By: Watson S.B. No. 555
A BILL TO BE ENTITLED
AN ACT
relating to the regulation of propane gas distribution retailers.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Title 3, Utilities Code, is amended by adding
Subtitle C to read as follows:
SUBTITLE C. PROPANE GAS DISTRIBUTION SYSTEMS
CHAPTER 141. STANDARDS FOR DISTRIBUTION SYSTEM RETAILERS
Sec. 141.001. DEFINITIONS. In this chapter:
(1) "Distribution system retailer":
(A) means a retail propane dealer that owns or
operates for compensation in this state equipment and facilities
connected to a contiguous piping system through which propane gas
is supplied to at least 10 residential end users and:
(i) has a Class E license issued by the Gas Services
Division of the License and Permit Section of the railroad
commission or is an active company representative or operations
supervisor on file with the section; and
(ii) is a regular supplier or a potential
regular supplier of propane to a consumer; and
(B) does not include a person that furnishes
propane gas only to the person, to the person's employees, or to the
person's tenants as an incident of employment or tenancy, if the
service is not resold to commercial customers or other end users.
(2) "Railroad commission" means the Railroad
Commission of Texas or the successor agency to that commission.
Sec. 141.002. APPLICABILITY. This chapter applies only to
a distribution system retailer. This chapter does not apply to a
traditional retail liquefied petroleum gas company that provides
service in the service area.
Sec. 141.003. RATE AND FEE CEILINGS. (a) A distribution
system retailer may not charge a customer during any given billing
period a rate for gas that exceeds the actual average delivered
price charged, excluding price specials and tank rental fees, for
propane gas delivered to company-owned, individual propane tanks by
traditional retail liquefied petroleum gas companies that provide
service in the service area where the distribution system retailer
is located. The actual average price must be determined using
independent objective market surveys of liquefied petroleum gas
prices quoted by traditional liquefied petroleum gas companies and
charged in the ordinary course of business during the respective
billing period. Each distribution system retailer each quarter
shall supply the market surveys and report the gas rates the
distribution system retailer charges to the railroad commission.
(b) For the following services or occurrences, a
distribution system retailer may charge a fee not to exceed:
(1) $12 a month as a recurring monthly fee to maintain
an active gas service account with the distribution system retailer
to be charged to a customer whose actual gas usage exceeds 99
gallons;
(2) $17.50 a month as a recurring monthly fee to
maintain an active service account with the distribution system
retailer as long as the service address's gas usage history during
the preceding 12-month period does not exceed 99 gallons;
(3) $15 for a late payment received by the
distribution system retailer, provided the bill was mailed or
electronically transmitted 15 days prior to the date payment is
due;
(4) $25 to disconnect or terminate service from an
active or delinquent account;
(5) $65 for standard next available service for an
active or delinquent account;
(6) $125 for accelerated reconnect service;
(7) $30 for a dishonored check that was received for a
payment; and
(8) $75 to initiate service to a new customer.
(c) The railroad commission by rule annually shall adjust
the fee limits described by Subsection (b) upward or downward based
on changes in the Consumer Price Index for All Urban Consumers in
the State of Texas published by the Bureau of Labor Statistics of
the United States Department of Labor each calendar year. The
distribution system retailer's adjustment, if required, must be
made not later than the later of September or the 45th day after the
date the railroad commission gives notice of the change to the
distribution system retailer.
(d) Nothing in this section limits a distribution system
retailer's ability to pass through to a customer a new governmental
fee, fee increase, or charge imposed on the retailer after
September 1, 2011. Any fee, fee increase, or charge passed through
to a customer shall be listed as a separate item on a customer's
bill.
Sec. 141.004. DISCONNECTION OF PROPANE GAS SERVICE. (a) A
distribution system retailer may not disconnect propane gas service
to a residential customer on a weekend day unless personnel of the
distribution system retailer are available on that day to take
payments and reconnect service.
(b) A distribution system retailer may not disconnect
propane gas service to a residential customer during an extreme
weather emergency, as defined by Section 104.258. The distribution
system retailer shall defer collection of the full payment of bills
that are due during an extreme weather emergency, as defined by
Section 104.258, until after the emergency is over.
Sec. 141.005. CONTINUITY OF SERVICE. (a) A distribution
system retailer shall make all reasonable efforts to prevent
interruptions of service. When an interruption occurs, the
distribution system retailer shall reestablish service within the
shortest possible time consistent with prudent operating
principles so that the smallest number of customers are affected.
(b) Excluding service interruptions for nonpayment, a
distribution system retailer shall keep complete records of all
emergency and scheduled service interruptions lasting greater than
four hours in duration and affecting more than two customers. The
records must describe the cause of each interruption, the date,
length, location, approximate number of customers affected by the
interruption, and, in the case of an emergency interruption, the
remedy and steps taken to prevent a recurrence, if applicable. The
distribution system retailer shall submit copies of the records to
the railroad commission quarterly.
