1-1 By: Bivins S.B. No. 1152
1-2 (In the Senate - Filed March 10, 1999; March 11, 1999, read
1-3 first time and referred to Committee on Natural Resources;
1-4 April 6, 1999, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 6, Nays 0; April 6, 1999,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 1152 By: Bivins
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to the authority of the state to obtain electricity and to
1-11 sell or convey that electricity.
1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13 SECTION 1. Subdivision (1), Section 31.002, Utilities Code,
1-14 is amended to read as follows:
1-15 (1) "Electric utility" means a person or river
1-16 authority that owns or operates for compensation in this state
1-17 equipment or facilities to produce, generate, transmit, distribute,
1-18 sell, or furnish electricity in this state. The term includes a
1-19 lessee, trustee, or receiver of an electric utility and a
1-20 recreational vehicle park owner who does not comply with Subchapter
1-21 C, Chapter 184, with regard to the metered sale of electricity at
1-22 the recreational vehicle park. The term does not include:
1-23 (A) a municipal corporation;
1-24 (B) a qualifying facility;
1-25 (C) an exempt wholesale generator;
1-26 (D) a power marketer;
1-27 (E) a corporation described by Section 32.053 to
1-28 the extent the corporation sells electricity exclusively at
1-29 wholesale and not to the ultimate consumer; [or]
1-30 (F) this state or an agency of this state; or
1-31 (G) a person not otherwise an electric utility
1-32 who:
1-33 (i) furnishes an electric service or
1-34 commodity only to itself, its employees, or its tenants as an
1-35 incident of employment or tenancy, if that service or commodity is
1-36 not resold to or used by others;
1-37 (ii) owns or operates in this state
1-38 equipment or facilities to produce, generate, transmit, distribute,
1-39 sell, or furnish electric energy to an electric utility, if the
1-40 equipment or facilities are used primarily to produce and generate
1-41 electric energy for consumption by that person; or
1-42 (iii) owns or operates in this state a
1-43 recreational vehicle park that provides metered electric service in
1-44 accordance with Subchapter C, Chapter 184.
1-45 SECTION 2. Chapter 35, Utilities Code, is amended by adding
1-46 Subchapter D to read as follows:
1-47 SUBCHAPTER D. STATE AUTHORITY TO SELL OR CONVEY POWER
1-48 Sec. 35.101. DEFINITIONS. In this chapter:
1-49 (1) "Commissioner" means the commissioner of the
1-50 General Land Office.
1-51 (2) "Public retail customer" means an end-use customer
1-52 that is an agency of this state, an institution of higher
1-53 education, a public school district, or a political subdivision of
1-54 this state and that purchases and ultimately consumes electricity.
1-55 Sec. 35.102. STATE AUTHORITY TO SELL OR CONVEY POWER. The
1-56 commissioner, acting on behalf of the state, may sell or otherwise
1-57 convey power generated from royalties taken in kind as provided by
1-58 Sections 52.133(f), 53.026, and 53.077, Natural Resources Code,
1-59 directly to a public retail customer regardless of whether the
1-60 public retail customer is also a wholesale customer.
1-61 Sec. 35.103. ACCESS TO TRANSMISSION AND DISTRIBUTION
1-62 SYSTEMS; RATES. (a) Except as provided in Section 35.104, the
1-63 state is entitled to have access to all transmission and
1-64 distribution systems of all electric utilities, municipally owned
2-1 utilities, and electric cooperative corporations that serve public
2-2 retail customers.
2-3 (b) An entity described by Subsection (a) shall provide any
2-4 utility service, including transmission, distribution, and other
2-5 services, to the state at the lowest applicable rate charged for
2-6 similar service to other customers.
2-7 Sec. 35.104. RETAIL TRANSACTION LIMIT. Sections 35.102 and
2-8 35.103 do not apply to the rates, retail service area, facilities,
2-9 or public retail customers of a municipally owned electric utility
2-10 or an electric cooperative that has not adopted retail competition.
2-11 In a certificated service area of an electric utility that is not
2-12 an electric cooperative, the state may not engage in retail
2-13 transactions that exceed 2.5 percent of a retail electric utility's
2-14 total retail load.
2-15 Sec. 35.105. COSTS OF SERVING STATE AGENCY. An electric
2-16 utility, municipally owned utility, or electric cooperative
2-17 corporation may not recover from a residential customer or from any
2-18 other customer class the assigned and allocated costs of serving a
2-19 state agency, institution of higher education, public school
2-20 district, or political subdivision of this state. The rates of a
2-21 municipally owned utility or electric cooperative shall be set in
2-22 accordance with the applicable provisions of this title.
2-23 Sec. 35.106. WHOLESALE CUSTOMERS. This subchapter does not
2-24 prevent the commissioner, acting on behalf of this state, from
2-25 registering as a power marketer.
2-26 Sec. 35.107. ACCESS TO POWER GENERATION. If pipeline
2-27 capacity is available on an existing facility of a gas utility or
2-28 municipally owned utility, a gas utility or a municipally owned
2-29 utility may not refuse to provide gas service to an electric
2-30 utility generating facility, if the purpose of the service is to
2-31 generate power for public retail customers by the state or an
2-32 agency of this state.
