By: Fraser S.B. No. 1748
A BILL TO BE ENTITLED
AN ACT
relating to the development and provision of broadband over
electric delivery systems and the development of enhanced electric
delivery systems.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle B, Title 2, Utilities Code is amended by
adding Chapter 43 to read as follows:
CHAPTER 43. USE OF ELECTRIC DELIVERY SYSTEM FOR ACCESS TO
BROADBAND AND OTHER ENHANCED SERVICES
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 43.001. LEGISLATIVE FINDINGS. (a) The Legislature
finds that broadband over power lines, also know as BPL, is an
emerging technology platform that offers a means of providing
broadband services to reach homes and businesses. BPL services can
also be used to enhance existing electric delivery systems, which
can result in improved customer service and reliability for
electric customers.
(b) The Legislature finds that access to broadband services
is important to this state. BPL deployment in Texas has the
potential to extend broadband service to customers where broadband
access is currently not available and may provide an additional
option for existing broadband consumers in Texas, resulting in a
more competitive market for broadband services. The Legislature
further finds that BPL development in Texas is fully dependent upon
the participation of electric utilities, municipally owned
utilities, electric cooperatives, and transmission and
distribution utilities in this state, who own and operate the power
lines and related facilities that are necessary for the
construction of BPL systems and the provision of BPL services.
(c) The Legislature finds that it is in the public interest
to encourage the deployment of BPL and to encourage each electric
utility, municipally owned utility, electric cooperative, and
transmission and distribution utility to construct, maintain, and
operate BPL systems, either as part of the utility's property or as
non-utility property owned and operated by affiliates of the
utility, or to permit unaffiliated entities to develop such BPL
systems. The purpose of this chapter is to provide regulatory
certainty and rate stability for utilities to support the
deployment of BPL.
(d) The Legislature finds that an electric utility,
municipally owned utility, electric cooperative, or transmission
and distribution utility may choose to implement BPL, but is not
required to do so. The electric utility, municipally owned
utility, electric cooperative, or transmission and distribution
utility shall have the right to decide, in its sole discretion,
whether to implement BPL and may not be penalized for deciding to
implement or not to implement BPL.
Sec. 43.002. APPLICABILITY. (a) This chapter applies to
an electric utility, a municipally owned utility, an electric
cooperative, or a transmission and distribution utility that owns
or operates for compensation in this state equipment or facilities
to transmit or distribute electricity, whether or not the utility,
municipally owned utility, or electric cooperative is offering
customer choice under Chapter 39, 40, or 41 of this subtitle.
(b) If there is a conflict between the specific provisions
of this chapter and any other provision of this title, the
provisions of this chapter control.
(c) No provision of this title shall impose an obligation on
an electric utility or transmission and distribution utility to
implement BPL or to provide broadband services.
Sec. 43.003. DEFINITIONS. In this chapter:
(1) "BPL," "broadband over power lines," and "BPL
services" mean the provision of broadband services over electric
power lines and related facilities, whether above ground or in
underground conduit.
(2) "BPL access" means the ability to access broadband
services via a BPL operator or BPL Internet service provider.
(3) "BPL customer" means a person who contracts with
and receives BPL services from a BPL operator or a BPL Internet
service provider.
(4) "BPL operator" means an entity that operates a BPL
system on the electric power lines and related facilities of a
utility.
(5) "BPL Internet service provider" and "BPL ISP" mean
an entity that provides Internet services to others on a wholesale
basis or to end-use customers on a retail basis.
(6) "BPL system" means the materials, equipment, and
other facilities installed on utility facilities that allow for the
provision of BPL services.
(7) "BPL utility applications" means technologies
that are designed to improve the operational performance and
service reliability of a utility including, but not limited to,
automated meter reading, real time system monitoring and meter
control, remote service control, outage detection and restoration,
predictive maintenance and diagnostics, and monitoring and
enhancement of power quality.
(8) "Electric cooperative" shall have the meaning
defined in Section 11.003 of this title.
(9) "Electric delivery system" means the power lines
and related transmission and distribution facilities used by a
utility to deliver electric energy.
