By: Martinez Fischer H.B. No. 3328
A BILL TO BE ENTITLED
AN ACT
relating to oversight and accountability of independent system
operators.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 39.151, Utilities Code, is amended by
amending subsections (b), (c), (d) and (e), and adding Subsections
(d-1) and (e-1), to read as follows:
(b) "Independent organization" means an [independent]
electric 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.] The commission shall make a determination by
December 1 of each even numbered year on the sufficiency of the
operator's independence.
(c) The commission shall certify an independent
organization or organizations to perform the functions prescribed
by this section. The commission may decertify an independent
organization or organizations in accordance with this section.
(d) 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. The procedures shall be subject to
commission oversight and review. An independent organization
certified by the commission is directly accountable to the
commission. The commission shall have authority to oversee and
investigate the organization's finances, budget, operations,
rates, revenues and expenditures as necessary to ensure the
organization's accountability and to ensure that the organization
adequately performs the organization's functions and duties in the
public interest. The organization shall fully cooperate with the
commission in the commission's oversight and investigatory
functions. The commission may request assistance from the
comptroller of public accounts in exercising the oversight and
investigatory functions required by this subsection. The
commission may decertify an organization that does not adequately
perform the organization's functions or duties or does not comply
with this section.
(d-1) The organization and the commission shall make all
information regarding the organization's finances, budget,
operations, rates, revenues and expenditures available to the
comptroller immediately upon the comptroller's request. If the
comptroller should make recommendations designed to improve the
organization's structure, finances or accountability to electric
consumers served by the organization, the organization and the
commission shall either implement the recommendations immediately
or shall advise the comptroller in writing within 30 days of receipt
of the recommendation of the reasons such implementation is not
feasible or not in the public interest. This section expires
September 1, 2007.
(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 review the organization's financial and
operational records, including budgets, accounts, debt
instruments, leases, contracts, employee and contractor records
and expenditures, and may require the organization to provide any
information necessary to effectively evaluate the organization's
budget and the reasonableness and neutrality of a rate or proposed
rate. The independent organization must file a petition or
application with the commission seeking to establish or change a
rate under this subsection. Public notice of such rate or rate
adjustment shall be published in the Texas Register and interested
parties shall have fifteen (15) days from the date of publication to
intervene and request a hearing. If a hearing is requested, the
proceeding shall be deemed a contested case and shall by heard and
decided in accordance with Chapter 2001, Government Code.
(e-1) At any time, the commission may audit the books and
records of an independent organization to determine if an approved
rate remains reasonable. If the commission finds upon audit that a
rate approved within the past four years produced revenue for the
independent organization in excess of reasonable costs, the
commission shall order the independent organization to provide
refunds of any excess amounts to its members, who shall in turn be
required to refund immediately such excess amounts pro rata to
ratepayers, consumers or customers who have been assessed the rate.
The commission shall require that electric utility members of the
independent organization who supply electricity to ratepayers,
consumers or customers must indicate on each bill the amount
charged to the ratepayer, consumer or customer and paid to the
independent operator. Failure to comply with this subsection may
result in the revocation, suspension, or amendment of a certificate
as provided by Section 39.356 or in the imposition of an
administrative penalty as provided by Section 39.357.
(f) In implementing this section, the commission may
[cooperate with] seek the assistance of the comptroller of public
accounts and the utility regulatory [commission] agencies of
another state or the federal government and may hold a joint hearing
or make a joint investigation with thatthose [commission] agencies
and hold such other hearings as may be necessary to ensure full
implementation.
SECTION 2. The commission shall promulgate rules to
implement the oversight and accountability provisions of Section 1
on or before December 31, 2005.
SECTION 3. 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 on September 1, 2005.