H.B. No. 2532
 
 
 
 
AN ACT
  relating to the regulation of propane distribution system
  retailers; authorizing a fee.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Title 3, Utilities Code, is amended by adding
  Subtitle C to read as follows:
  SUBTITLE C. PROPANE GAS DISTRIBUTION SYSTEMS
  CHAPTER 141. STANDARDS FOR DISTRIBUTION SYSTEM RETAILERS
         Sec. 141.001.  DEFINITIONS. In this chapter:
               (1)  "Allowable markup" means the two-calendar-year
  rolling average of the differences between the monthly E.I.A.
  retail prices per gallon reported during the two calendar years
  immediately preceding the calendar year in which a billing month
  occurs and the corresponding spot prices per gallon reported for
  the same month an E.I.A. retail price was reported during those two
  calendar years. As an example of the calculated allowable markup,
  for 2013, the allowable markup is $1.48 per gallon.
               (2)  "Allowable spot price" means the average of the
  spot prices for the two months preceding the billing month. As an
  example of the calculated allowable spot price, for the billing
  month of January 2013, the allowable spot price was $0.844 per
  gallon. The commission shall identify the allowable spot price each
  month and publish that price on the commission's website.
               (3)  "Commission" means the Railroad Commission of
  Texas or its successor agency.
               (4)  "Customer" means a retail customer of propane gas
  purchased from and delivered by a distribution system retailer
  through a propane gas system.
               (5)  "Distribution system retailer":
                     (A)  means a retail propane dealer that:
                           (i)  owns or operates for compensation in
  this state a propane gas system; and
                           (ii)  has a Category E or K license issued by
  the applicable license and permit section of the commission; and
                     (B)  does not include a person that furnishes
  propane gas only to the person, to the person's employees, or to the
  person's tenants as an incident of employment or tenancy, if the
  service is not resold to customers.
               (6)  "E.I.A. retail price" means the monthly U.S.
  Propane Residential Price as reported by the United States Energy
  Information Administration or its successor agency in dollars per
  gallon.  As an example of the calculated E.I.A. retail price, for
  January 2013, the E.I.A. retail price was $2.449 per gallon.
               (7)  "Propane gas" means a normally gaseous hydrocarbon
  defined as propane by the United States Energy Information
  Administration or its successor agency.
               (8)  "Propane gas system" means one or more propane
  storage containers, equipment, and facilities connected to a
  contiguous piping system through which propane gas is supplied by a
  distribution system retailer to at least 10 customers.
               (9)  "Rate" means the price per cubic foot of gas
  passing through the meter levied, charged, or collected by a
  distribution system retailer from a customer for propane gas
  provided through a propane gas system to the customer exclusive of
  any fees, taxes, or other charges. A conversion factor of 36.4
  cubic feet of propane gas per gallon shall be used for purposes of
  determining a rate.
               (10)  "Spot price" means the Mont Belvieu, TX monthly
  Propane Spot Price FOB per gallon as reported by the United States
  Energy Information Administration or its successor agency in
  dollars per gallon.  In January 2013, the spot price was $0.838 per
  gallon.
         Sec. 141.002.  APPLICABILITY. This chapter applies only to
  the retail sale of propane gas made by a distribution system
  retailer through a propane gas system. This chapter does not apply
  to any other retail or wholesale sale of propane gas.
         Sec. 141.003.  RATE AND FEE CEILINGS. (a) In each billing
  month, a distribution system retailer shall charge a customer a
  just and reasonable rate for propane gas provided through a propane
  gas system to the customer. For the purposes of this section, a just
  and reasonable rate charged monthly for propane gas is a rate for
  propane gas provided through a propane gas system to the customer if
  it is less than or equal to the allowable spot price plus the
  allowable markup.  For a customer's bill that contains days in more
  than one month, the month with the most days covered by the bill
  shall be considered the billing month.  The price per gallon shall
  be converted to the cubic foot rate by dividing the price per gallon
  by 36.4.
         (b)  In addition to the rate authorized by Subsection (a), a
  distribution system retailer may charge customers special fees for
  services, including a connection fee, a disconnection fee, a
  monthly account fee to maintain an active account, a late payment
  fee, a disconnect or termination fee, a reconnection fee, an
  accelerated reconnection fee, a dishonored or canceled payment fee,
  a service initiation fee, and a tampering fee or an unauthorized gas
  consumption or diversion fee, if the fees are reasonable and
  customary. For purposes of this section, the fees described above
  that were charged or adopted by a distribution system retailer as of
  January 1, 2013, as adjusted pursuant to Subsection (c), are deemed
  reasonable and customary for that distribution system retailer and
  its successors regarding any systems owned or operated currently or
  in the future.
