UTILITIES CODE
CHAPTER 53. RATES
SUBCHAPTER A. GENERAL PROVISIONS
§ 53.001. AUTHORIZATION TO ESTABLISH AND REGULATE
RATES. (a) Except as otherwise provided by this title, the
commission may establish and regulate rates of a public utility and
may adopt rules for determining:
(1) the classification of customers and services; and
(2) the applicability of rates.
(b) A rule or order of the commission may not conflict with a
ruling of a federal regulatory body.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.002. COMPLIANCE WITH TITLE. A utility may not
charge or receive a rate for utility service except as provided by
this title.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.003. JUST AND REASONABLE RATES. (a) The
commission shall ensure that each rate a public utility or two or
more public utilities jointly make, demand, or receive is just and
reasonable.
(b) A rate may not be unreasonably preferential,
prejudicial, or discriminatory but must be sufficient, equitable,
and consistent in application to each class of consumer.
(c) A public utility may not:
(1) grant an unreasonable preference or advantage
concerning rates to a person in a classification;
(2) subject a person in a classification to an
unreasonable prejudice or disadvantage concerning rates; or
(3) establish or maintain an unreasonable difference
concerning rates between localities or between classes of service.
(d) In establishing a public utility's rates, the
commission may treat as a single class two or more municipalities
that a public utility serves if the commission considers that
treatment to be appropriate.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.004. EQUALITY OF RATES AND SERVICES. (a) A public
utility may not directly or indirectly charge, demand, or receive
from a person a greater or lesser compensation for a service
provided or to be provided by the utility than the compensation
prescribed by the applicable tariff filed under Section 52.251.
(b) A person may not knowingly receive or accept a service
from a public utility for a compensation greater or less than the
compensation prescribed by the tariff.
(c) This title does not prevent a cooperative corporation
from returning to its members net earnings resulting from its
operations in proportion to the members' purchases from or through
the corporation.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.005. RATES FOR AREA NOT IN MUNICIPALITY. Without
the approval of the commission, a public utility's rates for an area
not in a municipality may not exceed 115 percent of the average of
all rates for similar services for all municipalities served by the
same utility in the same county as that area.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.006. BURDEN OF PROOF. (a) In a proceeding
involving a proposed rate change, the public utility has the burden
of proving that:
(1) the rate change is just and reasonable, if the
utility proposes the change; or
(2) an existing rate is just and reasonable, if the
proposal is to reduce the rate.
(b) In a proceeding in which the rate of an incumbent local
exchange company is in issue, the incumbent local exchange company
has the burden of proving that the rate is just and reasonable.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.007. LIMIT ON RECONNECTION FEE. The commission
shall establish a reasonable limit on the amount that a local
exchange company may charge a customer for changing the location at
which the customer receives service.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
SUBCHAPTER B. COMPUTATION OF RATES
§ 53.051. ESTABLISHING OVERALL REVENUES. In
establishing a public utility's rates, the commission shall
establish the utility's overall revenues at an amount that will
permit the utility a reasonable opportunity to earn a reasonable
return on the utility's invested capital used and useful in
providing service to the public in excess of the utility's
reasonable and necessary operating expenses.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.052. ESTABLISHING REASONABLE RETURN. In
establishing a reasonable return on invested capital, the
commission shall consider applicable factors, including:
(1) the quality of the utility's services;
(2) the efficiency of the utility's operations; and
(3) the quality of the utility's management.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.053. COMPONENTS OF INVESTED CAPITAL. (a) Public
utility rates shall be based on the original cost, less
depreciation, of property used by and useful to the utility in
providing service.
(b) The original cost of property shall be determined at the
time the property is dedicated to public use, whether by the utility
that is the present owner or by a predecessor.
(c) In this section, "original cost" means the actual money
cost or the actual money value of consideration paid other than
money.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.054. CONSTRUCTION WORK IN
PROGRESS. (a) Construction work in progress, at cost as recorded
on the public utility's books, may be included in the utility's rate
base. The inclusion of construction work in progress is an
exceptional form of rate relief that the commission may grant only
if the utility demonstrates that inclusion is necessary to the
utility's financial integrity.
