Current through Reg. 50, No. 13; March 28, 2025
(a) Application. This section applies to an
electric utility that sells electricity.
(b) Definitions. The following terms, when
used in this section, have the following meanings unless the context indicates
otherwise.
(1) Class billing
determinants--Kilowatt-hours (kWh) for each class that is not billed using a
demand charge, and kilowatts (kW) for each class that is billed using a demand
charge.
(2) Cost year--the most
recent historical 12-month period for which data are available at the time a
utility prepares an application to establish, adjust, or terminate a
PCRF.
(3) Net production capacity
invested capital--Production capacity invested capital costs recorded in
Federal Energy Regulatory Commission (FERC) Uniform System of Accounts 303, 310
- 317, 320 - 326, 330 - 337, and 340 - 347, less accumulated depreciation and
adjusted for any changes in production capacity-related accumulated deferred
federal income taxes and excluding any impact associated with Financial
Accounting Standards Board Interpretation No. 48.
(c) Establishment, adjustment, and
termination of a PCRF.
(1) A utility may apply
for establishment of a PCRF rider only if all of the following conditions are
met:
(A) the utility's most recent
comprehensive base-rate proceeding established sufficient information to allow
for the determination of values for the parameters in subsection (h) of this
section;
(B) no more than two years
have passed since the final order in the utility's most recent comprehensive
base-rate proceeding;
(C) the
utility has not had a PCRF in effect within the last year; and
(D) no PCRF has been in effect for the
utility since the final order in the utility's most recent comprehensive
base-rate proceeding.
(2) The application in which the utility
applies for the establishment, adjustment, or termination of a PCRF rider must
be limited to issues related to the establishment, adjustment, or termination
of the PCRF rider.
(3) The PCRF
must not include:
(A) the cost of capacity
purchased directly or indirectly from an affiliate, as defined in §
25.5(3) of this
title (relating to Definitions), of the utility, including, without limitation,
whether such capacity is acquired through one or more intermediaries or
pursuant to a FERC approved agreement or tariff of a Regional Transmission
Organization or Independent System Operator, unless such affiliate-related
purchases have been previously approved by the commission in a proceeding under
subsection (d) of this section;
(B)
the cost of capacity owned by the utility;
(C) any costs recoverable by the utility
under §
25.236 of this title (relating to
Recovery of Fuel Costs), including purchases of firm energy;
(D) any costs for purchases made through
day-ahead or real-time markets of a Regional Transmission Organization or
Independent System Operator.
(4) Upon the establishment of a utility's
PCRF, the utility must annually file an application for an adjustment of the
PCRF. The cost year used in an annual PCRF adjustment must be the 12-month
period that immediately follows the cost year used to set the existing PCRF. In
addition, the utility must file the application to adjust the PCRF promptly
after the relevant cost-year data become available. The commission may
establish a schedule for the filing of such applications.
(5) A utility may terminate its PCRF as part
of any annual PCRF adjustment proceeding. The final order including the
termination of a PCRF must specify the date by which the utility must be
required to file an application for the final reconciliation of the costs and
revenues associated with the terminated PCRF.
(6) Commission staff may petition at any time
to terminate a utility's PCRF.
(7)
A utility's request to establish, adjust, terminate, or reconcile a PCRF must
include the utility's direct testimony supporting the request.
(d) Pre-approval of purchased
power agreements.
(1) The commission may
pre-approve a utility's executed agreement for the purchase of power capacity
from an affiliate if it finds that the agreement is reasonable, and the utility
may thereafter seek to include the capacity costs incurred under such a
commission-approved agreement in its PCRF rider.
(2) Though not required for inclusion in a
PCRF rider, a utility may seek commission review of the reasonableness of a
utility's executed agreement for the purchase of power capacity from a
non-affiliate, and the utility may seek to include the capacity costs incurred
under such a commission-approved agreement in its PCRF rider.
(3) Agreements under paragraphs (1) and (2)
of this subsection may include an agreement for the purchase of capacity to be
delivered in the future that relies on the construction of a generating unit or
units.
(4) An application in which
the utility applies for pre-approval of purchased power capacity agreements
under this subsection must be limited to issues related to the pre-approval of
such agreements.
(5) A utility may
apply for pre-approval of purchased power agreements under this subsection no
more than once per year, and no more than three times between comprehensive
base-rate proceedings.
(e) Notice of PCRF proceeding.
(1) Within one commission working day of
filing an application limited to establishing, adjusting, or terminating a
PCRF, a utility must provide notice of the application in accordance with the
following:
(A) Method of notice.
(i) The utility must serve notice of the
application on the parties to the utility's last PCRF reconciliation proceeding
or, if there has been no PCRF reconciliation proceeding, on the parties to the
utility's last comprehensive base-rate proceeding.
(ii) The utility must issue a news release
and post the news release on its website.
(B) Content of notice. Notice provided
pursuant to paragraph (1) of this subsection must include the following:
(i) The date the application was
filed;
(ii) A description of the
application, including the relief requested;
(iii) The date of the intervention and
hearing request deadline. The date of the intervention and hearing request
deadline must be 30 days after the application was filed, except that if the
date would fall on a day that is not a commission working day, the intervention
and hearing request deadline must be the first commission working day after the
30th day after the application was filed;
(iv) To the extent applicable, the existing
PCRF and the proposed PCRF by rate class, and the percentage difference between
the two;
(v) For an application
seeking to establish or adjust a PCRF, the following statement: "The PCRF is
subject to final review in the next PCRF reconciliation.";
(vi) The statement, "Persons with questions
or who want more information on this application may contact (utility name) at
(utility address) or call (utility toll-free telephone number) during normal
business hours. A complete copy of this application is available for inspection
at the address listed above"; and
(vii) The statement, "Persons who wish to
intervene in the proceeding for this application, or who wish to provide their
comments concerning this application, should contact the Public Utility
Commission of Texas, Customer Protection Division, P.O. Box 13326, Austin,
Texas 78711-3326, or call (512) 936-7120 or toll-free at (888) 782-8477.
