Senate Bill 1693, adopted last May by the Texas Legislature, should make it easier for the state’s electric utilities to push through rate increases. When finally in use, the legislation will allow transmission providers to obtain “periodic rate adjustments” to correspond with their spending on the poles and wires that distribute electricity to individual homes. The Texas Public Utility Commission is in the process of creating the rules needed to implement SB 1693.
But do the proposed rules go too far? A key lawmaker thinks they might.
State Rep. Sylvester Turner, who successfully sponsored a pro-consumer amendment to SB 1693 on the House floor, has expressed concern that some proposed rules would allow Texas utilities to hike rates in an overly broad fashion.
“I proposed and obtained an amendment to this bill that I believed improved the Legislation significantly and provided important safeguards for Texas ratepayers,” Turner wrote to the PUC Commissioners in an Aug. 12 letter.
“(But) I am concerned that the (proposed regulatory interpretation of the law) substantially weakens those protections and does not reflect my intent in seeking the amendment,” he wrote.
Turner expressed specific concern regarding how the rules apply to various utility expenditures, including indirect corporate costs, capitalized operations and maintenance expenses.
“To be clear, my amendment included no exceptions to the prohibition against recovery of indirect corporate costs through this mechanism,” Turner wrote. “The proposed rule substantially weakens this prohibition by permitting a wide variety of allocated, indirect costs that go well beyond the ‘wires-and-poles’ focus of the legislation and of the industry’s rationales for supporting it.”
The final rules won’t be adopted by the PUC until Sept. 15th. In the meantime, two city coalitions, a group of industrial customers and a state agency representing consumer interests also have weighed in.
You can read Rep. Turner’s letter here.
Is a policy analyst consultant for TCAP, a coalition of political subdivisions in Texas that purchase electricity in the deregulated market for their own governmental use. Because energy costs are typically a significant budget item to our members, TCAP is consistently looking for ways to save our members money, through cost-saving contracts, energy efficiency or demand response programs.