SRC-SLL, PNG S.B. 86 76(R)BILL ANALYSIS


Senate Research CenterS.B. 86
By: Nelson
Electricity Utility Restructuring
8/5/1999
Enrolled


DIGEST 

Currently, in Texas, there has been a marked increase in retail competition
in the telecommunications services industry with a resulting increase in
reported incidences of unfair or fraudulent business practices.  There is
additional concern that similar occurrences may result if the electric
industry is restructured to allow retail competition as well.  Ultimately,
the inability of customers to make choices with confidence in any retail
market because of the prevalence of unfair or fraudulent business practices
reduces the degree of participation and, consequently, the competitiveness
of that market.  This bill provides greater consumer protections in the
telecommunications and electric services industries. 

PURPOSE

As enrolled, S.B. 86 provides an increase in protection of
telecommunications and electric services customers, and provides penalties. 

RULEMAKING AUTHORITY

Rulemaking authority is granted to the Public Utility Commission in
SECTIONS 3 and 5 (Sections 17.003(c), 17.004(b) and (f), 17.051(a), 17.052,
17.102, and 55.012(c), Utilities Code), to the governing body of a
municipally owned utility in SECTION 3 (Section 17.005, Utilities Code) and
to an electric cooperative in SECTION 3 (Section 17.006, Utilities Code) of
this bill. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 11.002, Utilities Code, by adding Subsection (c)
to establish the purpose of this title that significant changes have
occurred in the telecommunications and electric power industries since the
Public Utility Regulatory Act was adopted, requiring the need for an
increase in consumer protection. 

SECTION 2. Amends Section 15.024(c), Utilities Code, to provide that this
subsection does not apply to a violation of Chapter 17 or 55. 

SECTION 3. Amends Title 2A, Utilities Code, by adding Chapter 17, as
follows: 

CHAPTER 17. CUSTOMER PROTECTION
SUBCHAPTER A. GENERAL PROVISIONS

Sec. 17.001. CUSTOMER PROTECTION POLICY. Sets forth the findings of the
legislature regarding new developments in telecommunications services and
the production and delivery of electricity.  Sets forth the purpose of this
chapter which is to provide retail customer safeguards and provide
rulemaking authority to the Public Utility Commission (PUC) to adopt and
enforce rules providing retail customer safeguards, including safeguards
against unfair, fraudulent, misleading, or anticompetitive practices.
Provides that nothing in this section shall be  construed to abridge
customer rights set forth in commission rules in effect at the time of
enactment of this chapter.  Provides that this chapter does not limit the
constitutional, statutory, and common law authority of the Office of the
Attorney General (OAG).  Provides that nothing in this chapter authorizes a
customer to receive retail electric service from a person other than a
certificated retail electric utility. 
 
Sec. 17.002. DEFINITIONS. Defines "billing agent," "billing utility,"
"certificated telecommunications utility," "customer," "electric utility,"
"retail electric provider," "service provider," and "telecommunications
utility." 

Sec. 17.003. CUSTOMER AWARENESS. Requires the PUC to promote public
awareness of electric and telecommunications market changes and provide
information to customers about available options and their rights as
customers.  Requires the PUC to compile a comparative customer service
report yearly.  Grants rulemaking authority to the PUC to require a
certificated telecommunications utility, a retail electric provider, or an
electric utility to provide clear, uniform and understandable information
to customers about rates, terms, services, customer rights, and other
necessary information.  Requires customer service awareness efforts to be
conducted in English, Spanish, and any other language necessary. 

