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Committee hears securitization bill to allow gas utilities to spread extraordinary event costs
Summary
House File 1226 would allow regulated natural gas utilities to petition the Public Utilities Commission to issue long-term bonds to spread the cost of extraordinary events; sponsors and utility lawyers said the tool is optional and subject to PUC oversight.
Representatives Igoe and Hollins presented House File 1226, a bipartisan bill to authorize securitization as an optional financing tool for regulated natural gas utilities to recover extraordinary and unavoidable costs arising from disasters or other unforeseen events.
Representative Igoe said the legislation “creates the regulatory and legal framework needed to enable regulated natural gas utilities to seek securitization and allow the utility the option to petition to the PUC to issue long term bonds.” He emphasized that the bill applies only to regulated natural gas utilities and does not change treatment of electric or municipal utilities.
Jason Luce, associate general counsel at CenterPoint Energy, told the committee CenterPoint supports the bill as an optional tool and noted the company has used securitization in other states to reduce customer costs after major storm events. Eric Swanson of law firm Winthrop & Weinstine added that securitization “is entirely optional” and that the bill includes procedural safeguards: the Public Utilities Commission must find the costs were reasonably and prudently incurred, determine securitization would benefit customers versus other options, and allow interested parties — including the Department of Commerce and consumer advocates — to participate in the review.
Swanson said securitization can lower borrowing costs because the bonds issued for such recovery can receive favorable credit treatment; CenterPoint’s example in Texas, cited during testimony, estimated roughly $50 million in customer savings. Committee members asked clarifying questions and said they appreciated the bill’s consumer-protection provisions; Representative Hollins stressed that the PUC “has to find extraordinary events are…reasonable” and that the process aims to “put customers before companies.”
Representatives adopted a technical A2 amendment prior to testimony, and the committee laid House File 1226 over as amended for further consideration.
