80R14608 PAM-F

By: Keffer H.B. No. 3498

Substitute the following for H.B. No. 3498:

By: Menendez C.S.H.B. No. 3498

A BILL TO BE ENTITLED

AN ACT

relating to energy aggregation by political subdivisions.

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

SECTION 1. Section 304.001, Local Government Code, is amended by amending Subsection (d) and adding Subsection (d-1) to read as follows:

(d) A political subdivision corporation may negotiate on behalf of its incorporating political subdivisions and the citizens of municipalities that are member political subdivisions that create aggregation programs under Section 304.002 for the purchase of electricity, make contracts for the purchase of electricity, purchase electricity, and take any other action necessary to purchase electricity for use:

(1) in the public facilities of the political subdivision or subdivisions represented by the political subdivision corporation; or

(2) by citizens of municipalities that are member political subdivisions that create aggregation programs under Section 304.002.

(d-1) In Subsection (d) [this subsection], "electricity" means electric energy, capacity, energy services, ancillary services, or other electric services for retail or wholesale consumption by the political subdivisions.

SECTION 2. Section 304.002, Local Government Code, is amended by amending Subsection (a) and adding Subsections (b-1), (b-2), (b-3), (d), (e), and (f) to read as follows:

(a) A political subdivision aggregator may negotiate for the purchase of, contract for the purchase of, purchase, and take any other action necessary to purchase electricity and energy services on behalf of the citizens of the political subdivision or subdivisions. [The citizens must affirmatively request to be included in the aggregation services by the political subdivision aggregator.]

(b-1) After a public hearing for which notice as provided by law is given, the governing body of a municipality with a population of less than 50,000 located in a county with a population of less than 200,000 may adopt an ordinance or resolution providing for:

(1) automatic enrollment of the citizens of the municipality in aggregation services provided under this section; and

(2) enrollment on request of citizens who reside in the unincorporated area located within 20 miles of the geographic boundaries of the municipality.

(b-2) A municipality that adopts an ordinance or resolution under Subsection (b-1) shall order an election on the question of whether citizens of the municipality will be automatically enrolled in aggregation services. Automatic enrollment of citizens of a municipality in aggregation services may not be implemented by the municipality under this section unless:

(1) approved by a majority of the voters of the municipality voting in an election held for that purpose; and

(2) notice is provided as required by Subsection (b-3).

(b-3) If automatic enrollment of the citizens is approved at an election held under Subsection (b-2), the municipality shall provide written notice to each citizen not later than the 60th day before the date the automatic enrollment will take effect. The notice must be mailed to each citizen and state that the citizen will be automatically enrolled unless the citizen expressly requests to be excluded from enrollment. A citizen who resides in an unincorporated area described by Subsection (b-1)(2) must affirmatively request the municipality to include the citizen in the aggregation services offered by the political subdivision aggregator.

(d) Each retail electric provider and transmission and distribution utility shall provide to a municipality any information the municipality considers necessary to solicit or administer an aggregation program under this section, including the name, address, electric service identifier, and monthly usage of each residential customer who resides in the municipality. The provider or utility may not require the consent of a customer as a condition of providing information to a municipality under this subsection. The municipality may provide to a third party or an aggregator any information received under this subsection only if the information is provided in relation to submitting a bid on, implementing, or administering an aggregation program under this section.

(e) This section is not intended to abrogate an electric service contract between a citizen of any municipality and a competitive retail electric provider. The initial customer base for an aggregation program consists only of customers who remained on price to beat rates established under Section 39.202, Utilities Code, as of December 31, 2006, and who continue to receive service from an affiliated retail electric provider on the date an ordinance or resolution creating the citizen aggregation program is passed. A citizen who receives power from a competitive retail electric provider as of the date an ordinance or resolution passes may not join an aggregation program under this section until the citizen's contract with the competitive retail electric provider expires.

(f) Any savings attributable to an aggregation program under this section accrues to the citizen participants, except that a municipality may recover its actual administrative costs.

SECTION 3. This 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, 2007.