By: Perry, Lucio S.B. No. 1650

(In the Senate - Filed March 11, 2021; March 24, 2021, read first time and referred to Committee on Transportation; April 9, 2021, reported adversely, with favorable Committee Substitute by the following vote: Yeas 9, Nays 0; April 9, 2021, sent to printer.) Click here to see the committee vote

COMMITTEE SUBSTITUTE FOR S.B. No. 1650 By: Perry

A BILL TO BE ENTITLED

AN ACT

relating to middle mile broadband service provided by an electric utility.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Chapter 43, Utilities Code, is amended to read as follows:

CHAPTER 43. PROVISION [USE] OF MIDDLE MILE [ELECTRIC DELIVERY

SYSTEM FOR ACCESS TO] BROADBAND SERVICE BY ELECTRIC UTILITIES [AND

OTHER ENHANCED SERVICES, INCLUDING COMMUNICATIONS]

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 43.001. LEGISLATIVE FINDINGS. (a) The legislature finds that access to quality, high-speed broadband Internet service is important to this state, is a necessary prerequisite for enabling economic development and improving education, health care, public safety, and government services in this state, and provides other benefits to its citizens [broadband over power lines, also known as BPL, is an emerging technology platform that offers a means of providing broadband services to reach homes and businesses. BPL services can also be used to enhance existing electric delivery systems, which can result in improved service and reliability for electric customers].

(b) [The legislature finds that access to quality, high speed broadband services is important to this state. BPL deployment in Texas has the potential to extend broadband service to customers where broadband access is currently not available and may provide an additional option for existing broadband consumers in Texas, resulting in a more competitive market for broadband services.] The legislature [further] finds that broadband [BPL] development in unserved and underserved areas of Texas can be facilitated by [is fully dependent upon] the participation of electric utilities in this state that own and operate [power lines and related] facilities that may be useful [are necessary] for the full deployment of broadband service by Internet service providers throughout this state [construction of BPL systems and the provision of BPL services].

(c) The legislature finds that electric utilities have existing infrastructure in place throughout this state and that excess fiber capacity on that infrastructure could be used to provide middle mile broadband service in unserved and underserved areas.

(d) The [(c) Consistent with the goal of increasing options for telecommunications in this state, the] legislature finds that it is in the public interest to encourage the deployment of broadband service in unserved and underserved areas [BPL] by permitting electric utilities to own or operate facilities providing middle mile broadband service to lease excess fiber capacity [affiliates of the electric utility, or permitting unaffiliated entities, to own or operate all or a portion of such BPL systems]. The purpose of this chapter is to provide the appropriate framework to facilitate the leasing of excess fiber capacity on electric utility facilities [support the deployment of BPL].

(e) [(d)] The legislature finds that an electric utility may choose to implement middle mile broadband service to lease excess fiber capacity to Internet service providers [BPL] under the procedures set forth in this chapter, but is not required to do so. The electric utility shall have the right to decide, in its sole discretion, whether to implement middle mile broadband service [BPL] and may not be penalized for deciding to implement or not to implement that service [BPL].

Sec. 43.002. APPLICABILITY. (a) This chapter applies to an electric utility whether or not the electric utility is offering customer choice under Chapter 39.

(b) If there is a conflict between the specific provisions of this chapter and any other provisions of this title, the provisions of this chapter control.

(c) Except as otherwise provided by this title, no [No] provision of this title imposes [shall impose] an obligation on an electric utility to construct or operate a middle mile system, to [implement BPL, to] provide middle mile broadband service [services], or to allow others to install [BPL] facilities or use the electric utility's facilities for the provision of broadband service [services].

Sec. 43.003. DEFINITIONS. In this chapter:

(1) "Broadband service" means retail Internet service provided by a commercial Internet service provider with the capability of providing a download speed of 25 megabits per second or faster and an upload speed of 3 megabits per second or faster ["BPL," "broadband over power lines," and "BPL services" mean the provision of broadband services over electric power lines and related facilities, whether above ground or in underground conduit].

(2) "Middle mile broadband service" means the provision of excess fiber capacity on an electric utility's electric delivery system to an Internet service provider to provide broadband service. The term does not include provision of Internet service to end-use customers on a retail basis ["BPL access" means the ability to access broadband services via a BPL operator or BPL Internet service provider].

(3) "Internet ["BPL operator" means an entity that owns or operates a BPL system on the electric power lines and related facilities of an electric utility.

[(4) "BPL Internet] service provider" means a commercial [and "BPL ISP" mean an] entity that provides Internet services [to others on a wholesale basis or] to end-use customers on a retail basis.

(4) [(5) "BPL system" means the materials, equipment, and other facilities installed on electric utility property to facilitate the provision of BPL services.

