CHAPTER 104. RATES AND SERVICES
UTILITIES CODE
TITLE 3. GAS REGULATION
SUBTITLE A. GAS UTILITY REGULATORY ACT
CHAPTER 104. RATES AND SERVICES
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 104.001. AUTHORIZATION TO ESTABLISH AND REGULATE RATES.
(a) The railroad commission is vested with all the authority and
power of this state to ensure compliance with the obligations of
gas utilities in this subtitle.
(b) The regulatory authority may establish and regulate rates of
a gas utility and may adopt rules for determining:
(1) the classification of customers and services; and
(2) the applicability of rates.
(c) 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. 104.002. COMPLIANCE WITH SUBTITLE. A gas utility may not:
(1) charge, collect, or receive a rate for utility service
except as provided by this subtitle; or
(2) impose a rule or regulation except as provided by this
subtitle.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 104.003. JUST AND REASONABLE RATES. (a) The regulatory
authority shall ensure that each rate a gas utility or two or
more gas utilities jointly make, demand, or receive is just and
reasonable. A rate may not be unreasonably preferential,
prejudicial, or discriminatory but must be sufficient, equitable,
and consistent in application to each class of consumer. In
establishing a gas utility's rates, the railroad commission may
treat as a single class two or more municipalities that a gas
utility serves if the commission considers that treatment to be
appropriate.
(b) A rate for a pipeline-to-pipeline transaction or to a
transportation, industrial, or similar large volume contract
customer is considered to be just and reasonable and otherwise to
comply with this section and shall be approved by the regulatory
authority if:
(1) neither the gas utility nor the customer had an unfair
advantage during the negotiations;
(2) the rate is substantially the same as the rate between the
gas utility and at least two of those customers under the same or
similar conditions of service; or
(3) competition does or did exist with another gas utility,
another supplier of natural gas, or a supplier of an alternative
form of energy.
(c) Subsection (b) does not apply:
(1) if a complaint is filed with the railroad commission by a
transmission pipeline purchaser of gas sold or transported under
the pipeline-to-pipeline or transportation rate; or
(2) to a direct sale for resale to a gas distribution utility at
a city gate.
(d) The reasonableness of gas purchase costs included in a city
gate rate proposed to be charged for a sale for resale to a gas
distribution utility at a city gate may be reviewed at a city
gate rate proceeding even though the costs have been previously
approved as a rate for other parties under Subsection (b).
(e) Subsection (b)(1) does not apply to a rate charged or
offered to be charged to an affiliated pipeline utility.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 104.004. UNREASONABLE PREFERENCE OR PREJUDICE PROHIBITED.
A gas utility may not:
(1) grant an unreasonable preference or advantage concerning
rates or services to a person in a classification;
(2) subject a person in a classification to an unreasonable
prejudice or disadvantage concerning rates or services; or
(3) establish or maintain an unreasonable difference concerning
rates of services between localities or between classes of
service.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 104.005. EQUALITY OF RATES AND SERVICES. (a) A gas
utility may not directly or indirectly charge, demand, collect,
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 schedule of rates filed
under Section 102.151.
(b) A person may not knowingly receive or accept a service from
a gas utility for a compensation greater or less than the
compensation prescribed by the schedules. A rate charged and
collected by a gas utility on September 1, 1983, may be continued
until schedules are filed.
(c) After notice and hearing, the railroad commission may, in
the public interest, order a gas utility to refund with interest
compensation received in violation of this section.
(d) This subtitle 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. 104.006. RATES FOR AREA NOT IN MUNICIPALITY. Without the
approval of the railroad commission, a gas 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. 104.007. DISCRIMINATION AND RESTRICTION ON COMPETITION. A
gas utility may not:
(1) discriminate against a person who sells or leases equipment
or performs services in competition with the gas utility; or
(2) engage in a practice that tends to restrict or impair that
competition.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 104.008. BURDEN OF PROOF. In a proceeding involving a
proposed rate change, the gas 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.
