Honorable Troy Fraser, Chair, Senate Committee on Business & Commerce
FROM:
John S. O'Brien, Director, Legislative Budget Board
IN RE:
SB495 by Van de Putte (Relating to allowing a municipal electric utility to enter into hedging contracts for certain commodities.), As Introduced
No fiscal implication to the State is anticipated.
The bill would amend the Government Code by authorizing a municipality that owns a municipal electric utility that is engaged in the distribution and sale of electric energy or naturat gas to the public to enter into a hedging contract and related security and insurance agreements in relation to coal and nuclear fuel. Under current statute, those municipalities may enter into hedging contracts for fuel oil, natural gas, and electric energy. The expansion of applicability would provide flexibility in resources used by the utilities and protection against financial loss due to price fluctuation in the use of those other energy resources.
Local Government Impact
No significant fiscal implication to units of local government is anticipated.