By Wolens H.B. No. 349
Line and page numbers may not match official copy.
Bill not drafted by TLC or Senate E&E.
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to competition in retail electric markets.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS
1-4 SECTION 1. Subtitle B, Title 2, Utilities Code, is amended
1-5 by amending Section 31.001 to read as follows:
1-6 Sec. 31.001. LEGISLATIVE FINDINGS; PURPOSE OF SUBTITLE.
1-7 (a) Significant changes have occurred in the production and
1-8 delivery of electricity since the Public Utility Regulatory Act was
1-9 originally adopted. Conditions exist that will permit the
1-10 introduction of competition in the retail sale of electricity, if
1-11 an appropriate framework for the market is developed and
1-12 legislative safeguards are adopted. To introduce competitive
1-13 retail electric service and encourage the development of advanced
1-14 electric services, the public interest requires that new rules,
1-15 policies, and principles be formulated.
1-16 (b) It is the policy of this state to:
1-17 (1) encourage a fully competitive electric service
1-18 marketplace;
1-19 (2) protect electric service customers from unfair and
1-20 deceptive practices;
1-21 (3) maintain the availability of high-quality electric
2-1 service at affordable prices for all customers; and
2-2 (4) promote diversity of electric service providers.
2-3 (c) The policy goals described by Subsection (b) are best
2-4 achieved by legislation that:
2-5 (1) introduces free market competition in regions and
2-6 segments of the electric service industry, where competition is
2-7 feasible;
2-8 (2) continues regulation over essential facilities,
2-9 including facilities for the delivery of electricity, and in
2-10 markets where competition is not feasible; and
2-11 (3) prescribes standards for the protection of the
2-12 public from unfair, deceptive, or anti-competitive practices.
2-13 (d) A technologically advanced electric service industry
2-14 that provides for broad customer choice of electric services and
2-15 service providers in a truly competitive market will play a
2-16 critical role in the economic future of Texas by raising living
2-17 standards for Texans through:
2-18 (1) enhanced economic development;
2-19 (2) more efficient use of energy resources in the
2-20 production of goods and the delivery of services by government
2-21 agencies and privately-owned businesses; and
2-22 (3) more cost effective and innovative provision of
2-23 electric service to all customers.
2-24 [(a) This subtitle is enacted to protect the public interest
2-25 inherent in the rates and services of electric utilities. The
3-1 purpose of this subtitle is to establish a comprehensive and
3-2 adequate regulatory system for electric utilities to assure rates,
3-3 operations, and services that are just and reasonable to the
3-4 consumers and to the electric utilities.]
3-5 [(b) Electric utilities are by definition monopolies in many
3-6 of the services provided and areas they serve. As a result, the
3-7 normal forces of competition that regulate prices in a free
3-8 enterprise society do not always operate. Public agencies regulate
3-9 electric utility rates, operations, and services, except as
3-10 otherwise provided by this subtitle.]
3-11 [(c) The wholesale electric industry, through federal
3-12 legislative, judicial, and administrative actions, is becoming a
3-13 more competitive industry that does not lend itself to traditional
3-14 electric regulatory rules, policies, and principles. As a result,
3-15 the public interest requires that rules, policies, and principles
3-16 be formulated and applied to protect the public interest in a more
3-17 competitive marketplace. The development of a competitive
3-18 wholesale market that allows for increased participation by
3-19 electric utilities and certain nonutilities is in the public
3-20 interest.]
3-21 SECTION 2. Subtitle B, Title 2, Utilities Code, is amended
3-22 by amending Section 31.002 to read as follows:
3-23 Sec. 31.002. Definitions. (1) "Electric Reliability
3-24 Council of Texas" or "ERCOT" means the area in Texas served by
3-25 electric utilities that are not synchronously interconnected with
4-1 electric utilities outside of the State of Texas.
4-2 (2) [(1)] "Electric utility" means a person or river
4-3 authority that owns or operates for compensation in this state
4-4 equipment or facilities to produce, generate, transmit, distribute,
4-5 sell, or furnish electricity in this state. The term includes a
4-6 lessee, trustee, or receiver of an electric utility and a
4-7 recreational vehicle park owner who does not comply with Subchapter
4-8 C, Chapter 184, with regard to the metered sale of electricity at
4-9 the recreational vehicle park. The term does not include:
4-10 (A) a municipal corporation;
4-11 (B) a qualifying facility;
4-12 (C) an exempt wholesale generator;
4-13 (D) a power marketer;
4-14 (E) a corporation described by Section 32.053 to
4-15 the extent the corporation sells electricity exclusively at
4-16 wholesale and not to the ultimate consumer; or
4-17 (F) a retail electric provider;
4-18 (G) a wholesale power seller; or
4-19 [(F)] (H) a person not otherwise an electric
4-20 utility who:
4-21 (i) furnishes an electric service or
4-22 commodity only to itself, its employees, or its tenants as an
4-23 incident of employment or tenancy, if that service or commodity is
4-24 not resold to or used by others;
4-25 (ii) owns or operates in this state
5-1 equipment or facilities to produce, generate, transmit, distribute,
5-2 sell, or furnish electric energy to an electric utility, if the
5-3 equipment or facilities are used primarily to produce and generate
5-4 electric energy for consumption by that person; or
5-5 (iii) owns or operates in this state a
5-6 recreational vehicle park that provides metered electric service in
5-7 accordance with Subchapter C, Chapter 184.
5-8 (3) [(2)] "Exempt wholesale generator" means a person
5-9 who is engaged directly or indirectly through one or more
5-10 affiliates exclusively in the business of owning or operating all
5-11 or part of a facility for generating electric energy and selling
5-12 electric energy at wholesale and who:
5-13 (A) does not own a facility for the transmission
5-14 of electricity, other than an essential interconnecting
5-15 transmission facility necessary to effect a sale of electric energy
5-16 at wholesale; and
5-17 (B) has:
5-18 (i) applied to the Federal Energy
5-19 Regulatory Commission for a determination under 15 U.S.C. Section
5-20 79z-5a; or
5-21 (ii) registered as an exempt wholesale
5-22 generator as required by Section 35.032.
5-23 (4) "Fallback retail electric provider" means the
5-24 retail electric provider designated under Section 39.056.
5-25 (5) [(3)] "Power marketer" means a person who:
6-1 (A) becomes an owner of electric energy in this
6-2 state for the purpose of selling the electric energy at wholesale;
6-3 (B) does not own generation, transmission, or
6-4 distribution facilities in this state;
6-5 (C) does not have a certificated service area;
6-6 and
6-7 (D) has:
6-8 (i) been granted authority by the Federal
6-9 Energy Regulatory Commission to sell electric energy at
6-10 market-based rates; or
6-11 (ii) registered as a power marketer under
6-12 Section 35.032.
6-13 (6) [(4)] "Qualifying cogenerator" and "qualifying
6-14 small power producer" have the meanings assigned those terms by 16
6-15 U.S.C. Sections 796(18)(C) and 796(17)(D).
