<num value="1">TITLE 1.</num> <heading>GENERAL PROVISIONS</heading> <chapter identifier="/us/tx/ut/t1/c1"> <num value="1">CHAPTER 1.</num> <heading>GENERAL PROVISIONS</heading> <section identifier="/us/tx/ut/t1/c1/s1.001"> <num value="1.001">Sec. 1.001.</num> <heading>PURPOSE OF CODE</heading> <subsection identifier="/us/tx/ut/t1/c1/s1.001/a"> <num value="a">(a)</num> <content>This code is enacted as a part of the state's continuing statutory revision program, begun by the Texas Legislative Council in 1963 as directed by the legislature in the law codified as Section 323.007, Government Code. The program contemplates a topic-by-topic revision of the state's general and permanent statute law without substantive change.</content> </subsection> <subsection identifier="/us/tx/ut/t1/c1/s1.001/b"> <num value="b">(b)</num> <chapeau>Consistent with the objectives of the statutory revision program, the purpose of this code is to make the law encompassed by this code more accessible and understandable by:</chapeau> <paragraph identifier="/us/tx/ut/t1/c1/s1.001/1"> <num value="1">(1)</num> <content>rearranging the statutes into a more logical order;</content> </paragraph> <paragraph identifier="/us/tx/ut/t1/c1/s1.001/2"> <num value="2">(2)</num> <content>employing a format and numbering system designed to facilitate citation of the law and to accommodate future expansion of the law;</content> </paragraph> <paragraph identifier="/us/tx/ut/t1/c1/s1.001/3"> <num value="3">(3)</num> <content>eliminating repealed, duplicative, unconstitutional, expired, executed, and other ineffective provisions; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t1/c1/s1.001/4"> <num value="4">(4)</num> <content>restating the law in modern American English to the greatest extent possible.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t1/c1/s1.002"> <num value="1.002">Sec. 1.002.</num> <heading>CONSTRUCTION OF CODE</heading> <content>Chapter 311, Government Code (Code Construction Act), applies to the construction of each provision in this code except as otherwise expressly provided by this code.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t1/c1/s1.003"> <num value="1.003">Sec. 1.003.</num> <heading>REFERENCE IN LAW TO STATUTE REVISED BY CODE</heading> <content>A reference in a law to a statute or a part of a statute revised by this code is considered to be a reference to the part of this code that revises that statute or part of that statute.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </chapter>

<num value="1">TITLE 1.</num> <heading>GENERAL PROVISIONS</heading> <chapter identifier="/us/tx/ut/t1/c1"> <num value="1">CHAPTER 1.</num> <heading>GENERAL PROVISIONS</heading> <section identifier="/us/tx/ut/t1/c1/s1.001"> <num value="1.001">Sec. 1.001.</num> <heading>PURPOSE OF CODE</heading> <subsection identifier="/us/tx/ut/t1/c1/s1.001/a"> <num value="a">(a)</num> <content>This code is enacted as a part of the state's continuing statutory revision program, begun by the Texas Legislative Council in 1963 as directed by the legislature in the law codified as Section 323.007, Government Code. The program contemplates a topic-by-topic revision of the state's general and permanent statute law without substantive change.</content> </subsection> <subsection identifier="/us/tx/ut/t1/c1/s1.001/b"> <num value="b">(b)</num> <chapeau>Consistent with the objectives of the statutory revision program, the purpose of this code is to make the law encompassed by this code more accessible and understandable by:</chapeau> <paragraph identifier="/us/tx/ut/t1/c1/s1.001/1"> <num value="1">(1)</num> <content>rearranging the statutes into a more logical order;</content> </paragraph> <paragraph identifier="/us/tx/ut/t1/c1/s1.001/2"> <num value="2">(2)</num> <content>employing a format and numbering system designed to facilitate citation of the law and to accommodate future expansion of the law;</content> </paragraph> <paragraph identifier="/us/tx/ut/t1/c1/s1.001/3"> <num value="3">(3)</num> <content>eliminating repealed, duplicative, unconstitutional, expired, executed, and other ineffective provisions; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t1/c1/s1.001/4"> <num value="4">(4)</num> <content>restating the law in modern American English to the greatest extent possible.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t1/c1/s1.002"> <num value="1.002">Sec. 1.002.</num> <heading>CONSTRUCTION OF CODE</heading> <content>Chapter 311, Government Code (Code Construction Act), applies to the construction of each provision in this code except as otherwise expressly provided by this code.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t1/c1/s1.003"> <num value="1.003">Sec. 1.003.</num> <heading>REFERENCE IN LAW TO STATUTE REVISED BY CODE</heading> <content>A reference in a law to a statute or a part of a statute revised by this code is considered to be a reference to the part of this code that revises that statute or part of that statute.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </chapter> <num value="2">TITLE 2.</num> <heading>PUBLIC UTILITY REGULATORY ACT</heading> <chapter identifier="/us/tx/ut/t2/c11"> <num value="11">CHAPTER 11.</num> <heading>GENERAL PROVISIONS</heading> <section identifier="/us/tx/ut/t2/c11/s11.001"> <num value="11.001">Sec. 11.001.</num> <heading>SHORT TITLE</heading> <content>This title may be cited as the Public Utility Regulatory Act.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c11/s11.002"> <num value="11.002">Sec. 11.002.</num> <heading>PURPOSE AND FINDINGS</heading> <subsection identifier="/us/tx/ut/t2/c11/s11.002/a"> <num value="a">(a)</num> <content>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.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c11/s11.002/b"> <num value="b">(b)</num> <content>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.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c11/s11.002/c"> <num value="c">(c)</num> <content>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.</content> </subsection> <sourceCredit>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.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c11/s11.003"> <num value="11.003">Sec. 11.003.</num> <heading>DEFINITIONS</heading> <chapeau>In this title:</chapeau> <paragraph identifier="/us/tx/ut/t2/c11/s11.003/1"> <num value="1">(1)</num> <chapeau>"Affected person" means:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c11/s11.003/A"> <num value="A">(A)</num> <content>a public utility or electric cooperative affected by an action of a regulatory authority;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c11/s11.003/B"> <num value="B">(B)</num> <content>a person whose utility service or rates are affected by a proceeding before a regulatory authority; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c11/s11.003/C"> <num value="C">(C)</num> <content>a person who:</content> </subparagraph> </paragraph> <subsection identifier="/us/tx/ut/t2/c11/s11.003/i"> <num value="i">(i)</num> <chapeau>is a competitor of a public utility with respect to a service performed by the utility; or</chapeau> <clause identifier="/us/tx/ut/t2/c11/s11.003/ii"> <num value="ii">(ii)</num> <content>wants to enter into competition with a public utility.</content> </clause> <paragraph identifier="/us/tx/ut/t2/c11/s11.003/2"> <num value="2">(2)</num> <chapeau>"Affiliate" means:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c11/s11.003/A"> <num value="A">(A)</num> <content>a person who directly or indirectly owns or holds at least five percent of the voting securities of a public utility;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c11/s11.003/B"> <num value="B">(B)</num> <content>a person in a chain of successive ownership of at least five percent of the voting securities of a public utility;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c11/s11.003/C"> <num value="C">(C)</num> <content>a corporation that has at least five percent of its voting securities owned or controlled, directly or indirectly, by a public utility;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c11/s11.003/D"> <num value="D">(D)</num> <content>a corporation that has at least five percent of its voting securities owned or controlled, directly or indirectly, by:</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c11/s11.003/i"> <num value="i">(i)</num> <chapeau>a person who directly or indirectly owns or controls at least five percent of the voting securities of a public utility; or</chapeau> <clause identifier="/us/tx/ut/t2/c11/s11.003/ii"> <num value="ii">(ii)</num> <content>a person in a chain of successive ownership of at least five percent of the voting securities of a public utility;</content> </clause> <subparagraph identifier="/us/tx/ut/t2/c11/s11.003/E"> <num value="E">(E)</num> <content>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</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c11/s11.003/F"> <num value="F">(F)</num> <content>a person determined to be an affiliate under Section 11.006.</content> </subparagraph> <paragraph identifier="/us/tx/ut/t2/c11/s11.003/3"> <num value="3">(3)</num> <content>"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.</content> <continuation>(3-a) "Chilled water program" means:</continuation> <subparagraph identifier="/us/tx/ut/t2/c11/s11.003/A"> <num value="A">(A)</num> <content>a program to produce chilled water at a central plant and pipe that water to buildings for air conditioning, including a district cooling system or chilled water service; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c11/s11.003/B"> <num value="B">(B)</num> <content>any other program designed to used chilled water to provide air conditioning, reduce peak electric demand, or shift electric load.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c11/s11.003/4"> <num value="4">(4)</num> <content>"Commission" means the Public Utility Commission of Texas.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c11/s11.003/5"> <num value="5">(5)</num> <content>"Commissioner" means a member of the Public Utility Commission of Texas.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c11/s11.003/6"> <num value="6">(6)</num> <chapeau>"Cooperative corporation" means:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c11/s11.003/A"> <num value="A">(A)</num> <content>an electric cooperative; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c11/s11.003/B"> <num value="B">(B)</num> <content>a telephone cooperative corporation organized under Chapter 162 or a predecessor statute to Chapter 162 and operating under that chapter.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c11/s11.003/7"> <num value="7">(7)</num> <content>"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.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c11/s11.003/8"> <num value="8">(8)</num> <content>"Counsellor" means the public utility counsel.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c11/s11.003/9"> <num value="9">(9)</num> <chapeau>"Electric cooperative" means:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c11/s11.003/A"> <num value="A">(A)</num> <content>a corporation organized under Chapter 161 or a predecessor statute to Chapter 161 and operating under that chapter; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c11/s11.003/B"> <num value="B">(B)</num> <content>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.</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c11/s11.003/C"> <num value="C">(C)</num> <content>Deleted by Acts 2003, 78th Leg., ch. 1327, Sec. 1.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c11/s11.003/10"> <num value="10">(10)</num> <content>"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.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c11/s11.003/11"> <num value="11">(11)</num> <content>"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 and includes any chilled water program operated by the utility.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c11/s11.003/12"> <num value="12">(12)</num> <content>"Office" means the Office of Public Utility Counsel.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c11/s11.003/13"> <num value="13">(13)</num> <chapeau>"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:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c11/s11.003/A"> <num value="A">(A)</num> <content>the issuance of a certificate of convenience and necessity; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c11/s11.003/B"> <num value="B">(B)</num> <content>the setting of a rate.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c11/s11.003/14"> <num value="14">(14)</num> <content>"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.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c11/s11.003/15"> <num value="15">(15)</num> <content>"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.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c11/s11.003/16"> <num value="16">(16)</num> <chapeau>"Rate" includes:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c11/s11.003/A"> <num value="A">(A)</num> <content>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</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c11/s11.003/B"> <num value="B">(B)</num> <content>a rule, practice, or contract affecting the compensation, tariff, charge, fare, toll, rental, or classification.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c11/s11.003/17"> <num value="17">(17)</num> <content>"Ratemaking proceeding" means a proceeding in which a rate is changed.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c11/s11.003/18"> <num value="18">(18)</num> <content>"Regulatory authority" means either the commission or the governing body of a municipality, in accordance with the context.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c11/s11.003/19"> <num value="19">(19)</num> <content>"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.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c11/s11.003/20"> <num value="20">(20)</num> <content>"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.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c11/s11.003/21"> <num value="21">(21)</num> <content>"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.</content> </paragraph> </subsection> <sourceCredit>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. Amended by: Acts 2021, 87th Leg., R.S., Ch. 277 (H.B. 3615), Sec. 2, eff. September 1, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c11/s11.004"> <num value="11.004">Sec. 11.004.</num> <heading>DEFINITION OF UTILITY</heading> <chapeau>In Subtitle A, "public utility" or "utility" means:</chapeau> <paragraph identifier="/us/tx/ut/t2/c11/s11.004/1"> <num value="1">(1)</num> <content>an electric utility, as that term is defined by Section 31.002; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c11/s11.004/2"> <num value="2">(2)</num> <content>a public utility or utility, as those terms are defined by Section 51.002.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c11/s11.0042"> <num value="11.0042">Sec. 11.0042.