80R7846 TAD-D

By: King of Parker H.B. No. 1901

A BILL TO BE ENTITLED

AN ACT

relating to the assessment of generation market-share of power generation companies.

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

SECTION 1. Sections 39.152(a) and (d), Utilities Code, are amended to read as follows:

(a) The commission shall certify a power region if:

(1) a sufficient number of interconnected utilities in the power region fall under the operational control of an independent organization as described by Section 39.151;

(2) the power region has a generally applicable tariff that guarantees open and nondiscriminatory access for all users to transmission and distribution facilities in the power region as provided by Section 39.203; and

(3) no person owns or [and] controls, or any combination of owning or controlling, more than 20 percent of the installed generation capacity located in or capable of delivering electricity to a power region, as determined according to Section 39.154.

(d) For a power region outside of ERCOT, a power generation company that is affiliated with an electric utility may elect to demonstrate that it meets the requirements of Subsection (a)(3) by showing that it does not own or [and] control, or any combination of owning or controlling, more than 20 percent of the installed capacity in a geographic market that includes the power region, using the guidelines, standards, and methods adopted by the Federal Energy Regulatory Commission.

SECTION 2. Sections 39.154(a), (c), and (e), Utilities Code, are amended to read as follows:

(a) Beginning on the date of introduction of customer choice, a power generation company may not own or [and] control, or any combination of owning or controlling, more than 20 percent of the installed generation capacity located in, or capable of delivering electricity to, a power region.

(c) In determining the percentage shares of installed generation capacity under this section, the commission shall combine capacity owned or [and] controlled by a power generation company and any entity that is affiliated with that power generation company within the power region, reduced by the installed generation capacity of those facilities that are made subject to capacity auctions under Sections 39.153(a) and (d).

(e) In determining the percentage shares of installed generation capacity owned or [and] controlled by a power generation company under this section and Section 39.156, the commission shall, for purposes of calculating the numerator, reduce the installed generation capacity owned or [and] controlled by that power generation company by the installed generation capacity of any "grandfathered facility" within an ozone nonattainment area as of September 1, 1999, for which that power generation company has commenced complying or made a binding commitment to comply with Section 39.264. This subsection applies only to a power generation company that is affiliated with an electric utility that owned and controlled more than 27 percent of the installed generation capacity in the power region on January 1, 1999.

SECTION 3. Section 39.155(a), Utilities Code, is amended to read as follows:

(a) Each person, municipally owned utility, electric cooperative, and river authority that owns or controls generation facilities and offers electricity for sale in this state shall report to the commission its installed generation capacity, the total amount of capacity available for sale to others, the total amount of capacity under contract to others, the total amount of capacity dedicated to its own use, its annual wholesale power sales in the state, its annual retail power sales in the state, and any other information necessary for the commission to assess market power or the development of a competitive retail market in the state. The commission shall by rule prescribe the nature and detail of the reporting requirements and shall administer those reporting requirements in a manner that ensures the confidentiality of competitively sensitive information.

SECTION 4. Sections 39.156(a) and (b), Utilities Code, are amended to read as follows:

(a) In this section, "market power mitigation plan" or "plan" means a written proposal by an electric utility or a power generation company for reducing its ownership or [and] control of installed generation capacity as required by Section 39.154.

(b) An electric utility or power generation company owning or [and] controlling, or any combination of owning or controlling, more than 20 percent of the generation capacity located in, or capable of delivering electricity to, a power region shall file a market power mitigation plan with the commission not later than December 1, 2000.

SECTION 5. Section 39.157(b), Utilities Code, is amended to read as follows:

(b) Beginning on the date of introduction of customer choice, a person that owns or controls generation facilities may not own transmission or distribution facilities in this state except for those facilities necessary to interconnect a generation facility with the transmission or distribution network, a facility not dedicated to public use, or a facility otherwise excluded from the definition of "electric utility" under Section 31.002. However, nothing in this chapter shall prohibit a power generation company affiliated with a transmission and distribution utility from owning or controlling generation facilities.

SECTION 6. Section 39.158(a), Utilities Code, is amended to read as follows:

(a) A person who owns or controls [An owner of] electric generation facilities that offers electricity for sale in the state and proposes to merge, consolidate, or otherwise become affiliated with another person who owns or controls [owner of] electric generation facilities that offers electricity for sale in this state shall obtain the approval of the commission before closing if the electricity offered for sale in the power region by the merged, consolidated, or affiliated entity will exceed one percent of the total electricity for sale in the power region. The approval shall be requested at least 120 days before the date of the proposed closing. The commission shall approve the transaction unless the commission finds that the transaction results in a violation of Section 39.154. If the commission finds that the transaction as proposed would violate Section 39.154, the commission may condition approval of the transaction on adoption of reasonable modifications to the transaction as prescribed by the commission to mitigate potential market power abuses.

SECTION 7. Section 39.407(a), Utilities Code, is amended to read as follows:

(a) If an electric utility chooses on or after January 1, 2007, to participate in customer choice, the commission may not authorize customer choice until the applicable power region has been certified as a qualifying power region under Section 39.152(a). Except as otherwise provided by this subsection, the commission shall certify that the requirements of Section 39.152(a)(3) are met for electric utilities subject to this subchapter only upon a finding that the total capacity owned or [and] controlled, or any combination of owned or controlled, by each such electric utility and its affiliates does not exceed 20 percent of the total installed generation capacity within the constrained geographic region served by each such electric utility plus the total available transmission capacity capable of delivering firm power and energy to that constrained geographic region. Not later than May 1, 2002, each electric utility subject to this subchapter shall submit to the electric utility restructuring legislative oversight committee an analysis of the needed transmission facilities necessary to make the electric utility's service area transmission capability comparable to areas within the ERCOT power region. On or after September 1, 2003, each electric utility subject to this subchapter shall file the utility's plans to develop the utility's transmission interconnections with the utility's power region or other adjacent power regions. The commission shall review the plan and not later than the 180th day after the date the plan is filed, determine the additional transmission facilities necessary to provide access to power and energy that is comparable to the access provided in areas within the ERCOT power region; provided, however, that if a hearing is requested by any party to the proceeding, the 180-day deadline will be extended one day for each day of hearings. The commission shall, as a part of the commission's approval of the plan, approve a rate rider mechanism for the recovery of the incremental costs of those facilities after the facilities are completed and in-service. A finding of need under this subsection shall meet the requirements of Sections 37.056(c)(1), (2), and (4)(E). The commission may certify that the requirements of Section 39.152(a)(3) are met for electric utilities subject to this subchapter if the commission finds that:

(1) each such utility has sufficient transmission facilities to provide customers access to power and energy from capacity controlled by suppliers not affiliated with the incumbent utility that is comparable to the access to power and energy from capacity controlled by suppliers not affiliated with the incumbent utilities in areas of the ERCOT power region; and

(2) the total capacity owned or [and] controlled, or any combination of owned or controlled, by each such electric utility and its affiliates does not exceed 20 percent of the total installed generation capacity within the power region.

SECTION 8. Section 39.453(b), Utilities Code, is amended to read as follows:

(b) The commission shall certify that the requirement of Section 39.152(a)(3) is met for an electric utility subject to this subchapter only if the commission finds that the total capacity owned or [and] controlled, or any combination of owned or controlled, by the electric utility and the utility's affiliates does not exceed 20 percent of the total installed generation capacity within the power region of that utility.

SECTION 9. This Act takes effect September 1, 2007.