Office of House Bill AnalysisH.B. 3726
By: Bailey
State Affairs


The purpose of this bill is to ensure that consumers are protected under
any restructuring of  the electric industry of Texas. 

H.B.3726 sets forth the rights and protections of electric energy consumers
and electric industry workers relating to equal opportunity and equitable
treatment of customers, the provision of universal service to residential
consumers, customer privacy, customer billing, change of providers, service
disconnections and supplier terminations, credit and collections practices,
marketing practices, metering, and disputes.  This bill also sets forth
standards that must be established by the Texas Natural Resource and
Conservation Commission (TNRCC) relating to the emissions of pollution,
mercury, and other hazardous substances.  This bill sets forth rules for
labor protections and workforce impact plans and requires TNRCC to enforce
and adopt  rules and orders under this chapter.  In addition, this bill
allows damages and equitable relief to be awarded to customers for
violations of this chapter. 


It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the Public Utility Commission of Texas
in SECTION 1 (Sections 42.001, 42.002, 42.003, 42.024, 42.025, 42.027,
42.030, 42.072, 42.073, Utilities Code), and to the Texas Natural Resource
Conservation Commission in SECTION 1 (Sections 42.052 and 42.054, Utilities


SECTION 1.  Amends Subtitle B, Title 2, Utilities Code, by adding Chapter
42, as follows: 



the Public Utility Commission of Texas (PUC) to ensure each utility treats
each class of its customers equitably and fairly as the utility implements
laws and rules that deregulate the electric industry.  

(b)  Requires PUC, by rule, to ensure that service choices and discount
rates are available to all customers and classes of customers of the
utility, a captive residential customer does not pay any part of a cost
that is avoided by another customer or customer class, and consumers have a
broadened array of services.  Specifies the types of service that are to be
Sec. 42.002.  REIMBURSEMENT FOR PARTICIPATION.  Requires PUC, by rule, to
provide for reimbursement for active participation in commission
proceedings by a nonprofit corporation or a low-income consumer group.  

Sec. 42.003.  UNIVERSAL SERVICE.  Requires PUC, by rule, to ensure that a
utility  offers to residential electric energy consumers, including persons
with low incomes, an affordable basic electric service package.  


Sec. 42.021.  CUSTOMER PRIVACY.  (a) Prohibits a person that distributes or
supplies electric energy to a customer from releasing information about the
customer to any other person without the customer's written permission.
Authorizes a customer that provides written permission to revoke the
permission at any time.  

(b)  Authorizes a person that distributes or supplies electric energy to
customers to release to another person information regarding its customer
base if the information does not disclose information about an individual

(c)  Authorizes a person that distributes or supplies electric energy to
customers to reveal information concerning an individual customer to a law
enforcement agency or a consumer credit collection agency, notwithstanding
Subsection (a) and as otherwise provided by law.  

Sec. 42.022.  CUSTOMER BILLING.  (a) Requires a distributor or supplier of
electric energy to offer to its customers a deferred payment plan and a
billing plan allowing for equal monthly payments.  

(b)  Requires a distributor or supplier of electric energy to provide
specified information on the face of its bills for services. 
Sec. 42.023.  COST SHIFTING; REGULATORY REMEDY.  (a) Prohibits a
distributor or supplier of electric energy from charging a class of
customers for transmission or distribution service in an amount that
exceeds the class's pro rata share of the distributor's or supplier's costs
of transmission or distribution.  

(b)  Requires PUC, if a distributor or supplier's rate differential between
residential and industrial customers exceeds three percent, to adjust
access charges to achieve a differential of no more than three percent.  

Sec. 42.024.  CHANGE OF PROVIDER.  Requires PUC, by rule, to set standards
for contracts between a customer and the persons who provide electric
energy to the customer. Provides that the standards must provide that the
contract may not prohibit the customer from changing to another provider
but may provide for clearly stated penalties under the contract for making
a change of providers.  

Requires PUC, by rule, to provide for protections for consumers designed to
prevent an unreasonable distribution service disconnection or an
unreasonable supply termination.  

(b)  Prohibits a distributor or supplier of electric energy from
disconnecting or terminating a customer's electric service without adequate
notice to the customer or for the customer's failure to pay for any service
besides the supply of electric energy or the failure of the customer's
lessor to pay for service.  

(c)  Prohibits a distributor or supplier of electric energy from
disconnecting or terminating the electric service of a customer who gives
the distributor or supplier a doctor's written notice that a medical
emergency requires continued service or that disconnection or termination
of electric service would cause a medical emergency.  