(b) Construction work in progress may not be included in the
rate base for a major project under construction to the extent that
the project has been inefficiently or imprudently planned or
managed.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.055. SEPARATIONS AND ALLOCATIONS. Costs of
facilities, revenues, expenses, taxes, and reserves shall be
separated or allocated as prescribed by the commission.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.056. DEPRECIATION, AMORTIZATION, AND
DEPLETION. (a) The commission shall establish proper and
adequate rates and methods of depreciation, amortization, or
depletion for each class of property of a public utility.
(b) On application of a utility, the commission shall
establish depreciation rates that promote the use of new technology
and infrastructure. In establishing rates under this subsection,
the commission shall consider depreciation practices of
nonregulated telecommunications providers.
(c) The rates and methods established under this section and
the depreciation account required by Section 52.252 shall be used
uniformly and consistently throughout rate-setting and appeal
proceedings.
(d) Notwithstanding this section, a company electing under
Chapter 58 may determine its own depreciation rates and
amortizations. The company shall notify the commission of any
change in those rates or amortizations.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.057. NET INCOME; DETERMINATION OF REVENUES AND
EXPENSES. (a) A public utility's net income is the total revenues
of the utility less all reasonable and necessary expenses as
determined by the commission.
(b) The commission shall determine revenues and expenses in
a manner consistent with this subchapter.
(c) The commission may adopt reasonable rules with respect
to whether an expense is allowed for ratemaking purposes.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.058. CONSIDERATION OF PAYMENT TO
AFFILIATE. (a) Except as provided by Subsection (b), the
commission may not allow as capital cost or as expense a payment to
an affiliate for:
(1) cost of a service, property, right, or other item;
or
(2) interest expense.
(b) The commission may allow a payment described by
Subsection (a) only to the extent that the commission finds the
payment is reasonable and necessary for each item or class of items
as determined by the commission.
(c) A finding under Subsection (b) must include:
(1) a specific finding of the reasonableness and
necessity of each item or class of items allowed; and
(2) except as provided by Subsection (d), a finding
that the price to the utility is not higher than the prices charged
by the supplying affiliate to:
(A) its other affiliates or divisions for the
same item or class of items; or
(B) a nonaffiliated person within the same market
area or having the same market conditions.
(d) A finding under this section is not required as to the
prices charged by the supplying affiliate to its other affiliates
or divisions if the supplying affiliate computed its charges to the
utility in a manner consistent with Federal Communications
Commission rules.
(e) If the commission finds that the affiliate expense for
the test period is unreasonable, the commission shall:
(1) determine the reasonable level of the expense;
and
(2) include that expense in determining the utility's
cost of service.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.059. TREATMENT OF CERTAIN TAX BENEFITS. (a) In
determining the allocation of tax savings derived from liberalized
depreciation and amortization, the investment tax credit, and the
application of similar methods, the commission shall:
(1) balance equitably the interests of present and
future customers; and
(2) apportion accordingly the benefits between
consumers and the public utility.
(b) If a public utility retains a portion of the investment
tax credit, that portion shall be deducted from the original cost of
the facilities or other addition to the rate base to which the
credit applied to the extent allowed by the Internal Revenue Code.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.060. COMPUTATION OF INCOME TAX; CONSOLIDATED
RETURN. (a) Unless it is shown to the satisfaction of the
commission that it was reasonable to choose not to consolidate
returns, a public utility's income taxes shall be computed as
though a consolidated return had been filed and the utility had
realized its fair share of the savings resulting from that return,
if:
(1) the utility is a member of an affiliated group
eligible to file a consolidated income tax return; and
(2) it is advantageous to the utility to do so.
