80R11351 JJT-D

By: Fraser, et al. S.B. No. 482

Substitute the following for S.B. No. 482:

By: King of ParkerC.S.S.B. No. 482C.S.S.B. No. 482 King of Parker C.S.S.B. No. 482

A BILL TO BE ENTITLED

AN ACT

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

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

SECTION 1. Sections 17.157(a) and (b), Utilities Code, are amended to read as follows:

(a) The commission may investigate or resolve disputes between a residential retail customer and a billing utility, service provider, telecommunications utility, retail electric provider, or electric utility.

(b) In exercising its authority under Subsection (a), the commission may:

(1) order a billing utility, service provider, retail electric provider, or electric utility to produce information or records;

(2) require that all contracts, bills, and other communications from a billing utility, service provider, retail electric provider, or electric utility display a working toll-free telephone number that residential customers may call with complaints and inquiries;

(3) require a billing utility, service provider, retail electric provider, or electric utility to refund or credit overcharges or unauthorized charges with interest if the billing utility, service provider, retail electric provider, or electric utility has failed to comply with commission rules or a contract with the residential customer;

(4) order appropriate relief to ensure that a residential customer's choice of a telecommunications service provider, a retail electric provider, or an electric utility that encompasses a geographic area in which more than one provider has been certificated is honored;

(5) require the continuation of service to a residential [or small commercial] customer while a dispute is pending regarding charges the customer has alleged were unauthorized; and

(6) investigate an alleged violation.

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 and the competitive affiliates of the utility created in accordance with Subsection (b) and owned by a common holding company each shall:

(1) have a name and logo that is distinct from the name and logo of each of the other entities owned by the common holding company and distinct from the name and logo of the common holding company;

(2) have its board of directors composed exclusively of individuals who are not members of the board of directors of any of the other entities owned by the common holding company and are not members of the board of the common holding company;

(3) have a chief executive officer who is the chief executive officer only of that entity;

(4) have its headquarters located in a building separate and apart from the building or buildings in which the headquarters of any of the other entities owned by the common holding company is located or in which the headquarters of the common holding company is located;

(5) maintain an arm's-length relationship with the other entities owned by the common holding company;

(6) enter into transactions with another entity owned by the common holding company only on a commercially reasonable basis and only as approved by a majority of the directors of its governing board of directors;

(7) prepare its separate annual financial statement in accordance with generally accepted accounting principles showing its assets and liabilities as separate and distinct from the assets of the other entities owned by the common holding company; and

(8) ensure that the commission has complete access to all of the entity's books and records pertaining to transactions between the entity and another entity owned by the common holding company.

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

(i) A retail electric provider may not state or imply that it can provide a level of reliability of electric service or preferential treatment in the restoration of service following an outage that is better than another provider can provide. A retail electric provider may make claims regarding the provider's customer service reliability. 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. 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) A reference in this section to "retail electric provider" includes:

(1) a successor in interest to the retail electric provider; and

(2) a provider that was an affiliate of the retail electric provider on December 31, 2006.

(b) 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.

(c) This section applies only to a retail electric provider with more than 250,000 residential customers in this state that on December 31, 2006, was required to offer service to residential customers at the price to beat in accordance with Section 39.202. This section does not apply to a retail electric provider at any time after the retail electric provider has not been assessed a charge under Subsection (d) for two consecutive years.

(d) The commission annually shall impose a charge on a retail electric provider if the gross number of residential customers the provider gained during a calendar year, as measured by move-in and switch transactions processed by the independent organization, 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 was less than the following customer target number:

(1) for a retail electric provider with one million or more residential customers in this state on December 31, 2006, a gain of 90,000 residential customers; and

(2) for a retail electric provider with fewer than one million residential customers in this state on December 31, 2006, a gain of 45,000 residential customers.

(e) The annual charge the commission shall impose under Subsection (d) is computed by multiplying the difference between the applicable target number of residential customers gained as provided by Subsection (d)(1) or (2) and the gross number of residential customers that the retail electric provider actually gained during the relevant calendar year by:

(1) $100 on December 31, 2007;

(2) $200 on December 31, 2008; and

(3) $300 on December 31, 2009.

