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.