Floor Packet Page No. 31
      Amend CSSB 7 (House committee report) as follows:
      (1)  Strike Subsection (j), Section 39.201, Utilities Code,
as added by SECTION 40 of the bill (page 85, lines 15-24) and
substitute a new Subsection (j) to read as follows:
      (j)  Any competition transition charge shall be allocated
among retail customer classes according to Section 39.253.
      (2)  Strike Section 39.253, Utilities Code, as added by
SECTION  40 of the bill (page 97, lines 5-19), and substitute a new
Section 39.253 to read as follows:
      Sec. 39.253. ALLOCATION OF STRANDED COSTS. (a) Any capital
costs incurred by an electric utility to improve air quality under
Section 39.263 or 39.264 that are included in a utility's invested
capital in accordance with those sections shall be allocated among
customer classes as follows:
            (1)  50 percent of those costs shall be allocated in
accordance with the methodology used to allocate the costs of the
underlying assets in the electric utility's most recent commission
order addressing rate design; and
            (2)  the remainder shall be allocated on the basis of
the energy consumption of the customer classes.
      (b)  All other retail stranded costs shall be allocated among
retail customer classes in accordance with Subsections (c)-(i).
      (c)  The allocation to the residential class shall be
determined by allocating to all customer classes 50 percent of the
stranded costs in accordance with the methodology used to allocate
the costs of the underlying assets in the electric utility's most
recent commission order addressing rate design, and allocating the
remainder of the stranded costs on the basis of the energy
consumption of the classes.
      (d)  After the allocation to the residential class required
by Subsection (b) has been calculated, the remaining stranded costs
shall be allocated to the remaining customer classes in accordance
with the methodology used to allocate the costs of the underlying
assets in the electric utility's most recent commission order
addressing rate design. Non-firm industrial customers shall be
allocated stranded costs equal to 150 percent of the amount
allocated to that class.
      (e)  After the allocation to the residential class required
by Subsection (C) and the allocation to the non-firm industrial
class required by Subsection (D) have been calculated, the
remaining stranded costs shall be allocated to the remaining
customer classes in accordance with the methodology used to
allocate the costs of the underlying assets in the electric
utility's most recent commission order addressing rate design.
      (f)  Notwithstanding any other provision of this section, to
the extent that the total retail stranded costs, including
regulatory costs, of investor-owned utilities exceed $5 billion,
any stranded costs in excess of $5 billion shall be allocated among
retail customer classes in accordance with the methodology used to
allocate the costs of the underlying assets in the electric
utility's most recent commission order addressing rate design.
      (g)  The energy consumption of the customer classes used in
Subsections (a)(2) and (c) shall be based on the relevant class
characteristics as of May 1, 1999, adjusted for normal weather
conditions.
      (h)  For purposes of this section, "stranded costs" includes
regulatory assets.
      (i)  Except as provided by Section 39.262(k), no customer or
customer class may avoid the obligation to pay the amount of
stranded costs allocated to that customer class.