Texas 2009 - 81st Regular

Texas House Bill HB2782 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	81R9100 TRH-F
2	2	By: Keffer H.B. No. 2782
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to regulation of electric generation capacity ownership in
8	8	the electric power market.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Sections 39.152(a) and (d), Utilities Code, are
11	11	amended to read as follows:
12	12	(a) The commission shall certify a power region if:
13	13	(1) a sufficient number of interconnected utilities in
14	14	the power region fall under the operational control of an
15	15	independent organization as described by Section 39.151;
16	16	(2) the power region has a generally applicable tariff
17	17	that guarantees open and nondiscriminatory access for all users to
18	18	transmission and distribution facilities in the power region as
19	19	provided by Section 39.203; and
20	20	(3) no person owns, controls, or owns and controls in
21	21	any combination more than 20 percent of the installed generation
22	22	capacity located in or capable of delivering electricity to a power
23	23	region, as determined according to Section 39.154.
24	24	(d) For a power region outside of ERCOT, a power generation
25	25	company that is affiliated with an electric utility may elect to
26	26	demonstrate that it meets the requirements of Subsection (a)(3) by
27	27	showing that it does not own, control, or own and control in any
28	28	combination more than 20 percent of the installed capacity in a
29	29	geographic market that includes the power region, using the
30	30	guidelines, standards, and methods adopted by the Federal Energy
31	31	Regulatory Commission.
32	32	SECTION 2. Section 39.153, Utilities Code, is amended by
33	33	adding Subsection (a-1) and amending Subsections (e) and (f) to
34	34	read as follows:
35	35	(a-1) Not later than September 30, 2010, each electric
36	36	utility subject to this section shall sell at auction or otherwise
37	37	divest any additional entitlements to the utility's jurisdictional
38	38	installed generation capacity necessary to ensure that the electric
39	39	utility does not control more than 20 percent of the installed
40	40	generation capacity:
41	41	(1) in ERCOT;
42	42	(2) in an ERCOT zonal boundary; or
43	43	(3) in a functional market recognized by the
44	44	commission.
45	45	(e) The commission shall adopt rules by December 31, 2000,
46	46	that define the initial scope of the capacity entitlements to be
47	47	auctioned and not later than December 31, 2009, shall adopt
48	48	additional rules that define the scope of the auctions necessary to
49	49	comply with Subsection (a-1). Entitlements may be auctioned in
50	50	blocks of less than 15 percent. The rules shall state the minimum
51	51	amount of capacity that can be sold at auction as an entitlement.
52	52	At a minimum, the rules shall provide that the entitlements:
53	53	(1) may be sold and purchased in periods of not less
54	54	than one month nor more than four years;
55	55	(2) may be resold to any lawful purchaser, except for a
56	56	retail electric provider affiliated with the electric utility that
57	57	originally auctioned the entitlement;
58	58	(3) include no possessory interest in the unit from
59	59	which the power is produced;
60	60	(4) include no obligations of a possessory owner of an
61	61	interest in the unit from which the power is produced; and
62	62	(5) give the purchaser the right to designate the
63	63	dispatch of the entitlement, subject to planned outages, outages
64	64	beyond the control of the utility operating the unit, and other
65	65	considerations subject to the oversight of the applicable
66	66	independent organization.
67	67	(f) The commission shall adopt rules by December 31, 2000,
68	68	that prescribe the procedure for the auction of the entitlements as
69	69	required by Subsection (a). If necessary, the commission may adopt
70	70	additional rules that prescribe the procedure for the auction of
71	71	the entitlements as required by Subsection (a-1). The rules shall
72	72	include:
73	73	(1) a process for conducting the auction or auctions,
74	74	including who shall conduct it, how often it shall be conducted, and
75	75	how winning bidders shall be determined;
76	76	(2) a process for the electric utility to designate
77	77	which generation units or combination of units are offered for
78	78	auction;
79	79	(3) a provision for the utility to establish an
80	80	opening bid price based on the electric utility's expected cost,
81	81	with the commission prescribing the means for determining the
82	82	opening bid price, which may not include return on equity; and
83	83	(4) a provision that allows a bidder to specify the
84	84	magnitude and term of the entitlement, subject to the conditions
85	85	established in Subsection (e).
86	86	SECTION 3. Sections 39.154(a) and (c), Utilities Code, are
87	87	amended to read as follows:
88	88	(a) Beginning on the date of introduction of customer
89	89	choice, a power generation company may not own, [and] control, or
90	90	own and control in any combination more than 20 percent of the
91	91	installed generation capacity located in, or capable of delivering
92	92	electricity to, a power region, zone, or functional market
93	93	recognized by the commission in the power region.
94	94	(c) In determining the percentage shares of installed
95	95	generation capacity under this section, the commission shall
96	96	combine capacity owned or [and] controlled by a power generation
97	97	company and any entity that is affiliated with that power
98	98	generation company within the power region, zone, or functional
99	99	market recognized by the commission in the power region, reduced by
100	100	the installed generation capacity of those facilities that are made
101	101	subject to capacity auctions under Sections 39.153(a) and (d).
102	102	SECTION 4. Section 39.155(a), Utilities Code, is amended to
103	103	read as follows:
104	104	(a) Each person, municipally owned utility, electric
105	105	cooperative, and river authority that owns or controls generation
106	106	facilities and offers electricity for sale in this state shall
107	107	report to the commission its installed generation capacity, the
108	108	total amount of capacity available for sale to others, the total
109	109	amount of capacity under contract to others, the total amount of
110	110	capacity dedicated to its own use, its annual wholesale power sales
111	111	in the state, its annual retail power sales in the state, and any
112	112	other information necessary for the commission to assess market
113	113	power or the development of a competitive retail market in the
114	114	state. The commission shall by rule prescribe the nature and detail
115	115	of the reporting requirements and shall administer those reporting
116	116	requirements in a manner that ensures the confidentiality of
117	117	competitively sensitive information.