(10) "Electric utility" shall have the meaning defined
in Section 31.002 of this title.
(11) "Municipally owned utility" shall have the
meaning defined in Section 11.003 of this title.
(12) "Transmission and distribution utility" shall
have the meaning defined in Section 31.002 of this title.
(13) "Utility" means an electric utility, a
municipally owned utility, an electric cooperative, or a
transmission and distribution utility.
SUBCHAPTER B. DEVELOPMENT OF BPL SYSTEMS
Sec. 43.051. AUTHORIZATION FOR A BPL SYSTEM. A utility may
own, construct, maintain, and operate a BPL system and provide BPL
services or allow others to do so on its electric delivery system
consistent with the requirements of this chapter.
Sec. 43.052. OWNERSHIP AND OPERATION OF BPL SYSTEM. (a) A
utility may elect to:
(1) own or operate a BPL system on its electric
delivery system as utility property;
(2) allow an affiliated entity to own or operate a BPL
system on the utility's electric delivery system;
(3) allow an unaffiliated entity to own or operate a
BPL system on the utility's electric delivery system;
(4) provide Internet service over a BPL system; or
(5) participate in any combination of the forms of
ownership listed in Subparagraphs (1) through (4) of this
subsection.
(b) Regardless of who owns the BPL system or systems on a
utility's electric delivery system, the utility may act as a BPL
operator. If the utility owns the BPL system or systems on its
electric delivery system, the utility may allow one or more
affiliated or unaffiliated entities to act as BPL operators.
(c) The BPL operator shall determine what BPL Internet
service providers may have access to broadband capacity on the BPL
system except that if the BPL operator is not the utility, the
utility and the BPL operator for that specific system shall
determine what Internet service providers shall have access to the
BPL system.
Sec. 43.053. FEES AND CHARGES. (a) A utility that elects
to own a BPL system as utility property shall charge a BPL operator
for the use of its BPL system.
(b) A utility that acts as a BPL operator shall charge a BPL
ISP for the use of the BPL system.
(c) A utility that allows an affiliated entity or an
unaffiliated entity to own a BPL system on the utility's electric
delivery system shall charge the owner of the BPL system for the use
of the utility's electric delivery system.
(d) A utility that allows an affiliated entity or an
unaffiliated entity to own a BPL system on the utility's electric
delivery system may pay the owner of the BPL system for the right to
be the BPL operator.
(e) A utility may pay a BPL owner or a BPL operator for the
use of the BPL system required to operate BPL utility applications.
(f) If all or part of a BPL system is installed on poles or
other structures of a telecommunications utility as that term is
defined in Section 51.002, the owner of the BPL system shall be
required to pay the telecommunications utility an annual fee
consistent with the usual and customary charges for access to the
space occupied by that portion of the BPL system so installed.
(g) Notwithstanding Subsections (a) through (f) of this
section:
(1) a utility may not charge an affiliated entity
under this section an amount less than the utility would charge an
unaffiliated entity for the same item or class of items; and
(2) a utility may not pay an affiliated entity under
this section an amount more than the affiliate would charge an
unaffiliated entity for the same item or class of items.
Sec. 43.054. NO ADDITIONAL EASEMENTS OR PAYMENTS REQUIRED.
The installation of a BPL system on an electric delivery system
shall not require the utility or the owner of the BPL system to
obtain easements or other right of way for the BPL system or to make
payments for easements in addition to payments made by the utility
for the placement of its electric delivery system.
Sec. 43.055. RELIABILITY OF ELECTRIC SYSTEMS MAINTAINED. A
utility that allows the installation and operation of a BPL system
on its electric delivery system shall employ reasonable measures to
ensure that the operation of the BPL system does not interfere with
or diminish the reliability of the utility's electric delivery
system. Should a disruption in the provision of electric service
occur, the utility shall be governed by the terms and conditions of
the retail electric delivery service tariff. At all times, the
provision of broadband services shall be secondary to the reliable
provision of electric delivery services.
