By: Hancock S.B. No. 853

(In the Senate - Filed February 10, 2023; March 1, 2023, read first time and referred to Committee on Business & Commerce; April 5, 2023, reported adversely, with favorable Committee Substitute by the following vote: Yeas 8, Nays 3; April 5, 2023, sent to printer.) Click here to see the committee vote

COMMITTEE SUBSTITUTE FOR S.B. No. 853 By: King

A BILL TO BE ENTITLED

AN ACT

relating to electricity service provided by certain municipally owned utilities.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Chapter 33, Utilities Code, is amended by adding Subchapter F to read as follows:

SUBCHAPTER F. REVIEW OF RATES OF CERTAIN MUNICIPAL UTILITIES

Sec. 33.151. APPLICABILITY. This subchapter applies only to a municipally owned utility that provides service in the Capitol complex, as defined by Section 443.0071, Government Code.

Sec. 33.152. REVIEW OF RATES; CUSTOMER CHOICE. (a) Notwithstanding any other law, a group of retail customers may file a petition for commission review of current or proposed rates of a municipally owned utility that apply to the petitioning customers. The petition must be signed by at least 10,000 of those customers. The signature of a retail customer of a municipally owned utility may be counted as a valid signature only on the first filed petition on which that customer's signature appears.

(b) The commission shall initiate a proceeding not later than the 90th day after the petition is submitted to determine whether the rates of the municipally owned utility are consistent with the rates available to similarly situated customers in areas of the state that have access to customer choice. If the commission determines that the rates of the municipally owned utility are consistent with the rates available to similarly situated customers in areas of the state that have access to customer choice, the commission shall deny the petition.

(c) If the commission does not deny the petition under Subsection (b), not later than the 90th day after the date of the determination described by Subsection (b), the municipally owned utility shall file a rate application with the commission that complies in all material respects with the rules and forms prescribed by the commission. The commission for good cause may extend the deadline for filing the rate application.

(d) The commission shall conduct a full review of the rates applicable to the petitioning customer or group to determine whether those rates are just and reasonable using the standards prescribed by Chapter 36, notwithstanding the lack of consistency between those rates and rates available to similarly situated customers in areas of the state that have access to customer choice. If the commission determines that the rates are just and reasonable, the commission shall deny the petition. If the commission determines that the rates are not just and reasonable, the commission shall set rates for the petitioning customer or group that are just, reasonable, and consistent with the rates available to similarly situated customers in areas of the state that have access to customer choice.

(e) The commission shall:

(1) allow the municipally owned utility an opportunity to respond to a review conducted under this section; and

(2) make publicly available on the commission's Internet website the commission's review and the utility's response.

Sec. 33.153. LIMITED DURATION. (a) Except as provided by Subsection (b), the commission may review the rates of a municipally owned utility under this subchapter only until September 1, 2028.

(b) The commission may review the rates of a municipally owned utility under this subchapter after September 1, 2028, if:

(1) the municipally owned utility did not initiate a base rate proceeding during the period beginning September 1, 2023, and ending September 1, 2028; and

(2) the rates being reviewed are proposed for or were adopted in the first base rate proceeding initiated by the municipally owned utility after September 1, 2028.

SECTION 2. Section 40.004, Utilities Code, is amended to read as follows:

Sec. 40.004. JURISDICTION OF COMMISSION. Except as specifically otherwise provided in this chapter, the commission has jurisdiction over municipally owned utilities only for the following purposes:

(1) to regulate wholesale transmission rates and service, including terms of access, to the extent provided by Subchapter A, Chapter 35;

(2) to regulate certification of retail service areas to the extent provided by Chapter 37;

(3) to regulate rates:

(A) under Subchapter F, Chapter 33, subject to Section 40.051(c); and

(B) on appeal under Subchapters D and E, Chapter 33, subject to Section 40.051(c);

(4) to establish a code of conduct as provided by Section 39.157(e) applicable to anticompetitive activities and to affiliate activities limited to structurally unbundled affiliates of municipally owned utilities, subject to Section 40.054;

(5) to establish terms and conditions for open access to transmission and distribution facilities for municipally owned utilities providing customer choice, as provided by Section 39.203;

(6) to administer the renewable energy credits program under Section 39.904(b) and the natural gas energy credits program under Section 39.9044(b);

(7) to require reports of municipally owned utility operations only to the extent necessary to:

(A) enable the commission to determine the aggregate load and energy requirements of the state and the resources available to serve that load; or

(B) enable the commission to determine information relating to market power as provided by Section 39.155; and

(8) to evaluate and monitor the cybersecurity preparedness of a municipally owned utility described by Section 39.1516(a)(3) or (4).

SECTION 3. Section 40.051(c), Utilities Code, is amended to read as follows:

(c) After a decision to offer customer choice has been made, Subchapters D, [and] E, and F, Chapter 33, do not apply to any action taken under this chapter.

SECTION 4. This Act takes effect September 1, 2023.

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