By Chisum H.B. No. 12
75R1072 CBH-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the restructuring of the electric industry.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 2.001, Public Utility Regulatory Act of
1-5 1995 (Article 1446c-0, Vernon's Texas Civil Statutes), is amended
1-6 by adding Subsections (e), (f), and (g) to read as follows:
1-7 (e) The legislature intends to promote public policy that
1-8 will provide benefits to all consumers.
1-9 (f) The legislature finds that:
1-10 (1) the economy of this state depends on the
1-11 availability of reliable, low-cost energy;
1-12 (2) there is a nationwide trend toward competition in
1-13 the generation and sale of electric energy; and
1-14 (3) increasing competition in the generation and sale
1-15 of electric energy has potential benefits to consumers and has the
1-16 potential to affect the efficiency of electric energy providers.
1-17 (g) The legislature also finds that it is in the best
1-18 interests of the residents of this state to efficiently and
1-19 expeditiously move to increased competition in the generation and
1-20 sale of electric energy after a thorough assessment of the economic
1-21 consequences and opportunities associated with competition. In
1-22 increasing competition in the electric energy markets, the
1-23 legislature does not intend to:
1-24 (1) cause any adverse economic consequences to either
2-1 shareholders or customers of investor-owned utilities, river
2-2 authorities, municipally owned utilities, independent generators,
2-3 power marketers, or cooperatives in generating, selling, or
2-4 distributing electric energy in this state;
2-5 (2) place investor-owned utilities, river authorities,
2-6 municipally owned utilities, independent generators, power
2-7 marketers, or cooperatives at a competitive disadvantage with other
2-8 states by adopting legislation incompatible with other states that
2-9 would negatively affect the economy of this state; or
2-10 (3) place investor-owned utilities, river authorities,
2-11 municipally owned utilities, or cooperatives at an advantage or
2-12 disadvantage among themselves or each other.
2-13 SECTION 2. Subtitle A, Title II, Public Utility Regulatory
2-14 Act of 1995 (Article 1446c-0, Vernon's Texas Civil Statutes), is
2-15 amended by adding Section 2.0031 to read as follows:
2-16 Sec. 2.0031. AUTHORITY TO ADOPT RULES REGARDING RETAIL
2-17 COMPETITION. The commission may not adopt a rule or implement a
2-18 policy relating to the transition to or implementation of retail
2-19 competition unless this Act expressly authorizes the adoption of
2-20 the rule or the implementation of the policy.
2-21 SECTION 3. Title II, Public Utility Regulatory Act of 1995
2-22 (Article 1446c-0, Vernon's Texas Civil Statutes), is amended by
2-23 adding Subtitle G to read as follows:
2-24 SUBTITLE G. COUNCIL ON ELECTRIC INDUSTRY RESTRUCTURING
2-25 Sec. 2.301. DEFINITIONS. In this subtitle:
2-26 (1) "Board" means the board of directors of the
2-27 Council on Electric Industry Restructuring.
3-1 (2) "Council" means the Council on Electric Industry
3-2 Restructuring.
3-3 (3) "Executive director" means the executive director
3-4 of the council.
3-5 (4) "Stranded investment" means any legitimate,
3-6 prudent, and verifiable cost incurred by a public utility or
3-7 transmitting utility to provide service to a retail or wholesale
3-8 customer who later becomes, in whole or part, an unbundled retail
3-9 or wholesale services customer of that public utility or
3-10 transmitting utility.
3-11 Sec. 2.302. COUNCIL; GENERAL POWERS AND DUTIES. (a) The
3-12 Council on Electric Industry Restructuring is an advisory body to
3-13 the commission. The council shall operate in a manner that ensures
3-14 that the council's research, findings, and conclusions are factual,
3-15 fair, and unbiased.
3-16 (b) The council shall conduct professional studies and
3-17 research as directed by the board.
3-18 (c) The council shall identify, collect, maintain, and
3-19 analyze the key information required to assess the effects of
3-20 deregulation of and competition in the electric industry as
3-21 directed by the board.
3-22 (d) The council, with the approval of the board, may apply
3-23 for and spend federal funds to implement this subtitle.
