bill gives the PUC 60 days on water improvement charges

The text as introduced · 1,525 words

89R5264 SCR-F

By: Spiller
H.B. No. 2500

A BILL TO BE ENTITLED

AN ACT

relating to certain proceedings by the Public Utility Commission of

Texas regarding water or sewer service.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 13.183, Water Code, is amended by

amending Subsection (c) and adding Subsection (c-1) to read as

follows:

(c) To ensure that retail customers receive a higher

quality, more affordable, or more reliable water or sewer service,

to encourage regionalization, or to maintain financially stable and

technically sound utilities, the regulatory authority, by rule or

ordinance, as appropriate, may adopt specific alternative

ratemaking methodologies for water or sewer rates to allow for more

timely and efficient cost recovery. Appropriate alternative

ratemaking methodologies are the introduction of new customer

classes, the cash needs method, and phased and multi-step rate

changes. The regulatory authority may also adopt system

improvement charges that may be periodically adjusted to ensure

timely recovery of infrastructure investment. If the utility

commission is the appropriate regulatory authority, the utility

commission shall enter a final order on a request for a system

improvement charge under this subsection not later than the 60th

day after the date the utility commission determines that a

complete application for a system improvement charge has been

filed. The utility commission may extend the deadline for not more

than 15 days for good cause. The utility commission by rule shall

establish a schedule that requires all utilities that have

implemented a system improvement charge approved by the utility

commission to make periodic filings with the utility commission to

modify or review base rates charged by the utility. Overall

revenues determined according to an alternative ratemaking

methodology adopted under this section must provide revenues to the

utility that satisfy the requirements of Subsection (a). The

regulatory authority may not approve rates under an alternative

ratemaking methodology unless the regulatory authority adopts the

methodology before the date the rate application was

administratively complete.

(c-1) An application for a system improvement charge under

Subsection (c) may not be considered complete by the utility

commission unless, to substantiate each claimed eligible cost of a

utility's eligible plant that is not already included in the

applying utility's rates, the application includes:

(1) receipts;

(2) invoices;

(3) contracts; or

(4) other documentation of eligible costs.

SECTION 2. Section 13.301(l), Water Code, is amended to

read as follows:

(l) Notwithstanding any other provision of this section or

Section 13.302 , the utility commission by rule shall adopt a [ an

expedited ] process to expedite an application for the acquisition

of the stock or ownership interest under Section 13.302, or of

assets under this section, of a utility in receivership under

Section 13.412, a utility in supervision under Section 13.4131, or

a utility in temporary management under Section 13.4132, and, if

applicable, its certificated service area, by a Class A or Class B

utility. The applicant must have been appointed as a temporary

manager or supervisor for the utility by the utility commission or

commission or have been appointed as a receiver for the utility at

the request of the utility commission or commission before filing

the application [ that allows a person appointed by the utility

commission or commission under Section 13.4132 as a temporary

manager of a utility, utility in receivership, or utility in

supervision, who is also an operator of a Class A or Class B utility

to apply for utility commission approval of the person's

acquisition of the stock, ownership interest, or assets of the

temporarily managed and operated utility, utility in receivership,

or utility in supervision, its facilities, and, if applicable, its

certificated service area ]. The [ expedited ] process must:

(1) waive public notice requirements regardless of

whether the person elects to charge initial rates in accordance

with Section 13.3011 or use a voluntary valuation determined under

Section 13.305;

(2) require approval of the acquisition transaction if

the transaction is considered to be in the public interest; and

(3) provide that:

(A) the person's appointment is considered

sufficient to demonstrate adequate financial, managerial, and

technical capability for providing continuous and adequate service

to the service area to be acquired and any areas currently

certificated to the person; and

(B) all used and useful invested capital and just

and reasonable operations and maintenance costs incurred by the

person during the person's appointment as temporary manager and

operator of the utility, utility in receivership, or utility in

supervision to be acquired are considered to be a regulatory asset

for the person and are recoverable in the person's next

comprehensive rate proceeding or system improvement charge

application.

