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

(In the Senate - Filed February 7, 2007; February 14, 2007, read first time and referred to Committee on Business and Commerce; March 5, 2007, reported adversely, with favorable Committee Substitute by the following vote: Yeas 9, Nays 0; March 5, 2007, sent to printer.)

COMMITTEE SUBSTITUTE FOR S.B. No. 482 By: Fraser

A BILL TO BE ENTITLED

AN ACT

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

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

SECTION 1. 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 2. Section 39.101, Utilities Code, is amended by amending Subsection (a) 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 information identifying 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.

(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 3. 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 on December 31, 2006, 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 40 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 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 4. 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, affiliated retail electric providers shall release information to competitive retail electric providers that identifies the residential customers receiving retail electric service at, or within 10 percent of, the price to beat rate on December 31, 2006, from the affiliated retail electric providers.

(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.

SECTION 5. 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) If the price charged by a retail electric provider to residential customers is more than two cents per kilowatt hour higher than the simple average of the prices charged for other similar electric service plans in the market for more than six consecutive months, the commission shall initiate a review of the retail electric provider's cost of power to serve residential customers. If the commission determines that the retail electric provider's residential retail price charged to customers is not reasonable based on its review of the retail electric provider's power cost for those customers, the commission may reduce the retail electric provider's residential price charged to customers, but not to more than one cent per kilowatt hour higher than the simple average of the prices charged for other similar electric service plans in the market at the time the downward adjustment is required.

(b) If the retail electric provider's price to customers was lowered as a result of the commission review described by Subsection (a), the retail electric provider must provide 45 days' notice to subsequently raise the price charged to the affected customers.

(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 6. 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, 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 7. 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.

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