</num> <heading>DEFINITION OF AFFILIATE</heading> <subsection identifier="/us/tx/ut/t2/c11/s11.0042/a"> <num value="a">(a)</num> <chapeau>The term "person" or "corporation" as used in the definition of "affiliate" provided by Section 11.003(2) does not include:</chapeau> <paragraph identifier="/us/tx/ut/t2/c11/s11.0042/1"> <num value="1">(1)</num> <content>a broker or dealer registered under the Securities Exchange Act of 1934 (15 U.S.C. Section 78a et seq.), as amended;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c11/s11.0042/2"> <num value="2">(2)</num> <content>a bank or insurance company as defined under the Securities Exchange Act of 1934 (15 U.S.C. Section 78a et seq.), as amended;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c11/s11.0042/3"> <num value="3">(3)</num> <content>an investment adviser registered under state law or the Investment Advisers Act of 1940 (15 U.S.C. Section 80b-1 et seq.); or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c11/s11.0042/4"> <num value="4">(4)</num> <content>an investment company registered under the Investment Company Act of 1940 (15 U.S.C. Section 80a-1 et seq.); or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c11/s11.0042/5"> <num value="5">(5)</num> <chapeau>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:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c11/s11.0042/A"> <num value="A">(A)</num> <content>for the purpose of or with the effect of changing or influencing the control of the issuer of the securities; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c11/s11.0042/B"> <num value="B">(B)</num> <content>in connection with or as a participant in any transaction that changes or influences the control of the issuer of the securities.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c11/s11.0042/b"> <num value="b">(b)</num> <chapeau>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:</chapeau> <paragraph identifier="/us/tx/ut/t2/c11/s11.0042/1"> <num value="1">(1)</num> <content>for the purpose of or with the effect of changing or influencing the control of the issuer of the securities; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c11/s11.0042/2"> <num value="2">(2)</num> <content>in connection with or as a participant in any transaction that changes or influences the control of the issuer of the securities.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c11/s11.0042/c"> <num value="c">(c)</num> <chapeau>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:</chapeau> <paragraph identifier="/us/tx/ut/t2/c11/s11.0042/1"> <num value="1">(1)</num> <content>for the purpose of or with the effect of changing or influencing the control of the issuer of the securities; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c11/s11.0042/2"> <num value="2">(2)</num> <content>in connection with or as a participant in any transaction that changes or influences the control of the issuer of the securities.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., Ch. 413 (S.B. 1668), Sec. 2, eff. June 17, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c11/s11.005"> <num value="11.005">Sec. 11.005.</num> <heading>ENTITY, COMPETITOR, OR SUPPLIER AFFECTED IN MANNER OTHER THAN BY SETTING OF RATES</heading> <content>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.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c11/s11.006"> <num value="11.006">Sec. 11.006.</num> <heading>PERSON DETERMINED TO BE AFFILIATE</heading> <subsection identifier="/us/tx/ut/t2/c11/s11.006/a"> <num value="a">(a)</num> <chapeau>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:</chapeau> <paragraph identifier="/us/tx/ut/t2/c11/s11.006/1"> <num value="1">(1)</num> <content>actually exercises substantial influence or control over the policies and actions of a public utility;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c11/s11.006/2"> <num value="2">(2)</num> <content>is a person over which a public utility exercises the control described by Subdivision (1);</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c11/s11.006/3"> <num value="3">(3)</num> <content>is under common control with a public utility; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c11/s11.006/4"> <num value="4">(4)</num> <content>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.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c11/s11.006/b"> <num value="b">(b)</num> <content>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.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c11/s11.007"> <num value="11.007">Sec. 11.007.</num> <heading>ADMINISTRATIVE PROCEDURE</heading> <subsection identifier="/us/tx/ut/t2/c11/s11.007/a"> <num value="a">(a)</num> <content>Chapter 2001, Government Code, applies to a proceeding under this title except to the extent inconsistent with this title.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c11/s11.007/b"> <num value="b">(b)</num> <content>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.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c11/s11.008"> <num value="11.008">Sec. 11.008.</num> <heading>LIBERAL CONSTRUCTION</heading> <content>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.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c11/s11.009"> <num value="11.009">Sec. 11.009.</num> <heading>CONSTRUCTION WITH FEDERAL AUTHORITY</heading> <content>This title shall be construed to apply so as not to conflict with any authority of the United States.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </chapter> <chapter identifier="/us/tx/ut/t2/c12"> <num value="12">CHAPTER 12.</num> <heading>ORGANIZATION OF COMMISSION</heading> <subchapter identifier="/us/tx/ut/t2/c12/scA"> <num value="A">SUBCHAPTER A.</num> <heading>GENERAL PROVISIONS</heading> <section identifier="/us/tx/ut/t2/c12/scA/s12.001"> <num value="12.001">Sec. 12.001.</num> <heading>PUBLIC UTILITY COMMISSION OF TEXAS</heading> <content>The Public Utility Commission of Texas exercises the jurisdiction and powers conferred by this title.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c12/scA/s12.002"> <num value="12.002">Sec. 12.002.</num> <heading>OFFICE</heading> <subsection identifier="/us/tx/ut/t2/c12/scA/s12.002/a"> <num value="a">(a)</num> <content>The principal office of the commission is in Austin.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c12/scA/s12.002/b"> <num value="b">(b)</num> <content>The office shall be open daily during usual business hours. The office is not required to be open on Saturday, Sunday, or a legal holiday.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c12/scA/s12.003"> <num value="12.003">Sec. 12.003.</num> <heading>SEAL</heading> <subsection identifier="/us/tx/ut/t2/c12/scA/s12.003/a"> <num value="a">(a)</num> <content>The commission has a seal bearing the inscription: "Public Utility Commission of Texas."</content> </subsection> <subsection identifier="/us/tx/ut/t2/c12/scA/s12.003/b"> <num value="b">(b)</num> <content>The seal shall be affixed to each record and to an authentication of a copy of a record. The commission may require the seal to be affixed to other instruments.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c12/scA/s12.003/c"> <num value="c">(c)</num> <content>A court of this state shall take judicial notice of the seal.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c12/scA/s12.004"> <num value="12.004">Sec. 12.004.</num> <heading>REPRESENTATION BY THE ATTORNEY GENERAL</heading> <content>The attorney general shall represent the commission in a matter before a state court, a court of the United States, or a federal public utility regulatory commission.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c12/scA/s12.005"> <num value="12.005">Sec. 12.005.</num> <heading>APPLICATION OF SUNSET ACT</heading> <content>The Public Utility Commission of Texas is subject to Chapter 325, Government Code (Texas Sunset Act). Unless continued in existence as provided by that chapter or by Chapter 39, the commission is abolished September 1, 2029.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 405, Sec. 2, eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 1212, Sec. 1, eff. Sept. 1, 1999. Amended by: Acts 2005, 79th Leg., Ch. 797 (S.B. 408), Sec. 1, eff. September 1, 2005. Acts 2011, 82nd Leg., R.S., Ch. 1232 (S.B. 652), Sec. 1.08(a), eff. June 17, 2011. Acts 2013, 83rd Leg., R.S., Ch. 170 (H.B. 1600), Sec. 1.01, eff. September 1, 2013. Acts 2019, 86th Leg., R.S., Ch. 596 (S.B. 619), Sec. 3.07, eff. June 10, 2019. Acts 2021, 87th Leg., R.S., Ch. 850 (S.B. 713), Sec. 1.06, eff. June 16, 2021. Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 1, eff. September 1, 2023.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c12/scB"> <num value="B">SUBCHAPTER B.</num> <heading>COMMISSION APPOINTMENT AND FUNCTIONS</heading> <section identifier="/us/tx/ut/t2/c12/scB/s12.051"> <num value="12.051">Sec. 12.051.</num> <heading>APPOINTMENT; TERM</heading> <subsection identifier="/us/tx/ut/t2/c12/scB/s12.051/a"> <num value="a">(a)</num> <content>The commission is composed of five commissioners appointed by the governor with the advice and consent of the senate.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c12/scB/s12.051/b"> <num value="b">(b)</num> <content>An appointment to the commission shall be made without regard to the race, color, disability, sex, religion, age, or national origin of the appointee.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c12/scB/s12.051/c"> <num value="c">(c)</num> <content>Commissioners serve staggered, six-year terms.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2021, 87th Leg., R.S., Ch. 1052 (S.B. 2154), Sec. 1, eff. June 18, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c12/scB/s12.052"> <num value="12.052">Sec. 12.052.</num> <heading>PRESIDING OFFICER</heading> <subsection identifier="/us/tx/ut/t2/c12/scB/s12.052/a"> <num value="a">(a)</num> <content>The governor shall designate a commissioner as the presiding officer.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c12/scB/s12.052/b"> <num value="b">(b)</num> <content>The presiding officer serves in that capacity at the pleasure of the governor.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c12/scB/s12.0521"> <num value="12.0521">Sec. 12.0521.</num> <heading>PRESIDING OFFICER QUALIFICATIONS</heading> <content>The commissioner designated as the presiding officer must be a resident of this state.</content> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 425 (S.B. 2), Sec. 1, eff. June 8, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c12/scB/s12.053"> <num value="12.053">Sec. 12.053.</num> <heading>MEMBERSHIP QUALIFICATIONS</heading> <subsection identifier="/us/tx/ut/t2/c12/scB/s12.053/a"> <num value="a">(a)</num> <chapeau>To be eligible for appointment, a commissioner must:</chapeau> <paragraph identifier="/us/tx/ut/t2/c12/scB/s12.053/1"> <num value="1">(1)</num> <content>be a qualified voter;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c12/scB/s12.053/2"> <num value="2">(2)</num> <content>be a citizen of the United States;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c12/scB/s12.053/3"> <num value="3">(3)</num> <content>be a resident of this state;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c12/scB/s12.053/4"> <num value="4">(4)</num> <content>be a competent and experienced administrator; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c12/scB/s12.053/5"> <num value="5">(5)</num> <chapeau>have at least five years of experience:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c12/scB/s12.053/A"> <num value="A">(A)</num> <content>in the administration of business or government; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c12/scB/s12.053/B"> <num value="B">(B)</num> <content>as a practicing attorney, certified public accountant, or professional engineer.</content> <continuation>(a-1) At least two commissioners must be well informed and qualified in the field of public utilities and utility regulation.</continuation> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c12/scB/s12.053/b"> <num value="b">(b)</num> <chapeau>A person is not eligible for appointment as a commissioner if the person:</chapeau> <paragraph identifier="/us/tx/ut/t2/c12/scB/s12.053/1"> <num value="1">(1)</num> <chapeau>at any time during the one year preceding appointment:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c12/scB/s12.053/A"> <num value="A">(A)</num> <content>personally served as an officer, director, owner, employee, partner, or legal representative of a public utility regulated by the commission or of an affiliate or direct competitor of a public utility regulated by the commission;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c12/scB/s12.053/B"> <num value="B">(B)</num> <content>owned or controlled, directly or indirectly, more than a 10 percent interest in a public utility regulated by the commission or in an affiliate or direct competitor of a public utility regulated by the commission; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c12/scB/s12.053/C"> <num value="C">(C)</num> <content>served as an executive officer listed under Section 1, Article IV, Texas Constitution, other than the secretary of state, or a member of the legislature; or</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c12/scB/s12.053/2"> <num value="2">(2)</num> <content>is not qualified to serve under Section 12.151, 12.152, or 12.153.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2013, 83rd Leg., R.S., Ch. 170 (H.B. 1600), Sec. 1.02, eff. September 1, 2013. Acts 2021, 87th Leg., R.S., Ch. 1052 (S.B. 2154), Sec. 2, eff. June 18, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c12/scB/s12.054"> <num value="12.054">Sec. 12.054.</num> <heading>REMOVAL OF COMMISSIONER</heading> <subsection identifier="/us/tx/ut/t2/c12/scB/s12.054/a"> <num value="a">(a)</num> <chapeau>It is a ground for removal from the commission if a commissioner:</chapeau> <paragraph identifier="/us/tx/ut/t2/c12/scB/s12.054/1"> <num value="1">(1)</num> <content>does not have at the time of appointment or maintain during service on the commission the qualifications required by Section 12.053;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c12/scB/s12.054/2"> <num value="2">(2)</num> <content>violates a prohibition provided by Section 12.053 or by Subchapter D;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c12/scB/s12.054/3"> <num value="3">(3)</num> <content>cannot discharge the commissioner's duties for a substantial part of the term for which the commissioner is appointed because of illness or disability; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c12/scB/s12.054/4"> <num value="4">(4)</num> <content>is absent from more than half of the regularly scheduled commission meetings that the commissioner is eligible to attend during a calendar year unless the absence is excused by majority vote of the commission.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c12/scB/s12.054/b"> <num value="b">(b)</num> <content>The validity of an action of the commission is not affected by the fact that the action is taken when a ground for removal of a commissioner exists.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c12/scB/s12.054/c"> <num value="c">(c)</num> <content>If the executive director has knowledge that a potential ground for removal exists, the executive director shall notify the presiding officer of the commission of the potential ground. The presiding officer shall then notify the governor and the attorney general that a potential ground for removal exists. If the potential ground for removal involves the presiding officer, the executive director shall notify the next highest officer of the commission, who shall notify the governor and the attorney general that a potential ground for removal exists.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c12/scB/s12.055"> <num value="12.055">Sec. 12.055.</num> <heading>PROHIBITION ON SEEKING ANOTHER OFFICE</heading> <content>A person may not seek nomination or election to another civil office of this state or of the United States while serving as a commissioner. If a commissioner files for nomination or election to another civil office of this state or of the United States, the person's office as commissioner immediately becomes vacant, and the governor shall appoint a successor.