88R11236 KBB-F
 
  By: Troxclair H.B. No. 4212
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to competition in the electric utility market of certain
  municipalities.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 40.003, Utilities Code, is amended by
  amending Subsection (a) and adding Subsection (g) to read as
  follows:
         (a)  Municipally owned utilities, other than utilities
  required to initiate customer choice under Section 40.051(d), and
  river authorities may adopt and use securitization provisions
  having the effect of the provisions provided by Subchapter G,
  Chapter 39, to recover through appropriate charges their stranded
  costs, at a recovery level deemed appropriate by the municipally
  owned utility or river authority up to 100 percent, under rules and
  procedures that shall be established:
               (1)  in the case of a municipally owned utility to which
  this subsection applies, by the municipal governing body or a body
  vested with the power to manage and operate the municipally owned
  utility, including procedures providing for rate orders of the
  governing body having the effect of financing orders, providing for
  a separate nonbypassable charge approved by the governing body, in
  the nature of a transition charge, to be collected from all retail
  electric customers of the municipally owned utility, identified as
  of a date determined by the governing body, to fund the recovery of
  the stranded costs of the municipally owned utility and of all
  reasonable related expenses, as determined by the governing body,
  and providing for the issuance of bonds, having a term and other
  characteristics as determined by the governing body, as necessary
  to recover the amount deemed appropriate by the governing body
  through securitization financing; and
               (2)  in the case of a river authority, by the
  commission.
         (g)  A municipally owned utility required to initiate
  customer choice under Section 40.051(d) may recover the utility's
  stranded cost through securitization provisions:
               (1)  having the effect of the provisions provided by
  Subchapter G, Chapter 39; and
               (2)  under rules and procedures established by the
  commission.
         SECTION 2.  Section 40.051, Utilities Code, is amended by
  amending Subsection (a) and adding Subsection (d) to read as
  follows:
         (a)  Except as provided by Subsection (d), the [The]
  municipal governing body or a body vested with the power to manage
  and operate a municipally owned utility has the discretion to
  decide when or if the municipally owned utility will provide
  customer choice.
         (d)  Not later than the 365th day after the date a municipal
  governing body or other body described by Subsection (a) receives
  notice under Section 2165.059, Government Code, that the utility is
  included on the list created under that section, the utility shall:
               (1)  initiate customer choice; and
               (2)  except as otherwise provided by this chapter, be
  considered to be a municipally owned utility that chooses to
  participate in customer choice under Subsection (b) for purposes of
  this subtitle.
         SECTION 3.  Section 40.054, Utilities Code, is amended by
  amending Subsection (e) and adding Subsection (g) to read as
  follows:
         (e)  The commission does not have jurisdiction to require
  unbundling of services or functions of[, or to regulate the
  recovery of stranded investment of,] a municipally owned utility
  or, except as provided by this section, jurisdiction with respect
  to the rates, terms, and conditions of service for retail customers
  of a municipally owned utility within the utility's certificated
  service area.
         (g)  Except as provided by Section 40.003(g), the commission
  does not have jurisdiction to regulate the recovery of stranded
  investment of a municipally owned utility.
