Part 2.
PUBLIC UTILITY COMMISSION OF TEXAS
Chapter 25.
SUBSTANTIVE RULES APPLICABLE TO ELECTRIC SERVICE PROVIDERS
Subchapter L. NUCLEAR DECOMMISSIONING
16 TAC §25.303
The Public Utility Commission of Texas (commission) proposes
new §25.303, relating to Nuclear Decommissioning following the Transfer
of Nuclear Generating Plant Assets. The proposed new rule will prescribe rules
for the administration of a nuclear decommissioning trust fund and the continued
collection of funds for such a trust, in the event of a transfer of the nuclear
decommissioning trust fund in connection with the sale of a nuclear generating
plant assets. Project Number 29169 is assigned to this proceeding.
When commenting on specific subsections of the proposed rule, parties are
encouraged to describe "best practice" examples of regulatory policies, and
their rationale, that have been proposed or implemented successfully in other
states already undergoing electric industry restructuring, if the parties
believe that Texas would benefit from application of the same policies. The
commission is interested in receiving only "leading edge" examples which are
specifically related and directly applicable to the Texas statute, rather
than broad citations to other state restructuring efforts.
Martha Elvey, Financial Review Division, has determined that for each year
of the first five-year period the proposed section is in effect there will
be no fiscal implications for state or local government as a result of enforcing
or administering the section.
Ms. Elvey has determined that for each year of the first five years the
proposed section is in effect the public benefit anticipated as a result of
enforcing the section will be assuring that funds for the safe decommissioning
of nuclear power plants when they reach the end of their useful lives continue
to be collected and invested in a manner that minimizes the impact of the
decommissioning costs on consumers of electricity. There will be no adverse
economic effect on small businesses or micro-businesses as a result of enforcing
this section. There is no anticipated economic cost to persons who are required
to comply with the section as proposed. Costs for the collection, administration,
and investment of decommissioning funds have been incurred by regulated electric
utilities, and the impact of the rule is to prescribe responsibilities for
companies to whom an interest in a nuclear generating plant is transferred.
These are essentially the same economic costs that have been incurred by regulated
utilities.
Ms. Elvey has also determined that for each year of the first five years
the proposed section is in effect there should be no effect on a local economy,
and therefore no local employment impact statement is required under Administrative
Procedure Act (APA), Texas Government Code 2001.022.
The commission staff will conduct a public hearing on this rulemaking,
if requested pursuant to the Administrative Procedure Act, Texas 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,
June 11, 2004. The request for a public hearing must be received within 21
days after publication.
Comments on the proposed new section (16 copies) may be submitted to the
Filing Clerk, Public Utility Commission of Texas, 1701 North Congress Avenue,
P.O. Box 13326, Austin, Texas 78711-3326, within 21 days after publication.
Reply comments may be submitted within 31 days after publication. Comments
should be organized in a manner consistent with the organization of the proposed
rule. The commission invites specific comments regarding the costs associated
with, and benefits that will be gained by, implementation of the proposed
section. The commission will consider the costs and benefits in deciding whether
to adopt the section. All comments should refer to Project Number 29169.
This new section is proposed under the Public Utility Regulatory
Act, Texas Utilities Code Annotated §14.002 (Vernon 1998 and Supplement
2004) (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, PURA §39.205 which provides that decommissioning
costs remain subject to cost-of-service regulation.
Cross Reference to Statutes: Public Utility Regulatory Act §§14.002,
39.051, 39.201, and 39.205.
§25.303.Nuclear Decommissioning Following the Transfer of Nuclear Generating Plant Assets.
(a)
Purpose. The purpose of this rule is to:
(1)
delineate the rights and obligations of the transferor
and the transferee companies involved in a transfer of Texas jurisdictional
nuclear generating plant assets for which decommissioning funds will continue
to be collected from retail customers pursuant to Public Utility Regulatory
Act (PURA) §39.205, as well as the obligations of the utility responsible
for collecting the decommissioning funds;
(2)
prescribe a utility's continuing responsibility for collecting
funds through its rates for nuclear decommissioning trust funds for the benefit
of the transferee company;
(3)
protect the nuclear decommissioning trust funds so that
the funds collected from customers through the utility's rates, plus the amounts
earned from investment of the funds, will be available for decommissioning,
in the event of a transfer of the nuclear decommissioning trust funds;
(4)
minimize the amounts collected from customers for nuclear
decommissioning by maximizing net earnings on the nuclear decommissioning
trust funds through prudent investment of such funds, in accordance with the
guidelines set out in subsection (e) of this section, including achieving
optimum tax efficiency.
