HB2500 - Relating to certain proceedings by the Public Utility Commission of Texas regarding water or sewer service.

  89R5264 SCR-F     By: Spiller H.B. No. 2500       A BILL TO BE ENTITLED   AN ACT   relating to certain proceedings by the Public Utility Commission of   Texas regarding water or sewer service.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 13.183, Water Code, is amended by   amending Subsection (c) and adding Subsection (c-1) to read as   follows:          (c)  To ensure that retail customers receive a higher   quality, more affordable, or more reliable water or sewer service,   to encourage regionalization, or to maintain financially stable and   technically sound utilities, the regulatory authority, by rule or   ordinance, as appropriate, may adopt specific alternative   ratemaking methodologies for water or sewer rates to allow for more   timely and efficient cost recovery.  Appropriate alternative   ratemaking methodologies are the introduction of new customer   classes, the cash needs method, and phased and multi-step rate   changes.  The regulatory authority may also adopt system   improvement charges that may be periodically adjusted to ensure   timely recovery of infrastructure investment.   If the utility   commission is the appropriate regulatory authority, the utility   commission shall enter a final order on a request for a system   improvement charge under this subsection not later than the 60th   day after the date the utility commission determines that a   complete application for a system improvement charge has been   filed. The utility commission may extend the deadline for not more   than 15 days for good cause. The utility commission by rule shall   establish a schedule that requires all utilities that have   implemented a system improvement charge approved by the utility   commission to make periodic filings with the utility commission to   modify or review base rates charged by the utility. Overall   revenues determined according to an alternative ratemaking   methodology adopted under this section must provide revenues to the   utility that satisfy the requirements of Subsection (a).  The   regulatory authority may not approve rates under an alternative   ratemaking methodology unless the regulatory authority adopts the   methodology before the date the rate application was   administratively complete.           (c-1)     An application for a system improvement charge under   Subsection (c) may not be considered complete by the utility   commission unless, to substantiate each claimed eligible cost of a   utility's eligible plant that is not already included in the   applying utility's rates, the application includes:                 (1)  receipts;                 (2)  invoices;                 (3)  contracts; or                 (4)  other documentation of eligible costs.          SECTION 2.  Section 13.301(l), Water Code, is amended to   read as follows:          (l)  Notwithstanding any other provision of this section or   Section 13.302 , the utility commission by rule shall adopt a [ an   expedited ] process to expedite an application for the acquisition   of the stock or ownership interest under Section 13.302, or of   assets under this section, of a utility in receivership under   Section 13.412, a utility in supervision under Section 13.4131, or   a utility in temporary management under Section 13.4132, and, if   applicable, its certificated service area, by a Class A or Class B   utility.   The applicant must have been appointed as a temporary   manager or supervisor for the utility by the utility commission or   commission or have been appointed as a receiver for the utility at   the request of the utility commission or commission before filing   the application [ that allows a person appointed by the utility   commission or commission under Section 13.4132 as a temporary   manager of a utility, utility in receivership, or utility in   supervision, who is also an operator of a Class A or Class B utility   to apply for utility commission approval of the person's   acquisition of the stock, ownership interest, or assets of the   temporarily managed and operated utility, utility in receivership,   or utility in supervision, its facilities, and, if applicable, its   certificated service area ]. The [ expedited ] process must:                (1)  waive public notice requirements regardless of   whether the person elects to charge initial rates in accordance   with Section 13.3011 or use a voluntary valuation determined under   Section 13.305;                (2)  require approval of the acquisition transaction if   the transaction is considered to be in the public interest; and                (3)  provide that:                      (A)  the person's appointment is considered   sufficient to demonstrate adequate financial, managerial, and   technical capability for providing continuous and adequate service   to the service area to be acquired and any areas currently   certificated to the person; and                      (B)  all used and useful invested capital and just   and reasonable operations and maintenance costs incurred by the   person during the person's appointment as temporary manager and   operator of the utility, utility in receivership, or utility in   supervision to be acquired are considered to be a regulatory asset   for the person and are recoverable in the person's next   comprehensive rate proceeding or system improvement charge   application.          