3-24 Sec. 2.303. BOARD OF DIRECTORS. (a) The council is
3-25 governed by a board of directors composed of:
3-26 (1) six senators appointed by the lieutenant governor;
3-27 and
4-1 (2) six members of the house of representatives
4-2 appointed by the speaker of the house of representatives.
4-3 (b) A member of the board is not liable for any act
4-4 performed in good faith in the exercise of duties as a board
4-5 member.
4-6 (c) A member of the board may not receive compensation for
4-7 service on the board but is entitled to reimbursement for actual
4-8 and necessary expenses incurred in performing functions as a board
4-9 member, subject to any limit in the General Appropriations Act.
4-10 Sec. 2.304. EMPLOYMENT RESTRICTIONS AND EFFECT OF LOBBYING
4-11 ACTIVITY. (a) A person may not be employed by the council if the
4-12 person is required to register as a lobbyist under Chapter 305,
4-13 Government Code, because of the person's activities for
4-14 compensation on behalf of a profession that is regulated by or has
4-15 fees, rates, or charges regulated by the commission.
4-16 (b) A person may not be employed by the council if the
4-17 person:
4-18 (1) does business in the generation, transmission,
4-19 distribution, sale, marketing, or brokering of electric energy; or
4-20 (2) has stated an intent to do business or has made
4-21 preparations to do business in the generation, transmission,
4-22 distribution, sale, marketing, or brokering of electric energy.
4-23 (c) A special interest group or lobbyist may not offer the
4-24 board or council funds to be used for operating expenses, and the
4-25 board or council may not accept funds offered for operating
4-26 expenses from a special interest group or lobbyist.
4-27 Sec. 2.305. TERMS OF BOARD MEMBERS; VACANCIES. (a) Board
5-1 members serve two-year terms expiring on February 1 of each
5-2 odd-numbered year.
5-3 (b) If a vacancy occurs on the board, the appointing officer
5-4 shall appoint a replacement in the same manner as the original
5-5 appointment to serve the remainder of the unexpired term.
5-6 Sec. 2.306. REMOVAL OF BOARD MEMBERS. (a) A person is
5-7 disqualified from service on the board and shall be removed by the
5-8 appointing officer if the board member:
5-9 (1) does not have at the time of appointment or
5-10 maintain during service on the board the qualifications required by
5-11 Section 2.303(a);
5-12 (2) cannot discharge the member's duties for a
5-13 substantial part of the term for which the member is appointed
5-14 because of illness or disability; or
5-15 (3) is absent from more than half of the regularly
5-16 scheduled board meetings that the member is eligible to attend
5-17 during a calendar year.
5-18 (b) The validity of an action of the board is not affected
5-19 by the fact that the action is taken when a ground for removal of a
5-20 board member exists.
5-21 Sec. 2.307. PRESIDING OFFICERS; MEETINGS. (a) The board
5-22 shall have a chair and vice chair who shall serve in those
5-23 capacities for a period of two years expiring on February 1 of each
5-24 odd-numbered year.
5-25 (b) The lieutenant governor and the speaker of the house of
5-26 representatives shall designate members of the council to serve as
5-27 chair and vice chair and shall alternate that designation.
6-1 (c) The chair and vice chair may vote on all matters before
6-2 the board.
6-3 (d) The board shall meet as necessary at the call of the
6-4 chair.
6-5 Sec. 2.308. EXECUTIVE DIRECTOR; APPROPRIATIONS REQUEST. (a)
6-6 The board shall employ an executive director, who shall administer
6-7 the council in accordance with board policies. The executive
6-8 director serves at the pleasure of the board.
6-9 (b) The executive director may hire not more than four
6-10 persons to staff the council as necessary to accomplish the
6-11 objectives of the council and may delegate powers and duties to
6-12 members of that staff as necessary.
6-13 (c) The executive director shall prepare a request for
6-14 legislative appropriations for the operations of the council. If
6-15 the request is approved by the board, the board shall submit the
6-16 request to the commission. The commission shall include the
6-17 request in the commission's legislative appropriations request.
6-18 (d) The executive director shall prepare annually a complete
6-19 and detailed written report accounting for all funds received and
6-20 disbursed by the council during the preceding fiscal year. The
6-21 annual report must meet the reporting requirements applicable to
6-22 financial reporting provided by the General Appropriations Act.
