(a) In any rate proceeding, any utility and/or municipality claiming reimbursement for its rate case expenses pursuant to Texas Utilities Code, §103.022(b), shall have the burden to prove the reasonableness of such rate case expenses by a preponderance of the evidence. Each gas utility and/or municipality shall detail and itemize all rate case expenses and allocations and shall provide evidence showing the reasonableness of the cost of all professional services, including but not limited to:
  (1) the amount of work done;
  (2) the time and labor required to accomplish the work;
  (3) the nature, extent, and difficulty of the work done;
  (4) the originality of the work;
  (5) the charges by others for work of the same or similar nature; and
  (6) any other factors taken into account in setting the amount of the compensation.
(b) In determining the reasonableness of the rate case expenses, the Commission shall consider all relevant factors including but not limited to those set out previously, and shall also consider whether the request for a rate change was warranted, whether there was duplication of services or testimony, whether the work was relevant and reasonably necessary to the proceeding, and whether the complexity and expense of the work was commensurate with both the complexity of the issues in the proceeding and the amount of the increase sought as well as the amount of any increase granted.
(c) Absent a showing of good cause:
  (1) rate case expenses reimbursed to a municipality under Texas Utilities Code, §103.022(b), shall be recovered by the utility through rates effective only within that municipality; or
  (2) when a municipality has joined a coalition of municipalities for the purpose of pursuing rate case activities, rate case expenses reimbursed to the municipalities within the coalition under Texas Utilities Code, §103.022(b), shall be recovered by the utility through rates effective only within the municipalities belonging to that coalition.
(d) Reasonable rate case expenses of the utility shall be classified into three categories:
  (1) required regulatory expenses, which shall consist of expenses the utility incurs that are related to the initial filing of the statement of intent and the expenses the utility incurs to provide or publish required notices;
  (2) litigation expenses, which shall consist of expenses incurred after the utility files its statement of intent, excluding the cost of providing notice; and
  (3) estimated expenses, which shall consist of the costs the utility estimates it will incur for potential appellate proceedings.
(e) The utility's required regulatory expenses shall be allocated uniformly to all customers affected by the proposed rate change. The utility's litigation expenses and estimated expenses, to the extent there are any, shall be allocated to affected customers in the municipalities or coalitions of municipalities participating in the appellate proceeding and affected customers subject to the original jurisdiction of the Commission.

Source Note: The provisions of this §7.5530 adopted to be effective July 29, 2002, 27 TexReg 6687; amended to be effective September 1, 2015, 39 TexReg 10433