By Danburg                                            H.B. No. 3203
         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 limitations placed on utilities with regard to its
 1-3     activities, relationship, and interaction with competitive
 1-4     affiliates.
 1-5           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-6           SECTION 1.  Subchapter B, Chapter 38, Utilities Code, is
 1-7     amended by adding Section 38.023 to read as follows:
 1-8           Sec. 38.023.  COMPETITIVE ACTIVITIES AND LIMITATIONS ON A
 1-9     UTILITY WITH REGARD TO ITS AFFILIATES.  (a)  The commission shall
1-10     establish rules that prohibit a regulated utility from providing
1-11     retail customer energy services which are available in the market,
1-12     such as air conditioning installation and repair, lighting,
1-13     building controls, electrical wiring installation or related
1-14     services.
1-15           (b)  The commission shall establish rules that limit the
1-16     relationship of a regulated utility with its affiliates in order to
1-17     avoid anti-competitive abuses of market power.  The rule shall
1-18     establish the requirements for the implementation of contracts
1-19     between regulated utilities and their affiliates and set forth the
1-20     requirements for enforcement including the compliance proceedings
1-21     necessary to assure at a minimum that:
 2-1                 (1)  a utility must in general be a separate corporate
 2-2     entity from its affiliates with separate officers, directors and
 2-3     employees and must maintain separate books and records;
 2-4                 (2)  a utility may not allow an affiliate to obtain
 2-5     credit under any arrangement that would permit a creditor to have
 2-6     recourse to the utility's assets;
 2-7                 (3)  transactions between a utility and its affiliate
 2-8     must be arm's length transactions;
 2-9                 (4)  products or services supplied by an affiliate to a
2-10     utility must be the result of a fair competitive bidding process,
2-11     formalized by contract, and not involve the transfer of
2-12     confidential information;
2-13                 (5)  rate-based assets, other than generation and
2-14     transmission facilities, transferred by a utility to an affiliate
2-15     must be the result of a fair competitive bid process and formalized
2-16     by contract;
2-17                 (6)  employee migration must be tracked and employee
2-18     rotations between the utility and an affiliate are prohibited;
2-19     office space, office equipment, as well as computer and information
2-20     systems must be separate unless specific sharing is approved by the
2-21     commission;
2-22                 (7)  products, services, the application of discretion
2-23     in tariffs, discounts, rebates or fee waivers must be offered by a
2-24     utility to affiliated and non-affiliated entities on a
2-25     non-discriminatory basis;
 3-1                 (8)  tying arrangements or making certain conditions in
 3-2     order to access a beneficial product or service from a utility on
 3-3     purchasing goods or services from an affiliate are prohibited;
 3-4                 (9)  proprietary customer information is protected and
 3-5     cannot be released to an affiliate or other persons without
 3-6     permission from the customer;
 3-7                 (10)  aggregate customer information, such as a
 3-8     utility's energy purchases or sales, may be made available, but
 3-9     must be provided to affiliates and non-affiliates under the same
3-10     terms, on the same conditions, and at the same price;
3-11                 (11)  a utility shall use best efforts to make that
3-12     information available to all non-affiliated persons through an
3-13     accessible, centralized clearing house;
3-14                 (12)  utilities may not allow the use of their name or
3-15     logo by an affiliate without a specific disclaimer indicating that
3-16     the companies are not the same companies; and
3-17                 (13)  joint business development and joint business
3-18     marketing are prohibited.
3-19           SECTION 2.  This Act takes effect September 1, 1999.
3-20           SECTION 3.  The importance of this legislation and the
3-21     crowded condition of the calendars in both houses create an
3-22     emergency and an imperative public necessity that the
3-23     constitutional rule requiring bills to be read on three several
3-24     days in each house be suspended, and this rule is hereby suspended.