CHAPTER 36. RATES
UTILITIES CODE
TITLE 2. PUBLIC UTILITY REGULATORY ACT
SUBTITLE B. ELECTRIC UTILITIES
CHAPTER 36. RATES
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 36.001. AUTHORIZATION TO ESTABLISH AND REGULATE RATES. (a)
The regulatory authority may establish and regulate rates of an
electric utility and may adopt rules for determining:
(1) the classification of customers and services; and
(2) the applicability of rates.
(b) A rule or order of the regulatory authority may not conflict
with a ruling of a federal regulatory body.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 36.002. COMPLIANCE WITH TITLE. An electric utility may not
charge or receive a rate for utility service except as provided
by this title.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 36.003. JUST AND REASONABLE RATES. (a) The regulatory
authority shall ensure that each rate an electric utility or two
or more electric utilities jointly make, demand, or receive is
just and reasonable.
(b) A rate may not be unreasonably preferential, prejudicial, or
discriminatory but must be sufficient, equitable, and consistent
in application to each class of consumer.
(c) An electric utility may not:
(1) grant an unreasonable preference or advantage concerning
rates to a person in a classification;
(2) subject a person in a classification to an unreasonable
prejudice or disadvantage concerning rates; or
(3) establish or maintain an unreasonable difference concerning
rates between localities or between classes of service.
(d) In establishing an electric utility's rates, the commission
may treat as a single class two or more municipalities that an
electric utility serves if the commission considers that
treatment to be appropriate.
(e) A charge to an individual customer for retail or wholesale
electric service that is less than the rate approved by the
regulatory authority does not constitute an impermissible
difference, preference, or advantage.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 36.004. EQUALITY OF RATES AND SERVICES. (a) An electric
utility may not directly or indirectly charge, demand, or receive
from a person a greater or lesser compensation for a service
provided or to be provided by the utility than the compensation
prescribed by the applicable tariff filed under Section 32.101.
(b) A person may not knowingly receive or accept a service from
an electric utility for a compensation greater or less than the
compensation prescribed by the tariff.
(c) Notwithstanding Subsections (a) and (b), an electric utility
may charge an individual customer for wholesale or retail
electric service in accordance with Section 36.007.
(d) This title does not prevent a cooperative corporation from
returning to its members net earnings resulting from its
operations in proportion to the members' purchases from or
through the corporation.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 36.005. RATES FOR AREA NOT IN MUNICIPALITY. Without the
approval of the commission, an electric utility's rates for an
area not in a municipality may not exceed 115 percent of the
average of all rates for similar services for all municipalities
served by the same utility in the same county as that area.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 36.006. BURDEN OF PROOF. In a proceeding involving a
proposed rate change, the electric utility has the burden of
proving that:
(1) the rate change is just and reasonable, if the utility
proposes the change; or
(2) an existing rate is just and reasonable, if the proposal is
to reduce the rate.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 36.007. DISCOUNTED WHOLESALE OR RETAIL RATES. (a) On
application by an electric utility, a regulatory authority may
approve wholesale or retail tariffs or contracts containing
charges that are less than rates approved by the regulatory
authority but not less than the utility's marginal cost. The
charges must be in accordance with the principles of this title
and may not be unreasonably preferential, prejudicial,
discriminatory, predatory, or anticompetitive.
(b) The method for computing the marginal cost of the electric
utility consists of energy and capacity components. The energy
component includes variable operation and maintenance expense and
marginal fuel or the energy component of purchased power. The
capacity component is based on the annual economic value of
deferring, accelerating, or avoiding the next increment of needed
capacity, without regard to whether the capacity is purchased or
built.
(c) The commission shall ensure that the method for determining
marginal cost is consistently applied among utilities but may
recognize the individual load and resource requirements of the
electric utility.
(d) Notwithstanding any other provision of this title, the
commission shall ensure that the electric utility's allocable
costs of serving customers paying discounted rates under this
section are not borne by the utility's other customers.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 36.008. STATE TRANSMISSION SYSTEM. In establishing rates
for an electric utility, the commission may review the state's
transmission system and make recommendations to the utility on
the need to build new power lines, upgrade power lines, and make
other necessary improvements and additions.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Amended by Acts 1999, 76th Leg., ch. 405, Sec. 23, eff. Sept. 1,
1999.
SUBCHAPTER B. COMPUTATION OF RATES
Sec. 36.051. ESTABLISHING OVERALL REVENUES. In establishing an
electric utility's rates, the regulatory authority shall
establish the utility's overall revenues at an amount that will
permit the utility a reasonable opportunity to earn a reasonable
return on the utility's invested capital used and useful in
providing service to the public in excess of the utility's
reasonable and necessary operating expenses.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 36.052. ESTABLISHING REASONABLE RETURN. In establishing a
reasonable return on invested capital, the regulatory authority
shall consider applicable factors, including:
(1) the efforts and achievements of the utility in conserving
resources;
(2) the quality of the utility's services;
(3) the efficiency of the utility's operations; and
(4) the quality of the utility's management.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Amended by Acts 1999, 76th Leg., ch. 405, Sec. 24, eff. Sept. 1,
1999.
Sec. 36.053. COMPONENTS OF INVESTED CAPITAL. (a) Electric
utility rates shall be based on the original cost, less
depreciation, of property used by and useful to the utility in
providing service.
(b) The original cost of property shall be determined at the
time the property is dedicated to public use, whether by the
utility that is the present owner or by a predecessor.
(c) In this section, the term "original cost" means the actual
money cost or the actual money value of consideration paid other
than money.
