By Danburg                                            H.B. No. 2505
         77R5834 CBH-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the "price to beat" for residential and small
 1-3     commercial electricity customers.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1. Sections 39.202(a), (e), (f), and (n), Utilities
 1-6     Code, are amended to read as follows:
 1-7           (a)  An [From January 1, 2002, until January 1, 2007, an]
 1-8     affiliated retail electric provider shall make available to
 1-9     residential and small commercial customers of its affiliated
1-10     transmission and distribution utility rates that, on a bundled
1-11     basis, are six percent less than the affiliated electric utility's
1-12     corresponding average residential and small commercial rates, on a
1-13     bundled basis, that were in effect on January 1, 1999, adjusted to
1-14     reflect the fuel factor determined as provided by Subsection (b)
1-15     and adjusted for any base rate reduction as stipulated to by an
1-16     electric utility in a proceeding for which a final order had not
1-17     been issued by January 1, 1999.  These rates on a bundled basis
1-18     shall be known as the "price to beat" for residential and small
1-19     commercial customers, except that the "price to beat" for a utility
1-20     is the rate in effect as a result of a settlement approved by the
1-21     commission after January 1, 1999, if the commission determines that
1-22     base rates for that utility have been reduced by more than 12
1-23     percent as a result of a final order issued by the commission after
1-24     October 1, 1998.  The affiliated retail electric provider shall
 2-1     make those rates available to residential and small commercial
 2-2     providers until the later of January 1, 2007, or the date the
 2-3     commission determines that:
 2-4                 (1)  for service to residential customers:
 2-5                       (A)  40 percent or more of the electric power
 2-6     consumed by residential customers within the affiliated
 2-7     transmission and distribution utility's certificated service area
 2-8     before the onset of customer choice is committed to be served by
 2-9     nonaffiliated retail electric providers; and
2-10                       (B)  there are viable and effective competitive
2-11     alternatives for the residential customers who have not chosen to
2-12     be served by a nonaffiliated retail electric provider; or
2-13                 (2)  for service to small commercial customers:
2-14                       (A)  40 percent or more of the electric power
2-15     consumed by small commercial customers within the affiliated
2-16     transmission and distribution utility's certificated service area
2-17     before the onset of customer choice is committed to be served by
2-18     nonaffiliated retail electric providers; and
2-19                       (B)  there are viable and effective competitive
2-20     alternatives for the small commercial customers who have not chosen
2-21     to be served by a nonaffiliated retail electric provider.
2-22           (e)  The affiliated retail electric provider may not charge
2-23     rates for residential or small commercial customers that are lower
2-24     than [different from] the price to beat until the earlier of 36
2-25     months after the date customer choice is introduced or:
2-26                 (1)  for service to residential customers, the date the
2-27     commission determines that 40 percent or more of the electric power
 3-1     consumed by residential customers within the affiliated
 3-2     transmission and distribution utility's certificated service area
 3-3     before the onset of customer choice is committed to be served by
 3-4     nonaffiliated retail electric providers; or
 3-5                 (2)  for service to small commercial customers, the
 3-6     date the commission determines that 40 percent or more of the
 3-7     electric power consumed by small commercial customers within the
 3-8     affiliated transmission and distribution utility's certificated
 3-9     service area before the onset of customer choice is committed to be
3-10     served by nonaffiliated retail electric providers.
3-11           (f)  Notwithstanding Subsection (e), the affiliated retail
3-12     electric provider may charge rates that are lower than [different
3-13     from] the price to beat for service to aggregated loads of
3-14     nonresidential customers having an aggregated peak demand greater
3-15     than 1,000 kilowatts, provided that all affected customers are:
3-16                 (1)  commonly owned; or
3-17                 (2)  franchisees of the same franchisor.
3-18           (n)  Notwithstanding Subsection (a), in a power region
3-19     outside of ERCOT, if customer choice is introduced before the
3-20     requirements of Section 39.152(a) are met, an affiliated retail
3-21     electric provider shall continue to offer the price to beat to
3-22     residential and small commercial customers, unless the price is
3-23     changed by the commission in accordance with this chapter, until
3-24     the later of:
3-25                 (1)  60 months after the date customer choice is
3-26     introduced;
3-27                 (2)  the date [or] the requirements of Section
 4-1     39.152(a) are met; or
 4-2                 (3)  the date the commission determines that:
 4-3                       (A)  for service to residential customers:
 4-4                             (i)  40 percent or more of the electric
 4-5     power consumed by residential customers within the affiliated
 4-6     transmission and distribution utility's certificated service area
 4-7     before the onset of customer choice is committed to be served by
 4-8     nonaffiliated retail electric providers; and
 4-9                             (ii)  there are viable and effective
4-10     competitive alternatives for the residential customers who have not
4-11     chosen to be served by a nonaffiliated retail electric provider; or
4-12                       (B)  for service to small commercial customers:
4-13                             (i)  40 percent or more of the electric
4-14     power consumed by small commercial customers within the affiliated
4-15     transmission and distribution utility's certificated service area
4-16     before the onset of customer choice is committed to be served by
4-17     nonaffiliated retail electric providers; and
4-18                             (ii)  there are viable and effective
4-19     competitive alternatives for the small commercial customers who
4-20     have not chosen to be served by a nonaffiliated retail electric
4-21     provider.
4-22           SECTION 2. This Act takes effect September 1, 2001.