PAK C.S.S.B. 965 75(R) BILL ANALYSIS
STATE AFFAIRS
C.S.S.B. 965
By: Armbrister (Wolens)
5-22-97
Committee Report (Substituted)
BACKGROUND
Currently, the powers and the duties of the Public Utility Commission of
Texas (PUC) are set out in Article 1446c-0, V.T.C.S., the Public Utility
Regulatory Act of 1995. The electric and telecommunications industries
are currently in a period of regulatory transition. The Texas Performance
Review, in a report entitled "Light Years: The Future of the Public
Utility Commission of Texas," concluded that PUC needs new tools to
effectively and efficiently regulate these two industries through this
period of regulatory transition. This bill would implement some of those
tools suggested by the report. S.B. 965 would allow PUC to streamline its
regulatory operations through the use of proposed orders, staff reports,
and alternative dispute resolution processes. This bill would clarify
legislative priorities; give PUC certain reliability and customer
protection authority over new parties participating in the market; and
amend provisions to bring the employment/post-employment restrictions for
PUC and the Office of the Public Utility Counsel in line with other state
regulatory agencies. Finally, this bill would require a report to be
created by the comptroller and PUC on the structure of gross receipts tax
imposed under Section 1.351, Article 1446c-0, V.T.C.S., and the potential
effects that deregulation would have on the revenue generated by the tax
over the next decade.
PURPOSE
As proposed, C.S.S.B. 965 revises the powers and duties of the Public
Utility Commission of Texas under Article 1446c-0, V.T.C.S., the Public
Utility Regulatory Act of 1995.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does expressly grant any
additional rulemaking authority to the Public Utility Commission in
SECTION 11 (Sections 1.105, Section 1.106, and Section 1.107, Article
1446c-0, V.T.C.S., PURA 1995); SECTION 18 (Section 2.057(b), Article
1446c-0, V.T.C.S., PURA 1995); and SECTION 19 (Section 2.058, Article
1446c-0, V.T.C.S., PURA 1995).
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Section 1.002 of the Public Utility Regulatory Act of
1995 (Article 1446c-0, V.T.C.S) by adding subsection (b) requiring the
Public Utility Commission to ensure adequate customer service and
information concerning the electric and telecommunications markets.
SECTION 2. Amends Section 1.003 Subdivisions (14) and (19) of the Public
Utility Regulatory Act of 1995 (Article 1446c-0, V.T.C.S) with a
conforming change and to define "Alternative dispute resolution."
SECTION 3. Amends Section 1.004 of the Public Utility Regulatory Act of
1995 (Article 1446c-0, V.T.C.S) to define "Affected entity;" "Direct
competitor;" "Participated;" "Particular matter;" "Pecuniary interest;"
"Public;" and "Rate regulated entity."
SECTION 4. Amends Section 1.023(d), (e), and (f) of the Public Utility
Regulatory Act of 1995 (Article 1446c-0, V.T.C.S) as follows:
Section 1.023(d) prohibits a person who must be registered as a lobbyist
to serve as public utility counsel or be an employee of the Public Utility
Commission.
Section 1.023(e), (f) removes the prohibitions against serving as general
counsel for the Public Utility Commission.
SECTION 5. Amends Subtitle B, Title I of the Public Utility Regulatory
Act of 1995 (Article 1446c-0, V.T.C.S) by adding sections 1.0235, 1.0241
and 1.0245 as follows:
Section 1.0235 prohibits a current Public Utility Commission commissioner
from seeking elective office.
Section 1.0241(a) prohibits a Public Utility Commission employee or State
Office of Administrative Hearings employee from holding pecuniary interest
or securities in a rate regulated entity, competitor, or affected entity.
This section also prohibits these employees from accepting gifts or
solicit employment from these entities.
Section 1.0241(b) prohibits a rate regulated entity, competitor, or an
affected entity from offering or giving a gift, gratuity, employment, or
entertainment to a Public Utility Commission employee or commissioner.