(d) If the commission issues a certificate of convenience and
necessity or, acting under Section 39.203(e), orders an electric
utility or a transmission and distribution utility to construct
or enlarge transmission or transmission-related facilities to
facilitate meeting the goal for generating capacity from
renewable energy technologies under Section 39.904(a), the
commission shall find that the facilities are used and useful to
the utility in providing service for purposes of this section and
are prudent and includable in the rate base, regardless of the
extent of the utility's actual use of the facilities.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Amended by:
Acts 2005, 79th Leg., 1st C.S., Ch.
1, Sec. 1, eff. September 1, 2005.
Sec. 36.054. CONSTRUCTION WORK IN PROGRESS. (a) Construction
work in progress, at cost as recorded on the electric utility's
books, may be included in the utility's rate base. The inclusion
of construction work in progress is an exceptional form of rate
relief that the regulatory authority may grant only if the
utility demonstrates that inclusion is necessary to the utility's
financial integrity.
(b) Construction work in progress may not be included in the
rate base for a major project under construction to the extent
that the project has been inefficiently or imprudently planned or
managed.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 36.055. SEPARATIONS AND ALLOCATIONS. Costs of facilities,
revenues, expenses, taxes, and reserves shall be separated or
allocated as prescribed by the regulatory authority.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 36.056. DEPRECIATION, AMORTIZATION, AND DEPLETION. (a)
The commission shall establish proper and adequate rates and
methods of depreciation, amortization, or depletion for each
class of property of an electric or municipally owned utility.
(b) The rates and methods established under this section and the
depreciation account required by Section 32.102 shall be used
uniformly and consistently throughout rate-setting and appeal
proceedings.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 36.057. NET INCOME; DETERMINATION OF REVENUES AND EXPENSES.
(a) An electric utility's net income is the total revenues of
the utility less all reasonable and necessary expenses as
determined by the regulatory authority.
(b) The regulatory authority shall determine revenues and
expenses in a manner consistent with this subchapter.
(c) The regulatory authority may adopt reasonable rules with
respect to whether an expense is allowed for ratemaking purposes.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 36.058. CONSIDERATION OF PAYMENT TO AFFILIATE. (a) Except
as provided by Subsection (b), the regulatory authority may not
allow as capital cost or as expense a payment to an affiliate
for:
(1) the cost of a service, property, right, or other item; or
(2) interest expense.
(b) The regulatory authority may allow a payment described by
Subsection (a) only to the extent that the regulatory authority
finds the payment is reasonable and necessary for each item or
class of items as determined by the commission.
(c) A finding under Subsection (b) must include:
(1) a specific finding of the reasonableness and necessity of
each item or class of items allowed; and
(2) a finding that the price to the electric utility is not
higher than the prices charged by the supplying affiliate for the
same item or class of items to:
(A) its other affiliates or divisions; or
(B) a nonaffiliated person within the same market area or having
the same market conditions.
(d) In making a finding regarding an affiliate transaction, the
regulatory authority shall:
(1) determine the extent to which the conditions and
circumstances of that transaction are reasonably comparable
relative to quantity, terms, date of contract, and place of
delivery; and
(2) allow for appropriate differences based on that
determination.
(e) This section does not require a finding to be made before
payments made by an electric utility to an affiliate are included
in the utility's charges to consumers if there is a mechanism for
making the charges subject to refund pending the making of the
finding.
(f) If the regulatory authority finds that an affiliate expense
for the test period is unreasonable, the regulatory authority
shall:
(1) determine the reasonable level of the expense; and
(2) include that expense in determining the electric utility's
cost of service.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Amended by Acts 1999, 76th Leg., ch. 405, Sec. 25, eff. Sept. 1,
1999.
Amended by:
Acts 2005, 79th Leg., Ch.
413, Sec. 1, eff. June 17, 2005.
Sec. 36.059. TREATMENT OF CERTAIN TAX BENEFITS. (a) In
determining the allocation of tax savings derived from
liberalized depreciation and amortization, the investment tax
credit, and the application of similar methods, the regulatory
authority shall:
(1) balance equitably the interests of present and future
customers; and
(2) apportion accordingly the benefits between consumers and the
electric or municipally owned utility.
(b) If an electric utility or a municipally owned utility
retains a portion of the investment tax credit, that portion
shall be deducted from the original cost of the facilities or
other addition to the rate base to which the credit applied to
the extent allowed by the Internal Revenue Code.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 36.060. CONSOLIDATED INCOME TAX RETURNS. (a) Unless it is
shown to the satisfaction of the regulatory authority that it was
reasonable to choose not to consolidate returns, an electric
utility's income taxes shall be computed as though a consolidated
return had been filed and the utility had realized its fair share
of the savings resulting from that return, if:
(1) the utility is a member of an affiliated group eligible to
file a consolidated income tax return; and
(2) it is advantageous to the utility to do so.
(b) The amount of income tax that a consolidated group of which
an electric utility is a member saves, because the consolidated
return eliminates the intercompany profit on purchases by the
utility from an affiliate, shall be applied to reduce the cost of
the property or service purchased from the affiliate.
(c) The investment tax credit allowed against federal income
taxes, to the extent retained by the electric utility, shall be
applied as a reduction in the rate-based contribution of the
assets to which the credit applies, to the extent and at the rate
allowed by the Internal Revenue Code.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 36.061. ALLOWANCE OF CERTAIN EXPENSES. (a) The regulatory
authority may not allow as a cost or expense for ratemaking
purposes:
(1) an expenditure for legislative advocacy; or
(2) an expenditure described by Section 32.104 that the
regulatory authority determines to be not in the public interest.
