80R1093 CBH-D

By: Turner H.B. No. 1394

A BILL TO BE ENTITLED

AN ACT

relating to the provision of electricity in this state; providing civil penalties.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter B, Chapter 15, Utilities Code, is amended by adding Section 15.0295 to read as follows:

Sec. 15.0295. CIVIL PENALTY FOR VIOLATION OF SECTION 39.157. (a) A person who violates Section 39.157 or a rule adopted or order issued under that section is subject to a civil penalty in an amount equal to three times the amount of economic benefit gained by the person as a result of the violation.

(b) At the request of the commission, the attorney general or the appropriate district or county attorney shall institute and conduct a suit to recover the penalty.

(c) On its own initiative, the attorney general, district attorney, or county attorney may institute and conduct a suit to recover the penalty. If a district attorney or county attorney institutes the suit, the district or county attorney shall provide notice of the suit to the commission and attorney general.

(d) The attorney general, at the request of the commission or on its own initiative, may intervene in a suit brought by a district or county attorney under Subsection (c). The attorney general may assume primary responsibility for conducting the suit if the commission or the attorney general determines that the issue involved is of statewide importance.

(e) If a suit is brought by the attorney general or if the attorney general intervenes in a suit under Subsection (d), the independent organization certified under Section 39.151 and the commission shall provide to the attorney general all relevant information, including otherwise confidential information, related to the alleged violation. If a suit is brought by a district or county attorney and the attorney general does not assume primary responsibility for conducting the suit, the commission, the independent organization certified under Section 39.151, and the attorney general shall provide to the district or county attorney all relevant information, including otherwise confidential information, related to the alleged violation.

(f) The attorney general or district or county attorney may recover reasonable expenses incurred in obtaining a civil penalty, including investigation costs, court costs, reasonable attorney's fees, witness fees, and deposition expenses.

(g) Notwithstanding Section 15.033, the court by order shall provide for a penalty under this section to be paid to the consumers who incurred economic damage as a result of the violation so that each identifiable consumer is paid an amount of the total penalty collected that bears the same proportion to the total penalty collected as that consumer's economic damage bears to the total of the economic damage incurred by identifiable consumers as a result of the violation.

SECTION 2. Section 17.008, Utilities Code, is amended by amending Subsection (h) and adding Subsections (h-1) and (h-2) to read as follows:

(h) A retail electric provider may not require a person applying for residential electric service to provide a security deposit or advance payment as a condition of service if:

(1) the person was a customer of one or more retail electric providers or electric utilities in this state during the entire six-month period preceding the request for electric service;

(2) the person is not delinquent in payment of any electric service account on the date the person applies for service; and

(3) during the preceding six-month period, the person was not late in paying an electric service bill more than once [This section does not limit a retail electric provider's authority to require a deposit or advance payment as a condition of service].

(h-1) A retail electric provider that is authorized to require a security deposit or advance payment under Subsection (h) may not require a payment in an amount that exceeds the lesser of:

(1) the greater of:

(A) 1/12 of the customer's estimated annual billing; or

(B) the amount of the customer's estimated billing for the next month; or

(2) the difference between the amount determined under Subdivision (1) and any amount transferred to the retail electric provider under Subsection (h-2), if the amount transferred to the retail electric provider under Subsection (h-2) is less than the amount determined under Subdivision (1).

(h-2) Notwithstanding Subsection (h), a retail electric provider or electric utility that holds a security deposit or advance payment from a residential customer shall transfer the deposit or payment to the new retail electric provider when the service is switched or transferred.

SECTION 3. Section 39.101(h), Utilities Code, is amended to read as follows:

(h) A retail electric provider, power generation company, aggregator, or other entity that provides retail electric service may not disconnect service to a residential customer during an extreme weather emergency or on a weekend day. The entity providing service shall defer collection of the full payment of bills that are due during an extreme weather emergency until after the emergency is over and shall offer [work with] customers a deferred payment plan providing for a period of not less than five months for a customer to pay deferred amounts [to establish a pay schedule for deferred bills]. For purposes of this subsection, "extreme weather emergency" means [a period when]:

(1) a day for which the National Weather Service forecasts that the [previous day's highest] temperature will reach or fall below [did not exceed] 32 degrees Fahrenheit in any part of a county in the relevant service territory [and the temperature is predicted to remain at or below that level for the next 24 hours according to the nearest National Weather Service reports]; [or]

(2) a day for which the National Weather Service forecasts that the heat index will reach or exceed 100 degrees Fahrenheit in any part of a county in the relevant service territory; or

(3) a period when, [issues a heat advisory for any county in the relevant service territory, or when such an advisory has been issued] on any one of the previous two calendar days, the National Weather Service observes a heat index of 100 degrees Fahrenheit or more in any part of a county in the relevant service territory.

