79R7214 CBH-F

By:  Cook of Colorado                                             H.B. No. 2244



A BILL TO BE ENTITLED

AN ACT

relating to the payment and recovery of municipal charges and costs 
by providers of electricity.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 33.008, Utilities Code, is amended by 
amending Subsections (b) and (c) and adding Subsection (g-1) to 
read as follows:
	(b)  If a municipality collected a charge or fee for a 
franchise to use a municipal street, alley, or public way from an 
electric utility, a municipally owned utility, or an electric 
cooperative before the end of the freeze period, the municipality, 
after the end of the freeze period or after implementation of 
customer choice by the municipally owned utility or electric 
cooperative, as appropriate, is entitled to collect from each 
electric utility, transmission and distribution utility, 
municipally owned utility, or electric cooperative that uses the 
municipality's streets, alleys, or public ways to provide 
distribution service a charge based on each kilowatt hour of 
electricity delivered by the utility to each retail customer whose 
consuming facility's point of delivery is located within the 
municipality's boundaries.  The charge imposed shall be equal to 
the total electric franchise fee revenue due the municipality from 
electric utilities, municipally owned utilities, or electric 
cooperatives, as appropriate, for calendar year 1998 divided by the 
total kilowatt hours delivered during 1998 by the applicable 
electric utility, municipally owned utility, or electric 
cooperative to retail customers whose consuming facilities' points 
of delivery were located within the municipality's boundaries.  The 
compensation a municipality may collect from each electric utility, 
transmission and distribution utility, municipally owned utility, 
or electric cooperative providing distribution service shall be 
equal to the charge per kilowatt hour determined for 1998 
multiplied times the number of kilowatt hours delivered within the 
municipality's boundaries.  On the termination, expiration, or 
extension of a franchise agreement existing on September 1, 2005, a 
municipality may change the per kilowatt hour charge otherwise 
prescribed by this subsection.  The charge may not exceed $.0045 per 
kilowatt hour.
	(c)  The municipal franchise charges authorized by this 
section shall be considered a reasonable and necessary operating 
expense of each electric utility, transmission and distribution 
utility, municipally owned utility, or electric cooperative that is 
subject to a charge under this section.  The charge shall be 
included in the nonbypassable delivery charges that a customer's 
retail electric provider must pay under Section 39.107 to the 
utility serving the customer.  Notwithstanding any other provision 
of this title, the regulatory authority shall allow an electric 
utility or transmission and distribution utility to adjust the 
utility's rates or nonbypassable charges to permit the timely 
recovery of any change in municipal franchise fees.  The utility 
shall recover the change in municipal franchise fees from the 
customers residing in the municipality or, if applicable, from the 
retail electric providers serving those customers.
	(g-1)  This section may not be construed to interfere with or 
abrogate the rights or obligations of any party to a franchise 
agreement in effect on September 1, 2005.
	SECTION 2.  Section 36.201, Utilities Code, is amended to 
read as follows:   
	Sec. 36.201.  AUTOMATIC ADJUSTMENT FOR CHANGES IN COSTS. 
Except as permitted by Sections 33.008 and [Section] 36.204, the 
commission may not establish a rate or tariff that authorizes an 
electric utility to automatically adjust and pass through to the 
utility's customers a change in the utility's fuel or other costs.
	SECTION 3.  Section 39.202, Utilities Code, is amended by 
adding Subsection (q) to read as follows:
	(q)  The commission shall adjust the price to beat as 
necessary to reflect any change in the nonbypassable charges of a 
transmission and distribution utility made under Section 33.008.
	SECTION 4.  Sections 33.008(f) and 33.023(b), Utilities 
Code, are repealed.  
	SECTION 5.  This Act applies only to franchise fees imposed 
on or after the effective date of this Act.  Franchise fees imposed 
before the effective date of this Act are governed by the law in 
effect on the date the fees are imposed, and that law is continued 
in effect for that purpose.
	SECTION 6.  This Act takes effect September 1, 2005.