By: Solomons H.B. No. 3245

A BILL TO BE ENTITLED

AN ACT

relating to consumer protections within the electricity markets.

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

SECTION 1. Section 39.101(h), Utilities Code, is amended to read as follows:

(h) A retail electric provider, power generation company, aggregator, or other entity that provides retail electric service may not disconnect service to a residential customer during an extreme weather emergency or on a weekend day. The entity providing service shall defer collection of the full payment of bills that are due during an extreme weather emergency until after the emergency is over and shall work with customers to establish a pay schedule for deferred bills. For purposes of this subsection, "extreme weather emergency" means a period when: the previous day's highest temperature did not exceed 32 degrees Fahrenheit and the temperature is predicted to remain at or below that level for the next 24 hours according to the nearest National Weather Service reports; or a day for which the National Weather Service forecasts that the heat index will reach or exceed 100 degrees Fahrenheit in any part of a county in the relevant service territory; or a period when, on any one of the previous two calendar days, the National Weather Service observes a heat index of 101 degrees Fahrenheit or more in any part of a county in the relevant service territory. [the National Weather Service issues a heat advisory for any county in the relevant service territory, or when such an advisory has been issued on any one of the previous two calendar days.]

SECTION 2. Section 39.151, Utilities Code, is amended by amending Subsection (g), to read as follows:

(g) To maintain certification as an independent organization under this section, the organization must operate a regional electrical network that is contained wholly within the borders of the State of Texas. Such 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 the professional qualifications necessary for selection as a member of the organization and[. T]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] three sitting commissioners of the commission as [an] 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) [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;

[(E) one representing municipally owned utilities; 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] nine members unaffiliated with any market segment and selected by the other members of the governing body to serve three-year terms.

SECTION 3. Subchapter D, Chapter 39, Utilities Code, Section 39.157 (a) is amended to read as follows:

(a) The commission shall monitor market power associated with the generation, transmission, distribution, and sale of electricity in this state. On a finding that market power abuses or other violations of this section are occurring, the commission shall require reasonable mitigation of the market power by ordering the construction of additional transmission or distribution facilities, by seeking an injunction or civil penalties as necessary to eliminate or to remedy the market power abuse or violation as authorized by Chapter 15, by imposing an administrative penalty as authorized by Chapter 15, or by suspending, revoking, or amending a certificate or registration as authorized by Section 39.356. Section 15.024(c) does not apply to an administrative penalty imposed under this section. For purposes of this subchapter, market power abuses are practices by persons possessing market power that are unreasonably discriminatory or tend to unreasonably restrict, impair, or reduce the level of competition, including practices that tie unregulated products or services to regulated products or services or unreasonably discriminate in the provision of regulated services. For purposes of this section, "market power abuses" include predatory pricing, withholding of production, precluding entry, and collusion. A violation of the code of conduct provided by Subsection (d) that materially impairs the ability of a person to compete in a competitive market shall be deemed to be an abuse of market power. The possession of a high market share in a market open to competition may not, of itself, be deemed to be an abuse of market power; however, this sentence shall not affect the application of state and federal antitrust laws. The possession of a low market share within the power region may not, by itself, be deemed as a sufficient condition to preclude a finding that an investor owner generator engaged in an abuse of market power.

SECTION 4. Subchapter D, Chapter 39, Utilities Code, Section 39.157 (a) is amended to read as follows:

