83R7189 RWG-F
 
  By: Workman H.B. No. 2532
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the regulation of propane distribution retailers.
         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)  "Commission" means the Railroad Commission of
  Texas or its successor agency.
               (2)  "Customer" means a retail customer of propane gas
  purchased from and delivered by a distribution system retailer
  through a propane gas system.
               (3)  "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 Class E license issued by the Gas
  Services Division of the license and permit section of the
  commission or is an active company representative or operations
  supervisor on file with the section; 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.
               (4)  "Markup" means the retail price for a period
  divided by the spot price for that period.
               (5)  "Propane gas" means propane gas vapor, but does
  not include liquefied petroleum gas as described by Chapter 113,
  Natural Resources Code.
               (6)  "Propane gas system" means a system that supplies
  propane gas and includes 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.
               (7)  "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.
               (8)  "Retail price" means the U.S. Propane Residential
  Price as reported by the United States Energy Information
  Administration.
               (9)  "Spot price" means the Mont Belvieu, TX Propane
  Spot Price FOB as reported by the United States Energy Information
  Administration.
         Sec. 141.002.  APPLICABILITY. This chapter applies only to
  a 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) A distribution
  system retailer may not charge a customer for propane gas provided
  through a propane gas system to the customer a rate that exceeds the
  three-month rolling average of the spot price per gallon at the Mont
  Belvieu supply point multiplied by the rolling three-year average
  markup of retail price to spot price as reported by the United
  States Energy Information Administration. The allowable markup
  (three-year average) as of January 2013 is 2.1780 times spot. The
  commission shall change the markup in January of each year by adding
  the average annual markup, as determined by the average of the six
  monthly reporting periods of a calendar year from the United States
  Energy Information Administration, of the three preceding years and
  dividing by three. The price per gallon shall be converted to cubic
  foot rate by dividing the price per gallon by 36.4.
         (b)  A distribution system retailer may charge customers
  special fees for services, including connection, disconnection,
  account maintenance, late fees, and reconnection fees, if the fees
  are reasonable and customary.
         (c)  Nothing in this section limits a distribution system
  retailer's ability to pass through to a customer on a pro-rata
  actual-cost basis:
               (1)  a fee, including the actual cost of the
  performance guarantee;
               (2)  a fee increase; or
               (3)  a tax, other than taxes assessed on the basis of
  income, gross income, property or margins, assessment, surcharge,
  levy, or other charge imposed by a governmental entity 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.
         (d)  A fee passed through to a customer shall be:
               (1)  passed through without any additional markup; and
               (2)  identified as a separate item on a customer's bill.
         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 is 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 a toll-free 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 and to notify the commission that the customer believes the
  distribution system retailer is charging an amount greater than
  allowed by law. The commission shall immediately investigate the
  notification.
         (e)  To restore and maintain service, the commission may
  assume temporary receivership of a propane gas system that
  experiences a service interruption that affects the entire propane
  gas system and that:
               (1)  lasts more than 48 hours;
               (2)  occurs more than three times in one month; or
               (3)  is the result of the distribution system
  retailer's failure to replenish the primary propane tank for a
  reason other than a general local market disruption, a restriction
  on wholesale propane supplies, or criminal activity.
         (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)  If the commission assumes temporary receivership of a
  propane gas system under Subsection (e), it shall notify the
  distribution system retailer and shall take whatever action is
  necessary and appropriate to reestablish service to affected
  customers. The commission shall provide the distribution system
  retailer 72 hours to prepare and submit a plan to avoid continuing
  receivership.
         (h)  If a distribution system retailer's inability to
  fulfill its financial obligations is the cause of a service
  interruption described by Subsection (e), the commission may
  delegate the operation of the propane gas system to a qualified
  homeowners' association or municipal utility district until
  another distribution system retailer can assume control over the
  propane gas system or until a court in bankruptcy proceedings
  instructs otherwise.
         (i)  If the commission determines that the distribution
  system retailer is able to resume operations of the system, the
  commission shall notify the distribution system retailer of its
  determination and allow the resumption of operation after the
  distribution system retailer replaces the amount of the financial
  surety that was used in receivership. The distribution system
  retailer shall reimburse the commission for direct costs the
  commission may have incurred as a result of receivership.
         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 promptly and
  suitably shall 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)  ordering a distribution system retailer to refund
  the amounts of any overcharges to the distribution system
  retailer's customers; or
               (2)  drawing 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.
         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 or cash deposited 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
  $250,000. The issuer of a letter of credit used to meet this
  requirement shall honor the letter of credit if the issuer receives
  from the commission notice that the letter of credit is due and
  payable. The commission may draw all or a portion of the financial
  surety. The commission shall verify and adjust the amount of the
  financial surety annually.
         Sec. 141.010.  RULES. The commission shall adopt rules
  necessary to implement this chapter.
         Sec. 141.011.  DISCLOSURE TO HOMEOWNERS. (a) A distribution
  system retailer shall provide to a homeowners' association or
  municipal utility district with jurisdiction over property that
  receives service from a distribution system retailer, or to the
  distribution system retailer's customers if there is no homeowners'
  association or municipal utility district, a disclosure that
  includes a physical or digital copy or website posting of:
               (1)  a copy of this chapter or a summary of the
  customers rights under this chapter; and
               (2)  for development agreements entered into after
  September 1, 2013,  a statement disclosing the existence of a
  financial interest that a homeowners' association, municipal
  utility district, or developer holds in the propane gas system.
         (b)  A homeowners' association or municipal utility district
  that has jurisdiction over real property that receives service from
  a distribution system retailer shall provide the disclosure
  described by Subsection (a) to all homeowners along with a list of
  the homeowners' covenants and deed restrictions. The homeowners'
  association or municipal utility district shall post the
  information required to be disclosed under this subsection on the
  homeowners' association's or municipal utility district's website.
         SECTION 2.  This Act takes effect September 1, 2013.