Bill not drafted by TLC or Senate E&E.
Line and page numbers may not match official copy.
By Bosse H.B. No. 1807
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to ensuring that customers receive reliable and affordable
1-3 electric energy services.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Title II, Public Utility Regulatory Act of 1995
1-6 (Article 1446c-0, Vernon's Texas Civil Statutes), is amended by
1-7 adding Subtitle G to read as follows:
1-8 SUBTITLE G. CUSTOMER SAFEGUARDS
1-9 Sec. 2.301. APPLICATION AND IMPLEMENTATION OF SUBTITLE. (a)
1-10 This subtitle prescribes basic rights and protections for electric
1-11 utility customers, including residential customers.
1-12 (b) This subtitle does not affect a right or protection an
1-13 electric utility customer has under another provision of this Act
1-14 or under other law.
1-15 (c) This subtitle applies without exception to a retail
1-16 electric utility regardless of whether the utility is a monopoly,
1-17 is transitioning to a competitive regulatory environment, or is a
1-18 provider in a competitive retail electric market.
1-19 (d) The commission shall adopt rules to implement and
1-20 enforce this subtitle.
1-21 Sec. 2.302. EQUAL OPPORTUNITY FOR BENEFIT. (a) The
1-22 commission shall ensure all of its rules and policies treat all
1-23 customers and all customer classes equitably and fairly.
1-24 (b) In implementing and enforcing this section, the
2-1 commission shall ensure that:
2-2 (1) service choices and discounted rates are available
2-3 to all customers and customer classes;
2-4 (2) captive, residential customers are not required to
2-5 pay costs avoided by other customers;
2-6 (3) customer choices are broadened to include other
2-7 types of electric energy services, such as demand-side management,
2-8 solar and wind energy, cost-effective substitution of electric
2-9 energy with alternative fuels, green marketing, and renewable
2-10 energy line extension alternatives; and
2-11 (4) reasonable financial reimbursement from the
2-12 utility or utilities engaged in the proceeding for active
2-13 participation by nonprofit and low-income consumer groups and
2-14 environmental groups in a commission proceeding in which:
2-15 (A) the financial needs of the groups are small
2-16 in comparison to the potential benefits of their participation; and
2-17 (B) the participation of the groups is necessary
2-18 to fully represent a legitimate viewpoint in the proceeding.
2-19 Sec. 2.303. UNIVERSAL SERVICE. (a) Electricity is an
2-20 essential service necessary for health and safety and each resident
2-21 of this state is entitled to basic electric utility service at a
2-22 reasonable price.
2-23 (b) In implementing this section, the commission shall
2-24 ensure that:
2-25 (1) universal electric utility service, including an
2-26 affordable basic service package, is available to all residential
2-27 electric utility customers, including low-income customers;
2-28 (2) universal service requirements and provisions
2-29 address all necessary issues, including:
2-30 (A) protections relating to obligation to serve;
3-1 (B) identification of a provider of last resort
3-2 in each service area;
3-3 (C) universally affordable rates;
3-4 (D) provision of a basic service package of firm
3-5 electric services for all customers, whether urban or rural, that:
3-6 (i) provides a block of kilowatt hours
3-7 sufficient to provide lighting, refrigeration, heating, and
3-8 cooling, as determined by the commission, based on a 10-year
3-9 average for residential electricity use in a comparable dwelling in
3-10 the county;
3-11 (ii) is offered at a price that does not
3-12 vary by time of day or season; and
3-13 (iii) has no associated administrative fee
3-14 or fixed fee;
3-15 (E) access to basic weatherization and energy
3-16 audit services; and
3-17 (F) provision of a levelized payment plan
3-18 available to all customers that allows customers to make timely and
3-19 consistent payments of the total amount owed;
3-20 (3) a transmission or distribution utility is required
3-21 to provide transmission or distribution service to each customer in
3-22 the area served by the utility; and
3-23 (4) low-income customers have access to payment
3-24 programs, targeted energy conservation and weatherization programs,
3-25 and special rate structures such as lifeline rates.
3-26 (c) The commission shall adopt a competitively neutral
3-27 funding mechanism to ensure that low-income customers have access
3-28 to the basic service package. The commission shall impose an
3-29 assessment against each electric utility generator doing business
3-30 in this state to ensure that assistance is provided to households
4-1 with incomes at or below 125 percent of the federal poverty
4-2 guidelines and to ensure that a household does not pay more than
4-3 five percent of the household's total household income for the
4-4 basic service package. The commission shall impose the assessment
4-5 based on kilowatt hours sold. The commission shall attempt to
4-6 streamline program delivery and enrollment procedures by
4-7 coordinating with state human services agencies and low-income
4-8 weatherization providers.