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c12/scB/s12.056"> <num value="12.056">Sec. 12.056.</num> <heading>EFFECT OF VACANCY</heading> <content>A vacancy or disqualification does not prevent the remaining commissioner or commissioners from exercising the powers of the commission.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c12/scB/s12.057"> <num value="12.057">Sec. 12.057.</num> <heading>COMPENSATION</heading> <content>The annual salary of the commissioners is determined by the legislature.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c12/scB/s12.058"> <num value="12.058">Sec. 12.058.</num> <heading>MEETINGS</heading> <content>The commission shall hold meetings at its office and at other convenient places in this state as expedient and necessary for the proper performance of the commission's duties.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c12/scB/s12.059"> <num value="12.059">Sec. 12.059.</num> <heading>TRAINING PROGRAM FOR COMMISSIONERS</heading> <subsection identifier="/us/tx/ut/t2/c12/scB/s12.059/a"> <num value="a">(a)</num> <content>A person who is appointed to and qualifies for office as a member of the commission may not vote, deliberate, or be counted as a member in attendance at a meeting of the commission until the person completes a training program that complies with this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c12/scB/s12.059/b"> <num value="b">(b)</num> <chapeau>The training program must provide the person with information regarding:</chapeau> <paragraph identifier="/us/tx/ut/t2/c12/scB/s12.059/1"> <num value="1">(1)</num> <content>the law governing commission operations;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c12/scB/s12.059/2"> <num value="2">(2)</num> <content>the programs, functions, rules, and budget of the commission;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c12/scB/s12.059/3"> <num value="3">(3)</num> <content>the scope of and limitations on the rulemaking authority of the commission;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c12/scB/s12.059/4"> <num value="4">(4)</num> <content>the results of the most recent formal audit of the commission;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c12/scB/s12.059/5"> <num value="5">(5)</num> <chapeau>the requirements of:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c12/scB/s12.059/A"> <num value="A">(A)</num> <content>laws relating to open meetings, public information, administrative procedure, and disclosing conflicts of interest; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c12/scB/s12.059/B"> <num value="B">(B)</num> <content>other laws applicable to members of a state policy-making body in performing their duties; and</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c12/scB/s12.059/6"> <num value="6">(6)</num> <content>any applicable ethics policies adopted by the commission or the Texas Ethics Commission.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c12/scB/s12.059/c"> <num value="c">(c)</num> <content>A person appointed to the commission is entitled to reimbursement, as provided by the General Appropriations Act, for the travel expenses incurred in attending the training program regardless of whether the attendance at the program occurs before or after the person qualifies for office.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c12/scB/s12.059/d"> <num value="d">(d)</num> <content>The executive director of the commission shall create a training manual that includes the information required by Subsection (b). The executive director shall distribute a copy of the training manual annually to each member of the commission. Each member of the commission shall sign and submit to the executive director a statement acknowledging that the member received and has reviewed the training manual.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2005, 79th Leg., Ch. 797 (S.B. 408), Sec. 2, eff. September 1, 2005. Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 2, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c12/scB/s12.060"> <num value="12.060">Sec. 12.060.</num> <heading>FORMER COMMISSIONER: LOBBYING RESTRICTED</heading> <content>A former member of the commission may not, before the first anniversary of the date the member ceases to be a member of the commission, engage in an activity before the commission that requires registration under Chapter 305, Government Code.</content> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 1052 (S.B. 2154), Sec. 3, eff. June 18, 2021.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c12/scC"> <num value="C">SUBCHAPTER C.</num> <heading>COMMISSION PERSONNEL</heading> <section identifier="/us/tx/ut/t2/c12/scC/s12.101"> <num value="12.101">Sec. 12.101.</num> <heading>COMMISSION EMPLOYEES</heading> <chapeau>The commission shall employ:</chapeau> <paragraph identifier="/us/tx/ut/t2/c12/scC/s12.101/1"> <num value="1">(1)</num> <content>an executive director; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c12/scC/s12.101/2"> <num value="2">(2)</num> <content>officers and other employees the commission considers necessary to administer this title.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 405, Sec. 3, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c12/scC/s12.102"> <num value="12.102">Sec. 12.102.</num> <heading>DUTIES OF EMPLOYEES</heading> <content>The commission shall develop and implement policies that clearly separate the policymaking responsibilities of the commission and the management responsibilities of the commission employees.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2005, 79th Leg., Ch. 797 (S.B. 408), Sec. 3, eff. September 1, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c12/scC/s12.103"> <num value="12.103">Sec. 12.103.</num> <heading>DUTIES OF EXECUTIVE DIRECTOR</heading> <content>The executive director is responsible for the daily operations of the commission and shall coordinate the activities of commission employees.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c12/scC/s12.105"> <num value="12.105">Sec. 12.105.</num> <heading>CAREER LADDER PROGRAM; PERFORMANCE EVALUATIONS; MERIT PAY</heading> <subsection identifier="/us/tx/ut/t2/c12/scC/s12.105/a"> <num value="a">(a)</num> <content>The executive director or the executive director's designee shall develop an intra-agency career ladder program that addresses opportunities for mobility and advancement for commission employees. The program shall require intra-agency posting of each position concurrently with any public posting.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c12/scC/s12.105/b"> <num value="b">(b)</num> <content>The executive director or the executive director's designee shall develop a system of annual performance evaluations that are based on documented employee performance. Merit pay for commission employees must be based on the system established under this subsection.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c12/scC/s12.106"> <num value="12.106">Sec. 12.106.</num> <heading>EQUAL EMPLOYMENT OPPORTUNITY POLICY STATEMENT</heading> <subsection identifier="/us/tx/ut/t2/c12/scC/s12.106/a"> <num value="a">(a)</num> <content>The executive director or the executive director's designee shall prepare and maintain a written policy statement to ensure implementation of a program of equal employment opportunity under which all personnel transactions are made without regard to race, color, disability, sex, religion, age, or national origin.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c12/scC/s12.106/b"> <num value="b">(b)</num> <chapeau>The policy statement under Subsection (a) must include:</chapeau> <paragraph identifier="/us/tx/ut/t2/c12/scC/s12.106/1"> <num value="1">(1)</num> <content>personnel policies, including policies related to recruitment, evaluation, selection, appointment, training, and promotion of personnel, that are in compliance with the requirements of Chapter 21, Labor Code;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c12/scC/s12.106/2"> <num value="2">(2)</num> <content>a comprehensive analysis of the commission workforce that meets federal and state guidelines;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c12/scC/s12.106/3"> <num value="3">(3)</num> <content>procedures by which a determination can be made about the extent of underuse in the commission workforce of all persons for whom federal or state guidelines encourage a more equitable balance; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c12/scC/s12.106/4"> <num value="4">(4)</num> <content>reasonable methods to appropriately address the underuse.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c12/scC/s12.106/c"> <num value="c">(c)</num> <chapeau>A policy statement prepared under Subsection (b) must:</chapeau> <paragraph identifier="/us/tx/ut/t2/c12/scC/s12.106/1"> <num value="1">(1)</num> <content>cover an annual period;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c12/scC/s12.106/2"> <num value="2">(2)</num> <content>be updated at least annually;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c12/scC/s12.106/3"> <num value="3">(3)</num> <content>be reviewed by the Commission on Human Rights for compliance with Subsection (b)(1); and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c12/scC/s12.106/4"> <num value="4">(4)</num> <content>be filed with the governor's office.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c12/scC/s12.106/d"> <num value="d">(d)</num> <content>The governor's office shall deliver a biennial report to the legislature based on the information received under Subsection (c). The report may be made separately or as a part of other biennial reports to the legislature.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c12/scC/s12.107"> <num value="12.107">Sec. 12.107.</num> <heading>CRIMINAL HISTORY CHECKS FOR CERTAIN EMPLOYEES</heading> <content>Before hiring a person as an employee, the commission may obtain from the Department of Public Safety or a private vendor all criminal history record information relating to the prospective employee.</content> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 154 (S.B. 1112), Sec. 2, eff. September 1, 2023.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c12/scD"> <num value="D">SUBCHAPTER D.</num> <heading>PROHIBITED RELATIONSHIPS AND ACTIVITIES</heading> <section identifier="/us/tx/ut/t2/c12/scD/s12.151"> <num value="12.151">Sec. 12.151.</num> <heading>REGISTERED LOBBYIST</heading> <content>A person required to register as a lobbyist under Chapter 305, Government Code, because of the person's activities for compensation on behalf of a profession related to the operation of the commission may not serve as a commissioner.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 405, Sec. 4, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c12/scD/s12.152"> <num value="12.152">Sec. 12.152.</num> <heading>CONFLICT OF INTEREST</heading> <subsection identifier="/us/tx/ut/t2/c12/scD/s12.152/a"> <num value="a">(a)</num> <chapeau>A person is not eligible for appointment as a commissioner or executive director of the commission if:</chapeau> <paragraph identifier="/us/tx/ut/t2/c12/scD/s12.152/1"> <num value="1">(1)</num> <content>the person serves on the board of directors of a company that supplies fuel, utility-related services, or utility-related products to regulated or unregulated electric or telecommunications utilities; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c12/scD/s12.152/2"> <num value="2">(2)</num> <chapeau>the person or the person's spouse:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c12/scD/s12.152/A"> <num value="A">(A)</num> <content>is employed by or participates in the management of a business entity or other organization that is regulated by or receives funds from the commission;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c12/scD/s12.152/B"> <num value="B">(B)</num> <content>directly or indirectly owns or controls more than a 10 percent interest in:</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c12/scD/s12.152/i"> <num value="i">(i)</num> <chapeau>a business entity or other organization that is regulated by or receives funds from the commission; or</chapeau> <clause identifier="/us/tx/ut/t2/c12/scD/s12.152/ii"> <num value="ii">(ii)</num> <content>a utility competitor, utility supplier, or other entity affected by a commission decision in a manner other than by the setting of rates for that class of customer;</content> </clause> <subparagraph identifier="/us/tx/ut/t2/c12/scD/s12.152/C"> <num value="C">(C)</num> <content>uses or receives a substantial amount of tangible goods, services, or funds from the commission, other than compensation or reimbursement authorized by law for commission membership, attendance, or expenses; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c12/scD/s12.152/D"> <num value="D">(D)</num> <content>notwithstanding Paragraph (B), has an interest in a mutual fund or retirement fund in which more than 10 percent of the fund's holdings at the time of appointment is in a single utility, utility competitor, or utility supplier in this state and the person does not disclose this information to the governor, senate, commission, or other entity, as appropriate.</content> </subparagraph> </subsection> <subsection identifier="/us/tx/ut/t2/c12/scD/s12.152/b"> <num value="b">(b)</num> <chapeau>A person otherwise ineligible because of Subsection (a)(2)(B) may be appointed to the commission and serve as a commissioner or may be employed as executive director if the person:</chapeau> <paragraph identifier="/us/tx/ut/t2/c12/scD/s12.152/1"> <num value="1">(1)</num> <content>notifies the attorney general and commission that the person is ineligible because of Subsection (a)(2)(B); and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c12/scD/s12.152/2"> <num value="2">(2)</num> <chapeau>divests the person or the person's spouse of the ownership or control:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c12/scD/s12.152/A"> <num value="A">(A)</num> <content>before beginning service or employment; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c12/scD/s12.152/B"> <num value="B">(B)</num> <content>if the person is already serving or employed, within a reasonable time.</content> </subparagraph> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 405, Sec. 4, eff. Sept. 1, 1999. Amended by: Acts 2013, 83rd Leg., R.S., Ch. 170 (H.B. 1600), Sec. 1.03, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c12/scD/s12.153"> <num value="12.153">Sec. 12.153.</num> <heading>RELATIONSHIP WITH TRADE ASSOCIATION</heading> <chapeau>A person may not serve as a commissioner or be a commission employee who is employed in a "bona fide executive, administrative, or professional capacity," as that phrase is used for purposes of establishing an exemption to the overtime provisions of the federal Fair Labor Standards Act of 1938 (29 U.S.C. Section 201 et seq.), if the person is:</chapeau> <paragraph identifier="/us/tx/ut/t2/c12/scD/s12.153/1"> <num value="1">(1)</num> <content>an officer, employee, or paid consultant of a trade association; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c12/scD/s12.153/2"> <num value="2">(2)</num> <content>the spouse of an officer, manager, or paid consultant of a trade association.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2005, 79th Leg., Ch. 797 (S.B. 408), Sec. 4, eff. September 1, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c12/scD/s12.154"> <num value="12.154">Sec. 12.154.