SB 1977

relating to the recovery of certain expenses by an electric utility
or a water and sewer utility in a rate proceeding.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Section 36.061, Utilities Code, is amended by
adding Subsection (b-1) to read as follows:
(b-1)  For purposes of Subsection (b)(2), the regulatory
authority may not allow as a cost or expense legal expenses incurred
by an electric utility for participating in a rate proceeding under
this title that exceed the greater of $50,000 or 50 percent of the
total legal expenses incurred by the electric utility to
SECTION 2.  Section 13.185(h), Water Code, is amended to
(h)  The regulatory authority may not include for ratemaking
(1)  legislative advocacy expenses, whether made
directly or indirectly, including legislative advocacy expenses
included in trade association dues;
(2)  costs of processing a refund or credit under this
(3)  any expenditure found by the regulatory authority
to be unreasonable, unnecessary, or not in the public interest,
including executive salaries, advertising expenses, [legal
expenses,] and civil penalties or fines; or
(4)  legal expenses for a rate proceeding that exceed
the greater of $50,000 or 50 percent of the total legal expenses
incurred by the utility for the proceeding or any other legal
expenses found by the regulatory authority to be unreasonable,
unnecessary, or not in the public interest.
SECTION 3.  The changes in law made by this Act apply only to
a rate proceeding under Chapter 36, Utilities Code, or Chapter 13,
Water Code, as applicable, that begins on or after the effective
date of this Act.  A rate proceeding that begins before the
effective date of this Act is governed by the law in effect on the
date the rate proceeding began, and the former law is continued in
SECTION 4.  This Act takes effect September 1, 2025.