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AN ACT
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relating to transition to competition in the Southwestern Electric |
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Power Company service area. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Chapter 39, Utilities Code, is amended by adding |
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Subchapter K to read as follows: |
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SUBCHAPTER K. TRANSITION TO COMPETITION FOR CERTAIN |
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AREAS OUTSIDE OF ERCOT |
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Sec. 39.501. APPLICABILITY. (a) This subchapter applies |
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to an investor-owned electric utility: |
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(1) that is operating solely outside of ERCOT in areas |
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of this state that were included in the Southwest Power Pool on |
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January 1, 2008; |
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(2) that was not affiliated with the Southeastern |
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Electric Reliability Council on January 1, 2008; and |
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(3) to which Subchapter I does not apply. |
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(b) The legislature finds that an electric utility subject |
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to this subchapter is unable at this time to offer fair competition |
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and reliable service to all retail customer classes in the area |
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served by the utility. As a result, the introduction of retail |
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competition for such an electric utility is delayed until fair |
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competition and reliable service are available to all retail |
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customer classes as determined under this subchapter. |
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Sec. 39.502. COST-OF-SERVICE REGULATION. (a) Until the |
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date on which an electric utility subject to this subchapter is |
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authorized by the commission under Section 39.503(f) to implement |
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retail customer choice, the rates of the utility are subject to |
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regulation under Chapter 36. |
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(b) Until the date on which an electric utility subject to |
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this subchapter implements customer choice, the provisions of this |
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chapter, other than this subchapter and Sections 39.904 and 39.905, |
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do not apply to that utility. |
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Sec. 39.503. TRANSITION TO COMPETITION. (a) The events |
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prescribed by Subsections (b)-(f) shall be followed to introduce |
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retail competition in the service area of an electric utility |
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subject to this subchapter. The commission may modify the sequence |
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of events required by Subsections (b)-(e), but not the substance of |
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the requirements. Full retail competition may not begin in the |
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service area of an electric utility subject to this subchapter |
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until all actions prescribed by those subsections are completed. |
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(b) The first stage for the transition to competition |
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consists of the following activities: |
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(1) approval of a regional transmission organization |
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by the Federal Energy Regulatory Commission for the power region |
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that includes the electric utility's service area and commencement |
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of independent operation of the transmission network under the |
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approved regional transmission organization; |
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(2) development of retail market protocols to |
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facilitate retail competition; and |
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(3) completion of an expedited proceeding to develop |
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non-bypassable delivery rates for the customer choice pilot project |
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to be implemented under Subsection (c)(1). |
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(c) The second stage for the transition to competition |
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consists of the following activities: |
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(1) initiation of the customer choice pilot project in |
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accordance with Section 39.104; |
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(2) development of a balancing energy market, a market |
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for ancillary services, and a market-based congestion management |
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system for the wholesale market in the power region in which the |
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regional transmission organization operates; and |
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(3) implementation of a seams agreement with adjacent |
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power regions to reduce barriers to entry and facilitate |
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competition. |
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(d) The third stage for the transition to competition |
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consists of the following activities: |
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(1) the electric utility filing with the commission: |
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(A) an application for business separation in |
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accordance with Section 39.051; |
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(B) an application for unbundled transmission |
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and distribution rates in accordance with Section 39.201; |
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(C) an application for certification of a |
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qualified power region in accordance with Section 39.152; and |
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(D) an application for price-to-beat rates in |
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accordance with Section 39.202; |
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(2) the commission: |
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(A) approving a business separation plan for the |
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utility; |
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(B) setting unbundled transmission and |
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distribution rates for the utility; |
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(C) certifying a qualified power region, which |
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includes conducting a formal evaluation of wholesale market power |
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in the region, in accordance with Section 39.152; |
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(D) setting price-to-beat rates for the utility; |
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and |
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(E) determining which competitive energy |
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services must be separated from regulated utility activities in |
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accordance with Section 39.051; and |
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(3) completion of the testing of retail and wholesale |
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systems, including those systems necessary for switching customers |
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to the retail electric provider of their choice and for settlement |
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of wholesale market transactions, by the regional transmission |
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organization, the registration agent, and market participants. |
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(e) The fourth stage for the transition to competition |
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consists of the following activities: |
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(1) commission evaluation of the results of the pilot |
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project; |
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(2) initiation by the electric utility of a capacity |
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auction in accordance with Section 39.153 at a time to be determined |
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by the commission; and |
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(3) separation by the utility of competitive energy |
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services from its regulated utility activities, in accordance with |
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the commission order approving the separation of competitive energy |
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services. |
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(f) The fifth stage for the transition to competition |
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consists of the following activities: |
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(1) evaluation by the commission of whether the |
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electric utility can offer fair competition and reliable service to |
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all retail customer classes in the area served by the utility, and: |
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(A) if the commission concludes that the electric |
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utility can offer fair competition and reliable service to all |
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retail customer classes in the area served by the utility, the |
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commission issuing an order initiating retail competition for the |
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utility; and |
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(B) if the commission determines that the |
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electric utility cannot offer fair competition and reliable service |
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to all retail customer classes in the area served by the utility, |
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the commission issuing an order further delaying retail competition |
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for the utility; and |
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(2) on the issuance of an order from the commission |
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initiating retail competition for the utility, completion by the |
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utility of the business separation and unbundling in accordance |
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with the commission order approving the unbundling. |
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SECTION 2. This Act takes effect September 1, 2009. |
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______________________________ |
______________________________ |
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President of the Senate |
Speaker of the House |
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I hereby certify that S.B. No. 547 passed the Senate on |
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April 2, 2009, by the following vote: Yeas 31, Nays 0. |
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______________________________ |
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Secretary of the Senate |
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I hereby certify that S.B. No. 547 passed the House on |
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May 12, 2009, by the following vote: Yeas 145, Nays 0, two |
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present not voting. |
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______________________________ |
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Chief Clerk of the House |
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Approved: |
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______________________________ |
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Date |
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______________________________ |
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Governor |