(b) The regulatory authority may allow as a cost or expense:
(1) reasonable charitable or civic contributions not to exceed
the amount approved by the regulatory authority; and
(2) reasonable costs of participating in a proceeding under this
title not to exceed the amount approved by the regulatory
authority.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
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 36.110; 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.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 36.063. CONSIDERATION OF PROFIT OR LOSS FROM SALE OR LEASE
OF MERCHANDISE. In establishing an electric or municipally owned
utility's rates, the regulatory authority may not consider any
profit or loss that results from the sale or lease of
merchandise, including appliances, fixtures, or equipment, to the
extent that merchandise is not integral to providing utility
service.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 36.064. SELF-INSURANCE. (a) An electric utility may
self-insure all or part of the utility's potential liability or
catastrophic property loss, including windstorm, fire, and
explosion losses, that could not have been reasonably anticipated
and included under operating and maintenance expenses.
(b) The commission shall approve a self-insurance plan under
this section if the commission finds that:
(1) the coverage is in the public interest;
(2) the plan, considering all costs, is a lower cost alternative
to purchasing commercial insurance; and
(3) ratepayers will receive the benefits of the savings.
(c) In computing an electric utility's reasonable and necessary
expenses under this subchapter, the regulatory authority, to the
extent the regulatory authority finds is in the public interest,
shall allow as a necessary expense the money credited to a
reserve account for self-insurance. The regulatory authority
shall determine reasonableness under this subsection:
(1) from information provided at the time the self-insurance
plan and reserve account are established; and
(2) on the filing of a rate case by an electric utility that has
a reserve account.
(d) After a reserve account for self-insurance is established,
the regulatory authority shall:
(1) determine whether the reserve account has a surplus or
shortage under Subsection (e); and
(2) subtract any surplus from or add any shortage to the
utility's rate base.
(e) A surplus in the reserve account exists if the charges
against the account are less than the money credited to the
account. A shortage in the reserve account exists if the charges
against the account are greater than the money credited to the
account.
(f) The allowance for self-insurance under this title for
ratemaking purposes is not applicable to nuclear plant
investment.
(g) The commission shall adopt rules governing self-insurance
under this section.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 36.065. PENSION AND OTHER POSTEMPLOYMENT BENEFITS. (a)
The regulatory authority shall include in the rates of an
electric utility expenses for pension and other postemployment
benefits, as determined by actuarial or other similar studies in
accordance with generally accepted accounting principles, in an
amount the regulatory authority finds reasonable. Expenses for
pension and other postemployment benefits include, in an amount
found reasonable by the regulatory authority, the benefits
attributable to the service of employees who were employed by the
predecessor integrated electric utility of an electric utility
before the utility's unbundling under Chapter 39 irrespective of
the business activity performed by the employee or the affiliate
to which the employee was transferred on or after the unbundling.
(b) Effective January 1, 2005, an electric utility may establish
one or more reserve accounts for expenses for pension and other
postemployment benefits. An electric utility shall periodically
record in the reserve account any difference between:
(1) the annual amount of pension and other postemployment
benefits approved as an operating expense in the electric
utility's last general rate proceeding or, if that amount cannot
be determined from the regulatory authority's order, the amount
recorded for pension and other postemployment benefits under
generally accepted accounting principles during the first year
that rates from the electric utility's last general rate
proceeding are in effect; and
(2) the annual amount of pension and other postemployment
benefits as determined by actuarial or other similar studies that
are chargeable to the electric utility's operating expense.
(c) A surplus in the reserve account exists if the amount of
pension and other postemployment benefits under Subsection (b)(1)
is greater than the amount determined under Subsection (b)(2). A
shortage in the reserve account exists if the amount of pension
and other postemployment benefits under Subsection (b)(1) is less
than the amount determined under Subsection (b)(2).
(d) If a reserve account for pension and other postemployment
benefits is established, the regulatory authority at a subsequent
general rate proceeding shall:
(1) review the amounts recorded to the reserve account to
determine whether the amounts are reasonable expenses;
(2) determine whether the reserve account has a surplus or
shortage under Subsection (c); and
(3) subtract any surplus from or add any shortage to the
electric utility's rate base with the surplus or shortage
amortized over a reasonable time.
Added by Acts 2005, 79th Leg., Ch.
385, Sec. 1, eff. June 17, 2005.
SUBCHAPTER C. GENERAL PROCEDURES FOR RATE CHANGES PROPOSED BY
UTILITY
Sec. 36.101. DEFINITION. In this subchapter, "major change"
means an increase in rates that would increase the aggregate
revenues of the applicant more than the greater of $100,000 or
2-1/2 percent. The term does not include an increase in rates
that the regulatory authority allows to go into effect or the
electric utility makes under an order of the regulatory authority
after hearings held with public notice.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 36.102. STATEMENT OF INTENT TO CHANGE RATES. (a) Except
as provided by Section 33.024, an electric utility may not change
its rates unless the utility files a statement of its intent with
the regulatory authority that has original jurisdiction over
those rates at least 35 days before the effective date of the
proposed change.
(b) The electric utility shall also mail or deliver a copy of
the statement of intent to the appropriate officer of each
affected municipality.
(c) The statement of intent must include:
(1) proposed revisions of tariffs; and
(2) a detailed statement of:
(A) each proposed change;
(B) the effect the proposed change is expected to have on the
revenues of the utility;
(C) each class and number of utility consumers affected; and
(D) any other information required by the regulatory authority's
rules.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 36.103. NOTICE OF INTENT TO CHANGE RATES. (a) The
electric utility shall:
(1) publish, in conspicuous form and place, notice to the public
of the proposed change once each week for four successive weeks
before the effective date of the proposed change in a newspaper
having general circulation in each county containing territory
affected by the proposed change; and
(2) mail notice of the proposed change to any other affected
person as required by the regulatory authority's rules.
(b) The regulatory authority may waive the publication of notice
requirement prescribed by Subsection (a) in a proceeding that
involves only a rate reduction for each affected ratepayer. The
applicant shall give notice of the proposed rate change by mail
to each affected utility customer.