6-16 (7) [(5)] "Qualifying facility" means a qualifying
6-17 cogenerator or qualifying small power producer.
6-18 (8) [(6)] "Rate" includes a compensation, tariff,
6-19 charge, fare, toll, rental, or classification that is directly or
6-20 indirectly demanded, observed, charged, or collected by an electric
6-21 utility for a service, product, or commodity described in the
6-22 definition of electric utility in this section and a rule,
6-23 practice, or contract affecting the compensation, tariff, charge,
6-24 fare, toll, rental, or classification that must be approved by a
6-25 regulatory authority.
7-1 (9) "Renewable Energy Technology" means any technology
7-2 that exclusively relies on an energy source that is naturally
7-3 regenerated over a short time scale and derived directly from the
7-4 sun, indirectly from the sun, or from other natural movements and
7-5 mechanisms of the environment. A renewable energy technology does
7-6 not rely on energy resources derived from fossil fuels, waste
7-7 products from fossil fuels, or waste products from inorganic
7-8 sources.
7-9 (10) "Retail electric provider" means a person that
7-10 sells electric service to end use customers in this state.
7-11 (11) [(7)] "Transmission service" includes
7-12 construction or enlargement of facilities, transmission over
7-13 distribution facilities, control area services, scheduling
7-14 resources, regulation services, reactive power support, voltage
7-15 control, provision of operating reserves, and any other associated
7-16 electrical service the commission determines appropriate.
7-17 (12) "Wholesale power seller" means a person selling
7-18 electric service to another person for resale in this state or
7-19 generating electricity that is intended to be resold.
7-20 SECTION 3. Subtitle B, Title 2, Utilities Code, is amended
7-21 by adding Chapter 39 to read as follows:
7-22 CHAPTER 39. RETAIL ELECTRIC COMPETITION
7-23 SUBCHAPTER A. INTRODUCTION OF RETAIL COMPETITION.
7-24 Sec. 39.001. INTRODUCTION OF RETAIL ELECTRIC COMPETITION.
7-25 (a) Competition shall be introduced in the retail sale of
8-1 electricity, and customers of electricity providers shall have the
8-2 right to choose their retail electric provider, in accordance with
8-3 this Act. The introduction of competition shall be consistent with
8-4 the following principles:
8-5 (1) reliable service to customers;
8-6 (2) competition among numerous producers and sellers
8-7 of electricity; and
8-8 (3) continued regulation of transmission and
8-9 distribution service.
8-10 (b) The commission shall coordinate the activities of
8-11 persons engaged in the sale of electricity to ensure that the
8-12 institutions and procedures necessary to introduce retail
8-13 competition are created and able to operate in a timely and
8-14 efficient manner and shall adopt and enforce such rules as may be
8-15 necessary or appropriate to carry out this Chapter.
8-16 Sec. 39.002. DATE OF INTRODUCTION OF RETAIL COMPETITION IN
8-17 ERCOT. Retail competition in ERCOT shall begin on January 1, 2002,
8-18 if the institutions and procedures are in place to permit
8-19 competition in accordance with the principles set out in subsection
8-20 (a) of Section 39.001. The commission may delay the date for the
8-21 beginning of retail competition, if it finds that these conditions
8-22 are not met.
8-23 Sec. 39.003. DATE OF INTRODUCTION OF RETAIL COMPETITION IN
8-24 REGIONS OTHER THAN ERCOT. Retail competition in regions other than
8-25 ERCOT shall begin on a date determined by the commission if it
9-1 determines that concentration in the generation market meets the
9-2 requirements of this Chapter, transmission service and rates for
9-3 the region are conducive to retail competition, and the
9-4 institutions and procedures are in place to permit competition in
9-5 accordance with the principles set out in subsection (a) of Section
9-6 39.001.
9-7 Sec. 39.004. LIMITATION ON COMPETITIVE MARKETS FOR AREAS
9-8 SERVED BY COOPERATIVES AND MUNICIPAL UTILITIES. (a) Within a
9-9 region where competition is introduced under Sections 39.002 and
9-10 39.003, retail competition will be effective, except for an area
9-11 where an electric cooperative or a municipally owned utility, on
9-12 the date of enactment of this Act, is the exclusive service
9-13 provider and has facilities in service in the area to provide
9-14 retail electric service.
9-15 (b) Within a region where competition is introduced under
9-16 Section 39.002 and 39.003, a majority of the voting members of an
9-17 electric cooperative or a majority of the voting residents of the
9-18 municipality served by a municipally owned utility may elect to
9-19 introduce retail competition in the areas where it is the exclusive
9-20 service provider.
9-21 (c) An election under this Section shall be irrevocable, and
9-22 shall be filed with the commission. Such an election shall be
9-23 effective on the date determined by the electric cooperative or
9-24 municipally owned utility.
9-25 (d) An electric cooperative or municipally owned utility
10-1 that elects to introduce retail competition under subsection (b) is
10-2 subject to any code of conduct adopted by the commission pursuant
10-3 to Section 39.103.
10-4 (e) Notwithstanding subsection (a), if an electric
10-5 cooperative, or its affiliate, or municipally owned utility, or its
10-6 affiliate, is a retail electric provider in a region outside its
10-7 certificated service territory where competition has been
10-8 introduced, then an area where that electric cooperative or
10-9 municipally owned utility is the exclusive service provider will be
10-10 subject to retail competition if that area is within a region where
10-11 competition has been introduced pursuant to Sections 39.002 and
10-12 39.003.
10-13 Sec. 39.005. STRANDED COST POLICY STATEMENT. It is in the
10-14 public interest to allow utilities with uneconomic generation
10-15 related assets and purchased power contracts an opportunity to
10-16 recover the reasonable excess costs over the market value of such
10-17 assets and purchased power contracts. It is also in the public
10-18 interest to allow customers served by utilities with generation
10-19 related assets and purchased power contracts with costs below their
10-20 market value to continue to benefit from such lower costs.
10-21 Sec. 39.006. ELIGIBILITY TO RECOVER STRANDED COSTS. An
10-22 electric utility is eligible for stranded cost recovery as allowed
10-23 by this Chapter only if such electric utility has been found by the
10-24 commission since September 1, 1997, to have potentially stranded
10-25 costs.
11-1 Sec. 39.007. RECOVERY OF STRANDED COSTS THROUGH EXISTING
11-2 RATES. (a) An electric utility subject to the commission's
11-3 jurisdiction may elect to recover stranded costs through its
11-4 existing rates by notifying the commission no later than October 1,
11-5 1999, of its election under this section. From the date of
11-6 election until January 1, 2002, an electric utility electing under
11-7 this section shall not be subject to a rate review under Subchapter
11-8 D of Chapter 36 of this code nor may the electric utility file for
11-9 a rate increase under Subchapter C of Chapter 36 of this code. If
11-10 on January 1, 2002, an electric utility electing under this section
11-11 serves in a region in which retail competition has not begun, the
11-12 commission may adjust the rates of such electric utility under
11-13 Subchapter C and D of Chapter 36. In setting rates, the commission
11-14 shall value generation related assets at the lesser of market value
11-15 or the net book value as reduced by the excess earnings as
11-16 determined by the commission for the period during which rates were
11-17 not subject to review.
