By: Parker S.B. No. 83
73R4768 DWS-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to utility service and related service provided by or to
1-3 the state, a state agency or institution, or a local government.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 3(c), Public Utility Regulatory Act
1-6 (Article 1446c, Vernon's Texas Civil Statutes), is amended to read
1-7 as follows:
1-8 (c) The term "public utility" or "utility," when used in
1-9 this Act, includes any person, corporation, river authority,
1-10 cooperative corporation, or any combination thereof, other than a
1-11 municipal corporation or a water supply or sewer service
1-12 corporation, or their lessees, trustees, and receivers, now or
1-13 hereafter owning or operating for compensation in this state
1-14 equipment or facilities for:
1-15 (1) producing, generating, transmitting, distributing,
1-16 selling, or furnishing electricity ("electric utilities"
1-17 hereinafter) provided, however, that this definition shall not be
1-18 construed to apply to or include a qualifying small power producer
1-19 or qualifying cogenerator, as defined in Sections 3(17)(D) and
1-20 3(18)(C) of the Federal Power Act, as amended (16 U.S.C. Sections
1-21 796(17)(D) and 796(18)(C));
1-22 (2)(A) the conveyance, transmission, or reception of
1-23 communications over a telephone system as a dominant carrier as
1-24 hereinafter defined ("telecommunications utilities" hereinafter);
2-1 provided that no person or corporation not otherwise a public
2-2 utility within the meaning of this Act shall be deemed such solely
2-3 because of the furnishing or furnishing and maintenance of a
2-4 private system or the manufacture, distribution, installation, or
2-5 maintenance of customer premise communications equipment and
2-6 accessories; and provided further that nothing in this Act shall be
2-7 construed to apply to telegraph services, television stations,
2-8 radio stations, community antenna television services, or
2-9 radio-telephone services that may be authorized under the Public
2-10 Mobile Radio Services rules of the Federal Communications
2-11 Commission, other than such radio-telephone services provided by
2-12 wire-line telephone companies under the Domestic Public Land Mobile
2-13 Radio Service and Rural Radio Service rules of the Federal
2-14 Communications Commission; and provided further that interexchange
2-15 telecommunications carriers (including resellers of interexchange
2-16 telecommunications services), specialized communications common
2-17 carriers, other resellers of communications, other communications
2-18 carriers who convey, transmit, or receive communications in whole
2-19 or in part over a telephone system, and providers of operator
2-20 services as defined in Section 18A(a) of this Act (except that
2-21 subscribers to customer-owned pay telephone service shall not be
2-22 deemed to be telecommunications utilities) who are not dominant
2-23 carriers are also telecommunications utilities, but the
2-24 commission's regulatory authority as to them is only as hereinafter
2-25 defined;
2-26 (B) "dominant carrier" when used in this Act
2-27 means (i) a provider of any particular communication service which
3-1 is provided in whole or in part over a telephone system who as to
3-2 such service has sufficient market power in a telecommunications
3-3 market as determined by the commission to enable such provider to
3-4 control prices in a manner adverse to the public interest for such
3-5 service in such market; and (ii) any provider of local exchange
3-6 telephone service within a certificated exchange area as to such
3-7 service. A telecommunications market shall be statewide until
3-8 January 1, 1985. After this date the commission may, if it
3-9 determines that the public interest will be served, establish
3-10 separate markets within the state. Prior to January 1, 1985, the
3-11 commission shall hold such hearings and require such evidence as is
3-12 necessary to carry out the public purpose of this Act and to
3-13 determine the need and effect of establishing separate markets.
3-14 Any such provider determined to be a dominant carrier as to a
3-15 particular telecommunications service in a market shall not be
3-16 presumed to be a dominant carrier of a different telecommunications
3-17 service in that market.
