A municipally owned utility that is required to apply for a certificate of public convenience and necessity to construct, install, or extend a transmission facility within ERCOT under Chapter 37 is entitled to recover, through the utility’s wholesale transmission rate, reasonable payments made to a taxing entity in lieu of ad valorem taxes on that transmission facility, provided that:
(1) the utility enters into a written agreement with the governing body of the taxing entity related to the payments;
(2) the amount paid is the same as the amount the utility would have to pay to the taxing entity on that transmission facility if the facility were subject to ad valorem taxation;
(3) the governing body of the taxing entity is not the governing body of the utility; and
(4) the utility provides the commission with a copy of the written agreement and any other information the commission considers necessary in relation to the agreement.