81R11033 TRH-D
By: Thompson H.B. No. 2282
A BILL TO BE ENTITLED
AN ACT
relating to reregulation of retail electric services.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. The following provisions of the Utilities Code
are repealed:
(1) Sections 31.002(1), (4), (8), and (9);
(2) Chapter 39;
(3) Section 40.001;
(4) Section 40.003;
(5) Sections 40.051, 40.052, 40.053, 40.054, 40.055,
40.056, 40.057, 40.058, and 40.059;
(6) Section 41.001;
(7) Section 41.003;
(8) Sections 41.051, 41.052, 41.053, and 41.054;
(9) Sections 41.056, 41.057, and 41.058;
(10) Section 41.060; and
(11) Section 41.062.
SECTION 2. Sections 31.002(6), (17), (18), and (19),
Utilities Code, are amended to read as follows:
(6) "Electric utility" means a person or river
authority that owns or operates for compensation in this state
equipment or facilities to produce, generate, transmit,
distribute, sell, or furnish electricity in this state. The term
includes a lessee, trustee, or receiver of an electric utility and a
recreational vehicle park owner who does not comply with Subchapter
C, Chapter 184, with regard to the metered sale of electricity at
the recreational vehicle park. The term does not include:
(A) a municipal corporation;
(B) a qualifying facility;
(C) a power generation company;
(D) an exempt wholesale generator;
(E) a power marketer;
(F) a corporation described by Section 32.053 to
the extent the corporation sells electricity exclusively at
wholesale and not to the ultimate consumer;
(G) an electric cooperative;
(H) [a retail electric provider;
[(I)] this state or an agency of this state; or
(I) [(J)] a person not otherwise an electric
utility who:
(i) furnishes an electric service or
commodity only to itself, its employees, or its tenants as an
incident of employment or tenancy, if that service or commodity is
not resold to or used by others;
(ii) owns or operates in this state
equipment or facilities to produce, generate, transmit,
distribute, sell, or furnish electric energy to an electric
utility, if the equipment or facilities are used primarily to
produce and generate electric energy for consumption by that
person; or
(iii) owns or operates in this state a
recreational vehicle park that provides metered electric service in
accordance with Subchapter C, Chapter 184.
(17) "Retail electric provider" means a person that
sells electric energy to retail customers in this state. [A retail
electric provider may not own or operate generation assets.]
(18) "Separately metered" means metered by an
individual meter that is used to measure electric energy
consumption by a retail customer and for which the customer is
directly billed by a utility, [retail electric provider,] electric
cooperative, or municipally owned utility.
(19) "Transmission and distribution utility" means a
person or river authority that owns or operates for compensation in
this state equipment or facilities to transmit or distribute
electricity, except for facilities necessary to interconnect a
generation facility with the transmission or distribution network,
a facility not dedicated to public use, or a facility otherwise
excluded from the definition of "electric utility" under this
section, in a [qualifying] power region [certified under Section
39.152, but does not include a municipally owned utility or an
electric cooperative].
SECTION 3. Subchapter A, Chapter 32, Utilities Code, is
amended by adding Section 32.0013 to read as follows:
Sec. 32.0013. COMMISSION JURISDICTION RELATING TO
REREGULATION OF ELECTRIC UTILITIES. The commission has all
necessary jurisdiction to take any action necessary to effectuate
the reregulation of retail electric service in an area in which
customer choice was introduced before January 1, 2010.
SECTION 4. Subtitle B, Title 2, Utilities Code, is amended
by adding Chapter 34 to read as follows:
CHAPTER 34. ELECTRICAL PLANNING
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 34.001. ADOPTION OF INTEGRATED RESOURCE PLANNING
PROCESS. (a) The commission by rule shall develop an integrated
resource planning process to provide reliable energy service at the
lowest reasonable system cost.
