81R11066 TRH-F
By: Davis, Wendy S.B. No. 2129
A BILL TO BE ENTITLED
AN ACT
relating to the certification of retail electric providers.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 39.352, Utilities Code, is amended by
amending Subsection (a) and adding Subsections (a-1), (a-2), (a-3),
(a-4), (a-5), (a-6), (b-1), (b-2), and (h) to read as follows:
(a) After the date of customer choice, a person, including
an affiliate of an electric utility, may not provide retail
electric service in this state, or purchase, take title to, or
resell electricity in this state for sale to a retail customer
unless the person is certified by the commission as a retail
electric provider, in accordance with this section.
(a-1) In order to be certified as a retail electric
provider, a person must submit an application to the commission on a
form prescribed by the commission. An application submitted under
this section must be signed by the applicant's principal and
verified by oath or affirmation. Not later than the 20th day after
the date an application is submitted, the commission shall issue an
order determining the application to be complete or deficient. An
order finding an application to be deficient constitutes a
rejection of the application. The commission shall reject an
application if the application does not contain at least one
suitable name under which a certificate may be issued. A rejection
of an application does not prevent an applicant from submitting a
new application.
(a-2) Not later than the 10th day after the date an
applicant identifies a material change in information provided in a
pending application, the applicant shall inform the commission of
the change.
(a-3) The commission shall reject an application for
certification as a retail electric provider to serve customers in a
specified geographic area under Subsection (a-6) if the commission
finds that the provision of service only in the proposed geographic
area would result in discrimination in the provision of electric
service to any customer because of:
(1) race;
(2) creed;
(3) color;
(4) national origin;
(5) ancestry;
(6) sex;
(7) marital status;
(8) lawful source of income;
(9) disability;
(10) familial status;
(11) the fact that:
(A) the customer is located in an economically
distressed area; or
(B) the customer qualifies for low income
affordability or energy efficiency services; or
(12) any other basis prohibited by law.
(a-4) Unless the commission finds sufficient cause to
extend the period of review of an application, not later than the
90th day after the date an application is submitted, the commission
shall:
(1) approve the application as submitted;
(2) reject the application; or
(3) approve the application with modifications.
(a-5) An applicant shall designate on the application
whether the applicant seeks to offer service:
(1) to customers in a specified geographic service
area; or
(2) to certain specified customers.
(a-6) If an applicant seeks to offer service to customers in
a specified geographic service area under Subsection (a-5), the
applicant must indicate on the application that the geographic area
to be served includes:
(1) the entire state;
(2) a specific geographic area of this state covering
certain specified zip codes;
(3) the service area of certain specified transmission
and distribution utilities, municipal utilities, or electric
cooperatives in which competition is offered; or
(4) the portion of an independent organization
certified under Section 39.151 that is located in this state.
(b-1) An application for certification as a retail electric
provider must demonstrate that a retail electric provider, its
guarantor, or a combination of the retail electric provider and its
guarantor:
(1) has an investment-grade credit rating; or
(2) maintains:
(A) a tangible net worth of at least $100
million;
(B) a current ratio of at least 1.0; and
(C) a debt to total capitalization ratio of not
more than 0.6.
(b-2) As an alternative to the requirements of Subsection
(b-1), an application for certification as a retail electric
provider may demonstrate that a retail electric provider, its
guarantor, or a combination of the retail electric provider and its
guarantor has:
(1) liquid capital of not less than $3 million;
(2) liquid capital of not less than $2 million, if the
retail electric provider has continuously served retail customers
in this state's retail electricity market without sanction or
default for not less than two years; or
(3) liquid capital of not less than $1 million, if the
retail electric provider has continuously served retail customers
in this state's retail electricity market without sanction or
default for not less than three years.
(h) The commission shall issue a certificate in the
applicant's corporate name if the applicant is a corporation. The
commission may approve not more than five other names for a
certificated retail electric provider to use in providing service
under a certificate.
SECTION 2. Subchapter H, Chapter 39, Utilities Code, is
amended by adding Section 39.3521 to read as follows:
Sec. 39.3521. CONDITIONS ON CERTIFICATES; DUTIES OF RETAIL
ELECTRIC PROVIDERS. (a) The commission shall condition issuance
of a certificate under Section 39.352 on the retail electric
provider providing service only under the names under which the
certificate is issued.
(b) On the issuance of a certificate under Section 39.352, a
retail electric provider shall continuously maintain an office in
this state for the purpose of providing customer service, accepting
service of process, and making available in that office books and
records sufficient to establish the retail electric provider's
compliance with this title. An office maintained under this
subsection must:
(1) have a physical address that is not a post office
box; and
(2) be in a location where the purposes of this
subsection may be achieved.
(c) A retail electric provider that demonstrates financial
security under Section 39.352(b-1) shall keep customer deposits in
a restricted cash account or escrow account, or provide an
irrevocable standby letter of credit in an amount sufficient to
cover the entire amount of the retail electric provider's
outstanding customer deposits and advances at all times.
(d) A retail electric provider that demonstrates financial
security under Section 39.352(b-2) shall keep all customer deposits
in an escrow account, or provide an irrevocable standby letter of
credit in an amount sufficient to cover the entire amount of the
retail electric provider's outstanding customer deposits and
advances at all times.
