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  83R20784 JJT-D
 
  By: Turner of Harris, Reynolds H.B. No. 550
 
  Substitute the following for H.B. No. 550:
 
  By:  Cook C.S.H.B. No. 550
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to financing programs for low-income electric customers
  and certain other electric customers; lowering the amount of a fee;
  imposing a fee.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 17.007, Utilities Code, is amended to
  read as follows:
         Sec. 17.007.  ELIGIBILITY PROCESS FOR CUSTOMER SERVICE
  DISCOUNTS. The commission by rule shall provide for an integrated
  eligibility process for customer service discounts, including
  discounts under Sections 39.9035 [39.903] and 55.015.
         SECTION 2.  Section 39.002, Utilities Code, is amended to
  read as follows:
         Sec. 39.002.  APPLICABILITY.  This chapter, other than
  Sections 39.155, 39.157(e), 39.203, 39.903, 39.9035, 39.904,
  39.9051, 39.9052, and 39.914(e), does not apply to a municipally
  owned utility or an electric cooperative. Sections 39.157(e),
  39.203, and 39.904, however, apply only to a municipally owned
  utility or an electric cooperative that is offering customer
  choice. If there is a conflict between the specific provisions of
  this chapter and any other provisions of this title, except for
  Chapters 40 and 41, the provisions of this chapter control.
         SECTION 3.  Subchapter Z, Chapter 39, Utilities Code, is
  amended by amending Section 39.903 and adding Section 39.9035 to
  read as follows:
         Sec. 39.903.  SYSTEM BENEFIT FUND. (a)  The system benefit
  fund is an account in the general revenue fund.  Money in the
  account may be appropriated only for the purposes provided by this
  section [or other law].  Interest earned on the system benefit fund
  shall be credited to the fund.  Section 403.095, Government Code,
  does not apply to the system benefit fund.
         (b)  The system benefit fund is financed by a nonbypassable
  system benefit fund fee set by the commission in an amount not to
  exceed two [65] cents per megawatt hour. The system benefit fund
  fee is allocated to customers based on the amount of kilowatt hours
  used.
         (c)  The nonbypassable system benefit fund fee may not be
  imposed on the retail electric customers of a municipally owned
  utility or electric cooperative before the sixth month preceding
  the date on which the utility or cooperative implements customer
  choice. Money distributed from the system benefit fund to a
  municipally owned utility or an electric cooperative shall be
  proportional to the nonbypassable fee paid by the municipally owned
  utility or the electric cooperative[, subject to the reimbursement
  provided by Subsection (i)]. On request by a municipally owned
  utility or electric cooperative, the commission shall reduce the
  nonbypassable fee imposed on retail electric customers served by
  the municipally owned utility or electric cooperative by an amount
  equal to the amount provided by the municipally owned utility or
  electric cooperative or its ratepayers for [local low-income
  programs and] local programs that educate customers about the
  retail electric market in a neutral and nonpromotional manner. The
  commission shall adopt rules providing for reimbursements from
  appropriated system benefit fund money for activities authorized
  for funding under this section.
         (d)  The commission shall annually review and approve system
  benefit fund accounts, projected revenue requirements, and
  proposed nonbypassable fees. The commission shall report to the
  electric utility restructuring legislative oversight committee if
  the system benefit fund fee is insufficient to fund the purposes set
  forth in Subsection (e) to the extent required by this section.
         (e)  Money in the system benefit fund may be appropriated to
  provide funding solely for the following regulatory purposes [, in
  the following order of priority]:
               (1)  [programs to:
                     [(A)     assist low-income electric customers by
  providing the 10 percent reduced rate prescribed by Subsection (h);
  and
                     [(B)     provide one-time bill payment assistance to
  electric customers who are or who have in their households one or
  more seriously ill or disabled low-income persons and who have been
  threatened with disconnection for nonpayment;
               [(2)]  customer education programs;
               (2)  [,] administrative expenses incurred by the
  commission in implementing and administering this chapter;
               (3)  [, and] expenses incurred by the office under this
  chapter;
               (4) [(3)]  programs to assist low-income electric
  customers by providing weatherization or other [the targeted]
  energy efficiency programs [described by Subsection (f)(2);
               [(4)     programs to assist low-income electric customers
  by providing the 20 percent reduced rate prescribed by Subsection
  (h)]; and
               (5)  reimbursement to the commission and the Health and
  Human Services Commission for expenses incurred in the
  implementation and administration of an integrated eligibility
  process created under Section 17.007 for customer service discounts
  relating to retail electric service, including outreach expenses
  the commission determines are reasonable and necessary.
