By: Solomons (Senate Sponsor - Fraser) H.B. No. 2133
(In the Senate - Received from the House April 28, 2011;
May 3, 2011, read first time and referred to Committee on Natural
Resources; May 18, 2011, reported favorably by the following vote:
Yeas 8, Nays 0; May 18, 2011, sent to printer.)
A BILL TO BE ENTITLED
AN ACT
relating to the Public Utility Commission of Texas' authority to
disgorge revenue obtained as a result of certain violations;
providing an administrative penalty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. The heading to Section 15.023, Utilities Code,
is amended to read as follows:
Sec. 15.023. ADMINISTRATIVE PENALTY, DISGORGEMENT ORDER,
OR MITIGATION PLAN.
SECTION 2. Section 15.023, Utilities Code, is amended by
adding Subsections (e), (f), and (g) to read as follows:
(e) For a violation of Section 39.157, the commission shall,
in addition to the assessment of a penalty, order disgorgement of
all excess revenue resulting from the violation. For any other
violation of the statutes, rules, or protocols relating to
wholesale electric markets, the commission may, in addition to the
assessment of a penalty, order disgorgement of all excess revenue
resulting from the violation.
(f) The commission and a person may develop and enter into a
voluntary mitigation plan relating to a violation of Section 39.157
or rules adopted by the commission under that section. If the
commission and a person enter into a voluntary mitigation plan,
adherence to the plan constitutes an absolute defense against an
alleged violation with respect to activities covered by the plan.
(g) In this subchapter, "excess revenue" means revenue in
excess of revenue that would have occurred absent a violation.
SECTION 3. The heading to Section 15.024, Utilities Code,
is amended to read as follows:
Sec. 15.024. ADMINISTRATIVE PENALTY ASSESSMENT OR
DISGORGEMENT ORDER PROCEDURE.
SECTION 4. Section 15.024(f), Utilities Code, is amended to
read as follows:
(f) If the person requests a hearing or fails to timely
respond to the notice, the executive director shall set a hearing
and give notice of the hearing to the person. The parties to a
proceeding under this subchapter shall be limited to the person and
the commission, including the independent market monitor. The
hearing shall be held by an administrative law judge of the State
Office of Administrative Hearings. The administrative law judge
shall make findings of fact and conclusions of law and promptly
issue to the commission a proposal for a decision about the
occurrence of the violation and the amount of a proposed penalty.
Based on the findings of fact, conclusions of law, and proposal for
a decision, the commission by order may find that a violation has
occurred and impose a penalty or disgorgement order or may find that
no violation occurred.
SECTION 5. Section 15.025, Utilities Code, is amended by
adding Subsections (e) and (f) to read as follows:
(e) Any excess revenue ordered disgorged under this section
for a violation of the statutes, rules, or protocols relating to
wholesale electric markets shall be returned to the affected
wholesale electric market participants to be used to reduce costs
or fees incurred by retail electric customers. The commission
shall adopt rules to prescribe how revenue shall be returned to the
affected wholesale electric market participants under this
subsection.
(f) For purposes of this section and Section 15.026, a
reference to a penalty shall be construed to include disgorgement.
SECTION 6. Sections 15.026(a) and (b), Utilities Code, are
amended to read as follows:
(a) Judicial review of a commission order imposing an
administrative penalty or disgorgement is:
(1) instituted by filing a petition as provided by
Subchapter G, Chapter 2001, Government Code; and
(2) under the substantial evidence rule.
(b) If the court sustains the occurrence of the violation,
the court may uphold or reduce the amount of the penalty or
disgorgement and order the person to pay the full or reduced amount
of the penalty or disgorgement. If the court does not sustain the
occurrence of the violation, the court shall order that no penalty
or disgorgement is owed.
SECTION 7. Section 39.157(a), Utilities Code, is amended 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 imposing an
administrative penalty as authorized by Chapter 15, by ordering the
disgorgement of excess revenue 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. 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.
SECTION 8. The changes in law made by this Act apply only to
a violation that occurs 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 at the time the violation occurred, and
the former law is continued in effect for that purpose.
SECTION 9. This Act takes effect September 1, 2011.
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