BILL ANALYSIS

C.S.H.B. 1904

By: Turner, Sylvester

State Affairs

Committee Report (Substituted)

BACKGROUND AND PURPOSE

Current law protects all residential customers from disconnection during extremely hot or cold weather, and Public Utility Commission of Texas (PUC) rules allow a customer to delay disconnection for nonpayment when doing so would cause a household member to become seriously ill.  There is no statutory guidance, however, on the treatment of vulnerable customers during hot Texas summers.  In 2006, the PUC adopted an emergency rule to address deferred payment plans and disconnect prohibitions for low-income customers and elderly or critical care customers.  During 2007 and 2008, some retail electric providers voluntarily offered assistance to these customers.

C.S.H.B. 1904 ensures that all vulnerable customers receive the same protections each summer, regardless of the electric service provider. 

RULEMAKING AUTHORITY

It is the committee's opinion that rulemaking authority is expressly granted to the Public Utility Commission of Texas in SECTIONS 1 and 2 of this bill.

ANALYSIS

C.S.H.B. 1904 amends the Utilities Code to prohibit a retail electric provider or other entity that provides retail electric service, during the period beginning July 1 and ending September 30 of each year, from disconnecting or authorizing the disconnection of service to a low-income residential customer, or a low-income residential customer of at least 65 years of age, who requests, and complies with the terms of, a deferred payment plan applicable to that customer. The bill prohibits such an entity, during the same July-September period, from disconnecting or authorizing the disconnection of service to a residential customer who, under rules of the Public Utility Commission of Texas (PUC), is designated as a critical care residential customer for whom an interruption or suspension of electric service will create a dangerous or life-threatening condition. 

C.S.H.B. 1904 requires a retail electric provider or other entity that provides retail electric service to provide clear notice of such legal protections on or with the first invoice issued to a residential customer during the July-September period of each year.   The bill sets this provision to expire on June 30, 2010. The bill requires an entity subsequently, on and after July 1, 2010, to provide clear notice of the legal protections on or with each disconnection notice issued to a residential customer during the July-September period of each year.

C.S.H.B. 1904 requires a retail electric provider or other entity that provides retail electric service, on request, to offer a low-income residential customer a deferred payment plan that allows the customer to avoid disconnection during the July-September period. The bill provides that such a customer is eligible for the deferred payment plan if the customer does not owe an outstanding balance from a deferred payment plan granted by the provider of electric service in a previous year that allowed the customer to avoid disconnection during the July-September period, if the customer pays at least 33 percent of the outstanding balance due, and if the customer agrees to pay the remaining balance in equal installments over the next five billing cycles, unless the customer agrees to a lesser number of installments. The bill authorizes such a customer who is granted a deferred payment plan to continue to avoid disconnection during the July-September period by paying the additional amounts that become due, including the installment amount due, or by paying at least 33 percent of the balance then currently due, including any installment amount due, and agreeing to pay the recalculated remaining balance in equal installments over the next five billing cycles, unless the customer agrees to a lesser number of installments.

C.S.H.B. 1904 requires a retail electric provider or other entity that provides retail electric service, on request, to offer a low-income residential customer of at least 65 years of age a deferred payment plan that allows the customer to avoid disconnection during the July-September period without payment of any outstanding balance until after September 30.  The bill provides that such a customer is eligible for the deferred payment plan if the customer agrees to pay 25 percent of the deferred charges when the first bill issued to the customer after September 30 is due, and to pay the remaining balance in equal installments over the next five billing cycles, unless the customer agrees to a lesser number of installments. 

C.S.H.B. 1904 requires a retail electric provider or other entity that provides retail electric service to allow a critical care residential customer to pay unpaid amounts accumulated during the July-September period over the next six billing cycles beginning with the first bill issued to the customer after September 30. 

C.S.H.B. 1904 authorizes a retail electric provider or other entity that provides retail electric service to encourage a low-income residential customer of at least 65 years of age, or a critical care residential customer, to make a partial payment toward an amount deferred during the July-September period, but requires the provider to inform the customer clearly that the customer may not be disconnected for nonpayment before October 1 following that period. 

