HBA-KDB, CBW H.B. 918 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 918 By: Turner, Sylvester State Affairs 2/27/2001 Introduced BACKGROUND AND PURPOSE In the 76th session, the legislature set the groundwork for the state of Texas to enter a competitive electric market. However, certain unexpected events have occurred in the electric market, and consumers may need assurances that the state will proceed into a deregulated electric market with the proper safeguards and oversight. House Bill 918 requires the Public Utility Commission of Texas (PUC) to determine if the electric market has fair competition and is providing reliable service, and authorizes the PUC to intervene to protect against market failure. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS House Bill 918 amends the Utilities Code to require the Public Utility Commission of Texas (PUC) to determine, by December 1, 2001, if each power region and each transmission and distribution utility's certificated service area is able to offer, on January 1, 2002, fair competition and reliable service to all retail customer classes in the region or certificated service area. The bill sets forth criteria for the PUC to use when making this determination. If the PUC determines that a power region or certificated service area is unable to sustain fair competition and reliable service or that retail prices are at a level that violates public interest, the bill specifies actions that the PUC may take, after notice and a hearing. The bill authorizes the PUC to order any registered or certified entity to produce documents or information relevant to an investigation of market performance. Moreover, the PUC is required to make the information available to the office of Public Utility Counsel and PUC staff. The bill prohibits an affiliated retail electric provider from recovering from a customer on a retroactive basis a loss resulting from the provision of electricity at the price to beat. The bill requires a certified independent organization to maintain a task force to monitor the performance of generation markets. The bill sets forth the functions and entitlements of the task force, and requires the independent organization to ensure that the findings of the task force are not influenced by a seller of generation services. EFFECTIVE DATE On passage, or if the Act does not receive the necessary vote, the Act takes effect September 1, 2001.