Amends TCA Title 7 and Title 65.

This bill authorizes a public utility to request, and the Tennessee public utilities commission to authorize, a mechanism to recover the costs related to the use or development of infrastructure to facilitate use of innovative natural gas resources for natural gas utility customers, if the commission finds that the costs are in the public interest. For purposes of this bill, "innovative natural gas resources" include, but are not limited to, farm gas, biogas, renewable natural gas, hydrogen, carbon capture, qualified offsets, renewable natural gas attributes, RSG, and energy efficiency resources. The full text of this bill specifies various financial components that may be included in a cost recovery mechanism that the commission authorizes. This bill requires the Tennessee public utilities commission to grant recovery and authorize a separate recovery mechanism, or adjust rates through a utility's existing annual review process, to recover operational expenses or capital costs, or both, associated with the investment in natural gas innovation resources, including a return on the innovative natural gas resource capital investments, utilizing, at a minimum, the authorized return on equity approved by the commission at the public utility's most recent general rate case, upon a finding that the mechanism or adjustment is in the public interest. This bill limits an incremental rate adjustment due to the investment in innovative natural gas resources at two percent of a utility's latest approved annual revenue requirement. Under this bill, incremental innovative natural gas costs to procure innovative natural gas resources from third parties may be reflected in a utility's purchased gas adjustment; provided, the total incremental natural gas cost cannot exceed three percent of the annual cost of gas. The full text of this bill specifies the formula for establishing a recovery cap.