| (a) Each gas utility subject to the original jurisdiction or
which becomes subject to the appellate jurisdiction of the Commission may
include a purchased gas adjustment clause in its rates to provide for the
flow-through of part or all of its gas costs above or below the cost of gas
contained in its rates, subject to proof, by a preponderance of the evidence,
of certain criteria. Criteria to be used by the Commission in determining
whether or not to grant a gas utility a purchased gas adjustment clause as
well as the percentage thereof shall include but not be limited to:
(1) the ability of the gas utility to control prices for gas
purchased as affected by competition and relative competitive advantage;
(2) the probability of continued frequent price changes; and
(3) the availability of alternate gas supply sources.
(b) This section shall be applied prospectively only to rate
cases filed and only after notice and hearing pursuant to the Texas Utilities
Code, Title 3. The gas utility shall have the burden of proof regarding the
necessity, if any, of a purchased gas adjustment clause and any amount of
adjustment. This section shall not impair the rights of existing contract
gas customers in any manner except as otherwise provided by law.
(c) The Commission shall determine in each case the necessary
reporting, filing, and other procedures to be followed by a gas utility in
implementing a purchased gas adjustment clause, if any, as well as other items
of expense that fluctuate with gas costs which may be included in such a clause.
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