6-23 Sec. 2.309. GENERAL POWERS AND DUTIES OF THE BOARD. (a)
6-24 The board shall:
6-25 (1) approve the operating budget of the council;
6-26 (2) develop and implement policies that clearly
6-27 separate the policy-making responsibilities of the board and the
7-1 management responsibilities of the executive director and the staff
7-2 of the council; and
7-3 (3) adopt rules for the operations of the board and
7-4 the council.
7-5 (b) The board shall report to the governor, lieutenant
7-6 governor, and speaker of the house of representatives not later
7-7 than December 31 of each even-numbered year. The report must
7-8 include:
7-9 (1) the activities of the council;
7-10 (2) identification of any problems in the electric
7-11 industry or other businesses or entities affected by the electric
7-12 industry;
7-13 (3) specific recommendations for legislation
7-14 implementing increased competition in the generation and sale of
7-15 electric energy as required by Section 2.312 of this Act; and
7-16 (4) the status of the effectiveness of the electric
7-17 industry to provide adequate, equitable, and reliable electric
7-18 service to residential, commercial, and industrial electric
7-19 consumers as the electric industry moves into increased
7-20 competition.
7-21 (c) The board shall publish and disseminate its studies to
7-22 interested persons and may determine charges for the publications
7-23 as necessary to achieve optimal dissemination.
7-24 (d) The board may:
7-25 (1) delegate powers to the executive director as the
7-26 board considers appropriate, including general guidance on the
7-27 identification of information needs and the conduct of research;
8-1 (2) contract with other persons, including
8-2 institutions of higher education, for conducting economical studies
8-3 of high quality for the council;
8-4 (3) contract with the commission for a fiscal,
8-5 personnel, or other support function;
8-6 (4) appoint expert advisory committees to provide
8-7 technical assistance in conducting research; and
8-8 (5) receive or request reports and other information
8-9 on the electric industry from any public entity charged with
8-10 regulation of the electric industry.
8-11 (e) A request for a report or other information made under
8-12 Subsection (d)(5) must be reasonable in scope and must consider the
8-13 availability of the information requested, the preparation time
8-14 required, and other relevant circumstances.
8-15 (f) The board may take action by majority vote when a quorum
8-16 is present.
8-17 Sec. 2.310. INCLUSION OF STAKEHOLDERS. (a) Before
8-18 beginning any research or studies, the board shall determine
8-19 appropriate stakeholders interested in electric industry
8-20 restructuring and invite those stakeholders to identify, discuss,
8-21 and, if possible, agree on the desired resolution of issues that
8-22 will probably be involved in the restructuring of the electric
8-23 industry.
8-24 (b) The identification, discussion, and possible agreement
8-25 of issues may be before the board or a subcommittee of the board
8-26 as determined by the chair.
8-27 (c) The board may:
9-1 (1) determine the number of meetings necessary and the
9-2 representation of the stakeholders involved in the discussions; and
9-3 (2) accept or reject any suggestion made by a
9-4 stakeholder.
9-5 Sec. 2.311. REQUIRED ASSESSMENTS AND RECOMMENDATIONS. (a)
9-6 The board shall assess increased competition in the generation and
9-7 sale of electricity based on all financial, legal, and social
9-8 matters relevant to the cost, reliability, economic efficiency,
9-9 quality, and operational effectiveness of the electric industry.