(b) The amount of income tax that a consolidated group of
which a public utility is a member saves, because the consolidated
return eliminates the intercompany profit on purchases by the
utility from an affiliate, shall be applied to reduce the cost of
the property or service purchased from the affiliate.
(c) The investment tax credit allowed against federal
income taxes, to the extent retained by the utility, shall be
applied as a reduction in the rate-based contribution of the assets
to which the credit applies, to the extent and at the rate allowed
by the Internal Revenue Code.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.061. ALLOWANCE OF CERTAIN EXPENSES. (a) The
commission may not allow as a cost or expense for ratemaking
purposes:
(1) an expenditure for legislative advocacy; or
(2) an expenditure described by Section 52.254 that
the commission determines to be not in the public interest.
(b) The commission may allow as a cost or expense reasonable
charitable or civic contributions not to exceed the amount approved
by the commission.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.062. CONSIDERATION OF CERTAIN EXPENSES. The
commission may not consider for ratemaking purposes:
(1) an expenditure for legislative advocacy, made
directly or indirectly, including legislative advocacy expenses
included in trade association dues;
(2) an expenditure for costs of processing a refund or
credit under Section 53.110; or
(3) any other expenditure, including an executive
salary, advertising expense, legal expense, or civil penalty or
fine the commission finds to be unreasonable, unnecessary, or not
in the public interest.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.063. CONSIDERATION OF PROFIT OR LOSS FROM SALE OR
LEASE OF MERCHANDISE. In establishing a public utility's rates,
the commission may not consider a profit or loss that results from
the sale or lease of merchandise, including appliances, fixtures,
or equipment, to the extent that merchandise is not integral to
providing utility service.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.064. SELF-INSURANCE. (a) A public utility may
self-insure all or part of the utility's potential liability or
catastrophic property loss, including windstorm, fire, and
explosion losses, that could not have been reasonably anticipated
and included under operating and maintenance expenses.
(b) The commission shall approve a self-insurance plan
under this section if the commission finds that:
(1) the coverage is in the public interest;
(2) the plan, considering all costs, is a lower cost
alternative to purchasing commercial insurance; and
(3) ratepayers will receive the benefits of the
savings.
(c) In computing a utility's reasonable and necessary
expenses under this subchapter, the commission, to the extent the
commission finds is in the public interest, shall allow as a
necessary expense money credited to a reserve account for
self-insurance. The commission shall determine reasonableness
under this subsection:
(1) from information provided at the time the
self-insurance plan and reserve account are established; and
(2) on the filing of a rate case by a utility that has a
reserve account.
(d) After a reserve account for self-insurance is
established, the commission shall:
(1) determine whether the account has a surplus or
shortage under Subsection (e); and
(2) subtract any surplus from or add any shortage to
the utility's rate base.
(e) A surplus in the reserve account exists if the charges
against the account are less than the money credited to the account.
A shortage in the reserve account exists if the charges against the
account are greater than the money credited to the account.
(f) The commission shall adopt rules governing
self-insurance under this section.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.065. INTEREXCHANGE SERVICES; RATES OF INCUMBENT
LOCAL EXCHANGE COMPANY. (a) An incumbent local exchange
company's rates for interexchange telecommunications services must
be statewide average rates except as ordered by the commission
after application and hearing.
(b) This section does not limit the ability of an incumbent
local exchange company to contract for high-speed private line
services of 1.544 megabits or greater under Section 52.057.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
SUBCHAPTER C. GENERAL PROCEDURES FOR RATE CHANGE PROPOSED BY
UTILITY
§ 53.101. DEFINITION. In this subchapter, "major
change" means an increase in rates that would increase the
aggregate revenues of the applicant more than the greater of
$100,000 or 2-1/2 percent. The term does not include an increase in
rates that the commission allows to go into effect or the utility
makes under an order of the commission after hearings held with
public notice.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.102. STATEMENT OF INTENT TO CHANGE RATES. (a) A
utility may not change its rates unless the utility files a
statement of its intent with the commission at least 35 days before
the effective date of the proposed change.