(e) To maintain a retail electric provider certificate, the
holder of the certificate must keep its certification information
current. Not later than the 15th day after the date of a change in a
certificate holder's business address, telephone number,
authorized contacts, or other contact information, the certificate
holder shall notify the commission of the change. On a material
change to information provided to the commission as a basis for the
commission's approval of a certificate, the holder of the
certificate shall notify the commission of the change not later
than the 10th day after the date the change occurs. A retail
electric provider may seek prior approval from the commission
regarding a change, by submitting to the commission an amendment
application before the material change occurs. For purposes of
this section, the transfer of a retail electric provider
certificate is a material change.
(f) Not later than the 45th day before the date a retail
electric provider ceases to operate, the retail electric provider
shall give notice to:
(1) the commission;
(2) each customer to whom the retail electric provider
is scheduled to be providing service on the planned date of
cessation of operations; and
(3) any other person affected by the cessation of
operations, including:
(A) an applicable independent organization
certified under Section 39.151;
(B) a transmission and distribution utility;
(C) an electric cooperative;
(D) a municipally owned utility;
(E) a generation supplier; and
(F) a provider of last resort.
(g) On the cessation of operation by a retail electric
provider, the provider shall submit to the commission proof that
any money owed to the provider's customers has been refunded. The
retail electric provider's certificate is suspended on the
effective cessation date. The commission may not reinstate a
certificate unless the certificate holder demonstrates that the
certificate holder is in compliance with the certification
requirements of this title. The commission may revoke a suspended
certificate if it determines that the certificate holder does not
meet the certification requirements of this title.
(h) A retail electric provider shall notify the commission
and provide the commission with a summary of an insolvency
proceeding not later than the third day after the date the retail
electric provider files a petition in bankruptcy, becomes the
subject of an involuntary bankruptcy proceeding, or in any other
manner becomes insolvent. To satisfy any unpaid obligation of the
retail electric provider to customers, or unpaid administrative
penalties, the commission may proceed against any financial
resources that the retail electric provider relied on in obtaining
its certificate.
(i) A retail electric provider shall respond not later than
the third day after the date it receives a request from the
commission for additional information to ensure compliance with
this section.
SECTION 3. Section 39.356(a), Utilities Code, is amended to
read as follows:
(a) The commission may suspend, revoke, or amend a retail
electric provider's certificate for significant violations of this
title or the rules adopted under this title or of any reliability
standard adopted by an independent organization certified by the
commission to ensure the reliability of a power region's electrical
network, including the failure to observe any scheduling,
operating, planning, reliability, or settlement protocols
established by the independent organization. The commission may
also suspend or revoke a retail electric provider's certificate if
the provider no longer has the financial or technical capability to
provide continuous and reliable electric service. For purposes of
this subsection, "significant violations" include:
(1) providing false or misleading information to the
commission;
(2) engaging in fraudulent, unfair, misleading,
deceptive, or anticompetitive practices, or unlawful
discrimination;
(3) switching, or causing to be switched, the retail
electric provider for a customer without first obtaining the
customer's permission;
(4) billing an unauthorized charge, or causing an
unauthorized charge to be billed, to a customer's retail electric
service bill;
(5) failure to maintain continuous and reliable
electric service to customers pursuant to this chapter;
(6) failure to maintain the financial resources the
provider was required to have to obtain a certificate under Section
39.352;
(7) bankruptcy, insolvency, or the inability to meet
financial obligations on a reasonable and timely basis;
(8) failure to timely remit payment for invoiced
charges to an independent organization certified under Section
39.151;
(9) failure to observe applicable scheduling,
operating, planning, reliability, and settlement polices,
protocols, guidelines, procedures, and other rules established by
an independent organization certified under Section 39.151;
(10) demonstrating a pattern of not responding to
commission inquiries or customer complaints in a timely manner;
(11) suspension or revocation of a registration,
certification, or license by any state or federal authority;
(12) conviction of a felony by the certificate holder
or principal employed by the certificate holder, or a conviction
for any crime involving fraud, theft, or deceit related to the
certificate holder's service;
(13) failure to provide retail electric service to
customers more than 24 months after a certificate is granted by the
commission;
(14) failure to serve as a provider of last resort if
required by the commission;
(15) providing retail electric service in an area in
which customer choice is in effect without obtaining a certificate
under this chapter; and
(16) a failure or a pattern of failures to meet the
requirements of this title.
SECTION 4. (a) The changes in law made by this Act apply to
a retail electric provider regardless of whether the provider is
certified before, on, or after the effective date of this Act.
(b) A retail electric provider certified before the
effective date of this Act shall notify the Public Utility
Commission of Texas if the provider is unable to comply with the
financial requirements of Section 39.352, Utilities Code, as
amended by this Act, not later than March 1, 2010, and shall
surrender its certificate as a retail electric provider not later
than September 1, 2010, if the provider cannot comply with those
requirements.
SECTION 5. The Public Utility Commission of Texas shall
adopt rules consistent with Sections 39.352 and 39.356, Utilities
Code, as amended by this Act, and Section 39.3521, Utilities Code,
as added by this Act, not later than December 1, 2009.
SECTION 6. This Act takes effect September 1, 2009.