(b) In determining the lowest reasonable system cost of an
electric utility's integrated resource plan, the commission shall
consider:
(1) direct costs;
(2) the effect on the rates and bills of various types
of customers;
(3) minimization of the risks of future fuel costs and
regulations;
(4) the appropriateness and reliability of the mix of
resources; and
(5) the cost of compliance with environmental
protection requirements of all applicable state and federal laws,
rules, and orders.
(c) An appropriate and reliable mix under Subsection (b)(4)
may include a portfolio of cost-effective sources of power,
including fueled and nonfueled resources, such as renewable
resources and conservation measures, and a mixture of long-term and
short-term contracts.
(d) In establishing a requirement under this chapter,
including a reporting requirement, the commission shall consider
and recognize the different capabilities of small and large
electric utilities.
Sec. 34.002. STATEWIDE INTEGRATED RESOURCE PLAN. (a) The
commission by rule shall adopt and periodically update a statewide
integrated resource plan that includes the commission's long-term
resource planning goals. The commission shall notify each electric
utility of the approval of the plan.
(b) The commission shall send a report on the statewide
integrated resource plan to the governor when it adopts or revises
the plan and make the report available to the public.
(c) The report on the statewide integrated resource plan
must include:
(1) historical data for electric consumption
statewide and by each electric utility;
(2) historical data for electric generation by each
electric utility and by type of capacity, including alternative
energy sources;
(3) an inventory of generation capacity statewide and
by each electric utility;
(4) quantitative data on demand-side management
programs to the extent the commission determines necessary;
(5) each generating electric utility's forecast
without adjustment;
(6) the commission's long-term resource planning goals
included in the plan;
(7) a projection of the need for electric services;
(8) a description of the approved individual
integrated resource plan of each electric utility; and
(9) an assessment of transmission planning being
conducted by electric utilities in this state.
Sec. 34.003. PROMOTION OF RENEWABLE ENERGY TECHNOLOGIES.
The commission shall adopt rules consistent with the integrated
resource planning process to promote the development of renewable
energy technologies.
Sec. 34.004. REVIEW OF STATE TRANSMISSION SYSTEM. In
carrying out its duties related to the integrated resource planning
process, the commission may review this state's transmission system
and make recommendations to electric utilities on the need to build
new power lines, upgrade power lines, and make other necessary
improvements and additions.
[Sections 34.005-34.020 reserved for expansion]
SUBCHAPTER B. PRELIMINARY INTEGRATED RESOURCE PLAN
Sec. 34.021. PRELIMINARY INTEGRATED RESOURCE PLAN
REQUIRED. (a) Every three years each nongenerating electric
utility planning to construct generating resources and each
generating electric utility shall submit to the commission a
preliminary integrated resource plan covering a 10-year period.
(b) The commission by rule shall:
(1) establish a staggered schedule for the submission
of integrated resource plans by electric utilities;
(2) prescribe the form and manner in which a plan must
be submitted;
(3) adopt filing requirements and schedules; and
(4) prescribe the methods by which an electric utility
may recover supply-side and demand-side costs.
(c) The commission by rule may:
(1) define the scope and nature of public
participation in the development of the integrated resource plan;
and
(2) establish the general guidelines an electric
utility shall use to evaluate and to select or reject a resource,
including procedures governing the solicitation process.
Sec. 34.022. CONTENTS OF PRELIMINARY INTEGRATED RESOURCE
PLAN. (a) A preliminary integrated resource plan must include:
(1) the electric utility's forecast of future demands;
(2) an estimate of the energy savings and demand
reduction the electric utility can achieve during the time covered
by the plan by use of demand-side management resources and the range
of possible costs for those resources;
(3) if additional supply-side resources are needed to
meet future demand, an estimate of:
(A) the amount and operational characteristics
of the additional capacity needed;
(B) the types of viable supply-side resources for
meeting that need; and
(C) the range of probable costs of those
resources;
(4) if necessary, proposed requests for proposals to
be used in a solicitation of demand-side or supply-side resources,
or both;
(5) the specific criteria the electric utility will
use to evaluate and to select or reject demand-side or supply-side
resources;
(6) the methods by which the electric utility intends
to monitor demand-side or supply-side resources, or both as
appropriate, after selection;
(7) the method by which the electric utility intends
to allocate costs;
(8) a description of how the electric utility will
achieve equity among customer classes and provide demand-side
programs to each customer class, including tenants and low-income
ratepayers;
(9) any proposed incentive factors; and
(10) any other information the commission requires.
