By:  Armbrister                                        S.B. No. 373
                                 A BILL TO BE ENTITLED
                                        AN ACT
    1-1  relating to the continuation, operations, and functions of the
    1-2  Public Utility Commission of Texas and the Office of Public Utility
    1-3  Counsel; providing penalties.
    1-4        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-5                               ARTICLE 1
    1-6        SECTION 1.01.  Section 1.003, Public Utility Regulatory Act
    1-7  of 1995, as enacted by S.B. No. 319, Acts of the 74th Legislature,
    1-8  Regular Session, 1995, is amended by amending Subdivision (14) and
    1-9  by adding Subdivisions (13A) and (18) to read as follows:
   1-10              (13A)  The term "ratemaking proceeding" is limited to
   1-11  those proceedings in which rates are changed, except the term shall
   1-12  include proceedings initiated under Section 2.051 of this Act.
   1-13              (14)  "Rate" means and includes every compensation,
   1-14  tariff, charge, fare, toll, rental, and classification, or any of
   1-15  them demanded, observed, charged, or collected whether directly or
   1-16  indirectly by any public utility for any service, product, or
   1-17  commodity described in the definition of "utility" in Section 2.001
   1-18  or 3.001 of this Act and any rules, regulations, practices, or
   1-19  contracts affecting any such compensation, tariff, charge, fare,
   1-20  toll, rental, or classification, that must be approved by a
   1-21  regulatory authority.  Prices as defined in Section 2.0011 of this
   1-22  Act that are charged to individual customers for electric service
   1-23  shall not be considered a "rate."
   1-24              (18)  "Trade association" means a nonprofit,
    2-1  cooperative, and voluntarily joined association of business or
    2-2  professional persons who are employed by public utilities or
    2-3  utility competitors to assist the public utility industry, a
    2-4  utility competitor, or the industry's or competitor's employees in
    2-5  dealing with mutual business or professional problems and in
    2-6  promoting their common interest.
    2-7        SECTION 1.02.  Section 1.005, Public Utility Regulatory Act
    2-8  of 1995, as enacted by S.B. No. 319, Acts of the 74th Legislature,
    2-9  Regular Session, 1995, is amended to read as follows:
   2-10        Sec. 1.005.  APPLICABILITY OF ADMINISTRATIVE PROCEDURE ACT
   2-11  AND OPEN MEETINGS LAW.  (a)  Chapter 2001, Government Code, applies
   2-12  to all proceedings under this Act except to the extent inconsistent
   2-13  with this Act.  Communications of members and employees of the
   2-14  commission with a party, a party's representative, or other persons
   2-15  are governed by Section 2001.061, Government Code.
   2-16        (b)  The commission is subject to Chapter 551, Government
   2-17  Code.
   2-18        SECTION 1.03.  Subtitle A, Title I, Public Utility Regulatory
   2-19  Act of 1995, as enacted by S.B.  No. 319, Acts of the 74th
   2-20  Legislature, Regular Session, 1995, is amended by adding Section
   2-21  1.006 to read as follows:
   2-22        Sec. 1.006.  ENTITY, COMPETITOR, OR SUPPLIER AFFECTED IN
   2-23  MANNER OTHER THAN BY SETTING OF RATES.  In this Act, an entity,
   2-24  utility competitor, or utility supplier is considered to be
   2-25  affected in a manner other than by the setting of rates for that
   2-26  class of customer if during a relevant calendar year the entity
   2-27  provides fuel, utility-related goods, utility-related products, or
    3-1  utility-related services to a regulated or unregulated provider of
    3-2  telecommunications or electric services or to an affiliated
    3-3  interest in an amount equal to the greater of $10,000 or 10 percent
    3-4  of the person's business.
    3-5        SECTION 1.04.  Subsections (c) and (d), Section 1.021, Public
    3-6  Utility Regulatory Act of 1995, as enacted by S.B. No. 319, Acts of
    3-7  the 74th Legislature, Regular Session, 1995, are amended to read as
    3-8  follows:
    3-9        (c)  The governor shall designate a member of the commission
   3-10  as presiding officer of the commission to serve in that capacity at
   3-11  the pleasure of the governor.  <At its first meeting following the
   3-12  biennial appointment and qualification of a commissioner, the
   3-13  commission shall elect one of the commissioners chairman.>
   3-14        (d)  Appointments to the commission shall be made without
   3-15  regard to the race, color, disability <creed>, sex, religion, age,
   3-16  or national origin of the appointees.
   3-17        SECTION 1.05.  Section 1.022, Public Utility Regulatory Act
   3-18  of 1995, as enacted by S.B. No. 319, Acts of the 74th Legislature,
   3-19  Regular Session, 1995, is amended to read as follows:
   3-20        Sec. 1.022.  SUNSET PROVISION.  The Public Utility Commission
   3-21  of Texas and the Office of Public Utility Counsel are subject to
   3-22  Chapter 325, Government Code (Texas Sunset Act).  Unless continued
   3-23  in existence as provided by that chapter, the commission and the
   3-24  office are abolished and this Act expires September 1, 2001 <1995>.
   3-25        SECTION 1.06.  Section 1.023, Public Utility Regulatory Act
   3-26  of 1995, as enacted by S.B. No. 319, Acts of the 74th Legislature,
   3-27  Regular Session, 1995, is amended to read as follows:
    4-1        Sec. 1.023.  QUALIFICATIONS; OATH <AND BOND>; PROHIBITED
    4-2  ACTIVITIES.  (a)  To be eligible for appointment as a commissioner,
    4-3  a person must be a qualified voter, <not less than 30 years of
    4-4  age,> a citizen of the United States, <and> a resident of the State
    4-5  of Texas, and a representative of the general public.
    4-6        (b)  Each commissioner shall qualify for office by taking the
    4-7  oath prescribed for other state officers <and shall execute a bond
    4-8  for $5,000 payable to the state and conditioned on the faithful
    4-9  performance of his duties>.
   4-10        (c)  A person is not eligible for appointment as a
   4-11  commissioner if at any time during the two-year period immediately
   4-12  preceding his appointment he personally served as an officer,
   4-13  director, owner, employee, partner, or legal representative of any
   4-14  public utility, <or any> affiliated interest, or direct competitor
   4-15  of a public utility or he owned or controlled, directly or
   4-16  indirectly, stocks or bonds of any class with a value of $10,000 or
   4-17  more in a public utility, <or any> affiliated interest, or direct
   4-18  competitor of a public utility.
   4-19        (d)  A person who is required to register as a lobbyist under
   4-20  Chapter 305, Government Code, because of the person's activities
   4-21  for compensation on behalf of a profession related to the operation
   4-22  of the commission may not serve as a member of the commission or
   4-23  public utility counsel or act as the general counsel to the
   4-24  commission.
   4-25        (e)  A person is not eligible for appointment as a public
   4-26  member of the commission or for employment as the general counsel
   4-27  or executive director of the commission if:
    5-1              (1)  the person serves on the board of directors of a
    5-2  company that supplies fuel, utility-related services, or
    5-3  utility-related products to regulated or unregulated electric or
    5-4  telecommunications utilities; or
    5-5              (2)  the person or the person's spouse:
    5-6                    (A)  is employed by or participates in the
    5-7  management of a business entity or other organization regulated by
    5-8  the commission or receiving funds from the commission;
    5-9                    (B)  owns or controls, directly or indirectly,
   5-10  more than a 10 percent interest or a pecuniary interest with a
   5-11  value exceeding $10,000 in:
   5-12                          (i)  a business entity or other
   5-13  organization regulated by the commission or receiving funds from
   5-14  the commission; or
   5-15                          (ii)  any utility competitor, utility
   5-16  supplier, or other entity affected by a commission decision in a
   5-17  manner other than by the setting of rates for that class of
   5-18  customer;
   5-19                    (C)  uses or receives a substantial amount of
   5-20  tangible goods, services, or funds from the commission, other than
   5-21  compensation or reimbursement authorized by law for commission
   5-22  membership, attendance, or expenses; or
   5-23                    (D)  notwithstanding Paragraph (B) of this
   5-24  subdivision, has an interest in a mutual fund or retirement fund in
   5-25  which more than 10 percent of the fund's holdings at the time of
   5-26  appointment is in a single utility, utility competitor, or utility
   5-27  supplier in this state and the person does not disclose this
    6-1  information to the governor, senate, commission, or other entity,
    6-2  as appropriate.
    6-3        (f)  Notwithstanding any other provision of this Act, a
    6-4  person otherwise ineligible because of the application of
    6-5  Subsection (e)(2)(B) of this section may be appointed to the
    6-6  commission and serve as a commissioner or may be employed as the
    6-7  general counsel or executive director if the person:
    6-8              (1)  notifies the attorney general and commission that
    6-9  the person is ineligible because of the application of Subsection
   6-10  (e)(2)(B) of this section; and
   6-11              (2)  divests the person or the person's spouse of the
   6-12  ownership or control before beginning service or employment, or
   6-13  within a reasonable time if the person is already serving or
   6-14  employed at the time Subsection (e)(2)(B) of this section first
   6-15  applies to the person.
   6-16        (g)  An officer, employee, or paid consultant of a trade
   6-17  association in the field of public utilities may not be a member or
   6-18  employee of the commission who is exempt from the state's position
   6-19  classification plan or is compensated at or above the amount
   6-20  prescribed by the General Appropriations Act for step 1, salary
   6-21  group 17, of the position classification salary schedule.
   6-22        (h)  A person who is a spouse of an officer, manager, or paid
   6-23  consultant of a trade association in the field of public utilities
   6-24  may not be a commission member and may not be a commission employee
   6-25  who is exempt from the state's position classification plan or is
   6-26  compensated at or above the amount prescribed by the General
   6-27  Appropriations Act for step 1, salary group 17, of the position
    7-1  classification salary schedule.
    7-2        SECTION 1.07.  Subsections (a), (d), and (e), Section 1.024,
    7-3  Public Utility Regulatory Act of 1995, as enacted by S.B. No. 319,
    7-4  Acts of the 74th Legislature, Regular Session, 1995, are amended to
    7-5  read as follows:
    7-6        (a)  A commissioner or employee of the commission may not do
    7-7  any of the following during his period of service with the
    7-8  commission:
    7-9              (1)  have any pecuniary interest, either as an officer,
   7-10  director, partner, owner, employee, attorney, consultant, or
   7-11  otherwise, in any public utility or affiliated interest, or in any
   7-12  person or corporation or other business entity a significant
   7-13  portion of whose business consists of furnishing goods or services
   7-14  to public utilities or affiliated interests, but not including a
   7-15  nonprofit group or association solely supported by gratuitous
   7-16  contributions of money, property or services, other than a trade
   7-17  association;
   7-18              (2)  own or control any securities in a public utility,
   7-19  <or> affiliated interest, or direct competitor of a public utility,
   7-20  either directly or indirectly; or
   7-21              (3)  accept any gift, gratuity, or entertainment
   7-22  whatsoever from any public utility, <or> affiliated interest, or
   7-23  direct competitor of a public utility, or from any person,
   7-24  corporation, agent, representative, employee, or other business
   7-25  entity a significant portion of whose business consists of
   7-26  furnishing goods or services to public utilities, <or> affiliated
   7-27  interests, or direct competitors of public utilities, or from any
    8-1  agent, representative, attorney, employee, officer, owner,
    8-2  director, or partner of any such business entity or of any public
    8-3  utility, <or> affiliated interest, or direct competitor of a public
    8-4  utility; provided, however, that the receipt and acceptance of any
    8-5  gifts, gratuities, or entertainment after termination of service
    8-6  with the commission whose cumulative value in any one-year period
    8-7  is less than $100 does not constitute a violation of this Act.
    8-8        (d)  A public utility, <or> affiliated interest, or direct
    8-9  competitor of a public utility, or any person, corporation, firm,
   8-10  association, or business that furnishes goods or services to any
   8-11  public utility, <or> affiliated interest, or direct competitor of a
   8-12  public utility, or any agent, representative, attorney, employee,
   8-13  officer, owner, director, or partner of any public utility, <or>
   8-14  affiliated interest, or direct competitor of a public utility, or
   8-15  any person, corporation, firm, association, or business furnishing
   8-16  goods or services to any public utility, <or> affiliated interest,
   8-17  or direct competitor of a public utility may not give or offer to
   8-18  give any gift, gratuity, employment, or entertainment whatsoever to
   8-19  any member or employee of the commission except as allowed by
   8-20  Subdivision (3) of Subsection (a) of this section, nor may any such
   8-21  public utility, <or> affiliated interest, or direct competitor of a
   8-22  public utility or any such person, corporation, firm, association,
   8-23  or business aid, abet, or participate with any member, employee, or
   8-24  former employee of the commission in any activity or conduct that
   8-25  would constitute a violation of this subsection or Subdivision (3)
   8-26  of Subsection (a) of this section.
   8-27        (e)  It is not a violation of this section if a member of the
    9-1  commission or a person employed by the commission, upon becoming
    9-2  the owner of any stocks or bonds or other pecuniary interest in a
    9-3  public utility, <or> affiliated interest, or direct competitor of a
    9-4  public utility <under the jurisdiction of the commission> otherwise
    9-5  than voluntarily, informs the commission and the attorney general
    9-6  of such ownership and divests himself of the ownership or interest
    9-7  within a reasonable time.  In this section, a "pecuniary interest"
    9-8  includes income, compensation, and payment of any kind, in addition
    9-9  to ownership interests.  It is not a violation of this section if
   9-10  such a pecuniary interest is held indirectly by ownership of an
   9-11  interest in a retirement system, institution, or fund which in the
   9-12  normal course of business invests in diverse securities
   9-13  independently of the control of the commissioner or employee.
   9-14        SECTION 1.08.  Section 1.025, Public Utility Regulatory Act
   9-15  of 1995, as enacted by S.B. No. 319, Acts of the 74th Legislature,
   9-16  Regular Session, 1995, is amended to read as follows:
   9-17        Sec. 1.025.  PROHIBITION OF EMPLOYMENT OR REPRESENTATION.
   9-18  (a)  A commissioner may not within two years, and an employee of
   9-19  the commission or an employee of the State Office of Administrative
   9-20  Hearings involved in hearing utility cases may not, within one year
   9-21  after his employment with the commission or the State Office of
   9-22  Administrative Hearings has ceased, be employed by a public utility
   9-23  which was in the scope of the commissioner's or employee's official
   9-24  responsibility while the commissioner or employee was associated
   9-25  with the commission or the State Office of Administrative Hearings.
   9-26        (b)  During the time a commissioner or employee of the
   9-27  commission or an employee of the State Office of Administrative
   10-1  Hearings involved in hearing utility cases is associated with the
   10-2  commission or State Office of Administrative Hearings or at any
   10-3  time after, the commissioner or employee may not represent a
   10-4  person, corporation, or other business entity before the commission
   10-5  or State Office of Administrative Hearings or a court in a matter
   10-6  in which the commissioner or employee was personally involved while
   10-7  associated with the commission or State Office of Administrative
   10-8  Hearings or a matter that was within the commissioner's or
   10-9  employee's official responsibility while the commissioner or
  10-10  employee was associated with the commission or State Office of
  10-11  Administrative Hearings.
  10-12        (c)  The commission shall require its members and employees
  10-13  to read this section and Section 1.024 of this Act and as often as
  10-14  necessary shall provide information regarding their qualifications
  10-15  for office or employment under this Act and their responsibilities
  10-16  under applicable laws relating to standards of conduct for state
  10-17  officers and employees.
  10-18        SECTION 1.09.  Section 1.026, Public Utility Regulatory Act
  10-19  of 1995, as enacted by S.B. No. 319, Acts of the 74th Legislature,
  10-20  Regular Session, 1995, is amended to read as follows:
  10-21        Sec. 1.026.  GROUNDS FOR REMOVAL; VALIDITY OF ACTIONS.
  10-22  (a)  It is a ground for removal from the commission if a member:
  10-23              (1)  does not have at the time of appointment the
  10-24  qualifications required by Section 1.023 of this Act <for
  10-25  appointment to the commission>; <or>
  10-26              (2)  does not maintain during <the> service on the
  10-27  commission the qualifications required by Section 1.023 of this
   11-1  Act;
   11-2              (3)  violates a prohibition established by Section
   11-3  1.023, 1.024, or 1.025 of this Act;
   11-4              (4)  cannot discharge the member's duties for a
   11-5  substantial part of the term for which the member is appointed
   11-6  because of illness or disability; or
   11-7              (5)  is absent from more than half of the regularly
   11-8  scheduled commission meetings that the member is eligible to attend
   11-9  during a calendar year unless the absence is excused by majority
  11-10  vote of <for appointment to> the commission.
  11-11        (b)  The validity of an action of the commission is not
  11-12  affected by the fact that it is <was> taken when a ground for
  11-13  removal of a commission member exists <of the commission existed>.
  11-14        (c)  If the executive director has knowledge that a potential
  11-15  ground for removal exists, the executive director shall notify the
  11-16  presiding officer of the commission of the potential ground.  The
  11-17  presiding officer shall then notify the governor and the attorney
  11-18  general that a potential ground for removal exists.  If the
  11-19  potential ground for removal involves the presiding officer of the
  11-20  commission, the executive director shall notify the next highest
  11-21  officer of the commission, who shall notify the governor and the
  11-22  attorney general that a potential ground for removal exists.
  11-23        (d)  Before a member of the commission may assume the
  11-24  member's duties and before the member may be confirmed by the
  11-25  senate, the member must complete at least one course of the
  11-26  training program established under this section.
  11-27        (e)  A training program established under this section shall
   12-1  provide information to the member regarding:
   12-2              (1)  the enabling legislation that created the
   12-3  commission and its policymaking body to which the member is
   12-4  appointed to serve;
   12-5              (2)  the programs operated by the commission;
   12-6              (3)  the role and functions of the commission;
   12-7              (4)  the rules of the commission with an emphasis on
   12-8  the rules that relate to disciplinary and investigatory authority;
   12-9              (5)  the current budget for the commission;
  12-10              (6)  the results of the most recent formal audit of the
  12-11  commission;
  12-12              (7)  the requirements of Chapters 551, 552, and 2001,
  12-13  Government Code;
  12-14              (8)  the requirements of the conflict of interest laws
  12-15  and other laws relating to public officials; and
  12-16              (9)  any applicable ethics policies adopted by the
  12-17  commission or the Texas Ethics Commission.
  12-18        SECTION 1.10.  Subsections (a), (b), and (e), Section 1.028,
  12-19  Public Utility Regulatory Act of 1995, as enacted by S.B. No. 319,
  12-20  Acts of the 74th Legislature, Regular Session, 1995, are amended to
  12-21  read as follows:
  12-22        (a)  The commission shall employ an executive director, a
  12-23  general counsel, and such officers<, administrative law judges,
  12-24  hearing examiners, investigators, lawyers, engineers, economists,
  12-25  consultants, statisticians, accountants, administrative assistants,
  12-26  inspectors, clerical staff,> and other employees as it deems
  12-27  necessary to carry out the provisions of this Act.  All employees
   13-1  receive such compensation as is fixed by the legislature.  The
   13-2  commission shall develop and implement policies that clearly define
   13-3  the respective responsibilities of the commission and the staff of
   13-4  the commission.
   13-5        (b)  The executive director is responsible for the day-to-day
   13-6  operations of the commission and shall coordinate the activities of
   13-7  commission employees <commission shall employ the following:>
   13-8              <(1)  an executive director;>
   13-9              <(2)  a director of hearings who has wide experience in
  13-10  utility regulation and rate determination;>
  13-11              <(3)  a chief engineer who is a registered engineer and
  13-12  an expert in public utility engineering and rate matters;>
  13-13              <(4)  a chief accountant who is a certified public
  13-14  accountant, experienced in public utility accounting;>
  13-15              <(5)  a director of research who is experienced in the
  13-16  conduct of analyses of industry, economics, energy, fuel, and other
  13-17  related matters that the commission may want to undertake;>
  13-18              <(6)  a director of consumer affairs and public
  13-19  information;>
  13-20              <(7)  a director of utility evaluation;>
  13-21              <(8)  a director of energy conservation; and>
  13-22              <(9)  a general counsel.>
  13-23        <(e)  The commission shall employ administrative law judges
  13-24  to preside at hearings of major importance before the commission.
  13-25  An administrative law judge must be a licensed attorney with not
  13-26  less than five years' general experience or three years' experience
  13-27  in utility regulatory law.  The administrative law judge shall
   14-1  perform his duties independently from the commission>.
   14-2        SECTION 1.11.  Section 1.029, Public Utility Regulatory Act
   14-3  of 1995, as enacted by S.B. No. 319, Acts of the 74th Legislature,
   14-4  Regular Session, 1995, is amended to read as follows:
   14-5        Sec. 1.029.  PERSONNEL POLICIES.  (a)  The executive director
   14-6  or the executive director's <his> designee shall develop an
   14-7  intra-agency career ladder program that addresses opportunities for
   14-8  mobility and advancement for employees of the commission.  The
   14-9  program shall require intra-agency posting of all positions
  14-10  concurrently with<, one part of which shall be the intra-agency
  14-11  posting of all nonentry level positions for at least 10 days
  14-12  before> any public posting.  The executive director or the
  14-13  executive director's <his> designee shall develop a system of
  14-14  annual performance evaluations that are based on documented
  14-15  employee performance <measurable job tasks>.  All merit pay for
  14-16  commission employees must be based on the system established under
  14-17  this section.
