82R3634 JXC/ALL-D
By: Solomons H.B. No. 2134
A BILL TO BE ENTITLED
AN ACT
relating to the continuation and functions of the Electric
Reliability Council of Texas, the Office of Public Utility Counsel,
and the Public Utility Commission of Texas; imposing an
administrative penalty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 12.005, Utilities Code, is amended to
read as follows:
Sec. 12.005. APPLICATION OF SUNSET ACT. The Public Utility
Commission of Texas is subject to Chapter 325, Government Code
(Texas Sunset Act). Unless continued in existence as provided by
that chapter or by Chapter 39, the commission is abolished and this
title expires September 1, 2023 [2011].
SECTION 2. Section 12.155, Utilities Code, is amended by
adding Subsection (d) to read as follows:
(d) A commissioner may not be employed by an independent
organization certified under Section 39.151. The prohibition under
this subsection applies until the second anniversary of the date
the commissioner ceases to serve as a commissioner.
SECTION 3. Section 13.002, Utilities Code, is amended to
read as follows:
Sec. 13.002. APPLICATION OF SUNSET ACT. The Office of
Public Utility Counsel is subject to Chapter 325, Government Code
(Texas Sunset Act). Unless continued in existence as provided by
that chapter, the office is abolished and this chapter expires
September 1, 2023 [2011].
SECTION 4. Section 15.023, Utilities Code, is amended by
amending Subsections (b), (c), and (d) and adding Subsection (b-1)
to read as follows:
(b) Except as provided by Subsection (b-1), the [The]
penalty for a violation may be in an amount not to exceed $25,000.
Each day a violation continues or occurs is a separate violation for
purposes of imposing a penalty.
(b-1) The penalty for a violation of a reliability standard
adopted by the independent organization certified under Section
39.151 or of a commission rule relating to reliability in the
wholesale electric market may be in an amount not to exceed
$100,000. Each day a violation continues or occurs is a separate
violation for purposes of imposing a penalty.
(c) The commission by rule shall establish a classification
system for violations described by Subsection (b) and a separate
classification system for violations described by Subsection
(b-1). Each system must include [that includes] a range of
administrative penalties that may be assessed for each class of
violation, based on:
(1) the seriousness of the violation, including:
(A) the nature, circumstances, extent, and
gravity of a prohibited act; and
(B) the hazard or potential hazard created to the
health, safety, or economic welfare of the public;
(2) the economic harm to property or the environment
caused by the violation;
(3) the history of previous violations;
(4) the amount necessary to deter future violations;
(5) efforts to correct the violation; and
(6) any other matter that justice may require.
(d) The classification system established under Subsection
(c) shall provide that a penalty in an amount that exceeds $5,000
may be assessed only if the violation is included in the highest
class of violations in the classification system. This subsection
does not apply to the classification system established under
Subsection (c) for a violation described by Subsection (b-1).
SECTION 5. Chapter 15, Utilities Code, is amended by adding
Subchapter D to read as follows:
SUBCHAPTER D. CEASE AND DESIST ORDERS
Sec. 15.101. APPLICATION OF SUBCHAPTER. This subchapter
applies only to a person to whom Subtitle B applies.
Sec. 15.102. RULES. The commission shall adopt rules to
implement this subchapter.
Sec. 15.103. PROCEEDINGS UNDER OTHER LAW. The commission
may proceed solely under this subchapter or under this subchapter
in conjunction with other applicable law.
Sec. 15.104. AUTHORITY TO ISSUE ORDER. (a) The
commission on its own motion may issue a cease and desist order:
(1) after providing notice and an opportunity for a
hearing if practicable or without notice or opportunity for a
hearing; and
(2) if the commission determines that the conduct of a
person:
(A) poses a threat to continuous and adequate
electric service;
(B) is fraudulent;
(C) is hazardous;
(D) creates an immediate danger to the public
safety; or
(E) is causing or can be reasonably expected to
cause an immediate injury to a customer of electric services and
that the injury is incapable of being repaired or rectified by
monetary compensation.
(b) The commission by order or rule may delegate to the
executive director the authority to issue cease and desist orders
under this subchapter.
Sec. 15.105. NOTICE. (a) Notice of a proposed order must be
given not later than the 10th day before the date set for a hearing
if the commission requires notice and hearing before issuing the
order.
