| the need for the temporary rate. A request for a temporary water rate
provision for mandatory water use reduction under this paragraph is
not considered a statement of intent to increase rates subject to
the 12-month limitation in §24.29 of this title (relating to
Time Between Filings).
(B) The utility must establish that the projected revenues
that will be generated by the temporary water rate provision are required
by the utility to pay reasonable and necessary expenses that will
be incurred by the utility during the time mandatory water use reductions
are in effect.
(4) A utility may request a temporary water rate provision
for mandatory water use reduction using the formula in paragraph (3)
of this subsection or any other method acceptable to the regulatory
authority to recover up to 100% of the revenues that would otherwise
have been lost due to mandatory water use reductions.
(A) If the utility requests authorization to recover
more than 50% of lost revenues, the utility must submit financial
data to support its existing rates as well as the temporary water
rate provision for mandatory water use reduction even if no other
rates are proposed to be changed. The utility's existing rates are
subject to review in addition to the temporary water rate provision
for mandatory water use reduction.
(B) The utility must establish that the projected revenues
that will be generated by the temporary water rate provision for mandatory
water use reduction are required by the utility to pay reasonable
and necessary expenses that will be incurred by the utility during
the time mandatory water use reductions are in effect; that the rate
of return granted by the regulatory authority in the utility's last
rate case does not adequately compensate the utility for the foreseeable
risk that mandatory water use reductions will be ordered; and that
revenues generated by existing rates do not exceed reasonable cost
of service.
(5) The utility may place the temporary water rate
provision into effect only after:
(A) it has been approved by the regulatory authority
and included in the utility's approved tariff in a prior rate proceeding;
(B) there is an action by a court, government agency,
or other authority requiring mandatory water use reduction measures
that affect the utility's customers' use of utility services; and
(C) issuing notice as required by paragraph (7) of
this subsection.
(6) The utility may readjust its temporary water rate
provision to respond to modifications or changes to the original required
water use reductions by reissuing notice as required by paragraph
(7) of this subsection. If the commission is the regulatory authority,
only the commission or the utility may request a hearing on the proposed
implementation.
(7) A utility implementing a temporary water rate for
mandatory water use reduction must take the following actions prior
to the beginning of the billing period in which the temporary water
rate provision takes effect:
(A) submit a written notice, including a copy of the
notice received from the court, government agency, or other authority
requiring the reduction in water use, to the regulatory authority;
and
(B) e-mail, if the customer has agreed to receive communications
electronically, or mail notice to the utility's customers. Notice
may be in the form of a billing insert and must contain the effective
date of the implementation and the new rate the customers will pay
after the temporary water rate provision is implemented. If the commission
is the regulatory authority, the notice must include the following
language: "This rate change is being implemented in accordance with
the temporary water rate provision approved by the Public Utility
Commission of Texas to recognize the loss of revenues due to mandatory
water use reduction ordered by (name of entity issuing order). The
new rates will be effective on (date) and will remain in effect until
the mandatory water use reductions are lifted or expired. The purpose
of the rate is to ensure the financial integrity of the utility. The
utility will recover through the rate (the percentage authorized by
the temporary rate) % of the revenues the utility would otherwise
have lost due to mandatory water use reduction by increasing the volume
charge from ($ per 1,000 gallons to $ per 1,000 gallons)."
(8) A utility must stop charging a temporary water
rate provision as soon as is practicable after the order that required
mandatory water use reduction is ended, but in no case later than
the end of the billing period that was in effect when the order was
ended. The utility must notify its customers of the date that the
temporary water rate provision ends and that its rates will return
to the level authorized before the temporary water rate provision
was implemented. The notice provided to customers regarding the end
of the temporary water rate provision must be filed with the commission.
(9) If the regulatory authority initiates an inquiry
into the appropriateness or the continuation of a temporary water
rate provision, it may establish the effective date of its decision
on or after the date the inquiry is filed.
(k) Multiple system consolidation. Except as otherwise
provided in subsection (m) of this section, a utility may consolidate
its tariff and rate design for more than one system if:
(1) the systems included in the tariff are substantially
similar in terms of facilities, quality of service, and cost of service;
and
(2) the tariff provides for rates that promote water
conservation for single-family residences and landscape irrigation.
(l) Regional rates. The regulatory authority, where
practicable, will consolidate the rates by region for applications
submitted by a Class A, B, or C utility, or a Class D utility filing
under TWC §13.1872(c)(2), with a consolidated tariff and rate
design for more than one system.
(m) Exemption. Subsection (k) of this section does
not apply to a utility that provided service in only 24 counties on
January 1, 2003.
(n) Energy cost adjustment clause.
(1) A utility that purchases energy (electricity or
natural gas) that is necessary for the provision of retail water or
sewer service may request the inclusion of an energy cost adjustment
clause in its tariff to allow the utility to adjust its rates to reflect
increases and decreases in documented energy costs.
(2) A utility that requests the inclusion of an energy
cost adjustment clause in its tariff must file a request with the
commission. The utility must also give notice of the proposed energy
cost adjustment clause by mail, either separately or accompanying
customer billings, by e-mail, or by hand delivery to all affected
utility customers at least 60 days prior to the proposed effective
date. Proof of notice in the form of an affidavit stating that proper
notice was delivered to affected customers and stating the date of
such delivery must be filed with the commission by the utility as
part of the request. Notice must be provided on a form prescribed
by the commission and must contain the following information:
(A) the utility name and address, a description of
how the increase or decrease in energy costs will be calculated, the
effective date of the proposed change, and the classes of utility
customers affected. The effective date of the proposed energy cost
adjustment clause must be the first day of a billing period, which
should correspond to the day of the month when meters are typically
read, and the clause may not apply to service received before the
effective date of the clause;
(B) information on how to submit comments regarding
the energy cost adjustment clause, the address of the commission,
and the time frame for comments; and
(C) any other information that is required by the commission.
(3) The commission's review of the utility's request
is not subject to a contested case hearing. However, the commission
will hold a public meeting if requested by a member of the legislature
who represents an area served by the utility or if the commission
determines that there is substantial public interest in the matter.
(4) Once an energy cost adjustment clause has been
approved, documented changes in energy costs must be passed through
to the utility's customers within a reasonable time. The pass-through,
whether an increase or decrease, must be implemented on at least an
annual basis, unless the commission determines otherwise. Before making
a change to the energy cost adjustment clause, notice must be provided
as required by paragraph (5) of this subsection. Copies of notices
to customers must be filed with the commission.
(5) Before a utility implements a change in its energy
cost adjustment clause as required by paragraph (4) of this subsection,
the utility must take the following actions prior to the beginning
of the billing period in which the implementation takes effect:
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