2-33 SECTION 3. Section 52.133, Natural Resources Code, is
2-34 amended by amending Subsections (a), (c), and (d) and adding
2-35 Subsection (f) to read as follows:
2-36 (a) Each oil or gas lease covering land leased by the board,
2-37 by a board for lease [other than the Board for Lease of University
2-38 Lands], or by the surface owner of land under which the state owns
2-39 the minerals, commonly referred to as Relinquishment Act land,
2-40 which shall be subject to approval by the commissioner before it is
2-41 effective, shall include a provision granting the board authorized
2-42 to lease the land or the owner of the soil of Relinquishment Act
2-43 land and the commissioner authority to take their royalty in kind,
2-44 and the commissioner and the boards for lease may include any other
2-45 reasonable provisions that are not inconsistent with this section.
2-46 (c) The commissioner, the owner of the soil under Subchapter
2-47 F [of this chapter], or the commissioner, acting on the behalf of
2-48 and at the direction of an owner of the soil under Subchapter F [of
2-49 this chapter], the board, or a board for lease, or at the direction
2-50 of the Board for Lease of University Lands, may negotiate and
2-51 execute contracts or any other instruments or agreements necessary
2-52 to dispose of their portion of the royalty taken in kind, including
2-53 contracts for sale, marketing, transportation, including purchase
2-54 and exchange agreements necessary to transport gas, and storage and
2-55 including insurance contracts or other agreements, to secure or
2-56 guarantee payment.
2-57 (d) The commissioner, the owner of the soil under Subchapter
2-58 F, or the commissioner acting on behalf of and at the direction of
2-59 an owner of the soil under Subchapter F, the board, or a board for
2-60 lease may negotiate and execute contracts or any other instruments
2-61 or agreements necessary to convert that portion of the royalty
2-62 taken in kind into other forms of energy, including electricity.
2-63 (f) For the purposes of this section, royalty taken in kind
2-64 includes oil or gas sold or marketed by the commissioner that has
2-65 been produced on state mineral lands or from the first three miles
2-66 of federal waters adjacent to the state boundaries, also known as
2-67 the 8g zone. [This section does not apply to or have any effect on
2-68 the Board for Lease of University Lands or any lease executed on
2-69 university land.]
3-1 SECTION 4. Section 53.026, Natural Resources Code, is
3-2 amended to read as follows:
3-3 Sec. 53.026. IN KIND ROYALTY. (a) The commissioner or the
3-4 commissioner acting on behalf of and at the direction of the board
3-5 or a board for lease may negotiate and execute a contract or any
3-6 other instrument or agreement necessary to dispose of or enhance
3-7 their portion of the royalty taken in kind, including contracts [a
3-8 contract] for sale, transportation, or storage.
3-9 (b) The commissioner or the commissioner acting on behalf of
3-10 and at the direction of the board or a board for lease may
3-11 negotiate and execute a contract or any other instrument or
3-12 agreement necessary to convert that portion of the royalty taken in
3-13 kind to other forms of energy, including electricity.
3-14 (c) This section shall not be construed to surrender or in
3-15 any way affect the right of the state under an existing or future
3-16 lease to receive monetary royalty from its lessee.
3-17 SECTION 5. Section 53.077, Natural Resources Code, is
3-18 amended to read as follows:
3-19 Sec. 53.077. IN KIND ROYALTY. (a) The commissioner, each
3-20 owner of the soil under this subchapter, or the commissioner acting
3-21 on the behalf of and at the direction of an owner of the soil under
3-22 this subchapter may negotiate and execute a contract or any other
3-23 instrument or agreement necessary to dispose of or enhance their
3-24 portion of the royalty taken in kind, including a contract for
3-25 sale, transportation, or storage.
3-26 (b) The commissioner, each owner of the soil under this
3-27 subchapter, or the commissioner acting on behalf of and at the
3-28 direction of an owner of the soil under this subchapter may
3-29 negotiate and execute a contract or any other instrument or
3-30 agreement necessary to convert that portion of the royalty taken in
3-31 kind to other forms of energy, including electricity.
3-32 (c) This section shall not be construed to surrender or in
3-33 any way affect the right of the state or the owner of the soil
3-34 under an existing or future lease to receive monetary royalty from
3-35 its lessee.
3-36 SECTION 6. To the extent of any conflict between this Act
3-37 and S.B. No. 7, Acts of the 76th Legislature, Regular Session,
3-38 1999, S.B. No. 7 controls, regardless of the date of enactment.
3-39 SECTION 7. This Act takes effect September 1, 1999.
3-40 SECTION 8. The importance of this legislation and the
3-41 crowded condition of the calendars in both houses create an
3-42 emergency and an imperative public necessity that the
3-43 constitutional rule requiring bills to be read on three several
3-44 days in each house be suspended, and this rule is hereby suspended.
3-45 * * * * *