Office of House Bill AnalysisH.B. 2505
By: Danburg
State Affairs


The price to beat is a pricing component that is intended to foster
competition for residential and small commercial customers and is set by
applying a six percent reduction to the total bundled electric rate in
effect on January 1, 1999 for that customer class.  Under current law, the
price to beat takes effect January 1, 2002 and expires January 1, 2007.
During this period, the affiliate retail electric provider of the local
utility is restricted from charging residential and small commercial class
customers rates that are different from the price to beat in its
traditional service territory until non affiliated retail electric
providers serve 40 percent or more of the load for that customer class or a
period of 36 months has elapsed from the start date of customer choice.
Certain unexpected events have occurred in the electric market, and
consumers may need assurances that the state will proceed into a
deregulated electric market with the proper safeguards and oversight.
House Bill 2505 extends the price to beat expiration date past January 1,
2007 if certain conditions are not met. 


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 2505 amends the Utilities Code to conditionally extend the price
to beat expiration date past January 1, 2007.  The time period is extended
if the Public Utility Commission determines that, for service to
residential and small commercial providers, less than 40 percent of the
electric power consumed by the customer class within the affiliated
transmission and distribution utility's certificated service area before
the onset of customer choice is committed to be served by nonaffiliated
retail electric providers and there are not viable and effective
competitive alternatives for the respective customers who have not chosen
to be served by a nonaffiliated retail electric provider.  The bill
specifies that the affiliated retail electric provider is prohibited from
charging rates for residential or small commercial customers that are lower
than, rather than different from, the price to beat until competitors serve
40 percent of the load for that customer class or a period of 36 months has
elapsed from the start date of retail choice.   


September 1, 2001.