H.R. No. 2854
 
 
 
R E S O L U T I O N
         BE IT RESOLVED by the House of Representatives of the State of
  Texas, 80th Legislature, Regular Session, 2007, That House Rule 13,
  Section 9(a), be suspended in part as provided by House Rule 13,
  Section 9(f), to enable the conference committee appointed to
  resolve the differences on Senate Bill 482 (competition and
  customer choice in the retail electric power market) to consider
  and take action on the following matters:
         (1)  House Rule 13, Section 9(a)(4), is suspended to permit
  the committee to add the following sections to the bill, to amend
  Sections 15.023(b) and (d), Utilities Code, and Section 15.024(f),
  Utilities Code, to read:
         SECTION 1.  Sections 15.023(b) and (d), Utilities Code, are
  amended to read as follows:
         (b)  The penalty for a violation may be in an amount not to
  exceed $25,000 except as provided by Section 39.157. Each day a
  violation continues or occurs is a separate violation for purposes
  of imposing a penalty.
         (d)  The classification system established under Subsection
  (c) shall provide that a penalty in an amount that exceeds $5,000
  may be assessed only if the violation is included in the highest
  class of violations in the classification system. Violations of
  Section 39.157 shall be included in the highest class of
  violations.
         SECTION 2.  Section 15.024(f), Utilities Code, is amended to
  read as follows:
         (f)  If the person requests a hearing or fails to timely
  respond to the notice, the executive director shall set a hearing
  and give notice of the hearing to the person. The hearing shall be
  held in accordance with Subchapter B, Chapter 14 [by an
  administrative law judge of the State Office of Administrative
  Hearings]. For hearings conducted by the State Office of
  Administrative Hearings, the [The] administrative law judge shall
  make findings of fact and conclusions of law and promptly issue to
  the commission a proposal for a decision about the occurrence of the
  violation and the amount of a proposed penalty. Based on the
  findings of fact, conclusions of law, and proposal for a decision,
  the commission by order may find that a violation has occurred and
  impose a penalty or may find that no violation occurred.
         Explanation: The addition of those sections to the bill is
  necessary both to clarify the applicability of Sections 15.023 and
  15.024, Utilities Code, when a penalty may be imposed as provided by
  Section 39.157, Utilities Code, as amended by the bill, and to
  clarify the authority of the Public Utility Commission of Texas to
  conduct hearings in administrative penalty matters.
         (2)  House Rule 13, Section 9(a)(2), is suspended to permit
  the committee to omit amended Section 39.101(h), Utilities Code,
  from the bill.
         Explanation: The change is necessary to retain the current
  law's flexibility and certainty concerning the period for deferrals
  of electric utility bill payments because of extreme weather.
         (3)  House Rule 13, Sections 9(a)(3) and (4), are suspended
  to permit the committee to add the following Subsection (i) to added
  Section 39.1015, Utilities Code, to read:
         (i)  This section does not apply to metered electric service
  sold to residential customers on a prepaid basis.
         Explanation: The change is necessary to prevent the
  application of the prohibition on disconnecting certain customers'
  electric service, intended to apply to customers with whom
  arrangements are made for periodic payments for service, to
  differently situated prepaid electric service customers.
         (4)  House Rule 13, Section 9(a)(4), is suspended to permit
  the committee to add the following sections to the bill, to amend
  Sections 39.262(c), 39.301, 39.302(4), 39.303(a), and 39.303(b),
  Utilities Code, to read:
         SECTION 15.  Section 39.262(c), Utilities Code, is amended
  to read as follows:
         (c)  After January 10, 2004, at a schedule and under
  procedures to be determined by the commission, each transmission
  and distribution utility, its affiliated retail electric provider,
  and its affiliated power generation company shall jointly file to
  finalize stranded costs under Subsections (h) and (i) and reconcile
  those costs with the estimated stranded costs used to develop the
  competition transition charge in the proceeding held under Section
  39.201. Any resulting difference shall be applied to the
  nonbypassable delivery rates of the transmission and distribution
  utility, except that at the utility's option, any or all of the
  amounts recovered under this section [remaining stranded costs] may
  be securitized under Subchapter G.
         SECTION 16.  Section 39.301, Utilities Code, is amended to
  read as follows:
