By: Armbrister S.B. No. 1227
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the regulation of electric cooperative corporations.
1-2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-3 SECTION 1. Article VI, Public Utility Regulatory Act
1-4 (Article 1446c, Vernon's Texas Civil Statutes), is amended by
1-5 adding Section 37A to read as follows:
1-6 Sec. 37A. (a) An electric cooperative corporation that
1-7 provides retail electric utility service at distribution voltage is
1-8 exempt from rate regulation if a majority of the members voting in
1-9 an election on the deregulation of the electric cooperative vote to
1-10 approve the exemption and the electric cooperative sends notice of
1-11 the action to each applicable regulatory authority. An electric
1-12 cooperative that wants to hold an election under this section shall
1-13 send a ballot by mail to each electric cooperative member. The
1-14 electric cooperative may include the ballot in a monthly billing.
1-15 The ballot shall provide for voting for or against rate
1-16 deregulation of the electric cooperative. If the proposition is
1-17 approved, the electric cooperative shall send each ballot to the
1-18 commission not later than the 10th day after the date the electric
1-19 cooperative counts the ballots. Based on the ballots received, the
1-20 commission shall administratively certify that the electric
1-21 cooperative is or is not deregulated for ratemaking purposes. An
1-22 electric cooperative may not hold another election on the issue of
1-23 being exempt from rate regulation before the first anniversary of
1-24 the most recent election on the issue. Subsections (b) through (n)
2-1 of this section apply to an electric cooperative that has elected
2-2 to be exempt from rate regulation.
2-3 (b) No regulatory authority shall fix and regulate the rates
2-4 of an electric cooperative that has made an election under this
2-5 section to be exempt from rate regulation except as provided for
2-6 the commission in Subsections (g) and (i) of this section.
2-7 Notwithstanding Section 17(a) of this Act, the commission has
2-8 exclusive original jurisdiction in all of the electric
2-9 cooperative's service area in a proceeding initiated under
2-10 Subsection (g) or (i) of this section.
2-11 (c) An electric cooperative may change its rates by:
2-12 (1) adopting a resolution approving the proposed
2-13 change;
2-14 (2) mailing notice of the proposed change to:
2-15 (A) the commission;
2-16 (B) each affected municipality;
2-17 (C) each affected customer, which notice may be
2-18 included in a monthly billing; and
2-19 (D) each electric utility providing retail
2-20 service in the electric cooperative's service area or in the
2-21 adjoining service area; and
2-22 (3) making available at each of the electric
2-23 cooperative's business offices for review by all interested persons
2-24 a cost-of-service study that:
2-25 (A) is not more than five years old at the time
2-26 the electric cooperative adopts rates under this subsection; and
2-27 (B) bears the certification of a professional
3-1 engineer or certified public accountant.
3-2 (d)(1) The notice required by Subsection (c) of this section
3-3 must contain the following information:
3-4 (A) the increase or decrease in total operating
3-5 revenues over actual test year revenues or over test year revenues
3-6 adjusted to annualize the recovery of changes in the cost of
3-7 purchased electricity, stated both as a dollar amount and as a
3-8 percentage;
3-9 (B) the classes of utility customers affected
3-10 and the creation and application of any new rate classes;
3-11 (C) the increase or decrease for each class
3-12 stated as a percentage of actual test year revenues for the class
3-13 or of test year revenues for the class adjusted to annualize the
3-14 recovery of changes in the cost of purchased electricity;
3-15 (D) a statement that the commission may review
3-16 the rate change if the commission receives a petition within 60
3-17 days in accordance with Subsection (g) of this section;
3-18 (E) the address and telephone number of the
3-19 commission;
3-20 (F) a statement that a customer opposed to the
3-21 rate change should notify the electric cooperative in writing of
3-22 the person's opposition and should provide a return address; and
3-23 (G) a statement that members may review a copy
3-24 of any written opposition the electric cooperative receives.
3-25 (2) The electric cooperative may not be required to
3-26 include additional information in the notice.
3-27 (e) The electric cooperative shall make available for review
4-1 by a member of the cooperative at each of the electric
4-2 cooperative's business offices a copy of any written opposition to
4-3 the rate change the electric cooperative receives.
4-4 (f) The electric cooperative shall file tariffs with the
4-5 commission. If the electric cooperative complies with Subsection
4-6 (c) of this section, the commission shall approve the tariffs not
4-7 later than the 10th day after the 60-day period prescribed by
4-8 Subsection (g) of this section expires unless a review is required
4-9 under Subsection (g) or (i) of this section. If the tariffs are
4-10 approved or if a review is not required and the commission fails to
4-11 act during the period prescribed by this subsection, the change in
4-12 rates takes effect on the 70th day after the date on which the
4-13 electric cooperative first complies with all requirements of
4-14 Subsection (c) of this section or on a later date determined by the
4-15 electric cooperative. Except as provided by Subsections (g) and
4-16 (i) of this section, the rates of the electric cooperative are not
4-17 subject to review.