         (c)  The distribution system retailer may adjust the fees
  described by Subsection (b) up or down based on the 12-month changes
  in the Consumer Price Index for All Urban Consumers, U.S. City
  Average, All Items, CPI-U, Not Seasonally Adjusted, published by
  the Bureau of Labor Statistics of the United States Department of
  Labor or a similar index if that index is unavailable. For
  calculation purposes, the beginning base month is December 2012.
         (d)  Nothing in this section limits a distribution system
  retailer's ability to pass through to a customer as a separate
  charge on a pro rata actual-cost basis:
               (1)  a tax, other than a tax assessed on the basis of
  income, gross income, property, or margins;
               (2)  an assessment, surcharge, levy, fee, or other
  charge imposed by a governmental entity, any one of which begins or
  is increased on or after January 1, 2013, either:
                     (A)  directly on a propane gas system or any
  portion; or
                     (B)  on a distribution system retailer by virtue
  of its ownership or operation of a propane gas system; or
               (3)  a sales tax or franchise fee.
         (e)  A fee passed through to a customer under Subsection (d)
  shall be:
               (1)  passed through without any additional markup; and
               (2)  identified as a separate item on a customer's bill.
         (f)  Notwithstanding any other provision in this section,
  this subtitle does not apply to a new gas line construction charge,
  a gas line repair charge, or an appliance repair charge.
         (g)  In the event either or both the E.I.A. retail price or
  the Mont Belvieu, TX monthly Propane Spot Price FOB per gallon cease
  to be available, the commission shall designate a reasonably
  similar available substitute index or indices as necessary for
  purposes of calculation of the rate deemed just and reasonable for
  purposes of this section. Until the commission publishes an order
  designating the substitute index or indices, distribution system
  retailers shall charge a rate not to exceed the most recent
  available allowable markup plus the most recent available Mont
  Belvieu, TX monthly Propane Spot Price FOB per gallon. If the Mont
  Belvieu, TX monthly Propane Spot Price FOB per gallon is not
  available from the United States Energy Information
  Administration, the distribution system retailer, for the purpose
  of defining the spot price, may identify and use the Mont Belvieu,
  TX monthly Propane Spot Price FOB per gallon as reported by an
  alternative publicly available published source.
         Sec. 141.004.  DISCONNECTION OF PROPANE GAS SERVICE. (a) A
  distribution system retailer may not disconnect propane gas service
  to a residential customer on a weekend day or holiday officially
  observed by the State of Texas unless personnel of the distribution
  system retailer are available on that day to receive payments and
  reconnect service.
         (b)  A distribution system retailer may not disconnect
  propane gas service to a residential customer during an extreme
  weather emergency, as defined by Section 104.258. The distribution
  system retailer shall defer collection of the full payment of bills
  that are due during an extreme weather emergency, as defined by
  Section 104.258, until after the emergency is over.
         Sec. 141.005.  CONTINUITY OF SERVICE. (a) A distribution
  system retailer shall make all reasonable efforts to prevent
  interruptions of service. When an interruption occurs, the
  distribution system retailer shall reestablish service within the
  shortest possible time consistent with prudent operating
  principles so that the smallest number of customers are affected.
         (b)  Excluding service interruptions under Section 141.006,
  a distribution system retailer shall keep complete records of all
  emergency and scheduled service interruptions lasting more than six
  hours and affecting more than two customers. The records must
  describe the cause, date, length, and location of each
  interruption, the approximate number of customers affected by the
  interruption, and, in the case of an emergency interruption, the
  remedy and steps taken to prevent a recurrence, if applicable. The
  distribution system retailer shall submit copies of the service
  interruption records to the commission quarterly.
         (c)  The distribution system retailer shall notify the
  commission in writing not later than 48 hours after an interruption
  in service that affects the entire propane gas system, lasts more
  than four hours, represents an existing or probable hazard to
  persons or property, and requires immediate repair or continuous
  action until the conditions are no longer hazardous. The notice
  shall include the distribution system report of a service
  interruption. A written report of a service interruption in another
  form, including a part of a safety report, is sufficient to comply
  with this subsection.
         (d)  The commission shall establish and maintain a toll-free
  telephone number to enable a customer to notify the commission of a
  service interruption that does not involve a refusal to serve under
  Section 141.006. The commission shall immediately investigate the
  notification.  A distribution system retailer shall notify the
  customer of the commission phone number on each billing statement.