(b)
Application. This rule supercedes §25.231(b)(1)(F)
of this title (relating to Allowable Expenses) and §25.301 of this title
(relating to Nuclear Decommissioning Trusts) for electric utilities that have
completed their business separation pursuant to PURA §39.051 or that
transfer Texas jurisdictional nuclear generating plant assets, including the
associated nuclear decommissioning trust funds, to another entity prior to,
or as part of, a business separation. This rule applies to:
(1)
an electric utility or a power generation company that
transfers its Texas jurisdictional nuclear generating plant assets, including
any associated nuclear decommissioning trust funds, to another entity;
(2)
a utility that is responsible for collecting revenue for
the decommissioning of a Texas jurisdictional nuclear generating plant assets
that has been transferred to another entity; and
(3)
a transferee company.
(c)
Definitions.
(1)
Transferor Company--An electric utility, its successor
in interest, or any power generation company that transfers Texas jurisdictional
nuclear generating plant assets, including any associated nuclear decommissioning
trust funds collected from customers.
(2)
Transferee Company--An entity or its successor in interest
to which Texas jurisdictional nuclear decommissioning generating plant assets,
including the associated nuclear decommissioning trust funds, are transferred
from a transferor company.
(3)
Collecting Utility--The electric utility or transmission
and distribution utility responsible for collecting the decommissioning funds
from customers and depositing them into the nuclear decommissioning trust
funds. The collecting utility may or may not be the transferor company.
(4)
Nuclear Decommissioning Trust Funds--Funds that are contained
in one or more external and irrevocable trusts created for the purpose of
protecting and holding revenue collected from customers to cover the costs
of decommissioning a Texas jurisdictional nuclear generating plant at the
end of its useful life.
(5)
Decommissioning Funds Collection Agreement--An agreement
between the collecting utility and the transferee company that governs the
transfer of responsibility for administration of the nuclear decommissioning
trust funds, the collection of decommissioning revenues from utility customers,
and the remittance of the funds to the nuclear decommissioning trust.
(d)
Transfer of Nuclear Decommissioning Trust Funds.
(1)
Prior to the closing of any transaction involving the transfer
of a nuclear decommissioning trust funds:
(A)
The collecting utility, the transferor company (if different
than the collecting utility) and the transferee company shall jointly submit
for the commission's review the proposed decommissioning funds collection
agreement and the proposed agreements with the institutional trustee and investment
manager(s) of the decommissioning trust, and copies shall be provided to the
commission's Legal and Enforcement Division and Financial Review Division.
(B)
In connection with the submission required in subparagraph
(A) of this paragraph, the transferee company shall submit an affidavit, signed
under oath by an authorized executive of the transferee company, certifying
that once the transfer of administration of the nuclear decommissioning trust
funds is ordered by the commission, the transferred funds and the future contributions
to the funds will be administered in accordance with subsection (e) of this
section, and that the company will not challenge the authority of the commission
to enforce its rules that shall be adopted from time to time with respect
to the collection, investment and use of the funds provided by customers for
nuclear decommissioning.
(2)
For transfers of nuclear decommissioning trust funds that
occurred before this rule took effect, the executed decommissioning funds
collection agreement and agreements with the institutional trustee and investment
manager(s) shall be filed at the commission within 15 days of the effective
date of this rule. If such agreements must be amended to comply with this
section, the amended agreements must take effect on or before the collecting
utility's next general rate proceeding or a rate proceeding under subsection
(g) of this section, whichever occurs first.
(3)
Prior to executing an amended decommissioning funds collection
agreement or amended agreement with the institutional trustee or investments
managers, the proposed amended agreements shall be filed at the commission
for review along with a redlined version showing all changes made since the
documents were reviewed by the commission, and copies shall be provided to
the commission's Legal and Enforcement Division and Financial Review Division.
(4)
All final agreements reviewed pursuant to subsection (d)(1)(A)
and (d)(3) of this section shall be filed at the commission within 15 days
of the execution of the documents.
