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A BILL TO BE ENTITLED
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AN ACT
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relating to the regulation of propane distribution system |
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retailers; authorizing a fee. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Title 3, Utilities Code, is amended by adding |
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Subtitle C to read as follows: |
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SUBTITLE C. PROPANE GAS DISTRIBUTION SYSTEMS |
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CHAPTER 141. STANDARDS FOR DISTRIBUTION SYSTEM RETAILERS |
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Sec. 141.001. DEFINITIONS. In this chapter: |
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(1) "Allowable markup" means the two-calendar-year |
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rolling average of the differences between the monthly reported |
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E.I.A. retail prices per gallon during those two calendar years and |
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the corresponding spot prices per gallon reported for the same two |
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calendar years. The allowable markup for 2013 is $1.48 per gallon. |
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(2) "Allowable spot price" means the average of the |
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spot prices for the two months preceding the billing month. For the |
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billing month of January 2013, the allowable spot price was $0.844 |
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per gallon. The commission shall identify the allowable spot price |
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each month and publish that price on the commission's website. |
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(3) "Commission" means the Railroad Commission of |
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Texas or its successor agency. |
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(4) "Customer" means a retail customer of propane gas |
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purchased from and delivered by a distribution system retailer |
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through a propane gas system. |
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(5) "Distribution system retailer": |
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(A) means a retail propane dealer that: |
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(i) owns or operates for compensation in |
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this state a propane gas system; and |
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(ii) has a Category E or K license issued by |
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the applicable license and permit section of the commission; and |
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(B) does not include a person that furnishes |
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propane gas only to the person, to the person's employees, or to the |
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person's tenants as an incident of employment or tenancy, if the |
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service is not resold to customers. |
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(6) "E.I.A. retail price" means the monthly U.S. |
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Propane Residential Price as reported by the United States Energy |
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Information Administration in dollars per gallon. In January 2013, |
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the E.I.A. retail price was $2.449 per gallon. |
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(7) "Propane gas" means a normally gaseous hydrocarbon |
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defined as propane by the United States Energy Information |
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Administration. |
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(8) "Propane gas system" means one or more propane |
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storage containers, equipment, and facilities connected to a |
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contiguous piping system through which propane gas is supplied by a |
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distribution system retailer to at least 10 customers. |
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(9) "Rate" means the price per cubic foot of gas |
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passing through the meter levied, charged, or collected by a |
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distribution system retailer from a customer for propane gas |
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provided through a propane gas system to the customer exclusive of |
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any fees, taxes, or other charges. A conversion factor of 36.4 |
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cubic feet of propane gas per gallon shall be used for purposes of |
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determining a rate. |
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(10) "Spot price" means the Mont Belvieu, TX monthly |
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Propane Spot Price FOB per gallon as reported by the United States |
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Energy Information Administration in dollars per gallon. In |
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January 2013, the spot price was $0.838 per gallon. |
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Sec. 141.002. APPLICABILITY. This chapter applies only to |
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a retail sale of propane gas made by a distribution system retailer |
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through a propane gas system. This chapter does not apply to any |
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other retail or wholesale sale of propane gas. |
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Sec. 141.003. RATE AND FEE CEILINGS. (a) In each billing |
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month, a distribution system retailer shall charge a customer a |
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just and reasonable rate for propane gas provided through a propane |
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gas system to the customer. The just and reasonable rate may not |
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exceed the allowable spot price plus the allowable markup. For a |
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customer's bill that contains days in more than one month, the month |
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with the most days covered by the bill shall be considered the |
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billing month. The price per gallon shall be converted to the cubic |
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foot rate by dividing the price per gallon by 36.4. |
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(b) In addition to the rate authorized by Subsection (a), a |
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distribution system retailer may charge customers special fees for |
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services, including connection, disconnection, account |
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maintenance, late fees, and reconnection fees, if the fees are |
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reasonable and customary. If a distribution system retailer |
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charges a customer a fee for a service or occurrence described by |
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this subsection that does not exceed the fees allowed for the |
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services and occurrences described in Subdivisions (1)-(9), the |
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amount of the fees shall qualify as reasonable and customary for the |
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purposes of this section. The services and occurrences and related |
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allowable fees are as follows: |
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(1) a recurring monthly fee of $12.50 to maintain an |
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active gas service account with the distribution system retailer to |
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be charged to a customer at a service address where the propane gas |
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usage history during the preceding 12-month period exceeded 99 |
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gallons; |
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(2) a recurring monthly fee of $17.50 to maintain an |
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active gas service account with the distribution system retailer to |
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be charged to a customer at a service address where the propane gas |
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usage history during the preceding 12-month period did not exceed |
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99 gallons; |
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(3) a fee of $15 for a late payment received by the |
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distribution system retailer, provided the bill was mailed or |
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electronically transmitted 15 days before the date payment is due; |
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(4) a fee of $25 to disconnect or terminate service |
