Part 1.
RAILROAD COMMISSION OF TEXAS
Chapter 1.
PRACTICE AND PROCEDURE
Subchapter I. PERMIT PROCESSING
16 TAC §1.201
The Railroad Commission of Texas adopts new §1.201,
relating to Time Periods for Processing Applications and Issuing Permits Administratively,
with changes to the version published in the November 24, 2000, issue of the
An application is complete when the division or section processing the
application has determined that the application contains information addressing
each application requirement of the regulatory program and all information
necessary to initiate the final review. Also for purposes of this section,
certain applicants are required to have an approved organization report (Form
P-5) on file with the Commission in order for an application to be procedurally
complete.
The division or section receiving permit applications will process them
in accordance with the time periods shown in the rule for a particular permit.
Time periods are counted on the basis of calendar days. A permit application
is received on the date the application reaches the designated division or
section within a division of the Commission. The initial review period begins
on that date and ends on the date the division or section: (1) gives written
notice to the applicant that either the application is complete and accepted
for filing or the application is incomplete and describes the specific information
required to complete the application; or (2) receives the second supplemental
submission on an incomplete application. For incomplete applications, the
initial review period begins again each time the division or section receives
additional information, up to a maximum of two supplemental submissions. After
the second supplemental submission, the division or section must either administratively
rule on the merits of the application if it is complete or deny the application,
if it is still incomplete.
The final review period begins on the date the division or section receives
the last item necessary to complete an application and ends on the date the
permit is administratively granted, administratively denied, or docketed as
a contested case proceeding if the application is neither granted nor denied
administratively.
An applicant may complain directly to the Director of Energy Operations
if a division or section does not process an application within the applicable
time periods and may request a timely resolution of any dispute arising from
the claimed delay. All complaints must be in writing and must state the specific
relief sought, which may include the full reimbursement of the fee paid in
that particular application process. As soon as possible after receiving a
complaint, the Director of Energy Operations must notify the appropriate division
director of the complaint. Within 30 days of receipt of a complaint, the division
or section processing the application that is the subject of the complaint
must submit to the Director of Energy Operations a written report of the facts
relating to the processing of the application, including the division's or
section's explanation of the reason or reasons it did or did not exceed the
established time periods. If the Director of Energy Operations does not agree
that the division or section has violated the established periods or finds
that good cause existed for the division or section to have exceeded the established
periods, the Director may deny the relief requested by the complaint.
If an application is docketed as a contested case proceeding, the time
periods in the Commission's General Rules of Practice and Procedure (Chapter
1 of Title 16) are applicable once the application has been filed with the
Docket Services Section of the Office of General Counsel.
The Commission based the permit processing times shown in Table 1 of §1.201
on permit processing data for calendar year 1999 as well as on educated estimates
for those permits for which the Commission has no data or for which the data
are unreliable or unrepresentative. For example, during 1999, the Commission
processed no applications for an exception to a liquefied natural gas rule
pursuant to 16 Texas Admin. Code §13.2052; however, because of the requirement
that an applicant provide notice to certain persons, who then have 18 days
to file an objection to the application, the median processing time will always
be more than seven days.
The Commission does not anticipate that §1.201 will result in either
an increase or a decrease in the number of applications filed, reviewed, and
ruled on administratively. Commission staff will likely consult with and advise
applicants whose applications are incomplete, similar to the process in place
now. The major difference will be that following the second supplemental filing
for an incomplete application, the staff will be required to make a determination:
if the application is then complete, the staff will administratively grant
or deny the application on its merits; if it is still incomplete, then the
staff will be required to administratively deny the application. The Commission
is unable to estimate how many, if any, complaints related to permit processing
might be filed and whether such complaints would result in the refund of any
permit fees.
New §1.201 is expected to result in more efficient use of Commission
resources in processing permit applications. Applicants will know, within
a certain time following the initial filing of an application, whether the
application is complete or not and, if not, what additional information the
Commission requires. Applicants will also know, generally, how long it will
take the Commission staff to review a permit application once it is complete.
Finally, applicants will have a process for complaining about permit processing
problems, and a procedure for pursuing any such complaints.
The Commission received no comments from any associations or organizations,
but did receive two other comments. One comment suggested that there be a
time limit of seven days by which the division or section should be required
to send an application to the Office of General Counsel for hearing after
the division or section has either docketed the application or has administratively
denied the application and has received a hearing request from the applicant.
