79R6847 CBH-F

By:  Ritter                                                       H.B. No. 1567

relating to delay in the deregulation of certain electric utilities outside of ERCOT. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. Chapter 39, Utilities Code, is amended by adding Subchapter J to read as follows:
Sec. 39.451. APPLICABILITY. (a) This subchapter applies only to an investor-owned electric utility that is operating solely outside of ERCOT in areas of this state that were included in the Southeastern Electric Reliability Council on January 1, 2005. (b) The legislature finds that circumstances exist that require that areas served by an electric utility described by Subsection (a) be treated as competitive development areas in which it is not in the public interest to transition to full customer choice at this time. Sec. 39.452. REGULATION OF UTILITY AND TRANSITION TO COMPETITION. (a) Until the date on which an electric utility subject to this subchapter is authorized by the commission to implement customer choice under Section 39.453, the rates of the electric utility shall be regulated under traditional cost-of-service regulation and the electric utility is subject to all applicable regulatory authority prescribed by this subtitle and Subtitle A, including Chapters 14, 32, 33, 36, and 37. (b) A commission order issued before the effective date of this section requiring the electric utility to comply with a provision of this chapter is void. (c) Until the date on which an electric utility subject to this subchapter implements customer choice: (1) the provisions of this chapter do not apply to that electric utility, other than this subchapter, Sections 39.904 and 39.905, and the provisions relating to the duty to obtain a permit from the Texas Commission on Environmental Quality for an electric generating facility and to reduce emissions from an electric generating facility; and (2) the electric utility is not subject to a rate freeze and may file for rate changes under Chapter 36, for approval of one or more of the rate rider mechanisms authorized by Section 39.454, or for both rate changes and approval of rate rider mechanisms. (d) An electric utility subject to this subchapter may proceed with and complete jurisdictional separation. (e) An electric utility subject to this subchapter may file a transition to competition plan with the commission. After the applicable power region is certified in accordance with Section 39.453, the commission may order the electric utility to file a transition to competition plan. The transition to competition plan must identify how the electric utility intends to mitigate market power, if necessary, and to achieve full customer choice. The electric utility must also include in the transition to competition plan a provision to reinstate a customer choice pilot project and to establish a price to beat for residential customers and commercial customers having a peak load of 1,000 kilowatts or less. (f) The commission shall approve or reject a plan filed under Subsection (e) not later than the 180th day after the date the plan is filed unless a hearing is requested by any party to the proceeding. If a hearing is requested, the 180-day deadline is extended one day for each day of the hearing. The transition to competition plan may be updated or amended annually, subject to commission approval, until the applicable power region is certified as a qualifying power region under Section 39.152. Sec. 39.453. CUSTOMER CHOICE AND RELEVANT MARKET AND RELATED MATTERS. (a) The commission may not authorize customer choice until the commission certifies the applicable power region as a qualifying power region under Section 39.152(a). Sections 39.152(b)-(d) also apply to the electric utility and commission in determining whether to certify the applicable power region. (b) The commission shall certify that the requirement of Section 39.152(a)(3) is met for an electric utility subject to this subchapter only if the commission finds that the total capacity owned and controlled by the electric utility and the utility's affiliates does not exceed 20 percent of the total installed generation capacity within the power region of that utility. Sec. 39.454. RECOUPMENT OF TRANSITION TO COMPETITION COSTS. An electric utility subject to this subchapter is entitled to recover, as provided by this section, all reasonable and necessary expenditures made or incurred before the effective date of this section to comply with this chapter. The electric utility may file with the commission an application for recovery that gives details of the amounts spent or incurred. After notice and hearing, the commission shall review the amounts and, if the amounts are found to be reasonable and necessary, approve a transition to competition retail rate rider mechanism for the recovery of the approved transition to competition costs. A rate proceeding under Chapter 36 is not required to implement the rider. A rate rider implemented to recover approved transition to competition costs shall expire not later than December 31, 2015. 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, 2005.