11-18 (b) An electric utility electing under this section shall
11-19 not otherwise have the right to request recovery of stranded costs.
11-20 (c) An electric utility electing under this section may use
11-21 any profits earned during the period that such an election is in
11-22 effect to recover stranded costs.
11-23 (d) An electric utility electing under this section may file
11-24 with the regulatory authority for approval of new services,
11-25 discounted rates, or for a reduction of an existing tariff.
12-1 (e) An electric utility electing under this section shall
12-2 continue to be subject to the commission's regulatory authority
12-3 over fuel costs and charges, and power cost recovery factors.
12-4 (f) An electric utility electing under this section shall
12-5 continue to pay property taxes on its assets over the life of such
12-6 assets without recognition of the lesser value such assets may have
12-7 in a competitive market and without any reduction in the taxable
12-8 value of such assets from the date of election other than normal
12-9 straight line depreciation. Such obligation to pay property taxes
12-10 on such assets will survive transfers or sales of such assets.
12-11 Sec. 39.008. RECOVERY OF STRANDED COSTS BY ACCESS CHARGE.
12-12 (a) An eligible electric utility that does not elect to recover
12-13 stranded costs through existing rates under Section 39.007 may
12-14 request recovery of stranded costs under this section by notifying
12-15 the commission no later than October 1, 1999, of its desire for
12-16 recovery under this section.
12-17 (b) An electric utility requesting recovery of stranded
12-18 costs under this section shall file by October 1, 1999, tariffs
12-19 with the appropriate regulatory authority reducing the base rates
12-20 of residential and small commercial customers by 12% and all other
12-21 rate classes except non-firm or curtailable service by 4% as
12-22 compared to base rates in effect January 1, 1996. Such tariffs
12-23 shall be effective on November 1, 1999. If it is necessary to hold
12-24 hearings or require the refiling of such tariffs, the rate
12-25 reduction will nonetheless relate back to November 1, 1999. For
13-1 purposes of this paragraph, base rates shall be considered to be
13-2 the non-fuel, non-purchased power portion of rates. Nothing herein
13-3 shall prevent the regulatory authority from further adjusting the
13-4 electric utility's rates as necessary to prevent excessive
13-5 earnings.
13-6 (c) An electric utility recovering stranded costs under this
13-7 section may quantify its stranded costs by either a market
13-8 valuation method or by an administrative method.
13-9 1. Market valuation methods of quantifying stranded
13-10 costs include bona fide sale of all of the electric utility's
13-11 generation assets under circumstances that provide assurances that
13-12 a fair market price was achieved, a transfer of all of the electric
13-13 utility's generation assets to a separate affiliate that has at
13-14 least twenty percent of its stock publicly traded, and such other
13-15 methods as the commission may determine provide a market valuation.
13-16 2. Administrative methods of quantifying stranded
13-17 investment are those non-market valuation methods found reasonable
13-18 by the commission for quantifying an electric utility's stranded
13-19 cost.
13-20 3. Stranded costs shall be the reasonable net excess
13-21 cost over the market value of the electric utility's generation
13-22 related assets and purchased power contracts entered into before
13-23 January 1, 1995, nuclear decommissioning costs, and eligible costs
13-24 associated with improved air quality as provided by Section 39.010.
13-25 In calculating the stranded cost, the value of incumbency shall be
14-1 considered and used to offset stranded costs. The quantification
14-2 shall be done for the date of the market valuation if such method
14-3 is used or the date expected for retail access in the case of
14-4 administrative valuation. The estimated property taxes that would
14-5 be expected to be due on the excess cost portion of such assets
14-6 over the balance of the life of the asset but for the transition to
14-7 a competitive electric market will be included in the
14-8 quantification of stranded cost.
14-9 4. An electric utility requesting recovery under this
14-10 subsection shall submit to the commission a request for approval of
14-11 the electric utility's quantification of its stranded cost and
14-12 proposed access charges. The commission shall set a schedule for
14-13 the filing of such requests. Upon application, the commission
14-14 shall determine the level of the electric utility's stranded cost
14-15 and authorize the recovery as provided herein.
14-16 (d) The commission shall authorize the recovery of stranded
14-17 costs by the imposition of an access charge on a retail electric
14-18 provider for the use of the electric utility's distribution and
14-19 transmission system.
14-20 1. The commission shall set the access charge or
14-21 charges such that they are reasonably calculated to recover in a
14-22 period of no longer than fifteen years, one hundred percent of the
14-23 stranded costs of an electric utility that has chosen a market
14-24 valuation method of quantification of stranded cost or seventy
14-25 percent of the stranded costs of an electric utility that has
15-1 chosen an administrative method of quantification of stranded cost.
15-2 Upon the electric utility's or the commission's own motion, the
15-3 commission may adjust the access charge as necessary to ensure that
15-4 the access charge does not recover more than the electric utility's
15-5 allowed stranded cost and that the electric utility has a
15-6 reasonable opportunity to recover its allowed stranded costs. In a
15-7 proceeding to adjust the access charge, the commission may not
15-8 consider adjusting its previous quantification of allowed stranded
15-9 cost. Such access charges shall fairly allocate the costs of
15-10 stranded investment among customer classes consistent with the
15-11 allocation of the underlying asset(s) and shall not be
15-12 preferential, discriminatory, or anticompetitive.
15-13 2. The unrecovered balance of the allowed stranded
15-14 costs shall earn a 7% return on equity if the electric utility has
15-15 chosen an administrative method of quantification or the weighted
15-16 cost of capital as determined by the commission if the electric
15-17 utility has chosen a market valuation method.
15-18 3. Upon expiration of the access charge, the electric
15-19 utility shall file with the commission a reconciliation of the
15-20 access charges collected with the amount of stranded investment
15-21 determined by the commission to be eligible for recovery. If the
15-22 commission determines that the electric utility collected access
15-23 charges in excess of the stranded costs and their carrying costs,
15-24 the commission shall order a refund of the overcollections plus
15-25 interest. An electric utility may not seek recovery of stranded
16-1 costs not collected through the access charge.
16-2 4. An electric utility electing to recover stranded
16-3 costs under this section shall continue to pay property taxes on
16-4 its assets that have stranded cost associated with them over the
16-5 balance of the life of the asset as if the stranded cost portion
16-6 quantified by the commission was still part of the value of such
16-7 asset. The value of such stranded cost for property tax purposes
16-8 shall only be reduced by straight line depreciation over the
16-9 balance of the life of the asset.
