CHAPTER 31. GENERAL PROVISIONS - Texas Statutes

UTILITIES CODE

TITLE 2. PUBLIC UTILITY REGULATORY ACT

SUBTITLE B. ELECTRIC UTILITIES

CHAPTER 31. GENERAL PROVISIONS

Sec. 31.001. LEGISLATIVE FINDINGS; PURPOSE OF SUBTITLE. (a)

This subtitle is enacted to protect the public interest inherent

in the rates and services of electric utilities. The purpose of

this subtitle is to establish a comprehensive and adequate

regulatory system for electric utilities to assure rates,

operations, and services that are just and reasonable to the

consumers and to the electric utilities.

(b) Electric utilities are by definition monopolies in many of

the services provided and areas they serve. As a result, the

normal forces of competition that regulate prices in a free

enterprise society do not always operate. Public agencies

regulate electric utility rates, operations, and services, except

as otherwise provided by this subtitle.

(c) The wholesale electric industry, through federal

legislative, judicial, and administrative actions, is becoming a

more competitive industry that does not lend itself to

traditional electric utility regulatory rules, policies, and

principles. As a result, the public interest requires that rules,

policies, and principles be formulated and applied to protect the

public interest in a more competitive marketplace. The

development of a competitive wholesale electric market that

allows for increased participation by electric utilities and

certain nonutilities is in the public interest.

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

Sec. 31.002. DEFINITIONS. In this subtitle:

(1) "Affiliated power generation company" means a power

generation company that is affiliated with or the successor in

interest of an electric utility certificated to serve an area.

(2) "Affiliated retail electric provider" means a retail

electric provider that is affiliated with or the successor in

interest of an electric utility certificated to serve an area.

(3) "Aggregation" includes the following:

(A) the purchase of electricity from a retail electric provider,

a municipally owned utility, or an electric cooperative by an

electricity customer for its own use in multiple locations,

provided that an electricity customer may not avoid any

nonbypassable charges or fees as a result of aggregating its

load; or

(B) the purchase of electricity by an electricity customer as

part of a voluntary association of electricity customers,

provided that an electricity customer may not avoid any

nonbypassable charges or fees as a result of aggregating its

load.

(4) "Customer choice" means the freedom of a retail customer to

purchase electric services, either individually or through

voluntary aggregation with other retail customers, from the

provider or providers of the customer's choice and to choose

among various fuel types, energy efficiency programs, and

renewable power suppliers.

(5) "Electric Reliability Council of Texas" or "ERCOT" means the

area in Texas served by electric utilities, municipally owned

utilities, and electric cooperatives that is not synchronously

interconnected with electric utilities outside the state.

(6) "Electric utility" means a person or river authority that

owns or operates for compensation in this state equipment or

facilities to produce, generate, transmit, distribute, sell, or

furnish electricity in this state. The term includes a lessee,

trustee, or receiver of an electric utility and a recreational

vehicle park owner who does not comply with Subchapter C, Chapter

184, with regard to the metered sale of electricity at the

recreational vehicle park. The term does not include:

(A) a municipal corporation;

(B) a qualifying facility;

(C) a power generation company;

(D) an exempt wholesale generator;

(E) a power marketer;

(F) a corporation described by Section 32.053 to the extent the

corporation sells electricity exclusively at wholesale and not to

the ultimate consumer;

(G) an electric cooperative;

(H) a retail electric provider;

(I) this state or an agency of this state; or

(J) a person not otherwise an electric utility who:

(i) furnishes an electric service or commodity only to itself,

its employees, or its tenants as an incident of employment or

tenancy, if that service or commodity is not resold to or used by

others;

(ii) owns or operates in this state equipment or facilities to

produce, generate, transmit, distribute, sell, or furnish

electric energy to an electric utility, if the equipment or

facilities are used primarily to produce and generate electric

energy for consumption by that person; or

(iii) owns or operates in this state a recreational vehicle park

that provides metered electric service in accordance with

Subchapter C, Chapter 184.

(7) "Exempt wholesale generator" means a person who is engaged

directly or indirectly through one or more affiliates exclusively

in the business of owning or operating all or part of a facility

for generating electric energy and selling electric energy at

wholesale and who:

(A) does not own a facility for the transmission of electricity,

other than an essential interconnecting transmission facility

necessary to effect a sale of electric energy at wholesale; and

(B) has:

(i) applied to the Federal Energy Regulatory Commission for a

determination under 15 U.S.C. Section 79z-5a; or

(ii) registered as an exempt wholesale generator as required by

Section 35.032.

(8) "Freeze period" means the period beginning on January 1,

1999, and ending on December 31, 2001.

(9) "Independent system operator" means an entity supervising

the collective transmission facilities of a power region that is

charged with nondiscriminatory coordination of market

transactions, systemwide transmission planning, and network

reliability.

(10) "Power generation company" means a person that:

(A) generates electricity that is intended to be sold at

wholesale;

(B) does not own a transmission or distribution facility in this

state other than an essential interconnecting facility, a

facility not dedicated to public use, or a facility otherwise

excluded from the definition of "electric utility" under this

section; and

(C) does not have a certificated service area, although its

affiliated electric utility or transmission and distribution

utility may have a certificated service area.

