BILL ANALYSIS
C.S.S.B. 373
By: Armbrister
State Affairs
4-24-95
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 the 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, the 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.
The Office of Public Utility Counsel (OPUC) was created in 1983 to
represent residential and small business consumers before the 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. The
OPUC has participated in major rate cases, but only a percentage of
all cases before the 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
As proposed, C.S.S.B. 373 continues and revises the functions of
the Public Utility Commission of Texas and the Office of Public
Utility Counsel, including adding provisions to allow for
competition in the electric wholesale market; provides an
administrative penalty.
RULEMAKING AUTHORITY
It is the committee's opinion that rulemaking authority is granted
to the Public Utility Commission in SECTION 1.14 (Section 1.036(b),
PURA 1995), SECTION 1.22 (Section 1.101(b), PURA 1995), SECTION
1.24 (Section 1.104(a), PURA 1995), SECTION 1.33 (Section 1.407(a),
PURA 1995), SECTION 1.34 (Sections 2003.047(b) and (f), Government
Code), SECTION 2.03 (Sections 2.051(a), (b), (e), (u), (v), and
(cc), PURA 1995), SECTION 2.05 (Section 2.053(c), PURA 1995),
SECTION 2.08 (Sections 2.057(a) and (b), PURA 1995), SECTION 2.19
(Sections 2.212(g)(2)(A) and (B)), and SECTION 2.23(a), and to the
Office of Public Utility Counsel in SECTION 1.34 (Section
2003.047(b), Government Code) of this bill.
SECTION BY SECTION ANALYSIS
SECTION 1.01. Amends Section 1.003, Public Utility Regulatory Act,
as enacted by S.B. 319, 74th Legislature, Regular Session (PURA
1995), by adding Subdivisions (13A) and (18), to define "ratemaking
proceeding" and "trade association."
SECTION 1.02. Amends Section 1.005, PURA 1995, as follows:
Sec. 1.005. New heading: APPLICABILITY OF ADMINISTRATIVE
PROCEDURE ACT AND OPEN MEETINGS LAW. Subjects the Public
Utility Commission (commission) to Chapter 551, Government
Code.
SECTION 1.03. Amends Title IA, PURA 1995, by adding Section 1.006,
as follows:
Sec. 1006. ENTITY, COMPETITOR, OR SUPPLIER AFFECTED IN MANNER
OTHER THAN BY SETTING OF RATES. Provides that an entity,
utility competitor, or utility supplier is considered to be
affected in a manner other than by the setting of rates if
during a relevant year the entity provides fuel, or utility-related goods, products, or services to a provider of
telecommunications or electric services or to an affiliated
interest valued at the greater of $10,000 or 10 percent of the
person's business.
SECTION 1.04. Amends Sections 1.021(c) and (d), PURA 1995, to
require the governor to designate a member of the commission as
presiding officer of the commission to serve in that capacity at
the pleasure of the governor, rather than requiring the commission
to elect a chairman. Makes nonsubstantive changes.
SECTION 1.05. Amends Section 1.022, PURA 1995, to provide that the
commission and the Office of Public Utility Counsel (office) are
subject to the Texas Sunset Act and, unless continued, are
abolished and this Act expires September 1, 2001, rather than 1995.
SECTION 1.06. Amends Section 1.023, PURA 1995, as follows:
Sec. 1.023. New heading: QUALIFICATIONS; OATH; PROHIBITED
ACTIVITIES. (a) Deletes a provision requiring a commissioner
to be older than 30 years old. Requires a commissioner to be
a representative of the general public.
(b) Deletes a provision requiring a commissioner to execute
a bond for $5,000 payable to the state and conditioned on
the faithful performance of the commissioner's duties.
(c) Includes people associated for two years before
appointment with direct competitors of public utilities in
the list of individuals who are ineligible to serve as
commissioner.
(d) Prohibits a person who is required to register as a
lobbyist because of the person's activities for compensation
on behalf of a profession related to the operation of the
commission from serving as a commissioner member or public
utility counsel or act as the general counsel to the
commission.