  14-18        (b)  The executive director or the executive director's
  14-19  <his/her> designee shall prepare and maintain a written policy
  14-20  statement <plan> to assure implementation of a program of equal
  14-21  employment opportunity under which <whereby> all personnel
  14-22  transactions are made without regard to race, color, disability,
  14-23  sex, religion, age, or national origin.  The policy statement must
  14-24  <plan shall> include:
  14-25              (1)  personnel policies that comply with Chapter 21,
  14-26  Labor Code, including policies relating to recruitment, evaluation,
  14-27  selection, appointment, training, and promotion of personnel;
   15-1              (2)  a comprehensive analysis of the commission
   15-2  workforce that meets federal and state guidelines;
   15-3              (3)  procedures by which a determination can be made
   15-4  about the extent of underuse in the commission workforce of all
   15-5  persons for whom federal or state guidelines encourage a more
   15-6  equitable balance; and
   15-7              (4)  reasonable methods to appropriately address the
   15-8  underuse.  <a comprehensive analysis of all the agency's workforce
   15-9  by race, sex, ethnic origin, class of position, and salary or wage;>
  15-10              <(2)  plans for recruitment, evaluation, selection,
  15-11  appointment, training, promotion, and other personnel policies;>
  15-12              <(3)  steps reasonably designed to overcome any
  15-13  identified underutilization of minorities and women in the agency's
  15-14  workforce; and>
  15-15              <(4)  objectives and goals, timetables for the
  15-16  achievement of the objectives and goals, and assignments of
  15-17  responsibility for their achievement.>
  15-18        (c)  The policy statement <plan> required under Subsection
  15-19  (b) of this section must <shall be filed with the governor's office
  15-20  within 60 days of the effective date of this Act,> cover an annual
  15-21  period, <and> be updated at least annually and reviewed by the
  15-22  Commission on Human Rights for compliance with Subsection (b)(1) of
  15-23  this section, and<.  Progress reports shall> be filed with
  15-24  <submitted to> the governor's office <within 30 days of November 1
  15-25  and April 1 of each year and shall include the steps the agency has
  15-26  taken within the reporting period to comply with these
  15-27  requirements>.
   16-1        (d)  The governor's office shall deliver a biennial report to
   16-2  the legislature based on the information received under Subsection
   16-3  (c) of this section.  The report may be made separately or as a
   16-4  part of other biennial reports made to the legislature.
   16-5        SECTION 1.12.  Section 1.031, Public Utility Regulatory Act
   16-6  of 1995, as enacted by S.B. No. 319, Acts of the 74th Legislature,
   16-7  Regular Session, 1995, is amended to read as follows:
   16-8        Sec. 1.031.  OFFICE; MEETINGS.  (a)  The principal office of
   16-9  the commission shall be located in the City of Austin, Texas, and
  16-10  shall be open daily during the usual business hours, Saturdays,
  16-11  Sundays, and legal holidays excepted.  The commission shall hold
  16-12  meetings at its office and at such other convenient places in the
  16-13  state as shall be expedient and necessary for the proper
  16-14  performance of its duties.
  16-15        (b)  The commission shall develop and implement policies that
  16-16  provide the public with a reasonable opportunity to appear before
  16-17  the commission and to speak on any issue under the jurisdiction of
  16-18  the commission.
  16-19        SECTION 1.13.  Subsection (a), Section 1.035, Public Utility
  16-20  Regulatory Act of 1995, as enacted by S.B. No. 319, Acts of the
  16-21  74th Legislature, Regular Session, 1995, is amended to read as
  16-22  follows:
  16-23        (a)  The commission shall prepare annually a complete and
  16-24  detailed written report accounting for all funds received and
  16-25  disbursed by the commission during the preceding fiscal year.  The
  16-26  annual report must meet the reporting requirements applicable to
  16-27  financial reporting in the General Appropriations Act <publish an
   17-1  annual report to the governor, summarizing its proceedings, listing
   17-2  its receipts and the sources of its receipts, listing its
   17-3  expenditures and the nature of such expenditures, and setting forth
   17-4  such other information concerning the operations of the commission
   17-5  and the public utility industry as it considers of general
   17-6  interest>.
   17-7        SECTION 1.14.  Section 1.036, Public Utility Regulatory Act
   17-8  of 1995, as enacted by S.B. No. 319, Acts of the 74th Legislature,
   17-9  Regular Session, 1995, is amended to read as follows:
  17-10        Sec. 1.036.  <CONSUMER> INFORMATION; ACCESSIBILITY.  (a)  The
  17-11  commission shall prepare information of public <consumer> interest
  17-12  describing the <regulatory> functions of the commission and
  17-13  <describing> the commission's procedures by which <consumer>
  17-14  complaints are filed with and resolved by the commission.  The
  17-15  commission shall make the information available to the <general>
  17-16  public and appropriate state agencies.
  17-17        (b)  The commission by rule shall establish methods by which
  17-18  consumers and service recipients are notified of the name, mailing
  17-19  address, and telephone number of the commission for the purpose of
  17-20  directing complaints to the commission.
  17-21        (c)  The commission shall comply with federal and state laws
  17-22  related to program and facility accessibility.  The commission
  17-23  shall also prepare and maintain a written plan that describes how a
  17-24  person who does not speak English can be provided reasonable access
  17-25  to the commission's programs and services.
  17-26        SECTION 1.15.  Section 1.051, Public Utility Regulatory Act
  17-27  of 1995, as enacted by S.B. No. 319, Acts of the 74th Legislature,
   18-1  Regular Session, 1995, is amended to read as follows:
   18-2        Sec. 1.051.  OFFICE OF PUBLIC UTILITY COUNSEL.  (a)  The
   18-3  independent Office of Public Utility Counsel represents the
   18-4  interests of residential and small commercial consumers.
   18-5        (b)  The chief executive of the office <Office of Public
   18-6  Utility Counsel> is the public utility counsel, hereinafter
   18-7  referred to as counsellor.  The counsellor is appointed by the
   18-8  governor with the advice and consent of the senate to a two-year
   18-9  term that expires on February 1 of the final year of the term.
  18-10  Appointment of the counsellor shall be made without regard to the
  18-11  race, color, disability, sex, religion, age, or national origin of
  18-12  the appointee.
  18-13        (c)  The counsellor shall be a resident of Texas and admitted
  18-14  to the practice of law in this state who has demonstrated a strong
  18-15  commitment and involvement in efforts to safeguard the rights of
  18-16  the public and possesses the knowledge and experience necessary to
  18-17  practice effectively in utility proceedings.
  18-18        (d)  A person is not eligible for appointment as counsellor
  18-19  if the person or the person's spouse:
  18-20              (1)  is employed by or participates in the management
  18-21  of a business entity or other organization regulated by the
  18-22  commission or receiving funds from the commission;
  18-23              (2)  owns or controls, directly or indirectly, more
  18-24  than a 10 percent interest or a pecuniary interest with a value
  18-25  exceeding $10,000 in:
  18-26                    (A)  a business entity or other organization
  18-27  regulated by the commission or receiving funds from the commission
   19-1  or the office; or
   19-2                    (B)  any utility competitor, utility supplier, or
   19-3  other entity affected by a commission decision in a manner other
   19-4  than by the setting of rates for that class of customer;
   19-5              (3)  uses or receives a substantial amount of tangible
   19-6  goods, services, or funds from the commission or the office, other
   19-7  than compensation or reimbursement authorized by law for counsellor
   19-8  or commission membership, attendance, or expenses; or
   19-9              (4)  notwithstanding Subdivision (2) of this
  19-10  subsection, has an interest in a mutual fund or retirement fund in
  19-11  which more than 10 percent of the fund's holdings is in a single
  19-12  utility, utility competitor, or utility supplier in this state and
  19-13  the person does not disclose this information to the governor,
  19-14  senate, or other entity, as appropriate.
  19-15        (e)  A person may not serve as counsellor or act as the
  19-16  general counsel for the office if the person is required to
  19-17  register as a lobbyist under Chapter 305, Government Code, because
  19-18  of the person's activities for compensation related to the
  19-19  operation of the commission or the office.
  19-20        (f)  An officer, employee, or paid consultant of a trade
  19-21  association in the field of public utilities may not serve as
  19-22  counsellor or be an employee of the office who is exempt from the
  19-23  state's position classification plan or is compensated at or above
  19-24  the amount prescribed by the General Appropriations Act for step 1,
  19-25  salary group 17, of the position classification salary schedule.  A
  19-26  person who is the spouse of an officer, manager, or paid consultant
  19-27  of a trade association in the field of public utilities may not
   20-1  serve as counsellor and may not be an office employee who is exempt
   20-2  from the state's position classification plan or is compensated at
   20-3  or above the amount prescribed by the General Appropriations Act
   20-4  for step 1, salary group 17, of the position classification salary
   20-5  schedule.
   20-6        (g)  Notwithstanding any other provision of this Act, a
   20-7  person otherwise ineligible because of the application of
   20-8  Subsection (d)(2) of this section may be appointed as counsellor
   20-9  and may serve as counsellor if the person:
  20-10              (1)  notifies the attorney general and commission that
  20-11  the person is ineligible because of the application of Subsection
  20-12  (d)(2) of this section; and
  20-13              (2)  divests the person or the person's spouse of the
  20-14  ownership or control before appointment, or within a reasonable
  20-15  time if the person is already serving at the time Subsection (d)(2)
  20-16  of this section first applies to the person.
  20-17        SECTION 1.16.  Subtitle C, Title I, Public Utility Regulatory
  20-18  Act of 1995, as enacted by S.B. No. 319, Acts of the 74th
  20-19  Legislature, Regular Session, 1995, is amended by adding Section
  20-20  1.0511 to read as follows:
  20-21        Sec. 1.0511.  GROUNDS FOR REMOVAL.  (a)  It is a ground for
  20-22  removal from office if the counsellor:
  20-23              (1)  does not have at the time of appointment the
  20-24  qualifications required by Section 1.051 of this Act;
  20-25              (2)  does not maintain during service as counsellor the
  20-26  qualifications required by Section 1.051 of this Act;
  20-27              (3)  violates a prohibition established by Section
   21-1  1.051 or 1.0512 of this Act; or
   21-2              (4)  cannot discharge the counsellor's duties for a
   21-3  substantial part of the term for which the counsellor is appointed
   21-4  because of illness or disability.
   21-5        (b)  The validity of an action of the office is not affected
   21-6  by the fact that it is taken when a ground for removal of the
   21-7  counsellor exists.
   21-8        SECTION 1.17.  Subtitle C, Title I, Public Utility Regulatory
   21-9  Act of 1995, as enacted by S.B. No. 319, Acts of the 74th
  21-10  Legislature, Regular Session, 1995, is amended by adding Section
  21-11  1.0512 to read as follows:
  21-12        Sec. 1.0512.  PROHIBITION OF EMPLOYMENT OR REPRESENTATION.
  21-13  (a)  The counsellor may not within two years, and an employee of
  21-14  the office may not, within one year after his employment with the
  21-15  office has ceased, be employed by a public utility which was in the
  21-16  scope of the counsellor's or employee's official responsibility
  21-17  while the counsellor or employee was associated with the office.
  21-18        (b)  During the time the counsellor or an employee of the
  21-19  office is associated with the office or at any time after, the
  21-20  counsellor or employee may not represent a person, corporation, or
  21-21  other business entity before the commission or a court in a matter
  21-22  in which the counsellor or employee was personally involved while
  21-23  associated with the office or a matter that was within the
  21-24  counsellor's or employee's official responsibility while the
  21-25  counsellor or employee was associated with the office.
  21-26        SECTION 1.18.  Subtitle C, Title I, Public Utility Regulatory
  21-27  Act of 1995, as enacted by S.B. No. 319, Acts of the 74th
   22-1  Legislature, Regular Session, 1995, is amended by adding Section
   22-2  1.0513 to read as follows:
   22-3        Sec. 1.0513.  INFORMATION; ACCESSIBILITY.  (a)  The office
   22-4  shall prepare annually a complete and detailed written report
   22-5  accounting for all funds received and disbursed by the office
   22-6  during the preceding fiscal year.  The annual report must meet the
   22-7  reporting requirements applicable to financial reporting provided
   22-8  in the General Appropriations Act.
   22-9        (b)  The office shall prepare information of public interest
  22-10  describing the functions of the office.  The office shall make the
  22-11  information available to the public and appropriate state agencies.
  22-12        (c)  The office shall comply with federal and state laws
  22-13  related to program and facility accessibility.  The office shall
  22-14  also prepare and maintain a written plan that describes how a
  22-15  person who does not speak English can be provided reasonable access
  22-16  to the office's programs and services.
  22-17        SECTION 1.19.  Section 1.052, Public Utility Regulatory Act
  22-18  of 1995, as enacted by S.B. No. 319, Acts of the 74th Legislature,
  22-19  Regular Session, 1995, is amended to read as follows:
  22-20        Sec. 1.052.  INTEREST PROHIBITED.  During the period of the
  22-21  counsellor's employment and for a period of two years following the
  22-22  termination of employment, it shall be unlawful for any person
  22-23  employed as counsellor to have a direct or indirect interest in any
  22-24  utility company regulated under this Act, to provide legal services
  22-25  directly or indirectly to or be employed in any capacity by a
  22-26  utility company regulated under this Act, its parent, or its
  22-27  subsidiary companies, corporations, or cooperatives or a utility
   23-1  competitor, utility supplier, or other entity affected in a manner
   23-2  other than by the setting of rates for that class of customer; but
   23-3  such person may otherwise engage in the private practice of law
   23-4  after the termination of employment as counsellor.
   23-5        SECTION 1.20.  Section 1.053, Public Utility Regulatory Act
   23-6  of 1995, as enacted by S.B. No. 319, Acts of the 74th Legislature,
   23-7  Regular Session, 1995, is amended to read as follows:
   23-8        Sec. 1.053.  EMPLOYEES.  (a)  The counsellor may employ such
   23-9  lawyers, economists, engineers, consultants, statisticians,
  23-10  accountants, clerical staff, and other employees as he or she deems
  23-11  necessary to carry out the provisions of this section.  All
  23-12  employees shall receive such compensation as is fixed by the
  23-13  legislature from the assessment imposed by Section 1.351 of this
  23-14  Act.
  23-15        (b)  The counsellor or the counsellor's designee shall
  23-16  develop an intra-agency career ladder program that addresses
  23-17  opportunities for mobility and advancement for employees within the
  23-18  commission.  The program shall require intra-agency postings of all
  23-19  positions concurrently with any public posting.  The counsellor or
  23-20  the counsellor's designee shall develop a system of annual
  23-21  performance evaluations that are based on documented employee
  23-22  performance.  All merit pay for office employees must be based on
  23-23  the system established under this subsection.  The counsellor or
  23-24  the counsellor's designee shall provide to the public utility
  23-25  counsel and its employees, as often as necessary, information
  23-26  regarding their qualification for office or employment under this
  23-27  Act and their responsibilities under applicable laws relating to
   24-1  standards of conduct for state officers or employees.
   24-2        (c)  The counsellor or the counsellor's designee shall
   24-3  prepare and maintain a written policy statement to assure
   24-4  implementation of a program of equal employment opportunity under
   24-5  which all personnel transactions are made without regard to race,
   24-6  color, disability, sex, religion, age, or national origin.  The
   24-7  policy statement must include:
   24-8              (1)  personnel policies that comply with Chapter 21,
   24-9  Labor Code, including policies relating to recruitment, evaluation,
  24-10  selection, appointment, training, and promotion of personnel;
  24-11              (2)  a comprehensive analysis of the office workforce
  24-12  that meets federal and state guidelines;
  24-13              (3)  procedures by which a determination can be made
  24-14  about the extent of underuse in the office workforce of all persons
  24-15  for whom federal or state guidelines encourage a more equitable
  24-16  balance; and
  24-17              (4)  reasonable methods to appropriately address the
  24-18  underuse.
  24-19        (d)  A policy statement prepared under Subsection (c) of this
  24-20  section must cover an annual period, be updated at least annually
  24-21  and reviewed by the Commission on Human Rights for compliance with
  24-22  Subsection (c)(1) of this section, and be filed with the governor's
  24-23  office.  The governor's office shall deliver a biennial report to
  24-24  the legislature based on the information received under this
  24-25  subsection.  The report may be made separately or as a part of
  24-26  other biennial reports made to the legislature.
  24-27        (e)  The office shall provide to its employees, as often as
   25-1  necessary, information regarding their qualification for office or
   25-2  employment under this Act and their responsibilities under
   25-3  applicable laws relating to standards of conduct for state officers
   25-4  or employees.
   25-5        SECTION 1.21.  Section 1.101, Public Utility Regulatory Act
   25-6  of 1995, as enacted by S.B. No. 319, Acts of the 74th Legislature,
   25-7  Regular Session, 1995, is amended to read as follows:
   25-8        Sec. 1.101.  GENERAL POWER; RULES; HEARINGS; AUDITS.
   25-9  (a)  The commission has the general power to regulate and supervise
  25-10  the business of every public utility within its jurisdiction and to
  25-11  do all things, whether specifically designated in this Act or
  25-12  implied herein, necessary and convenient to the exercise of this
  25-13  power and jurisdiction.
  25-14        (b)  The commission shall make and enforce rules reasonably
  25-15  required in the exercise of its powers and jurisdiction, including
  25-16  rules governing practice and procedure before the commission and,
  25-17  as applicable, practice and procedure before the utility division
  25-18  of the State Office of Administrative Hearings.  The commission
  25-19  shall adopt rules authorizing an administrative law judge to:
  25-20              (1)  limit the amount of time that a party may have to
  25-21  present its case;
  25-22              (2)  limit the number of requests for information that
  25-23  a party may make in a contested case;
  25-24              (3)  require a party to a contested case to identify
  25-25  contested issues and facts before the hearing begins and to limit
  25-26  cross-examination to only those issues and facts and to any new
  25-27  issues that may arise as a result of the discovery process; or
   26-1              (4)  group parties, other than the office, that have
   26-2  the same position on an issue to facilitate cross-examination on
   26-3  that issue, provided that each party in a group is entitled to
   26-4  present that party's witnesses for cross-examination during the
   26-5  hearing.
   26-6        (c)  Rules adopted under Subsection (b) of this section must
   26-7  ensure that all parties receive due process.
   26-8        (d)  The commission may call and hold hearings, administer
   26-9  oaths, receive evidence at hearings, issue subpoenas to compel the
  26-10  attendance of witnesses and the production of papers and documents,
  26-11  and make findings of fact and decisions with respect to
  26-12  administering the provisions of this Act or the rules, orders, or
  26-13  other actions of the commission.
  26-14        (e)  Hearings in contested cases not conducted by one or more
  26-15  commissioners shall be conducted by the utility division of the
  26-16  State Office of Administrative Hearings.  The <(d)  Notwithstanding
  26-17  any other provision of this Act or other law, in proceedings other
  26-18  than those involving major rate changes, the> commission may
  26-19  delegate to the utility division of the State Office of
  26-20  Administrative Hearings <an administrative law judge or hearings
  26-21  examiner> the authority to make a final decision and to issue
  26-22  findings of fact, conclusions of law, and other necessary orders in
  26-23  a proceeding in which there is no contested issue of fact or law.
  26-24  The commission by rule shall define the procedures by which it
  26-25  delegates final decision-making authority authorized by this
  26-26  section.  For review purposes the final decision of the
  26-27  administrative law judge <or hearings examiner> has the same effect
   27-1  as a final decision of the commission unless a commissioner
   27-2  requests formal review of the decision.
   27-3        SECTION 1.22.  Subsection (b), Section 1.102, Public Utility
   27-4  Regulatory Act of 1995, as enacted by S.B. No. 319, Acts of the
   27-5  74th Legislature, Regular Session, 1995, is amended to read as
   27-6  follows:
   27-7        (b)  The commission may audit each utility under the
   27-8  jurisdiction of the commission as frequently as needed<, but shall
   27-9  audit each utility at least once every 10 years>.  Six months after
  27-10  any audit, the utility shall report to the commission on the status
  27-11  of the implementation of the recommendations of the audit and shall
  27-12  file subsequent reports at such times as the commission deems
  27-13  appropriate.
  27-14        SECTION 1.23.  Subtitle D, Title I, Public Utility Regulatory
  27-15  Act of 1995, as enacted by S.B. No. 319, Acts of the 74th
  27-16  Legislature, Regular Session, 1995, is amended by adding Section
  27-17  1.104 to read as follows:
  27-18        Sec. 1.104.  SETTLEMENTS.  (a)  The commission by rule shall
  27-19  adopt procedures governing the use of settlements to resolve
  27-20  contested cases.
  27-21        (b)  The rules shall ensure that:
  27-22              (1)  each party retains the right to:
  27-23                    (A)  have a full hearing before the commission on
  27-24  issues that remain in dispute; and
  27-25                    (B)  judicial review of issues that remain in
  27-26  dispute;
  27-27              (2)  an issue of fact raised by a nonsettling party
   28-1  cannot be waived by a settlement or stipulation of the other
   28-2  parties; and
   28-3              (3)  the nonsettling party may use the issue of fact
   28-4  raised by that party as the basis for judicial review.
   28-5        SECTION 1.24.  Section 1.202, Public Utility Regulatory Act
   28-6  of 1995, as enacted by S.B. No. 319, Acts of the 74th Legislature,
   28-7  Regular Session, 1995, is amended to read as follows:
   28-8        Sec. 1.202.  POWERS OF COMMISSION.  (a)  The commission shall
   28-9  have the power to:
  28-10              (1)  require that public utilities report to it such
  28-11  information relating to transactions between themselves and
  28-12  affiliated interests both within and without the State of Texas to
  28-13  the extent that those transactions are subject to the jurisdiction
  28-14  of the commission <as it may consider useful in the administration
  28-15  of this Act>;
  28-16              (2)  establish forms for all reports;
  28-17              (3)  determine the time for reports and the frequency
  28-18  with which any reports are to be made;
  28-19              (4)  require that any reports be made under oath;
  28-20              (5)  require that a copy of any contract or arrangement
  28-21  between any public utility and any affiliated interest be filed
  28-22  with it.  It may require any such contract or arrangement not in
  28-23  writing to be reduced to writing and filed with it;
  28-24              (6)  require that a copy of any report filed with any
  28-25  federal agency or any governmental agency or body of any other
  28-26  state be filed with it; and
  28-27              (7)  require that a copy of annual reports showing all
   29-1  payments of compensation (other than salary or wages subject to the
   29-2  withholding of federal income tax) to residents of Texas, or with
   29-3  respect to legal, administrative, or legislative matters in Texas,
   29-4  or for representation before the Texas Legislature or any
   29-5  governmental agency or body be filed with it.