9-10 (b) The assessments required by this section and the
9-11 recommendations required by Section 2.312 must be based on a public
9-12 policy to provide benefits to all consumers. In making the
9-13 assessments and recommendations the board shall consider various
9-14 issues, including:
9-15 (1) financial issues that affect the interests of
9-16 residential customers, small business customers, large business
9-17 customers, shareholders, and other stakeholders, including:
9-18 (A) fairness of rates, terms, and conditions of
9-19 service for the services chosen;
9-20 (B) affordability of rates, bills, and services
9-21 for customers;
9-22 (C) stability and predictability of rates and
9-23 bills;
9-24 (D) assurance that rates, terms, and conditions
9-25 are nondiscriminatory for all customers;
9-26 (E) ability of customers to understand the
9-27 potential choices;
10-1 (F) a fair dispute resolution process for
10-2 customers; and
10-3 (G) potential for rates to reflect the
10-4 customer's desired level of reliability and firmness;
10-5 (2) additional financial issues including:
10-6 (A) financial integrity of and cost of capital
10-7 for utilities;
10-8 (B) taxes paid or collected by public utilities,
10-9 including franchise taxes, sales and use taxes, gross receipts
10-10 taxes, and real and personal property taxes;
10-11 (C) tax implications to local governments;
10-12 (D) pricing transmission and distribution of
10-13 services;
10-14 (E) pricing and rate subsidies for all classes
10-15 of customers; and
10-16 (F) unbundling costs of service;
10-17 (3) legal issues, including:
10-18 (A) issues of state and federal jurisdiction;
10-19 (B) state statutory constraints;
10-20 (C) issues related to the Federal Energy
10-21 Regulatory Commission;
10-22 (D) federal commerce clause constraints;
10-23 (E) interstate reciprocity;
10-24 (F) obligations to serve customers;
10-25 (G) issues concerning the use and protection of
10-26 proprietary information in a competitive market; and
10-27 (H) a review of existing state laws, rules, and
11-1 constitutional provisions that affect the generation, sale, and
11-2 transmission of electric energy, including the need for and
11-3 appropriateness of regulatory reforms for services that will
11-4 continue to be provided by a regulated utility;
11-5 (4) social issues, including:
11-6 (A) least-cost planning and the operation of
11-7 public utilities;
11-8 (B) the appropriateness and magnitude of
11-9 integrated resource planning in an increasingly competitive
11-10 environment and the appropriate method of recovering the cost of
11-11 demand-side management programs;
11-12 (C) environmental externalities;
11-13 (D) development and use of renewable resources;
11-14 (E) the appropriateness of providing social, low
11-15 income, demand-side management, and noneconomic renewable energy
11-16 programs to ensure that the costs are fairly and equitably shared
11-17 among all consumers of electric energy, and if those costs are
11-18 considered appropriate, the proper method of recovery; and
11-19 (F) the impact of social, low income, and
11-20 renewable resource programs on each class of customers and the
11-21 economy of this state;
11-22 (5) issues related to system planning, operation, and
11-23 reliability, including:
11-24 (A) electric system reliability and the
11-25 appropriate role of contracting; and
11-26 (B) provisions by which wheeling customers would
11-27 be permitted to leave or rejoin the system of a utility;
12-1 (6) identification and review of the potential market
12-2 structures, including:
12-3 (A) possible market structures for a deregulated
12-4 generation market and whether the structures should be required or
12-5 allowed to form voluntarily;
12-6 (B) formation of market segments in response to
12-7 customers' requirements;
12-8 (C) the effect on the investment stability of
12-9 the electric utility industry;
12-10 (D) the potential to improve economic
12-11 efficiency;
12-12 (E) the size of market and whether and to what
12-13 extent the size affects the level of benefits for customers or
12-14 classes of customers;
12-15 (F) the ability of participants with control
12-16 over the generation and transmission system to exercise market
12-17 power over pricing or the need for controls to prevent the exercise
12-18 of market power; and
12-19 (G) measures necessary to govern corporate
12-20 relationships between regulated utilities and emerging competitive
12-21 sectors;
12-22 (7) barriers to achieving nondiscriminatory
12-23 competition among suppliers, including:
12-24 (A) a review of federal and state tax issues;
12-25 (B) the availability of federal subsidies to
12-26 certain suppliers;
12-27 (C) the application of federal laws that impose
13-1 regulatory requirements on the electric utility industry; and
13-2 (D) jurisdiction of the Federal Energy
13-3 Regulatory Commission over competitors;
13-4 (8) viability of all customers to participate in and
13-5 benefit from a competitive utility industry, including:
13-6 (A) the risks that customers or classes of