16-10 Sec. 39.009. FLOW THROUGH OF BELOW MARKET COSTS. (a) The
16-11 commission may require an electric utility with generation related
16-12 assets and purchased power costs that are below market value as
16-13 determined by the commission to flow through seventy five percent
16-14 of the benefit of the lower cost to its customers. The commission
16-15 shall flow through the benefit by imposing a negative access charge
16-16 on the customers of the electric utility's distribution and
16-17 transmission system.
16-18 (b) The commission shall set the access charge or charges
16-19 such that they are reasonably calculated to recover in a period of
16-20 no longer than fifteen years the benefit of the below market costs
16-21 of an electric utility. The commission may use any reasonable
16-22 means consistent with the methods used for quantifying stranded
16-23 costs to determine the amount of benefit that should be flowed to
16-24 the customers. Upon the electric utility's or the commission's own
16-25 motion, the commission may adjust the negative access charge as
17-1 necessary to ensure that the negative access charge does not flow
17-2 through to the customers more or less than the amount by which the
17-3 electric utility's generation assets and purchased power contracts
17-4 are below market. In a proceeding to adjust the negative access
17-5 charge, the commission may not adjust its previous quantification
17-6 of stranded cost. Such negative access charges shall fairly
17-7 allocate the benefits of below market costs among customer classes
17-8 consistent with the allocation of the underlying asset(s) and shall
17-9 not be preferential, discriminatory, or anticompetitive.
17-10 (c) Upon expiration of the negative access charge, the
17-11 electric utility shall file with the commission a reconciliation of
17-12 the access charges collected with the amount of benefit of below
17-13 market cost determined by the commission to be flowed through to
17-14 the customers. Any difference between the amount of the negative
17-15 access charge flowed through to the customer and the amount of the
17-16 benefit of below market cost shall be refunded or surcharged as
17-17 appropriate to the customers of the utility's distribution and
17-18 transmission customers.
17-19 Sec. 39.010. STRANDED COSTS RELATED TO AIR QUALITY. (a) A
17-20 cost incurred by an electric utility to improve air quality is
17-21 eligible for stranded cost recovery if:
17-22 (1) the cost is applied to retrofit electric
17-23 generating facilities that have not obtained air quality
17-24 authorization pursuant to 30 T.A.C. Chapter 116;
17-25 (2) the cost is incurred prior to January 1, 2001; and
18-1 (3) the electric utility demonstrates that the
18-2 incurred cost is more economical than retirement of the generating
18-3 facility.
18-4 (b) With the exception of costs qualifying under Subsection
18-5 (a), any cost incurred by an electric utility that is not included
18-6 in the electric utility's existing rates in effect on January 1,
18-7 1998, to achieve emissions reductions that exceed applicable
18-8 federal or state standards at the time the cost is incurred is not
18-9 eligible for stranded cost recovery.
18-10 Sec. 39.011. FEDERAL INCOME TAXES. The Commission may enter
18-11 such orders as are necessary and in the public interest with regard
18-12 to potential federal income tax liability of entities participating
18-13 in the electric service market in Texas resulting from either the
18-14 restructuring of the electric utility industry directly or changes
18-15 in federal tax law in response to such restructuring. In entering
18-16 such orders, the commission shall consider the federal tax burden
18-17 on electric utilities and their customers and the effect that such
18-18 federal tax burden may have on competition.
18-19 SUBCHAPTER B. MARKET STRUCTURE
18-20 Sec. 39.051. ESSENTIAL ORGANIZATIONS. (a) In order to
18-21 permit retail competition, it is essential to establish and operate
18-22 in a region one or more independent organizations to perform the
18-23 following functions:
18-24 (1) ensure access to the transmission and distribution
18-25 systems for all buyers and sellers of electricity on
19-1 non-discriminatory terms;
19-2 (2) ensure the reliability of the regional electrical
19-3 network; and
19-4 (3) ensure that a customer's choice of retail electric
19-5 provider is conveyed in a timely manner to the persons who need
19-6 such information and that electricity production and delivery are
19-7 accurately accounted for among the generators and wholesale buyers
19-8 and sellers in the region.
19-9 (b) For the purpose of this section, an independent
19-10 organization consists of an independent system operator or other
19-11 person that is sufficiently independent of any producer or seller
19-12 of electricity that its decisions will not be unduly influenced by
19-13 any producer or seller. An entity will be deemed to be independent
19-14 if it is:
19-15 (1) governed by a board that has equal representation
19-16 of all segments of the electric market, including retail customers;
19-17 or
19-18 (2) not affiliated with any person who produces or
19-19 sells electricity in the electric market in this state and is
19-20 governed by a board that consists of persons who have no
19-21 affiliation with persons who produce or sell electricity in the
19-22 electric market in this state.
19-23 (c) The commission shall determine the appropriate regions
19-24 for the independent organizations prescribed by this section and
19-25 shall certify an organization or organizations to perform the
20-1 functions set out in this section.
20-2 (d) An independent organization certified by the commission
20-3 for a region may establish and enforce procedures, consistent with
20-4 this Act and the commission's rules, relating to the reliability of
20-5 the regional electrical network and accounting for the production
20-6 and delivery of electricity among generators and wholesale buyers
20-7 and sellers. The rules shall be subject to commission oversight
20-8 and review.
20-9 (e) The commission may authorize an independent organization
20-10 that is certified under this section to charge a reasonable rate to
20-11 wholesale buyers and sellers to cover the independent
20-12 organization's costs.
20-13 (f) In implementing this section, the commission may
20-14 cooperate with the utility regulatory commission of another state
20-15 or the federal government, and may hold a joint hearing or make a
20-16 joint investigation with that commission.
20-17 (g) The existing independent system operator in ERCOT will
20-18 meet the criteria set out in this section with respect to access to
20-19 the transmission systems for all buyers and sellers of electricity
20-20 in the ERCOT region and ensuring the reliability of the regional
20-21 electrical network, if it amends its governance rules to allow
20-22 representation reflecting the make-up of the retail market on its
20-23 governing board, in accordance with subsection (b). The criteria
20-24 relating to the other functions set out in subsection (a) may be
20-25 met by adopting procedures and acquiring the resources needed to
21-1 carry out those functions. The commission shall determine whether
21-2 the ERCOT independent system operator may be certified as meeting
21-3 the criteria relating to subsections (a) and (b).
21-4 Sec. 39.052. OBLIGATIONS OF ELECTRIC UTILITIES. (a) An
21-5 electric utility or municipally owned utility that owns or operates
21-6 transmission or distribution facilities in an area where retail
21-7 competition has been introduced shall provide transmission or
21-8 distribution service on a non-discriminatory basis.
21-9 (b) In areas where retail competition has been introduced,
21-10 an electric utility is responsible for obtaining a franchise
21-11 agreement from each municipality in which it has distribution
21-12 facilities. Municipalities may not require retail electric
21-13 providers to obtain franchise agreements except to the extent that
21-14 the retail electric provider may own facilities on the streets,
21-15 alleys, or right of ways within a municipality.
