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A BILL TO BE ENTITLED
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AN ACT
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relating to allowing a municipal electric utility to enter into |
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hedging contracts for certain commodities. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Sections 2256.0201(a) and (d), Government Code, |
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are amended to read as follows: |
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(a) A municipality that owns a municipal electric utility |
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that is engaged in the distribution and sale of electric energy or |
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natural gas to the public may enter into a hedging contract and |
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related security and insurance agreements in relation to fuel oil, |
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natural gas, coal, nuclear fuel, and electric energy to protect |
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against loss due to price fluctuations. A hedging transaction must |
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comply with the regulations of the Commodity Futures Trading |
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Commission and the Securities and Exchange Commission. If there is |
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a conflict between the municipal charter of the municipality and |
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this chapter, this chapter prevails. |
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(d) In this section, "hedging" means the buying and selling |
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of fuel oil, natural gas, coal, nuclear fuel, and electric energy |
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futures or options or similar contracts on those commodities and |
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related transportation costs [commodity futures] as a protection |
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against loss due to price fluctuation. |
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SECTION 2. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2007. |