(e) Provides that a person is ineligible for appointment as
a public member of the commission or for employment as the
general counsel or executive director (director) if the
person or the person's spouse meet certain criteria.
(f) Authorizes a person otherwise ineligible because of the
application of Subsection (e)(2)(B) to be appointed to the
commission and serve as commissioner or be employed as the
general counsel or director if the person meets certain
criteria.
(g)-(h) Prohibit an officer, employee, or paid consultant of
a trade association in the field of public utilities or
spouse of an officer, manager, or paid consultant from being
a member or employee of the commission who is exempt from
the state's position classification plan or is compensated
at or above the amount prescribed for step 1, salary group
17, of the position classification salary schedule.
SECTION 1.07. Amends Sections 1.024(a), (d), and (e), PURA 1995,
as follows:
(a) Prohibits a commissioner or an employee from having
certain pecuniary interests in a trade association, owning or
controlling any securities of a direct competitor of a public
utility, or accepting gifts from parties closely associated
with direct competitors.
(d) Prohibits a direct competitor of a public utility or any
parties closely associated from furnishing gifts to commission
members or employees or aiding any person to violate this
subsection or Subsection (a)(3).
(e) Makes conforming changes.
SECTION 1.08. Amends Section 1.025, PURA 1995, as follows:
Sec. 1.025. PROHIBITION OF EMPLOYMENT OR REPRESENTATION. (a)
Includes an employee of the commission or of the State Office
of Administrative Hearings (hearing office) involved in
hearing utility cases among those prohibited from being
employed by a public utility or affiliate in the scope of the
commissioner's or employee's official responsibility or a
utility competitor or other entity affected in a manner other
than by the setting of rates for that class of customer within
one year of employment with the commission or hearing office.
(b) Prohibits an employee of the hearing office from
representing a business entity before the commission or
hearing office at any time.
(c) Requires the commission to provide its members and
employees information regarding their qualifications for
office or employment.
SECTION 1.09. Amends Section 1.026, PURA 1995, as follows:
Sec. 1.026. GROUNDS FOR REMOVAL; VALIDITY OF ACTIONS. (a)
Adds to the list of grounds for removing a member from the
commission.
(b) Makes nonsubstantive changes.
(c) Requires the director to notify the presiding officer,
or the next highest officer if the potential ground involves
the presiding officer, if a potential ground for removal
exists. Requires the presiding officer to notify the
governor and the attorney general that a potential ground
for removal exists.
(d) Requires a member to complete a training program before
a member may assume the member's duties or be confirmed.
(e) Requires the training program to provide certain
information to the member.
SECTION 1.10. Amends Sections 1.028(a), (b), and (e), PURA 1995,
as follows:
(a) Requires the commission to employ a director, a general
counsel, and other officers and employees, rather than
specifying employees, to carry out this Act. Requires the
commission to develop and implement policies that define the
responsibilities of the commission and the staff.
(b) Provides that the director is responsible for the
operations of the commission and shall coordinate employee
activities. Deletes provisions specifying positions the
commission is required to hire.
(e) Deletes existing subsection.
SECTION 1.11. Amends Section 1.029, PURA 1995, as follows:
Sec. 1.029. PERSONNEL POLICIES. (a) Requires the director or
a designee to develop an intra-agency career ladder program
that addresses opportunities for employee mobility and to post
all positions, rather than only nonentry level positions
concurrently with any public posting, rather than in advance.
Makes nonsubstantive changes.
(b) Requires an equal opportunity policy statement to
include certain elements.
(c) Requires the statement to be reviewed annually by the
Texas Commission on Human Rights, but does not specify a
time frame.
(d) Requires the governor's office to deliver a biennial
report to the legislature based on the statement.
Authorizes the report to be made separately or as a part of
other biennial reports.
SECTION 1.12. Amends Section 1.031, PURA 1995, to require the
commission to develop policies to provide the public with an
opportunity to appear before the commission and speak on any issue
under the commission's jurisdiction.
