By: Fraser, Harris, West S.B. No. 482

A BILL TO BE ENTITLED

AN ACT

relating to competition, customer choice, and customer protection in the retail electric market; providing an administrative penalty.

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

SECTION 1. Section 17.008, Utilities Code, is amended to read as follows:

Sec. 17.008. PROTECTION OF RESIDENTIAL ELECTRIC SERVICE APPLICANTS AND CUSTOMERS. (a) In this section and in Section 17.009:

(1) "Credit history":

(A) means information regarding an individual's past history of:

(i) financial responsibility;

(ii) payment habits; or

(iii) creditworthiness; and

(B) does not include an individual's outstanding balance for retail electric or telecommunications service.

(2) "Credit score" means a score, grade, or value that is derived by a consumer reporting agency, as defined under Section 603(f) of the Fair Credit Reporting Act (15 U.S.C. Section 1681a(f)), using data from a credit history in any type of model, method, or program for the purpose of grading or ranking credit report data, whether derived electronically, from an algorithm, through a computer software application model or program, or through any other analogous process.

(3) "Utility payment data" means a measure that is derived by a consumer reporting agency, as defined under Section 603(f) of the Fair Credit Reporting Act (15 U.S.C. Section 1681a(f)), from a model specifically designed to correlate to utility payment histories.

(b) A retail electric provider may not deny an applicant's request to become a residential electric service customer on the basis of the applicant's credit history or credit score[, but may use the applicant's utility payment data until the later of January 1, 2007, or the date on which the price to beat is no longer in effect in the geographic area in which the customer is located].

(c) [Notwithstanding Subsection (b), while a retail electric provider is required to provide service to a geographic area as the affiliated retail electric provider, the provider may not deny an applicant's request to become a residential electric service customer within that geographic area on the basis of the applicant's credit history, credit score, or utility payment data.

[(d) After the date described in Subsection (b), a retail electric provider, including an affiliated retail electric provider, may not deny an applicant's request to become a residential electric service customer on the basis of the applicant's credit history, credit score, or utility payment data but may use the applicant's electric bill payment history.

[(e)] A retail electric provider may not use a credit score, a credit history, or utility payment data as the basis for determining the price for month-to-month electric service or electric service that includes a fixed price commitment of 12 months or less:

(1) for an existing residential customer; or

(2) in response to an applicant's request to become a residential electric service customer.

(d) On [(f)After the date described in Subsection (b), on] request by a customer or former customer in this state, a retail electric provider or electric utility shall timely provide to the customer or former customer bill payment history information with the retail electric provider or electric utility during the preceding 12-month period. Bill payment history information may be obtained by the customer or former customer once during each 12-month period without charge. If additional copies of bill payment history information are requested during a 12-month period, the electric service provider may charge the customer or former customer a reasonable fee for each copy.

(e) [(g)] On request by a retail electric provider, another retail electric provider or electric utility shall timely verify information that purports to show a customer's service and bill payment history with the retail electric provider or electric utility.

(f) 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) it can be shown that the person was a customer of one or more retail electric providers or electric utilities in this state during the entire 12-month period preceding the request for electric service; and

(2) during the preceding 12-month period, the person was not late in paying an electric service bill.

(g) If a person applying for residential electric service does not provide the documentation described in Subsection (f), nothing in this section limits [(h)This section does not limit] a retail electric provider's authority to require a deposit or advance payment as a condition of service.

(h) [(i)] Notwithstanding Subsection (c) [(e)], a retail electric provider may provide rewards, benefits, or credits to residential electric service customers on the basis of the customer's payment history for retail electric service to that provider.

SECTION 2. Section 39.051, Utilities Code, is amended by adding Subsection (h) to read as follows:

(h) On or before January 1, 2008, an electric utility that is affiliated with power generation companies that own 5,000 megawatts or more of generating capacity in this state or with retail electric providers that have annual sales of 10,000,000 megawatt hours or more of electricity in this state shall file with the commission an unbundling plan for discontinuing, within a reasonable time determined by the commission, the utility's affiliation with power generation companies or retail electric providers.

