LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 76th Regular Session
  
                              April 1, 1999
  
  
          TO:  Honorable J.E. "Buster" Brown, Chair, Senate Committee on
               Natural Resources
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  SB 1152 by Bivins (relating to the authority of the state
               to obtain electricity and to sell or convey that
               electricity), Committee Report 1st House, Substituted
  
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*  No significant fiscal implication to the State is anticipated.        *
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Fiscal Analysis

The bill would allow the General Land Office (GLO) to sell or convey
power directly to a public retail customer, such as a state agency,
institution of higher education, public school district, or unit of local
government.  The bill would provide the state with access to all
transmission and distribution system utilities serving public retail
customers.  These electric utilities would be required to provide
services to the state at the lowest applicable rate charged for a similar
service to other customers.

Methodology

Authorizing the GLO to convert in-kind natural gas into electricity to be
sold to public entities could result in some savings for electricity
costs for state entities.  There could also be some additional revenue
to the state from the sale of electricity to the Permanent School Fund
and the Permanent University Fund.
  
Technology Impact
  
None.
  
  
Local Government Impact
  
Public retail customers of a municipally owned electric utility would not
be eligible for service from the GLO.  As a result, the bill would not
result in lost revenues to municipally owned utilities.  Likewise, public
retail customers within the municipally owned utility's service area
would not benefit from the bill either.  Additionally, to the extent that
capacity is available on a gas pipeline, a municipally owned utility
would have to make the capacity available.  This could result in
additional revenues for a municipally owned utility.

No individual utility would be expected to experience a revenue decline
greater than 2.5 percent, and some portion of such losses could be
offset by a decrease in costs associated with providing service to fewer
customers.
  
  
Source Agencies:   
LBB Staff:         JK, DE, TT