By: Ritter H.B. No. 1567
A BILL TO BE ENTITLED
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:
SUBCHAPTER J. DELAY OF COMPETITION IN CERTAIN NON-ERCOT AREAS
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
(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.