By: Bivins S.B. No. 1152
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the authority of the state to obtain electricity and to
1-2 sell or convey that electricity.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Subdivision (1), Section 31.002, Utilities Code,
1-5 is amended to read as follows:
1-6 (1) "Electric utility" means a person or river
1-7 authority that owns or operates for compensation in this state
1-8 equipment or facilities to produce, generate, transmit, distribute,
1-9 sell, or furnish electricity in this state. The term includes a
1-10 lessee, trustee, or receiver of an electric utility and a
1-11 recreational vehicle park owner who does not comply with Subchapter
1-12 C, Chapter 184, with regard to the metered sale of electricity at
1-13 the recreational vehicle park. The term does not include:
1-14 (A) a municipal corporation;
1-15 (B) a qualifying facility;
1-16 (C) an exempt wholesale generator;
1-17 (D) a power marketer;
1-18 (E) a corporation described by Section 32.053 to
1-19 the extent the corporation sells electricity exclusively at
1-20 wholesale and not to the ultimate consumer; [or]
1-21 (F) this state or an agency of this state; or
1-22 (G) a person not otherwise an electric utility
1-23 who:
1-24 (i) furnishes an electric service or
2-1 commodity only to itself, its employees, or its tenants as an
2-2 incident of employment or tenancy, if that service or commodity is
2-3 not resold to or used by others;
2-4 (ii) owns or operates in this state
2-5 equipment or facilities to produce, generate, transmit, distribute,
2-6 sell, or furnish electric energy to an electric utility, if the
2-7 equipment or facilities are used primarily to produce and generate
2-8 electric energy for consumption by that person; or
2-9 (iii) owns or operates in this state a
2-10 recreational vehicle park that provides metered electric service in
2-11 accordance with Subchapter C, Chapter 184.
2-12 SECTION 2. Chapter 35, Utilities Code, is amended by adding
2-13 Subchapter D to read as follows:
2-14 SUBCHAPTER D. STATE AUTHORITY TO SELL OR CONVEY POWER
2-15 Sec. 35.101. DEFINITIONS. In this chapter:
2-16 (1) "Commissioner" means the commissioner of the
2-17 General Land Office.
2-18 (2) "Public retail customer" means an end-use customer
2-19 that is an agency of this state, an institution of higher
2-20 education, a public school district, or a political subdivision of
2-21 this state and that purchases and ultimately consumes electricity.
2-22 Sec. 35.102. STATE AUTHORITY TO SELL OR CONVEY POWER. The
2-23 commissioner, acting on behalf of the state, may sell or otherwise
2-24 convey power generated from royalties taken in kind as provided by
2-25 Sections 52.133(f), 53.026, and 53.077, Natural Resources Code,
2-26 directly to a public retail customer regardless of whether the
3-1 public retail customer is also a wholesale customer.
3-2 Sec. 35.103. ACCESS TO TRANSMISSION AND DISTRIBUTION
3-3 SYSTEMS; RATES. (a) Except as provided in Section 35.104, the
3-4 state is entitled to have access to all transmission and
3-5 distribution systems of all electric utilities, municipally owned
3-6 utilities, and electric cooperative corporations that serve public
3-7 retail customers.
3-8 (b) An entity described by Subsection (a) shall provide any
3-9 utility service, including transmission, distribution, and other
3-10 services, to the state at the lowest applicable rate charged for
3-11 similar service to other customers.
3-12 Sec. 35.104. RETAIL TRANSACTION LIMIT. Sections 35.102 and
3-13 35.103 do not apply to the rates, retail service area, facilities,
3-14 or public retail customers of a municipally owned electric utility
3-15 or an electric cooperative that has not adopted retail competition.
3-16 In a certificated service area of an electric utility that is not
3-17 an electric cooperative, the state may not engage in retail
3-18 transactions that exceed 2.5 percent of a retail electric utility's
3-19 total retail load.
3-20 Sec. 35.105. COSTS OF SERVING STATE AGENCY. An entity
3-21 described by Section 35.103(a) shall provide any utility service,
3-22 including transmission, distribution, and other services, which
3-23 must include any stranded costs associated with providing service,
3-24 to the state at the lowest applicable rate charged for similar
3-25 service to other customers.
3-26 Sec. 35.106. WHOLESALE CUSTOMERS. This subchapter does not
4-1 prevent the commissioner, acting on behalf of this state, from
4-2 registering as a power marketer.
4-3 Sec. 35.107. ACCESS TO POWER GENERATION. If pipeline
4-4 capacity is available on an existing facility of a gas utility or
4-5 municipally owned utility, a gas utility or a municipally owned
4-6 utility may not refuse to provide gas service to an electric
4-7 utility generating facility, if the purpose of the service is to
4-8 generate power for public retail customers by the state or an
4-9 agency of this state.