13-7 customers will incur by participating in a competitive market;
13-8 (B) the costs of gathering, processing, and
13-9 managing information on the price and quality of electricity; and
13-10 (C) the benefits to customers or classes of
13-11 customers from participating in a competitive electricity market;
13-12 (9) recovery of stranded investments, including those
13-13 situations in which:
13-14 (A) a customer has an obligation to bear certain
13-15 costs and finds a way to avoid that obligation by leaving without
13-16 paying the costs incurred on the customer's behalf;
13-17 (B) the costs of investments exceed the
13-18 investments' value in the competitive markets; and
13-19 (C) a utility has regulatory assets;
13-20 (10) contract issues related to stranded investments,
13-21 including:
13-22 (A) franchise agreements with municipalities for
13-23 rights-of-way for transmission and distribution facilities;
13-24 (B) long-term fuel contracts, power supplier
13-25 contracts, or other resource contracts;
13-26 (C) the enforceability of precompetition private
13-27 contracts in the electric industry when restructuring occurs; and
14-1 (D) the enforceability of precompetition
14-2 contracts between power suppliers and retail consumers;
14-3 (11) constitutional issues, including the
14-4 applicability of:
14-5 (A) federal and state "takings clauses" if
14-6 stranded investments are not recovered; and
14-7 (B) unconstitutional interference with private
14-8 contracts as that issue may relate to contracts classified as
14-9 stranded investments;
14-10 (12) power pools as an alternative method of
14-11 competition; and
14-12 (13) the appropriate length of the transition period
14-13 from existing regulation to increased competition, including:
14-14 (A) the reduction of the role played by the
14-15 commission as increased competition is introduced;
14-16 (B) the substitution of alternative rate-making
14-17 for cost of service rate-making for those aspects of the electric
14-18 industry that appropriately remain regulated; and
14-19 (C) the expansion of flexible pricing during the
14-20 transition period.
14-21 Sec. 2.312. RECOMMENDATIONS TO LEGISLATURE; ABOLITION OF
14-22 BOARD. (a) After a thorough assessment of the reliability of
14-23 service in an increasingly competitive electric market in addition
14-24 to the economic consequences and opportunities associated with
14-25 increased competition in the generation and sale of electric
14-26 energy, the board shall make specific recommendations to the
14-27 legislature for legislation implementing increased competition.
15-1 The board shall make its first recommendations not later than
15-2 December 31, 1998.
15-3 (b) After a thorough assessment of the reliability of
15-4 service in a competitive electric market in addition to the
15-5 economic consequences and opportunities associated with the
15-6 increased competition in the generation and sale of electric energy
15-7 as implemented under the recommendations made under Subsection (a)
15-8 of this section, the board shall make additional recommendations to
15-9 the legislature for legislation implementing later phases of that
15-10 increased competition. The board shall make those recommendations
15-11 biennially. The board shall make the first recommendation under
15-12 this subsection not later than December 31, 2000.
15-13 (c) Not later than December 31, 2006, the board shall make
15-14 its final biennial recommendations. The recommendations made under
15-15 this subsection shall include statutory changes necessary to ensure
15-16 that a full transition of the generation and sale of electricity to
15-17 the optimum degree of competition is completed by December 31,
15-18 2007.
15-19 (d) The council is abolished and this subchapter expires on
15-20 the date the board makes its final recommendations under Subsection
15-21 (c) of this section.
15-22 SECTION 4. Subtitle J, Title I, Public Utility Regulatory
15-23 Act of 1995 (Article 1446c-0, Vernon's Texas Civil Statutes), is
15-24 amended by adding Section 1.3511 to read as follows:
15-25 Sec. 1.3511. COUNCIL ON ELECTRIC INDUSTRY RESTRUCTURING
15-26 FUNDING; ASSESSMENT. (a) The Council on Electric Industry
15-27 Restructuring is funded through an assessment imposed on each
16-1 person other than a public utility who generates or sells electric
16-2 energy in this state, including an exempt wholesale generator,
16-3 power marketer, qualifying facility, and river authority subject to
16-4 Section 2.0012 of this Act.
16-5 (b) The commission shall set the rate of the assessment
16-6 based on the expenditures authorized and the receipts anticipated
16-7 in legislative appropriations. The rate set by the commission may
16-8 not exceed one-sixth of one percent of the person's gross receipts
16-9 from the generation or sale of electric energy in this state.
16-10 (c) The assessment shall be collected and paid in the same
16-11 manner and at the same time as the assessment on public utilities
16-12 imposed under Section 1.351 of this Act.