SECTION 1.13. Amends Section 1.035(a), PURA 1995, to require the
commission to prepare annually a report accounting for all funds
received and disbursed by the commission during the preceding
fiscal year. Requires the report to meet the applicable financial
reporting requirements.
SECTION 1.14. Amends Section 1.036, PURA 1995, as follows:
Sec. 1.036. New heading: INFORMATION; ACCESSIBILITY. (a)
Makes nonsubstantive changes.
(b) Requires the commission, by rule, to establish methods
by which consumers and service recipients are notified of
the name, address and telephone number of the commission for
the purpose of directing complaints.
(c) Requires the commission to comply with laws related to
program and facility accessibility. Requires the commission
to prepare a plan that describes how a non-English speaker
can be provided access to the commission's programs.
SECTION 1.15. Amends Section 1.051, PURA 1995, as follows:
Sec. 1.051. OFFICE OF PUBLIC UTILITY COUNSEL. (a) Makes no
changes.
(b) Requires the appointment of the public utility counsel
(counsellor) to be made without regard to certain personal
characteristics.
(c) Makes no changes.
(d) Provides that a person is ineligible for appointment as
counsellor if the person or the person's spouse meets
certain criteria.
(e) Prohibits a person from serving as counsellor or acting
as the general counsel for the office if the person is
required to register as a lobbyist because of the person's
activities for compensation related to the operation of the
commission or the office.
(f) Prohibits an officer, employee, or paid consultant of a
trade association in the field of public utilities or the
spouse of an officer, manager, or paid consultant of a
related trade association, from serving as counsellor or
being an office employee who is exempt from the state's
position classification plan or is compensated at or above
the amount prescribed for step 1, salary group 17, of the
position classification salary schedule.
(g) Authorizes a person otherwise ineligible to be appointed
as counsellor to serve if the person meets certain
qualifications.
SECTION 1.16. Amends Title IC, PURA 1995, by adding Section
1.0511, as follows:
Sec. 1.0511. GROUNDS FOR REMOVAL. (a) Sets forth grounds for
removing the counsellor from office.
(b) Provides that the validity of an office action is not
affected by the fact that it is taken when a ground for
removal of the counsellor exists.
SECTION 1.17. Amends Title IC, PURA 1995, by adding Section
1.0512, as follows:
Sec. 1.0512. PROHIBITION OF EMPLOYMENT OR REPRESENTATION.
(a) Prohibits the counsellor within two years, and an office
employee within one year after employment with the office has
ceased, from being employed by a public utility which was in
the scope of the counsellor's or employee's official
responsibility.
(b) Prohibits the counsellor or employee from representing
a business entity before the commission or a court in a
matter in which the person was involved or within the
person's responsibility.
SECTION 1.18. Amends Title IC, PURA 1995, by adding Section
1.0513, as follows:
Sec. 1.0513. INFORMATION; ACCESSIBILITY. (a) Requires the
office to prepare annually a report accounting for all funds
received and disbursed by the office during the preceding
fiscal year. Requires the report to meet the financial
reporting requirements.
(b) Requires the office to prepare information of public
interest describing the office functions to be made
available to the public and appropriate state agencies.
(c) Requires the office to comply with federal and state
laws related to program and facility accessibility.
Requires the office to prepare a plan describing how a non-English speaker can be provided reasonable access to the
office's programs.
SECTION 1.19. Amends Section 1.052, PURA 1995, to provide that it
is unlawful for a period of two years following employment for any
counsellor to have an interest in, provide legal services to, or to
be employed by a utility competitor, utility supplier, among other
entities affected in a manner other than by the setting of rates
for that class of customer.
SECTION 1.20. Amends Section 1.053, PURA 1995, as follows:
Sec. 1.053. EMPLOYEES. (a) Makes no changes.
