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A BILL TO BE ENTITLED
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AN ACT
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relating to rates for electricity charged by certain municipally |
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owned utilities and to the use of revenue from the rates. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter B, Chapter 40, Utilities Code, is |
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amended by adding Section 40.0521 to read as follows: |
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Sec. 40.0521. RATES OF AND USE OF REVENUE BY CERTAIN |
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UTILITIES NOT OFFERING CUSTOMER CHOICE. (a) This section applies |
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only to a municipally owned utility that is governed directly by the |
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governing body of the municipality and is owned by a municipality |
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with a population of more than 750,000. |
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(b) This section does not require a municipally owned |
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utility to implement or opt for customer choice. |
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(c) In the case of a conflict between this section and |
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another provision of law, this section prevails. |
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(d) A municipally owned utility may not: |
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(1) directly or indirectly subsidize wholesale |
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competitive activities through rates charged for the provision of |
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retail electric service that include fixed or variable costs |
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reasonably attributable to the operation and maintenance of |
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municipally owned utility assets that generate energy for sale at |
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wholesale; or |
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(2) charge rates for the provision of retail electric |
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service that exceed 50 percent of the average rates available to |
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similarly situated customers in areas of the state that have access |
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to customer choice. |
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(e) The commission by rule shall require a municipally owned |
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utility to submit to the commission information to allow the |
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commission to determine whether the municipally owned utility is |
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complying with the requirements of Subsection (d). The commission |
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shall notify the municipal governing body if the commission |
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determines that the municipally owned utility is not complying with |
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the requirements of Subsection (d). |
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(f) A municipal governing body that receives notice from the |
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commission under Subsection (e): |
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(1) shall require the municipally owned utility to |
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comply with Subsection (d); and |
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(2) may, in a manner consistent with Section |
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40.055(a)(4), reasonably determine the amount of the municipally |
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owned utility's stranded investment and calculate and establish for |
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the municipally owned utility a non-bypassable charge reflecting |
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stranded costs properly attributable to the municipally owned |
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utility's retail electric service customers. |
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(g) The relevant date for identifying stranded investment |
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under Subsection (f) is November 30, 2010, instead of the date |
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specified in Section 40.055(a)(4). The amount and duration of the |
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charge under Subsection (f) must: |
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(1) be calculated in a similar manner to that |
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prescribed by Subchapter F, Chapter 39; |
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(2) include the calculation of nuclear |
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decommissioning costs as allowed by Sections 39.205 and 39.206; and |
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(3) consider the municipally owned utility's capital |
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and debt structure. |
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(h) A person affected by a determination made under this |
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section by a municipal governing body may appeal the determination |
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to the commission by filing with the commission a petition for |
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review not later than the 30th day after the date of the |
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determination. An appeal under this section is de novo. The |
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commission shall enter a final order: |
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(1) approving the determination of the municipal |
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governing body; or |
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(2) substituting the commission's own determination. |
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(i) A municipally owned utility may use the net proceeds of |
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its wholesale competitive activities for utility debt repayment, |
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reduction of purchased power costs, or vegetation management. The |
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municipally owned utility shall: |
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(1) document and book the underlying transactions in |
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auditable form; and |
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(2) on at least an annual basis as part of the |
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budgeting process, disclose to the public the net amount of the |
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proceeds and the intended uses of the proceeds. |
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SECTION 2. A municipally owned utility described by Section |
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40.0521, Utilities Code, as added by this Act, that does not comply |
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with Section 40.0521, Utilities Code, as added by this Act, on the |
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effective date of this Act shall comply with Section 40.0521, |
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Utilities Code, as added by this Act, not later than March 1, 2024. |
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SECTION 3. This Act takes effect September 1, 2023. |