   29-6        (b)  <The railroad commission shall have the power to review
   29-7  and approve, for purposes of the Outer Continental Shelf Lands Act
   29-8  Amendments of 1978  and any other federal authorities, applications
   29-9  by gas utilities for the purchase of natural gas from producing
  29-10  affiliates.>
  29-11        <(c)>  On the request of the governing body of any
  29-12  municipality, the commission may provide sufficient staff members
  29-13  to advise and consult with such municipality on any pending matter.
  29-14        SECTION 1.25.  Subsection (b), Section 1.251, Public Utility
  29-15  Regulatory Act of 1995, as enacted by S.B. No. 319, Acts of the
  29-16  74th Legislature, Regular Session, 1995, is amended to read as
  29-17  follows:
  29-18        (b)  All transactions involving the sale of 50 percent or
  29-19  more of the stock of a public utility shall also be reported to the
  29-20  commission within a reasonable time.  On the filing of a report
  29-21  with the commission, the commission shall investigate the same with
  29-22  or without public hearing to determine whether the action is
  29-23  consistent with the public interest.  In reaching its
  29-24  determination, the commission shall take into consideration the
  29-25  reasonable value of the property, facilities, or securities to be
  29-26  acquired, disposed of, merged, transferred, or consolidated and
  29-27  whether such a transaction will adversely affect the health or
   30-1  safety of customers or employees, result in the transfer of jobs of
   30-2  Texas citizens to workers domiciled outside the State of Texas, or
   30-3  result in the decline of service, that the public utility will
   30-4  receive consideration equal to the reasonable value of the assets
   30-5  when it sells, leases, or transfers assets, and that the
   30-6  transaction is consistent with the public interest.
   30-7        SECTION 1.26.  Section 1.271, Public Utility Regulatory Act
   30-8  of 1995, as enacted by S.B. No. 319, Acts of the 74th Legislature,
   30-9  Regular Session, 1995, is amended to read as follows:
  30-10        Sec. 1.271.  JURISDICTION OVER AFFILIATED INTERESTS.  The
  30-11  commission shall have jurisdiction over <affiliated interests
  30-12  having> transactions between <with> public utilities under the
  30-13  jurisdiction of the commission and affiliated interests to the
  30-14  extent of access to all accounts and records of such affiliated
  30-15  interests relating to such transactions, including but in no way
  30-16  limited to accounts and records of joint or general expenses, any
  30-17  portion of which may be applicable to such transactions.   Any
  30-18  accounts or records obtained by the commission related to sales of
  30-19  electrical energy at wholesale by an affiliated interest to the
  30-20  public utility shall be confidential and not subject to disclosure
  30-21  under Chapter 552, Government Code.
  30-22        SECTION 1.27.  Subtitle I, Title I, Public Utility Regulatory
  30-23  Act of 1995, as enacted by S.B. No. 319, Acts of the 74th
  30-24  Legislature, Regular Session, 1995, is amended by adding Section
  30-25  1.3215 to read as follows:
  30-26        Sec. 1.3215.  ADMINISTRATIVE PENALTY.  (a)  The commission
  30-27  may impose an administrative penalty against a person regulated
   31-1  under this Act who violates this Act or a rule or order adopted
   31-2  under this Act.
   31-3        (b)  The penalty for a violation may be in an amount not to
   31-4  exceed $5,000.  Each day a violation continues or occurs is a
   31-5  separate violation for purposes of imposing a penalty.
   31-6        (c)  The amount of the penalty shall be based on:
   31-7              (1)  the seriousness of the violation, including the
   31-8  nature, circumstances, extent, and gravity of any prohibited acts,
   31-9  and the hazard or potential hazard created to the health, safety,
  31-10  or economic welfare of the public;
  31-11              (2)  the economic harm to property or the environment
  31-12  caused by the violation;
  31-13              (3)  the history of previous violations;
  31-14              (4)  the amount necessary to deter future violations;
  31-15              (5)  efforts to correct the violation; and
  31-16              (6)  any other matter that justice may require.
  31-17        (d)  If the executive director determines that a violation
  31-18  has occurred, the executive director may issue to the commission a
  31-19  report that states the facts on which the determination is based
  31-20  and the director's recommendation on the imposition of a penalty,
  31-21  including a recommendation on the amount of the penalty.
  31-22        (e)  Within 14 days after the date the report is issued, the
  31-23  executive director shall give written notice of the report to the
  31-24  person.  The notice may be given by certified mail.  The notice
  31-25  must include a brief summary of the alleged violation and a
  31-26  statement of the amount of the recommended penalty and must inform
  31-27  the person that the person has a right to a hearing on the
   32-1  occurrence of the violation, the amount of the penalty, or both the
   32-2  occurrence of the violation and the amount of the penalty.  Before
   32-3  any penalty may be assessed under this section, the person against
   32-4  whom the penalty may be assessed shall be given 30 days after
   32-5  receiving from the executive director the notice of the report
   32-6  summarizing the alleged violation pursuant to this subsection in
   32-7  which to cure the violation and the person must fail to cure the
   32-8  alleged violation within the 30-day period.  The person against
   32-9  whom the penalty may be assessed who claims to have cured the
  32-10  alleged violation shall have the burden of proving to the
  32-11  commission that the alleged violation was cured and was accidental
  32-12  or inadvertent.
  32-13        (f)  Within 20 days after the date the person receives the
  32-14  notice, the person in writing may accept the determination and
  32-15  recommended penalty of the executive director or may make a written
  32-16  request for a hearing on the occurrence of the violation, the
  32-17  amount of the penalty, or both the occurrence of the violation and
  32-18  the amount of the penalty.
  32-19        (g)  If the person accepts the determination and recommended
  32-20  penalty of the executive director, the commission by order shall
  32-21  approve the determination and impose the recommended penalty.
  32-22        (h)  If the person requests a hearing or fails to respond
  32-23  timely to the notice, the executive director shall set a hearing
  32-24  and give notice of the hearing to the person.  The hearing shall be
  32-25  held by an administrative law judge of the State Office of
  32-26  Administrative Hearings.   The administrative law judge shall make
  32-27  findings of fact and conclusions of law and promptly issue to the
   33-1  commission a proposal for a decision about the occurrence of the
   33-2  violation and the amount of a proposed penalty.  Based on the
   33-3  findings of fact, conclusions of law, and proposal for a decision,
   33-4  the commission by order may find that a violation has occurred and
   33-5  impose a penalty or may find that no violation occurred.
   33-6        (i)  The notice of the commission's order given to the person
   33-7  under Chapter 2001, Government Code, must include a statement of
   33-8  the right of the person to judicial review of the order.
   33-9        (j)  Within 30 days after the date the commission's order is
  33-10  final as provided by Section 2001.144, Government Code, the person
  33-11  shall:
  33-12              (1)  pay the amount of the penalty;
  33-13              (2)  pay the amount of the penalty and file a petition
  33-14  for judicial review contesting the occurrence of the violation, the
  33-15  amount of the penalty, or both the occurrence of the violation and
  33-16  the amount of the penalty; or
  33-17              (3)  without paying the amount of the penalty, file a
  33-18  petition for judicial review contesting the occurrence of the
  33-19  violation, the amount of the penalty, or both the occurrence of the
  33-20  violation and the amount of the penalty.
  33-21        (k)  Within the 30-day period, a person who acts under
  33-22  Subsection (j)(3) of this section may:
  33-23              (1)  stay enforcement of the penalty by:
  33-24                    (A)  paying the amount of the penalty to the
  33-25  court for placement in an escrow account; or
  33-26                    (B)  giving to the court a supersedeas bond that
  33-27  is approved by the court for the amount of the penalty and that is
   34-1  effective until all judicial review of the commission's order is
   34-2  final; or
   34-3              (2)  request the court to stay enforcement of the
   34-4  penalty by:
   34-5                    (A)  filing with the court a sworn affidavit of
   34-6  the person stating that the person is financially unable to pay the
   34-7  amount of the penalty and is financially unable to give the
   34-8  supersedeas bond; and
   34-9                    (B)  giving a copy of the affidavit to the
  34-10  executive director by certified mail.
  34-11        (l)  The executive director, on receipt of a copy of an
  34-12  affidavit under Subsection (k)(2) of this section, may file with
  34-13  the court, within five days after the date the copy is received, a
  34-14  contest to the affidavit.  The court shall hold a hearing on the
  34-15  facts alleged in the affidavit as soon as practicable and shall
  34-16  stay the enforcement of the penalty on finding that the alleged
  34-17  facts are true.  The person who files an affidavit has the burden
  34-18  of proving that the person is financially unable to pay the amount
  34-19  of the penalty and to give a supersedeas bond.
  34-20        (m)  If the person does not pay the amount of the penalty and
  34-21  the enforcement of the penalty is not stayed, the executive
  34-22  director may refer the matter to the attorney general for
  34-23  collection of the amount of the penalty.
  34-24        (n)  Judicial review of the order of the commission:
  34-25              (1)  is instituted by filing a petition as provided by
  34-26  Subchapter G, Chapter 2001, Government Code; and
  34-27              (2)  is under the substantial evidence rule.
   35-1        (o)  If the court sustains the occurrence of the violation,
   35-2  the court may uphold or reduce the amount of the penalty and order
   35-3  the person to pay the full or reduced amount of the penalty.  If
   35-4  the court does not sustain the occurrence of the violation, the
   35-5  court shall order that no penalty is owed.
   35-6        (p)  When the judgment of the court becomes final, the court
   35-7  shall proceed under this subsection.  If the person paid the amount
   35-8  of the penalty and if that amount is reduced or is not upheld by
   35-9  the court, the court shall order that the appropriate amount plus
  35-10  accrued interest be remitted to the person.  The rate of the
  35-11  interest is the rate charged on loans to depository institutions by
  35-12  the New York Federal Reserve Bank, and the interest shall be paid
  35-13  for the period beginning on the date the penalty was paid and
  35-14  ending on the date the penalty is remitted.  If the person gave a
  35-15  supersedeas bond and if the amount of the penalty is not upheld by
  35-16  the court, the court shall order the release of the bond.  If the
  35-17  person gave a supersedeas bond and if the amount of the penalty is
  35-18  reduced, the court shall order the release of the bond after the
  35-19  person pays the amount.
  35-20        (q)  A penalty collected under this section shall be remitted
  35-21  to the comptroller for deposit in the general revenue fund.
  35-22        (r)  All proceedings under this section are subject to
  35-23  Chapter 2001, Government Code.
  35-24        (s)  The executive director may delegate to a person that the
  35-25  executive director designates any power or duty given the executive
  35-26  director by this section.
  35-27        SECTION 1.28.  Subsection (b), Section 1.351, Public Utility
   36-1  Regulatory Act of 1995, as enacted by S.B. No. 319, Acts of the
   36-2  74th Legislature, Regular Session, 1995, is amended to read as
   36-3  follows:
   36-4        (b)  The legislature may <commission shall, subject to the
   36-5  approval of the legislature,> adjust this assessment to provide a
   36-6  level of income sufficient to fund the commission and the office of
   36-7  public utility counsel.
   36-8        SECTION 1.29.  Section 1.354, Public Utility Regulatory Act
   36-9  of 1995, as enacted by S.B. No. 319, Acts of the 74th Legislature,
  36-10  Regular Session, 1995, is amended to read as follows:
  36-11        Sec. 1.354.  COLLECTION AND PAYMENT INTO GENERAL REVENUE
  36-12  FUND.  (a)  All fees, penalties, and interest paid under the
  36-13  provisions of Sections 1.351, <and> 1.352, and 1.353 of this Act
  36-14  shall be collected by the comptroller of public accounts and paid
  36-15  into the general revenue fund.  <The commission shall notify the
  36-16  comptroller of public accounts of any adjustment of the assessment
  36-17  imposed in Section 1.351 when made.>
  36-18        (b)  All money paid to the commission or to the office under
  36-19  this Act is subject to Subchapter F, Chapter 404, Government Code.
  36-20        SECTION 1.30.  Section 1.355, Public Utility Regulatory Act
  36-21  of 1995, as enacted by S.B. No. 319, Acts of the 74th Legislature,
  36-22  Regular Session, 1995, is amended to read as follows:
  36-23        Sec. 1.355.  GRANTS OF FEDERAL FUNDS.  (a)  The commission
  36-24  may apply to any appropriate agency or officer of the United States
  36-25  to receive and spend federal funds which it may obtain from grants
  36-26  or other similar forms of financial assistance.  Nothing in this
  36-27  section shall inhibit the commission's ability to contract with or
   37-1  otherwise receive assistance from any state, local, or other
   37-2  authorized source of funds.
   37-3        (b)  Sections 403.094 and 403.095, Government Code, do not
   37-4  apply to the special account established under this section.
   37-5  <APPROVAL OF BUDGET.  The budget of the commission shall be subject
   37-6  to legislative approval as part of the appropriations act.>
   37-7        SECTION 1.31.  Subtitle J, Title I, Public Utility Regulatory
   37-8  Act of 1995, as enacted by S.B. No. 319, Acts of the 74th
   37-9  Legislature, Regular Session, 1995, is amended by adding Section
  37-10  1.357 to read as follows:
  37-11        Sec. 1.357.  APPROVAL OF BUDGET.  The budget of the
  37-12  commission shall be subject to legislative approval as part of the
  37-13  General Appropriations Act.
  37-14        SECTION 1.32.  Subsections (a) and (b), Section 1.401, Public
  37-15  Utility Regulatory Act of 1995, as enacted by S.B. No. 319, Acts of
  37-16  the 74th Legislature, Regular Session, 1995, are amended to read as
  37-17  follows:
  37-18        (a)  Any affected person may complain to the regulatory
  37-19  authority in writing setting forth any act or thing done or omitted
  37-20  to be done by any public utility in violation or claimed violation
  37-21  of any law which the regulatory authority has jurisdiction to
  37-22  administer or of any order, ordinance, rule, or regulation of the
  37-23  regulatory authority.  The commission shall keep <an> information
  37-24  <file> about each complaint filed with the commission <relating to
  37-25  a utility>.  The commission shall retain the information <file> for
  37-26  a reasonable period.  The information shall include:
  37-27              (1)  the date the complaint is received;
   38-1              (2)  the name of the complainant;
   38-2              (3)  the subject matter of the complaint;
   38-3              (4)  a record of all persons contacted in relation to
   38-4  the complaint;
   38-5              (5)  a summary of the results of the review or
   38-6  investigation of the complaint; and
   38-7              (6)  for complaints for which the commission took no
   38-8  action, an explanation of the reason the complaint was closed
   38-9  without action.
  38-10        (b)  The commission shall keep a file about each <If a>
  38-11  written complaint <is> filed with the commission.  The commission
  38-12  shall provide to the person filing the complaint and to the persons
  38-13  or entities complained about the commission's policies and
  38-14  procedures pertaining to complaint investigation and resolution.
  38-15  The <relating to a utility, the> commission, at least <as
  38-16  frequently as> quarterly and until final disposition of the
  38-17  complaint, shall notify the person filing <parties to> the
  38-18  complaint and each person or entity complained about of the status
  38-19  of the complaint unless the notice would jeopardize an undercover
  38-20  investigation.
  38-21        SECTION 1.33.  Subtitle K, Title I, Public Utility Regulatory
  38-22  Act of 1995, as enacted by S.B. No. 319, Acts of the 74th
  38-23  Legislature, Regular Session, 1995, is amended by adding Section
  38-24  1.408 to read as follows:
  38-25        Sec. 1.408.  RIGHT TO CONTRIBUTION.  In any action or claim
  38-26  brought against a public utility for personal injury or property
  38-27  damage arising out of or in connection with the utility's
   39-1  transmission or distribution system, the utility shall have, in
   39-2  addition to any other rights of contribution or indemnity provided
   39-3  by law, a right of contribution against any person, other than
   39-4  another electric utility having retail customers, using or which
   39-5  has used the utility's transmission or distribution system to
   39-6  transmit or sell electricity during the period relevant to the
   39-7  claim or action which is the basis of the claim or action against
   39-8  the utility.  This right of contribution shall not extend to an
   39-9  action or claim based solely on the utility's failure to comply
  39-10  with the National Electrical Safety Code or to properly maintain
  39-11  its facilities.
  39-12        SECTION 1.34.  Subchapter C, Chapter 2003, Government Code,
  39-13  is amended by adding Section 2003.047 to read as follows:
  39-14        Sec. 2003.047.  UTILITY DIVISION.  (a)  The office shall
  39-15  establish a utility division to perform the contested case hearings
  39-16  for the Public Utility Commission of Texas as prescribed by the
  39-17  Public Utility Regulatory Act of 1995 and other applicable law.
  39-18        (b)  The utility division shall conduct hearings relating to
  39-19  contested cases before the commission, other than a hearing
  39-20  conducted by one or more commissioners.  The commission by rule may
  39-21  delegate the responsibility to hear any other matter before the
  39-22  commission if consistent with the duties and responsibilities of
  39-23  the division.
  39-24        (c)  Only an administrative law judge in the utility division
  39-25  may conduct a hearing on behalf of the commission.  An
  39-26  administrative law judge in the utility division may conduct
  39-27  hearings for other state agencies as time allows.  The office may
   40-1  transfer an administrative law judge into the division on a
   40-2  temporary or permanent basis and may contract with qualified
   40-3  individuals to serve as temporary administrative law judges as
   40-4  necessary.
   40-5        (d)  To be eligible to preside at a hearing, an
   40-6  administrative law judge, regardless of temporary or permanent
   40-7  status, must be licensed to practice law in this state and have not
   40-8  less than five years of general experience or three years of
   40-9  experience in utility regulatory law.
  40-10        (e)  At the time the office receives jurisdiction of a
  40-11  proceeding, the commission shall provide to the administrative law
  40-12  judge a list of issues or areas that must be addressed.  In
  40-13  addition, the commission may identify and provide to the
  40-14  administrative law judge at any time additional issues or areas
  40-15  that must be addressed.
  40-16        (f)  The office and the commission shall jointly adopt rules
  40-17  providing for certification to the commission of an issue that
  40-18  involves an ultimate finding of compliance with or satisfaction of
  40-19  a statutory standard the determination of which is committed to the
  40-20  discretion or judgment of the commission by law.  The rules must
  40-21  address, at a minimum, the issues that are appropriate for
  40-22  certification and the procedure to be used in certifying the issue.
  40-23  Each agency shall publish the jointly adopted rules.
  40-24        (g)  Notwithstanding Section 2001.058, the commission may
  40-25  change a finding of fact or conclusion of law made by the
  40-26  administrative law judge or vacate or modify an order issued by the
  40-27  administrative law judge only if the commission:
   41-1              (1)  determines that the administrative law judge:
   41-2                    (A)  did not properly apply or interpret
   41-3  applicable law, commission rules or policies, or prior
   41-4  administrative decisions; or
   41-5                    (B)  issued a finding of fact that is not
   41-6  supported by a preponderance of the evidence; or
   41-7              (2)  determines that a commission policy or a prior
   41-8  administrative decision on which the administrative law judge
   41-9  relied is incorrect or should be changed.
  41-10        (h)  The commission shall state in writing the specific
  41-11  reason and legal basis for its determination under Subsection (g).
  41-12        (i)  An administrative law judge, on the judge's own motion
  41-13  or on motion of a party and after notice and an opportunity for a
  41-14  hearing, may impose appropriate sanctions as provided by Subsection
  41-15  (j) against a party or its representative for:
  41-16              (1)  filing a motion or pleading that is groundless and
  41-17  brought:
  41-18                    (A)  in bad faith;
  41-19                    (B)  for the purpose of harassment; or
  41-20                    (C)  for any other improper purpose, such as to
  41-21  cause unnecessary delay or needless increase in the cost of the
  41-22  proceeding;
  41-23              (2)  abuse of the discovery process in seeking, making,
  41-24  or resisting discovery; or
  41-25              (3)  failure to obey an order of the administrative law
  41-26  judge or the commission.
  41-27        (j)  A sanction imposed under Subsection (i) may include, as
   42-1  appropriate and justified, issuance of an order:
   42-2              (1)  disallowing further discovery of any kind or of a
   42-3  particular kind by the offending party;
   42-4              (2)  charging all or any part of the expenses of
   42-5  discovery against the offending party or its representative;
   42-6              (3)  holding that designated facts be deemed admitted
   42-7  for purposes of the proceeding;
   42-8              (4)  refusing to allow the offending party to support
   42-9  or oppose a designated claim or defense or prohibiting the party
  42-10  from introducing designated matters in evidence;
  42-11              (5)  disallowing in whole or in part requests for
  42-12  relief by the offending party and excluding evidence in support of
  42-13  such requests;
  42-14              (6)  punishing the offending party or its
  42-15  representative for contempt to the same extent as a district court;
  42-16              (7)  requiring the offending party or its
  42-17  representative to pay, at the time ordered by the administrative
  42-18  law judge, the reasonable expenses, including attorney's fees,
  42-19  incurred by other parties because of the sanctionable behavior; and
  42-20              (8)  striking pleadings or testimony, or both, in whole
  42-21  or in part, or staying further proceedings until the order is
  42-22  obeyed.
  42-23        (k)  Hearings conducted for the commission by the office
  42-24  shall be held in hearing rooms provided by the commission.  The
  42-25  commission shall also provide the utility division access to its
  42-26  computer systems, databases, and library resources.
  42-27        (l)  The office shall charge the commission a fixed annual
   43-1  fee rather than an hourly rate for services rendered by the utility
   43-2  division to the commission.  The office and the commission shall
   43-3  negotiate the amount of the fixed fee biennially, subject to the
   43-4  approval of the governor, to coincide with the commission's
   43-5  legislative appropriations request.
