FRASER ANNOUNCES ELECTRICITY LEGISLATION

Austin -- Senator Troy Fraser (R-Horseshoe Bay) announced the filing of a comprehensive package of electricity legislation on Wednesday. The legislation is intended to ensure the competitive electric market is working, help lower rates and encourage consumer choice of retail providers.

"Since 1999 Texas has been held up as the national model for implementing electric deregulation," Fraser said. "We have experienced success throughout the commercial and industrial market, but that success has not translated to the residential side. The legislation filed today will strengthen competitive forces and improve the residential electric market."

The multi-bill package includes a measure to prohibit a utility from exercising market power in a region, as well as a provision which gives the Public Utility Commission (PUC) the ability to make adjustments to assure that residential rates are reasonable. Issues also addressed include the System Benefit Fund and the development of generation that is reliable, economically viable, and environmentally friendly.

"Over the last two years we have been monitoring the status of the Texas electric market and have become concerned at the level of competition available to residential consumers," he said. "Our goal is to expand competition in the marketplace by providing choices and lower prices for consumers."

The legislative package also provides that the PUC can issue a ballot to help consumers choose a more competitive offer; requires that a company refund ratepayers any money received as a result of market power abuses; and requires the System Benefit Fund to be used for its original purposes -- low-income customer assistance and consumer education.

"It is important to explore new innovative generation as one step in stabilizing our electric market," Fraser said. The legislation gives the state the ability to pursue policies which will encourage the use of cleaner technologies to be used in electric generation throughout the state.

Fraser, Chairman of the Senate Committee on Business and Commerce, has been actively engaged in seeking solutions to the rising cost of residential electricity. Senator Fraser held a hearing in November of 2006 where he questioned the CEOs from the three largest electric providers in the state about the status of competition in the residential marketplace.

 

 

SB 482 - RETAIL

Customer Education Issues

Authorizes the PUC to release residential customer data from an AREP to a CREP.

Authorizes the PUC to issue a customer ballot to residential customers remaining on an

AREP's month-to-month plan in order to select another retail electric provider.

Authorizes the PUC to require AREPs to provide information to residential customers via

bill insert and implement other customer education initiatives.

Authorizes the PUC to transfer month-to-month residential customers from an AREP to a

CREP.

Customer Protection Issues

Authorizes the PUC to study the reasonableness of residential rates and make adjustments

to ensure rates are reasonable. Further authorizes the PUC to implement other actions to

correct the market, if necessary.

Requires AREPs to reimburse residential customers a rate based on the following

formula: customers in territory less customers out of territory multiplied by $300.

Provides that if after two years the AREP has not been charged, it would be released from

this provision.

Provides for structural separation.

Prohibits an AREP from implying it is more reliable than any other REP.

SB 483 - WHOLESALE

Requires a utility to sell at auction or divest generation so that it does not control more

than 20% in ERCOT or 20% of generation in a zonal boundary or functional market.

Requires the refund or disgorgement of revenues received as a result of market power

abuses.

Prohibits a utility from implying reliability of service may be impacted based on a

customer's choice of REP.

Prohibits a competitive affiliate from using a utility's corporate name, trademark, brand

or logo after January 1, 2008.

SB 484 - EURLOC

Authorizes the Electric Utility Restructuring Legislative Oversight Committee to study

reliability, economic viability and the environmental impact of new fuels on generation

technology.

SB 485 - SYSTEM BENEFIT FUND

Prohibits the System Benefit Fund from being used for any purpose except those outlined

in Chapter 39 of PURA. Authorizes the PUC to set the nonbypassable fees at an amount

sufficient to ensure funding is available for those purposes.