Sec. 42.026. CREDIT AND COLLECTION PRACTICES.  (a) Requires a distributor
of electric energy that bills for a supplier of electric energy to allocate
a customer's partial payment of an amount due primarily to services
regulated by the regulatory authority and authorize the distributor to
apply the partial payment that remains to satisfy the amounts  owed for the
unregulated services.  

(b) Prohibits a retail supplier of electric energy from refusing to grant a
prospective customer credit on application in contravention of the terms of
the Equal Credit Opportunity Act.  

(c)  Prohibits a retail supplier of electric energy from requiring from a
prospective customer a deposit of more than the amount of the customer's
anticipated bills for the first two months of service.  

Sec. 42.027.  MARKETING PRACTICES.  (a) Requires PUC, by rule, to prohibit
slamming and cramming;  gifts to customers or prospective customers that
exceed the value of $50 from a distributor or supplier of electricity; and
misleading advertising.  

(b)  Requires PUC to require a distributor or supplier of electric energy
to bill customers accurately and understandably; supply customers with
essential information and disclosures expressed clearly in plain English
and Spanish; and meet standards relating to service quality and customer
service, including the installation and repair of equipment related to

Sec. 42.028.  METERING.  Requires a distributor of electric energy to
provide a standard meter at no cost to a customer at a location that the
distributor has not previously served. Authorizes a customer to purchase,
lease, or install a different meter without a penalty. Provides that a
meter must measure time-of-use.  Prohibits a distributor of electric energy
from requiring a customer to use a prepayment meter.  

Sec. 42.029.  DISPUTES.  (a) Requires a distributor or supplier of electric
energy to make a dispute resolution process available to customers that
will protect the interests of the customers.  Prohibits the process from
requiring the arbitration of a dispute payment of an amount in dispute for
the customer to participate in the process. 
(b)  Prohibits a distributor or supplier from disconnecting or terminating
service to a customer while a dispute is pending.  

Sec. 42.030.  CUSTOMER AGGREGATION.  (a) Requires PUC, by rule,  to
encourage the creation of entities to represent aggregations of customers
and other means of customer aggregation, including new municipal electric
systems, franchise contracts, community choice aggregation, and cooperative
buying clubs.  

(b)  Requires PUC to make consumers aggregated by a nonprofit aggregation
eligible to control money collected for energy efficiency and renewable
energy programs.  


Sec. 42.051.  AIR CONTAMINANTS STANDARDS.  (a) Requires the Texas Natural
Resource Conservation Commission (TNRCC) to require all electric generation
facilities to meet standards for the emission of air contaminants per
kilowatt-hour of electric energy generated.  

(b)  Requires TNRCC to establish limitations on the amount of nitrogen
oxides, sulfur dioxide, and carbon dioxide emitted by an electric
generation facility with which each facility is required to comply on or
before January 1, 2005. 
(c) Requires TNRCC to decrease the limitation on carbon dioxide in equal
steps each year so that in the year 2010 not more than 380 million tons of
carbon dioxide may be emitted for the generation of electricity.  

Sec. 42.052.  STANDARDS FOR MERCURY.  Requires TNRCC, by rule, to provide
for the elimination of the use, production, or disposal of mercury by a
generator of electricity not  later than January 1, 2010.  

Sec. 42.053.  STANDARDS FOR RADIOACTIVE WASTE.  Requires TNRCC to provide a
standard for nuclear power generation of electric energy that will reduce
the amount of radiation produced radioactive waste from that process by two
percent each year for high-level radioactive waste and five percent each
year for low-level radioactive waste.  

rule, to provide for the reduction each year of hazardous substances
produced in the generation of electric energy.  


Sec. 42.071.  RECOVERABLE COSTS.  Requires PUC to permit a utility to
recover the costs of a program that provides for voluntary employee
severance, job retraining for employees, early retirement of employees,
continuing health care for employees, outplacement of former employees, and
related benefits.  

Sec. 42.072.  WORKFORCE IMPACT PLAN.  Requires PUC, by rule, to require a
utility to submit a plan for the utility to mitigate the negative effects
on its employees of any workforce reduction.  

Sec. 42.073.  CONTRACT CONSISTENCY.  Requires PUC, by rule, to permit a
change in the ownership of a facility that generates electric energy unless
the owner of the facility agrees to employ the workers at the facility at
similar wage rates and benefits and subject to any labor union contract in


Sec. 42.091.  STATE AGENCY ACTION.  Requires TNRCC to enforce this chapter
and rules adopted and orders issued under this chapter.  

Sec. 42.092.  CUSTOMER DAMAGES.  Provides that a customer injured by a
violation of this chapter, a rule, or order has a cause of action against
the violator for damages or for equitable relief.  Entitles a customer who
prevails in a suit filed under this section to recover attorneys' fees and
court costs.  

SECTION 2.  Emergency clause.
  Effective date: upon passage.