Current through Reg. 50, No. 13; March 28, 2025
(a)
Applicability. This section provides a mechanism for an electric utility to
request to recover investment in a power generation facility through a
generation cost recovery rider (GCRR) outside of a base-rate proceeding. This
section applies only to an electric utility that operates solely outside of the
Electric Reliability Council of Texas.
(b) Definitions. The following terms, when
used in this section, have the following meanings unless context indicates
otherwise.
(1) GCRR billing determinant--Each
rate class's annual billing determinant (kilowatt-hour, kilowatt, or
kilovolt-ampere) for the previous calendar year.
(2) Generation invested capital--The parts of
the electric utility's invested capital for a power generation facility that
will be functionalized as generation plant properly recorded in Federal Energy
Regulatory Commission (FERC) Uniform System of Accounts 303 through 347, 352,
and 353 when the generation facility is placed into service.
(3) Power generation facility--A discrete
facility or facilities constructed or purchased by an electric utility for use
in generating electricity for public service by the electric utility, and the
cost of which is not included in the electric utility's base rates. The term
"facility" may encompass different parts of a single generation facility that
begins providing service to the electric utility's customers on the same
date.
(4) Power generation facility
invested capital--Generation invested capital associated with a power
generation facility included in the electric utility's GCRR that will be placed
into service before or at the time the GCRR becomes effective under subsection
(g) of this section.
(5) Power
generation facility net invested capital--Power generation facility invested
capital that is adjusted for accumulated depreciation and any changes in
accumulated deferred federal income taxes, including changes to excess
accumulated deferred federal income taxes, associated with all power generation
facilities included in the electric utility's GCRR.
(6) Weather-normalized--Adjusted for normal
weather using weather data for the most recent ten-year period prior to the
year from which the GCRR billing determinants are derived.
(c) GCRR Requirements. The GCRR rate for each
rate class, and any other terms or conditions related to those rates, will be
specified in a rider to the utility's tariff.
(1) An electric utility must not have more
than one GCRR.
(2) An electric
utility with an existing GCRR may apply to amend the GCRR to include the
electric utility's actual capital investment in a power generation facility and
additional power generation facilities.
(3) Any GCRR established under this section
will take effect on the date the power generation facility begins providing
service to the electric utility's customers. Any amendment to an existing GCRR
for an additional power generation facility will take effect on the date that
the additional power generation facility begins providing service to the
electric utility's customers.
(4)
As part of the next base-rate proceeding for the electric utility, the electric
utility must request to move all investment being recovered in a GCRR into base
rates and the GCRR will be set to zero.
(d) Calculation of GCRR Rates. The GCRR rate
for each rate class must be calculated according to the provisions of this
subsection and subsections (e) and (f) of this section.
(1) The GCRR rates will not take into account
changes in the number of the electric utility's customers and the effects that
energy consumption and energy demand have on the amount of revenue recovered
through the electric utility's base rates.
(2) The GCRR rates must not include estimated
costs.
(3) The GCRR rate for each
rate class will be calculated using the following formula:
GCRRCLASS = RRCLASS /
BDC-CLASS
(4) The values of the terms used in this
subsection will be calculated as follows:
(A)
RRCLASS = RRTOT *
ALLOCC-CLASS
(B) RRTOT = TRAF *
((PGFIC * RORRC) + PGFDEPR + PGFFIT + PGFOT)
(C) ALLOCC-CLASS =
ALLOCRC-CLASS * (BDC-CLASS /
BDRC-CLASS) / [Sigma]
(ALLOCRC-CLASS * (BDC-CLASS /
BDRC-CLASS))
(5) The terms used in this subsection
represent or are defined as follows:
(A)
Descriptions of calculated values.
(i)
GCRRCLASS--GCRR rate for a rate class.
(ii) RRCLASS--GCRR
class revenue requirement.
(iii)
RRTOT--Total GCRR revenue requirement.
(iv)
ALLOCC-CLASS--GCRR class allocation factor for a rate
class.
(B) GCRR billing
determinants and power generation facility values.
(i) BDC-CLASS--GCRR
billing determinants that are weather-normalized.
(ii) PGFIC--Power generation facility net
invested capital.
(iii)
PGFDEPR--Power generation facility depreciation expense.
(iv) PGFFIT--Federal income tax expense
associated with the return on the power generation facility net invested
capital, reduced by any tax credits related to the power generation facility
that are not returned to customers as a credit or other offset to eligible fuel
expense.
(v) PGFOT--Other tax
expense associated with the power generation facility.
(C) Baseline values. The following values are
based on those values used to establish rates in the electric utility's most
recent base-rate proceeding, or if an input to the GCRR calculation from the
electric utility's last base-rate proceeding is not separately identified in
that proceeding, it will be derived from information from that proceeding:
(i) TRAF--Texas retail jurisdiction
production allocation factor value used to establish rates in the electric
utility's last base-rate proceeding determined under the provisions of
subsection (e) of this section.
(ii) BDRC-CLASS--Rate
class billing determinants used to establish generation base rates in the last
base-rate proceeding. Energy-based billing determinants will be used for those
rate classes that do not include any rate demand charges, and demand-based
billing determinants will be used for those rate classes that include rate
demand charges.
(iii)
RORRC--After-tax rate of return approved by the
commission in the electric utility's last base-rate proceeding.
