Texas 2023 - 88th Regular

Texas Senate Bill SB1368 Compare Versions

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11 88R9643 CXP-D
22 By: Schwertner, et al. S.B. No. 1368
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55 A BILL TO BE ENTITLED
66 AN ACT
77 relating to the continuation and functions of the Public Utility
88 Commission of Texas and the Office of Public Utility Counsel, and
99 the functions of the independent organization certified for the
1010 ERCOT power region.
1111 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1212 SECTION 1. Section 12.005, Utilities Code, is amended to
1313 read as follows:
1414 Sec. 12.005. APPLICATION OF SUNSET ACT. The Public Utility
1515 Commission of Texas is subject to Chapter 325, Government Code
1616 (Texas Sunset Act). Unless continued in existence as provided by
1717 that chapter or by Chapter 39, the commission is abolished [and this
1818 title expires] September 1, 2029 [2023].
1919 SECTION 2. Section 12.059, Utilities Code, is amended to
2020 read as follows:
2121 Sec. 12.059. TRAINING PROGRAM FOR COMMISSIONERS. (a) A
2222 person who is appointed to and qualifies for office as a member of
2323 the commission may not vote, deliberate, or be counted as a member
2424 in attendance at a meeting of the commission until the person
2525 completes a [Before a commissioner may assume the commissioner's
2626 duties and before the commissioner may be confirmed by the senate,
2727 the commissioner must complete at least one course of the] training
2828 program that complies with [established under] this section.
2929 (b) The [A] training program must [established under this
3030 section shall] provide the person with information [to the
3131 commissioner] regarding:
3232 (1) the law governing [enabling legislation that
3333 created the] commission operations [and its policymaking body to
3434 which the commissioner is appointed to serve];
3535 (2) the programs, functions, rules, and budget of
3636 [operated by] the commission;
3737 (3) the scope [role and functions] of and limitations
3838 on the rulemaking authority of the commission;
3939 (4) the results [rules] of the most recent formal
4040 audit of the commission [with an emphasis on the rules that relate
4141 to disciplinary and investigatory authority];
4242 (5) the requirements of:
4343 (A) laws relating to open meetings, public
4444 information, administrative procedure, and disclosing conflicts of
4545 interest; and
4646 (B) other laws applicable to members of a state
4747 policy-making body in performing their duties [current budget for
4848 the commission]; and
4949 (6) [the results of the most recent formal audit of the
5050 commission;
5151 [(7) the requirements of Chapters 551, 552, and 2001,
5252 Government Code;
5353 [(8) the requirements of the conflict of interest laws
5454 and other laws relating to public officials; and
5555 [(9)] any applicable ethics policies adopted by the
5656 commission or the Texas Ethics Commission.
5757 (c) A person [who is] appointed to the commission is
5858 entitled to reimbursement, as provided by the General
5959 Appropriations Act, for the travel expenses incurred in attending
6060 the training program regardless of whether the attendance at the
6161 program occurs before or after the person qualifies for office.
6262 (d) The executive director of the commission shall create a
6363 training manual that includes the information required by
6464 Subsection (b). The executive director shall distribute a copy of
6565 the training manual annually to each member of the commission. Each
6666 member of the commission shall sign and submit to the executive
6767 director a statement acknowledging that the member received and has
6868 reviewed the training manual.
6969 SECTION 3. Section 12.202, Utilities Code, is amended by
7070 adding Subsections (a-1) and (a-2) to read as follows:
7171 (a-1) The policies adopted under this section must require
7272 the agenda for each regular commission meeting to include public
7373 testimony as a meeting agenda item and allow members of the public
7474 to comment on:
7575 (1) each meeting agenda item unrelated to a contested
7676 case; and
7777 (2) other matters under the commission's jurisdiction.
7878 (a-2) The commission may prohibit public comment at a
7979 regular commission meeting on a meeting agenda item related to a
8080 contested case.
