CHAPTER 11. GENERAL PROVISIONS - Texas Statutes

UTILITIES CODE

TITLE 2. PUBLIC UTILITY REGULATORY ACT

SUBTITLE A. PROVISIONS APPLICABLE TO ALL UTILITIES

CHAPTER 11. GENERAL PROVISIONS

Sec. 11.001. SHORT TITLE. This title may be cited as the Public

Utility Regulatory Act.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Sec. 11.002. PURPOSE AND FINDINGS. (a) This title is enacted

to protect the public interest inherent in the rates and services

of public utilities. The purpose of this title is to establish a

comprehensive and adequate regulatory system for public utilities

to assure rates, operations, and services that are just and

reasonable to the consumers and to the utilities.

(b) Public utilities traditionally are by definition monopolies

in the areas they serve. As a result, the normal forces of

competition that regulate prices in a free enterprise society do

not operate. Public agencies regulate utility rates, operations,

and services as a substitute for competition.

(c) Significant changes have occurred in the telecommunications

and electric power industries since the Public Utility Regulatory

Act was originally adopted. Changes in technology and market

structure have increased the need for minimum standards of

service quality, customer service, and fair business practices to

ensure high-quality service to customers and a healthy

marketplace where competition is permitted by law. It is the

purpose of this title to grant the Public Utility Commission of

Texas authority to make and enforce rules necessary to protect

customers of telecommunications and electric services consistent

with the public interest.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 1999, 76th Leg., ch. 1579, Sec. 1, eff. Aug. 30,

1999.

Sec. 11.003. DEFINITIONS. In this title:

(1) "Affected person" means:

(A) a public utility or electric cooperative affected by an

action of a regulatory authority;

(B) a person whose utility service or rates are affected by a

proceeding before a regulatory authority; or

(C) a person who:

(i) is a competitor of a public utility with respect to a

service performed by the utility; or

(ii) wants to enter into competition with a public utility.

(2) "Affiliate" means:

(A) a person who directly or indirectly owns or holds at least

five percent of the voting securities of a public utility;

(B) a person in a chain of successive ownership of at least five

percent of the voting securities of a public utility;

(C) a corporation that has at least five percent of its voting

securities owned or controlled, directly or indirectly, by a

public utility;

(D) a corporation that has at least five percent of its voting

securities owned or controlled, directly or indirectly, by:

(i) a person who directly or indirectly owns or controls at

least five percent of the voting securities of a public utility;

or

(ii) a person in a chain of successive ownership of at least

five percent of the voting securities of a public utility;

(E) a person who is an officer or director of a public utility

or of a corporation in a chain of successive ownership of at

least five percent of the voting securities of a public utility;

or

(F) a person determined to be an affiliate under Section 11.006.

(3) "Allocation" means the division among municipalities or

among municipalities and unincorporated areas of the plant,

revenues, expenses, taxes, and reserves of a utility used to

provide public utility service in a municipality or for a

municipality and unincorporated areas.

(4) "Commission" means the Public Utility Commission of Texas.

(5) "Commissioner" means a member of the Public Utility

Commission of Texas.

(6) "Cooperative corporation" means:

(A) an electric cooperative; or

(B) a telephone cooperative corporation organized under Chapter

162 or a predecessor statute to Chapter 162 and operating under

that chapter.

(7) "Corporation" means a domestic or foreign corporation,

joint-stock company, or association, and each lessee, assignee,

trustee, receiver, or other successor in interest of the

corporation, company, or association, that has any of the powers

or privileges of a corporation not possessed by an individual or

partnership. The term does not include a municipal corporation or

electric cooperative, except as expressly provided by this title.

(8) "Counsellor" means the public utility counsel.

(9) "Electric cooperative" means:

(A) a corporation organized under Chapter 161 or a predecessor

statute to Chapter 161 and operating under that chapter; or

(B) a corporation organized as an electric cooperative in a

state other than Texas that has obtained a certificate of

authority to conduct affairs in the State of Texas

(C) Deleted by Acts 2003, 78th Leg., ch. 1327, Sec. 1.

(10) "Facilities" means all of the plant and equipment of a

public utility, and includes the tangible and intangible

property, without limitation, owned, operated, leased, licensed,

used, controlled, or supplied for, by, or in connection with the

business of the public utility.

(11) "Municipally owned utility" means a utility owned,

operated, and controlled by a municipality or by a nonprofit

corporation the directors of which are appointed by one or more

municipalities.

(12) "Office" means the Office of Public Utility Counsel.

(13) "Order" means all or a part of a final disposition by a

regulatory authority in a matter other than rulemaking, without

regard to whether the disposition is affirmative or negative or

injunctive or declaratory. The term includes:

(A) the issuance of a certificate of convenience and necessity;

and

(B) the setting of a rate.

(14) "Person" includes an individual, a partnership of two or

more persons having a joint or common interest, a mutual or

cooperative association, and a corporation, but does not include

an electric cooperative.

(15) "Proceeding" means a hearing, investigation, inquiry, or

other procedure for finding facts or making a decision under this

title. The term includes a denial of relief or dismissal of a

complaint.

(16) "Rate" includes:

(A) any compensation, tariff, charge, fare, toll, rental, or

classification that is directly or indirectly demanded, observed,

charged, or collected by a public utility for a service, product,

or commodity described in the definition of utility in Section

31.002 or 51.002; and

(B) a rule, practice, or contract affecting the compensation,

tariff, charge, fare, toll, rental, or classification.