(b) If the commission adopts under Section 34.021(c) the
general guidelines an electric utility shall use to evaluate and to
select or reject a resource, the specific criteria proposed by the
electric utility under Subsection (a)(5) may deviate from those
guidelines only on a showing of good cause.
Sec. 34.023. PUBLIC HEARING ON PRELIMINARY INTEGRATED
RESOURCE PLAN. (a) If a preliminary integrated resource plan
includes a proposed solicitation of demand-side or supply-side
resources, the commission, on its own motion or on the motion of the
electric utility or an affected person, may convene a public
hearing on the adequacy and merits of the plan.
(b) Any interested person may intervene in the hearing and,
at the hearing, may present evidence and cross-examine witnesses
regarding the contents and adequacy of the preliminary integrated
resource plan.
(c) Discovery by a participant in the hearing is limited to:
(1) an issue relating to the development of the
preliminary integrated resource plan;
(2) a fact issue included in the plan; and
(3) other issues the commission is required to decide
relating to the plan.
(d) A hearing before the commission is not required for a
preliminary integrated resource plan filed by a river authority or
generating electric cooperative that does not intend to build a new
generating plant.
Sec. 34.024. INTERIM ORDER ON PRELIMINARY INTEGRATED
RESOURCE PLAN; DEADLINE. (a) After conducting a hearing on a
preliminary integrated resource plan under Section 34.023, the
commission shall determine:
(1) whether the plan is based on substantially
accurate data and an adequate method of forecasting;
(2) whether the plan identifies and takes into account
any present and projected reduction in the demand for energy that
may result from cost-effective measures to improve conservation and
energy efficiency in various customer classes of the area being
served;
(3) if additional supply-side resources are needed to
meet future demand, whether the plan adequately demonstrates:
(A) the amount and operational characteristics
of the additional capacity needed;
(B) the types of viable supply-side resources for
meeting that need; and
(C) the range of probable costs of those
resources;
(4) whether the plan describes opportunities for
appropriate persons to participate in developing the plan;
(5) whether the specific criteria the electric utility
will use to evaluate and to select or reject resources are
reasonable and consistent with the guidelines of the integrated
resource planning process;
(6) whether the cost allocation method proposed by the
electric utility is reasonable;
(7) how the electric utility will achieve equity among
customer classes and provide demand-side programs to each customer
class, including tenants and low-income ratepayers; and
(8) whether any incentive factors are appropriate and,
if so, the levels of the factors.
(b) Not later than the 180th day after the date an electric
utility submits a preliminary integrated resource plan, the
commission shall issue an interim order approving the plan,
approving the plan as modified by the commission, or remanding the
plan for additional proceedings. The commission may extend the
deadline for not more than 30 days for extenuating circumstances
encountered in the development and processing of the plan if the
circumstances are fully explained and agreed on by the
commissioners.
[Sections 34.025-34.050 reserved for expansion]
SUBCHAPTER C. RESOURCE SOLICITATION
Sec. 34.051. COMMENCEMENT OF SOLICITATION. (a) After the
commission approves an electric utility's preliminary integrated
resource plan, the utility shall conduct solicitations of
demand-side and supply-side resources as prescribed by the plan.
(b) In addition to soliciting resources from a
nonaffiliated third party, an electric utility may:
(1) prepare and submit a bid of a new utility
demand-side management program as prescribed by Section 34.053;
(2) receive bids from one or more affiliates; and
(3) request a certificate of convenience and necessity
for a new rate-based generating plant.
Sec. 34.052. SUBMISSION OF BIDS; CONFIDENTIALITY. (a)
Each bidder under Section 34.051, including the electric utility
conducting the solicitation and each bidding affiliate, shall
submit two copies of its bid to the commission. The commission shall
ensure that the electric utility has access to all bids at the same
time.