</num> <heading>PROHIBITED ACTIVITIES</heading> <subsection identifier="/us/tx/ut/t2/c12/scD/s12.154/a"> <num value="a">(a)</num> <chapeau>During the period of service with the commission, a commissioner or commission employee may not:</chapeau> <paragraph identifier="/us/tx/ut/t2/c12/scD/s12.154/1"> <num value="1">(1)</num> <chapeau>have a pecuniary interest, including an interest as an officer, director, partner, owner, employee, attorney, or consultant, in:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c12/scD/s12.154/A"> <num value="A">(A)</num> <content>a public utility or affiliate; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c12/scD/s12.154/B"> <num value="B">(B)</num> <content>a person a significant portion of whose business consists of furnishing goods or services to public utilities or affiliates; or</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c12/scD/s12.154/2"> <num value="2">(2)</num> <chapeau>accept a gift, gratuity, or entertainment from:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c12/scD/s12.154/A"> <num value="A">(A)</num> <content>a public utility, affiliate, or direct competitor of a public utility;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c12/scD/s12.154/B"> <num value="B">(B)</num> <content>a person a significant portion of whose business consists of furnishing goods or services to public utilities, affiliates, or direct competitors of public utilities; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c12/scD/s12.154/C"> <num value="C">(C)</num> <content>an agent, representative, attorney, employee, officer, owner, director, or partner of a person described by Paragraph (A) or (B).</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c12/scD/s12.154/b"> <num value="b">(b)</num> <content>A commissioner or a commission employee may not directly or indirectly solicit, request from, or suggest or recommend to a public utility or an agent, representative, attorney, employee, officer, owner, director, or partner of a public utility the appointment to a position or the employment of a person by the public utility or affiliate.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c12/scD/s12.154/c"> <num value="c">(c)</num> <chapeau>A person may not give or offer to give a gift, gratuity, employment, or entertainment to a commissioner or commission employee if that person is:</chapeau> <paragraph identifier="/us/tx/ut/t2/c12/scD/s12.154/1"> <num value="1">(1)</num> <content>a public utility, affiliate, or direct competitor of a public utility;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c12/scD/s12.154/2"> <num value="2">(2)</num> <content>a person who furnishes goods or services to a public utility, affiliate, or direct competitor of a public utility; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c12/scD/s12.154/3"> <num value="3">(3)</num> <content>an agent, representative, attorney, employee, officer, owner, director, or partner of a person described by Subdivision (1) or (2).</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c12/scD/s12.154/d"> <num value="d">(d)</num> <content>A public utility, affiliate, or direct competitor of a public utility or a person furnishing goods or services to a public utility, affiliate, or direct competitor of a public utility may not aid, abet, or participate with a commissioner, commission employee, or former commission employee in conduct that violates Subsection (a)(3) or (c).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c12/scD/s12.154/e"> <num value="e">(e)</num> <content>Subsection (a)(1) does not apply to an interest in a nonprofit group or association, other than a trade association, that is solely supported by gratuitous contributions of money, property, or services.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c12/scD/s12.154/f"> <num value="f">(f)</num> <content>It is not a violation of this section if a commissioner or commission employee, on becoming the owner of stocks, bonds, or another pecuniary interest in a public utility, affiliate, or direct competitor of a public utility otherwise than voluntarily, informs the commission and the attorney general of the ownership and divests the ownership or interest within a reasonable time.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c12/scD/s12.154/g"> <num value="g">(g)</num> <content>It is not a violation of this section if a pecuniary interest is held indirectly by ownership of an interest in a retirement system, institution, or fund that in the normal course of business invests in diverse securities independently of the control of the commissioner or commission employee.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c12/scD/s12.154/h"> <num value="h">(h)</num> <content>This section does not apply to a contract for a public utility product or service or equipment for use of a public utility product when a commissioner or commission employee is acting as a consumer.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c12/scD/s12.154/i"> <num value="i">(i)</num> <content>In this section, a "pecuniary interest" includes income, compensation, and payment of any kind, in addition to an ownership interest.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2013, 83rd Leg., R.S., Ch. 170 (H.B. 1600), Sec. 1.04, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c12/scD/s12.155"> <num value="12.155">Sec. 12.155.</num> <heading>PROHIBITION ON EMPLOYMENT OR REPRESENTATION</heading> <subsection identifier="/us/tx/ut/t2/c12/scD/s12.155/a"> <num value="a">(a)</num> <chapeau>A commissioner, a commission employee, or an employee of the State Office of Administrative Hearings involved in hearing utility cases may not:</chapeau> <paragraph identifier="/us/tx/ut/t2/c12/scD/s12.155/1"> <num value="1">(1)</num> <content>be employed by a public utility that was in the scope of the commissioner's or employee's official responsibility while the commissioner or employee was associated with the commission or the State Office of Administrative Hearings; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c12/scD/s12.155/2"> <num value="2">(2)</num> <chapeau>represent a person before the commission or State Office of Administrative Hearings or a court in a matter:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c12/scD/s12.155/A"> <num value="A">(A)</num> <content>in which the commissioner or employee was personally involved while associated with the commission or State Office of Administrative Hearings; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c12/scD/s12.155/B"> <num value="B">(B)</num> <content>that was within the commissioner's or employee's official responsibility while the commissioner or employee was associated with the commission or State Office of Administrative Hearings.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c12/scD/s12.155/b"> <num value="b">(b)</num> <chapeau>The prohibition of Subsection (a)(1) applies until the:</chapeau> <paragraph identifier="/us/tx/ut/t2/c12/scD/s12.155/1"> <num value="1">(1)</num> <content>second anniversary of the date the commissioner ceases to serve as a commissioner; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c12/scD/s12.155/2"> <num value="2">(2)</num> <content>first anniversary of the date the employee's employment with the commission or State Office of Administrative Hearings ceases.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c12/scD/s12.155/c"> <num value="c">(c)</num> <content>The prohibition of Subsection (a)(2) applies while a commissioner, commission employee, or employee of the State Office of Administrative Hearings involved in hearing utility cases is associated with the commission or State Office of Administrative Hearings and at any time after.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c12/scD/s12.155/d"> <num value="d">(d)</num> <content>A commissioner may not be employed by an independent organization certified under Section 39.151. The prohibition under this subsection applies until the second anniversary of the date the commissioner ceases to serve as a commissioner.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2013, 83rd Leg., R.S., Ch. 170 (H.B. 1600), Sec. 1.05, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c12/scD/s12.156"> <num value="12.156">Sec. 12.156.</num> <heading>QUALIFICATIONS AND STANDARDS OF CONDUCT INFORMATION</heading> <chapeau>The executive director or the executive director's designee shall provide to commissioners and commission employees as often as necessary information regarding their:</chapeau> <paragraph identifier="/us/tx/ut/t2/c12/scD/s12.156/1"> <num value="1">(1)</num> <content>qualifications for office or employment under this title; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c12/scD/s12.156/2"> <num value="2">(2)</num> <content>responsibilities under applicable laws relating to standards of conduct for state officers and employees.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c12/scE"> <num value="E">SUBCHAPTER E.</num> <heading>PUBLIC INTEREST INFORMATION AND REPORTS</heading> <section identifier="/us/tx/ut/t2/c12/scE/s12.201"> <num value="12.201">Sec. 12.201.</num> <heading>PUBLIC INTEREST INFORMATION</heading> <subsection identifier="/us/tx/ut/t2/c12/scE/s12.201/a"> <num value="a">(a)</num> <content>The commission shall prepare information of public interest describing the functions of the commission and the commission's procedures by which a complaint is filed with and resolved by the commission. The commission shall make the information available to the public and appropriate state agencies.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c12/scE/s12.201/b"> <num value="b">(b)</num> <content>The commission by rule shall establish methods by which consumers and service recipients are notified of the name, mailing address, and telephone number of the commission for the purpose of directing complaints to the commission.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c12/scE/s12.202"> <num value="12.202">Sec. 12.202.</num> <heading>PUBLIC PARTICIPATION</heading> <subsection identifier="/us/tx/ut/t2/c12/scE/s12.202/a"> <num value="a">(a)</num> <content>The commission shall develop and implement policies that provide the public with a reasonable opportunity to appear before the commission and to speak on any issue under the jurisdiction of the commission.</content> <continuation>(a-1) The policies adopted under this section must require the agenda for each regular commission meeting to include public testimony as a meeting agenda item and allow members of the public to comment on:</continuation> <paragraph identifier="/us/tx/ut/t2/c12/scE/s12.202/1"> <num value="1">(1)</num> <content>each meeting agenda item unrelated to a contested case; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c12/scE/s12.202/2"> <num value="2">(2)</num> <content>other matters under the commission's jurisdiction.</content> <continuation>(a-2) The commission may prohibit public comment at a regular commission meeting on a meeting agenda item related to a contested case.</continuation> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c12/scE/s12.202/b"> <num value="b">(b)</num> <content>The commission shall comply with federal and state laws related to program and facility accessibility.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c12/scE/s12.202/c"> <num value="c">(c)</num> <content>The commission shall prepare and maintain a written plan that describes how a person who does not speak English may be provided reasonable access to the commission's programs and services.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 3, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c12/scE/s12.203"> <num value="12.203">Sec. 12.203.</num> <heading>BIENNIAL REPORT</heading> <subsection identifier="/us/tx/ut/t2/c12/scE/s12.203/a"> <num value="a">(a)</num> <chapeau>Not later than January 15 of each odd-numbered year, the commission shall prepare a written report that includes:</chapeau> <paragraph identifier="/us/tx/ut/t2/c12/scE/s12.203/1"> <num value="1">(1)</num> <content>suggestions regarding modification and improvement of the commission's statutory authority and for the improvement of utility regulation in general, including the regulation of water and sewer service under Chapter 13, Water Code, that the commission considers appropriate for protecting and furthering the interest of the public;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c12/scE/s12.203/2"> <num value="2">(2)</num> <chapeau>a report on the scope of competition in the electric and telecommunications markets that includes:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c12/scE/s12.203/A"> <num value="A">(A)</num> <content>an assessment of:</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c12/scE/s12.203/i"> <num value="i">(i)</num> <chapeau>the effect of competition and industry restructuring on customers in both competitive and noncompetitive electric markets; and</chapeau> <clause identifier="/us/tx/ut/t2/c12/scE/s12.203/ii"> <num value="ii">(ii)</num> <content>the effect of competition on the rates and availability of electric services for residential and small commercial customers;</content> </clause> <subparagraph identifier="/us/tx/ut/t2/c12/scE/s12.203/B"> <num value="B">(B)</num> <content>an assessment of the effect of competition on:</content> </subparagraph> </subsection> <subsection identifier="/us/tx/ut/t2/c12/scE/s12.203/i"> <num value="i">(i)</num> <chapeau>customers in both competitive and noncompetitive telecommunications markets, with a specific focus on rural markets; and</chapeau> <clause identifier="/us/tx/ut/t2/c12/scE/s12.203/ii"> <num value="ii">(ii)</num> <content>the rates and availability of telecommunications services for residential and business customers, including any effects on universal service; and</content> </clause> <subparagraph identifier="/us/tx/ut/t2/c12/scE/s12.203/C"> <num value="C">(C)</num> <content>a summary of commission action over the preceding two years that reflects changes in the scope of competition in regulated electric and telecommunications markets; and</content> </subparagraph> <paragraph identifier="/us/tx/ut/t2/c12/scE/s12.203/3"> <num value="3">(3)</num> <content>recommendations for legislation that the commission determines appropriate to promote the public interest in the context of partially competitive electric and telecommunications markets.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c12/scE/s12.203/b"> <num value="b">(b)</num> <content>A telecommunications utility, as defined by Section 51.002, shall cooperate with the commission as necessary for the commission to satisfy the requirements of this section.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2013, 83rd Leg., R.S., Ch. 1312 (S.B. 59), Sec. 94, eff. September 1, 2013. Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 4, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c12/scE/s12.204"> <num value="12.204">Sec. 12.204.</num> <heading>INTERNET FOR HEARINGS AND MEETINGS</heading> <chapeau>The commission shall make publicly accessible without charge live Internet video of all public hearings and meetings the commission holds for viewing from the Internet website found at http://www.puc.state.tx.us. The commission may recover the costs of administering this section by imposing an assessment against a:</chapeau> <paragraph identifier="/us/tx/ut/t2/c12/scE/s12.204/1"> <num value="1">(1)</num> <content>public utility;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c12/scE/s12.204/2"> <num value="2">(2)</num> <content>corporation described by Section 32.053;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c12/scE/s12.204/3"> <num value="3">(3)</num> <content>retail electric provider that serves more than 250,000 customers; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c12/scE/s12.204/4"> <num value="4">(4)</num> <content>power generation company that owns more than 5,000 megawatts of installed capacity in this state.