BILL ANALYSIS
C.S.S.B. 373
By: Armbrister (Seidlits)
05-20-95
Committee Report (Substituted)
BACKGROUND
The Public Utility Commission of Texas (PUC) was created in 1975
and is responsible for regulating electric and telephone utilities
in Texas. The key functions of PUC include certifying a utility's
initial operation, reviewing any new construction or changes to
existing facilities, setting rates, and monitoring and auditing the
operations of utilities under its jurisdiction. Currently, PUC has
oversight of investor-owned utilities, electric cooperatives, river
authorities, and local telephone companies. Cities have retained
original ratemaking authority for electric utilities and
cooperatives operating within their boundaries, but the commission
reviews these rates on an appellate basis. The commission also
reviews on appeal the rates of city utilities serving customers
outside of their city limits.
The Office of Public Utility Counsel (OPUC) was created in 1983 to
represent residential and small business consumers before PUC.
OPUC participates in many proceedings before PUC but concentrates
its efforts on telephone and electric utility rate cases having the
greatest impact on residential and small business consumers. OPUC
has participated in major rate cases, but only a percentage of all
cases before PUC since 1983.
The PUC and OPUC are subject to the sunset act and will be
abolished September 1, 1995 unless continued by the Legislature.
PURPOSE
The purpose of this bill is to continue the Public Utility
Commission of Texas and the Office of Public Utility Counsel for a
six-year period and make other statutory modifications. The
modifications proposed by this bill:
- apply standard language developed by the Sunset
Commission to the statute relating to the PUC and OPUC;
- provide the PUC with administrative penalty authority;
- transfer the administrative hearings from the PUC to the
State Office of Administrative Hearings;
- partially deregulate electric utility cooperatives;
- provide for an integrated resource planning process;
- provide for competition in the electric wholesale
market; and
- provide for other changes.
RULEMAKING AUTHORITY
In the committee's opinion, this bill grants rulemaking authority
to the Public Utility Commission in the following sections:
SECTION 1.09 - Section 1.026, Public Utility Regulatory Act of
1995, as enacted by S.B. 319, Acts of the 74th Legislature, Regular
Session, 1995; SECTION 1.10 - Section 1.028; SECTION 1.11 - Section
1.029; SECTION 1.12 - Section 1.031; SECTION 1.14 - Section 1.036;
SECTION 1.21 - Section 1.101; SECTION 1.23 - Section 1.104; SECTION
1.34 - Section 2003.047, Government Code; SECTION 2.01 - Section
2.001; SECTION 2.03 - Section 2.051; SECTION 2.04 - Section 2.052;
SECTION 2.05 - Section 2.053; SECTION 2.07 - Section 2.056; SECTION
2.08 - Section 2.057; SECTION 2.10 - Section 2.108; SECTION 2.11 -
Section 2.1511; SECTION 2.17 - Section 2.211; SECTION 2.18 -
Section 2.212. The bill grants rulemaking authority to the Office
of Public Utility Counsel in SECTION 1.18 - Section 1.0513 and
SECTION 1.20 - Section 1.053. The bill grants rulemaking authority
to the State Office of Administrative Hearings in SECTION 1.34 -
Section 2003.47, Government Code. In addition, under the general
rulemaking authority already granted to the Public Utility
Commission, rules may also be developed to implement other
provisions found in this bill.
SECTION BY SECTION ANALYSIS
SECTION 1.01. Amends Section 1.003, Public Utility Regulatory Act
of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
Regular Session, 1995 by adding Subdivisions (13A) and (18).
Limits "ratemaking proceeding" to proceedings that change rates,
but includes integrated resource planning proceedings. Defines
"trade association" for purposes of standard language developed by
the Sunset Commission regarding conflicts of interest.
SECTION 1.02. Amends Section 1.005., Public Utility Regulatory Act
of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
Regular Session, 1995. Applies standard language developed by the
Sunset Commission making the commission subject to the open
meetings law.
SECTION 1.03. Amends Subtitle A, Title I, Public Utility
Regulatory Act of 1995, as enacted by S.B. 319, Acts of the 74th
Legislature, Regular Session, 1995, by adding Section 1.006.
ENTITY, COMPETITOR, OR SUPPLIER AFFECTED IN MANNER OTHER THAN BY
SETTING OF RATES. Specifies persons affected in a manner other
than by setting of rates for purposes of conflict of interest
requirements if $10,000 or ten percent of their business is the
providing of fuel or utility-related products or services to a
regulated or unregulated provider of telecommunications or electric
services or an affiliate.
SECTION 1.04. Amends Sections 1.021(c) and (d), Public Utility
Regulatory Act of 1995, as enacted by S.B. 319, Acts of the 74th
Legislature, Regular Session, 1995. Applies standard language
developed by the Sunset Commission for the governor to appoint the
presiding officer of the commission. Also updates standard Sunset
language regarding non-discriminatory appointments to commission.
SECTION 1.05. Amends Section 1.022, Public Utility Regulatory Act
of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
Regular Session, 1995. Updates the sunset review date for the
Public Utility Commission and Office of Public Utility Commission
to 2001 which provides for a six-year review.
SECTION 1.06. Amends Section 1.023, Public Utility Regulatory Act
of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
Regular Session, 1995. (a) Removes age requirement for commission
membership and updates standard Sunset language regarding public
membership on the commission.
(b) Removes requirement for commission members to post a
bond.
(c) Specifies that conflict of interest provisions apply to
direct competitors of utilities.
(d) Updates standard language developed by the Sunset
Commission prohibiting lobbyists from serving on the commission or
as the public utility counsel or as general counsel to the
commission.
(e) Applies standard language developed by the Sunset
Commission prohibiting conflicts of interest for commission members
and expands it to apply to the executive director and general
counsel; persons connected with companies supplying fuel or
utility-related products or services to regulated or unregulated
utilities; persons with more than a ten percent or $10,000 interest
in a related business or other affected entity; persons receiving
funds from the commission; and persons with an interest in a mutual
or retirement fund with more than ten percent of its holdings in a
utility or utility competitor or supplier.
(f) Provides for persons otherwise ineligible to serve
because of interest in a related business or other affected entity
to serve if they notify the attorney general and commission of the
reason for ineligibility and divest ownership or control.
(g)-(h) Applies standard language developed by the Sunset
Commission prohibiting certain trade association representatives or
their spouses from serving on the commission or being employed at
a salary group 17 or above.
SECTION 1.07. Amends Subsections (a),(d), and (e), Section 1.024,
Public Utility Regulatory Act of 1995, as enacted by S.B. 319, Acts
of the 74th Legislature, Regular Session, 1995. Adds reference to
utility competitors to existing provisions regarding prohibited
conduct by commission members and employees.
SECTION 1.08. Amends Section 1.025, Public Utility Regulatory Act
of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
Regular Session, 1995. Expands existing revolving door provisions
to include employees of the State Office of Administrative Hearings
(SOAH) involved in hearing utility cases. Updates standard
language developed by the Sunset Commission regarding providing
information on standards of conduct for commissioners and
employees.