C.S.H.B. 1904 provides that the disconnection prohibitions and the deferred payment plan provisions do not apply to metered electric service sold to a residential customer on a prepaid basis. The bill provides that a critical care residential customer for whom an interruption or suspension of electric service will create a dangerous or life-threatening condition is not eligible for metered electric service sold on a prepaid basis.

C.S.H.B. 1904 requires the PUC by rule to provide uniform standards for a retail electric provider or other entity that provides retail electric service to apply when designating a critical care residential customer for whom an interruption or suspension of electric service will create a dangerous or life-threatening condition, and special protections and procedures for a retail electric provider or other entity that provides retail electric service to apply when disconnecting a critical care residential customer for whom an interruption or suspension of electric service will create a dangerous or life-threatening condition.

C.S.H.B. 1904 requires the PUC to adopt rules to implement the bill's changes as quickly as practicable.

EFFECTIVE DATE

On passage, or, if the act does not receive the necessary vote, the act takes effect September 1, 2009.

COMPARISON OF ORIGINAL AND SUBSTITUTE

C.S.H.B. 1904 removes a provision in the original requiring a retail electric provider, power generation company, aggregator, or other entity that provides retail electric service to waive any initial deposit requirement for a residential customer who is at least 65 years of age and is not currently delinquent in payment of any electric service account, or who has a payment history for electric service in Texas that includes not more than one late payment in the preceding 12 months.

C.S.H.B. 1904 removes references in the original to a power generation company and an aggregator, instead referring to a retail electric provider or other entity that provides retail electric service.

C.S.H.B. 1904, in provisions that require an entity to provide notice of the protections available, differs from the original, which requires the inclusion of such notice with the first invoice issued to a residential customer after June 30 of each year. The substitute instead has a temporary provision, expiring June 30, 2010, that requires inclusion of the notice on or with the first invoice issued to a residential customer during the period beginning July 1 and ending September 30 each year, and subsequently, on or after July 1, 2010, requires inclusion of the notice of available protections on or with each disconnection notice issued to a residential customer during the period beginning July 1 and ending September 30 of each year. The substitute removes a provision in the original specifying that the notice may be printed on the bill or to be included as an insert provided with the bill.

C.S.H.B. 1904 adds provisions not in the original specifying that a low-income customer granted a deferred payment plan may continue to avoid disconnection during the July-September period by satisfying either of two specified payment requirements.  

C.S.H.B. 1904 adds a provision not in the original to require an entity to allow a residential customer who is designated as a critical care residential customer to pay unpaid amounts accumulated during the July-September period over the next six billing cycles beginning with the first bill issued to the customer after September 30. The substitute adds a provision not in the original to authorize an entity to encourage a low-income customer of age 65 or over, or a critical care residential customer, to make a partial payment toward an amount deferred during the period, but requires the provider to inform the customer clearly that the customer may not be disconnected for nonpayment before October 1 following that period. 

C.S.H.B. 1904 adds a provision not in the original to provide that a critical care residential customer for whom an interruption or suspension of electric service will create a dangerous or life-threatening condition is not eligible for metered electric service sold on a prepaid basis.

C.S.H.B. 1904 adds a provision not in the original to require rules adopted by the Public Utility Commission of Texas (PUC) to provide uniform standards for such an entity to apply when designating a critical care residential customer for whom an interruption or suspension of electric service will create a dangerous or life-threatening condition, and special protections and procedures for such an entity to apply when disconnecting a critical care residential customer for whom an interruption or suspension of electric service will create a dangerous or life-threatening condition.

C.S.H.B. 1904, in provisions requiring the PUC to adopt rules as quickly as practicable, removes the requirement in the original that the PUC do so in order that low-income electric customers and elderly or vulnerable electric customers are provided protections before September 30, 2009.

C.S.H.B. 1904 differs from the original by making its provisions effective immediately, or on September 1, 2009, if the bill does not receive the requisite two-thirds vote, whereas the original makes its provisions effective September 1, 2009.

C.S.H.B. 1904 differs from the original in nonsubstantive ways by using language reflective of certain bill drafting conventions.