21-16 Sec. 39.053. METERING. For a period ending January 1, 2004,
21-17 in areas in which competition is introduced on January 1, 2002, or
21-18 in other areas for a period of two years after the introduction of
21-19 competition, the electric utility shall retain the function of
21-20 metering electricity usage to the retail electric customers in its
21-21 certificated service territory. At the conclusion of such period,
21-22 metering shall become a competitive service. Nothing in this
21-23 section shall prevent a retail electric provider, with the
21-24 permission of the retail customer, from providing additional or
21-25 enhanced metering devices on the customer's premises.
22-1 Sec. 39.054. REGULATION OF ELECTRIC UTILITIES. (a) After
22-2 the introduction of retail competition, an electric utility may not
22-3 sell electric service to customers or own facilities for the
22-4 generation of electricity. This subsection
22-5 (b) Every electric utility shall maintain accurate records
22-6 that will permit it to bill the appropriate person for transmission
22-7 and distribution services that it provides. The commission shall
22-8 adopt rules and oversee the development of the systems governing:
22-9 (1) notification and recording of changes in the
22-10 retail electric provider serving a retail customer;
22-11 (2) maintenance of accurate records of the retail
22-12 electric provider serving each retail customer; and
22-13 (3) maintenance of accurate records of the electric
22-14 utility providing distribution service in each area of the state
22-15 where retail competition is in effect.
22-16 Sec. 39.055. RETAIL ELECTRIC PROVIDER. (a) A retail
22-17 electric provider may provide electricity to any customer in Texas
22-18 in an area where retail competition has been introduced under
22-19 Section 39.002 or 39.003.
22-20 (b) A person who owns facilities for the generation of
22-21 electricity may sell electric service at retail only by becoming a
22-22 licensed retail electric provider under this Act.
22-23 (c) A retail electric customer who does not affirmatively
22-24 select a retail electric provider shall be served by the retail
22-25 electric provider that is affiliated with or the successor in
23-1 interest of the electric utility serving that customer on the day
23-2 immediately prior to the introduction of retail competition, or if
23-3 there is no such provider, by the fallback retail electric provider
23-4 designated under Section 39.056. The right of the retail electric
23-5 provider to serve customers who do not choose shall be considered
23-6 in determining the value of incumbency under Section 39.008.
23-7 Sec. 39.056. FALLBACK RETAIL ELECTRIC PROVIDER. (a) The
23-8 commission shall designate fallback retail electric providers in
23-9 areas of the state in which retail competition is in effect.
23-10 (b) A fallback retail electric provider shall offer a
23-11 standard retail service package for each class of customers
23-12 designated by the commission at a fixed, non-discountable rate
23-13 approved by the commission.
23-14 (c) A fallback retail electric provider shall provide the
23-15 standard retail service package to any requesting customer in the
23-16 territory for which it is the fallback retail electric provider.
23-17 (d) For all areas of the state in which retail competition
23-18 is introduced on January 1, 2002, the commission shall designate
23-19 the fallback retail electric provider or providers no later June 1,
23-20 2001. For areas of the state in which retail competition is not
23-21 introduced on January 1, 2002, the commission shall designate the
23-22 fallback retail electric provider or providers at the earliest
23-23 feasible date after determining that conditions for permitting
23-24 competition in that area have been met, but at least six months
23-25 before retail competition begins. The commission shall determine
24-1 the procedures and criteria, which may include solicitation of
24-2 bids, for designation of a fallback retail electric provider or
24-3 providers. The commission may redesignate the fallback retail
24-4 electric provider according to a schedule it deems appropriate.
24-5 (e) In the event that no retail electric provider applies to
24-6 be the fallback retail electric provider for a given area of the
24-7 state on reasonable terms and conditions, the commission may
24-8 require a retail electric provider to become the fallback retail
24-9 electric provider as a condition of receiving or maintaining a
24-10 license pursuant to Section 39.121.
24-11 (f) In the event that a retail electric provider fails to
24-12 serve any or all of its customers, the fallback retail electric
24-13 provider shall offer each such customer in each customer class the
24-14 standard retail service package for that class with no interruption
24-15 of service to any customer.
24-16 SUBCHAPTER C. MARKET POWER.
24-17 Sec. 39.101. COMMISSION ASSESSMENT OF MARKET POWER. (a)
24-18 Each person, municipally owned utility, and river authority that
24-19 owns generation facilities and offers electricity for sale in this
24-20 state shall report to the commission its installed generation
24-21 capacity, the total amount of capacity available for sale to
24-22 others, the total amount of capacity under contract to others, the
24-23 total amount of capacity dedicated to its own use, its annual
24-24 wholesale power sales in the state, its annual retail power sales
24-25 in the state, and any other information necessary for the
25-1 commission to assess market power or the development of a
25-2 competitive retail market in Texas. The commission shall by rule
25-3 prescribe the nature and detail of such reporting requirements.
25-4 (b) The Electric Reliability Council of Texas independent
25-5 system operator shall submit an annual report to the commission
25-6 identifying existing and potential transmission and distribution
25-7 constraints, system needs, alternatives for meeting system needs,
25-8 and recommendations for meeting system needs. The first report
25-9 shall be submitted on or before October 1, 1999. Subsequent
25-10 reports shall be submitted by January 15 of each year or as
25-11 determined necessary by the commission.
25-12 (c) Electric utilities owning transmission and distribution
25-13 facilities outside the Electric Reliability Council of Texas shall
25-14 report to the commission existing and potential transmission and
25-15 distribution constraints, system needs, alternatives for meeting
25-16 system needs, and recommendations for meeting system needs as
25-17 directed by the commission.
25-18 (d) On or before January 31, 2000, the commission shall
25-19 determine the geographic markets for assessing market power in
25-20 Texas. Thereafter, the commission shall determine the geographic
25-21 markets for assessing market power in Texas as necessary to
25-22 implement Section 39.102.
25-23 (e) In determining the boundaries of geographic markets
25-24 under this section, the commission shall consider whether the
25-25 available transmission facilities limit the delivery of electricity
26-1 from remote generators.
26-2 (f) For electric utilities operating within the Electric
26-3 Reliability Council of Texas, the geographic market is the Electric
26-4 Reliability Council of Texas, unless the commission determines that
26-5 specific transmission, distribution, or other constraints exist for
26-6 a given geographic area within the Electric Reliability Council of
26-7 Texas such that returns in excess of the reasonable cost of capital
26-8 may be earned in the long-run without inducing entry of additional
26-9 competitors in the specific geographic area. Upon such a finding,
26-10 the commission shall determine the appropriate geographic market
26-11 for an electric utility operating within the Electric Reliability
26-12 Council of Texas.
26-13 Sec. 39.102. LIMITATION OF OWNERSHIP OF INSTALLED CAPACITY.
26-14 (a) The commission shall determine the amount of installed
26-15 capacity available for sale to others in each geographic market.
26-16 Upon and after introduction of retail competition under Section
26-17 39.002 or 39.003, no person may own, operate or control more than
26-18 twenty percent of the installed generation capacity in each
26-19 geographic market.
