Texas Laws - Utility Code
UTILITIES CODE
TITLE 3. GAS REGULATION

TITLE 3. GAS REGULATION (7995)(1-click HTML)

SUBTITLE A. GAS UTILITY REGULATORY ACT (7996)(1-click HTML)

CHAPTER 101. GENERAL PROVISIONS AND OFFICE OF PUBLIC UTILITY COUNSEL (7997)(1-click HTML)
Sec. 101.001. SHORT TITLE. (7998)(1-click HTML)

This subtitle may be cited as the Gas Utility Regulatory Act. (7999)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8000)

Sec. 101.002. PURPOSE AND FINDINGS. (8001)(1-click HTML)

(a) This subtitle is enacted to protect the public interest inherent in the rates and services of gas utilities. The purpose of this subtitle is to establish a comprehensive and adequate regulatory system for gas utilities to assure rates, operations, and services that are just and reasonable to the consumers and to the utilities. (8002)

(b) Gas utilities are by definition monopolies in the areas they serve. As a result, the normal forces of competition that regulate prices in a free enterprise society do not operate. Public agencies regulate utility rates, operations, and services as a substitute for competition. (8003)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8004)

Sec. 101.003. DEFINITIONS. (8005)(1-click HTML)

In this subtitle: (8006)

(1) "Affected person" means: (8007)

(A) a gas utility affected by an action of a regulatory authority; (8008)

(B) a person whose utility service or rates are affected by a proceeding before a regulatory authority; or (8009)

(C) a person who: (8010)

(i) is a competitor of a gas utility with respect to a service performed by the utility; or (8011)

(ii) wants to enter into competition with a gas utility. (8012)

(2) "Affiliate" means: (8013)

(A) a person who directly or indirectly owns or holds at least five percent of the voting securities of a gas utility; (8014)

(B) a person in a chain of successive ownership of at least five percent of the voting securities of a gas utility; (8015)

(C) a corporation that has at least five percent of its voting securities owned or controlled, directly or indirectly, by a gas utility; (8016)

(D) a corporation that has at least five percent of its voting securities owned or controlled, directly or indirectly, by: (8017)

(i) a person who directly or indirectly owns or controls at least five percent of the voting securities of a gas utility; or (8018)

(ii) a person in a chain of successive ownership of at least five percent of the voting securities of a gas utility; (8019)

(E) a person who is an officer or director of a gas utility or of a corporation in a chain of successive ownership of at least five percent of the voting securities of a gas utility; or (8020)

(F) a person determined to be an affiliate under Section 101.004. (8021)

(3) "Allocation" means the division among municipalities or among municipalities and unincorporated areas of the plant, revenues, expenses, taxes, and reserves of a gas utility used to provide gas utility service in a municipality or for a municipality and unincorporated areas. (8022)

(4) "Corporation" means a domestic or foreign corporation, joint-stock company, or association, and each lessee, assignee, trustee, receiver, or other successor in interest of the corporation, company, or association, that has any of the powers or privileges of a corporation not possessed by an individual or partnership. The term does not include a municipal corporation, except as expressly provided by this subtitle. (8023)

(5) "Counsellor" means the chief executive of the Office of Public Utility Counsel. (8024)

(6) "Facilities" means all of the plant and equipment of a gas utility and includes the tangible and intangible property, without limitation, owned, operated, leased, licensed, used, controlled, or supplied for, by, or in connection with the business of the gas utility. (8025)

(7) "Gas utility" includes a person or river authority that owns or operates for compensation in this state equipment or facilities to transmit or distribute combustible hydrocarbon natural gas or synthetic natural gas for sale or resale in a manner not subject to the jurisdiction of the Federal Energy Regulatory Commission under the Natural Gas Act (15 U.S.C. Section 717 et seq.). The term includes a lessee, trustee, or receiver of a gas utility. The term does not include: (8026)

(A) a municipal corporation; (8027)

(B) a person or river authority to the extent the person or river authority: (8028)

(i) produces, gathers, transports, or sells natural gas or synthetic natural gas under Section 121.004 or 121.005; (8029)

(ii) distributes or sells liquefied petroleum gas; or (8030)

(iii) transports, delivers, or sells natural gas for fuel for irrigation wells or any other direct agricultural use; (8031)

(C) a person to the extent the person: (8032)

(i) sells natural gas for use as vehicle fuel; (8033)

(ii) sells natural gas to a person who later sells the natural gas for use as vehicle fuel; or (8034)

(iii) owns or operates equipment or facilities to sell or transport natural gas for ultimate use as vehicle fuel; (8035)

(D) a person not otherwise a gas utility who furnishes gas or gas service only to itself, its employees, or its tenants as an incident of employment or tenancy, if the gas or gas service is not resold to or used by others; (8036)

(E) a person excluded from being considered a gas utility under Section 121.007; or (8037)

(F) an electric cooperative, as that term is defined by Section 11.003, or its subsidiary, that is excluded from regulation as a gas utility by Section 121.008. (8038)

(8) "Municipally owned utility" means a utility owned, operated, and controlled by a municipality or by a nonprofit corporation the directors of which are appointed by one or more municipalities. (8039)

(9) "Order" means all or a part of a final disposition by a regulatory authority in a matter other than rulemaking, without regard to whether the disposition is affirmative or negative or injunctive or declaratory. The term includes the setting of a rate. (8040)

(10) "Person" includes an individual, a partnership of two or more persons having a joint or common interest, a mutual or cooperative association, a limited liability company, and a corporation. (8041)

(11) "Proceeding" means a hearing, investigation, inquiry, or other procedure for finding facts or making a decision under this subtitle. The term includes a denial of relief or dismissal of a complaint. (8042)

(12) "Rate" means: (8043)

(A) any compensation, tariff, charge, fare, toll, rental, or classification that is directly or indirectly demanded, observed, charged, or collected by a gas utility for a service, product, or commodity described in the definition of gas utility in this section; and (8044)

(B) a rule, regulation, practice, or contract affecting the compensation, tariff, charge, fare, toll, rental, or classification. (8045)

(13) "Regulatory authority" means either the railroad commission or the governing body of a municipality, in accordance with the context. (8046)

(14) "Service" has its broadest and most inclusive meaning. The term includes any act performed, anything supplied, and any facilities used or supplied by a gas utility in the performance of the utility's duties under this subtitle to its patrons, employees, other gas utilities, and the public. The term also includes the interchange of facilities between two or more gas utilities. (8047)

(15) "State agency" has the meaning assigned by Section 572.002, Government Code, to the extent the state agency must obtain the approval described by Section 31.401(a), Natural Resources Code. (8048)

(16) "Test year" means the most recent 12 months, beginning on the first day of a calendar or fiscal year quarter, for which operating data for a gas utility are available. (8049)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 11, Sec. 1, eff. May 3, 1999. (8050)

Amended by: (8051)

Acts 2007, 80th Leg., R.S., Ch. 709 (H.B. 2174), Sec. 1, eff. June 15, 2007. (8052)

Acts 2011, 82nd Leg., R.S., Ch. 4 (S.B. 312), Sec. 1, eff. April 21, 2011. (8053)

Sec. 101.004. PERSON DETERMINED TO BE AFFILIATE. (8054)(1-click HTML)

(a) The railroad commission may determine that a person is an affiliate for purposes of this subtitle if the railroad commission after notice and hearing finds that the person: (8055)

(1) actually exercises substantial influence or control over the policies and actions of a gas utility; (8056)

(2) is a person over which a gas utility exercises the control described by Subdivision (1); (8057)

(3) is under common control with a gas utility; or (8058)

(4) actually exercises substantial influence over the policies and actions of a gas utility in conjunction with one or more persons with whom the person is related by ownership or blood relationship, or by action in concert, that together they are affiliated with the gas utility within the meaning of this section even though neither person may qualify as an affiliate individually. (8059)

(b) For purposes of Subsection (a)(3), "common control with a gas utility" means the direct or indirect possession of the power to direct or cause the direction of the management and policies of another, without regard to whether that power is established through ownership or voting of securities or by any other direct or indirect means. (8060)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8061)

Sec. 101.005. ADMINISTRATIVE PROCEDURE. (8062)(1-click HTML)

Chapter 2001, Government Code, applies to a proceeding under this subtitle except to the extent inconsistent with this subtitle. (8063)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8064)

Sec. 101.006. CUMULATIVE EFFECT; APPLICATION TO GAS UTILITIES. (8065)(1-click HTML)

(a) This subtitle is cumulative of laws existing on September 1, 1983, relating to the jurisdiction, power, or authority of the railroad commission over a gas utility, and, except as specifically in conflict with this subtitle, that jurisdiction, power, and authority are not limited by this subtitle. (8066)