4-9 Sec. 2.304. CONSUMER PROTECTIONS. (a) Each electric energy
4-10 customer, regardless of service provider, is entitled, at a
4-11 minimum, to have customer service standards and consumer
4-12 protections at least as strong as those in effect on the effective
4-13 date of this section.
4-14 (b) The commission shall ensure that each customer has, at a
4-15 minimum:
4-16 (1) access to customer service offices;
4-17 (2) sufficient unbiased information on which to make
4-18 decisions, including information relating to service and pricing
4-19 options that is clear, accurate, written in plain language, and
4-20 available in English or Spanish;
4-21 (3) accurate and understandable bills;
4-22 (4) disclosure of unbundled cost and price;
4-23 (5) disclosure of fuel mix and generation profile of
4-24 the service provider;
4-25 (6) notice of risk of fuel price volatility;
4-26 (7) access to a provider's complaint history;
4-27 (8) protection against service disconnection in
4-28 extreme weather conditions, in cases of medical necessity, or in
4-29 cases of nonpayment for unrelated services;
4-30 (9) adequate notice of a proposed service termination,
5-1 a change in the quality of service, or a change in the price of
5-2 service;
5-3 (10) the right to quickly resolve service and billing
5-4 problems and the right to appeal an unfair utility action to an
5-5 impartial regulator and to have a complaint resolved quickly
5-6 through a simplified hearings process; and
5-7 (11) protection against abusive or anti-competitive
5-8 practices, including rules relating to:
5-9 (A) credit and collection practices, connection
5-10 and reconnection, repair, complaint handling, and billing;
5-11 (B) deposit requirements;
5-12 (C) disconnection policies;
5-13 (D) the form and content of bills;
5-14 (E) bill payments.
5-15 (c) In implementing and enforcing the protections required
5-16 by Subsection (b) of this section, the commission shall ensure that
5-17 downsizing and layoffs do not result in customer inconvenience and
5-18 service delays.
5-19 (d) Each consumer is entitled to have information about
5-20 customer billing, payment, and usage history kept strictly
5-21 confidential. An electric utility or other person may aggregate
5-22 information in a manner that masks the usage, billing, and payment
5-23 history of an individual consumer. Nonaggregated information may
5-24 be released only with the express written consent of the customer
5-25 in accordance with procedures adopted by the commission. In
5-26 addition, the commission shall adopt nondiscriminatory rules
5-27 regarding telemarketing calls relating to retail electric service.
5-28 (e) Each consumer is entitled to fair and reasonable
5-29 marketing, sales, and business practices. The commission may bring
5-30 an action under Subchapter E, Chapter 17, Business & Commerce Code,
6-1 if an allegedly false, misleading, or deceptive act or practice
6-2 involves a good or service that is related to electricity. A
6-3 consumer must notify the commission if the consumer brings an
6-4 action under Subchapter E, Chapter 17, Business & Commerce Code,
6-5 against an electric provider who is under the commission's
6-6 jurisdiction.
6-7 (f) If competitive choices or the number of retail electric
6-8 providers in a market increase, either by state or federal action
6-9 or because of changing market conditions, the commission shall
6-10 adopt any additional rules relating to billing, business practices,
6-11 consumer choice of service provider, and service quality as the
6-12 commission considers necessary and consistent with this subtitle.
6-13 The commission shall also adopt and enforce standards for licensing
6-14 electric service providers in this state to ensure that the
6-15 providers are financially stable and have not violated the laws or
6-16 regulations of other states.
6-17 Sec. 2.305. PROTECTION AGAINST MARKET FAILURE. (a) The
6-18 commission shall ensure that the electric energy market is fair to
6-19 both consumers and to companies operating in the market.
6-20 (b) The commission shall adopt safeguards to prevent:
6-21 (1) anti-competitive behavior such as favoritism,
6-22 self-dealing, and cross-subsidization among affiliates;
6-23 (2) anti-competitive domination in a geographic area
6-24 or service market or sub-market in which a limited number of
6-25 competitors, either along or in combination, may, by reason of
6-26 their market share or other inherent advantage, exercise
6-27 substantial control over the prevailing market price;
6-28 (3) cross-subsidization between competitive and
6-29 noncompetitive services;
6-30 (4) action, including but not limited to unreasonable
7-1 tying arrangement and anti-competitive contracts, which may act as
7-2 unreasonable barriers to the entry of competing suppliers;
7-3 (5) holding company practices, including but not
7-4 limited to corporate tax allocation, sharing of services, and
7-5 transfers of assets, whether tangible or intangible, which enable
7-6 an electric utility's unregulated affiliate to gain an advantage
7-7 over its competitors based upon its affiliation with the electric
7-8 utility; and
7-9 (6) affiliated electric and gas utilities which serve
7-10 the same service area from engaging in collusive pricing behavior.