(iv)
ALLOCRC-CLASS--Rate class allocation factor value
determined under the provisions of subsection (e) of this section.
(e)
Jurisdictional and class allocation factors. For calculating GCRR rates, the
baseline jurisdictional and rate-class allocation factors used to allocate
generation invested capital in the last base-rate proceeding will be
used.
(f) Customer classification.
For the purposes of establishing GCRR rates, customers will be classified
according to the rate classes established in the electric utility's most
recently completed base-rate proceeding.
(g) GCRR application. An electric utility may
file an application for a GCRR before the electric utility places a power
generation facility in service. An electric utility may include only one
discrete power generation facility in an application for a GCRR. An electric
utility may file an application to amend its GCRR to include another discrete
power generation facility even if it has another application to amend its GCRR
pending before the commission. The proceeding for a GCRR application must
conform to the requirements of this subsection.
(1) Scope of proceeding. The issues of
whether generation invested capital included in an application for a GCRR
complies with PURA and is prudent, reasonable, and necessary will not be
addressed in a GCRR proceeding.
(2)
Notice. The applicant must notify all parties in the applicant's last base-rate
proceeding that an application was filed. The notice must be provided by
first-class mail and mailed the same day the application is filed. The notice
must specify the docket number assigned to the application and a copy of the
application must be included with the notice.
(3) Parties and intervention. Requests to
intervene must be filed no later than 10 calendar days after the date the
application is filed. Objections to a request to intervene must be filed no
later than five working days after the request is filed. All requests to
intervene must be ruled upon no later than 21 calendar days after the
application is filed.
(4) GCRR
forms. If the commission adopts a form for GCRR applications, an electric
utility must file its application using that form.
(5) Sufficiency of application. A motion to
find the application materially deficient must be filed no later than 10
calendar days after the application is filed. A motion to find an amended
application deficient, when the amendment is in response to an order issued
under this paragraph, must be filed no later than five working days after the
amended application is filed. The motion must specify the nature of any alleged
deficiency and, if the commission has adopted a form for a GCRR application,
the particular requirements of the form for which the application is alleged to
be out of compliance. The applicant's response to such motion must be filed no
later than five working days after the motion is filed. Within five working
days of the applicant's response, the presiding officer must issue an order
finding the application sufficient or deficient, and if deficient must specify
the deficiencies and the time within which the applicant must amend its
application to cure the deficiencies. If the presiding officer has not issued a
written order within 35 calendar days of the filing of the application, or 25
calendar days of the filing of an amended application, concluding that material
deficiencies exist in the application, the application is sufficient.
(6) Action on application. If the
requirements of §
22.35 of this title are met, the
presiding officer must issue a notice of approval within 60 calendar days of
the date an application is found to be sufficient by order or rule. The
presiding officer may extend this time if a party demonstrates that additional
time is needed to review the application or the presiding officer needs
additional time to prepare the notice of approval. Further, if the presiding
officer determines that the application should be considered by the commission,
the presiding officer must issue a proposed order for consideration by the
commission at the next available open meeting.
(h) Update of generation invested capital.
Within 60 calendar days after a power generation facility included in a GCRR
begins providing service to the electric utility's customers, the electric
utility may file an application to update the GCRR to reflect the electric
utility's actual capital investment in the power generation facility. An
application to update the GCRR under this subsection is subject to the
requirements in subsection (g) of this section. Any update to the GCRR made
under this subsection must include carrying costs on the amount of investment
in excess of the investment initially approved for recovery under subsection
(g) of this section. Carrying costs will accrue monthly from the date the power
generation facility began providing service to the electric utility's customers
through the date the adjustment is approved and must be calculated using the
rate of return approved by the commission in the electric utility's most recent
base-rate proceeding.
(i)
Reconciliation.
(1) Amounts recovered through
a GCRR approved under this section are subject to reconciliation in the first
base-rate proceeding for the electric utility that is filed after the effective
date of the GCRR. The reconciliation will true up the total amount actually
recovered through the GCRR approved under this section with the total revenue
requirement that the approved GCRR was designed to recover. As part of the
reconciliation, the commission will determine if the amounts recovered through
the GCRR are reasonable and necessary.
(2) Any amounts recovered through the GCRR
that are found to have been unreasonable, unnecessary, or imprudent, plus the
corresponding return and taxes, must be refunded with carrying costs. Carrying
costs will be determined as follows:
(A) For
the time period beginning with the date on which over-recovery is determined to
have begun to the effective date of the electric utility's base rates set in
the base-rate proceeding in which the GCRR is reconciled, carrying costs will
accrue monthly and will be calculated using an effective monthly interest rate
based on the same rate of return that was applied to the investments included
in the GCRR.
(B) For the time
period beginning with the effective date of the electric utility's rates set in
the base-rate proceeding in which the GCRR is reconciled, carrying costs will
accrue monthly and will be calculated using an effective monthly interest rate
based on the electric utility's rate of return authorized in that base-rate
proceeding.
(j)
Threshold to initiate base-rate proceeding. If a GCRR approved under this
section includes cumulative incremental recovery for a power generation
facility or power generation facilities where the amount of generation invested
capital is greater than $200 million on a Texas jurisdictional basis, the
electric utility must initiate a base-rate proceeding at the commission not
later than 18 months after the date the GCRR takes effect.