(b) On issuance of an order under Section 15.104 with or
without a hearing, the commission shall serve on the person
affected by the order an order that:
(1) contains a statement of the charges; and
(2) requires the person immediately to cease and
desist from the acts, methods, or practices stated in the order.
(c) The commission shall serve the order by registered or
certified mail, return receipt requested, to the person's last
known address.
Sec. 15.106. HEARING. (a) Chapter 2001, Government Code,
does not apply to the issuance of a cease and desist order under
this subchapter without a hearing. A hearing conducted before or
after issuance of an order under this subchapter is a contested case
under Chapter 2001, Government Code.
(b) Not later than the 10th day after the date the
commission issues an order under this subchapter without a hearing,
the commission shall set the time and place for a hearing to affirm,
modify, or set aside the order. The commission shall set the
hearing for a date that is not later than the 30th day after the date
the commission sets the time and place.
(c) At or following the hearing, the commission shall wholly
or partly affirm, modify, or set aside the order.
(d) The commission may hold a hearing under this subchapter
or may authorize the State Office of Administrative Hearings to
hold the hearing.
Sec. 15.107. EFFECT OF ORDER PENDING HEARING. Pending a
hearing under this subchapter, an order continues in effect unless
the order is stayed by the commission.
Sec. 15.108. ADMINISTRATIVE PENALTY. The commission may
impose an administrative penalty under Subchapter B against a
person who violates an order issued under this subchapter.
SECTION 6. Section 39.151, Utilities Code, is amended by
amending Subsections (d-1), (e), and (g) and adding Subsections
(d-2), (d-3), (d-4), (e-1), (g-2), (g-3), and (n) to read as
follows:
(d-1) The commission shall require an independent
organization certified by the commission under this section to
annually submit to the commission for review and approval the
organization's entire proposed annual budget. The commission may
approve, disapprove, or modify any item included in the proposed
budget. The commission by rule shall establish the type of
information or documents needed to effectively evaluate the
proposed budget and reasonable dates for the submission of that
information or those documents. The commission shall establish a
procedure to provide public notice of and public participation in
the budget review process.
(d-2) An independent organization certified by the
commission under this section must submit to the commission for
review and approval proposals for obtaining debt financing or for
refinancing existing debt. The commission may approve, disapprove,
or modify a proposal.
(d-3) An independent organization certified by the
commission under this section shall develop proposed performance
measures to track the organization's operations. The independent
organization must submit the proposed performance measures to the
commission for review and approval. The commission shall annually
review the organization's performance as part of the budget review
process under Subsection (d-1). The commission shall prepare an
annual report detailing the organization's performance and submit
the report to the lieutenant governor, the speaker of the house of
representatives, and each house and senate standing committee that
has jurisdiction over electric utility issues.
(d-4) The commission may:
(1) require an independent organization to provide
reports and information relating to the independent organization's
performance of the functions prescribed by this section and
relating to the organization's revenues, expenses, and other
financial matters;
(2) prescribe a system of accounts for an independent
organization;
(3) conduct audits of an independent organization's
performance of the functions prescribed by this section or relating
to its revenues, expenses, and other financial matters and may
require an independent organization to conduct such an audit;
(4) inspect an independent organization's facilities,
records, and accounts during reasonable hours and after reasonable
notice to the independent organization;
(5) assess administrative penalties against an
independent organization that violates this title or a rule or
order adopted by the commission and, at the request of the
commission, the attorney general may apply for a court order to
require an independent organization to comply with commission rules
and orders in the manner provided by Chapter 15; and
(6) resolve disputes between an affected person and an
independent organization and adopt procedures for the efficient
resolution of such disputes.
(e) After approving the budget of an independent
organization under Subsection (d-1), the [The] commission shall
[may] authorize the [an independent] organization [that is
certified under this section] to charge [a reasonable and
competitively neutral rate] to wholesale buyers and sellers a
system administration fee, within a range determined by the
commission, that is reasonable and competitively neutral to fund
[to cover] the independent organization's approved budget [costs].