(b) The commission shall keep a copy of each bid submitted
by the electric utility conducting the solicitation or a bidding
affiliate to determine whether the utility complied with the
criteria established for conducting the solicitation.
(c) A bid submitted or retained under this section is
confidential and is not subject to disclosure under Chapter 552,
Government Code.
Sec. 34.053. ELECTRIC UTILITY DEMAND-SIDE MANAGEMENT
PROGRAMS. (a) An electric utility that intends to use a proposed
demand-side management program to meet a need identified by the
utility's preliminary integrated resource plan must prepare a bid
reflecting that resource.
(b) A bid prepared by an electric utility under this section
must comply with the solicitation, evaluation, selection, and
rejection criteria specified by the utility's preliminary
integrated resource plan. The electric utility may not give
preferential treatment or consideration to the bid.
Sec. 34.054. QUALIFYING FACILITY BIDS; AVOIDED COSTS. (a)
The submission of a bid under this chapter by a qualifying facility,
regardless of whether the bid is accepted or rejected, with respect
to the capacity need for which the bid is submitted:
(1) is a waiver by the qualifying facility of any right
it may otherwise have under law to sell capacity to the electric
utility;
(2) represents the qualifying facility's agreement to
negotiate a rate for the purchase of capacity and terms relating to
the purchase that differ from the rate or terms that would otherwise
be required by 18 C.F.R. Part 292, Subpart C; and
(3) is a waiver by the qualifying facility of its right
to the rate or terms for a purchase of capacity by the electric
utility that might otherwise be required by 18 C.F.R. Part 292,
Subpart C.
(b) The avoided capacity costs under 18 C.F.R. Part 292,
Subpart C, of an electric utility that has submitted a preliminary
integrated resource plan to the commission under this chapter is $0
and remains $0, with respect to any capacity needs shown in the
preliminary plan or final plan that are to be satisfied by resources
approved in the utility's final plan.
(c) This section does not affect the validity of a contract
entered into between an electric utility and a qualifying facility
for any purchase.
Sec. 34.055. EVALUATION OF BIDS; NEGOTIATION OF CONTRACTS.
(a) An electric utility shall evaluate each bid submitted,
including an affiliate bid, in accordance with the criteria
specified by the utility's preliminary integrated resource plan and
shall negotiate each necessary contract.
(b) An electric utility is not required to accept a bid and
may reject any or all bids in accordance with the selection and
rejection criteria specified by the utility's preliminary
integrated resource plan.
Sec. 34.056. APPLICATION FOR CERTIFICATE OF CONVENIENCE AND
NECESSITY FOR RESOURCE NOT INCLUDED IN PRELIMINARY PLAN. If the
results of the solicitation and contract negotiations do not meet
the supply-side needs identified by the electric utility's
preliminary integrated resource plan, the utility may apply for a
certificate of convenience and necessity for a utility-owned
resource addition, notwithstanding that a solicitation was
conducted and the resource addition was not included in the
approved plan.
[Sections 34.057-34.100 reserved for expansion]
SUBCHAPTER D. FINAL INTEGRATED RESOURCE PLAN
Sec. 34.101. SUBMISSION OF FINAL INTEGRATED RESOURCE PLAN.
After conducting each solicitation and negotiating each contract,
an electric utility shall submit a proposed final integrated
resource plan to the commission. The proposed plan must include:
(1) the results of each solicitation;
(2) any contracts for resources;
(3) the terms under which the electric utility will
provide resources to meet a need identified by the preliminary
integrated resource plan, if the electric utility accepts a bid
submitted under Section 34.053; and
(4) an application for a certificate of convenience
and necessity, if necessary.
Sec. 34.102. PUBLIC HEARING ON FINAL INTEGRATED RESOURCE
PLAN. (a) The commission, on request by an affected person, shall
convene a public hearing on the reasonableness and
cost-effectiveness of a proposed final integrated resource plan.
