HBA-KDB, CBW H.B. 918 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 918
By: Turner, Sylvester
State Affairs
2/27/2001
Introduced



BACKGROUND AND PURPOSE 

In the 76th session, the legislature set the groundwork for the state of
Texas to enter a competitive electric market.  However, 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 918 requires the
Public Utility Commission of Texas (PUC) to determine if the electric
market has fair competition and is providing reliable service, and
authorizes the PUC to intervene to protect against market failure. 

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 918 amends the Utilities Code to require the Public Utility
Commission of Texas (PUC) to determine, by December 1, 2001,  if each power
region and each transmission and distribution utility's certificated
service area  is able to offer, on January 1, 2002, fair competition and
reliable service to all retail customer classes in the region or
certificated service area. The bill sets forth  criteria for the PUC to use
when making this determination. 

If the PUC determines that a power region or certificated service area is
unable to sustain fair competition and reliable service or that retail
prices are at a level that violates public interest, the bill specifies
actions that the PUC may take, after notice and a hearing.   The bill
authorizes the PUC to order any registered or certified entity to produce
documents or information relevant to an investigation of market
performance. Moreover, the PUC is required to make the information
available to the office of Public Utility Counsel and PUC staff.  The bill
prohibits an affiliated retail electric provider from recovering from a
customer on a retroactive basis a loss resulting from the provision of
electricity at the price to beat. 

The bill requires a certified independent organization to maintain a task
force to monitor the performance of generation markets.  The bill sets
forth the functions and entitlements of  the task  force, and requires the
independent organization to ensure that the findings of the task force are
not influenced by a seller of generation services. 

EFFECTIVE DATE

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