(c) The regulatory authority by rule shall define other
proceedings for which the publication of notice requirement
prescribed by Subsection (a) may be waived on a showing of good
cause. A waiver may not be granted in a proceeding involving a
rate increase to any class or category of ratepayer.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 36.104. EARLY EFFECTIVE DATE OF RATE CHANGE. (a) For good
cause shown, the regulatory authority may allow a rate change,
other than a major change, to take effect:
(1) before the end of the 35-day period prescribed by Section
36.102; and
(2) under conditions the regulatory authority prescribes,
subject to suspension as provided by this subchapter.
(b) The electric utility shall immediately revise its tariffs to
include the change.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 36.105. DETERMINATION OF PROPRIETY OF RATE CHANGE; HEARING.
(a) If a tariff changing rates is filed with a regulatory
authority, the regulatory authority shall, on complaint by an
affected person, or may, on its own motion, not later than the
30th day after the effective date of the change, enter on a
hearing to determine the propriety of the change.
(b) The regulatory authority shall hold a hearing in every case
in which the change constitutes a major change. The regulatory
authority may, however, use an informal proceeding if the
regulatory authority does not receive a complaint before the 46th
day after the date notice of the change is filed.
(c) The regulatory authority shall give reasonable notice of the
hearing, including notice to the governing body of each affected
municipality and county. The electric utility is not required to
provide a formal answer or file any other formal pleading in
response to the notice, and the absence of an answer does not
affect an order for a hearing.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 36.106. REGIONAL HEARING. The commission shall hold a
regional hearing at an appropriate location in a case in which
the commission determines it is in the public interest to hear
testimony at a regional hearing for inclusion in the record.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 36.107. PREFERENCE TO HEARING. The regulatory authority
shall:
(1) give preference to a hearing under this subchapter and to
deciding questions arising under this subchapter and Subchapter E
over any other question pending before it; and
(2) decide the questions as quickly as possible.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 36.108. RATE SUSPENSION; DEADLINE. (a) Pending the
hearing and a decision:
(1) the local regulatory authority, after delivering to the
electric utility a written statement of the regulatory
authority's reasons, may suspend the rate change for not longer
than 90 days after the date the rate change would otherwise be
effective; and
(2) the commission may suspend the rate change for not longer
than 150 days after the date the rate change would otherwise be
effective.
(b) The 150-day period prescribed by Subsection (a)(2) shall be
extended two days for each day the actual hearing on the merits
of the case exceeds 15 days.
(c) If the regulatory authority does not make a final
determination concerning a rate change before expiration of the
applicable suspension period, the regulatory authority is
considered to have approved the change. This approval is subject
to the authority of the regulatory authority thereafter to
continue a hearing in progress.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 36.109. TEMPORARY RATES. (a) The regulatory authority may
establish temporary rates to be in effect during the applicable
suspension period under Section 36.108.
(b) If the regulatory authority does not establish temporary
rates, the rates in effect when the suspended tariff was filed
continue in effect during the suspension period.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 36.110. BONDED RATES. (a) An electric utility may put a
changed rate into effect throughout the area in which the utility
sought to change its rates, including an area over which the
commission is exercising appellate or original jurisdiction, by
filing a bond with the commission if:
(1) the 150-day suspension period has been extended under
Section 36.108(b); and
(2) the commission fails to make a final determination before
the 151st day after the date the rate change would otherwise be
effective.
(b) The bonded rate may not exceed the proposed rate.
(c) The bond must be:
(1) payable to the commission in an amount, in a form, and with
a surety approved by the commission; and
(2) conditioned on refund.
(d) The electric utility shall refund or credit against future
bills:
(1) money collected under the bonded rates in excess of the rate
finally ordered; and
(2) interest on that money, at the current interest rate as
determined by the commission.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 36.111. ESTABLISHMENT OF FINAL RATES. (a) If, after
hearing, the regulatory authority finds the rates are
unreasonable or in violation of law, the regulatory authority
shall:
(1) enter an order establishing the rates the electric utility
shall charge or apply for the service in question; and
(2) serve a copy of the order on the electric utility.
(b) The rates established in the order shall be observed
thereafter until changed as provided by this title.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
SUBCHAPTER D. RATE CHANGES PROPOSED BY REGULATORY AUTHORITY
Sec. 36.151. UNREASONABLE OR VIOLATIVE EXISTING RATES. (a) If
the regulatory authority, on its own motion or on complaint by an
affected person, after reasonable notice and hearing, finds that
the existing rates of an electric utility for a service are
unreasonable or in violation of law, the regulatory authority
shall:
(1) enter an order establishing the just and reasonable rates to
be observed thereafter, including maximum or minimum rates; and
(2) serve a copy of the order on the electric utility.
(b) The rates established under Subsection (a) constitute the
legal rates of the electric utility until changed as provided by
this title.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 36.152. INVESTIGATING COSTS OF OBTAINING SERVICE FROM
ANOTHER SOURCE. If an electric utility does not produce or
generate the service that it distributes, transmits, or furnishes
to the public for compensation but obtains the service from
another source, the regulatory authority may investigate the cost
of that production or generation in an investigation of the
reasonableness of the electric utility's rates.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 36.153. RATE-FILING PACKAGE. (a) An electric utility
shall file a rate-filing package with the regulatory authority
not later than the 120th day after the date the authority
notifies the utility that the authority will proceed with an
inquiry under Section 36.151.
(b) The regulatory authority may grant an extension of the
120-day period prescribed by Subsection (a) or waive the
rate-filing package requirement on agreement of the parties.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 36.154. DEADLINE. (a) The regulatory authority shall make
a final determination not later than the 185th day after the date
the electric utility files the rate-filing package required by
Section 36.153.