4-10 SECTION 3. Section 52.133, Natural Resources Code, is
4-11 amended by amending Subsections (a), (c), and (d) and adding
4-12 Subsection (f) to read as follows:
4-13 (a) Each oil or gas lease covering land leased by the board,
4-14 by a board for lease [other than the Board for Lease of University
4-15 Lands], or by the surface owner of land under which the state owns
4-16 the minerals, commonly referred to as Relinquishment Act land,
4-17 which shall be subject to approval by the commissioner before it is
4-18 effective, shall include a provision granting the board authorized
4-19 to lease the land or the owner of the soil of Relinquishment Act
4-20 land and the commissioner authority to take their royalty in kind,
4-21 and the commissioner and the boards for lease may include any other
4-22 reasonable provisions that are not inconsistent with this section.
4-23 (c) The commissioner, the owner of the soil under Subchapter
4-24 F [of this chapter], or the commissioner, acting on the behalf of
4-25 and at the direction of an owner of the soil under Subchapter F [of
4-26 this chapter], the board, or a board for lease, or at the direction
5-1 of the Board for Lease of University Lands, may negotiate and
5-2 execute contracts or any other instruments or agreements necessary
5-3 to dispose of their portion of the royalty taken in kind, including
5-4 contracts for sale, marketing, transportation, including purchase
5-5 and exchange agreements necessary to transport gas, and storage and
5-6 including insurance contracts or other agreements, to secure or
5-7 guarantee payment.
5-8 (d) The commissioner, the owner of the soil under Subchapter
5-9 F, or the commissioner acting on behalf of and at the direction of
5-10 an owner of the soil under Subchapter F, the board, or a board for
5-11 lease may negotiate and execute contracts or any other instruments
5-12 or agreements necessary to convert that portion of the royalty
5-13 taken in kind into other forms of energy, including electricity.
5-14 (f) For the purposes of this section, royalty taken in kind
5-15 includes oil or gas sold or marketed by the commissioner that has
5-16 been produced on state mineral lands or from the first three miles
5-17 of federal waters adjacent to the state boundaries, also known as
5-18 the 8g zone. [This section does not apply to or have any effect on
5-19 the Board for Lease of University Lands or any lease executed on
5-20 university land.]
5-21 SECTION 4. Section 53.026, Natural Resources Code, is
5-22 amended to read as follows:
5-23 Sec. 53.026. IN KIND ROYALTY. (a) The commissioner or the
5-24 commissioner acting on behalf of and at the direction of the board
5-25 or a board for lease may negotiate and execute a contract or any
5-26 other instrument or agreement necessary to dispose of or enhance
6-1 their portion of the royalty taken in kind, including contracts [a
6-2 contract] for sale, transportation, or storage.
6-3 (b) The commissioner or the commissioner acting on behalf of
6-4 and at the direction of the board or a board for lease may
6-5 negotiate and execute a contract or any other instrument or
6-6 agreement necessary to convert that portion of the royalty taken in
6-7 kind to other forms of energy, including electricity.
6-8 (c) This section shall not be construed to surrender or in
6-9 any way affect the right of the state under an existing or future
6-10 lease to receive monetary royalty from its lessee.
6-11 SECTION 5. Section 53.077, Natural Resources Code, is
6-12 amended to read as follows:
6-13 Sec. 53.077. IN KIND ROYALTY. (a) The commissioner, each
6-14 owner of the soil under this subchapter, or the commissioner acting
6-15 on the behalf of and at the direction of an owner of the soil under
6-16 this subchapter may negotiate and execute a contract or any other
6-17 instrument or agreement necessary to dispose of or enhance their
6-18 portion of the royalty taken in kind, including a contract for
6-19 sale, transportation, or storage.
6-20 (b) The commissioner, each owner of the soil under this
6-21 subchapter, or the commissioner acting on behalf of and at the
6-22 direction of an owner of the soil under this subchapter may
6-23 negotiate and execute a contract or any other instrument or
6-24 agreement necessary to convert that portion of the royalty taken in
6-25 kind to other forms of energy, including electricity.
6-26 (c) This section shall not be construed to surrender or in
7-1 any way affect the right of the state or the owner of the soil
7-2 under an existing or future lease to receive monetary royalty from
7-3 its lessee.
7-4 SECTION 6. To the extent of any conflict between this Act
7-5 and S.B. No. 7, Acts of the 76th Legislature, Regular Session,
7-6 1999, S.B. No. 7 controls, regardless of the date of enactment.
7-7 SECTION 7. This Act takes effect September 1, 1999.
7-8 SECTION 8. The importance of this legislation and the
7-9 crowded condition of the calendars in both houses create an
7-10 emergency and an imperative public necessity that the
7-11 constitutional rule requiring bills to be read on three several
7-12 days in each house be suspended, and this rule is hereby suspended.