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  By: Fraser, Harris, West S.B. No. 482
 
 
A BILL TO BE ENTITLED
AN ACT
relating to competition, customer choice, and customer protection
in the retail electric market; providing an administrative penalty.
       BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
       SECTION 1.  Section 17.008, Utilities Code, is amended to
read as follows:
       Sec. 17.008.  PROTECTION OF RESIDENTIAL ELECTRIC SERVICE
APPLICANTS AND CUSTOMERS.  (a)  In this section and in Section
17.009:
             (1)  "Credit history":
                   (A)  means information regarding an individual's
past history of:
                         (i)  financial responsibility;
                         (ii)  payment habits; or
                         (iii)  creditworthiness; and
                   (B)  does not include an individual's outstanding
balance for retail electric or telecommunications service.
             (2)  "Credit score" means a score, grade, or value that
is derived by a consumer reporting agency, as defined under Section
603(f) of the Fair Credit Reporting Act (15 U.S.C. Section
1681a(f)), using data from a credit history in any type of model,
method, or program for the purpose of grading or ranking credit
report data, whether derived electronically, from an algorithm,
through a computer software application model or program, or
through any other analogous process.
             (3)  "Utility payment data" means a measure that is
derived by a consumer reporting agency, as defined under Section
603(f) of the Fair Credit Reporting Act (15 U.S.C. Section
1681a(f)), from a model specifically designed to correlate to
utility payment histories.
       (b)  A retail electric provider may not deny an applicant's
request to become a residential electric service customer on the
basis of the applicant's credit history or credit score[, but may
use the applicant's utility payment data until the later of January
1, 2007, or the date on which the price to beat is no longer in
effect in the geographic area in which the customer is located].
       (c)  [Notwithstanding Subsection (b), while a retail
electric provider is required to provide service to a geographic
area as the affiliated retail electric provider, the provider may
not deny an applicant's request to become a residential electric
service customer within that geographic area on the basis of the
applicant's credit history, credit score, or utility payment data.
       [(d)  After the date described in Subsection (b), a retail
electric provider, including an affiliated retail electric
provider, may not deny an applicant's request to become a
residential electric service customer on the basis of the
applicant's credit history, credit score, or utility payment data
but may use the applicant's electric bill payment history.
       [(e)]  A retail electric provider may not use a credit score,
a credit history, or utility payment data as the basis for
determining the price for month-to-month electric service or
electric service that includes a fixed price commitment of 12
months or less:
             (1)  for an existing residential customer; or
             (2)  in response to an applicant's request to become a
residential electric service customer.
       (d)  On [(f)After the date described in Subsection (b), on]
request by a customer or former customer in this state, a retail
electric provider or electric utility shall timely provide to the
customer or former customer bill payment history information with
the retail electric provider or electric utility during the
preceding 12-month period. Bill payment history information may be
obtained by the customer or former customer once during each
12-month period without charge. If additional copies of bill
payment history information are requested during a 12-month period,
the electric service provider may charge the customer or former
customer a reasonable fee for each copy.
       (e) [(g)]  On request by a retail electric provider, another
retail electric provider or electric utility shall timely verify
information that purports to show a customer's service and bill
payment history with the retail electric provider or electric
utility.
       (f)  A retail electric provider may not require a person
applying for residential electric service to provide a security
deposit or advance payment as a condition of service if:
             (1)  it can be shown that the person was a customer of
one or more retail electric providers or electric utilities in this
state during the entire 12-month period preceding the request for
electric service; and
             (2)  during the preceding 12-month period, the person
was not late in paying an electric service bill.
       (g)  If a person applying for residential electric service
does not provide the documentation described in Subsection (f),
nothing in this section limits [(h)This section does not limit] a
retail electric provider's authority to require a deposit or
advance payment as a condition of service.
       (h) [(i)]  Notwithstanding Subsection (c) [(e)], a retail
electric provider may provide rewards, benefits, or credits to
residential electric service customers on the basis of the
customer's payment history for retail electric service to that
provider.
       SECTION 2.  Section 39.051, Utilities Code, is amended by
adding Subsection (h) to read as follows:
       (h)  On or before January 1, 2008, an electric utility that
is affiliated with power generation companies that own 5,000
megawatts or more of generating capacity in this state or with
retail electric providers that have annual sales of 10,000,000
megawatt hours or more of electricity in this state shall file with
the commission an unbundling plan for discontinuing, within a
reasonable time determined by the commission, the utility's
affiliation with power generation companies or retail electric
providers.