8181 SECTION 4. Section 12.203, Utilities Code, is amended to
8282 read as follows:
8383 Sec. 12.203. BIENNIAL REPORT. (a) Not later than January
8484 15 of each odd-numbered year, the commission shall prepare a
8585 written report that includes:
8686 (1) suggestions regarding modification and
8787 improvement of the commission's statutory authority and for the
8888 improvement of utility regulation in general, including the
8989 regulation of water and sewer service under Chapter 13, Water Code,
9090 that the commission considers appropriate for protecting and
9191 furthering the interest of the public;
9292 (2) a report on the scope of competition in the
9393 electric and telecommunications markets that includes:
9494 (A) an assessment of:
9595 (i) the effect of competition and industry
9696 restructuring on customers in both competitive and noncompetitive
9797 electric markets; and
9898 (ii) the effect of competition on the rates
9999 and availability of electric services for residential and small
100100 commercial customers;
101101 (B) an assessment of the effect of competition
102102 on:
103103 (i) customers in both competitive and
104104 noncompetitive telecommunications markets, with a specific focus
105105 on rural markets; and
106106 (ii) the rates and availability of
107107 telecommunications services for residential and business
108108 customers, including any effects on universal service; and
109109 (C) a summary of commission action over the
110110 preceding two years that reflects changes in the scope of
111111 competition in regulated electric and telecommunications markets;
112112 and
113113 (3) recommendations for legislation that the
114114 commission determines appropriate to promote the public interest in
115115 the context of partially competitive electric and
116116 telecommunications markets.
117117 (b) A telecommunications utility, as defined by Section
118118 51.002, shall cooperate with the commission as necessary for the
119119 commission to satisfy the requirements of this section.
120120 SECTION 5. Subchapter E, Chapter 12, Utilities Code, is
121121 amended by adding Section 12.205 to read as follows:
122122 Sec. 12.205. STRATEGIC COMMUNICATIONS PLAN. The commission
123123 shall:
124124 (1) develop an agency-wide plan for:
125125 (A) improving the effectiveness of commission
126126 communications with the public, market participants, and other
127127 relevant audiences; and
128128 (B) responding to changing communications needs;
129129 (2) include in the plan required by Subdivision (1)
130130 goals, objectives, and metrics to assess commission efforts; and
131131 (3) update the plan required by Subdivision (1) at
132132 least once every two years.
133133 SECTION 6. Section 13.002, Utilities Code, is amended to
134134 read as follows:
135135 Sec. 13.002. APPLICATION OF SUNSET ACT. The Office of
136136 Public Utility Counsel is subject to Chapter 325, Government Code
137137 (Texas Sunset Act). Unless continued in existence as provided by
138138 that chapter, the office is abolished [and this chapter expires]
139139 September 1, 2029 [2023].
140140 SECTION 7. Section 39.151, Utilities Code, is amended by
141141 amending Subsections (d), (g-1), and (g-6) and adding Subsection
142142 (g-7) to read as follows:
143143 (d) The commission shall adopt and enforce rules relating to
144144 the reliability of the regional electrical network and accounting
145145 for the production and delivery of electricity among generators and
146146 all other market participants, or may delegate those
147147 responsibilities to an independent organization [responsibilities
148148 for adopting or enforcing such rules. Rules adopted by an
149149 independent organization and enforcement actions taken by the
150150 organization under delegated authority from the commission are
151151 subject to commission oversight and review and may not take effect
152152 before receiving commission approval]. An independent organization
153153 certified by the commission is directly responsible and accountable
154154 to the commission. The commission has complete authority to
155155 oversee and investigate the independent organization's finances,
156156 budget, and operations as necessary to ensure the organization's
157157 accountability and to ensure that the organization adequately
158158 performs the organization's functions and duties. The independent
159159 organization shall fully cooperate with the commission in the
160160 commission's oversight and investigatory functions. The
161161 commission may take appropriate action against an independent
162162 organization that does not adequately perform the organization's
163163 functions or duties or does not comply with this section, including
164164 decertifying the organization or assessing an administrative
165165 penalty against the organization. The commission by rule shall
166166 adopt procedures governing decertification of an independent
167167 organization, selecting and certifying a successor organization,
168168 and transferring assets to the successor organization to ensure
169169 continuity of operations in the region. The commission may not
170170 implement, by order or by rule, a requirement that is contrary to an
171171 applicable federal law or rule.