SECTION 1.09. Amends Section 1.026, Public Utility Regulatory Act
of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
Regular Session, 1995. Updates standard language developed by the
Sunset Commission regarding grounds for removal of commissioners.
Requires the notification of the governor and attorney general of
any potential ground for removal of a commission member. Applies
standard language developed by the Sunset Commission regarding
training requirements for commissioners.
SECTION 1.10. Amends Subsections (a),(b), and (e), Section 1.028,
Public Utility Regulatory Act of 1995, as enacted by S.B. 319, Acts
of the 74th Legislature, Regular Session, 1995. Deletes language
regarding required staffing and organization of the agency.
Applies standard language developed by the Sunset Commission
regarding separation of commission and staff functions.
SECTION 1.11. Amends Section 1.029, Public Utility Regulatory Act
of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
Regular Session, 1995. Updates standard language developed by the
Sunset Commission regarding the development of an intra-agency
career ladder. Updates standard language developed by the Sunset
Commission regarding employee performance evaluations. Updates
standard language developed by the Sunset Commission regarding an
agency equal employment policy that is annually updated, reviewed
by the Texas Commission on Human Rights, and filed with the
governor's office.
SECTION 1.12. Amends Section 1.031, Public Utility Regulatory Act
of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
Regular Session, 1995. Applies standard language developed by the
Sunset Commission regarding opportunity for public input before the
commission.
SECTION 1.13. Amends Section 1.035(a), Public Utility Regulatory
Act of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
Regular Session, 1995. Updates standard language developed by the
Sunset Commission requiring the commission to prepare an annual
financial report that meets the reporting requirements in the
appropriations act.
SECTION 1.14. Amends Section 1.036, Public Utility Regulatory Act
of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
Regular Session, 1995. Updates standard language developed by the
Sunset Commission regarding notice of complaint procedures.
Applies standard language developed by the Sunset Commission
requiring the commission to comply with laws relating to program
and facility accessibility and requiring the commission to develop
a plan for non-English speaking persons to have access to the
commission's programs.
SECTION 1.15. Amends Section 1.051, Public Utility Regulatory Act
of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
Regular Session, 1995 . (b) Applies standard language developed by
the Sunset Commission regarding non-discriminatory appointments to
the position of public utility counsel.
(d) Applies standard language developed by the Sunset
Commission prohibiting conflicts of interest for the public utility
counsel and expands it to include persons connected with
unregulated utilities and other affected entities; persons with
more than a ten percent or $10,000 interest in a related business
or other affected entity; persons receiving funds from the
commission; and persons with an interest in a mutual or retirement
fund with more than ten percent of its holdings in utility or a
utility competitor or supplier.
(e) Updates standard language developed by the Sunset
Commission prohibiting lobbyists from serving as the public utility
counsel.
(f) Applies standard language developed by the Sunset
Commissions prohibiting trade association representatives or their
spouses from serving as the public utility counsel or being
employed at a salary group 17 or above.
(g) Provides for persons otherwise ineligible to serve as the
public utility counsel because of interest in a related business or
other affected entity to serve if they notify the attorney general
and the commission of the reason for ineligibility and divest
ownership or control.
SECTION 1.16. Amends Subtitle C, Title I, Public Utility
Regulatory Act of 1995, as enacted by S.B. 319, Acts of the 74th
Legislature, Regular Session, 1995, by adding Section 1.0511.
GROUNDS FOR REMOVAL. Applies standard language developed by the
Sunset Commission regarding grounds for removal of the public
utility counsel. Affirms that an action of the office is valid
even if it is taken when a ground for removal of the public counsel
exists.
SECTION 1.17. Amends Subtitle C, Title I, Public Utility
Regulatory Act of 1995, as enacted by S.B. 319, Acts of the 74th
Legislature, Regular Session, 1995, by adding Section 1.0512.
PROHIBITION OF EMPLOYMENT OR REPRESENTATION. Applies two-year
revolving door provision to the public utility counsel and one-year
revolving door for office employees for employment with a public
utility in the scope of their responsibility while at the office.
Prohibits the counsellor and employees from representing clients
before the commission in matters in which they were personally
involved while they were with the office.
SECTION 1.18. Amends Subtitle C, Title I, Public Utility
Regulatory Act of 1995, as enacted by S.B. 319, Acts of the 74th
Legislature, Regular Session, 1995, by adding Section 1.0513.
INFORMATION; ACCESSIBILITY. Updates standard language developed by
the Sunset Commission that requires the office to prepare an annual
financial report that meets the reporting requirements in the
appropriations act. Applies standard language developed by the
Sunset Commission regarding information about office's functions.
Applies standard language developed by the Sunset Commission
requiring the office to comply with laws relating to program and
facility accessibility and requiring the office to develop a plan
for non-English speaking persons to have access to the commission's
programs.
SECTION 1.19. Amends Section 1.052, Public Utility Regulatory Act
of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
Regular Session, 1995. Prohibits the public utility counsel from
having an interest in a utility competitor, supplier, or other
affected entity for two years following termination of employment.
SECTION 1.20. Amends Section 1.053, Public Utility Regulatory Act
of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
Regular Session, 1995. Applies standard language developed by the
Sunset Commission regarding the development of an intra-agency
career ladder, employee performance evaluations, a merit pay
system, an equal employment policy statement, and notice to
employees of standards of conduct.
SECTION 1.21. Amends Section 1.101, Public Utility Regulatory Act
of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
Regular Session, 1995. Specifies that the commission's rulemaking
authority extends to practice before the State Office of
Administrative Hearings (SOAH). Requires the commission to adopt
rules to allow administrative law judges to limit the length of
cases, limit discovery, identify issues and facts subject to
discovery, and group parties (other than OPUC) to facilitate cross
examination. Specifies that hearings not conducted by one or more
commissioners must be heard by SOAH and authorizes the commission
to delegate matters to the utility division of SOAH.
SECTION 1.22. Amends Section 1.102(b), Public Utility Regulatory
Act of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
Regular Session, 1995. Deletes the requirement for the commission
to audit each utility at least once every ten years.
SECTION 1.23. Amends Subtitle D, Title I, Public Utility
Regulatory Act of 1995, as enacted by S.B. 319, Acts of the 74th
Legislature, Regular Session, 1995, by adding Section 1.104.
SETTLEMENTS. Requires the commission to adopt rules governing
settlements to resolve contested cases, while maintaining each
party's right to hearing before the commission and judicial review
of issues that remain in dispute.
SECTION 1.24. Amends Section 1.202, Public Utility Regulatory Act
of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
Regular Session, 1995. Adds a provision authorizing the PUC to
require reports from utilities relating to utility-affiliate
transactions to the extent that the transactions are subject to the
commission's jurisdiction. Deletes provision for the railroad
commission to review and approve gas utilities' applications to
purchase natural gas from producing affiliates. Deletes provision
for the railroad commission to review and approve gas utilities'
applications to purchase natural gas from producing affiliates.
Reletters sections.
SECTION 1.25. Amends Section 1.251(b), Public Utility Regulatory
Act of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
Regular Session, 1995. Adds language requiring the PUC to consider
whether a proposed utility sale will adversely affect the health
and safety of customers or employees, will result in loss of Texas
jobs or a decline in service, and whether the utility will recoup
its investment and whether the transaction is in the public
interest.