(b) This subtitle applies to all gas utilities, including a gas utility that is under the jurisdiction, power, or authority of the railroad commission in accordance with a law other than this subtitle. (8067)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8068)

Sec. 101.007. LIBERAL CONSTRUCTION. (8069)(1-click HTML)

This subtitle shall be construed liberally to promote the effectiveness and efficiency of regulation of gas utilities to the extent that this construction preserves the validity of this subtitle and its provisions. (8070)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8071)

Sec. 101.008. CONSTRUCTION WITH FEDERAL AUTHORITY. (8072)(1-click HTML)

This subtitle shall be construed to apply so as not to conflict with any authority of the United States. (8073)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8074)

SUBCHAPTER B. OFFICE OF PUBLIC UTILITY COUNSEL (8075)(1-click HTML)
Sec. 101.051. OFFICE OF PUBLIC UTILITY COUNSEL. (8076)(1-click HTML)

The independent office of public utility counsel represents the interests of residential consumers. (8077)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8078)

Sec. 101.052. OFFICE POWERS AND DUTIES. (8079)(1-click HTML)

(a) The office: (8080)

(1) may appear or intervene as a party or otherwise represent residential consumers, as a class, in appeals to the railroad commission only at the written request of an affected municipality's governing body; (8081)

(2) may initiate or intervene as a matter of right or otherwise appear in a judicial proceeding that involves an action taken by the railroad commission in a proceeding in which the office was a party; (8082)

(3) is entitled to the same access as a party, other than railroad commission staff, to records gathered by the railroad commission under Section 102.203; (8083)

(4) is entitled to discovery of any nonprivileged matter that is relevant to the subject matter of a proceeding or petition before the railroad commission; (8084)

(5) may represent an individual residential consumer with respect to the consumer's disputed complaint concerning utility services that is unresolved before the railroad commission; and (8085)

(6) may recommend legislation to the legislature that the office determines would positively affect the interests of residential consumers. (8086)

(b) The office may represent only as a class the residential consumers of a municipality that makes a request under Subsection (a)(1). (8087)

(c) This section does not limit the authority of the railroad commission to represent residential consumers. (8088)

(d) The appearance of the counsellor in a proceeding does not preclude the appearance of other parties on behalf of residential consumers. The counsellor may not be grouped with any other party. (8089)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8090)

Sec. 101.053. PROHIBITED ACTS. (8091)(1-click HTML)

(a) The counsellor may not: (8092)

(1) have a direct or indirect interest in a gas utility company regulated under this subtitle; or (8093)

(2) provide legal services directly or indirectly to or be employed in any capacity by a gas utility company regulated under this subtitle, its parent, or its subsidiary companies, corporations, or cooperatives. (8094)

(b) The prohibition under Subsection (a) applies during the period of the counsellor's service and until the first anniversary of the date the counsellor ceases to serve as counsellor. (8095)

(c) This section does not prohibit a person from otherwise engaging in the private practice of law after the person ceases to serve as counsellor. (8096)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8097)

Sec. 101.054. PERSONNEL. (8098)(1-click HTML)

(a) The counsellor may employ lawyers, economists, engineers, consultants, statisticians, accountants, clerical staff, and other employees as the counsellor determines necessary to carry out this subchapter. (8099)

(b) An employee receives compensation as prescribed by the legislature from the assessment imposed by Subchapter A, Chapter 16. (8100)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8101)

CHAPTER 102. JURISDICTION AND POWERS OF RAILROAD COMMISSION AND OTHER REGULATORY AUTHORITIES (8102)(1-click HTML)
SUBCHAPTER A. GENERAL POWERS OF RAILROAD COMMISSION (8103)(1-click HTML)
Sec. 102.001. RAILROAD COMMISSION JURISDICTION. (8104)(1-click HTML)

(a) The railroad commission has exclusive original jurisdiction over the rates and services of a gas utility: (8105)

(1) that distributes natural gas or synthetic natural gas in: (8106)

(A) areas outside a municipality; and (8107)

(B) areas inside a municipality that surrenders its jurisdiction to the railroad commission under Section 103.003; and (8108)

(2) that transmits, transports, delivers, or sells natural gas or synthetic natural gas to a gas utility that distributes the gas to the public. (8109)

(b) The railroad commission has exclusive appellate jurisdiction to review an order or ordinance of a municipality exercising exclusive original jurisdiction as provided by this subtitle. (8110)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 2001, 77th Leg., ch. 1233, Sec. 63, eff. Sept. 1, 2001. (8111)

Sec. 102.002. LIMITATION ON RAILROAD COMMISSION JURISDICTION. (8112)(1-click HTML)

Except as otherwise provided by this subtitle, this subtitle does not authorize the railroad commission to: (8113)

(1) regulate or supervise a rate or service of a municipally owned utility; or (8114)

(2) affect the jurisdiction, power, or duty of a municipality that has elected to regulate and supervise a gas utility in the municipality. (8115)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8116)

Sec. 102.003. RAILROAD COMMISSION POWERS RELATING TO REPORTS. (8117)(1-click HTML)

The railroad commission may: (8118)

(1) require a gas utility to report to the railroad commission information relating to the gas utility and an affiliate inside or outside this state as useful in administering this subtitle; (8119)

(2) establish the form for a report; (8120)

(3) determine the time for a report and the frequency with which the report is to be made; (8121)

(4) require that a report be made under oath; (8122)

(5) require the filing with the railroad commission of a copy of: (8123)

(A) a contract or arrangement between a gas utility and an affiliate; (8124)

(B) a report filed with a federal agency or a governmental agency or body of another state; and (8125)

(C) an annual report that shows each payment of compensation, other than salary or wages subject to federal income tax withholding: (8126)

(i) to residents of this state; (8127)

(ii) with respect to legal, administrative, or legislative matters in this state; or (8128)

(iii) for representation before the legislature of this state or any governmental agency or body; and (8129)

(6) require that a contract or arrangement described by Subdivision (5)(A) that is not in writing be reduced to writing and filed with the railroad commission. (8130)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8131)

Sec. 102.004. REPORT OF SUBSTANTIAL INTEREST. (8132)(1-click HTML)

The railroad commission may require disclosure of the identity and respective interests of each owner of at least one percent of the voting securities of a gas utility or its affiliate. (8133)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8134)

Sec. 102.005. ASSISTANCE TO MUNICIPALITY. (8135)(1-click HTML)

On request of a municipality, the railroad commission may advise and assist the municipality with respect to a question or proceeding arising under this subtitle. Assistance provided by the railroad commission may include aid to a municipality on a matter pending before the railroad commission, a court, or the municipality's governing body, such as making a staff member available as a witness or otherwise providing evidence. (8136)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8137)

Sec. 102.006. ADMINISTRATIVE HEARINGS IN CONTESTED CASES. (8138)(1-click HTML)

(a) The railroad commission by rule shall provide for administrative hearings in contested cases to be conducted by one or more members of the railroad commission, by railroad commission hearings examiners, or by the State Office of Administrative Hearings. The rules must provide for a railroad commission hearings examiner or the State Office of Administrative Hearings to conduct each hearing in a contested case that is not conducted by one or more members of the railroad commission. A hearing must be conducted in accordance with the rules and procedures adopted by the railroad commission. (8139)

(b) The railroad commission may delegate to a railroad commission hearings examiner or to the State Office of Administrative Hearings the authority to make a final decision and to issue findings of fact, conclusions of law, and other necessary orders in a proceeding in which there is not a contested issue of fact or law. (8140)

(c) The railroad commission by rule shall define the procedures by which it delegates final decision-making authority under Subsection (b) to a railroad commission hearings examiner or to the State Office of Administrative Hearings. (8141)

(d) For purposes of judicial review, the final decision of a railroad commission hearings examiner or an administrative law judge of the State Office of Administrative Hearings in a matter delegated under Subsection (b) has the same effect as a final decision of the railroad commission unless a member of the commission requests formal review of the decision. (8142)

(e) The State Office of Administrative Hearings shall charge the railroad commission a fixed annual rate for hearings conducted by the office under this section only if the legislature appropriates money for that purpose. If the legislature does not appropriate money for the payment of a fixed annual rate under this section, the State Office of Administrative Hearings shall charge the railroad commission an hourly rate set by the office under Section 2003.024(a), Government Code, for hearings conducted by the office under this section. (8143)

Added by Acts 2001, 77th Leg., ch. 1233, Sec. 64, eff. Sept. 1, 2001. Amended by Acts 2003, 78th Leg., ch. 200, Sec. 3, eff. Sept. 1, 2003. (8144)

Amended by: (8145)

Acts 2015, 84th Leg., R.S., Ch. 228 (H.B. 2154), Sec. 25, eff. September 1, 2015. (8146)