</content> </paragraph> <sourceCredit>Added by Acts 2009, 81st Leg., R.S., Ch. 400 (H.B. 1783), Sec. 1, eff. September 1, 2009.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c12/scE/s12.205"> <num value="12.205">Sec. 12.205.</num> <heading>STRATEGIC COMMUNICATIONS PLAN</heading> <chapeau>The commission shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c12/scE/s12.205/1"> <num value="1">(1)</num> <chapeau>develop an agency-wide plan for:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c12/scE/s12.205/A"> <num value="A">(A)</num> <content>improving the effectiveness of commission communications with the public, market participants, and other relevant audiences; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c12/scE/s12.205/B"> <num value="B">(B)</num> <content>responding to changing communications needs;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c12/scE/s12.205/2"> <num value="2">(2)</num> <content>include in the plan required by Subdivision (1) goals, objectives, and metrics to assess commission efforts; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c12/scE/s12.205/3"> <num value="3">(3)</num> <content>update the plan required by Subdivision (1) at least once every two years.</content> </paragraph> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 5, eff. September 1, 2023.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c12/scF"> <num value="F">SUBCHAPTER F.</num> <heading>HISTORICALLY UNDERUTILIZED BUSINESSES</heading> <section identifier="/us/tx/ut/t2/c12/scF/s12.251"> <num value="12.251">Sec. 12.251.</num> <heading>DEFINITION</heading> <content>In this subchapter, "historically underutilized business" has the meaning assigned by Section 481.101, Government Code.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c12/scF/s12.252"> <num value="12.252">Sec. 12.252.</num> <heading>COMMISSION AUTHORITY</heading> <content>The commission, after notice and hearing, may require each utility subject to regulation under this title to make an effort to overcome the underuse of historically underutilized businesses.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c12/scF/s12.253"> <num value="12.253">Sec. 12.253.</num> <heading>REPORT REQUIRED</heading> <content>The commission shall require each utility subject to regulation under this title to prepare and submit to the commission a comprehensive annual report detailing its use of historically underutilized businesses.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c12/scF/s12.254"> <num value="12.254">Sec. 12.254.</num> <heading>DISCRIMINATION PROHIBITED</heading> <content>The rules adopted under this subchapter may not be used to discriminate against a citizen on the basis of sex, race, color, creed, or national origin.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c12/scF/s12.255"> <num value="12.255">Sec. 12.255.</num> <heading>CAUSE OF ACTION NOT CREATED</heading> <content>This subchapter does not create a public or private cause of action.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t2/c13"> <num value="13">CHAPTER 13.</num> <heading>OFFICE OF PUBLIC UTILITY COUNSEL</heading> <subchapter identifier="/us/tx/ut/t2/c13/scA"> <num value="A">SUBCHAPTER A.</num> <heading>GENERAL PROVISIONS; POWERS AND DUTIES</heading> <section identifier="/us/tx/ut/t2/c13/scA/s13.001"> <num value="13.001">Sec. 13.001.</num> <heading>OFFICE OF PUBLIC UTILITY COUNSEL</heading> <content>The independent office of public utility counsel represents the interests of residential and small commercial consumers.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c13/scA/s13.002"> <num value="13.002">Sec. 13.002.</num> <heading>APPLICATION OF SUNSET ACT</heading> <content>The Office of Public Utility Counsel is subject to Chapter 325, Government Code (Texas Sunset Act). Unless continued in existence as provided by that chapter, the office is abolished September 1, 2029.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 405, Sec. 5, eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 1212, Sec. 2, eff. Sept. 1, 1999. Amended by: Acts 2005, 79th Leg., Ch. 300 (S.B. 409), Sec. 1, eff. September 1, 2005. Acts 2011, 82nd Leg., R.S., Ch. 1232 (S.B. 652), Sec. 6.02, eff. June 17, 2011. Acts 2019, 86th Leg., R.S., Ch. 596 (S.B. 619), Sec. 3.08, eff. June 10, 2019. Acts 2021, 87th Leg., R.S., Ch. 850 (S.B. 713), Sec. 1.07, eff. June 16, 2021. Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 6, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c13/scA/s13.003"> <num value="13.003">Sec. 13.003.</num> <heading>OFFICE POWERS AND DUTIES</heading> <subsection identifier="/us/tx/ut/t2/c13/scA/s13.003/a"> <num value="a">(a)</num> <chapeau>The office:</chapeau> <paragraph identifier="/us/tx/ut/t2/c13/scA/s13.003/1"> <num value="1">(1)</num> <content>shall assess the effect of utility rate changes and other regulatory actions on residential consumers in this state;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c13/scA/s13.003/2"> <num value="2">(2)</num> <content>shall advocate in the office's own name a position determined by the counsellor to be most advantageous to a substantial number of residential consumers;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c13/scA/s13.003/3"> <num value="3">(3)</num> <chapeau>may appear or intervene, as a party or otherwise, as a matter of right on behalf of:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c13/scA/s13.003/A"> <num value="A">(A)</num> <content>residential consumers, as a class, in any proceeding before the commission, including an alternative dispute resolution proceeding; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c13/scA/s13.003/B"> <num value="B">(B)</num> <content>small commercial consumers, as a class, in any proceeding in which the counsellor determines that small commercial consumers are in need of representation, including an alternative dispute resolution proceeding;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c13/scA/s13.003/4"> <num value="4">(4)</num> <chapeau>may initiate or intervene as a matter of right or otherwise appear in a judicial proceeding:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c13/scA/s13.003/A"> <num value="A">(A)</num> <content>that involves an action taken by an administrative agency in a proceeding, including an alternative dispute resolution proceeding, in which the counsellor is authorized to appear; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c13/scA/s13.003/B"> <num value="B">(B)</num> <content>in which the counsellor determines that residential electricity consumers or small commercial electricity consumers are in need of representation;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c13/scA/s13.003/5"> <num value="5">(5)</num> <chapeau>is entitled to:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c13/scA/s13.003/A"> <num value="A">(A)</num> <content>the same access as a party, other than commission staff, to records gathered by the commission under Section 14.204; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c13/scA/s13.003/B"> <num value="B">(B)</num> <content>request and receive electricity market data, including data related to reliability, generation resource adequacy, long-term transmission planning, and transmission and distribution system resiliency, from:</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c13/scA/s13.003/i"> <num value="i">(i)</num> <chapeau>the commission;</chapeau> <clause identifier="/us/tx/ut/t2/c13/scA/s13.003/ii"> <num value="ii">(ii)</num> <content>the independent organization certified under Section 39.151 for the ERCOT power region; and</content> </clause> <clause identifier="/us/tx/ut/t2/c13/scA/s13.003/iii"> <num value="iii">(iii)</num> <content>an electric utility;</content> </clause> <paragraph identifier="/us/tx/ut/t2/c13/scA/s13.003/6"> <num value="6">(6)</num> <content>is entitled to discovery of any nonprivileged matter that is relevant to the subject matter of a proceeding or petition before the commission;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c13/scA/s13.003/7"> <num value="7">(7)</num> <content>may represent an individual residential or small commercial consumer with respect to the consumer's disputed complaint concerning utility services that is unresolved before the commission;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c13/scA/s13.003/8"> <num value="8">(8)</num> <content>may recommend legislation to the legislature that the office determines would positively affect the interests of residential and small commercial consumers; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c13/scA/s13.003/9"> <num value="9">(9)</num> <content>may advise persons who are interested parties for purposes of Section 37.054 on procedural matters related to proceedings before the commission on an application for a certificate of convenience and necessity filed under Section 37.053.</content> <continuation>(a-1) Information submitted to the office under Subsection (a)(5)(B) is confidential and not subject to disclosure by the office under Chapter 552, Government Code, if that information would be confidential and not subject to disclosure by the commission under Chapter 552, Government Code, or other law if the commission held the information.</continuation> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c13/scA/s13.003/b"> <num value="b">(b)</num> <content>This section does not limit the authority of the commission to represent residential or small commercial consumers.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c13/scA/s13.003/c"> <num value="c">(c)</num> <content>The appearance of the counsellor in a proceeding does not preclude the appearance of other parties on behalf of residential or small commercial consumers. The counsellor may not be grouped with any other party.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 405, Sec. 6, eff. Sept. 1, 1999. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 416 (S.B. 855), Sec. 1, eff. June 17, 2011. Acts 2025, 89th Leg., R.S., Ch. 104 (S.B. 1877), Sec. 1, eff. September 1, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c13/scA/s13.004"> <num value="13.004">Sec. 13.004.</num> <heading>ALTERNATIVE DISPUTE RESOLUTION PROCEDURES</heading> <subsection identifier="/us/tx/ut/t2/c13/scA/s13.004/a"> <num value="a">(a)</num> <content>The counsellor shall develop and implement a policy to encourage the use of appropriate alternative dispute resolution procedures under Chapter 2009, Government Code, to assist in the resolution of internal disputes under the office's jurisdiction.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c13/scA/s13.004/b"> <num value="b">(b)</num> <content>The office's procedures relating to alternative dispute resolution must conform, to the extent possible, to any model guidelines issued by the State Office of Administrative Hearings for the use of alternative dispute resolution by state agencies.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c13/scA/s13.004/c"> <num value="c">(c)</num> <chapeau>The counsellor shall designate a trained person to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c13/scA/s13.004/1"> <num value="1">(1)</num> <content>coordinate the implementation of the policy adopted under Subsection (a);</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c13/scA/s13.004/2"> <num value="2">(2)</num> <content>serve as a resource for any training needed to implement the procedures for alternative dispute resolution; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c13/scA/s13.004/3"> <num value="3">(3)</num> <content>collect data concerning the effectiveness of those procedures, as implemented by the office.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., Ch. 300 (S.B. 409), Sec. 2, eff. September 1, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c13/scA/s13.005"> <num value="13.005">Sec. 13.005.</num> <heading>COMPLAINTS</heading> <subsection identifier="/us/tx/ut/t2/c13/scA/s13.005/a"> <num value="a">(a)</num> <content>The office shall maintain a system to promptly and efficiently act on complaints filed with the office that the office has the authority to resolve. The office shall maintain information about parties to the complaint, the subject matter of the complaint, a summary of the results of the review or investigation of the complaint, and its disposition.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c13/scA/s13.005/b"> <num value="b">(b)</num> <content>The office shall make information available describing its procedures for complaint investigation and resolution.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c13/scA/s13.005/c"> <num value="c">(c)</num> <content>The office shall periodically notify the complaint parties of the status of the complaint until final disposition.</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., Ch. 300 (S.B. 409), Sec. 2, eff. September 1, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c13/scA/s13.006"> <num value="13.006">Sec. 13.006.</num> <heading>TECHNOLOGY POLICY</heading> <content>The counsellor shall implement a policy requiring the office to use appropriate technological solutions to improve the office's ability to perform its functions. The policy must ensure that the public is able to interact with the office on the Internet.</content> <sourceCredit>Added by Acts 2005, 79th Leg., Ch. 300 (S.B. 409), Sec. 2, eff. September 1, 2005.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c13/scB"> <num value="B">SUBCHAPTER B.</num> <heading>PUBLIC UTILITY COUNSEL</heading> <section identifier="/us/tx/ut/t2/c13/scB/s13.021"> <num value="13.021">Sec. 13.021.</num> <heading>APPOINTMENT; TERM</heading> <subsection identifier="/us/tx/ut/t2/c13/scB/s13.021/a"> <num value="a">(a)</num> <content>The chief executive of the office is the counsellor.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c13/scB/s13.021/b"> <num value="b">(b)</num> <content>The counsellor is appointed by the governor with the advice and consent of the senate.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c13/scB/s13.021/c"> <num value="c">(c)</num> <content>The appointment of the counsellor shall be made without regard to the race, color, disability, sex, religion, age, or national origin of the appointee.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c13/scB/s13.021/d"> <num value="d">(d)</num> <content>The counsellor serves a two-year term that expires on February 1 of the final year of the term.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c13/scB/s13.022"> <num value="13.022">Sec. 13.022.</num> <heading>QUALIFICATIONS</heading> <subsection identifier="/us/tx/ut/t2/c13/scB/s13.022/a"> <num value="a">(a)</num> <chapeau>The counsellor must:</chapeau> <paragraph identifier="/us/tx/ut/t2/c13/scB/s13.022/1"> <num value="1">(1)</num> <content>be licensed to practice law in this state and a resident of this state;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c13/scB/s13.022/2"> <num value="2">(2)</num> <content>have demonstrated a strong commitment to and involvement in efforts to safeguard the rights of the public; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c13/scB/s13.022/3"> <num value="3">(3)</num> <content>possess the knowledge and experience necessary to practice effectively in utility proceedings.