78R7402 CBH-F

By:  Turner                                                       H.B. No. 2335



A BILL TO BE ENTITLED

AN ACT

relating to a limitation on an electric utility's installed 
generation capacity.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 39.153, Utilities Code, is amended by 
amending Subsections (b) and (e) and adding Subsection (a-1) to 
read as follows:
	(a-1) Not later than September 30, 2004, each electric 
utility subject to this section shall sell at auction additional 
entitlements to the utility's Texas jurisdictional installed 
generation capacity so that no utility will control more than:
		(1)  20 percent of the installed generation capacity in 
ERCOT; or    
		(2)  50 percent of the installed generation capacity in 
an ERCOT zonal boundary created by ERCOT during the annual 
commercially significant constraints demonstration.
	(b)  The obligation to auction the entitlements shall 
continue until the [earlier of 60 months after the date customer 
choice is introduced or the] date the commission determines that 40 
percent or more of the electric power consumed by residential and 
small commercial customers within the affiliated transmission and 
distribution utility's certificated service area before the onset 
of customer choice is provided by nonaffiliated retail electric 
providers.
	(e)  The commission shall adopt rules by December 31, 2000, 
that define the scope of the capacity entitlements to be auctioned.  
The commission shall amend the rules not later than December 31, 
2003, as necessary to provide for the auction of additional 
entitlements under Subsection (a-1).  Entitlements may be auctioned 
in blocks of less than 15 percent.  The rules shall state the 
minimum amount of capacity that can be sold at auction as an 
entitlement.  At a minimum, the rules shall provide that the 
entitlements:
		(1)  may be sold and purchased in periods of not less 
than one month nor more than four years;
		(2)  may be resold to any lawful purchaser, except for a 
retail electric provider affiliated with the electric utility that 
originally auctioned the entitlement;
		(3)  include no possessory interest in the unit from 
which the power is produced;
		(4)  include no obligations of a possessory owner of an 
interest in the unit from which the power is produced; and
		(5)  give the purchaser the right to designate the 
dispatch of the entitlement, subject to planned outages, outages 
beyond the control of the utility operating the unit, and other 
considerations subject to the oversight of the applicable 
independent organization.
	SECTION 2.  This Act takes effect immediately if it receives 
a vote of two-thirds of all the members elected to each house, as 
provided by Section 39, Article III, Texas Constitution.  If this 
Act does not receive the vote necessary for immediate effect, this 
Act takes effect September 1, 2003.