(f) Money collected from the charge assessed under this section may be appropriated only for programs devised and directed by the commission as provided by this subsection. If appropriations from the system benefit fund are sufficient to assist low-income electric customers by providing the 10 percent reduced rate prescribed by Section 39.903(h), the money collected from the charges under Subsection (d) may be used only for a residential customer education program under Section 39.903, including the provision of call center services when the commission conducts a customer education program under Section 39.2021(e). If appropriations from the system benefit fund are not sufficient to assist low-income electric customers by providing the 10 percent reduced rate prescribed by Section 39.903(h), the money collected from the charges under Subsection (d) may be appropriated only for the following purposes, in the following order of priority:

(1) to assist low-income electric customers by providing the 10 percent reduced rate prescribed by Section 39.903(h); and

(2) for a residential customer education program under Section 39.903, including the provision of call center services when the commission conducts a customer education program under Section 39.2021(e), using money remaining after the reduced rate prescribed by Section 39.903(h) has been fully implemented.

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

(h) This section expires March 31, 2010.

SECTION 5. Subchapter E, Chapter 39, Utilities Code, is amended by adding Section 39.2021 to read as follows:

Sec. 39.2021. ASSISTANCE IN CUSTOMER CHOICE. (a) In this section, "residential customers under a price to beat tariff on December 31, 2006" includes:

(1) residential customers served at the price to beat on that date;

(2) residential customers who received discounts off of the price to beat on that date in the form of reduced rates, bill credits, or customer appreciation bonuses without affirmatively choosing an electric service plan other than the price to beat; and

(3) any other residential customers who as of December 31, 2006, had not affirmatively chosen an electric service plan.

(b) This section applies only to:

(1) a retail electric provider that served residential customers under a price to beat tariff on December 31, 2006; and

(2) the residential customers under a price to beat tariff on December 31, 2006, served by the retail electric provider.

(c) Until March 1, 2008, a retail electric provider shall assist the provider's residential customers who have not affirmatively chosen an electric service plan in choosing an alternative electric service plan offered by the retail electric provider.

(d) After March 1, 2008, a retail electric provider may provide to the provider's residential customers who have not affirmatively chosen an electric service plan offered by the provider a ballot that describes the alternative electric service plans the provider offers to residential customers and that allows the customer to affirmatively choose a particular alternative electric service plan. If a residential customer does not affirmatively choose an alternative electric service plan under the balloting process, the provider shall, after giving the customer at least 45 days' notice, modify the terms of service for the customer to conform to the terms of service for an alternative electric service plan offered to residential customers that does not include a termination fee. The notice may be included with the ballot provided under this subsection.

(e) If a retail electric provider did not provide ballots to its residential customers under Subsection (d) or if the provider paid a charge imposed under Section 39.110(d) for the calendar year 2007, on or before May 1, 2008, the provider shall release to the commission the names and addresses of its residential customers who have not affirmatively chosen an alternative electric service plan. The commission may use this customer information to conduct a customer education program under Section 39.903 to inform those residential customers of the availability of an alternative electric service plan offered by that provider or of alternative retail electric providers from whom the customers may receive service.

(f) For purposes of this section, a residential customer is not considered to have affirmatively chosen an electric service plan offered by a retail electric provider if electric service is provided under a plan that is initiated through negative option marketing.

(g) A retail electric provider shall include on a ballot provided under Subsection (d) the following statement: "You may obtain important information that will allow you to compare the products offered on this ballot with other retail electric services by contacting the Public Utility Commission of Texas or by viewing the Internet site at http://www.powertochoose.com."

SECTION 6. Section 39.902, Utilities Code, is amended by amending Subsection (c) and adding Subsection (d) 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 or service 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 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 on the customer's receiving service from a particular retail electric provider.

SECTION 7. The change in law made to Section 17.157(a), Utilities Code, by this Act does not apply to a dispute for which a final administrative order is entered on or before the effective date of this Act.

SECTION 8. 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.