.
         (c)  A periodic rate adjustment approved under this section
  may not be used to adjust the portion of a nonfuel rate relating to
  the generation of electricity.
         (d)  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.
         (e)  A periodic rate adjustment approved under this section
  may not include indirect corporate costs or capitalized operations
  and maintenance expenses.
         (f)  Nothing in this section is intended to:
               (1)  conflict with a provision contained in a financing
  order issued under Subchapter I of this chapter or Subchapter G or
  J, Chapter 39;
               (2)  affect the limitation on the commission's
  jurisdiction under Section 32.002;
               (3)  include in a periodic rate adjustment authorized
  by this section costs adjusted under a transmission cost-of-service
  adjustment approved under Section 35.004(d);
               (4)  limit the jurisdiction of a municipality over the
  rates, operations, and services of an electric utility as provided
  by Section 33.001;
               (5)  limit the ability of a municipality to obtain a
  reimbursement under Section 33.023 for the reasonable cost of
  services of a person engaged in an activity described by that
  section; or
               (6)  prevent the commission from:
                     (A)  reviewing the investment costs included in a
  periodic rate adjustment or in the following comprehensive base
  rate proceeding to determine whether the costs were prudent,
  reasonable, and necessary; or
                     (B)  refunding to customers any amount improperly
  recovered through the periodic rate adjustments, with appropriate
  carrying costs.
         (g)  The commission shall adopt rules necessary to implement
  this section.  The rules must provide for:
               (1)  a procedure by which a tariff or rate schedule is
  to be reviewed and approved;
               (2)  filing requirements and discovery consistent with
  the expedited procedure described by Subsection (a)(1);
               (3)  an earnings monitoring report that allows the
  commission or regulatory authority to reasonably determine whether
  a utility is earning in excess of the utility's allowed return on
  investment as normalized for weather;
               (4)  denial of the electric utility's filing if the
  electric utility is earning more than the utility's authorized rate
  of return on investment, on a weather-normalized basis, at the time
  the periodic rate adjustment request is filed; and
               (5)  a mechanism by which the commission may refund
  customers any amounts determined to be improperly recovered through
  a periodic rate adjustment, including any interest on the amounts.
         (h)  The commission shall undertake a study and conduct a
  report analyzing any periodic rate adjustment established under
  this section.  The study shall be available for the legislature's
  review by January 31, 2017, so that the legislature may properly be
  informed as to the need to continue the commission's authority to
  allow periodic rate adjustments.  The report shall contain but
  shall not be limited to:
               (1)  an analysis of all periodic rate adjustments
  approved by the commission;
               (2)  an analysis of the amounts in real dollars and
  percentages of the approved amounts by the commission and the
  effects on all classes of ratepayers;
               (3)  the costs savings, if any, realized by all parties
  by utilizing periodic rate adjustment as opposed to ratemaking
               (4)  an analysis on distribution costs included in
  periodic rate adjustments, and their appropriateness for inclusion
  in periodic rate adjustments; and
               (5)  an analysis submitted by the office on the effects
  of periodic rate adjustments.
         (i)  This section expires January 1, 2017.
         SECTION 2.  The Public Utility Commission of Texas shall
  adopt rules as necessary to implement Section 36.210, Utilities
  Code, as added by this Act, not later than the 120th day after the
  effective date of this Act.
         SECTION 3.  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, 2011.
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
         I hereby certify that S.B. No. 1693 passed the Senate on
  April 26, 2011, by the following vote: Yeas 30, Nays 1; and that
  the Senate concurred in House amendments on May 17, 2011, by the
  following vote: Yeas 30, Nays 1.
  Secretary of the Senate    
         I hereby certify that S.B. No. 1693 passed the House, with
  amendments, on May 10, 2011, by the following vote: Yeas 140,
  Nays 3, one present not voting.
  Chief Clerk of the House