LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
May 24, 2001
TO: Honorable James E. "Pete" Laney, Speaker of the House,
House of Representatives
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB1692 by Chisum (Relating to customer protections
applicable to certain electric utilities.), As Passed 2nd
House
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB1692, As Passed 2nd House: negative impact of $(11,457,608) *
* through the biennium ending August 31, 2003. *
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General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $(5,672,083) *
* 2003 (5,785,525) *
* 2004 (5,901,236) *
* 2005 (6,019,261) *
* 2006 (6,139,646) *
****************************************************
All Funds, Five-Year Impact:
*****************************************************
* Fiscal Year Probable Revenue Gain/(Loss) from *
* General Revenue Fund (System *
* Benefit Fund) *
* 0001 *
* 2002 $(5,672,083) *
* 2003 (5,785,525) *
* 2004 (5,901,236) *
* 2005 (6,019,261) *
* 2006 (6,139,646) *
*****************************************************
Fiscal Analysis
The bill would remove investor-owned utilities operating outside of the
Electric Reliability Council of Texas (ERCOT) from retail competition
until the later of January 1, 2007 or until the utility is authorized by
the Public Utility Commission (PUC) to implement customer choice. During
the period such utilities are not participating in retail competition,
the utility shall be regulated under traditional cost of service
regulation by the PUC.
The PUC may certify a utility to enter customer choice only if the PUC
finds the utility has sufficient transmission facilities to provide
customers access to power and capacity from non-affiliated suppliers at a
level that is comparable to the access to power and energy from capacity
controlled by non-affiliated suppliers within the ERCOT region.
The bill would take effect immediately upon a two-thirds vote of each
house of the Legislature, or on September 1, 2001.
Methodology
The bill would remove non-ERCOT investor-owned utilities from competition
until January 1, 2007, and therefore remove those utilities from
participation and contribution to the system benefit fund. The reduction
in revenue to the system benefit fund is calculated based upon the
historic usage of the non-ERCOT region and the utilities that would be
affected. Subsequent years' reductions are calculated using a two percent
electricity usage growth factor.
The system benefit fund has been estimated to realize revenues of
approximately $150 million in fiscal year 2002 and $166 million in
fiscal year 2003. This bill would reduce those amounts by approximately
$5 million each year.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 473 Public Utility Commission of Texas
LBB Staff: JK, SD, JO, KM