Bill Sponsors / Authors:

  Rep. David Spiller
  R - Lampasas

  Sen. Phil King
  R - Weatherford

 

Supporting Documents / Links:

•   Tina Paez Oppose SB 1015
  March 14, 2023
•   Texans could see ‘sizable’ electric rate hikes under state proposal, critics say
  Houston Chronicle - March 17, 2023
•   Texas electricity bills could rise more frequently under pending legislation
  Houston Chronicle - April 13, 2023
•   Tina Paez on SB 1015
  May 3, 2023

Senate Bill 1015 - Additional Rate Hearings

For years, cities have negotiated settlements with electric utilities over proposed rate hikes, securing lower costs for residents and businesses if they can show the increase is excessive.

Tina Paez, Director of Administration and Regulatory Affairs for the City of Houston, has lead interventions on behalf of the City on four periodic rate hikes from 2015 to 2019 — saving $80 million for ratepayers from rates proposed by CenterPoint, the investor- owned utility that provides electric distribution & transmission.

Senate Bill 1015 made changes to the utility Periodic Rate Adjustment (PRA) mechanism, commonly referred to as the Distribution Cost Recovery Factor (DCRF).

The PRA was signed into law in 2011 as a means of incentivizing capital investment by electric utilities by allowing them to recover these expenses in a more timely manner (once a year) than the periodic base rates proceedings allowed (once every 5 years).

Through the existing DCRF mechanism of an annual applications, the local utility serving Houston –CenterPoint Energy – recovered more than $158 million from the four DCRF increases the Company sought after the PRA went into effect.

Municipalities and other interested parties have the jurisdiction to participate and intervene in these proceedings, providing valuable review and scrutiny of expenditures recovered through this mechanism to safeguard the interests of Texas residents and businesses.

The original version of Senate Bill 1015 proposed to completely eliminate municipal original jurisdiction over DCRF rates, taking away a municipality’s ability to intervene or participate in a proceeding that dramatically impacts how much Houston residents pay for their electricity service.

The City of Houston fought back against his change with in-person testimony from Director Paez. Senator Phil King, the sponsor of the legislation, had a floor amendment that helped restore portions of the original jurisdiction for municipalities. Rep. David Spiller made further changes to the bill to clarify the original jurisdiction would fully remain with the city.

Director Paez offered testimony to that affect, writing:

Rep. Spiller’s amended provisions in the proposed House Committee Substitute restore municipal original jurisdiction over these expedited DCRF rate mechanisms– a critical amendment for protecting the interests of electricity customers across Texas. Based on the amendments proposed by Rep. Spiller in the proposed House Committee Substitute, the City of Houston withdraws our stated opposition to the bill.

Retaining the original jurisdiction was the main objective for the City of Houston. If utilities feel they need more DCRFs than currently allowed, as long as the City of Houston can continue to protest, ratepayers will continue to be protected.