(b) Requires the counsellor or a designee to develop an
intra-agency career ladder program that addresses
opportunities for mobility for employees within the
commission. Requires the program to post all intra-agency
positions concurrently with any public posting. Requires
the counsellor or a designee to develop a system of annual
performance evaluations. Requires all merit pay to be based
on the system established under this subsection. Requires
the counsellor or a designee to provide to the public
utility counsel and its employees information regarding
their qualification for office or employment and their
responsibilities relating to standards of conduct.
(c) Requires the counsellor or a designee to prepare a
policy statement to assure implementation of a program of
equal employment opportunity. Sets forth requirements to be
included in the statement.
(d) Requires the statement to cover an annual period, be
updated and reviewed annually by the Commission on Human
Rights, and be filed with the governor's office. Requires
the governor's office to deliver a biennial report to the
legislature based on the statement, to be made separately or
as a part of other biennial reports.
(e) Requires the office to provide to its employees
information regarding their qualification for office or
employment and their responsibilities relating to standards
of conduct.
SECTION 1.21. Section 1.054, PURA 1995, makes no changes.
SECTION 1.22. Amends Section 1.101, PURA 1995, as follows:
Sec. 1.101. GENERAL POWER; RULES; HEARINGS; AUDITS. (a)
Makes no changes.
(b) Requires the commission to make rules regarding practice
and procedure before the utility division of the hearing
office. Requires the office to adopt rules authorizing an
administrative law judge (judge) to perform certain actions.
(c) Requires the rules adopted to ensure that all parties
receive due process.
(d) Redesignates existing text.
(e) Requires hearings in contested cases not conducted by
one or more commissioners to be conducted by the utility
division of the hearing office. Authorizes the commission
to delegate to the utility division the authority to make a
final decision and to issue certain findings or orders in a
proceeding in which there is no contested issue of fact or
law. Deletes a provision providing that the final decision
of the hearings examiner has the same effect as a final
decision of the commission unless a commissioner requests
formal review of the decision.
SECTION 1.23. Amends Section 1.102(b), PURA 1995, to delete a
provision requiring the commission to audit each utility at least
once every 10 years.
SECTION 1.24. Amends Title ID, PURA 1995, by adding Section 1.104,
as follows:
Sec. 1.104. SETTLEMENTS. (a) Requires the commission, by
rule, to adopt procedures governing the use of settlements to
resolve contested cases.
(b) Requires the rules to ensure certain conditions are met.
SECTION 1.25. Amends Section 1.202, PURA 1995, as follows:
Sec. 1.202. POWERS OF COMMISSION. (a) Makes no changes.
(b) Deletes a provision requiring the railroad commission to
have the power to review and approve applications by gas
utilities for the purchase of natural gas from producing
affiliates. Redesignates existing Subsection (c).
SECTION 1.26. Amends Section 1.251(b), PURA 1995, to require the
commission in determining whether a transaction involving the sale
of 50 percent or more of a public utility's stock is consistent
with the public interest, to take into consideration the value of
the entity to be transferred, among other actions, and whether such
a transaction will adversely affect the health or safety of
customers or employees, result in the transfer of jobs, or result
in the decline of service, that the public utility will receive
consideration equal to the reasonable value of the assets when it
sells, leases, or transfers assets, and that the transaction is
consistent with the public interest.
SECTION 1.27. Amends Section 1.271, PURA 1995, to require any
accounts or records obtained by the commission related to sales of
electrical energy at wholesale by an affiliated interest to the
public utility to be confidential and not subject to disclosure.
SECTION 1.28. Amends Subtitle I, Title I, PURA 1995, by adding
Section 1.3215, as follows:
Sec. 1.3215. ADMINISTRATIVE PENALTY. (a) Authorizes the
commission to impose an administrative penalty against a
person regulated under this Act who violates it or a rule or
order adopted under it.
(b) Authorizes the penalty to be up to $5,000. Provides
that each day of violation is a separate violation.
(c) Sets forth terms on which the penalty shall be based.
