Senate Bill No. 2780 introduces a new section, 104.302, to the Utilities Code, which outlines the recovery process for a gas utility's gross plant that has been placed in service but is not yet being recovered in rates. The bill defines key terms such as "gross plant," "post in-service carrying costs," and "unrecovered gross plant." It allows gas utilities to defer certain costs related to unrecovered gross plant as a regulatory asset, including post in-service carrying costs, depreciation, ad valorem taxes, and incremental operations and maintenance expenses. These deferred costs will be included in the cost recovery mechanism authorized by the Railroad Commission.

Additionally, the bill mandates that the Railroad Commission of Texas adopt rules to implement this new section within 180 days of the Act's effective date. It specifies that the Act applies only to cost recovery proceedings initiated on or after its effective date, while proceedings started before will follow the previous law. The Act will take effect immediately if it receives a two-thirds vote from both houses; otherwise, it will take effect on September 1, 2025.

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