172172 (g-1) The [independent organization's] bylaws of an
173173 independent organization certified for the ERCOT power region [or
174174 protocols] must be approved by [the commission] and [must] reflect
175175 the input of the commission. The bylaws must require that every
176176 member of the governing body be a resident of this state and must
177177 prohibit a legislator from serving as a member. The governing body
178178 must be composed of:
179179 (1) two members [the chairman] of the commission as
180180 [an] ex officio nonvoting members:
181181 (A) one of whom must be the presiding officer of
182182 the commission; and
183183 (B) one of whom must be designated by the
184184 presiding officer of the commission to serve a one-year term on the
185185 governing body [member];
186186 (2) the counsellor as an ex officio voting member
187187 representing residential and small commercial consumer interests;
188188 (3) the chief executive officer of the independent
189189 organization as an ex officio nonvoting member; and
190190 (4) eight members selected by the selection committee
191191 under Section 39.1513 with executive-level experience in any of the
192192 following professions:
193193 (A) finance;
194194 (B) business;
195195 (C) engineering, including electrical
196196 engineering;
197197 (D) trading;
198198 (E) risk management;
199199 (F) law; or
200200 (G) electric market design.
201201 (g-6) In this subsection, a reference to a protocol includes
202202 a rule. Protocols adopted by an independent organization and
203203 enforcement actions taken by the organization under delegated
204204 authority from the commission are subject to commission oversight
205205 and review and may not take effect before receiving commission
206206 approval. To maintain certification as an independent organization
207207 under this section, the organization's governing body must
208208 establish and implement a formal process for adopting new protocols
209209 or revisions to existing protocols. The process must require that
210210 new or revised protocols may not take effect until the commission
211211 approves a market impact statement describing the new or revised
212212 protocols. The commission may approve, reject, or remand with
213213 suggested modifications to the independent organization's
214214 governing body protocols adopted by the organization.
215215 (g-7) The presiding officer of the commission shall
216216 designate commissioners to serve terms on the independent
217217 organization's governing body under Subsection (g-1)(1)(B) in the
218218 order in which the commissioners were first appointed to the
219219 commission. A commissioner may not serve an additional term until
220220 each commissioner has served a term.
221221 SECTION 8. Section 39.1511, Utilities Code, is amended by
222222 amending Subsection (a) and adding Subsection (a-1) to read as
223223 follows:
224224 (a) Meetings of the governing body of an independent
225225 organization certified under Section 39.151 and meetings of a
226226 subcommittee that includes a member of the governing body must be
227227 open to the public. The bylaws of the independent organization and
228228 the rules of the commission may provide for the governing body or
229229 subcommittee to enter into executive session closed to the public
230230 only to address [sensitive matters such as confidential personnel
231231 information,] contracts, [lawsuits,] competitively sensitive
232232 information, [or other] information related to the security of the
233233 regional electrical network, or a matter which the commission would
234234 be authorized to consider in a closed meeting under Chapter 551,
235235 Government Code.
236236 (a-1) An independent organization's governing body or a
237237 subcommittee may adopt a policy allowing the governing body or
238238 subcommittee to enter into an executive session closed to the
239239 public and commissioners, including the commissioners serving as ex
240240 officio nonvoting members, in specific circumstances to address a
241241 matter authorized under Subsection (a). A policy described by this
242242 subsection is not subject to approval by the commission.
243243 SECTION 9. Subchapter D, Chapter 39, Utilities Code, is
244244 amended by adding Section 39.1514 to read as follows:
245245 Sec. 39.1514. COMMISSION DIRECTIVES TO INDEPENDENT
246246 ORGANIZATION. (a) The commission may not use a verbal directive
247247 to direct an independent organization certified under Section
248248 39.151 to take an official action. The commission may direct the
249249 organization to take an official action only through:
250250 (1) a contested case;
251251 (2) rulemaking;
252252 (3) a memorandum; or
253253 (4) a written order.