(5)
A transferee company shall establish one or more irrevocable
trusts external to the transferee company for the purpose of receiving the
nuclear decommissioning trust funds collected from customers. The transferee
company shall be named as beneficiary of each such trust.
(6)
The transferee company shall execute a decommissioning
funds collection agreement with the collecting utility or, if appropriate,
the transferor company. The agreement shall provide that the transferor company's
rights to accumulated and future decommissioning funding and the responsibilities
for decommissioning of the nuclear plant shall be transferred to the transferee
company upon closing of the transaction.
(7)
The collecting utility, transferor and transferee companies
shall request one of the following:
(A)
a commission review of the agreements filed pursuant to
subsection (d)(1)(A) or (d)(3) of this section for compliance with this rule.
The commission will provide written comments to the companies within 60 days
of receipt of the request; or
(B)
a contested case proceeding to approve or reject the agreements.
The commission will issue an order within 120 days of the receipt of the joint
request for a contested case proceeding. In considering whether or not to
approve the decommissioning funds collection agreement, the commission may
consider the impact on customers including any impact on federal income taxes
related to the nuclear decommissioning trust funds, the ability of the transferee
company to administer the trust, any investment restrictions on the transferee
company, the ability of the commission to enforce its rules over the administration
of the funds, and any other relevant factors.
(8)
Absent a commission order to the contrary, the collecting
utility shall be the administrator of the nuclear decommissioning trust funds
established by the transferee company and shall be responsible for administering
the funds in accordance with subsection (e) of this section.
(9)
Upon the issuance of an order from the commission releasing
the collecting utility from the obligation to administer the nuclear decommissioning
trust funds, the transferee company that owns the nuclear decommissioning
trust funds shall become the administrator of such funds in accordance with
subsection (e) of this section.
(e)
Administration of the Nuclear Decommissioning Trust Funds.
(1)
Duties of fund administrator.
(A)
Each fund administrator of a nuclear decommissioning trust
shall assure that the nuclear decommissioning trust is managed so that the
funds are secure and earn a reasonable return; and, that the funds provided
from the utility's cost of service, plus the amounts earned from investment
of the funds, will be available at the time of decommissioning.
(B)
The fund administrator shall appoint an institutional trustee
and may appoint an investment manager(s). Unless otherwise specified in paragraph
(2) of this subsection, the Texas Trust Code controls the administration and
management of the nuclear decommissioning trusts, except that the appointed
trustee(s) need not be qualified to exercise trust powers in Texas. If the
collecting utility is the acting administrator, the selection of such trustee
and investment managers shall be made in consultation with the transferee
company. The agreements with such trustee and investment mangers shall require
that any reports regarding the trust funds given to the fund administrator
shall also be given to the transferee company, if different from the fund
administrator.
(C)
The fund administrator shall retain the right to replace
the trustee with or without cause. In appointing a trustee, the fund administrator
shall have the following duties, which will be of a continuing nature:
(i)
A duty to determine whether the trustee's fee schedule
for administering the trust is reasonable, when compared to other institutional
trustees rendering similar services, and meets the requirement of paragraph
(3)(B)(i) of this subsection;
(ii)
A duty to investigate and determine whether the past administration
of trusts by the trustee has been reasonable;
(iii)
A duty to investigate and determine whether the financial
stability and strength of the trustee is adequate;
(iv)
A duty to investigate and determine whether the trustee
has complied with the trust agreement and this section as it relates to trustees;
and,
(v)
A duty to investigate any other factors which may bear
on whether the trustee is suitable.
(D)
The fund administrator shall retain the right to replace
the investment manager with or without cause. In appointing an investment
manager, the administrator shall have the following duties, which will be
of a continuing nature:
(i)
A duty to determine whether the investment manager's fee
schedule for investment management services is reasonable, when compared to
other such managers, and meets the requirement of paragraph (3)(B)(i) of this
subsection;
(ii)
A duty to investigate and determine whether the past performance
of the investment manager in managing investments has been reasonable;
(iii)
A duty to investigate and determine whether the financial
stability and strength of the investment manager is adequate for purposes
of liability;
(iv)
A duty to investigate and determine whether the investment
manager has complied with the investment management agreement and this section
as it relates to investments; and,
(v)
A duty to investigate any other factors which may bear
on whether the investment manager is suitable.
