81R35671 TRH-D
By: Fraser S.B. No. 1772
Substitute the following for S.B. No. 1772:
By: Solomons C.S.S.B. No. 1772
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), (j), (k),
(l), (m), (n), (o), and (p) 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 have occurred or are occurring,
the commission shall require reasonable mitigation of the market
power by one or any combination of the following:
(1) ordering the construction of additional
transmission or distribution facilities;
(2) [, 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;
(3) [, by] imposing an administrative penalty as
authorized by Chapter 15;
(4) ordering refunds to affected parties pursuant to
Section 17.157;
(5) with regard to the wholesale market, ordering
refunds to affected parties in a manner established by the
commission; or
(6) [, or by] suspending, revoking, or amending a
certificate or registration as authorized by Section 39.356.
(a-1) The commission shall permit the office, in exercising
its powers to represent residential and small commercial consumers,
to participate in enforcement proceedings to seek refunds for
alleged market power abuses or manipulation of the wholesale
market. Section 15.024(c) does not apply to an administrative
penalty imposed under this section. 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.
(j) The commission shall contract with an entity selected by
the commission to act as the commission's retail electric market
monitor to:
(1) detect and prevent:
(A) possible market power abuse or market
manipulation strategies; and
(B) unfair, misleading, or deceptive practices;
and
(2) recommend measures to enhance the efficiency of
the retail market.
(k) The commission is responsible for ensuring that the
commission's retail market monitor has the resources, expertise,
and authority necessary to monitor the retail electric market
effectively and shall adopt rules and perform oversight of the
retail market monitor as necessary. The retail market monitor
shall operate under the supervision and oversight of the
commission. The commission shall retain all enforcement authority
conferred under this title, and this section may not be construed to
confer enforcement authority on the retail market monitor or to
authorize the commission to delegate the commission's enforcement
authority to the retail market monitor. The commission by rule
shall define:
(1) the retail market monitor's monitoring
responsibilities, including reporting obligations and limitations;
(2) the standards for funding the retail market
monitor, including staffing requirements;
(3) qualifications for personnel of the retail market
monitor; and
(4) ethical standards for the retail market monitor
and the personnel of the retail market monitor.
(l) In adopting rules governing the standards for funding
the retail market monitor, the commission shall consult with a
subcommittee of the governing body of the independent organization
certified under Section 39.151 to receive information on how money
is or should be spent for market monitoring functions. Rules
governing ethical standards must include provisions designed to
ensure that the personnel of the retail market monitor are
professionally and financially independent from market
participants. The commission shall develop and implement policies
that clearly separate the policymaking responsibilities of the
commission and the monitoring, analysis, and reporting
responsibilities of the retail market monitor.
(m) The retail market monitor immediately shall report
directly to the commission any potential market manipulations and
any discovered or potential violations of commission rules or rules
of the independent organization.
(n) The personnel of the retail market monitor may
communicate with commission staff on any matter without
restriction.
(o) The retail market monitor annually shall submit to the
commission a report that identifies market design flaws and
recommends methods to correct the flaws. The commission shall
review the report and evaluate whether changes to rules of the
commission should be made.
(p) The commission shall investigate whether a retail
electric provider is abusing market power or engaging in unfair,
misleading, or deceptive practices. Retail electric providers
shall cooperate with the commission in any investigation and shall
provide information requested. The commission may assess
administrative penalties under Section 15.023 for any violation
discovered under this section.
SECTION 2. The Public Utility Commission of Texas shall
adopt rules to implement the changes in law made by this Act as
quickly as practicable.
SECTION 3. 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 occurs before the
effective date of this Act is covered by the law in effect on the
date the violation occurred, and that law is continued in effect for
that purpose.
SECTION 4. 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.