By: Nelson S.B. No. 408
A BILL TO BE ENTITLED
AN ACT
relating to the continuation and functions of the Public Utility
Commission of Texas; providing a penalty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 12.005, Utilities Code, is amended to
read as follows:
Sec. 12.005. APPLICATION OF SUNSET ACT. The Public Utility
Commission of Texas is subject to Chapter 325, Government Code
(Texas Sunset Act). Unless continued in existence as provided by
that chapter or by Chapter 39, the commission is abolished and this
title expires September 1, 2011 [2005].
SECTION 2. Section 12.059, Utilities Code, is amended by
adding Subsection (c) to read as follows:
(c) A person who is appointed to the commission is entitled
to reimbursement, as provided by the General Appropriations Act,
for the travel expenses incurred in attending the training program
regardless of whether the attendance at the program occurs before
or after the person qualifies for office.
SECTION 3. Section 12.102, Utilities Code, is amended to
read as follows:
Sec. 12.102. DUTIES OF EMPLOYEES. The commission shall
develop and implement policies that clearly separate [define] the
policymaking [respective] responsibilities of the commission and
the management responsibilities of the commission employees.
SECTION 4. Section 12.153, Utilities Code, is amended to
read as follows:
Sec. 12.153. RELATIONSHIP WITH TRADE ASSOCIATION. A person
may not serve as a commissioner or be a commission employee who is
employed in a "bona fide executive, administrative, or professional
capacity," as that phrase is used for purposes of establishing an
exemption to the overtime provisions of the federal Fair Labor
Standards Act of 1938 (29 U.S.C. Section 201 et seq.), [exempt from
the state's position classification plan or is compensated at or
above the amount prescribed by the General Appropriations Act for
step 1, salary group 17, of the position classification salary
schedule] if the person is:
(1) an officer, employee, or paid consultant of a
trade association; or
(2) the spouse of an officer, manager, or paid
consultant of a trade association.
SECTION 5. Subchapter A, Chapter 14, Utilities Code, is
amended by adding Section 14.0025 to read as follows:
Sec. 14.0025. NEGOTIATED RULEMAKING AND ALTERNATIVE
DISPUTE RESOLUTION. (a) The commission shall develop and
implement a policy to encourage the use of:
(1) negotiated rulemaking procedures under Chapter
2008, Government Code, for the adoption of commission rules; and
(2) appropriate alternative dispute resolution
procedures under Chapter 2009, Government Code, to assist in the
resolution of internal and external disputes under the commission's
jurisdiction.
(b) The commission's procedures relating to alternative
dispute resolution must conform, to the extent possible, to any
model guidelines issued by the State Office of Administrative
Hearings for the use of alternative dispute resolution by state
agencies.
(c) The commission shall designate a trained person to:
(1) coordinate the implementation of the policy
adopted under Subsection (a);
(2) serve as a resource for any training needed to
implement the procedures for negotiated rulemaking or alternative
dispute resolution; and
(3) collect data concerning the effectiveness of those
procedures, as implemented by the commission.
SECTION 6. Subchapter B, Chapter 14, Utilities Code, is
amended by adding Section 14.059 to read as follows:
Sec. 14.059. TECHNOLOGY POLICY. The commission shall
implement a policy requiring the commission to use appropriate
technological solutions to improve the commission's ability to
perform its functions. The policy must ensure that the public is
able to interact with the commission on the Internet.
SECTION 7. Section 15.023, Utilities Code, is amended by
amending Subsections (b) and (c) and adding Subsection (d) to read
as follows:
(b) The penalty for a violation may be in an amount not to
exceed $25,000 [$5,000]. Each day a violation continues or occurs
is a separate violation for purposes of imposing a penalty.