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c13/scB/s13.022/b"> <num value="b">(b)</num> <chapeau>A person is not eligible for appointment as counsellor if:</chapeau> <paragraph identifier="/us/tx/ut/t2/c13/scB/s13.022/1"> <num value="1">(1)</num> <chapeau>the person or the person's spouse:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c13/scB/s13.022/A"> <num value="A">(A)</num> <content>is employed by or participates in the management of a business entity or other organization that is regulated by or receives funds from the commission;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c13/scB/s13.022/B"> <num value="B">(B)</num> <content>directly or indirectly owns or controls more than a 10 percent interest or a pecuniary interest with a value exceeding $10,000 in:</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c13/scB/s13.022/i"> <num value="i">(i)</num> <chapeau>a business entity or other organization that is regulated by or receives funds from the commission or the office; or</chapeau> <clause identifier="/us/tx/ut/t2/c13/scB/s13.022/ii"> <num value="ii">(ii)</num> <content>a utility competitor, utility supplier, or other entity affected by a commission decision in a manner other than by the setting of rates for that class of customer;</content> </clause> <subparagraph identifier="/us/tx/ut/t2/c13/scB/s13.022/C"> <num value="C">(C)</num> <content>uses or receives a substantial amount of tangible goods, services, or funds from the commission or the office, other than compensation or reimbursement authorized by law for service as counsellor or for commission membership, attendance, or expenses; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c13/scB/s13.022/D"> <num value="D">(D)</num> <content>notwithstanding Paragraph (B), has an interest in a mutual fund or retirement fund in which more than 10 percent of the fund's holdings is in a single utility, utility competitor, or utility supplier in this state and the person does not disclose this information to the governor, senate, or other entity, as appropriate; or</content> </subparagraph> <paragraph identifier="/us/tx/ut/t2/c13/scB/s13.022/2"> <num value="2">(2)</num> <content>the person is not qualified to serve under Section 13.042.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c13/scB/s13.022/c"> <num value="c">(c)</num> <content>Repealed by Acts 2005, 79th Leg., Ch. 300, Sec. 7, eff. September 1, 2005.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c13/scB/s13.022/d"> <num value="d">(d)</num> <chapeau>A person otherwise ineligible because of Subsection (b)(1)(B) may be appointed and serve as counsellor if the person:</chapeau> <paragraph identifier="/us/tx/ut/t2/c13/scB/s13.022/1"> <num value="1">(1)</num> <content>notifies the attorney general and commission that the person is ineligible because of Subsection (b)(1)(B); and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c13/scB/s13.022/2"> <num value="2">(2)</num> <chapeau>divests the person or the person's spouse of the ownership or control:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c13/scB/s13.022/A"> <num value="A">(A)</num> <content>before beginning service; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c13/scB/s13.022/B"> <num value="B">(B)</num> <content>if the person is already serving, within a reasonable time.</content> </subparagraph> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2005, 79th Leg., Ch. 300 (S.B. 409), Sec. 7, eff. September 1, 2005. Acts 2021, 87th Leg., R.S., Ch. 425 (S.B. 2), Sec. 2, eff. June 8, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c13/scB/s13.023"> <num value="13.023">Sec. 13.023.</num> <heading>GROUNDS FOR REMOVAL</heading> <subsection identifier="/us/tx/ut/t2/c13/scB/s13.023/a"> <num value="a">(a)</num> <chapeau>It is a ground for removal from office if the counsellor:</chapeau> <paragraph identifier="/us/tx/ut/t2/c13/scB/s13.023/1"> <num value="1">(1)</num> <content>does not have at the time of taking office or maintain during service as counsellor the qualifications required by Section 13.022;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c13/scB/s13.023/2"> <num value="2">(2)</num> <content>is ineligible for service as counsellor under Section 13.022, 13.042, or 13.043; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c13/scB/s13.023/3"> <num value="3">(3)</num> <content>cannot discharge the counsellor's duties for a substantial part of the term for which the counsellor is appointed because of illness or disability.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c13/scB/s13.023/b"> <num value="b">(b)</num> <content>The validity of an action of the office is not affected by the fact that the action is taken when a ground for removal of the counsellor exists.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c13/scB/s13.023/c"> <num value="c">(c)</num> <content>If an employee has knowledge that a potential ground for removal of the counsellor exists, the employee shall notify the next highest ranking employee of the office, other than the counsellor, who shall then notify the governor and the attorney general that a potential ground for removal exists.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2005, 79th Leg., Ch. 300 (S.B. 409), Sec. 3, eff. September 1, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c13/scB/s13.024"> <num value="13.024">Sec. 13.024.</num> <heading>PROHIBITED ACTS</heading> <subsection identifier="/us/tx/ut/t2/c13/scB/s13.024/a"> <num value="a">(a)</num> <content>The counsellor may not have a direct or indirect interest in a utility company regulated under this title, its parent, or its subsidiary companies, corporations, or cooperatives or a utility competitor, utility supplier, or other entity affected in a manner other than by the setting of rates for that class of customer.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c13/scB/s13.024/b"> <num value="b">(b)</num> <content>The prohibition under Subsection (a) applies during the period of the counsellor's service.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 405, Sec. 7, eff. Sept. 1, 1999.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c13/scC"> <num value="C">SUBCHAPTER C.</num> <heading>OFFICE PERSONNEL</heading> <section identifier="/us/tx/ut/t2/c13/scC/s13.041"> <num value="13.041">Sec. 13.041.</num> <heading>PERSONNEL</heading> <subsection identifier="/us/tx/ut/t2/c13/scC/s13.041/a"> <num value="a">(a)</num> <content>The counsellor may employ lawyers, economists, engineers, consultants, statisticians, accountants, clerical staff, and other employees as the counsellor considers necessary to carry out this chapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c13/scC/s13.041/b"> <num value="b">(b)</num> <content>An employee receives compensation as prescribed by the legislature from the assessment imposed by Subchapter A, Chapter 16.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c13/scC/s13.042"> <num value="13.042">Sec. 13.042.</num> <heading>CONFLICT OF INTEREST</heading> <subsection identifier="/us/tx/ut/t2/c13/scC/s13.042/a"> <num value="a">(a)</num> <content>In this section, "Texas trade association" means a cooperative and voluntarily joined statewide association of business or professional competitors in this state designed to assist its members and its industry or profession in dealing with mutual business or professional problems and in promoting their common interest.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c13/scC/s13.042/b"> <num value="b">(b)</num> <chapeau>A person may not serve as counsellor or be an employee of the office employed in a "bona fide executive, administrative, or professional capacity," as that phrase is used for purposes of establishing an exemption to the overtime provisions of the federal Fair Labor Standards Act of 1938 (29 U.S.C. Section 201 et seq.) if the person is:</chapeau> <paragraph identifier="/us/tx/ut/t2/c13/scC/s13.042/1"> <num value="1">(1)</num> <content>an officer, employee, or paid consultant of a Texas trade association in the field of utilities; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c13/scC/s13.042/2"> <num value="2">(2)</num> <content>the spouse of an officer, manager, or paid consultant of a Texas trade association in the field of utilities.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c13/scC/s13.042/c"> <num value="c">(c)</num> <content>A person may not serve as counsellor or act as the general counsel to the office if the person is required to register as a lobbyist under Chapter 305, Government Code, because of the person's activities for compensation on behalf of a profession related to the operation of the office.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2005, 79th Leg., Ch. 300 (S.B. 409), Sec. 4, eff. September 1, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c13/scC/s13.043"> <num value="13.043">Sec. 13.043.</num> <heading>PROHIBITION ON EMPLOYMENT OR REPRESENTATION</heading> <subsection identifier="/us/tx/ut/t2/c13/scC/s13.043/a"> <num value="a">(a)</num> <chapeau>A former counsel may not make any communication to or appearance before the commission or an officer or employee of the commission before the second anniversary of the date the person ceases to serve as counsel if the communication or appearance is made:</chapeau> <paragraph identifier="/us/tx/ut/t2/c13/scC/s13.043/1"> <num value="1">(1)</num> <content>on behalf of another person in connection with any matter on which the person seeks official action; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c13/scC/s13.043/2"> <num value="2">(2)</num> <content>with the intent to influence a commission decision or action, unless acting on his or her own behalf and without remuneration.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c13/scC/s13.043/b"> <num value="b">(b)</num> <content>A former counsel may not represent any person or receive compensation for services rendered on behalf of any person regarding a matter before the commission before the second anniversary of the date the person ceases to serve as counsel.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c13/scC/s13.043/c"> <num value="c">(c)</num> <content>A person commits an offense if the person violates this section. An offense under this subsection is a Class A misdemeanor.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c13/scC/s13.043/d"> <num value="d">(d)</num> <chapeau>An employee of the office may not:</chapeau> <paragraph identifier="/us/tx/ut/t2/c13/scC/s13.043/1"> <num value="1">(1)</num> <content>be employed by a public utility that was in the scope of the employee's official responsibility while the employee was associated with the office; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c13/scC/s13.043/2"> <num value="2">(2)</num> <chapeau>represent a person before the commission or a court in a matter:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c13/scC/s13.043/A"> <num value="A">(A)</num> <content>in which the employee was personally involved while associated with the office; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c13/scC/s13.043/B"> <num value="B">(B)</num> <content>that was within the employee's official responsibility while the employee was associated with the office.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c13/scC/s13.043/e"> <num value="e">(e)</num> <content>The prohibition of Subsection (d)(1) applies until the first anniversary of the date the employee's employment with the office ceases.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c13/scC/s13.043/f"> <num value="f">(f)</num> <content>The prohibition of Subsection (d)(2) applies while an employee of the office is associated with the office and at any time after.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c13/scC/s13.043/g"> <num value="g">(g)</num> <content>For purposes of this section, "person" includes an electric cooperative.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 405, Sec. 8, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c13/scC/s13.044"> <num value="13.044">Sec. 13.044.</num> <heading>CAREER LADDER PROGRAM; PERFORMANCE EVALUATIONS; MERIT PAY</heading> <subsection identifier="/us/tx/ut/t2/c13/scC/s13.044/a"> <num value="a">(a)</num> <content>The counsellor or the counsellor's designee shall develop an intra-agency career ladder program that addresses opportunities for mobility and advancement for office employees. The program shall require intra-agency postings of each position concurrently with any public posting.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c13/scC/s13.044/b"> <num value="b">(b)</num> <content>The counsellor or the counsellor's designee shall develop a system of annual performance evaluations that are based on documented employee performance. Merit pay for office employees must be based on the system established under this subsection.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c13/scC/s13.045"> <num value="13.045">Sec. 13.045.</num> <heading>EQUAL EMPLOYMENT OPPORTUNITY POLICY STATEMENT</heading> <subsection identifier="/us/tx/ut/t2/c13/scC/s13.045/a"> <num value="a">(a)</num> <content>The counsellor or the counsellor's designee shall prepare and maintain a written policy statement to ensure implementation of a program of equal employment opportunity under which all personnel transactions are made without regard to race, color, disability, sex, religion, age, or national origin.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c13/scC/s13.045/b"> <num value="b">(b)</num> <chapeau>The policy statement under Subsection (a) must include:</chapeau> <paragraph identifier="/us/tx/ut/t2/c13/scC/s13.045/1"> <num value="1">(1)</num> <content>personnel policies, including policies related to recruitment, evaluation, selection, appointment, training, and promotion of personnel, that are in compliance with the requirements of Chapter 21, Labor Code;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c13/scC/s13.045/2"> <num value="2">(2)</num> <content>a comprehensive analysis of the office workforce that meets federal and state guidelines;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c13/scC/s13.045/3"> <num value="3">(3)</num> <content>procedures by which a determination can be made about the extent of underuse in the office workforce of all persons for whom federal or state guidelines encourage a more equitable balance; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c13/scC/s13.045/4"> <num value="4">(4)</num> <content>reasonable methods to appropriately address the underuse.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c13/scC/s13.045/c"> <num value="c">(c)</num> <chapeau>A policy statement prepared under Subsection (b) must:</chapeau> <paragraph identifier="/us/tx/ut/t2/c13/scC/s13.045/1"> <num value="1">(1)</num> <content>cover an annual period;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c13/scC/s13.045/2"> <num value="2">(2)</num> <content>be updated at least annually;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c13/scC/s13.045/3"> <num value="3">(3)</num> <content>be reviewed by the Commission on Human Rights for compliance with Subsection (b)(1); and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c13/scC/s13.045/4"> <num value="4">(4)</num> <content>be filed with the governor's office.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c13/scC/s13.045/d"> <num value="d">(d)</num> <content>The governor's office shall deliver a biennial report to the legislature based on the information received under Subsection (c). The report may be made separately or as a part of other biennial reports to the legislature.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c13/scC/s13.046"> <num value="13.046">Sec. 13.046.