26-20 (b) In determining the shares of generation capacity under
26-21 this subsection, capacity owned by a person and an entity that is
26-22 affiliated with that person shall be combined.
26-23 (c) For electric utilities operating within the Electric
26-24 Reliability Council of Texas, the commission shall establish a
26-25 schedule for each electric utility owning more than twenty percent
27-1 of the installed capacity in a geographic market to submit a plan
27-2 to the commission to comply with this section by December 31, 2001.
27-3 (d) For electric utilities operating outside the geographic
27-4 boundaries of the Electric Reliability Council of Texas, the
27-5 commission shall, after determining that the conditions necessary
27-6 for competition as specified in Section 39.001 exist in the
27-7 geographic market, establish a schedule for each electric utility
27-8 owning more than twenty percent of the installed capacity in the
27-9 geographic market to submit a plan to the commission to comply with
27-10 this section.
27-11 (e) The commission shall approve, modify, or reject each
27-12 plan as necessary to ensure a robust competitive generation market
27-13 consistent with the public interest within 180 days of the plan
27-14 being submitted to the commission for approval. In reaching its
27-15 determination, the commission shall consider:
27-16 (1) the degree to which the electric utility's
27-17 stranded costs, if any, are minimized;
27-18 (2) whether on disposition of the generation asset(s)
27-19 the reasonable value is likely to be received;
27-20 (3) the effect of the plan on the electric utility's
27-21 federal income taxes;
27-22 (4) the effect of the plan on the environment;
27-23 (5) the effect of the plan on current and potential
27-24 competitors in the generation market; and
27-25 (6) whether the plan is consistent with the public
28-1 interest.
28-2 Sec. 39.103. COMMISSION AUTHORITY TO ADDRESS MARKET POWER.
28-3 (a) The commission shall monitor market power associated with the
28-4 generation, transmission, distribution, and sale of electricity in
28-5 this state. Upon a finding, after notice and opportunity for
28-6 hearing, that undue market power abuses are occurring, the
28-7 commission shall require reasonable mitigation of the market power
28-8 by ordering the construction of additional transmission or
28-9 distribution facilities, by instituting price cap regulation, by
28-10 setting appropriate restrictions on sales of electricity, by
28-11 establishing limitations on the use of generation, transmission, or
28-12 distribution facilities, or any other reasonable remedy, except for
28-13 mandatory divestiture or other required sales of assets.
28-14 (b) Upon and after introduction of retail competition, no
28-15 person, municipally owned utility, or river authority that owns
28-16 generation facilities may own transmission or distribution
28-17 facilities in this state except for those facilities necessary to
28-18 interconnect a generation facility with the transmission or
28-19 distribution network. However, nothing in this Chapter shall
28-20 prohibit an affiliate of an electric utility from owning generation
28-21 facilities.
28-22 (c) In order to avoid potential market power abuses, the
28-23 commission shall adopt rules to govern transactions or activities
28-24 between an electric utility and its affiliates.
28-25 Sec. 39.104. MERGERS AND CONSOLIDATIONS. (a) Any owner of
29-1 electric generation that offers electricity for sale in this state
29-2 and proposes to merge, consolidate, or otherwise become affiliated
29-3 with any other owner of electric generation that offers electricity
29-4 for sale in this state shall obtain the approval of the commission
29-5 prior to closing. Such approval shall be requested at least 120
29-6 days prior to the proposed closing. The commission shall approve
29-7 the transaction unless the commission finds that the transaction is
29-8 inconsistent with the public interest or state or federal antitrust
29-9 laws. If the commission finds that the transaction as proposed is
29-10 inconsistent with the public interest, the commission may condition
29-11 approval of the transaction upon adoption of reasonable
29-12 modifications to the transaction as determined by the commission to
29-13 mitigate potential market power abuses.
29-14 (b) Any retail electric provider that proposes to merge,
29-15 consolidate, or otherwise become affiliated with any other retail
29-16 electric provider in this state shall obtain the approval of the
29-17 commission prior to closing. Such approval shall be requested at
29-18 least 120 days prior to the proposed closing. The commission shall
29-19 approve the transaction unless the commission finds that the
29-20 transaction is inconsistent with the public interest or state or
29-21 federal antitrust laws, or that the merged entity fails to satisfy
29-22 Section 39.121. If the commission finds that the transaction as
29-23 proposed is inconsistent with the public interest, the commission
29-24 may condition approval of the transaction upon adoption of
29-25 reasonable modifications to the transaction as determined by the
30-1 commission to mitigate potential market power abuses.
30-2 (c) Nothing in this section shall confer immunity from state
30-3 or federal antitrust laws. This section is intended to complement
30-4 other state and federal antitrust provisions. Therefore, antitrust
30-5 remedies may also be sought in state or federal court to remedy
30-6 anticompetitive activities.
30-7 SUBCHAPTER D. LICENSING AND REGISTRATION
30-8 Sec. 39.121. LICENSING OF RETAIL ELECTRIC PROVIDERS. (a)
30-9 In areas where retail competition has been introduced, no person,
30-10 including an affiliate of an electric utility, may provide retail
30-11 electric service in this state unless the person obtains a license
30-12 from the commission as a retail electric provider, in accordance
30-13 with this section.
30-14 (b) No license is necessary for a municipally owned utility
30-15 or distribution cooperative to provide retail electric service to
30-16 the areas where it is providing electric service on the date of
30-17 enactment of this Act or is authorized to provide electric service
30-18 under a certificate of public convenience and necessity.
30-19 (c) The commission shall issue a license to provide retail
30-20 electric service to a person applying for such a license who
30-21 demonstrates:
30-22 (1) the financial and technical capability to provide
30-23 continuous and reliable electric service to customers in the area
30-24 for which the license is sought; and
30-25 (2) the organization, personnel, and other resources
31-1 needed to meet the customer protection requirements of this Act.
31-2 Sec. 39.122. REGISTRATION OF WHOLESALE POWER SELLERS.
31-3 (a) Except as provided in this section, a person may not sell
31-4 electricity for resale, unless the person registers with the
31-5 commission as a wholesale power seller, in accordance with this
31-6 section. A person may register as a wholesale power seller by
31-7 filing the following information with the commission:
31-8 (1) a description of the location of any facility used
31-9 to generate electricity;
31-10 (2) a description of the type of services provided;
31-11 (3) a copy of any information filed with the Federal
31-12 Energy Regulatory Commission in connection with registration with
31-13 that commission; and
31-14 (4) any other information required by commission rule.
31-15 (b) A wholesale power seller shall comply with the
31-16 reliability standards adopted by an independent organization
31-17 certified by the commission to ensure the reliability of the
31-18 regional electrical network for a region in which the wholesale
31-19 power seller is generating electricity or transmitting or selling
31-20 electricity.