(c) The commission by rule shall establish a classification
system for violations that includes a range [The amount] of [an]
administrative penalties that may be assessed for each class of
violation [penalty shall be] based on:
(1) the seriousness of the violation, including:
(A) the nature, circumstances, extent, and
gravity of a prohibited act; and
(B) the hazard or potential hazard created to the
health, safety, or economic welfare of the public;
(2) the economic harm to property or the environment
caused by the violation;
(3) the history of previous violations;
(4) the amount necessary to deter future violations;
(5) efforts to correct the violation; and
(6) any other matter that justice may require.
(d) The classification system established under Subsection
(c) shall provide that a penalty in an amount that exceeds $5,000
may be assessed only if the violation is included in the highest
class of violations in the classification system.
SECTION 8. Subsection (b), Section 15.051, Utilities Code,
is amended to read as follows:
(b) The commission shall keep for a reasonable period
information about each complaint filed with the commission that the
commission has authority to resolve. The information shall
include:
(1) the date the complaint is received;
(2) the name of the complainant;
(3) the subject matter of the complaint;
(4) a record of each person contacted in relation to
the complaint;
(5) a summary of the results of the review or
investigation of the complaint; and
(6) if the commission took no action on the complaint,
an explanation of the reason the complaint was closed without
action.
SECTION 9. 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 10. Subchapter D, Chapter 39, Utilities Code, is
amended by adding Sections 39.1511, 39.1512, and 39.1515 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 recuse 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.
Sec. 39.1515. WHOLESALE ELECTRIC MARKET MONITOR. (a) An
independent organization certified under Section 39.151 shall
contract with an entity selected by the commission to act as the
commission's wholesale electric market monitor to detect and
prevent market manipulation strategies and recommend measures to
enhance the efficiency of the wholesale market.
(b) The independent organization shall provide to the
personnel of the market monitor:
(1) full access to the organization's main operations
center and the organization's records that concern operations,
settlement, and reliability; and
(2) other support and cooperation the commission
determines is necessary for the market monitor to perform the
market monitor's functions.
(c) The independent organization shall use money from the
rate authorized by Section 39.151(e) to pay for the market
monitor's activities.
(d) The commission is responsible for ensuring that the
market monitor has the resources, expertise, and authority
necessary to monitor the wholesale electric market effectively and
shall adopt rules and perform oversight of the market monitor as
necessary. The market monitor shall operate under the supervision
and oversight of the commission. The commission shall retain all
enforcement authority conferred under this title, and this section
may not be construed to confer enforcement authority on the market
monitor or to authorize the commission to delegate the commission's
enforcement authority to the market monitor. The commission by
rule shall define:
(1) the market monitor's monitoring responsibilities,
including reporting obligations and limitations;
(2) the standards for funding the market monitor,
including staffing requirements;
(3) qualifications for personnel of the market
monitor; and
(4) ethical standards for the market monitor and the
personnel of the market monitor.
(e) In adopting rules governing the standards for funding
the market monitor, the commission shall consult with a
subcommittee of the independent organization's governing body to
receive information on how money is or should be spent for
monitoring functions. Rules governing ethical standards must
include provisions designed to ensure that the personnel of the
market monitor are professionally and financially independent from
market participants. The commission shall develop and implement
policies that clearly separate the policymaking responsibilities
of the commission and the monitoring, analysis, and reporting
responsibilities of the market monitor.
(f) The market monitor immediately shall report directly to
the commission any potential market manipulations and any
discovered or potential violations of commission rules or rules of
the independent organization.
(g) The personnel of the market monitor may communicate with
commission staff on any matter without restriction.
(h) The market monitor annually shall submit to the
commission and the independent organization a report that
identifies market design flaws and recommends methods to correct
the flaws. The commission and the independent organization shall
review the report and evaluate whether changes to rules of the
commission or the independent organization should be made.