         (e)  To restore and maintain service, the commission may
  assume temporary operational control of a propane gas system that
  experiences a service interruption that affects the entire propane
  gas system and that:
               (1)  continues to affect the entire propane gas system
  after the distribution system retailer has had direct access to and
  control of the system for more than 48 hours after the service
  interruption began;
               (2)  occurs more than three times in one month; or
               (3)  is the result of the distribution system
  retailer's failure or refusal to replenish the primary propane tank
  for a reason other than a general local market disruption, a
  restriction on wholesale propane supplies, mechanical failure,
  criminal activity, or an act of God.
         (f)  The commission may draw down all or part of the
  financial surety posted under Section 141.009, as required, to
  restore and maintain service under Subsection (e).
         (g)  At the request of the commission, the attorney general
  shall bring suit for the appointment of a receiver to collect the
  assets and carry on the business of a distribution system retailer
  that:
               (1)  has abandoned operation of its facilities;
               (2)  informs the commission that the owner is
  abandoning the system; or
               (3)  experiences a service interruption as described
  under Subsection (e).
         (h)  The court shall appoint a receiver if an appointment is
  necessary to guarantee:
               (1)  the collection of assessments, fees, penalties, or
  interest; or
               (2)  continuous and adequate service to the customers
  of the utility.
         (i)  The receiver shall execute a bond to assure the proper
  performance of the receiver's duties in an amount to be set by the
  court.
         (j)  After appointment and execution of bond, the receiver
  shall take possession of the assets of the utility specified by the
  court. Until discharged by the court, the receiver shall perform
  the duties that the court directs to preserve the assets and carry
  on the business of the utility and shall strictly observe the final
  order involved.
         (k)  On a showing of good cause by the distribution system
  retailer, the court may dissolve the receivership and order the
  assets and control of the business returned to the distribution
  system retailer.
         (l)  Notwithstanding Section 64.021, Civil Practice and
  Remedies Code, a receiver appointed under this section may seek
  commission approval to acquire the distribution system retailer's
  facilities.
         (m)  Subject to the approval of the court and after giving
  notice to all interested parties, the receiver may sell or
  otherwise dispose of all or part of the real or personal property of
  a propane gas system against which a proceeding has been brought
  under this subchapter to pay the costs incurred in the operation of
  the receivership. The costs include:
               (1)  payment of fees to the receiver for the receiver's
  services;
               (2)  payment of fees to attorneys, accountants,
  engineers, or any other persons or entities that provide goods or
  services necessary to the operation of the receivership; and
               (3)  payment of costs incurred ensuring that any
  property owned or controlled by a distribution system retailer is
  not used in violation of a final order of the court.
         Sec. 141.006.  GROUNDS FOR REFUSAL TO SERVE. (a) A
  distribution system retailer may refuse service to an applicant for
  new service or to an existing customer for continued service or
  reconnection if:
               (1)  an applicant or customer fails to pay fees,
  advances, contributions, or deposits required for service under the
  distribution system retailer's policies;
               (2)  an applicant or customer fails to furnish a
  service or meter location specified for service by the distribution
  system retailer;
               (3)  the existence or repeated creation of an unsafe
  condition, such as impaired meter access or a leak in the
  applicant's piping system, may potentially create bodily harm or
  endanger life or property in the distribution system retailer's
  opinion;
               (4)  an applicant, customer, or service location owner
  is delinquent in payment for services provided by a distribution
  system retailer service location owner; or
               (5)  a current resident or occupant of the premises to
  receive service is delinquent in payment for services provided by a
  distribution system retailer.
         (b)  The right to refuse service ends when the cause for the
  refusal to serve is corrected.
         Sec. 141.007.  REASONABLE TIME TO BEGIN SERVICE. A
  distribution system retailer may delay providing service following
  an application or execution of an agreement for service for a
  reasonable amount of time considering required approvals,
  inspections, or permits, the extent of the facilities to be built,
  and the distribution system retailer's workload at the time.
         Sec. 141.008.  CUSTOMER COMPLAINTS. (a) A distribution
  system retailer that receives a written complaint shall promptly
  and suitably investigate the complaint and advise the complainant
  of the results of the investigation. A distribution system
  retailer shall keep for at least three years after the final
  disposition of each complaint a record that includes each
  complainant's name and address, the date and nature of the
  complaint, and the adjustment or disposition of the complaint. A
  distribution system retailer is not required to keep a record of a
  complaint that does not require the distribution system retailer to
  take specific further action. A distribution system retailer shall
  notify each complainant of the right to file a complaint with the
  commission if the complainant is not satisfied by the distribution
  system retailer's resolution of the matter.