(17) "Ratemaking proceeding" means a proceeding in which a rate

is changed.

(18) "Regulatory authority" means either the commission or the

governing body of a municipality, in accordance with the context.

(19) "Service" has its broadest and most inclusive meaning. The

term includes any act performed, anything supplied, and any

facilities used or supplied by a public utility in the

performance of the utility's duties under this title to its

patrons, employees, other public utilities, an electric

cooperative, and the public. The term also includes the

interchange of facilities between two or more public utilities.

The term does not include the printing, distribution, or sale of

advertising in a telephone directory.

(20) "Test year" means the most recent 12 months, beginning on

the first day of a calendar or fiscal year quarter, for which

operating data for a public utility are available.

(21) "Trade association" means a nonprofit, cooperative, and

voluntarily joined association of business or professional

persons who are employed by public utilities or utility

competitors to assist the public utility industry, a utility

competitor, or the industry's or competitor's employees in

dealing with mutual business or professional problems and in

promoting their common interest.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 1999, 76th Leg., ch. 405, Sec. 1, eff. Sept. 1,

1999; Acts 2003, 78th Leg., ch. 1327, Sec. 1, eff. Sept. 1, 2003.

Sec. 11.004. DEFINITION OF UTILITY. In Subtitle A, "public

utility" or "utility" means:

(1) an electric utility, as that term is defined by Section

31.002; or

(2) a public utility or utility, as those terms are defined by

Section 51.002.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Sec. 11.0042. DEFINITION OF AFFILIATE. (a) The term "person"

or "corporation" as used in the definition of "affiliate"

provided by Section 11.003(2) does not include:

(1) a broker or dealer registered under the Securities Exchange

Act of 1934 (15 U.S.C. Section 78a et seq.), as amended;

(2) a bank or insurance company as defined under the Securities

Exchange Act of 1934 (15 U.S.C. Section 78a et seq.), as amended;

(3) an investment adviser registered under state law or the

Investment Advisers Act of 1940 (15 U.S.C. Section 80b-1 et

seq.); or

(4) an investment company registered under the Investment

Company Act of 1940 (15 U.S.C. Section 80a-1 et seq.); or

(5) an employee benefit plan, pension fund, endowment fund, or

other similar entity that may, directly or indirectly, own, hold,

or control five percent or more of the voting securities of a

public utility or the parent corporation of a public utility if

the entity did not acquire the voting securities:

(A) for the purpose of or with the effect of changing or

influencing the control of the issuer of the securities; or

(B) in connection with or as a participant in any transaction

that changes or influences the control of the issuer of the

securities.

(b) For the purpose of determining whether a person is an

affiliate under Section 11.006(a)(3), the term "person" does not

include an entity that may, directly or indirectly, own, hold, or

control the voting securities of a public utility or the parent

corporation of a public utility if the entity did not acquire the

voting securities:

(1) for the purpose of or with the effect of changing or

influencing the control of the issuer of the securities; or

(2) in connection with or as a participant in any transaction

that changes or influences the control of the issuer of the

securities.

(c) A report filed by an entity described by Subsection (a)(5)

or (b) with the Securities and Exchange Commission is conclusive

evidence of the entity's intent if the report confirms that the

voting securities were not acquired:

(1) for the purpose of or with the effect of changing or

influencing the control of the issuer of the securities; or

(2) in connection with or as a participant in any transaction

that changes or influences the control of the issuer of the

securities.

Added by Acts 2005, 79th Leg., Ch.

413, Sec. 2, eff. June 17, 2005.

Sec. 11.005. ENTITY, COMPETITOR, OR SUPPLIER AFFECTED IN MANNER

OTHER THAN BY SETTING OF RATES. In this title, an entity,

including a utility competitor or utility supplier, is considered

to be affected in a manner other than by the setting of rates for

that class of customer if during a relevant calendar year the

entity provides fuel, utility-related goods, utility-related

products, or utility-related services to a regulated or

unregulated provider of telecommunications or electric services

or to an affiliate in an amount equal to the greater of $10,000

or 10 percent of the person's business.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Sec. 11.006. PERSON DETERMINED TO BE AFFILIATE. (a) The

commission may determine that a person is an affiliate for

purposes of this title if the commission after notice and hearing

finds that the person:

(1) actually exercises substantial influence or control over the

policies and actions of a public utility;

(2) is a person over which a public utility exercises the

control described by Subdivision (1);

(3) is under common control with a public utility; or

(4) together with one or more persons with whom the person is

related by ownership or blood relationship, or by action in

concert, actually exercises substantial influence over the

policies and actions of a public utility even though neither

person may qualify as an affiliate individually.

(b) For purposes of Subsection (a)(3), "common control with a

public utility" means the direct or indirect possession of the

power to direct or cause the direction of the management and

policies of another, without regard to whether that power is

established through ownership or voting of securities or by any

other direct or indirect means.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Sec. 11.007. ADMINISTRATIVE PROCEDURE. (a) Chapter 2001,

Government Code, applies to a proceeding under this title except

to the extent inconsistent with this title.

(b) A communication of a member or employee of the commission

with any person, including a party or a party's representative,

is governed by Section 2001.061, Government Code.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Sec. 11.008. LIBERAL CONSTRUCTION. This title shall be

construed liberally to promote the effectiveness and efficiency

of regulation of public utilities to the extent that this

construction preserves the validity of this title and its

provisions.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Sec. 11.009. CONSTRUCTION WITH FEDERAL AUTHORITY. This title

shall be construed to apply so as not to conflict with any

authority of the United States.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.