SECTION 1.26. Amends Section 1.271, Public Utility Regulatory Act
of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
Regular Session, 1995. Specifies that accounts or records obtained
by PUC related to sales of electrical energy at wholesale by an
affiliate are confidential and exempt from the open records law.
SECTION 1.27. Amends Subtitle I, Title I, Public Utility
Regulatory Act of 1995, as enacted by S.B. 319, Acts of the 74th
Legislature, Regular Session, 1995, by adding Section 1.3215.
ADMINISTRATIVE PENALTY. Authorizes PUC to impose administrative
penalties up to $5,000 for violations of the Act or a PUC rule or
order. Establishes criteria for determining the amount of
penalties and procedures for assessing penalties. Specifies that
persons have 30 days after receiving a notice of violation to
correct the violation before a penalty may be assessed. a penalty
will not be imposed on accidental or inadvertent violations or
other violations that have been corrected or is corrected no later
than 30 days after receipt of a notice of violation. Specifies
that persons who may be assessed a penalty have the burden of
proving that the violation has been corrected and that the
violation was accidental or inadvertent. Specifies that penalty
amounts are deposited into general revenue and authorizes the
executive director to delegate powers or duties under this section.
SECTION 1.28. Repeals Section 1.324, Public Utility Regulatory Act
of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
Regular Session, 1995. Deletes civil penalty provision for
violations of the Act under the jurisdiction of the Railroad
Commission that result in pollution.
SECTION 1.29. Amends Section 1.351(b), Public Utility Regulatory
Act of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
Regular Session, 1995. Shifts authority from the commission to the
legislature for adjusting utility gross receipts assessment.
SECTION 1.30. Amends Section 1.354, Public Utility Regulatory Act
of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
Regular Session, 1995. Removes language for the commission to
notify comptroller of adjustment of assessment. Applies standard
language developed by the Sunset Commission that requires the
commission's and the office's funds to be managed in accordance
with the State Funds Reforms Act.
SECTION 1.31. Amends Section 1.355, Public Utility Regulatory Act
of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
Regular Session, 1995. GRANTS OF FEDERAL FUNDS. Adds language
authorizing the commission to receive and spend federal funds from
grants or other forms of financial assistance and exempts special
accounts established under this section from funds consolidation.
SECTION 1.32. Amends Subtitle J, Title I, Public Utility
Regulatory Act of 1995, as enacted by S.B. 319, Acts of the 74th
Legislature, Regular Session, 1995, by adding Section 1.357.
APPROVAL OF BUDGET. Specifies that PUC's budget is subject to
legislative approval as part of General Appropriations Act.
SECTION 1.33. Amends Subsections (a) and (b), Section 1.401,
Public Utility Regulatory Act of 1995, as enacted by S.B. 319, Acts
of the 74th Legislature, Regular Session, 1995. Updates standard
Sunset provision requiring the PUC to keep specified information,
but not a file, about each complaint it receives and requires PUC
to keep file about each written complaint that it has authority to
resolve. Requires PUC to provide information about its policies
and procedures regarding complaint investigation and resolution.
SECTION 1.34. Amends Subchapter C, Chapter 2003, Government Code,
by adding Section 2003.047. UTILITY DIVISION. (a) Requires SOAH
to establish a utility division to perform contested case hearings
for the commission.
(b) Requires the division to hear cases not conducted by one
or more commissioners.
(c) Specifies that only the utility division may hear cases
for the commission.
(d) Specifies that administrative law judges must be licensed
attorneys with at least five years general experience or three
years experience in utility regulatory law.
(e) Establishes the process for the commission to identify
issues for the administrative law judge to address.
(f) Requires joint rules between the commission and SOAH to
provide for certifying to the commission of issues it is required
by law to determine.
(g) Allows the commission to change finding of fact or
conclusion of law or to vacate or modify an order issued by an
administrative law judge if it determines that the administrative
law judge did not properly apply or interpret applicable law,
commission rules or policies, or prior administrative decisions;
the administrative law judge issued a finding of fact not supported
by preponderance of evidence; or commission policy or prior
administrative decision on which the administrative law judge
relied is incorrect or should be changed.
(h) Requires the commission to state in writing specific
reason and legal basis for changing finding or conclusion.
(i) Authorizes the administrative law judge to impose
sanctions against parties in contested cases for specified actions.
(j) Specifies sanctions including limiting discovery, charging
expenses of discovery, and punishing offending party to same extent
as a district court.
(k) Requires hearings conducted by SOAH for the commission to
be held in hearing rooms provided by the commission and requires
the commission to provide the utility division access to its
computer systems, databases, and library resources.
(l) Specifies that SOAH is to charge the commission a fixed
annual fee, negotiated biennially and subject to the governor's
approval, rather than an hourly rate for services provided by the
utility division.
SECTION 1.35. Establishes a task force to oversee the transfer of
the hearings division from the commission to SOAH.
SECTION 1.36. Specifies transfer of existing hearings personnel
and equipment, excluding central records on September 1, 1995 and
provides employment protections for one year thereafter. Specifies
other implementation provisions relating to the transfer of the
hearings division.
SECTION 1.37. Specifies that provisions related to administrative
penalties apply only to violations occurring on or after the
effective date of the act.
SECTION 1.38. Specifies that settlement process applies only
proceedings in which a final order has not been issued before the
effective date of this Act and does not apply to an electric
utility merger proceeding filed before January 1, 1995 in which a
final order has not been issued.
SECTION 1.39. Specifies that standard Sunset language regarding
requirements for membership on the commission or employment as
executive director or general counsel applies only to persons
appointed or hired on or after the effective date.
ARTICLE 2
SECTION 2.01. Amends Subtitle A, Title II, Public Utility
Regulatory Act of 1995, as enacted by S.B. 319, Acts of the 74th
Legislature, Regular Session, 1995, by amending Section 2.001 and
adding Sections 2.0011 and 2.0012.
Sec. 2.001. LEGISLATIVE POLICY CONCERNING REGULATION OF THE
ELECTRIC UTILITY INDUSTRY. (a) Sets forth the legislative findings
and purpose relating to protection of the public interest inherent
in the rates and services of public utilities. States that the
legislature finds that the wholesale electric industry through
federal legislative, judicial, and administrative actions is
becoming a more competitive industry which does not lend itself to
traditional electric utility regulatory rules, policies, and
principles and, therefore, requires new rules, policies, and
principles in order to protect the public interest in a more
competitive marketplace.
(b) Authorizes the regulator to approve wholesale tariffs or
contracts containing charges that are less than rates approved by
the regulator, but equal to or greater than the utility's marginal
cost. Specifies that the charges must be in accordance with the
principles of this Act and may not be unreasonably preferential,
prejudicial, discriminatory, predatory, or anticompetitive.
(c) Specifies what the methodology for calculating the
marginal cost will include.