 Sec. 17.004. CUSTOMER PROTECTION STANDARDS. Establishes that all buyers of
telecommunications and electric services have certain entitlements.  Grants
rulemaking authority to the PUC to adopt and enforce rules for minimum
service standards on customer deposits, credit extensions, switching fees,
levelized billing programs, and service termination and energy efficiency
programs, an affordable rate package, and bill payment assistance for
certificated telecommunications utilities, retail electric providers, and
electric utilities.  Authorizes the commission to waive language
requirements for a good cause. Requires the commission to request the
comments of the OAG in developing the rules necessary to carry out this
section.  Requires the commission to coordinate its enforcement efforts
with the OAG.  Provides that nothing in this section shall be construed to
abridge customer rights set forth in commission rules or to abridge the
rights of low-income customers to receive benefits through pending or
operating programs in effect at the time of the enactment of this chapter.
Requires PUC to adopt rules to provide automatic enrollment of eligible
utility customers for lifeline telephone service and reduced electric rates
available to low-income households.  Requires each state agency, on the
request of PUC, to assist in the adoption and implementation of those
rules.  Requires the rules adopted under Subsection (b), notwithstanding
any other provision of this title, to provide full, concurrent
reimbursement for the costs of any programs provided under Subsection
(a)(11) and for reimbursement for the difference between any affordable
rate package provided under Subsection (a)(11) and any rates otherwise
applicable. 

Sec. 17.005. PROTECTIONS FOR CUSTOMERS OF MUNICIPALLY OWNED UTILITIES.
Prohibits a municipally owned utility from being deemed a "service
provider" or "billing agent" for purposes of Sections 17.156(b) and
17.156(e).  Grants rulemaking authority to the governing body of a
municipally owned utility to adopt, implement, and enforce rules to
accomplish objectives set out in Sections 17.004(a) and (b) and Section
17.102, as to the municipally owned utility within its certificated service
area.  Requires the governing body of a municipally owned utility or its
designate to perform the dispute resolution function provided for by
Section 17.157 for disputes arising from services provided by the
municipally owned utility to electric customers served within its
certificated service area.  Provides that, with respect to electric
customers served by a municipally owned utility outside its certificated
service area or otherwise served through others' distribution facilities,
after retail competition begins as authorized by the legislature, the
provisions of this chapter as administered by PUC apply.  Provides that
nothing in this chapter shall be deemed to apply to a wholesale customer of
a municipally owned utility. 

Sec. 17.006. PROTECTIONS FOR CUSTOMERS OF ELECTRIC COOPERATIVES. Prohibits
an electric cooperative from being deemed to be a "service provider" or a
"billing agent" for purposes of Sections 17.156(b) and (e).  Requires the
electric cooperative to adopt, implement, and enforce rules that have the
effect of accomplishing the objectives set out in Sections 17.004(a) and
(b) and 17.102.  Requires the board of directors of the electric
cooperative or its designee to perform the dispute resolution function
provided for by Section 17.157 for electric customers served by the
electric cooperative within its certificated service ares.  Provides that,
with respect to electric customers served by an electric cooperative
outside its certificated service area or otherwise served through others'
distribution facilities,  after the legislature authorizes retail
competition, the provisions of this chapter as administered by PUC shall
apply.  Provides that nothing in this chapter shall be deemed to apply to a
wholesale customer of an electric cooperative. 

SUBCHAPTER B. CERTIFICATION, REGISTRATION, AND REPORTING REQUIREMENTS

Sec. 17.051. ADOPTION OF RULES. Grants rulemaking authority to the PUC
regarding certification, registration, and reporting requirements for
certificated telecommunications utilities, retail electric providers,
electric utilities, telecommunications utilities that are not dominant
carriers, pay telephone providers, qualifying facilities that are selling
capacity into the wholesale or retail market, exempt wholesale generators,
and power marketers.  Requires the rules adopted under Subsection (a) to be
consistent with and no less effective than federal law and may not require
the disclosure of highly-sensitive competitive or trade secret information. 

 Sec. 17.052. SCOPE OF RULES. Sets forth requirements for the creation and
enforcement  of the PUC's rules.   

 Sec. 17.053. REPORTS. Authorizes the PUC to require telecommunications
service providers, retail electric providers, or electric utilities to
submit reports to the PUC concerning any matter over which PUC has
authority. 

SUBCHAPTER C. CUSTOMER'S RIGHT TO CHOICE

Sec. 17.101. POLICY. Establishes a state policy to protect customers from
unauthorized switching of a selected telecommunications service provider,
retail electric provider, or electric utility. 