SUBCHAPTER B. RESTRICTIONS ON CERTAIN TRANSACTIONS (8147)(1-click HTML)
Sec. 102.051. REPORT OF CERTAIN TRANSACTIONS; RAILROAD COMMISSION CONSIDERATION. (8148)(1-click HTML)

(a) Not later than the 60th day after the date the transaction takes effect, a gas utility shall report to the railroad commission: (8149)

(1) a sale, acquisition, or lease of a plant as an operating unit or system in this state for a total consideration of more than $1 million; or (8150)

(2) a merger or consolidation with another gas utility operating in this state. (8151)

(b) On the filing of a report with the railroad commission, the railroad commission shall investigate the transaction described by Subsection (a), with or without a public hearing, to determine whether the action is consistent with the public interest. In reaching its determination, the railroad commission shall consider the reasonable value of the property, facilities, or securities to be acquired, disposed of, merged, or consolidated. (8152)

(c) If the railroad commission finds that a transaction is not in the public interest, the railroad commission shall take the effect of the transaction into consideration in ratemaking proceedings and disallow the effect of the transaction if the transaction will unreasonably affect rates or service. (8153)

(d) This section does not apply to: (8154)

(1) the purchase of a unit of property for replacement; or (8155)

(2) an addition to the facilities of a gas utility by construction. (8156)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 32, Sec. 1, eff. Sept. 1, 1999. (8157)

Amended by: (8158)

Acts 2005, 79th Leg., Ch. 1000 (H.B. 474), Sec. 1, eff. September 1, 2005. (8159)

Sec. 102.052. REPORT OF PURCHASE OF VOTING STOCK IN GAS UTILITY. (8160)(1-click HTML)

A gas utility may not purchase voting stock in another gas utility doing business in this state unless the utility reports the purchase to the railroad commission. (8161)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8162)

Sec. 102.053. REPORT OF LOAN TO STOCKHOLDERS. (8163)(1-click HTML)

A gas utility may not loan money, stocks, bonds, notes, or other evidence of indebtedness to a person who directly or indirectly owns or holds any stock of the gas utility unless the gas utility reports the transaction to the railroad commission within a reasonable time. (8164)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8165)

SUBCHAPTER C. RECORDS (8166)(1-click HTML)
Sec. 102.101. RECORDS OF GAS UTILITY. (8167)(1-click HTML)

(a) Each gas utility shall keep and provide to the regulatory authority, in the manner and form prescribed by the railroad commission, uniform accounts of all business transacted by the gas utility. (8168)

(b) The railroad commission may prescribe the form of books, accounts, records, and memoranda to be kept by a gas utility, including: (8169)

(1) the books, accounts, records, and memoranda of: (8170)

(A) the provision of and capacity for service; and (8171)

(B) the receipt and expenditure of money; and (8172)

(2) any other form, record, and memorandum that the railroad commission considers necessary to carry out this subtitle. (8173)

(c) For a gas utility subject to regulation by a federal regulatory agency, compliance with the system of accounts prescribed for the particular class of utilities by the federal agency may be considered sufficient compliance with the system prescribed by the railroad commission. The railroad commission may prescribe the form of books, accounts, records, and memoranda covering information in addition to that required by the federal agency. The system of accounts and the form of books, accounts, records, and memoranda prescribed by the railroad commission for a gas utility or class of utilities may not be inconsistent with the systems and forms established by a federal agency for that gas utility or class of utilities. (8174)

(d) Each gas utility shall: (8175)

(1) keep and provide its books, accounts, records, and memoranda accurately and faithfully in the manner and form prescribed by the railroad commission; and (8176)

(2) comply with the directions of the regulatory authority relating to the books, accounts, records, and memoranda. (8177)

(e) In this section, "gas utility" includes a municipally owned utility. (8178)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8179)

Sec. 102.102. MAINTENANCE OF OFFICE AND RECORDS IN THIS STATE. (8180)(1-click HTML)

(a) Each gas utility shall maintain an office in this state in a county in which some part of the utility's property is located. The gas utility shall keep in this office all books, accounts, records, and memoranda required by the railroad commission to be kept in this state. (8181)

(b) A book, account, record, or memorandum required by the regulatory authority to be kept in this state may not be removed from this state except as prescribed by the railroad commission. (8182)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8183)

Sec. 102.103. COMMUNICATIONS WITH REGULATORY AUTHORITY. (8184)(1-click HTML)

(a) The regulatory authority shall adopt rules governing communications with the regulatory authority or a member or employee of the regulatory authority by: (8185)

(1) a gas utility; (8186)

(2) an affiliate; or (8187)

(3) a representative of a gas utility or affiliate. (8188)

(b) A record of a communication must contain: (8189)

(1) the name of the person contacting the regulatory authority or member or employee of the regulatory authority; (8190)

(2) the name of the business entity represented; (8191)

(3) a brief description of the subject matter of the communication; and (8192)

(4) the action, if any, requested by the gas utility, affiliate, or representative. (8193)

(c) Records compiled under Subsection (b) shall be available to the public monthly. (8194)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8195)

Sec. 102.104. JURISDICTION OVER AFFILIATE. (8196)(1-click HTML)

The railroad commission has jurisdiction over an affiliate that has a transaction with a gas utility under the railroad commission's jurisdiction to the extent of access to an account or a record of the affiliate relating to the transaction, including an account or a record of joint or general expenses, any portion of which may be applicable to the transaction. (8197)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8198)

SUBCHAPTER D. REQUIRED REPORTS AND FILINGS (8199)(1-click HTML)
Sec. 102.151. SCHEDULE FILINGS. (8200)(1-click HTML)

(a) A gas utility shall file with each regulatory authority schedules showing all rates that are: (8201)

(1) subject to the regulatory authority's original or appellate jurisdiction; and (8202)

(2) in effect for a gas utility service, product, or commodity offered by the gas utility. (8203)

(b) The gas utility shall file as a part of the schedules required under Subsection (a) each rule or regulation that relates to or affects: (8204)

(1) a rate of the gas utility; or (8205)

(2) a gas utility service, product, or commodity furnished by the gas utility. (8206)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8207)

Sec. 102.152. DEPRECIATION ACCOUNT. (8208)(1-click HTML)

The railroad commission shall require each gas utility or municipally owned utility to carry a proper and adequate depreciation account in accordance with: (8209)

(1) the rates and methods prescribed by the railroad commission under Section 104.054; and (8210)

(2) any other rule the railroad commission adopts. (8211)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8212)

Sec. 102.153. ACCOUNTS OF PROFITS AND LOSSES. (8213)(1-click HTML)

A gas utility or municipally owned utility shall keep separate accounts showing profits or losses from the sale or lease of merchandise, including an appliance, a fixture, or equipment. (8214)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8215)

Sec. 102.154. REPORT OF CERTAIN EXPENSES. (8216)(1-click HTML)

A regulatory authority may require a gas utility to annually report the utility's expenditures for: (8217)

(1) business gifts and entertainment; and (8218)

(2) advertising or public relations, including expenditures for institutional and consumption-inducing purposes. (8219)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8220)

Sec. 102.201. INQUIRY INTO MANAGEMENT AND AFFAIRS. (8221)(1-click HTML)

A regulatory authority may inquire into the management and affairs of each gas utility and shall keep itself informed as to the manner and method in which each gas utility is managed and its affairs are conducted. (8222)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8223)

Sec. 102.202. AUDIT OF ACCOUNTS. (8224)(1-click HTML)

A regulatory authority may require the examination and audit of the accounts of a gas or municipally owned utility. (8225)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8226)

Sec. 102.203. INSPECTION. (8227)(1-click HTML)

At a reasonable time for a reasonable purpose, a regulatory authority and, to the extent authorized by the regulatory authority, its counsel, agent, or employee may: (8228)

(1) inspect and obtain copies of the papers, books, accounts, documents, and other business records of a gas utility within its jurisdiction; and (8229)

(2) inspect the plant, equipment, and other property of a gas utility within its jurisdiction. (8230)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8231)

Sec. 102.204. EXAMINATIONS UNDER OATH. (8232)(1-click HTML)

In connection with an investigation taken under Section 102.203, the regulatory authority may: (8233)

(1) examine under oath an officer, agent, or employee of a gas utility; or (8234)

(2) authorize the person conducting the action to make the examination under oath. (8235)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8236)

Sec. 102.205. ENTERING PREMISES OF GAS UTILITY. (8237)(1-click HTML)

(a) A member, agent, or employee of a regulatory authority may enter the premises occupied by a gas utility to conduct an inspection, examination, or test or to exercise any other authority provided by this subtitle. (8238)

(b) A member, agent, or employee of the regulatory authority may act under this section only during reasonable hours and after reasonable notice to the gas utility. (8239)

