Amend CSHB 1779 by adding the following new SECTIONS and
renumber accordingly:
SECTION _____. Section 39.151, Utilities Code, is amended
by amending Subsections (b) through (e), (g), and (h) and adding
Subsections (d-1) and (g-1) to read as follows:
(b) "Independent organization" means an independent system
operator or other person that is sufficiently independent of any
producer or seller of electricity that its decisions will not be
unduly influenced by any producer or seller. [An entity will be
deemed to be independent if it is governed by a board that has three
representatives from each segment of the electric market, with the
consumer segment being represented by one residential customer, one
commercial customer, and one industrial retail customer.]
(c) The commission shall certify an independent
organization or organizations to perform the functions prescribed
by this section. The commission shall apply the provisions of this
section and Sections 39.1511, 39.1512, and 39.1515 so as to avoid
conflict with a ruling of a federal regulatory body.
(d) The commission shall adopt and enforce rules [An
independent organization certified by the commission for a power
region shall establish and enforce procedures, consistent with this
title and the commission's rules,] relating to the reliability of
the regional electrical network and accounting for the production
and delivery of electricity among generators and all other market
participants, or may delegate to an independent organization
responsibilities for establishing or enforcing such rules. Any
such rules adopted by an independent organization and any
enforcement actions taken by the organization are[. The procedures
shall be] subject to commission oversight and review. An
independent organization certified by the commission is directly
responsible and accountable to the commission. The commission has
complete authority to oversee and investigate the organization's
finances, budget, and operations as necessary to ensure the
organization's accountability and to ensure that the organization
adequately performs the organization's functions and duties. The
organization shall fully cooperate with the commission in the
commission's oversight and investigatory functions. The
commission may take appropriate action against an organization that
does not adequately perform the organization's functions or duties
or does not comply with this section, including decertifying the
organization or assessing an administrative penalty against the
organization. The commission by rule shall adopt procedures
governing decertification of an independent organization,
selecting and certifying a successor organization, and
transferring assets to the successor organization to ensure
continuity of operations in the region. The commission may not
implement, by order or by rule, a requirement that is contrary to an
applicable federal law or rule.
(d-1) The commission may:
(1) require an independent organization to provide
reports and information relating to the independent organization's
performance of the functions prescribed by this section and
relating to the organization's revenues, expenses, and other
financial matters;
(2) prescribe a system of accounts for an independent
organization;
(3) conduct audits of an independent organization's
performance of the functions prescribed by this section or relating
to its revenues, expenses, and other financial matters and may
require an independent organization to conduct such an audit;
(4) inspect an independent organization's facilities,
records, and accounts during reasonable hours and after reasonable
notice to the independent organization;
(5) assess administrative penalties against an
independent organization that violates this title or a rule or
order adopted by the commission and, at the request of the
commission, the attorney general may apply for a court order to
require an independent organization to comply with commission rules
and orders in the manner provided by Chapter 15; and
(6) resolve disputes between an affected person and an
independent organization and adopt procedures for the efficient
resolution of such disputes.
(e) The commission may authorize an independent
organization that is certified under this section to charge a
reasonable and competitively neutral rate to wholesale buyers and
sellers to cover the independent organization's costs. The
commission shall investigate the organization's cost efficiencies,
salaries and benefits, and use of debt financing and may require the
organization to provide any information needed to effectively
evaluate the organization's budget and the reasonableness and
neutrality of a rate or proposed rate or to evaluate the
effectiveness or efficiency of the organization. The commission
shall work with the organization to establish the detail of
information, both current and historical, and the time frames the
commission needs to effectively evaluate a rate or a rate request.
(g) To maintain certification as an independent
organization under this section, an organization's [If it amends
its governance rules to provide that its governing body is composed
as prescribed by this subsection, the existing independent system
operator in ERCOT will meet the criteria provided by Subsection (a)
with respect to ensuring access to the transmission systems for all
buyers and sellers of electricity in the ERCOT region and ensuring
the reliability of the regional electrical network. To comply with
this subsection, the] governing body must be composed of persons
specified by this section and selected in accordance with formal
bylaws or protocols of the organization. The bylaws or protocols
must be approved by the commission and must reflect the input of the
commission. The bylaws must specify the process by which
appropriate stakeholders elect members and, for unaffiliated
members, prescribe professional qualifications for selection as a
member. The bylaws must require the use of a professional search
firm to identify candidates for membership of unaffiliated members.