[(6) "BPL electric utility applications" means services and technologies that are used and useful and designed to improve the operational performance and service reliability of an electric utility including, but not limited to, automated meter reading, real time system monitoring and meter control, remote service control, outage detection and restoration, predictive maintenance and diagnostics, and monitoring and enhancement of power quality.

[(7)] "Electric delivery system" means the power lines and related transmission and distribution facilities constructed [used by an electric utility] to deliver electric energy to the electric utility's customers.

(5) [(8)] "Electric utility" includes [shall include] an electric utility and a transmission and distribution utility as defined in Section 31.002(6) or (19).

SUBCHAPTER B. DEVELOPMENT OF MIDDLE MILE BROADBAND [BPL] SYSTEMS

Sec. 43.051. AUTHORIZATION FOR MIDDLE MILE BROADBAND [BPL] SYSTEM. (a) An [affiliate of an] electric utility [or a person unaffiliated with an electric utility] may own, construct, maintain, and operate fiber optic cables and other facilities for providing middle mile broadband service [a BPL system and provide BPL services on an electric utility's electric delivery system] consistent with the requirements of this chapter. Nothing in this chapter prohibits [shall prohibit] an entity defined in Section 11.003(9) from providing broadband [BPL] service to an Internet service provider or owning and operating a broadband [BPL] system as otherwise permitted by law.

(b) The electric utility may determine on a nondiscriminatory basis which Internet service providers may have access to excess fiber capacity on the electric utility's electric delivery system and provide access points to allow connection between the electric utility's electric delivery system and the Internet service provider systems of those Internet service providers. The electric utility may provide access to excess fiber capacity on the electric utility's middle mile broadband system only on reasonable and nondiscriminatory terms and conditions. [Nothing in this chapter shall prohibit an electric utility from providing construction or maintenance services to a BPL operator or BPL ISP provided that the costs of these services are properly accounted for between the electric utility and the BPL operator or BPL ISP.]

Sec. 43.052. [OWNERSHIP AND OPERATION OF BPL SYSTEM. (a) An electric utility may elect to:

[(1) allow an affiliate to own or operate a BPL system on the utility's electric delivery system;

[(2) allow an unaffiliated entity to own or operate a BPL system on the electric utility's electric delivery system; or

[(3) allow an affiliate or unaffiliated entity to provide Internet service over a BPL system.

[(b) The BPL operator and the electric utility shall determine what BPL Internet service providers may have access to broadband capacity on the BPL system.

[Sec. 43.053. FEES AND] CHARGES. [(a)] An electric utility that owns and operates a middle mile broadband system may lease excess fiber capacity on the electric utility's electric delivery system to an Internet service provider on a wholesale basis and [allows an affiliate or an unaffiliated entity to own a BPL system on the electric utility's electric delivery system] shall charge the Internet service provider [owner of the BPL system] for the use of the electric utility's [electric delivery] system for all costs associated with that use. The rates, terms, and conditions of a lease of excess fiber capacity on an electric utility's middle mile broadband system must be nondiscriminatory. An electric utility may not lease excess fiber capacity on the electric utility's middle mile broadband system to an affiliated Internet service provider.

[(b) An electric utility may pay a BPL owner, a BPL operator, or a BPL ISP for the use of the BPL system required to operate BPL utility applications.

[(c) If all or part of a BPL system is installed on poles or other structures of a telecommunications utility as that term is defined in Section 51.002, the owner of the BPL system shall be required to pay the telecommunications utility an annual fee consistent with the usual and customary charges for access to the space occupied by that portion of the BPL system so installed.

[(d) Notwithstanding Subsections (a)-(c):

[(1) an electric utility may not charge an affiliate under this section an amount less than the electric utility would charge an unaffiliated entity for the same item or class of items;

[(2) an electric utility may not pay an affiliate under this section an amount more than the affiliate would charge an unaffiliated entity for the same item or class of items; and

[(3) an electric utility or an affiliate of an electric utility may not discriminate against a retail electric provider that is not affiliated with the utility in the terms or availability of BPL services.]

Sec. 43.053 [43.054]. NO ADDITIONAL EASEMENTS OR CONSIDERATION REQUIRED. (a) Because broadband [BPL] systems provide benefits to electric delivery systems, the installation of a middle mile broadband [BPL] system on an electric delivery system does [shall] not require the electric utility [or the owner of the BPL system] or an entity defined in Section 11.003(9) to obtain, modify, or expand easements or other rights-of-way for the middle mile broadband [BPL] system or to give additional consideration as a result of the installation or the operation of a middle mile broadband [BPL] system on the electric delivery system of the electric utility or entity, unless the property owner protests the use as provided by this section.

(b) Not later than the 60th day before the date an electric utility begins construction in an easement or other property right of fiber optic cables and other facilities for providing middle mile broadband service, the electric utility shall provide written notice to the owners of the affected property of the electric utility's intent to use the easement or other property right for middle mile broadband service.