The comment suggested that because staff would already have identified the
shortcomings of the application itself, no additional time would be necessary
to prepare a memorandum explaining the reason for docketing the application
or administratively denying it. The Commission agrees and has added new paragraph
(6) to subsection (c) to state that an applicant whose permit was denied may
request a hearing in writing. Within seven days of receiving a written request
for a hearing, the division or section is required to docket the application
and forward the file and the request for hearing to the Office of General
Counsel. The Office of General Counsel must process the matter as a contested
case. New paragraph (7) in subsection (c) clarifies that if the division or
section dockets an application pursuant to subsection (c)(5)(C), the same
seven day time for forwarding the file to the Office of General Counsel applies.
The Commission has also amended the designation of proposed subsection
(d)(5) to subsection (e). The provisions of that subsection do not apply to
the complaint process; including it as part of subsection (d) was inappropriate
and potentially misleading.
One comment suggested that §3.31 and §3.51 which concern gas
allowables and oil allowables should not be included in the table in the rule
because allowables are not considered to be permits. The Commission notes
that these two rules were not included in the table in the preamble of the
proposed rule, which addressed the minimum, median, and maximum time periods
for various permits. The Commission agrees and has removed those rules from
the table. In addition, because permits are not issued administratively under
rule §3.106 (by statute, these must be approved by the Commission), this
rule is also removed from the table. Applications for T-4 permits under §3.65
will remain in the table, however, because not all of them are associated
with applications under §3.106.
Another comment requested that the Commission's section referred to as
the Compliance Section be changed to Field Operations, which is the current
name of that section. This change has been made in Column B of the table in
the entry for §3.8, Water Protection, Minor Permit for One-Time Annular
Disposal of Drilling Fluid.
Another comment suggested that §3.83 concerning two-year inactive
wells should not be subject to the requirements of this rule because, with
some programming changes, the median processing time would be under seven
days. Because the programming changes have not yet been completed and the
Texas Government Code, Chapter 2005, requires agencies to track permit processing
times and amend any applicable rule as necessary, §3.83 will remain in
the rule at this time. The Commission expects to propose amendments to the
rule in the future after the programming changes have been made and when the
results are known.
The other comments focused on the impact of the permit processing requirements
on the Commission's internal procedures, including such things as computer
programming that would be necessary to create or modify tracking systems for
information related to permit applications.
A comment also addressed several types of permit applications authorized
in 10 other Commission rules and indicates that the number of these applications
is expected to increase from 1,463 in fiscal year 2000 to 1,900 in fiscal
year 2001. The comment stated that some internal procedures will need to be
changed or added (such as a new database and logging system at an estimated
cost of $2,000) in order for staff to process these applications in accordance
with new §1.201, with a total estimated impact of $10,000. Texas Government
Code, Chapter 2005, does not specifically prescribe how agencies must or may
deal with an increase in the total number of permit applications; rather,
Texas Government Code, §2005.004(1), provides that an agency has good
cause to exceed the period it has established for processing a permit application
if the number of permit applications to be processed exceeds by at least 15%
the number of permit applications processed in the same quarter of the previous
calendar year. In any event, if a 15% or greater increase in the number of
any particular permit application proved to be more regular than episodic,
the Commission would need to either amend the rule to change the time periods
for that particular application or devote more resources to meeting the prescribed
time period.
Regarding §3.9 and §3.46, a comment states that a new process
of scanning and indexing applications submitted under these rules has been
implemented and that the process adds another day to the review process. The
Commission notes that the new rule does not break down the time periods for
Initial Review and Final Review into any specific components; therefore, the
operating divisions have the flexibility to determine if any additional benchmarks
are required within the maximum time periods for the Initial and Final Reviews.
If the time periods given for §3.9 and §3.46 are reviewed in a year
and prove to be inaccurate, the rule should be amended. The comment estimates
that about 30% of the applications under these two rules are complete when
received at the Commission and the new rule will result in about 300 additional
letters having to be generated each year. The response to this comment is
to observe that Texas Government Code, Chapter 2005, requires "written notice,"
not a letter (
i.e
., one or more sheets of
paper with an envelope and postage). There is nothing in either the statute
or the rule that prohibits a written notice of completeness from being an
e-mail, a facsimile transmission of a form letter with applicable provisions
checked, or even a postcard.
The comment also stated that the new rule does not appear to address a
possible situation where staff discovers that information is missing after
a notice of completeness has been sent to the applicant. While that is true,
it is equally true that it would be impossible for any rule to address every
situation and every way in which human beings might make a mistake. If staff
discovers that information is missing after it has sent a notice of completeness,
then another notice will need to be sent, informing the applicant of the error
and identifying the information required to be submitted.
The Commission notes that the maximum time periods in the table were developed
using information provided from staff and, in many cases, the maximum time
periods listed in the rule are longer than the estimated time periods for
various permits.
