The bill, S.B. No. 1977, amends the Utilities Code and the Water Code to regulate the recovery of legal expenses by electric and water utilities during rate proceedings. Specifically, it introduces a new provision in Section 36.061 that prohibits regulatory authorities from allowing legal expenses exceeding the greater of $50,000 or 50 percent of the total legal expenses incurred by an electric utility in a rate proceeding. Additionally, it modifies Section 13.185(h) of the Water Code to include similar restrictions on legal expenses for water and sewer utilities, while also removing references to certain legal expenses that were previously included in the list of costs not allowed for ratemaking purposes.

The changes outlined in this bill will only apply to rate proceedings that commence on or after the effective date of September 1, 2025. Rate proceedings that begin before this date will continue to be governed by the existing laws in effect at that time. This legislation aims to ensure that utilities do not incur excessive legal costs that could ultimately impact consumer rates.

Statutes affected:
Introduced: Utilities Code 36.061, Water Code 13.185 (Utilities Code 36, Water Code 13)