254254 (b) The commission by rule shall:
255255 (1) specify the types of directives the commission may
256256 issue through a contested case, rulemaking, memorandum, or written
257257 order;
258258 (2) establish the conditions under which a commission
259259 vote is required before issuing a directive;
260260 (3) require that proposed commission directives be
261261 included as an item on a commission meeting agenda and require the
262262 commission to allow members of the public an opportunity to comment
263263 on the agenda item; and
264264 (4) establish a reasonable timeline for the release
265265 before a commission meeting of discussion materials relevant to
266266 any proposed commission directives included as agenda items for
267267 that meeting.
268268 (c) Notwithstanding another provision of this section, the
269269 commission may use a verbal directive to direct an independent
270270 organization to take an official action in an urgent or emergency
271271 situation that poses an imminent threat to public health, public
272272 safety, or the reliability of the power grid. The commission by rule
273273 shall establish criteria for determining whether a situation is
274274 urgent or an emergency under this subsection and establish a
275275 process by which the commission will issue directives to the
276276 independent organization under this subsection. If an independent
277277 organization follows a verbal directive for more than 72 hours, the
278278 commission shall use a process adopted under this section to
279279 provide written documentation of the directive to the independent
280280 organization.
281281 SECTION 10. Section 39.155(d), Utilities Code, is amended
282282 to read as follows:
283283 (d) In a qualifying power region, the report [reports]
284284 required by Subsection (c) [Subsections (b) and (c)] shall be
285285 submitted by the independent organization or organizations having
286286 authority over the power region or discrete areas thereof.
287287 SECTION 11. Section 39.157(f), Utilities Code, is amended
288288 to read as follows:
289289 (f) Following review of the annual report [reports]
290290 submitted to it under Section 39.155(c) [Sections 39.155(b) and
291291 (c)], the commission shall determine whether specific transmission
292292 or distribution constraints or bottlenecks within this state give
293293 rise to market power in specific geographic markets in the state.
294294 The commission, on a finding that specific transmission or
295295 distribution constraints or bottlenecks within this state give rise
296296 to market power, may order reasonable mitigation of that potential
297297 market power by ordering, under Section 39.203(e), one or more
298298 electric utilities or transmission and distribution utilities to
299299 construct additional transmission or distribution capacity, or
300300 both, subject to the certification provisions of this title.
301301 SECTION 12. (a) This section takes effect only if the Act
302302 of the 88th Legislature, Regular Session, 2023, relating to
303303 nonsubstantive additions to and corrections in enacted codes
304304 becomes law.
305305 (b) Subchapter D, Chapter 39, Utilities Code, is amended by
306306 adding Sections 39.166 and 39.167 to read as follows:
307307 Sec. 39.166. ELECTRIC INDUSTRY REPORT. (a) Not later than
308308 January 15 of each odd-numbered year, the commission, in
309309 consultation with the independent organization certified under
310310 Section 39.151 for the ERCOT power region, shall prepare and submit
311311 to the legislature an electric industry report.
312312 (b) Each electric industry report submitted under this
313313 section must:
314314 (1) identify existing and potential transmission and
315315 distribution constraints and system needs within the ERCOT power
316316 region, alternatives for meeting system needs, and recommendations
317317 for meeting system needs;
318318 (2) summarize key findings from:
319319 (A) the grid reliability assessment conducted
320320 under Section 39.165; and
321321 (B) the report required by Section 39.904(k);
322322 (3) outline basic information regarding the electric
323323 grid and market in this state, including generation capacity,
324324 customer demand, and transmission capacity currently installed on
325325 the grid and projected in the future; and
326326 (4) be presented in plain language that is readily
327327 understandable by a person with limited knowledge of the electric
328328 industry.
329329 Sec. 39.167. CONFLICTS OF INTEREST REPORT. The commission
330330 and the independent organization certified under Section 39.151 for
331331 the ERCOT power region annually shall review statutes, rules,
332332 protocols, and bylaws that apply to conflicts of interest for
333333 commissioners and for members of the governing body of the
334334 independent organization and submit to the legislature a report on
335335 the effects the statutes, rules, protocols, and bylaws have on the
336336 ability of the commission and the independent organization to
337337 fulfill their duties.