(d) Requires the commission to ensure that the utility's
allocable costs of serving customers paying discounted rates under
this section or Section 2.051 are not borne by the utility's other
customers. Provides that mark-ups may only be recovered from
ratepayers if the commission finds that such relief is necessary to
maintain the financial integrity of the utility.
Sec. 2.0011. Redefines "public utility" and "utility."
Defines "exempt wholesale generator," "power marketer," "qualifying
cogenerator" and "qualifying small power producer," "qualifying
facility," "rate," and "transmission service."
Sec. 2.0012. CERTAIN RIVER AUTHORITIES. (a) Prohibits the
commission from having the authority to regulate the revenue
requirements, rates, fuel costs, fuel charges, or fuel acquisitions
that are related to the generation and sale of electricity at
wholesale and not to ultimate consumers by a river authority
operating steam generating plants. Defines "public utility,"
"retail public utility," and "utility."
(b) Requires this section to constitute full authority for any
river authority operating steam generating plants to acquire,
finance, construct, rebuilt, repower, and use new and existing
power plants and assets, for the sale of electricity exclusively at
wholesale and not at retail to any purchaser within San Saba,
Llano, Burnet, Travis, Bastrop, Blanco, Colorado, and Fayette
counties and any purchaser within the area served by the river
authority on January 1, 1975.
(c) Requires this section to constitute full authority for a
corporation described in Subsection (a) to acquire, finance,
construct, rebuild, repower, operate, or sell facilities directly
related to the generation of electricity and sell the output of
such facilities, provided that nothing in this section shall
preclude the corporation from purchasing transmission and related
services from such river authority. Requires this project to be
subject to the provisions of all applicable laws other than this
Act and the property, gross receipts, and income of such
corporation acting on behalf of a river authority to be subject to,
and such corporation shall pay, taxes and assessments of the
federal government, this state, or any municipal corporation or
other political subdivision or taxing district of this state on the
same basis as an exempt wholesale generator. Prohibits any
proceeds from the sale of any obligations, other than as may be
available to investor-owned utilities or exempt generators, from
being used to finance the construction, acquisition, rebuilding, or
repowering of any facilities for the generation of electricity by
the corporation.
(d) Prohibits this section from authorizing the river
authority to perform the listed actions on generating plants whose
aggregate capacity is greater than 5,000 megawatts to serve
purchasers within the area served by the river authority on January
1, 1975. Authorizes any river authority subject to this section to
provide retail service only to those retail customers served by the
river authority or corporation acting on behalf of the river
authority on September 1, 1995.
(e) Prohibits anything in this section from limiting the
powers granted a river authority in its enabling legislation and
other applicable law.
SECTION 2.02. Amends Subtitle A, Title II, Public Utility
Regulatory Act of 1995, as enacted by S.B. 319, Acts of the 74th
Legislature, Regular Session, 1995, by adding Section 2.003.
Sec. 2.003. SCOPE OF COMPETITION. Requires the commission to
report to the legislature before January 15 of each odd-numbered
year on the scope of competition in electric markets and the impact
of competition and industry restructuring on customers. Requires
the report to include certain information and recommendations.
SECTION 2.03. Amends Section 2.051, Public Utility Regulatory
Act of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
Regular Session, 1995. INTEGRATED RESOURCE PLANNING. (a) Requires
the commission, by rule, to develop an integrated resources
planning process to provide reliable energy service at the lowest
reasonable system cost. Sets forth the issues the commission is
required to consider in addition to direct costs in determining the
lowest reasonable system cost of an electric utility's plan.
(b) Requires the commission, by rule, to adopt and update a
statewide integrated resource plan that includes the commission's
long-term goals. Requires the commission to send a report on the
plan to the governor and notify each public utility of the approval
of the statewide plan. Requires the commission to make the report
available to the public.
(c) Sets forth requirements for the report on the statewide
plan.
(d) Requires the commission to consider the different
capacities of small and large utilities.
(e) Requires generating public utilities and non-generating
public utilities planning to construct generating resources to
submit to the commission a preliminary integrated resource plan
(preliminary plan) every three years covering a 10-year period.
Requires the commission, by rule, to establish certain criteria and
authorizes it to define other requirements regarding the
preliminary plan.
(f) Sets forth required contents for a preliminary plan.
(g) Requires a municipally owned utility to submit to the
commission a report containing all of the information required in
a preliminary plan, but specifies that the utility not otherwise be
subject to the requirements of this section.
(h) If the utility's preliminary plan does not include a
proposed solicitation for demand-side or supply-side resources,
then the preliminary plan is required to be filed with the
commission so that the commission may compile the report required
in Subsection (c) of this section. Specifies that only if the
utility's preliminary plan includes a proposed solicitation for
demand-side or supply-side resources is the commission authorized,
on its own or the motion of a utility or an affected person, to
convene a public hearing on the preliminary plan. Authorizes any
interested party to intervene, present evidence, and cross-examine
witnesses at the hearing regarding the contents and adequacy of the
preliminary plan. Limits discovery to certain issues. Provides
that a hearing is not required for a plan filed by a river
authority or generating electric cooperative that does not intend
to build a new generating plant or for a plan filed by a
municipally owned public utility.
(i) Requires the commission to determine after the hearing
whether the preliminary plan meets certain criteria.
(j) Requires the commission to issue an interim order on the
preliminary plan within 180 days after the plan's filing. Requires
the commission to approve, modify, or remand the plan for
additional proceedings. Authorizes the 180-day period to be
extended for a period up to 30 days for extenuating circumstances
encountered in the development and processing of an initial plan,
if the circumstances are explained and agreed on by the
commissioners.
(k) Requires the utility to conduct solicitations for
demand-side and supply-side resources. Authorizes the utility to
take certain actions in addition to soliciting resources from
unaffiliated third parties.
(l) Requires each bidder to submit two copies of its bid to
the commission. Requires the commission to ensure that the utility
has access to all bids at the same time. Requires the commission
to keep a copy of each bid submitted to determine whether the
utility complied with the criteria established for conduct of the
solicitation. Provides that a bid is confidential and not subject
to the open records law.
(m) Requires the utility, if the utility wants to use a
proposed demand-side management program, to prepare a bid
reflecting that resource. Requires the bid to comply with the
solicitation, evaluation, selection, and rejection criteria
specified in the preliminary plan. Prohibits the utility from
giving preferential treatment to a bid prepared under this
subsection.
(n) Requires the utility to evaluate each bid submitted and to
negotiate necessary contracts. Does not require the utility to
accept a bid and authorizes the utility to reject any or all bids
in accordance with the criteria specified in the preliminary plan.
Authorizes the utility to apply for a certificate of convenience
and necessity (certificate) for a utility-owned resource addition
if the results of the solicitations and contract negotiations do
not meet the supply-side needs in the plan.
(o) Requires the utility, after conducting solicitations and
negotiating contracts, to submit to the commission a proposed final
integration resource plan including certain items.
(p) Requires the commission, on request by any affected person
and within 90 days of filing its final plan, to convene a public
hearing on the proposed final plan. Authorizes any interested
party to intervene, present evidence, and cross-examine witnesses
regarding the final plan. Specifies that parties are not allowed
to litigate or conduct discovery on issues that were litigated or
could have been litigated in connection with the preliminary plan.
