Relating to the recovery of certain costs associated with a gas utility's plant, facilities, or equipment placed in service, the official text

H.B. No. 4384

AN ACT

relating to the recovery of certain costs associated with a gas

utility's plant, facilities, or equipment placed in service.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter G, 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.

(a) In this section:

(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 an 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 until recovery.

(3) "Unrecovered gross plant" means a 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:

(1) post in-service carrying costs;

(2) depreciation associated with the unrecovered

gross plant; and

(3) ad valorem taxes associated with the unrecovered

gross plant.

(c) A regulatory asset established under Subsection (b)

must be included in the railroad commission's authorized cost

recovery mechanism under Section 104.301.

(d) On recovery in rates of a regulatory asset established

by a gas utility under Subsection (b), the gas utility shall make

appropriate accounting adjustments to reflect the recovery in

rates.

(e) The railroad commission shall review the costs included

in a regulatory asset established by a gas utility under Subsection

(b) in a general rate proceeding. The costs are subject to a refund

with interest to the extent the railroad commission by order

disallows recovery in rates.

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 270th day after the effective date of

this Act.

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

in effect for that purpose.

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.

______________________________
______________________________

President of the Senate
Speaker of the House

I certify that H.B. No. 4384 was passed by the House on May 8,

2025, by the following vote: Yeas 135, Nays 10, 3 present, not

voting; and that the House concurred in Senate amendments to H.B.

No. 4384 on May 28, 2025, by the following vote: Yeas 121, Nays 11,

1 present, not voting.

______________________________

Chief Clerk of the House

I certify that H.B. No. 4384 was passed by the Senate, with

amendments, on May 26, 2025, by the following vote: Yeas 29, Nays

2.

______________________________

Secretary of the Senate

APPROVED: __________________

Date

__________________

Governor