(a) The commission shall monitor market power associated with the generation, transmission, distribution, and sale of electricity in this state. On a finding that market power abuses or other violations of this section are occurring, the commission shall require reasonable mitigation of the market power by ordering the construction of additional transmission or distribution facilities, by seeking an injunction or civil penalties as necessary to eliminate or to remedy the market power abuse or violation as authorized by Chapter 15, by imposing an administrative penalty as authorized by Chapter 15, or by suspending, revoking, or amending a certificate or registration as authorized by Section 39.356. The commission shall permit affected customers, including political subdivisions, retail electric providers and commercial power users to participate in enforcement proceedings alleging market power abuses or manipulation of the wholesale market. The commission shall order refunds be made to end users adversely impacted by findings of market power abuse or manipulation of the wholesale market. Notwithstanding any action or inaction by the commission on an allegation of market power abuse or manipulation of the wholesale market, private parties may seek remedies in any appropriate forum. The Filed Rate Doctrine shall not be a defense in any private party suit that alleges market power abuse or manipulation of the wholesale market. Section 15.024(c) does not apply to an administrative penalty imposed under this section. For purposes of this subchapter, market power abuses are practices by persons possessing market power that are unreasonably discriminatory or tend to unreasonably restrict, impair, or reduce the level of competition, including practices that tie unregulated products or services to regulated products or services or unreasonably discriminate in the provision of regulated services. For purposes of this section, "market power abuses" include predatory pricing, withholding of production, precluding entry, and collusion. A violation of the code of conduct provided by Subsection (d) that materially impairs the ability of a person to compete in a competitive market shall be deemed to be an abuse of market power. The possession of a high market share in a market open to competition may not, of itself, be deemed to be an abuse of market power; however, this sentence shall not affect the application of state and federal antitrust laws.

SECTION 5. Sections 37.051(a), 37.053(a), 37.055, 37.057, and 37.151, Utilities Code, are amended to read as follows:

Sec. 37.051. CERTIFICATE REQUIRED. (a) An person [electric utility] may not directly or indirectly provide service to the public under a franchise or permit unless the person [utility] first obtains from the commission a certificate that states that the public convenience and necessity requires or will require the installation, operation, or extension of the service.

(d) A certificate may be granted to a person under this subsection for a facility used solely for the transmission of electricity.

Sec. 37.053. APPLICATION FOR CERTIFICATE. (a) A person [An electric utility] that wants to obtain or amend a certificate must submit an application to the commission.

Sec. 37.055. REQUEST FOR PRELIMINARY ORDER. (a) a person [An electric utility] that wants to exercise a right or privilege under a franchise or permit that the person [utility] anticipates obtaining but has not been granted may apply to the commission for a preliminary order under this section.

(b) The commission may issue a preliminary order declaring that the commission, on application and under commission rules, will grant the requested certificate on terms the commission designates, after the person [electric utility] obtains the franchise or permit.

(c) The commission shall grant the certificate on presentation of evidence satisfactory to the commission that the person [electric utility] has obtained the franchise or permit.

Sec. 37.057. DEADLINE FOR APPLICATION FOR NEW TRANSMISSION FACILITY. The commission may grant a certificate for a new transmission facility to any qualified applicant that meets the requirements of this subchapter. The commission must approve or deny an application for a certificate for a new transmission facility not later than the first anniversary of the date the application is filed. If the commission does not approve or deny the application on or before that date, a party may seek a writ of mandamus in a district court of Travis County to compel the commission to decide on the application.

Sec. 37.151. PROVISION OF SERVICE. Except as provided by this section, Section 37.152, and Section 37.153, a certificate holder, other than those granted a certificate pursuant to Section 37.051(d), shall:

(1) serve every consumer in the utility's certificated area; and

(2) provide continuous and adequate service in that area.

SECTION 6. Subchapter Z, Chapter 39, Utilities Code, is amended by adding Section 39.925 to read as follows:

Sec. 39.925. NODAL IMPLEMENTATION. An independent organization under this section shall not allow any charges or costs associated with a nodal wholesale market design or its implementation to be passed to the retail customers. The wholesale companies may recover the nodal wholesale market design and implementation costs only from costs savings realized from the nodal system. The commission is authorized and directed to monitor the nodal wholesale market system and an independent organization under this section shall insure that all monetary and other material information is shared with the commission. The commission shall determine when costs recovery is complete. After cost recovery is complete, any future monetary savings realized by the wholesale companies as a result of the nodal wholesale market design must be passed to the retail customers as determined by the commission. The commission shall enforce this section with civil penalties.