SUBCHAPTER B. COMPUTATION OF RATES
Sec. 104.051. ESTABLISHING OVERALL REVENUES. In establishing a
gas 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 its reasonable and necessary
operating expenses.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 104.052. ESTABLISHING FAIR RATE OF RETURN. The regulatory
authority may not establish a rate that yields more than a fair
return on the adjusted value of the invested capital used and
useful in providing service to the public.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 104.053. COMPONENTS OF ADJUSTED VALUE OF INVESTED CAPITAL.
(a) Gas utility rates shall be based on the adjusted value of
invested capital used and useful to the utility in providing
service and that adjusted value shall be computed on the basis of
a reasonable balance between:
(1) original cost, less depreciation; and
(2) current cost, less an adjustment for present age and
condition.
(b) The regulatory authority may determine a reasonable balance
that reflects:
(1) not less than 60 percent nor more than 75 percent of the
original cost of the property at the time the property was
dedicated to public use, whether by the gas utility that is the
present owner or by a predecessor, less depreciation; and
(2) not less than 25 percent nor more than 40 percent of the
current cost less an adjustment for present age and condition.
(c) In determining a reasonable balance, the regulatory
authority may consider inflation, deflation, quality of service
being provided, growth rate of the service area, and need for the
gas utility to attract new capital.
(d) Construction work in progress, at cost as recorded on the
gas utility's books, may be included as part of the adjusted
value of invested capital used by and useful to the utility in
providing service, as necessary to the financial integrity of the
utility.
(e) Costs of facilities, revenues, expenses, taxes, and reserves
shall be separated or allocated as prescribed by the regulatory
authority.
(f) In this section, "original cost" means the actual money cost
or the actual money value of consideration paid other than money.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 104.054. DEPRECIATION, AMORTIZATION, AND DEPLETION. (a)
The railroad commission shall establish proper and adequate rates
and methods of depreciation, amortization, or depletion for each
class of property of a gas utility or municipally owned utility.
(b) The rates and methods established under this section and the
depreciation account required under Section 102.152 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. 104.055. NET INCOME; ALLOWABLE EXPENSES. (a) Net income
shall be used to establish just and reasonable rates. For that
purpose, "net income" means the total revenues of the gas utility
from gas utility service less all reasonable and necessary
expenses related to that gas utility service. The regulatory
authority shall determine those revenues and expenses in a manner
consistent with this subchapter.
(b) In establishing a gas utility's rates, the regulatory
authority may not allow a gas utility's payment to an affiliate
for the cost of a service, property, right, or other item or for
an interest expense to be included as capital cost or as expense
related to gas utility service except 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
regulatory authority. That finding 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 gas utility is not higher
than the prices charged by the supplying affiliate to its other
affiliates or divisions or to a nonaffiliated person for the same
item or class of items.
(c) If an expense is allowed to be included in utility rates, or
an investment is included in the utility rate base, the related
income tax deduction or benefit shall be included in the
computation of income tax expense to reduce the rates. If an
expense is disallowed or not included in utility rates, or an
investment is not included in the utility rate base, the related
income tax deduction or benefit may not be included in the
computation of income tax expense to reduce the rates. The income
tax expense shall be computed using the statutory income tax
rates.
(d) The regulatory authority may adopt reasonable rules
complying with this section with respect to including and
excluding certain expenses in computing the rates to be
established.
(e) This section is not intended to increase gas utility rates
to the customer not caused by utility service. Utility rates may
include only expenses caused by utility service.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 104.056. 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
gas utility or municipally owned utility.
(b) If a gas utility or 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. 104.057. CONSIDERATION OF CERTAIN EXPENSES. (a) In
establishing a gas utility's rates, the regulatory authority may
not allow as a cost or expense an expenditure:
(1) described by Section 102.154 that the regulatory authority
determines to be not in the public interest; or
(2) for legislative advocacy.