(11) "Power marketer" means a person who:

(A) becomes an owner of electric energy in this state for the

purpose of selling the electric energy at wholesale;

(B) does not own generation, transmission, or distribution

facilities in this state;

(C) does not have a certificated service area; and

(D) has:

(i) been granted authority by the Federal Energy Regulatory

Commission to sell electric energy at market-based rates; or

(ii) registered as a power marketer under Section 35.032.

(12) "Power region" means a contiguous geographical area which

is a distinct region of the North American Electric Reliability

Council.

(13) "Qualifying cogenerator" and "qualifying small power

producer" have the meanings assigned those terms by 16 U.S.C.

Sections 796(18)(C) and 796(17)(D). A qualifying cogenerator that

provides electricity to the purchaser of the cogenerator's

thermal output is not for that reason considered to be a retail

electric provider or a power generation company.

(14) "Qualifying facility" means a qualifying cogenerator or

qualifying small power producer.

(15) "Rate" includes a compensation, tariff, charge, fare, toll,

rental, or classification that is directly or indirectly

demanded, observed, charged, or collected by an electric utility

for a service, product, or commodity described in the definition

of electric utility in this section and a rule, practice, or

contract affecting the compensation, tariff, charge, fare, toll,

rental, or classification that must be approved by a regulatory

authority.

(16) "Retail customer" means the separately metered end-use

customer who purchases and ultimately consumes electricity.

(17) "Retail electric provider" means a person that sells

electric energy to retail customers in this state. A retail

electric provider may not own or operate generation assets.

(18) "Separately metered" means metered by an individual meter

that is used to measure electric energy consumption by a retail

customer and for which the customer is directly billed by a

utility, retail electric provider, electric cooperative, or

municipally owned utility.

(19) "Transmission and distribution utility" means a person or

river authority that owns or operates for compensation in this

state equipment or facilities to transmit or distribute

electricity, except for facilities necessary to interconnect a

generation facility with the transmission or distribution

network, a facility not dedicated to public use, or a facility

otherwise excluded from the definition of "electric utility"

under this section, in a qualifying power region certified under

Section 39.152, but does not include a municipally owned utility

or an electric cooperative.

(20) "Transmission service" includes construction or enlargement

of facilities, transmission over distribution facilities, control

area services, scheduling resources, regulation services,

reactive power support, voltage control, provision of operating

reserves, and any other associated electrical service the

commission determines appropriate, except that, on and after the

implementation of customer choice, control area services,

scheduling resources, regulation services, provision of operating

reserves, and reactive power support, voltage control, and other

services provided by generation resources are not "transmission

service."

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

Amended by Acts 1999, 76th Leg., ch. 405, Sec. 11, eff. Sept. 1,

1999.

Sec. 31.003. REPORT ON SCOPE OF COMPETITION. (a) Before

January 15 of each odd-numbered year, the commission shall report

to the legislature on the scope of competition in electric

markets and the effect of competition and industry restructuring

on customers in both competitive and noncompetitive markets.

(b) The report under this section must include:

(1) an assessment of the effect of competition on the rates and

availability of electric services for residential and small

commercial customers;

(2) a summary of commission action over the preceding two years

that reflects changes in the scope of competition in regulated

electric markets; and

(3) recommendations to the legislature for legislation that the

commission finds appropriate to promote the public interest in

the context of a partially competitive electric market.

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

Sec. 31.004. ENERGY-EFFICIENT SCHOOL FACILITIES. (a) The

commission may serve as a resource center to assist school

districts in developing energy-efficient facilities.

(b) As a resource center under this section, the commission may:

(1) present programs to school districts relating to managing

energy, training school-plant operators, and designing

energy-efficient buildings;

(2) provide school districts with technical assistance in

managing energy;

(3) collect and distribute information relating to energy

management in school facilities; and

(4) offer energy resource workshops to educators and make

available to educators a film library on energy-related matters

and energy education lesson packages.

(c) The commission shall provide information to school districts

regarding how a school district may finance the installation of

solar electric generation panels for school district buildings.

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

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

939, Sec. 18, eff. September 1, 2007.

Sec. 31.005. CUSTOMER-OPTION PROGRAMS. (a) This section

applies to:

(1) a municipally owned electric utility;

(2) an electric cooperative;

(3) an electric utility;

(4) a power marketer;

(5) a retail electric provider; and

(6) a transmission and distribution utility.

(b) An entity to which this section applies shall consider

establishing customer-option programs that encourage the

reduction of air contaminant emissions, such as:

(1) an appliance retirement and recycling program;

(2) a solar water heating market transformation program;

(3) an air conditioning tune-up program;

(4) a program that allows the use of on-site energy storage as

an eligible efficiency measure in existing programs;

(5) a program that encourages the deployment of advanced

electricity meters;

(6) a program that encourages the installation of cool roofing

materials;

(7) a program that establishes lighting limits;

(8) a distributed energy generation technology program; and

(9) a program that encourages the use of high-efficiency

building distribution transformers and variable air volume fan

controls.

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

1095, Sec. 6, eff. September 1, 2005.