80R1701 JJT-D

By: Zaffirini S.B. No. 65

A BILL TO BE ENTITLED

AN ACT

relating to reconstituting the system benefit fund as a trust fund and to uses of the fund.

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

SECTION 1. 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 established under Subsection (a) 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); and

(3) [(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.

SECTION 2. The Public Utility Commission of Texas shall adopt rules under Section 39.903, Utilities Code, as amended by this Act, as soon as is practicable. Fees for the system benefit fund collected under Section 39.903, Utilities Code, before the effective date of this Act 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 Act 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 Act. The Public Utility Commission of Texas shall hold fees remitted to it under this section in trust for the benefit of the system benefit fund until that fund is established as provided by this Act and shall transfer those fees to the fund on the date the fund is established.

SECTION 3. This Act takes effect September 1, 2007.