81R35671 TRH-D
  By: Fraser S.B. No. 1772
  Substitute the following for S.B. No. 1772:
  By:  Solomons C.S.S.B. No. 1772
  relating to the authority of the Public Utility Commission of Texas
  to address market power abuse, including the right to order
  restitution for violations.
         SECTION 1.  Section 39.157, Utilities Code, is amended by
  amending Subsection (a) and adding Subsections (a-1), (j), (k),
  (l), (m), (n), (o), and (p) 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 have occurred or are occurring,
  the commission shall require reasonable mitigation of the market
  power by one or any combination of the following:
               (1)  ordering the construction of additional
  transmission or distribution facilities;
               (2)  [, 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;
               (3)  [, by] imposing an administrative penalty as
  authorized by Chapter 15;
               (4)  ordering refunds to affected parties pursuant to
  Section 17.157;
               (5)  with regard to the wholesale market, ordering
  refunds to affected parties in a manner established by the
  commission; or
               (6)  [, or by] suspending, revoking, or amending a
  certificate or registration as authorized by Section 39.356.
         (a-1)  The commission shall permit the office, in exercising
  its powers to represent residential and small commercial consumers,
  to participate in enforcement proceedings to seek refunds for
  alleged market power abuses 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.
         (j)  The commission shall contract with an entity selected by
  the commission to act as the commission's retail electric market
  monitor to:
               (1)  detect and prevent:
                     (A)  possible market power abuse or market
  manipulation strategies; and
                     (B)  unfair, misleading, or deceptive practices;
               (2)  recommend measures to enhance the efficiency of
  the retail market.
         (k)  The commission is responsible for ensuring that the
  commission's retail market monitor has the resources, expertise,
  and authority necessary to monitor the retail electric market
  effectively and shall adopt rules and perform oversight of the
  retail market monitor as necessary. The retail market monitor
  shall operate under the supervision and oversight of the
  commission. The commission shall retain all enforcement authority
  conferred under this title, and this section may not be construed to
  confer enforcement authority on the retail market monitor or to
  authorize the commission to delegate the commission's enforcement
  authority to the retail market monitor. The commission by rule
  shall define:
               (1)  the retail market monitor's monitoring
  responsibilities, including reporting obligations and limitations;
               (2)  the standards for funding the retail market
  monitor, including staffing requirements;
               (3)  qualifications for personnel of the retail market
  monitor; and
               (4)  ethical standards for the retail market monitor
  and the personnel of the retail market monitor.
         (l)  In adopting rules governing the standards for funding
  the retail market monitor, the commission shall consult with a
  subcommittee of the governing body of the independent organization
  certified under Section 39.151 to receive information on how money
  is or should be spent for market monitoring functions. Rules
  governing ethical standards must include provisions designed to
  ensure that the personnel of the retail market monitor are
  professionally and financially independent from market
  participants. The commission shall develop and implement policies
  that clearly separate the policymaking responsibilities of the
  commission and the monitoring, analysis, and reporting
  responsibilities of the retail market monitor.
         (m)  The retail market monitor immediately shall report
  directly to the commission any potential market manipulations and
  any discovered or potential violations of commission rules or rules
  of the independent organization.
         (n)  The personnel of the retail market monitor may
  communicate with commission staff on any matter without
         (o)  The retail market monitor annually shall submit to the
  commission a report that identifies market design flaws and
  recommends methods to correct the flaws. The commission shall
  review the report and evaluate whether changes to rules of the
  commission should be made.
         (p)  The commission shall investigate whether a retail
  electric provider is abusing market power or engaging in unfair,
  misleading, or deceptive practices. Retail electric providers
  shall cooperate with the commission in any investigation and shall
  provide information requested.  The commission may assess
  administrative penalties under Section 15.023 for any violation
  discovered under this section.
         SECTION 2.  The Public Utility Commission of Texas shall
  adopt rules to implement the changes in law made by this Act as
  quickly as practicable.
         SECTION 3.  The changes in law made by this Act apply only to
  a violation that occurs or continues to occur on or after the
  effective date of this Act.  A violation that occurs before the
  effective date of this Act is covered by the law in effect on the
  date the violation occurred, and that law is continued in effect for
  that purpose.
         SECTION 4.  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.