SUBCHAPTER C. IMPLEMENTATION OF A BPL SYSTEM BY A UTILITY
Sec. 43.101. PARTICIPATION BY A UTILITY. (a) A utility,
either on its own, through an affiliate, or through an unaffiliated
entity, may elect to install and operate a BPL system on some or all
of its electric delivery system in any part or all of its
certificated service area.
(b) The installation, operation, and use of a BPL system and
the provision of BPL services shall not be regulated by the state, a
municipality, or local government other than as provided for in
this chapter.
(c) Neither the commission nor any state or local government
or regulatory or quasi-government or quasi-regulatory authority
shall:
(1) require a utility to install a BPL system on its
power lines or offer BPL services in all or any part of the
utility's certificated service area, either directly or indirectly
through an affiliated or unaffiliated entity;
(2) require a utility to allow others to install a BPL
system on the utility's electric delivery system in any part or all
of the utility's certificated service area; or
(3) prohibit a utility from installing a BPL system or
offering BPL services in any part or all of the utility's
certificated service area, either directly or indirectly through
and affiliated or unaffiliated entity.
(d) If a municipality or local government is already
collecting a charge or fee from the electric utility, electric
cooperative, or transmission and distribution utility for the use
of a municipal street, alley, or public way for the delivery of
electricity to retail electric customers, the municipality or local
government is prohibited from requiring a franchise or an amendment
to a franchise and is prohibited from imposing or collecting a
charge, fee, or tax from a BPL operator, an electric utility, an
electric cooperative, a transmission and distribution utility, an
affiliate of an electric utility, or an unaffiliated entity
operating a BPL system on a utility's electric delivery system for a
franchise to use a municipal street, alley, or public way for a BPL
system or for the provision of BPL services.
(e) Notwithstanding Subsection (d) of this section, the
state, a municipality, or local government may impose reasonable
charges, other than charges for the use of streets, alleys, an
public ways, on the provision of retail BPL Internet services that
are no greater than the charges the state, the municipality, or the
local government impose on other providers of Internet services.
Sec. 43.102. INCENTIVES AND COST RECOVERY FOR DEPLOYMENT OF
BPL AND UTILITY APPLICATIONS. (a) A utility that owns or allows
another entity to own a BPL system installed on its electric
delivery system shall make an election under this section or under
Section 43.103.
(b) Where a utility owns or permits the installation of a
BPL system on its electric delivery system under Section
43.052(a)(1)-(4), the utility's investment in that BPL system,
which is incurred to support, in whole or in part, the provision of
BPL utility applications and other BPL services consumed by the
utility, shall be deemed used and useful in providing service and
included in the utility's invested capital at original cost, and
any fees or operating expenses related to that BPL system shall be
deemed reasonable and necessary operating expenses for the purposes
of any rate proceeding under Chapter 36.
(c) Where a utility has elected to neither own nor operate a
BPL system, but pays fees to an affiliated or unaffiliated entity
for the use of BPL utility applications, those fees shall be deemed
reasonable and necessary operating expenses for the purposes of any
rate proceeding under Chapter 36.
(d) In any rate proceeding under Chapter 36, 40 percent of
the revenues received by a utility owning or operating a BPL system
or providing BPL services, or allowing the provision of BPL
services, shall be considered revenue to the utility and applied to
reduce the total revenue requirement of the utility. To encourage
the utility to develop and deploy BPL systems, the remaining 60
percent of the revenues received by the utility shall not be
considered in determining a revenue requirement or rates for the
utility, but shall be wholly outside the jurisdiction of any
regulatory authority.
(e) In any rate proceeding under Chapter 36, the utility
must demonstrate that any affiliated BPL operator or BPL ISP is
paying just and reasonable compensation to the utility. For an
affiliated BPL operator, just and reasonable compensation shall be
the usual and customary charges for access to the space occupied by
the BPL system. For an affiliated BPL ISP, just and reasonable
compensation shall be the usual and customary charges that are paid
by other Internet service providers for equivalent broadband
capacity. The commission may reduce the utility's total revenue
requirement by an amount equal to the difference between the amount
actually paid to the utility and the amount that would be just and
reasonable only upon finding that the compensation paid to the
utility by an affiliated BPL operator or an affiliated BPL ISP is
not just and reasonable.