16-13 (d) Amounts received under this section shall be deposited
16-14 in the state treasury to the credit of a special account. Money in
16-15 the account may be appropriated only for the operation of the
16-16 council.
16-17 SECTION 5. Subtitle B, Title II, Public Utility Regulatory
16-18 Act of 1995 (Article 1446c-0, Vernon's Texas Civil Statutes), is
16-19 amended by adding Sections 2.0511 and 2.0512 to read as follows:
16-20 Sec. 2.0511. DETERMINATION OF STRANDED INVESTMENT; REPORT.
16-21 (a) The commission shall:
16-22 (1) determine whether any investor-owned utilities,
16-23 river authorities, municipally owned utilities, independent
16-24 generators, or power marketers operating in this state have
16-25 investments that can be classified as stranded investments;
16-26 (2) identify the obligations included in the stranded
16-27 investment for each entity, if any, that has a stranded investment;
17-1 and
17-2 (3) determine a fair value for the stranded investment
17-3 of each utility, after considering any factor the commission
17-4 determines to be relevant, including situations in which:
17-5 (A) a customer has an obligation to bear certain
17-6 costs and finds a way to avoid that obligation by leaving without
17-7 paying the costs incurred on the customer's behalf;
17-8 (B) the costs of investments exceed the
17-9 investments' value in the competitive markets;
17-10 (C) a utility has stranded investments in
17-11 franchise agreements with municipalities for rights-of-way for
17-12 facilities;
17-13 (D) a utility has long-term fuel contracts;
17-14 (E) a utility has power supplier contracts or
17-15 other resource contracts; or
17-16 (F) a utility has regulatory assets.
17-17 (b) The commission shall evaluate fair alternative methods
17-18 for recovering stranded investments, including the Federal Energy
17-19 Regulatory Commission's methodology provided by 18 C.F.R. Section
17-20 35.26(c)(2)(iii). The commission shall consider the effect of each
17-21 methodology on the utilities and electric consumers and shall
17-22 ensure that a departing customer does not escape costs incurred by
17-23 an entity to serve that customer. The commission shall make the
17-24 alternative methods known to the Council on Electric Industry
17-25 Restructuring.
17-26 (c) Not later than September 1, 1998, the commission shall
17-27 report to the Council on Electric Industry Restructuring on the
18-1 commission's determinations under this section.
18-2 (d) In this section, "stranded investment" has the meaning
18-3 assigned by Section 2.301 of this Act.
18-4 (e) This section expires September 1, 1999.
18-5 Sec. 2.0512. PILOT PROJECTS FOR COMPETITION. (a) Not later
18-6 than September 1, 1998, the commission by rule shall provide for
18-7 the establishment of pilot projects for competition in electric
18-8 services for facilities owned by a state agency.
18-9 (b) The rules adopted under this section:
18-10 (1) may only apply to a state agency;
18-11 (2) must give a state agency the option to purchase
18-12 electric energy in the retail market; and
18-13 (3) may not require a state agency to purchase
18-14 electric energy in the retail market.
18-15 (c) The total combined load limit of all pilot projects
18-16 approved by the commission may not exceed 50 megawatts.
18-17 (d) The rules adopted under this section shall provide for
18-18 negotiation between the power provider and the end user interested
18-19 in participating in a pilot project, provided that:
18-20 (1) an end user who terminates a negotiated agreement
18-21 after the agreement takes effect is prohibited from further
18-22 participation in a pilot project under this section; and
18-23 (2) the total load at a single location of an end user
18-24 participant must be served by a single power provider.
18-25 (e) A utility, an affiliate of a utility, a nonutility
18-26 generator, or a power marketer may be a power provider in a pilot
18-27 project. A participating provider:
19-1 (1) shall match and follow the load of the provider's
19-2 participating end users;
19-3 (2) may negotiate and contract with customers to
19-4 provide generation service at a market-based price, a fixed price,
19-5 a market-indexed price, or a time-of-use price; and
19-6 (3) must certify by affidavit that prices offered are
19-7 not below the provider's cost to provide that service.