(b) The deadline prescribed by Subsection (a) is extended two
days for each day the actual hearing on the merits of the case
exceeds 15 days.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 36.155. INTERIM ORDER ESTABLISHING TEMPORARY RATES. (a)
At any time after an initial complaint is filed under Section
36.151, the regulatory authority may issue an interim order
establishing temporary rates for the electric utility to be in
effect until a final determination is made.
(b) On issuance of a final order, the regulatory authority:
(1) may require the electric utility to refund to customers or
to credit against future bills:
(A) money collected under the temporary rates in excess of the
rate finally ordered; and
(B) interest on that money, at the current interest rate as
determined by the commission; or
(2) shall authorize the electric utility to surcharge bills to
recover:
(A) the amount by which the money collected under the temporary
rates is less than the money that would have been collected under
the rate finally ordered; and
(B) interest on that amount, at the current interest rate as
determined by the commission.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 36.156. AUTOMATIC TEMPORARY RATES. (a) The rates charged
by the electric utility on the 185th day after the date the
utility files the rate-filing package required by Section 36.153
automatically become temporary rates if:
(1) the 185-day period has been extended under Section
36.154(b); and
(2) the regulatory authority has not issued a final order or
established temporary rates for the electric utility on or before
the 185th day.
(b) On issuance of a final order, the regulatory authority:
(1) shall require the electric utility to refund to customers or
to credit against future bills:
(A) money collected under the temporary rates in excess of the
rate finally ordered; and
(B) interest on that money, at the current interest rate as
determined by the commission; or
(2) shall authorize the electric utility to surcharge bills to
recover:
(A) the amount by which the money collected under the temporary
rates is less than the money that would have been collected under
the rate finally ordered; and
(B) interest on that amount, at the current interest rate as
determined by the commission.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
SUBCHAPTER E. COST RECOVERY AND RATE ADJUSTMENT
Sec. 36.201. AUTOMATIC ADJUSTMENT FOR CHANGES IN COSTS. Except
as permitted by Section 36.204, the commission may not establish
a rate or tariff that authorizes an electric utility to
automatically adjust and pass through to the utility's customers
a change in the utility's fuel or other costs.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Amended by Acts 1999, 76th Leg., ch. 405, Sec. 26, eff. Sept. 1,
1999.
Sec. 36.202. ADJUSTMENT FOR CHANGE IN TAX LIABILITY. (a) The
commission, on its own motion or on the petition of an electric
utility, shall provide for the adjustment of the utility's
billing to reflect an increase or decrease in the utility's tax
liability to this state if the increase or decrease:
(1) results from Chapter 5, Acts of the 72nd Legislature, 1st
Called Session, 1991; and
(2) is attributable to an activity subject to the commission's
jurisdiction.
(b) The commission shall apportion pro rata to each type and
class of service provided by the utility any billing adjustment
under this section. The adjustment:
(1) shall be made effective at the same time as the increase or
decrease of tax liability described by Subsection (a)(1) or as
soon after that increase or decrease as is reasonably practical;
and
(2) remains effective only until the commission alters the
adjustment as provided by this section or enters an order for the
utility under Subchapter C or D.
(c) Each year after an original adjustment, the commission
shall:
(1) review the utility's increase or decrease of tax liability
described by Subsection (a)(1); and
(2) alter the adjustment as necessary to reflect the increase or
decrease.
(d) A proceeding under this section is not a rate case under
Subchapter C.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 36.203. FUEL COST RECOVERY; ADJUSTMENT OF FUEL FACTOR. (a)
Section 36.201 does not prohibit the commission from reviewing
and providing for adjustments of a utility's fuel factor.
(b) The commission by rule shall implement procedures that
provide for the timely adjustment of a utility's fuel factor,
with or without a hearing. The procedures must require that:
(1) the findings required by Section 36.058 regarding fuel
transactions with affiliated interests are made in a fuel
reconciliation proceeding or in a rate case filed under
Subchapter C or D; and
(2) an affected party receive notice and have the opportunity to
request a hearing before the commission.
(c) The commission may adjust a utility's fuel factor without a
hearing if the commission determines that a hearing is not
necessary. If the commission holds a hearing, the commission may
consider at the hearing any evidence that is appropriate and in
the public interest.
(d) The commission shall render a timely decision approving,
disapproving, or modifying the adjustment to the utility's fuel
factor.
(e) The commission by rule shall provide for the reconciliation
of a utility's fuel costs on a timely basis.
(f) A proceeding under this section is not a rate case under
Subchapter C.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 36.204. COST RECOVERY AND INCENTIVES. In establishing
rates for an electric utility, the commission may:
(1) allow timely recovery of the reasonable costs of
conservation, load management, and purchased power,
notwithstanding Section 36.201; and
(2) authorize additional incentives for conservation, load
management, purchased power, and renewable resources.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Amended by Acts 1999, 76th Leg., ch. 405, Sec. 27, eff. Sept. 1,
1999.
Sec. 36.205. PURCHASED POWER COST RECOVERY. (a) This section
applies only to an increase or decrease in the cost of purchased
electricity that has been:
(1) accepted by a federal regulatory authority; or
(2) approved after a hearing by the commission.
(b) The commission may use any appropriate method to provide for
the adjustment of the cost of purchased electricity on terms
determined by the commission.
(c) Purchased electricity costs may be recovered:
(1) concurrently with the effective date of the changed costs to
the purchasing electric utility; or
(2) as soon after the effective date as reasonably practical.