(2)
Agreements between the fund administrator and the institutional
trustee or investment manager.
(A)
The fund administrator shall execute an agreement with
the institutional trustee. The agreement shall include the restrictions in
subparagraphs (A)(i)-(v) of this paragraph and may include additional restrictions
on the trustee. A fund administrator shall not grant the trustee powers that
are greater than those provided to trustees under the Texas Trust Code or
that are inconsistent with the limitations of this section.
(i)
The interest earned on the corpus of the trust becomes
part of the trust corpus. A trustee owes the same duties with regard to the
interest earned on the corpus as are owed with regard to the corpus of the
trust.
(ii)
A trustee shall have a continuing duty to review the trust
portfolio for compliance with investment guidelines and governing regulations.
(iii)
A trustee shall not lend funds from the decommissioning
trust with itself, its officers, or its directors.
(iv)
A trustee shall not invest or reinvest decommissioning
trust funds in instruments issued by the trustee, except for time deposits,
demand deposits, or money market accounts of the trustee. However, investments
of a decommissioning trust may include mutual funds that contain securities
issued by the trustee if the securities of the trustee constitute no more
than five percent of the fair market value of the assets of such mutual funds
at the time of the investment.
(v)
The agreement shall comply with all applicable requirements
of the Nuclear Regulatory Commission.
(B)
The fund administrator shall execute an agreement with
the investment manager. (If the trustee performs investment management functions,
the contractual provisions governing those functions must be included in either
the trust agreement or a separate investment management agreement.) The agreement
shall include the restrictions set forth in subparagraphs (B)(i)-(v) of this
paragraph and may include additional restrictions on the manager. A fund administrator
shall not grant the manager powers that are greater than those provided to
trustees under the Texas Trust Code or that are inconsistent with the limitations
of this section.
(i)
An investment manager shall, in investing and reinvesting
the funds in the trust, comply with paragraph (3) of this subsection.
(ii)
The interest earned on the corpus of the trust becomes
part of the trust corpus. An investment manager owes the same duties with
regard to the interest earned on the corpus as are owed with regard to the
corpus of the trust.
(iii)
An investment manager shall have a continuing duty to
review the trust portfolio to determine the appropriateness of the investments.
(iv)
An investment manager shall not invest funds from the
decommissioning trust with itself, its officers, or its directors.
(v)
The agreement shall comply with all applicable requirements
of the Nuclear Regulatory Commission.
(3)
Trust investments.
(A)
Investment portfolio goals. The funds should be invested
consistent with the following goals. The fund administrator may apply additional
prudent investment goals to the funds so long as they are not inconsistent
with the stated goals of this subsection.
(i)
The funds should be invested with a goal of earning a reasonable
return commensurate with the need to preserve the value of the assets of the
trusts.
(ii)
In keeping with prudent investment practices, the portfolio
of securities held in the decommissioning trust shall be diversified to the
extent reasonably feasible given the size of the trust.
(iii)
Asset allocation and the acceptable risk level of the
portfolio should take into account market conditions, the time horizon remaining
before the commencement and completion of decommissioning, and the funding
status of the trust. While maintaining an acceptable risk level consistent
with the goal in subparagraph (A)(i) of this paragraph, the investment emphasis
when the remaining life of the liability, as defined in subparagraph (B)(vi)(IV)
of this paragraph, exceeds five years should be to maximize net long-term
earnings. The investment emphasis in the remaining investment period of the
trust should be on current income and the preservation of the fund's assets.
(iv)
In selecting investments, the impact of the investment
on the portfolio's volatility and expected return net of fees, commissions,
expenses and taxes should be considered.
(B)
General requirements. The following requirements shall
apply to all decommissioning trusts. Where a transferee company has multiple
trusts for a single generating unit, the restrictions contained in this subsection
apply to all trusts in the aggregate for that generating unit. For purposes
of this section, a commingled fund is defined as a professionally managed
investment fund of fixed-income or equity securities established by an investment
company regulated by the Securities Exchange Commission or a bank regulated
by the Office of the Comptroller of the Currency.