SECTION 7. Subchapter Z, Chapter 39, Utilities Code, is amended by adding Section 39.926 to read as follows:

Sec. 39.926. Electricity providers shall provide a real time quote from the NYMEX for the Henry Hub spot gas price. The quote shall be placed prominently on the electricity provider's homepage. A graph showing the daily gas price for the previous five years shall also be provided with a comparison of electricity prices charged by the provider. This real time quote shall establish the rate to be charged by electricity providers and will enforce direct pass through of non-bypassable charges (both up and down) to the consumer.

SECTION 8. Section 39.107(h), Utilities Code, is amended to read as follows:

(h) The commission shall establish a non-bypassable surcharge for an electric utility or transmission and distribution utility to use to recover reasonable and necessary costs incurred in deploying advanced metering and meter information networks to residential customers and nonresidential customers other than those required by the independent system operator to have an interval data recorder meter. The commission shall ensure that the nonbypassable surcharge reflects a deployment of advanced meters that is no more than one-third of the utility's total meters over each calendar year and shall ensure that the nonbypassable surcharge does not result in the utility recovering more than its actual, fully allocated meter and meter information network costs. The expenses must be allocated to the customer classes receiving the services, based on the electric utility's most recently approved tariffs. An electric utility or transmission and distribution utility that deploys advanced meter and meter information networks shall seek to obtain and utilize funds, including grants, loans, and loan guarantees, made available by the federal government if such funds would lower the overall cost of deployment. The commission shall reflect the funds obtained by the electric utility or transmission and distribution utility when establishing the surcharge required by this subsection, including timely ordering reductions to surcharges approved prior to the receipt of the funds.

SECTION 9. Section 39.904, Utilities Code, is amended by adding Subsection (h-1) to read as follows:

(h-1) An electric utility, transmission and distribution utility, or river authority that has been designated by the commission to construct transmission capacity pursuant to Subsection (g) shall seek to obtain and utilize funds, including grants, loans, and loan guarantees, made available by the federal government if such funds would lower the overall cost of construction. The commission shall reflect the funds obtained by the electric utility, transmission and distribution utility, or river authority when establishing or modifying the rates of the electric utility or transmission and distribution utility, including timely ordering reductions to rates approved prior to the receipt of the funds.

SECTION 10. Subchapter C, Chapter 39, Utilities Code, is amended by adding Section 39.107(i) to read as follows:

(i) Electric providers shall state per unit cost of smart meters for residential and business on billing statements and the company website. Customers shall only be charged for the actual cost of a smart meter. The actual cost of the meter is the amount the provider paid to the manufacturer. Consumers shall have the option of making either a one time payment for the full cost of the meter or a recurring monthly fee. Providers must file with the PUC a payment schedule for smart meters which clearly states the cost, proposed monthly fee, and date certain when smart meter fee ends. Providers charging more than the actual price the provider paid are subject to fines and license revocation.

SECTION 11. Subchapter E, Chapter 12, Utilities Code, is amended by adding Section 12.204 to read as follows:

Sec. 12.204. INTERNET FOR HEARINGS AND MEETINGS. The commission shall make publicly accessible without charge live Internet video of all public hearings and meetings of the commission for viewing from the Internet website found at http://www.puc.state.tx.us.

SECTION 12. Section 39.1511, Utilities Code, is amended by adding Subsection (c) to read as follows:

(c) The commission shall ensure that an independent organization certified under this section makes publicly accessible without charge live Internet video of all public hearings and meetings subject to this section for viewing from an Internet website.

SECTION 13. The change in law made by this Act applies to a hearing or meeting held on or after the effective date of this Act. A hearing or meeting held before the effective date of this Act is governed by the law as it existed immediately before that date, and that law is continued in effect for that purpose.

SECTION 14. An independent organization certified by the commission 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 no later than September 1, 2010. On or after September 1, 2010, the commission may decertify an independent organization whose governing body does not comply with Section 39.151(g), Utilities Code, as amended by this Act.

SECTION 15. 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, 2009.