Authorizes the commission to issue an order for access to the
books, accounts, memoranda, contracts, or records of any exempt
wholesale generator or power marketer selling energy at wholesale
to a utility, if the examination is required for the effective
discharge of the commission's regulatory responsibilities, with an
exception.
(q) Requires the commission to determine after the hearing
whether the final plan meets certain criteria.
(r) Requires the commission to consider certain criteria in
determining whether to certify a supply-side or demand-side
contract that results from solicitations. Prohibits the commission
from certifying contracts for new purchases of power by a utility
unless the utility has determined after making certain
considerations, that the contract would not impair the reliability
of electric systems affected by the purchase, and the purchase can
reasonably be expected to produce benefits to customers of the
purchasing utility. Requires the commission, if the contract is
with an affiliate, to determine whether the utility treated the bid
in the same manner as others and whether, in connection with such
purchase, whether the transaction meets certain criteria. Requires
the regulatory authority to consider payments made to be reasonable
and necessary operating expenses of the public utility in setting
a public utility's rates for a period during which a certified
contract is effective. Authorizes the regulatory authority to
provide for monthly recovery of the approved costs of the contract
as those costs are incurred.
(s) Requires the commission to consider the effect of granting
a certificate on the recipient and on any public utility of the
same kind already serving the proximate area. Requires the
commission to consider other factors if the certificate is granted.
Requires the commission to grant the certificate as part of the
approval of the final plan if it finds that certain circumstances
exist.
(t) Requires the commission to issue a final order on the plan
within 180 days after the utility files the proposed final plan.
Requires the commission to approve, modify, or remand the final
plan for additional proceedings.
(u) Requires the commission to adopt rules allowing a utility
to add new or incremental resources outside the solicitation
process.
(v) Requires the commission to establish rules and guidelines
that will promote the development of renewable energy technologies
consistent with the guidelines of the planning process.
(w) Authorizes the commission to take certain actions in
carrying out its duties related to the planning process.
(x) Sets forth examples of new or incremental resources
outside the solicitation process the utility, including a
nongenerating utility, is authorized to add.
(y) Provides that the addition of new or incremental resources
does not require an amendment to the utility's integrated resource
plan.
(z) Provides that the submission of a bid from a qualifying
facility has certain effects, regardless of whether that bid is
accepted or rejected and only with respect to the capacity need for
which the bid has been submitted. Sets forth requirements for
determining a utility's avoided capacity costs. Prohibits anything
in this subsection from affecting the validity of any contract
entered into between a qualifying facility and an electric utility
for any purchase.
(aa) Defines "utility" in this section.
(bb) Provides that nongenerating utilities not planning to
construct generating resources are not required to submitted a
statewide integrated resource plan to the commission. Requires the
utility to conduct a solicitation for resources if such a utility
seeks to purchase certain amounts of megawatts from a wholesale
power supplier other than its existing power supplier, but not for
a purchase from its existing supplier. Authorizes new or
incremental resources to be added outside the solicitation process
as provided in Subsection (x). Authorizes the commission to review
the reasonableness of any contract for resources resulting from the
solicitation on the utility's request. Requires the commission to
certify a contract found to be reasonable. Requires the commission
to make its determination within 90 days after the date the
proposed contract is submitted. Provides that nothing in this
subsection is intended to alter or amend existing wholesale power
supply contracts.
(cc) Requires the commission to make final reconciliation of
the costs recovered through those cost recovery factors authorized
by the commission. Requires the commission to adopt rules
regarding matters necessary to perform the reconciliation. Sets
forth requirements for the reconciliation.
(dd) Specifies that an integrated resource plan is not
required prior to the issuance of a certificate of convenience and
necessity for the construction of generating facilities if certain
conditions are met. This provides for an orderly transition to an
integrated resource planning process.
(ee) To the extent that the commission requires a utility to
reimburse a municipality for expenses the municipality incurred for
its participation in the integrated resource planning process, this
section requires the commission, in approving a utility's
integrated resource plan, to authorize a surcharge to be included
in the utility's rates to recover a municipality's expenses for
participating in the integrated resource plan proceeding.
Deletes existing Section 2.051 regarding electrical energy
forecasts.
SECTION 2.04. Amends Section 2.052, Public Utility Regulatory Act
of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
Regular Session, 1995. Authorizes the regulator to approve retail
tariffs or contracts containing charges that are less than rates
approved by the regulator, but equal to or greater than the
utility's marginal cost. Specifies that the charges must be in
accordance with the principles of this Act and may not be
unreasonably preferential, prejudicial, discriminatory, predatory,
or anticompetitive. Specifies what the methodology for calculating
the marginal cost will include.
SECTION 2.05. Amends Subtitle B, Title II, Public Utility
Regulatory Act of 1995, as enacted by S.B. 319, Acts of the 74th
Legislature, Regular Session, 1995, by adding Section 2.053.
EXEMPT WHOLESALE GENERATORS AND POWER MARKETERS. (a) Authorizes
an exempt wholesale generator or power marketer to sell electric
energy only at wholesale.
(b) Sets forth the commission's jurisdiction over exempt
wholesale generators and power marketers that sell electric energy
in this state.
(c) Requires each exempt wholesale generator and power
marketer to register with the commission or provide proof that it
registered with the Federal Energy Regulatory Commission (FERC) or
been authorized by the FERC to sell electric energy at market-based
rates. Sets forth the authorized procedure for registration
including information the commission prescribes by rule.
SECTION 2.06. Amends Subtitle B, Title II, Public Utility
Regulatory Act of 1995, as enacted by S.B. 319, Acts of the 74th
Legislature, Regular Session, 1995, by adding Section 2.054.
EXEMPT WHOLESALE GENERATOR AND POWER MARKETER AFFILIATES. (a)
Authorizes an affiliate to be an exempt wholesale generator or
power marketer and sets forth authorized actions for the affiliate.
(b) Prohibits a facility from being sold, transferred, or
considered an eligible facility if a rate or charge for or in
connection with the construction of a facility or for electric
energy produced by a facility other than any portion of a rate or
charge which represents recovery of the cost of a wholesale rate or
charge was in effect as of the date of enactment of this section.
Authorizes the commission to allow such facility to undergo any of
these actions only if such sale or transfer will benefit ratepayers
of the utility taking the action, is in the public interest, and
complies with state law.
(c) Specifies that any transfer of assets from a utility to an
affiliated exempt wholesale generator or power marketer shall be
valued at the greater of net book cost or fair market value.
Specifies that any transfer of assets from an exempt wholesale
generator or power marketer to an affiliated public utility shall
be valued at the lesser of net book cost or fair market value.
Requires the commission to order the utility to adjust its rates so
that its tariffs reflect benefits from the proceeds of the sale and
exclude any costs associated with the transferred facility at the
time the transfer is approved.
SECTION 2.07. Amends Subtitle B, Title II, Public Utility
Regulatory Act of 1995, as enacted by S.B. 319, Acts of the 74th
Legislature, Regular Session, 1995, by adding Section 2.056.