</num> <heading>QUALIFICATIONS AND STANDARDS OF CONDUCT INFORMATION</heading> <chapeau>The office shall provide to office employees as often as necessary information regarding their:</chapeau> <paragraph identifier="/us/tx/ut/t2/c13/scC/s13.046/1"> <num value="1">(1)</num> <content>qualifications for employment under this title; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c13/scC/s13.046/2"> <num value="2">(2)</num> <content>responsibilities under applicable laws relating to standards of conduct for employees.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c13/scD"> <num value="D">SUBCHAPTER D.</num> <heading>PUBLIC INTEREST INFORMATION AND REPORTS</heading> <section identifier="/us/tx/ut/t2/c13/scD/s13.061"> <num value="13.061">Sec. 13.061.</num> <heading>PUBLIC INTEREST INFORMATION</heading> <content>The office shall prepare information of public interest describing the functions of the office. The office shall make the information available to the public and appropriate state agencies.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c13/scD/s13.062"> <num value="13.062">Sec. 13.062.</num> <heading>PUBLIC PARTICIPATION</heading> <subsection identifier="/us/tx/ut/t2/c13/scD/s13.062/a"> <num value="a">(a)</num> <content>The office shall comply with federal and state laws related to program and facility accessibility.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c13/scD/s13.062/b"> <num value="b">(b)</num> <content>The office shall prepare and maintain a written plan that describes how a person who does not speak English may be provided reasonable access to the office's programs and services.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c13/scD/s13.063"> <num value="13.063">Sec. 13.063.</num> <heading>ANNUAL REPORT</heading> <chapeau>The office shall prepare annually a report on the office's activities during the preceding year and submit the report to the standing legislative committees that have jurisdiction over the office, the house appropriations committee, and the senate finance committee. At a minimum, the report must include:</chapeau> <paragraph identifier="/us/tx/ut/t2/c13/scD/s13.063/1"> <num value="1">(1)</num> <content>a list of the types of activities conducted by the office and the time spent by the office on each activity;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c13/scD/s13.063/2"> <num value="2">(2)</num> <content>the number of hours billed by the office for representing residential or small commercial consumers in proceedings;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c13/scD/s13.063/3"> <num value="3">(3)</num> <content>the number of staff positions and the type of work performed by each position; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c13/scD/s13.063/4"> <num value="4">(4)</num> <content>the office's rate of success in representing residential or small commercial consumers in appealing commission decisions.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2005, 79th Leg., Ch. 300 (S.B. 409), Sec. 5, eff. September 1, 2005. Acts 2011, 82nd Leg., R.S., Ch. 1083 (S.B. 1179), Sec. 25(161), eff. June 17, 2011. Acts 2019, 86th Leg., R.S., Ch. 573 (S.B. 241), Sec. 1.44, eff. September 1, 2019.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c13/scD/s13.064"> <num value="13.064">Sec. 13.064.</num> <heading>PUBLIC HEARING</heading> <subsection identifier="/us/tx/ut/t2/c13/scD/s13.064/a"> <num value="a">(a)</num> <content>The office annually shall conduct a public hearing to assist the office in developing a plan of priorities and to give the public, including residential and small commercial consumers, an opportunity to comment on the office's functions and effectiveness.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c13/scD/s13.064/b"> <num value="b">(b)</num> <content>A public hearing held under this section is not subject to Chapter 551, Government Code.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c13/scD/s13.064/c"> <num value="c">(c)</num> <content>The office shall file notice of a public hearing held under this section with the secretary of state for publication in the Texas Register.</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., Ch. 300 (S.B. 409), Sec. 6, eff. September 1, 2005.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t2/c14"> <num value="14">CHAPTER 14.</num> <heading>JURISDICTION AND POWERS OF COMMISSION AND OTHER REGULATORY AUTHORITIES</heading> <subchapter identifier="/us/tx/ut/t2/c14/scA"> <num value="A">SUBCHAPTER A.</num> <heading>GENERAL POWERS OF COMMISSION</heading> <section identifier="/us/tx/ut/t2/c14/scA/s14.001"> <num value="14.001">Sec. 14.001.</num> <heading>POWER TO REGULATE AND SUPERVISE</heading> <content>The commission has the general power to regulate and supervise the business of each public utility within its jurisdiction and to do anything specifically designated or implied by this title that is necessary and convenient to the exercise of that power and jurisdiction.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c14/scA/s14.002"> <num value="14.002">Sec. 14.002.</num> <heading>RULES</heading> <content>The commission shall adopt and enforce rules reasonably required in the exercise of its powers and jurisdiction.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c14/scA/s14.0025"> <num value="14.0025">Sec. 14.0025.</num> <heading>NEGOTIATED RULEMAKING AND ALTERNATIVE DISPUTE RESOLUTION</heading> <subsection identifier="/us/tx/ut/t2/c14/scA/s14.0025/a"> <num value="a">(a)</num> <chapeau>The commission shall develop and implement a policy to encourage the use of:</chapeau> <paragraph identifier="/us/tx/ut/t2/c14/scA/s14.0025/1"> <num value="1">(1)</num> <content>negotiated rulemaking procedures under Chapter 2008, Government Code, for the adoption of commission rules; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c14/scA/s14.0025/2"> <num value="2">(2)</num> <content>appropriate alternative dispute resolution procedures under Chapter 2009, Government Code, to assist in the resolution of internal and external disputes under the commission's jurisdiction.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c14/scA/s14.0025/b"> <num value="b">(b)</num> <content>The commission's procedures relating to alternative dispute resolution must conform, to the extent possible, to any model guidelines issued by the State Office of Administrative Hearings for the use of alternative dispute resolution by state agencies.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c14/scA/s14.0025/c"> <num value="c">(c)</num> <chapeau>The commission shall designate a trained person to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c14/scA/s14.0025/1"> <num value="1">(1)</num> <content>coordinate the implementation of the policy adopted under Subsection (a);</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c14/scA/s14.0025/2"> <num value="2">(2)</num> <content>serve as a resource for any training needed to implement the procedures for negotiated rulemaking or alternative dispute resolution; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c14/scA/s14.0025/3"> <num value="3">(3)</num> <content>collect data concerning the effectiveness of those procedures, as implemented by the commission.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., Ch. 797 (S.B. 408), Sec. 5, eff. September 1, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c14/scA/s14.003"> <num value="14.003">Sec. 14.003.</num> <heading>COMMISSION POWERS RELATING TO REPORTS</heading> <chapeau>The commission may:</chapeau> <paragraph identifier="/us/tx/ut/t2/c14/scA/s14.003/1"> <num value="1">(1)</num> <chapeau>require a public utility to report to the commission information relating to:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c14/scA/s14.003/A"> <num value="A">(A)</num> <content>the utility; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c14/scA/s14.003/B"> <num value="B">(B)</num> <content>a transaction between the utility and an affiliate inside or outside this state, to the extent that the transaction is subject to the commission's jurisdiction;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c14/scA/s14.003/2"> <num value="2">(2)</num> <content>establish the form for a report;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c14/scA/s14.003/3"> <num value="3">(3)</num> <content>determine the time for a report and the frequency with which the report is to be made;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c14/scA/s14.003/4"> <num value="4">(4)</num> <content>require that a report be made under oath;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c14/scA/s14.003/5"> <num value="5">(5)</num> <chapeau>require the filing with the commission of a copy of:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c14/scA/s14.003/A"> <num value="A">(A)</num> <content>a contract or arrangement between a public utility and an affiliate;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c14/scA/s14.003/B"> <num value="B">(B)</num> <content>a report filed with a federal agency or a governmental agency or body of another state; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c14/scA/s14.003/C"> <num value="C">(C)</num> <content>an annual report that shows each payment of compensation, other than salary or wages subject to federal income tax withholding:</content> </subparagraph> </paragraph> <subsection identifier="/us/tx/ut/t2/c14/scA/s14.003/i"> <num value="i">(i)</num> <chapeau>to residents of this state;</chapeau> <clause identifier="/us/tx/ut/t2/c14/scA/s14.003/ii"> <num value="ii">(ii)</num> <content>with respect to legal, administrative, or legislative matters in this state; or</content> </clause> <clause identifier="/us/tx/ut/t2/c14/scA/s14.003/iii"> <num value="iii">(iii)</num> <content>for representation before the legislature of this state or any governmental agency or body; and</content> </clause> <paragraph identifier="/us/tx/ut/t2/c14/scA/s14.003/6"> <num value="6">(6)</num> <content>require that a contract or arrangement described by Subdivision (5)(A) that is not in writing be reduced to writing and filed with the commission.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c14/scA/s14.004"> <num value="14.004">Sec. 14.004.</num> <heading>REPORT OF SUBSTANTIAL INTEREST</heading> <content>The commission may require disclosure of the identity and respective interests of each owner of at least one percent of the voting securities of a public utility or its affiliate.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c14/scA/s14.005"> <num value="14.005">Sec. 14.005.</num> <heading>CRITERIA AND GUIDELINES GOVERNING TERMINATION OF SERVICES TO ELDERLY AND DISABLED</heading> <content>The commission may establish criteria and guidelines with the utility industry relating to industry procedures used in terminating services to the elderly and disabled.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c14/scA/s14.006"> <num value="14.006">Sec. 14.006.</num> <heading>INTERFERENCE WITH TERMS OR CONDITIONS OF EMPLOYMENT; PRESUMPTION OF REASONABLENESS</heading> <content>The commission may not interfere with employee wages and benefits, working conditions, or other terms or conditions of employment that are the product of a collective bargaining agreement recognized under federal law. An employee wage rate or benefit that is the product of the collective bargaining is presumed to be reasonable.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c14/scA/s14.007"> <num value="14.007">Sec. 14.007.</num> <heading>ASSISTANCE TO MUNICIPALITY</heading> <content>On request by the governing body of a municipality, the commission may provide commission employees as necessary to advise and consult with the municipality on a pending matter.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c14/scA/s14.008"> <num value="14.008">Sec. 14.008.</num> <heading>MUNICIPAL FRANCHISES</heading> <subsection identifier="/us/tx/ut/t2/c14/scA/s14.008/a"> <num value="a">(a)</num> <content>This title does not restrict the rights and powers of a municipality to grant or refuse a franchise to use the streets and alleys in the municipality or to make a statutory charge for that use.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c14/scA/s14.008/b"> <num value="b">(b)</num> <content>A franchise agreement may not limit or interfere with a power conferred on the commission by this title.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c14/scB"> <num value="B">SUBCHAPTER B.</num> <heading>PRACTICE AND PROCEDURE</heading> <section identifier="/us/tx/ut/t2/c14/scB/s14.051"> <num value="14.051">Sec. 14.051.</num> <heading>PROCEDURAL POWERS</heading> <chapeau>The commission may:</chapeau> <paragraph identifier="/us/tx/ut/t2/c14/scB/s14.051/1"> <num value="1">(1)</num> <content>call and hold a hearing;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c14/scB/s14.051/2"> <num value="2">(2)</num> <content>administer an oath;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c14/scB/s14.051/3"> <num value="3">(3)</num> <content>receive evidence at a hearing;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c14/scB/s14.051/4"> <num value="4">(4)</num> <content>issue a subpoena to compel the attendance of a witness or the production of a document; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c14/scB/s14.051/5"> <num value="5">(5)</num> <content>make findings of fact and decisions to administer this title or a rule, order, or other action of the commission.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c14/scB/s14.052"> <num value="14.052">Sec. 14.052.</num> <heading>RULES</heading> <subsection identifier="/us/tx/ut/t2/c14/scB/s14.052/a"> <num value="a">(a)</num> <content>The commission shall adopt and enforce rules governing practice and procedure before the commission and, as applicable, practice and procedure before the State Office of Administrative Hearings.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c14/scB/s14.052/b"> <num value="b">(b)</num> <chapeau>The commission shall adopt rules that authorize an administrative law judge to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c14/scB/s14.052/1"> <num value="1">(1)</num> <content>limit the amount of time that a party may have to present its case;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c14/scB/s14.052/2"> <num value="2">(2)</num> <content>limit the number of requests for information that a party may make in a contested case;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c14/scB/s14.052/3"> <num value="3">(3)</num> <content>require a party to a contested case to identify contested issues and facts before the hearing begins;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c14/scB/s14.052/4"> <num value="4">(4)</num> <content>limit cross-examination to only those issues and facts identified before the hearing and to any new issues that may arise as a result of the discovery process; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c14/scB/s14.052/5"> <num value="5">(5)</num> <content>group parties, other than the office, that have the same position on an issue to facilitate cross-examination on that issue.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c14/scB/s14.052/c"> <num value="c">(c)</num> <content>A rule adopted under Subsection (b)(5) must permit each party in a group to present that party's witnesses for cross-examination during the hearing.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c14/scB/s14.052/d"> <num value="d">(d)</num> <content>A rule adopted under this section must ensure that each party receives due process.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2015, 84th Leg., R.S., Ch. 228 (H.B. 2154), Sec. 23, eff. September 1, 2015.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c14/scB/s14.053"> <num value="14.053">Sec. 14.053.