| (a) In any rate proceeding, any utility and/or municipality
claiming reimbursement for its rate case expenses pursuant to Texas
Utilities Code, §103.022(b), shall have the burden to prove the
reasonableness of such rate case expenses by a preponderance of the
evidence. Each gas utility and/or municipality shall detail and itemize
all rate case expenses and allocations and shall provide evidence
showing the reasonableness of the cost of all professional services,
including but not limited to:
(1) the amount of work done;
(2) the time and labor required to accomplish the work;
(3) the nature, extent, and difficulty of the work
done;
(4) the originality of the work;
(5) the charges by others for work of the same or similar
nature; and
(6) any other factors taken into account in setting
the amount of the compensation.
(b) In determining the reasonableness of the rate case
expenses, the Commission shall consider all relevant factors including
but not limited to those set out previously, and shall also consider
whether the request for a rate change was warranted, whether there
was duplication of services or testimony, whether the work was relevant
and reasonably necessary to the proceeding, and whether the complexity
and expense of the work was commensurate with both the complexity
of the issues in the proceeding and the amount of the increase sought
as well as the amount of any increase granted.
(c) Absent a showing of good cause:
(1) rate case expenses reimbursed to a municipality
under Texas Utilities Code, §103.022(b), shall be recovered by
the utility through rates effective only within that municipality;
or
(2) when a municipality has joined a coalition of municipalities
for the purpose of pursuing rate case activities, rate case expenses
reimbursed to the municipalities within the coalition under Texas
Utilities Code, §103.022(b), shall be recovered by the utility
through rates effective only within the municipalities belonging to
that coalition.
(d) Reasonable rate case expenses of the utility shall
be classified into three categories:
(1) required regulatory expenses, which shall consist
of expenses the utility incurs that are related to the initial filing
of the statement of intent and the expenses the utility incurs to
provide or publish required notices;
(2) litigation expenses, which shall consist of expenses
incurred after the utility files its statement of intent, excluding
the cost of providing notice; and
(3) estimated expenses, which shall consist of the
costs the utility estimates it will incur for potential appellate
proceedings.
(e) The utility's required regulatory expenses shall
be allocated uniformly to all customers affected by the proposed rate
change. The utility's litigation expenses and estimated expenses,
to the extent there are any, shall be allocated to affected customers
in the municipalities or coalitions of municipalities participating
in the appellate proceeding and affected customers subject to the
original jurisdiction of the Commission.
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