118	118	SECTION 5. Sections 39.156(a), (b), and (g), Utilities
119	119	Code, are amended to read as follows:
120	120	(a) In this section, "market power mitigation plan" or
121	121	"plan" means a written proposal by an electric utility or a power
122	122	generation company for reducing its ownership or [and] control of
123	123	installed generation capacity as required by Section 39.154.
124	124	(b) An electric utility or power generation company owning,
125	125	controlling, or owning and controlling in any combination more than
126	126	20 percent of the generation capacity located in, or capable of
127	127	delivering electricity to, a power region, zone, or functional
128	128	market recognized by the commission in the power region shall file a
129	129	market power mitigation plan with the commission not later than the
130	130	90th day after the date the electric utility's or power generation
131	131	company's generation capacity exceeds the 20 percent limitation
132	132	under this subsection [December 1, 2000].
133	133	(g) In reaching its determination under Subsection (f), the
134	134	commission shall consider:
135	135	(1) the degree to which the electric utility's or power
136	136	generation company's stranded costs, if any, are minimized;
137	137	(2) whether on disposition of the generation assets
138	138	the reasonable value is likely to be received;
139	139	(3) the effect of the plan on the electric utility's or
140	140	power generation company's federal income taxes;
141	141	(4) the effect of the plan on current and potential
142	142	competitors in the generation market; [and]
143	143	(5) whether the plan is consistent with the public
144	144	interest;
145	145	(6) the ownership of generation resources in a zone;
146	146	(7) the control of generation through the use of
147	147	contracts between affiliated retail electric providers and
148	148	independent power producers; and
149	149	(8) the emissions credits owned or controlled by an
150	150	electric utility or power generation company in a nonattainment
151	151	area for national ambient air quality standards.
152	152	SECTION 6. Section 39.407(a), Utilities Code, is amended to
153	153	read as follows:
154	154	(a) If an electric utility chooses on or after January 1,
155	155	2007, to participate in customer choice, the commission may not
156	156	authorize customer choice until the applicable power region has
157	157	been certified as a qualifying power region under Section
158	158	39.152(a). Except as otherwise provided by this subsection, the
159	159	commission shall certify that the requirements of Section
160	160	39.152(a)(3) are met for electric utilities subject to this
161	161	subchapter only upon a finding that the total capacity owned,
162	162	controlled, or owned and controlled in any combination by each such
163	163	electric utility and its affiliates does not exceed 20 percent of
164	164	the total installed generation capacity within the constrained
165	165	geographic region served by each such electric utility plus the
166	166	total available transmission capacity capable of delivering firm
167	167	power and energy to that constrained geographic region. Not later
168	168	than May 1, 2002, each electric utility subject to this subchapter
169	169	shall submit to the electric utility restructuring legislative
170	170	oversight committee an analysis of the needed transmission
171	171	facilities necessary to make the electric utility's service area
172	172	transmission capability comparable to areas within the ERCOT power
173	173	region. On or after September 1, 2003, each electric utility
174	174	subject to this subchapter shall file the utility's plans to
175	175	develop the utility's transmission interconnections with the
176	176	utility's power region or other adjacent power regions. The
177	177	commission shall review the plan and not later than the 180th day
178	178	after the date the plan is filed, determine the additional
179	179	transmission facilities necessary to provide access to power and
180	180	energy that is comparable to the access provided in areas within the
181	181	ERCOT power region; provided, however, that if a hearing is
182	182	requested by any party to the proceeding, the 180-day deadline will
183	183	be extended one day for each day of hearings. The commission shall,
184	184	as a part of the commission's approval of the plan, approve a rate
185	185	rider mechanism for the recovery of the incremental costs of those
186	186	facilities after the facilities are completed and in-service. A
187	187	finding of need under this subsection shall meet the requirements
188	188	of Sections 37.056(c)(1), (2), and (4)(E). The commission may
189	189	certify that the requirements of Section 39.152(a)(3) are met for
190	190	electric utilities subject to this subchapter if the commission
191	191	finds that:
192	192	(1) each such utility has sufficient transmission
193	193	facilities to provide customers access to power and energy from
194	194	capacity controlled by suppliers not affiliated with the incumbent
195	195	utility that is comparable to the access to power and energy from
196	196	capacity controlled by suppliers not affiliated with the incumbent
197	197	utilities in areas of the ERCOT power region; and
198	198	(2) the total capacity owned, controlled, or owned and
199	199	controlled in any combination by each such electric utility and its
200	200	affiliates does not exceed 20 percent of the total installed
201	201	generation capacity within the power region.
202	202	SECTION 7. Section 39.453(b), Utilities Code, is amended to
203	203	read as follows:
204	204	(b) The commission shall certify that the requirement of
205	205	Section 39.152(a)(3) is met for an electric utility subject to this
206	206	subchapter only if the commission finds that the total capacity
207	207	owned, controlled, or owned and controlled in any combination by
208	208	the electric utility and the utility's affiliates does not exceed
209	209	20 percent of the total installed generation capacity within the
210	210	power region of that utility.
211	211	SECTION 8. Sections 39.153(b) and 39.154(e), Utilities
212	212	Code, are repealed.
213	213	SECTION 9. This Act takes effect immediately if it receives
214	214	a vote of two-thirds of all the members elected to each house, as
215	215	provided by Section 39, Article III, Texas Constitution. If this
216	216	Act does not receive the vote necessary for immediate effect, this
217	217	Act takes effect September 1, 2009.