SECTION 4. Section 39.101, Utilities Code, is amended by adding Subsection (i) to read as follows:

(i) During the period beginning on July 1 and ending on September 30 each year, a retail electric provider, power generation company, aggregator, or other entity that provides retail electric service may not disconnect service to a residential customer who is at a higher risk of heat-related illness. The entity providing service shall defer until after September 30 collection of the full payment of bills for service that are due during that period and shall offer the customer a deferred payment plan providing for a period of not less than five months for the customer to pay deferred amounts. The entity providing service shall allow the customer to initiate a renegotiation of the deferred payment plan one time during the deferment period regardless of whether the customer's economic or financial circumstances have changed. For purposes of this subsection, a residential customer is at a higher risk of heat-related illness if the customer's household includes:

(1) an infant or child who is younger than four years of age;

(2) a person who is at least 65 years of age;

(3) a person who is eligible for lifeline service under Section 55.015(d-1); or

(4) a person for whom an interruption or suspension of electric service will create a dangerous or life-threatening condition.

SECTION 5. Subchapter C, Chapter 39, Utilities Code, is amended by adding Sections 39.1013 and 39.1015 to read as follows:

Sec. 39.1013. STANDARD SERVICE AGREEMENT. (a) The commission by rule shall prescribe the form of a term of service document or other document that serves as a contract to provide retail electric service to a residential customer or that prescribes the terms of that service contract.

(b) In adopting the rules, the commission shall ensure that a document described by Subsection (a):

(1) is available in English and Spanish and, as appropriate, in the language in which the retail electric service is marketed;

(2) specifies all provisions relating to rates and fees in a clear format and in language readily understandable by customers; and

(3) is in a standard format that will permit comparisons between price and service offerings.

Sec. 39.1015. CANCELLATION OR TERMINATION FEES. (a) A retail electric provider may not charge a residential customer who requests cancellation or termination of retail electric service provided on a month-to-month basis a fee relating to the cancellation or termination.

(b) A fee relating to the early cancellation or termination of retail electric service provided to a residential customer under a term contract may not exceed $100.

SECTION 6. Subchapter C, Chapter 39, Utilities Code, is amended by adding Section 39.110 to read as follows:

Sec. 39.110. RETAIL ELECTRIC ENERGY EFFICIENCY PROGRAMS. (a) This section applies only to an affiliated retail electric provider that serves at least 50 percent of the residential customers in the affiliated transmission and distribution utility's certificated service area.

(b) An affiliated retail electric provider, in accordance with the provider's least-cost procurement plan under Section 39.2024, shall provide energy efficiency programs that offer in a nondiscriminatory manner a variety of choices to all classes of customers in the service area described by Subsection (a).

(c) An affiliated retail electric provider may provide an energy efficiency program directly to customers or contract with another person to provide a program.

(d) The commission shall adopt rules as necessary to implement this section. At a minimum, the rules must require that a program administered under this section supplement and not supplant energy efficiency incentive programs administered by electric utilities under Section 39.905.

SECTION 7. (a) Subchapter E, Chapter 39, Utilities Code, is amended by adding Sections 39.2023 and 39.2024 to read as follows:

Sec. 39.2023. STANDARD OFFER SERVICE. (a) This section applies only to an affiliated retail electric provider in relation to which the commission determines that less than 50 percent of the residential customers in the affiliated transmission and distribution utility's certificated service area before the onset of customer choice are served by nonaffiliated retail electric providers on the date the commission makes a determination under Subsection (e).

(b) The commission shall require an affiliated retail electric provider to offer a standard retail service package to residential customers of the affiliated transmission and distribution utility.

(c) The commission shall set the price for the standard offer service for the affiliated retail electric provider at an amount that allows the provider to recover the provider's fuel and other costs and a reasonable retail margin determined by the commission. The commission may not set the price at a higher amount unless the provider demonstrates that a higher price is necessary to implement the least-cost procurement system required by Section 39.2024 or is necessary to ensure system reliability.

(d) The commission, on its own motion or on the motion of the affiliated retail electric provider, the office, or an affected person, may, at any time, review and adjust the affiliated retail electric provider's standard offer service price to ensure that the price:

(1) accurately reflects the cost of providing electricity to residential customers; and

(2) includes an appropriate retail margin.

(e) At least once each state fiscal year, the commission shall determine the applicability of this section to each affiliated retail electric provider.

