81R3429 TRH-F

By: Turner of Harris H.B. No. 630

A BILL TO BE ENTITLED

AN ACT

relating to the regulation and governing bodies of independent organizations that govern power regions.

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

SECTION 1. Section 39.151, Utilities Code, is amended by amending Subsections (e) and (g) and by adding Subsection (g-2) to read as follows:

(e) The commission may authorize an independent organization that is certified under this section to charge a reasonable and competitively neutral rate to wholesale buyers and sellers to cover the independent organization's costs. The commission shall investigate the organization's cost efficiencies, salaries and benefits, and use of debt financing and may require the organization to provide any information needed to effectively evaluate the organization's budget and the reasonableness and neutrality of a rate or proposed rate or to evaluate the effectiveness or efficiency of the organization. The commission may require prior approval of the use of debt financing by the organization. The commission shall work with the organization to establish the detail of information, both current and historical, and the time frames the commission needs to effectively evaluate a rate or a rate request.

(g) To maintain certification as an independent organization under this section, an organization's governing body must be composed of persons specified by this section and selected in accordance with formal bylaws or protocols of the organization. The bylaws or protocols must be approved by the commission and must reflect the input of the commission. The bylaws must specify the process by which appropriate stakeholders elect members and, for unaffiliated members, prescribe professional qualifications for selection as a member. [The bylaws must require the use of a professional search firm to identify candidates for membership of unaffiliated members.] The process must allow for commission input in identifying candidates. The governing body must be composed of:

(1) the chairman of the commission as an ex officio voting [nonvoting] member;

(1-a) the other two commissioners as ex officio nonvoting members;

(2) the counsellor as an ex officio voting member representing residential and small commercial consumer interests;

(3) the chief executive officer of the independent organization as an ex officio voting member;

(4) four [six] market participants elected by their respective market segments to serve one-year terms, with:

(A) one representing [independent] generators;

(B) one representing investor-owned utilities;

(C) [one representing power marketers;

[(D)] one representing retail electric providers; and

(D) [(E)] one representing municipally owned utilities and electric cooperatives; [and

[(F) one representing electric cooperatives;]

(5) one member representing industrial consumer interests and elected by the industrial consumer market segment to serve a one-year term;

(6) one member representing large commercial consumer interests selected in accordance with the bylaws to serve a one-year term; and

(7) five members unaffiliated with any market segment, nominated [and selected] by the other members of the governing body and selected by the commission to serve three-year terms.

(g-2) The commission may require removal of a member of the governing body if the member:

(1) does not have at the time of appointment or maintain during service the qualifications required by this section and by the formal bylaws or protocols of the organization;

(2) fails to comply with the requirements of Section 39.1512; or

(3) fails to impartially and adequately discharge the member's duties and responsibilities.

SECTION 2. An independent organization certified by the Public Utility Commission of Texas before September 1, 2009, shall modify the organization's governing body to comply with Section 39.151(g), Utilities Code, as amended by this Act, not later than September 1, 2010. On or after September 1, 2010, the Public Utility Commission of Texas may decertify an independent organization whose governing body does not comply with Section 39.151(g), Utilities Code, as amended by this Act.

SECTION 3. This Act takes effect September 1, 2009.