19-8 (f) The host utility in a pilot project shall:
19-9 (1) continue to provide distribution service to the
19-10 participating end user;
19-11 (2) continue to own and read the meter of the
19-12 utility's participating customer, but may require reasonable
19-13 reimbursement for the cost of:
19-14 (A) reading the meter; and
19-15 (B) providing any necessary special metering
19-16 equipment;
19-17 (3) receive full compensation for providing the
19-18 distribution service;
19-19 (4) receive full and timely recovery of any stranded
19-20 investment the utility incurs as a result of customer participation
19-21 in the pilot project; and
19-22 (5) provide and be compensated for any necessary
19-23 system ancillary services in accordance with federal or state
19-24 rules or regulations.
19-25 (g) The transmitting utility in a pilot project shall:
19-26 (1) provide transmission service and be compensated in
19-27 accordance with federal and state rules and regulations; and
20-1 (2) provide and be compensated for any necessary
20-2 transmission ancillary services in accordance with federal and
20-3 state rules and regulations.
20-4 (h) The pilot projects established under this section and
20-5 the rules adopted to establish the projects must:
20-6 (1) test the feasibility of various metering
20-7 technologies; and
20-8 (2) be sufficient to determine the ability of the
20-9 generation service provider to accurately follow the load of the
20-10 provider's participating pilot project end use customers.
20-11 (i) Before adopting the rules establishing the pilot
20-12 projects, the commission shall investigate various methods of
20-13 stranded investment recovery for the pilot projects. The adopted
20-14 method must:
20-15 (1) be determined in a manner consistent with federal
20-16 rules and regulations under 18 C.F.R. Section 35.26(c)(2)(iii);
20-17 (2) provide for full and timely recovery of stranded
20-18 investments; and
20-19 (3) prevent cost-shifting by providing that costs are
20-20 borne by the parties participating in the pilot project.
20-21 (j) For purposes of the pilot projects only, the commission,
20-22 after an adequate investigation as required by Subsection (i) of
20-23 this section, shall determine the fairest method of stranded
20-24 investment recovery and report the determination to the Council on
20-25 Electric Industry Restructuring.
20-26 (k) Participating end use customers shall file data required
20-27 by the commission as necessary for making findings and for
21-1 preparations of reports.
21-2 (l) Not later than September 1 of each year, the commission
21-3 shall report to the Council on Electric Industry Restructuring on
21-4 the status and effectiveness of the pilot projects. The commission
21-5 shall make the first report not later than September 1, 1999, and
21-6 the last report not later than September 1, 2004. The report must
21-7 include information on:
21-8 (1) the workability, status, and fairness of the pilot
21-9 projects;
21-10 (2) the value of the pilot projects to customers;
21-11 (3) the ability of generation service providers to
21-12 match and follow load requirements;
21-13 (4) the level of market participant interest, both
21-14 during and at the conclusion of the pilot projects;
21-15 (5) customer satisfaction with the pilot projects; and
21-16 (6) the effect on host utilities, transmitting
21-17 utilities, service providers, and participating and
21-18 nonparticipating customers.
21-19 (m) This section expires August 31, 2005.
21-20 SECTION 6. Section 2.003, Public Utility Regulatory Act of
21-21 1995 (Article 1446c-0, Vernon's Texas Civil Statutes), is repealed.
21-22 SECTION 7. (a) This Act takes effect September 1, 1997.
21-23 (b) As soon after the effective date of this Act as
21-24 possible, the lieutenant governor and speaker of the house of
21-25 representatives shall appoint the initial members of the board of
21-26 directors of the Council on Electric Industry Restructuring. The
21-27 lieutenant governor shall appoint six senators to serve terms
22-1 expiring February 1, 1999, and the speaker of the house of
22-2 representatives shall appoint six members of the house of
22-3 representatives to serve terms expiring February 1, 1999.
22-4 (c) After appointing the initial members, the lieutenant
22-5 governor shall designate a member of the board as the chair and the
22-6 speaker of the house of representatives shall designate a member of
22-7 the board as the vice chair. The initial chair and vice chair
22-8 serve in those capacities for a period expiring February 1, 1999.
22-9 SECTION 8. The importance of this legislation and the
22-10 crowded condition of the calendars in both houses create an
22-11 emergency and an imperative public necessity that the
22-12 constitutional rule requiring bills to be read on three several
22-13 days in each house be suspended, and this rule is hereby suspended.