       SECTION 3.  Section 39.101, Utilities Code, is amended by
amending Subsections (a) and (h) and adding Subsection (i) to read
as follows:
       (a)  Before customer choice begins on January 1, 2002, the
commission shall ensure that retail customer protections are
established that entitle a customer:
             (1)  to safe, reliable, and reasonably priced
electricity, including protection against service disconnections
in an extreme weather emergency as provided by Subsection (h) or in
cases of medical emergency or nonpayment for unrelated services;
             (2)  to privacy of customer consumption and credit
information; provided, however, that the release to competitive
retail electric providers of the names and addresses of residential
customers that were served by the affiliated retail electric
provider at the end of the price to beat period shall not be
considered a violation of customer privacy;
             (3)  to bills presented in a clear format and in
language readily understandable by customers;
             (4)  to the option to have all electric services on a
single bill, except in those instances where multiple bills are
allowed under Chapters 40 and 41;
             (5)  to protection from discrimination on the basis of
race, color, sex, nationality, religion, or marital status;
             (6)  to accuracy of metering and billing;
             (7)  to information in English and Spanish and any
other language as necessary concerning rates, key terms and
conditions, in a standard format that will permit comparisons
between price and service offerings, and the environmental impact
of certain production facilities;
             (8)  to information in English and Spanish and any
other language as necessary concerning low-income assistance
programs and deferred payment plans; and
             (9)  to other information or protections necessary to
ensure high-quality service to customers.
       (h)  A retail electric provider, power generation company,
aggregator, or other entity that provides retail electric service
may not disconnect service to a residential customer during an
extreme weather emergency or on a weekend day. The entity providing
service shall defer collection of the full payment of bills that are
due during an extreme weather emergency until after the emergency
is over and shall offer [work with] customers a deferred payment
plan providing for a period of not less than five months for a
customer to pay deferred amounts [to establish a pay schedule for
deferred bills]. For purposes of this subsection, "extreme weather
emergency" means [a period when]:
             (1)  a day for which the National Weather Service
forecasts that the [previous day's highest] temperature will reach
or fall below [did not exceed] 32 degrees Fahrenheit in any part of
a county in the relevant service territory [and the temperature is
predicted to remain at or below that level for the next 24 hours
according to the nearest National Weather Service reports]; [or]
             (2)  a day for which the National Weather Service
forecasts that the heat index will reach or exceed 100 degrees
Fahrenheit in any part of a county in the relevant service
territory; or
             (3)  a period when, [issues a heat advisory for any
county in the relevant service territory, or when such an advisory
has been issued] on any one of the previous two calendar days, the
National Weather Service observes a heat index of 100 degrees
Fahrenheit or more in any part of a county in the relevant service
territory.
       (i)  A retail electric provider may not state or imply that
it can provide a greater level of reliability of electric service or
preferential treatment in the restoration of service following an
outage; provided, however, that a retail electric provider may make
claims regarding aspects of reliability related to customer
service. The commission may impose an administrative penalty for a
violation of this subsection in accordance with Section 15.024. A
violation of this subsection shall be included in the highest class
of violations in the classification system established by the
commission under Section 15.023.
       SECTION 4.  (a)  Subchapter C, Chapter 39, Utilities Code,
is amended by adding Section 39.1015 to read as follows:
       Sec. 39.1015.  SUSPENSION OF DISCONNECTION FOR CERTAIN
CUSTOMERS. (a)  In this section:
             (1)  "Critical care residential customer" means a
residential electric customer for whom an interruption or
suspension of electric service will create a dangerous or
life-threatening condition.
             (2)  "Elderly low-income customer" means a low-income
customer who is 65 years old or older.
             (3)  "Low-income customer" means an electric customer:
                   (A)  whose household income is not more than 125
percent of the federal poverty guidelines;
                   (B)  who receives food stamps from the Health and
Human Services Commission; or
                   (C)  who receives medical assistance from a state
agency that administers a part of the medical assistance program.
             (4)  "Service provider" means a retail electric
provider, power generation company, aggregator, or other entity
that provides retail electric service.
       (b)  During the period beginning July 1 and ending September
30 of each year a service provider:
             (1)  may not disconnect service or authorize the
disconnection of service to a critical care residential customer or
elderly low-income customer who contacts the service provider
regarding bill payment or in response to a disconnection notice;
             (2)  may not disconnect service or authorize the
disconnection of service to a low-income customer other than an
elderly low-income customer if the customer:
                   (A)  contacts the service provider regarding bill
payment or in response to a disconnection notice; and
                   (B)  enters into a deferred payment plan with the
service provider for the current month's electric charges and meets
the terms of any then current deferred payment plan;
             (3)  shall request reconnection of service or reconnect
service to a critical care residential customer or an elderly
low-income customer whose service is disconnected before or during
the period if:
                   (A)  the customer contacts the service provider
regarding bill payment or in response to a disconnection notice; or
                   (B)  the service provider has previously been
notified that the customer is a critical care residential customer;
             (4)  shall request reconnection of service or reconnect
service to a low-income customer whose service is disconnected
before or during the period if the customer enters into a deferred
payment plan with the service provider; and
             (5)  shall rescind a request for disconnection of
service to a critical care residential customer, elderly low-income
customer, or low-income customer made before the period begins if
the service provider is prohibited under this subsection from
disconnecting or authorizing the disconnection of the customer's
service during the period.
