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

89(R) HB 3157 - Engrossed version - Bill Text

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.