(b) The regulatory authority may allow as a cost or expense
reasonable charitable or civic contributions not to exceed the
amount approved by the regulatory authority.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 104.058. CONSIDERATION OF PROFIT OR LOSS FROM SALE OR LEASE
OF MERCHANDISE. In establishing a gas utility's or municipally
owned utility's rates, the regulatory authority may not consider
a 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.
SUBCHAPTER C. RATE CHANGES PROPOSED BY UTILITY
Sec. 104.101. 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 gas
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. 104.102. STATEMENT OF INTENT TO INCREASE RATES. (a) A gas
utility may not increase 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 increase.
(b) The gas 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 schedules; and
(2) a detailed statement of:
(A) each proposed increase;
(B) the effect the proposed increase 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 and regulations.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 104.103. NOTICE OF INTENT TO INCREASE RATES. (a) The gas
utility shall:
(1) publish, in conspicuous form, notice to the public of the
proposed increase once each week for four successive weeks in a
newspaper having general circulation in each county containing
territory affected by the proposed increase; and
(2) provide notice of the proposed increase to any other
affected person as required by the regulatory authority's rules.
(b) Instead of publishing newspaper notice, a gas utility may
provide notice to the public in an area outside the affected
municipality or in a municipality with a population of less than
2,500 by:
(1) mailing the notice by United States mail, postage prepaid,
to the billing address of each directly affected customer; or
(2) including the notice, in conspicuous form, in the bill of
each directly affected customer.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 104.104. EARLY EFFECTIVE DATE OF RATE INCREASE. (a) For
good cause shown, the regulatory authority may allow a rate
increase, other than a major change, to take effect:
(1) before the end of the 35-day period prescribed by Section
104.102; and
(2) under conditions the regulatory authority prescribes,
subject to suspension as provided by this subchapter.
(b) The gas utility shall immediately revise its schedules to
include the increase.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 104.105. DETERMINATION OF PROPRIETY OF RATE CHANGE;
HEARING. (a) If a schedule modifying or increasing 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 increase, enter on a hearing to determine the propriety of
the increase.
(b) The regulatory authority shall hold a hearing in every case
in which the increase constitutes a major change. The regulatory
authority may, however, use an informal proceeding if the
regulatory authority does not receive a complaint before the
expiration of 45 days after the date notice of the increase 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 gas 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. 104.106. PREFERENCE TO HEARING. The regulatory authority
shall:
(1) give preference to the hearing under this subchapter and to
deciding questions arising under this subchapter 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. 104.107. RATE SUSPENSION; DEADLINE. (a) Pending the
hearing and a decision:
(1) the local regulatory authority, after delivering to the gas
utility a written statement of the regulatory authority's
reasons, may suspend the operation of the schedule for not longer
than 90 days after the date the schedule would otherwise be
effective; and
(2) the railroad commission may suspend the operation of the
schedule for not longer than 150 days after the date the schedule
would otherwise be effective.
(b) The 150-day period prescribed by Subsection (a)(2) shall be
extended for 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 schedule of rates before expiration of
the applicable suspension period, the regulatory authority is
considered to have approved the schedule. 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.
Amended by Acts 2001, 77th Leg., ch. 1233, Sec. 67, eff. Sept. 1,
2001.
Sec. 104.108. TEMPORARY RATES. (a) The regulatory authority
may establish temporary rates to be in effect during the
applicable suspension period under Section 104.107.
(b) If the regulatory authority does not establish temporary
rates, the rates in effect when the suspended schedule was filed
continue in effect during the suspension period.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 104.109. BONDED RATES. (a) A gas utility may put a
changed rate into effect by filing a bond with the regulatory
authority if the regulatory authority fails to make a final
determination within 90 days from the date the proposed increase
would otherwise be effective.
(b) The bonded rate may not exceed the proposed rate.