(i)
Fees limitation. The total trustee and investment manager
fees paid on an annual basis by the fund administrator for the entire portfolio
including commingled funds shall not exceed 0.7% of the entire portfolio's
average annual balance.
(ii)
Diversification. For the purpose of this subparagraph,
a commingled or mutual fund is not considered a security; rather, the diversification
standard applies to all securities, including the individual securities held
in commingled or mutual funds. Once the portfolio of securities (including
commingled funds) held in the decommissioning trust(s) contains securities
with an aggregate value in excess of $20 million, it shall be diversified
such that:
(I)
no more than 5.0 % of the securities held may be issued
by one entity, with the exception of the federal government, its agencies
and instrumentalities, and;
(II)
the portfolio shall contain at least 20 different issues
of securities. Municipal securities and real estate investments shall be diversified
as to geographic region.
(iii)
Qualified trusts. The fund administrator may invest the
decommissioning funds by means of qualified or unqualified nuclear decommissioning
trusts; however, the fund administrator shall, to the extent permitted by
the Internal Revenue Service, invest its decommissioning funds in "qualified"
nuclear decommissioning trusts, in accordance with the Internal Revenue Service
Code §468A.
(iv)
Derivatives. The use of derivative securities in the trust
is limited to those whose purpose is to enhance returns of the trust without
a corresponding increase in risk or to reduce risk of the portfolio. Derivatives
may not be used to increase the value of the portfolio by any amount greater
than the value of the underlying securities. Prohibited derivative securities
include, but are not limited to, mortgage strips; inverse floating rate securities;
leveraged investments or internally leveraged securities; residual and support
tranches of Collateralized Mortgage Obligations; tiered index bonds or other
structured notes whose return characteristics are tied to non-market events;
uncovered call/put options; large counter-party risk through over-the-counter
options, forwards and swaps; and instruments with similar high-risk characteristics.
(v)
The use of leverage (borrowing) to purchase securities
or the purchase of securities on margin for the trust is prohibited.
(vi)
Investment limits in equity securities. The following
investment limits shall apply to the percentage of the aggregate market value
of all non-fixed income investments relative to the total portfolio market
value.
(I)
Except as noted in subclause (II) of this clause, when
the weighted average remaining life of the liability exceeds five years, the
equity cap is 60%;
(II)
When the weighted average remaining life of the liability
ranges between five years and two and a half years, the equity cap shall be
30%. Additionally, during all years in which expenditures for decommissioning
the nuclear units occur, the equity cap shall also be 30%;
(III)
When the weighted average remaining life of the liability
is less than two and a half years, the equity cap shall be 0%;
(IV)
For purposes of this subparagraph, the weighted average
remaining life in any given year is defined as the weighted average of years
between the given year and the years of each decommissioning outlay, where
the weights are based on each year's expected decommissioning expenditures
divided by the amount of the remaining liability in that year; and
(V)
Should the market value of non-fixed income investments,
measured monthly, exceed the appropriate cap due to market fluctuations, the
fund administrator shall, as soon as practicable, reduce the market value
of the non-fixed income investments below the cap. Such reductions may be
accomplished by investing all future contributions to the fund in debt securities
as is necessary to reduce the market value of the non-fixed income investments
below the cap, or if prudent, by the sale of equity securities.
(vii)
A decommissioning trust shall not invest in securities
issued by the transferee company or the collecting utility collecting the
funds or any of its affiliates; however, investments of a decommissioning
trust may include commingled funds that contain securities issued by the transferee
company or collecting utility if the securities of such company or utility
constitute no more than 5.0% of the fair market value of the assets of such
commingled funds at the time of the investment.
(C)
Specific investment restrictions. The following restrictions
shall apply to all decommissioning trusts. Where a transferee company has
multiple trusts for a single generating unit, the restrictions contained in
this subsection apply to all trusts in the aggregate for that generating unit.
(i)
Fixed-income investments. A decommissioning trust shall
not invest trust funds in corporate or municipal debt securities that have
a bond rating below investment grade (below "BBB-" by Standard and Poor's
Corporation or "Baa3" by Moody's Investor's Service) at the time that the
securities are purchased and shall reexamine the appropriateness of continuing
to hold a particular debt security if the debt rating of the company in question
falls below investment grade at some time after the debt security has been
purchased. Commingled funds may contain some below investment grade bonds;
however, the overall portfolio of debt instruments shall have a quality level,
measured quarterly, not below a "AA" grade by Standard and Poor's Corporation
or "Aa2" by Moody's Investor's Service. In calculating the quality of the
overall portfolio, debt securities issued by the federal government shall
be considered as having a "AAA" rating.
