Texas 2009 - 81st Regular

Texas Senate Bill SB2129 Compare Versions

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

Old	New	Differences
1	1	81R11066 TRH-F
2	2	By: Davis, Wendy S.B. No. 2129
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the certification of retail electric providers.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. Section 39.352, Utilities Code, is amended by
10	10	amending Subsection (a) and adding Subsections (a-1), (a-2), (a-3),
11	11	(a-4), (a-5), (a-6), (b-1), (b-2), and (h) to read as follows:
12	12	(a) After the date of customer choice, a person, including
13	13	an affiliate of an electric utility, may not provide retail
14	14	electric service in this state, or purchase, take title to, or
15	15	resell electricity in this state for sale to a retail customer
16	16	unless the person is certified by the commission as a retail
17	17	electric provider, in accordance with this section.
18	18	(a-1) In order to be certified as a retail electric
19	19	provider, a person must submit an application to the commission on a
20	20	form prescribed by the commission. An application submitted under
21	21	this section must be signed by the applicant's principal and
22	22	verified by oath or affirmation. Not later than the 20th day after
23	23	the date an application is submitted, the commission shall issue an
24	24	order determining the application to be complete or deficient. An
25	25	order finding an application to be deficient constitutes a
26	26	rejection of the application. The commission shall reject an
27	27	application if the application does not contain at least one
28	28	suitable name under which a certificate may be issued. A rejection
29	29	of an application does not prevent an applicant from submitting a
30	30	new application.
31	31	(a-2) Not later than the 10th day after the date an
32	32	applicant identifies a material change in information provided in a
33	33	pending application, the applicant shall inform the commission of
34	34	the change.
35	35	(a-3) The commission shall reject an application for
36	36	certification as a retail electric provider to serve customers in a
37	37	specified geographic area under Subsection (a-6) if the commission
38	38	finds that the provision of service only in the proposed geographic
39	39	area would result in discrimination in the provision of electric
40	40	service to any customer because of:
41	41	(1) race;
42	42	(2) creed;
43	43	(3) color;
44	44	(4) national origin;
45	45	(5) ancestry;
46	46	(6) sex;
47	47	(7) marital status;
48	48	(8) lawful source of income;
49	49	(9) disability;
50	50	(10) familial status;
51	51	(11) the fact that:
52	52	(A) the customer is located in an economically
53	53	distressed area; or
54	54	(B) the customer qualifies for low income
55	55	affordability or energy efficiency services; or
56	56	(12) any other basis prohibited by law.
57	57	(a-4) Unless the commission finds sufficient cause to
58	58	extend the period of review of an application, not later than the
59	59	90th day after the date an application is submitted, the commission
60	60	shall:
61	61	(1) approve the application as submitted;
62	62	(2) reject the application; or
63	63	(3) approve the application with modifications.
64	64	(a-5) An applicant shall designate on the application
65	65	whether the applicant seeks to offer service:
66	66	(1) to customers in a specified geographic service
67	67	area; or
68	68	(2) to certain specified customers.
69	69	(a-6) If an applicant seeks to offer service to customers in
70	70	a specified geographic service area under Subsection (a-5), the
71	71	applicant must indicate on the application that the geographic area
72	72	to be served includes:
73	73	(1) the entire state;
74	74	(2) a specific geographic area of this state covering
75	75	certain specified zip codes;
76	76	(3) the service area of certain specified transmission
77	77	and distribution utilities, municipal utilities, or electric
78	78	cooperatives in which competition is offered; or
79	79	(4) the portion of an independent organization
80	80	certified under Section 39.151 that is located in this state.
81	81	(b-1) An application for certification as a retail electric
82	82	provider must demonstrate that a retail electric provider, its
83	83	guarantor, or a combination of the retail electric provider and its
84	84	guarantor:
85	85	(1) has an investment-grade credit rating; or
86	86	(2) maintains:
87	87	(A) a tangible net worth of at least $100
88	88	million;
89	89	(B) a current ratio of at least 1.0; and
90	90	(C) a debt to total capitalization ratio of not
91	91	more than 0.6.