The commission shall investigate the organization's cost
efficiencies, salaries and benefits, and use of debt financing and
may require the organization to provide any information needed to
effectively evaluate [the organization's budget and] the
reasonableness and neutrality of the fee [a rate or proposed rate]
or to evaluate the effectiveness or efficiency of the
organization. The commission shall work with the organization to
establish the detail of information, both current and historical,
and the time frames the commission needs to effectively evaluate
the fee. The commission shall require the independent organization
to closely match actual revenues generated by the fee with revenue
necessary to fund the budget and make quarterly fee adjustments to
ensure that the budget year does not end with surplus or
insufficient funds. The commission shall require the organization
to submit to the commission quarterly reports that compare actual
expenditures with budgeted expenditures [a rate or a rate request].
(e-1) The review and approval of a proposed budget under
Subsection (d-1) or a proceeding to authorize and set the range for
the amount of a fee under Subsection (e) is not a contested case for
purposes of Chapter 2001, Government Code.
(g) To maintain certification as an independent
organization under this section, an organization's governing body
must be composed of persons specified by this section and selected
in accordance with formal bylaws or protocols of the
organization. The bylaws or protocols must be approved by the
commission and must reflect the input of the commission. The
bylaws must specify the process by which appropriate stakeholders
elect members and, for unaffiliated members, prescribe
professional qualifications for selection as a member. The bylaws
must require the use of a professional search firm to identify
candidates for membership of unaffiliated members. The process
must allow for commission input in identifying candidates. The
governing body must be composed of:
(1) one member unaffiliated with any market segment
and selected by [the chairman of] the commission, who may be a
former commissioner, to serve a three-year term [as an ex officio
nonvoting member];
(2) one member [the counsellor as an ex officio voting
member] representing residential and small commercial consumer
interests and selected by the counsellor to serve a one-year term;
(3) the chief executive officer of the independent
organization as an ex officio voting member;
(4) six market participants elected by their
respective market segments to serve one-year terms, with:
(A) one representing independent generators;
(B) one representing investor-owned utilities;
(C) one representing power marketers;
(D) one representing retail electric providers;
(E) one representing municipally owned
utilities; and
(F) one representing electric cooperatives;
(5) one member representing industrial consumer
interests and elected by the industrial consumer market segment to
serve a one-year term;
(6) one member representing large commercial consumer
interests selected in accordance with the bylaws to serve a
one-year term; [and]
(7) five members unaffiliated with any market segment
and selected by the other members of the governing body to serve
three-year terms; and
(8) one member unaffiliated with any market segment
who possesses financial expertise and is selected by the other
members of the governing body to serve a three-year term.
(g-2) To maintain certification as an independent
organization under this section, the organization's governing body
must establish and implement a formal process for adopting new
protocols or revisions to existing protocols. The process must
require that:
(1) the organization's governing body initiate the
creation or revision of protocols; and
(2) the organization's staff develop the new or
revised protocols and submit the protocols to the governing body
for adoption.
(g-3) The governing body of an independent organization
certified by the commission under this section shall, in accordance
with formal bylaws or protocols adopted by the organization and
approved by the commission, establish and maintain an advisory
committee whose membership is broadly representative of the
organization's members to assist the organization's governing body
and staff in developing or revising protocols or in performing the
organization's other duties and functions. This subsection does
not prohibit the governing body of the organization from appointing
one or more additional committees or subcommittees to assist the
organization's governing body and staff in performing the
organization's duties and functions.
(n) An independent organization certified by the commission
under this section is subject to review under Chapter 325,
Government Code (Texas Sunset Act), but is not abolished under that
chapter. The independent organization shall be reviewed during
the periods in which the Public Utility Commission of Texas is
reviewed.
SECTION 7. Section 39.1515(c), Utilities Code, is amended
to read as follows:
(c) The independent organization shall use money from the
fee [rate] authorized by Section 39.151(e) to pay for the market
monitor's activities.
SECTION 8. Section 52.057, Utilities Code, is amended by
amending Subsections (a), (b), and (c) and adding Subsections (c-1)
and (d-1) to read as follows:
(a) This section applies only to [The commission shall
approve] a customer-specific contract [that meets the requirements
of Subsection (b)] to provide:
(1) central office based PBX-type services for a
system of 200 stations or more;
(2) billing and collection services;
(3) high-speed private line services of 1.544 megabits
or greater; or
(4) customized services.
(b) The commission may require an incumbent local exchange
company to submit the company's customer-specific contract to the
commission for review [shall approve a contract for a service
described by Subsection (a) if:
[(1) the contract is filed before the 30th day before
the date the service contracted for is initiated;
[(2) the contract is accompanied by an affidavit from
the person or entity contracting for the service stating that the
person or entity considered acquiring the same, equivalent, or
substitutable service by bid or quotation from a source other than
the incumbent local exchange company;
[(3) the incumbent local exchange company recovers the
appropriate costs of providing the service; and
[(4) approval of the contract is in the public
interest].