Hearing and speech-impaired individuals may use Relay Texas (toll-free)
1-800-735-2989."
(C)
Proof of notice. Within five commission working days from the filing of the
application limited to establishing or adjusting a PCRF, the utility must file
proof in the form of an affidavit that it complied with this
paragraph.
(2) If a
utility applies to reconcile a PCRF in a base-rate proceeding, the appropriate
method and proof of notice set forth in §
22.51 of this title (relating to
Notice for Public Utility Regulatory Act, Chapter 36, Subchapters C-E; Chapter
51, §51.009; and Chapter 53, Subchapters C-E Proceedings) must apply. The
notice must include a description of the requested change to the
PCRF.
(3) If a utility applies to
reconcile a PCRF outside of a base-rate proceeding, the method of notice set
forth in §
25.235(b)(1)(B)
of this title (relating to Fuel Costs-General) applies. The proof of notice set
forth in §
25.235(b)(3) of
this title must apply. The notice must include a description of the requested
reconciliation of the PCRF.
(f) Procedural schedule. Upon the filing of
an application limited to the annual adjustment of a PCRF pursuant to this
section, the presiding officer must set a procedural schedule that will enable
the commission to issue a final order in the proceeding as follows, except
where good cause supports a different procedural schedule:
(1) within 60 days after a sufficient
application was filed, if no hearing is requested within 30 days of the filing
of the application; or
(2) within
120 days after a sufficient application was filed, if a hearing is requested
within 30 days of the filing of the application. If a hearing is requested, the
hearing will be held no earlier than the first working day after the 45th day
after a sufficient application was filed.
(g) Exclusion from fuel factor. Costs that
are recovered through a PCRF must be excluded in calculating the utility's
fixed fuel factor as defined in §
25.237 of this title (relating to
Fuel Factors).
(h) PCRF formula.
(1) The PCRF for each rate class must be
calculated using the following formula:
Attached Graphic
(2) Where the cost year used in
setting a PCRF includes a change in base rates due to a comprehensive base-rate
proceeding, parameters in the PCRF formula that refer to values from the
utility's last comprehensive base-rate proceeding must be calculated by
prorating the values from the relevant base rate-proceedings across the
cost-year.
(i) True-up.
After establishment of an initial PCRF, a subsequent PCRF cost year is expected
to contain portions of two different PCRF rate years. Therefore, for purposes
of calculating class over- or under-recoveries for use in a proceeding to
adjust the PCRF, previous PCRF revenue requirements from PCRF rate years in
effect during the cost year must be prorated across the cost year. For each
rate class, the difference between the prorated cost-year PCRF revenue
requirement that previous PCRFs were set to recover from that class and the
actual cost-year PCRF revenues recovered from that class, with interest on the
balance calculated at the rate established annually by the commission pursuant
to §
25.28(c) and (d)
of this title (relating to Bill Payment and Adjustments), must be credited or
charged to that class when calculating the adjusted PCRF. In the event that a
PCRF rider is terminated, any over- or under-recovery amounts, with interest
applied, must be included in a separate rider.
(j) Reconciliation of PCRF expenses.
(1) The reasonableness and necessity of
expenses recovered through the PCRF must be reviewed, and such costs and
corresponding PCRF revenues must be reconciled, as part of any proceeding
initiated under §
25.236(b) of
this title. Upon motion and showing of good cause, a PCRF reconciliation
proceeding may be severed from or consolidated with other
proceedings.
(2) In a proceeding in
which PCRF costs are being reconciled, the electric utility has the burden of
showing that:
(A) its expenses recovered
through the PCRF during the reconciliation period were reasonable and necessary
expenses incurred to provide reliable electric service to retail customers;
and
(B) it has properly accounted
for the amount of purchased power capacity-related revenues collected pursuant
to the PCRF and corresponding to costs reviewed during the reconciliation
period.
(3) Any refunds
or surcharges resulting from a PCRF reconciliation, with interest applied,
must, in the annual PCRF proceeding immediately subsequent to the filing of the
final order in the reconciliation proceeding, be incorporated into the true-up
balances described in subsection (i) of this section. In the event that no PCRF
rider is in effect subsequent to a PCRF reconciliation, such refunds or
surcharges, with interest applied, must be included in a separate
rider.
(k) Transition
Issues. For a utility subject to a commission order to transition to retail
competition as of the effective date of this section, the utility's existing
power cost recovery factor in its tariff approved under the prior rule
continues to be effective until the effective date of new unbundled retail
delivery tariffs for the utility, at which time the power cost recovery factor
must be terminated. Any over- or under-recovery amounts, with interest applied,
must be included in a separate rider to the utility's retail delivery tariffs
to be established in the proceeding that approves such tariffs and must be
credited or charged to customers as appropriate. The utility must file monthly
reports with the commission showing all such amounts until no remaining amounts
remain to be credited or charged, at which time the utility must file a final
report with the commission.
