(a) Each gas utility subject to the original jurisdiction or which becomes subject to the appellate jurisdiction of the Commission may include a purchased gas adjustment clause in its rates to provide for the flow-through of part or all of its gas costs above or below the cost of gas contained in its rates, subject to proof, by a preponderance of the evidence, of certain criteria. Criteria to be used by the Commission in determining whether or not to grant a gas utility a purchased gas adjustment clause as well as the percentage thereof shall include but not be limited to:
  (1) the ability of the gas utility to control prices for gas purchased as affected by competition and relative competitive advantage;
  (2) the probability of continued frequent price changes; and
  (3) the availability of alternate gas supply sources.
(b) This section shall be applied prospectively only to rate cases filed and only after notice and hearing pursuant to the Texas Utilities Code, Title 3. The gas utility shall have the burden of proof regarding the necessity, if any, of a purchased gas adjustment clause and any amount of adjustment. This section shall not impair the rights of existing contract gas customers in any manner except as otherwise provided by law.
(c) The Commission shall determine in each case the necessary reporting, filing, and other procedures to be followed by a gas utility in implementing a purchased gas adjustment clause, if any, as well as other items of expense that fluctuate with gas costs which may be included in such a clause.

Source Note: The provisions of this §7.5519 adopted to be effective July 29, 2002, 27 TexReg 6687