         (f)  The legislature may appropriate from the system benefit
  fund not more than $50 million each state fiscal biennium for the
  purposes of Subsection (e)(4).  Money appropriated from the system
  benefit fund for the purposes of Subsection (e)(4) must be
  transferred to the low-income electric customers program fund for
  disbursement under Section 39.9035.
         Sec. 39.9035.  LOW-INCOME ELECTRIC CUSTOMERS PROGRAM FUND.
  (a)  In this section, "critical care residential customer" means a
  residential customer who has a person permanently residing in the
  customer's home who is diagnosed by a physician as being dependent
  on an electric-powered medical device to sustain life.
         (b)  The commission shall adopt and enforce rules requiring
  transmission and distribution utilities to establish a low-income
  electric customers program fund under commission oversight. The
  rules must provide for:
               (1)  the fund to be established as a trust fund outside
  of the state treasury;
               (2)  the fund to be held by an administrator selected by
  the transmission and distribution utilities in accordance with
  standards adopted by the commission; and
               (3)  any interest earned on money in the fund to be
  credited to the fund.
         (c)  The administrator serves as trustee of the fund for the
  benefit of low-income electric customer programs described by this
  section, and in accordance with commission rules, the administrator
  may make any payments or reimbursements from the fund to further the
  programs. Commission rules must prescribe the maximum percentage
  of money available in the fund that may be used for the expenses of
  administering the fund and for annual independent auditing of the
  fund and expenditures and other transactions related to the fund.
  The commission or its agents may at any time examine any records
  related to the fund or investigate any fund-related expenditures or
  expenses. The administrator and each transmission and distribution
  utility shall fully cooperate with any investigation regarding the
  fund conducted by the commission or its agents.
         (d)  The commission by rule shall impose a nonbypassable
  low-income electric customers program fund fee to be set by the
  commission in an amount not to exceed 50 cents per megawatt hour,
  allocated to customers based on the amount of kilowatt hours used.
         (e)  The commission shall provide for a nonbypassable fee in
  the same amount as the fee imposed under Subsection (d) to be
  imposed on the retail electric customers of a municipally owned
  utility or electric cooperative beginning on the first day of the
  sixth month preceding the date on which the utility or cooperative
  implements customer choice.
         (f)  Commission rules adopted under this section must
  provide that the low-income electric customers program fund fees
  collected for the programs described by this section are collected
  through the rates of the transmission and distribution service
  providers and deposited into the low-income electric customers
  program fund.
         (g)  Except as provided by Subsection (h), money in the
  low-income electric customers program fund may be spent only for
  the following regulatory purposes and must be allocated as follows:
               (1)  not more than 96 percent of the money available in
  the fund must be used to provide a 15 percent reduced rate for
  low-income households for each billing period; and
               (2)  not more than 4 percent of the money available in
  the fund must be used for bill payment assistance for critical care
  residential customers with total household incomes not to exceed
  400 percent of the federal poverty guidelines.
         (h)  Only money appropriated for the purposes of Section
  39.903(e)(4) and transferred to the fund may be used to finance
  low-income electric customer weatherization programs under this
  section.  The programs must be operated by a statewide network of
  federal weatherization program providers under federal
  weatherization program guidelines and may include related
  low-income energy efficiency programs.
         (i) [(f)     Notwithstanding Section 39.106(b), the commission
  shall adopt rules regarding programs to assist low-income electric
  customers on the introduction of customer choice. The programs may
  not be targeted to areas served by municipally owned utilities or
  electric cooperatives that have not adopted customer choice. The
  programs shall include:
               [(1)     reduced electric rates as provided by Subsections
  (h)-(l); and
               [(2)     targeted energy efficiency programs to be
  administered by the Texas Department of Housing and Community
  Affairs in coordination with existing weatherization programs.
         [(g)]  Until customer choice is introduced in a power region,
  an electric utility may not reduce, in any manner, programs already
  offered to assist low-income electric customers.
