Texas Senate Passes Bill To Extend TDUs' Ability To Rely on Alternative Ratemaking In Assessing Charges to REPs

The Texas Senate last week passed SB 774 which would 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, meaning alternative ratemaking mechanisms such as the distribution cost recovery factor

Currently, such authority to use alternative ratemaking mechanisms expires January 1, 2017

The bill has now been sent to the House, where it awaits action. A similar House version of the bill has already been favorably reported out of committee.

The engrossed version of SB 774 provides that the PUC shall conduct a study and make a report analyzing alternative ratemaking mechanisms adopted by other states and shall make recommendations regarding appropriate reforms to the ratemaking process in Texas. The PUC shall provide the report to the legislature not later than January 15, 2017.

To date, no TDU within ERCOT has implemented a distribution cost recovery factor, but as previously reported (click here), CenterPoint Energy Houston Electric has filed to implement a DCRF effective September 1, 2015