TRANSMISSION SERVICE. (a) Authorizes the commission to require a
utility to provide transmission service (service) at wholesale to
another utility, a qualifying facility, an exempt wholesale
generator, or a power marketer and to determine whether the terms
for the service are reasonable. Authorizes the commission to
require transmission service at wholesale in a proceeding not
related to approval of an integrated resource plan. Prohibits the
commission from issuing a decision or rule relating to service that
is contrary to an applicable decision of a federal regulatory
agency.
(b) Requires the commission to appoint, with the governor's
advice and consent, a five-person interstate connection committee
to recommend the most economical, reliable, and efficient means to
synchronously interconnect the alternating current electric
facilities of electric utilities within the Electric Reliability
Council of Texas reliability area to the alternating current
electric facilities of electric utilities within the Southwest
Power Pool reliability area.
SECTION 2.08. Amends Subtitle B, Title II, Public Utility
Regulatory Act of 1995, as enacted by S.B. 319, Acts of the 74th
Legislature, Regular Session, 1995, by adding Section 2.057.
WHOLESALE COMPETITION. (a) Requires a public utility that owns or
operates transmission facilities to provide service comparable to
the rates, terms of access, and conditions of the utility's use of
its system. Requires the commission to ensure that the utilities
provide nondiscriminatory access to service. Requires the
commission to adopt rules within 180 days of the effective date of
this Act relating to wholesale transmission service, rates, and
access. Requires the rules to be consistent with the standards in
this section, to not be contrary to federal law, and to require
services that are not less than the transmission services the
Federal Energy Regulatory Commission may require. Also requires
the rules to provide that all ancillary services associated with a
utility's discounted wholesale sales to be provided by the utility
at the same prices and under the same terms and conditions as those
services provided to third persons. Requires all public utilities
that own or operate transmission facilities to file tariffs
implementing such rules within a certain time period. Requires such
tariffs to be filed with the appropriate state or federal
regulatory agency having jurisdiction over the transmission service
of the entity filing the tariff.
(b) Requires the commission to adopt rules relating to the
registration and reporting requirements of qualifying facilities,
exempt wholesale generators, and power marketers.
(c) Requires the commission to ensure that the costs of
transmission are not borne by the utility's other customers by
requiring the utility to recover from the entity for which the
transmission is provided all reasonable costs incurred.
(d) Authorizes the commission to require that parties to a
dispute over the service engage in an alternative dispute
resolution before seeking a resolution from the commission.
(e) Requires the commission to report to the 75th Legislature
on methods or procedures for quantifying the magnitude of stranded
investment, procedures for allocating costs, and the acceptable
methods of recovering stranded costs.
(f) Authorizes affiliates of public utilities, exempt
wholesale generators, qualifying facilities, and all other
providers of generation to compete for the business of selling
power. Authorizes a public utility to purchase power from an
affiliate. Prohibits a public utility from granting preference to
any person in connection with the utility's purchase or sale of
electric energy at wholesale or other utility services.
(g) Provides for one pilot program to provide transmission
service for transactions between end users of electricity and
qualifying facilities, exempt wholesale generators, power
marketers, or public utilities. Requires the commission to ensure,
as feasible, that all classes of customers, including residential,
commercial, and other customer classes, are provided a full
opportunity to participate in the pilot program. Requires the
pilot program to remain in effect for an initial period of six
years from the date the commission issues a final order initiating
the program. Requires the commission to evaluate the program and
report to the legislature on its results by January 1, 2001.
(h) Defines "public utility" for this section.
SECTION 2.09. Amends Section 2.105, Public Utility Regulatory Act
of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
Regular Session, 1995, by adding Subsection (c). Requires the
utility to provide to each municipality having original
jurisdiction notice of intent to file the statement. Authorizes
the municipality to request that the utility file a statement of
intent within 30 days of receiving the utility's notice and, upon
request, requires the utility to file the statement with the
municipality, commission, and office simultaneously.
SECTION 2.10. Amends Section 2.108(g), Public Utility Regulatory
Act of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
Regular Session, 1995. Adds an exception for interim rate orders
set by the commission to be prospective if the order is necessary
to provide the utility the opportunity to avoid confiscation
between the date of filing of a petition for review with the
commission and the date of a final order setting rates. Requires
the commission to order interim rates on a showing by the utility
that it has experienced confiscation during that period and defines
confiscation. Requires the utility concerned to refund or credit
against future bills any excess sums collected during the period of
interim rates.
SECTION 2.11. Amends Subtitle D, Title II, Public Utility
Regulatory Act of 1995, as enacted by S.B. 319, Acts of the 74th
Legislature, Regular Session, 1995, by adding Section 2.1511.
Sec. 2.1511. MARK-UP. Authorizes any cost recovery factor
established for recovery of purchased power costs to include costs
incurred by the utility for the purchase of capacity and energy,
together with a mark-up, as determined by the commission, to
reasonably compensate the utility for financial risks.
SECTION 2.12. Amends Section 2.152, Public Utility Regulatory Act
of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
Regular Session, 1995, by adding Subsection (e). Authorizes
reasonable costs of participating in a proceeding to be allowed,
but not exceeding the regulator's approved amount.
SECTION 2.13. Amends Section 2.154(b), Public Utility Regulatory
Act of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
Regular Session, 1995. Requires the regulator to treat customer
names and addresses, prices, individual customer contracts, and
expected load and usage data as highly sensitive trade secrets not
subject to disclosure under the open records law.
SECTION 2.14. Amends Subtitle E, Title II, Public Utility
Regulatory Act of 1995, as enacted by S.B. 319, Acts of the 74th
Legislature, Regular Session, 1995, by adding Section 2.2011. (a)
Exempts an electric cooperative corporation (cooperative) that
provides retail electric utility service at distribution voltage
from rate regulation if a majority of the members vote to approve
the exemption (exemption election) and the cooperative sends notice
of the action to each applicable regulator. Sets forth required
procedure for a cooperative that wants to hold an exemption
election.
(b) Prohibits any regulator from fixing and regulating the
rates of a cooperative that has made an exemption election, except
as provided for the commission. Provides that the commission has
exclusive original jurisdiction in all of the proceedings initiated
under Subsection (g) or (i).
(c) Sets forth ways a cooperative may change its rates.
(d) Sets forth requirements for the notice of a rate change.
Prohibits requiring a cooperative to include additional information
in the notice.
(e) Requires the cooperative to make available to a member of
the cooperative a copy of any written opposition to the rate
change.
(f) Requires the cooperative to file tariffs with the
commission. Requires the commission to approve the tariffs within
a certain period if the cooperative complies with Subsection (c),
with an exception. Sets forth the date that the rate change takes
effect if approved or not required to be reviewed. Provides that
the rates of a cooperative are not subject to review, with
exceptions.
(g) Requires the commission to review a rate change if within
a certain time period the commission receives a petition requesting
review signed by certain parties.
(h) Requires a person to notify the cooperative when a person
files a petition.
(i) Authorizes the commission on its own motion to review the
rates if the commission first finds that there is good cause to
believe the cooperative is earning more than a reasonable return on
certain revenue.