   43-6        SECTION 1.35.  (a)  A task force is established to administer
   43-7  the transfer of the hearings division from the Public Utility
   43-8  Commission of Texas to the State Office of Administrative Hearings.
   43-9  The task force is composed of:
  43-10              (1)  the governor or the governor's designee;
  43-11              (2)  the Legislative Budget Board or the board's
  43-12  designee;
  43-13              (3)  the chairman of the Public Utility Commission of
  43-14  Texas;
  43-15              (4)  the public utility counsel; and
  43-16              (5)  the chief administrative law judge of the State
  43-17  Office of Administrative Hearings.
  43-18        (b)  The governor or the governor's designee is the presiding
  43-19  officer of the task force.
  43-20        (c)  The task force shall:
  43-21              (1)  determine the personnel, equipment, data,
  43-22  facilities, and other items that will be transferred under this Act
  43-23  and the schedule for the transfers; and
  43-24              (2)  mediate and resolve disputes between the
  43-25  respective agencies relating to a transfer.
  43-26        (d)  After the transfers have been completed, the task force
  43-27  shall prepare a written report detailing the specifics of the
   44-1  transfers and shall submit the report to the governor and the
   44-2  legislature.
   44-3        (e)  In determining a transfer under this Act, the task force
   44-4  shall ensure that the transfer does not adversely affect a
   44-5  proceeding before the Public Utility Commission of Texas or the
   44-6  rights of the parties to the proceeding.
   44-7        (f)  This section takes effect immediately.
   44-8        SECTION 1.36.  (a)  On September 1, 1995, all personnel,
   44-9  including hearings examiners and administrative law judges,
  44-10  equipment, data, facilities, and other items of the hearings
  44-11  division of the Public Utility Commission of Texas, other than the
  44-12  personnel, equipment, data, facilities, and other items of the
  44-13  central records office, are transferred to the utility division of
  44-14  the State Office of Administrative Hearings.  Until September 1,
  44-15  1996, an employee transferred to the utility division may be
  44-16  terminated or subject to salary reduction only for cause and only
  44-17  in relation to poor performance or unacceptable conduct.  A
  44-18  hearings examiner transferred to the State Office of Administrative
  44-19  Hearings becomes an administrative law judge on the date of
  44-20  transfer.
  44-21        (b)  A hearings examiner or administrative law judge
  44-22  transferred from the Public Utility Commission of Texas to the
  44-23  State Office of Administrative Hearings shall continue to hear any
  44-24  case assigned to the person as if the transfer had not occurred.
  44-25        (c)  The changes in law made by this Act that relate to the
  44-26  procedures governing a hearing before the utility division of the
  44-27  State Office of Administrative Hearings apply only to a case that
   45-1  is filed on or after September 1, 1995.  In addition, the
   45-2  procedures prescribed by the provisions amended by this Act shall
   45-3  continue to be used in a hearing as those provisions existed on
   45-4  August 31, 1995.  The former law is continued in effect for those
   45-5  purposes.
   45-6        (d)  The Public Utility Commission of Texas is not required
   45-7  by this Act or amendments made by this Act to adopt new rules
   45-8  governing practice and procedure before the Public Utility
   45-9  Commission of Texas or the utility division of the State Office of
  45-10  Administrative Hearings.  The rules in effect on the effective date
  45-11  of this Act remain in effect until amended or repealed as required
  45-12  by law.  Any rules adopted after the effective date of this Act
  45-13  governing practice and procedure before the utility division of the
  45-14  State Office of Administrative Hearings must be adopted jointly by
  45-15  that office and the commission.
  45-16        SECTION 1.37.  Section 1.3215, Public Utility Regulatory Act
  45-17  of 1995, as added by this Act, applies only to a violation
  45-18  committed on or after the effective date of this Act.  A violation
  45-19  committed before the effective date of this Act is governed by the
  45-20  law in effect when the violation occurred, and that law is
  45-21  continued in effect for that purpose.
  45-22        SECTION 1.38.  Section 1.104, Public Utility Regulatory Act
  45-23  of 1995, as added by this Act, applies only to a proceeding for
  45-24  which a final order has not been issued before the effective date
  45-25  of this Act and does not apply to an electric utility merger
  45-26  proceeding filed before January 1, 1995, in which a final order has
  45-27  not been issued.  Except as otherwise provided by this section, on
   46-1  or after the effective date of this Act, the Public Utility
   46-2  Commission of Texas may not approve a settlement unless the
   46-3  settlement has been reached in accordance with rules adopted under
   46-4  Section 1.104, Public Utility Regulatory Act of 1995, as added by
   46-5  this Act.
   46-6        SECTION 1.39.  The changes in law made by this Act relating
   46-7  to the requirements for membership on the Public Utility Commission
   46-8  of Texas, to the requirements for service as public utility
   46-9  counsel, or to employment as executive director or general counsel
  46-10  of the commission apply only to a person appointed or hired, as
  46-11  appropriate, on or after the effective date of this Act and do not
  46-12  affect the entitlement of a member serving on the commission on
  46-13  August 31, 1995, to continue to hold office for the remainder of
  46-14  the term for which the person was appointed or the ability of a
  46-15  person serving as public utility counsel, executive director, or
  46-16  general counsel on August 31, 1995, to continue to hold that
  46-17  position.
  46-18                               ARTICLE 2
  46-19        SECTION 2.01.  Subtitle A, Title II, Public Utility
  46-20  Regulatory Act of 1995, as enacted by S.B. No. 319, Acts of the
  46-21  74th Legislature, Regular Session, 1995, is amended by amending
  46-22  Section 2.001 and adding Sections 2.0011 and 2.0012 to read as
  46-23  follows:
  46-24        Sec. 2.001.  LEGISLATIVE POLICY CONCERNING REGULATION OF THE
  46-25  ELECTRIC UTILITY INDUSTRY.  (a)  This title is enacted to protect
  46-26  the public interest inherent in the rates and services of public
  46-27  utilities.  The legislature finds that public utilities are by
   47-1  definition monopolies in many of the services they provide and in
   47-2  many of the areas they serve, and that therefore the normal forces
   47-3  of competition that operate to regulate prices in a free enterprise
   47-4  society do not always operate, and that therefore, except as
   47-5  otherwise provided for in this Act, utility rates, operations, and
   47-6  services are regulated by public agencies.  The purpose of this
   47-7  title is to establish a comprehensive regulatory system that is
   47-8  adequate to the task of regulating public utilities as defined in
   47-9  this title, to assure rates, operations, and services that are just
  47-10  and reasonable to consumers and to the utilities.  Retail electric
  47-11  service maintains the attributes that make regulation of monopolies
  47-12  appropriate.  The legislature finds that the wholesale electric
  47-13  industry through federal legislative, judicial, and administrative
  47-14  actions is becoming a more competitive industry which does not lend
  47-15  itself to traditional electric utility regulatory rules, policies,
  47-16  and principles and that, therefore, the public interest requires
  47-17  that new rules, policies, and principles be formulated and applied
  47-18  to protect the public interest in a more competitive marketplace.
  47-19  The development of a competitive wholesale electric market that
  47-20  allows for increased participation by both utilities and certain
  47-21  nonutilities is in the public interest.
  47-22        (b)  Following adoption by the commission of rules
  47-23  implementing the consumer and competitive safeguards included in
  47-24  Subdivisions (1) through (4) of this subsection and only when the
  47-25  utility has excess generation capacity, an electric utility may
  47-26  charge individual customers for wholesale electric service at a
  47-27  price that is lower than the wholesale rate approved by a
   48-1  regulatory authority, but equal to or greater than the greater of
   48-2  fifty percent of the demand-related cost included in such rate or
   48-3  the utility's marginal costs.  Nothing in this subsection, however,
   48-4  shall affect the ability of electric utilities to enter into
   48-5  emergency energy transactions.  Within 180 days from the effective
   48-6  date of this section, the commission shall make and enforce rules
   48-7  sufficient to ensure that a utility's allocable costs of serving
   48-8  customers paying discounted wholesale prices are not borne by the
   48-9  utility's other customers.  Such rules shall provide for the
  48-10  following:
  48-11              (1)  that all revenues associated with discounted
  48-12  wholesale sales shall be separately accounted for and credited to
  48-13  the utility's other customers;
  48-14              (2)  rules of conduct pertaining to information
  48-15  transfers, separation of personnel, operating procedures, and other
  48-16  matters the commission finds necessary to ensure that third parties
  48-17  receiving services from the utility are not disadvantaged relative
  48-18  to the utility when it makes discounted wholesale sales;
  48-19              (3)  accounting standards including maintenance of
  48-20  separate books, if necessary, reporting requirements, and other
  48-21  provisions necessary to enforce the commission's responsibilities
  48-22  under this subsection; and
  48-23              (4)  that discounted wholesale sales may only be made
  48-24  when the firm capacity available to the utility is in excess of its
  48-25  applicable reserve requirements for the duration of the sale.
  48-26        Sec. 2.0011.  DEFINITIONS.  In this title:
  48-27              (1)  "Public<, "public> utility" or "utility" means any
   49-1  person, corporation, river authority, cooperative corporation, or
   49-2  any combination thereof, other than a municipal corporation, or
   49-3  their lessees, trustees, and receivers, now or hereafter owning or
   49-4  operating for compensation in this state equipment or facilities
   49-5  for producing, generating, transmitting, distributing, selling, or
   49-6  furnishing electricity in this state (hereinafter "electric
   49-7  utility"); provided, however, that this definition may not be
   49-8  construed to apply to or include a qualifying facility <small power
   49-9  producer or qualifying cogenerator, as defined in Sections 3(17)(D)
  49-10  and 3(18)(C) of the Federal Power Act, as amended (16 U.S.C.
  49-11  Sections 796(17)(D) and 796(18)(C))>.  The term does not include an
  49-12  exempt wholesale generator, a power marketer, or a corporation as
  49-13  prescribed by Section 2.0012 of this Act, or any person or
  49-14  corporation not otherwise a public utility that:
  49-15                    (A) <(1)>  furnishes the services or commodity
  49-16  described in this section only to itself, its employees, or its
  49-17  tenants as an incident of such employee service or tenancy, when
  49-18  such service or commodity is not resold to or used by others;
  49-19                    (B) <(2)>  owns or operates in this state
  49-20  equipment or facilities for producing, generating, transmitting,
  49-21  distributing, selling, or furnishing electric energy to an electric
  49-22  utility, if the equipment or facilities are used primarily for the
  49-23  production and generation of electric energy for consumption by the
  49-24  person or corporation; or
  49-25                    (C) <(3)>  owns or operates in this state a
  49-26  recreational vehicle park that provides metered electric service in
  49-27  accordance with Article 1446d-2, Revised Statutes, provided that a
   50-1  recreational vehicle park owner is considered a public utility if
   50-2  the owner fails to comply with Article 1446d-2, Revised Statutes,
   50-3  with regard to the metered sale of electricity at the recreational
   50-4  vehicle park.
   50-5              (2)  "Exempt wholesale generator" means a person that
   50-6  is engaged directly, or indirectly through one or more affiliates,
   50-7  exclusively in the business of owning, operating, or both owning
   50-8  and operating all or part of one or more facilities for the
   50-9  generation of electric energy and selling electric energy at
  50-10  wholesale and that:
  50-11                    (A)  does not own facilities for the transmission
  50-12  of electricity, other than essential interconnecting transmission
  50-13  facilities necessary to effect a sale of electric energy at
  50-14  wholesale; and
  50-15                    (B)  has applied to the Federal Energy Regulatory
  50-16  Commission for a determination under Section 32, Public Utility
  50-17  Holding Company Act (15 U.S.C. Section 79z-5a), or has registered
  50-18  as an exempt wholesale generator as required by this Act.
  50-19              (3)  "Power marketer" means a person that:
  50-20                    (A)  becomes owner of electric energy in this
  50-21  state for the purpose of buying and selling the electric energy at
  50-22  wholesale;
  50-23                    (B)  does not own generation, transmission, or
  50-24  distribution facilities in this state;
  50-25                    (C)  does not have a certificated service area;
  50-26  and
  50-27                    (D)  has been granted authority by the Federal
   51-1  Energy Regulatory Commission to sell electric energy at
   51-2  market-based rates or has registered as a power marketer under this
   51-3  Act.
   51-4              (4)  "Price" means any charge to a customer for retail
   51-5  or wholesale electric service that is at or lower than a rate
   51-6  approved by a regulatory authority.
   51-7              (5)  "Qualifying cogenerator" and "qualifying small
   51-8  power producer" have the meanings assigned by Sections 3(18)(C) and
   51-9  3(17)(D), Federal Power Act (16 U.S.C. Sections 796(18)(C) and
  51-10  796(17)(D)).
  51-11              (6)  "Qualifying facility" means a qualifying
  51-12  cogenerator or qualifying small power producer.
  51-13              (7)  "Rate" means and includes every compensation,
  51-14  tariff, charge, fare, toll, rental, and classification, or any of
  51-15  them demanded, observed, charged, or collected whether directly or
  51-16  indirectly by any public utility for any service, product, or
  51-17  commodity described in the definition of "utility" in Section 2.001
  51-18  or 3.001 of this Act and any rules, regulations, practices, or
  51-19  contracts affecting any such compensation, tariff, charge, fare,
  51-20  toll, rental, or classification that must be approved by a
  51-21  regulatory authority.  Prices as defined in Subdivision (4) of this
  51-22  section shall not be considered a rate.
  51-23              (8)  "Transmission service" includes construction or
  51-24  enlargement of facilities, transmission over distribution
  51-25  facilities, control area services, scheduling resources, regulation
  51-26  service, providing operating reserves, reactive power support,
  51-27  voltage control, and any other associated electrical services
   52-1  deemed appropriate by the commission.
   52-2        Sec. 2.0012.  CERTAIN RIVER AUTHORITIES.  (a)
   52-3  Notwithstanding any other provision of this Act to the contrary,
   52-4  the commission shall not have the authority to regulate directly or
   52-5  indirectly the revenue requirements, rates, fuel costs, fuel
   52-6  charges, or fuel acquisitions that are related to the generation
   52-7  and sale of electricity at wholesale and not to ultimate consumers
   52-8  by a river authority operating one or more steam generating plants.
   52-9  Subject to the provisions of this section, the term "public
  52-10  utility," "retail public utility," or "utility" shall not include a
  52-11  corporation authorized by Chapter 245, Acts of the 67th
  52-12  Legislature, Regular Session, 1981 (Article 717p, Vernon's Texas
  52-13  Civil Statutes), and acting on behalf of the river authority to the
  52-14  extent that the corporation sells electricity exclusively at
  52-15  wholesale and not to ultimate consumers.
  52-16        (b)  This section shall constitute full authority for any
  52-17  river authority operating one or more steam generating plants to
  52-18  acquire, finance, construct, rebuild, repower, and use new and
  52-19  existing power plants, equipment, transmission lines, and other
  52-20  assets, for the sale of electricity exclusively at wholesale and
  52-21  not at retail to any purchaser within San Saba, Llano, Burnet,
  52-22  Travis, Bastrop, Blanco, Colorado, and Fayette counties and any
  52-23  purchaser within the area served by the river authority on
  52-24  January 1, 1975.
  52-25        (c)  This section shall constitute full authority for a
  52-26  corporation described in Subsection (a) of this section to acquire,
  52-27  finance, construct, rebuild, repower, operate, or sell facilities
   53-1  directly related to the generation of electricity and sell the
   53-2  output of such facilities, to the extent that such corporation
   53-3  sells such electricity to any purchaser at any location in this
   53-4  state exclusively at wholesale, and not to ultimate consumers,
   53-5  notwithstanding any provisions to the contrary in the river
   53-6  authority's enabling legislation or Chapter 245, Acts of the 67th
   53-7  Legislature, Regular Session, 1981 (Article 717p, Vernon's Texas
   53-8  Civil Statutes), provided that nothing in this section shall
   53-9  preclude the corporation from purchasing transmission and related
  53-10  services from such river authority.  Except as provided in this
  53-11  section, the development, financing, ownership, and operation of
  53-12  such facilities by such corporation shall be subject to the
  53-13  provisions of all applicable laws other than this Act, and the
  53-14  property, gross receipts, and income of such corporation acting on
  53-15  behalf of a river authority pursuant to this section shall be
  53-16  subject to, and such corporation shall pay, taxes and assessments
  53-17  of the federal government or of this state or of any municipal
  53-18  corporation, county, or other political subdivision or taxing
  53-19  district of this state on the same basis as an exempt wholesale
  53-20  generator.  No proceeds from the sale of bonds or other
  53-21  obligations, the interest on which is exempt from taxation, issued
  53-22  by the corporation or river authority, other than as may be
  53-23  available to investor-owned utilities or exempt wholesale
  53-24  generators, shall be used, or shall have been used, to finance the
  53-25  construction or acquisition of or rebuilding or repowering of any
  53-26  facilities for the generation of electricity by the corporation.
  53-27        (d)  This section shall not authorize the river authority to
   54-1  acquire, install, construct, make additions to, or operate steam
   54-2  generating plants whose aggregate capacity is greater than 5,000
   54-3  megawatts to serve purchasers within the area served by the river
   54-4  authority on January 1, 1975.  In addition, any river authority
   54-5  subject to this section and any corporation acting on behalf of
   54-6  such river authority may provide retail service only to those
   54-7  retail customers served by the river authority or corporation
   54-8  acting on behalf of the river authority on September 1, 1995.
   54-9        (e)  Nothing in this section shall otherwise limit the powers
  54-10  granted a river authority in its enabling legislation and other
  54-11  applicable law.
  54-12        SECTION 2.02.  Subtitle A, Title II, Public Utility
  54-13  Regulatory Act of 1995, as enacted by S.B. No. 319, Acts of the
  54-14  74th Legislature, Regular Session, 1995, is amended by adding
  54-15  Section 2.003 to read as follows:
  54-16        Sec. 2.003.  SCOPE OF COMPETITION.  Before January 15 of each
  54-17  odd-numbered year, the commission shall report to the legislature
  54-18  on the scope of competition in electric markets and the impact of
  54-19  competition and industry restructuring on customers in both
  54-20  competitive and noncompetitive markets.  The report shall include
  54-21  an assessment of the impact of competition on the rates and
  54-22  availability of electric services for residential and small
  54-23  commercial customers and a summary of commission actions over the
  54-24  preceding two years that reflect changes in the scope of
  54-25  competition in regulated electric markets.  The report shall also
  54-26  include recommendations to the legislature for further legislation
  54-27  that the commission finds appropriate to promote the public
   55-1  interest in the context of a partially competitive electric market.
   55-2        SECTION 2.03.  Section 2.051, Public Utility Regulatory Act
   55-3  of 1995, as enacted by S.B. No. 319, Acts of the 74th Legislature,
   55-4  Regular Session, 1995, is amended to read as follows:
   55-5        Sec. 2.051.  INTEGRATED RESOURCE PLANNING.  (a)  The
   55-6  commission by rule shall develop an integrated resource planning
   55-7  process to provide reliable energy service at the lowest reasonable
   55-8  cost.  In determining the lowest reasonable cost of an electric
   55-9  utility's plan, the commission shall consider in addition to direct
  55-10  costs the following:
  55-11              (1)  the effect on the rates and bills of various types
  55-12  of customers;
  55-13              (2)  minimization of the risks of future fuel costs and
  55-14  regulations;
  55-15              (3)  the appropriateness and reliability of the mix of
  55-16  resources; and
  55-17              (4)  the costs of compliance with the environmental
  55-18  protection requirements of all applicable state and federal laws,
  55-19  rules, and orders.
  55-20        (b)  The commission by rule shall adopt and periodically
  55-21  update a statewide integrated resource plan that includes the
  55-22  commission's long-term resource planning goals.  The commission
  55-23  shall send a report on the plan to the governor when it adopts or
  55-24  revises the plan and notify each public utility of the approval of
  55-25  the statewide plan.  The commission shall make the report available
  55-26  to the public.
  55-27        (c)  The report on the statewide plan shall include:
   56-1              (1)  historical data for electric consumption statewide
   56-2  and by utility;
   56-3              (2)  historical data for electric generation by utility
   56-4  and by type of capacity, including alternative energy sources;
   56-5              (3)  an inventory of generation capacity statewide and
   56-6  by utility;
   56-7              (4)  quantitative data on demand-side management
   56-8  programs to the extent the commission determines necessary;
   56-9              (5)  each generating utility's forecast without
  56-10  adjustment;
  56-11              (6)  the commission's long-term resource planning goals
  56-12  included in the plan;
  56-13              (7)  a projection of the need for electric services;
  56-14              (8)  a description of the approved individual
  56-15  integrated resource plans of public utilities; and
  56-16              (9)  an assessment of transmission planning being
  56-17  performed by utilities within this state.
  56-18        (d)  In prescribing the requirements under this section,
  56-19  including reporting requirements, the commission shall consider and
  56-20  recognize the differences in capabilities of small and large
  56-21  utilities.
  56-22        (e)  Generating public utilities as well as non-generating
  56-23  public utilities planning to construct generating resources shall
  56-24  submit to the commission a preliminary integrated resource plan.
  56-25  Preliminary integrated resource plans shall be submitted every
  56-26  three years and cover a 10-year period.  The commission by rule:
  56-27              (1)  shall:
   57-1                    (A)  prescribe a staggered schedule for the
   57-2  submission of plans by utilities;
   57-3                    (B)  prescribe the form and manner in which a
   57-4  plan must be submitted;
   57-5                    (C)  adopt filing requirements and schedules; and
   57-6                    (D)  prescribe the methods by which a utility may
   57-7  recover supply-side and demand-side costs; and
   57-8              (2)  may:
   57-9                    (A)  define the scope and nature of public
  57-10  participation in the development of the plan; and
  57-11                    (B)  establish the general guidelines to be used
  57-12  by utilities in evaluating and selecting or rejecting resources,
  57-13  including procedures governing the solicitation process.
