1-1 By: Armbrister S.B. No. 1227
1-2 (In the Senate - Filed March 10, 1995; March 16, 1995, read
1-3 first time and referred to Committee on State Affairs;
1-4 March 27, 1995, reported favorably by the following vote: Yeas 10,
1-5 Nays 0; March 27, 1995, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to the regulation of electric cooperative corporations.
1-9 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-10 SECTION 1. Article VI, Public Utility Regulatory Act
1-11 (Article 1446c, Vernon's Texas Civil Statutes), is amended by
1-12 adding Section 37A to read as follows:
1-13 Sec. 37A. (a) An electric cooperative corporation that
1-14 provides retail electric utility service at distribution voltage is
1-15 exempt from rate regulation if a majority of the members voting in
1-16 an election on the deregulation of the electric cooperative vote to
1-17 approve the exemption and the electric cooperative sends notice of
1-18 the action to each applicable regulatory authority. An electric
1-19 cooperative that wants to hold an election under this section shall
1-20 send a ballot by mail to each electric cooperative member. The
1-21 electric cooperative may include the ballot in a monthly billing.
1-22 The ballot shall provide for voting for or against rate
1-23 deregulation of the electric cooperative. If the proposition is
1-24 approved, the electric cooperative shall send each ballot to the
1-25 commission not later than the 10th day after the date the electric
1-26 cooperative counts the ballots. Based on the ballots received, the
1-27 commission shall administratively certify that the electric
1-28 cooperative is or is not deregulated for ratemaking purposes. An
1-29 electric cooperative may not hold another election on the issue of
1-30 being exempt from rate regulation before the first anniversary of
1-31 the most recent election on the issue. Subsections (b) through (n)
1-32 of this section apply to an electric cooperative that has elected
1-33 to be exempt from rate regulation.
1-34 (b) No regulatory authority shall fix and regulate the rates
1-35 of an electric cooperative that has made an election under this
1-36 section to be exempt from rate regulation except as provided for
1-37 the commission in Subsections (g) and (i) of this section.
1-38 Notwithstanding Section 17(a) of this Act, the commission has
1-39 exclusive original jurisdiction in all of the electric
1-40 cooperative's service area in a proceeding initiated under
1-41 Subsection (g) or (i) of this section.
1-42 (c) An electric cooperative may change its rates by:
1-43 (1) adopting a resolution approving the proposed
1-44 change;
1-45 (2) mailing notice of the proposed change to:
1-46 (A) the commission;
1-47 (B) each affected municipality;
1-48 (C) each affected customer, which notice may be
1-49 included in a monthly billing; and
1-50 (D) each electric utility providing retail
1-51 service in the electric cooperative's service area or in the
1-52 adjoining service area; and
1-53 (3) making available at each of the electric
1-54 cooperative's business offices for review by all interested persons
1-55 a cost-of-service study that:
1-56 (A) is not more than five years old at the time
1-57 the electric cooperative adopts rates under this subsection; and
1-58 (B) bears the certification of a professional
1-59 engineer or certified public accountant.
1-60 (d)(1) The notice required by Subsection (c) of this section
1-61 must contain the following information:
1-62 (A) the increase or decrease in total operating
1-63 revenues over actual test year revenues or over test year revenues
1-64 adjusted to annualize the recovery of changes in the cost of
1-65 purchased electricity, stated both as a dollar amount and as a
1-66 percentage;
1-67 (B) the classes of utility customers affected
1-68 and the creation and application of any new rate classes;
2-1 (C) the increase or decrease for each class
2-2 stated as a percentage of actual test year revenues for the class
2-3 or of test year revenues for the class adjusted to annualize the
2-4 recovery of changes in the cost of purchased electricity;
2-5 (D) a statement that the commission may review
2-6 the rate change if the commission receives a petition within 60
2-7 days in accordance with Subsection (g) of this section;
2-8 (E) the address and telephone number of the
2-9 commission;
2-10 (F) a statement that a customer opposed to the
2-11 rate change should notify the electric cooperative in writing of
2-12 the person's opposition and should provide a return address; and
2-13 (G) a statement that members may review a copy
2-14 of any written opposition the electric cooperative receives.
2-15 (2) The electric cooperative may not be required to
2-16 include additional information in the notice.
2-17 (e) The electric cooperative shall make available for review
2-18 by a member of the cooperative at each of the electric
2-19 cooperative's business offices a copy of any written opposition to
2-20 the rate change the electric cooperative receives.
2-21 (f) The electric cooperative shall file tariffs with the
2-22 commission. If the electric cooperative complies with Subsection
2-23 (c) of this section, the commission shall approve the tariffs not
2-24 later than the 10th day after the 60-day period prescribed by
2-25 Subsection (g) of this section expires unless a review is required
2-26 under Subsection (g) or (i) of this section. If the tariffs are
2-27 approved or if a review is not required and the commission fails to
2-28 act during the period prescribed by this subsection, the change in
2-29 rates takes effect on the 70th day after the date on which the
2-30 electric cooperative first complies with all requirements of
2-31 Subsection (c) of this section or on a later date determined by the
2-32 electric cooperative. Except as provided by Subsections (g) and
2-33 (i) of this section, the rates of the electric cooperative are not
2-34 subject to review.