Another comment questions the requirement for notices from the Commission
to be in writing and states that staff frequently telephones an applicant
to address an incomplete application. The comment also questions whether this
requirement would conflict with the Commission's efforts regarding electronic
filing of many applications and other transactions. Because of the provisions
of Texas Government Code, Chapter 2005, new §1.201 require the Commission
responses to be in writing. However, the Commission notes that a letter is
not specifically required and that electronic mail, facsimile transmission,
or postcards would satisfy this requirement. Such writings have the additional
advantage of being a record of staff contact with applicants, and can be included
in the materials kept on file for the various permits.
A comment points out that some applications under §3.9 and §3.46
include complicated well conversions or area-of-review issues. Frequently,
the applicant will provide information as it becomes available, but not for
the purpose of delaying the final decision. In addition, there are times when
the supplemental information filed raises new questions for staff. Staff has
in the past returned the application as many times as needed to complete all
the information required and suggests that there is no real purpose in denying
an application for lack of information. The Commission notes that, although
in the past applicants have had unlimited opportunities to complete their
applications, the statutory requirements in Chapter 2005 require the Commission
to promulgate and act on the requirements of this rule regarding permit processing
time periods and, contrary to the comment, there is a salutary purpose in
denying an application for lack of information. The practice of filing partial
applications or filing information piece by piece is a waste not only of Commission
time and resources, but also those of the applicant. Applicants who may have
their applications denied because they are still incomplete after the two
allowed supplemental filings will still have the option of refiling their
applications, and this time with the benefit of knowing how requirements will
be interpreted and what remaining information is needed. The rule applies
to time periods for Commission actions, but applicants are now on notice that
there will be limited opportunities--two, in fact--to supplement permit applications.
The Commission anticipates that all participants in permit processing--staff
and applicants alike--will have an incentive to become more efficient.
Another comment referred to the "good cause" provisions in the rule regarding
increases of 15% or more in permit applications. The comment stated that applications
under §3.9 and §3.46 may involve one or one hundred wells and that
the number of applications could possibly remain the same from year to year,
but the number of wells involved in the applications could increase 15% or
more. The more wells included in a permit application means more time will
be necessary to process it. The comment requests that for §3.46 applications
the number of wells be considered when determining whether the 15% mark has
been reached. The Commission notes that the provisions of Chapter 2005 require
the agency to track and review these time periods over a year; the Commission
will do so and will amend the rule if the year's information shows the number
of wells to be a significant factor.
Two comments addressed some pending applications under §§3.95,
3.96, and 3.97, and asked if these applications, which have been pending longer
than the time periods proposed in the new rule, would have to be administratively
denied. Sections 3.95, 3.96, and 3.97, adopted effective January 1, 1995,
in response to legislation, required operators of approximately 75% of existing
facilities storing hydrocarbons in salt formations to submit permit amendment
applications. Staff has completed processing about 75% of these applications,
and another 20% have been docketed for contested case proceedings. The average
time to process these permit amendment applications has far exceeded the time
periods in the new rule, although new permit applications submitted under
these rules have been processed within the new time frames. The Commission
notes that new §1.201 was not proposed to be and will not be applied
retroactively to currently pending applications, so these pending applications
will not be affected by or required to be processed under the new rule. However,
an application that is pending at the time new §1.201 becomes effective,
is withdrawn, and is later re-filed will be subject to and processed according
to the time period in the new rule.
The Commission anticipates that as new electronic filing procedures, such
as the Electronic Compliance and Approval Process (ECAP), are implemented,
the times for processing various types of permits will change, and new §1.201
will be amended accordingly. The Commission views this rule not as imposing
unfair or punitive standards on either the regulated industries or on the
staff, but rather as an opportunity and an inducement to developing innovative
and efficient methods for completing required tasks.
In summary, the Commission adopts the new rule with these changes: new
paragraphs (6) and (7) in subsection (c) specify that staff has seven days
to forward an application to the Office of General Counsel for a hearing if
an application was either docketed or administratively denied and the applicant
has requested a hearing; oil and gas production allowables under §3.31
and §3.51 and sour gas pipeline facility construction permits under §3.106
have been removed from the table; "Compliance" has been changed to "Field
Operations" in Column B of the entry for §3.8, Water Protection, Minor
Permit for One- Time Annular Disposal of Drilling Fluid; and subsection (d)(5)
has been changed to subsection (e).
The Commission adopts the new rule under Texas Government Code, §§2005.001-2001.007,
which requires the Commission to adopt procedural rules for processing permit
applications and issuing permits and to establish by rule a complaint procedure
allowing permit applicants to complaint directly to the chief administrator
of the agency; and under Texas Government Code, §2001.004, which requires
agencies to adopt rules of practice stating the nature and requirements of
all available formal and informal procedures.
Texas Government Code, §§2001.004 and 2005.001-2005.007, are
affected by the adopted new section.