         (b)  On receipt of a written complaint from the commission on
  behalf of a customer, a distribution system retailer promptly and
  suitably shall investigate and notify the commission and
  complainant of the results of the investigation. An initial
  response must be made not later than the third business day after
  the date the distribution system retailer receives the complaint
  electronically delivered to a minimum of two electronic addresses
  designated by the distribution system retailer. A distribution
  system retailer shall send a final and complete response to the
  commission and complainant not later than the 15th day after the
  date the complaint was received, unless the commission grants
  additional time before the expiration of the 15-day period.
         (c)  The commission may impose sanctions on a distribution
  system retailer if, after an investigation, the commission
  determines that the distribution system retailer has violated
  Section 141.003. Sanctions may include:
               (1)  adopting an order requiring a distribution system
  retailer to refund the amounts of any overcharges to the
  distribution system retailer's customers;
               (2)  drawing down all or a portion of the financial
  surety for the purpose of refunding the amounts of any overcharges
  to the distribution system retailer's customers not refunded before
  the 61st day after the date the commission orders a refund; or
               (3)  adopting an order setting rates and fees for the
  distribution system retailer in accordance with Section 141.003.
         Sec. 141.009.  PERFORMANCE GUARANTEE. A distribution system
  retailer shall post, in favor of the commission, financial surety
  in the form of a letter of credit, bond, or other acceptable form of
  financial surety with the commission in an amount equal to the
  lesser of $3 multiplied by the number of gallons of aggregate
  storage capacity in all of the propane gas systems operated by the
  distribution system retailer or $50,000. The issuer of the
  financial surety used to meet this requirement shall honor the
  financial surety if the issuer receives from the commission notice
  that the financial surety is due and payable. The commission may
  draw down all or a portion of the financial surety. The distribution
  system retailer shall provide the commission with verification of
  the adequacy of the financial surety, and the commission may order
  the distribution system retailer to adjust the amount of the
  financial surety annually.
         Sec. 141.010.  DISCLOSURE TO HOMEOWNERS. (a)  A
  distribution system retailer shall record in the real property
  records of each county in which the distribution system retailer
  owns or operates a propane gas system a notice of disclosure of the
  existence of the propane gas system and the service the retailer
  provides.  The notice shall include:
               (1)  a service map reflecting the location of the
  subdivisions or areas the distribution system retailer serves in
  the county;
               (2)  a copy of this chapter or a summary of the
  customer's rights under this chapter; and
               (3)  for development agreements entered into after
  September 1, 2013, a statement disclosing the existence of any
  financial interest held by a homeowners' association, municipal
  utility district, or developer in the propane gas system.
         (b)  If a person proposes to sell or convey real property
  located in a propane gas system service area owned by a distribution
  system retailer, the person must give to the purchaser written
  notice as prescribed by this subsection.  The notice must include a
  copy of the notice recorded in the real property records as required
  by Subsection (a), must be executed by the seller, and must read as
  follows: "The real property, described below, that you are about to
  purchase may be located in a propane gas system service area, which
  is authorized by law to provide propane gas service to the
  properties in the area pursuant to Chapter 141, Utilities Code.  If
  your property is located in a propane gas system service area, there
  may be special costs or charges that you will be required to pay
  before you can receive propane gas service.  There may be a period
  required to construct lines or other facilities necessary to
  provide propane gas service to your property.  You are advised to
  determine if the property is in a propane gas system service area
  and contact the distribution system retailer to determine the cost
  that you will be required to pay and the period, if any, that is
  required to provide propane gas service to your property.
         "The undersigned purchaser hereby acknowledges receipt of
  the foregoing notice at or before the execution of a binding
  contract for the purchase of the real property described in the
  notice or at closing of purchase of the real property.
                                       ________________________________
                                       Date
                                       ________________________________
                                       Signature of Purchaser"
         (c)  Each county shall accept and record in its real property
  records a distribution system retailer's service map presented to
  the county clerk under this section if the map meets filing
  requirements, does not exceed 11 inches by 17 inches in size, and is
  accompanied by the appropriate fee.  The recording required by this
  section must be completed not later than the later of January 1,
  2014, or the 90th day after the date a distribution system retailer
  completes construction of a new propane gas system in the county.
         SECTION 2.  This Act takes effect September 1, 2013.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 2532 was passed by the House on May 7,
  2013, by the following vote:  Yeas 125, Nays 16, 2 present, not
  voting; and that the House concurred in Senate amendments to H.B.
  No. 2532 on May 23, 2013, by the following vote:  Yeas 116, Nays 24,
  2 present, not voting.
 
  ______________________________
  Chief Clerk of the House   
 
         I certify that H.B. No. 2532 was passed by the Senate, with
  amendments, on May 21, 2013, by the following vote:  Yeas 25, Nays
  5.
 
  ______________________________
  Secretary of the Senate   
  APPROVED: __________________
                  Date       
   
           __________________
                Governor