(c) Notice under this section must:

(1) be sent by first class mail to the last known address of each person in whose name the affected property is listed on the most recent tax roll of each county authorized to levy property taxes against the property; and

(2) state whether any new fiber optic cables used for middle mile broadband service will be located above or below ground in the easement or other property right.

(d) Not later than the 60th day after the date an electric utility mails notice under this section, a property owner entitled to the notice may submit to the electric utility a written protest of the intended use of the easement or other property right for middle mile broadband service. An electric utility that receives a timely written protest may not use the easement or other property right for middle mile broadband service unless the protestor later agrees in writing to that use or that use is authorized by law. If a property owner fails to submit a timely written protest, an electric utility may proceed under Subsection (a) without modifying or expanding the easement for that property owner.

(e) An electric utility that receives a timely written protest under Subsection (d) regarding a proposed middle mile broadband project may cancel the project at any time.

(f) The requirements of this section do not apply to an existing easement that permits the installation of a third-party middle mile broadband system on an electric delivery system. [For purposes of this section, installation of a BPL system shall be deemed to be consistent with installation of an electric delivery system.]

Sec. 43.054 [43.055]. RELIABILITY OF ELECTRIC SYSTEMS MAINTAINED. An electric utility that installs [allows the installation] and operates [operation of] a middle mile broadband [BPL] system [on its electric delivery system] shall employ all reasonable measures to ensure that the operation of the middle mile broadband [BPL] system does not interfere with or diminish the reliability of the utility's electric delivery system. If [Should] a disruption in the provision of electric service occurs [occur], the electric utility is [shall be] governed by the terms and conditions of the retail electric delivery service tariff. The electric utility may take all necessary actions regarding its middle mile broadband system to address emergency circumstances that may pose health, safety, or reliability concerns. At all times, the provision of broadband service is [services shall be] secondary to the reliable provision of electric delivery services. An electric utility is not liable to any person, including an Internet service provider, for any direct, indirect, or consequential damages, including loss of business, loss of profits or revenue, or loss of production capacity caused by a fluctuation, disruption, or interruption of middle mile broadband service that is caused in whole or in part by:

(1) force majeure; or

(2) the electric utility's provision of electric delivery services, including actions taken by the electric utility to ensure the reliability of the electric delivery system and actions taken in response to address emergency circumstances that may pose health, safety, or reliability concerns.

SUBCHAPTER C. IMPLEMENTATION OF MIDDLE MILE BROADBAND [BPL] SYSTEM

BY ELECTRIC UTILITY

Sec. 43.101. PARTICIPATION BY ELECTRIC UTILITY. (a) An electric utility[, through an affiliate or through an unaffiliated entity,] may [elect to] install and operate a middle mile broadband [BPL] system on any part of its electric delivery system for Internet service providers but may not construct new electric delivery facilities for the purpose of the electric utility's middle mile service [some or all of its electric delivery system in any part or all of its certificated service area].

(b) The installation, operation, and use of a middle mile broadband [BPL] system and the provision of middle mile broadband service and the lease of excess fiber capacity by Internet service providers from an electric utility may [BPL services shall] not be regulated by any state agency, a municipality, or local government other than as provided by [for in] this chapter.

(c) An electric utility that owns and operates a middle mile broadband system:

(1) may lease excess fiber capacity on the electric utility's electric delivery system to an Internet service provider on a wholesale basis; and

(2) may not provide Internet service to end-use customers on a retail basis.

(d) [(c)] The commission or a state or local government or a regulatory or quasi-governmental or a quasi-regulatory authority may not:

(1) require an electric utility[, either through an affiliate or an unaffiliated entity,] to install a middle mile broadband [BPL] system [on its power lines] or offer middle mile broadband service on the utility's electric delivery system [BPL services in all or any part of the electric utility's certificated service area];

(2) require an electric utility to allow others to install a middle mile broadband [BPL] system on the utility's electric delivery system [in any part or all of the electric utility's certificated service area]; or

(3) prohibit an electric utility from installing a middle mile broadband system or offering middle mile broadband service on the utility's electric delivery system [having an affiliate or unaffiliated entity install a BPL system or offering BPL services in any part or all of the electric utility's certificated service area].

(e) [(d)] If a municipality or local government is already collecting a charge or fee from the electric utility for the use of the public rights-of-way for the delivery of electricity to retail electric customers, the municipality or local government may not require [is prohibited from requiring] a franchise or an amendment to a franchise or require an additional [from requiring a] charge, fee, or tax from the electric utility [any entity] for use of the public rights-of-way for a middle mile broadband [BPL] system.