         Sec. 39.301.  PURPOSE. The purpose of this subchapter is to
  enable utilities to use securitization financing to recover
  regulatory assets, all other amounts determined under Section
  39.262, and any amounts being recovered under a competition
  transition charge determined as a result of the proceedings under
  Sections 39.201 and 39.262. This [and stranded costs, because this]
  type of debt will lower the carrying costs of the assets relative to
  the costs that would be incurred using conventional utility
  financing methods. The proceeds of the transition bonds shall be
  used solely for the purposes of reducing the amount of recoverable
  regulatory assets and other amounts [stranded costs], as determined
  by the commission in accordance with this chapter, through the
  refinancing or retirement of utility debt or equity. The
  commission shall ensure that securitization provides tangible and
  quantifiable benefits to ratepayers, greater than would have been
  achieved absent the issuance of transition bonds. The commission
  shall ensure that the structuring and pricing of the transition
  bonds result in the lowest transition bond charges consistent with
  market conditions and the terms of the financing order. The amount
  securitized may not exceed the present value of the revenue
  requirement over the life of the proposed transition bond
  associated with the regulatory assets or other amounts [stranded
  costs] sought to be securitized. The present value calculation
  shall use a discount rate equal to the proposed interest rate on the
  transition bonds.
         SECTION 17.  Section 39.302(4), Utilities Code, is amended
  to read as follows:
               (4)  "Qualified costs" means 100 percent of an electric
  utility's regulatory assets and 75 percent of its recoverable costs
  determined by the commission under Section 39.201 and any remaining
  amounts [stranded costs] determined under Section 39.262 together
  with the costs of issuing, supporting, and servicing transition
  bonds and any costs of retiring and refunding the electric
  utility's existing debt and equity securities in connection with
  the issuance of transition bonds. The term includes the costs to
  the commission of acquiring professional services for the purpose
  of evaluating proposed transactions under Section 39.201 and this
  subchapter.
         SECTION 18.  Sections 39.303(a) and (b), Utilities Code, are
  amended to read as follows:
         (a)  The commission shall adopt a financing order, on
  application of a utility to recover the utility's regulatory assets
  and other amounts determined [eligible stranded costs] under
  Section 39.201 or 39.262, on making a finding that the total amount
  of revenues to be collected under the financing order is less than
  the revenue requirement that would be recovered over the remaining
  life of the regulatory assets or other amounts [stranded costs]
  using conventional financing methods and that the financing order
  is consistent with the standards in Section 39.301.
         (b)  The financing order shall detail the amount of
  regulatory assets and other amounts [stranded costs] to be
  recovered and the period over which the nonbypassable transition
  charges shall be recovered, which period may not exceed 15 years. If
  an amount determined under Section 39.262 is subject to judicial
  review at the time of the securitization proceeding, the financing
  order shall include an adjustment mechanism requiring the utility
  to adjust its rates, other than transition charges, or provide
  credits, other than credits to transition charges, in a manner that
  would refund over the remaining life of the transition bonds any
  overpayments resulting from securitization of amounts in excess of
  the amount resulting from a final determination after completion of
  all appellate reviews. The adjustment mechanism may not affect the
  stream of revenue available to service the transition bonds. An
  adjustment may not be made under this subsection until all
  appellate reviews, including, if applicable, appellate reviews
  following a commission decision on remand of its original orders,
  have been completed.
         Explanation: The addition of those sections to the bill is
  necessary to enable certain utilities to use securitization
  financing to recover, in addition to regulatory assets, amounts
  determined in a true-up proceeding under Subchapter F, Chapter 39,
  Utilities Code, and amounts being recovered under a competition
  transition charge under Subchapter E or F, Chapter 39, Utilities
  Code.
 
  King of Parker
 
  ______________________________
  Speaker of the House     
 
         I certify that H.R. No. 2854 was adopted by the House on May
  26, 2007, by the following vote:  Yeas 100, Nays 35, 3 present, not
  voting.
 
  ______________________________
  Chief Clerk of the House