(c) A gas utility is entitled to be represented when an inspection, examination, or test is conducted on its premises. The gas utility is entitled to a reasonable time to secure a representative before the inspection, examination, or test begins. (8240)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8241)

Sec. 102.206. PRODUCTION OF OUT-OF-STATE RECORDS. (8242)(1-click HTML)

(a) A regulatory authority may require, by order or subpoena served on a gas utility, the production, at the time and place in this state that the regulatory authority designates, of any books, accounts, papers, or records kept by that gas utility outside this state or, if ordered by the railroad commission, verified copies of the books, accounts, papers, or records. (8243)

(b) A gas utility that fails or refuses to comply with an order or subpoena under this section violates this subtitle. (8244)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8245)

SUBCHAPTER F. GENERAL PROVISIONS RELATING TO PROCEEDINGS BEFORE REGULATORY AUTHORITY (8246)(1-click HTML)
Sec. 102.251. RECORD OF PROCEEDING. (8247)(1-click HTML)

The regulatory authority shall keep a record of each proceeding before the authority. (8248)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8249)

Sec. 102.252. RIGHT TO BE HEARD. (8250)(1-click HTML)

Each party to a proceeding before a regulatory authority is entitled to be heard by attorney or in person. (8251)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8252)

CHAPTER 103. JURISDICTION AND POWERS OF MUNICIPALITY (8253)(1-click HTML)
Sec. 103.001. MUNICIPAL JURISDICTION. (8254)(1-click HTML)

To provide fair, just, and reasonable rates and adequate and efficient services, the governing body of a municipality has exclusive original jurisdiction over the rates, operations, and services of a gas utility within the municipality, subject to the limitations imposed by this subtitle, unless the municipality surrenders its jurisdiction to the railroad commission under Section 103.003. (8255)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 2001, 77th Leg., ch. 1233, Sec. 65, eff. Sept. 1, 2001. (8256)

Sec. 103.002. FRANCHISES. (8257)(1-click HTML)

(a) This subtitle does not restrict the rights and powers of a municipality to grant or refuse a franchise to use the streets and alleys in the municipality or to make a statutory charge for that use. (8258)

(b) A municipality that performs a regulatory function under this subtitle may make each charge that is authorized by: (8259)

(1) this subtitle; or (8260)

(2) the applicable franchise agreement. (8261)

(c) A franchise agreement may not limit or interfere with a power conferred on the railroad commission by this subtitle. (8262)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8263)

Sec. 103.003. SURRENDER OF MUNICIPAL JURISDICTION TO RAILROAD COMMISSION; REINSTATEMENT OF JURISDICTION. (8264)(1-click HTML)

(a) A municipality may elect to have the railroad commission exercise exclusive original jurisdiction over gas utility rates, operations, and services in the municipality by ordinance or by submitting the question of the surrender of its jurisdiction to the voters at a municipal election. (8265)

(b) The governing body of a municipality shall submit at a municipal election the question of surrendering its jurisdiction to the railroad commission if the governing body receives a petition signed by a number of qualified voters of the municipality equal to at least the lesser of 20,000 or 10 percent of the number of voters voting in the last preceding general election in the municipality. (8266)

(c) A municipality may not elect to surrender its jurisdiction while a case involving the municipality is pending. (8267)

(d) A municipality that surrenders its jurisdiction to the railroad commission may reinstate its jurisdiction. The provisions of this section governing the surrender of jurisdiction apply to the reinstatement of jurisdiction. (8268)

Added by Acts 2001, 77th Leg., ch. 1233, Sec. 66, eff. Sept. 1, 2001. (8269)

Sec. 103.021. MUNICIPAL PROCEEDINGS. (8270)(1-click HTML)

(a) A municipality regulating a gas utility under this subtitle shall require the utility to submit information as necessary to make a reasonable determination of rate base, expenses, investment, and rate of return in the municipality. (8271)

(b) A municipality shall make a determination under Subsection (a) using the procedures and requirements prescribed by this subtitle. (8272)

(c) A municipality shall retain personnel necessary to make the determination of reasonable rates. (8273)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8274)

Sec. 103.022. RATE ASSISTANCE AND COST REIMBURSEMENT. (8275)(1-click HTML)

(a) The governing body of a municipality participating in or conducting a ratemaking proceeding may engage rate consultants, accountants, auditors, attorneys, and engineers to: (8276)

(1) conduct investigations, present evidence, and advise and represent the governing body; and (8277)

(2) assist the governing body with litigation or a gas utility ratemaking proceeding before a regulatory authority or court. (8278)

(b) The gas utility in the ratemaking proceeding shall reimburse the governing body of the municipality for the reasonable cost of the services of a person engaged under Subsection (a) to the extent the applicable regulatory authority determines reasonable. (8279)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8280)

Sec. 103.023. MUNICIPAL STANDING. (8281)(1-click HTML)

(a) A municipality has standing in each case before the railroad commission that relates to a gas utility's rates and services in the municipality. (8282)

(b) A municipality's standing is subject to the right of the railroad commission to consolidate that municipality with another party on an issue of common interest. (8283)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8284)

Sec. 103.024. JUDICIAL REVIEW. (8285)(1-click HTML)

A municipality is entitled to judicial review of a railroad commission order relating to a gas utility's rates and services in a municipality as provided by Section 105.001. (8286)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8287)

Sec. 103.051. APPEAL BY PARTY. (8288)(1-click HTML)

A party to a rate proceeding before a municipality's governing body may appeal the governing body's decision to the railroad commission. (8289)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8290)

Sec. 103.052. APPEAL BY RESIDENTS. (8291)(1-click HTML)

The residents of a municipality may appeal to the railroad commission the decision of the municipality's governing body in a rate proceeding by filing with the railroad commission a petition for review signed by a number of qualified voters of the municipality equal to at least the lesser of 20,000 or 10 percent of the qualified voters of the municipality. (8292)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8293)

Sec. 103.053. APPEAL BY RATEPAYERS OUTSIDE MUNICIPALITY. (8294)(1-click HTML)

(a) The ratepayers of a municipally owned utility who are outside the municipality may appeal to the railroad commission an action of the municipality's governing body affecting the municipally owned utility's rates by filing with the railroad commission a petition for review signed by a number of ratepayers served by the utility outside the municipality equal to at least the lesser of 10,000 or five percent of those ratepayers. (8295)

(b) A petition for review is properly signed if signed by a person or the spouse of a person in whose name residential utility service is carried. (8296)

(c) For purposes of this section, each person who receives a separate bill is a ratepayer. A person who receives more than one bill may not be counted as more than one ratepayer. (8297)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8298)

Sec. 103.054. FILING OF APPEAL. (8299)(1-click HTML)

(a) An appeal under this subchapter is initiated by filing a petition for review with the railroad commission and serving a copy of the petition on each party to the original rate proceeding. (8300)

(b) The appeal must be initiated not later than the 30th day after the date of the final decision by the governing body of the municipality. (8301)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8302)

Sec. 103.055. HEARING AND ORDER. (8303)(1-click HTML)

(a) An appeal under this subchapter is de novo and based on the test year presented to the municipality adjusted for known changes and conditions that are measurable with reasonable accuracy. (8304)

(b) The railroad commission shall enter a final order establishing the rates the railroad commission determines the municipality should have set in the ordinance to which the appeal applies. (8305)

(c) If the railroad commission fails to enter a final order within 185 days after the date the appeal is perfected, the rates proposed by the gas utility are considered to be approved by the railroad commission and take effect on the expiration of the 185-day period. (8306)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8307)

Sec. 103.056. APPLICABILITY OF RATES. (8308)(1-click HTML)

Temporary or permanent rates set by the railroad commission are prospective and observed from the date of the applicable railroad commission order, except an interim rate order necessary to provide a gas utility the opportunity to avoid confiscation during the period beginning on the date a petition for review is filed with the railroad commission and ending on the date of a final order establishing rates. (8309)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8310)

CHAPTER 104. RATES AND SERVICES (8311)(1-click HTML)
Sec. 104.001. AUTHORIZATION TO ESTABLISH AND REGULATE RATES. (8312)(1-click HTML)

(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. (8313)

(b) The regulatory authority may establish and regulate rates of a gas utility and may adopt rules for determining: (8314)

(1) the classification of customers and services; and (8315)

(2) the applicability of rates. (8316)

(c) A rule or order of the regulatory authority may not conflict with a ruling of a federal regulatory body. (8317)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8318)

Sec. 104.002. COMPLIANCE WITH SUBTITLE. (8319)(1-click HTML)

A gas utility may not: (8320)

(1) charge, collect, or receive a rate for utility service except as provided by this subtitle; or (8321)