7-11 (c) The commission may:
7-12 (1) develop procedures to investigate and take action
7-13 against anti-competitive behavior;
7-14 (2) provide commission staff with appropriate training
7-15 in anti-trust law; and
7-16 (3) apply any condition or limitation on a merger or
7-17 acquisition within its jurisdiction to the extent that the
7-18 commission finds that the condition or limitation is reasonably
7-19 necessary to protect ratepayers, promote competition, or prevent
7-20 anti-competitive actions.
7-21 (d) The commission shall take such actions as necessary to
7-22 enforce and achieve remedial compliance with the provisions of this
7-23 section. The commission may order one or more of the following
7-24 sanctions against a person or firm within its jurisdiction if the
7-25 commission determines from the facts that such would be fair,
7-26 reasonable or equitable:
7-27 (1) cancel or suspend any permit, license,
7-28 certificate, or registration existing under its authority;
7-29 (2) enter an administrative penalty in according with
7-30 the provisions of this Act;
8-1 (3) order the person or firm to cease and desist from
8-2 the specified activity;
8-3 (4) direct the person or firm to make complete
8-4 restitution to all Texas consumers and entities operating in Texas
8-5 harmed by violation of this section;
8-6 (5) modify any rate schedules within the commission's
8-7 jurisdiction to the extent such modification is reasonably related
8-8 to compliance with the section; and
8-9 (6) forbid the person or firm from merging with or
8-10 acquiring any electric utility without the approval of the
8-11 commission.
8-12 (e) For purposes of Subsection (b)(2), a sub-market includes
8-13 electric services provided to particular classes of customers or
8-14 during particular seasons or hours of the year.
8-15 Sec. 2.306. RELIABILITY AND SAFETY. (a) Each customer
8-16 class is entitled to reliable and safe electric energy service.
8-17 (b) The commission shall:
8-18 (1) establish clear and enforceable service
8-19 reliability and safety standards;
8-20 (2) establish service quality standards that all
8-21 service providers must meet and that are comparable to or superior
8-22 to standards applicable to electric utilities on the effective date
8-23 of this section;
8-24 (3) ensure that improvements are made in any area in
8-25 which service is not adequately reliable; and
8-26 (4) ensure that downsizing and layoffs do not occur at
8-27 the expense of the safety and reliability of the electric energy
8-28 system.
8-29 Sec. 2.307. ENVIRONMENT. (a) The commission shall ensure
8-30 that changing market conditions or governmental actions that result
9-1 in new choices of energy services and supplies:
9-2 (1) are used as an opportunity to improve
9-3 environmental quality and advance renewable energy technologies,
9-4 particularly those based on native Texas resources;
9-5 (2) do not create an advantage for older, more
9-6 environmentally damaging generation facilities; and
9-7 (3) do not jeopardize cost-effective energy
9-8 conservation programs.
9-9 (b) In determining whether to approve a new generating
9-10 facility or transmission line, the commission shall:
9-11 (1) hold hearings, including public hearings;
9-12 (2) apply the approval standards in effect on the
9-13 effective date of this section, including consideration of
9-14 community values, recreational and park areas, historical and
9-15 aesthetic values, environmental integrity, future operating costs,
9-16 the financial viability of the project, and the probable
9-17 improvement of service or lowering of cost to consumers in the
9-18 area; and
9-19 (3) ensure that siting standards do not exacerbate
9-20 discriminatory treatment of low-income and minority communities.
9-21 (c) Each property owner, business owner, and resident who
9-22 may be affected by a project shall be notified in writing of the
9-23 project. A hearing must be held in which public comment is taken.
9-24 The commission must fully address the issues raised at the public
9-25 hearing before making a decision in relation to the project.
9-26 (d) A utility intending to refurbish an existing generating
9-27 facility shall submit a plan to the commission showing that the
9-28 refurbishment will meet the Environmental Protection Agency's new
9-29 source standards for power plants and result in a cost lower than
9-30 retirement of the plant and replacement of the capacity through
10-1 either building a new generating facility or purchasing power on
10-2 the wholesale market.
10-3 Sec. 2.308. RESTRUCTURING INITIATED BY UTILITIES OR THE
10-4 FEDERAL GOVERNMENT. (a) The commission may not adopt an order or
10-5 substantive rule that has the effect of:
10-6 (1) adopting an accounting procedure or depreciation
10-7 system which, directly or indirectly, reallocates the cost of
10-8 generation or other potential excess costs over market to the
10-9 transmission and distribution system;
10-10 (2) accelerating the depreciation or amortization of
10-11 generation assets or other potential excess costs over market
10-12 instead of giving rate decreases to each customer class;
10-13 (3) delaying or denying customer rate decreases or the
10-14 effects of reductions in utility costs that would have occurred
10-15 under cost of service ratemaking or would have been passed through
10-16 a fuel or purchase power cost recovery factor.
