S.B. No. 1910

	AN ACT
	relating to the delay of the transition to competition in the
	Western Electricity Coordinating Council service area and to net
	metering and energy efficiency goals and programs for utilities in
	that area.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Chapter 39, Utilities Code, is amended by adding
	Subchapter L to read as follows:
	SUBCHAPTER L. TRANSITION TO COMPETITION AND OTHER PROVISIONS FOR
	CERTAIN AREAS OUTSIDE OF ERCOT
	Sec. 39.551.  APPLICABILITY. (a) This subchapter applies
	only to an investor-owned electric utility:
	(1)  that is operating solely outside of ERCOT in areas
	of this state that were included in the Western Electricity
	Coordinating Council on January 1, 2011;
	(2)  that was not affiliated with ERCOT on January 1,
	2011; and
	(3)  to which Subchapters I, J, and K do not apply.
	(b)  The legislature finds that an electric utility subject
	to this subchapter is unable at this time to offer fair competition
	and reliable service to all retail customer classes in the area
	served by the utility.  As a result, the introduction of retail
	competition for such an electric utility is delayed until fair
	competition and reliable service are available to all retail
	customer classes as determined under this subchapter.
	Sec. 39.552.  COST-OF-SERVICE REGULATION. (a) Until the
	date on which an electric utility subject to this subchapter is
	authorized by the commission under Section 39.553(f) to implement
	retail customer choice, the rates of the utility are subject to
	regulation under Chapter 36.
	(b)  Until the date on which an electric utility subject to
	this subchapter implements customer choice, the provisions of this
	chapter, other than this subchapter and Sections 39.904 and 39.905,
	do not apply to that utility.
	Sec. 39.553.  TRANSITION TO COMPETITION. (a) The events
	prescribed by Subsections (b)-(f) shall be followed to introduce
	retail competition in the service area of an electric utility
	subject to this subchapter. The commission shall ensure that the
	listed items in each stage are completed before the next stage is
	initiated.  Unless stated otherwise, the commission shall conduct
	each activity with the electric utility and other interested
	parties.  The commission may modify the sequence of events required
	by Subsections (b)-(e), but not the substance of the requirements,
	if the commission finds good cause to do so. Full retail
	competition may not begin in the service area of an electric utility
	subject to this subchapter until all actions prescribed by those
	subsections are completed.
	(b)  The first stage for the transition to competition
	consists of the following activities:
	(1)  approval of a regional transmission organization
	by the Federal Energy Regulatory Commission for the power region
	that includes the electric utility's service area and commencement
	of independent operation of the transmission network under the
	approved regional transmission organization;
	(2)  development of retail market protocols to
	facilitate retail competition; and
	(3)  completion of an expedited proceeding to develop
	nonbypassable delivery rates for the customer choice pilot project
	to be implemented under Subsection (c)(1).
	(c)  The second stage for the transition to competition
	consists of the following activities:
	(1)  initiation of the customer choice pilot project in
	accordance with Section 39.104;
	(2)  development of a balancing energy market, a market
	for ancillary services, and a market-based congestion management
	system for the wholesale market in the power region in which the
	regional transmission organization operates; and
	(3)  implementation of a seams agreement with adjacent
	power regions to reduce barriers to entry and facilitate
	competition.
	(d)  The third stage for the transition to competition
	consists of the following activities:
	(1)  the electric utility filing with the commission:
	(A)  an application for business separation in
	accordance with Section 39.051;
	(B)  an application for unbundled transmission
	and distribution rates in accordance with Section 39.201;
	(C)  an application for certification of a
	qualified power region in accordance with Section 39.152; and
	(D)  an application for price-to-beat rates in
	accordance with Section 39.202;
	(2)  the commission:
	(A)  approving a business separation plan for the
	utility;
	(B)  setting unbundled transmission and
	distribution rates for the utility;
	(C)  certifying a qualified power region, which
	includes conducting a formal evaluation of wholesale market power
	in the region, in accordance with Section 39.152;
	(D)  setting price-to-beat rates for the utility;
	and
	(E)  determining which competitive energy
	services must be separated from regulated utility activities in
	accordance with Section 39.051; and
	(3)  completion of the testing of retail and wholesale
	systems, including those systems necessary for switching customers
	to the retail electric provider of their choice and for settlement
	of wholesale market transactions, by the regional transmission
	organization, the registration agent, and market participants.
	(e)  The fourth stage for the transition to competition
	consists of the following activities:
	(1)  commission evaluation of the results of the pilot
	project;
	(2)  initiation by the electric utility of a capacity
	auction in accordance with Section 39.153 at a time to be determined
	by the commission; and
	(3)  separation by the utility of competitive energy
	services from its regulated utility activities, in accordance with
	the commission order approving the separation of competitive energy
	services.
	(f)  The fifth stage for the transition to competition
	consists of the following activities:
	(1)  evaluation by the commission of whether the
	electric utility can offer fair competition and reliable service to
	all retail customer classes in the area served by the utility, and:
	(A)  if the commission concludes that the electric
	utility can offer fair competition and reliable service to all
	retail customer classes in the area served by the utility, the
	commission issuing an order initiating retail competition for the
	utility; and
	(B)  if the commission determines that the
	electric utility cannot offer fair competition and reliable service
	to all retail customer classes in the area served by the utility,
	the commission issuing an order further delaying retail competition
	for the utility; and
	(2)  on the issuance of an order from the commission
	initiating retail competition for the utility, completion by the
	utility of the business separation and unbundling in accordance
	with the commission order approving the unbundling.