SECTION 11. Subsection (e), Section 39.903, Utilities Code,
as amended by Chapters 1394, 1451, and 1466, Acts of the 77th
Legislature, Regular Session, 2001, is reenacted and amended to
read as follows:
(e) Money in the system benefit fund may be appropriated to
provide funding solely for the following regulatory purposes, [and]
in the following order of priority:
(1) programs to:
(A) assist low-income electric customers by
providing the 10 percent reduced rate prescribed by Subsection (h);
and
(B) provide one-time bill payment assistance to
electric customers who are or who have in their households one or
more seriously ill or disabled low-income persons and who have been
threatened with disconnection for nonpayment;
(2) customer education programs, administrative
expenses incurred by the commission in implementing and
administering this chapter, and expenses incurred by the office
under this chapter;
(3) programs to assist low-income electric customers
by providing the targeted energy efficiency programs described by
Subsection (f)(2);
(4) the school funding loss mechanism provided by
Section 39.901;
(5) programs to assist low-income electric customers
by providing the 20 percent reduced rate prescribed by Subsection
(h); and
(6) reimbursement to the commission and the Health and
Human Services Commission [Texas Department of Human Services] for
expenses incurred in the implementation and administration of an
integrated eligibility process created under Section 17.007 for
customer service discounts relating to retail electric service,
including outreach expenses the commission determines are
reasonable and necessary.
SECTION 12. Section 39.903, Utilities Code, is amended by
adding Subsection (j-1) to read as follows:
(j-1) The commission shall adopt rules governing the bill
payment assistance program provided under Subsection (e)(1)(B).
The rules must provide that a customer is eligible to receive the
assistance only if the assistance is necessary to prevent the
disconnection of service for nonpayment of bills and the electric
customer is or has in the customer's household one or more seriously
ill or disabled low-income persons whose health or safety may be
injured by the disconnection. The commission may prescribe the
documentation necessary to demonstrate eligibility for the
assistance and may establish additional eligibility criteria. The
Health and Human Services Commission, on request of the commission,
shall assist in the adoption and implementation of these rules.
SECTION 13. (a) The Public Utility Commission of Texas
shall conduct a comprehensive review of the reporting requirements
relating to telecommunications providers that are prescribed by
statute or commission rules.
(b) In conducting the review, the Public Utility Commission
of Texas shall:
(1) solicit input and assistance from appropriate
affected persons, as that term is defined by Section 11.003,
Utilities Code; and
(2) consider:
(A) the manner in which information included in a
report is used;
(B) whether information included in a report is
duplicative of information included in a different report; and
(C) whether the requirements relating to a report
the commission determines is necessary can be changed to make the
reporting process more efficient.
(c) The Public Utility Commission of Texas shall conclude
the review required by this section not later than September 30,
2006, and shall report to the legislature on the results of the
review. The report must include:
(1) specific recommendations on which reports the
commission determines are necessary and which are not necessary;
(2) for a report the commission determines is
necessary, whether the requirements relating to the report can be
changed to make the reporting process more efficient; and
(3) the actions the commission has taken or will take
to amend commission rules to reflect the results of the review.
(d) If the Public Utility Commission of Texas determines
that legislation is necessary or appropriate to eliminate or change
reporting requirements prescribed by statute, the commission shall
include those recommendations in the biennial report to the
legislature required by Section 52.006, Utilities Code.
SECTION 14. Section 52.254, Utilities Code, is repealed.
SECTION 15. The change in law made by this Act relating to
qualifications and eligibility to serve as a commissioner or to be
employed with the Public Utility Commission of Texas applies only
to a commissioner or employee appointed or employed after the
effective date of this Act. A commissioner or employee of the
Public Utility Commission of Texas who is serving or employed on the
effective date of this Act is governed by the law as it existed
immediately before the effective date of this Act, and the former
law is continued in effect for that purpose.
SECTION 16. The change in law made by this Act to Section
15.023, Utilities Code, applies only to a violation committed on or
after the effective date of this Act. A violation committed before
the effective date of this Act is governed by the law in effect when
the violation was committed, and the former law is continued in
effect for that purpose.
SECTION 17. 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.
SECTION 18. This Act takes effect September 1, 2005.