(c) The distribution system retailer shall notify the
railroad commission in writing not later than 48 hours after an
interruption in service that affects the entire system and lasts
more than four hours caused by a Grade I leak that represents an
existing or probable hazard to persons or property and requires
immediate repair or continuous action until the conditions are no
longer hazardous. The notice shall include the distribution system
retailer's assessment of the cause of the interruption. A written
report of a service interruption in another form, including a part
of a safety report, is sufficient to comply with this subsection.
(d) The railroad commission shall establish a toll-free
number to enable a customer of a distribution system retailer to
notify the railroad commission of a service interruption that does
not involve a refusal to serve under Section 141.006. The railroad
commission shall immediately investigate the cause of the service
interruption.
(e) To restore and maintain service, the railroad
commission may assume temporary receivership of a system that
experiences a service interruption that affects the entire system:
(1) exceeding 48 hours in duration;
(2) more than three times in one month; or
(3) that is the result of the distribution system
retailer's failure to replenish the primary propane tank that is
not caused by a general local market disruption or a restriction on
wholesale propane supplies.
(f) The railroad commission may draw down all or part of the
financial surety posted under Section 141.009, as required, to
restore and maintain service under Subsection (e).
(g) If the railroad commission assumes temporary
receivership of a system under Subsection (e), it shall notify the
distribution system retailer and provide the distribution system
retailer 72 hours to prepare and submit a plan to avoid continuing
receivership.
(h) If a distribution system retailer's inability to
fulfill its financial obligations is the cause of a service
interruption described by Subsection (e), the railroad commission
may delegate the operation of the system to a homeowners'
association or municipal utility district until another
distribution system retailer can assume control over the system or
until a court in bankruptcy proceedings instructs otherwise.
Sec. 141.006. GROUNDS FOR REFUSAL TO SERVE. (a) A
distribution system retailer may refuse service to an applicant if:
(1) an applicant fails to pay fees, advances,
contributions, or deposits required for service under the
distribution system retailer's policies;
(2) an applicant fails to furnish a service or meter
location specified for service by the distribution system retailer;
(3) the existence or repeated creation of an unsafe
condition, such as impaired meter access or a leak in the
applicant's piping system, may potentially endanger life or
property in the distribution system retailer's opinion;
(4) an applicant or service location owner is
delinquent in payment for services provided by a distribution
system retailer service location owner;
(5) another current resident of the premises to
receive service is delinquent in payment for services provided by a
distribution system retailer; or
(6) an applicant fails to adhere to an agreed payment
plan.
(b) The right to refuse service ends when the cause for the
refusal to serve is corrected.
Sec. 141.007. REASONABLE TIME TO BEGIN SERVICE. A
distribution system retailer may delay providing service following
an application or execution of an agreement for service for a
reasonable amount of time considering required approvals or
permits, the extent of the facilities to be built, and the
distribution system retailer's workload at the time.
Sec. 141.008. CUSTOMER COMPLAINTS. (a) A distribution
system retailer that receives a written complaint promptly and
suitably shall investigate the complaint and advise the complainant
of the results of the investigation. A distribution system
retailer shall keep for at least three years after the final
disposition of each complaint a record that includes each
complainant's name and address, the date and nature of the
complaint, and the adjustment or disposition of the complaint. A
distribution system retailer is not required to keep a record of a
complaint that does not require the distribution system retailer to
take specific further action. A distribution system retailer shall
notify each complainant of the right to file a complaint with the
railroad commission if the complainant is not satisfied by the
distribution system retailer's resolution of the matter.
(b) On receipt of a complaint from the railroad commission
on behalf of a customer, a distribution system retailer promptly
and suitably shall investigate and notify the railroad commission
and complainant of the results of the investigation. An initial
response must be made not later than the third business day after
the date the distribution system retailer receives the complaint
electronically to up to two electronic addresses designated by the
distribution system retailer. A distribution system retailer shall
send a final and complete response to the railroad commission and
complainant not later than the 15th day after the date the complaint
was received, unless the railroad commission grants additional time
before the expiration of the 15-day period.
(c) The railroad commission may impose sanctions on a
distribution system retailer if, after an investigation, the
railroad commission determines that the distribution system
retailer has violated Section 141.003. Sanctions may include:
(1) ordering a distribution system retailer to refund
the amounts of any overcharges to the distribution system
retailer's customers; or
(2) drawing all or a portion of the financial surety
for the purpose of refunding the amounts of any overcharges to the
distribution system retailer's customers not refunded before the
61st day after the date the railroad commission orders a refund.
