Office of House Bill AnalysisH.B. 2151
By: Danburg
State Affairs


With the passage of Senate Bill 7, the 76th legislature restructured the
electric utility industry.  There was a provision within the legislation
that authorized political subdivisions to form political subdivision
corporations (corporations) to aggregate the purchasing of electricity.
However, political subdivisions do not have the ability to get assistance
from corporations in the management of natural gas purchases.  Unlike
private electricity customers, corporations do not have the option of
obtaining certifications as retail electric providers.  House Bill 2151
authorizes such a corporation to assist political subdivisions with natural
gas purchasing and to form and operate as a retail electric provider for
electric consumption by its members. 


It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 


House Bill 2151 amends the Local Government and Utilities codes relating to
the authority of political subdivisions to aggregate, purchase, and sell
energy and natural gas.  The bill adds school districts and special
districts to the definition of "political subdivision."  The bill
authorizes a political subdivision to join with another political
subdivision or subdivisions to form a political subdivision corporation or
corporations (corporation) to negotiate the purchase of natural gas, or
likewise aid or act on behalf of the political subdivisions for which the
corporation is created, with respect to their own natural gas use for their
respective public facilities, in accordance with all applicable laws and
rules.  Additionally, such corporations may provide education and
information services for the political subdivisions for which the
corporation is created, including education and information related to the
aggregation of electricity and natural gas, the purchase, sale, use, and
management of electricity and natural gas, and the operation of facilities
dependent on electricity or natural gas. 

The bill authorizes a corporation to obtain certification as a retail
electric provider and sell electricity as a retail electric provider.  

 The bill authorizes a corporation to negotiate on behalf of its
incorporating political subdivisions for the purchase of natural gas, make
contracts for the purchase of natural gas, purchase natural gas, and take
any other action necessary to purchase or sell natural gas for use in the
public facilities of the political subdivision or subdivisions represented
by the corporation.  The corporation is authorized to take any of the
preceding actions only to the same extent its incorporating political
subdivisions have the authority to take that action under other law.  The
bill does not create new or additional authority for an incorporating
political subdivision to take these actions.  In addition to an aggregation
fee charged per kilowatt hour, the bill authorizes a corporation to recover
its expenses through an aggregation fee charged according to any other
appropriate formula determined by the corporation.    The bill authorizes a
corporation to only aggregate the purchasing of electricity for the
facilities of political subdivisions that receive electric service from an
entity that has implemented customer choice. 


On passage, or if the Act does not receive the necessary vote, the Act
takes effect September 1, 2001.