92	92	(b-2) As an alternative to the requirements of Subsection
93	93	(b-1), an application for certification as a retail electric
94	94	provider may demonstrate that a retail electric provider, its
95	95	guarantor, or a combination of the retail electric provider and its
96	96	guarantor has:
97	97	(1) liquid capital of not less than $3 million;
98	98	(2) liquid capital of not less than $2 million, if the
99	99	retail electric provider has continuously served retail customers
100	100	in this state's retail electricity market without sanction or
101	101	default for not less than two years; or
102	102	(3) liquid capital of not less than $1 million, if the
103	103	retail electric provider has continuously served retail customers
104	104	in this state's retail electricity market without sanction or
105	105	default for not less than three years.
106	106	(h) The commission shall issue a certificate in the
107	107	applicant's corporate name if the applicant is a corporation. The
108	108	commission may approve not more than five other names for a
109	109	certificated retail electric provider to use in providing service
110	110	under a certificate.
111	111	SECTION 2. Subchapter H, Chapter 39, Utilities Code, is
112	112	amended by adding Section 39.3521 to read as follows:
113	113	Sec. 39.3521. CONDITIONS ON CERTIFICATES; DUTIES OF RETAIL
114	114	ELECTRIC PROVIDERS. (a) The commission shall condition issuance
115	115	of a certificate under Section 39.352 on the retail electric
116	116	provider providing service only under the names under which the
117	117	certificate is issued.
118	118	(b) On the issuance of a certificate under Section 39.352, a
119	119	retail electric provider shall continuously maintain an office in
120	120	this state for the purpose of providing customer service, accepting
121	121	service of process, and making available in that office books and
122	122	records sufficient to establish the retail electric provider's
123	123	compliance with this title. An office maintained under this
124	124	subsection must:
125	125	(1) have a physical address that is not a post office
126	126	box; and
127	127	(2) be in a location where the purposes of this
128	128	subsection may be achieved.
129	129	(c) A retail electric provider that demonstrates financial
130	130	security under Section 39.352(b-1) shall keep customer deposits in
131	131	a restricted cash account or escrow account, or provide an
132	132	irrevocable standby letter of credit in an amount sufficient to
133	133	cover the entire amount of the retail electric provider's
134	134	outstanding customer deposits and advances at all times.
135	135	(d) A retail electric provider that demonstrates financial
136	136	security under Section 39.352(b-2) shall keep all customer deposits
137	137	in an escrow account, or provide an irrevocable standby letter of
138	138	credit in an amount sufficient to cover the entire amount of the
139	139	retail electric provider's outstanding customer deposits and
140	140	advances at all times.
141	141	(e) To maintain a retail electric provider certificate, the
142	142	holder of the certificate must keep its certification information
143	143	current. Not later than the 15th day after the date of a change in a
144	144	certificate holder's business address, telephone number,
145	145	authorized contacts, or other contact information, the certificate
146	146	holder shall notify the commission of the change. On a material
147	147	change to information provided to the commission as a basis for the
148	148	commission's approval of a certificate, the holder of the
149	149	certificate shall notify the commission of the change not later
150	150	than the 10th day after the date the change occurs. A retail
151	151	electric provider may seek prior approval from the commission
152	152	regarding a change, by submitting to the commission an amendment
153	153	application before the material change occurs. For purposes of
154	154	this section, the transfer of a retail electric provider
155	155	certificate is a material change.
156	156	(f) Not later than the 45th day before the date a retail
157	157	electric provider ceases to operate, the retail electric provider
158	158	shall give notice to:
159	159	(1) the commission;
160	160	(2) each customer to whom the retail electric provider
161	161	is scheduled to be providing service on the planned date of
162	162	cessation of operations; and
163	163	(3) any other person affected by the cessation of
164	164	operations, including:
165	165	(A) an applicable independent organization
166	166	certified under Section 39.151;
167	167	(B) a transmission and distribution utility;
168	168	(C) an electric cooperative;
169	169	(D) a municipally owned utility;
170	170	(E) a generation supplier; and
171	171	(F) a provider of last resort.
172	172	(g) On the cessation of operation by a retail electric
173	173	provider, the provider shall submit to the commission proof that
174	174	any money owed to the provider's customers has been refunded. The
175	175	retail electric provider's certificate is suspended on the
176	176	effective cessation date. The commission may not reinstate a
177	177	certificate unless the certificate holder demonstrates that the
178	178	certificate holder is in compliance with the certification
179	179	requirements of this title. The commission may revoke a suspended
180	180	certificate if it determines that the certificate holder does not
181	181	meet the certification requirements of this title.