       (c)  A service provider may not disconnect service or
authorize the disconnection of a critical care residential
customer's service during the period provided by Subsection (b)
regardless of whether the customer contacts the service provider as
provided by Subsection (b) if the service provider has previously
been notified that the customer is a critical care residential
customer.
       (d)  A service provider shall allow a critical care
residential customer, elderly low-income customer, or low-income
customer to establish with the provider a deferred payment plan in
person or by telephone. The service provider shall confirm the
payment plan with the customer in writing. The deferred payment
plan may not include a penalty for late payments accrued during the
period provided by Subsection (b). The service provider shall
allow a critical care residential customer, elderly low-income
customer, or low-income customer to renegotiate the terms of the
deferred payment plan at least one time, regardless of whether the
customer's economic or financial circumstances have changed. For a
low-income customer other than an elderly low-income customer,
during the period provided by Subsection (b), the payment plan may
require the payment of not more than 25 percent of the then current
month's charges plus any due installments of a previous deferred
payment plan. For a low-income customer other than an elderly
low-income customer, the service provider is not required to extend
a deferred payment plan entered into under this subsection beyond
the March billing cycle following the period provided by Subsection
(b).
       (e)  A deferred payment plan established under Subsection
(d) for one or more electric bills that come due during the period
provided by Subsection (b) must provide:
             (1)  for a critical care residential customer or
elderly low-income customer, that the customer is not required to
pay more than 25 percent of the deferred electric bills as part of
the first electric bill issued after the end of the period and that
the remaining balance is to be paid in equal installments over the
next five billing cycles, unless the customer requests a lesser
number of installments; and
             (2)  for a low-income customer other than an elderly
low-income customer, that the customer is required to pay not more
than 25 percent of the deferred bills to initiate the agreement and
that the remaining balance is to be paid in equal installments over
the next five billing cycles, unless the customer requests a lesser
number of installments.
       (f)  A service provider may pursue disconnection of
electrical service for a critical care residential customer or an
elderly low-income customer only after the period provided by
Subsection (b) and only if the customer does not meet the terms of
the deferred payment plan, unless the disconnection is otherwise
prohibited. A service provider may pursue disconnection of service
for a low-income customer other than an elderly low-income customer
if the customer does not meet the terms of the deferred payment
plan, unless the disconnection is otherwise prohibited. The
service provider shall give the customer appropriate notice that
the customer has not met the terms of the plan before the service
provider disconnects or authorizes the disconnection of service.
       (g)  A service provider may encourage a critical care
residential customer or elderly low-income customer to make partial
payment of a deferred electric bill during the period provided by
Subsection (b), but the service provider shall clearly inform the
customer that the customer may not be disconnected for nonpayment
before October 1 following the period provided by Subsection (b).
       (b)  This section takes effect June 1, 2007, if this Act
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.  
If this Act does not receive the vote necessary for this section to
take effect on that date, this section takes effect September 30,
2007.
       SECTION 5.  Subchapter C, Chapter 39, Utilities Code, is
amended by adding Section 39.1016 to read as follows:
       Sec. 39.1016.  CANCELLATION OR TERMINATION FEES.  A retail
electric provider may not charge a residential customer who
requests cancellation or termination of retail electric service
provided on a month-to-month basis a fee relating to the
cancellation or termination.
       SECTION 6.  Subchapter C, Chapter 39, Utilities Code, is
amended by adding Section 39.110 to read as follows:
       Sec. 39.110.  PROMOTION OF RESIDENTIAL CUSTOMER CHOICE.
(a)  The purpose of this section is to promote customer choice for
residential customers by imposing a charge on certain retail
electric providers to provide an additional incentive for them to
compete for residential customers.
       (b)  This section applies to a retail electric provider that,
as of December 31, 2006, had more than 250,000 residential
customers and was required to offer service to residential
customers at the price to beat in accordance with Section 39.202,
and to any successor in interest of the retail electric provider,
and any reference in this section to a retail service provider
includes a successor in interest to such provider. This section no
longer applies to a retail electric provider if the retail electric
provider is not assessed a charge under Subsection (c) for two
consecutive years.
       (c)  The commission shall impose an annual charge on a retail
electric provider that is subject to this section if at the end of a
calendar year the number of residential customers served by the
retail electric provider in areas where customer choice is
available outside the transmission and distribution utility
service territory in which it was required to offer the price to
beat is less than 35 percent of the total number of residential
customers served by the retail electric provider in all areas open
to competition in this state.  As used in this subsection, the term
"retail electric provider" includes providers that were affiliates
as of December 31, 2006.