(c) An affected party may request in writing that the
commission review a customer-specific contract. The commission by
rule may establish guidelines for submitting a request [shall
approve or deny a contract under this section not later than the
30th day after the date the contract is filed, unless the commission
for good cause extends the effective date for an additional 35
days].
(c-1) The commission by rule may establish the criteria the
commission will consider when reviewing a customer-specific
contract.
(d-1) The commission by rule shall prescribe the period
during which an incumbent local exchange company must keep a record
of a customer-specific contract to which the company is a party.
SECTION 9. Subchapter C, Chapter 52, Utilities Code, is
amended by adding Section 52.1035 to read as follows:
Sec. 52.1035. RENEWAL OF CERTAIN REGISTRATIONS OR
CERTIFICATES. (a) The commission by rule shall require each
interexchange telecommunications utility, holder of a certificate
of operating authority, and holder of a service provider
certificate of operating authority to file with the commission on a
one-time or regular basis:
(1) the utility's or holder's name;
(2) the utility's or holder's address; and
(3) the most recent version of each annual report the
commission requires the utility or holder to file under this
subtitle.
(b) The rules must:
(1) require the commission to automatically allow a
utility or holder an extension of a filing deadline for the number
of days prescribed by the rule, as applicable; and
(2) state that the registration or certificate of a
utility or holder will not be valid after the last day of the
automatic extension period described by Subdivision (1) if the
utility or holder does not file information required by the
commission under this section by the end of the automatic extension
period.
(c) A utility or holder whose registration or certificate is
no longer valid may reregister or obtain a new certificate only by
complying with the requirements prescribed for an original
registration or for obtaining an original certificate.
SECTION 10. Subchapter B, Chapter 55, Utilities Code, is
amended by adding Section 55.026 to read as follows:
Sec. 55.026. NEW ORDERS PROHIBITED AFTER A CERTAIN DATE. On
or after September 1, 2011, the commission may not order a local
exchange company that is a dominant carrier to provide mandatory or
optional extended area service to additional metropolitan areas or
calling areas under this subchapter.
SECTION 11. Section 58.255, Utilities Code, is amended by
amending Subsection (c) and adding Subsection (e) to read as
follows:
(c) The commission may require an electing company to file a
private network service contract with the commission. The
commission shall require an electing company to file the company's
contract with the commission on the written request of an entity
described by Section 58.253(a). [Each contract shall be filed with
the commission.] Commission approval of a contract is not
required.
(e) The commission by rule shall prescribe the period during
which an electing company must keep a record of a private network
service contract to which the company is a party.
SECTION 12. Section 59.074, Utilities Code, is amended by
amending Subsection (c) and adding Subsection (d) to read as
follows:
(c) The commission may require an electing company to file a
private network service contract with the commission. The
commission shall require an electing company to file the company's
contract with the commission on the written request of an entity
described by Section 59.072(a). [Each contract shall be filed with
the commission.] Commission approval of a contract is not
required.
(d) The commission by rule shall prescribe the period during
which an electing company must keep a record of a private network
service contract to which the company is a party.
SECTION 13. The Public Utility Commission of Texas shall
adopt rules to implement the filing process required by Section
52.1035, Utilities Code, as added by this Act, as soon as
practicable. The rules must specify whether the commission will
require that an interexchange telecommunications utility, holder
of a certificate of operating authority, or holder of a service
provider certificate of operating authority file the information
required by Section 52.1035, Utilities Code, as added by this Act,
once or on a regular basis. Regardless of the frequency of filing
required, each utility or holder shall file the information
required by Section 52.1035, Utilities Code, as added by this Act,
not later than January 1, 2012. If the commission requires regular
filings, the rules must specify the timing of the subsequent
filings.
SECTION 14. The change in law made by this Act to Section
15.023, Utilities Code, applies only to a violation that occurs on
or after the effective date of this Act. For purposes of this
section, a violation occurs before the effective date of this Act if
any element of the violation occurs before that date. 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 the former law
is continued in effect for that purpose.
SECTION 15. This Act takes effect September 1, 2011.