3-18 (3) The term "public utility" or "utility" shall not
3-19 include any person or corporation not otherwise a public utility
3-20 that furnishes the services or commodity described in any paragraph
3-21 of this subsection only to itself, its employees, or tenants as an
3-22 incident of such employee service or tenancy, when such service or
3-23 commodity is not resold to or used by others. The term "electric
3-24 utility" shall not include any person or corporation not otherwise
3-25 a public utility that owns or operates in this state equipment or
3-26 facilities for producing, generating, transmitting, distributing,
3-27 selling, or furnishing electric energy to an electric utility, if
4-1 the equipment or facilities are used primarily for the production
4-2 and generation of electric energy for consumption by the person or
4-3 corporation. The term "public utility," "utility," or "electric
4-4 utility" shall not include any person or corporation not otherwise
4-5 a public utility that owns or operates in this state a recreational
4-6 vehicle park that provides metered electric service in accordance
4-7 with Article 1446d-2, Revised Statutes. A recreational vehicle
4-8 park owner is considered a public utility if the owner fails to
4-9 comply with Article 1446d-2, Revised Statutes, with regard to the
4-10 metered sale of electricity at the recreational vehicle park.
4-11 (4) Operation of, access to, or use of the state's
4-12 TEXAN network or any other governmental telecommunications network
4-13 by the state, an agency or institution of the state, a county, a
4-14 municipality, a special district, or another political subdivision
4-15 of the state does not make the network or the operator or user of
4-16 the network a utility or carrier under this Act. For the purposes
4-17 of this Act, a reference to the TEXAN network is a reference to
4-18 TEXAN II and any other subsequent designation of the network.
4-19 SECTION 2. Section 41, Public Utility Regulatory Act
4-20 (Article 1446c, Vernon's Texas Civil Statutes), is amended to read
4-21 as follows:
4-22 Sec. 41. The components of invested capital and net income
4-23 shall be determined according to the following rules:
4-24 (a) Invested Capital. Utility rates shall be based
4-25 upon the original cost of property used by and useful to the public
4-26 utility in providing service including construction work in
4-27 progress at cost as recorded on the books of the utility. The
5-1 inclusion of construction work in progress is an exceptional form
5-2 of rate relief to be granted only upon the demonstration by the
5-3 utility that such inclusion is necessary to the financial integrity
5-4 of the utility. Construction work in progress shall not be
5-5 included in the rate base for major projects under construction to
5-6 the extent that such projects have been inefficiently or
5-7 imprudently planned or managed. Original cost shall be the actual
5-8 money cost, or the actual money value of any consideration paid
5-9 other than money, of the property at the time it shall have been
5-10 dedicated to public use, whether by the utility which is the
5-11 present owner or by a predecessor, less depreciation.
5-12 (b) Separations and Allocations. Costs of facilities,
5-13 revenues, expenses, taxes, and reserves shall be separated or
5-14 allocated as prescribed by the regulatory authority.
5-15 (c) Net Income. By "net income" is meant the total
5-16 revenues of the public utility less all reasonable and necessary
5-17 expenses as determined by the regulatory authority. The regulatory
5-18 authority shall determine expenses and revenues in a manner
5-19 consistent with the following:
5-20 (1) Transactions with Affiliated Interests.
5-21 Payment to affiliated interests for costs of any services, or any
5-22 property, right or thing, or for interest expense shall not be
5-23 allowed either as capital cost or as expense except to the extent
5-24 that the regulatory authority shall find such payment to be
5-25 reasonable and necessary for each item or class of items as
5-26 determined by the commission. Any such finding shall include
5-27 specific findings of the reasonableness and necessity of each item
6-1 or class of items allowed and a finding that the price to the
6-2 utility is no higher than prices charged by the supplying affiliate
6-3 to its other affiliates or divisions for the same item or class of
6-4 items, or to unaffiliated persons or corporations. The price paid
6-5 by gas utilities to affiliated interests for natural gas from Outer
6-6 Continental Shelf lands shall be subject to a rebuttable
6-7 presumption that such price is reasonable if the price paid does
6-8 not exceed the price permitted by federal regulation if such gas is
6-9 regulated by any federal agency or if not regulated by a federal
6-10 agency does not exceed the price paid by nonaffiliated parties for
6-11 natural gas from Outer Continental Shelf lands. The burden of
6-12 establishing that such a price paid is not reasonable shall be on
6-13 any party challenging the reasonableness of such price.