SECTION 3.  Subchapter H, Chapter 13, Water Code, is amended   by adding Section 13.3021 to read as follows:           Sec.   13.3021.     SALES, TRANSFERS, AND MERGERS FOR CERTAIN   RETAIL PUBLIC UTILITIES.   (a) The utility commission by rule shall   adopt an expedited process to authorize a municipally owned   utility, a county, a water supply or sewer service corporation, or a   district or authority created under Section 52, Article III, or   Section 59, Article XVI, Texas Constitution, to acquire the stock   or ownership interest under Section 13.302, or assets under Section   13.301, of a utility in receivership under Section 13.412, a   utility in supervision under Section 13.4131, or a utility in   temporary management under Section 13.4132, and, if applicable, its   certificated service area, in the manner provided by Sections   13.301 and 13.302.           (b)     The municipally owned utility, county, water supply or   sewer service corporation, district, or authority must have been   appointed as a temporary manager or supervisor for the utility by   the utility commission or commission or as a receiver for the   utility at the request of the utility commission or commission   before filing an acquisition application under this section.           (c)  The process must:                 (1)     be based on the expedited process adopted under   Section 13.301(l), except for any aspects of the process that   cannot be applied to an entity over which the utility commission   does not have original rate jurisdiction;                 (2)  waive public notice requirements;                 (3)     require approval of the acquisition transaction if   the transaction is considered to be in the public interest; and                 (4)     provide that the municipally owned utility's,   county's, water supply or sewer service corporation's, district's,   or authority's appointment is considered sufficient to demonstrate   adequate financial, managerial, and technical capability for   providing continuous and adequate service to the service area to be   acquired and any areas currently certificated to the municipally   owned utility, county, corporation, district, or authority.          SECTION 4.  Section 13.412(g), Water Code, is amended to   read as follows:          (g)  Notwithstanding Section 64.021, Civil Practice and   Remedies Code, a receiver appointed under this section may :                 (1)     be a person, a municipally owned utility, a   county, a water supply or sewer service corporation, or a district   or authority created under Section 52, Article III, or Section 59,   Article XVI, Texas Constitution; and                 (2)   seek approval from the utility commission and the   commission to acquire the water or sewer utility's facilities and   transfer the utility's certificate of convenience and necessity.   The receiver must apply in accordance with Subchapter H.          SECTION 5.  Section 13.4132, Water Code, is amended by   amending Subsection (a) and adding Subsection (a-1) to read as   follows:          (a)  The utility commission or the commission, after   providing to the utility notice and an opportunity to be heard by   the commissioners at a utility commission or commission meeting,   may authorize a willing person , municipally owned utility, county,   water supply or sewer service corporation, or district or authority   created under Section 52, Article III, or Section 59, Article XVI,   Texas Constitution, to temporarily manage and operate a utility if   the utility:                (1)  has discontinued or abandoned operations or the   provision of services;                (2)  has been or is being referred to the attorney   general for the appointment of a receiver under Section 13.412; or                (3)  provides retail water or sewer utility service   through fewer than 10,000 taps or connections and violates a final   order of the commission by failing to:                      (A)  provide system capacity that is greater than   the required raw water or groundwater production rate or the   anticipated daily demand of the system;                      (B)  provide a minimum pressure of 35 pounds per   square inch throughout the distribution system under normal   operating conditions; or                      (C)  maintain accurate or properly calibrated   testing equipment or other means of monitoring the effectiveness of   a chemical treatment or pathogen inactivation or removal process.           (a-1)     For the purposes of this section, a reference to a   person includes a municipally owned utility, county, water supply   or sewer service corporation, or district or authority created   under Section 52, Article III, or Section 59, Article XVI, Texas   Constitution.          SECTION 6.  Section 13.183(c), Water Code, as amended by   this Act, applies only to an application for system improvement   charges received by the Public Utility Commission of Texas on or   after the effective date of this Act. An application for system   improvement charges received before the effective date of this Act   is governed by the law in effect on the date the application is   filed, and the former law is continued in effect for that purpose.          SECTION 7.  This Act takes effect September 1, 2025.