By Armbrister S.B. No. 1227
74R7600 DWS-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the regulation of electric cooperative corporations.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Article VI, Public Utility Regulatory Act
1-5 (Article 1446c, Vernon's Texas Civil Statutes), is amended by
1-6 adding Section 37A to read as follows:
1-7 Sec. 37A. (a) An electric cooperative corporation that
1-8 provides retail electric utility service at distribution voltage is
1-9 exempt from rate regulation if a majority of the members voting in
1-10 an election on the deregulation of the electric cooperative vote to
1-11 approve the exemption and the electric cooperative sends notice of
1-12 the action to each applicable regulatory authority. An electric
1-13 cooperative that wants to hold an election under this section shall
1-14 send a ballot by mail to each electric cooperative member. The
1-15 electric cooperative may include the ballot in a monthly billing.
1-16 The ballot shall provide for voting for or against rate
1-17 deregulation of the electric cooperative. If the proposition is
1-18 approved, the electric cooperative shall send each ballot to the
1-19 commission not later than the 10th day after the date the electric
1-20 cooperative counts the ballots. Based on the ballots received, the
1-21 commission shall administratively certify that the electric
1-22 cooperative is or is not deregulated for rate-making purposes. An
1-23 electric cooperative may not hold another election on the issue of
1-24 being exempt from rate regulation before the first anniversary of
2-1 the most recent election on the issue. Subsections (b) through (n)
2-2 of this section apply to an electric cooperative that has elected
2-3 to be exempt from rate regulation.
2-4 (b) No regulatory authority shall fix and regulate the rates
2-5 of an electric cooperative that has made an election under this
2-6 section to be exempt from rate regulation except as provided for
2-7 the commission in Subsections (g) and (i) of this section.
2-8 Notwithstanding Section 17(a) of this Act, the commission has
2-9 exclusive original jurisdiction in all of the electric
2-10 cooperative's service area in a proceeding initiated under
2-11 Subsection (g) or (i) of this section.
2-12 (c) An electric cooperative may change its rates by:
2-13 (1) adopting a resolution approving the proposed
2-14 change;
2-15 (2) mailing notice of the proposed change to:
2-16 (A) the commission;
2-17 (B) each affected municipality;
2-18 (C) each affected customer, which notice may be
2-19 included in a monthly billing; and
2-20 (D) each electric utility providing retail
2-21 service in the electric cooperative's service area or in the
2-22 adjoining service area; and
2-23 (3) making available at each of the electric
2-24 cooperative's business offices for review by all interested persons
2-25 a cost-of-service study that:
2-26 (A) is not more than five years old at the time
2-27 the electric cooperative adopts rates under this subsection; and
3-1 (B) bears the certification of a professional
3-2 engineer or certified public accountant.
3-3 (d)(1) The notice required by Subsection (c) of this section
3-4 must contain the following information:
3-5 (A) the increase or decrease in total operating
3-6 revenues over actual test year revenues or over test year revenues
3-7 adjusted to annualize the recovery of changes in the cost of
3-8 purchased electricity, stated both as a dollar amount and as a
3-9 percentage;
3-10 (B) the classes of utility customers affected
3-11 and the creation and application of any new rate classes;
3-12 (C) the increase or decrease for each class
3-13 stated as a percentage of actual test year revenues for the class
3-14 or of test year revenues for the class adjusted to annualize the
3-15 recovery of changes in the cost of purchased electricity;
3-16 (D) a statement that the commission may review
3-17 the rate change if the commission receives a petition within 60
3-18 days in accordance with Subsection (g) of this section;
3-19 (E) the address and telephone number of the
3-20 commission;
3-21 (F) a statement that a customer opposed to the
3-22 rate change should notify the electric cooperative in writing of
3-23 the person's opposition and should provide a return address; and
3-24 (G) a statement that members may review a copy
3-25 of any written opposition the electric cooperative receives.
3-26 (2) The electric cooperative may not be required to
3-27 include additional information in the notice.
4-1 (e) The electric cooperative shall make available for review
4-2 by a member of the cooperative at each of the electric
4-3 cooperative's business offices a copy of any written opposition to
4-4 the rate change the electric cooperative receives.
4-5 (f) The electric cooperative shall file tariffs with the
4-6 commission. If the electric cooperative complies with Subsection
4-7 (c) of this section, the commission shall approve the tariffs not
4-8 later than the 10th day after the 60-day period prescribed by
4-9 Subsection (g) of this section expires, unless a review is required
4-10 under Subsection (g) or (i) of this section. If the tariffs are
4-11 approved or if a review is not required and the commission fails to
4-12 act during the period prescribed by this subsection, the change in
4-13 rates takes effect on the 70th day after the date on which the
4-14 electric cooperative first complies with all requirements of
4-15 Subsection (c) of this section or on a later date determined by the
4-16 electric cooperative. Except as provided by Subsections (g) and
4-17 (i) of this section, the rates of the electric cooperative are not
4-18 subject to review.