	Sec. 39.554.  INTERCONNECTION OF DISTRIBUTED RENEWABLE
	GENERATION. (a)  In this section:
	(1)  "Distributed renewable generation" has the
	meaning assigned by Section 39.916.
	(2)  "Distributed renewable generation owner" means an
	owner of distributed renewable generation that is a retail electric
	customer.
	(3)  "Interconnection" has the meaning assigned by
	Section 39.916.
	(b)  A distributed renewable generation owner in the service
	area of an electric utility subject to this subchapter may request
	interconnection by filing an application for interconnection with
	the utility.  An application for interconnection is subject to the
	utility's safety and reliability requirements.  The utility's
	procedures for the submission and processing of an application for
	interconnection shall be consistent with rules adopted by the
	commission regarding interconnection.
	(c)  An electric utility that approves an application of a
	distributed renewable generation owner under Subsection (b):
	(1)  shall install, maintain, and retain ownership of
	the meter and metering equipment; and
	(2)  may install load research metering equipment on
	the premises of the owner, at no expense to the owner.
	(d)  At the request of an electric utility that approves an
	application of a distributed renewable generation owner under
	Subsection (b), the owner shall:
	(1)  provide and install a meter socket, a metering
	cabinet, or both a socket and cabinet at a location designated by
	the utility on the premises of the owner; and
	(2)  provide, at no expense to the utility, a suitable
	location for the utility to install meters and equipment associated
	with billing and load research.
	(e)  An electric utility that approves an application of a
	distributed renewable generation owner under Subsection (b) shall
	provide to the owner the metering options described by Section
	39.916(f) and an option to interconnect with the utility through a
	single meter that runs forward and backward if:
	(1)  the owner:
	(A)  intends to interconnect the distributed
	renewable generation at an apartment house, as defined by Section
	184.011, occupied by low-income elderly tenants that qualifies for
	master metering under Section 184.012(b) and the distributed
	renewable generation is reasonably expected to generate not less
	than 50 percent of the apartment house's annual electricity use; or
	(B)  has a qualifying facility with a design
	capacity of not more than 50 kilowatts; and
	(2)  the distributed renewable generation or
	qualifying facility that is the subject of the application is rated
	to produce an amount of electricity that is less than or equal to:
	(A)  the owner's estimated annual kilowatt hour
	consumption for a new apartment house or qualifying facility; or
	(B)  the amount of electricity the owner consumed
	in the year before installation of the distributed renewable
	generation or qualifying facility.
	(f)  For a distributed renewable generation owner that
	chooses interconnection through a single meter under Subsection
	(e):
	(1)  the amount of electricity the owner generates
	through distributed renewable generation or a qualifying facility
	for a given billing period offsets the owner's consumption for that
	billing period; and
	(2)  any electricity the owner generates through
	distributed renewable generation or a qualifying facility that
	exceeds the owner's consumption for a given billing period shall be
	credited to the owner under Subsection (g).
	(g)  An electric utility that purchases surplus electricity
	under Subsection (f)(2) shall purchase the electricity from the
	distributed renewable generation owner at the cost of the utility
	as determined by commission rule. The utility shall take
	reasonable steps to inform the owner of the amount of surplus
	electricity purchased from the owner in kilowatt hours during the
	owner's most recent billing cycle.  A credit balance of not more
	than $50 on the owner's monthly bill may be carried forward onto the
	owner's next monthly bill.  The utility shall refund to the owner a
	credit balance that is not carried forward or the portion of a
	credit balance that exceeds $50 if the credit balance is carried
	forward.
	(h)  In a base rate proceeding or fuel cost recovery
	proceeding conducted under Chapter 36, the commission shall ensure
	that any additional cost associated with the metering and payment
	options described by Subsections (e), (f), and (g) is allocated
	only to customer classes that include distributed renewable
	generation owners who have chosen those metering options.
	Sec. 39.555.  MARKETING OF ENERGY EFFICIENCY AND RENEWABLE
	ENERGY PROGRAMS. An electric utility subject to this subchapter
	may market an energy efficiency or renewable energy program
	directly to a retail electric customer in its service territory and
	provide rebate or incentive funds directly to a customer to promote
	or facilitate the success of programs implemented under Section
	39.905.
	SECTION 2.  This Act takes effect immediately if it receives
	a vote of two-thirds of all the members elected to each house, as
	provided by Section 39, Article III, Texas Constitution.  If this
	Act does not receive the vote necessary for immediate effect, this
	Act takes effect September 1, 2011.
	______________________________	______________________________
	President of the Senate	Speaker of the House
	I hereby certify that S.B. No. 1910 passed the Senate on
	May 5, 2011, by the following vote: Yeas 31, Nays 0; and that the
	Senate concurred in House amendment on May 25, 2011, by the
	following vote: Yeas 31, Nays 0.
	______________________________
	Secretary of the Senate
	I hereby certify that S.B. No. 1910 passed the House, with
	amendment, on May 20, 2011, by the following vote: Yeas 148,
	Nays 1, one present not voting.
	______________________________
	Chief Clerk of the House
	Approved:
	______________________________
	Date
	______________________________
	Governor