(f) In any rate proceeding, costs that are incurred to
support, in whole or in part, the provision of BPL utility
applications and other BPL services consumed by the utility shall
be borne by the utility. Incremental costs that are incurred solely
to support the provision of BPL services to affiliated or
unaffiliated third parties shall be borne by the BPL operator.
Sec. 43.103. ALTERNATIVE INCENTIVE MECHANISM. (a) A
utility that installs or allows the installation of a BPL system on
its electric delivery system may elect to provide electric
transmission and distribution delivery services under the terms and
condition and at the rates it had in effect on July 1, 2005. The
utility shall notify the commission of its election on or before
December 31, 2005, and thereafter shall not be subject to the other
provisions of Subchapters C and D of Chapter 36 until September 1,
2009, and shall not be permitted to include its investment in the
BPL system in rates or otherwise seek to change its rates except as
permitted by this section.
(b) An electric utility or transmission and distribution
utility making the election under subsection (a) may seek an
increase in its electric rates or in its transmission and
distribution delivery rates for reasons of force majeure. For
purposes of this paragraph, "force majeure" means a major event or
combination of events, including new or expanded state or federal
statutory or regulatory requirements; hurricanes, tornadoes, ice
storms, or other natural disasters; or acts of war, terrorism, or
civil disturbance, beyond the control of an electric utility or a
transmission and distribution utility that the regulatory
authority finds increases the electric utility's or transmission
and distribution utility's total reasonable and necessary costs or
decreases the electric utility's or transmission and distribution
utility's total revenues related to the delivery of electricity by
more than 10 percent for any calendar year during the period ending
September 1, 2009. The term "force majeure" does not include any
changes in general economic conditions such as inflation, interest
rates, or other factors of general application.
(c) During the period ending September 1, 2009, the
commission shall allow a utility that has made the election under
Subsection (a) to:
(1) make adjustments to its distribution service
provider transmission cost recovery factors;
(2) make adjustments to its transmission cost of
service rates to reflect changes in the cost of providing such
service;
(3) implement, adjust, or discontinue a competition
transition charge, transition charge, or system benefit fun fee to
the extent necessary to effectuate the purposes of Chapter 39; and
(4) implement additional tariffs for new or expanded
electric delivery or utility services.
SUBCHAPTER D. MISCELLANEOUS PROVISION
Sec. 43.151. AFFILIATES OF A UTILITY. (a) A utility may
have a full or partial ownership interest in a BPL operator or a BPL
ISP. Whether a BPL operator or a BPL ISP is an affiliate of the
utility shall be determined under Section 11.003(2) and Section
11.006.
(b) Neither a BPL operator nor a BPL ISP shall be considered
a "competitive affiliate" of a utility as that term is defined in
Section 39.157.
Sec. 43.152. NO CROSS-SUBSIDIZATION. A utility that
provides BPL services to BPL customers is prohibited from
cross-subsidizing its BPL services with utility revenues.
Contracts and ownership arrangements that are permitted by this
chapter do not constitute cross-subsidization for purposes of this
section.
SECTION 2. Section 33.001, Utilities Code, is amended to
read as follows:
Sec. 33.001. MUNICIPAL JURISDICTION. (a) To provide fair,
just, and reasonable rates and adequate and efficient services, the
governing body of a municipality has exclusive original
jurisdiction over the rates, operations, and services of an
electric utility in areas in the municipality, subject to the
limitations imposed by this title.
(b) Notwithstanding subsection (a), the governing body of a
municipality shall not have jurisdiction over the BPL system, BPL
services, or the rates, operations, or services of the electric
utility or transmission and distribution utility to the extent that
such rates, operations, or services are related, in whole or in
part, to the ownership, construction, maintenance, or operation of
a BPL system used to provide BPL services to affiliated or
unaffiliated entities.
SECTION 3. The 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.