By Chisum H.B. No. 1692
77R6847 T
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to customer protections applicable to certain electric
1-3 utilities.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Chapter 39, Subchapter I of the Utilities Code, is
1-6 amended by amending Section 39.401 to read as follows:
1-7 Sec. 39.401. APPLICABILITY. This subchapter shall apply to
1-8 investor-owned electric utilities operating solely outside of ERCOT
1-9 having fewer than six synchronous interconnections with voltage
1-10 levels above 69 kilovolts systemwide on the effective date of this
1-11 subchapter. This subchapter recognizes that circumstances exist
1-12 that require that areas served by such utilities be treated as
1-13 competitive development areas in which full retail customer choice
1-14 may develop on a more structured schedule than is anticipated for
1-15 the rest of the state. For competitive development areas, full
1-16 retail customer choice may not begin until the commission makes a
1-17 finding that customer choice will not cause rates to be higher, for
1-18 any customer class, than the rates in effect under regulation. If
1-19 there are any conflicts between this subchapter and any other
1-20 provisions of this chapter, the provisions of this subchapter shall
1-21 control, but shall not be deemed to limit or in any way restrict
1-22 any provision of this title that governs customer protection or
1-23 quality or reliability of service.
1-24 SECTION 2. Chapter 39, Subchapter I of the Utilities Code,
2-1 is amended by amending Section 39.402 to read as follows:
2-2 Sec. 39.402. TRANSITION TO COMPETITION PLAN. All electric
2-3 utilities subject to this subchapter shall file a transition to
2-4 competition plan with the commission not later than December 1,
2-5 2000. This transition to competition plan shall identify how
2-6 utilities subject to this subchapter [shall achieve full customer
2-7 choice] propose to mitigate market power, including specific
2-8 alternatives for constructing additional transmission facilities,
2-9 auctioning rights to generation capacity, divesting generation
2-10 capacity, or any other measure [necessary for the electric utility
2-11 to meet the requirements of Section 39.152(a) and] that is
2-12 consistent with the public interest. This transition to
2-13 competition plan shall also provide guarantees that rates will not
2-14 rise for wholesale or retail customers due to the implementation of
2-15 retail customer choice. The commission shall approve, modify, or
2-16 reject a plan within 180 days after the date of a filing under this
2-17 section. The transition to competition plan may be updated or
2-18 amended [as circumstances change] annually, subject to commission
2-19 approval, until the applicable power region is certified as a
2-20 qualifying power region.
2-21 SECTION 3. Chapter 39, Subchapter I of the Utilities Code,
2-22 is amended by amending Section 39.403 to read as follows:
2-23 Sec. 39.403. UNBUNDLING. Electric utilities subject to this
2-24 subchapter shall unbundle as required by Section 39.051[.];
2-25 provided, however, that for utilities subject to this subchapter,
2-26 unbundling may not occur until the date upon which full retail
2-27 electric competition begins. For purposes of this subchapter, full
3-1 retail competition may not begin until after the applicable power
3-2 region is certified as a qualifying power region.
3-3 SECTION 4. Chapter 39, Subchapter I of the Utilities Code,
3-4 is amended by adding new subsections (d)-(g) to Section 39.407 to
3-5 read as follows:
3-6 (d) An electric utility subject to this subchapter may meet
3-7 the requirements of subsection (a) by selling or transferring its
3-8 generation assets; provided, however, that it may not sell or
3-9 transfer more than 20 percent of its generation assets, as measured
3-10 by installed capacity at the time of the transaction, within any 24
3-11 month period.
3-12 (e) An electric utility subject to this subchapter desiring
3-13 to sell or transfer generation assets must submit each proposed
3-14 transaction to the commission. The commission may not approve the
3-15 sale or transfer of any generation asset unless it finds that it is
3-16 in the public interest and that it will not result in rates, for
3-17 any rate class, that will be higher in a competitive market than
3-18 the rates in effect under regulation.
3-19 (f) In approving the sale or transfer of any generation
3-20 asset by a utility subject to this subchapter, the commission shall
3-21 ensure that sufficient contractual protections exist so that the
3-22 electric utility will be able to meet its rate obligations under
3-23 any prior commission orders and under Sections 39.404, 39.406 and
3-24 39.407(b)-(c) of this Chapter.
3-25 (g) If an electric utility subject to this subchapter sells
3-26 or transfers any assets prior to the implementation of full retail
3-27 electric competition, including generation assets, any resulting
4-1 proceeds from the sale or transfer above the book value of the
4-2 assets shall be shared in the amount of 10% to the electric
4-3 utility's shareholders and 90% to the electric utility's retail
4-4 customers. Proceeds shall be returned to customers through the
4-5 electric utility's power cost recovery factor.
4-6 SECTION 5. Chapter 39, Subchapter I of the Utilities Code,
4-7 is amended by adding Section 39.409 to read as follows:
4-8 Sec. 39.409. ELECTRIC UTILITY DEFINITION. (a) For purposes
4-9 of this subchapter, the term electric utility includes the
4-10 affiliated power generation company and retail electric provider.
4-11 (b) An electric utility subject to this subchapter is
4-12 subject to all applicable commission authority, including but not
4-13 limited to Chapters 32, 36 and 37 of this Title, and the commission
4-14 shall ensure that all aspects of the provision of electric service
4-15 are provided under traditional cost of service regulation
4-16 principles until the region is opened to full retail competition.
4-17 SECTION 6. This Act takes effect immediately.