LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
74th Regular Session
May 20, 1995
TO: Honorable Curtis Seidlits, Chair IN RE: Committee Substitute
Committee on State Affairs forSenate Bill
House of Representatives No. 373
Austin, Texas By: Armbrister
FROM: John Keel, Director
In response to your request for a Fiscal Note on Senate Bill No.
373 (relating to the continuation, operations, and functions of
the Public Utility Commission of Texas and the Office of Public
Utility Counsel; providing penalties) this office has determined
the following:
The bill would make no appropriation but could provide the legal
basis for an appropriation of funds to implement the provisions
of the bill.
Fiscal implications of the bill are calculated from agency grand
total amounts included in the General Appropriations Bill
(Seventy-fourth Regular Session), as introduced: Public Utility
Commission (PUC), approximately $10 million each year of the
1996-1997 biennium; Office of the Public Utility Counsel (OPUC),
approximately $1.3 million each year of the biennium. The
General Appropriations Bill would provide for 211.5 PUC employees
and 21 OPUC employees each year.
Fiscal implications of the bill to units of local government
cannot be determined, but are not expected to result in
significant additional costs or revenue reductions.
Section 1.27 would provide authority to the commission to impose
administrative penalties. The provisions would result in
additional agency costs of $31,453 for fiscal year 1996 and
$29,092 in each year thereafter, including one half-time position
in each year.
Section 1.34-1.36 would provide for a utility division to be
established within the State Office of Administrative Hearings to
perform contested case hearings for the PUC and other matters
delegated by PUC rule. A task force would be established
immediately upon enactment of the bill to administer the transfer
of the hearings division from the PUC to the State Office of
Administrative Hearings. Personnel, equipment, data, facilities
and other items of the hearings division would be transferred on
September 1, 1995. The PUC has identified 26.5 positions and
other resources for a total amount of approximately $1.7 million
per year that would be subject to transfer. Additional costs are
anticipated for moving ($7,000), installations for local area
network capabilities ($27,000) and an electronic link between the
SOAH Utility Division and the PUC ($30,000).
Section 2.01 and others would make changes regarding electric
utility regulation, with the main impacts related to the addition
of exempt wholesale generators (EWGs) and power marketers and to
wholesale pricing flexibility for electric utilities. The PUC
would anticipate proceedings for the adoption of three major
policy rules for EWGs, the addition of competitive issues in rate
cases, and docketed EWG-related complaints. Additional costs
would be anticipated of $236,780 in fiscal year 1996 and $190,449
in 1997, including 4 additional employees each year. Additional
costs would decline to $108,121 and 2 employees in fiscal year
2000.
Section 2.02 would require the commission to prepare a biennial
report on the scope and impacts of competition and industry
restructuring on customers. Additional costs, based on agency
experience with similar reporting projects, would be
approximately $70,000, including 1.5 employees, during even years
and $26,000 during odd years, including 0.5 position.
Section 2.03 and others would require the commission to establish
an integrated resource planning (IRP) process administered in a
three year cycle. Additional costs would be associated initially
with complex rule adoption proceedings, then with the case
filings and hearings for approval of each utility's plan. In
addition, the PUC would be required to review the state's
transmission system to make appropriate recommendations for
improvements. Additional resources of $478,797, including 8
employees, would be needed for fiscal year 1996 and $813,483 in
1997, including 14 new employees.
Section 2.04 would delegate new responsibility to the PUC
relating to retail pricing flexibility for electric utilities.
Implementation of the provisions would result in additional costs
of $175,523 in fiscal year 1996, including 3 positions, and
$135,564 each year thereafter, including 2.5 positions.
Section 2.05 and others would require exempt wholesale generators
and power marketers to sell only at wholesale. Additional costs
to the PUC are estimated for rule adoption proceedings and case
reviews of $166,592 in fiscal year 1996 and $152,898, including 3
positions in each year.
Sections 2.07 and 2.08 would grant the commission authority to
require a utility to provide transmission service at wholesale to
another utility or certain other entities. The provision would
require commission adoption of a major rule, which would be
performed with existing resources. The PUC would also be
required to submit a report to the 75th Legislature on methods
and procedures for quantifying the magnitude of stranded
investment. The study would result in additional costs for
fiscal years 1996 and 1997 of $143,739 and $132,088,
respectively, including 2.5 employees.
Section 2.14 would allow certain electric cooperatives to opt for
rate deregulation if a majority of the cooperative members elect
to deregulate. This provision would result in estimated savings
beginning in fiscal year 1997 of $62,339, including a reduction
of 1 employee; $93,508 in 1998, including 2 employees; and
$124,677 in 1999 and 2000, including 2.5 employees each year.
Changes to the Public Utility Regulatory Act would result in
additional program support costs related to all sections of the
bill. Such costs would include $104,498 in 1996 and $94,454 in
each subsequent year for two new positions each year to respond
to a large increase in consumer inquiries relating to
implementation of the bill's provisions.
The Office of Public Utility Counsel also projects needs for
additional resources to participate in rule adoption proceedings
and other regulatory changes resulting from the bill. Additional
costs are anticipated of $387,010 in fiscal year 1996 and
$330,428 in each subsequent year, including 5 positions each year
and expert witness fees.
Revenue implications from the bill's provisions cannot be
estimated, but no significant impacts are anticipated because the
bill does not directly affect utility taxes.
The probable fiscal implication of implementing the provisions of
the bill during each of the first five years following passage
is estimated as follows:
Fiscal Probable Cost Out Probable Change in
Year of General Cost/(Savings) Number of State
Revenue Fund 001 from General Employees from
Revenue Fund 001 FY 1995
1996 $1,865,401 $0 29.0
1997 1,904,249 (62,339) 34.0
1998 1,789,850 (93,508) 32.0
1999 1,745,717 (124,677) 31.0
2000 1,709,171 (124,677) 31.0
Similar annual fiscal implications would continue as long as the
provisions of the bill are in effect.
Source: Public Utility Commission, Office of the Public Utility
Counsel
LBB Staff: JK, RM, DF