  57-14        (f)  A preliminary plan submitted under this section must
  57-15  include:
  57-16              (1)  the utility's forecast of future demands;
  57-17              (2)  an estimate of the energy savings and demand
  57-18  reduction the utility can achieve during the 10-year period  by use
  57-19  of demand-side management resources and the range of possible costs
  57-20  for those resources;
  57-21              (3)  if additional supply-side resources are needed to
  57-22  meet future demand, an estimate of:
  57-23                    (A)  the amount and operational characteristics
  57-24  of the additional capacity needed;
  57-25                    (B)  the types of viable supply-side resources
  57-26  for meeting that need; and
  57-27                    (C)  the range of probable costs of those
   58-1  resources;
   58-2              (4)  if necessary,  proposed requests for proposals for
   58-3  demand-side or supply-side resources, or both;
   58-4              (5)  the specific criteria the utility will use to
   58-5  evaluate and select or reject those resources, which criteria may
   58-6  deviate from the general guidelines on a showing of good cause;
   58-7              (6)  the methods by which the utility intends to
   58-8  monitor those resources after selection;
   58-9              (7)  the method by which the utility intends to
  58-10  allocate costs;
  58-11              (8)  any proposed incentive factors; and
  58-12              (9)  any other information the commission requires.
  58-13        (g)  Every three years, a municipally owned utility shall
  58-14  submit to the commission a report containing all of the information
  58-15  required in a preliminary integrated resource plan under Subsection
  58-16  (f) of this section, but shall not otherwise be subject to the
  58-17  requirements of this section.
  58-18        (h)  After a utility files its preliminary plan, the
  58-19  commission on its own motion or on the motion of the utility or of
  58-20  an affected person shall convene a public hearing on the adequacy
  58-21  and merits of the preliminary plan.  At the hearing, any interested
  58-22  person may intervene, present evidence, and cross-examine witnesses
  58-23  regarding the contents and adequacy of the preliminary plan.
  58-24  Discovery is limited to an issue relating to the development of the
  58-25  preliminary plan, a fact issue included in the preliminary plan,
  58-26  and other issues the commission is required to decide relating to
  58-27  the preliminary plan.   A commission hearing is not required for a
   59-1  preliminary plan filed by a river authority or generating electric
   59-2  cooperative that does not intend to build a new generating plant or
   59-3  for a preliminary plan filed by a municipally owned public utility.
   59-4        (i)  After the hearing, the commission shall determine
   59-5  whether:
   59-6              (1)  the utility's preliminary plan is based on
   59-7  substantially accurate data and an adequate method of forecasting;
   59-8              (2)  the utility's preliminary plan identifies and
   59-9  takes into account any present and projected reductions in the
  59-10  demand for energy that may result from cost-effective measures to
  59-11  improve conservation and energy efficiency in various customer
  59-12  classes of the area being served;
  59-13              (3)  if additional supply-side resources are needed to
  59-14  meet future demand, the utility's preliminary plan adequately
  59-15  demonstrates:
  59-16                    (A)  the amount and operational characteristics
  59-17  of the additional capacity needed;
  59-18                    (B)  the types of viable supply-side resources
  59-19  for meeting that need; and
  59-20                    (C)  the range of probable costs of those
  59-21  resources;
  59-22              (4)  the utility's preliminary plan demonstrates the
  59-23  opportunities for appropriate persons to participate in the
  59-24  development of the preliminary plan;
  59-25              (5)  the specific criteria the utility will use to
  59-26  evaluate and select or reject resources are reasonable and
  59-27  consistent with the guidelines of the integrated resource planning
   60-1  process;
   60-2              (6)  the cost allocation method proposed by the utility
   60-3  is reasonable; and
   60-4              (7)  any incentive factors are appropriate and, if so,
   60-5  the levels of such incentive factors.
   60-6        (j)  Not later than the 180th day after the date the utility
   60-7  files the preliminary plan, the commission shall issue an interim
   60-8  order on the preliminary plan.  The commission shall approve the
   60-9  preliminary plan, modify the preliminary plan, or, if necessary,
  60-10  remand the preliminary plan for additional proceedings.  The
  60-11  180-day period may be extended for a period not to exceed 30 days
  60-12  for extenuating circumstances encountered in the development and
  60-13  processing of an initial plan, if the extenuating circumstances are
  60-14  fully explained and agreed on by the commissioners.
  60-15        (k)  On approval of the preliminary plan, the utility shall
  60-16  conduct solicitations for demand-side and supply-side resources, as
  60-17  prescribed in the preliminary plan.  In addition to soliciting
  60-18  resources from unaffiliated third parties, the utility may:
  60-19              (1)  prepare and submit a bid of a new utility
  60-20  demand-side management program as prescribed by Subsection (m) of
  60-21  this section;
  60-22              (2)  receive bids from one or more affiliates; and
  60-23              (3)  request a certificate of convenience and necessity
  60-24  for a new rate-based generating plant.
  60-25        (l)  Each bidder, including the utility and its affiliates,
  60-26  shall submit two copies of its bid to the commission.  The
  60-27  commission shall ensure that the utility has access to all bids at
   61-1  the same time.  The commission shall keep a copy of each bid
   61-2  submitted by the utility or an affiliate to determine whether the
   61-3  utility complied with the criteria established for conduct of the
   61-4  solicitation.  A bid submitted under this subsection or retained
   61-5  under this subsection is confidential and is not subject to
   61-6  disclosure under Chapter 552, Government Code.
   61-7        (m)  If a utility wants to use a proposed demand-side
   61-8  management program to meet a need identified in the preliminary
   61-9  plan, the utility must prepare a bid reflecting that resource.  A
  61-10  bid prepared by the utility under this subsection must comply with
  61-11  the solicitation, evaluation, selection, and rejection criteria
  61-12  specified in the preliminary plan.  The utility may not give
  61-13  preferential treatment or consideration to a bid prepared under
  61-14  this subsection.
  61-15        (n)  The utility shall evaluate each bid submitted, including
  61-16  an affiliate bid, in accordance with the criteria specified in the
  61-17  preliminary plan and shall negotiate necessary contracts.  The
  61-18  utility is not required to accept a bid and may reject any or all
  61-19  bids in accordance with the selection and rejection criteria
  61-20  specified in the preliminary plan.  If the results of the
  61-21  solicitations and contract negotiations do not meet the supply-side
  61-22  needs identified in the preliminary plan, the utility may apply for
  61-23  a certificate of convenience and necessity for a utility-owned
  61-24  resource addition notwithstanding the fact a solicitation was
  61-25  conducted and the addition was not included in the approved
  61-26  preliminary plan.
  61-27        (o)  After conducting the solicitations and negotiating the
   62-1  contracts, the utility shall submit to the commission a proposed
   62-2  final integrated resource plan.  The proposed final plan must
   62-3  include:
   62-4              (1)  the results of the solicitations;
   62-5              (2)  the contracts for resources;
   62-6              (3)  the terms and conditions under which the utility
   62-7  will provide resources to meet a need identified in the preliminary
   62-8  plan, if the utility accepts a bid submitted under Subsection (m)
   62-9  of this section; and
  62-10              (4)  an application for a certificate of convenience
  62-11  and necessity, if necessary.
  62-12        (p)  The commission shall, on request by any affected person
  62-13  and within 90 days after the date a utility files its final
  62-14  integrated resource plan under this section, convene a public
  62-15  hearing on the reasonableness and cost-effectiveness of the
  62-16  proposed final plan.  At the hearing, any interested person may
  62-17  intervene, present evidence, and cross-examine witnesses regarding
  62-18  the reasonableness and cost-effectiveness of the proposed final
  62-19  plan.  Parties will not be allowed to litigate or conduct discovery
  62-20  on issues that were litigated or could have been litigated in
  62-21  connection with the filing of the utility's preliminary plan.  To
  62-22  the extent permitted by federal law, the commission may issue a
  62-23  written order for access to the books, accounts, memoranda,
  62-24  contracts, or records of any exempt wholesale generator or power
  62-25  marketer selling energy at wholesale to a utility, if the
  62-26  examination is required for the effective discharge of the
  62-27  commission's regulatory responsibilities under this Act, except
   63-1  that if the commission issues such an order, the books, accounts,
   63-2  memoranda, contracts, and records obtained by the commission are
   63-3  confidential and not subject to disclosure under Chapter 552,
   63-4  Government Code.
   63-5        (q)  After the hearing, the commission shall determine
   63-6  whether:
   63-7              (1)  the utility's proposed final plan was developed in
   63-8  accordance with the preliminary plan and commission rules;
   63-9              (2)  the resource solicitations, evaluations,
  63-10  selections, and rejections were conducted in accordance with the
  63-11  criteria included in the preliminary plan;
  63-12              (3)  the utility's proposed final plan is
  63-13  cost-effective;
  63-14              (4)  the commission should certify the contracts and
  63-15  any utility bid submitted under Subsection (m) of this section that
  63-16  resulted from the solicitations; and
  63-17              (5)  the commission should grant a requested
  63-18  certificate of convenience and necessity for a utility-owned
  63-19  resource addition.
  63-20        (r)(1)  In determining whether to certify a supply-side or
  63-21  demand-side contract that results from the solicitations, the
  63-22  commission shall consider the reliability, financial condition, and
  63-23  safety of that resource contract and whether the solicitation,
  63-24  evaluation, and selection of that resource contract was conducted
  63-25  in accordance with the criteria included in the preliminary plan.
  63-26  The commission shall not certify contracts for new purchases of
  63-27  power by a utility unless the utility has determined, after giving
   64-1  consideration to consistently applied regional or national
   64-2  reliability standards, guidelines, or criteria, that the contract
   64-3  would not unreasonably impair the continued reliability of electric
   64-4  systems affected by the purchase, and the purchase can reasonably
   64-5  be expected to produce benefits to customers of the purchasing
   64-6  utility.  Commission certification of a resource contract does not
   64-7  negate the necessity of the resource to comply with all applicable
   64-8  environmental and siting regulations.  In addition, if the contract
   64-9  is with a utility affiliate, the commission shall determine whether
  64-10  the utility treated and considered the affiliate's bid in the same
  64-11  manner it treated and considered other bids intended to meet the
  64-12  same resource needs and shall further determine, in connection with
  64-13  such purchase, whether:
  64-14                    (A)  the transaction will benefit consumers;
  64-15                    (B)  the transaction violates any state law,
  64-16  including least cost planning;
  64-17                    (C)  the transaction provides the utility
  64-18  affiliate any unfair competitive advantage by virtue of its
  64-19  affiliation or association with the utility;
  64-20                    (D)  the transaction is in the public interest;
  64-21  and
  64-22                    (E)  the commission has sufficient regulatory
  64-23  authority, resources, and access to the books and records of the
  64-24  utility and its affiliate to make these determinations.
  64-25              (2)  In setting a public utility's rates for a period
  64-26  during which a certified contract is effective, the regulatory
  64-27  authority shall consider payments made under the contract to be
   65-1  reasonable and necessary operating expenses of the public utility.
   65-2  The regulatory authority may provide for monthly recovery of the
   65-3  approved costs of the contract as those costs are incurred,
   65-4  including the allowed mark-up determined by the commission.
   65-5        (s)  In determining whether to grant a requested certificate
   65-6  of convenience and necessity, the commission shall consider the
   65-7  effect of the granting of a certificate on the recipient of the
   65-8  certificate and on any public utility of the same kind already
   65-9  serving the proximate area.  The commission shall also consider
  65-10  other factors such as community values, recreational and park
  65-11  areas, historical and aesthetic values, environmental integrity,
  65-12  and the probable improvement of service or lowering of cost to
  65-13  consumers in that area if the certificate is granted.  The
  65-14  commission shall grant the certificate as part of the approval of
  65-15  the final plan if it finds that:
  65-16              (1)  the proposed addition is necessary under the final
  65-17  plan;
  65-18              (2)  the proposed addition is the best and most
  65-19  economical choice of technology for that service area; and
  65-20              (3)  cost-effective conservation and other
  65-21  cost-effective alternative energy sources cannot reasonably meet
  65-22  the need.
  65-23        (t)  Not later than the 180th day after the date the utility
  65-24  files the proposed final plan, the commission shall issue a final
  65-25  order on the plan.  The commission shall approve the proposed final
  65-26  plan, modify the proposed final plan, or, if necessary, remand the
  65-27  proposed final plan for additional proceedings.
   66-1        (u)  The commission shall adopt rules allowing a utility to
   66-2  add, consistent with the utility's last approved integrated
   66-3  resource planning goals, new or incremental resources outside the
   66-4  solicitation process, including resources listed in Subsection (x)
   66-5  of this section.
   66-6        (v)  In addition to its other authority and responsibility
   66-7  under this section, the commission shall establish rules and
   66-8  guidelines that will promote the development of renewable energy
   66-9  technologies consistent with the guidelines of the integrated
  66-10  resource planning process.
  66-11        (w)  In carrying out its duties related to the integrated
  66-12  resource planning process, the commission may:
  66-13              (1)  allow timely recovery of reasonable costs of
  66-14  conservation, load management, and purchased power, notwithstanding
  66-15  Section 2.212(g)(1) of this Act;
  66-16              (2)  authorize additional incentives for conservation,
  66-17  load management, purchased power, and renewable resources;
  66-18              (3)  require a utility to provide transmission service,
  66-19  exclusively for the purposes of transmitting wholesale power, to
  66-20  another utility or any other entity authorized to generate and sell
  66-21  electricity or to a power marketer; and
  66-22              (4)  review the state's transmission system to
  66-23  determine and make recommendations to public utilities on the need
  66-24  to build new power lines, upgrade power lines, and make other
  66-25  improvements and additions as necessary, and who should pay the
  66-26  direct and indirect cost of these improvements if made, review the
  66-27  actions of the public utilities in light of those recommendations,
   67-1  and take those actions into account in fixing a reasonable return
   67-2  on invested capital under Section 2.203(b) of this Act.
   67-3        (x)  Consistent with the utility's last approved integrated
   67-4  resource planning goals, if any, the utility, including a
   67-5  nongenerating utility, may add new or incremental resources outside
   67-6  the solicitation process such as:
   67-7              (1)  contract renegotiation for existing capacity from
   67-8  an electric cooperative or nonaffiliated power generating
   67-9  facilities;
  67-10              (2)  electric cooperative or nonaffiliated demand-side
  67-11  management programs or renewable resources;
  67-12              (3)  capacity purchases with terms of two years or less
  67-13  from an electric cooperative or nonaffiliated power suppliers or
  67-14  capacity purchases necessary to satisfy unanticipated emergency
  67-15  conditions;
  67-16              (4)  the exercise of an option in a purchased power
  67-17  contract with an electric cooperative or nonaffiliated supplier;
  67-18  and
  67-19              (5)  renewable distributed resources, located at or
  67-20  near the point of consumption, if they are less costly than
  67-21  transmission extensions or upgrades.
  67-22        (y)  The addition of new or incremental resources by a
  67-23  utility under Subsection (x) of this section does not require an
  67-24  amendment to the utility's integrated resource plan.
  67-25        (z)(1)  If a qualifying facility submits a bid under this
  67-26  section, regardless of whether that bid is accepted or rejected,
  67-27  and only with respect to the capacity need for which the bid has
   68-1  been submitted, the submission of the bid:
   68-2                    (A)  constitutes a waiver by the qualifying
   68-3  facility of any rights it may otherwise have under law to sell
   68-4  capacity to the utility;
   68-5                    (B)  represents the qualifying facility's
   68-6  agreement to negotiate a rate for purchase of capacity and terms
   68-7  and conditions relating to any purchase of capacity by the utility
   68-8  that differ from the rate or terms and conditions that would
   68-9  otherwise be required by 18 CFR Chapter I, Subchapter K, Part 292,
  68-10  Subpart C; and
  68-11                    (C)  constitutes a waiver by the qualifying
  68-12  facility of its right to the rate, terms, or conditions for
  68-13  purchases of capacity by the utility that might otherwise be
  68-14  required by that subpart.
  68-15              (2)  For the purpose of determining a utility's avoided
  68-16  capacity costs under 18 CFR Chapter I, Subchapter K, Part 292,
  68-17  Subpart C, on submitting a preliminary integrated resource plan to
  68-18  the commission under Section 2.051 of this Act, the utility's
  68-19  avoided capacity costs shall be deemed to be $0 and shall remain
  68-20  $0, with respect to any capacity needs shown in such preliminary
  68-21  integrated resource plan or final integrated resource plan that are
  68-22  to be satisfied by resources approved in the utility's final
  68-23  integrated resource plan.
  68-24              (3)  Nothing in this subsection shall affect the
  68-25  validity of any contract entered into between a qualifying facility
  68-26  and an electric utility for any purchase.
  68-27        (aa)  In this section, "utility" includes a river authority
   69-1  subject to Section 2.0012 of this Act with respect to the area
   69-2  served by the river authority on January 1, 1975.
   69-3        (bb)  Nongenerating utilities not planning to construct
   69-4  generating resources are not required to submit an integrated
   69-5  resource plan to the commission.  If such a utility seeks to
   69-6  purchase more than 25 percent of its peak demand or more than 70
   69-7  megawatts from a wholesale power supplier other than its existing
   69-8  power supplier, the utility shall conduct a solicitation for
   69-9  resources.  However, no solicitation is required for purchases from
  69-10  an existing power supplier, and new or incremental resources may be
  69-11  added outside the solicitation process as provided in Subsection
  69-12  (x) of this section.  If requested by such a utility, the
  69-13  commission may review the reasonableness of any contract for
  69-14  resources resulting from the solicitation.  On a finding by the
  69-15  commission that such a contract is reasonable, the commission shall
  69-16  certify the contract.  The commission shall make its determination
  69-17  within 90 days after the date the proposed contract is submitted.
  69-18  Nothing in this subsection is intended to alter or amend existing
  69-19  wholesale power supply contracts.
  69-20        (cc)  To the extent that the commission authorizes utilities
  69-21  to recover costs of demand-side management programs, conservation,
  69-22  load management, or purchased power through various cost recovery
  69-23  factors, the commission shall make a final reconciliation of the
  69-24  costs recovered through those cost recovery factors.  The
  69-25  commission shall adopt rules regarding when the reconciliations
  69-26  will occur for each of the cost recovery factors, what type of
  69-27  information utilities need to file in support of the
   70-1  reconciliation, and other matters necessary to perform the
   70-2  reconciliation.  The reconciliation shall (1) review the
   70-3  reasonableness of the utility's administration of the contracts and
   70-4  programs whose costs are being reconciled and (2) reconcile the
   70-5  revenue collected under each cost recovery factor and the costs
   70-6  that the utility incurred on purchased power, demand-side
   70-7  management, conservation, or load management during the
   70-8  reconciliation period.
   70-9        (dd)  To provide for the orderly transition to an integrated
  70-10  resource planning process and to avoid delays in the construction
  70-11  of resources necessary to provide electric service, an integrated
  70-12  resource plan shall not be required prior to the issuance of a
  70-13  certificate of convenience and necessity for the construction of
  70-14  generating facilities if:
  70-15              (1)  the commission has approved the utility's notice
  70-16  of intent prior to the effective date of this section;
  70-17              (2)  the utility has conducted a solicitation for
  70-18  resources to meet the need identified in the utility's notice of
  70-19  intent in accordance with commission rules then in effect; and
  70-20              (3)  the utility has submitted to the commission the
  70-21  results of the solicitation and an application for certification of
  70-22  facilities to meet the need identified in the utility's notice of
  70-23  intent.  A certificate of convenience and necessity shall be
  70-24  granted by the commission if the facilities are needed to meet
  70-25  future demand, the facilities are the best and most economical
  70-26  choice of technology for the service area, and cost-effective
  70-27  conservation and cost-effective alternative energy sources cannot
   71-1  reasonably meet the need.  <ELECTRICAL FORECAST.  (a)  The
   71-2  commission shall develop a long-term statewide electrical energy
   71-3  forecast which shall be sent to the governor biennially.  The
   71-4  forecast will include an assessment of how alternative energy
   71-5  sources, conservation, and load management will meet the state's
   71-6  electricity needs.>
   71-7        <(b)  Every generating electric utility in the state shall
   71-8  prepare and transmit to the commission every two years a report
   71-9  specifying at least a 10-year forecast for assessments of load and
  71-10  resources for its service area.  The report shall include a list of
  71-11  facilities which will be required to supply electric power during
  71-12  the forecast periods.  The report shall be in a form prescribed by
  71-13  the commission.  The report shall include:>
  71-14              <(1)  a tabulation of estimated peak load, resources,
  71-15  and reserve margins for each year during the forecast or assessment
  71-16  period;>
  71-17              <(2)  a list of existing electric generating plants in
  71-18  service with a description of planned and potential generating
  71-19  capacity at existing sites;>
  71-20              <(3)  a list of facilities which will be needed to
  71-21  serve additional electrical requirements identified in the
  71-22  forecasts or assessments, the general location of such facilities,
  71-23  and the anticipated types of fuel to be utilized in the proposed
  71-24  facilities, including an estimation of shutdown costs and disposal
  71-25  of spent fuel for nuclear power plants;>
  71-26              <(4)  a description of additional system capacity which
  71-27  might be achieved through, among other things, improvements in:>
   72-1                    <(A)  generating or transmission efficiency;>
   72-2                    <(B)  importation of power;>
   72-3                    <(C)  interstate or interregional pooling;>
   72-4                    <(D)  other improvements in efficiencies of
   72-5  operation; and>
   72-6                    <(E)  conservation measures;>
   72-7              <(5)  an estimation of the mix and type of fuel
   72-8  resources for the forecast or assessment period;>
   72-9              <(6)  an annual load duration curve and a forecast of
  72-10  anticipated peak loads for the forecast or assessment period for
  72-11  the residential, commercial, industrial, and such other major
  72-12  demand sectors in the service area of the electric utility as the
  72-13  commission shall determine; and>
  72-14              <(7)  a description of projected population growth,
  72-15  urban development, industrial expansion, and other growth factors
  72-16  influencing increased demand for electric energy and the basis for
  72-17  such projections.>
  72-18        <(c)  The commission shall establish and every electric
  72-19  utility shall utilize a reporting methodology for preparation of
  72-20  the forecasts of future load and resources.>
  72-21        <(d)  The commission shall review and evaluate the electric
  72-22  utilities' forecast of load and resources and any public comment on
  72-23  population growth estimates prepared by the Bureau of Business
  72-24  Research, The University of Texas at Austin.>
  72-25        <(e)  Within 12 months after the receipt of the reports
  72-26  required by this section, the commission shall hold a public
  72-27  hearing and subsequently issue a final report to the governor and
   73-1  notify every electric utility of the commission's electric forecast
   73-2  for that utility.  The commission shall consider its electric
   73-3  forecast in all certification proceedings covering new generation
   73-4  plants.>
   73-5        SECTION 2.04.  Section 2.052, Public Utility Regulatory Act
   73-6  of 1995, as enacted by S.B. No. 319, Acts of the 74th Legislature,
   73-7  Regular Session, 1995, is amended to read as follows:
   73-8        Sec. 2.052.  ENCOURAGEMENT OF ECONOMICAL PRODUCTION.
