By: Fraser S.B. No. 1772
(In the Senate - Filed March 11, 2009; March 20, 2009, read
first time and referred to Committee on Business and Commerce;
April 24, 2009, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 7, Nays 0; April 24, 2009,
sent to printer.)
COMMITTEE SUBSTITUTE FOR S.B. No. 1772 By: Fraser
A BILL TO BE ENTITLED
AN ACT
relating to the authority of the Public Utility Commission of Texas
to address market power abuse, including the right to order
restitution for violations.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 39.157, Utilities Code, is amended by
amending Subsection (a) and adding Subsections (a-1) and (a-2) to
read as follows:
(a) The commission shall monitor market power associated
with the generation, transmission, distribution, and sale of
electricity in this state. On a finding that market power abuses or
other violations of this section are occurring, the commission
shall require reasonable mitigation of the market power by ordering
the construction of additional transmission or distribution
facilities, by seeking an injunction or civil penalties as
necessary to eliminate or to remedy the market power abuse or
violation as authorized by Chapter 15, by ordering a person to cease
a practice that the commission finds is a market power abuse, by
imposing an administrative penalty as authorized by Chapter 15, or
by suspending, revoking, or amending a certificate or registration
as authorized by Section 39.356. Section 15.024(c) does not apply
to an administrative penalty imposed under this section. In lieu of
assessing an administrative penalty as authorized by Section 15.024
and this section, the commission may order any person found to have
committed market power abuse to refund to entities directly
affected by the abuse an amount not to exceed the greater of the
administrative penalty that would otherwise be ordered by the
commission or one hundred and fifteen percent of the amount of
additional profit that the person received as a result of the market
power abuse. For purposes of this subchapter, market power abuses
are practices by persons possessing market power that are
unreasonably discriminatory or tend to unreasonably restrict,
impair, or reduce the level of competition, including practices
that tie unregulated products or services to regulated products or
services or unreasonably discriminate in the provision of regulated
services. For purposes of this section, "market power abuses"
include predatory pricing, withholding of production, precluding
entry, and collusion. A violation of the code of conduct provided
by Subsection (d) that materially impairs the ability of a person to
compete in a competitive market shall be deemed to be an abuse of
market power. The possession of a high market share in a market
open to competition may not, of itself, be deemed to be an abuse of
market power; however, this sentence shall not affect the
application of state and federal antitrust laws.
(a-1) The office shall be permitted to intervene in any
proceeding concerning market power abuse or market manipulation.
The commission may allow intervention to any party that
demonstrates that the party has been directly affected by market
power abuse, if the commission finds that participation by the
party will not unduly delay the proceeding or prejudice the rights
of the party accused of market power abuse. The commission may
limit the scope of intervention of a party other than the office,
including limits on discovery and the number of interrogatories
that the party may issue on the person accused of market power abuse
and commission staff. The commission shall take all necessary
steps to ensure that trade secrets, proprietary information and
business strategies, and any other competitively sensitive
information is adequately protected from disclosure to competitors
or customers of the person accused of market power abuse.
(a-2) Following a proceeding related to market power abuse
in which the commission determines that refunds are appropriate,
the commission shall conduct a proceeding to determine the proper
method of distributing the refunds to entities directly affected by
the market power abuse. Any entity directly affected by the abuse
may intervene in the proceeding.
SECTION 2. The changes in law made by this Act apply only to
a violation that occurs or continues to occur on or after the
effective date of this Act. A violation that occurred before the
effective date of this Act is covered by the law in effect at the
time the violation occurred, and the former law is continued in
effect for that purpose.
SECTION 3. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2009.
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