By Bivins                                             S.B. No. 1152
         76R6370 CBH-F                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the authority of the state to obtain electricity and to
 1-3     sell or convey that electricity.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Section 31.002(1), Utilities Code, is amended to
 1-6     read as follows:
 1-7                 (1)  "Electric utility" means a person or river
 1-8     authority that owns or operates for compensation in this state
 1-9     equipment or facilities to produce, generate, transmit, distribute,
1-10     sell, or furnish electricity in this state.  The term includes a
1-11     lessee, trustee, or receiver of an electric utility and a
1-12     recreational vehicle park owner who does not comply with Subchapter
1-13     C, Chapter 184, with regard to the metered sale of electricity at
1-14     the recreational vehicle park.  The term does not include:
1-15                       (A)  a municipal corporation;
1-16                       (B)  a qualifying facility;
1-17                       (C)  an exempt wholesale generator;
1-18                       (D)  a power marketer;
1-19                       (E)  a corporation described by Section 32.053 to
1-20     the extent the corporation sells electricity exclusively at
1-21     wholesale and not to the ultimate consumer; [or]
1-22                       (F)  this state or an agency of this state; or
1-23                       (G)  a person not otherwise an electric utility
1-24     who:
 2-1                             (i)  furnishes an electric service or
 2-2     commodity only to itself, its employees, or its tenants as an
 2-3     incident of employment or tenancy, if that service or commodity is
 2-4     not resold to or used by others;
 2-5                             (ii)  owns or operates in this state
 2-6     equipment or facilities to produce, generate, transmit, distribute,
 2-7     sell, or furnish electric energy to an electric utility, if the
 2-8     equipment or facilities are used primarily to produce and generate
 2-9     electric energy for consumption by that person; or
2-10                             (iii)  owns or operates in this state a
2-11     recreational vehicle park that provides metered electric service in
2-12     accordance with Subchapter C, Chapter 184.
2-13           SECTION 2.  Chapter 35, Utilities Code, is amended by adding
2-14     Subchapter D to read as follows:
2-15           SUBCHAPTER D.  STATE AUTHORITY TO SELL OR CONVEY POWER
2-16           Sec. 35.101.  DEFINITIONS.  In this chapter:
2-17                 (1)  "Commissioner" means the commissioner of the
2-18     General Land Office.
2-19                 (2)  "Public retail customer" means an end-use customer
2-20     that is an agency of this state, an institution of higher
2-21     education, a public school district, or a political subdivision of
2-22     this state and that purchases and ultimately consumes electricity.
2-23           Sec. 35.102.  STATE AUTHORITY TO SELL OR CONVEY POWER.  The
2-24     commissioner, acting on behalf of the state, may sell or otherwise
2-25     convey power directly to a public retail customer regardless of
2-26     whether the public retail customer is also a wholesale customer.
2-27           Sec. 35.103.  ACCESS TO TRANSMISSION AND DISTRIBUTION
 3-1     SYSTEMS; RATES.  (a) The state is entitled to have access to all
 3-2     transmission and distribution systems of all electric utilities,
 3-3     municipally owned utilities, and electric cooperative corporations
 3-4     that serve public retail customers.
 3-5           (b)  An entity described by Subsection (a) shall provide any
 3-6     utility service, including transmission, distribution, and other
 3-7     services to the state at the lowest applicable rate charged for
 3-8     similar service to other customers.
 3-9           Sec. 35.104.  RETAIL TRANSACTION LIMIT.  The state may not
3-10     engage in retail transactions that exceed 2.5 percent of a retail
3-11     electric utility's total retail load in a service area.
3-12           Sec. 35.105.  COSTS OF SERVING STATE AGENCY.  An electric
3-13     utility, municipally owned utility, or electric cooperative
3-14     corporation may not recover from a residential customer or from any
3-15     other customer class the assigned and allocated costs of serving a
3-16     state agency, institution of higher education, public school
3-17     district, or political subdivision of this state.
3-18           Sec. 35.106.  WHOLESALE CUSTOMERS.  This subchapter does not
3-19     prevent the commissioner, acting on behalf of this state, from
3-20     registering as a power marketer.