4-18 (g) The commission shall review a change in rates under this
4-19 section if, not later than the 60th day after the date the electric
4-20 cooperative first complies with all requirements of Subsection (c)
4-21 of this section, the commission receives a petition requesting
4-22 review signed by:
4-23 (1) at least 10 percent of the members of the electric
4-24 cooperative;
4-25 (2) members of the electric cooperative who purchased
4-26 more than 50 percent of the electric cooperative's annual energy
4-27 sales to a customer class in the test year, provided that the
5-1 petition includes a certification of the purchases; or
5-2 (3) an executive officer of an affected electric
5-3 utility, provided that the petition prescribes the particular class
5-4 or classes for which a review is requested.
5-5 (h) When a person files a petition under Subsection (g) of
5-6 this section, the person shall notify the electric cooperative in
5-7 writing of the action.
5-8 (i) The commission may on its own motion review the rates of
5-9 an electric cooperative if the commission first finds that there is
5-10 good cause to believe that the electric cooperative is earning more
5-11 than a reasonable return on overall system revenues or on revenue
5-12 from a rate class.
5-13 (j) The commission shall conduct a review under Subsection
5-14 (g)(1) or (2) of this section or under Subsection (i) of this
5-15 section in accordance with Section 43 of this Act and the other
5-16 applicable rate-setting principles of Article VI of this Act,
5-17 except that:
5-18 (1) the period for review does not begin until the
5-19 electric cooperative files a rate-filing package as required by
5-20 commission rules;
5-21 (2) the proposed change may not be suspended during
5-22 the pendency of the review; however, the electric cooperative shall
5-23 refund or credit against future bills all sums collected in excess
5-24 of the rate finally set by the commission, if the commission so
5-25 orders; and
5-26 (3) the electric cooperative shall observe the rates
5-27 set by the commission until the rates are changed as provided by
6-1 this section or by other sections of this Act.
6-2 (k) For a review conducted under Subsection (g)(3) of this
6-3 section, the electric cooperative shall file with the commission a
6-4 copy of the cost-of-service study required under Subsection (c)(3)
6-5 of this section not later than the 10th day after the date the
6-6 electric cooperative receives from the affected electric utility
6-7 notice that a petition has been filed. The commission shall
6-8 determine for each class for which review has been requested the
6-9 annual cost of providing service to the class, as stated in the
6-10 electric cooperative's cost-of-service study, and the revenues for
6-11 the class that would be produced by multiplying the rate set by the
6-12 electric cooperative by the annual billing units for the class, as
6-13 stated in the cost-of-service study. If the electric cooperative
6-14 proposes a rate class solely for a new customer, the electric
6-15 cooperative shall estimate the reasonable annual cost of providing
6-16 service to the class, and the electric cooperative shall base class
6-17 revenues on reasonable estimates of billing units.
6-18 (l) The rate for each class for which review has been
6-19 requested under Subsection (g)(3) of this section is suspended
6-20 during the pendency of the review. The commission shall dismiss
6-21 the petition and approve the rates if the revenues for the class
6-22 are equal to or greater than the cost of providing service to the
6-23 class. The commission shall disapprove the rate if the revenues
6-24 for the class are less than the cost of providing service to the
6-25 class; however, this action does not affect reconsideration of the
6-26 rate as a part of any subsequent ratemaking proceeding. The rate
6-27 adopted by the electric cooperative is deemed approved and may be
7-1 placed into effect if the commission fails to make its final
7-2 determination administratively not later than the 45th day after
7-3 the date the electric cooperative files its cost-of-service study.
7-4 (m) Except as provided by Subsection (a) of this section,
7-5 the members of an electric cooperative may at any time revoke the
7-6 electric cooperative's election to be exempt from rate regulation
7-7 or elect to again be exempt from rate regulation by majority vote
7-8 of the members voting.
7-9 (n) This section does not affect the application of other
7-10 provisions of this Act not directly related to rates or to the
7-11 authority of the commission to require an electric cooperative to
7-12 file reports required under this Act or rules adopted by the
7-13 commission. A service fee or a service rule or regulation set by
7-14 the electric cooperative under this section must comply with
7-15 commission rules applicable to all electric utilities. The
7-16 commission may determine whether an electric cooperative has
7-17 unlawfully charged, collected, or received a rate for electric
7-18 utility service.
7-19 (o) A single customer may seek a review of the rates of an
7-20 electric cooperative pursuant to Section 42 of this Act if the
7-21 customer consumes more than 250,000,000 kwh and purchases more than
7-22 10 percent of the total energy sales or more than 7-1/2 percent of
7-23 the total revenues of the electric cooperative in any period of 12
7-24 consecutive months within the 36 months preceding the date on which
7-25 that customer initiates a proceeding under Section 42 of this Act.
7-26 The rights under this subsection shall be in addition to rights
7-27 that a customer has under Subsection (g) of this section, and not
8-1 in limitation or in lieu of rights under Subsection (g) of this
8-2 section.
8-3 SECTION 2. The importance of this legislation and the
8-4 crowded condition of the calendars in both houses create an
8-5 emergency and an imperative public necessity that the
8-6 constitutional rule requiring bills to be read on three several
8-7 days in each house be suspended, and this rule is hereby suspended,
8-8 and that this Act take effect and be in force from and after its
8-9 passage, and it is so enacted.