6-14 (2) Income Taxes. If the public utility is a
6-15 member of an affiliated group that is eligible to file a
6-16 consolidated income tax return, and if it is advantageous to the
6-17 public utility to do so, income taxes shall be computed as though a
6-18 consolidated return had been so filed and the utility had realized
6-19 its fair share of the savings resulting from the consolidated
6-20 return, unless it is shown to the satisfaction of the regulatory
6-21 authority that it was reasonable to choose not to consolidate
6-22 returns. The amounts of income taxes saved by a consolidated group
6-23 of which a public utility is a member by reason of the elimination
6-24 in the consolidated return of the intercompany profit on purchases
6-25 by the public utility from an affiliate shall be applied to reduce
6-26 the cost of the property or services so purchased. The investment
6-27 tax credit allowed against federal income taxes, to the extent
7-1 retained by the utility, shall be applied as a reduction in the
7-2 rate based contribution of the assets to which such credit applies,
7-3 to the extent and at such rate as allowed by the Internal Revenue
7-4 Code.
7-5 (3) Expenses Disallowed. The regulatory
7-6 authority shall not consider for ratemaking purposes the following
7-7 expenses:
7-8 (A) legislative advocacy expenses, whether
7-9 made directly or indirectly, including but not limited to
7-10 legislative advocacy expenses included in trade association dues;
7-11 (B) payments, except those made under an
7-12 insurance or risk-sharing arrangement executed before the date of
7-13 loss, made to cover costs of an accident, equipment failure, or
7-14 negligence at a utility facility owned by a person or governmental
7-15 body not selling power inside the State of Texas;
7-16 (C) Costs of processing a refund or credit
7-17 under Subsection (e) of Section 43 of this Act; or
7-18 (D) any expenditure found by the
7-19 regulatory authority to be unreasonable, unnecessary, or not in the
7-20 public interest, including but not limited to executive salaries,
7-21 advertising expenses, legal expenses, and civil penalties or fines.
7-22 The regulatory authority may promulgate reasonable rules and
7-23 regulations with respect to the allowance or disallowance of any
7-24 expenses for ratemaking purposes.
7-25 (d) Rates Charged State. The rates that a utility or
7-26 municipally owned utility charges the state or a state agency or
7-27 institution may not include an amount representing a municipal
8-1 franchise fee, gross receipts assessment, rate case expense,
8-2 litigation expense related to a rate case, regulatory assessment,
8-3 expense related to the high cost fund or universal service fund, or
8-4 other similar expense. A regulatory authority may adopt reasonable
8-5 rules specifying similar expenses to be excluded.
8-6 SECTION 3. Section 87B, Public Utility Regulatory Act
8-7 (Article 1446c, Vernon's Texas Civil Statutes), is amended to read
8-8 as follows:
8-9 Sec. 87B. (a) A telecommunications utility providing
8-10 dedicated line long distance service (TEXAN) to the state on August
8-11 31, 1987, shall continue to have this type of service available to
8-12 the state on a month-to-month contract basis until September 1,
8-13 1988. The contract will become effective on September 1, 1987, and
8-14 shall be under terms and conditions negotiated by the state and the
8-15 utility in accordance with the amounts appropriated by the General
8-16 Appropriations Act for this purpose. The <State Purchasing and>
8-17 General Services Commission shall perform all actions necessary to
8-18 insure that one or more contracts for telecommunications services
8-19 as provided in Article 10 of the State Purchasing and General
8-20 Services Act (Article 601b, Vernon's Texas Civil Statutes) (TEXAN
8-21 II) are awarded pursuant to the requirements of the State
8-22 Purchasing and General Services Act (Article 601b, Vernon's Texas
8-23 Civil Statutes) by October 15, 1987, and that TEXAN II is
8-24 operational no later than August 31, 1988. Those funds
8-25 appropriated by the General Appropriations Act for extending the
8-26 existing TEXAN contract which are not expended in fiscal year 1988
8-27 shall be transferred to the <State Purchasing and> General Services
9-1 Commission for the sole purpose of offsetting the expenses
9-2 associated with the administration of the TEXAN II network. If,
9-3 during the period of time this section is in effect, any
9-4 supplemental or other telecommunications service is required by the
9-5 state, it may be acquired from vendors other than the utility or
9-6 utilities providing TEXAN or TEXAN II service.