   73-9  (a)  The commission shall make and enforce rules to encourage the
  73-10  economical production of electric energy by qualifying cogenerators
  73-11  and qualifying small power producers.
  73-12        (b)  A qualifying cogenerator or qualifying small power
  73-13  producer may sell electric energy in this state only at wholesale,
  73-14  except that a qualifying cogenerator may sell electric energy at
  73-15  retail to the sole purchaser of the cogenerator's thermal output.
  73-16        (c)  The retail rates of an electric utility shall be
  73-17  approved by the regulatory authority in accordance with the
  73-18  principles of this Act to assure that they are just and reasonable.
  73-19  The electric utility, at its option, however, has the legal
  73-20  authority to charge individual customers for electric service at a
  73-21  price that is lower than the rate approved by a regulatory
  73-22  authority but equal to or greater than the marginal cost of the
  73-23  utility as provided in this subsection.  The net present value of
  73-24  prices charged pursuant to this subsection must equal or exceed the
  73-25  net present value of the marginal cost of the utility for each
  73-26  customer for the term of the customer contract for which a price is
  73-27  offered and shall only be applicable for service to:
   74-1              (1)  the existing load of an existing customer of the
   74-2  utility, and further provided the customer demonstrates to the
   74-3  utility that, without the offered price, it will cease receiving
   74-4  service from the utility or reduce its load as a result of
   74-5  switching to alternative energy sources, switching to service by
   74-6  another electric utility, self-generation, cogeneration,
   74-7  relocation, closure, or shutdown; an electric utility may not
   74-8  provide electric service at a price less than its approved rate to
   74-9  any existing customer load in a multicertificated service area
  74-10  unless the customer is connected to and has taken service from the
  74-11  utility continuously for the previous 30 months;
  74-12              (2)  the existing load of an existing customer of the
  74-13  utility operating a marginal oil or gas property, if the customer
  74-14  demonstrates to the utility that a price that is lower than the
  74-15  rate approved by a regulatory authority will extend the economic
  74-16  life of the marginal oil or gas property.  An electric utility may
  74-17  not, however, provide electric service at a price less than its
  74-18  approved rate to any marginal oil or gas property in a
  74-19  multicertificated service area unless the customer is connected to
  74-20  and has taken service from the utility continuously for the
  74-21  previous 30 months.  A marginal oil and gas property means any well
  74-22  or group of wells and related facilities, located within the
  74-23  service area of a utility serviced by the electrical meter of a
  74-24  utility, that produced on average either:
  74-25                    (A)  15 barrels of oil equivalent or less per
  74-26  well during the preceding 12 months based upon the records of the
  74-27  Railroad Commission of Texas; or
   75-1                    (B)  25 barrels of oil equivalent or less per
   75-2  well and the average water cut is equal to or greater than 95
   75-3  percent during the preceding 12 months based on the records of the
   75-4  Railroad Commission of Texas; or
   75-5                    (C)  any enhanced oil recovery project; or
   75-6              (3)  the new load, if located in the singly
   75-7  certificated service area of the utility, of a new or existing
   75-8  customer, provided the customer demonstrates to the utility that,
   75-9  without the offered price, the new customer will not take service
  75-10  from the utility for such new load.
  75-11        (d)  No electric utility shall, pursuant to this subsection,
  75-12  offer, demand, charge, or receive for retail electric service a
  75-13  price that is lower than the rate approved by a regulatory
  75-14  authority for service to new load of a new customer if the load is
  75-15  located in a multicertificated service area.  An electric utility
  75-16  may not provide electric service at a price less than its approved
  75-17  rate to any existing customer of another utility in a
  75-18  multicertificated service area or to any customer load in a
  75-19  multicertificated service area that was connected to and received
  75-20  service from another electric utility at any time during the
  75-21  previous 36 months.
  75-22        (e)  A price in accordance with Subsection (c) of this
  75-23  section shall only be available to a customer in a
  75-24  multicertificated service area receiving service at 480 volts or
  75-25  higher.  A price in accordance with Subsection (c) of this section
  75-26  shall only be available for a term of 120 months or less.
  75-27        (f)  If an electric utility charges a price in accordance
   76-1  with Subsection (c) of this section for retail electric utility
   76-2  service that is lower than the rate approved by a regulatory
   76-3  authority, it shall submit the following information to the
   76-4  commission at least 35 days prior to the proposed implementation of
   76-5  the price:
   76-6              (1)  the customer contract, including name and address
   76-7  of the customer;
   76-8              (2)  an analysis demonstrating that the price is within
   76-9  the range of prices allowed under this section;
  76-10              (3)  the approved rate that would be applicable in the
  76-11  absence of any such lower price;
  76-12              (4)  whether the load is a new or existing load,
  76-13  whether the customer is a new or existing customer, that the load
  76-14  is located in a singly certificated service area or in a
  76-15  multicertificated service area;
  76-16              (5)  the number of months the load has been
  76-17  continuously connected to and served by the utility;
  76-18              (6)  if the load is located in a multicertificated
  76-19  area, the commission shall require sworn affidavits stating each of
  76-20  the particular facts within affiant's personal knowledge necessary
  76-21  to establish that the customer qualifies for the price and that the
  76-22  price meets the criteria of this section; and
  76-23              (7)  if the load is located in a multicertificated
  76-24  service area, a sworn affidavit of the affiant's personal knowledge
  76-25  that the utility has concurrently notified any other electric
  76-26  utilities having authority to provide retail service to the load
  76-27  and such other information as may be determined by the commission.
   77-1        (g)  The commission shall have exclusive original
   77-2  jurisdiction to review any price proposed by an electric utility
   77-3  pursuant to Subsection (c) of this section.  To assure compliance
   77-4  with the criteria of this section, for prices proposed to be
   77-5  charged for service to loads in multicertificated areas, the
   77-6  commission shall, within 60 days after the effective date of this
   77-7  section, establish procedures for administrative review.  The
   77-8  commission shall determine compliance with Subsections (c), (d),
   77-9  (e), and (f) of this section, including whether the price is within
  77-10  the range of prices allowed as well as eligibility of the customer
  77-11  and load for the proposed price.  The commission may reserve other
  77-12  issues to be determined in later proceedings.  In establishing
  77-13  procedures, the commission shall provide for suspension of
  77-14  implementation of a price for a period of 60 days if the commission
  77-15  finds a reasonable need for additional time for an affected person,
  77-16  including a competing utility, to investigate the utility's
  77-17  compliance with this section.  If the commission determines that a
  77-18  violation of Subsection (c), (d), (e), or (f) of this section has
  77-19  occurred, the commission shall disallow the price.   Otherwise the
  77-20  price shall be approved.  Any final administrative action shall be
  77-21  appealable to the commission by any party.
  77-22        (h)  Prior to its first integrated resource plan filing,
  77-23  electric utilities desiring to charge a price pursuant to this
  77-24  section shall, except as provided in Subsection (i) of this
  77-25  section, file with the commission a methodology for calculation of
  77-26  its marginal cost.  The methodology for calculating the marginal
  77-27  cost of the electric utility shall consist of energy and capacity
   78-1  components.  The energy component shall include variable operation
   78-2  and maintenance expense and marginal fuel or the energy component
   78-3  of purchased power.  The capacity component included shall be based
   78-4  on the annual economic value of deferring, accelerating, or
   78-5  avoiding the next increment of any needed capacity, whether such
   78-6  capacity is purchased or built.  The commission shall ensure that
   78-7  the methodology for determining marginal cost is consistently
   78-8  applied among utilities but may recognize in any case the
   78-9  individual load and resource requirements of the utility.  The
  78-10  commission shall determine the marginal cost for each utility
  78-11  within 180 days after an application is filed; however, no
  78-12  application for approval of marginal cost shall be deemed to have
  78-13  been filed less than 90 days after the effective date of this
  78-14  section.  If the commission does not approve the marginal cost
  78-15  within the time prescribed, the filed marginal cost shall be deemed
  78-16  approved.
  78-17        (i)  For utilities that do not file an integrated resource
  78-18  plan or do not generate electricity, the marginal cost shall be the
  78-19  lowest marginal cost of any of the utility's wholesale power
  78-20  suppliers unless otherwise determined by the commission on
  78-21  application by the utility.
  78-22        (j)  The commission shall periodically redetermine an
  78-23  electric utility's marginal cost in connection with approval of the
  78-24  utility's integrated resource plan under this section.
  78-25        (k)  Nothing contained in this section shall have the effect
  78-26  of limiting the authority of the regulatory authority to change the
  78-27  rates or establish new rates of electric utilities as provided for
   79-1  in other sections of this Act, nor shall the validity of any lawful
   79-2  rate previously set by a regulatory authority be affected by this
   79-3  section.
   79-4        (l)  Generating and transmission electric cooperatives have
   79-5  the legal authority, pursuant to this subsection, to charge
   79-6  wholesale customers for electric service at a price that is lower
   79-7  than the rate approved by a regulatory authority, provided that
   79-8  each of the following conditions is met:
   79-9              (1)  the price shall only be applicable for that
  79-10  portion of a distribution cooperative's retail load for which the
  79-11  retail price is determined pursuant to Subsection (c) of this
  79-12  section;
  79-13              (2)  the price shall not be less than the generating
  79-14  and transmission cooperative's marginal cost for that portion of
  79-15  the customer's retail load for which the retail price is determined
  79-16  pursuant to Subsection (c) of this section.
  79-17        (m)  Rates established under this section shall not be
  79-18  unreasonably preferential, prejudicial, or discriminatory;
  79-19  subsidized either directly or indirectly by the utility's other
  79-20  customers; or predatory or anticompetitive.  For service provided
  79-21  under this section, the commission shall ensure that the utility's
  79-22  allocable costs of serving customers paying discounted retail
  79-23  prices are not borne by the utility's other customers.
  79-24        SECTION 2.05.  Subtitle B, Title II, Public Utility
  79-25  Regulatory Act of 1995, as enacted by S.B. No. 319, Acts of the
  79-26  74th Legislature, Regular Session, 1995, is amended by adding
  79-27  Section 2.053 to read as follows:
   80-1        Sec. 2.053.  EXEMPT WHOLESALE GENERATORS AND POWER MARKETERS.
   80-2  (a)  An exempt wholesale generator or power marketer may sell
   80-3  electric energy only at wholesale.
   80-4        (b)  The commission has the following jurisdiction over
   80-5  exempt wholesale generators and power marketers that sell electric
   80-6  energy in this state:
   80-7              (1)  to require registration as provided by Subsection
   80-8  (c) of this section; and
   80-9              (2)  to require the filing of reports the commission
  80-10  prescribes by rule.
  80-11        (c)  Each exempt wholesale generator and power marketer
  80-12  shall, within 30 days after the date it becomes subject to this
  80-13  section, register with the commission or provide proof that it has
  80-14  registered with the Federal Energy Regulatory Commission or been
  80-15  authorized by the Federal Energy Regulatory Commission to sell
  80-16  electric energy at market-based rates.  Registration may be
  80-17  accomplished by filing with the commission a description of the
  80-18  location of any facility used to provide service, the type of
  80-19  service provided, a copy of any information filed with the Federal
  80-20  Energy Regulatory Commission in connection with registration with
  80-21  that commission, and other information the commission prescribes by
  80-22  rule.
  80-23        SECTION 2.06.  Subtitle B, Title II, Public Utility
  80-24  Regulatory Act of 1995, as enacted by S.B. No. 319, Acts of the
  80-25  74th Legislature, Regular Session, 1995, is amended by adding
  80-26  Section 2.054 to read as follows:
  80-27        Sec. 2.054.  EXEMPT WHOLESALE GENERATOR AND POWER MARKETER
   81-1  AFFILIATES.  (a)  An affiliate of a public utility may be an exempt
   81-2  wholesale generator or power marketer and may sell electric energy
   81-3  to its affiliated public utility in accordance with Section 2.051
   81-4  of this Act and other provisions of law governing wholesale sales
   81-5  of electric energy.
   81-6        (b)  If a rate or charge for or in connection with the
   81-7  construction of a facility, or for electric energy produced by the
   81-8  construction of a facility, or for electric energy produced by a
   81-9  facility other than any portion of a rate or charge which
  81-10  represents recovery of the cost of a wholesale rate or charge was
  81-11  in effect as of the date of enactment of this section, the facility
  81-12  shall not be sold, transferred to an affiliate, or otherwise
  81-13  considered an eligible facility as defined by federal law.  The
  81-14  commission may, after notice and hearing, allow such facility to be
  81-15  sold, transferred to an affiliate, or become an eligible facility
  81-16  only if such sale or transfer will benefit ratepayers of the
  81-17  utility making the sale or transfer, is in the public interest, and
  81-18  otherwise complies with state law.
  81-19        SECTION 2.07.  Subtitle B, Title II, Public Utility
  81-20  Regulatory Act of 1995, as enacted by S.B. No. 319, Acts of the
  81-21  74th Legislature, Regular Session, 1995, is amended by adding
  81-22  Section 2.056 to read as follows:
  81-23        Sec. 2.056.  TRANSMISSION SERVICE.  (a)  The commission may
  81-24  require a utility, including a municipally owned utility, to
  81-25  provide transmission service at wholesale to another utility, a
  81-26  qualifying facility, an exempt wholesale generator, or a power
  81-27  marketer and may determine whether the terms and conditions for the
   82-1  transmission service are reasonable.  The commission may require
   82-2  transmission service at wholesale, including construction or
   82-3  enlargement of facilities, in a proceeding not related to approval
   82-4  of an integrated resource plan.  The commission may not issue a
   82-5  decision or rule relating to transmission service that is contrary
   82-6  to an applicable decision, rule, or policy statement of a federal
   82-7  regulatory agency having jurisdiction.
   82-8        (b)  The commission, with the advice and consent of the
   82-9  governor, shall appoint a five-person interstate connection
  82-10  committee to investigate the most economical, reliable, and
  82-11  efficient means to synchronously interconnect the alternating
  82-12  current electric facilities of the electric facilities of electric
  82-13  utilities within the Electric Reliability Council of Texas
  82-14  reliability area to the alternating current electric facilities of
  82-15  the electric facilities of electric utilities within the Southwest
  82-16  Power Pool reliability area.  The committee shall report an
  82-17  estimate of the cost and benefit to effect the interconnection, an
  82-18  estimate of the time to construct the interconnecting facilities,
  82-19  and the service territory of the utilities in which those
  82-20  facilities will be located.  The committee shall submit its report
  82-21  to the legislature by September 1, 1997, at which time the
  82-22  committee shall be dissolved.
  82-23        SECTION 2.08.  Subtitle B, Title II, Public Utility
  82-24  Regulatory Act of 1995, as enacted by S.B. No. 319, Acts of the
  82-25  74th Legislature, Regular Session, 1995, is amended by adding
  82-26  Section 2.057 to read as follows:
  82-27        Sec. 2.057.  WHOLESALE COMPETITION.  (a)  A public utility
   83-1  that owns or operates transmission facilities shall provide
   83-2  wholesale transmission service at rates, terms of access, and
   83-3  conditions that are comparable to the rates, terms of access, and
   83-4  conditions of the utility's use of its system.  The commission
   83-5  shall ensure that utilities provide nondiscriminatory access to
   83-6  transmission service for qualifying facilities, exempt wholesale
   83-7  generators, power marketers, and public utilities.  The commission
   83-8  shall adopt rules within 180 days of the effective date of this
   83-9  section relating to wholesale transmission service, rates, and
  83-10  access.  The rules shall be consistent with the standards in this
  83-11  section, shall not be contrary to federal law, including any
  83-12  applicable policy statement, decision, or rule of a federal
  83-13  regulatory agency, having jurisdiction and shall require
  83-14  transmission services that are not less than the transmission
  83-15  services the Federal Energy Regulatory Commission may require in
  83-16  similar circumstances.  The rules shall also provide that all
  83-17  ancillary services associated with a utility's discounted wholesale
  83-18  sales shall be provided by the utility at the same prices and under
  83-19  the same terms and conditions as such services are provided to
  83-20  third persons, and all ancillary services provided by the utility
  83-21  and associated with its discounted wholesale sales also be provided
  83-22  to third persons upon request.  All public utilities that own or
  83-23  operate transmission facilities shall file tariffs implementing
  83-24  such rules within 60 days after the commission has adopted
  83-25  transmission pricing and access rules pursuant to this section
  83-26  unless the terms and conditions for access and pricing are included
  83-27  in the tariff of another utility.  Such tariffs shall be filed with
   84-1  the appropriate state or federal regulatory agency having
   84-2  jurisdiction over the transmission service of the entity filing the
   84-3  tariff.
   84-4        (b)  The commission shall adopt rules relating to the
   84-5  registration and reporting requirements of qualifying facilities,
   84-6  exempt wholesale generators, and power marketers.
   84-7        (c)  The regulatory authority may not require a public
   84-8  utility to wheel or transmit electricity over that public utility's
   84-9  facilities from another entity to an ultimate consumer of
  84-10  electricity in the utility's certificated service area, including
  84-11  wheeling or transmitting electricity to another location of that
  84-12  other entity, if the entity is an ultimate consumer of electricity.
  84-13        (d)  To the extent a utility provides transmission of
  84-14  electric energy at the request of a third party, the commission
  84-15  shall ensure that the costs of the transmission are not borne by
  84-16  the utility's other customers by requiring the utility to recover
  84-17  from the entity for which the transmission is provided all
  84-18  reasonable costs incurred by the utility in providing transmission
  84-19  services necessary for the transaction.
  84-20        (e)  For the purposes of administering these rules, the
  84-21  commission may require that parties to a dispute over the prices,
  84-22  terms, and conditions of wholesale transmission service engage in a
  84-23  nonbinding alternative dispute resolution process before seeking a
  84-24  resolution of a dispute from the commission.
  84-25        (f)  The commission shall submit a report to the 75th
  84-26  Legislature on methods or procedures for quantifying the magnitude
  84-27  of stranded investment, procedures for allocating costs, and the
   85-1  acceptable methods of recovering stranded costs.
   85-2        (g)  Affiliates of public utilities, exempt wholesale
   85-3  generators, qualifying facilities, and all other providers of
   85-4  generation may compete for the business of selling power to a third
   85-5  party that is not an ultimate consumer of electricity.  In
   85-6  accordance with the applicable provisions of this Act, a public
   85-7  utility may purchase power from an affiliate.  A public utility may
   85-8  not grant undue preference to any person in connection with the
   85-9  utility's purchase or sale of electric energy at wholesale or other
  85-10  utility services.
  85-11        (h)(1)  Notwithstanding any other provision of this Act, the
  85-12  commission shall entertain proposals for and, from such proposals,
  85-13  adopt a pilot program to require a public utility, on order of the
  85-14  commission, to provide transmission service to a self-generating or
  85-15  qualifying cogenerating customer of such public utility.  Such
  85-16  transmission service approved by the commission shall be solely for
  85-17  the purpose of transmitting electricity generated by the customer
  85-18  from the site of generation to another site or sites 100 percent
  85-19  owned by such customer.  The pilot program shall last three years
  85-20  from the time that the commission issues an order requiring a
  85-21  utility to transmit electricity pursuant to this section, after
  85-22  which the commission shall report to the legislature whether there
  85-23  occurred any harmful effects on the utility or on its ratepayers or
  85-24  if any harmful effects would occur if the transmission service were
  85-25  to be continued.
  85-26              (2)  The commission shall adopt such limits on the
  85-27  availability of transmission service under this section as it finds
   86-1  necessary to protect ratepayers.  The commission must make an
   86-2  affirmative finding, prior to issuing an order, that the pilot
   86-3  program:
   86-4                    (A)  is in the public interest;
   86-5                    (B)  will not adversely affect the ratepayers of
   86-6  the transmitting utility;
   86-7                    (C)  does not unreasonably impair the
   86-8  transmitting utility's reliability; and
   86-9                    (D)  is priced based on the embedded cost of
  86-10  providing service plus a reasonable rate of return.
  86-11              (3)  If at any time during the course of the pilot
  86-12  program, the commission determines that the program is adversely
  86-13  affecting the ratepayers of the transmitting utility, the
  86-14  commission shall issue an order to terminate the program as soon as
  86-15  practicable.
  86-16        (i)  For the purposes of this section, the term "public
  86-17  utility" shall include municipally owned utilities.
  86-18        SECTION 2.09.  Subtitle B, Title II, Public Utility
  86-19  Regulatory Act of 1995, as enacted by S.B. No. 319, Acts of the
  86-20  74th Legislature, Regular Session, 1995, is amended by adding
  86-21  Section 2.059 to read as follows:
  86-22        Sec. 2.059.  ELECTRIC UTILITIES; REGULATION OF COMPETITION.
