HB3157 - Relating to interim rates charged by electric utilities during a rate suspension period.

  89R23321 SCR-F     By: Darby H.B. No. 3157       A BILL TO BE ENTITLED   AN ACT   relating to interim rates charged by electric utilities during a   rate suspension period.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 36.062, Utilities Code, is amended to   read as follows:          Sec. 36.062.  CONSIDERATION OF CERTAIN EXPENSES.  The   regulatory authority may not consider for ratemaking purposes:                (1)  an expenditure for legislative advocacy, made   directly or indirectly, including legislative advocacy expenses   included in trade association dues;                (2)  a payment made to cover costs of an accident,   equipment failure, or negligence at a utility facility owned by a   person or governmental entity not selling power in this state,   other than a payment made under an insurance or risk-sharing   arrangement executed before the date of loss;                (3)  an expenditure for costs of processing a refund or   credit under Section 36.1091 or 36.110 , as applicable ; or                (4)  any other expenditure, including an executive   salary, advertising expense, legal expense, or civil penalty or   fine, the regulatory authority finds to be unreasonable,   unnecessary, or not in the public interest.          SECTION 2.  Section 36.109, Utilities Code, is amended by   adding Subsection (c) to read as follows:           (c)     This section does not apply to an electric utility that   operates solely inside ERCOT.          SECTION 3.  Subchapter C, Chapter 36, Utilities Code, is   amended by adding Section 36.1091 to read as follows:           Sec.   36.1091.     INTERIM RATES. (a)   This section applies only   to an electric utility that operates solely inside ERCOT.           (b)     If the regulatory authority orders a rate suspension   under Section 36.108, on the 90th day after the date the electric   utility files a statement of intent under Section 36.102, and   subject to Subsection (e), the utility shall put an interim rate   into effect throughout the area in which the utility sought to   change its rates.   The interim rate must be calculated using:                 (1)     the utility's proposed test year cost of debt, rate   base, and expenses, including depreciation expense at the current   authorized depreciation rates;                 (2)     the return on equity, or debt service coverage,   for the utility established in the commission's final order in the   utility's most recent base rate proceeding;                 (3)     rate base or expense items the same in nature and   kind as established in the commission's final order in the utility's   most recent base rate proceeding; and                 (4)     the utility's current class cost allocation   methodology and rate design.           (c)     An electric utility that implements an interim rate for   distribution services under this section must give notice to each   retail electric provider in the utility's service area at least 45   days before the effective date of the interim rate required by   Subsection (b).           (d)     The electric utility shall refund money collected under   the interim rates in excess of the rate finally ordered with   interest on that money at the utility's last approved rate of   return.           (e)     The commission may modify or deny an interim rate   charged under this section on a finding of exigent circumstances.          SECTION 4.  Section 36.110, Utilities Code, is amended by   adding Subsection (e) to read as follows:           (e)     This section does not apply to an electric utility that   operates solely inside ERCOT.          SECTION 5.  Section 36.211(b), Utilities Code, is amended to   read as follows:          (b)  In a rate proceeding under Subchapter D, or if requested   by an electric utility in the utility's statement of intent   initiating a rate proceeding under Subchapter C, notwithstanding   Section 36.109(a) or 36.1091, as applicable , the final rate set in   the proceeding, whether a rate increase or rate decrease, shall be   made effective for consumption on and after the 155th day after the   date the rate-filing package is filed.          SECTION 6.  The changes in law made by this Act apply only to   a rate proceeding initiated on or after the effective date of this   Act.  A rate proceeding initiated before the effective date of this   Act is governed by the law in effect on the date the proceeding was   initiated, and the former law is continued in effect for that   purpose.          SECTION 7.  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, 2025.