HBA-TYH H.B. 3734 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 3734 By: Longoria State Affairs 3/31/1999 Introduced BACKGROUND AND PURPOSE Texas has more than one-million households that are at or below 100 percent of the Office of Management Budget federal poverty guidelines. Utilities can be especially expensive for lower income Texans. The average family spends about four and one-third percent of the household budget on home energy. Though low-income families use less electricity than other residential customers, families with incomes at or below 125 percent of the poverty guidelines spend 11.6 percent of the household budget on home energy. SSI (Supplemental Security Income) and Social Security recipients, the majority of whom are elderly, spend 19.5 percent and 13 percent of their household budgets, respectively, on home energy. The hardest hit are the AFDC (Aid to Families with Dependent Children) recipients, who spend 44.6 percent of their household budget on home energy expenses. H.B. 3734 establishes a statewide program to provide a discounted rate and a comprehensive energy efficiency program for low-income consumers. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to Public Utility Commission of Texas in SECTION 1 (Section 39.003, Utilities Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Subtitle B, Title 2, Utilities Code, by adding Chapter 39, as follows: CHAPTER 39. AFFORDABLE ELECTRICITY PROGRAMS Sec. 39.001. DEFINITION. Defines "low-income customer." Sec. 39.002. ESTABLISHMENT OF PROGRAM. Requires the Public Utility Commission of Texas (commission) to develop affordable electricity and energy efficiency programs for low-income customers that include the enumerated features. Sec. 39.003 AFFORDABLE ELECTRICITY. (a) Requires the commission, by rule, except as provided by Section 39.004, to require an electric utility to file a tariff that includes a reduced rate for electric service provided to low-income customers. The tariff is authorized to concern the implementation of this chapter only, is not a rate change under Subchapter C (General Procedures for Rate Changes Proposed by Utility), Chapter 36, and does not affect the utility's other rates or services. (b) Provides that the reduced rate must be approximately 20 percent lower than the rate that the customer would otherwise be charged, and must apply to the amount of electricity the commission determines is sufficient to provide necessary lighting, refrigeration, heating, and cooling for the customer. (c) Prohibits the reduced rate from varying by time of day or season, except that the commission is authorized to increase the amount of the reduction under the enumerated circumstances. (d) Prohibits the utility from charging a customer a fee for participation in the reduced rate program. Requires the utility to offer each low-income customer a levelized payment plan. (e) Requires the Texas Department of Human Services to provide automatic enrollment in the reduced rate program for each low-income customer who receives benefits under federal and state funded income tested programs administered by the Texas Department of Human Services. Requires an alternative procedure for establishing eligibility to be implemented for income eligible customers that do not currently receive benefits through a program administered through the Texas Department of Human Services. Sec. 39.004. AGGREGATION PROJECTS. Authorizes the commission, if otherwise permitted by law, to establish pilot projects to provide for the aggregation of the acquisition of electricity by low-income customers. Authorizes the projects to include acquisition of electricity for low-income customers by the General Services Commission as part of an aggregated acquisition of electricity for state agencies. Requires the General Services Commission to cooperate with the commission in carrying out programs. Authorizes the commission by the rule, if the commission determines that aggregation will provide an equivalent or greater level of discount and service as the affordable electricity program under Section 39.003, to continue the aggregation programs and discontinue the affordable electricity program. Sec. 39.005. FUNDING. (a) Requires each electric utility to pay an annual assessment in the amount determined by the commission to be necessary to fund the activities specified by Subsection(b), but not more than one mill for each kilowatt hour sold by the utility to retail customers in this state. (b) Provides that the assessment must be collected by the comptroller and deposited to the credit of the affordable electricity account. Provides that the affordable electricity account is an account in the general revenue fund that is authorized to be appropriated only to perform the enumerated actions. (c) Authorizes the comptroller to require an electric utility to provide any report or information necessary to fulfill the comptroller's duties under this section. SECTION 2. Effective date: September 1, 1999. SECTION 3. Emergency clause.