PUCT Staff File Proposal for Distribution Cost Recovery Factor Applicable to REPs

PUCT Staff have filed in Project 39465 a recommended proposal for publication to implement a Distribution Cost Recovery Factor (DCRF) via proposed Substantive Rule 25.243.

Authorized under recent legislation, the Distribution Cost Recovery Factor would allow a Transmission and Distribution Utility (TDU) to adjust the delivery rates charged to Retail Electric Providers periodically outside of full rate cases.

Staff's proposal would limit TDUs to a single DCRF or DCRF update effective each calendar year.

TDUs would only be permitted to file for a DCRF or DCRF update during the period April 1 through April 8.

The presiding officer would be required set the effective date of the DCRF or DCRF update for a TDU as September 1 unless good cause exists for a later date.

The presiding officer would also be required to render a final decision on a DCRF or DCRF update, on a system-wide basis, at least 46 days before the effective date of the approved rates, even if this requirement results in an effective date after September 1.

A TDU would not be permitted to apply for a DCRF or DCRF update while a comprehensive base-rate proceeding is pending. Additionally, a TDU would be prohibited from changing its rates pursuant to a DCRF more than four times between comprehensive base-rate proceedings.

The Commission would be required to deny an electric utility's application for a DCRF or DCRF update if, at the time that the DCRF or DCRF update application is filed, the most recent earnings monitoring report filed by the electric utility shows that the electric utility is earning more than its authorized rate of return using weather-normalized data.