(2) impose a rule or regulation except as provided by this subtitle. (8322)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8323)

Sec. 104.003. JUST AND REASONABLE RATES. (8324)(1-click HTML)

(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. (8325)

(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: (8326)

(1) neither the gas utility nor the customer had an unfair advantage during the negotiations; (8327)

(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 (8328)

(3) competition does or did exist with another gas utility, another supplier of natural gas, or a supplier of an alternative form of energy. (8329)

(c) Subsection (b) does not apply: (8330)

(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 (8331)

(2) to a direct sale for resale to a gas distribution utility at a city gate. (8332)

(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). (8333)

(e) Subsection (b)(1) does not apply to a rate charged or offered to be charged to an affiliated pipeline utility. (8334)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8335)

Sec. 104.004. UNREASONABLE PREFERENCE OR PREJUDICE PROHIBITED. (8336)(1-click HTML)

A gas utility may not: (8337)

(1) grant an unreasonable preference or advantage concerning rates or services to a person in a classification; (8338)

(2) subject a person in a classification to an unreasonable prejudice or disadvantage concerning rates or services; or (8339)

(3) establish or maintain an unreasonable difference concerning rates of services between localities or between classes of service. (8340)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8341)

Sec. 104.005. EQUALITY OF RATES AND SERVICES. (8342)(1-click HTML)

(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. (8343)

(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. (8344)

(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. (8345)

(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. (8346)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8347)

Sec. 104.006. RATES FOR AREA NOT IN MUNICIPALITY. (8348)(1-click HTML)

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. (8349)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8350)

Sec. 104.007. DISCRIMINATION AND RESTRICTION ON COMPETITION. (8351)(1-click HTML)

A gas utility may not: (8352)

(1) discriminate against a person who sells or leases equipment or performs services in competition with the gas utility; or (8353)

(2) engage in a practice that tends to restrict or impair that competition. (8354)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8355)

Sec. 104.008. BURDEN OF PROOF. (8356)(1-click HTML)

In a proceeding involving a proposed rate change, the gas utility has the burden of proving that: (8357)

(1) the rate change is just and reasonable, if the utility proposes the change; or (8358)

(2) an existing rate is just and reasonable, if the proposal is to reduce the rate. (8359)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8360)

Sec. 104.051. ESTABLISHING OVERALL REVENUES. (8361)(1-click HTML)

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. (8362)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8363)

Sec. 104.052. ESTABLISHING FAIR RATE OF RETURN. (8364)(1-click HTML)

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. (8365)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8366)

Sec. 104.053. COMPONENTS OF ADJUSTED VALUE OF INVESTED CAPITAL. (8367)(1-click HTML)

(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: (8368)

(1) original cost, less depreciation; and (8369)

(2) current cost, less an adjustment for present age and condition. (8370)

(b) The regulatory authority may determine a reasonable balance that reflects: (8371)

(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 (8372)

(2) not less than 25 percent nor more than 40 percent of the current cost less an adjustment for present age and condition. (8373)

(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. (8374)

(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. (8375)

(e) Costs of facilities, revenues, expenses, taxes, and reserves shall be separated or allocated as prescribed by the regulatory authority. (8376)

(f) In this section, "original cost" means the actual money cost or the actual money value of consideration paid other than money. (8377)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8378)

Sec. 104.054. DEPRECIATION, AMORTIZATION, AND DEPLETION. (8379)(1-click HTML)

(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. (8380)

(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. (8381)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8382)

Sec. 104.055. NET INCOME; ALLOWABLE EXPENSES. (8383)(1-click HTML)

(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. (8384)

(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: (8385)

(1) a specific finding of the reasonableness and necessity of each item or class of items allowed; and (8386)

(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. (8387)

(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. (8388)

(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. (8389)

(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. (8390)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8391)

Sec. 104.056. TREATMENT OF CERTAIN TAX BENEFITS. (8392)(1-click HTML)

(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: (8393)

(1) balance equitably the interests of present and future customers; and (8394)

(2) apportion accordingly the benefits between consumers and the gas utility or municipally owned utility. (8395)

(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. (8396)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8397)

Sec. 104.057. CONSIDERATION OF CERTAIN EXPENSES. (8398)(1-click HTML)

(a) In establishing a gas utility's rates, the regulatory authority may not allow as a cost or expense an expenditure: (8399)

(1) described by Section 102.154 that the regulatory authority determines to be not in the public interest; or (8400)

(2) for legislative advocacy. (8401)

(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. (8402)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8403)

Sec. 104.058. CONSIDERATION OF PROFIT OR LOSS FROM SALE OR LEASE OF MERCHANDISE. (8404)(1-click HTML)

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. (8405)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8406)

Sec. 104.059. PENSION AND OTHER POSTEMPLOYMENT BENEFITS. (8407)(1-click HTML)

(a) In establishing a gas utility's rates, the regulatory authority shall allow recovery of the gas utility's costs of pensions and other postemployment benefits, as determined by actuarial or other similar studies in accordance with generally accepted accounting principles, in amounts the regulatory authority finds reasonable and necessary. (8408)

(b) If a gas utility establishes one or more reserve accounts for the purpose of tracking changes in the costs of pensions and other postemployment benefits, the gas utility shall periodically record in a reserve account any difference between: (8409)

(1) the annual amount of pension and other postemployment benefits approved and included in the gas utility's then current rates or, if that annual 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 gas utility's last general rate proceeding were in effect; and (8410)

(2) the annual amount of costs of pensions and other postemployment benefits as determined by actuarial or other similar studies that would otherwise be recorded by the gas utility were this provision not applicable. (8411)

(c) The gas utility must: (8412)

(1) establish separate reserve accounts for pensions and for other postemployment benefits; and (8413)

(2) apply the same methodology to allocate pension and other postemployment benefits between capital and expense as in the gas utility's last rate case. (8414)

(d) A surplus in a 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 a 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). (8415)

(e) If the gas utility establishes reserve accounts for the costs of pensions and other postemployment benefits, the regulatory authority at a subsequent general rate proceeding shall: (8416)

(1) review the amounts recorded to each reserve account to determine whether the amounts are reasonable and necessary; (8417)

(2) determine in accordance with Subsection (d) whether each reserve account has a surplus or shortage; and (8418)

(3) subtract any surplus from or add any shortage to the gas utility's rate base, with the surplus or shortage amortized over a reasonable time. (8419)

Added by Acts 2011, 82nd Leg., R.S., Ch. 172 (S.B. 403), Sec. 1, eff. May 28, 2011. (8420)

SUBCHAPTER C. RATE CHANGES PROPOSED BY UTILITY (8421)(1-click HTML)
Sec. 104.101. DEFINITION. (8422)(1-click HTML)

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. (8423)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8424)

Sec. 104.102. STATEMENT OF INTENT TO INCREASE RATES. (8425)(1-click HTML)

(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. (8426)

(b) The gas utility shall also mail or deliver a copy of the statement of intent to the appropriate officer of each affected municipality. (8427)

(c) The statement of intent must include: (8428)

(1) proposed revisions of tariffs and schedules; and (8429)

(2) a detailed statement of: (8430)

(A) each proposed increase; (8431)

(B) the effect the proposed increase is expected to have on the revenues of the utility; (8432)

(C) each class and number of utility consumers affected; and (8433)

(D) any other information required by the regulatory authority's rules and regulations. (8434)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8435)

Sec. 104.103. NOTICE OF INTENT TO INCREASE RATES. (8436)(1-click HTML)

(a) The gas utility shall: (8437)

(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 (8438)

(2) provide notice of the proposed increase to any other affected person as required by the regulatory authority's rules. (8439)

(b) Instead of publishing newspaper notice, a gas utility may provide notice by: (8440)

(1) mailing the notice by United States mail, postage prepaid, to the billing address of each directly affected customer; (8441)

(2) including the notice, in conspicuous form, in the bill of each directly affected customer; or (8442)

(3) sending the notice by e-mail to each directly affected customer if that address is available to the utility. (8443)

(c) A gas utility may provide a customer with notice of the utility's intent to increase rates by e-mail as described by Subsection (b)(3) only if the customer has consented in writing to the use of the customer's e-mail address for that purpose. (8444)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8445)

Amended by: (8446)

Acts 2013, 83rd Leg., R.S., Ch. 103 (S.B. 885), Sec. 1, eff. September 1, 2013. (8447)

Sec. 104.104. EARLY EFFECTIVE DATE OF RATE INCREASE. (8448)(1-click HTML)

(a) For good cause shown, the regulatory authority may allow a rate increase, other than a major change, to take effect: (8449)

(1) before the end of the 35-day period prescribed by Section 104.102; and (8450)

(2) under conditions the regulatory authority prescribes, subject to suspension as provided by this subchapter. (8451)