         SECTION 4.  Section 40.055, Utilities Code, is amended by
  amending Subsection (a) and adding Subsection (c) to read as
  follows:
         (a)  The municipal governing body or a body vested with the
  power to manage and operate a municipally owned utility has
  exclusive jurisdiction to:
               (1)  set all terms of access, conditions, and rates
  applicable to services provided by the municipally owned utility,
  subject to Sections 40.054 and 40.056, including nondiscriminatory
  and comparable rates for distribution, but excluding wholesale
  transmission rates, terms of access, and conditions for wholesale
  transmission service set by the commission under this subtitle,
  provided that the rates for distribution access established by the
  municipal governing body shall be comparable to the distribution
  access rates that apply to the municipally owned utility and the
  municipally owned utility's affiliates;
               (2)  determine whether to unbundle any energy-related
  activities and, if the municipally owned utility chooses to
  unbundle, whether to do so structurally or functionally;
               (3)  except for a municipally owned utility required to
  initiate customer choice under Section 40.051(d), reasonably
  determine the amount of the municipally owned utility's stranded
  investment;
               (4)  except for a municipally owned utility required to
  initiate customer choice under Section 40.051(d), establish
  nondiscriminatory transition charges reasonably designed to
  recover the stranded investment over an appropriate period of time,
  provided that recovery of retail stranded costs shall be from all
  existing or future retail customers, including the facilities,
  premises, and loads of those retail customers, within the utility's
  geographical certificated service area as it existed on May 1,
  1999;
               (5)  determine the extent to which the municipally
  owned utility will provide various customer services at the
  distribution level, including other services that the municipally
  owned utility is legally authorized to provide, or will accept the
  services from other providers;
               (6)  manage and operate the municipality's electric
  utility systems, including exercise of control over resource
  acquisition and any related expansion programs;
               (7)  establish and enforce service quality and
  reliability standards and consumer safeguards designed to protect
  retail electric customers, including safeguards that will
  accomplish the objectives of Sections 39.101(a) and (b), consistent
  with this chapter;
               (8)  determine whether a base rate reduction is
  appropriate for the municipally owned utility;
               (9)  determine any other utility matters that the
  municipal governing body or body vested with power to manage and
  operate the municipally owned utility believes should be included;
               (10)  make any other decisions affecting the
  municipally owned utility's participation in customer choice that
  are not inconsistent with this chapter; and
               (11)  determine the extent to which the municipally
  owned utility offers energy efficiency programs and how the
  programs are administered by the utility, except as provided by
  Section 39.9051(e).
         (c)  For a municipally owned utility required to initiate
  customer choice under Section 40.051(d), the relevant date for the
  commission to identify stranded investment is the date the
  municipal governing body or other body receives notice under
  Section 2165.059, Government Code, that the utility is included on
  the list created under that section.
         SECTION 5.  Subchapter B, Chapter 40, Utilities Code, is
  amended by adding Section 40.061 to read as follows:
         Sec. 40.061.  ENFORCEMENT OF CUSTOMER CHOICE. (a) In this
  section, "governing body" means the body vested with the power to
  manage and operate a municipally owned utility.
         (b)  If the commission determines that a municipally owned
  utility required to initiate customer choice under Section
  40.051(d) is not adequately offering customer choice on the 90th
  day after the date customer choice was to be initiated, the utility
  becomes subject to the oversight authority of the commission for
  matters relating to the implementation of customer choice.
         (c)  The commission shall make a determination under
  Subsection (b), if any, as soon as practicable after the expiration
  of the 90-day period. The commission assumes oversight authority
  over the municipally owned utility on the date the commission makes
  an affirmative determination that the utility is not adequately
  offering customer choice, and this authority encompasses any
  portion of the authority vested with the governing body of the
  utility under this subchapter that the commission determines is
  necessary.
         (d)  The governing body shall work cooperatively with the
  commission in offering customer choice.
         (e)  The oversight authority under this section continues
  until the date the commission determines that the municipally owned
  utility:
               (1)  has completed the transition to customer choice;
  and
               (2)  is prepared to continue to provide customer choice
  in a manner consistent with the competitive market.
         (f)  On the date the commission makes an affirmative
  determination under Subsection (e), the management and operation of
  the municipally owned utility returns to the control of the
  utility's governing body.
         SECTION 6.  Subchapter B, Chapter 2165, Government Code, is
  amended by adding Section 2165.059 to read as follows:
         Sec. 2165.059.  LIST BASED ON CERTAIN STATE-OWNED OFFICE
  SPACE. (a)  On the second Monday in September of each year, the
  commission shall:
               (1)  create a list of each municipally owned utility in
  whose certificated retail service area the commission manages three
  million or more square feet of state-owned office space; and
               (2)  for each utility that appears on the list for the
  first time, notify the Public Utility Commission of Texas and the
  governing body vested with the power to manage and operate the
  utility of the utility's addition to the list.
         (b)  The Public Utility Commission of Texas shall assist the
  commission as necessary in performing duties under Subsection (a).
         SECTION 7.  (a)  The changes in law made by this Act apply
  only to the activities of a municipally owned utility that occur on
  or after the effective date of this Act. Activities of a
  municipally owned utility that occur before the effective date of
  this Act are governed by the law in effect on the date the
  activities occurred, and the former law is continued in effect for
  that purpose.
         (b)  The Texas Facilities Commission shall create the
  initial list described by Section 2165.059, Government Code, as
  added by this Act, on September 11, 2023.
         SECTION 8.  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, 2023.