2-35 (g) The commission shall review a change in rates under this
2-36 section if, not later than the 60th day after the date the electric
2-37 cooperative first complies with all requirements of Subsection (c)
2-38 of this section, the commission receives a petition requesting
2-39 review signed by:
2-40 (1) at least 10 percent of the members of the electric
2-41 cooperative;
2-42 (2) members of the electric cooperative who purchased
2-43 more than 50 percent of the electric cooperative's annual energy
2-44 sales to a customer class in the test year, provided that the
2-45 petition includes a certification of the purchases; or
2-46 (3) an executive officer of an affected electric
2-47 utility, provided that the petition prescribes the particular class
2-48 or classes for which a review is requested.
2-49 (h) When a person files a petition under Subsection (g) of
2-50 this section, the person shall notify the electric cooperative in
2-51 writing of the action.
2-52 (i) The commission may on its own motion review the rates of
2-53 an electric cooperative if the commission first finds that there is
2-54 good cause to believe that the electric cooperative is earning more
2-55 than a reasonable return on overall system revenues or on revenue
2-56 from a rate class.
2-57 (j) The commission shall conduct a review under Subsection
2-58 (g)(1) or (2) of this section or under Subsection (i) of this
2-59 section in accordance with Section 43 of this Act and the other
2-60 applicable rate-setting principles of Article VI of this Act,
2-61 except that:
2-62 (1) the period for review does not begin until the
2-63 electric cooperative files a rate-filing package as required by
2-64 commission rules;
2-65 (2) the proposed change may not be suspended during
2-66 the pendency of the review; however, the electric cooperative shall
2-67 refund or credit against future bills all sums collected in excess
2-68 of the rate finally set by the commission, if the commission so
2-69 orders; and
2-70 (3) the electric cooperative shall observe the rates
3-1 set by the commission until the rates are changed as provided by
3-2 this section or by other sections of this Act.
3-3 (k) For a review conducted under Subsection (g)(3) of this
3-4 section, the electric cooperative shall file with the commission a
3-5 copy of the cost-of-service study required under Subsection (c)(3)
3-6 of this section not later than the 10th day after the date the
3-7 electric cooperative receives from the affected electric utility
3-8 notice that a petition has been filed. The commission shall
3-9 determine for each class for which review has been requested the
3-10 annual cost of providing service to the class, as stated in the
3-11 electric cooperative's cost-of-service study, and the revenues for
3-12 the class that would be produced by multiplying the rate set by the
3-13 electric cooperative by the annual billing units for the class, as
3-14 stated in the cost-of-service study. If the electric cooperative
3-15 proposes a rate class solely for a new customer, the electric
3-16 cooperative shall estimate the reasonable annual cost of providing
3-17 service to the class, and the electric cooperative shall base class
3-18 revenues on reasonable estimates of billing units.
3-19 (l) The rate for each class for which review has been
3-20 requested under Subsection (g)(3) of this section is suspended
3-21 during the pendency of the review. The commission shall dismiss
3-22 the petition and approve the rates if the revenues for the class
3-23 are equal to or greater than the cost of providing service to the
3-24 class. The commission shall disapprove the rate if the revenues
3-25 for the class are less than the cost of providing service to the
3-26 class; however, this action does not affect reconsideration of the
3-27 rate as a part of any subsequent ratemaking proceeding. The rate
3-28 adopted by the electric cooperative is deemed approved and may be
3-29 placed into effect if the commission fails to make its final
3-30 determination administratively not later than the 45th day after
3-31 the date the electric cooperative files its cost-of-service study.
3-32 (m) Except as provided by Subsection (a) of this section,
3-33 the members of an electric cooperative may at any time revoke the
3-34 electric cooperative's election to be exempt from rate regulation
3-35 or elect to again be exempt from rate regulation by majority vote
3-36 of the members voting.
3-37 (n) This section does not affect the application of other
3-38 provisions of this Act not directly related to rates or to the
3-39 authority of the commission to require an electric cooperative to
3-40 file reports required under this Act or rules adopted by the
3-41 commission. A service fee or a service rule or regulation set by
3-42 the electric cooperative under this section must comply with
3-43 commission rules applicable to all electric utilities. The
3-44 commission may determine whether an electric cooperative has
3-45 unlawfully charged, collected, or received a rate for electric
3-46 utility service.
3-47 SECTION 2. The importance of this legislation and the
3-48 crowded condition of the calendars in both houses create an
3-49 emergency and an imperative public necessity that the
3-50 constitutional rule requiring bills to be read on three several
3-51 days in each house be suspended, and this rule is hereby suspended,
3-52 and that this Act take effect and be in force from and after its
3-53 passage, and it is so enacted.
3-54 * * * * *