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Bill to cap recoverable legal expenses in rate proceedings draws split testimony; utilities warn of unintended consequences
Summary
Senate Bill 19 77 would limit the portion of a utility's legal expenses that may be recovered from ratepayers in a rate proceeding. Proponents said caps would protect customers; utilities and industry groups warned caps could chill legal participation, discourage investment, and run counter to the PUC's existing reasonableness review.
Senate Bill 19 77, sponsored by Senator Kolkhorst, would amend the Utilities and Water Codes to limit recovery of legal expenses in rate proceedings. The bill as filed would bar recovery of legal expenses that exceed the greater of $50,000 or 50% of a utility’s total legal expenses in a rate proceeding that commences on or after Sept. 1, 2025.
Benjamin Barclay of the Office of Public Utility Counsel (OPC) described how rate case expenses are currently recovered and noted the problem the bill seeks to address: "Because rates must be just and reasonable, utilities must invest in technical and legal experts ... these costs…
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