Sec. 17.102. RULES RELATING TO CHOICE. Grants rulemaking authority to the
PUC to ensure customers are protected from unauthorized switching of a
selected telecommunications service provider, retail electric provider, or
electric utility.  

SUBCHAPTER D. PROTECTION AGAINST UNAUTHORIZED CHARGES

 Sec. 17.151. REQUIREMENTS FOR SUBMITTING CHARGES. Authorizes a service
provider, retail electric provider, or billing agent to submit charges on a
customer's bill if certain requirements are met.  Requires customer consent
to be verified by the service provider offering the product or service and
a record kept of the authorization for a certain time period.  Sets forth
the method of obtaining customer and consent.  Requires the contract
required by Subsection (a)(3)(B) to include the service provider's name,
business address, and business telephone number and to be maintained by the
billing utility for a certain period of time.  Prohibits the use of any
fraudulent, unfair, misleading, deceptive, or anticompetitive marketing
practices, including the use of negative option marketing, sweepstakes, and
contests, by  a service provider offering a product or service to be
charged on a customer's telephone or electric bill and any billing agent
for the service provider.  Provides that, unless verification is required
by federal law or rules implementing federal law, Subsection (b) does not
apply to customer-initiated transactions with a certificated
telecommunications provider or an electric utility for which the service
provider has the appropriate documentation. Requires a service provider to
cease charging a customer for an unauthorized product or service if the
service provider is notified by a billing utility that a customer has
reported an unauthorized charge.  Provides that this section does not apply
to certain message telecommunications service charges or collect calls and
charges for video services if the service provider has the necessary call
detail record to establish the billing for the call or service.  

 Sec. 17.152. RESPONSIBILITIES OF A BILLING UTILITY. Requires a billing
utility,  upon its knowledge or notification of an unauthorized charge on a
customer's bill, to  promptly take certain actions by a certain date.
Requires certain information to be contained  in every report of an
unauthorized charge to a customer's bill.  Prohibits a billing utility from
disconnecting or terminating service to any customer for nonpayment of an
unauthorized charge, or from filing an unfavorable credit report against a
customer who has not paid charges the customer has alleged were
unauthorized unless the dispute regarding the unauthorized charge is
ultimately resolved against the customer.  Requires the customer to remain
obligated to pay any charges that are not in dispute, and provides that
this subsection does not apply to those undisputed charges. 

 Sec. 17.153. RECORDS OF DISPUTED CHARGES. Requires every service provider
to maintain a record of every disputed charge placed on a customer's bill.
Requires certain information to be contained in the record of a disputed
charge to a customer's bill.  Requires the record to be kept for at least
24 months following the completion of all steps required by Section
17.152(a).   

Sec. 17.154. NOTICE. Requires a billing utility to provide notice of a
customer's right in a manner prescribed by the PUC. Requires the notice to
be provided by mail to each residential and business customer within 60
days of the effective date of this section or by inclusion in the
publication of the telephone directory next following the effective date of
this section. Requires each billing utility to send the notice to new
customers at the initiation of service or to any customer upon their
request. 
 
Sec. 17.155. PROVIDING COPY OF RECORDS. Requires a billing utility to
provide a copy of records to PUC staff upon request.  Requires a service
provider to provide a copy of records to PUC on request. 

Sec. 17.156. VIOLATIONS. Authorizes the PUC to implement penalties and
other enforcement actions under Chapter 15 for a violation of this
subchapter by a billing utility. Authorizes the PUC to enforce the
provisions of Chapter 15 for any violation of this subchapter or for the
knowing provision of false information to the PUC against service provider
or billing agent as if it was regulated by the PUC.  Establishes that
jurisdiction to regulate entities not otherwise subject to PUC regulation
is not authorized other than as specifically provided by this chapter.
Authorizes the PUC to deny a telecommunications service provider, retail
electric provider, or electric utility the right to provide service in this
state if the billing utility repeatedly violates this subchapter, except
that PUC may not revoke a certificate of convenience and necessity of an
electric utility except as provided by Section 37.059 or a certificate of
convenience and necessity of a telecommunications utility except as
provided by Section 54.008. Authorizes the PUC to order a billing utility
to terminate billing and collection services with a repeat violator of this
subchapter.  Establishes that a billing utility may terminate or restrict
its billing and collection services on its own to provide customer
safeguards.   