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from an active or delinquent account; |
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(5) a fee of $65 for standard next available reconnect |
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service for an active or delinquent account; |
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(6) a fee of $125 for accelerated reconnect service; |
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(7) a fee of $30 for a dishonored or canceled payment |
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received; |
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(8) a fee of $75 to initiate service to a new customer; |
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and |
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(9) a fee of $225 plus charges for the estimated amount |
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of gas consumed and damages for attempted unauthorized gas |
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consumption or diversion. |
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(c) The distribution system retailer may adjust the fee |
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limits described by Subsection (b) up or down based on the 12-month |
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changes in the Consumer Price Index for All Urban Consumers, U.S. |
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City Average, All Items, CPI-U, Not Seasonally Adjusted, published |
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by the Bureau of Labor Statistics of the United States Department of |
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Labor or a similar index if that index is unavailable. For |
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calculation purposes, the beginning base month is December 2012. |
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(d) Nothing in this section limits a distribution system |
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retailer's ability to pass through to a customer as a separate |
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charge on a pro rata actual-cost basis: |
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(1) a tax, other than taxes assessed on the basis of |
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income, gross income, property, or margins; or |
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(2) an assessment, surcharge, levy, fee, or other |
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charge imposed by a governmental entity, any one of which begins or |
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is increased on or after January 1, 2013, either: |
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(A) directly on a propane gas system or any |
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portion; or |
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(B) on a distribution system retailer by virtue |
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of its ownership or operation of a propane gas system. |
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(e) A fee passed through to a customer under Subsection (d) |
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shall be: |
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(1) passed through without any additional markup; and |
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(2) identified as a separate item on a customer's bill. |
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(f) Notwithstanding any other provision in this section, |
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this subtitle does not apply to a new construction charge or an |
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appliance repair charge. |
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Sec. 141.004. DISCONNECTION OF PROPANE GAS SERVICE. (a) A |
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distribution system retailer may not disconnect propane gas service |
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to a residential customer on a weekend day or holiday officially |
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observed by the State of Texas unless personnel of the distribution |
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system retailer are available on that day to receive payments and |
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reconnect service. |
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(b) A distribution system retailer may not disconnect |
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propane gas service to a residential customer during an extreme |
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weather emergency, as defined by Section 104.258. The distribution |
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system retailer shall defer collection of the full payment of bills |
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that are due during an extreme weather emergency, as defined by |
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Section 104.258, until after the emergency is over. |
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Sec. 141.005. CONTINUITY OF SERVICE. (a) A distribution |
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system retailer shall make all reasonable efforts to prevent |
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interruptions of service. When an interruption occurs, the |
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distribution system retailer shall reestablish service within the |
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shortest possible time consistent with prudent operating |
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principles so that the smallest number of customers are affected. |
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(b) Excluding service interruptions under Section 141.006, |
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a distribution system retailer shall keep complete records of all |
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emergency and scheduled service interruptions lasting more than six |
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hours and affecting more than two customers. The records must |
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describe the cause, date, length, and location of each |
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interruption, the approximate number of customers affected by the |
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interruption, and, in the case of an emergency interruption, the |
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remedy and steps taken to prevent a recurrence, if applicable. The |
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distribution system retailer shall submit copies of the service |
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interruption records to the commission quarterly. |
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(c) The distribution system retailer shall notify the |
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commission in writing not later than 48 hours after an interruption |
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in service that affects the entire propane gas system, lasts more |
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than four hours, represents an existing or probable hazard to |
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persons or property, and requires immediate repair or continuous |
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action until the conditions are no longer hazardous. The notice |
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shall include the distribution system report of a service |
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interruption. A written report of a service interruption in another |
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form, including a part of a safety report, is sufficient to comply |
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with this subsection. |
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(d) The commission shall establish and maintain a toll-free |
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telephone number to enable a customer to notify the commission of a |
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service interruption that does not involve a refusal to serve under |
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Section 141.006 and to notify the commission that the customer |
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believes the distribution system retailer is charging an amount |
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greater than allowed by law. The commission shall immediately |
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investigate the notification. A distribution system retailer shall |
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notify the customer of the commission phone number on each billing |
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statement. |
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(e) To restore and maintain service, the commission may |
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assume temporary receivership of a propane gas system that |
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experiences a service interruption that affects the entire propane |
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gas system and that: |
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(1) continues to affect the entire propane gas system |
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after the distribution system retailer has had direct access to and |
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control of the system for more than 48 hours after the service |
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interruption began; |
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(2) occurs more than three times in one month; or |