9-7 (b) The state's TEXAN network is not required to subscribe
9-8 to switched access service if the technical requirements of the
9-9 TEXAN network may be satisfied by less expensive service. A
9-10 restriction on the availability or use of the less expensive
9-11 service based on location or distance of calls does not apply to
9-12 the TEXAN network or to a user of the TEXAN network.
9-13 (c) A telecommunications utility or a regulatory authority
9-14 may not prohibit the state's TEXAN network or a state agency or
9-15 institution from sharing or reselling TEXAN service. The TEXAN
9-16 network may provide service to:
9-17 (1) a state agency or institution, house of the
9-18 legislature, county, municipality, special district, or other
9-19 political subdivision of the state; and
9-20 (2) a nongovernmental entity that has a close working
9-21 relationship with the state or with an entity listed by Subdivision
9-22 (1) of this subsection if the service furthers the relationship.
9-23 (d) If the state's TEXAN network or a state agency or
9-24 institution uses a telecommunications utility's switched access
9-25 service, the utility may not charge the state or the state agency
9-26 or institution an amount for the service that exceeds the utility's
9-27 costs in providing the service.
10-1 SECTION 4. Article XIII, Public Utility Regulatory Act
10-2 (Article 1446c, Vernon's Texas Civil Statutes), is amended by
10-3 adding Section 88 to read as follows:
10-4 Sec. 88. (a) The commission shall determine the just and
10-5 reasonable rates a local exchange company may charge an educational
10-6 institution in accordance with this section. In any rate case
10-7 before the commission, the commission shall treat an educational
10-8 institution as a separate class in allocating costs and designing
10-9 rates.
10-10 (b) The commission shall establish a flat rate for single
10-11 line local exchange services, including services used to access the
10-12 Texas Education Network, or its successor or assigns, or any other
10-13 data or voice network that assists in or is related to education,
10-14 including a school/parent communications system. The flat rate
10-15 shall be set in an amount not greater than the rate established for
10-16 that utility's residential customers in each rate group.
10-17 (c) The commission may not establish or allow a local
10-18 exchange company to charge a rate for service using dedicated
10-19 private lines operating at 56 kilobits per second or greater and
10-20 used to access the Texas Education Network, or its successor or
10-21 assigns, or any other data or voice network that assists in or is
10-22 related to education, including a school/parent communications
10-23 system, in an amount greater than 2.5 times the rate available to
10-24 the utility's residential customers in each rate group.
10-25 (d) The commission may not establish or allow a local
10-26 exchange company to charge a rate for service using dedicated
10-27 private lines operating at 1.5 megabits per second or greater and
11-1 used to access the Texas Education Network, or its successor or
11-2 assigns, or any other data or voice network that assists in or is
11-3 related to education, including a school/parent communications
11-4 system, in an amount greater than 7.5 times the rate available to
11-5 the utility's residential customers in each rate group.
11-6 (e) The commission may not establish or allow a local
11-7 exchange company to charge a rate for multiline business service,
11-8 PBX service, or central office based PBX-type services in an amount
11-9 greater than 50 percent of the utility's otherwise applicable rate
11-10 for each type of service.
11-11 (f) In establishing a rate under this section, the
11-12 commission shall follow sound ratemaking principles and may not
11-13 establish a rate that is less than the utility's long-run
11-14 incremental costs for providing that service to an educational
11-15 institution.
11-16 (g) In this section, "educational institution" includes:
11-17 (1) a school, college, or university owned or operated
11-18 by this state or a political subdivision of the state;
11-19 (2) the Central Education Agency and its successors
11-20 and assigns; and
11-21 (3) the Texas Higher Education Coordinating Board and
11-22 its successors and assigns.
