Texas Administrative Code › Title 16 - ECONOMIC REGULATION › Part 2 - PUBLIC UTILITY COMMISSION OF TEXAS › Chapter 25 - SUBSTANTIVE RULES APPLICABLE TO ELECTRIC SERVICE PROVIDERS › Subchapter J - COSTS, RATES AND TARIFFS › Division 1 - RETAIL RATES › Section 25.236 - Recovery of Fuel Costs

Current through Reg. 49, No. 28; July 12, 2024
(a) Eligible fuel
					 expenses. Eligible fuel expenses include expenses properly recorded in the
					 Federal Energy Regulatory Commission Uniform System of Accounts, numbers 501,
					 502, 503, 509, 518, 536, 547, and 555, as modified in this subsection, as of
					 April 1, 2013, and the items specified in paragraph (8) 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 (7) 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 Account 502, the only eligible fuel
					 expenses are environmental consumables that are: properly recorded in the
					 Account as chemicals; required to comply with applicable state or federal
					 emission reduction statutes, orders, and regulations; and whose use is directly
					 proportional to the fuel consumed to generate electricity.
(4) For Account 509, the only eligible fuel
					 expenses are allowances expensed concurrent with the monthly emissions of
					 sulfur dioxide and nitrogen oxides.
(5) 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.
(6) For Account 555, the
					 electric utility may not recover demand or capacity costs.
(7) 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) - (6) 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.
(8) 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) - (7) 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;
(B)
					 revenues from off-system sales in their entirety, except as permitted in
					 paragraph (9) of this subsection; and
(C) revenues from disposition of allowances
					 properly recorded in Account 411.8.
(9) 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.