         (j) [(h)]  The commission shall adopt rules for a retail
  electric provider to determine a reduced rate for eligible
  customers to be discounted off the standard retail service package
  as approved by the commission under Section 39.106 and shall
  require a retail electric provider to apply the same reduction to
  any rate plan under which an eligible low-income electric customer
  is receiving service [, or the price to beat established by Section
  39.202, whichever is lower].  Municipally owned utilities and
  electric cooperatives shall establish a reduced rate for eligible
  customers to be discounted off the standard retail service package
  established under Section 40.053 or 41.053, as appropriate.  The
  reduced rate for a retail electric provider shall result in a total
  charge for each billing period that is at least 15 [10] percent
  [and, if sufficient money in the   system benefit fund is available,
  up to 20 percent,] lower than the amount the customer would
  otherwise be charged for each billing period.  To the extent the
  low-income electric customers program [system benefit] fund is
  insufficient to pay for [fund] the 15 [initial 10] percent rate
  reduction, the commission may increase the fee to an amount of not
  more than 50 [65] cents per megawatt hour, as provided by Subsection
  (d) [(b)].  If the fee is set at 50 [65] cents per megawatt hour or
  if the commission determines that revenues anticipated to be due
  for deposit to the fund are [appropriations are] insufficient to
  pay for [fund] the 15 [10] percent rate reduction, the commission
  shall [may] reduce the rate of the reduction to less than 15 [10]
  percent.  For a municipally owned utility or electric cooperative,
  the reduced rate shall be equal to an amount that can be fully
  funded by that portion of the nonbypassable fee proceeds paid by the
  municipally owned utility or electric cooperative that is allocated
  to the utility or cooperative by the commission under Subsection
  (g) [(e)] for programs for low-income customers of the utility or
  cooperative.  The reduced rate for municipally owned utilities and
  electric cooperatives under this section is in addition to any rate
  reduction that may result from local programs for low-income
  customers of the municipally owned utilities or electric
  cooperatives.
         (k) [(i)]  A retail electric provider, municipally owned
  utility, or electric cooperative seeking reimbursement from the
  low-income electric customers program [system benefit] fund may not
  charge an eligible low-income customer a rate higher than the
  appropriate rate determined under Subsection (j) [(h)].
  Commission rules must provide for [A retail electric provider not
  subject to the price to beat, or] a municipally owned utility or
  electric cooperative subject to the nonbypassable fee under
  Subsection (e) to [(c), shall] be reimbursed from the [system
  benefit] fund for the difference between the reduced rate and the
  rate established under [Section 39.106 or, as appropriate, the rate
  established under] Section 40.053 or 41.053, as appropriate. A
  retail electric provider [who is subject to the price to beat] shall
  be reimbursed from the [system benefit] fund for the difference
  between the reduced rate and the rate plan under which the customer
  is receiving service [the price to beat]. The commission shall
  adopt rules providing for the reimbursement.
         (l) [(j)]  The commission shall adopt rules providing for
  methods of enrolling customers eligible to receive the reduced
  rates determined under Subsection (j) [(h)]. The rules must
  provide for automatic enrollment as one enrollment option. The
  Health and [Texas Department of] Human Services Commission, on
  request of the commission, shall assist in the adoption and
  implementation of these rules. The commission and the Health and 
  [Texas Department of] Human Services Commission shall enter into a
  memorandum of understanding establishing the respective duties of
  the agencies [commission and the department] in relation to the
  automatic enrollment. Rules adopted under this section must
  provide that:
               (1)  an electric customer eligible for the reduced
  rates determined under Subsection (j) is also eligible for reduced
  rates for telecommunications services offered for low-income
  customers; and
               (2)  a customer eligible for reduced rates for
  telecommunications services offered for low-income customers is
  also eligible for the reduced rates established under Subsection
  (j).
         (m) [(j-1)]  The commission shall adopt rules governing the
  bill payment assistance program provided under Subsection (g)(2)
  [(e)(1)(B)].  The rules must provide that a customer is eligible to
  receive the assistance only if the assistance is necessary to
  prevent the disconnection of service for nonpayment of bills for a
  critical care residential customer [and the electric customer is or
  has in the customer's household one or more seriously ill or
  disabled low-income persons whose health or safety may be injured
  by the disconnection].  The commission may prescribe the
  documentation necessary to demonstrate eligibility for the
  assistance and may establish additional eligibility criteria.  The
  Health and Human Services Commission, on request of the commission,
  shall assist in the adoption and implementation of these rules.
         (n) [(k)]  A retail electric provider is prohibited from
  charging the customer a fee for participation in the reduced rate
  program.
         (o)  Notwithstanding Subsections (d), (e), (f), and (j), the
  low-income electric customers program fund fee may not be imposed
  after August 31, 2023.  After that date, the commission and the
  administrator shall undertake to continue the low-income electric
  customers programs described by this section until the balance of
  the fund is exhausted.
         [(l)     For the purposes of this section, a "low-income
  electric customer" is an electric customer:
               [(1)     whose household income is not more than 125
  percent of the federal poverty guidelines; or
               [(2)     who receives food stamps from the Texas
  Department of Human Services or medical assistance from a state
  agency administering a part of the medical assistance program.]