4-19 (g) The commission shall review a change in rates under this
4-20 section if, not later than the 60th day after the date the electric
4-21 cooperative first complies with all requirements of Subsection (c)
4-22 of this section, the commission receives a petition requesting
4-23 review signed by:
4-24 (1) at least 10 percent of the members of the electric
4-25 cooperative;
4-26 (2) members of the electric cooperative who purchased
4-27 more than 50 percent of the electric cooperative's annual energy
5-1 sales to a customer class in the test year, provided that the
5-2 petition includes a certification of the purchases; or
5-3 (3) an executive officer of an affected electric
5-4 utility, provided that the petition prescribes the particular class
5-5 or classes for which a review is requested.
5-6 (h) When a person files a petition under Subsection (g) of
5-7 this section, the person shall notify the electric cooperative in
5-8 writing of the action.
5-9 (i) The commission may on its own motion review the rates of
5-10 an electric cooperative if the commission first finds that there is
5-11 good cause to believe that the electric cooperative is earning more
5-12 than a reasonable return on overall system revenues or on revenue
5-13 from a rate class.
5-14 (j) The commission shall conduct a review under Subsection
5-15 (g)(1) or (2) of this section or under Subsection (i) of this
5-16 section in accordance with Section 43 of this Act and the other
5-17 applicable rate-setting principles of Article VI of this Act,
5-18 except that:
5-19 (1) the period for review does not begin until the
5-20 electric cooperative files a rate-filing package as required by
5-21 commission rules;
5-22 (2) the proposed change may not be suspended during
5-23 the pendency of the review; however, the electric cooperative shall
5-24 refund or credit against future bills all sums collected in excess
5-25 of the rate finally set by the commission, if the commission so
5-26 orders; and
5-27 (3) the electric cooperative shall observe the rates
6-1 set by the commission until the rates are changed as provided by
6-2 this section or by other sections of this Act.
6-3 (k) For a review conducted under Subsection (g)(3) of this
6-4 section, the electric cooperative shall file with the commission a
6-5 copy of the cost-of-service study required under Subsection (c)(3)
6-6 of this section not later than the 10th day after the date the
6-7 electric cooperative receives from the affected electric utility
6-8 notice that a petition has been filed. The commission shall
6-9 determine for each class for which review has been requested the
6-10 annual cost of providing service to the class, as stated in the
6-11 electric cooperative's cost-of-service study, and the revenues for
6-12 the class that would be produced by multiplying the rate set by the
6-13 electric cooperative by the annual billing units for the class, as
6-14 stated in the cost-of-service study. If the electric cooperative
6-15 proposes a rate class solely for a new customer, the electric
6-16 cooperative shall estimate the reasonable annual cost of providing
6-17 service to the class, and the electric cooperative shall base class
6-18 revenues on reasonable estimates of billing units.
6-19 (l) The rate for each class for which review has been
6-20 requested under Subsection (g)(3) of this section is suspended
6-21 during the pendency of the review. The commission shall dismiss
6-22 the petition and approve the rates if the revenues for the class
6-23 are equal to or greater than the cost of providing service to the
6-24 class. The commission shall disapprove the rate if the revenues
6-25 for the class are less than the cost of providing service to the
6-26 class; however, this action does not affect reconsideration of the
6-27 rate as a part of any subsequent rate-making proceeding. The rate
7-1 adopted by the electric cooperative is deemed approved and may be
7-2 placed into effect if the commission fails to make its final
7-3 determination administratively not later than the 45th day after
7-4 the date the electric cooperative files its cost-of-service study.
7-5 (m) Except as provided by Subsection (a) of this section,
7-6 the members of an electric cooperative may at any time revoke the
7-7 electric cooperative's election to be exempt from rate regulation
7-8 or elect to again be exempt from rate regulation by majority vote
7-9 of the members voting.
7-10 (n) This section does not affect the application of other
7-11 provisions of this Act not directly related to rates or to the
7-12 authority of the commission to require an electric cooperative to
7-13 file reports required under this Act or rules adopted by the
7-14 commission. A service fee or a service rule or regulation set by
7-15 the electric cooperative under this section must comply with
7-16 commission rules applicable to all electric utilities. The
7-17 commission may determine whether an electric cooperative has
7-18 unlawfully charged, collected, or received a rate for electric
7-19 utility service.
7-20 SECTION 2. The importance of this legislation and the
7-21 crowded condition of the calendars in both houses create an
7-22 emergency and an imperative public necessity that the
7-23 constitutional rule requiring bills to be read on three several
7-24 days in each house be suspended, and this rule is hereby suspended,
7-25 and that this Act take effect and be in force from and after its
7-26 passage, and it is so enacted.