83R7189 RWG-F
By: Workman H.B. No. 2532
A BILL TO BE ENTITLED
AN ACT
relating to the regulation of propane 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) "Commission" means the Railroad Commission of
Texas or its successor agency.
(2) "Customer" means a retail customer of propane gas
purchased from and delivered by a distribution system retailer
through a propane gas system.
(3) "Distribution system retailer":
(A) means a retail propane dealer that:
(i) owns or operates for compensation in
this state a propane gas system; and
(ii) has a Class E license issued by the Gas
Services Division of the license and permit section of the
commission or is an active company representative or operations
supervisor on file with the section; 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 customers.
(4) "Markup" means the retail price for a period
divided by the spot price for that period.
(5) "Propane gas" means propane gas vapor, but does
not include liquefied petroleum gas as described by Chapter 113,
Natural Resources Code.
(6) "Propane gas system" means a system that supplies
propane gas and includes equipment and facilities connected to a
contiguous piping system through which propane gas is supplied by a
distribution system retailer to at least 10 customers.
(7) "Rate" means the price per cubic foot of gas
passing through the meter levied, charged, or collected by a
distribution system retailer from a customer for propane gas
provided through a propane gas system to the customer exclusive of
any fees, taxes, or other charges. A conversion factor of 36.4
cubic feet of propane gas per gallon shall be used for purposes of
determining a rate.
(8) "Retail price" means the U.S. Propane Residential
Price as reported by the United States Energy Information
Administration.
(9) "Spot price" means the Mont Belvieu, TX Propane
Spot Price FOB as reported by the United States Energy Information
Administration.
Sec. 141.002. APPLICABILITY. This chapter applies only to
a retail sale of propane gas made by a distribution system retailer
through a propane gas system. This chapter does not apply to any
other retail or wholesale sale of propane gas.
Sec. 141.003. RATE AND FEE CEILINGS. (a) A distribution
system retailer may not charge a customer for propane gas provided
through a propane gas system to the customer a rate that exceeds the
three-month rolling average of the spot price per gallon at the Mont
Belvieu supply point multiplied by the rolling three-year average
markup of retail price to spot price as reported by the United
States Energy Information Administration. The allowable markup
(three-year average) as of January 2013 is 2.1780 times spot. The
commission shall change the markup in January of each year by adding
the average annual markup, as determined by the average of the six
monthly reporting periods of a calendar year from the United States
Energy Information Administration, of the three preceding years and
dividing by three. The price per gallon shall be converted to cubic
foot rate by dividing the price per gallon by 36.4.
(b) A distribution system retailer may charge customers
special fees for services, including connection, disconnection,
account maintenance, late fees, and reconnection fees, if the fees
are reasonable and customary.
(c) Nothing in this section limits a distribution system
retailer's ability to pass through to a customer on a pro-rata
actual-cost basis:
(1) a fee, including the actual cost of the
performance guarantee;
(2) a fee increase; or
(3) a tax, other than taxes assessed on the basis of
income, gross income, property or margins, assessment, surcharge,
levy, or other charge imposed by a governmental entity either:
(A) directly on a propane gas system or any
portion; or
(B) on a distribution system retailer by virtue
of its ownership or operation of a propane gas system.
(d) A fee passed through to a customer shall be:
(1) passed through without any additional markup; and
(2) identified 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 or holiday officially
observed by the State of Texas unless personnel of the distribution
system retailer are available on that day to receive 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 is affected.
(b) Excluding service interruptions under Section 141.006,
a distribution system retailer shall keep complete records of all
emergency and scheduled service interruptions lasting more than six
hours and affecting more than two customers. The records must
describe the cause, date, length, and location of each
interruption, the 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 service
interruption records to the commission quarterly.
(c) The distribution system retailer shall notify the
commission in writing not later than 48 hours after an interruption
in service that affects the entire propane gas system, lasts more
than four hours, 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 report of a service
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 commission shall establish a toll-free number to
enable a customer to notify the commission of a service
interruption that does not involve a refusal to serve under Section
141.006 and to notify the commission that the customer believes the
distribution system retailer is charging an amount greater than
allowed by law. The commission shall immediately investigate the
notification.
(e) To restore and maintain service, the commission may
assume temporary receivership of a propane gas system that
experiences a service interruption that affects the entire propane
gas system and that:
(1) lasts more than 48 hours;
(2) occurs more than three times in one month; or
(3) is the result of the distribution system
retailer's failure to replenish the primary propane tank for a
reason other than a general local market disruption, a restriction
on wholesale propane supplies, or criminal activity.
(f) The 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 commission assumes temporary receivership of a
propane gas system under Subsection (e), it shall notify the
distribution system retailer and shall take whatever action is
necessary and appropriate to reestablish service to affected
customers. The commission shall 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 commission may
delegate the operation of the propane gas system to a qualified
homeowners' association or municipal utility district until
another distribution system retailer can assume control over the
propane gas system or until a court in bankruptcy proceedings
instructs otherwise.
(i) If the commission determines that the distribution
system retailer is able to resume operations of the system, the
commission shall notify the distribution system retailer of its
determination and allow the resumption of operation after the
distribution system retailer replaces the amount of the financial
surety that was used in receivership. The distribution system
retailer shall reimburse the commission for direct costs the
commission may have incurred as a result of receivership.
Sec. 141.006. GROUNDS FOR REFUSAL TO SERVE. (a) A
distribution system retailer may refuse service to an applicant for
new service or to an existing customer for continued service or
reconnection if:
(1) an applicant or customer fails to pay fees,
advances, contributions, or deposits required for service under the
distribution system retailer's policies;
(2) an applicant or customer 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 create bodily harm or
endanger life or property in the distribution system retailer's
opinion;
(4) an applicant, customer, or service location owner
is delinquent in payment for services provided by a distribution
system retailer service location owner; or
(5) a current resident or occupant of the premises to
receive service is delinquent in payment for services provided by a
distribution system retailer.
(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,
inspections, 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
commission if the complainant is not satisfied by the distribution
system retailer's resolution of the matter.
(b) On receipt of a written complaint from the commission on
behalf of a customer, a distribution system retailer promptly and
suitably shall investigate and notify the 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 delivered to a minimum of two electronic addresses
designated by the distribution system retailer. A distribution
system retailer shall send a final and complete response to the
commission and complainant not later than the 15th day after the
date the complaint was received, unless the commission grants
additional time before the expiration of the 15-day period.
(c) The commission may impose sanctions on a distribution
system retailer if, after an investigation, the 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 commission orders a refund.
Sec. 141.009. PERFORMANCE GUARANTEE. A distribution system
retailer shall post, in favor of the commission, financial surety
in the form of a letter of credit or cash deposited with the
commission in an amount equal to the lesser of $3 multiplied by the
number of gallons of aggregate storage capacity in all of the
propane gas systems operated by the distribution system retailer or
$250,000. The issuer of a letter of credit used to meet this
requirement shall honor the letter of credit if the issuer receives
from the commission notice that the letter of credit is due and
payable. The commission may draw all or a portion of the financial
surety. The commission shall verify and adjust the amount of the
financial surety annually.
Sec. 141.010. RULES. The commission shall adopt rules
necessary to implement this chapter.
Sec. 141.011. 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 a physical or digital copy or website posting of:
(1) a copy of this chapter or a summary of the
customers rights under this chapter; and
(2) for development agreements entered into after
September 1, 2013, a statement disclosing the existence of a
financial interest that a homeowners' association, municipal
utility district, or developer holds in the propane 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's or municipal utility district's website.
SECTION 2. This Act takes effect September 1, 2013.