Texas Administrative Code › Title 16 - ECONOMIC REGULATION › Part 2 - PUBLIC UTILITY COMMISSION OF TEXAS › Chapter 24 - SUBSTANTIVE RULES APPLICABLE TO WATER AND SEWER SERVICE PROVIDERS › Subchapter C - ALTERNATIVE RATE METHODS › Section 24.75 - Alternative Ratemaking Methodologies

Current through Reg. 49, No. 28; July 12, 2024
(a)
				  Purpose and application. This section establishes alternative ratemaking
				  methodologies for utilities that provide water or sewer service. The commission
				  may prescribe modified rate filing packages for these alternative ratemaking
				  methodologies.
(b) Multi-step
				  rates. Multi-step rates allow a utility to implement one or more rates over
				  time without filing multiple rate applications. Multi-step rates must be
				  established in accordance with this subsection.
(1) Multi-step rates must be established in a
				  comprehensive rate proceeding under Texas Water Code (TWC) §§13.187,
				  13.1871, 13.18715, or 13.1872.
(2)
				  The commission may establish multi-step rates on its own motion or at the
				  request of a utility or any other interested party.
(3) Rates established in a comprehensive rate
				  case under TWC §§13.187, 13.1871, 13.18715, or 13.1872 will replace
				  any multi-step rates already in effect or previously approved by the commission
				  to go into effect for that utility.
(4) Multi-step rates may be established when
				  a utility transitions from use of flat rates for unmetered service to use of
				  volumetric rates for metered service.
(A)
				  Multi-step rates for a utility's transition to metered service must not be
				  effective before the date that meters are installed and in operation for all of
				  the utility's connections.
(B) If
				  the utility is seeking multi-step rates to transition to the use of volumetric
				  rates for metered service, the utility must state in its notice of intent to
				  change rates that it is seeking permission to use multi-step rates to
				  transition to metered service with volumetric usage rates.
(C) The utility must provide notice to its
				  customers at least 30 days before the utility begins charging its volumetric
				  usage rate for metered service and at least 30 days before implementation of
				  each step of its commission-approved multi-step rate.
(5) Multi-step rates may be established when
				  a utility transitions from multiple rate schedules for different systems or
				  service areas to consolidated rate schedules for regional or system-wide rates.
(A) Different rates and a different timeline
				  may be established for each step in the multi-step rates of each system or
				  service area that is transitioning to a consolidated rate schedule provided
				  that the final step for each system or service area is the same consolidated
				  rate.
(B) If the utility is seeking
				  multi-step rates to transition to consolidated rate schedules, the utility must
				  state in its notice of intent to change rates that it is seeking permission to
				  use multi-step rates to transition from multiple rate schedules for different
				  systems or service areas to consolidated rate schedules for regional or
				  system-wide rates.
(C) The utility
				  must provide notice to its customers at least 30 days before implementation of
				  each step of its commission-approved multi-step rate.
(6) Multi-step rates may be established to
				  moderate the effects of a rate increase on customers or if other good cause
				  exists.
(A) Different rates and a different
				  timeline may be established for each step in the multi-step rates for each of a
				  utility's systems or service areas provided that the final step for each system
				  or service area is the same final rate.
(B) If the utility is seeking multi-step
				  rates under this paragraph, the utility must state in its notice of intent to
				  change rates that it is seeking permission to use multi-step rates.
(C) The utility must provide notice to its
				  customers at least 30 days before implementation of each step of its
				  commission-approved multi-step rate.
(7) The notice requirements in paragraphs (4)
				  - (6) of this subsection do not replace the standard statement of intent notice
				  requirements under TWC §§13.187, 13.1871, 13.18715. or
				  13.1872.
(8) The commission may
				  place conditions on the implementation of a multi-step rate or on any step of a
				  multi-step rate. For the purpose of ensuring just and reasonable rates, the
				  commission may terminate a multi-step rate in a rate proceeding before
				  completion of all steps of the multi-step rate.