(c) The bond must be:
(1) payable to the regulatory authority in an amount, in a form,
and with a surety approved by the regulatory authority; and
(2) conditioned on refund.
(d) The gas 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 regulatory authority.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 104.110. 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 gas utility shall
charge or apply for the service in question; and
(2) serve a copy of the order on the gas utility.
(b) The rates established in the order shall be observed
thereafter until changed as provided by this subtitle.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 104.111. APPROVAL OF DECREASE IN RATES. Notwithstanding
any other provision in this subtitle, the regulatory authority
may, without reference to the cost of service standard prescribed
by Section 104.051, administratively approve a decrease in rates
proposed by the applicant and agreed on by each party directly
affected unless the regulatory authority determines that the
proposed decrease is not in the public interest.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 104.112. SURCHARGE TO RECOVER RELOCATION COSTS. (a) This
section applies to a gas utility's costs of relocating a facility
to accommodate construction or improvement of a highway, road,
street, public way, or other public work by or on behalf of the
United States, this state, a political subdivision of this state,
or another entity having the power of eminent domain that are not
reimbursed by a source other than as provided by this section.
(b) A gas utility may recover its relocation costs to which this
section applies through a surcharge on gas volumes sold and
transported to customers in the service area where the relocation
occurred by applying to each appropriate regulatory authority for
a new rate schedule or tariff. The gas utility is not required to
file a statement of intent to increase rates to institute the
surcharge, and the other provisions of this subchapter, other
than appeal rights, do not apply to institution of the surcharge.
(c) An application under Subsection (b) must include sufficient
documentation to demonstrate:
(1) the requirement for each relocation;
(2) the entity requiring the relocation;
(3) costs incurred for relocation of comparable facilities;
(4) surcharge computations; and
(5) that reasonable efforts have been made to receive
reimbursement from the entity requiring the relocation, if
applicable.
(d) Not later than the 35th day after the date an application
under Subsection (b) is received, the regulatory authority shall
administratively grant or deny the application. Denial of the
application must be based on a finding that:
(1) the relocation was not necessary or required;
(2) the costs of the relocation were excessive or not supported;
(3) the utility did not pursue reimbursement from the entity
requiring the relocation, if applicable;
(4) the surcharge is unduly discriminatory among customers or
classes of customers located in the service area; or
(5) the period over which the relocation costs are designed to
be recovered is less than one or more than three years.
(e) If the regulating authority does not make a decision before
the deadline prescribed by Subsection (d), the application is
approved.
Added by Acts 1999, 76th Leg., ch. 219, Sec. 1, eff. Sept. 1,
1999. Amended by Acts 2001, 77th Leg., ch. 662, Sec. 1, eff.
Sept. 1, 2001.
SUBCHAPTER D. RATE CHANGES PROPOSED BY COMMISSION
Sec. 104.151. 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 a gas 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 gas utility.
(b) The rates set under Subsection (a) constitute the legal
rates of the gas utility until changed as provided by this
subtitle.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 104.152. INVESTIGATING COSTS OF OBTAINING SERVICE FROM
ANOTHER SOURCE. If a gas utility does not produce 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
in an investigation of the reasonableness of the gas utility's
rates.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
SUBCHAPTER E. RATES FOR GOVERNMENTAL ENTITIES
Sec. 104.201. TRANSPORTATION RATES BETWEEN GAS UTILITY OR
MUNICIPALLY OWNED UTILITY AND STATE AGENCY. (a) Notwithstanding
Section 104.003(b), absent a contract for transportation service
between a state agency and a gas utility or municipally owned
utility, the railroad commission, not later than the 210th day
after the date either party files a request to set a
transportation rate, shall establish the transportation rate for
the state agency. The commission has exclusive original
jurisdiction to establish a transportation rate for a state
agency under this section.
(b) The railroad commission shall base its determination of the
transportation rate under Subsection (a) on the cost of providing
the transportation service for both the distribution system and
the transmission system, as applicable, of the gas utility or
municipally owned utility.