       (d)  The annual charge under this section shall equal the
difference between the number of residential customers that the
retail electric provider served on the last day of the relevant
calendar year in the transmission and distribution utility service
territory in which it was required to offer the price to beat and
the number of residential customers that the retail electric
provider, or other retail electric providers that as of December
31, 2006, were affiliated with the retail electric provider, served
on the last day of the relevant calendar year outside the
transmission and distribution utility service territory in which
the retail electric provider was required to offer the price to beat
multiplied by:
             (1)  $100 at the end of 2007;
             (2)  $200 at the end of 2008; and
             (3)  $300 at the end of 2009.
       (e)  Funds collected from the charge assessed under this
section shall be held in a segregated account by the retail electric
provider and allocated for programs devised and directed by the
commission as follows:
             (1)  a fund for a customer education program in the
transmission and distribution utility service territory in which
the retail electric provider was required to offer the price to beat
and a low-income discount program; and
             (2)  a fund to be paid to residential customers served
by the retail electric provider in the transmission and
distribution utility service territory in which the retail electric
provider was required to offer the price to beat.
       (f)  The commission may adopt and enforce rules as necessary
or appropriate to carry out this section.
       SECTION 7.  Section 39.202, Utilities Code, is amended by
adding Subsections (q) and (r) to read as follows:
       (q)  On a schedule to be determined by the commission, the
commission shall require affiliated retail electric providers to
provide the commission with the names and addresses of residential
customers who have not affirmatively chosen a retail electric
provider or electric service plan. The commission shall release
the names and addresses of those customers to retail electric
providers licensed by the commission and currently offering
residential service. The commission shall provide updated
information on the list of names and addresses to remove the
customers who have affirmatively made a choice in relation to
providers or plans.
       (r)  The commission may conduct a program to assist
residential customers receiving service from an affiliated retail
electric provider under a month-to-month service plan to select a
competitive retail electric provider or plan.
       SECTION 8.  Subchapter E, Chapter 39, Utilities Code, is
amended by adding Section 39.2025 to read as follows:
       Sec. 39.2025.  MARKET REVIEW BASED ON PRICE OF ELECTRICITY.
(a)  The commission may review, as described in Subsection (b), the
price of the electric service plan under which customers who took
service under a price to beat tariff on December 31, 2006, who have
not subsequently chosen an alternate retail electric service plan
are served in a transmission and distribution utility service
territory if:
             (1)  at the end of calendar year 2007 the number of such
customers exceeds 25 percent of the number of residential customers
in the transmission and distribution utility service territory in
which such customers take service; or
             (2)  at the end of calendar year 2008 the number of such
customers exceeds 15 percent of the number of residential customers
in the transmission and distribution utility service territory in
which such customers take service.
       (b)  If the price charged by a retail electric provider to
applicable residential customers is more than two cents per
kilowatt hour higher for more than six consecutive months than the
simple average of the prices charged for other similar electric
service plans in the relevant transmission and distribution utility
service territory, the commission may initiate a review of the
retail electric provider's price charged to such residential
customers. If the commission determines that the retail electric
provider's price charged to such customers is not reasonable based
on its review, the commission may reduce the retail electric
provider's residential price charged to such customers, but not to
less than one cent per kilowatt hour higher than the simple average
of the prices charged for other similar electric service plans in
the relevant transmission and distribution utility service
territory at the time the downward adjustment is required.
       (c)  The commission may adopt and enforce rules as necessary
or appropriate to carry out this section.
       (d)  This section expires on September 1, 2009.
       SECTION 9.  Section 39.902, Utilities Code, is amended by
amending Subsection (c) and adding Subsections (d) and (e) to read
as follows:
       (c)  After the opening of the retail electric market, the
commission shall conduct ongoing customer education designed to
help customers make informed choices of electric services and
retail electric providers. As part of ongoing education, the
commission may provide customers information concerning prices
available in the marketplace, savings available to customers by
switching retail electric providers, plans, and information
concerning specific retail electric providers, including instances
of complaints against them and records relating to quality of
customer service.
       (d)  The commission may require an affiliated retail
electric provider to provide information to customers regarding
savings available to the customer from switching to another retail
electric provider or product in a manner specified by the
commission, including through bill inserts or statements on
customer bills.
       (e)  The commission may require a transmission and
distribution utility to issue public service announcements that
inform customers that service reliability and the restoration of
electric service following an outage is not contingent upon the
customer's receiving service from a particular retail electric
provider.
       SECTION 10.  Except as otherwise provided by this Act, this
Act takes effect immediately if it receives a vote of two-thirds of
all the members elected to each house, as provided by Section 39,
Article III, Texas Constitution. If this Act does not receive the
vote necessary for immediate effect, except as otherwise provided
by this Act, this Act takes effect September 1, 2007.