(d) Authorizes the director to issue to the commission a
report that states the facts on which the determination is
based and the director's recommendation on the imposition of
a penalty.
(e) Requires the director to give notice of the report to
the person within 14 days after issuing the report.
Authorizes the notice to be given by certified mail.
Requires the notice to include a summary of the violation,
a recommended penalty, and a statement informing the person
of the person's right to a hearing.
(f) Authorizes the person to accept the determination and
penalty or to make a request for a hearing.
(g) Requires the commission, by order, to approve the
determination and impose the penalty if the person accepts
the determination and penalty.
(h) Requires the director to set and give notice to the
person of a hearing if the person requests a hearing or
fails to respond to the notice. Sets forth requirements for
conducting the hearing and imposing penalties.
(i) Requires the notice of the commission's order to include
a statement of the right of the person to judicial review of
the order.
(j) Requires the person to take certain actions within 30
days after the commission's order is final.
(k) Sets forth authorized actions for a person who files a
petition for judicial review without paying the amount of
the penalty.
(l) Authorizes the director, on receipt of a copy of an
affidavit requesting the court to stay the penalty, to file
a contest to the affidavit. Requires the court to hold a
hearing on the facts alleged in the affidavit as soon as
possible and to stay the enforcement of the penalty on
finding that the alleged facts are true. Provides that the
person who files an affidavit has the burden of providing
that the person is financially unable to pay the amount of
the penalty and to give a supersedeas bond.
(m) Authorizes the director to refer the matter to the
attorney general for collection if the person does not pay
the penalty and the enforcement is not stayed.
(n) Provides that judicial review of the order is instituted
by filing a petition and is under the substantial evidence
rule.
(o) Authorizes the court to uphold or reduce the amount of
the penalty and to order the person to pay that amount.
Requires the court to order that no penalty is owed if the
court does not sustain the occurrence of the violation.
(p) Requires the court to proceed under this subsection when
the judgment of the court becomes final. Requires the court
to order that the penalty plus accrued interest be remitted
or the supersedeas bond released if the person paid a
penalty that was reduced or not upheld. Sets forth the
procedure for determining the rate of interest.
(q) Requires the penalty to be remitted to the comptroller
for the general revenue fund.
(r) Subjects all proceedings under this section to Chapter
2001, Government Code.
(s) Authorizes the director to delegate any power or duty
given the director by this section.
SECTION 1.29. Amends Section 1.351(b), PURA 1995, to authorize the
legislature, rather than requiring the commission with the
legislature's approval, to adjust an assessment to provide a level
of income sufficient to fund the commission and the office.
SECTION 1.30. Amends Section 1.354, PURA 1995, to make conforming
changes. Deletes a provision requiring the commission to notify
the comptroller of any adjustment of the assessment imposed.
Subjects all money paid to the commission or to the office to
Chapter 404F, Government Code.
SECTION 1.31. Amends Section 1.355, PURA 1995, as follows:
Sec. 1.355. GRANTS OF FEDERAL FUNDS. (a) Authorizes the
commission to apply to any appropriate agency or officer of
the United States to receive and spend federal funds which it
may obtain from grants or other similar forms of financial
assistance. Prohibits anything in this section from
inhibiting the commission's ability to contract with or
otherwise receive assistance from any authorized source of
funds.
(b) Provides that Sections 403.094 and 403.095, Government
Code, do not apply to the special account established.
Deletes a provision requiring the commission's budget to be
subject to legislative approval.
SECTION 1.32. Amends Sections 1.401(a) and (b), PURA 1995, as
follows:
(a) Sets forth requirements for the information the commission
is required to keep regarding complaints.
(b) Requires the commission to keep a file about each
complaint filed with the commission. Requires the commission
to provide to the person filing the complaint and to the
persons or entities complained about the commission's
procedures pertaining to complaint investigation and
resolution. Makes conforming changes.