Sec. 39.2024. LEAST-COST PROCUREMENT. (a) An affiliated retail electric provider required to provide standard offer service under Section 39.2023 shall use a least-cost procurement planning process to systematically evaluate all available supply options to ensure that the provider acquires sufficient, reliable, cost-effective, and environmentally responsible resources to meet its customers' needs.

(b) An affiliated retail electric provider shall comply with the provider's approved least-cost procurement plan in procuring resources to meet the provider's standard offer service obligation under Section 39.2023.

(c) Every three years, each affiliated retail electric provider in this state shall file with the commission a least-cost procurement plan that systematically evaluates all available supply options during the next 10-year period. The plan must include:

(1) an estimate of the provider's supply and demand forecast for that period;

(2) the resource mix with which the provider intends to meet the supply obligation during that period, including:

(A) demand-side management programs;

(B) long-term purchased power contracts;

(C) short-term purchased power contracts;

(D) procurement through wholesale markets by request for proposals; and

(E) spot-market purchases;

(3) a detailed evaluation of each reasonable long-term and short-term procurement and demand-side management strategy, regardless of whether the provider ultimately recommends using that strategy;

(4) the short-term and long-term environmental effects of the resource mix;

(5) the specific criteria the provider will use to evaluate and to select or reject a resource or a strategy; and

(6) the range of probable costs for each resource or strategy.

(d) The commission, on its own motion, or on the motion of the affiliated retail electric provider, the office, or an affected person, may convene a public hearing on the adequacy and merits of the least-cost procurement plan. Any interested person may intervene in the hearing and, at the hearing, may present evidence and cross-examine witnesses regarding the contents and adequacy of the plan.

(e) Not later than the 180th day after the date the affiliated retail electric provider submits a least-cost procurement plan, the commission shall issue an interim order approving the plan, approving the plan as modified by the commission, or remanding the plan for additional proceedings. The commission may extend the deadline for not more than 30 days for extenuating circumstances.

(f) The commission, on its own motion or on the motion of the affiliated retail electric provider, the office, or an affected person, may periodically review an approved least-cost procurement plan to determine whether the plan should be modified because of changed market conditions.

(b) Not later than the 30th day after the date this Act takes effect, the Public Utility Commission of Texas shall make the determination required by Section 39.2023(e), Utilities Code, as added by this section, for each affiliated retail electric provider in this state.

(c) Not later than the 60th day after this Act takes effect, the Public Utility Commission of Texas shall set the initial standard offer service price for each affiliated retail electric provider that the commission determines is subject to Section 39.2023, Utilities Code, as added by this section. The initial price must be equal to the price to beat made available to residential customers by the provider on December 31, 2006, adjusted to reflect the averaged cost of natural gas on the second day before the date the price is set. The commission may adjust that price as necessary to reflect fuel costs until the date the commission determines the standard offer service price required by Section 39.2023, Utilities Code, as added by this section.

(d) Not later than October 1, 2007, the Public Utility Commission of Texas shall adopt a staggered schedule for the submission of least-cost procurement plans by affiliated retail electric providers under Section 39.2024, Utilities Code, as added by this section.

SECTION 8. Section 39.352(g), Utilities Code, is amended to read as follows:

(g) If a retail electric provider serves an aggregate load in excess of 300 megawatts within this state, not less than 25 [five] percent of the provider's total [the] load in megawatt hours in this state must consist of residential customers. This requirement applies to an affiliated retail electric provider only with respect to load served outside of the affiliated transmission and distribution utility's certificated [electric utility's] service area, and, in relation to that load, the affiliated retail electric provider shall meet the requirements of this subsection by serving residential customers outside of the affiliated transmission and distribution utility's certificated [electric utility's] service area. For the purpose of this subsection, the load served by retail electric providers that are under common ownership shall be combined. A retail electric provider may meet the requirements of this subsection by demonstrating on an annual basis that it serves residential load amounting to 25 [five] percent of its total load or[,] by demonstrating that another retail electric provider serves sufficient qualifying residential load on its behalf[, or by paying an amount into the system benefit fund equal to $1 multiplied by a number equal to the difference between the number of megawatt hours it sold to residential customers and the number of megawatt hours it was required to sell to such customers, or in the case of an affiliated retail electric provider, $1 multiplied by a number equal to the difference between the number of megawatt hours sold to residential customers outside of the electric utility's service area and the number of megawatt hours it was required to sell to such customers outside of the electric utility's service area]. Qualifying residential load may not include customers served by an affiliated retail electric provider in its own service area. Each retail electric provider shall file reports with the commission that are necessary to implement this subsection. [This subsection applies for 36 months after retail competition begins.] The commission shall adopt rules to implement this subsection.

