| 1 | 1 | | 81R3429 TRH-F |
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| 2 | 2 | | By: Turner of Harris H.B. No. 630 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to the regulation and governing bodies of independent |
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| 8 | 8 | | organizations that govern power regions. |
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| 9 | 9 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 10 | 10 | | SECTION 1. Section 39.151, Utilities Code, is amended by |
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| 11 | 11 | | amending Subsections (e) and (g) and by adding Subsection (g-2) to |
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| 12 | 12 | | read as follows: |
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| 13 | 13 | | (e) The commission may authorize an independent |
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| 14 | 14 | | organization that is certified under this section to charge a |
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| 15 | 15 | | reasonable and competitively neutral rate to wholesale buyers and |
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| 16 | 16 | | sellers to cover the independent organization's costs. The |
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| 17 | 17 | | commission shall investigate the organization's cost efficiencies, |
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| 18 | 18 | | salaries and benefits, and use of debt financing and may require the |
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| 19 | 19 | | organization to provide any information needed to effectively |
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| 20 | 20 | | evaluate the organization's budget and the reasonableness and |
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| 21 | 21 | | neutrality of a rate or proposed rate or to evaluate the |
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| 22 | 22 | | effectiveness or efficiency of the organization. The commission |
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| 23 | 23 | | may require prior approval of the use of debt financing by the |
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| 24 | 24 | | organization. The commission shall work with the organization to |
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| 25 | 25 | | establish the detail of information, both current and historical, |
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| 26 | 26 | | and the time frames the commission needs to effectively evaluate a |
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| 27 | 27 | | rate or a rate request. |
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| 28 | 28 | | (g) To maintain certification as an independent |
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| 29 | 29 | | organization under this section, an organization's governing body |
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| 30 | 30 | | must be composed of persons specified by this section and selected |
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| 31 | 31 | | in accordance with formal bylaws or protocols of the |
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| 32 | 32 | | organization. The bylaws or protocols must be approved by the |
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| 33 | 33 | | commission and must reflect the input of the commission. The |
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| 34 | 34 | | bylaws must specify the process by which appropriate stakeholders |
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| 35 | 35 | | elect members and, for unaffiliated members, prescribe |
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| 36 | 36 | | professional qualifications for selection as a member. [The |
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| 37 | 37 | | bylaws must require the use of a professional search firm to |
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| 38 | 38 | | identify candidates for membership of unaffiliated members.] The |
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| 39 | 39 | | process must allow for commission input in identifying |
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| 40 | 40 | | candidates. The governing body must be composed of: |
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| 41 | 41 | | (1) the chairman of the commission as an ex officio |
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| 42 | 42 | | voting [nonvoting] member; |
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| 43 | 43 | | (1-a) the other two commissioners as ex officio |
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| 44 | 44 | | nonvoting members; |
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| 45 | 45 | | (2) the counsellor as an ex officio voting member |
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| 46 | 46 | | representing residential and small commercial consumer interests; |
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| 47 | 47 | | (3) the chief executive officer of the independent |
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| 48 | 48 | | organization as an ex officio voting member; |
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| 49 | 49 | | (4) four [six] market participants elected by their |
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| 50 | 50 | | respective market segments to serve one-year terms, with: |
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| 51 | 51 | | (A) one representing [independent] generators; |
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| 52 | 52 | | (B) one representing investor-owned utilities; |
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| 53 | 53 | | (C) [one representing power marketers; |
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| 54 | 54 | | [(D)] one representing retail electric |
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| 55 | 55 | | providers; and |
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| 56 | 56 | | (D) [(E)] one representing municipally owned |
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| 57 | 57 | | utilities and electric cooperatives; [and |
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| 58 | 58 | | [(F) one representing electric cooperatives;] |
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| 59 | 59 | | (5) one member representing industrial consumer |
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| 60 | 60 | | interests and elected by the industrial consumer market segment to |
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| 61 | 61 | | serve a one-year term; |
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| 62 | 62 | | (6) one member representing large commercial consumer |
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| 63 | 63 | | interests selected in accordance with the bylaws to serve a |
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| 64 | 64 | | one-year term; and |
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| 65 | 65 | | (7) five members unaffiliated with any market segment, |
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| 66 | 66 | | nominated [and selected] by the other members of the governing body |
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| 67 | 67 | | and selected by the commission to serve three-year terms. |
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| 68 | 68 | | (g-2) The commission may require removal of a member of the |
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| 69 | 69 | | governing body if the member: |
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| 70 | 70 | | (1) does not have at the time of appointment or |
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| 71 | 71 | | maintain during service the qualifications required by this section |
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| 72 | 72 | | and by the formal bylaws or protocols of the organization; |
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| 73 | 73 | | (2) fails to comply with the requirements of Section |
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| 74 | 74 | | 39.1512; or |
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| 75 | 75 | | (3) fails to impartially and adequately discharge the |
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| 76 | 76 | | member's duties and responsibilities. |
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| 77 | 77 | | SECTION 2. An independent organization certified by the |
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| 78 | 78 | | Public Utility Commission of Texas before September 1, 2009, shall |
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| 79 | 79 | | modify the organization's governing body to comply with Section |
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| 80 | 80 | | 39.151(g), Utilities Code, as amended by this Act, not later than |
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| 81 | 81 | | September 1, 2010. On or after September 1, 2010, the Public |
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| 82 | 82 | | Utility Commission of Texas may decertify an independent |
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| 83 | 83 | | organization whose governing body does not comply with Section |
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| 84 | 84 | | 39.151(g), Utilities Code, as amended by this Act. |
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| 85 | 85 | | SECTION 3. This Act takes effect September 1, 2009. |
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