(b) The gas utility shall immediately revise its schedules to include the increase. (8452)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8453)

Sec. 104.105. DETERMINATION OF PROPRIETY OF RATE CHANGE; HEARING. (8454)(1-click HTML)

(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. (8455)

(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. (8456)

(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. (8457)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8458)

Sec. 104.106. PREFERENCE TO HEARING. (8459)(1-click HTML)

The regulatory authority shall: (8460)

(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 (8461)

(2) decide the questions as quickly as possible. (8462)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8463)

Sec. 104.107. RATE SUSPENSION; DEADLINE. (8464)(1-click HTML)

(a) Pending the hearing and a decision: (8465)

(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 (8466)

(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. (8467)

(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. (8468)

(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. (8469)

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. (8470)

Sec. 104.108. TEMPORARY RATES. (8471)(1-click HTML)

(a) The regulatory authority may establish temporary rates to be in effect during the applicable suspension period under Section 104.107. (8472)

(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. (8473)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8474)

Sec. 104.109. BONDED RATES. (8475)(1-click HTML)

(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. (8476)

(b) The bonded rate may not exceed the proposed rate. (8477)

(c) The bond must be: (8478)

(1) payable to the regulatory authority in an amount, in a form, and with a surety approved by the regulatory authority; and (8479)

(2) conditioned on refund. (8480)

(d) The gas utility shall refund or credit against future bills: (8481)

(1) money collected under the bonded rates in excess of the rate finally ordered; and (8482)

(2) interest on that money, at the current interest rate as determined by the regulatory authority. (8483)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8484)

Sec. 104.110. ESTABLISHMENT OF FINAL RATES. (8485)(1-click HTML)

(a) If, after hearing, the regulatory authority finds the rates are unreasonable or in violation of law, the regulatory authority shall: (8486)

(1) enter an order establishing the rates the gas utility shall charge or apply for the service in question; and (8487)

(2) serve a copy of the order on the gas utility. (8488)

(b) The rates established in the order shall be observed thereafter until changed as provided by this subtitle. (8489)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8490)

Sec. 104.111. APPROVAL OF DECREASE IN RATES. (8491)(1-click HTML)

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. (8492)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8493)

Sec. 104.112. SURCHARGE TO RECOVER RELOCATION COSTS. (8494)(1-click HTML)

(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. (8495)

(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. (8496)

(c) An application under Subsection (b) must include sufficient documentation to demonstrate: (8497)

(1) the requirement for each relocation; (8498)

(2) the entity requiring the relocation; (8499)

(3) costs incurred for relocation of comparable facilities; (8500)

(4) surcharge computations; and (8501)

(5) that reasonable efforts have been made to receive reimbursement from the entity requiring the relocation, if applicable. (8502)

(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: (8503)

(1) the relocation was not necessary or required; (8504)

(2) the costs of the relocation were excessive or not supported; (8505)

(3) the utility did not pursue reimbursement from the entity requiring the relocation, if applicable; (8506)

(4) the surcharge is unduly discriminatory among customers or classes of customers located in the service area; or (8507)

(5) the period over which the relocation costs are designed to be recovered is less than one or more than three years. (8508)

(e) If the regulating authority does not make a decision before the deadline prescribed by Subsection (d), the application is approved. (8509)

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. (8510)

Sec. 104.151. UNREASONABLE OR VIOLATIVE EXISTING RATES. (8511)(1-click HTML)

(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: (8512)

(1) enter an order establishing the just and reasonable rates to be observed thereafter, including maximum or minimum rates; and (8513)

(2) serve a copy of the order on the gas utility. (8514)

(b) The rates set under Subsection (a) constitute the legal rates of the gas utility until changed as provided by this subtitle. (8515)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8516)

Sec. 104.152. INVESTIGATING COSTS OF OBTAINING SERVICE FROM ANOTHER SOURCE. (8517)(1-click HTML)

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. (8518)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8519)

SUBCHAPTER E. RATES FOR GOVERNMENTAL ENTITIES (8520)(1-click HTML)
Sec. 104.201. TRANSPORTATION RATES BETWEEN GAS UTILITY OR MUNICIPALLY OWNED UTILITY AND STATE AGENCY. (8521)(1-click HTML)

(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. (8522)

(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. (8523)

(c) The railroad commission may order temporary rates under Subsection (a) as provided for under the commission's appellate jurisdiction. (8524)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8525)

Sec. 104.202. EXCLUDED EXPENSES. (8526)(1-click HTML)

(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. (8527)

(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. (8528)

(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. (8529)

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. (8530)

Sec. 104.203. PAYMENT IN LIEU OF TAX. (8531)(1-click HTML)

(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. (8532)

(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. (8533)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8534)

SUBCHAPTER F. SERVICES (8535)(1-click HTML)
Sec. 104.251. GENERAL STANDARD. (8536)(1-click HTML)

A gas utility shall furnish service, instrumentalities, and facilities that are safe, adequate, efficient, and reasonable. (8537)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8538)

Sec. 104.252. AUTHORITY OF REGULATORY AUTHORITY CONCERNING STANDARDS. (8539)(1-click HTML)

A regulatory authority, on its own motion or on complaint and after reasonable notice and hearing, may: (8540)

(1) adopt just and reasonable standards, classifications, regulations, or practices a gas utility must follow in furnishing a service; (8541)

(2) adopt adequate and reasonable standards for measuring a condition, including quantity, quality, and pressure relating to the furnishing of a service; (8542)

(3) adopt reasonable regulations for examining, testing, and measuring a service; and (8543)

(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. (8544)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8545)

Sec. 104.253. RULE OR STANDARD. (8546)(1-click HTML)

(a) A gas utility may file with the regulatory authority a standard, classification, regulation, or practice the utility follows. (8547)

(b) The standard, classification, regulation, or practice continues in force until: (8548)

(1) amended by the utility; or (8549)

(2) changed by the regulatory authority as provided by this subtitle. (8550)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8551)

Sec. 104.254. SERVICE. (8552)(1-click HTML)

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. (8553)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8554)

Sec. 104.2545. REQUIRED SERVICE TO PUBLIC RETAIL CUSTOMER. (8555)(1-click HTML)

(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. (8556)

(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: (8557)

(1) the sale of gas; (8558)

(2) the transportation of an annual average of 25 million British thermal units or more each day of gas that is: (8559)

(A) taken as a royalty in kind; and (8560)

(B) owned by the state or managed by a marketing program operated by the state or by a state agency; or (8561)

(3) a combination of the services described by Subdivisions (1) and (2). (8562)

(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. (8563)

(d) In this section, "public retail customer" has the meaning assigned by Section 35.101. (8564)

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. (8565)

Sec. 104.255. BILLING. (8566)(1-click HTML)

(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. (8567)

(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. (8568)

(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. (8569)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8570)

Sec. 104.2551. ELECTRONIC BILLING. (8571)(1-click HTML)

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. (8572)

Added by Acts 2001, 77th Leg., ch. 1233, Sec. 68, eff. Sept. 1, 2001. (8573)

Sec. 104.256. EXAMINATION AND TEST OF INSTRUMENT OR EQUIPMENT; INSPECTION. (8574)(1-click HTML)

(a) A regulatory authority may: (8575)

(1) examine and test equipment, including meters and instruments, used to measure service of a gas utility; and (8576)

(2) set up and use on the premises occupied by a gas utility an apparatus or appliance necessary for the examination or test. (8577)

(b) The gas utility is entitled to be represented at an examination, test, or inspection made under this section. (8578)

(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. (8579)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8580)

Sec. 104.257. INSPECTION FOR CONSUMER. (8581)(1-click HTML)

(a) A consumer may have a meter or other measuring device tested by a gas utility: (8582)

(1) once without charge, after a reasonable period of presumed accuracy that the regulatory authority establishes by rule; and (8583)

(2) at a shorter interval on payment of a reasonable fee established by the regulatory authority. (8584)

(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. (8585)

(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. (8586)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8587)

Sec. 104.258. DISCONNECTION OF GAS SERVICE. (8588)(1-click HTML)

(a) In this section: (8589)

(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. (8590)

(2) "Provider" means: (8591)

(A) a gas utility, as defined by Sections 101.003 and 121.001; and (8592)

(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. (8593)

(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. (8594)

(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. (8595)

Added by Acts 2001, 77th Leg., ch. 1149, Sec. 1, eff. Sept. 1, 2001. (8596)

SUBCHAPTER G. INTERIM COST RECOVERY AND RATE ADJUSTMENT (8597)(1-click HTML)
Sec. 104.301. INTERIM ADJUSTMENT FOR CHANGES IN INVESTMENT. (8598)(1-click HTML)

(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. (8599)

(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. (8600)

