HB 4384

relating to the recovery of a gas utility's gross plant placed in
service not yet being recovered in rates.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Chapter 104, Utilities Code, is amended by
adding Section 104.302 to read as follows:
Sec. 104.302.  RECOVERY OF CERTAIN COSTS FOR GROSS PLANT.
(1)  "Gross plant" means a gas utility's plant,
facilities, or equipment that has been placed in service.
(2)  "Post in-service carrying costs" means the product
of unrecovered gross plant multiplied by a gas utility's pre-tax
weighted average cost of capital established in the railroad
commission's final order in the gas utility's most recent general
rate proceeding, compounded at the gas utility's pre-tax weighted
average cost of capital until recovery.
(3)  "Unrecovered gross plant" means gross plant whose
cost is not yet being recovered in a gas utility's rates and not
already being deferred to a regulatory asset.
(b)  A gas utility may defer for future recovery as a
regulatory asset the following:
(1)  post in-service carrying costs;
(2)  depreciation associated with unrecovered gross
(3)  ad valorem taxes associated with the unrecovered
(4)  incremental operations and maintenance expense
associated with the unrecovered gross plant and that is not being
(c)  The regulatory asset established under Subsection (b)
shall be included in the railroad commission authorized cost
recovery mechanism under Section 104.301.
(d)  Upon recovery in rates of the regulatory asset
established by a gas utility under Subsection (b), the gas utility
shall make appropriate accounting adjustments to reflect recovery
(e)  The costs included in the regulatory asset established
by a gas utility under Subsection (b) shall be reviewed by the
railroad commission in a general rate proceeding and are subject to
refund to the extent the railroad commission orders a disallowance.
SECTION 2.  The Railroad Commission of Texas shall adopt
rules to implement Section 104.302, Utilities Code, as added by
this Act, not later than the 180th day after the effective date of
SECTION 3.  This Act applies only to a cost recovery
proceeding commenced on or after the effective date of this Act.  A
cost recovery proceeding commenced before the effective date of
this Act is governed by the law in effect on the date the cost
recovery proceeding was commenced, and the former law is continued
SECTION 4.  This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution.  If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2025.