BILL ANALYSIS

 

 

                                                                                                                                    C.S.H.B. 3644

                                                                                                                                          By: Puente

                                                                                                                           Regulated Industries

                                                                                                        Committee Report (Substituted)

 

 

 

BACKGROUND AND PURPOSE

 

Currently, normal operations and maintenance expenses of a utility are, by law, superior to the obligation to pay bond indebtedness.  It is a first lien against a utility's bond indebtedness.  However, it is unclear if  low-income, customer, bill-payer assistance programs qualify as a maintenance and operation expense.     

 

These programs keep the poor, elderly, and disabled from having their electricity   disconnected, particularly during the summer months.  It can be more cost efficient for utilities to offer these programs, than it is to disconnect electricity and lose the customer completely.  Customer assistance programs for low-income          customers can keep maintenance and operations costs down, and in turn help utilities pay back their bonds. C.S.H.B. 3644 clarifies that bill-payer assistance programs do qualify as  a maintenance and operation expense under the first lien against the revenue of an electric or gas utility system that secures the payment of public securities, for a municipality with a population of more than one million.     

 

RULEMAKING AUTHORITY

 

This bill does not expressly grant any additional rulemaking authority to a state officer,

department, agency, or institution.

 

ANALYSIS

 

SECTION 1. Section 1502.056(a), Government Code is amended by adding, for a municipality with a population of more than one million, the first lien against the revenue of an electric or gas utility system that secures the payment of public securities issued or obligations incurred under this chapter also applies to funding, as a necessary operations expense, for a bill payment assistance program for utility system customers who have been threatened with disconnection from service for nonpayment of bills and who have been determined by the municipality to be low-income customers.

 

EFFECTIVE DATE

 

Upon passage, or, if the Act does not receive the necessary vote, the Act takes effect September 1, 2007.

 

COMPARISON OF ORIGINAL TO SUBSTITUTE

 

The substitute adds a sentence  to line 14 that states, "for a municipality with a population of more than one million"