SECTION 3. Section 39.101, Utilities Code, is amended by amending Subsections (a) and (h) and adding Subsection (i) to read as follows:

(a) Before customer choice begins on January 1, 2002, the commission shall ensure that retail customer protections are established that entitle a customer:

(1) to safe, reliable, and reasonably priced electricity, including protection against service disconnections in an extreme weather emergency as provided by Subsection (h) or in cases of medical emergency or nonpayment for unrelated services;

(2) to privacy of customer consumption and credit information; provided, however, that the release to competitive retail electric providers of the names and addresses of residential customers that were served by the affiliated retail electric provider at the end of the price to beat period shall not be considered a violation of customer privacy;

(3) to bills presented in a clear format and in language readily understandable by customers;

(4) to the option to have all electric services on a single bill, except in those instances where multiple bills are allowed under Chapters 40 and 41;

(5) to protection from discrimination on the basis of race, color, sex, nationality, religion, or marital status;

(6) to accuracy of metering and billing;

(7) to information in English and Spanish and any other language as necessary concerning rates, key terms and conditions, in a standard format that will permit comparisons between price and service offerings, and the environmental impact of certain production facilities;

(8) to information in English and Spanish and any other language as necessary concerning low-income assistance programs and deferred payment plans; and

(9) to other information or protections necessary to ensure high-quality service to customers.

(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.

(i) A retail electric provider may not state or imply that it can provide a greater level of reliability of electric service or preferential treatment in the restoration of service following an outage; provided, however, that a retail electric provider may make claims regarding aspects of reliability related to customer service. The commission may impose an administrative penalty for a violation of this subsection in accordance with Section 15.024. A violation of this subsection shall be included in the highest class of violations in the classification system established by the commission under Section 15.023.

SECTION 4. (a) Subchapter C, Chapter 39, Utilities Code, is amended by adding Section 39.1015 to read as follows:

Sec. 39.1015. SUSPENSION OF DISCONNECTION FOR CERTAIN CUSTOMERS. (a) In this section:

(1) "Critical care residential customer" means a residential electric customer for whom an interruption or suspension of electric service will create a dangerous or life-threatening condition.

(2) "Elderly low-income customer" means a low-income customer who is 65 years old or older.

(3) "Low-income customer" means an electric customer:

(A) whose household income is not more than 125 percent of the federal poverty guidelines;

(B) who receives food stamps from the Health and Human Services Commission; or

(C) who receives medical assistance from a state agency that administers a part of the medical assistance program.

(4) "Service provider" means a retail electric provider, power generation company, aggregator, or other entity that provides retail electric service.

(b) During the period beginning July 1 and ending September 30 of each year a service provider:

(1) may not disconnect service or authorize the disconnection of service to a critical care residential customer or elderly low-income customer who contacts the service provider regarding bill payment or in response to a disconnection notice;

(2) may not disconnect service or authorize the disconnection of service to a low-income customer other than an elderly low-income customer if the customer:

(A) contacts the service provider regarding bill payment or in response to a disconnection notice; and

(B) enters into a deferred payment plan with the service provider for the current month's electric charges and meets the terms of any then current deferred payment plan;

(3) shall request reconnection of service or reconnect service to a critical care residential customer or an elderly low-income customer whose service is disconnected before or during the period if:

(A) the customer contacts the service provider regarding bill payment or in response to a disconnection notice; or

(B) the service provider has previously been notified that the customer is a critical care residential customer;

(4) shall request reconnection of service or reconnect service to a low-income customer whose service is disconnected before or during the period if the customer enters into a deferred payment plan with the service provider; and

(5) shall rescind a request for disconnection of service to a critical care residential customer, elderly low-income customer, or low-income customer made before the period begins if the service provider is prohibited under this subsection from disconnecting or authorizing the disconnection of the customer's service during the period.

(c) A service provider may not disconnect service or authorize the disconnection of a critical care residential customer's service during the period provided by Subsection (b) regardless of whether the customer contacts the service provider as provided by Subsection (b) if the service provider has previously been notified that the customer is a critical care residential customer.

