CSSB 735 by Hancock: Support Revisions to PUC Ratemaking Oversight of Electric Utilities

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Overview of CSSB 735 by Hancock

  • Requires the Public Utility Commission of Texas (PUC) to establish a schedule requiring periodic rate cases for electric utilities. Provides the PUC the ability to extend the date for good cause.
  • Eliminates the sunset date on the distribution cost recovery factor (DCRF) as recommended by the PUC, which has been used by electric utilities to more efficiently recover its investment in infrastructure.
  • Removes the four-time limit on an ERCOT utility’s use of the DCRF between rate cases. ERCOT utilities would be allowed to utilize the DCRF only once per year.
  • Extends the time available to the PUC to evaluate a sale, transfer or merger of a utility under its purview by 60 days beyond current statute limitations.

AECT Supports Ratemaking Approaches that Promote a Reliable, Cost-Effective Electric System

  • Efficient ratemaking allows for the timely recovery of the costs of critical investments made to meet the demands of a growing economy and to replace aging infrastructure.
  • The DCRF mechanism has been used several times by electric utilities to more efficiently recover costs over the six years since it was enacted by SB 1693 in 2011, and the PUC recommended its continued use in its 2017 Scope of Competition Report.

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