SECTION 3. Subchapter H, Chapter 13, Water Code, is amended

by adding Section 13.3021 to read as follows:

Sec. 13.3021. SALES, TRANSFERS, AND MERGERS FOR CERTAIN

RETAIL PUBLIC UTILITIES. (a) The utility commission by rule shall

adopt an expedited process to authorize a municipally owned

utility, a county, a water supply or sewer service corporation, or a

district or authority created under Section 52, Article III, or

Section 59, Article XVI, Texas Constitution, to acquire the stock

or ownership interest under Section 13.302, or assets under Section

13.301, of a utility in receivership under Section 13.412, a

utility in supervision under Section 13.4131, or a utility in

temporary management under Section 13.4132, and, if applicable, its

certificated service area, in the manner provided by Sections

13.301 and 13.302.

(b) The municipally owned utility, county, water supply or

sewer service corporation, district, or authority must have been

appointed as a temporary manager or supervisor for the utility by

the utility commission or commission or as a receiver for the

utility at the request of the utility commission or commission

before filing an acquisition application under this section.

(c) The process must:

(1) be based on the expedited process adopted under

Section 13.301(l), except for any aspects of the process that

cannot be applied to an entity over which the utility commission

does not have original rate jurisdiction;

(2) waive public notice requirements;

(3) require approval of the acquisition transaction if

the transaction is considered to be in the public interest; and

(4) provide that the municipally owned utility's,

county's, water supply or sewer service corporation's, district's,

or authority's appointment is considered sufficient to demonstrate

adequate financial, managerial, and technical capability for

providing continuous and adequate service to the service area to be

acquired and any areas currently certificated to the municipally

owned utility, county, corporation, district, or authority.

SECTION 4. Section 13.412(g), Water Code, is amended to

read as follows:

(g) Notwithstanding Section 64.021, Civil Practice and

Remedies Code, a receiver appointed under this section may :

(1) be a person, a municipally owned utility, a

county, a water supply or sewer service corporation, or a district

or authority created under Section 52, Article III, or Section 59,

Article XVI, Texas Constitution; and

(2) seek approval from the utility commission and the

commission to acquire the water or sewer utility's facilities and

transfer the utility's certificate of convenience and necessity.

The receiver must apply in accordance with Subchapter H.

SECTION 5. Section 13.4132, Water Code, is amended by

amending Subsection (a) and adding Subsection (a-1) to read as

follows:

(a) The utility commission or the commission, after

providing to the utility notice and an opportunity to be heard by

the commissioners at a utility commission or commission meeting,

may authorize a willing person , municipally owned utility, county,

water supply or sewer service corporation, or district or authority

created under Section 52, Article III, or Section 59, Article XVI,

Texas Constitution, to temporarily manage and operate a utility if

the utility:

(1) has discontinued or abandoned operations or the

provision of services;

(2) has been or is being referred to the attorney

general for the appointment of a receiver under Section 13.412; or

(3) provides retail water or sewer utility service

through fewer than 10,000 taps or connections and violates a final

order of the commission by failing to:

(A) provide system capacity that is greater than

the required raw water or groundwater production rate or the

anticipated daily demand of the system;

(B) provide a minimum pressure of 35 pounds per

square inch throughout the distribution system under normal

operating conditions; or

(C) maintain accurate or properly calibrated

testing equipment or other means of monitoring the effectiveness of

a chemical treatment or pathogen inactivation or removal process.

(a-1) For the purposes of this section, a reference to a

person includes a municipally owned utility, county, water supply

or sewer service corporation, or district or authority created

under Section 52, Article III, or Section 59, Article XVI, Texas

Constitution.

SECTION 6. Section 13.183(c), Water Code, as amended by

this Act, applies only to an application for system improvement

charges received by the Public Utility Commission of Texas on or

after the effective date of this Act. An application for system

improvement charges received before the effective date of this Act

is governed by the law in effect on the date the application is

filed, and the former law is continued in effect for that purpose.

SECTION 7. This Act takes effect September 1, 2025.