(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. (8601)

(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. (8602)

(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. (8603)

(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. (8604)

(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. (8605)

(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. (8606)

(i) This section does not limit the power of a regulatory authority under Section 104.151. (8607)

(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. (8608)

Added by Acts 2003, 78th Leg., ch. 938, Sec. 1, eff. Sept. 1, 2003. (8609)

Amended by: (8610)

Acts 2005, 79th Leg., Ch. 948 (H.B. 872), Sec. 1, eff. September 1, 2005. (8611)

SUBCHAPTER H. PROTECTION AGAINST UTILITY SERVICE DISCONNECTION (8612)(1-click HTML)
Sec. 104.351. DEFINITIONS. (8613)(1-click HTML)

In this subchapter: (8614)

(1) "Customer" means any person in whose name gas utility service is billed, including individuals, governmental units at all levels of government, corporate entities, and any other entity with legal capacity to be billed for gas service. (8615)

(2) "Gas utility" has the meaning assigned by Section 181.021 but does not include a municipally owned utility or gas utility owned by an electric cooperative. (8616)

(3) "Nonsubmetered master metered multifamily property" means an apartment, a leased or owner-occupied condominium, or one or more buildings containing at least 10 dwellings that receive gas utility service that is master metered but not submetered. (8617)

Added by Acts 2013, 83rd Leg., R.S., Ch. 322 (H.B. 1772), Sec. 3, eff. January 1, 2014. (8618)

Sec. 104.352. NOTICE OF DISCONNECTION TO MUNICIPALITIES FOR NONSUBMETERED MASTER METERED MULTIFAMILY PROPERTIES. (8619)(1-click HTML)

(a) A gas utility shall send a written notice of service disconnection to a municipality before the gas utility disconnects service to a nonsubmetered master metered multifamily property for nonpayment if: (8620)

(1) the property is located in the municipality; and (8621)

(2) the municipality establishes an authorized representative to receive the notice as described by Section 104.353(c). (8622)

(b) The gas utility shall send the notice required by this section not later than the 10th day before the date gas utility service is scheduled for disconnection. (8623)

Added by Acts 2013, 83rd Leg., R.S., Ch. 322 (H.B. 1772), Sec. 3, eff. January 1, 2014. (8624)

Sec. 104.353. ADDITIONAL SAFEGUARDS. (8625)(1-click HTML)

(a) The customer safeguards provided by this subchapter are in addition to safeguards provided by other law or agency rules. (8626)

(b) This subchapter does not prohibit a municipality or the regulatory authority from adopting customer safeguards that exceed the safeguards provided by this chapter. (8627)

(c) The regulatory authority by rule shall develop a mechanism by which a municipality may provide the regulatory authority with the contact information of the municipality's authorized representative to whom the notice required by Section 104.352 must be sent. The regulatory authority shall make the contact information available to the public. (8628)

Added by Acts 2013, 83rd Leg., R.S., Ch. 322 (H.B. 1772), Sec. 3, eff. January 1, 2014. (8629)

CHAPTER 105. JUDICIAL REVIEW; ENFORCEMENT AND PENALTIES (8630)(1-click HTML)
Sec. 105.001. RIGHT TO JUDICIAL REVIEW. (8631)(1-click HTML)

(a) Any party to a proceeding before the railroad commission is entitled to judicial review under the substantial evidence rule. (8632)

(b) The issue of confiscation is determined by a preponderance of the evidence. (8633)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8634)

Sec. 105.002. JUDICIAL STAY OR SUSPENSION. (8635)(1-click HTML)

While an appeal of an order, ruling, or decision of a regulatory authority is pending, the district court, court of appeals, or supreme court, as appropriate, may stay or suspend all or part of the operation of the order, ruling, or decision. In granting or refusing a stay or suspension, the court shall act in accordance with the practice of a court exercising equity jurisdiction. (8636)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8637)

Sec. 105.021. ACTION TO ENJOIN OR REQUIRE COMPLIANCE. (8638)(1-click HTML)

(a) The attorney general, on the request of the railroad commission, shall apply in the name of the commission for an order under Subsection (b) if the commission determines that a gas utility or other person is: (8639)

(1) engaging in or about to engage in an act that violates this subtitle or an order or rule of the commission entered or adopted under this subtitle; or (8640)

(2) failing to comply with the requirements of this subtitle or a rule or order of the commission. (8641)

(b) A court, in an action under this section, may: (8642)

(1) prohibit the commencement or continuation of an act that violates this subtitle or an order or rule of the commission entered or adopted under this subtitle; or (8643)

(2) require compliance with a provision of this subtitle or an order or rule of the commission. (8644)

(c) The remedy under this section is in addition to any other remedy provided under this subtitle. (8645)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8646)

Sec. 105.022. CONTEMPT. (8647)(1-click HTML)

The railroad commission may file an action for contempt against a person who: (8648)

(1) fails to comply with a lawful order of the commission; (8649)

(2) fails to comply with a subpoena or subpoena duces tecum; or (8650)

(3) refuses to testify about a matter on which the person may be lawfully interrogated. (8651)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8652)

Sec. 105.023. CIVIL PENALTY AGAINST GAS UTILITY OR AFFILIATE. (8653)(1-click HTML)

(a) A gas utility or affiliate is subject to a civil penalty if the gas utility or affiliate knowingly violates this subtitle, fails to perform a duty imposed on it, or fails, neglects, or refuses to obey an order, rule, direction, or requirement of the railroad commission or a decree or judgment of a court. (8654)

(b) A civil penalty under this section shall be in an amount of not less than $1,000 and not more than $5,000 for each violation. (8655)

(c) A gas utility or affiliate commits a separate violation each day it continues to violate Subsection (a). (8656)

(d) The attorney general shall file in the name of the railroad commission a suit on the attorney general's own initiative or at the request of the commission to recover the civil penalty under this section. (8657)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8658)

Sec. 105.024. OFFENSE. (8659)(1-click HTML)

(a) A person commits an offense if the person knowingly violates this subtitle. (8660)

(b) An offense under this section is a felony of the third degree. (8661)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8662)

Sec. 105.025. PLACE FOR SUIT. (8663)(1-click HTML)

A suit for an injunction or a penalty under this subtitle may be brought in: (8664)

(1) Travis County; (8665)

(2) a county in which the violation is alleged to have occurred; or (8666)

(3) a county in which a defendant resides. (8667)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8668)

Sec. 105.026. PENALTIES CUMULATIVE. (8669)(1-click HTML)

(a) A penalty that accrues under this subtitle is cumulative of any other penalty. (8670)

(b) A suit for the recovery of a penalty does not bar or affect the recovery of any other penalty or bar a criminal prosecution against any person, including a gas utility or officer, director, agent, or employee of a gas utility. (8671)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8672)

Sec. 105.027. DISPOSITION OF FINES AND PENALTIES. (8673)(1-click HTML)

A fine or penalty collected under this subtitle, other than a fine or penalty collected in a criminal proceeding, shall be paid to the railroad commission. (8674)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8675)

Sec. 105.051. COMPLAINT BY AFFECTED PERSON. (8676)(1-click HTML)

An affected person may complain to the regulatory authority in writing setting forth an act or omission by a gas utility in violation or claimed violation of a law that the regulatory authority has jurisdiction to administer or of an order, ordinance, or rule of the regulatory authority. (8677)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8678)

SUBTITLE B. REGULATION OF TRANSPORTATION AND USE (8679)(1-click HTML)

CHAPTER 121. GAS PIPELINES (8680)(1-click HTML)
SUBCHAPTER A. GAS UTILITY DEFINED (8681)(1-click HTML)
Sec. 121.001. DEFINITION OF GAS UTILITY. (8682)(1-click HTML)

(a) In this chapter, "gas utility" means a person who owns, manages, operates, leases, or controls in this state property or equipment or a pipeline, plant, facility, franchise, license, or permit for a business that: (8683)

(1) transports, conveys, distributes, or delivers natural gas: (8684)

(A) for public use or service for compensation; (8685)

(B) for sale to municipalities or persons engaged in distributing or selling natural gas to the public, in a situation described by Subdivision (3); (8686)

(C) for sale or delivery to a person operating under a franchise or contract with a political subdivision of this state; or (8687)

(D) for sale or delivery to the public for domestic or other use; (8688)

(2) owns, operates, or manages a pipeline: (8689)

(A) that is for transporting or carrying natural gas, whether for public hire or not; and (8690)

(B) for which the right-of-way has been or is hereafter acquired by exercising the right of eminent domain; or (8691)

(3) produces or purchases natural gas and transports or causes the transportation of natural gas by a pipeline to or near the limits of a municipality in which the gas is received and distributed or sold to the public by another gas utility or by the municipality in a situation in which the business is the only or practically the only agency of supply of natural gas to the gas utility or municipality. (8692)

