Office of House Bill AnalysisH.B. 3734
By: Longoria
State Affairs


Texas has more than one-million households that are at or below 100 percent
of the Office of Management Budget federal poverty guidelines.  Utilities
can be especially expensive for lower income Texans.  The average family
spends about  four and one-third percent of the household budget on home
energy.  Though low-income families use less electricity than other
residential customers, families with incomes at or below 125 percent of the
poverty guidelines spend 11.6 percent of the household budget on home
energy.  SSI (Supplemental Security Income) and Social Security recipients,
the majority of whom are elderly, spend 19.5 percent and 13 percent of
their household budgets, respectively, on home energy.  The hardest hit are
the AFDC (Aid to Families with Dependent Children) recipients, who spend
44.6 percent of their household budget on home energy expenses.  H.B. 3734
establishes a statewide program to provide a discounted rate and a
comprehensive energy efficiency program for low-income consumers. 


It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to Public Utility Commission of Texas in
SECTION 1 (Section 39.003, Utilities Code) of this bill. 


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

Sec. 39.001.  DEFINITION.  Defines "low-income customer."

Sec. 39.002.  ESTABLISHMENT OF PROGRAM.  Requires the Public Utility
Commission of Texas (commission) to develop affordable electricity and
energy efficiency programs for low-income customers that include the
enumerated features. 
Sec. 39.003  AFFORDABLE ELECTRICITY.  (a)  Requires the commission, by
rule, except as provided by Section 39.004, to require an electric utility
to file a tariff that includes a reduced rate for electric service provided
to low-income customers.  The tariff is authorized to concern the
implementation of this chapter only, is not a rate change under Subchapter
C (General Procedures for Rate Changes Proposed by Utility), Chapter 36,
and does not affect the utility's other rates or services.  
(b)  Provides that the reduced rate must be approximately 20 percent lower
than the rate that the customer would otherwise be charged, and must apply
to the amount of electricity the commission determines is sufficient to
provide necessary lighting, refrigeration, heating, and cooling for the
(c)  Prohibits the reduced rate from varying by time of day or season,
except that the commission is authorized to increase the amount of the
reduction under the enumerated circumstances. 
(d)  Prohibits the utility from charging a customer a fee for participation
in the reduced  rate program.  Requires the utility to offer each
low-income customer a levelized payment plan.  
(e)  Requires the Texas Department of Human Services to provide automatic
enrollment in the reduced rate program for each low-income customer who
receives benefits under federal and state funded income tested programs
administered by the Texas Department of Human Services.  Requires an
alternative procedure for establishing eligibility to be implemented for
income eligible customers that do not currently receive benefits through a
program administered through the Texas Department of Human Services.  
Sec. 39.004.  AGGREGATION PROJECTS.  Authorizes the commission, if
otherwise permitted by law, to establish pilot projects to provide for the
aggregation of the acquisition of electricity by low-income customers.
Authorizes the projects to include acquisition of electricity for
low-income customers by the General Services Commission as part of an
aggregated acquisition of electricity for state agencies.  Requires the
General Services Commission to cooperate with the commission in carrying
out programs.  Authorizes the commission by the rule, if the commission
determines that aggregation will provide an equivalent or greater level of
discount and service as the affordable electricity program under Section
39.003, to continue the aggregation programs and discontinue the affordable
electricity program.  
Sec. 39.005.  FUNDING.  (a)  Requires each electric utility to pay an
annual assessment in the amount determined by the commission to be
necessary to fund the activities specified by Subsection(b), but not more
than one mill for each kilowatt hour sold by the utility to retail
customers in this state.  
(b)  Provides that the assessment must be collected by the comptroller and
deposited to the credit of the affordable electricity account.  Provides
that the affordable electricity account is an account in the general
revenue fund that is authorized to be appropriated only to perform the
enumerated actions. 
(c)  Authorizes the comptroller to require an electric utility to provide
any report or information necessary to fulfill the comptroller's duties
under this section.  

SECTION 2.  Effective date: September 1, 1999.

SECTION 3.  Emergency clause.