Issued in Austin, Texas, on April 24, 2001.
§1.201.Time Periods for Processing Applications and Issuing Permits Administratively.
(a)
Applicability. This rule applies to the permits listed
in Column A of Table 1 of this section. For purposes of this rule, the term
"permit" includes any authorization issued administratively by the Commission,
through the Oil and Gas Division, the Gas Services Division, the Surface Mining
and Reclamation Division, or the Rail Division, and required by the Commission
either to engage in or conduct a specific activity or to deviate from requirements,
standards, or conditions in statutes or Commission rules and for which the
median processing time exceeds seven days.
Figure: 16 TAC §1.201(a)
(b)
Completeness. An application is complete when the division
or section shown in Column B of Table 1 has determined that the application
contains information addressing each application requirement of the regulatory
program and all information necessary to initiate the final review by the
division or section processing the application. For purposes of this section,
certain applicants, as shown in Column D of Table 1, are required to have
an approved organization report (Form P-5) on file with the Commission in
order for an application to be complete.
(c)
Time periods.
(1)
The date a permit application is received under this section
is the date the application reaches the designated division or section within
a division of the Commission as shown in Column B of Table 1.
(2)
The division or section shown in Column B of Table 1 shall
process permit applications in accordance with the time periods shown in Columns
F and G of Table 1 for a particular permit. Time periods are counted on the
basis of calendar days.
(3)
The Initial Review Period, shown in Column F of Table 1,
begins on the date the designated division or section receives the application
and ends on the date the division or section gives written notice to the applicant
indicating that either:
(A)
the application is complete and accepted for filing; or
(B)
the application is incomplete, as described in paragraph
(4) of this subsection.
(4)
If the division or section determines that an application
is incomplete, the division or section shall notify the applicant in writing
and shall describe the specific information required to complete the application.
An applicant may make no more than two supplemental filings to complete an
application. The Initial Review Period shall start again each time the division
or section receives a supplemental filing relating to an incomplete application.
After the second supplemental submission, if the application is complete,
the division or section shall administratively rule on the application; if
the application is still incomplete, the division or section shall administratively
deny the application. The division or section specifically does not have the
authority to accept or review any other additional supplemental submissions.
The division or section shall notify the applicant in writing of the administrative
decision and, in the case of an administrative denial, the applicant's right
to request a hearing on the application as it stands. The applicant may withdraw
the application.
(5)
The Final Review Period, shown in Column G of Table 1,
begins on the date the division or section receives the last item necessary
to complete an application and ends on the date the permit is:
(A)
administratively granted;
(B)
administratively denied; or
(C)
docketed as a contested case proceeding if the application
is neither administratively granted nor administratively denied.
(6)
An applicant whose application has been administratively
denied may request a hearing by filing a written request for a hearing addressed
to the division or section processing the application, within 30 days of the
date the application is administratively denied.
(7)
Within seven days of either docketing an application under
paragraph (5)(C) of this subsection or receiving a written request for a hearing
under paragraph (6) of this subsection, the division or section processing
the application shall forward the file and any request for hearing, including
any memoranda or notes explaining or describing the reasons for docketing
or administrative denial, to the Docket Services Section of the Office of
General Counsel. The Office of General Counsel shall process the application
as prescribed in subsection (e) of this section.
(d)
Complaint procedure.
(1)
An applicant may complain directly to the Director of Energy
Operations if a division or section does not process an application within
the applicable time periods shown in Columns F and G of Table 1, and may request
a timely resolution of any dispute arising from the claimed delay. All complaints
shall be in writing and shall state the specific relief sought, which may
include the full reimbursement of the fee paid in that particular application
process, if any, as shown in Column E of Table 1. As soon as possible after
receiving a complaint, the Director of Energy Operations shall notify the
appropriate division director of the complaint.
(2)
Within 30 days of receipt of a complaint, the division
director of the division or section processing the application that is the
subject of the complaint shall submit to the Director of Energy Operations
a written report of the facts relating to the processing of the application.
The report shall include the division director's explanation of the reason
or reasons the division or section did or did not exceed the established time
periods. If the Director of Energy Operations does not agree that the division
or section has violated the established periods or finds that good cause existed
for the division or section to have exceeded the established periods, the
Director may deny the relief requested by the complaint.
(3)
For purposes of this section, good cause for exceeding
the established period means:
(A)
the number of permit applications to be processed by the
division or section exceeds by at least 15 percent the number of permit applications
processed by that division or section in the same quarter of the previous
calendar year;
(B)
the division or section must rely on another public or
private entity to process all or part of the permit application received by
the agency, and the delay is caused by that entity; or
(C)
other conditions exist that give the division or section
good cause for exceeding the established period, including but not limited
to circumstances such as personnel shortages, equipment outages, and other
unanticipated events or emergencies.