SECTION 1.33. Amends Title IK, PURA 1995, by adding Section 1.407,
as follows:
Sec. 1.407. HISTORICALLY UNDERUTILIZED BUSINESSES. (a)
Requires the commission, by rule, to require each utility to
make a good faith effort to overcome the underuse of
historically underutilized businesses (HUBs). Requires the
rules to take into account different disparity ratios shown
for different race and sex groups.
(b) Requires the commission to conduct further research and
analysis to adjust the results of the disparity study to
account for underuse of HUBs by the utility industry.
(c) Requires the rules adopted to require each utility to
submit to the commission a strategic plan for the use of
HUBs.
(d) Defines "historically underutilized business" and
"minority group members."
SECTION 1.34. Amends Chapter 2003C, Government Code, by adding
Section 2003.047, as follows:
Sec. 2003.047. UTILITY DIVISION. (a) Requires the office to
establish a utility division to perform the contested case
hearings for the commission.
(b) Authorizes the commission, by rule, to delegate the
responsibility to hear any other matter before the
commission if consistent with the commission's duties and
responsibilities. Makes conforming changes.
(c) Authorizes only a judge in the utility division to
conduct a hearing on behalf of the commission. Authorizes
the judge to conduct hearings for other state agencies as
time allows. Authorizes the office to transfer a judge into
the division on a temporary or permanent basis and to
contract with individuals to serve as temporary judges.
(d) Requires a judge to be licensed to practice law in this
state and have a certain amount of experience to preside at
a hearing.
(e) Requires the commission to provide to the judge a list
of issues or areas that must be addressed at the time the
office receives jurisdiction of a proceeding. Authorizes
the commission to identify and provide to the judge at any
time additional issues to be addressed.
(f) Requires the office and the commission to jointly adopt
rules providing for the certification to the commission of
an issue that involves an ultimate finding of compliance
with a statutory standard the determination of which is
committed to the discretion or judgment of the commission by
law. Requires the rules to address the issues that are
appropriate for certification and procedure to be used in
certifying the issue. Requires each agency to publish the
jointly adopted rules.
(g) Authorizes the commission to change a finding or
conclusion made by the judge or vacate or modify an order
issued by the judge only in certain circumstances.
(h) Requires the commission to state the reason and legal
basis for its determination.
(i) Authorizes a judge, on the judge's or a notified party's
motion, to impose appropriate sanctions against a party or
its representative for certain actions.
(j) Authorizes a sanction to include issuance of certain
orders.
(k) Requires hearings to be conducted in hearing rooms
provided by the commission. Requires the commission to
provide the utility division access to certain resources.
(l) Requires the office to charge the commission a fixed
annual fee for services rendered by the division to the
commission. Requires the office and the commission to
negotiate the amount of the fixed fee biennially to coincide
with the commission's appropriations request.
SECTION 1.35. (a) Establishes a task force to administer the
transfer of the hearings division from the commission to the
hearing office. Sets forth persons who compose the task force.
(b) Provides that the governor or a designee is the presiding
officer of the task force.
(c) Sets forth requirements for the task force.
(d) Requires the task force to prepare a report detailing the
specifics of the transfers and submit it to the governor and
the legislature.
(e) Requires the task force to ensure the transfer does not
adversely affect a proceeding before the commission or the
rights of the parties to the proceeding.
(f) Provides that this section takes effect immediately.
SECTION 1.36. (a) Transfers all personnel and items of the
hearings division of the commission other than the items of the
central records office to the utility division of the hearing
office on September 1, 1995. Authorizes an employee transferred to
the utility division to be terminated or subject to salary
reduction, until September 1, 1996, only for cause and only in
relation to poor performance or unacceptable conduct. Provides
that a hearings examiner transferred to the State Office of
Administrative Hearings becomes an administrative law judge on the
date of transfer.
(b) Requires the hearings examiners or judge transferred from
the commission to the hearing office to continue to hear any
case assigned to the person.
(c) Makes application of this Act prospective regarding
procedures governing a hearing before the utility division of
the hearing office.