Section 1.0241(c) provides that it is not a violation of this section if a
Public Utility Commission commissioner or employee or a SOAH employee
informs the PUC, SOAH and the attorney general if that person becomes the
owner of pecuniary interest or securities in an affected entity.
Section 1.0241(d) provides that it is not a violation of this section if
pecuniary interest is held indirectly.
Section 1.0241(e) provides that this section does not apply to a contract
for a product or service if the employee is acting as a consumer of the
product or service.
Section 1.0245 requires the executive director or designee to inform
Public Utility Commission employees about their qualifications for
employment and responsibilities under this Act.
SECTION 6. Amends Section 1.025(a) and (b) of the Public Utility
Regulatory Act of 1995 (Article 1446c-0, V.T.C.S) with a conforming
change.
SECTION 7. Amends Section 1.026(a) of the Public Utility Regulatory Act
of 1995 (Article 1446c-0, V.T.C.S) with a conforming change.
SECTION 8. Amends Section 1.028(a), (c), and (d) of the Public Utility
Regulatory Act of 1995 (Article 1446c-0, V.T.C.S) to delete the
requirements that the Public Utility Commission hire a general counsel and
transfers the duties of the general counsel to the commission staff.
SECTION 9. Amends Section 1.0512 of the Public Utility Regulatory Act of
1995 (Article 1446c-0, V.T.C.S) as follows:
Section 1.0512 prohibits the counselor may not be employed by a rate
regulated entity within one year after leaving the position of counselor.
SECTION 10. Amends Section 1.054(a) of the Public Utility Regulatory Act
of 1995 (Article 1446c-0, V.T.C.S) to allow the Office of Public Utility
Counsel to appear at alternative dispute resolution hearings.
SECTION 11. Amends Subtitle D, Title I of the Public Utility Regulatory
Act of 1995 (Article 1446c-0, V.T.C.S) by adding Sections 1.105-1.109 as
follows:
Section 1.105(a) requires the Public Utility Commission to adopt rules
to allow the staff to resolve a contested case.
Section 1.105(b) requires the above rules to prescribe the type of cases
that a proposed order may be issued, sets deadlines, and ensures that each
party retains the right to a full hearing and judicial review.
Section 1.105(c) provides that a proposed order or part of a proposed
order to which a party does not object becomes final with Public Utility
Commission approval.
Section 1.106(a) requires the Public Utility Commission to adopt rules
allowing Public Utility Commission staff to prepare reports containing the
information the staff would have presenting in a contested case.
Section 1.106(b) requires the above rules to prescribe the type of cases
that a proposed order may be issued, sets deadlines, and ensures that each
party retains the right to a full hearing and judicial review. The rules
may not allow the Public Utility Commission to act on a staff
recommendation before the 45 day after it is released.
Section 1.107 requires the PUC, by rule, to adopt procedures by which PUC
may use an alternative dispute resolution procedure to resolve a pending
issue or proceeding. Sets forth the conditions by which the rules must
comply. Authorizes PUC to use an alternative dispute resolution procedure
if PUC does not receive a timely objection or if PUC determines that an
objection does not have a reasonable basis. Authorizes a residential or
small commercial consumer who brings a complaint or other action before
PUC in which the value does not exceed $10,000 to choose whether to use a
contested case proceeding or an alternative dispute resolution proceeding
to resolve the complaint or action. Provides that a deadline for a PUC
decision prescribed by another provision of this Act, including Sections
2.2011, 2.211, 2.212, 3.211, 3.212, 3.2135, 3.2531, and 3.2532, is
suspended during the pendency of an alternative dispute resolution
procedure.
Section 1.108 provides that PUC has jurisdiction over a person required to
register under Title II of this Act, except qualifying facilities, or to
obtain a certificate under Title III of this Act to the extent necessary
to establish and ensure service quality and reliability and customer
service and protection.
Section 1.109 authorizes the PUC to educate and provide information to
consumers to assist them in making an informed decision regarding electric
and telecommunications services; and providers of electric and
telecommunications services relating to the providers' responsibilities
under state laws and regulations.