31-21 Sec. 39.123. REVOCATION OF LICENSE OR REGISTRATION. (a)
31-22 The commission may suspend, revoke, or amend a retail electric
31-23 provider's license for significant violations of this Act, or the
31-24 rules adopted pursuant to this Act. The commission may also
31-25 suspend or revoke a retail electric provider's license if it no
32-1 longer has the financial or technical capability to provide
32-2 continuous and reliable electric service.
32-3 (b) The commission may suspend or revoke a wholesale power
32-4 seller's registration for significant violations of this Act, the
32-5 rules adopted pursuant to this Act, or the reliability standards
32-6 adopted by an independent organization certified by the commission
32-7 to ensure the reliability of the regional electrical network.
32-8 Sec. 39.124. LOCAL REGISTRATION OF RETAIL ELECTRIC
32-9 PROVIDERS. (a) A municipality may require a retail electric
32-10 provider to register with the municipality as a condition of
32-11 serving residents of the municipality. The municipality may assess
32-12 a reasonable administrative fee for this purpose.
32-13 (b) The municipality may suspend or revoke a retail electric
32-14 provider's registration and operation in that municipality for
32-15 significant violations of this Act or the rules adopted pursuant to
32-16 this Act.
32-17 SUBCHAPTER E. PLANNING
32-18 Sec. 39.151. PLANNING FOR ELECTRIC UTILITIES SUBJECT TO
32-19 SECTIONS 39.002 AND 39.003. Chapter 34 does not apply in regions
32-20 subject to competition under Sections 39.002 and 39.003.
32-21 Sec. 39.152. RENEWABLE ENERGY TECHNOLOGIES. (a) It is the
32-22 goal and intent of the Legislature that by January 1, 2005,
32-23 renewable energy technologies comprise no less than three percent
32-24 of the installed electric generation capacity that is physically
32-25 located in the state and available to sell power at wholesale or
33-1 retail.
33-2 (b) The introduction of competition and retail customer
33-3 choice is expected to create opportunities that will stimulate the
33-4 economic development of renewable energy technologies in the state
33-5 to a level that achieves the goal of Subsection (a) through the
33-6 reliance upon market forces alone.
33-7 (c) On January 1, 2003, if the commission finds that
33-8 renewable energy technologies comprise less than 1.5 percent of the
33-9 electric generation capacity as defined in Subsection (a), market
33-10 failure shall be assumed.
33-11 (d) Should market failure occur, the commission shall take
33-12 appropriate measures, as it deems appropriate, to meet the goal of
33-13 Subsection (a), including, but not limited to, the imposition of a
33-14 non-bypassable charge to fund renewable energy technology
33-15 development or tradable renewable energy credits.
33-16 SUBCHAPTER F. CUSTOMER PROTECTION
33-17 Sec. 39.171. CUSTOMER PROTECTION POLICY. (a) The
33-18 legislature finds that introducing competition in the retail
33-19 electric market will create a number of new opportunities for
33-20 customers and retail electric providers. These new opportunities
33-21 may be confusing for some customers, who are not accustomed to a
33-22 choice of services or service providers. Without customer
33-23 protections, customers may be misled by fraudulent or deceptive
33-24 business practices or by businesses that do not have the technical
33-25 and financial resources to provide adequate service.
34-1 (b) The purpose of this Chapter is to establish customer
34-2 protection standards and confer on the commission broad authority
34-3 to adopt and enforce rules to protect customers from unfair,
34-4 deceptive, or anti-competitive practices.
34-5 Sec. 39.172. CUSTOMER PROTECTION STANDARDS. (a) All buyers
34-6 of electricity in a competitive retail market shall have the
34-7 following rights to:
34-8 (1) protection from unfair, misleading, or deceptive
34-9 practices, including protection from being billed for services that
34-10 were not authorized or provided;
34-11 (2) choose a service provider and have that choice
34-12 honored;
34-13 (3) the privacy of customer consumption and credit
34-14 information;
34-15 (4) mandatory disclosure of information by retail
34-16 electric providers concerning rates, key terms and conditions, and
34-17 the environmental impact of their production facilities;
34-18 (5) protection from discrimination on the basis of
34-19 race, sex, nationality, religion, color, or marital status;
34-20 (6) impartial and prompt resolution of disputes with a
34-21 retail electric provider; and
34-22 (7) accuracy of metering and billing.
34-23 (b) In addition to the rights prescribed under Subsection
34-24 (a), residential and small commercial customers in a competitive
34-25 retail market shall have the following rights to:
35-1 (1) rescind a selection of a retail electric provider
35-2 within three days of making the selection without penalty;
35-3 (2) receive a complete and timely response to
35-4 complaints and inquiries, and advance written notification of
35-5 changes in rates;
35-6 (3) the disclosure of information by retail electric
35-7 providers concerning rates and key terms and conditions in English
35-8 and Spanish, in language that is readily understandable by
35-9 customers; and
35-10 (4) operation of a customer information center, with a
35-11 working telephone number and valid postal address, where customers
35-12 can reach a retail electric provider concerning questions and about
35-13 prices, bills, and other customer issues; and
35-14 (5) receive a single bill that combines the costs of
35-15 regulated and competitive electric services, and which indicates
35-16 the average total cost per kilowatt-hour used during the billing
35-17 period.
35-18 (c) A program for assistance to low-income customers shall
35-19 be established by the commission, which shall be funded by a charge
35-20 not to exceed $0.05 per megawatt-hour that will be collected from
35-21 all customers in an equitable manner and used for electricity
35-22 assistance programs for low-income customers, as determined by the
35-23 commission. All funds from the charge shall be remitted to the
35-24 Comptroller of Public Accounts and fully disbursed as directed by
35-25 the Texas Department of Housing and Community Affairs to support
36-1 qualifying programs.
36-2 (d) Beginning September 1, 2000, the commission shall
36-3 conduct customer education campaigns in connection with the
36-4 initiation of competition in retail electric service. The
36-5 campaigns shall be designed and conducted to provide residential
36-6 and small commercial customers objective information concerning the
36-7 initiation of retail competition and the energy service options
36-8 available to them. The commission may engage independent
36-9 consultants and shall consult with the Public Utility Counsel in
36-10 developing the campaigns and information to be provided to
36-11 customers in the campaigns. The commission may enter contracts for
36-12 professional services to carry out the customer education
36-13 campaigns. The campaigns shall be designed to provide broad
36-14 dissemination of information to the public and shall include
36-15 efforts to reach persons who are not proficient in English or are
36-16 otherwise difficult to reach through standard communications media.
36-17 (e) The commission shall conduct an on going customer
36-18 education campaign designed to help customers make informed choices
36-19 of electric services and retail electric providers. As a part of
36-20 such an education campaign, the commission may provide customers
36-21 information concerning specific retail electric providers, such as
36-22 the instances of complaints against them and records relating to
36-23 quality of service.
36-24 (f) The commission shall adopt and enforce such rules as may
36-25 be necessary or appropriate to carry out this Subchapter, including
37-1 but not limited to rules for minimum service standards for retail
37-2 electric providers relating to customer deposits and the extension
37-3 of credit, switching fees, levelized billing programs, termination
37-4 of service, and quality of service.