(b) The utility shall also mail or deliver a copy of the
statement of intent to the appropriate officer of each affected
municipality.
(c) The statement of intent must include:
(1) proposed revisions of tariffs; and
(2) a detailed statement of:
(A) each proposed change;
(B) the effect the proposed change is expected to
have on the revenues of the utility;
(C) each class and number of utility consumers
affected; and
(D) any other information required by the
commission's rules.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.103. NOTICE OF INTENT TO CHANGE RATES. (a) The
utility shall:
(1) publish, in conspicuous form and place, notice to
the public of the proposed change once each week for four successive
weeks before the effective date of the proposed change in a
newspaper having general circulation in each county containing
territory affected by the proposed change; and
(2) mail notice of the proposed change to any other
affected person as required by the commission's rules.
(b) The commission may waive the publication of notice
requirement prescribed by Subsection (a) in a proceeding that
involves only a rate reduction for each affected ratepayer. The
applicant shall give notice of the proposed rate change by mail to
each affected utility customer.
(c) The commission by rule shall define other proceedings
for which the publication of notice requirement prescribed by
Subsection (a) may be waived on a showing of good cause. A waiver
may not be granted in a proceeding involving a rate increase to any
class or category of ratepayer.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.104. EARLY EFFECTIVE DATE OF RATE CHANGE. (a) For
good cause shown, the commission may allow a rate change, other than
a major change, to take effect:
(1) before the end of the 35-day period prescribed by
Section 53.102; and
(2) under conditions the commission prescribes,
subject to suspension as provided by this subchapter.
(b) The utility shall immediately revise its tariffs to
include the change.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.105. DETERMINATION OF PROPRIETY OF CHANGE;
HEARING. (a) If a tariff changing rates is filed with the
commission, the commission shall, on complaint by an affected
person, or may, on its own motion, not later than the 30th day after
the effective date of the change, enter on a hearing to determine
the propriety of the change.
(b) The commission shall hold a hearing in every case in
which the change constitutes a major change. The commission may,
however, use an informal proceeding if the commission does not
receive a complaint before the 46th day after the date notice of the
change is filed.
(c) The commission shall give reasonable notice of the
hearing, including notice to the governing body of each affected
municipality and county. The utility is not required to provide a
formal answer or file any other formal pleading in response to the
notice, and the absence of an answer does not affect an order for a
hearing.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.106. REGIONAL HEARING. The commission shall hold a
regional hearing at an appropriate location in a case in which the
commission determines it is in the public interest to hear
testimony at a regional hearing for inclusion in the record.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.107. PREFERENCE TO HEARING. The commission shall:
(1) give preference to a hearing under this subchapter
and to deciding questions arising under this subchapter and
Subchapter E over any other question pending before it; and
(2) decide the questions as quickly as possible.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.108. RATE SUSPENSION; DEADLINE. (a) Pending the
hearing and a decision, the commission, after delivering to the
utility a written statement of the commission's reasons, may
suspend the rate change for not longer than 150 days after the date
the rate change would otherwise be effective.
(b) The 150-day period prescribed by Subsection (a) shall be
extended two days for each day the actual hearing on the merits of
the case exceeds 15 days.
(c) If the commission does not make a final determination
concerning a rate change before expiration of the suspension
period, the commission is considered to have approved the change.
This approval is subject to the authority of the commission
thereafter to continue a hearing in progress.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.109. TEMPORARY RATES. (a) The commission may
establish temporary rates to be in effect during the suspension
period under Section 53.108.
(b) If the commission does not establish temporary rates,
the rates in effect when the suspended tariff was filed continue in
effect during the suspension period.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.110. BONDED RATES. (a) A utility may put a
changed rate into effect by filing a bond with the commission if:
(1) the 150-day suspension period has been extended
under Section 53.108(b); and
(2) the commission fails to make a final determination
before the 151st day after the date the rate change would otherwise
be effective.
(b) The bonded rate may not exceed the proposed rate.
