By: Armbrister S.B. No. 1506
A BILL TO BE ENTITLED
AN ACT
relating to default service for residential customers of an
Affiliated Retail Electric Provider
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 39, Subchapter E, Utilities Code, is
amended to read as follows:
Section 39.2025 DEFAULT SERVICE. (a) Commencing January 1,
2007, Affiliated Retail Electric Providers (AREPs) shall provide
Default Service electric service to residential customers who have
not elected to take electric service from a Competitive Retail
Electric Provider, or whose Competitive Retail Electric Provider
supply agreement has expired or otherwise terminated. Default
Service shall be a non-discriminatory basic service whereby
wholesale supply is procured competitively by the applicable AREP.
The PUCT, in coordination with ERCOT, shall contract with one or
more private entities, certified by ERCOT as qualified to establish
and conduct a competitive procurement process, to provide the
functions provided for in this section.
(b) The commission, in coordination with ERCOT, shall adopt
rules and standards to implement the Default Service provided for
in Subsection (a).
(c) In adopting rules and standards required by Subsection
(b), among other elements, the Commission shall address the
following:
1) The competitive procurement process shall be an
open and transparent solicitation for the wholesale, full
requirements supply to residential customers;
2) In order to ensure continued development of
competitive retail markets, Default Service rates shall reflect the
results of the wholesale competitive procurement process plus the
full cost incurred by the AREP to provide Default Service to
residential customers, such that Default Service is not subsidized
by any other services that the AREP may provide;
3) Default Service shall include financial
performance standards including minimum credit requirements for
potential wholesale suppliers;
4) Duration of wholesale power supply contracts
awarded under this solicitation shall ensure Default Services is
generally reflective of existing market pricing;
5) A limit on the amount served by any single wholesale
supplier of default service within each AREP service territory;
6) A limit on the amount served by any single wholesale
supplier in the total ERCOT Default Service market;
7) Detailed energy product description; and
8) Safeguards to ensure switching restrictions
eliminate the potential for economic arbitrage between Default
Service and Competitive Retail Electric Providers.
(d) The commission shall be responsible for determining the
rate mechanism to ensure the price adequately reflects all retail
costs and does not impede competitive retail market developments.
SECTION 7. This Act takes September 1, 2005.