SECTION 12. Amends Section 1.3215(e) of the Public Utility Regulatory Act
of 1995 (Article 1446c-0, V.T.C.S) to delete a provision relating to
notice and cure of a violation prior to a penalty being assessed under
this section.
SECTION 13. Amends Section 1.323 of the Public Utility Regulatory Act of
1995 (Article 1446c-0, V.T.C.S) to add a new heading, PENALTY FOR
VIOLATING SECTION 1.0235 OR 1.0241 OF THIS ACT, and requires any member of
PUC or any officer or director of a public utility or affiliated interest
to be subject to a civil penalty of $1,000 for each and every knowing
violation of Section 1.0235 or 1.0241, rather than 1.024, of this Act.
Makes conforming changes.
SECTION 14. Amends Section 1.401 of the Public Utility Regulatory Act of
1995 (Article 1446c-0, V.T.C.S) by adding subsection (d) to require PUC to
submit to the legislature a report on complaints received from consumers
during the previous two years by January 15 of each odd-numbered year.
Sets forth the required contents of the report.
SECTION 15. Amends Section 2.003 of the Public Utility Regulatory Act of
1995 (Article 1446c-0, V.T.C.S) to require the Public Utility Commission
legislative report include reports complaints relating to electric service
or electric utilities.
SECTION 16. Amends Section 2.053(b) to provide that PUC has the
jurisdiction over exempt wholesale generators and power marketers that
sell electric energy in this state, among other options, to require
registration as provided by this section as a condition of doing business
in this state; and to revoke a registration for repeated violations of
this Act or PUC rules. Makes conforming changes.
SECTION 17. Amends Section 2.056(b) of the Public Utility Regulatory Act
of 1995 (Article 1446c-0, V.T.C.S) to require a certain committee to
submit a certain report to the legislature by May 1, 1998, rather than
September 1, 1997, at which time the committee shall be dissolved.
SECTION 18. Amends Section 2.057(b) of the Public Utility Regulatory Act
of 1995 (Article 1446c-0, V.T.C.S) to require rules adopted by PUC and
relating to the registration and reporting requirements of qualifying
facilities, exempt wholesale generators, and power marketers, to require
each qualifying facility, exempt wholesale generator, and power marketer
to register with PUC as a condition doing business in this state.
Authorizes PUC to revoke a registration for repeated violations of this
Act or PUC rules.
SECTION 19. Amends Subtitle B, Title II of the Public Utility Regulatory
Act of 1995 (Article 1446c-0, V.T.C.S) by adding Sections 2.058 as
follows:
Section 2.058(a) requires the Public Utility Commission to implement
reliability standards relating to electrical service to retail customers.
Section 2.058(b) requires that Public Utility Commission standards include
requirements for utilities to maintain adequate staff to deliver
appropriate quality service.
Section 2.058(c) provides that a interruption of service due to a supplier
does not have do be included in the reliability performance measures. The
section also require Public Utility Commission rules to create appropriate
standards for different customers and ensure no customer or area is
neglected by a utility.
Section 2.058(d) allow the Public Utility Commission to require each
electric utility to supply data on an annual basis.
Section 2.058(e) requires the Public Utility Commission to annual compute
a reliability score for electric utility reliability standards adjusted to
remove the effects of natural events and reasonable outages. If a utility
scores less than five percent below a determined standard the Public
Utility Commission shall issue an order stating its findings. The
offending utility must report within 90 days of the commission order,
information showing the there is no need for corrective action; a plan to
implement corrective action; or information showing the utility has
already corrected to deficiency.
Section 2.058(f) allows the Public Utility Commission to order a utility
to increase its transmission or distribution expenditures by up to 5
percent in applicable accounts for failure to correct a deficiency within
a year; or for a service interruption effecting 10,000 customers lasting
over 48 hours.
Section 2.058(g) requires the Public Utility Commission to take into
account acts of god when analyzing service interruptions. This section
also requires that mandatory expenditure increases be spent in the
geographical location of the outage and prohibits the Public Utility
Commission from assessing additional administrative penalties. Increased
expenditures required by this section may not be grounds for a rate
increase.