  86-23  (a)  It is the policy of this state to protect the public interest
  86-24  in having adequate and efficient electric service available to
  86-25  consumers at just, fair, and reasonable rates.  The legislature
  86-26  finds that the electric industry, through technical advancements,
  86-27  federal legislative and administrative actions, and the formulation
   87-1  of new electric enterprises, can become in many and growing areas a
   87-2  competitive industry that does not lend itself to traditional
   87-3  public utility regulatory rules and policies and that, therefore,
   87-4  the public interest requires that new rules and policies be
   87-5  formulated and applied to protect the public interest and to
   87-6  provide equal opportunity to all electric service providers in a
   87-7  competitive marketplace.  It is the purpose of this section to
   87-8  grant to the commission the authority to carry out the public
   87-9  policy herein stated.
  87-10        (b)  For the purpose of carrying out the public policy stated
  87-11  in Subsection (a) of this section, and any other section of this
  87-12  Act notwithstanding, the commission is granted all necessary power
  87-13  and authority to promulgate rules and establish procedures
  87-14  applicable to public utilities to facilitate the development of
  87-15  competition consistent with the public interest and, where the
  87-16  commission determines that sufficient competition exists in
  87-17  specific electric markets or submarkets, to provide appropriate
  87-18  regulatory treatment to allow electric utilities to respond to
  87-19  significant competitive challenges.  Nothing in this section is
  87-20  intended to change the burden of proof of an electric utility under
  87-21  Sections 2.202, 2.203, 2.204, 2.205, 2.206, 2.207, and 2.208 of
  87-22  this Act for services that are not subject to such competitive
  87-23  challenges.
  87-24        (c)  In promulgating rules and policies under this section,
  87-25  the commission shall seek to balance the public interest in a
  87-26  technologically advanced electric system providing services that
  87-27  are attractive to consumers with traditional regulatory concerns
   88-1  for preserving the quality and availability of service, prohibiting
   88-2  anti-competitive pricing and practices, preventing the
   88-3  subsidization of competitive services with revenues from regulated
   88-4  monopoly services, and maintaining rates that are not unreasonably
   88-5  preferential, prejudicial, or discriminatory and that are not
   88-6  subsidized either directly or indirectly by regulated monopoly
   88-7  services.  The commission shall promulgate these rules and
   88-8  procedures so as to incorporate an appropriate mix of regulatory
   88-9  and market mechanisms reflecting the level and nature of
  88-10  competition in the marketplace.
  88-11        SECTION 2.10.  Subsection (a), Section 2.101, Public Utility
  88-12  Regulatory Act of 1995, as enacted by S.B. No. 319, Acts of the
  88-13  74th Legislature, Regular Session, 1995, is amended to read as
  88-14  follows:
  88-15        (a)  Subject to the limitations imposed by Sections 2.2011
  88-16  and 2.211 of <in> this Act, and for the purpose of regulating rates
  88-17  and services so that such rates may be fair, just, and reasonable,
  88-18  and the services adequate and efficient, the governing body of each
  88-19  municipality shall have exclusive original jurisdiction over all
  88-20  retail electric utility rates, operations, and services provided by
  88-21  an electric utility within its city or town limits.
  88-22        SECTION 2.11.  Section 2.105, Public Utility Regulatory Act
  88-23  of 1995, as enacted by S.B. No. 319, Acts of the 74th Legislature,
  88-24  Regular Session, 1995, is amended by adding Subsection (c) to read
  88-25  as follows:
  88-26        (c)  Not later than the 31st day before the date a utility
  88-27  files a statement of intent under Section 2.212(a) of this Act, the
   89-1  utility shall provide to each municipality having original
   89-2  jurisdiction notice of intent to file the statement.  Not later
   89-3  than the 30th day after the date a municipality receives notice of
   89-4  intent to file a statement, the municipality may request that the
   89-5  utility file with the municipality a statement of intent in
   89-6  accordance with Section 2.212(a) of this Act.  If requested, the
   89-7  utility shall file the statement of intent with the municipality at
   89-8  the same time the statement is filed with the commission.
   89-9        SECTION 2.12.  Subtitle D, Title II, Public Utility
  89-10  Regulatory Act of 1995, as enacted by S.B. No. 319, Acts of the
  89-11  74th Legislature, Regular Session, 1995, is amended by adding
  89-12  Section 2.1511 to read as follows:
  89-13        Sec. 2.1511.  MARK-UP.  Any cost recovery factor established
  89-14  for recovery of purchased power costs may include the costs
  89-15  incurred by the utility for the purchase of capacity and energy,
  89-16  together with a mark-up added to the costs or other mechanism, as
  89-17  determined by the commission, to reasonably compensate the utility
  89-18  for financial risks, if any, to the utility associated with
  89-19  purchased power obligations and the value added by the utility in
  89-20  making the purchased power available to its customers.  Such
  89-21  mark-ups are an exceptional form of rate relief which may be
  89-22  recovered from ratepayers only on entry of a finding by the
  89-23  commission that such relief is necessary to maintain the financial
  89-24  integrity of the utility.  The mark-ups and cost recovery factors,
  89-25  if allowed, may be those that are necessary to encourage the
  89-26  utility to include economical purchased power as part of its energy
  89-27  and capacity resource supply plan.
   90-1        SECTION 2.13.  Section 2.152, Public Utility Regulatory Act
   90-2  of 1995, as enacted by S.B. No. 319, Acts of the 74th Legislature,
   90-3  Regular Session, 1995, is amended by adding Subsection (e) to read
   90-4  as follows:
   90-5        (e)  Reasonable costs of participating in a proceeding under
   90-6  this Act may be allowed, not to exceed the amount approved by the
   90-7  regulatory authority.
   90-8        SECTION 2.14.  Subsection (b), Section 2.154, Public Utility
   90-9  Regulatory Act of 1995, as enacted by S.B. No. 319, Acts of the
  90-10  74th Legislature, Regular Session, 1995, is amended to read as
  90-11  follows:
  90-12        (b)  Every public utility shall file with, and as a part of
  90-13  such schedules, all rules and regulations relating to or affecting
  90-14  the rates, public utility service, product, or commodity furnished
  90-15  by such utility.  The commission shall treat customer names and
  90-16  addresses, prices, individual customer contracts, and expected load
  90-17  and usage data as highly sensitive trade secrets, and such
  90-18  information shall not be subject to disclosure under the open
  90-19  records law, Chapter 552, Government Code.
  90-20        SECTION 2.15.  Subtitle E, Title II, Public Utility
  90-21  Regulatory Act of 1995, as enacted by S.B. No. 319, Acts of the
  90-22  74th Legislature, Regular Session, 1995, is amended by adding
  90-23  Section 2.2011 to read as follows:
  90-24        Sec. 2.2011.  ELECTRIC COOPERATIVE EXEMPTION.  (a)  An
  90-25  electric cooperative corporation that provides retail electric
  90-26  utility service at distribution voltage is exempt from rate
  90-27  regulation if a majority of the members voting in an election on
   91-1  the deregulation of the electric cooperative vote to approve the
   91-2  exemption and the electric cooperative sends notice of the action
   91-3  to each applicable regulatory authority.  An electric cooperative
   91-4  that wants to hold an election under this section shall send a
   91-5  ballot by mail to each electric cooperative member.  The electric
   91-6  cooperative may include the ballot in a monthly billing.  The
   91-7  ballot shall provide for voting for or against rate deregulation of
   91-8  the electric cooperative.  If the proposition is approved, the
   91-9  electric cooperative shall send each ballot to the commission not
  91-10  later than the 10th day after the date the electric cooperative
  91-11  counts the ballots.  Based on the ballots received, the commission
  91-12  shall administratively certify that the electric cooperative is or
  91-13  is not deregulated for rate-making purposes.  An electric
  91-14  cooperative may not hold another election on the issue of being
  91-15  exempt from rate regulation before the first anniversary of the
  91-16  most recent election on the issue.  Subsections (b) through (n) of
  91-17  this section apply to an electric cooperative that has elected to
  91-18  be exempt from rate regulation.
  91-19        (b)  No regulatory authority shall fix and regulate the rates
  91-20  of an electric cooperative that has made an election under this
  91-21  section to be exempt from rate regulation except as provided for
  91-22  the commission in Subsections (g) and (i) of this section.
  91-23  Notwithstanding Section 2.101(a) of this Act, the commission has
  91-24  exclusive original jurisdiction in all of the electric
  91-25  cooperative's service area in a proceeding initiated under
  91-26  Subsection (g) or (i) of this section.
  91-27        (c)  An electric cooperative may change its rates by:
   92-1              (1)  adopting a resolution approving the proposed
   92-2  change;
   92-3              (2)  mailing notice of the proposed change to:
   92-4                    (A)  the commission;
   92-5                    (B)  each affected municipality;
   92-6                    (C)  each affected customer, which notice may be
   92-7  included in a monthly billing; and
   92-8                    (D)  each electric utility providing retail
   92-9  service in the electric cooperative's service area or in the
  92-10  adjoining service area; and
  92-11              (3)  making available at each of the electric
  92-12  cooperative's business offices for review by all interested persons
  92-13  a cost-of-service study that:
  92-14                    (A)  is not more than five years old at the time
  92-15  the electric cooperative adopts rates under this subsection; and
  92-16                    (B)  bears the certification of a professional
  92-17  engineer or certified public accountant.
  92-18        (d)(1)  The notice required by Subsection (c) of this section
  92-19  must contain the following information:
  92-20                    (A)  the increase or decrease in total operating
  92-21  revenues over actual test year revenues or over test year revenues
  92-22  adjusted to annualize the recovery of changes in the cost of
  92-23  purchased electricity, stated both as a dollar amount and as a
  92-24  percentage;
  92-25                    (B)  the classes of utility customers affected
  92-26  and the creation and application of any new rate classes;
  92-27                    (C)  the increase or decrease for each class
   93-1  stated as a percentage of actual test year revenues for the class
   93-2  or of test year revenues for the class adjusted to annualize the
   93-3  recovery of changes in the cost of purchased electricity;
   93-4                    (D)  a statement that the commission may review
   93-5  the rate change if the commission receives a petition within 60
   93-6  days in accordance with Subsection (g) of this section;
   93-7                    (E)  the address and telephone number of the
   93-8  commission;
   93-9                    (F)  a statement that a customer opposed to the
  93-10  rate change should notify the electric cooperative in writing of
  93-11  the person's opposition and should provide a return address; and
  93-12                    (G)  a statement that members may review a copy
  93-13  of any written opposition the electric cooperative receives.
  93-14              (2)  The electric cooperative may not be required to
  93-15  include additional information in the notice.
  93-16        (e)  The electric cooperative shall make available for review
  93-17  by a member of the cooperative at each of the electric
  93-18  cooperative's business offices a copy of any written opposition to
  93-19  the rate change the electric cooperative receives.
  93-20        (f)  The electric cooperative shall file tariffs with the
  93-21  commission.  If the electric cooperative complies with Subsection
  93-22  (c) of this section, the commission shall approve the tariffs not
  93-23  later than the 10th day after the 60-day period prescribed by
  93-24  Subsection (g) of this section expires, unless a review is required
  93-25  under Subsection (g) or (i) of this section.  If the tariffs are
  93-26  approved or if a review is not required and the commission fails to
  93-27  act during the period prescribed by this subsection, the change in
   94-1  rates takes effect on the 70th day after the date the electric
   94-2  cooperative first complies with all requirements of Subsection (c)
   94-3  of this section or on a later date determined by the electric
   94-4  cooperative.  Except as provided by Subsections (g) and (i) of this
   94-5  section, the rates of the electric cooperative are not subject to
   94-6  review.
   94-7        (g)  The commission shall review a change in rates under this
   94-8  section if, not later than the 60th day after the date the electric
   94-9  cooperative first complies with all requirements of Subsection (c)
  94-10  of this section, the commission receives a petition requesting
  94-11  review signed by:
  94-12              (1)  at least 10 percent of the members of the electric
  94-13  cooperative;
  94-14              (2)  members of the electric cooperative who purchased
  94-15  more than 50 percent of the electric cooperative's annual energy
  94-16  sales to a customer class in the test year, provided that the
  94-17  petition includes a certification of the purchases; or
  94-18              (3)  an executive officer of an affected electric
  94-19  utility, provided that the petition prescribes the particular class
  94-20  or classes for which a review is requested.
  94-21        (h)  When a person files a petition under Subsection (g) of
  94-22  this section, the person shall notify the electric cooperative in
  94-23  writing of the action.
  94-24        (i)  The commission may on its own motion review the rates of
  94-25  an electric cooperative if the commission first finds that there is
  94-26  good cause to believe that the electric cooperative is earning more
  94-27  than a reasonable return on overall system revenues or on revenue
   95-1  from a rate class.
   95-2        (j)  The commission shall conduct a review under Subsection
   95-3  (g)(1) or (2) of this section or under Subsection (i) of this
   95-4  section in accordance with Section 2.212 of this Act and the other
   95-5  applicable rate-setting principles of this subtitle, except that:
   95-6              (1)  the period for review does not begin until the
   95-7  electric cooperative files a rate-filing package as required by
   95-8  commission rules;
   95-9              (2)  the proposed change may not be suspended during
  95-10  the pendency of the review; however, the electric cooperative shall
  95-11  refund or credit against future bills all sums collected in excess
  95-12  of the rate finally set by the commission, if the commission so
  95-13  orders; and
  95-14              (3)  the electric cooperative shall observe the rates
  95-15  set by the commission until the rates are changed as provided by
  95-16  this section or by other sections of this Act.
  95-17        (k)  For a review conducted under Subsection (g)(3) of this
  95-18  section, the electric cooperative shall file with the commission a
  95-19  copy of the cost-of-service study required under Subsection (c)(3)
  95-20  of this section not later than the 10th day after the date the
  95-21  electric cooperative receives from the affected electric utility
  95-22  notice that a petition has been filed.  The commission shall
  95-23  determine for each class for which review has been requested the
  95-24  annual cost of providing service to the class, as stated in the
  95-25  electric cooperative's cost-of-service study, and the revenues for
  95-26  the class that would be produced by multiplying the rate set by the
  95-27  electric cooperative by the annual billing units for the class, as
   96-1  stated in the cost-of-service study.  If the electric cooperative
   96-2  proposes a rate class solely for a new customer, the electric
   96-3  cooperative shall estimate the reasonable annual cost of providing
   96-4  service to the class, and the electric cooperative shall base class
   96-5  revenues on reasonable estimates of billing units.
   96-6        (l)  The rate for each class for which review has been
   96-7  requested under Subsection (g)(3) of this section is suspended
   96-8  during the pendency of the review.  The commission shall dismiss
   96-9  the petition and approve the rates if the revenues for the class
  96-10  are equal to or greater than the cost of providing service to the
  96-11  class.  The commission shall disapprove the rate if the revenues
  96-12  for the class are less than the cost of providing service to the
  96-13  class; however, this action does not affect reconsideration of the
  96-14  rate as a part of any subsequent rate-making proceeding.  The rate
  96-15  adopted by the electric cooperative is deemed approved and may be
  96-16  placed into effect if the commission fails to make its final
  96-17  determination administratively not later than the 45th day after
  96-18  the date the electric cooperative files its cost-of-service study.
  96-19        (m)  Except as provided by Subsection (a) of this section,
  96-20  the members of an electric cooperative may at any time revoke the
  96-21  electric cooperative's election to be exempt from rate regulation
  96-22  or elect to again be exempt from rate regulation by majority vote
  96-23  of the members voting.
  96-24        (n)  This section does not affect the application of other
  96-25  provisions of this Act not directly related to rates or to the
  96-26  authority of the commission to require an electric cooperative to
  96-27  file reports required under this Act or rules adopted by the
   97-1  commission.  A service fee or a service rule or regulation set by
   97-2  the electric cooperative under this section must comply with
   97-3  commission rules applicable to all electric utilities.  The
   97-4  commission may determine whether an electric cooperative has
   97-5  unlawfully charged, collected, or received a rate for electric
   97-6  utility service.
   97-7        (o)  A single customer may seek a review of the rates of an
   97-8  electric cooperative pursuant to Section 2.211 of this Act if the
   97-9  customer consumes more than 250,000,000 kwh and purchases more than
  97-10  10 percent of the total energy sales or more than 7.5 percent of
  97-11  the revenues of the electric cooperative in any period of 12
  97-12  consecutive months within the 36 months preceding the date on which
  97-13  that customer initiates a proceeding under Section 2.211 of this
  97-14  Act.  A right conferred by this subsection is in addition to rights
  97-15  that the customer has under Subsection (g) of this section and not
  97-16  in limitation or in lieu of those rights.
  97-17        (p)  Subsections (g)(3), (k), and (l) of this section shall
  97-18  not apply to prices charged by an electric cooperative pursuant to
  97-19  this section.
  97-20        SECTION 2.16.  Section 2.202, Public Utility Regulatory Act
  97-21  of 1995, as enacted by S.B. No. 319, Acts of the 74th Legislature,
  97-22  Regular Session, 1995, is amended to read as follows:
  97-23        Sec. 2.202.  JUST AND REASONABLE RATES.  It shall be the duty
  97-24  of the regulatory authority to insure that every rate made,
  97-25  demanded, or received by any public utility or by any two or more
  97-26  public utilities jointly shall be just and reasonable.  Rates may
  97-27  not be unreasonably preferential, prejudicial, or discriminatory,
   98-1  but shall be sufficient, equitable, and consistent in application
   98-2  to each class of consumers.  Prices that are charged to individual
   98-3  customers for electric service may be no higher than the rate
   98-4  approved by the regulatory authority and shall be in accordance
   98-5  with the provisions of Section 2.001 of this Act.  For ratemaking
   98-6  purposes, the commission may treat two or more municipalities
   98-7  served by a public utility as a single class wherever it deems such
   98-8  treatment to be appropriate.
   98-9        SECTION 2.17.  Subsection (b), Section 2.203, Public Utility
  98-10  Regulatory Act of 1995, as enacted by S.B. No. 319, Acts of the
  98-11  74th Legislature, Regular Session, 1995, is amended to read as
  98-12  follows:
  98-13        (b)  In fixing a reasonable return on invested capital, the
  98-14  regulatory authority shall consider, in addition to other
  98-15  applicable factors, efforts to comply with the utility's most
  98-16  recently approved individual integrated resource <statewide energy>
  98-17  plan, the efforts and achievements of such utility in the
  98-18  conservation of resources, the quality of the utility's services,
  98-19  the efficiency of the utility's operations, and the quality of the
  98-20  utility's management.
  98-21        SECTION 2.18.  Subsections (b) and (d), Section 2.208, Public
  98-22  Utility Regulatory Act of 1995, as enacted by S.B. No. 319, Acts of
  98-23  the 74th Legislature, Regular Session, 1995, are amended to read as
  98-24  follows:
  98-25        (b)  Transactions with Affiliated Interests.  Payment to
  98-26  affiliated interests for costs of any services or any property,
  98-27  right, or thing or for interest expense may not be allowed either
   99-1  as capital cost or as expense except to the extent that the
   99-2  regulatory authority shall find such payment to be reasonable and
   99-3  necessary for each item or class of items as determined by the
   99-4  commission.  Any such finding shall include specific findings of
   99-5  the reasonableness and necessity of each item or class of items
   99-6  allowed and a finding that the price to the utility is no higher
   99-7  than prices charged by the supplying affiliate to its other
   99-8  affiliates or divisions for the same item or class of items or to
   99-9  unaffiliated persons or corporations.  <The price paid by gas
  99-10  utilities to affiliated interests for natural gas from Outer
  99-11  Continental Shelf lands shall be subject to a rebuttable
  99-12  presumption that such price is reasonable if the price paid does
  99-13  not exceed the price permitted by federal regulation if such gas is
  99-14  regulated by any federal agency or if not regulated by a federal
  99-15  agency does not exceed the price paid by nonaffiliated parties for
  99-16  natural gas from Outer Continental Shelf lands.  The burden of
  99-17  establishing that such a price paid is not reasonable shall be on
  99-18  any party challenging the reasonableness of such price.>
  99-19        (d)  Expenses Disallowed.  The regulatory authority may not
  99-20  consider for ratemaking purposes the following expenses:
  99-21              (1)  legislative advocacy expenses, whether made
  99-22  directly or indirectly, including but not limited to legislative
  99-23  advocacy expenses included in trade association dues;
  99-24              (2)  payments, except those made under an insurance or
  99-25  risk-sharing arrangement executed before the date of loss, made to
  99-26  cover costs of an accident, equipment failure, or negligence at a
  99-27  utility facility owned by a person or governmental body not selling
  100-1  power inside the State of Texas;
  100-2              (3)  costs of processing a refund or credit under
  100-3  Subsection (e) of Section 2.212 of this Act; or
  100-4              (4)  any expenditure found by the regulatory authority
  100-5  to be unreasonable, unnecessary, or not in the public interest,
  100-6  including but not limited to executive salaries, advertising
  100-7  expenses, legal expenses, and civil or administrative penalties or
  100-8  fines.
  100-9        SECTION 2.19.  Section 2.211, Public Utility Regulatory Act
 100-10  of 1995, as enacted by S.B. No. 319, Acts of the 74th Legislature,
 100-11  Regular Session, 1995, is amended by adding Subsections (c), (d),
 100-12  and (e) to read as follows:
 100-13        (c)  Not later than the 120th day after the date the
 100-14  regulatory authority notifies the utility that the regulatory
 100-15  authority has decided to proceed with an inquiry under this section
 100-16  relating to the rates of the utility, the utility shall file a
 100-17  rate-filing package with the regulatory authority.  The regulatory
 100-18  authority may grant an extension of the 120-day period or waive the
 100-19  rate-filing package requirement on agreement of the parties.  The
 100-20  regulatory authority shall make a final determination concerning
 100-21  the matter not later than the 185th day after the date the utility
 100-22  files the rate-filing package.  However, the 185-day period is
 100-23  extended two days for each one day of actual hearing on the merits
 100-24  of the case that exceeds 15 days.