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(3) is the result of the distribution system |
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retailer's failure or refusal to replenish the primary propane tank |
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for a reason other than a general local market disruption, a |
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restriction on wholesale propane supplies, mechanical failure, |
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criminal activity, or an act of God. |
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(f) The commission may draw down all or part of the |
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financial surety posted under Section 141.009, as required, to |
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restore and maintain service under Subsection (e). |
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(g) If the commission assumes temporary receivership of a |
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propane gas system under Subsection (e), it shall notify the |
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distribution system retailer and shall take whatever action is |
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necessary and appropriate to reestablish service to affected |
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customers. The commission shall provide the distribution system |
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retailer 72 hours to prepare and submit a plan to avoid continuing |
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receivership. |
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(h) If a distribution system retailer's inability to |
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fulfill its financial obligations is the cause of a service |
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interruption described by Subsection (e), the commission may |
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delegate the operation of the propane gas system to a receiver who |
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agrees to operate the system. The receiver shall operate the system |
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until relieved by order of the commission. A receiver ordered by the |
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commission to assume operational control over a system shall |
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operate the system in accordance with law. The commission shall, |
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from the proceeds of the financial surety and no other source, and |
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to the extent available, pay the receiver all reasonable costs, |
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including reasonable legal fees, associated with accepting the |
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assignment and the resumption and stabilization of system |
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operations plus a markup of 50 percent. Upon assuming operational |
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control of the system, the receiver shall earn, accrue, and receive |
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all gas system revenues pertaining to propane gas service provided |
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to system customers accruing from that date until the date it |
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relinquishes operational control of the system. The receiver is not |
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liable for debt associated with the propane gas system that was |
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incurred before the date the receiver assumed operational control |
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of the system or debt the relieved distribution system retailer |
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incurred before the date the receiver assumed operational control |
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of the system. |
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(i) If the commission determines that the distribution |
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system retailer is able to resume operation of the system, the |
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commission shall notify the distribution system retailer of its |
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determination and allow the resumption of operation after the |
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distribution system retailer replaces the amount of the financial |
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surety that was used in receivership. The distribution system |
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retailer, or a party claiming title to the system by, through, or |
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under the retailer, shall reimburse the commission for direct costs |
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the commission may have incurred as a result of receivership and all |
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unpaid money accrued or owed to the receiver under this section. |
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Sec. 141.006. GROUNDS FOR REFUSAL TO SERVE. (a) A |
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distribution system retailer may refuse service to an applicant for |
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new service or to an existing customer for continued service or |
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reconnection if: |
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(1) an applicant or customer fails to pay fees, |
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advances, contributions, or deposits required for service under the |
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distribution system retailer's policies; |
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(2) an applicant or customer fails to furnish a |
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service or meter location specified for service by the distribution |
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system retailer; |
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(3) the existence or repeated creation of an unsafe |
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condition, such as impaired meter access or a leak in the |
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applicant's piping system, may potentially create bodily harm or |
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endanger life or property in the distribution system retailer's |
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opinion; |
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(4) an applicant, customer, or service location owner |
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is delinquent in payment for services provided by a distribution |
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system retailer service location owner; or |
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(5) a current resident or occupant of the premises to |
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receive service is delinquent in payment for services provided by a |
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distribution system retailer. |
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(b) The right to refuse service ends when the cause for the |
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refusal to serve is corrected. |
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Sec. 141.007. REASONABLE TIME TO BEGIN SERVICE. A |
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distribution system retailer may delay providing service following |
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an application or execution of an agreement for service for a |
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reasonable amount of time considering required approvals, |
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inspections, or permits, the extent of the facilities to be built, |
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and the distribution system retailer's workload at the time. |
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Sec. 141.008. CUSTOMER COMPLAINTS. (a) A distribution |
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system retailer that receives a written complaint shall promptly |
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and suitably investigate the complaint and advise the complainant |
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of the results of the investigation. A distribution system |
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retailer shall keep for at least three years after the final |
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disposition of each complaint a record that includes each |
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complainant's name and address, the date and nature of the |
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complaint, and the adjustment or disposition of the complaint. A |
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distribution system retailer is not required to keep a record of a |
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complaint that does not require the distribution system retailer to |
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take specific further action. A distribution system retailer shall |
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notify each complainant of the right to file a complaint with the |
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commission if the complainant is not satisfied by the distribution |
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system retailer's resolution of the matter. |
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(b) On receipt of a written complaint from the commission on |