11-23 SECTION 5. Section 1.03(3), Gas Utility Regulatory Act
11-24 (Article 1446e, Vernon's Texas Civil Statutes), is amended to read
11-25 as follows:
11-26 (3) "Gas utility" or "utility" includes any person,
11-27 corporation, river authority, cooperative corporation, or any
12-1 combination thereof, other than a municipal corporation, or their
12-2 lessees, trustees, and receivers, now or hereafter owning or
12-3 operating for compensation in this state equipment or facilities
12-4 for transmitting or distributing combustible hydrocarbon natural or
12-5 synthetic natural gas for sale or resale in a manner which is not
12-6 subject to the jurisdiction of the Federal Energy Regulatory
12-7 Commission under the Natural Gas Act (15 U.S.C.A., Section 717, et
12-8 seq.) provided that the production, gathering, transportation, or
12-9 sale of natural gas or synthetic gas under Section 4, Article 6050,
12-10 Revised Statutes, the distribution or sale of liquefied petroleum
12-11 gas, and the transportation, delivery, or sale of natural gas for
12-12 fuel for irrigation wells or any other direct use in agricultural
12-13 activities is not included. The term "gas utility" or "utility"
12-14 does not include:
12-15 (A) a <any> person or corporation not otherwise
12-16 a gas utility that furnishes gas or gas service only to itself, its
12-17 employees, or tenants as an incident of that employee service or
12-18 tenancy, when the gas or gas service is not resold to or used by
12-19 others;
12-20 (B) <. The term also does not include> a person
12-21 to the extent the person sells natural gas for use as vehicle fuel,
12-22 sells natural gas to a person who later sells the natural gas for
12-23 use as vehicle fuel, or owns or operates equipment or facilities to
12-24 sell or transport the natural gas for ultimate use as vehicle fuel;
12-25 or
12-26 (C) a person or corporation not otherwise a gas
12-27 utility that transports gas on behalf of the state or a state
13-1 agency or institution.
13-2 SECTION 6. Section 4.09, Gas Utility Regulatory Act (Article
13-3 1446e, Vernon's Texas Civil Statutes), is amended by adding
13-4 Subsection (d) to read as follows:
13-5 (d) A utility or municipally owned utility may not refuse to
13-6 provide service to the state or a state agency or institution if
13-7 pipeline capacity is available.
13-8 SECTION 7. The Gas Utility Regulatory Act (Article 1446e,
13-9 Vernon's Texas Civil Statutes) is amended by adding Section 5.061
13-10 to read as follows:
13-11 Sec. 5.061. RATES CHARGED STATE. The rates that a utility
13-12 or municipally owned utility charges the state or a state agency or
13-13 institution may not include an amount representing a municipal
13-14 franchise fee, gross receipts assessment, rate case expense,
13-15 litigation expense related to a rate case, regulatory assessment,
13-16 or other similar expense. A regulatory authority may adopt
13-17 reasonable rules specifying similar expenses to be excluded.
13-18 SECTION 8. Section 5.02, Gas Utility Regulatory Act (Article
13-19 1446e, Vernon's Texas Civil Statutes), is amended to read as
13-20 follows:
13-21 Sec. 5.02. Just and Reasonable Rates. (a) It shall be the
13-22 duty of the regulatory authority to ensure that every rate made,
13-23 demanded, or received by any gas utility, or by any two or more gas
13-24 utilities jointly, is just and reasonable. Rates may not be
13-25 unreasonably preferential, prejudicial, or discriminatory, but must
13-26 be sufficient, equitable, and consistent in application to each
13-27 class of consumers. For ratemaking purposes, the railroad
14-1 commission may treat two or more municipalities served by a gas
14-2 utility as a single class if the railroad commission considers that
14-3 treatment to be appropriate.
14-4 (b) Rates charged or offered to be charged by a gas utility
14-5 for pipeline-to-pipeline transactions and to transportation,
14-6 industrial, and other similar large volume contract customers, but
14-7 excluding direct sales-for-resale to gas distribution utilities at
14-8 city gates, are considered to be just and reasonable and otherwise
14-9 to comply with this section, and shall be approved by the
14-10 regulatory authority, if:
14-11 (1) neither the gas utility nor the customer had an
14-12 unfair advantage during the negotiations;
14-13 (2) the rates are substantially the same as rates
14-14 between the gas utility and two or more of those customers under
14-15 the same or similar conditions of service; or
14-16 (3) competition does or did exist either with another
14-17 gas utility, another supplier of natural gas, or with a supplier of
14-18 an alternative form of energy.