(c) The railroad commission may order temporary rates under
Subsection (a) as provided for under the commission's appellate
jurisdiction.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 104.202. EXCLUDED EXPENSES. (a) The rates that a gas
utility or municipally owned utility charges a state agency may
not include an amount representing a gross receipts assessment,
regulatory assessment, or similar expense of the utility.
(b) An expense under Subsection (a) that is reasonable and is
not recovered from a state agency under this section may be
recovered from other customers of the gas utility or municipally
owned utility.
(c) A gross receipts assessment, regulatory assessment, or
similar expense of the utility does not include a payment to a
municipality under a contract, franchise, or other agreement.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Amended by Acts 1999, 76th Leg., ch. 1326, Sec. 1, eff. June 18,
1999.
Sec. 104.203. 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.
SUBCHAPTER F. SERVICES
Sec. 104.251. GENERAL STANDARD. A gas utility shall furnish
service, instrumentalities, and facilities that are safe,
adequate, efficient, and reasonable.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 104.252. AUTHORITY OF REGULATORY AUTHORITY CONCERNING
STANDARDS. A regulatory authority, on its own motion or on
complaint and after reasonable notice and hearing, may:
(1) adopt just and reasonable standards, classifications,
regulations, or practices a gas utility must follow in furnishing
a service;
(2) adopt adequate and reasonable standards for measuring a
condition, including quantity, quality, and pressure relating to
the furnishing of a service;
(3) adopt reasonable regulations for examining, testing, and
measuring a service; and
(4) adopt or approve reasonable rules, regulations,
specifications, and standards to ensure the accuracy of
equipment, including meters and instruments, used to measure a
service.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 104.253. RULE OR STANDARD. (a) A gas utility may file
with the regulatory authority a standard, classification,
regulation, or practice the utility follows.
(b) The standard, classification, regulation, or practice
continues in force until:
(1) amended by the utility; or
(2) changed by the regulatory authority as provided by this
subtitle.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 104.254. SERVICE. A gas utility or municipally owned
utility may not refuse to provide service to a state agency if
pipeline capacity is available on an existing facility of the
utility.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 104.2545. REQUIRED SERVICE TO PUBLIC RETAIL CUSTOMER. (a)
In this section, "service site" means facilities or buildings
operated by a public retail customer or a group of adjacent
facilities or buildings operated by a public retail customer
within one contiguous geographical area.
(b) Unless the utility is prohibited by other law from providing
the service and if sufficient pipeline capacity is available on
an existing facility of the utility to provide the service, a gas
utility or municipally owned utility may not refuse to provide
service to a public retail customer at a service site, at rates
established as provided by Subsection (c), the following
services:
(1) the sale of gas;
(2) the transportation of an annual average of 25 million
British thermal units or more each day of gas that is:
(A) taken as a royalty in kind; and
(B) owned by the state or managed by a marketing program
operated by the state or by a state agency; or
(3) a combination of the services described by Subdivisions (1)
and (2).
(c) A utility shall provide a service described by Subsection
(b) at rates provided by a written contract negotiated between
the utility and the state or a state agency. If the utility and
the state or state agency are not able to agree to a contract
rate, a fair and reasonable rate may be determined for the public
retail customer, as a rate for a separate class of service, by
the railroad commission or, for municipally owned gas utilities,
by the relevant regulatory body under this chapter.
(d) In this section, "public retail customer" has the meaning
assigned by Section 35.101.
Added by Acts 1999, 76th Leg., ch. 300, Sec. 1, eff. Sept. 1,
1999. Amended by Acts 2003, 78th Leg., ch. 563, Sec. 1, eff. June
20, 2003.
Sec. 104.255. BILLING. (a) A gas utility or municipally owned
utility may not bill or otherwise require the state or a state
agency or institution to pay for service before the service is
provided.