(j) Requires the commission to conduct a review in accordance
with Section 2.212 and the other applicable rate-setting principles
of this subtitle, with exceptions.
(k) Requires the cooperative to file with the commission a
copy of the cost-of-service study within a certain time period if
reviewed. Sets forth requirements for the commission in conducting
the review. Requires the cooperative to estimate the cost of
providing service to a class and to base revenues on estimates of
billing units if the cooperative proposes a rate class solely for
a new customer.
(l) Provides that the rate for each class for which review has
been requested is suspended during the review. Sets forth
requirements for the commission to dismiss the petition or
disapprove the rate change. Provides that the cooperative's rate
is approved and may be placed into effect if the commission fails
to make its determination within 45 days of receiving the
cost-of-service study.
(m) Authorizes the cooperative members to revoke the exemption
election or to elect to again be exempt from rate regulation by
majority vote, with an exception.
(n) Provides that this section does not affect the application
of other provisions of this Act not directly related to rates or to
the commission's authority to file reports or rules adopted by the
commission. Requires a service fee, rule, or regulation to comply
with commission rules applicable to all electric utilities.
Authorizes the commission to determine whether an electric
cooperative has unlawfully charged, collected, or received a rate
for service.
(o) Authorizes a single customer to seek a review of the rates
of an electric cooperative if the customer consumes or purchases
more than a certain amount within a given time period. Provides
that a right conferred by this subsection is in addition to rights
that the customer has under Subsection (g) and not in limitation or
in lieu of those rights.
SECTION 2.15. Amends Section 2.203(b), Public Utility Regulatory
Act of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
Regular Session, 1995. Makes conforming changes.
SECTION 2.16. Amends Section 2.208(b), Public Utility Regulatory
Act of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
Regular Session, 1995. (b) Transactions with Affiliated Interests.
Provides that a finding of the reasonableness of a payment to an
affiliated interest is not required before the payment is included
in the utility's charges to consumers if there is a method for
refunding the charge pending the finding of reasonableness.
Provides that no finding of reasonableness is required for charges
related to the utility's integrated resource plan. Deletes a
provision setting forth requirements for setting the price paid for
natural gas from Outer Continental Shelf lands.
SECTION 2.17. Amends Section 2.211, Public Utility Regulatory Act
of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
Regular Session, 1995, by adding Subsections (c), (d), and (e).
(c) Requires the utility to file a rate-filing package
concurrently with the regulator within 120 days. Authorizes the
regulator to extend the period or waive the requirement on
agreement of the parties. Requires the regulator to make a
determination concerning the matter within 185 days, with an
exception.
(d) Authorizes the regulator to issue an interim order fixing
temporary rates until a determination is made. Authorizes the
regulator to require the utility to refund to customers or credit
against future bills all sums collected when temporary rates were
in effect that are in excess of the final rate. Requires the
regulator to authorize the utility to surcharge bills if amounts
collected when temporary rates were in effect are less than the
amounts that would have been collected under the rate finally
ordered.
(e) Provides that the utility rates become temporary rates if
the regulator has not issued a final order or fixed temporary rates
within a certain period. Requires the regulator to require the
utility to make adjustments for rates collected when temporary
rates were in effect.
SECTION 2.18. Amends Sections 2.212(a), (e), and (g), Public
Utility Regulatory Act of 1995, as enacted by S.B. 319, Acts of the
74th Legislature, Regular Session, 1995.
(a) and (e) Make conforming changes.
(g) Provides that the commission is not prohibited from
reviewing and providing adjustments of a utility's fuel factor.
Requires the commission, by rule, to implement procedures that
provide for the adjustment of a utility's fuel factor. Sets forth
requirements for the procedures. Requires the commission to render
a decision approving, disapproving, or modifying the adjustment.
Requires the commission, by rule, to provide for the reconciliation
of a utility's fuel costs on a timely basis. Authorizes the
commission to provide for a mechanism to allow any public utility
that has a noncontiguous geographical service area and that
purchases power for resale for that area from public utilities that
are not members of the Electric Reliability Council of Texas, to
recover purchased power cost for that area reflecting the cost for
that specific noncontiguous area. Prohibits the commission from
requiring such a mechanism for any cooperative unless requested by
the cooperative.
SECTION 2.19. Amends Section 2.214, Public Utility Regulatory Act
of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
Regular Session, 1995. Specifies that charges to individual
customers for retail or wholesale electric service that are less
than the rate approved by the regulatory authority shall not
constitute an impermissible difference, preference, or advantage.
SECTION 2.20. Amends Subtitle E, Title II, Public Utility
Regulatory Act of 1995, as enacted by S.B. 319, Acts of the 74th
Legislature, Regular Session, 1995, by adding Section 2.2141.
DISCOUNTED RATES FOR CERTAIN STATE INSTITUTIONS OF HIGHER
EDUCATION. Provides for discounted rates for certain state
institutions of higher education. Specifies the discount.
Specifies that this section does not apply to rates charged to a
state institution of higher education by a municipally owned
utility which provides a discounted rate to the state for electric
services below rates in effect on January 1, 1995, and which
discounted rates provide a greater financial discount to the state
than is provided to the state institution of higher education
through the discount provided by this section. Specifies that an
investor-owned public utility is not allowed to recover costs of
the discount from residential customers or any other customer
class.
SECTION 2.21. Amends Section 2.215, Public Utility Regulatory Act
of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
Regular Session, 1995, by amending Subsection (a) and adding
Subsection (c).
(a) Provides for a utility to charge individual customers a
price for retail or wholesale electric service in accordance with
Section 2.052.
(c) If the commission approves the establishment of a separate
rate class for electric service for a university and for public
schools as of September 1, 1995, the commission shall include
community colleges in the rate class with public school customers.
SECTION 2.22. Amends Section 2.251, Public Utility Regulatory Act
of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
Regular Session, 1995, Specifies that a qualifying cogenerator
selling electric energy at retail to the sole purchaser of the
cogenerator's thermal output pursuant to Section 2.052 of this Act
is not considered a retail public utility.
SECTION 2.23. Amends Sections 2.255(d), (e), and (f), Public
Utility Regulatory Act of 1995, as enacted by S.B. 319, Acts of the
74th Legislature, Regular Session, 1995. Provides that this
section does not apply to a certificate of convenience and
necessity for an electric generating plant (plant) that is
requested under Section 2.051. Authorizes the commission to grant
a certificate for a plant only in accordance with Section 2.051.
Deletes existing provisions regarding the application for a
certificate.
SECTION 2.24. Amends Section 2302.043, Government Code. Makes
conforming changes.
SECTION 2.25. Amends Chapter 166, Acts of the 63rd Legislature, by
adding Section 4c. Authorizes an electric cooperative corporation
to form a joint powers agency with one or more public entities and
to participate in an existing joint powers agency in which at least
one public entity is a member and participant, as if the electric
cooperative corporation were a public entity. Specifies that a
joint powers agency formed under this section after the effective
date of this section is subject to all provisions of PURA and is
under the jurisdiction of the commission as provided by that Act.