Sec. 141.009. PERFORMANCE GUARANTEE. (a) A distribution
system retailer shall post, in favor of the railroad commission,
financial surety in the form of a letter of credit or cash deposited
with the railroad commission in an amount equal to the lesser of $3
multiplied by the number of gallons of storage capacity in all of
the systems operated by the distribution system retailer or
$100,000. The issuer of a letter of credit used to meet this
requirement shall honor the letter of credit if the issuer receives
from the railroad commission notice that the letter of credit is due
and payable. The railroad commission may draw all or a portion of
the financial surety.
(b) A distribution system retailer is exempt from posting
the financial surety if, during the most recent five years:
(1) the distribution system retailer continuously has
met the definition of distribution system retailer under Section
141.001;
(2) the distribution system retailer has not
experienced a service interruption that would have allowed the
railroad commission to place any system operated by the
distribution system retailer in temporary receivership under
Section 141.005(e) if that subsection had been in effect during
that period; and
(3) the distribution system retailer has maintained
the same or substantially similar ownership.
Sec. 141.010. MARKET SURVEY RULES. (a) The market survey
described by Section 141.003(a) shall be conducted according to
rules developed by the railroad commission under this chapter. The
railroad commission, by rule, shall:
(1) limit the survey pool to traditional retail
liquefied petroleum gas companies that provide service to an area
not more than 10 miles from the distribution system retailer's
system;
(2) determine the geographic area of the survey area
where surveyed companies may be located in the event that fewer than
six companies provide service to the service area;
(3) determine the appropriate survey sample size in
the event that fewer than six companies provide service to an area;
(4) allow the distribution system retailer to
determine the survey sample size provided the sample size includes
a minimum of six companies;
(5) provide that the railroad commission and the
distribution system retailer may each select half of the companies
to be included in the survey and, if necessary, alternates to be
included in the survey;
(6) require a survey to be conducted twice a month
during the period from November to April and once a month during the
period from May to October;
(7) require the survey quotes to include delivery
amounts to be more than 100 gallons and not greater than 500 gallons
during the period from November to April and less than 100 gallons
during the period from May to October;
(8) prohibit a company from being surveyed twice in a
seven-day period; and
(9) require a survey company retained by a
distribution system retailer to be a disinterested third party.
(b) A survey company shall conduct a survey once during each
half of the month during the period from November to April. A
survey company shall have discretion when to conduct a survey
during that period.
(c) The railroad commission by rule may require an officer
of the survey company and a distribution system retailer to provide
a signed sworn statement attesting to the survey company's
disinterested third-party status and disclosing compensation the
survey company received. The railroad commission shall qualify a
company that meets these requirements unless the railroad
commission shows the company is not capable of performing the
survey or is not a disinterested third party.
(d) Except for the information described in Subsection (b),
the railroad commission may not require a survey company:
(1) to disclose:
(A) private financial information;
(B) a list of employees or contractors; or
(C) proprietary methodology; or
(2) to provide information or perform an activity that
violates the survey company's industry standards or that increases
the cost of the survey.
(e) The railroad commission shall maintain a list of two or
more qualified survey companies that a distribution system retailer
may select and provide 30-day advance notice to affected
distribution system retailers when a qualified surveyor's
qualification is terminated.
Sec. 141.011. RULES. (a) The railroad commission shall
adopt rules implementing this chapter, including rules that
establish procedures for:
(1) calculating gas rate ceilings;
(2) reporting market surveys and gas rates to the
railroad commission;
(3) addressing unresolved complaints from a customer
of a distribution system retailer; and
(4) establishing rates to apply to a retailer whose
rates are based on flawed market surveys.
(b) The procedure the railroad commission adopts for
calculating a gas rate ceiling based on information from a survey of
six or more companies must provide for using the average of surveyed
prices, excluding a single highest and a single lowest quote.
(c) The railroad commission may institute nonfinancial
resolutions of complaints under this chapter.
(d) The railroad commission may institute financial
resolutions only for violations of this chapter.
Sec. 141.012. DISCLOSURE TO HOMEOWNERS. (a) A
distribution system retailer shall provide to a homeowners'
association or municipal utility district with jurisdiction over
property that receives service from a distribution system retailer,
or to the distribution system retailer's customers if there is no
homeowners' association or municipal utility district, a
disclosure that includes:
(1) the general methodology used to determine the
distribution system retailer's gas rates;
(2) a copy of this chapter or a summary of the
customers' rights under this chapter; and
(3) for development agreements entered into after
September 1, 2011, a statement disclosing the existence of a
financial interest a homeowners' association, municipal utility
district, or developer holds in the gas system.
(b) A homeowners' association or municipal utility district
that has jurisdiction over real property that receives service from
a distribution system retailer shall provide the disclosure
described by Subsection (a) to all homeowners along with a list of
the homeowners' covenants and deed restrictions. The homeowners'
association or municipal utility district shall post the
information required to be disclosed under this subsection on the
homeowners' association or municipal utility district website.
SECTION 2. This Act takes effect September 1, 2011.