(4)
The Director of Energy Operations shall make the final
decision and provide written notification of the decision to the applicant
and the division or section within 60 days of receipt of the complaint.
(e)
Hearings. If an application is docketed as a contested
case proceeding, it is governed by the time periods in this chapter (relating
to General Rules of Practice and Procedure) once the application has been
filed with the Docket Services Section of the Office of General Counsel.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of
the Secretary of State on April 24, 2001.
TRD-200102383
Mary Ross McDonald
Deputy General Counsel
Railroad Commission of Texas
Effective date: May 14, 2001
Proposal publication date: November 24, 2000
For further information, please call: (512) 475-1295
Chapter 25.
SUBSTANTIVE RULES APPLICABLE TO ELECTRIC SERVICE PROVIDERS
Subchapter J. COSTS, RATES, AND TARIFFS
1.
RETAIL RATES
16 TAC §25.236
The Public Utility Commission of Texas (commission) adopts
an amendment to §25.236 relating to Recovery of Fuel Costs with changes
to the proposed text as published in the February 16, 2001
Texas Register
(26 TexReg 1451). The amendment implements the provisions
of Public Utility Regulatory Act (PURA) §39.202(c) establishing the requirement
of final fuel reconciliation for affiliated power generation companies. This
amendment is adopted under Project Number 23014.
The commission amends §25.236 by adding a new subsection (g) establishing
a timeline for the filing of the final fuel reconciliation. The timeline is
based upon commission estimates of available commission staff, complexity
of the reconciliation filings and the anticipated workload of staff and potential
interested parties.
Comments were filed on the proposal on March 16, 2001 by Reliant Energy
HL&P(Reliant) and on March 19, 2001 by American Electric Power Company
(AEP) on behalf of its Texas operating companies, Central Power and Light
(CPL), Southwestern Electric Power Company (SWEPCO) and West Texas Utilities
Company (WTU).
Reliant supports the amendment's timeline, which has it filing in July,
2002 and envisions a final order issued within eight months.
AEP supports the proposed schedule under which its Texas companies will
file their final fuel reconciliations. It points out that CPL has applied
for a waiver to file a single fuel reconciliation for the forty-two-month
period ending December 31, 2001 and suggested that the proposed schedule might
be modified to allow CPL eight months for issuance of a final order.
The commission agrees with AEP's request to modify the proposed schedule
to allow eight months for the issuance of a final order for CPL's final reconciliation.
Reliant and TXU Electric have previously obtained such waivers to allow them
to file their final fuel reconciliations covering periods exceeding thirty-six
months and were allotted eight months from filing to final order.
The commission staff conducted a public hearing on this rulemaking under
Government Code §2001.029 at the commission's offices located in the
William B. Travis Building, 1701 North Congress Avenue, Austin, Texas 78701,
on Friday, March 23, 2001 beginning at 1:00 p.m. in Hearing Room Gee. The
meeting was brief with the only questions coming from the Lower Colorado River
Authority regarding the background of the need for the rule and whether there
were any changes in review scope from the standard fuel reconciliation.
This amendment is adopted under the Public Utility Regulatory
Act, Texas Utilities Code Annotated §14.002 (Vernon 1998, Supplement
2001) (PURA), which provides the Public Utility Commission with the authority
to make and enforce rules reasonably required in the exercise of its powers
and jurisdiction; and specifically, §39.202(c), which requires each affiliated
power generation company to file a final fuel reconciliation for the period
ending the day before the date customer choice is introduced.
Cross Reference to Statutes: Public Utility Regulatory Act §14.002
and §39.202
§25.236.Recovery of Fuel Costs.
(a)
Eligible fuel expenses. Eligible fuel expenses include
expenses properly recorded in the Federal Energy Regulatory Commission Uniform
System of Accounts, numbers 501, 503, 518, 536, 547, 555, and 565, as modified
in this subsection, as of April 1, 1997, and the items specified in paragraph
(7) of this subsection. Any later amendments to the System of Accounts are
not incorporated into this subsection. Subject to the commission finding special
circumstances under paragraph (6) of this subsection, eligible fuel expenses
are limited to:
(1)
For any account, the electric utility may not recover,
as part of eligible fuel expense, costs incurred after fuel is delivered to
the generating plant site, for example, but not limited to, operation and
maintenance expenses at generating plants, costs of maintaining and storing
inventories of fuel at the generating plant site, unloading and fuel handling
costs at the generating plant, and expenses associated with the disposal of
fuel combustion residuals. Further, the electric utility may not recover maintenance
expenses and taxes on rail cars owned or leased by the electric utility, regardless
of whether the expenses and taxes are incurred or charged before or after
the fuel is delivered to the generating plant site. The electric utility may
not recover an equity return or profit for an affiliate of the electric utility,
regardless of whether the affiliate incurs or charges the equity return or
profit before or after the fuel is delivered to the generating plant site.