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behalf of a customer, a distribution system retailer promptly and |
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suitably shall investigate and notify the commission and |
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complainant of the results of the investigation. An initial |
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response must be made not later than the third business day after |
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the date the distribution system retailer receives the complaint |
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electronically delivered to a minimum of two electronic addresses |
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designated by the distribution system retailer. A distribution |
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system retailer shall send a final and complete response to the |
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commission and complainant not later than the 15th day after the |
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date the complaint was received, unless the commission grants |
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additional time before the expiration of the 15-day period. |
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(c) The commission may impose sanctions on a distribution |
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system retailer if, after an investigation, the commission |
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determines that the distribution system retailer has violated |
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Section 141.003. Sanctions may include: |
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(1) ordering a distribution system retailer to refund |
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the amounts of any overcharges to the distribution system |
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retailer's customers; or |
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(2) drawing down all or a portion of the financial |
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surety for the purpose of refunding the amounts of any overcharges |
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to the distribution system retailer's customers not refunded before |
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the 61st day after the date the commission orders a refund. |
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Sec. 141.009. PERFORMANCE GUARANTEE. A distribution system |
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retailer shall post, in favor of the commission, financial surety |
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in the form of a letter of credit, bond, or other acceptable form of |
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financial surety with the commission in an amount equal to the |
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lesser of $3 multiplied by the number of gallons of aggregate |
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storage capacity in all of the propane gas systems operated by the |
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distribution system retailer or $50,000. The issuer of the |
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financial surety used to meet this requirement shall honor the |
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financial surety if the issuer receives from the commission notice |
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that the financial surety is due and payable. The commission may |
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draw down all or a portion of the financial surety. The distribution |
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system retailer shall provide the commission with verification of |
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the adequacy of the financial surety, and the commission may order |
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the distribution system retailer to adjust the amount of the |
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financial surety annually. |
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Sec. 141.010. RULES. The commission shall adopt rules |
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necessary to implement this chapter. |
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Sec. 141.011. DISCLOSURE TO HOMEOWNERS. (a) A |
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distribution system retailer shall record in the real property |
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records of each county in which the distribution system retailer |
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owns or operates a propane gas system a notice of disclosure of the |
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existence of the propane gas system and the service the retailer |
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provides. The notice shall include: |
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(1) a service map reflecting the location of the |
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subdivisions or areas the distribution system retailer serves in |
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the county; |
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(2) a copy of this chapter or a summary of the |
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customer's rights under this chapter; and |
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(3) for development agreements entered into after |
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September 1, 2013, a statement disclosing the existence of any |
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financial interest held by a homeowners' association, municipal |
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utility district, or developer in the propane gas system. |
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(b) If a person proposes to sell or convey real property |
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located in a propane gas system service area owned by a distribution |
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system retailer, the person must give to the purchaser written |
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notice as prescribed by this subsection. The notice must include a |
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copy of the notice recorded in the real property records as required |
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by Subsection (a), must be executed by the seller, and must read as |
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follows: "The real property, described below, that you are about to |
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purchase may be located in a propane gas system service area, which |
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is authorized by law to provide propane gas service to the |
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properties in the area pursuant to Chapter 141, Utilities Code. If |
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your property is located in a propane gas system service area, there |
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may be special costs or charges that you will be required to pay |
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before you can receive propane gas service. There may be a period |
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required to construct lines or other facilities necessary to |
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provide propane gas service to your property. You are advised to |
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determine if the property is in a propane gas system service area |
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and contact the distribution system retailer to determine the cost |
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that you will be required to pay and the period, if any, that is |
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required to provide propane gas service to your property. |
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"The undersigned purchaser hereby acknowledges receipt of |
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the foregoing notice at or before the execution of a binding |
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contract for the purchase of the real property described in the |
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notice or at closing of purchase of the real property. |
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________________________________ |
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Date |
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________________________________ |
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Signature of Purchaser" |
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(c) Each county shall accept and record in its real property |
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records a distribution system retailer's service map presented to |
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the county clerk under this section if the map meets filing |
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requirements, does not exceed 11 inches by 17 inches in size, and is |
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accompanied by the appropriate fee. The recording required by this |
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section must be completed not later than the later of January 1, |
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2014, or the 90th day after the date a distribution system retailer |
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completes construction of a new propane gas system in the county. |
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SECTION 2. This Act takes effect September 1, 2013. |