(d) A service provider shall allow a critical care residential customer, elderly low-income customer, or low-income customer to establish with the provider a deferred payment plan in person or by telephone. The service provider shall confirm the payment plan with the customer in writing. The deferred payment plan may not include a penalty for late payments accrued during the period provided by Subsection (b). The service provider shall allow a critical care residential customer, elderly low-income customer, or low-income customer to renegotiate the terms of the deferred payment plan at least one time, regardless of whether the customer's economic or financial circumstances have changed. For a low-income customer other than an elderly low-income customer, during the period provided by Subsection (b), the payment plan may require the payment of not more than 25 percent of the then current month's charges plus any due installments of a previous deferred payment plan. For a low-income customer other than an elderly low-income customer, the service provider is not required to extend a deferred payment plan entered into under this subsection beyond the March billing cycle following the period provided by Subsection (b).

(e) A deferred payment plan established under Subsection (d) for one or more electric bills that come due during the period provided by Subsection (b) must provide:

(1) for a critical care residential customer or elderly low-income customer, that the customer is not required to pay more than 25 percent of the deferred electric bills as part of the first electric bill issued after the end of the period and that the remaining balance is to be paid in equal installments over the next five billing cycles, unless the customer requests a lesser number of installments; and

(2) for a low-income customer other than an elderly low-income customer, that the customer is required to pay not more than 25 percent of the deferred bills to initiate the agreement and that the remaining balance is to be paid in equal installments over the next five billing cycles, unless the customer requests a lesser number of installments.

(f) A service provider may pursue disconnection of electrical service for a critical care residential customer or an elderly low-income customer only after the period provided by Subsection (b) and only if the customer does not meet the terms of the deferred payment plan, unless the disconnection is otherwise prohibited. A service provider may pursue disconnection of service for a low-income customer other than an elderly low-income customer if the customer does not meet the terms of the deferred payment plan, unless the disconnection is otherwise prohibited. The service provider shall give the customer appropriate notice that the customer has not met the terms of the plan before the service provider disconnects or authorizes the disconnection of service.

(g) A service provider may encourage a critical care residential customer or elderly low-income customer to make partial payment of a deferred electric bill during the period provided by Subsection (b), but the service provider shall clearly inform the customer that the customer may not be disconnected for nonpayment before October 1 following the period provided by Subsection (b).

(b) This section takes effect June 1, 2007, if this Act 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 this section to take effect on that date, this section takes effect September 30, 2007.

SECTION 5. Subchapter C, Chapter 39, Utilities Code, is amended by adding Section 39.1016 to read as follows:

Sec. 39.1016. CANCELLATION OR TERMINATION FEES. 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.

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

Sec. 39.110. PROMOTION OF RESIDENTIAL CUSTOMER CHOICE. (a) The purpose of this section is to promote customer choice for residential customers by imposing a charge on certain retail electric providers to provide an additional incentive for them to compete for residential customers.

(b) This section applies to a retail electric provider that, as of December 31, 2006, had more than 250,000 residential customers and was required to offer service to residential customers at the price to beat in accordance with Section 39.202, and to any successor in interest of the retail electric provider, and any reference in this section to a retail service provider includes a successor in interest to such provider. This section no longer applies to a retail electric provider if the retail electric provider is not assessed a charge under Subsection (c) for two consecutive years.

(c) The commission shall impose an annual charge on a retail electric provider that is subject to this section if at the end of a calendar year the number of residential customers served by the retail electric provider in areas where customer choice is available outside the transmission and distribution utility service territory in which it was required to offer the price to beat is less than 35 percent of the total number of residential customers served by the retail electric provider in all areas open to competition in this state. As used in this subsection, the term "retail electric provider" includes providers that were affiliates as of December 31, 2006.

