A gas utility may defer certain costs as a regulatory asset, but later must make accounting adjustments when the costs are recovered in rates.
Sec. 104.302. RECOVERY OF CERTAIN COSTS FOR GROSS PLANT. (a) In this section: (1) "Gross plant" means a gas utility's plant, facilities, or equipment that has been placed in service. (2) "Post in-service carrying costs" means the product of an unrecovered gross plant multiplied by a gas utility's pre-tax weighted average cost of capital established in the railroad commission's final order in the gas utility's most recent general rate proceeding until recovery. (3) "Unrecovered gross plant" means a gross plant whose cost is not yet being recovered in a gas utility's rates and not already being deferred to a regulatory asset. (b) A gas utility may defer for future recovery as a regulatory asset: (1) post in-service carrying costs; (2) depreciation associated with the unrecovered gross plant; and (3) ad valorem taxes associated with the unrecovered gross plant. (c) A regulatory asset established under Subsection (b) must be included in the railroad commission's authorized cost recovery mechanism under Section 104.301. (d) On recovery in rates of a regulatory asset established by a gas utility under Subsection (b), the gas utility shall make appropriate accounting adjustments to reflect the recovery in rates. (e) The railroad commission shall review the costs included in a regulatory asset established by a gas utility under Subsection (b) in a general rate proceeding. The costs are subject to a refund with interest to the extent the railroad commission by order disallows recovery in rates. Added by Acts 2025, 89th Leg., R.S., Ch. 657 (H.B. 4384), Sec. 1, eff. June 20, 2025. SUBCHAPTER H. PROTECTION AGAINST UTILITY SERVICE DISCONNECTION