In addition, all affiliate payments must satisfy the Public Utility Regulatory
Act (PURA) §36.058.
(2)
For Accounts 501 and 547, the only eligible fuel expenses
are the delivered cost of fuel to the generating plant site excluding fuel
brokerage fees. For Account 501, revenues associated with the disposal of
fuel combustion residuals will also be excluded.
(3)
For Accounts 518 and 536, the only eligible fuel expenses
are the expenses properly recorded in the Account excluding brokerage fees.
For Account 503, the only eligible fuel expenses are the expenses properly
recorded in the Account, excluding brokerage fees, return, non-fuel operation
and maintenance expenses, depreciation costs and taxes.
(4)
For Account 555, the electric utility may not recover demand
or capacity costs.
(5)
For Account 565, an electric utility may not recover transmission
expenses paid to affiliated companies for the purpose of equalizing or balancing
the financial responsibility of differing levels of investment and operating
costs associated with transmission assets. A non-ERCOT electric utility may
not recover expenses for wheeling transactions. An ERCOT electric utility
may recover only the expenses properly recorded in Account 565 for ISO fees
related to planned and unplanned transmission service and for payments to
parties related to unplanned transmission service, such as losses and re-dispatch
fees.
(6)
Upon demonstration that such treatment is justified by
special circumstances, an electric utility may recover as eligible fuel expenses
fuel or fuel related expenses otherwise excluded in paragraphs (1) - (5) of
this subsection. In determining whether special circumstances exist, the commission
shall consider, in addition to other factors developed in the record of the
reconciliation proceeding, whether the fuel expense or transaction giving
rise to the ineligible fuel expense resulted in, or is reasonably expected
to result in, increased reliability of supply or lower fuel expenses than
would otherwise be the case, and that such benefits received or expected to
be received by ratepayers exceed the costs that ratepayers otherwise would
have paid or otherwise would reasonably expect to pay.
(7)
Eligible fuel expenses shall not be offset by revenues
by affiliated companies for the purpose of equalizing or balancing the financial
responsibility of differing levels of investment and operation costs associated
with transmission assets. In addition to the expenses designated in paragraphs
(1) - (6) of this subsection, unless otherwise specified by the commission,
eligible fuel expenses shall be offset by:
(A)
revenues from steam sales included in Accounts 504 and
456 to the extent expenses incurred to produce that steam are included in
Account 503; and
(B)
revenues from wheeling transactions except for non-ERCOT
electric utilities; and
(C)
revenues from off-system sales in their entirety, except
as permitted in paragraph (8) of this subsection.
(D)
For electric utilities in ERCOT, revenues from third parties
for unplanned transmission service, such as ISO fees, losses, and re-dispatch
fees.
(8)
Shared margins from off-system sales. An electric utility
may retain 10% of the margins from an off-system energy sales transaction
if the following criteria are met:
(A)
the electric utility participates in a transmission region
governed by an independent system operator or a functionally equivalent independent
organization;
(B)
a generally-applicable tariff for firm and non-firm transmission
service is offered in the transmission region in which the electric utility
operates; and
(C)
the transaction is not found to be to the detriment of
its retail customers.
(b)
Reconciliation of fuel expenses. Electric utilities shall
file petitions for reconciliation on a periodic basis so that any petition
for reconciliation shall contain a maximum of three years and a minimum of
one year of reconcilable data and will be filed no later than six months after
the end of the period to be reconciled. However, notwithstanding the previous
sentence, a reconciliation shall be requested in any general rate proceeding
under the PURA, Chapter 36, Subchapters C and E and may be performed in any
general rate proceeding under the PURA, Chapter 36, Subchapter D. Upon motion
and showing of good cause, a fuel reconciliation proceeding may be severed
from or consolidated with other proceedings.