Specifies that the joint powers agency in which the electric
cooperative corporation participates is subject to the open
meetings law. Specifies that this section does not authorize the
electric cooperative corporation to issue bonds or other securities
that are exempt from taxation under federal law.
SECTION 2.26. Amends Section 4A, Electric Cooperative Corporation
Act. Makes conforming changes and strikes language exempting small
power production facilities and cogeneration facilities.
SECTION 2.27. Amends Section 171.079, Tax Code. Makes conforming
changes.
SECTION 2.28. (a) Requires the commission, by rule, to adopt an
integrated planning process by September 1, 1996.
(b) Specifies that changes in law regarding a certificate of
convenience and necessity take effect September 1, 1996 and only
apply to an application for a certificate of convenience and
necessity filed on or after that date, except that, in the case of
a utility for which the commission has not yet approved an
individual integrated resource plan as of September 1, 1996, an
application for a certificate of convenience and necessity is
governed by the law in effect immediately preceding the effective
date of this Act until the commission approves an integrated
resource plan for the utility.
SECTION 2.29. Requires the commission to adopt the initial rules
required by Section 2.057 within 180 days after the effective date
of this Act.
SECTION 2.30. Requires an exempt wholesale generator or power
marketer required to register to do so within 90 days of the
effective date.
SECTION 2.31. Effective date: September 1, 1995.
SECTION 2.32. Emergency clause.
COMPARISON OF ORIGINAL TO SUBSTITUTE
1. Restores existing statutory authority for PUC to require
utilities to report information about themselves. The Senate
version had limited PUC's authority so that it may only
require information relating to utility-affiliate
transactions.
2. Restores PUC's existing jurisdiction over affiliated interests
having transactions with public utilities. The Senate version
had removed PUC's jurisdiction over utility affiliates and
replaced it with jurisdiction over transactions between the
utilities and the affiliated interests. Specifies that
accounts or records obtained by PUC related to sales of
electrical energy at wholesale by an affiliate are
confidential and exempt from the open records law.
3. Adds a provision not in the Senate version repealing civil
penalty authority for violations of the Act under the
jurisdiction of the Railroad Commission that result in
pollution.
4. Deletes a provision in the Senate version providing utilities
a right of contribution against persons other than electric
utilities that use a utility's transmission or distribution
system for personal injury or property damage claims brought
in connection with the utility's transmission or distribution
system.
5. Changes language regarding pricing flexibility. Rather than
authorizing the utility to charge individual customers lower
prices for wholesale and retail electric service as in the
Senate version, the substitute authorizes the regulator to
approve wholesale or retail tariffs or contracts containing
charges that are less than approved rates.
6. Changes the requirement in the Senate version to develop an
integrated resource planning system at the lowest reasonable
system cost. The Senate version requires the commission,
rather than the lowest reasonable cost.
7. Adds a requirement not in the Senate version for a description
of how each utility will achieve equity among customer classes
and provide demand-side programs to each customer class,
including tenants and low income ratepayers to the list of
required provisions in a preliminary plan. A similar
provision is added in the list of determinations the
commission must make for the final plan.
8. Changes the authority of the commission regarding transmission
service from authorization to require a utility to provide
transmission service for transmitting wholesale power as in
the Senate version to authorization to review the state's
transmission system to determine and make recommendations to
public utilities on the need to build new power lines, upgrade
power lines, and make other improvements as necessary.
9. Adds a provision not in the Senate version regarding the
transfer of assets from a utility to an affiliated exempt
wholesale generator. The provision specifies that any
transfer of assets from a utility to an affiliated exempt
wholesale generator or power marketer shall be valued at the
greater of net book cost or fair market value. The provision
also specifies that any transfer of assets from an exempt
wholesale generator or power marketer to an affiliated public
utility shall be valued at the lesser of net book cost or fair
market value.
10. Changes the pilot program in the Senate version to specify
that the pilot program is one pilot program and that it is a
program to provide transmission service for transactions
between end users of electricity and qualifying facilities,
exempt wholesale generators, power marketers, or public
utilities. Changes the life of the program from three years
as in the Senate version to six years.
11. Deletes the provision in the Senate version that grants the
commission authority to deal with increased competition.
12. Deletes the provision in the Senate version requiring the
governing body of certain municipalities to have exclusive
original jurisdiction over retail, rather than all, utility
rates, operations, and services provided within city or town
limits.
13. Adds an exception, not in the Senate version, for interim rate
orders set by the commission to be prospective if the order is
necessary to provide the utility the opportunity to avoid
confiscation between the date of filing of a petition for
review with the commission and the date of a final order
setting rates. Requires the commission to order interim rates
on a showing by the utility that it has experienced
confiscation during that period and defines confiscation.
Requires the utility concerned to refund or credit against
future bills any excess sums collected during the period of
interim rates.
14. Deletes the provision in the Senate version authorizing
flexible pricing for cooperatives.
Changes the date by which the commission has approved the
establishment of a separate rate class for electric service for a
university and has grouped public schools in a separate rate class
from January 1, 1995 as in the Senate version to September 1, 1995.
SUMMARY OF COMMITTEE ACTION
SB 373 was considered by the Committee on State Affairs in a public
hearing on May 16, 1995. The Chair laid out SB 373. The following
persons testified for the bill: Robert Reilley representing NEWTEX,
Rick Levy representing Texas AFL-CIO, Jim Marston representing
Environmental Defense Fund and, Katherine Mosley representing the
City of Houston. The following persons testified against the bill:
Peggy Venable representing herself, Randy Eminger representing The
Center for Energy & Economic Development, Janee Briesemeister
representing Consumers Union, W. Paul Ruwe representing Destec
Energy Inc., Victor Gonzales representing Kimberly Clark, Mark
Shilling representing The Texas Chemical Council, Stephanie Kroger
representing Texas Industrial Energy Consumers, Steve Perry
representing Texaco Inc. and, Hill Kemp representing himself. The
following persons provided neutral testimony on the bill: Tom Smith
representing Public Citizen, Ali Al-Jabir representing The Public
Utility Commission of Texas, Robert W. Gee representing The Public
Utility Commission of Texas, Walter Washington representing The
Office of Public Utility Counsel, Mike Ozymy representing The
Association of Electric Companies of Texas, Kent Caperton
representing The Association of Electric Companies of Texas, Rob
Looney representing The Texas Mid Continent Oil & Gas Association
and, Geoffrey Gay representing various cities including Arlington
& McAllen. The Chair left SB 373 pending. SB 373 was considered
by the Committee on State Affairs in a formal meeting on May 19,
1995. The Chair laid out SB 373. The committee considered a
complete substitute for the bill. 6 amendments were offered to the
substitute. 5 of those amendments were adopted without objection.
One of the amendments failed to be tabled by a record vote of: 2
ayes; 10 nay; 0 pnv; and 3 absent. That amendment was also adopted
without objection. The substitute as amended was adopted without
objection. The Chair directed the staff to incorporate the
amendments into the substitute. The bill was reported favorably as
substituted with the recommendation that it do pass and be printed,
by a record vote of 12 ayes, 1 nay, 0 pnv, 2 absent.