37-5 Sec. 39.173. RESOLUTION OF DISPUTES. The commission is
37-6 authorized to resolve disputes between a customer and a retail
37-7 electric provider. The commission may order a retail electric
37-8 provider to refund overcharges or unauthorized charges or make
37-9 other restitution, where the retail electric provider has failed to
37-10 comply with the commission's customer protection rules or a
37-11 contract with the customer. If the commission finds that a retail
37-12 electric provider has failed to honor a customer's choice of
37-13 service provider, it may order other appropriate relief, including
37-14 the restoration of the customer's choice of service provider,
37-15 penalties, and compensation for the customer's losses. The
37-16 commission may adopt rules to require the continuation of service
37-17 to a residential or small commercial customer during the pendency
37-18 of a dispute.
37-19 Sec. 39.174. ACCESS TO PREMISES. A person leasing or using
37-20 a building, space within a building, or any other facility that is
37-21 separately metered for electric service shall have the right to
37-22 choose a retail electric provider and the owner of the building or
37-23 facility shall grant access to the building or facility on
37-24 reasonable, non-discriminatory terms, to permit the installation,
37-25 maintenance, and reading of meters, as necessary to accommodate the
38-1 needs of the retail electric provider.
38-2 Sec. 39.175. LIMITATIONS ON TELEPHONE SOLICITATION. No
38-3 person shall make or cause to be made any telephone solicitation to
38-4 any customer who has given notice to the commission of the
38-5 customer's objection to receiving telephone solicitations. The
38-6 commission shall establish and provide for the operation of a data
38-7 base to compile a list of customers who object to receiving
38-8 telephone solicitations. Such data base may be operated by the
38-9 commission or by another entity under contract with the commission.
38-10 Each customer shall be charged a fee not to exceed $5.00 for
38-11 inclusion in the data base established under this section.
38-12 SUBCHAPTER G. GENERAL PROVISIONS.
38-13 Sec. 39.201. REPORTS. The commission may require a retail
38-14 electric provider or wholesale power producer or seller to submit a
38-15 report to the commission concerning any matter over which it has
38-16 authority under this Act.
38-17 Sec. 39.202. COMMISSION AUTHORITY. The commission shall
38-18 adopt and enforce rules as may be necessary or appropriate to carry
38-19 out this Chapter.
38-20 Sec. 39.203. PENALTIES. The commission may impose
38-21 administrative penalties on an electric utility, a retail electric
38-22 provider, or a wholesale electric seller using the procedures set
38-23 out in Sections 15.024 through 15.033.
38-24 Sec. 39.204. COOPERATION WITH OTHER REGULATORY AUTHORITIES.
38-25 In regulating the rates, operations, and services of an electric
39-1 utility that provides service in another state, the commission may
39-2 cooperate with the utility regulatory commission of the other state
39-3 or the federal government and may hold a joint hearing or make a
39-4 joint investigation with that commission.
39-5 SECTION 4. Subtitle A, Title 2, Utilities Code, is amended
39-6 by amending Section 12.005 to read as follows:
39-7 Sec. 12.005. APPLICATION OF SUNSET ACT. The Public Utility
39-8 Commission of Texas is subject to Chapter 325, Government Code
39-9 (Texas Sunset Act). Unless continued in existence as provided by
39-10 that chapter, the commission is abolished and this title expires
39-11 September 1, 200[1]3.
39-12 SECTION 5. Subtitle A, Title 2, Utilities Code, is amended
39-13 by amending Section 16.001 to read as follows:
39-14 Sec. 16.001. ASSESSMENTS UPON PUBLIC UTILITIES. (a) To
39-15 defray the expenses incurred in the administration of this title,
39-16 and assessment is imposed on each public utility and retail
39-17 electric provider within the jurisdiction of the commission that
39-18 serves the ultimate consumer, including each interexchange
39-19 telecommunications carrier.
39-20 (b) An assessment under this section is equal to one-sixth
39-21 of one percent of the public utility's or retail electric
39-22 provider's gross receipts from rates charged to the ultimate
39-23 consumers in this state.
39-24 (c) An interexchange telecommunications carrier that does
39-25 not provide local exchange service may collect the fee imposed
40-1 under this section as an additional item separately stated on the
40-2 customer bill as "utility gross receipts assessment."
40-3 SECTION 6. Chapter 182, Tax Code, is amended by amending
40-4 Section 182.021 to read as follows:
40-5 Sec. 182.021. UTILITY COMPANIES. (1) "Utility company"
40-6 means a person who owns or operates a gas, electric light, electric
40-7 power, or water works, or water and light plant used for local sale
40-8 and distribution located within an incorporated city or town in
40-9 this state or who is a retail electric provider as that term is
40-10 defined in Section 31.002 of the Utilities Code that makes local
40-11 sales within an incorporated city or town in this state. A person
40-12 who owns an electric light or electric power plant used for
40-13 distribution but that does not make retail sales to the ultimate
40-14 consumer within an incorporated city or town in this state is not a
40-15 "utility company." However, for purposes of Section 182.025 alone,
40-16 "utility company" does not include a retail electric provider as
40-17 that term is defined in Section 31.002 of the Utilities Code, but
40-18 does include a person who owns an electric light or electric power
40-19 plant used for distribution even if that person does not make
40-20 retail sales to the ultimate consumer within an incorporated city
40-21 or town in this state.
40-22 (2) "Business" means the providing of gas, electric
40-23 light, electric power, or water.
40-24 (3), (4) Repealed by Acts 1991, 72nd Leg., 1st C.S.,
40-25 ch.5, Sec.17.06, eff. Sept. 1, 1991.
41-1 SECTION 7. Chapter 182, Tax Code, is amended by amending
41-2 Section 182.025 to read as follows:
41-3 Sec. 182.025. CHARGES BY A CITY. (a) An incorporated city
41-4 or town may make a reasonable lawful charge for the use of a city
41-5 street, alley, or public way by a public utility in the course of
41-6 its business.
41-7 (b) The total charges, however designated or measured, may
41-8 not exceed two percent of the gross receipts of the public utility
41-9 for the sale of gas, electric energy, or water within the city or
41-10 ten percent of the gross receipts of a public utility that provides
41-11 only the service of distribution of electric energy and does not
41-12 make sales of electric energy to the ultimate customer.
41-13 (c) If a public utility taxed under this subchapter pays a
41-14 special tax, rental, contribution, or charge under a contract or
41-15 franchise executed before May 1, 1941, the city shall credit the
41-16 payment against the amount owed by the public utility on any charge
41-17 allowable under Subsection (a) of this section.
41-18 SECTION 8. This Act takes effect September 1, 1999.
41-19 SECTION 9. The importance of this legislation and the
41-20 crowded condition of the calendars in both houses create an
41-21 emergency and an imperative public necessity that the
41-22 constitutional rule requiring bills to be read on three several
41-23 days in each house be suspended, and this rule is hereby suspended.