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Texas Bill Extending Authority for TDUs To Use Alternative Ratemaking Passes Both Houses
May 15,2015 A Texas bill (SB 774) to extend until September 1, 2019 the ability for distribution service providers to establish rates charged to retail electric providers through non-rate case periodic rate adjustments has passed both houses and has been sent to the governor. The non-rate case periodic rate adjustments covered by SB 774 include alternative ratemaking mechanisms such as the distribution cost recovery factor. Currently, TDUs' authority to use alternative ratemaking mechanisms expires January 1, 2017. No ERCOT TDU currently has in place a distribution cost recovery factor, but CenterPoint Energy Houston Electric has applied at the Public Utility Commission to implement a DCRF. The bill would require the Public Utility Commission to report on alternative ratemaking mechanisms in January 2019, with such report now including an analysis of alternative ratemaking mechanisms adopted by other states, with the PUC required to, " make recommendations regarding appropriate reforms to the ratemaking process in this state." "The commission shall include in the report an analysis that demonstrates how the commission's recommended reforms would improve the efficiency and effectiveness of the oversight of electric utilities and ensure that electric rates are just and reasonable," the bill provides
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