By Turner of Harris H.B. No. 918
77R3598 CBH-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to ensuring reliable and affordable electricity.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 39.001(b), Utilities Code, is amended to
1-5 read as follows:
1-6 (b) The legislature finds that it is in the public interest
1-7 to:
1-8 (1) implement on January 1, 2002, a competitive retail
1-9 electric market that allows each retail customer to choose the
1-10 customer's provider of electricity and that encourages full and
1-11 fair competition among all providers of electricity;
1-12 (2) allow utilities with uneconomic generation-related
1-13 assets and purchased power contracts to recover the reasonable
1-14 excess costs over market of those assets and purchased power
1-15 contracts;
1-16 (3) educate utility customers about anticipated
1-17 changes in the provision of retail electric service to ensure that
1-18 the benefits of the competitive market reach all customers; [and]
1-19 (4) protect consumers by recognizing that electricity
1-20 is essential to health and safety and to the economy; and
1-21 (5) protect the competitive process in a manner that
1-22 ensures the confidentiality of competitively sensitive information
1-23 during the transition to a competitive market and after the
1-24 commencement of customer choice.
2-1 SECTION 2. Section 39.103, Utilities Code, is amended to read
2-2 as follows:
2-3 Sec. 39.103. COMMISSION AUTHORITY TO DELAY COMPETITION AND
2-4 SET NEW RATES. (a) Not later than December 1, 2001, the
2-5 commission shall determine whether each power region and each
2-6 transmission and distribution utility's certificated service area
2-7 is able to offer, on January 1, 2002, fair competition and reliable
2-8 service to all retail customer classes in the region or
2-9 certificated service area. In making this determination, the
2-10 commission shall consider:
2-11 (1) the difference between the price to beat estimated
2-12 or established under Section 39.202 and the sum of:
2-13 (A) nonbypassable charges established under
2-14 Section 39.201;
2-15 (B) expected wholesale prices of generation
2-16 applicable to retail customer classes; and
2-17 (C) other costs required for retail electric
2-18 providers to participate in the electricity markets;
2-19 (2) the extent to which workable competition for
2-20 generation services is expected to produce reliable electric
2-21 service at reasonable prices, after considering factors such as how
2-22 expected available generation resources will be affected by demand
2-23 and transmission constraints;
2-24 (3) whether the independent organization certified by
2-25 the commission for the power region under Section 39.151 complies
2-26 with all applicable provisions of this chapter and is capable of
2-27 fulfilling the organization's obligations in an efficient and
3-1 effective manner;
3-2 (4) whether sufficient oversight is available to
3-3 detect and remedy market design flaws and market power abuses;
3-4 (5) the number of retail electric providers serving
3-5 each customer class;
3-6 (6) the results of the customer choice pilot projects
3-7 conducted under Section 39.104; and
3-8 (7) any other factors the commission considers
3-9 relevant.
3-10 (b) If the commission determines under Subsection (a)
3-11 [Section 39.104] that a power region or a transmission and
3-12 distribution utility's certificated service area is unable to offer
3-13 fair competition and reliable service to all retail customer
3-14 classes on January 1, 2002, the commission shall delay customer
3-15 choice for the power region or certificated service area and may on
3-16 or after January 1, 2002, establish new rates for all electric
3-17 utilities in the power region or certificated service area as
3-18 provided by Chapter 36.
3-19 SECTION 3. Subchapter C, Chapter 39, Utilities Code, is
3-20 amended by adding Section 39.110 to read as follows:
3-21 Sec. 39.110. PROTECTION AGAINST MARKET FAILURE. (a)
3-22 Notwithstanding any other provision of this code, if the
3-23 commission, on its own motion or on complaint, determines that a
3-24 power region or a transmission and distribution utility's
3-25 certificated service area is unable to sustain fair competition and
3-26 reliable service to all retail customer classes or that retail
3-27 prices are at a level that violates the public interest in
4-1 protecting the health, safety, and economic well-being of consumers
4-2 in this state, the commission may take any or all of the following
4-3 actions in the region or certificated service area:
4-4 (1) extend the price to beat beyond 2005;
4-5 (2) establish new retail rates under Chapter 36;
4-6 (3) review retail electric provider power contracts
4-7 and the transactions between an affiliated retail electric provider
4-8 and the provider's electric and gas affiliates in this state;
4-9 (4) impose just and reasonable limits on wholesale
4-10 prices for generation within all or a portion of ERCOT;
4-11 (5) issue emergency orders to enjoin market
4-12 participants from exploiting market design flaws or engaging in
4-13 anticompetitive practices;
4-14 (6) impose interim or temporary reductions in
4-15 transmission or distribution charges;
4-16 (7) allow a transmission and distribution utility to
4-17 acquire or procure sufficient generation resources to make
4-18 ancillary services available at a just and reasonable rate and on a
4-19 nondiscriminatory basis to retail electric providers;
4-20 (8) petition the Federal Energy Regulatory Commission
4-21 to set wholesale caps on non-ERCOT generators; or
4-22 (9) suspend or reverse the collection of competition
4-23 transition charges and other stranded cost recovery charges imposed
4-24 under Subchapter F, other than a charge collected under a financing
4-25 order issued under Subchapter G.
4-26 (b) The commission may take an action under Subsection (a)
4-27 only after notice and a hearing.
5-1 (c) The commission may order any entity registered or
5-2 certified under this chapter to produce documents or information,
5-3 including power contracts and pricing information, relevant to an
5-4 investigation of market performance. This subsection does not
5-5 affect the authority of the commission to obtain documents or
5-6 information under other provisions of this title.
5-7 (d) The commission shall make information provided under
5-8 Subsection (c) available to the office and commission staff.
5-9 (e) An affiliated retail electric provider may not, under
5-10 any circumstances, recover from a customer on a retroactive basis a
5-11 loss that results from provision of electricity at the price to
5-12 beat as required by Section 39.202.
5-13 SECTION 4. Subchapter D, Chapter 39, Utilities Code, is
5-14 amended by adding Section 39.1515 to read as follows:
5-15 Sec. 39.1515. TASK FORCE ON PERFORMANCE OF GENERATION
5-16 MARKETS. (a) An independent organization certified under Section
5-17 39.151 shall maintain a task force to monitor the performance of
5-18 generation markets. The task force is entitled to access to all
5-19 relevant information that is in the possession of the independent
5-20 organization. The independent organization shall ensure that the
5-21 findings of the task force are not influenced by a seller of
5-22 generation services.
5-23 (b) The task force shall report to commission staff and to
5-24 the office on a monthly basis any aberrant market behavior or
5-25 evidence of market manipulation.
5-26 (c) The task force may recommend to the commission that the
5-27 commission take action intended to remedy market design flaws or to
6-1 prevent market participants from engaging in anticompetitive
6-2 behavior.
6-3 SECTION 5. This Act takes effect immediately if it receives
6-4 a vote of two-thirds of all the members elected to each house, as
6-5 provided by Section 39, Article III, Texas Constitution. If this
6-6 Act does not receive the vote necessary for immediate effect, this
6-7 Act takes effect September 1, 2001.