(d) The commission may provide a mechanism to allow an electric
utility that has a noncontiguous geographical service area and
that purchases power for resale for that noncontiguous service
area from electric utilities that are not members of the Electric
Reliability Council of Texas to recover purchased power costs for
the area in a manner that reflects the purchased power cost for
that specific geographical noncontiguous area. The commission may
not require an electric cooperative corporation to use the
mechanism provided under this section unless the electric
cooperative corporation requests its use.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 36.206. MARK-UPS. (a) A cost recovery factor established
for the recovery of purchased power costs may include:
(1) the cost the electric utility incurs in purchasing capacity
and energy;
(2) a mark-up added to the cost or another mechanism the
commission determines will reasonably compensate the utility for
any financial risk associated with purchased power obligations;
and
(3) the value added by the utility in making the purchased power
available to customers.
(b) The mark-ups and cost recovery factors, if allowed, may be
those necessary to encourage the electric utility to include
economical purchased power as part of the utility's energy and
capacity resource supply plan.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 36.207. USE OF MARK-UPS. Any mark-ups approved under
Section 36.206 are an exceptional form of rate relief that the
electric utility may recover from ratepayers only on a finding by
the commission that the relief is necessary to maintain the
utility's financial integrity.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Amended by Acts 1999, 76th Leg., ch. 405, Sec. 28, eff. Sept. 1,
1999.
Sec. 36.208. PAYMENT TO QUALIFYING FACILITY. In establishing an
electric utility's rates, the regulatory authority shall:
(1) consider a payment made to a qualifying facility under an
agreement certified under Subchapter C, Chapter 35, to be a
reasonable and necessary operating expense of the electric
utility during the period for which the certification is
effective; and
(2) allow full, concurrent, and monthly recovery of the amount
of the payment.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 36.209. RECOVERY BY CERTAIN NON-ERCOT UTILITIES OF CERTAIN
TRANSMISSION COSTS. (a) This section applies only to an
electric utility that operates solely outside of ERCOT in areas
of this state included in the Southeastern Electric Reliability
Council, the Southwest Power Pool, or the Western Electricity
Coordinating Council and that owns or operates transmission
facilities.
(b) The commission, after notice and hearing, may allow an
electric utility to recover on an annual basis its reasonable and
necessary expenditures for transmission infrastructure
improvement costs and changes in wholesale transmission charges
to the electric utility under a tariff approved by a federal
regulatory authority to the extent that the costs or charges have
not otherwise been recovered. The commission may allow the
electric utility to recover only the costs allocable to retail
customers in the state and may not allow the electric utility to
over-recover costs.
Added by Acts 2005, 79th Leg., Ch.
1024, Sec. 1, eff. June 18, 2005.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
1226, Sec. 1, eff. June 19, 2009.
SUBCHAPTER H. RATES FOR GOVERNMENTAL ENTITIES
Sec. 36.351. DISCOUNTED RATES FOR CERTAIN INSTITUTIONS OF HIGHER
EDUCATION. (a) Notwithstanding any other provision of this
title, each electric utility and municipally owned utility shall
discount charges for electric service provided to a facility of a
four-year state university, upper-level institution, Texas State
Technical College, or college.
(b) The discount is a 20-percent reduction of the utility's base
rates that would otherwise be paid under the applicable tariffed
rate.
(c) An electric or municipally owned utility is exempt from this
section if the 20-percent discount results in a reduction equal
to more than one percent of the utility's total annual revenues.
(d) A municipally owned utility is exempt from this section if
the municipally owned utility, on September 1, 1995, discounted
base commercial rates for electric service provided to all
four-year state universities or colleges in its service area by
20 percent or more.
(e) This section does not apply to a rate charged to an
institution of higher education by a municipally owned utility
that provides a discounted rate to the state for electric
services below rates in effect on January 1, 1995, if the
discounted rate provides a greater financial discount to the
state than is provided to the institution of higher education
through the discount provided by this section.
(f) An investor-owned electric utility may not recover from
residential customers or any other customer class the assigned
and allocated costs of serving a state university or college that
receives a discount under this section.
(g) Each electric utility shall file tariffs with the commission
reflecting the discount required under this section. The initial
tariff filing is not a rate change for purposes of Subchapter C.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 36.352. SPECIAL RATE CLASS. Notwithstanding any other
provision of this title, if the commission, on or before
September 1, 1995, approved the establishment of a separate rate
class for electric service for a university and grouped public
schools in a separate rate class, the commission shall include
community colleges in the rate class with public school
customers.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 36.353. PAYMENT IN LIEU OF TAX. (a) A payment made in
lieu of a tax by a municipally owned utility to the municipality
by which the utility is owned may not be considered an expense of
operation in establishing the utility's rate for providing
utility service to a school district or hospital district.
(b) A rate a municipally owned utility receives from a school
district or hospital district may not be used to make or to cover
the cost of making payments in lieu of taxes to the municipality
that owns the utility.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 36.354. DISCOUNTED RATES FOR MILITARY BASES. (a)
Notwithstanding any other provision of this title, each
municipally owned utility, electric cooperative, or electric
utility in an area where customer choice is not available or the
commission has delayed the implementation of full customer choice
in accordance with Section 39.103 shall discount charges for
electric service provided to a military base.
(b) The discount under Subsection (a) is a 20 percent reduction
of the base commercial rate that the municipally owned utility,
electric cooperative, or electric utility would otherwise charge
the military installation.
(c) An electric utility, municipally owned utility, or electric
cooperative may assess a surcharge to all of the utility's retail
customers in the state to recover the difference in revenue
between the revenues from the discounted rate for military bases
provided under Subsection (a) and the base commercial rate. This
subsection does not apply to an electric utility, municipally
owned utility, or electric cooperative that was providing
electric service to a military base on December 31, 2002, at a
rate constituting a discount of 20 percent or more from the
utility's base commercial rate that the utility would otherwise
charge the military base.