182	182	(h) A retail electric provider shall notify the commission
183	183	and provide the commission with a summary of an insolvency
184	184	proceeding not later than the third day after the date the retail
185	185	electric provider files a petition in bankruptcy, becomes the
186	186	subject of an involuntary bankruptcy proceeding, or in any other
187	187	manner becomes insolvent. To satisfy any unpaid obligation of the
188	188	retail electric provider to customers, or unpaid administrative
189	189	penalties, the commission may proceed against any financial
190	190	resources that the retail electric provider relied on in obtaining
191	191	its certificate.
192	192	(i) A retail electric provider shall respond not later than
193	193	the third day after the date it receives a request from the
194	194	commission for additional information to ensure compliance with
195	195	this section.
196	196	SECTION 3. Section 39.356(a), Utilities Code, is amended to
197	197	read as follows:
198	198	(a) The commission may suspend, revoke, or amend a retail
199	199	electric provider's certificate for significant violations of this
200	200	title or the rules adopted under this title or of any reliability
201	201	standard adopted by an independent organization certified by the
202	202	commission to ensure the reliability of a power region's electrical
203	203	network, including the failure to observe any scheduling,
204	204	operating, planning, reliability, or settlement protocols
205	205	established by the independent organization. The commission may
206	206	also suspend or revoke a retail electric provider's certificate if
207	207	the provider no longer has the financial or technical capability to
208	208	provide continuous and reliable electric service. For purposes of
209	209	this subsection, "significant violations" include:
210	210	(1) providing false or misleading information to the
211	211	commission;
212	212	(2) engaging in fraudulent, unfair, misleading,
213	213	deceptive, or anticompetitive practices, or unlawful
214	214	discrimination;
215	215	(3) switching, or causing to be switched, the retail
216	216	electric provider for a customer without first obtaining the
217	217	customer's permission;
218	218	(4) billing an unauthorized charge, or causing an
219	219	unauthorized charge to be billed, to a customer's retail electric
220	220	service bill;
221	221	(5) failure to maintain continuous and reliable
222	222	electric service to customers pursuant to this chapter;
223	223	(6) failure to maintain the financial resources the
224	224	provider was required to have to obtain a certificate under Section
225	225	39.352;
226	226	(7) bankruptcy, insolvency, or the inability to meet
227	227	financial obligations on a reasonable and timely basis;
228	228	(8) failure to timely remit payment for invoiced
229	229	charges to an independent organization certified under Section
230	230	39.151;
231	231	(9) failure to observe applicable scheduling,
232	232	operating, planning, reliability, and settlement polices,
233	233	protocols, guidelines, procedures, and other rules established by
234	234	an independent organization certified under Section 39.151;
235	235	(10) demonstrating a pattern of not responding to
236	236	commission inquiries or customer complaints in a timely manner;
237	237	(11) suspension or revocation of a registration,
238	238	certification, or license by any state or federal authority;
239	239	(12) conviction of a felony by the certificate holder
240	240	or principal employed by the certificate holder, or a conviction
241	241	for any crime involving fraud, theft, or deceit related to the
242	242	certificate holder's service;
243	243	(13) failure to provide retail electric service to
244	244	customers more than 24 months after a certificate is granted by the
245	245	commission;
246	246	(14) failure to serve as a provider of last resort if
247	247	required by the commission;
248	248	(15) providing retail electric service in an area in
249	249	which customer choice is in effect without obtaining a certificate
250	250	under this chapter; and
251	251	(16) a failure or a pattern of failures to meet the
252	252	requirements of this title.
253	253	SECTION 4. (a) The changes in law made by this Act apply to
254	254	a retail electric provider regardless of whether the provider is
255	255	certified before, on, or after the effective date of this Act.
256	256	(b) A retail electric provider certified before the
257	257	effective date of this Act shall notify the Public Utility
258	258	Commission of Texas if the provider is unable to comply with the
259	259	financial requirements of Section 39.352, Utilities Code, as
260	260	amended by this Act, not later than March 1, 2010, and shall
261	261	surrender its certificate as a retail electric provider not later
262	262	than September 1, 2010, if the provider cannot comply with those
263	263	requirements.
264	264	SECTION 5. The Public Utility Commission of Texas shall
265	265	adopt rules consistent with Sections 39.352 and 39.356, Utilities
266	266	Code, as amended by this Act, and Section 39.3521, Utilities Code,
267	267	as added by this Act, not later than December 1, 2009.
268	268	SECTION 6. This Act takes effect September 1, 2009.