88R7673 JXC-F     By: Hughes S.B. No. 1049       A BILL TO BE ENTITLED   AN ACT   relating to gas utility alternative gas expenses and infrastructure   investments.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Subchapter B, Chapter 104, Utilities Code, is   amended by adding Section 104.061 to read as follows:          Sec. 104.061.  CONSIDERATION OF ALTERNATIVE GAS EXPENSES AND   INFRASTRUCTURE INVESTMENTS. (a)  In this section, "alternative   gas" means:                (1)  any pipeline-compatible gaseous fuel that is   derived from:                      (A)  the anaerobic digestion of biomass,   gasification of biomass, or another biomass conversion process;                      (B)  agricultural waste; or                      (C)  landfill gas;                (2)  hydrogen produced using:                      (A)  carbon capture and storage;                      (B)  renewable energy to break down water into   hydrogen and oxygen through electrolysis; or                      (C)  the breakdown of methane into hydrogen and   solid carbon through pyrolysis;                (3)  gas certified in a manner approved by the railroad   commission under Subsection (b); or                (4)  another gaseous fuel designated by the railroad   commission under Subsection (b).          (b)  The railroad commission by rule may:                (1)  approve a certification process used by an   organization to certify that a type of gas has a lower carbon   content than natural gas; and                (2)  designate a gaseous fuel as an alternative gas if   the fuel has a lower carbon content than natural gas.          (c)  A gas utility may include one or more forms of purchased   alternative gas in its gas supply portfolio used for the provision   of gas service to the public.  When establishing a gas utility's   rates, the regulatory authority shall allow a gas utility to   recover as a cost or expense expenditures associated with   purchasing the alternative gas.          (d)  When reviewing a gas utility's expenses, the regulatory   authority shall presume that purchases of alternative gas under   Subsection (c) are prudent, reasonable, and necessary gas expenses.          (e)  A gas utility may invest in infrastructure to acquire,   interconnect with, or produce alternative gas supply for its   customers.  When establishing a gas utility's rates, the regulatory   authority shall allow a gas utility to include in its invested   capital the infrastructure costs.          (f)  The regulatory authority shall presume that an   infrastructure investment under Subsection (e) is used and useful   in providing service to the public and a prudent, reasonable, and   necessary investment.          SECTION 2.  This Act takes effect September 1, 2023.