By Turner of Harris, Longoria, Bailey H.B. No. 2107
77R7116 CBH-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the recovery of stranded costs and the crediting of
1-3 negative stranded costs.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 39.201(d), Utilities Code, is amended to
1-6 read as follows:
1-7 (d) In accordance with a schedule and procedures it
1-8 establishes, the commission shall hold a hearing and approve or
1-9 modify and make effective as of January 1, 2002, the transmission
1-10 and distribution utility's proposed tariffs for transmission and
1-11 distribution services, the system benefit fund fee, and the
1-12 expected competition transition charge as determined under
1-13 Subsections (g) and (h) and as implemented under Subsections
1-14 (i)-(l), if any. If at any time before January 1, 2002, the
1-15 commission determines that a utility that is subject to Section
1-16 39.254 does not have positive stranded costs based on a computation
1-17 under Subsection (h), the commission shall order the utility to
1-18 discontinue the mitigation tools that are allowed by this chapter
1-19 and to reverse any prior mitigation to the extent required to
1-20 eliminate any estimated excess of the market value over the net
1-21 book value of generation assets. The commission shall reflect the
1-22 reversal of previous mitigation in the transmission and
1-23 distribution rates. In addition, the commission shall reduce the
1-24 affiliated retail electric provider's price to beat as necessary to
2-1 flow through any reductions to the transmission and distribution
2-2 rates associated with the reversal of the previous mitigation.
2-3 SECTION 2. Section 39.251, Utilities Code, is amended by
2-4 adding Subdivision (8) to read as follows:
2-5 (8) "Negative stranded costs" means the excess of the
2-6 market value of generation assets over the net book value of those
2-7 assets.
2-8 SECTION 3. The heading to Section 39.255, Utilities Code, is
2-9 amended to read as follows:
2-10 Sec. 39.255. [USE OF REVENUES FOR] UTILITIES WITH NO
2-11 STRANDED COSTS.
2-12 SECTION 4. Section 39.255, Utilities Code, is amended by
2-13 adding Subsection (d) to read as follows:
2-14 (d) During the freeze period, the commission may require an
2-15 electric utility that has negative stranded costs under Section
2-16 39.254, together with the utility's affiliated retail electric
2-17 provider and affiliated transmission and distribution utility, to
2-18 credit the negative stranded costs to customers. The commission
2-19 shall prescribe the manner in which the credit of negative stranded
2-20 costs is made. The electric utility, together with its affiliated
2-21 electric retail provider, affiliated power generation company, and
2-22 affiliated transmission and distribution utility, shall file to
2-23 finalize stranded costs and reconcile those costs as required by
2-24 Section 39.262.
2-25 SECTION 5. Sections 39.262(a) and (c), Utilities Code, are
2-26 amended to read as follows:
2-27 (a) An electric utility, together with its affiliated retail
3-1 electric provider and its affiliated transmission and distribution
3-2 utility, may not be permitted to overrecover stranded costs through
3-3 the procedures established by this section or through the
3-4 application of the measures provided by the other sections of this
3-5 chapter. An electric utility, together with its affiliated retail
3-6 electric provider and its affiliated transmission and distribution
3-7 utility, shall credit negative stranded costs to customers in
3-8 accordance with this section.
3-9 (c) After January 10, 2004, at a schedule and under
3-10 procedures to be determined by the commission, each transmission
3-11 and distribution utility, its affiliated retail electric provider,
3-12 and its affiliated power generation company shall jointly file to
3-13 finalize stranded costs. If the commission determines under
3-14 Subsections (h) and (i) that the transmission utility, its
3-15 affiliated retail electric provider, and its affiliated power
3-16 generation company have stranded costs, those stranded costs shall
3-17 be reconciled [under Subsections (h) and (i) and reconcile those
3-18 costs] with the estimated stranded costs used to develop the
3-19 competition transition charge in the proceeding held under Section
3-20 39.201. Any resulting difference shall be applied to the
3-21 nonbypassable delivery rates of the transmission and distribution
3-22 utility, except that at the utility's option, any or all of the
3-23 remaining stranded costs may be securitized under Subchapter G. If
3-24 the commission determines under Subsections (h) and (i) that the
3-25 transmission utility, its affiliated retail electric provider, and
3-26 its affiliated power generation company have negative stranded
3-27 costs, those negative stranded costs may be used to improve or
4-1 expand transmission or distribution facilities or on capital
4-2 expenditures to improve air quality, as included in a plan
4-3 submitted to and approved by the commission. An expenditure
4-4 included in a plan approved by the commission for those purposes
4-5 may not be recovered at any time from the ratepayers. Any amounts
4-6 that are not included in a plan approved by the commission for
4-7 those purposes shall be applied to reduce the transmission and
4-8 distribution utility's nonbypassable delivery rates. The
4-9 commission shall adjust the affiliated retail electric provider's
4-10 price to beat as necessary to flow through any reductions to the
4-11 transmission and distribution rates associated with the reversal of
4-12 negative stranded costs.
4-13 SECTION 6. This Act takes effect immediately if it receives
4-14 a vote of two-thirds of all the members elected to each house, as
4-15 provided by Section 39, Article III, Texas Constitution. If this
4-16 Act does not receive the vote necessary for immediate effect, this
4-17 Act takes effect September 1, 2001.