338338 SECTION 13. (a) This section takes effect only if the Act of
339339 the 88th Legislature, Regular Session, 2023, relating to
340340 nonsubstantive additions to and corrections in enacted codes does
341341 not become law.
342342 (b) Subchapter D, Chapter 39, Utilities Code, is amended by
343343 adding Sections 39.166 and 39.167 to read as follows:
344344 Sec. 39.166. ELECTRIC INDUSTRY REPORT. (a) Not later than
345345 January 15 of each odd-numbered year, the commission, in
346346 consultation with the independent organization certified under
347347 Section 39.151 for the ERCOT power region, shall prepare and submit
348348 to the legislature an electric industry report.
349349 (b) Each electric industry report submitted under this
350350 section must:
351351 (1) identify existing and potential transmission and
352352 distribution constraints and system needs within the ERCOT power
353353 region, alternatives for meeting system needs, and recommendations
354354 for meeting system needs;
355355 (2) summarize key findings from:
356356 (A) the grid reliability assessment conducted
357357 under Section 39.159, as added by Chapter 876 (S.B. 1281), Acts of
358358 the 87th Legislature, Regular Session, 2021; and
359359 (B) the report required by Section 39.904(k);
360360 (3) outline basic information regarding the electric
361361 grid and market in this state, including generation capacity,
362362 customer demand, and transmission capacity currently installed on
363363 the grid and projected in the future; and
364364 (4) be presented in plain language that is readily
365365 understandable by a person with limited knowledge of the electric
366366 industry.
367367 Sec. 39.167. CONFLICTS OF INTEREST REPORT. The commission
368368 and the independent organization certified under Section 39.151 for
369369 the ERCOT power region annually shall review statutes, rules,
370370 protocols, and bylaws that apply to conflicts of interest for
371371 commissioners and for members of the governing body of the
372372 independent organization and submit to the legislature a report on
373373 the effects the statutes, rules, protocols, and bylaws have on the
374374 ability of the commission and the independent organization to
375375 fulfill their duties.
376376 SECTION 14. Section 39.203(i), Utilities Code, is amended
377377 to read as follows:
378378 (i) The commission, in cooperation with transmission and
379379 distribution utilities and the ERCOT independent system operator,
380380 shall study whether existing transmission and distribution
381381 planning processes are sufficient to provide adequate
382382 infrastructure for seawater desalination projects. If the
383383 commission determines that statutory changes are needed to ensure
384384 that adequate infrastructure is developed for projects of that
385385 kind, the commission shall include recommendations in the report
386386 required by Section 12.203 [31.003].
387387 SECTION 15. Section 39.206(q), Utilities Code, is amended
388388 to read as follows:
389389 (q) The commission shall, in conjunction with the Nuclear
390390 Regulatory Commission, investigate the development of a mechanism
391391 whereby the State of Texas could ensure that funds for
392392 decommissioning will be obtained when necessary in the same manner
393393 as if the State of Texas were the licensee under federal law. [The
394394 commission shall file legislative recommendations regarding any
395395 changes in law that may be necessary to carry out the purposes of
396396 this subsection prior to January 15, 2009, which may be combined
397397 with the report required by Section 31.003.]
398398 SECTION 16. Section 39.904(k), Utilities Code, is amended
399399 to read as follows:
400400 (k) The commission and the independent organization
401401 certified under Section 39.151 for the ERCOT power region [for
402402 ERCOT] shall study the need for increased transmission and
403403 generation capacity throughout this state and report to the
404404 legislature the results of the study and any recommendations for
405405 legislation. The report must be filed with the legislature not
406406 later than December 31 of each even-numbered year [and may be filed
407407 as a part of the report required by Subsection (j)].