14-19 (c) Notwithstanding Subsection (b) of this section, the
14-20 railroad commission shall approve gas transportation rates
14-21 established under a contract between a utility or municipally owned
14-22 utility and a state agency or institution. Absent a contract
14-23 between a utility or municipally owned utility and a state agency
14-24 or institution, the railroad commission shall, not later than the
14-25 120th day after the date either party files a request to set rates,
14-26 establish rates not to exceed the cost-based transportation rate.
14-27 The railroad commission shall base its determination of a
15-1 cost-based transportation rate on the entire distribution system of
15-2 the utility or municipally owned utility in this state. The
15-3 railroad commission has exclusive original jurisdiction to
15-4 establish rates under this subsection.
15-5 (d) If a complaint is filed with the railroad commission by
15-6 a transmission pipeline purchaser of gas sold or transported under
15-7 any such pipeline-to-pipeline or transportation rate, then the
15-8 provisions of Subsection (b) shall not apply.
15-9 (e) <(d)> Notwithstanding any provision in this Act to the
15-10 contrary, the regulatory authority may approve administratively any
15-11 decrease in rates proposed by the applicant and agreed upon by all
15-12 parties directly affected, unless the regulatory authority finds
15-13 the proposed decrease not to be in the public interest.
15-14 (f) <(d)> The standard contained in Subsection (b)(1) of
15-15 this section shall not apply to rates charged or offered to be
15-16 charged to an affiliated pipeline utility. Gas purchase costs
15-17 included in city gate rates proposed to be charged for
15-18 sales-for-resale to gas distribution utilities at city gates may be
15-19 reviewed as to reasonableness in city gate rate proceedings even
15-20 though they have been previously approved as rates for other
15-21 parties under Subsection (b) of this section.
15-22 SECTION 9. Subchapter F, Chapter 13, Water Code, is amended
15-23 by adding Section 13.1861 to read as follows:
15-24 Sec. 13.1861. RATES CHARGED STATE. The rates that a utility
15-25 or municipally owned utility charges the state or a state agency or
15-26 institution may not include an amount representing a municipal
15-27 franchise fee, gross receipts assessment, rate case expense,
16-1 litigation expense related to a rate case, regulatory assessment,
16-2 or other similar expense. A regulatory authority may adopt
16-3 reasonable rules specifying similar expenses to be excluded.
16-4 SECTION 10. Sections 10.06(b) and (c), State Purchasing and
16-5 General Services Act (Article 601b, Vernon's Texas Civil Statutes),
16-6 are amended to read as follows:
16-7 (b) The comptroller of public accounts shall establish in
16-8 the state treasury a revolving fund account for the administration
16-9 of this article. The account shall be used as a depository for
16-10 funds received from entities served <and as a source of funds to
16-11 purchase, lease, or otherwise acquire services, supplies, and
16-12 equipment, and to pay salaries, wages, and other costs directly
16-13 attributable to the provisions and operations of the system>.
16-14 (c) In order to provide an adequate cash flow as may be
16-15 necessary for purposes of this article, using state agencies and
16-16 other entities, upon proper notification, shall make monthly
16-17 payments into the telecommunications revolving fund account from
16-18 appropriated or other available funds. The legislature may
16-19 appropriate funds for the operation of the system directly to the
16-20 commission. In that case the revolving fund account shall be used
16-21 to receive funds due from local government entities and other
16-22 agencies to the extent that their funds are not subject to
16-23 legislative appropriation. The commission shall maintain in the
16-24 revolving fund account sufficient amounts to pay the bills of the
16-25 consolidated telecommunications systems and the centralized Capitol
16-26 Complex telephone system. The commission shall certify amounts
16-27 that exceed this amount to the comptroller, and the comptroller
17-1 shall transfer the excess amounts to the credit of the statewide
17-2 network applications account established by Section 22A,
17-3 Information Resources Management Act (Article 4413(32j), Revised
17-4 Statutes).
17-5 SECTION 11. The Information Resources Management Act
17-6 (Article 4413(32j), Revised Statutes) is amended by adding Section
17-7 22A to read as follows:
17-8 Sec. 22A. STATEWIDE NETWORK APPLICATIONS ACCOUNT. The
17-9 statewide network applications account is established in the
17-10 general revenue fund. Money credited to the account is from
17-11 transfers of excess balances in the telecommunications revolving
17-12 fund account as provided by Section 10.06(c), State Purchasing and
17-13 General Services Act (Article 601b, Vernon's Texas Civil Statutes).