SECTION 9. (a) Sections 39.903(a), (b), (d), (e), and (h), Utilities Code, are amended to read as follows:

(a) The commission shall adopt and enforce rules requiring electric utilities to establish a system benefit fund as a trust fund outside of the state treasury to be used [is an account in the general revenue fund. Money in the account may be appropriated] only for the purposes provided by this section [or other law]. The commission shall provide for the fund to be held by a financial institution eligible to be a depository for state funds under Chapter 404, Government Code. Interest earned on the [system benefit] fund shall be credited to the fund. [Section 403.095, Government Code, does not apply to the system benefit fund.]

(b) The system benefit fund is financed by a nonbypassable fee set by the commission in an amount not to exceed 65 cents per megawatt hour and[. The system benefit fund fee is] allocated to customers based on the amount of kilowatt hours used. An electric utility shall remit the fees to the fund in accordance with procedures approved by the commission.

(d) The commission shall annually review and approve system benefit fund accounts, projected revenue requirements, and proposed nonbypassable fees. The commission by rule shall adopt review procedures, including a method for administrative review, as the commission determines is necessary to ensure that the fund is funded and that disbursements from the fund are properly made. The commission may provide for the fund to be operated by a contractor. The commission may require an electric utility or retail electric provider to provide information as necessary to assess contributions to and disbursements from the fund, and that information is not subject to disclosure under Chapter 552, Government Code. The commission shall provide for disbursements from the fund to be made promptly and efficiently so that an electric utility or retail electric provider does not experience an unnecessary cash-flow problem as a result of administrative delay. [The commission shall report to the electric utility restructuring legislative oversight committee if the system benefit fund fee is insufficient to fund the purposes set forth in Subsection (e) to the extent required by this section.]

(e) Money in the system benefit fund may be used [appropriated to provide funding] solely for the following [regulatory] purposes, 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) programs to assist low-income electric customers by providing the 20 percent reduced rate prescribed by Subsection (h); and

(5) reimbursement to the commission and the Health and Human Services Commission 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.

(h) The commission shall adopt rules for a retail electric provider to determine a reduced rate for eligible customers to be discounted off the standard retail service package as approved by the commission under Section 39.106, or the price to beat established by Section 39.202, whichever is lower. Municipally owned utilities and electric cooperatives shall establish a reduced rate for eligible customers to be discounted off the standard retail service package established under Section 40.053 or 41.053, as appropriate. The reduced rate for a retail electric provider shall result in a total charge that is at least 10 percent and, if sufficient money in the system benefit fund is available, up to 20 percent, lower than the amount the customer would otherwise be charged. To the extent the system benefit fund is insufficient to fund the initial 10 percent rate reduction, the commission may increase the fee to an amount not more than 65 cents per megawatt hour, as provided by Subsection (b). If the fee is set at 65 cents per megawatt hour and [or if] the commission determines that money in the fund is [appropriations are] insufficient to fund the 10 percent rate reduction, the commission may reduce the rate reduction to less than 10 percent. For a municipally owned utility or electric cooperative, the reduced rate shall be equal to an amount that can be fully funded by that portion of the nonbypassable fee proceeds paid by the municipally owned utility or electric cooperative that is allocated to the utility or cooperative by the commission under Subsection (e) for programs for low-income customers of the utility or cooperative. The reduced rate for municipally owned utilities and electric cooperatives under this section is in addition to any rate reduction that may result from local programs for low-income customers of the municipally owned utilities or electric cooperatives.

(b) The Public Utility Commission of Texas shall adopt rules under Section 39.903, Utilities Code, as amended by this section, as soon as is practicable. Fees for the system benefit fund collected under Section 39.903, Utilities Code, before the effective date of this section shall be remitted to the comptroller of public accounts for deposit in the general revenue fund. Fees for the system benefit fund collected under Section 39.903, Utilities Code, after the effective date of this section shall be remitted to the Public Utility Commission of Texas not later than 31 days after the fees are collected until the commission adopts rules governing the remittance of the fees to the trust fund established under that section, as amended by this section. The Public Utility Commission of Texas shall hold fees remitted to it under this subsection in trust for the benefit of the system benefit fund until that fund is established as provided by this section and shall transfer those fees to the fund on the date the fund is established.

SECTION 10. (a) The change in law made by this Act applies only to a violation committed on or after September 1, 2007. For purposes of this section, a violation is committed before September 1, 2007, if any element of the violation occurs before that date.

(b) A violation committed before September 1, 2007, is covered by the law in effect when the violation was committed, and the former law is continued in effect for that purpose.

SECTION 11. This Act takes effect September 1, 2007.