(c) The bond must be:
(1) payable to the commission in an amount, in a form,
and with a surety approved by the commission; and
(2) conditioned on refund.
(d) The utility shall refund or credit against future bills:
(1) money collected under the bonded rates in excess
of the rate finally ordered; and
(2) interest on that money, at the current interest
rate as determined by the commission.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.111. ESTABLISHMENT OF FINAL RATES. (a) If, after
hearing, the commission finds the rates are unreasonable or in
violation of law, the commission shall:
(1) enter an order establishing the rates the utility
shall charge or apply for the service in question; and
(2) serve a copy of the order on the utility.
(b) The rates established in the order shall be observed
thereafter until changed as provided by this title.
(c) This section does not apply to a company electing under
Chapter 58 or 59 except as otherwise provided by those chapters or
by Chapter 60.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.112. EXPIRATION OF SUSPENSION; EFFECT ON CERTAIN
RATES. (a) Notwithstanding Section 53.111(a), if the commission
does not make a final determination concerning an incumbent local
exchange company's rate change before expiration of the 150-day
suspension period, the rates finally approved by the commission
take effect on and the incumbent local exchange company is entitled
to collect those rates from the date the 150-day suspension period
expired.
(b) A surcharge or other charge necessary to effectuate this
section may not be recovered over a period of less than 90 days from
the date of the commission's final order.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.113. FCC-APPROVED TARIFFS FOR SWITCHED-ACCESS
SERVICE. (a) An incumbent local exchange company may file with
the commission tariffs for switched-access service that have been
approved by the Federal Communications Commission. The tariffs
must include all rate elements in the company's interstate access
tariff other than end-user charges.
(b) Not later than the 60th day after the date a company
files tariffs under Subsection (a), the commission shall order the
rates and terms to be the incumbent local exchange company's
intrastate switched-access rates and terms if, on review, the
tariffs contain the same rates and terms, excluding end-user
charges, as approved by the Federal Communications Commission.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
SUBCHAPTER D. RATE CHANGES PROPOSED BY COMMISSION
§ 53.151. UNREASONABLE OR VIOLATIVE EXISTING
RATES. (a) If the commission, on its own motion or on complaint
by an affected person, after reasonable notice and hearing, finds
that the existing rates of a public utility for a service are
unreasonable or in violation of law, the commission shall:
(1) enter an order establishing the just and
reasonable rates to be observed thereafter, including maximum or
minimum rates; and
(2) serve a copy of the order on the utility.
(b) The rates established under Subsection (a) constitute
the legal rates of the public utility until changed as provided by
this title.
(c) This section does not apply to a company electing under
Chapter 58 or Chapter 59 except as otherwise provided by those
chapters.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.152. INVESTIGATING COSTS OF OBTAINING SERVICE FROM
ANOTHER SOURCE. If a public utility does not produce or generate
the service that it distributes, transmits, or furnishes to the
public for compensation but obtains the service from another
source, the commission may investigate the cost of that production
or generation in an investigation of the reasonableness of the
utility's rates.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
SUBCHAPTER E. COST RECOVERY AND RATE ADJUSTMENTS
§ 53.201. AUTOMATIC ADJUSTMENT FOR CHANGE IN COSTS
PROHIBITED. The commission may not establish a rate or tariff that
authorizes a utility to automatically adjust and pass through to
the utility's customers a change in the utility's costs.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.202. ADJUSTMENT FOR CHANGE IN TAX
LIABILITY. (a) The commission, on its own motion or on the
petition of a utility, shall provide for the adjustment of the
utility's billing to reflect an increase or decrease in the
utility's tax liability to this state if the increase or decrease:
(1) results from Chapter 5, Acts of the 72nd
Legislature, 1st Called Session, 1991; and
(2) is attributable to an activity subject to the
commission's jurisdiction.