(d) Provides that the commission is not required to adopt new
rules governing practice and procedure before the commission
or the utility division of the hearing office. Provides that
the rules remain in effect until amended or repealed as
required by law. Requires any rules adopted after the
effective date governing practice before the utility division
of the hearing office to be adopted jointly by that office and
the commission.
SECTION 1.37. Makes application of Section 1.3215, PURA 1995,
prospective.
SECTION 1.38. Applies Section 1.104, PURA 1995, only to a
proceeding for which a final order has not been issued before the
effective date and does not apply Section 1.104 to an electric
utility merger proceeding filed before January 1, 1995, in which a
final order has not been issued. Prohibits the commission from
approving a settlement unless the settlement has been reached in
accordance with rules adopted under Section 1.104.
SECTION 1.39. Makes application of this Act prospective regarding
personnel requirements. Provides that the changes do not affect
the entitlement of a commission member, counsellor, director, or
general counsellor serving on August 31, 1995, to hold office.
ARTICLE 2
SECTION 2.01. Amends Title IIA, PURA 1995, by amending Section
2.001 and adding Sections 2.0011 and 2.0012, as follows:
Sec. 2.001. LEGISLATIVE POLICY AND PURPOSE. Sets forth the
legislative findings and purpose relating to protection of the
public interest inherent in the rates and services of public
utilities.
Sec. 2.0011. DEFINITIONS. Redefines "public utility" and
"utility." Defines "exempt wholesale generator," "power
marketer," "qualifying cogenerator" and "qualifying small
power producer," "qualifying facility," 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 Title IIA, PURA 1995, by adding Section
2.003, as follows:
Sec. 2.003. SCOPE OF COMPETITION. Requires the commission to
report to the legislature within a certain time frame 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, PURA 1995, as follows:
Sec. 2.051. 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 cost. Sets forth the issues the commission
is required to consider in addition to direct costs in
determining the lowest 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 to 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 plan.
(d) Requires the commission to consider the different
generating 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 meet
certain criteria and authorizes it to take certain actions
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 prohibits the utility
from being otherwise subject to the requirements of this
section.
(h) Requires the commission 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.
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 from being 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 disclosure.
(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 all contracts. Provides that the utility is
not required to accept a bid and may reject 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. Provides that parties are not allowed to litigate or
conduct discovery on issues that were 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)(1) Requires the commission to consider the reliability,
financial condition, and safety of a resource and whether
the contract was conducted in accordance with the
preliminary plan 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. Provides that certification of
a resource contract does not negate the necessity to comply
with environmental and siting regulations. 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.
(2) 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." Deletes existing section regarding
electrical forecast.
(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 to
the extent that the commission authorizes utilities to
recover certain costs. Requires the commission to adopt
rules regarding matters necessary to perform the
reconciliation. Sets forth requirements for the
reconciliation. Deletes existing Section 2.051 regarding
electrical energy forecasts.
SECTION 2.04. Amends Section 2.052, PURA 1995, to authorize a
qualifying cogenerator or small power producer to sell electric
energy in this state only at wholesale, with an exception.
SECTION 2.05. Amends Title IIB, PURA 1995, by adding Section
2.053, as follows:
Sec. 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 the Federal
Energy Regulatory Commission (FERC) or provide proof that it
has 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 Title IIB, PURA 1995, by adding Section
2.054, as follows:
Sec. 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.
SECTION 2.07. Amends Title IIB, PURA 1995, by adding Section
2.056, as follows:
Sec. 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 interconnection
committee to recommend the most economical, reliable, and
efficient means to synchronously interconnect, by the year
2001, the alternating current electric facilities of
electric utilities within the Electric Reliability Council
of Texas reliability area to the alternating current
electric facilities of utilities within the Southwest Power
Pool reliability area.
SECTION 2.08. Amends Title IIB, PURA 1995, by adding Section
2.057, as follows:
Sec. 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 if 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 FERC may require. 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) Prohibits the regulator from requiring a public utility
to wheel or transmit electricity over that public utility's
facilities from another entity to an ultimate consumer of
electricity in the utility's area if the entity is an
ultimate consumer of electricity.