17-14 Amounts credited to the statewide network applications account may
17-15 be appropriated only for the purchase, improvement, or maintenance
17-16 of information resources, information resources technologies or
17-17 applications, or related services and other items, for use by a
17-18 network of state agencies, which may include agencies in the
17-19 legislative branch of government.
17-20 SECTION 12. Section 1, Article 6050, Revised Statutes, is
17-21 amended to read as follows:
17-22 Sec. 1. In this article, "person" means an individual,
17-23 company, or private corporation, or their lessees, trustees, and
17-24 receivers. In Articles 6050-6066, Revised Civil Statutes of Texas,
17-25 1925, as amended, "gas utility," "public utility," or "utility"
17-26 means a person owning, managing, operating, leasing or controlling
17-27 within this State any pipe lines, plant, property, equipment,
18-1 facility, franchise, license, or permit for either one or more of
18-2 the following kinds of business:
18-3 (a) Transporting, conveying, distributing or
18-4 delivering natural gas: (1) for public use or service for
18-5 compensation; (2) for sale to municipalities or persons or
18-6 companies, in those cases referred to in Subsection (c) hereof,
18-7 engaged in distributing or selling natural gas to the public; (3)
18-8 for sale or delivery of natural gas to any person operating under
18-9 franchise or a contract with any municipality or other legal
18-10 subdivision of this State; or, (4) for sale or delivery of natural
18-11 gas to the public for domestic or other use.
18-12 (b) Owning or operating or managing a pipe line for
18-13 the transportation or carriage of natural gas, whether for public
18-14 hire or not, if any part of the right of way for said line has been
18-15 acquired, or is hereafter acquired by the exercise of the right of
18-16 eminent domain.
18-17 (c) Producing or purchasing natural gas and
18-18 transporting or causing the same to be transported by pipe lines to
18-19 or near the limits of any municipality in which said gas is
18-20 received and distributed or sold to the public by another public
18-21 utility or by said municipality, in all cases where such business
18-22 is in fact the only or practically exclusive agency of supply of
18-23 natural gas to such utility or municipality, is hereby declared to
18-24 be virtual monopoly and a business and calling affected with a
18-25 public interest, and the said business and property employed
18-26 therein within this State shall be subject to the provisions of
18-27 this law and to the jurisdiction and regulation of the Commission
19-1 as a gas utility.
19-2 (d) No person shall be deemed to be a "gas utility,"
19-3 "public utility," or "utility" solely because such person is an
19-4 affiliate of such an entity. The term "gas utility," "public
19-5 utility," or "utility" does not include a person not otherwise a
19-6 gas utility that transports gas on behalf of the state or a state
19-7 agency or institution.
19-8 (e) Every such gas utility is hereby declared to be
19-9 affected with a public interest and subject to the jurisdiction,
19-10 control and regulation of the Commission as provided herein.
19-11 SECTION 13. Article 6050, Revised Statutes, is amended by
19-12 adding Section 6 to read as follows:
19-13 Sec. 6. (a) A gas utility may not refuse to provide service
19-14 to the state or a state agency or institution if pipeline capacity
19-15 is available.
19-16 (b) In this section, "gas utility" includes a municipally
19-17 owned utility, as that term is defined by Section 1.03, Gas Utility
19-18 Regulatory Act (Article 1446e, Vernon's Texas Civil Statutes).