(d) The annual charge under this section shall equal the difference between the number of residential customers that the retail electric provider served on the last day of the relevant calendar year in the transmission and distribution utility service territory in which it was required to offer the price to beat and the number of residential customers that the retail electric provider, or other retail electric providers that as of December 31, 2006, were affiliated with the retail electric provider, served on the last day of the relevant calendar year outside the transmission and distribution utility service territory in which the retail electric provider was required to offer the price to beat multiplied by:

(1) $100 at the end of 2007;

(2) $200 at the end of 2008; and

(3) $300 at the end of 2009.

(e) Funds collected from the charge assessed under this section shall be held in a segregated account by the retail electric provider and allocated for programs devised and directed by the commission as follows:

(1) a fund for a customer education program in the transmission and distribution utility service territory in which the retail electric provider was required to offer the price to beat and a low-income discount program; and

(2) a fund to be paid to residential customers served by the retail electric provider in the transmission and distribution utility service territory in which the retail electric provider was required to offer the price to beat.

(f) The commission may adopt and enforce rules as necessary or appropriate to carry out this section.

SECTION 7. Section 39.202, Utilities Code, is amended by adding Subsections (q) and (r) to read as follows:

(q) On a schedule to be determined by the commission, the commission shall require affiliated retail electric providers to provide the commission with the names and addresses of residential customers who have not affirmatively chosen a retail electric provider or electric service plan. The commission shall release the names and addresses of those customers to retail electric providers licensed by the commission and currently offering residential service. The commission shall provide updated information on the list of names and addresses to remove the customers who have affirmatively made a choice in relation to providers or plans.

(r) The commission may conduct a program to assist residential customers receiving service from an affiliated retail electric provider under a month-to-month service plan to select a competitive retail electric provider or plan.

SECTION 8. Subchapter E, Chapter 39, Utilities Code, is amended by adding Section 39.2025 to read as follows:

Sec. 39.2025. MARKET REVIEW BASED ON PRICE OF ELECTRICITY. (a) The commission may review, as described in Subsection (b), the price of the electric service plan under which customers who took service under a price to beat tariff on December 31, 2006, who have not subsequently chosen an alternate retail electric service plan are served in a transmission and distribution utility service territory if:

(1) at the end of calendar year 2007 the number of such customers exceeds 25 percent of the number of residential customers in the transmission and distribution utility service territory in which such customers take service; or

(2) at the end of calendar year 2008 the number of such customers exceeds 15 percent of the number of residential customers in the transmission and distribution utility service territory in which such customers take service.

(b) If the price charged by a retail electric provider to applicable residential customers is more than two cents per kilowatt hour higher for more than six consecutive months than the simple average of the prices charged for other similar electric service plans in the relevant transmission and distribution utility service territory, the commission may initiate a review of the retail electric provider's price charged to such residential customers. If the commission determines that the retail electric provider's price charged to such customers is not reasonable based on its review, the commission may reduce the retail electric provider's residential price charged to such customers, but not to less than one cent per kilowatt hour higher than the simple average of the prices charged for other similar electric service plans in the relevant transmission and distribution utility service territory at the time the downward adjustment is required.

(c) The commission may adopt and enforce rules as necessary or appropriate to carry out this section.

(d) This section expires on September 1, 2009.

SECTION 9. Section 39.902, Utilities Code, is amended by amending Subsection (c) and adding Subsections (d) and (e) to read as follows:

(c) After the opening of the retail electric market, the commission shall conduct ongoing customer education designed to help customers make informed choices of electric services and retail electric providers. As part of ongoing education, the commission may provide customers information concerning prices available in the marketplace, savings available to customers by switching retail electric providers, plans, and information concerning specific retail electric providers, including instances of complaints against them and records relating to quality of customer service.

(d) The commission may require an affiliated retail electric provider to provide information to customers regarding savings available to the customer from switching to another retail electric provider or product in a manner specified by the commission, including through bill inserts or statements on customer bills.

(e) The commission may require a transmission and distribution utility to issue public service announcements that inform customers that service reliability and the restoration of electric service following an outage is not contingent upon the customer's receiving service from a particular retail electric provider.

SECTION 10. Except as otherwise provided by this Act, 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, except as otherwise provided by this Act, this Act takes effect September 1, 2007.