| 1 | 1 | | By: Troxclair H.B. No. 4213 |
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| 2 | 2 | | |
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| 3 | 3 | | |
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| 4 | 4 | | A BILL TO BE ENTITLED |
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| 5 | 5 | | AN ACT |
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| 6 | 6 | | relating to rates for electricity charged by certain municipally |
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| 7 | 7 | | owned utilities and to the use of revenue from the rates. |
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| 8 | 8 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 9 | 9 | | SECTION 1. Subchapter B, Chapter 40, Utilities Code, is |
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| 10 | 10 | | amended by adding Section 40.0521 to read as follows: |
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| 11 | 11 | | Sec. 40.0521. RATES OF AND USE OF REVENUE BY CERTAIN |
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| 12 | 12 | | UTILITIES NOT OFFERING CUSTOMER CHOICE. (a) This section applies |
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| 13 | 13 | | only to a municipally owned utility that is governed directly by the |
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| 14 | 14 | | governing body of the municipality and is owned by a municipality |
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| 15 | 15 | | with a population of more than 750,000. |
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| 16 | 16 | | (b) This section does not require a municipally owned |
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| 17 | 17 | | utility to implement or opt for customer choice. |
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| 18 | 18 | | (c) In the case of a conflict between this section and |
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| 19 | 19 | | another provision of law, this section prevails. |
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| 20 | 20 | | (d) A municipally owned utility may not: |
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| 21 | 21 | | (1) directly or indirectly subsidize wholesale |
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| 22 | 22 | | competitive activities through rates charged for the provision of |
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| 23 | 23 | | retail electric service that include fixed or variable costs |
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| 24 | 24 | | reasonably attributable to the operation and maintenance of |
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| 25 | 25 | | municipally owned utility assets that generate energy for sale at |
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| 26 | 26 | | wholesale; or |
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| 27 | 27 | | (2) charge rates for the provision of retail electric |
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| 28 | 28 | | service that exceed 50 percent of the average rates available to |
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| 29 | 29 | | similarly situated customers in areas of the state that have access |
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| 30 | 30 | | to customer choice. |
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| 31 | 31 | | (e) The commission by rule shall require a municipally owned |
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| 32 | 32 | | utility to submit to the commission information to allow the |
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| 33 | 33 | | commission to determine whether the municipally owned utility is |
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| 34 | 34 | | complying with the requirements of Subsection (d). The commission |
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| 35 | 35 | | shall notify the municipal governing body if the commission |
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| 36 | 36 | | determines that the municipally owned utility is not complying with |
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| 37 | 37 | | the requirements of Subsection (d). |
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| 38 | 38 | | (f) A municipal governing body that receives notice from the |
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| 39 | 39 | | commission under Subsection (e): |
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| 40 | 40 | | (1) shall require the municipally owned utility to |
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| 41 | 41 | | comply with Subsection (d); and |
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| 42 | 42 | | (2) may, in a manner consistent with Section |
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| 43 | 43 | | 40.055(a)(4), reasonably determine the amount of the municipally |
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| 44 | 44 | | owned utility's stranded investment and calculate and establish for |
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| 45 | 45 | | the municipally owned utility a non-bypassable charge reflecting |
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| 46 | 46 | | stranded costs properly attributable to the municipally owned |
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| 47 | 47 | | utility's retail electric service customers. |
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| 48 | 48 | | (g) The relevant date for identifying stranded investment |
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| 49 | 49 | | under Subsection (f) is November 30, 2010, instead of the date |
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| 50 | 50 | | specified in Section 40.055(a)(4). The amount and duration of the |
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| 51 | 51 | | charge under Subsection (f) must: |
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| 52 | 52 | | (1) be calculated in a similar manner to that |
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| 53 | 53 | | prescribed by Subchapter F, Chapter 39; |
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| 54 | 54 | | (2) include the calculation of nuclear |
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| 55 | 55 | | decommissioning costs as allowed by Sections 39.205 and 39.206; and |
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| 56 | 56 | | (3) consider the municipally owned utility's capital |
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| 57 | 57 | | and debt structure. |
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| 58 | 58 | | (h) A person affected by a determination made under this |
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| 59 | 59 | | section by a municipal governing body may appeal the determination |
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| 60 | 60 | | to the commission by filing with the commission a petition for |
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| 61 | 61 | | review not later than the 30th day after the date of the |
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| 62 | 62 | | determination. An appeal under this section is de novo. The |
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| 63 | 63 | | commission shall enter a final order: |
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| 64 | 64 | | (1) approving the determination of the municipal |
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| 65 | 65 | | governing body; or |
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| 66 | 66 | | (2) substituting the commission's own determination. |
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| 67 | 67 | | (i) A municipally owned utility may use the net proceeds of |
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| 68 | 68 | | its wholesale competitive activities for utility debt repayment, |
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| 69 | 69 | | reduction of purchased power costs, or vegetation management. The |
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| 70 | 70 | | municipally owned utility shall: |
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| 71 | 71 | | (1) document and book the underlying transactions in |
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| 72 | 72 | | auditable form; and |
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| 73 | 73 | | (2) on at least an annual basis as part of the |
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| 74 | 74 | | budgeting process, disclose to the public the net amount of the |
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| 75 | 75 | | proceeds and the intended uses of the proceeds. |
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| 76 | 76 | | SECTION 2. A municipally owned utility described by Section |
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| 77 | 77 | | 40.0521, Utilities Code, as added by this Act, that does not comply |
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| 78 | 78 | | with Section 40.0521, Utilities Code, as added by this Act, on the |
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| 79 | 79 | | effective date of this Act shall comply with Section 40.0521, |
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| 80 | 80 | | Utilities Code, as added by this Act, not later than March 1, 2024. |
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| 81 | 81 | | SECTION 3. This Act takes effect September 1, 2023. |
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