19-19 SECTION 14. Section 1, Article 6053, Revised Statutes, is
19-20 amended to read as follows:
19-21 Sec. 1. (a) The Commission after due notice shall fix
19-22 and establish and enforce the adequate and reasonable price of gas
19-23 and fair and reasonable rates of charges and regulations for
19-24 transporting, producing, distributing, buying, selling, and
19-25 delivering gas by such pipe lines in this State; and shall
19-26 establish fair and equitable rules and regulations for the full
19-27 control and supervision of said gas pipe lines and all their
20-1 holdings pertaining to the gas business in all their relations to
20-2 the public, as the Commission may from time to time deem proper;
20-3 and establish a fair and equitable division of the proceeds of the
20-4 sale of gas between the companies transporting or producing the gas
20-5 and the companies distributing or selling it; and prescribe and
20-6 enforce rules and regulations for the government and control of
20-7 such pipe lines in respect to their gas pipe lines and producing,
20-8 receiving, transporting, and distributing facilities; and regulate
20-9 and apportion the supply of gas between towns, cities, and
20-10 corporations, and when the supply of gas controlled by any gas pipe
20-11 line shall be inadequate, the Commission shall prescribe fair and
20-12 reasonable rules and regulations requiring such gas pipe lines to
20-13 augment their supply of gas, when in the judgment of the Commission
20-14 it is practicable to do so; and it shall exercise its power,
20-15 whether upon its own motion or upon petition by any person,
20-16 corporation, municipal corporation, county, or Commissioners
20-17 precinct showing a substantial interest in the subject, or upon
20-18 petition of the Attorney General, or of any County or District
20-19 Attorney in any county wherein such business or any part thereof
20-20 may be carried on.
20-21 (b) Notwithstanding Subsection (a) of this section, the
20-22 Commission shall approve rates established under a contract between
20-23 a gas utility or gas supplier and a State agency or institution.
20-24 Absent a contract between a gas utility or gas supplier and a State
20-25 agency or institution, the Commission shall, not later than the
20-26 120th day after the date either party files a request to set rates,
20-27 establish rates not to exceed the gas utility's or gas supplier's
21-1 cost-based transportation rate. The Commission shall base its
21-2 determination of a cost-based transportation rate on the entire
21-3 distribution system of the gas utility or gas supplier in this
21-4 State. The Commission has exclusive original jurisdiction to
21-5 establish rates under this subsection. In this subsection, the
21-6 term "gas utility" or "gas supplier" includes a municipally owned
21-7 utility, as that term is defined by Section 1.03, Gas Utility
21-8 Regulatory Act (Article 1446e, Vernon's Texas Civil Statutes).
21-9 (c) If any transportation, industrial, or other similar
21-10 large-volume contract customer who is an end-use customer of a gas
21-11 utility (i) reduces or ceases purchases of natural gas or of
21-12 natural gas service from the gas utility and (ii) purchases natural
21-13 gas or natural gas service from another supplier or purchases an
21-14 alternate form of energy, then the gas utility thereafter shall
21-15 have no obligation to serve or to maintain the gas supply or the
21-16 physical capacity to serve such customer, except to the extent that
21-17 such customer continues to purchase natural gas or natural gas
21-18 service of any class from the gas utility or to the extent the gas
21-19 utility has a written contract to provide natural gas or natural
21-20 gas service of any class to the customer. Nothing herein shall
21-21 prevent the Railroad Commission from requiring that utilities
21-22 comply with all orders of the Railroad Commission in apportioning
21-23 gas under curtailment plans and orders.
21-24 SECTION 15. Immediately after the effective date of this
21-25 Act, the Public Utility Commission of Texas shall initiate rate
21-26 proceedings under Section 42, Public Utility Regulatory Act
21-27 (Article 1446c, Vernon's Texas Civil Statutes), to set just and
22-1 reasonable rates in accordance with Section 88, Public Utility
22-2 Regulatory Act (Article 1446c, Vernon's Texas Civil Statutes), as
22-3 added by Section 4 of this Act. The commission shall provide that
22-4 the rates take effect September 1, 1993, regardless of the date on
22-5 which a final order is issued.
22-6 SECTION 16. (a) Except as provided by Subsection (b) of
22-7 this section, this Act takes effect September 1, 1993.
22-8 (b) Sections 4 and 15 of this Act take effect immediately.
22-9 SECTION 17. The importance of this legislation and the
22-10 crowded condition of the calendars in both houses create an
22-11 emergency and an imperative public necessity that the
22-12 constitutional rule requiring bills to be read on three several
22-13 days in each house be suspended, and this rule is hereby suspended,
22-14 and that this Act take effect and be in force according to its
22-15 terms, and it is so enacted.