88R11236 KBB-F
By: Troxclair H.B. No. 4212
A BILL TO BE ENTITLED
AN ACT
relating to competition in the electric utility market of certain
municipalities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 40.003, Utilities Code, is amended by
amending Subsection (a) and adding Subsection (g) to read as
follows:
(a) Municipally owned utilities, other than utilities
required to initiate customer choice under Section 40.051(d), and
river authorities may adopt and use securitization provisions
having the effect of the provisions provided by Subchapter G,
Chapter 39, to recover through appropriate charges their stranded
costs, at a recovery level deemed appropriate by the municipally
owned utility or river authority up to 100 percent, under rules and
procedures that shall be established:
(1) in the case of a municipally owned utility to which
this subsection applies, by the municipal governing body or a body
vested with the power to manage and operate the municipally owned
utility, including procedures providing for rate orders of the
governing body having the effect of financing orders, providing for
a separate nonbypassable charge approved by the governing body, in
the nature of a transition charge, to be collected from all retail
electric customers of the municipally owned utility, identified as
of a date determined by the governing body, to fund the recovery of
the stranded costs of the municipally owned utility and of all
reasonable related expenses, as determined by the governing body,
and providing for the issuance of bonds, having a term and other
characteristics as determined by the governing body, as necessary
to recover the amount deemed appropriate by the governing body
through securitization financing; and
(2) in the case of a river authority, by the
commission.
(g) A municipally owned utility required to initiate
customer choice under Section 40.051(d) may recover the utility's
stranded cost through securitization provisions:
(1) having the effect of the provisions provided by
Subchapter G, Chapter 39; and
(2) under rules and procedures established by the
commission.
SECTION 2. Section 40.051, Utilities Code, is amended by
amending Subsection (a) and adding Subsection (d) to read as
follows:
(a) Except as provided by Subsection (d), the [The]
municipal governing body or a body vested with the power to manage
and operate a municipally owned utility has the discretion to
decide when or if the municipally owned utility will provide
customer choice.
(d) Not later than the 365th day after the date a municipal
governing body or other body described by Subsection (a) receives
notice under Section 2165.059, Government Code, that the utility is
included on the list created under that section, the utility shall:
(1) initiate customer choice; and
(2) except as otherwise provided by this chapter, be
considered to be a municipally owned utility that chooses to
participate in customer choice under Subsection (b) for purposes of
this subtitle.
SECTION 3. Section 40.054, Utilities Code, is amended by
amending Subsection (e) and adding Subsection (g) to read as
follows:
(e) The commission does not have jurisdiction to require
unbundling of services or functions of[, or to regulate the
recovery of stranded investment of,] a municipally owned utility
or, except as provided by this section, jurisdiction with respect
to the rates, terms, and conditions of service for retail customers
of a municipally owned utility within the utility's certificated
service area.
(g) Except as provided by Section 40.003(g), the commission
does not have jurisdiction to regulate the recovery of stranded
investment of a municipally owned utility.