408408 SECTION 17. Section 39.9055, Utilities Code, is amended to
409409 read as follows:
410410 Sec. 39.9055. EXAMINATION OF DEMAND RESPONSE POTENTIAL OF
411411 SEAWATER DESALINATION PROJECTS. The commission and the ERCOT
412412 independent system operator shall study the potential for seawater
413413 desalination projects to participate in existing demand response
414414 opportunities in the ERCOT market. To the extent feasible, the
415415 study shall determine whether the operational characteristics of
416416 seawater desalination projects enable projects of that kind to
417417 participate in ERCOT-operated ancillary services markets or other
418418 competitively supplied demand response opportunities. The study
419419 shall also determine the potential economic benefit to a seawater
420420 desalination project if the project is able to reduce its demand
421421 during peak pricing periods. The commission shall include the
422422 results of the study in the report required by Section 12.203
423423 [31.003].
424424 SECTION 18. Section 39.908, Utilities Code, is amended to
425425 read as follows:
426426 Sec. 39.908. EFFECT OF SUNSET PROVISION. [(a)] If the
427427 commission is abolished under Section 12.005 or other law, the [and
428428 the other provisions of this title expire as provided by Chapter
429429 325, Government Code (Texas Sunset Act), this subchapter, including
430430 the provisions of this title referred to in this subchapter,
431431 continues in full force and effect and does not expire.
432432 [(b) The] authorities, duties, and functions of the
433433 commission under this chapter shall be performed and carried out by
434434 a successor agency to be designated by the legislature before
435435 abolishment of the commission or, if the legislature does not
436436 designate the successor, by the secretary of state.
437437 SECTION 19. Section 52.060, Utilities Code, is amended to
438438 read as follows:
439439 Sec. 52.060. ADMINISTRATIVE FEE OR ASSESSMENT. The
440440 commission may prescribe and collect a fee or assessment from local
441441 exchange companies necessary to recover the cost to the commission
442442 and to the office of activities carried out and services provided
443443 under this subchapter and Section 12.203 [52.006].
444444 SECTION 20. Section 13.4132, Water Code, is amended by
445445 adding Subsection (b-1) to read as follows:
446446 (b-1) Notwithstanding Section 5.505, the term of an
447447 emergency order issued under this section by the utility commission
448448 or the commission may not exceed 360 days. The emergency order may
449449 be renewed:
450450 (1) once for a period not to exceed 360 days; or
451451 (2) if the utility is undergoing a sale, transfer,
452452 merger, consolidation, or acquisition required to be reported to
453453 the utility commission under Section 13.301, for a reasonable time
454454 until the sale, transfer, merger, consolidation, or acquisition is
455455 complete.
456456 SECTION 21. (a) The following provisions are repealed:
457457 (1) Section 304.201, Business & Commerce Code;
458458 (2) Section 31.003, Utilities Code;
459459 (3) Section 39.155(b), Utilities Code;
460460 (4) Section 39.904(j), Utilities Code; and
461461 (5) Section 52.006, Utilities Code.
462462 (b) Section 34, Chapter 426 (S.B. 3), Acts of the 87th
463463 Legislature, Regular Session, 2021, is repealed.
464464 SECTION 22. The presiding officer of the Public Utility
465465 Commission of Texas shall designate a commissioner to serve a term
466466 on the governing body of the independent organization certified
467467 under Section 39.151, Utilities Code, for the ERCOT power region
468468 that begins January 1, 2024, to comply with Section 39.151(g-1),
469469 Utilities Code, as amended by this Act.
470470 SECTION 23. (a) Except as provided by Subsection (b) of
471471 this section, Section 12.059, Utilities Code, as amended by this
472472 Act, applies to a member of the Public Utility Commission of Texas
473473 appointed before, on, or after the effective date of this Act.
474474 (b) A member of the Public Utility Commission of Texas who,
475475 before the effective date of this Act, completed the training
476476 program required by Section 12.059, Utilities Code, as that law
477477 existed before the effective date of this Act, is only required to
478478 complete additional training on the subjects added by this Act to
479479 the training program required by Section 12.059, Utilities Code. A
480480 commission member described by this subsection may not vote,
481481 deliberate, or be counted as a member in attendance at a meeting of
482482 the commission held on or after December 1, 2023, until the member
483483 completes the additional training.
484484 SECTION 24. This Act takes effect September 1, 2023.