(f) [(e)] The state or a municipality may impose a charge on the provision of middle mile broadband service [BPL services], but the charge may not be greater than the lowest charge that the state or municipality imposes on other providers of broadband service [services] for use of the public rights-of-way in its respective jurisdiction.

Sec. 43.102. COMMISSION REVIEW OF UTILITY MIDDLE MILE PLAN. (a) An electric utility that plans a project to deploy middle mile broadband shall submit to the commission a written plan that includes:

(1) the route of the middle mile broadband infrastructure proposed for the project;

(2) the number of fiber strands and any other facilities that would be used in connection with the project and dedicated to an Internet service provider;

(3) the location of the electric utility's infrastructure that will be used in connection with the project;

(4) the capacity or number of fiber strands and any other facilities of the middle mile that will be available to lease to Internet service providers and other third parties on completion of the project;

(5) the name of at least one Internet service provider that has committed to leasing access to the middle mile broadband assets constructed as part of the project;

(6) an estimate of potential broadband customers that would be served by the Internet service provider;

(7) the estimated cost of the project, including engineering costs, construction costs, permitting costs, right-of-way costs, and a reasonable allowance for funds used during construction;

(8) the proposed schedule of construction for the project;

(9) the method of attachment and connection of the middle mile broadband assets by the Internet service provider to the electric utility's electric delivery system;

(10) testimony, exhibits, or other evidence that demonstrates the project will allow for the provision and maintenance of adequate, efficient, safe, reliable, and reasonably priced middle mile broadband service; and

(11) any other information that the applicant considers relevant or that the commission requires.

(b) The commission, after notice and hearing if required by the commission, shall approve the plan if the commission finds that the plan will allow for reasonably priced middle mile broadband service.

(c) The commission must approve, modify, or reject a plan submitted to the commission under this section not later than the 181st day after the date the plan is submitted under Subsection (a).

(d) An approved plan may be updated or amended subject to commission approval in accordance with this section.

Sec. 43.103 [43.102]. COST RECOVERY FOR DEPLOYMENT OF MIDDLE MILE BROADBAND FACILITIES [BPL AND UTILITY APPLICATIONS]. (a) Where an electric utility installs a middle mile broadband system [permits the installation of a BPL system on its electric delivery system] under Section 43.051 [43.052(a)], the electric utility's investment in that middle mile broadband [BPL] system is [to directly support the BPL electric utility applications and other BPL services consumed by the electric utility that are used and useful in providing electric utility service shall be] eligible for inclusion in the electric utility's invested capital, and any fees or operating expenses that are reasonable and necessary are [shall be] eligible for inclusion as operating expenses for purposes of any proceeding under Chapter 36. The commission may allow an electric utility to recover investment in a middle mile broadband system outside of a comprehensive base rate proceeding [The invested capital and expenses described in this section must be allocated to the customer classes directly receiving the services].

(b) In a [any] proceeding under Chapter 36, revenue received by an electric utility from an Internet service provider for the use of a middle mile broadband system must be applied as a revenue credit to customers in proportion to the customers' funding of the underlying infrastructure [just and reasonable charges for the use of the electric utility's electric delivery system by a BPL owner or operator shall be limited to the usual and customary pole attachment charges paid to the electric utility for comparable space by cable television operators].

[(c) The revenues of an affiliated BPL operator or an affiliated BPL ISP shall not be deemed the revenues of an electric utility for purposes of setting rates under Chapter 36.]

SUBCHAPTER D. MISCELLANEOUS PROVISIONS

Sec. 43.151. [AFFILIATES OF ELECTRIC UTILITY. (a) Subject to the limitations of this chapter, an electric utility may have a full or partial ownership interest in a BPL operator or a BPL ISP. Whether a BPL operator or a BPL ISP is an affiliate of the electric utility shall be determined under Section 11.003(2) or Section 11.006.

[(b) Neither a BPL operator nor a BPL ISP shall be considered a "competitive affiliate" of an electric utility as that term is defined in Section 39.157.

[Sec. 43.152.] COMPLIANCE WITH FEDERAL LAW. An electric utility that owns and operates a middle mile broadband system [BPL operators] shall comply with all applicable federal laws[, including those protecting licensed spectrum users from interference by BPL systems. The operator of a radio frequency device shall be required to cease operating the device upon notification by a Federal Communications Commission or Public Utilities Commission representative that the device is causing harmful interference. Operation shall not resume until the condition causing the harmful interference has been corrected].

SECTION 2. Section 33.001(b), Utilities Code, is repealed.

SECTION 3. The Public Utility Commission of Texas is required to implement a provision of this Act only if the legislature appropriates money specifically for that purpose. If the legislature does not appropriate money specifically for that purpose, the commission may, but is not required to, implement a provision of this Act using other appropriations that are available for that purpose.

SECTION 4. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2021.

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