The process must allow for commission input in identifying
candidates. The governing body must be composed of:
(1) the chairman of the commission as an ex officio
nonvoting member;
(2) the counsellor as an ex officio voting member
representing residential and small commercial consumer interests;
(3) the chief executive officer [director] of the
independent organization [system operator] as an ex officio voting
member;
(4) six market participants elected by their
respective market segments to serve one-year terms, with:
(A) one representing independent generators;
(B) one representing investor-owned utilities;
(C) one representing power marketers;
(D) one representing retail electric providers;
(E) one representing municipally owned
utilities; and
(F) one representing electric cooperatives [four
representatives of the power generation sector as voting members];
(5) one member representing industrial consumer
interests and elected by the industrial consumer market segment to
serve a one-year term [four representatives of the transmission and
distribution sector as voting members];
(6) one member representing large commercial consumer
interests selected in accordance with the bylaws to serve a
one-year term [four representatives of the power sales sector as
voting members]; and
(7) five members unaffiliated with any market segment
and selected by the other members of the governing body to serve
three-year terms [the following people as voting members, appointed
by the commission:
[(A) one representative of residential
customers;
[(B) one representative of commercial customers;
and
[(C) one representative of industrial
customers].
[The four representatives specified in each of Subdivisions
(4), (5), and (6) shall be selected in a manner that ensures
equitable representation for the various sectors of industry
participants.]
(g-1) The presiding officer of the governing body must be
one of the members described by Subsection (g)(7).
(h) The ERCOT independent system operator may meet the
criteria relating to the other functions of an independent
organization provided by Subsection (a) by adopting procedures and
acquiring resources needed to carry out those functions, consistent
with any rules or orders of the commission.
SECTION _____. Subchapter D, Chapter 39, Utilities Code, is
amended by adding Sections 39.1511 and 39.1512, to read as follows:
Sec. 39.1511. PUBLIC MEETINGS OF THE GOVERNING BODY OF AN
INDEPENDENT ORGANIZATION. (a) Meetings of the governing body of
an independent organization certified under Section 39.151 and
meetings of a subcommittee that includes a member of the governing
body must be open to the public. The bylaws of the independent
organization and the rules of the commission may provide for the
governing body or subcommittee to enter into executive session
closed to the public to address sensitive matters such as
confidential personnel information, contracts, lawsuits,
competitively sensitive information, or other information related
to the security of the regional electrical network.
(b) The bylaws of the independent organization and rules of
the commission must ensure that a person interested in the
activities of the independent organization has an opportunity to
obtain at least seven days' advance notice of meetings and the
planned agendas of the meetings and an opportunity to comment on
matters under discussion at the meetings. The bylaws and
commission rules governing meetings of the governing body may
provide for a shorter period of advance notice and for meetings by
teleconference technology for governing body meetings to take
action on urgent matters. The bylaws and rules must require actions
taken on short notice or at teleconference meetings to be ratified
at the governing body's next regular meeting. The notice
requirements may be met by a timely electronic posting on the
Internet.
Sec. 39.1512. DISCLOSURE OF INTEREST IN MATTER BEFORE
INDEPENDENT ORGANIZATION'S GOVERNING BODY; PARTICIPATION IN
DECISION. (a) If a matter comes before the governing body of an
independent organization certified under Section 39.151 and a
member has a direct interest in that matter or is employed by or has
a substantial financial interest in a person who has a direct
interest in that matter, that member shall publicly disclose the
fact of that interest to the governing body at a public meeting of
the body. The member shall refuse himself or herself from the
governing body's deliberations and actions on the matter and may
not vote on the matter or otherwise participate in a governing body
decision on the matter.
(b) A disclosure made under Subsection (a) shall be entered
in the minutes of the meeting at which the disclosure is made.
(c) The fact that a member is recused from a vote or decision
by application of this section does not affect the existence of a
quorum.
SECTION _____. An independent organization certified by the
Public Utility Commission of Texas before September 1, 2005, shall
modify the organization's governing body to comply with Subsection
(g), Section 39.151, Utilities Code, as amended by this Act, not
later than September 1, 2006. On or after September 1, 2006, the
Public Utility Commission of Texas may decertify an independent
organization whose governing body does not comply with Subsection
(g), Section 39.151, Utilities Code, as amended by this Act.