         SECTION 4.  Section 39.905(f), Utilities Code, is amended to
  read as follows:
         (f)  Unless funding is provided under Section 39.9035
  [39.903], each unbundled transmission and distribution utility
  shall include in its energy efficiency plan a weatherization and
  [targeted] low-income energy efficiency program as described by
  Section 39.9035(h) [39.903(f)(2)], and the savings achieved by the
  program shall count toward the transmission and distribution
  utility's energy efficiency goal.  The commission shall determine
  the appropriate level of funding to be allocated to both the
  required weatherization programs [targeted] and standard offer
  low-income energy efficiency programs in each unbundled
  transmission and distribution utility service area.  The level of
  funding for the required weatherization programs and low-income
  energy efficiency programs shall be provided from money approved by
  the commission for the transmission and distribution utility's
  energy efficiency programs.  The commission shall ensure that
  annual expenditures for the required weatherization programs and 
  [targeted] low-income energy efficiency programs of each unbundled
  transmission and distribution utility are not less than 10 percent
  of the transmission and distribution utility's energy efficiency
  budget for the year.  A required weatherization program or a
  [targeted] low-income energy efficiency program must comply with
  the same audit requirements that apply to federal weatherization
  subrecipients.  In an energy efficiency cost recovery factor
  proceeding related to expenditures under this subsection, the
  commission shall make findings of fact regarding whether the
  utility meets requirements imposed under this subsection.  The
  state agency that administers the federal weatherization
  assistance program shall provide reports as required by the
  commission to provide the most current information available on
  energy and peak demand savings achieved in each transmission and
  distribution utility service area.  The agency shall participate in
  energy efficiency cost recovery factor proceedings related to
  expenditures under this subsection to ensure that the required
  weatherization programs and [targeted] low-income weatherization
  programs are consistent with federal weatherization programs and
  adequately funded.
         SECTION 5.  Section 40.001(a), Utilities Code, is amended to
  read as follows:
         (a)  Notwithstanding any other provision of law, except
  Sections 39.155, 39.157(e), 39.203, 39.903, 39.9035, and 39.904,
  this chapter governs the transition to and the establishment of a
  fully competitive electric power industry for municipally owned
  utilities. With respect to the regulation of municipally owned
  utilities, this chapter controls over any other provision of this
  title, except for sections in which the term "municipally owned
  utility" is specifically used.
         SECTION 6.  Section 40.004, Utilities Code, is amended to
  read as follows:
         Sec. 40.004.  JURISDICTION OF COMMISSION. Except as
  specifically otherwise provided in this chapter, the commission has
  jurisdiction over municipally owned utilities only for the
  following purposes:
               (1)  to regulate wholesale transmission rates and
  service, including terms of access, to the extent provided by
  Subchapter A, Chapter 35;
               (2)  to regulate certification of retail service areas
  to the extent provided by Chapter 37;
               (3)  to regulate rates on appeal under Subchapters D
  and E, Chapter 33, subject to Section 40.051(c);
               (4)  to establish a code of conduct as provided by
  Section 39.157(e) applicable to anticompetitive activities and to
  affiliate activities limited to structurally unbundled affiliates
  of municipally owned utilities, subject to Section 40.054;
               (5)  to establish terms and conditions for open access
  to transmission and distribution facilities for municipally owned
  utilities providing customer choice, as provided by Section 39.203;
               (6)  to require collection of the nonbypassable fees
  [fee] established under Section 39.903(b) and Section 39.9035(e);
               (7)  [and] to administer the renewable energy credits
  program under Section 39.904(b) and the natural gas energy credits
  program under Section 39.9044(b); and
               (8) [(7)]  to require reports of municipally owned
  utility operations only to the extent necessary to:
                     (A)  enable the commission to determine the
  aggregate load and energy requirements of the state and the
  resources available to serve that load; or
                     (B)  enable the commission to determine
  information relating to market power as provided by Section 39.155.
         SECTION 7.  Section 41.001, Utilities Code, is amended to
  read as follows:
         Sec. 41.001.  APPLICABLE LAW. Notwithstanding any other
  provision of law, except Sections 39.155, 39.157(e), 39.203,
  39.903, 39.9035, and 39.904, this chapter governs the transition to
  and the establishment of a fully competitive electric power
  industry for electric cooperatives. Regarding the regulation of
  electric cooperatives, this chapter shall control over any other
  provision of this title, except for sections in which the term
  "electric cooperative" is specifically used.
         SECTION 8.  The Public Utility Commission of Texas shall
  adopt or revise, as necessary to implement this Act, rules
  governing the system benefit fund and the low-income electric
  customers program fund under Section 39.903, Utilities Code, as
  amended by this Act, and Section 39.9035, Utilities Code, as added
  by this Act, not later than January 1, 2014.
         SECTION 9.  This Act takes effect September 1, 2013.