(ii)
Equity investments.
(I)
At least 70% of the aggregate market value of the equity
portfolio, including the individual securities in commingled funds, shall
have a quality ranking from a major rating service such as the earnings and
dividend ranking for common stock by Standard and Poor's or the quality rating
of Ford Investor Services. Further, the overall portfolio of ranked equities
shall have a weighted average quality rating equivalent to the composite rating
of the Standard and Poor's 500 index assuming equal weighting of each ranked
security in the index. If the quality rating, measured quarterly, falls below
the minimum quality standard, the fund administrator shall as soon as practicable
and prudent to do so, increase the quality level of the equity portfolio to
the required level.
(II)
A decommissioning trust shall not invest in equity securities
where the issuer has a capitalization of less than $100 million.
(iii)
Commingled funds. The following guidelines shall apply
to the investments made through commingled funds. Examples of commingled funds
appropriate for investment by nuclear decommissioning trust funds include
United States equity-indexed funds, actively managed United States equity
funds, balanced funds, bond funds, real estate investment trusts, and international
funds.
(I)
The commingled funds should be selected consistent with
the goals specified in paragraph (1) and the requirements in paragraph (2)
of this subsection.
(II)
In evaluating the appropriateness of a particular commingled
fund, the fund administrator has the following duties, which shall be of a
continuing nature:
(-a-)
A duty to determine whether the fund manager's fee schedule
for managing the fund is reasonable, when compared to fee schedules of other
such managers;
(-b-)
A duty to investigate and determine whether the past
performance of the investment manager in managing the commingled fund has
been reasonable relative to prudent investment and utility decommissioning
trust practices and standards; and
(-c-)
A duty to investigate the reasonableness of the net after-tax
return and risk of the fund relative to similar funds, and the appropriateness
of the fund within the entire decommissioning trust investment portfolio.
(III)
The payment of load fees shall be avoided.
(IV)
Commingled funds focused on specific market sectors or
concentrated in a few holdings shall be used only as necessary to balance
the trust's overall investment portfolio mix.
(f)
Periodic Reviews of Decommissioning Costs and Nuclear Decommissioning
Trust Funds.
(1)
Following a transfer of Texas jurisdictional nuclear generating
plant assets, including the associated nuclear decommissioning trust funds,
any remaining costs associated with nuclear decommissioning obligations shall
remain subject to cost of service regulation based on a periodic review of
the costs. The reasonable and necessary nuclear decommissioning costs as approved
by the commission shall be included as a non-bypassable charge of the collecting
utility pursuant to subsection (g) of this section.
(2)
The transferee company shall periodically perform, or cause
to be performed, a study of the decommissioning costs of each Texas jurisdictional
nuclear generating unit which it owns or leases an interest in. A study or
re-determination of the previous study shall be performed at least every five
years, starting from the date of the most recent decommissioning cost study
for the plant on file with the commission. The study or re-determination shall
consider the most current and reasonably available information on the cost
of decommissioning. A copy of the study or re-determination shall be filed
with the commission and copies provided to the commission's Financial Review
Division and the Office of Public Utility Counsel.
(3)
The commission, on its own motion or on the motion of the
Legal and Enforcement Division, the Office of Public Utility Counsel, or any
affected person, may initiate a proceeding to review the transferee company's
balance of the trust, compliance with this section, or the annual funding
amount. The transferee company shall provide any information required to conduct
the review upon request in accordance with the commission's procedural rules.
(4)
During each periodic review of decommissioning costs, the
following evidence shall be provided:
(A)
The transferee company shall file the periodic cost study
described in paragraph (3) of this subsection, along with an updated decommissioning
funding analysis, within 90 days of completion of the periodic cost study.
The funding analysis shall be based on the most current information reasonably
available for the cost of decommissioning, an allowance for contingencies
of 10% of the cost of decommissioning, the balance of funds in the decommissioning
trusts, anticipated escalation rates, the anticipated after-tax return on
the funds in the trust, and other relevant factors. The funding analysis shall
be accompanied by testimony or a report supporting the assumptions used in
the analysis and shall calculate the required annual funding amount necessary
to ensure sufficient funds to decommission the nuclear generating plant at
the end of its useful life.
