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Texas Regulator Considers Streamlining Utility Rate Cases

The Railroad Commission of Texas (RRC) is considering rule changes intended to reduce the costs of contested natural gas utility rate cases, which are ultimately passed on to consumers. While utilities have voiced support, municipalities across Texas claim the changes would deter challenges to rate hikes.

RRC staff propose consolidating some of the actions of parties with similar interests, namely municipalities, which frequently are aligned in their interest in minimizing rate increases. "...[T]he commission proposes wording to include a presumption that municipal parties share a common interest such that alignment of municipal parties as a single party is appropriate," the proposal says.

The proposed rule changes would also place limits on discovery actions by some parties, limiting the number of requests for information during a case. "The goal of reducing the costs ultimately passed on to ratepayers can be realized by implementing reasonable limitations on discovery at the request of a party," the proposal says. More than 200 Texas cities are represented in comments filed at the RRC on the proposed changes.

In its comments, the Joint Alliance of Municipalities wrote that "the commission's proposed rules have the unintended consequences of facilitating utilities' efforts to increase rates in order to facilitate presumed savings in rate case expenses by increasing the burden on a municipality's ability to meaningfully participate in rate cases and by unnecessarily limiting the depth of review a city may undertake of a utility's application to increase rates."

However, utility CenterPoint Energy wrote that it "...fully supports the commission's efforts to adopt rules that promote efficiencies in the ratemaking process that do not impinge upon a party's ability to participate in a ratemaking proceeding that will also lead to lower costs for ratepayers.

"Encouraging alignment of parties with similar interests...and attempting to place a reasonable bound on certain types of discovery and to eliminate duplicative discovery requests in ratemaking proceedings...will serve to reduce rate case expenses and promote the efficient resolution of ratemaking proceedings."

The comment period on the proposed rule changes ended in late August, and a public hearing on the proposal was held Thursday. RRC commissioners are expected to consider the proposal at an upcoming meeting.

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