BILL ANALYSIS

S.B. 1170

By: Perry

State Affairs

Committee Report (Unamended)

BACKGROUND AND PURPOSE

Lubbock Power & Light (LP&L) is the third-largest municipally owned utility in the state and the first to deregulate and join the competitive market. However, LP&L needs certain statutory changes in order to fully transition into the competitive market. Once the transition has occurred, LP&L seeks to be treated in the same manner as investor-owned utilities. LP&L does not intend to serve as a retail electric provider and could not practically serve as the provider of last resort. Therefore, LP&L would like the option to delegate the decision-making authority on the issue of the provider of last resort to the Public Utility Commission of Texas. Additionally, after transitioning to the competitive market, LP&L will serve as a transmission distribution utility (TDSP) or "wires company" only. LP&L does not intend to serve as a billing agent for electric customers once the transition is complete and seeks to clarify that customers will receive a consolidated bill from their retail electric provider of choice that contains the LP&L charges. S.B. 1170 seeks to make these necessary changes to allow LP&L to smoothly transition into the competitive market.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

S.B. 1170 amends the Utilities Code to revise provisions relating to the designation of a provider of last resort by a municipally owned utility for its retail customers upon the initiation of customer choice by the utility as follows:

· replaces the requirement for the utility to designate itself or another entity as the provider of last resort for customers within the utility's certificated service area on the initiation of customer choice with an authorization for the utility to designate itself or one or more other entities as the provider or providers of last resort for such customers on that initiation;

· authorizes the utility to delegate the authority to designate the provider or providers of last resort to the Public Utility Commission of Texas (PUC); and

· limits the applicability of the requirement for the utility to fulfill the role of default provider of last resort in the event no other entity is available to act in that capacity to only if the utility continues to sell electric energy to retail customers after the initiation of customer choice.

The bill establishes that, if designation authority is delegated to the PUC, the PUC is not required to comply with procedures or criteria adopted by the utility for designating a provider of last resort.

S.B. 1170 expands the circumstances under which a provider of last resort must offer a customer the standard retail service package for the appropriate customer class, with no interruption of service, at a fixed, nondiscountable rate that is at least sufficient to cover the reasonable costs of providing that service, as approved by the governing body of the municipally owned utility that has the authority to set rates for the customer. The bill does so by making this requirement applicable when a customer is unable to obtain service from a municipally owned utility or electric cooperative offering customer choice, in addition to the current circumstance when a customer is unable to obtain service from a retail electric provider (REP). The bill authorizes the PUC to set the rate the provider may charge if the PUC designated the provider of last resort.  

S.B. 1170 removes a provision granting a customer that is being provided wires service by a municipally owned utility at distribution or transmission voltage and that is served by a REP for retail service the option of being billed directly by each service provider or to receive a single bill for distribution, transmission, and generation services from the municipally owned utility. The bill sets out provisions that instead establish the following:

· a municipally owned utility that opts for customer choice and does not sell electric energy to retail customers is not required to bill directly for distribution, transmission, and generation services provided to retail electric customers located in its certificated service area; and

· a REP may provide billing services for distribution, transmission, and generation services provided to those customers.

EFFECTIVE DATE

On passage, or, if the bill does not receive the necessary vote, September 1, 2023.