(B)
The decommissioning fund administrator shall demonstrate
that the decommissioning funds are being invested prudently and in compliance
with the investment guidelines in subsection (e) of this section.
(C)
To the extent the transferee company is subject to investment
restrictions that are more restrictive than the decommissioning investment
guidelines in subsection (e) of this section, the transferee company (or the
fund administrator and the transferee company, if different) shall demonstrate
their efforts to obtain relief from such investment restrictions in order
to permit investments in accordance with the guidelines in subsection (e)
of this section.
(D)
The transferee company (or the fund administrator and the
transferee company, if different) shall demonstrate efforts to achieve optimum
tax efficiency, including, as applicable, efforts to achieve "qualified" status
in accordance with Internal Revenue Service Code Section 468/a (or any successor
thereto) with respect to its nuclear decommissioning trust funds.
(5)
Within 90 days after completion of decommissioning the
nuclear generating plant, the transferee company shall file a request for
a final reconciliation proceeding at the commission. Any funds remaining in
the trust after the completion of decommissioning shall be refunded to customers
in a manner determined by the commission. If the reasonable and necessary
costs of decommissioning exceed the amount available in the trust, the excess
costs will be recovered through a non-bypassable charge approved by the commission
if the transferee company has substantially complied with this section and
prudently managed the decommissioning process.
(6)
The transferee company or its successor in interest may
request an increase or decrease in the annual funding amount by filing an
updated funding analysis as described in paragraph (4) of this subsection
if there has been a change of more than ten percent in the required annual
funding amount necessary to ensure sufficient funds to decommission the nuclear
generating plant at the end of its useful life.
(7)
The transferee company shall file an annual report on May
15 of each year on to report the status of the decommissioning trust fund
using a form approved by the commission.
(8)
The collecting utility, as part of its annual earnings
report, shall report the amounts and dates of the deposits into the decommissioning
trust and, if different, the revenues received from customers for the time
intervals corresponding to each deposit.
(g)
Collecting Utility rate proceedings for decommissioning
charges.
(1)
A collecting utility that has decommissioning expenses
embedded as part of a bundled rate shall apply to have its current level of
decommissioning funding removed from its general rates and stated as a separate
non-bypassable charge.
(A)
In the case of a transfer of Texas jurisdictional nuclear
generating plant assets to a non-affiliated entity, the request shall be made
no later than 30 days following the closing of the transaction.
(B)
In the case of a transfer of Texas jurisdictional nuclear
generating plant assets to an affiliated power generating company, the request
for a separate non-bypassable charge shall be made during the first general
rate case following the transfer.
(2)
The collecting utility shall deposit the decommissioning
revenues into the nuclear decommissioning trust consistent with the terms
of the decommissioning funds collection agreement on file with the commission
and the most recent commission order authorizing decommissioning collections
from customers. The decommissioning funds collection agreement may provide
for remittance by the collecting utility of levelized periodic payments based
on the most recent annual decommissioning funding amount approved by the commission;
for the remittance of the actual amounts of non-bypassable decommissioning
charges collected by the collecting utility during each applicable remittance
period or for such other remittance arrangement as the commission concludes
is reasonable and consistent with the purposes of this section; provided,
however, that in any event the parties to the decommissioning funds collection
agreement shall demonstrate that the remittance procedures achieve optimum
tax efficiency in connection with the nuclear decommissioning trusts.
(A)
The commission may order the collecting utility to discontinue
the deposit of decommissioning revenues to the nuclear decommissioning trust
funds if the transferee company substantially or repeatedly fails to comply
with any provision of this section.
(B)
If levelized deposits are made into the fund, the following
provisions apply.
(i)
The collecting utility shall keep records of its daily
receipts from customers once a separate non-bypassable charge is set by the
commission.