(b) In this subchapter, "person" means an individual, company, limited liability company, or private corporation and includes a lessee, trustee, or receiver of an individual, company, limited liability company, or private corporation. (8693)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 11, Sec. 2, eff. May 3, 1999. (8694)

Sec. 121.002. AFFILIATE OF GAS UTILITY EXCLUDED. (8695)(1-click HTML)

A person is not a gas utility solely because the person is an affiliate of a gas utility. (8696)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8697)

Sec. 121.003. AGRICULTURAL SERVICE EXCLUDED. (8698)(1-click HTML)

(a) The act or acts of transporting, delivering, selling, or otherwise making available natural gas for fuel, either directly or indirectly, to an owner of an irrigation well, or the sale, transportation, or delivery of natural gas for any other direct use in an agricultural activity, does not make a person a gas utility or make the person subject to the jurisdiction, control, and regulation of the railroad commission as a gas utility. (8699)

(b) In order for a person furnishing natural gas to qualify for the exemption under Subsection (a), the person to whom the gas was furnished under Subsection (a) shall use the gas exclusively to pump water for farm and other agricultural purposes. (8700)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8701)

Sec. 121.004. TRANSPORTATION OF GAS SOLELY FOR INTERSTATE COMMERCE EXCLUDED. (8702)(1-click HTML)

Except as provided by Section 121.001(a)(2), a person is not a gas utility if the person certifies to the railroad commission that the person transports natural or synthetic gas, for sale, for hire, or otherwise, solely in, or in the vicinity of, the field or fields where the gas is produced, to another person for transportation or sale in interstate commerce. (8703)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8704)

Sec. 121.005. TRANSPORTATION OF GAS IN VICINITY OF PLACE OF PRODUCTION EXCLUDED. (8705)(1-click HTML)

(a) Except as provided by Section 121.001(a)(2), a person is not a gas utility if the person certifies to the railroad commission that the person transports natural or synthetic gas, for sale, for hire, or otherwise, solely: (8706)

(1) in, or in the vicinity of, the field or fields where the gas is produced to a gas processing plant or treating facility; (8707)

(2) from the outlet of a gas processing plant or treating facility described by Subdivision (1) to a person: (8708)

(A) at, or in the vicinity of, the plant or treating facility; or (8709)

(B) described by Subdivision (3) or Section 121.004; or (8710)

(3) to another person in, or in the vicinity of, the field or fields where the gas is produced for transportation or sale in intrastate commerce. (8711)

(b) A person is not a gas utility because the person delivers or sells gas: (8712)

(1) for lease use, compressor fuel, processing plant fuel, or a similar use; (8713)

(2) under a lease or right-of-way agreement; (8714)

(3) in, or in the vicinity of, the field where the gas is produced; or (8715)

(4) at a processing plant outlet. (8716)

(c) Subsection (b) does not exclude as a gas utility a pipeline that: (8717)

(1) transmits or distributes to end users of gas, other than: (8718)

(A) those described by Subsection (b); or (8719)

(B) a person who qualifies for the exemption provided by Section 121.003; or (8720)

(2) makes city-gate deliveries for local distribution. (8721)

(d) The railroad commission may review a certification made by a person under Subsection (a). The railroad commission shall invite a person whose certification is being reviewed to an informal meeting to resolve the person's status under this subsection. If the person's status remains unresolved after the informal meeting and there is sufficient reason to move forward, the railroad commission shall provide notice and an opportunity for a hearing. After notice and an opportunity for a hearing, the railroad commission may determine whether the person is eligible for an exemption under this subsection. (8722)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8723)

Amended by: (8724)

Acts 2009, 81st Leg., R.S., Ch. 406 (H.B. 1883), Sec. 1, eff. September 1, 2009. (8725)

Sec. 121.006. VEHICLE FUEL EXCLUDED. (8726)(1-click HTML)

A person is not a gas utility to the extent that the person: (8727)

(1) sells natural gas for use as vehicle fuel; (8728)

(2) sells natural gas to a person who later sells the natural gas for use as vehicle fuel; or (8729)

(3) owns or operates equipment or facilities to sell or transport the natural gas for ultimate use as vehicle fuel. (8730)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8731)

Sec. 121.007. TRANSPORTATION OF GAS TO AND FROM LIQUEFIED NATURAL GAS MARINE TERMINAL EXCLUDED. (8732)(1-click HTML)

(a) A person who owns or operates a natural gas pipeline, a liquefied natural gas pipeline, or an underground storage facility is not a gas utility if the person certifies to the railroad commission that the person uses the pipeline or underground storage facility solely to deliver natural gas or liquefied natural gas or the constituents of natural gas or liquefied natural gas: (8733)

(1) to a liquefied natural gas marine terminal; (8734)

(2) from a liquefied natural gas marine terminal to the owner of the gas or another person on behalf of the owner of the gas; (8735)

(3) that is acquired, liquefied, or sold by the person as necessary for the operation or maintenance of its facility that is excluded as a gas utility under this section; or (8736)

(4) that has been stored for export. (8737)

(b) This section does not confer the power of eminent domain to a pipeline or underground storage facility excluded as a gas utility under this section. (8738)

(c) This section does not create an exception to the applicability of a pipeline safety requirement provided under this chapter or a penalty for a violation of such a requirement. (8739)

Added by Acts 2007, 80th Leg., R.S., Ch. 709 (H.B. 2174), Sec. 2, eff. June 15, 2007. (8740)

Amended by: (8741)

Acts 2009, 81st Leg., R.S., Ch. 406 (H.B. 1883), Sec. 2, eff. September 1, 2009. (8742)

Acts 2009, 81st Leg., R.S., Ch. 556 (S.B. 1826), Sec. 1, eff. September 1, 2009. (8743)

Acts 2013, 83rd Leg., R.S., Ch. 104 (S.B. 900), Sec. 5, eff. September 1, 2013. (8744)

Sec. 121.008. CERTAIN STORAGE FACILITIES OWNED BY ELECTRIC COOPERATIVES EXCLUDED. (8745)(1-click HTML)

An electric cooperative, as that term is defined by Section 11.003, or its subsidiary, that sells electricity at wholesale is not a gas utility or subject to regulation as a gas utility solely because it provides gas storage services for hire if the gas storage facility is predominantly operated to support the integration of renewable resources. Such a gas storage facility may not have a working gas capacity of greater than five billion cubic feet. (8746)

Added by Acts 2011, 82nd Leg., R.S., Ch. 4 (S.B. 312), Sec. 2, eff. April 21, 2011. (8747)

SUBCHAPTER B. PUBLIC POLICY (8748)(1-click HTML)
Sec. 121.051. GAS UTILITY: PUBLIC INTEREST AND JURISDICTION OF RAILROAD COMMISSION. (8749)(1-click HTML)

(a) A gas utility, including a business described by Section 121.001(a)(3), is affected with a public interest. (8750)

(b) A business described by Section 121.001(a)(3) is a virtual monopoly. (8751)

(c) A business described by Section 121.001(a)(3) and the property of the business used in this state is subject to the jurisdiction, control, and regulation of the railroad commission as provided by this chapter. (8752)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8753)

Sec. 121.052. PIPELINES: MONOPOLIES SUBJECT TO RAILROAD COMMISSION. (8754)(1-click HTML)

(a) The operation of a pipeline for buying, selling, transporting, producing, or otherwise dealing in natural gas is a business which in its nature and according to the established method of conducting the business is a monopoly. (8755)

(b) A business described by this section may not be conducted unless the gas pipeline used in connection with the business is subject to the jurisdiction conferred by this chapter on the railroad commission. (8756)

(c) The attorney general shall enforce this section by injunction or other remedy. (8757)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8758)

SUBCHAPTER C. DUTIES OF GAS UTILITIES AND PIPELINES (8759)(1-click HTML)
Sec. 121.101. MAINTENANCE OF OFFICE AND RECORDS IN THIS STATE. (8760)(1-click HTML)

(a) A gas utility shall maintain an office in this state in a county in which some part of the gas utility's property is located. The gas utility shall keep in this office all books, accounts, papers, records, vouchers, and receipts that the railroad commission requires. (8761)

(b) A book, account, paper, record, receipt, voucher, or other item of information required by the railroad commission to be kept in this state may not be removed from this state except as prescribed by the railroad commission. (8762)

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. (8763)

Sec. 121.102. OPERATOR'S REPORT. (8764)(1-click HTML)

The railroad commission may require a person or corporation that owns, controls, or operates a pipeline subject to this chapter to make to the commission a sworn report of any matter relating to the business of the person or corporation that the commission determines to be pertinent, including: (8765)

  

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