SRC-MAX C.S.S.B. 1571 75(R)BILL ANALYSIS


Senate Research CenterC.S.S.B. 1571
By: Madla
State Affairs
4-23-97
Committee Report (Substituted)


DIGEST 

Wholesale competition was introduced in the electric utility industry by
the passage of S.B. 373 during the 74th Legislature.  During the
rulemaking proceeding at the Public Utility Commission of Texas (PUC), PUC
adopted substantive rules to implement pricing of transmission service as
required by the statute.  There are concerns that these rules create
disproportionate and inequitable shifting of cost among electric
transmission providers in this state.  This bill sets forth requirements
relating to transmission pricing methodology for wholesale wheeling.   

PURPOSE

As proposed, C.S.S.B. 1571 sets forth requirements for transmission
pricing methodology for wheeling in the electric utility industry.  

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 2.057(c), Article 1446c-0, V.T.C.S.  (Public
Utility Regulatory Act of 1995), to prohibit the Public Utility Commission
(PUC) from employing certain transmission pricing methods.   

SECTION 2. Amends Section 2.105, Article 1446c-0, V.T.C.S., to authorize a
municipally owned utility to elect to use a cash flow method for
determining certain rates for investor-owned utilities. Requires PUC to
apply ratemaking principles based on the flow of funds set forth in the
municipality's revenue bond ordinance and other debt ordinances to allow
for a cash flow level sufficient to cover all items determined by the
municipally owned utility's governing board to be required to be paid or
funded from certain sources under certain conditions.  Requires PUC to
ensure that costs of nontransmission functions are used in a certain
manner.  Prohibits PUC from considering certain factors applicable to
investor-owned utilities, if the cash flow method is used. Requires PUC to
specifically acknowledge that provisions contained in certain sections of
this Act do not apply to municipally owned utilities. 

SECTION 3. Effective date:  September 1, 1997.

SECTION 4. Emergency clause.

SUMMARY OF COMMITTEE CHANGES

SECTION 1. 

Amends Section 2.057(c), Article 1446c-0, V.T.C.S., to prohibit PUC from
employing certain transmission pricing methods.   

SECTION 2. 

Amends Section 2.105, Article 1446c-0, V.T.C.S., to add a provision
authorizing a  municipally owned utility to use a cash flow method for
determining certain rates.  Requires PUC  to ensure that the costs of
nontransmission functions are used in a certain manner.