BILL ANALYSIS

C.S.H.B. 4207

By: Troxclair

State Affairs

Committee Report (Substituted)

BACKGROUND AND PURPOSE

Following the prolonged power outages during Winter Storm Mara, concerned constituents noted that many power outages were caused by and further delayed by fallen tree limbs. These downed tree limbs revealed that some municipally owned utilities have insufficient vegetation management plans in place, as evidenced by prolonged power outages lasting between 24 hours to more than 10 days in certain municipally owned electric utility service areas.

This bill seeks to address this issue by limiting municipally owned utilities’ authority to transfer utility revenue to the city’s general fund, if the Public Utilities Commission (PUC) finds that a utility’s vegetation management plan is insufficient to ensure reliable service in its service area.

CRIMINAL JUSTICE IMPACT

It is the committee’s opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee’s opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

C.S.H.B. 4207 amends the Local Government Code and Utilities Code to set out provisions prohibiting the transfer of municipal utility revenue in the fiscal year of a determination under Section 38.101 of the Utilities Code by the Public Utility Commission that a municipal utility’s vegetation management activities are insufficient to provide reliable service.

C.S.H.B. 4207 requires the Public Utility Commission, after providing notice to the municipal utility under Section 38.101(c), to provide the municipality with a reasonable grace period in which the municipality may continue to transfer utility revenue while the utility alters its vegetation management activities to ensure reliable service.

C.S.H.B. 4207 amends Utilities Code Sec. 38.101(a) to include municipally owned utilities as utilities required to submit annual reports to the Public Utilities Commission describing the utility’s activities related to identifying areas that are susceptible to damage during severe weather and hardening transmission and distribution facilities in those areas, vegetation management, and inspecting distribution poles.

C.S.H.B. 4207 amends Utilities Code Sec. 38.101 to add subsection (c), requiring the commission to evaluate each report submitted by a municipally owned utility under the section and to notify the utility of a commission determination that the utility’s vegetation management activities are insufficient to ensure reliable service.

Definitions

C.S.H.B. 4207 sets out the following definitions applicable to the bill’s provisions:

● “Commission” means the Public Utility Commission of Texas;

● “Municipal utility” means an electric utility system owned, operated, or controlled by a municipality.

EFFECTIVE DATE

September 1, 2023.

COMPARISON OF ORIGINAL TO SUBSTITUTE

While C.S.H.B. 4207 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill.

The introduced provided a definition of “utility system,” the committee substitute does not include such a definition. Whereas the committee substitute provides for the requirement for the Commission to provide the municipality with a reasonable grace period to transfer revenue after receiving notice of a determination of insufficiency of the utility’s vegetation management activities, the introduced contained no such provision for a grace period.