(ii)
Once the collecting utility has implemented a separate
non-bypassable charge, it may request an adjustment in the non-bypassable
charge if there is a material cumulative over- or under- collection of revenues,
including interest, greater than or equal to 15% of the most recent annual
nuclear decommissioning funding amount approved by the commission. The request
shall be based on the difference between the actual cumulative decommissioning
charge revenues collected from customers and the cumulative amount authorized
to be collected since the last rate adjustment, including interest calculated
in accordance with §25.236(e)(1) of this title (relating to True-Up filing
procedures). The calculated over- or under-recovery amount will be applied
to the new commission-authorized annual amount to determine the required non-
bypassable charge.
(C)
If deposits to the nuclear decommissioning trust funds
are less frequent than weekly, an implied interest calculation shall be used
in setting the decommissioning charge to account for the collecting utility's
short term use of the funds.
(3)
After the issuance of a commission order under subsection
(f)(1) or (f)(3) of this section that the cost of service for nuclear decommissioning
for a particular plant has increased or decreased and should be adjusted,
the collecting utility shall file a rate application within 45 days solely
to adjust the non-bypassable charge. The filing shall provide a sales forecast,
a proposed allocation methodology, a proposed tariff, and any other information
necessary to implement the commission's order. Such rate proceedings will
be conducted separately from the collecting utility's general rate proceedings
and the commission will issue a final order within 120 days of receipt of
the filing.
(4)
The transferee company may elect to request a change in
the decommissioning funding level during a general rate case of the collecting
utility. The collecting utility shall give the transferee company at least
90 days notice of an anticipated rate application for its general rates to
allow the transferee company to prepare a funding analysis to be filed jointly
with the collecting utility's application.
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of
the Secretary of State on April 30, 2004.
TRD-200402917
Adriana Gonzales
Rules Coordinator
Public Utility Commission of Texas
Earliest possible date of adoption: June 13, 2004
For further information, please call: (512) 936-7211
Chapter 64.
TEMPORARY COMMON WORKER EMPLOYERS
16 TAC §64.91
(Editor's note: The text of the following section proposed for
repeal will not be published. The section may be examined in the offices of
the Texas Department of Licensing and Regulation or in the Texas Register
office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)
The Texas Department of Licensing and Regulation
("Department") proposes the repeal of an existing rule at 16 Texas Administrative
Code, §64.91 regarding the Temporary Common Worker Employers program.
Section 64.91 relates to sanctions, denial, revocation, or suspension of
a license because of a criminal conviction. This section is no longer necessary
because the Department has issued Criminal Conviction Guidelines pursuant
to Texas Occupations Code, §53.025(a) which addresses the factors that
the Department considers when determining whether a criminal conviction renders
an applicant an unsuitable candidate for the license, or whether a conviction
warrants revocation or suspension of a license previously granted.
William H. Kuntz, Jr., Executive Director, has determined that for the
first five-year period the proposed amendment is in effect there will be no
cost to state or local government as a result of enforcing or administering
the repeal.
Mr. Kuntz also has determined that for each year of the first five-year
period the repeal is in effect, the public benefit will be less redundancy
and a better clarification of the rules.
There will be no effect on large, small, or micro-businesses as a result
of the proposed repeal. There are no anticipated economic costs to persons
as a result of the proposed repeal.
Comments on the proposal may be submitted to William H. Kuntz, Jr., Executive
Director, Texas Department of Licensing and Regulation, P.O. Box 12157, Austin,
Texas 78711, or facsimile 512/475-2872, or electronically: whkuntz@license.state.tx.us.
The deadline for comments is 30 days after publication in the
Texas Register
.
The repeal is proposed under Texas Labor Code, Chapter 92 and
Texas Occupations Code, Chapter 51, which authorizes the Department to adopt
rules as necessary to implement the codes and any other law establishing a
program regulated by the Department.
The statutory provisions affected by the repeal are those set forth in
Texas Labor Code, Chapter 92, and Texas Occupations Code, Chapter 51. No other
statutes, articles, or codes are affected by the repeal.
§64.91.Sanctions--Denial, Revocation or Suspension Because of Criminal Conviction.
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of
the Secretary of State on April 28, 2004.
TRD-200402810
William H. Kuntz, Jr.
Executive Director
Texas Department of Licensing and Regulation
Earliest possible date of adoption: June 13, 2004
For further information, please call: (512) 463-7348
Part 4.
TEXAS DEPARTMENT OF LICENSING AND REGULATION
Chapter 79.
WEATHER MODIFICATION