H.B. No. 2133
 
 
 
 
AN ACT
  relating to the Public Utility Commission of Texas' authority to
  disgorge revenue obtained as a result of certain violations;
  providing an administrative penalty.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  The heading to Section 15.023, Utilities Code,
  is amended to read as follows:
         Sec. 15.023.  ADMINISTRATIVE PENALTY, DISGORGEMENT ORDER,
  OR MITIGATION PLAN.
         SECTION 2.  Section 15.023, Utilities Code, is amended by
  adding Subsections (e), (f), and (g) to read as follows:
         (e)  For a violation of Section 39.157, the commission shall,
  in addition to the assessment of a penalty, order disgorgement of
  all excess revenue resulting from the violation. For any other
  violation of the statutes, rules, or protocols relating to
  wholesale electric markets, the commission may, in addition to the
  assessment of a penalty, order disgorgement of all excess revenue
  resulting from the violation.
         (f)  The commission and a person may develop and enter into a
  voluntary mitigation plan relating to a violation of Section 39.157
  or rules adopted by the commission under that section. If the
  commission and a person enter into a voluntary mitigation plan,
  adherence to the plan constitutes an absolute defense against an
  alleged violation with respect to activities covered by the plan.
         (g)  In this subchapter, "excess revenue" means revenue in
  excess of revenue that would have occurred absent a violation.
         SECTION 3.  The heading to Section 15.024, Utilities Code,
  is amended to read as follows:
         Sec. 15.024. ADMINISTRATIVE PENALTY ASSESSMENT OR
  DISGORGEMENT ORDER PROCEDURE.
         SECTION 4.  Section 15.024(f), Utilities Code, is amended to
  read as follows:
         (f)  If the person requests a hearing or fails to timely
  respond to the notice, the executive director shall set a hearing
  and give notice of the hearing to the person. The parties to a
  proceeding under this subchapter shall be limited to the person and
  the commission, including the independent market monitor. The
  hearing shall be held by an administrative law judge of the State
  Office of Administrative Hearings. The administrative law judge
  shall make findings of fact and conclusions of law and promptly
  issue to the commission a proposal for a decision about the
  occurrence of the violation and the amount of a proposed penalty.
  Based on the findings of fact, conclusions of law, and proposal for
  a decision, the commission by order may find that a violation has
  occurred and impose a penalty or disgorgement order or may find that
  no violation occurred.
         SECTION 5.  Section 15.025, Utilities Code, is amended by
  adding Subsections (e) and (f) to read as follows:
         (e)  Any excess revenue ordered disgorged under this section
  for a violation of the statutes, rules, or protocols relating to
  wholesale electric markets shall be returned to the affected
  wholesale electric market participants to be used to reduce costs
  or fees incurred by retail electric customers. The commission
  shall adopt rules to prescribe how revenue shall be returned to the
  affected wholesale electric market participants under this
  subsection.
         (f)  For purposes of this section and Section 15.026, a
  reference to a penalty shall be construed to include disgorgement.
         SECTION 6.  Sections 15.026(a) and (b), Utilities Code, are
  amended to read as follows:
         (a)  Judicial review of a commission order imposing an
  administrative penalty or disgorgement is:
               (1)  instituted by filing a petition as provided by
  Subchapter G, Chapter 2001, Government Code; and
               (2)  under the substantial evidence rule.
         (b)  If the court sustains the occurrence of the violation,
  the court may uphold or reduce the amount of the penalty or
  disgorgement and order the person to pay the full or reduced amount
  of the penalty or disgorgement. If the court does not sustain the
  occurrence of the violation, the court shall order that no penalty
  or disgorgement is owed.
         SECTION 7.  Section 39.157(a), Utilities Code, is amended to
  read as follows:
         (a)  The commission shall monitor market power associated
  with the generation, transmission, distribution, and sale of
  electricity in this state. On a finding that market power abuses or
  other violations of this section are occurring, the commission
  shall require reasonable mitigation of the market power by ordering
  the construction of additional transmission or distribution
  facilities, by seeking an injunction or civil penalties as
  necessary to eliminate or to remedy the market power abuse or
  violation as authorized by Chapter 15, by imposing an
  administrative penalty as authorized by Chapter 15, by ordering the
  disgorgement of excess revenue as authorized by Chapter 15, or by
  suspending, revoking, or amending a certificate or registration as
  authorized by Section 39.356. Section 15.024(c) does not apply to
  an administrative penalty imposed under this section. For purposes
  of this subchapter, market power abuses are practices by persons
  possessing market power that are unreasonably discriminatory or
  tend to unreasonably restrict, impair, or reduce the level of
  competition, including practices that tie unregulated products or
  services to regulated products or services or unreasonably
  discriminate in the provision of regulated services. For purposes
  of this section, "market power abuses" include predatory pricing,
  withholding of production, precluding entry, and collusion. A
  violation of the code of conduct provided by Subsection (d) that
  materially impairs the ability of a person to compete in a
  competitive market shall be deemed to be an abuse of market power.
  The possession of a high market share in a market open to
  competition may not, of itself, be deemed to be an abuse of market
  power; however, this sentence shall not affect the application of
  state and federal antitrust laws.
         SECTION 8.  The changes in law made by this Act apply only to
  a violation that occurs on or after the effective date of this Act.
  A violation that occurs before the effective date of this Act is
  covered by the law in effect at the time the violation occurred, and
  the former law is continued in effect for that purpose.
         SECTION 9.  This Act takes effect September 1, 2011.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 2133 was passed by the House on April
  27, 2011, by the following vote:  Yeas 123, Nays 20, 1 present, not
  voting.
 
  ______________________________
  Chief Clerk of the House   
 
 
         I certify that H.B. No. 2133 was passed by the Senate on May
  25, 2011, by the following vote:  Yeas 30, Nays 1.
 
  ______________________________
  Secretary of the Senate    
  APPROVED:  _____________________
                     Date          
   
            _____________________
                   Governor