(d) Each electric utility shall file a tariff with the
commission reflecting the discount required by Subsection (a) and
may file a tariff reflecting the surcharge provided by Subsection
(c). Not later than the 30th day after the date the commission
receives the electric utility's tariff reflecting the surcharge,
the commission shall approve the tariff. A proceeding under this
subsection is not a rate change for purposes of Subchapter C.
(e) An electric utility, municipally owned utility, or electric
cooperative is exempt from the requirements of Subsection (a) if:
(1) the 20 percent discount would result in a reduction of
revenue in an amount that is greater than one percent of the
utility's total annual revenues; or
(2) the utility:
(A) was providing electric service to a military base on
December 31, 2002, at a rate constituting a discount of 20
percent or more from the utility's base commercial rate that the
utility would otherwise charge the military base; and
(B) continues to provide electric service to the military base
at a rate constituting a discount of 20 percent or more from the
utility's base commercial rate that the utility would otherwise
charge the military base.
(f) Each electric utility shall provide the Texas Military
Preparedness Commission with the base commercial rate that the
utility would otherwise charge the military base and the rate the
utility is charging the military base.
(g) For the purposes of this section, the term "military base"
does not include a military base:
(1) that has been closed or realigned under the Defense Base
Closure and Realignment Act of 1990 (10 U.S.C. Section 2687) and
its subsequent amendments;
(2) that is administered by an authority established by a
municipality under Chapter 378, Local Government Code, as added
by Chapter 1221, Acts of the 76th Legislature, Regular Session,
1999;
(3) that is operated by or for the benefit of the Texas National
Guard, as defined by Section 431.001, Government Code, unless the
base is served by a municipally owned utility owned by a city
with a population of 650,000 or more; or
(4) for which a municipally owned utility has acquired the
electric distribution system under 10 U.S.C. Section 2688.
Added by Acts 2003, 78th Leg., ch. 149, Sec. 21, eff. May 27,
2003.
SUBCHAPTER I. SECURITIZATION FOR RECOVERY OF SYSTEM
RESTORATION COSTS
Sec. 36.401. SECURITIZATION FOR RECOVERY OF SYSTEM RESTORATION
COSTS; PURPOSE. (a) The purpose of this subchapter is to enable
an electric utility to obtain timely recovery of system
restoration costs and to use securitization financing to recover
these costs, because that type of debt will lower the carrying
costs associated with the recovery of these costs, relative to
the costs that would be incurred using conventional financing
methods. The proceeds of the transition bonds may be used only
for the purposes of reducing the amount of recoverable system
restoration costs, as determined by the commission in accordance
with this subchapter, including the refinancing or retirement of
utility debt or equity.
(b) It is the intent of the legislature that:
(1) securitization of system restoration costs will be
accomplished using the same procedures, standards, and
protections for securitization authorized under Subchapter G,
Chapter 39, as in effect on the effective date of this section,
except as provided by this subchapter; and
(2) the commission will ensure that securitization of system
restoration costs provides greater tangible and quantifiable
benefits to ratepayers than would have been achieved without the
issuance of transition bonds.
Added by Acts 2009, 81st Leg., R.S., Ch.
1, Sec. 1, eff. April 16, 2009.
Sec. 36.402. SYSTEM RESTORATION COSTS; STANDARDS AND
DEFINITIONS. (a) In this subchapter, "system restoration costs"
means reasonable and necessary costs, including costs expensed,
charged to self-insurance reserves, deferred, capitalized, or
otherwise financed, that are incurred by an electric utility due
to any activity or activities conducted by or on behalf of the
electric utility in connection with the restoration of service
and infrastructure associated with electric power outages
affecting customers of the electric utility as the result of any
tropical storm or hurricane, ice or snow storm, flood, or other
weather-related event or natural disaster that occurred in
calendar year 2008 or thereafter. System restoration costs
include mobilization, staging, and construction, reconstruction,
replacement, or repair of electric generation, transmission,
distribution, or general plant facilities. System restoration
costs shall include reasonable estimates of the costs of an
activity or activities conducted or expected to be conducted by
or on behalf of the electric utility in connection with the
restoration of service or infrastructure associated with electric
power outages, but such estimates shall be subject to true-up and
reconciliation after the actual costs are known.
(b) System restoration costs shall include carrying costs at the
electric utility's weighted average cost of capital as last
approved by the commission in a general rate proceeding from the
date on which the system restoration costs were incurred until
the date that transition bonds are issued or until system
restoration costs are otherwise recovered pursuant to the
provisions of this subchapter.
(c) To the extent a utility subject to this subchapter receives
insurance proceeds, governmental grants, or any other source of
funding that compensate it for system restoration costs, those
amounts shall be used to reduce the utility's system restoration
costs recoverable from customers. If the timing of a utility's
receipt of those amounts prevents their inclusion as a reduction
to the system restoration costs that are securitized, or the
commission later determines as a result of the true-up and
reconciliation provided for in Subsection (a) that the actual
costs incurred are less than estimated costs included in the
determination of system restoration costs, the commission shall
take those amounts into account in:
(1) the utility's next base rate proceeding; or
(2) any subsequent proceeding, other than a true-up proceeding
under Section 39.307, in which the commission considers system
restoration costs.
(d) If the commission determines that the insurance proceeds,
governmental grants, or other sources of funding that compensate
the electric utility for system restoration costs, or the amount
resulting from a true-up of estimated system restoration costs
are of a magnitude to justify a separate tariff rider, the
commission may establish a tariff rider to credit such amounts
against charges, other than transition charges or system
restoration charges as defined in Section 36.403, being collected
from customers.
(e) To the extent that the electric utility receives insurance
proceeds, governmental grants, or any other source of funding
that is used to reduce system restoration costs, the commission
shall impute interest on those amounts at the same cost of
capital included in the utility's system restoration costs until
the date that those amounts are used to reduce the amount of
system restoration costs that are securitized or otherwise
reflected in the rates of the utility.