(c)
Petitions to reconcile fuel expenses. In addition to the
commission prescribed reconciliation application, a fuel reconciliation petition
filed by an electric utility must be accompanied by a summary and supporting
testimony that includes the following information:
(1)
a summary of significant, atypical events that occurred
during the reconciliation period that affected the economic dispatch of the
electric utility's generating units, including but not limited to transmission
line constraints, fuel use or deliverability constraints, unit operational
constraints, and system reliability constraints;
(2)
a general description of typical constraints that limit
the economic dispatch of the electric utility's generating units, including
but not limited to transmission line constraints, fuel use or deliverability
constraints, unit operational constraints, and system reliability constraints;
(3)
the reasonableness and necessity of the electric utility's
eligible fuel expenses and its mix of fuel used during the reconciliation
period;
(4)
a summary table that lists all the fuel cost elements which
are covered in the electric utility's fuel cost recovery request, the dollars
associated with each item, and where to find the item in the prefiled testimony;
(5)
tables and graphs which show generation (MWh), capacity
factor, fuel cost (cents per kWh and cents per MMBtu), variable cost and heat
rate by plant and fuel type, on a monthly basis; and
(6)
a summary and narrative of the next-day and intra-day surveys
of the electricity markets and a comparison of those surveys to the electric
utility's marginal generating costs.
(d)
Fuel reconciliation proceedings. Burden of proof and scope
of proceeding are as follows:
(1)
In a proceeding to reconcile fuel factor revenues and expenses,
an electric utility has the burden of showing that:
(A)
its eligible fuel expenses during the reconciliation period
were reasonable and necessary expenses incurred to provide reliable electric
service to retail customers;
(B)
if its eligible fuel expenses for the reconciliation period
included an item or class of items supplied by an affiliate of the electric
utility, the prices charged by the supplying affiliate to the electric utility
were reasonable and necessary and no higher than the prices charged by the
supplying affiliate to its other affiliates or divisions or to unaffiliated
persons or corporations for the same item or class of items; and
(C)
it has properly accounted for the amount of fuel-related
revenues collected pursuant to the fuel factor during the reconciliation period.
(2)
The scope of a fuel reconciliation proceeding includes
any issue related to determining the reasonableness of the electric utility's
fuel expenses during the reconciliation period and whether the electric utility
has over- or under-recovered its reasonable fuel expenses.
(e)
Refunds. All fuel refunds and surcharges shall be made
using the following methods.
(1)
Interest shall be calculated on the cumulative monthly
ending under- or over-recovery balance at the rate established annually by
the commission for overbilling and underbilling in §25.28(c) and (d)
of this title (relating to Bill Payment and Adjustments). Interest shall be
calculated based on principles set out in subparagraphs (A) - (E) of this
paragraph.
(A)
Interest shall be compounded annually by using an effective
monthly interest factor.
(B)
The effective monthly interest factor shall be determined
by using the algebraic calculation x = (1 + i)
(1/12)
- 1; where i = commission-approved annual interest rate, and x = effective
monthly interest factor.
(C)
Interest shall accrue monthly. The monthly interest amount
shall be calculated by applying the effective monthly interest factor to the
previous month's ending cumulative under/over recovery fuel and interest balance.
(D)
The monthly interest amount shall be added to the cumulative
principal and interest under/over recovery balance.
(E)
Interest shall be calculated through the end of the month
of the refund or surcharge.
(2)
Rate class as used in this subparagraph shall mean all
customers taking service under the same tariffed rate schedule, or a group
of seasonal agricultural customers as identified by the electric utility.
(3)
Interclass allocations of refunds and surcharges, including
associated interest, shall be developed on a month-by-month basis and shall
be based on the historical kilowatt-hour usage of each rate class for each
month during the period in which the cumulative under- or over-recovery occurred,
adjusted for line losses using the same commission-approved loss factors that
were used in the electric utility's applicable fixed or interim fuel factor.
(4)
Intraclass allocations of refunds and surcharges shall
depend on the voltage level at which the customer receives service from the
electric utility. Retail customers who receive service at transmission voltage
levels, all wholesale customers, and any groups of seasonal agricultural customers
as identified by the electric utility shall be given refunds or assessed surcharges
based on their individual actual historical usage recorded during each month
of the period in which the cumulative under- or over-recovery occurred, adjusted
for line losses if necessary. All other customers shall be given refunds or
assessed surcharges based on the historical kilowatt-hour usage of their rate
class.
(5)
Unless otherwise ordered by the commission, all refunds
shall be made through a one-time bill credit and all surcharges shall be made
on a monthly basis over a period not to exceed 12 months through a bill charge.
However, refunds may be made by check to municipally-owned electric utility
systems if so requested. Retail customers who receive service at transmission
voltage levels, all wholesale customers, and any groups of seasonal agricultural
customers as identified by the electric utility shall be given a one-time
credit or assessed a surcharge made on a monthly basis over a period not to
exceed 12 months through a bill charge. All other customers shall be given
a credit or assessed a surcharge based on a factor which will be applied to
their kilowatt-hour usage over the refund or surcharge period. This factor
will be determined by dividing the amount of refund or surcharge allocated
to each rate class by forecasted kilowatt-hour usage for the class during
the period in which the refund or surcharge will be made.