The commission shall convene the hearing, if requested, not later
than the 90th day after the date the electric utility files its
proposed plan.
(b) Any interested person may intervene in the hearing and,
at the hearing, may present evidence and cross-examine witnesses
regarding the reasonableness and cost-effectiveness of the
proposed final integrated resource plan.
(c) A party to the hearing may not litigate or conduct
discovery on an issue that was or could have been litigated in
connection with the filing of the electric utility's preliminary
integrated resource plan.
(d) To the extent permitted by federal law, the commission
may issue a written order for access to the books, accounts,
memoranda, contracts, or other records of an exempt wholesale
generator or power marketer selling energy at wholesale to an
electric utility, if access is required for the effective discharge
of the commission's regulatory responsibilities under this
subtitle. The materials obtained by the commission under this
subsection are confidential and are not subject to disclosure under
Chapter 552, Government Code.
Sec. 34.103. RULING ON FINAL INTEGRATED RESOURCE PLAN;
DEADLINE. (a) After conducting a hearing on a proposed final
integrated resource plan under Section 34.102, the commission shall
determine whether:
(1) the final plan was developed in accordance with
the electric utility's preliminary integrated resource plan and
commission rules;
(2) the resource solicitations, evaluations,
selections, and rejections were conducted in accordance with the
criteria included in the utility's preliminary plan;
(3) the final plan is cost-effective;
(4) the final plan is equitable among customer classes
and provides demand-side programs to each customer class, including
tenants and low-income ratepayers;
(5) the commission should certify each contract and
electric utility bid submitted under Section 34.053 that resulted
from the solicitations; and
(6) the commission should grant a requested
certificate of convenience and necessity for an electric
utility-owned resource addition.
(b) Not later than the 180th day after the date an electric
utility submits a proposed final integrated resource plan, the
commission shall issue a final order approving the plan, approving
the plan as modified by the commission, or remanding the plan for
additional proceedings.
Sec. 34.104. CERTIFICATION OF CONTRACTS. (a) In
determining whether to certify a supply-side or demand-side
contract that results from a solicitation, the commission shall
consider:
(1) the reliability, financial condition, and safety
of the resource contract; and
(2) whether the solicitation, evaluation, and
selection of the resource contract were conducted in accordance
with the criteria included in the electric utility's preliminary
integrated resource plan.
(b) In addition to the considerations in Subsection (a), if
a contract proposed for certification is between an electric
utility and its affiliate, the commission shall determine whether:
(1) the utility treated and considered the affiliate's
bid in the same manner it treated and considered each other bid
intended to meet the same resource needs;
(2) the transaction will benefit consumers;
(3) the transaction violates any state law, including
least-cost planning;
(4) the transaction provides the affiliate with an
unfair competitive advantage by virtue of its affiliation or
association with the utility;
(5) the transaction is in the public interest; and
(6) the commission has sufficient regulatory
authority, resources, and access to the books and records of the
utility and its affiliate to make the determination required by
this subsection.
(c) The commission may not certify a contract for a new
purchase of power by an electric utility unless the utility has
determined, after giving consideration to consistently applied
regional or national reliability standards, guidelines, or
criteria, that:
(1) the contract would not unreasonably impair the
continued reliability of electric systems affected by the purchase;
and
(2) the purchase can reasonably be expected to produce
benefits to customers of the purchasing utility.
(d) Commission certification of a resource contract under
this section does not negate the necessity of the resource to comply
with all applicable environmental and siting regulations.
(e) In establishing an electric utility's rates, a
regulatory authority shall consider a payment made under a
certified contract to be a reasonable and necessary operating
expense of the utility during the period for which the certified
contract is effective. A regulatory authority may provide for
monthly recovery of approved costs of the contract as those costs
are incurred, including any markup allowed by the commission.