(b) The commission shall apportion pro rata to each type and
class of service provided by the utility any billing adjustment
under this section. The adjustment:
(1) shall be made effective at the same time as the
increase or decrease of tax liability described by Subsection
(a)(1), or as soon after that increase or decrease as is reasonably
practical; and
(2) remains effective only until the commission alters
the adjustment as provided by this section or enters an order for
the utility under Subchapter C or Subchapter D.
(c) Each year after an original adjustment, the commission
shall:
(1) review the utility's increase or decrease of tax
liability described by Subsection (a)(1); and
(2) alter the adjustment as necessary to reflect the
increase or decrease.
(d) A proceeding under this section is not a rate case under
Subchapter C.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
SUBCHAPTER F. REGULATORY POLICY FOR SMALL INCUMBENT LOCAL EXCHANGE
COMPANIES AND COOPERATIVES
§ 53.251. GENERAL POLICY. Regulatory policy should
recognize that:
(1) there are differences between small and large
incumbent local exchange companies;
(2) there are a large number of customer-owned
telephone cooperatives and small, locally owned investor
companies; and
(3) it is appropriate to provide incentives and
flexibility to allow an incumbent local exchange company that
serves a rural area to:
(A) provide existing services; and
(B) introduce new technology and new services in
a prompt, efficient, and economical manner.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.252. ADOPTION OF CERTAIN
POLICIES. Notwithstanding any other provision of this title, the
commission shall consider and may adopt policies to:
(1) provide for evaluation of the overall
reasonableness of the rates of a rural or small incumbent local
exchange company or cooperative not more frequently than once every
three years;
(2) permit consideration of future construction plans
and operational changes in evaluating the reasonableness of the
rates of a rural or small incumbent local exchange company or
cooperative; or
(3) allow a rural or small incumbent local exchange
company or cooperative to:
(A) provide required information by report or by
other means, as necessary, including a required rate filing
package, in substantially less burdensome and complex form than is
required of a larger incumbent local exchange company;
(B) change depreciation and amortization rates,
if customer rates are not affected, after notice to the commission,
subject to commission review in a proceeding under Subchapter C or
Subchapter D;
(C) adopt for a new service the rates for the same
or a substantially similar service offered by a larger incumbent
local exchange company, without additional cost justification; and
(D) submit to the commission, instead of a
management audit otherwise required by law, policy, or rule,
financial audits regularly performed by an independent auditor or
required and performed as a result of the company's or cooperative's
participation in a federal or state financing or revenue-sharing
program.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
SUBCHAPTER G. SPECIAL PROCEDURES FOR SMALL LOCAL EXCHANGE COMPANIES
AND COOPERATIVES
§ 53.301. DEFINITION. (a) In this subchapter, "minor
change" means a change, including the restructuring of rates of
existing services, that:
(1) decreases the rates or revenues of an incumbent
local exchange company; or
(2) together with any other rate or proposed or
approved tariff changes in the 12 months preceding the effective
date of the proposed change, increases the company's total
regulated intrastate gross annual revenues by not more than five
percent.
(b) With regard to a change to a basic local access line
rate, a "minor change" does not include a change that, together with
any other change to the basic local access line rate that took
effect during the 12 months preceding the effective date of the
proposed change, results in an increase of more than 10 percent.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.302. APPLICABILITY. This subchapter does not
apply to an incumbent local exchange company that is a cooperative
corporation partially deregulated under Subchapter H.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.303. PROVISIONS NOT EXCLUSIVE. This subchapter
does not prohibit:
(1) an incumbent local exchange company from filing
for a new service or rate change under another section of this
title; or
(2) the commission from conducting a review under
Subchapter D.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.304. PROCEDURE TO OFFER CERTAIN SERVICES OR MAKE
MINOR CHANGES. (a) An incumbent local exchange company may offer
an extended local calling service or a new service on an optional
basis or make a minor change in its rates or tariffs if the company:
(1) is a cooperative corporation or has, together with
all affiliated incumbent local exchange companies, fewer than
31,000 access lines in service in this state;
(2) files with the commission and the office a
statement of intent, as prescribed by Subsection (b), not later
than the 91st day before the effective date of the proposed change;
(3) provides notice as prescribed by Section 53.305;
and
(4) files with the commission affidavits verifying
that notice as prescribed by Section 53.305 was provided.
