MINUTES JOINT HEARING SENATE COMMITTEE ON BUSINESS & COMMERCE Wednesday, September 29, 2004 10:00 a.m. Capitol Extension, Room E1.036 ***** Pursuant to a notice posted in accordance with Senate Rule 11.18, a public hearing of the Senate Committee on Business & Commerce was held jointly with the House Committee on Regulated Industries and the Electric Utility Restructuring Legislative Oversight Committee on Wednesday, September 29, 2004, in the Capitol Extension, Room E1.036, at Austin, Texas. ***** MEMBERS PRESENT: MEMBERS ABSENT: Senator Troy Fraser, Chairman Senator Kenneth Armbrister Senator Kip Averitt, Vice Chairman Senator John Carona Senator Kim Brimer Senator Craig Estes Senator Eddie Lucio, Jr. Senator Mike Jackson Senator Leticia Van de Putte ***** A joint hearing of the Senate Committee on Business and Commerce, House Committee on Regulated Industries, and the Electric Utility Restructuring Legislative Oversight Committee was held. Chairman Fraser and Chairman King shared presiding duties. At 10:10 a.m. Chairman Fraser called the Senate Committee on Business and Commerce and the Electric Utility Restructuring Legislative Oversight Committee to order. Chairman King called the House Committee on Regulated Industries to order. The following business was transacted: Chairman Fraser welcomed Representative Burt Solomons, Chairman of the Sunset Commission, and everyone to the hearing. The Chairman made opening remarks and advised that the Committee would hear testimony regarding ongoing investigations concerning the Electric Reliability Council of Texas (ERCOT). Upon completion of Chairman Fraser's opening remarks, Chairman Fraser called Mike Greene, Chairman of ERCOT, Tom Schrader, CEO of ERCOT, and Paul Hudson, Chairman of the Public Utility Commission of Texas (PUC), to testify before the Committees. Mr. Greene testified about the investigations currently taking place at ERCOT and advised that there are seven audits in progress at the present time. Mr. Schrader also testified and responded to members' questions. Chairman Hudson testified that documentation will be provided showing a checklist of results of the various audits. Barry Smitherman, Commissioner, PUC and Julie Parsely, Commissioner, PUC, both joined the panel to testify and respond to members' questions. Chairman Fraser moved that the Committees stand at ease at 12:09 p.m. At 12:30 p.m. the Committees reconvened. Maxine Buckles, CFO, ERCOT, joined the panel to respond to members' questions. Following the above invited witnesses' testimony, Chairman Fraser called Paul O'Malley, CEO of TXU Energy. Mr. O'Malley testified on the issue of bad debt and the use of credit information to set electric utility rates. Upon completion of Mr. O'Malley testimony, Chairman Fraser opened up public testimony. Bob King, President of Good Company, was called by Chairman Fraser. Mr. King testified and responded to members' questions. At the conclusion of Mr. King's testimony, Chairman Fraser closed public testimony. There being no further business, at 3:00 p.m. Chairman Fraser moved that the Senate Committee on Business and Commerce and the Electric Utility Restructuring Legislative Oversight Committee stand recessed subject to the call of the Chairman. Without objection, it was so ordered. There being no further business, at 3:00 p.m. Chairman King moved that the House Committee on Regulated Industries stand recessed subject to the call of the Chairman. Without objection, it was so ordered. ________________________________ Troy Fraser, Chairman _________________________________ Tatum Baker, Clerk SENATE COMMITTEE ON BUSINESS & COMMERCE Minutes Wednesday, September 29, 2004 page 3 ElecElectric Reliability Council of Texas, Council of