BILL ANALYSIS

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

Over the past few years, Lubbock Power & Light (LP&L) worked closely with the Electric Reliability Council of Texas (ERCOT), the Public Utility Commission (PUC), and various industry stakeholders to work through the logistics of being the first city to deregulate and join the competitive market. There are several areas that can only be appropriately modified through statutory changes. It is the goal of LP&L to not join the retail competitive market as an outlier, but to ensure it is treated in the same manner as the investor-owned utilities that have operated in this space for over 20 years.  

Two changes are sought in Chapter 40, Utilities Code, in S.B. 1170. First, LP&L does not intend to serve as a retail electric provider after joining the competitive market, and therefore could not practically serve as the provider of last resort (POLR). Therefore, it is asking for the option to delegate the decision-making authority on the POLR to the PUC should it be necessary in the future.

Post go-live of the competitive market in Lubbock, LP&L will serve as a transmission distribution service provider (TDSP) or "wires company" only. Second, LP&L does not intend to serve as a billing agent for electric customers once the transition to competition is complete and seeks to clarify that customers will receive a consolidated bill from their retail electric provider of choice that contains the LP&L TDSP charges.

As proposed, S.B. 1170 amends current law relating to the initiation of customer choice by municipally owned utilities that provide electric service.

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Sections 40.053(c), (d), and (e), Utilities Code, as follows:

(c) Authorizes, rather than requires, a municipally owned utility, on its initiation of customer choice, to designate itself or one or more other entities, rather than another entity, as the provider or providers of last resort for customers within the municipally owned utility's certificated service area as that area existed on the date of the utility's initiation of customer choice. Requires the municipally owned utility to fulfill the role of default provider of last resort in the event no other entity is available to act in that capacity if the municipally owned utility continues to sell electric energy to retail customers after the initiation of customer choice. Authorizes the municipally owned utility to delegate the authority to designate the provider or providers of last resort to the Public Utility Commission of Texas (PUC).

(d) Requires the applicable provider of last resort, if a customer is unable to obtain service from a retail electric provider or a municipally owned utility or electric cooperative offering customer choice, on request by the customer, to offer the customer the standard retail service package for the appropriate customer class with no interruption of service, at a fixed, nondiscountable rate that is at least sufficient to cover the reasonable costs of providing that service, as approved by the governing body of the municipally owned utility that has authority to set rates. Requires the PUC to set the rate each provider of last resort is authorized to charge if a provider of last resort is designated by the PUC.

(e) Authorizes the governing body of a municipally owned utility to establish the procedures and criteria for designating a provider of last resort, rather than the provider of last resort, and to redesignate a provider of last resort, rather than the provider of last resort, according to a schedule it considers appropriate. Provides that the PUC is not required to comply with procedures or criteria adopted by the municipally owned utility if the municipally owned utility delegates authority to the PUC under Subsection (c).

SECTION 2. Amends Section 40.057(c), Utilities Code, as follows:

(c) Provides that a municipally owned utility that opts for customer choice and does not sell electric energy to retail customers is not required to bill directly for distribution, transmission, and generation services provided to retail electric customers located in its certified service area. Authorizes a retail electric provider to provide billing services for distribution, transmission, and generation services provided to those customers. Deletes existing text providing that a customer that is being provided wires service by a municipally owned utility at distribution or transmission voltage and that is served by a retail electric provider for retail service has the option of being billed directly by each service provider or to receive a single bill for distribution, transmission, and generation services from the municipally owned utility.

SECTION 3. Effective date: upon passage or September 1, 2023.