(d) 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.
(e) 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.
(f) Authorizes public utilities, affiliates, exempt
wholesale generators, qualifying facilities, and all other
providers of generation to compete for the business of
selling power to a third party that is not an ultimate
consumer of electricity. 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) Defines "public utility."
SECTION 2.09. Amends Section 2.101(a), PURA 1995, to require 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.
Makes conforming changes.
SECTION 2.10. Amends Section 2.105, PURA 1995, by adding
Subsection (c), to require 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 2.11. Amends Section 2.106(a), PURA 1995, to require the
governing body of any municipality participating in proceedings
initiated pursuant to Section 2.051 of this Act to have the right
to select and engage certain professionals to conduct
investigations, present evidence, advise and represent the
governing body, and assist with litigation in proceedings initiated
pursuant to Section 2.051 of this Act.
SECTION 2.12. Amends Title IID, PURA 1995, by adding Section
2.1511, as follows:
Sec. 2.1511. MARKUP. Authorizes any cost recovery factor
established for recovery of purchased power costs to include
the costs incurred by the utility for the purchase of capacity
and energy, together with a markup added to compensate the
utility for financial risks and the value added associated
with making the purchased power available to its customers.
Authorizes the mark-ups and cost recovery factors to be those
that are necessary to encourage the utility to include
economical purchased power as part of its resource supply
plan.
SECTION 2.13. Amends Section 2.152, PURA 1995, by adding
Subsection (e), to authorize reasonable costs of participating in
a proceeding to be allowed, but not exceeding the regulator's
approved amount.
SECTION 2.14. Amends Section 2.154(b), PURA 1995, to require
prices being charged to individual customers for retail electric
service to be filed with the regulator. Requires the regulator to
consider any information concerning a price charge filed with the
regulator to be a trade secret not subject to disclosure.
SECTION 2.15. Amends Title IIE, PURA 1995, by adding Section
2.2011, as follows:
Sec. 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 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 (i) and not in limitation or in lieu of those
rights.
SECTION 2.16. Amends Section 2.203(b), PURA 1995, to make
conforming changes.
SECTION 2.17. Amends Sections 2.208(b) and (d), PURA 1995, as
follows:
(b) Transactions with Affiliated Interests. Deletes a
provision setting forth requirements for setting the price
paid for natural gas from Outer Continental Shelf lands.
(d) Expenses Disallowed. Prohibits the regulator from
considering for ratemaking purposes expenditures including
administrative penalties.
SECTION 2.18. Amends Section 2.211, PURA 1995, by adding
Subsections (c)-(e), as follows:
(c) Requires the utility to file a rate-filing package
concurrently with the regulator within a certain time period.
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
a certain time period, 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 make adjustments for sums
collected when temporary rates were in effect that are in
excess or less than the final rate.
(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 2.19. Amends Sections 2.212(a), (e), and (g), PURA 1995,
as follows:
(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 2.20. Amends Section 2.215, PURA 1995, by adding
Subsection (c), to require the commission to include community
colleges in the rate class with public school customers when the
commission has approved the establishment of a separate rate class
for electric service for a university and for public schools.
SECTION 2.21. Amends Sections 2.255(d)-(f), PURA 1995, to provide
that this section does not apply to a certificate 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 2.22. Amends Section 2302.043, Government Code, to make
conforming changes.
SECTION 2.23. (a) Requires the commission, by rule, to adopt an
integrated planning process by September 1, 1996.
(b) Makes application of this Act prospective.
SECTION 2.24. Requires the commission to adopt the initial rules
required by Section 2.057 within 90 days after the effective date
of this Act.
SECTION 2.25. Requires an exempt wholesale generator or power
marketer required to register to do so within 90 days of the
effective date.
SECTION 2.26. Effective date: September 1, 1995.
SECTION 2.27. Emergency clause.