Sec. 34.105. CERTIFICATE OF CONVENIENCE AND NECESSITY. (a)
In determining whether to grant a certificate of convenience and
necessity requested by an electric utility in the utility's
proposed final integrated resource plan, the commission shall
consider:
(1) the effect of granting the certificate on the
recipient of the certificate and on any electric utility serving
the proximate area; and
(2) other factors, such as:
(A) community values;
(B) recreational and park areas;
(C) historical and aesthetic values;
(D) environmental integrity; and
(E) the probable improvement of service or
lowering of cost to consumers in the area if the certificate is
granted.
(b) The commission shall grant a requested certificate of
convenience and necessity as part of the commission's approval of a
final integrated resource plan if the commission finds that:
(1) the proposed resource addition is necessary under
the plan;
(2) the proposed resource addition is the best and
most economical choice of technology for the service area; and
(3) cost-effective conservation and other
cost-effective alternative energy sources cannot reasonably meet
the need.
[Sections 34.106-34.150 reserved for expansion]
SUBCHAPTER E. ACQUISITION OF RESOURCES OUTSIDE THE
INTEGRATED RESOURCE PLANNING PROCESS
Sec. 34.151. EXEMPTIONS FROM SOLICITATION PROCESS. (a)
The commission shall adopt rules allowing an electric utility to
add new or incremental resources outside the solicitation process,
consistent with the utility's last approved integrated resource
planning goals, including resources listed in Subsection (b).
(b) Consistent with an electric utility's last approved
integrated resource planning goals, if any, an electric utility,
including a nongenerating electric utility, may add new or
incremental resources outside the solicitation process, including:
(1) contract renegotiation for existing capacity from
an electric cooperative or nonaffiliated power generating
facility;
(2) electric cooperative or nonaffiliated demand-side
management programs or renewable resources;
(3) capacity purchases with two-year or shorter terms
from an electric cooperative or nonaffiliated power supplier;
(4) capacity purchases necessary to satisfy
unanticipated emergency conditions;
(5) the exercise of an option in a purchased power
contract with an electric cooperative or nonaffiliated supplier;
and
(6) renewable distributed resources, located at or
near the point of consumption, if the resources are less costly than
transmission extensions or upgrades.
(c) The addition of new or incremental resources by an
electric utility under Subsection (b) does not require an amendment
to the utility's integrated resource plan.
Sec. 34.152. NONGENERATING ELECTRIC UTILITY SOLICITATIONS.
(a) A nongenerating electric utility not planning to construct
generating facilities shall conduct a solicitation of resources if
the utility seeks to purchase from a wholesale power supplier other
than the utility's existing power supplier more than 25 percent of
the utility's peak demand or more than 70 megawatts. A
nongenerating electric utility is not required to conduct a
solicitation for a purchase from an existing power supplier and the
utility may add new or incremental resources outside the
solicitation process as provided by Section 34.151.
(b) The commission, on request by the nongenerating
electric utility, may review a proposed contract for resources
resulting from a solicitation to determine the contract's
reasonableness. The commission shall certify the proposed contract
if the commission finds that the contract is reasonable. The
commission shall make its determination not later than the 90th day
after the date the proposed contract is submitted.
(c) This section does not alter or amend a wholesale power
supply contract executed before January 1, 2010.
Sec. 34.153. EXEMPTION FOR CERTAIN FACILITIES. (a) To
provide for the orderly transition to an integrated resource
planning process and to avoid delays in the construction of
resources necessary to provide electric service, an integrated
resource plan is not required for issuance of a certificate of
convenience and necessity for the construction of a generating
facility if:
(1) the electric utility has conducted a solicitation
for resources to meet the need identified by the utility's notice of
intent in accordance with commission rules in effect at the time of
the solicitation; and
(2) the electric utility has submitted to the
commission the results of the solicitation and an application for
certification of the facility to meet the need identified by the
utility's notice of intent.
(b) The commission shall grant a certificate of convenience
and necessity for a generating facility to which this section
applies if:
(1) the facility is needed to meet future demand;
(2) the facility is the best and most economical
choice of technology for the service area; and
(3) cost-effective conservation and cost-effective
alternative energy sources cannot reasonably meet the need.