3-21           SECTION 3.  Sections 52.133(a), (c), and (d), Natural
3-22     Resources Code, are amended to read as follows:
3-23           (a)  Each oil or gas lease covering land leased by the board,
3-24     by a board for lease [other than the Board for Lease of University
3-25     Lands], or by the surface owner of land under which the state owns
3-26     the minerals, commonly referred to as Relinquishment Act land,
3-27     which shall be subject to approval by the commissioner before it is
 4-1     effective, shall include a provision granting the board authorized
 4-2     to lease the land or the owner of the soil of Relinquishment Act
 4-3     land and the commissioner authority to take their royalty in kind,
 4-4     and the commissioner and the boards for lease may include any other
 4-5     reasonable provisions that are not inconsistent with this section.
 4-6           (c)  The commissioner, the owner of the soil under Subchapter
 4-7     F [of this chapter], or the commissioner, acting on the behalf of
 4-8     and at the direction of an owner of the soil under Subchapter F [of
 4-9     this chapter], the board, or a board for lease, or at the direction
4-10     of the Board for Lease of University Lands, may negotiate and
4-11     execute contracts or any other instruments or agreements necessary
4-12     to dispose of or enhance their portion of the royalty taken in
4-13     kind, including contracts for sale, purchase, transportation, and
4-14     storage and including insurance contracts or other agreements, to
4-15     secure or guarantee payment.
4-16           (d)  The commissioner, the owner of the soil under Subchapter
4-17     F, or the commissioner acting on behalf of and at the direction of
4-18     an owner of the soil under Subchapter F, the board, or a board  for
4-19     lease, may negotiate and execute contracts or any other instruments
4-20     or agreements necessary to convert that portion of the royalty
4-21     taken in kind into other forms of energy, including electricity.
4-22     [This section does not apply to or have any effect on the Board for
4-23     Lease of University Lands or any lease executed on university
4-24     land.]
4-25           SECTION 4.  Section 53.026, Natural Resources Code, is
4-26     amended to read as follows:
4-27           Sec. 53.026.  IN KIND ROYALTY.  (a) The commissioner or the
 5-1     commissioner acting on behalf of and at the direction of the board
 5-2     or a board for lease may negotiate and execute a contract or any
 5-3     other instrument or agreement necessary to dispose of or enhance
 5-4     their portion of the royalty taken in kind, including contracts [a
 5-5     contract] for sale, purchase, transportation, or storage.
 5-6           (b)  The commissioner or the commissioner acting on behalf of
 5-7     and at the direction of the board or a board for lease may
 5-8     negotiate and execute a contract or any other instrument or
 5-9     agreement necessary to convert that portion of the royalty taken in
5-10     kind to other forms of energy, including electricity.
5-11           (c)  This section shall not be construed to surrender or in
5-12     any way affect the right of the state under an existing or future
5-13     lease to receive monetary royalty from its lessee.
5-14           SECTION 5.  Section 53.077, Natural Resources Code, is
5-15     amended to read as follows:
5-16           Sec. 53.077.  IN KIND ROYALTY.  (a) The commissioner, each
5-17     owner of the soil under this subchapter, or the commissioner acting
5-18     on the behalf of and at the direction of an owner of the soil under
5-19     this subchapter may negotiate and execute a contract or any other
5-20     instrument or agreement necessary to dispose of or enhance their
5-21     portion of the royalty taken in kind, including a contract for
5-22     sale, transportation, or storage.
5-23           (b)  The commissioner, each owner of the soil under this
5-24     subchapter, or the commissioner acting on behalf of and at the
5-25     direction of the owner of the soil under this subchapter may
5-26     negotiate and execute a contract or any other instrument or
5-27     agreement necessary to convert that portion of the royalty taken in
 6-1     kind to other forms of energy, including electricity.
 6-2           (c)  This section shall not be construed to surrender or in
 6-3     any way affect the right of the state or the owner of the soil
 6-4     under an existing or future lease to receive monetary royalty from
 6-5     its lessee.
 6-6           SECTION 6.  This Act takes effect September 1, 1999.
 6-7           SECTION 7.  The importance of this legislation and the
 6-8     crowded condition of the calendars in both houses create an
 6-9     emergency and an imperative public necessity that the
6-10     constitutional rule requiring bills to be read on three several
6-11     days in each house be suspended, and this rule is hereby suspended.