HBA-BSM H.B. 3245 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 3245 By: Hilderbran State Affairs 3/30/2001 Introduced BACKGROUND AND PURPOSE Before providing or extending service to the public, electric utilities and retail electric utilities are required to obtain a Certificate of Convenience and Necessity (CCN) from the Public Utility Commission (PUC) stating that the public convenience and necessity requires or will require the installation, operation, or extension of the service. Municipally owned utilities are not required to obtain PUC approval in the form of a CCN before they construct transmission lines to extend service. This is true even when the municipally owned utility is operating outside of the municipality. Consequently, when operating outside of their municipality, municipally owned utilities have no accountability to the citizens and property owners that are affected. Accountability for utilities comes in the form of PUC oversight and the requirement that utilities obtain a CCN. When operating within their municipality, these municipally owned utilities are accountable to the citizens through the election of their city council members. House Bill 3245 brings a municipality owned utility operating outside of its jurisdiction under the definition of an electric utility. RULEMAKING AUTHORITY 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. ANALYSIS House Bill 3245 amend the Utilities Code to include in the definition of "electric utility", a municipally owned utility when the utility is operating outside the municipality. The change prohibits such a municipally owned utility from providing service to the public unless the utility first obtains a certificate of convenience and necessity from the Public Utility Commission. EFFECTIVE DATE July 1, 2001, or if the Act does not receive the necessary vote, the Act takes effect September 1, 2001.