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House Bill 624 |
House Author: King, Phil et al. |
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Effective: 6-15-07 |
Senate Sponsor: Fraser |
Current law authorizes electric power companies subject to industry restructuring to use securitization to recover immediately their stranded costs--the difference between the net book value and the market value of their electric generation assets--by issuing bonds and retiring the bonds gradually through transition charges assessed customers. House Bill 624 amends the Utilities Code to authorize use of securitization to recover certain other investments in addition to stranded costs. It includes an adjustment mechanism to enable the refunding of securitization bonds in the event that a non-stranded amount being securitized undergoes judicial review.
The bill requires an electric utility (EU) or transmission and distribution utility (TDU) to report to and obtain approval of the Public Utility Commission of Texas (PUC) before closing any transaction in which: (1) the EU or TDU will be merged or consolidated with another EU or TDU; (2) at least 50 percent of the stock of an EU or TDU will be transferred or sold; or (3) a controlling interest in or operational control of either will be transferred. The PUC must approve a transaction if it finds that the transaction is in the public interest, considering the effects on electric service reliability, availability, or cost. The bill exempts from the reporting and approval requirement any transaction for which a definitive agreement was executed before April 1, 2007, if the EU, the TDU, or the acquisition or merger party made a filing before May 1, 2007, pursuant to certain other transaction reporting requirements currently in the Utilities Code. However, if any of those entities files with the PUC a stipulation, representation, or commitment in advance of or as part of a transaction report filing, whether the transaction report filing is made as required under the bill or under the current Utilities Code provision, the bill authorizes the PUC conditionally to enforce the stipulation, representation, or commitment.