Section 2.058(h) requires all generation providers to comply with
operational criteria established by the independent system operator and
the Public Utility Commission.
SECTION 20. Amends Section 3.051(c) of the Public Utility Regulatory Act
of 1995 (Article 1446c-0, V.T.C.S) to require registration as a condition
of doing business in Texas.
SECTION 21. Amends Section 3.051(s) (1) of the Public Utility Regulatory
Act of 1995 (Article 1446c-0, V.T.C.S) to include in the Public Utility
Commission authority over utilities maintaining reliability and customer
service standards.
SECTION 22. Amends Section 3.2625(g) of the Public Utility Regulatory Act
of 1995 (Article 1446c-0, V.T.C.S) to allow the Public Utility Commission
to revoke a utility's registration for repeat violations of this Act.
SECTION 23. Amends Section 3.263(a) of the Public Utility Regulatory Act
of 1995 (Article 1446c-0, V.T.C.S) to allow the Public Utility Commission
to revoke a utility's certificate for repeat violations of this Act.
SECTION 24(a). Requires the Public Utility Commission and the comptroller
to complete a study of the gross receipts tax on utilities and the effect
of deregulation on these taxes.
SECTION 24(b), (c). Requires the Public Utility Commission and the
comptroller to prepare a report detailing their findings by January 15,
1999.
SECTION 25. Repeals the following sections of the Public Utility
Regulatory Act of 1995 (Article 1446c-0, V.T.C.S):
-Section 1.024;
-Section 1.025(c); and
-Section 1.052.
SECTION 26. Effective date: September 1, 1997.
SECTION 27. Emergency clause.
COMPARISON OF ORIGINAL TO SUBSTITUTE
The substitute makes the following changes to the original engrossed
version:
In SECTION 1 the substitute adds customer service and protection to the
commission's legislative authority.
The substitute adds a new SECTION 3 that amends Sec. 1.004 to define
"affected entity," direct competitor," "particular matter," "pecuniary
interest," and "rate regulated entity." (These definitions were contained
in SECTION 4 of the original). Amends definition of "public utility."
The substitute renumbers the following SECTIONS accordingly.
In SECTION 4 the substitute (SECTION 3 of the original) extends the
prohibition on employment with the commission if a person is required to
be registered as a lobbyist to include commission staff.
In SECTION 5 the substitute reinstates the two year prohibition on
employment of a commissioner and the one year prohibition on employment of
a commission employee, a SOAH employee, or an OPUC employee by a rate
regulated entity. Reduces the restriction on the OPUC counselor to one
year.
A n d t h e s u b s t i t u t e i n S E C T I O N 6 r e i n s t a t
e s t h e p o s t -e m p l o y m e n t p r o h i b i t i o n o n c o
m m i s s i o n e r s , c o m m i s s i o n e m p l o y e e s , t h e
c o u n s e l o r , a n d O P U C e m p l o y e e s r e g a r d i n g
r e p r e s e n t a t i o n o n p a r t i c u l a r m a t t e r s i n
w h i c h t h e p e r s o n p a r t i c i p a t e d w h i l e e m p l
o y e d b y t h e c o m m i s s i o n o r O P U C . R e n u m b e r
s f o l l o w i n g S E C T I O N S a c c o r d i n g l y .
S E C T I O N 7 m a k e s c o n f o r m i n g c h a n g e s t o s e
c t i o n n u m b e r s .
In SECTION 9 the substitute repeals the section prohibiting the OPUC
counselor from holding an interest in or being employed by a utility
company or its affiliate, a utility supplier, cooperatives or a utility
competitor or other affected entity for two years following employment
with the office. The counselor will still be prohibited from owning more
than a 10% interest in a regulated utility and utility competitors,
suppliers, and affected entities pursuant to 1.051(d)(2).
In SECTION 13 the substitute makes a change to the exception for a penalty
under Sec. 1.323.
In SECTION 19 the substitute adds language creating reliability measures
for electric utilities power delivery and allows the Public Utility
Commission to increase its transmission and distribution expenditures to
correct any deficiencies in service delivery. Following SECTIONS
renumbered accordingly.