[Sections 34.154-34.170 reserved for expansion]
SUBCHAPTER F. MISCELLANEOUS PROVISIONS
Sec. 34.171. COST RECOVERY AND INCENTIVES. In carrying out
its duties related to the integrated resource planning process, the
commission may:
(1) allow timely recovery of the reasonable costs of
conservation, load management, and purchased power,
notwithstanding Section 36.201; and
(2) authorize additional incentives for conservation,
load management, purchased power, and renewable resources.
Sec. 34.172. RECONCILIATION OF RECOVERED COSTS. (a) To the
extent that the commission authorizes an electric utility to
recover the costs of demand-side management programs,
conservation, load management, or purchased power through cost
recovery factors, the commission shall make a final reconciliation
of the costs recovered through the cost recovery factors.
(b) The commission shall adopt rules regarding:
(1) the timing of reconciliations for each cost
recovery factor;
(2) the information an electric utility must file in
support of each reconciliation; and
(3) other matters necessary to accomplish the
reconciliation.
(c) Each reconciliation must:
(1) review the reasonableness of the electric
utility's administration of the contracts and programs the costs of
which are being reconciled; and
(2) reconcile the revenue collected under each cost
recovery factor and the costs that the utility incurred on
purchased power, demand-side management, conservation, or load
management, as applicable, during the reconciliation period.
Sec. 34.173. RESOURCE PLANNING EXPENSES. (a) To the extent
that an electric utility is required by the commission to reimburse
a municipality for expenses incurred while participating in a
proceeding under this chapter, the commission shall, as part of the
commission's approval of the utility's integrated resource plan,
authorize a surcharge to be included in the utility's rates to allow
the utility to recover the amount paid to the municipality before
the utility's next preliminary integrated resource plan is filed.
(b) An electric utility may recover its reasonable expenses
arising from planning, preparing, and participating in a proceeding
under this chapter only after commission review is conducted in
accordance with Subchapter C or D, Chapter 36.
SECTION 5. Section 37.051, Utilities Code, is amended by
adding Subsection (d) to read as follows:
(d) Notwithstanding any other provision of this title, the
commission may issue multiple certificates to serve an area in
which customer choice was introduced before January 1, 2010. On
application, the commission shall issue a certificate to a retail
electric provider authorizing the provider to continue to provide
retail electric service in any area in which it was providing that
service on December 21, 2009. After July 1, 2010, only retail
electric providers certificated to serve an area in which customer
choice was introduced before January 1, 2010, may continue to serve
that area.
SECTION 6. 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 on appeal under Subchapters D
and E, Chapter 33[, subject to Section 40.051(c)]; and
(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 require collection of the nonbypassable fee
established under Section 39.903(b) and to administer the renewable
energy credits program under Section 39.904(b) and the natural gas
energy credits program under Section 39.9044(b); and
[(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].
SECTION 7. Section 40.104, Utilities Code, is amended to
read as follows:
Sec. 40.104. TAX-EXEMPT STATUS. Nothing in this subtitle
may impair the tax-exempt status of municipalities, electric
cooperatives, or river authorities, nor shall anything in this
subtitle compel any municipality, electric cooperative, or river
authority to use its facilities in a manner that violates any
contractual provisions, bond covenants, or other restrictions
applicable to facilities financed by tax-exempt debt.
[Notwithstanding any other provision of law, the decision to
participate in customer choice by the adoption of a resolution in
accordance with Section 40.051(b) is irrevocable.]
SECTION 8. Section 41.004, Utilities Code, is amended to
read as follows:
Sec. 41.004. JURISDICTION OF COMMISSION. Except as
specifically provided otherwise in this chapter, the commission has
jurisdiction over electric cooperatives only as follows:
(1) to regulate wholesale transmission rates and
service, including terms of access, to the extent provided in
Subchapter A, Chapter 35;
(2) to regulate certification to the extent provided
in Chapter 37;
(3) to establish a code of conduct as provided in
Section 39.157(e) [subject to Section 41.054]; and
(4) [to establish terms and conditions, but not rates,
for open access to distribution facilities for electric
cooperatives providing customer choice, as provided in Section
39.203; and
[(5)] to require reports of electric cooperative
operations only to the extent necessary to:
(A) ensure the public safety;
(B) enable the commission to satisfy its
responsibilities relating to electric cooperatives under this
chapter; or
(C) enable the commission to determine the
aggregate electric load and energy requirements in the state and
the resources available to serve that load[; or
[(D) enable the commission to determine
information relating to market power as provided in Section
39.155].