(6)
A petition to surcharge or refund a fuel under- or over-recovery
balance not associated with a proceeding under subsection (d) of this section
shall be processed in accordance with the filing schedules in §25.237(d)
of this title (relating to Fuel factors) and the deadlines in §25.237(e)
of this title.
(f)
Procedural schedule. Upon the filing of a petition to reconcile
fuel expenses in a separate proceeding, the presiding officer shall set a
procedural schedule that will enable the commission to issue a final order
in the proceeding within one year after a materially complete petition was
filed. However, if the deadlines result in a number of electric utilities
filing cases within 45 days of each other, the presiding officers shall schedule
the cases in a manner to allow the commission to accommodate the workload
of the cases irrespective of whether such procedural schedule enables the
commission to issue a final order in each of the cases within one year after
a materially complete petition is filed.
(g)
Final fuel reconciliation. Notwithstanding the provisions
of subsections (b) and (f) of this section, each electric utility's affiliated
power generation company, except El Paso Electric Company's, shall file after
January 1, 2002, a final fuel reconciliation according to the schedule in
paragraphs (1) - (9) of this subsection. For the final fuel reconciliation,
the presiding officer shall set a procedural schedule that will enable the
commission to issue a final order in the proceeding within six months of the
filing date, except for Reliant Energy, Central Power and Light and TXU Electric
proceedings, which will be completed in eight months.
(1)
West Texas Utilities - June 1, 2002;
(2)
Reliant Energy - July 1, 2002;
(3)
Southwestern Public Service - August 1, 2002;
(4)
TXU Electric - October 1, 2002;
(5)
Central Power & Light - December 1, 2002;
(6)
Lower Colorado River Authority - February 1, 2003;
(7)
Entergy Gulf States, Inc. - March 1, 2003;
(8)
Texas-New Mexico Power Company - April 1, 2003; and
(9)
Southwestern Electric Power Company - May 1, 2003.
This agency hereby certifies that the adoption has been
reviewed by legal counsel and found to be a valid exercise of the agency's
legal authority.
Filed with the Office of
the Secretary of State on April 26, 2001.
TRD-200102411
Rhonda Dempsey
Rules Coordinator
Public Utility Commission of Texas
Effective date: May 16, 2001
Proposal publication date: February 16, 2001
For further information, please call: (512) 936-7308
Chapter 401.
ADMINISTRATION OF STATE LOTTERY ACT
The Texas Lottery Commission adopts amendments to 16 TAC §§401.351,
401.352, 401.355, 401.360, 401.361, 401.362, 401.363, 401.364, and 401.368,
repeal of §§401.353, 401.354, 401.356, 401.358, 401.359, 401.365,
401.367, and 401.369, and adopts new rule §401.353 regarding requirements
for lottery retailers, without changes to the proposed text as published in
the March 9, 2001 issue of the
Texas Register
(26TexReg1951). The rulemaking is on rules contained within Subchapter E.
Specifically, the amendments make the rules consistent with existing law and
clarify current agency practices and procedures relating to how the proceeds
from ticket sales are treated; the settlement procedures used in connection
with receiving monies from ticket sales from retailers; restricted sales;
payment of prizes; required sales of lottery tickets; retailer's financial
responsibility for lottery tickets received, winning lottery tickets paid,
and for lottery-related property; retailer's records; training; and, instant
ticket vending machines. The repeals eliminate language that is redundant
to language in the State Lottery Act or other Commission rules, inconsistent
with corresponding language in the State Lottery Act, inconsistent with current
agency practice, or because provisions of the rule are being revised so significantly
that it is more efficient to repeal the rule, §401.353, and adopt a new
rule,§401.353. The new rule, §401.353, replaces the existing rule
which is repealed.
No comments were received regarding adoption of the amendments, repeal,
and new rule.
Government Code §2001.039, and the General Appropriations Act, Article
IX, §9-10.13, 76th Legislature (1999), requires each state agency to
review and consider for readoption each rule adopted by that agency pursuant
to the Government Code, Chapter 2001 (Administrative Procedures Act). 16 TAC
Chapter 401 has been reviewed in its entirety and the Commission determined
that reasons for adopting certain sections continue to exist. The certain
sections that have been readopted pursuant to Commission Order No. 00-0004,
dated January 28, 2000, are set out in Exhibit "A" to the Order. The notice
of the proposed rule review was published in the November 12, 1999 issue of
the
Texas Register
, 24 TexReg 10149. No comments
were received regarding the agency's rule review of Chapter 401. The adoption
of this rulemaking is consistent with and the result of the agency's rule
review.
Subchapter E. RETAILER RULES
Part 2.
PUBLIC UTILITY COMMISSION OF TEXAS
Part 9.
TEXAS LOTTERY COMMISSION