SECTION 4. Section 40.055, Utilities Code, is amended by
amending Subsection (a) and adding Subsection (c) to read as
follows:
(a) The municipal governing body or a body vested with the
power to manage and operate a municipally owned utility has
exclusive jurisdiction to:
(1) set all terms of access, conditions, and rates
applicable to services provided by the municipally owned utility,
subject to Sections 40.054 and 40.056, including nondiscriminatory
and comparable rates for distribution, but excluding wholesale
transmission rates, terms of access, and conditions for wholesale
transmission service set by the commission under this subtitle,
provided that the rates for distribution access established by the
municipal governing body shall be comparable to the distribution
access rates that apply to the municipally owned utility and the
municipally owned utility's affiliates;
(2) determine whether to unbundle any energy-related
activities and, if the municipally owned utility chooses to
unbundle, whether to do so structurally or functionally;
(3) except for a municipally owned utility required to
initiate customer choice under Section 40.051(d), reasonably
determine the amount of the municipally owned utility's stranded
investment;
(4) except for a municipally owned utility required to
initiate customer choice under Section 40.051(d), establish
nondiscriminatory transition charges reasonably designed to
recover the stranded investment over an appropriate period of time,
provided that recovery of retail stranded costs shall be from all
existing or future retail customers, including the facilities,
premises, and loads of those retail customers, within the utility's
geographical certificated service area as it existed on May 1,
1999;
(5) determine the extent to which the municipally
owned utility will provide various customer services at the
distribution level, including other services that the municipally
owned utility is legally authorized to provide, or will accept the
services from other providers;
(6) manage and operate the municipality's electric
utility systems, including exercise of control over resource
acquisition and any related expansion programs;
(7) establish and enforce service quality and
reliability standards and consumer safeguards designed to protect
retail electric customers, including safeguards that will
accomplish the objectives of Sections 39.101(a) and (b), consistent
with this chapter;
(8) determine whether a base rate reduction is
appropriate for the municipally owned utility;
(9) determine any other utility matters that the
municipal governing body or body vested with power to manage and
operate the municipally owned utility believes should be included;
(10) make any other decisions affecting the
municipally owned utility's participation in customer choice that
are not inconsistent with this chapter; and
(11) determine the extent to which the municipally
owned utility offers energy efficiency programs and how the
programs are administered by the utility, except as provided by
Section 39.9051(e).
(c) For a municipally owned utility required to initiate
customer choice under Section 40.051(d), the relevant date for the
commission to identify stranded investment is the date the
municipal governing body or other body receives notice under
Section 2165.059, Government Code, that the utility is included on
the list created under that section.
SECTION 5. Subchapter B, Chapter 40, Utilities Code, is
amended by adding Section 40.061 to read as follows:
Sec. 40.061. ENFORCEMENT OF CUSTOMER CHOICE. (a) In this
section, "governing body" means the body vested with the power to
manage and operate a municipally owned utility.
(b) If the commission determines that a municipally owned
utility required to initiate customer choice under Section
40.051(d) is not adequately offering customer choice on the 90th
day after the date customer choice was to be initiated, the utility
becomes subject to the oversight authority of the commission for
matters relating to the implementation of customer choice.
(c) The commission shall make a determination under
Subsection (b), if any, as soon as practicable after the expiration
of the 90-day period. The commission assumes oversight authority
over the municipally owned utility on the date the commission makes
an affirmative determination that the utility is not adequately
offering customer choice, and this authority encompasses any
portion of the authority vested with the governing body of the
utility under this subchapter that the commission determines is
necessary.
(d) The governing body shall work cooperatively with the
commission in offering customer choice.
(e) The oversight authority under this section continues
until the date the commission determines that the municipally owned
utility:
(1) has completed the transition to customer choice;
and
(2) is prepared to continue to provide customer choice
in a manner consistent with the competitive market.
(f) On the date the commission makes an affirmative
determination under Subsection (e), the management and operation of
the municipally owned utility returns to the control of the
utility's governing body.
SECTION 6. Subchapter B, Chapter 2165, Government Code, is
amended by adding Section 2165.059 to read as follows:
Sec. 2165.059. LIST BASED ON CERTAIN STATE-OWNED OFFICE
SPACE. (a) On the second Monday in September of each year, the
commission shall:
(1) create a list of each municipally owned utility in
whose certificated retail service area the commission manages three
million or more square feet of state-owned office space; and
(2) for each utility that appears on the list for the
first time, notify the Public Utility Commission of Texas and the
governing body vested with the power to manage and operate the
utility of the utility's addition to the list.
(b) The Public Utility Commission of Texas shall assist the
commission as necessary in performing duties under Subsection (a).
SECTION 7. (a) The changes in law made by this Act apply
only to the activities of a municipally owned utility that occur on
or after the effective date of this Act. Activities of a
municipally owned utility that occur before the effective date of
this Act are governed by the law in effect on the date the
activities occurred, and the former law is continued in effect for
that purpose.
(b) The Texas Facilities Commission shall create the
initial list described by Section 2165.059, Government Code, as
added by this Act, on September 11, 2023.
SECTION 8. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2023.