SECTION 9. Section 41.055, Utilities Code, is amended to
read as follows:
Sec. 41.055. JURISDICTION OF BOARD OF DIRECTORS. A board
of directors has exclusive jurisdiction to:
(1) set all terms of access, conditions, and rates
applicable to services provided by the electric cooperative,
[except as provided by Sections 41.054 and 41.056,] 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 Subchapter A, Chapter 35, provided that the rates for
distribution established by the electric cooperative shall be
comparable to the distribution rates that apply to the electric
cooperative and its subsidiaries;
(2) [determine whether to unbundle any energy-related
activities and, if the board of directors chooses to unbundle,
whether to do so structurally or functionally;
[(3) reasonably determine the amount of the electric
cooperative's stranded investment;
[(4) establish nondiscriminatory transition charges
reasonably designed to recover the stranded investment over an
appropriate period of time;
[(5) determine the extent to which the electric
cooperative will provide various customer services, including
nonelectric services, or accept the services from other providers;
[(6)] manage and operate the electric cooperative's
utility systems, including exercise of control over resource
acquisition and any related expansion programs;
(3) [(7)] establish and enforce service quality
standards, reliability standards, and consumer safeguards designed
to protect retail electric customers;
(4) [(8) determine whether a base rate reduction is
appropriate for the electric cooperative;
[(9)] determine any other utility matters that the
board of directors believes should be included;
(5) [(10)] sell electric energy and capacity at
wholesale[, regardless of whether the electric cooperative
participates in customer choice;
[(11) determine the extent to which the electric
cooperative offers energy efficiency programs and how the programs
are administered by the electric cooperative]; and
(6) [(12)] make any other decisions affecting the
electric cooperative's method of conducting business that are not
inconsistent with the provisions of this chapter.
SECTION 10. Sections 41.061(a), (c), and (e), Utilities
Code, are amended to read as follows:
(a) This section shall apply to retail rates of an electric
cooperative [that has not adopted customer choice and to the retail
delivery rates of an electric cooperative that has adopted customer
choice]. This section may not apply to rates for[:
[(1) sales of electric energy by an electric
cooperative that has adopted customer choice; or
[(2)] wholesale sales of electric energy.
(c) An electric cooperative may implement the proposed
rates on completion of the requirements under Subsection (b), and
those rates shall remain in effect until changed by the electric
cooperative as provided by this section [or, for rates other than
retail delivery rates, until this section is no longer applicable
because the electric cooperative adopts customer choice].
(e) Retail rates set by an electric cooperative [that has
not adopted customer choice and retail delivery rates set by an
electric cooperative that has adopted customer choice] shall be
just and reasonable, not unreasonably preferential, prejudicial,
or discriminatory; provided, however, if the customer agrees, an
electric cooperative may charge a market-based rate to customers
who have energy supply options if rates are not increased for other
customers as a result.
SECTION 11. Not later than February 1, 2010, a retail
electric provider that wants to continue to provide retail electric
service in ERCOT shall file with the Public Utility Commission of
Texas:
(1) an application for a certificate of convenience
and necessity under Section 37.051(d), Utilities Code, as added by
this Act; and
(2) a tariff that complies with Section 32.101,
Utilities Code.
SECTION 12. This Act does not affect bonds or other
indebtedness issued before the effective date of this Act. Bonds or
other indebtedness issued before the effective date of this Act are
governed by the law in effect when the bonds or other indebtedness
was issued, and that law is continued in effect for that purpose.
SECTION 13. This Act takes effect January 1, 2010.