Added by Acts 2009, 81st Leg., R.S., Ch.
1, Sec. 1, eff. April 16, 2009.
Sec. 36.403. STANDARDS AND PROCEDURES GOVERNING SECURITIZATION
AND RECOVERY OF SYSTEM RESTORATION COSTS. (a) The procedures
and standards of this subchapter and the provisions of Subchapter
G, Chapter 39, govern an electric utility's application for, and
the commission's issuance of, a financing order to provide for
the securitization of system restoration costs, or to otherwise
provide for the recovery of system restoration costs.
(b) Subject to the standards, procedures, and tests contained in
this subchapter and Subchapter G, Chapter 39, the commission
shall adopt a financing order on the application of the electric
utility to recover its system restoration costs. If on its own
motion or complaint by an affected person, the commission
determines that it is likely that securitization of system
restoration costs would meet the tests contained in Section
36.401(b), the commission shall require the utility to file an
application for a financing order. On the commission's issuance
of a financing order allowing for recovery and securitization of
system restoration costs, the provisions of this subchapter and
Subchapter G, Chapter 39, continue to govern the financing order
and the rights and interests established in the order, and this
subchapter and Subchapter G, Chapter 39, continue to govern any
transition bonds issued pursuant to the financing order. To the
extent any conflict exists between the provisions of this
subchapter and Subchapter G, Chapter 39, in cases involving the
securitization of system restoration costs, the provisions of
this subchapter control.
(c) For purposes of this subchapter, "financing order," as
defined by Section 39.302 and as used in Subchapter G, Chapter
39, includes a financing order authorizing the securitization of
system restoration costs.
(d) For purposes of this subchapter, "qualified costs," as
defined by Section 39.302 and as used in Subchapter G, Chapter
39, includes 100 percent of the electric utility's system
restoration costs, net of any insurance proceeds, governmental
grants, or other source of funding that compensate the utility
for system restoration costs, received by the utility at the time
it files an application for a financing order. Qualified costs
also include the costs of issuing, supporting, and servicing
transition bonds and any costs of retiring and refunding existing
debt and equity securities of an electric utility subject to this
subchapter in connection with the issuance of transition bonds.
For purposes of this subchapter, the term qualified costs also
includes:
(1) the costs to the commission of acquiring professional
services for the purpose of evaluating proposed transactions
under this subchapter; and
(2) costs associated with ancillary agreements such as any bond
insurance policy, letter of credit, reserve account, surety bond,
swap arrangement, hedging arrangement, liquidity or credit
support arrangement, or other financial arrangement entered into
in connection with the issuance or payment of transition bonds.
(e) For purposes of this subchapter, "transition bonds," as
defined by Section 39.302 and as used in Subchapter G, Chapter
39, includes transition bonds issued in association with the
recovery of system restoration costs. Transition bonds issued to
securitize system restoration costs may be called "system
restoration bonds" or may be called by any other name acceptable
to the issuer and the underwriters of the transition bonds.
(f) For purposes of this subchapter, "transition charges," as
defined by Section 39.302 and as used in Subchapter G, Chapter
39, includes nonbypassable amounts to be charged for the use of
electric services, approved by the commission under a financing
order to recover system restoration costs, that shall be
collected by an electric utility, its successors, an assignee, or
other collection agents as provided for in the financing order.
Transition charges approved by the commission under a financing
order to recover system restoration costs may be called "system
restoration charges" or may be called by any other name
acceptable to the issuer and the underwriters of the transition
bonds.
(g) Notwithstanding Section 39.303(c), system restoration costs
shall be functionalized and allocated to customers in the same
manner as the corresponding facilities and related expenses are
functionalized and allocated in the electric utility's current
base rates. For an electric utility operating within the
Electric Reliability Council of Texas, system restoration costs
that are properly includable in the transmission cost of service
mechanism adopted under Section 35.004 and associated deferred
costs not included under Section 35.004 shall be recovered under
the method of pricing provided for in that section and commission
rules promulgated under that section; provided, however, that an
electric utility operating under a rate freeze or other
limitation on its ability to pass through wholesale costs to its
customers may defer such costs and accrue carrying costs at its
weighted average cost of capital as last approved by the
commission in a general rate proceeding until such time as the
freeze or limitation expires.
(h) The amount of any accumulated deferred federal income taxes
offset, used to determine the securitization total, may not be
considered in future rate proceedings. Any tax obligation of the
electric utility arising from its receipt of securitization bond
proceeds, or from the collection and remittance of transition
charges, shall be recovered by the electric utility through the
commission's implementation of this subchapter.
(i) Notwithstanding a rate freeze or limitations on an electric
utility's ability to change rates authorized or imposed by any
other provision of this title or by a regulatory authority, an
electric utility is entitled to recover system restoration costs
consistent with the provisions of this subchapter.
(j) If in the course of a proceeding to adopt a financing order
the commission determines that the recovery of all or any portion
of an electric utility's system restoration costs, using
securitization, is not beneficial to ratepayers of the electric
utility, under one or more of the tests applied to determine
those benefits, the commission shall nonetheless use the
proceeding to issue an order permitting the electric utility to
recover the remainder of its system restoration costs through an
appropriate customer surcharge mechanism, including carrying
costs at the electric utility's weighted average cost of capital
as last approved by the commission in a general rate proceeding,
to the extent that the electric utility has not securitized those
costs. A rate proceeding under Subchapter C or D shall not be
required to determine and implement this surcharge mechanism. On
the final implementation of rates resulting from the filing of a
rate proceeding under Subchapter C or D that provides for the
recovery of all r