10-17 (b) If the retail electric market in this state is fully or
10-18 partially deregulated by federal law, the commission, to the extent
10-19 permitted by federal law:
10-20 (1) shall ensure that the timing of the transition to
10-21 competition is expeditious and that the transition does not result
10-22 in the denial of equal and contemporaneous choice to a customer
10-23 class;
10-24 (2) shall maintain structural safeguards to regulate
10-25 affiliate transactions as necessary to ensure that consumers are
10-26 protected from self-dealing and favoritism and to prevent
10-27 anti-competitive practices in the absence of full divestiture;
10-28 (3) may not relax regulation of an incumbent utility
10-29 without a finding, after an evidentiary hearing, that the utility
10-30 is not dominant in a geographic or service market; and
11-1 (4) may make and enforce rules required by this
11-2 subtitle that apply to all providers of electricity sold at retail.
11-3 Sec. 2.309. RESOURCE MIX. (a) The commission shall ensure
11-4 that electric utilities use a balanced mix of resources, including
11-5 renewable resources and energy efficiency.
11-6 (b) The commission shall require utilities, through
11-7 long-term planning, to diversify fuel mix to mitigate future fuel
11-8 price, fuel supply, and environmental risks.
11-9 (c) The commission shall adopt resource portfolio standards
11-10 or similar mechanisms that:
11-11 (1) apply to all distribution utilities; and
11-12 (2) establish minimum requirements for a diversified
11-13 resource mix that includes cost-effective energy efficiency,
11-14 renewable energy resources, alternative fuel, and other options
11-15 that reduce customer bills, utility fuel costs, and capital
11-16 investments.
11-17 Sec. 2.310. EXCESS COSTS OVER MARKET. (a) The Legislature
11-18 finds that the most reasonable transition to retail competition is
11-19 to bring regulated rates closer to competitive rates. The
11-20 commission shall estimate excess costs over market in order to
11-21 develop strategies to reduce regulated rates to the level that
11-22 would occur under a competitive market.
11-23 (b) The commission shall require each electric utility to
11-24 take measures to reduce the potential amount of the utility's
11-25 excess costs over market. The measures may include:
11-26 (1) renegotiation and restructuring of those existing
11-27 purchase power contracts and fuel supply contracts which are over
11-28 market price;
11-29 (2) implementation of cost controls and cost reduction
11-30 procedures directly related to generation facilities included in
12-1 the utility's excess cost over market calculation;
12-2 (3) application of consolidated tax savings;
12-3 (4) selling uneconomic assets;
12-4 (5) selling excess capacity;
12-5 (6) offsetting potential excess costs over market
12-6 through the recognition of increases in revenues due to
12-7 participation in new markets;
12-8 (7) retiring generating facilities when operating
12-9 costs and taxes exceed the cost of replacement power; and
12-10 (8) improving operating performance of assets which
12-11 are potentially over market cost.
12-12 (c) The commission may require performance standards
12-13 governing the recovery of avoidable costs associated with assets
12-14 which are potentially over market costs.
12-15 (d) The commission shall develop a procedure for estimating
12-16 a utility's excess costs over market. The computation shall
12-17 exclude administrative costs which are not directly attributable to
12-18 the generation system and must produce a net value which is based
12-19 upon the investment costs of all generating plants. A utility's
12-20 excess costs over market shall be allocated based on the annual use
12-21 of system generation by the customer or customer class and
12-22 collected on a cents per kilowatt hour basis. Three years after
12-23 the initiation of retail competition the commission shall conduct a
12-24 reconciliation if excess costs over market recovered from customers
12-25 and the excess costs over market actually incurred.
12-26 (e) If the net book value of a utility's generating system
12-27 is less than the estimated market value of the generating system,
12-28 prior to any deregulation of that utility, the commission shall
12-29 determine whether it is fair and equitable to order the utility to
12-30 compensate its ratepayers for the foregone expected cost saving.
13-1 (f) The customers and shareholders of an electric utility
13-2 subject to this subtitle shall share equitably the utility's
13-3 uneconomic investments, as determined by the commission.
13-4 (g) For purposes of this subtitle excess costs over market
13-5 shall be defined as the difference between:
13-6 (1) the value of all of the utility's
13-7 generation-related assets that have a net book value equal to or
13-8 above their market value; and
13-9 (2) the value of all of the utility's
13-10 generation-related assets that have a net book value below their
13-11 market value, after mitigation efforts described in Subsection (b)
13-12 of this section, and excluding costs which are avoidable in the
13-13 future.
13-14 SECTION 2. This Act takes effect September 1, 1997.
13-15 SECTION 3. The importance of this legislation and the
13-16 crowded condition of the calendars in both houses create an
13-17 emergency and an imperative public necessity that the
13-18 constitutional rule requiring bills to be read on three several
13-19 days in each house be suspended, and this rule is hereby suspended.