Sec. 17.157. DISPUTES. Authorizes the PUC to resolve disputes between a
retail customer and a billing utility, service provider, telecommunications
utility, retail electric provider, or electric utility.  Authorizes the PUC
to take certain actions in resolving disputes.  Requires the PUC to adopt
procedures for resolution of disputes in a timely manner which in no event
shall exceed 60 days. 

Sec. 17.158. CONSISTENCY WITH FEDERAL LAW. Requires rules adopted by PUC
under this subchapter to be consistent with and not more burdensome than
applicable federal laws and rules. 

SECTION 4. Amends Section 51.002(10), Utilities Code, to redefine
"telecommunications provider." 

SECTION 5. Amends Chapter 55A, Utilities Code, by adding Section 55.012, as
follows: 

Sec. 55.012. LIMITATIONS ON DISCONTINUANCE OF BASIC LOCAL
TELECOMMUNICATIONS SERVICE. Prohibits a provider of basic local
telecommunications service from discontinuing that service because of
nonpayment by a  residential customer of charges for long distance service.
Requires payment to first be allocated to basic local telecommunications
service.  Sets forth provisions regarding allocating of payments if local
telecommunications service and other services are bundled. Requires PUC to
adopt and implement rules, not later than January 1, 2000, to prevent
customer abuse of protections afforded by this section.  Sets forth
provisions to be included in the rules adopted.  Provides that,
notwithstanding any other provision of this title, PUC has all jurisdiction
necessary to establish a maximum price that an incumbent local exchange
company may charge a long distance service provider to initiate the toll
blocking capability required to be offered under the rules adopted under
Subsection (c).  Requires the maximum price to be observed by all providers
of basic local telecommunications service in the incumbent local exchange
company's certificated service area.  Provides that, notwithstanding
Sections 52.102 and 52.152, PUC has all jurisdiction necessary to enforce
this section. 

SECTION 6. Codifies and amends Section 3.312, Article 1446c-0, V.T.C.S.
(Public Utility Regulatory Act of 1995), as Chapter 55K, Utilities Code, as
follows: 

SUBCHAPTER K. SELECTION OF TELECOMMUNICATIONS UTILITIES

Sec. 55.301. STATE POLICY. Makes no change.

Sec. 55.302. COMMISSION RULES. Deletes a provision regarding a rule
requiring telecommunications utilities to maintain records relating to a
customer initiated charge. Makes conforming and nonsubstantive changes. 

Sec. 55.303. New heading: VERIFICATION OF CHANGE. Deletes provisions
regarding verification by a telecommunications utility of a carrier
initiated change. Deletes existing Section 55.304, regarding customer
initiated change. 

Sec. 55.304. UNAUTHORIZED CHANGE. Provides that a customer is not liable
for charges incurred during the first 30 days after the date of an
unauthorized carrier change. Makes a conforming change. 

Sec. 55.305. CORRECTIVE ACTION AND PENALTIES. Makes a conforming change.

Sec. 55.306. REPEATED AND RECKLESS VIOLATION. Authorizes PUC, upon a
finding that a telecommunications utility has repeatedly and recklessly
violated PUC's telecommunications utility selection rules, to deny the
registration or certificate, including an amended certificate, of the
telecommunications utility, among other actions. 

Sec. 55.307. DECEPTIVE OR FRAUDULENT PRACTICE. Authorizes PUC to prohibit a
utility from engaging in a deceptive or fraudulent practice, including a
marketing practice, involving the selection of a customer's
telecommunications utility. Authorizes PUC to define deceptive and
fraudulent practices to which this section applies. 

SECTION 7. Emergency clause.
  Effective date: upon passage.