 100-25        (d)  At any time after an initial complaint is filed under
 100-26  this section, the regulatory authority may issue an interim order
 100-27  fixing temporary rates for the utility that will continue until a
  101-1  final determination on the matter is made.  On issuance of a final
  101-2  order, the regulatory authority may require the utility to refund
  101-3  to customers or to credit against future bills all sums collected
  101-4  during the period in which those temporary rates were in effect
  101-5  that are in excess of the rate finally ordered, plus interest at
  101-6  the current rate as finally determined by the commission or, if the
  101-7  amounts collected during the period in which the temporary rates
  101-8  were in effect are less than the amounts that would have been
  101-9  collected under the rate finally ordered, the regulatory authority
 101-10  shall authorize the utility to surcharge bills to recover the
 101-11  difference between those amounts, plus interest on the amount of
 101-12  the difference at the current rate as finally determined by the
 101-13  commission.
 101-14        (e)  If the 185-day period has been extended as provided by
 101-15  Subsection (c) of this section and the regulatory authority has not
 101-16  issued a final order or fixed temporary rates on or before the
 101-17  185th day, the rates charged by the utility on that 185th day
 101-18  automatically become temporary rates.  On issuance of a final
 101-19  order, the regulatory authority shall require the utility to refund
 101-20  to customers or to credit against future bills all sums collected
 101-21  during the period in which those temporary rates were in effect
 101-22  that are in excess of the rate finally ordered, plus interest at
 101-23  the current rate as finally determined by the commission or, if the
 101-24  amounts collected during the period in which the temporary rates
 101-25  were in effect are less than the amounts that would have been
 101-26  collected under the rate finally ordered, the regulatory authority
 101-27  shall authorize the utility to surcharge bills to recover the
  102-1  difference between those amounts, plus interest on the amount of
  102-2  the difference at the current rate as finally determined by the
  102-3  commission.
  102-4        SECTION 2.20.  Subsections (a), (e), and (g), Section 2.212,
  102-5  Public Utility Regulatory Act of 1995, as enacted by S.B. No. 319,
  102-6  Acts of the 74th Legislature, Regular Session, 1995, are amended to
  102-7  read as follows:
  102-8        (a)  Except as provided by Section 2.105(c) of this Act, a
  102-9  <A> utility may not make changes in its rates except by filing a
 102-10  statement of intent with the regulatory authority having original
 102-11  jurisdiction at least 35 days prior to the effective date of the
 102-12  proposed change.  The statement of intent shall include proposed
 102-13  revisions of tariffs and schedules and a statement specifying in
 102-14  detail each proposed change, the effect the proposed change is
 102-15  expected to have on the revenues of the company, the classes and
 102-16  numbers of utility consumers affected, and such other information
 102-17  as may be required by the regulatory authority's rules and
 102-18  regulations.  A copy of the statement of intent shall be mailed or
 102-19  delivered to the appropriate officer of each affected municipality,
 102-20  and notice shall be given by publication in conspicuous form and
 102-21  place of a notice to the public of such proposed change once in
 102-22  each week for four successive weeks prior to the effective date of
 102-23  the proposed change in a newspaper having general circulation in
 102-24  each county containing territory affected by the proposed change
 102-25  and by mail to such other affected persons as may be required by
 102-26  the regulatory authority's rules and regulations.  The regulatory
 102-27  authority may waive the publication of notice requirement
  103-1  prescribed by this subsection in a proceeding that involves a rate
  103-2  reduction for all affected ratepayers only.  The applicant shall
  103-3  give notice of the proposed rate change by mail to all affected
  103-4  utility customers.  The regulatory authority by rule shall also
  103-5  define other proceedings for which the publication of notice
  103-6  requirement prescribed by this subsection may be waived on a
  103-7  showing of good cause, provided that a waiver may not be granted in
  103-8  any proceeding involving a rate increase to any class or category
  103-9  of ratepayer.
 103-10        (e)  If the 150-day period has been extended, as provided for
 103-11  in Subsection (d) of this section, and the commission fails to make
 103-12  its final determination of rates within 150 days from the date that
 103-13  the proposed change otherwise would have gone into effect, the
 103-14  utility concerned may put a changed rate, not to exceed the
 103-15  proposed rate, into effect throughout all areas in which the
 103-16  utility sought to change its rates, including the areas over which
 103-17  the commission is exercising its appellate and its original
 103-18  jurisdiction, on the filing with the commission <regulatory
 103-19  authority> of a bond payable to the commission <regulatory
 103-20  authority> in an amount and with sureties approved by the
 103-21  commission <regulatory authority> conditioned upon refund and in a
 103-22  form approved by the commission <regulatory authority>.  The
 103-23  utility concerned shall refund or credit against future bills all
 103-24  sums collected during the period of suspension in excess of the
 103-25  rate finally ordered plus interest at the current rate as finally
 103-26  determined by the commission <regulatory authority>.
 103-27        (g)(1)  Except as permitted by Section 2.051 of this Act, a
  104-1  <A> rate or tariff set by the commission may not authorize a
  104-2  utility to automatically adjust and pass through to its customers
  104-3  changes in fuel or other costs of the utility.
  104-4              (2)(A)  Subdivision (1) of this subsection does not
  104-5  prohibit the commission from reviewing and providing for
  104-6  adjustments of a utility's fuel factor.  The commission by rule
  104-7  shall implement procedures that provide for the timely adjustment
  104-8  of a utility's fuel factor, with or without a hearing.  The
  104-9  procedures shall provide that the findings required by Section
 104-10  2.208(b) of this Act regarding fuel transactions with affiliated
 104-11  interests are made in a fuel reconciliation proceeding or in a rate
 104-12  case filed under Subsection (a) of this section or under Section
 104-13  2.211 of this Act.  The procedures shall provide an affected party
 104-14  notice and the opportunity to request a hearing before the
 104-15  commission.  However, the commission may adjust a utility's fuel
 104-16  factor without a hearing if the commission determines that a
 104-17  hearing is not necessary.  If the commission holds a hearing, the
 104-18  <Any revision of a utility's billings to its customers to allow for
 104-19  the recovery of additional fuel costs may be made only upon a
 104-20  public hearing and order of the commission.>
 104-21                    <(B)  The> commission may consider any evidence
 104-22  that is appropriate and in the public interest at such hearing.
 104-23  The commission shall render a timely decision approving,
 104-24  disapproving, or modifying the adjustment to the utility's fuel
 104-25  factor.
 104-26                    (B)  The commission by rule shall provide for the
 104-27  reconciliation of a utility's fuel costs on a timely basis.
  105-1                    (C)  A proceeding under this subsection may not
  105-2  be considered a rate case under this section.
  105-3              (3)  <The commission may, after a hearing, grant
  105-4  interim relief for fuel cost increases that are the result of
  105-5  unusual and emergency circumstances or conditions.>
  105-6              <(4)>(A)  This subsection applies only to increases or
  105-7  decreases in the cost of purchased electricity which have been:
  105-8                          (i)  accepted by a federal regulatory
  105-9  authority; or
 105-10                          (ii)  approved after a hearing by the
 105-11  commission.
 105-12                    (B)  The commission may utilize any appropriate
 105-13  method to provide for the adjustment of the cost of purchased
 105-14  electricity upon such terms and conditions as the commission may
 105-15  determine.  Such purchased electricity costs may be recovered
 105-16  concurrently with the effective date of the changed costs to the
 105-17  purchasing utility or as soon thereafter as is reasonably
 105-18  practical.
 105-19                    (C)  The commission may also provide for a
 105-20  mechanism to allow any public utility that has a noncontiguous
 105-21  geographical service area, and that purchases power for resale for
 105-22  that noncontiguous service area from public utilities that are not
 105-23  members of the Electric Reliability Council of Texas, to recover
 105-24  purchased power cost for that area in a manner that reflects the
 105-25  purchased power cost for that specific geographical noncontiguous
 105-26  area.  The commission may not, however, require such a mechanism
 105-27  for any electric cooperative corporation unless requested by the
  106-1  electric cooperative corporation.
  106-2        SECTION 2.21.  Section 2.214, Public Utility Regulatory Act
  106-3  of 1995, as enacted by S.B. No. 319, Acts of the 74th Legislature,
  106-4  Regular Session, 1995, is amended to read as follows:
  106-5        Sec. 2.214.  UNREASONABLE PREFERENCE OR PREJUDICE AS TO RATES
  106-6  OR SERVICES.  A public utility may not, as to rates or services,
  106-7  make or grant any unreasonable preference or advantage to any
  106-8  corporation or person within any classification or subject any
  106-9  corporation or person within any classification to any unreasonable
 106-10  prejudice or disadvantage.  A public utility may not establish and
 106-11  maintain any unreasonable differences as to rates of service either
 106-12  as between localities or as between classes of service.  Prices
 106-13  that are charged to individual customers for retail or wholesale
 106-14  electric service that are less than the rate approved by the
 106-15  regulatory authority shall not constitute an impermissible
 106-16  difference, preference, or advantage if such lesser prices are in
 106-17  accordance with Section 2.052.
 106-18        SECTION 2.22.  Subtitle E, Title II, Public Utility
 106-19  Regulatory Act of 1995, as enacted by S.B. No. 319, Acts of the
 106-20  74th Legislature, Regular Session, 1995, is amended by adding
 106-21  Section 2.2141 to read as follows:
 106-22        Sec. 2.2141.  DISCOUNTED RATES FOR CERTAIN STATE INSTITUTIONS
 106-23  OF HIGHER EDUCATION.  Notwithstanding any other provision of this
 106-24  Act, each public utility and municipally owned utility shall
 106-25  discount charges for electric service provided to any facility of
 106-26  any four-year state university, upper-level institution, or
 106-27  college.  The discount shall be a 20 percent reduction of the
  107-1  utility's base rates that otherwise would be rendered under the
  107-2  applicable tariffed rate.  However, if a 20 percent discount
  107-3  results in a reduction greater than one percent of the public or
  107-4  municipally owned utility's total annual revenues or if the
  107-5  municipally owned utility, as of September 1, 1995, discounts base
  107-6  commercial rates for electric service provided to all four-year
  107-7  state universities or colleges in its service area by 20 percent or
  107-8  more, the utility shall be exempt from the provisions of this
  107-9  section.  Each public utility shall file tariffs with the
 107-10  commission reflecting the discount within 30 days of the effective
 107-11  date of this section.  Such initial tariff filing shall not be
 107-12  considered a rate change for purposes of Section 2.212 of this Act.
 107-13  This section does not apply to rates charged to a state institution
 107-14  of higher education by a municipally owned utility which provides a
 107-15  discounted rate to the state for electric services below rates in
 107-16  effect on January 1, 1995, and which discounted rates provide a
 107-17  greater financial discount to the state than is provided to the
 107-18  state institution of higher education through the discount provided
 107-19  by this section.  An investor-owned public utility may not recover
 107-20  the assigned and allocated costs of serving a state university or
 107-21  college which receives a discount under this section from
 107-22  residential customers or any other customer class.
 107-23        SECTION 2.23.  Section 2.215, Public Utility Regulatory Act
 107-24  of 1995, as enacted by S.B. No. 319, Acts of the 74th Legislature,
 107-25  Regular Session, 1995, is amended by amending Subsection (a) and by
 107-26  adding Subsection (c) to read as follows:
 107-27        (a)  A public utility may not, directly or indirectly, by any
  108-1  device whatsoever or in any manner, charge, demand, collect, or
  108-2  receive from any person a greater or less compensation for any
  108-3  service rendered or to be rendered by the utility than that
  108-4  prescribed in the schedule of rates of the public utility
  108-5  applicable thereto when filed in the manner provided in this Act,
  108-6  nor may any person knowingly receive or accept any service from a
  108-7  public utility for a compensation greater or less than that
  108-8  prescribed in the schedules provided that it is lawful for a
  108-9  utility to charge individual customers a price for retail or
 108-10  wholesale electric service that is less than the rate approved by
 108-11  the regulatory authority and for a person to pay such lesser price
 108-12  if such lesser price is in accordance with Section 2.052.
 108-13        (c)  Notwithstanding any other provision of this Act, when
 108-14  the commission has approved the establishment of a separate rate
 108-15  class for electric service for a university and has grouped public
 108-16  schools in a separate rate class, the commission shall include
 108-17  community colleges in the rate class with public school customers.
 108-18        SECTION 2.24.  Section 2.251, Public Utility Regulatory Act
 108-19  of 1995, as enacted by S.B. No. 319, Acts of the 74th Legislature,
 108-20  Regular Session, 1995, is amended to read as follows:
 108-21        Sec. 2.251.  DEFINITION.  For the purposes of this subtitle
 108-22  only, "retail public utility" means any person, corporation,
 108-23  municipality, political subdivision or agency, or cooperative
 108-24  corporation, now or hereafter operating, maintaining, or
 108-25  controlling in Texas facilities for providing retail public utility
 108-26  service, except that a qualifying cogenerator selling electric
 108-27  energy at retail to the sole purchaser of the cogenerator's thermal
  109-1  output pursuant to Section 2.052 of this Act shall not be
  109-2  considered a retail public utility.
  109-3        SECTION 2.25.  Subsections (d), (e), and (f), Section 2.255,
  109-4  Public Utility Regulatory Act of 1995, as enacted by S.B. No. 319,
  109-5  Acts of the 74th Legislature, Regular Session, 1995, are amended to
  109-6  read as follows:
  109-7        (d)  This section does not apply to a certificate of
  109-8  convenience and necessity for an electric generating plant that is
  109-9  requested under Section 2.051 of this Act.  The commission may
 109-10  grant a certificate of convenience and necessity for an electric
 109-11  generating plant only in accordance with Section 2.051 of this Act.
 109-12        (e) <(1)  In addition to the requirements of this section, an
 109-13  electric utility applying for a certificate of convenience and
 109-14  necessity for a new generating plant must first file a notice of
 109-15  intent to file an application for certification.>
 109-16              <(2)  The notice of intent shall set out alternative
 109-17  methods considered to help meet the electrical needs, related
 109-18  electrical facilities, and the advantages and disadvantages of the
 109-19  alternatives.  In addition, the notice shall indicate compatibility
 109-20  with the most recent long-term forecast provided in this Act.>
 109-21              <(3)  The commission shall conduct a hearing on the
 109-22  notice of intent to determine the appropriateness of the proposed
 109-23  generating plant as compared to the alternatives and shall issue a
 109-24  report on its findings.  In conjunction with the issuance of the
 109-25  report, the commission shall render a decision approving or
 109-26  disapproving the notice.  Such decision shall be rendered within
 109-27  180 days from the date of filing the notice of intent.>
  110-1        <(e)(1)  On approval of the notice of intent, a utility may
  110-2  apply for certification for a generating plant, site, and site
  110-3  facilities not later than 12 months before construction is to
  110-4  commence.>
  110-5              <(2)  The application for certification shall contain
  110-6  such information as the commission may require to justify the
  110-7  proposed generating plant, site, and site facilities and to allow a
  110-8  determination showing compatibility with the most recent forecast.>
  110-9              <(3)  Certificates of convenience and necessity shall
 110-10  be granted on a nondiscriminatory basis if the commission finds
 110-11  that the proposed new plant is required under the service area
 110-12  forecast, that it is the best and most economical choice of
 110-13  technology for that service area as compatible with the
 110-14  commission's forecast, and that conservation and alternative energy
 110-15  sources cannot meet the need.>
 110-16        <(f)>  If the application for a certificate of convenience
 110-17  and necessity involves new transmission facilities, the commission
 110-18  shall approve or deny the application within one year after the
 110-19  date the application is filed.  If the commission does not approve
 110-20  or deny the application before this deadline, any party may seek a
 110-21  writ of mandamus in a district court of Travis County to compel the
 110-22  commission to make a decision on the application.
 110-23        SECTION 2.26.  Section 2302.043, Government Code, is amended
 110-24  to read as follows:
 110-25        Sec. 2302.043.  Order or Ruling.  (a)  A commission order or
 110-26  ruling entered under this chapter is considered to have been
 110-27  entered or adopted under the Public Utility Regulatory Act of 1995
  111-1  <(Article 1446c, Vernon's Texas Civil Statutes)>.
  111-2        (b)  A commission order or ruling entered under this chapter
  111-3  is enforced under Subtitle I, Title I, <Sections 71 through 77 of
  111-4  the> Public Utility Regulatory Act of 1995 <(Article 1446c,
  111-5  Vernon's Texas Civil Statutes)>.
  111-6        SECTION 2.27.  Chapter 166, Acts of the 63rd Legislature,
  111-7  Regular Session, 1973 (Article 1435a, Vernon's Texas Civil
  111-8  Statutes), is amended by adding Section 4c to read as follows:
  111-9        Sec. 4c.  (a)  Subject to the approval of the Public Utility
 111-10  Commission of Texas, an electric cooperative corporation may form a
 111-11  joint powers agency with one or more public entities and
 111-12  participate in an existing joint powers agency in which at least
 111-13  one public entity is a member and participant, as if the electric
 111-14  cooperative corporation were a public entity.
 111-15        (b)  The Public Utility Commission of Texas shall approve
 111-16  participation by an electric cooperative corporation under this
 111-17  section if the commission determines that the participation meets
 111-18  the requirements of law.
 111-19        (c)  A joint powers agency in which an electric cooperative
 111-20  corporation participates under this section is a governmental body
 111-21  subject to Chapter 551, Government Code.
 111-22        (d)  This section may not be construed to authorize or
 111-23  entitle an electric cooperative corporation to issue bonds or other
 111-24  securities that are exempt from taxation under federal law.
 111-25        SECTION 2.28.  Section 4A, Electric Cooperative Corporation
 111-26  Act (Article 1528b, Vernon's Texas Civil Statutes), is amended to
 111-27  read as follows:
  112-1        Sec. 4A.  Additional Powers.  Notwithstanding any other
  112-2  provision of this Act, a corporation has authority to generate,
  112-3  manufacture, purchase, acquire, and accumulate electric energy and
  112-4  to transmit, distribute, sell, furnish, and dispose of such
  112-5  electric energy to the following entities if the same are engaged
  112-6  in the generation, <and> transmission, or distribution of
  112-7  electricity <for resale>:
  112-8              (1)  firms, associations, corporations, except those
  112-9  who meet the criteria for a small power production facility and/or
 112-10  a cogeneration facility under Section 201 of the Public Utility
 112-11  Regulatory Policies Act of 1978 (PURPA);
 112-12              (2)  federal agency;
 112-13              (3)  state or political subdivision of a state <with an
 112-14  installed generation capacity in excess of 500 MW>; or
 112-15              (4)  a municipal power agency or political subdivision
 112-16  of a state which is a co-owner with such corporation of a jointly
 112-17  owned electric generation facility.
 112-18        <A corporation may also sell, furnish, and dispose of the
 112-19  electric energy to a political subdivision of the state which is
 112-20  engaged in the generation, transmission, or distribution of
 112-21  electricity for resale and to which the corporation was selling and
 112-22  furnishing electric energy on December 31, 1982.>
 112-23        The members-only requirement of Section 4(4) of this Act
 112-24  shall continue to apply to all sales by a corporation to other
 112-25  persons and entities.
 112-26        SECTION 2.29.  Section 171.079, Tax Code, is amended to read
 112-27  as follows:
  113-1        Sec. 171.079.  EXEMPTION--ELECTRIC COOPERATIVE CORPORATION.
  113-2  An electric cooperative corporation incorporated under the Electric
  113-3  Cooperative Corporation Act (Article 1528b, Vernon's Texas Civil
  113-4  Statutes) that is not a participant in a joint powers agency is
  113-5  exempted from the franchise tax.
  113-6        SECTION 2.30.  (a)  The Public Utility Commission of Texas by
  113-7  rule shall adopt a statewide integrated resource planning process
  113-8  as required by Section 2.051, Public Utility Regulatory Act of
  113-9  1995, as enacted by S.B. No. 319, Acts of the 74th Legislature,
 113-10  Regular Session, 1995, and as amended by this Act, not later than
 113-11  September 1, 1996.
 113-12        (b)  The changes in law made by this Act to Section 2.255,
 113-13  Public Utility Regulatory Act of 1995, as enacted by S.B. No. 319,
 113-14  Acts of the 74th Legislature, Regular Session, 1995, take effect
 113-15  September 1, 1996, and apply only to an application for a
 113-16  certificate of convenience and necessity filed on or after that
 113-17  date, except that, in the case of a utility for which the
 113-18  commission has not yet approved an individual integrated resource
 113-19  plan as of September 1, 1996, an application for a certificate of
 113-20  convenience and necessity is governed by the law in effect
 113-21  immediately preceding the effective date of this Act until the
 113-22  commission approves an integrated resource plan for the utility.
 113-23        SECTION 2.31.  The Public Utility Commission of Texas shall
 113-24  adopt the initial rules required by Section 2.057, Public Utility
 113-25  Regulatory Act of 1995, as added by this Act, not later than the
 113-26  180th day after the effective date of this Act.
 113-27        SECTION 2.32.  An exempt wholesale generator or power
  114-1  marketer required to register under Subsection (c), Section 2.053,
  114-2  Public Utility Regulatory Act of 1995, as added by this Act, shall
  114-3  register not later than the 90th day after the effective date of
  114-4  this Act.
  114-5        SECTION 2.33.  Except as otherwise provided by this Act, this
  114-6  Act takes effect September 1, 1995.
  114-7        SECTION 2.34.  The importance of this legislation and the
  114-8  crowded condition of the calendars in both houses create an
  114-9  emergency and an imperative public necessity that the
 114-10  constitutional rule requiring bills to be read on three several
 114-11  days in each house be suspended, and this rule is hereby suspended,
 114-12  and that this Act take effect and be in force according to its
 114-13  terms, and it is so enacted.