(b) The statement of intent must include:
(1) a copy of a resolution adopted by the incumbent
local exchange company's board of directors approving the proposed
change;
(2) a description of the services affected by the
proposed change;
(3) a copy of the proposed tariff for the affected
service;
(4) a copy of the customer notice required by
Subsection (a)(3);
(5) the number of access lines the company and each
affiliate have in service in this state; and
(6) the amount by which the company's total regulated
intrastate gross annual revenues will increase or decrease as a
result of the proposed change.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.305. NOTICE TO AFFECTED CUSTOMERS. (a) A company
shall provide notice of a proposed change to affected customers in
the manner prescribed by the commission.
(b) Notice must:
(1) be provided not later than the 61st day before the
effective date of the proposed change; and
(2) include:
(A) a description of the services affected by the
proposed change;
(B) the effective date of the proposed change;
(C) an explanation of the customer's right to
petition the commission for a review under Section 53.306,
including the number of persons required to petition before a
commission review will occur;
(D) an explanation of the customer's right to
information concerning how to obtain a copy of the proposed tariff
from the company;
(E) the amount by which the company's total
regulated intrastate gross annual revenues will increase or
decrease as a result of the proposed change; and
(F) a list of rates that are affected by the
proposed rate change.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.306. COMMISSION REVIEW OF PROPOSED
CHANGE. (a) The commission shall review a proposed change filed
under this subchapter if:
(1) the commission receives complaints relating to the
proposed change signed by a number of affected local service
customers equal at least to the lesser of 1,500 or five percent of
those customers;
(2) the commission receives a complaint relating to
the proposed change from an affected intrastate access customer, or
a group of affected intrastate access customers, that in the
preceding 12 months accounted for more than 10 percent of the
company's total intrastate gross access revenues;
(3) the proposed change is not a minor change;
(4) the company does not comply with the procedural
requirements of this subchapter; or
(5) the proposed change is inconsistent with the
commission's substantive policies as expressed in its rules.
(b) The commission may suspend a tariff proposed under this
subchapter during the review.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.307. COMPLIANCE WITH PRINCIPLES; REDUCED RATES. A
rate established under this subchapter must be in accordance with
the rate-setting principles of this chapter, except that a company
may provide to its board members, officers, employees, or agents
free or reduced rates for services.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.308. FEES AND ASSESSMENTS. The commission may
prescribe and collect a fee or assessment from incumbent local
exchange companies necessary to recover the cost to the commission
and to the office of activities carried out and services provided
under:
(1) this subchapter;
(2) Section 53.112;
(3) Subchapter H; and
(4) Section 55.004.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
SUBCHAPTER H. PARTIAL DEREGULATION AVAILABLE TO CERTAIN
COOPERATIVE CORPORATIONS
§ 53.351. PROVISIONS NOT EXCLUSIVE. (a) This
subchapter does not:
(1) prohibit a cooperative from filing for a new
service or a rate change under another applicable provision of this
title; or
(2) affect the application of a provision of this
title not directly related to:
(A) establishing rates; or
(B) the authority of the commission to require a
cooperative to file a report required under this title or the
commission's rules.
(b) Notwithstanding any other provision of this subchapter,
the commission may conduct a review under Subchapter D.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.352. PARTIAL DEREGULATION BY BALLOT. (a) An
incumbent local exchange company that is a cooperative corporation
may vote to partially deregulate the cooperative by sending a
ballot to each cooperative member. The incumbent local exchange
company may include the ballot in a bill or send the ballot
separately. The ballot shall be printed to permit voting for or
against the proposition: "Authorizing the partial deregulation of
the (name of the cooperative)."