(b) The railroad commission shall adopt rules concerning payment
of bills by the state or a state agency to a gas utility or
municipally owned utility. The rules must be consistent with
Chapter 2251, Government Code.
(c) This subtitle does not prohibit a gas utility or municipally
owned utility from entering into an agreement with the state or a
state agency to establish a level or average monthly service
billing plan. An agreement under this subsection must require
reconciliation of the leveled or equalized bills quarterly.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 104.2551. ELECTRONIC BILLING. A gas utility or municipally
owned utility may transmit the utility's bill for services
through the Internet or by other electronic means instead of
through the United States mail on the request of a customer of
the gas utility or municipally owned utility.
Added by Acts 2001, 77th Leg., ch. 1233, Sec. 68, eff. Sept. 1,
2001.
Sec. 104.256. EXAMINATION AND TEST OF INSTRUMENT OR EQUIPMENT;
INSPECTION. (a) A regulatory authority may:
(1) examine and test equipment, including meters and
instruments, used to measure service of a gas utility; and
(2) set up and use on the premises occupied by a gas utility an
apparatus or appliance necessary for the examination or test.
(b) The gas utility is entitled to be represented at an
examination, test, or inspection made under this section.
(c) The gas utility and its officers and employees shall
facilitate the examination, test, or inspection by giving
reasonable aid to the regulatory authority and to any person
designated by the regulatory authority for the performance of
those duties.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 104.257. INSPECTION FOR CONSUMER. (a) A consumer may have
a meter or other measuring device tested by a gas utility:
(1) once without charge, after a reasonable period of presumed
accuracy that the regulatory authority establishes by rule; and
(2) at a shorter interval on payment of a reasonable fee
established by the regulatory authority.
(b) The regulatory authority shall establish reasonable fees to
be paid for other examining or testing of a measuring device on
the request of a consumer.
(c) If the consumer requests the test under Subsection (a)(2)
and the measuring device is found unreasonably defective or
incorrect to the substantial disadvantage of the consumer, the
fee the consumer paid at the time of the request shall be
refunded.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 104.258. DISCONNECTION OF GAS SERVICE. (a) In this
section:
(1) "Extreme weather emergency" means a period during which the
previous day's highest temperature did not exceed 32 degrees
Fahrenheit and the temperature is predicted to remain at or below
that level for the next 24 hours according to the nearest
National Weather Service reports.
(2) "Provider" means:
(A) a gas utility, as defined by Sections 101.003 and 121.001;
and
(B) an owner, operator, or manager of a mobile home park or
apartment who purchases natural gas through a master meter for
delivery to a dwelling unit in a mobile home park or apartment
house under Chapter 124.
(b) A provider may not disconnect natural gas service to a
residential customer on a weekend day unless personnel of the
provider are available on that day to take payments and reconnect
service.
(c) A provider may not disconnect natural gas service to a
residential customer during an extreme weather emergency. The
provider shall defer collection of the full payment of bills that
are due during an extreme weather emergency until after the
emergency is over and shall work with customers to establish a
pay schedule for deferred bills.
Added by Acts 2001, 77th Leg., ch. 1149, Sec. 1, eff. Sept. 1,
2001.