(b) The cooperative is partially deregulated if a majority
of the ballots returned to the cooperative not later than the 45th
day after the date the ballots are mailed favor deregulation.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.353. VOTING PROCEDURES. The commission by rule
shall prescribe the voting procedures a cooperative must use under
this subchapter.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.354. PROCEDURE TO OFFER CERTAIN SERVICES OR MAKE
CERTAIN CHANGES. After the initial balloting, a cooperative may
offer extended local calling services, offer new services on an
optional basis, or make changes in its rates or tariffs if the
cooperative:
(1) files a statement of intent under Section 53.355;
(2) provides notice of the proposed action to each
customer and municipality as prescribed by Section 53.356; and
(3) files with the commission affidavits verifying
that notice was provided as prescribed by Section 53.357.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.355. STATEMENT OF INTENT. (a) A cooperative must
file a statement of intent to use this subchapter with the
commission and the office not later than the 61st day before the
effective date of the proposed change.
(b) The statement must include:
(1) a copy of a resolution, signed by a majority of the
members of the cooperative's board of directors, approving the
proposed action and authorizing the filing of the statement of
intent;
(2) a description of the services affected by the
proposed action;
(3) a copy of the proposed tariff for the affected
service; and
(4) a copy of the customer notice required by Section
53.356.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.356. NOTICE TO AFFECTED PERSONS. (a) The
cooperative shall provide to each affected customer or party,
including a municipality, at least two notices of the proposed
action by bill insert or by individual notice.
(b) The cooperative shall provide:
(1) the first notice not later than the 61st day before
the effective date of the proposed action; and
(2) the last notice not later than the 31st day before
the effective date of the proposed action.
(c) A notice prescribed by this section must include:
(1) a description of the services affected by the
proposed action;
(2) the effective date of the proposed action;
(3) an explanation of the customer's right to:
(A) obtain a copy of the proposed tariff from the
cooperative; and
(B) petition the commission for a review under
Section 53.358;
(4) a statement of the amount by which the
cooperative's total gross annual revenues will increase or decrease
and a statement explaining the effect on the cooperative revenues
as a result of the proposed action; and
(5) a list of rates that are affected by the proposed
rate action, showing the effect of the proposed action on each of
those rates.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.357. FILING OF AFFIDAVITS VERIFYING NOTICE. Not
later than the 15th day before the effective date of a proposed
action, the cooperative shall file with the commission affidavits
that verify that the cooperative provided each notice required by
Section 53.356.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.358. COMMISSION REVIEW OF PROPOSED
ACTION. (a) The commission shall review a proposed action filed
under this subchapter if:
(1) the commission receives, not later than the 45th
day after the date the first notice is provided under Section
53.356, complaints relating to the proposed action:
(A) signed by at least five percent of the
affected local service customers; or
(B) from an affected intrastate access customer,
or group of affected intrastate access customers, that in the
preceding 12 months accounted for more than 10 percent of the
cooperative's total intrastate access revenues;
(2) the cooperative does not comply with the
procedural requirements of this subchapter; or
(3) the proposed action is inconsistent with the
commission's substantive policies as expressed in its rules.
(b) If the commission conducts a review of the proposed
action under this section before the action's effective date, the
commission may suspend the proposed action during the review.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 53.359. REVERSAL OF DEREGULATION BY BALLOT. (a) A
cooperative that is partially deregulated under this subchapter may
vote to reverse the deregulation by sending a ballot to each
cooperative member.
(b) The cooperative's board of directors may order
reballoting on its own motion. If the board receives a written
request for that action from at least 10 percent of its members, the
board shall reballot not later than the 60th day after the date the
board receives that request.
(c) The cooperative may include the ballot in a bill or send
the ballot separately. The ballot shall be printed to permit voting
for or against the proposition: "Reversing the partial
deregulation of the (name of the cooperative)."
(d) The partial deregulation is reversed if a majority of
the ballots returned to the cooperative not later than the 45th day
after the date the ballots are mailed favor reversal.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