SUBCHAPTER G. INTERIM COST RECOVERY AND RATE ADJUSTMENT
Sec. 104.301. INTERIM ADJUSTMENT FOR CHANGES IN INVESTMENT. (a)
A gas utility that has filed a rate case under Subchapter C
within the preceding two years may file with the regulatory
authority a tariff or rate schedule that provides for an interim
adjustment in the utility's monthly customer charge or initial
block rate to recover the cost of changes in the investment in
service for gas utility services. The adjustment shall be
allocated among the gas utility's classes of customers in the
same manner as the cost of service was allocated among classes of
customers in the utility's latest effective rates for the area in
which the tariff or rate schedule is implemented. The gas
utility shall file the tariff or rate schedule, or the annual
adjustment under Subsection (c), with the regulatory authority at
least 60 days before the proposed implementation date of the
tariff, rate schedule, or annual adjustment. The gas utility
shall provide notice of the tariff, rate schedule, or annual
adjustment to affected customers by bill insert or direct mail
not later than the 45th day after the date the utility files the
tariff, rate schedule, or annual adjustment with the regulatory
authority. During the 60-day period, the regulatory authority
may act to suspend the implementation of the tariff, rate
schedule, or annual adjustment for up to 45 days. After the
issuance of a final order or decision by a regulatory authority
in a rate case that is filed after the implementation of a tariff
or rate schedule under this section, any change in investment
that has been included in an interim adjustment in accordance
with the tariff or rate schedule under this section shall no
longer be subject to subsequent review for reasonableness or
prudence. Until the issuance of a final order or decision by a
regulatory authority in a rate case that is filed after the
implementation of a tariff or rate schedule under this section,
all amounts collected under the tariff or rate schedule before
the filing of the rate case are subject to refund.
(b) The amount the gas utility shall adjust the utility's rates
upward or downward under the tariff or rate schedule each
calendar year is based on the difference between the value of the
invested capital for the preceding calendar year and the value of
the invested capital for the calendar year preceding that
calendar year. The value of the invested capital is equal to the
original cost of the investment at the time the investment was
first dedicated to public use minus the accumulated depreciation
related to that investment.
(c) The interim adjustment shall be recalculated on an annual
basis in accordance with the requirements of Subsection (b). The
gas utility may file a request with the regulatory authority to
suspend the operation of the tariff or rate schedule for any
year. The request must be in writing and state the reasons why
the suspension is justified. The regulatory authority may grant
the suspension on a showing by the utility of reasonable
justification.
(d) A gas utility may only adjust the utility's rates under the
tariff or rate schedule for the return on investment,
depreciation expense, ad valorem taxes, revenue related taxes,
and incremental federal income taxes related to the difference in
the value of the invested capital as determined under Subsection
(b). The return on investment, depreciation, and incremental
federal income tax factors used in the computation must be the
same as the factors reflected in the final order issued by or
settlement agreement approved by the regulatory authority
establishing the gas utility's latest effective rates for the
area in which the tariff or rate schedule is implemented.
(e) A gas utility that implements a tariff or rate schedule
under this section shall file with the regulatory authority an
annual report describing the investment projects completed and
placed in service during the preceding calendar year and the
investments retired or abandoned during the preceding calendar
year. The annual report shall also state the cost, need, and
customers benefited by the change in investment.
(f) In addition to the report required under Subsection (e), the
gas utility shall file with the regulatory authority an annual
earnings monitoring report demonstrating the utility's earnings
during the preceding calendar year.
(g) If the gas utility is earning a return on invested capital,
as demonstrated by the report filed under Subsection (f), of more
than 75 basis points above the return established in the latest
effective rates approved by a regulatory authority for the area
in which the tariff or rate schedule is implemented under this
section, the gas utility shall file a statement with that report
stating the reasons why the rates are not unreasonable or in
violation of law.
(h) If a gas utility that implements a tariff or rate schedule
under this section does not file a rate case under Subchapter C
before the fifth anniversary of the date on which the tariff or
rate schedule takes effect, the gas utility shall file a rate
case under that subchapter not later than the 180th day after
that anniversary in relation to any rates subject to the tariff
or rate schedule.
(i) This section does not limit the power of a regulatory
authority under Section 104.151.
(j) A gas utility implementing a tariff or rate schedule under
this section shall reimburse the railroad commission the
utility's proportionate share of the railroad commission's costs
related to the administration of the interim rate adjustment
mechanism provided by this section.
Added by Acts 2003, 78th Leg., ch. 938, Sec. 1, eff. Sept. 1,
2003.
Amended by:
Acts 2005, 79th Leg., Ch.
948, Sec. 1, eff. September 1, 2005.