</num> <heading>POWERS AND DUTIES OF STATE OFFICE OF ADMINISTRATIVE HEARINGS</heading> <subsection identifier="/us/tx/ut/t2/c14/scB/s14.053/a"> <num value="a">(a)</num> <content>The State Office of Administrative Hearings shall conduct each hearing in a contested case that is not conducted by one or more commissioners.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c14/scB/s14.053/b"> <num value="b">(b)</num> <content>The commission may delegate to the State Office of Administrative Hearings the authority to make a final decision and to issue findings of fact, conclusions of law, and other necessary orders in a proceeding in which there is not a contested issue of fact or law.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c14/scB/s14.053/c"> <num value="c">(c)</num> <content>The commission by rule shall define the procedures by which it delegates final decision-making authority under Subsection (b).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c14/scB/s14.053/d"> <num value="d">(d)</num> <content>For review purposes an administrative law judge's final decision under Subsection (b) has the same effect as a final decision of the commission unless a commissioner requests formal review of the decision.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2015, 84th Leg., R.S., Ch. 228 (H.B. 2154), Sec. 24, eff. September 1, 2015.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c14/scB/s14.054"> <num value="14.054">Sec. 14.054.</num> <heading>SETTLEMENTS</heading> <subsection identifier="/us/tx/ut/t2/c14/scB/s14.054/a"> <num value="a">(a)</num> <content>The commission by rule shall adopt procedures governing the use of settlements to resolve contested cases.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c14/scB/s14.054/b"> <num value="b">(b)</num> <chapeau>Rules adopted under this section must ensure that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c14/scB/s14.054/1"> <num value="1">(1)</num> <chapeau>each party retains the right to:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c14/scB/s14.054/A"> <num value="A">(A)</num> <content>a full hearing before the commission on issues that remain in dispute; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c14/scB/s14.054/B"> <num value="B">(B)</num> <content>judicial review of issues that remain in dispute;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c14/scB/s14.054/2"> <num value="2">(2)</num> <content>an issue of fact raised by a nonsettling party may not be waived by a settlement or stipulation of the other parties; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c14/scB/s14.054/3"> <num value="3">(3)</num> <content>a nonsettling party may use an issue of fact raised by that party as the basis for judicial review.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c14/scB/s14.055"> <num value="14.055">Sec. 14.055.</num> <heading>RECORD OF PROCEEDINGS</heading> <content>The regulatory authority shall keep a record of each proceeding before the authority.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c14/scB/s14.056"> <num value="14.056">Sec. 14.056.</num> <heading>RIGHT TO BE HEARD</heading> <content>Each party to a proceeding before a regulatory authority is entitled to be heard by attorney or in person.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c14/scB/s14.057"> <num value="14.057">Sec. 14.057.</num> <heading>ORDERS OF COMMISSION; TRANSCRIPTS AND EXHIBITS; PUBLIC RECORDS</heading> <subsection identifier="/us/tx/ut/t2/c14/scB/s14.057/a"> <num value="a">(a)</num> <content>A commission order must be in writing and contain detailed findings of the facts on which it is passed.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c14/scB/s14.057/b"> <num value="b">(b)</num> <content>The commission shall retain a copy of the transcript and the exhibits in any matter in which the commission issues an order.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c14/scB/s14.057/c"> <num value="c">(c)</num> <content>Subject to Chapter 552, Government Code, each file pertaining to a matter that was at any time pending before the commission or to a record, report, or inspection required by Section 14.003, 14.151, 14.152, 14.153, 14.201, or 14.203-14.207 or by Subtitle B or C is public information.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c14/scB/s14.058"> <num value="14.058">Sec. 14.058.</num> <heading>FEES FOR ELECTRONIC ACCESS TO INFORMATION</heading> <chapeau>The fees charged by the commission for electronic access to information that is stored in the system established by the commission using funds from the Texas Public Finance Authority and approved by the Department of Information Resources shall be established:</chapeau> <paragraph identifier="/us/tx/ut/t2/c14/scB/s14.058/1"> <num value="1">(1)</num> <content>by the commission in consultation with the comptroller; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c14/scB/s14.058/2"> <num value="2">(2)</num> <content>in an amount reasonable and necessary to retire the debt to the Texas Public Finance Authority associated with establishing the electronic access system.</content> </paragraph> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.01(a), eff. Sept. 1, 1999. Amended by: Acts 2007, 80th Leg., R.S., Ch. 937 (H.B. 3560), Sec. 1.115, eff. September 1, 2007.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c14/scB/s14.059"> <num value="14.059">Sec. 14.059.</num> <heading>TECHNOLOGY POLICY</heading> <content>The commission shall implement a policy requiring the commission to use appropriate technological solutions to improve the commission's ability to perform its functions. The policy must ensure that the public is able to interact with the commission on the Internet.</content> <sourceCredit>Added by Acts 2005, 79th Leg., Ch. 797 (S.B. 408), Sec. 6, eff. September 1, 2005.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c14/scC"> <num value="C">SUBCHAPTER C.</num> <heading>RESTRICTIONS ON CERTAIN TRANSACTIONS</heading> <section identifier="/us/tx/ut/t2/c14/scC/s14.101"> <num value="14.101">Sec. 14.101.</num> <heading>REPORT OF CERTAIN TRANSACTIONS; COMMISSION CONSIDERATION</heading> <subsection identifier="/us/tx/ut/t2/c14/scC/s14.101/a"> <num value="a">(a)</num> <chapeau>Unless a public utility reports the transaction to the commission within a reasonable time, the public utility may not:</chapeau> <paragraph identifier="/us/tx/ut/t2/c14/scC/s14.101/1"> <num value="1">(1)</num> <content>sell, acquire, or lease a plant as an operating unit or system in this state for a total consideration of more than $10 million; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c14/scC/s14.101/2"> <num value="2">(2)</num> <content>merge or consolidate with another public utility operating in this state.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c14/scC/s14.101/b"> <num value="b">(b)</num> <chapeau>A public utility shall report to the commission within a reasonable time each transaction that involves the sale of at least 50 percent of the stock of the utility. On the filing of a report with the commission, the commission shall investigate the transaction, with or without a public hearing, to determine whether the action is consistent with the public interest. In reaching its determination, the commission shall consider:</chapeau> <paragraph identifier="/us/tx/ut/t2/c14/scC/s14.101/1"> <num value="1">(1)</num> <content>the reasonable value of the property, facilities, or securities to be acquired, disposed of, merged, transferred, or consolidated;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c14/scC/s14.101/2"> <num value="2">(2)</num> <chapeau>whether the transaction will:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c14/scC/s14.101/A"> <num value="A">(A)</num> <content>adversely affect the health or safety of customers or employees;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c14/scC/s14.101/B"> <num value="B">(B)</num> <content>result in the transfer of jobs of citizens of this state to workers domiciled outside this state; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c14/scC/s14.101/C"> <num value="C">(C)</num> <content>result in the decline of service;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c14/scC/s14.101/3"> <num value="3">(3)</num> <content>whether the public utility will receive consideration equal to the reasonable value of the assets when it sells, leases, or transfers assets; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c14/scC/s14.101/4"> <num value="4">(4)</num> <content>whether the transaction is consistent with the public interest.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c14/scC/s14.101/c"> <num value="c">(c)</num> <content>If the commission finds that a transaction is not in the public interest, the commission shall take the effect of the transaction into consideration in ratemaking proceedings and disallow the effect of the transaction if the transaction will unreasonably affect rates or service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c14/scC/s14.101/d"> <num value="d">(d)</num> <chapeau>This section does not apply to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c14/scC/s14.101/1"> <num value="1">(1)</num> <content>the purchase of a unit of property for replacement;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c14/scC/s14.101/2"> <num value="2">(2)</num> <content>an addition to the facilities of a public utility by construction; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c14/scC/s14.101/3"> <num value="3">(3)</num> <content>transactions that facilitate unbundling, asset valuation, minimization of ownership or control of generation assets, or other purposes consistent with Chapter 39.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 405, Sec. 9, eff. Sept. 1, 1999. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 129 (H.B. 1753), Sec. 1, eff. September 1, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c14/scC/s14.102"> <num value="14.102">Sec. 14.102.</num> <heading>REPORT OF PURCHASE OF VOTING STOCK IN PUBLIC UTILITY</heading> <content>A public utility may not purchase voting stock in another public utility doing business in this state unless the utility reports the purchase to the commission.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c14/scC/s14.103"> <num value="14.103">Sec. 14.103.</num> <heading>REPORT OF LOAN TO STOCKHOLDERS</heading> <content>A public utility may not loan money, stocks, bonds, notes, or other evidence of indebtedness to a person who directly or indirectly owns or holds any stock of the public utility unless the public utility reports the transaction to the commission within a reasonable time.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c14/scD"> <num value="D">SUBCHAPTER D.</num> <heading>RECORDS</heading> <section identifier="/us/tx/ut/t2/c14/scD/s14.151"> <num value="14.151">Sec. 14.151.</num> <heading>RECORDS OF PUBLIC UTILITY</heading> <subsection identifier="/us/tx/ut/t2/c14/scD/s14.151/a"> <num value="a">(a)</num> <content>Each public utility shall keep and provide to the regulatory authority, in the manner and form prescribed by the commission, uniform accounts of all business transacted by the utility.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c14/scD/s14.151/b"> <num value="b">(b)</num> <chapeau>The commission may prescribe the form of books, accounts, records, and memoranda to be kept by a public utility, including:</chapeau> <paragraph identifier="/us/tx/ut/t2/c14/scD/s14.151/1"> <num value="1">(1)</num> <chapeau>the books, accounts, records, and memoranda of:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c14/scD/s14.151/A"> <num value="A">(A)</num> <content>the provision of and capacity for service; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c14/scD/s14.151/B"> <num value="B">(B)</num> <content>the receipt and expenditure of money; and</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c14/scD/s14.151/2"> <num value="2">(2)</num> <content>any other form, record, and memorandum that the commission considers necessary to carry out this title.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c14/scD/s14.151/c"> <num value="c">(c)</num> <content>For a public utility subject to regulation by a federal regulatory agency, compliance with the system of accounts prescribed for the particular class of utilities by the federal agency may be considered sufficient compliance with the system prescribed by the commission. The commission may prescribe the form of books, accounts, records, and memoranda covering information in addition to that required by the federal agency. The system of accounts and the form of books, accounts, records, and memoranda prescribed by the commission for a public utility or class of utilities may not be inconsistent with the systems and forms established by a federal agency for that public utility or class of utilities.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c14/scD/s14.151/d"> <num value="d">(d)</num> <chapeau>Each public utility shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c14/scD/s14.151/1"> <num value="1">(1)</num> <content>keep and provide its books, accounts, records, and memoranda accurately in the manner and form prescribed by the commission; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c14/scD/s14.151/2"> <num value="2">(2)</num> <content>comply with the directions of the regulatory authority relating to the books, accounts, records, and memoranda.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c14/scD/s14.151/e"> <num value="e">(e)</num> <content>In this section, "public utility" includes a municipally owned utility.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c14/scD/s14.152"> <num value="14.152">Sec. 14.152.</num> <heading>MAINTENANCE OF OFFICE AND RECORDS IN THIS STATE</heading> <subsection identifier="/us/tx/ut/t2/c14/scD/s14.152/a"> <num value="a">(a)</num> <content>Each public utility shall maintain an office in this state in a county in which some part of the utility's property is located. The utility shall keep in this office all books, accounts, records, and memoranda required by the commission to be kept in this state.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c14/scD/s14.152/b"> <num value="b">(b)</num> <chapeau>A book, account, record, or memorandum required by the regulatory authority to be kept in this state may not be removed from this state, except as:</chapeau> <paragraph identifier="/us/tx/ut/t2/c14/scD/s14.152/1"> <num value="1">(1)</num> <content>provided by Section 52.255; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c14/scD/s14.152/2"> <num value="2">(2)</num> <content>prescribed by the commission.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c14/scD/s14.153"> <num value="14.153">Sec. 14.153.</num> <heading>COMMUNICATIONS WITH REGULATORY AUTHORITY</heading> <subsection identifier="/us/tx/ut/t2/c14/scD/s14.153/a"> <num value="a">(a)</num> <chapeau>The regulatory authority shall adopt rules governing communications with the regulatory authority or a member or employee of the regulatory authority by:</chapeau> <paragraph identifier="/us/tx/ut/t2/c14/scD/s14.153/1"> <num value="1">(1)</num> <content>a public utility;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c14/scD/s14.153/2"> <num value="2">(2)</num> <content>an affiliate; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c14/scD/s14.153/3"> <num value="3">(3)</num> <content>a representative of a public utility or affiliate.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c14/scD/s14.153/b"> <num value="b">(b)</num> <chapeau>A record of a communication must contain:</chapeau> <paragraph identifier="/us/tx/ut/t2/c14/scD/s14.153/1"> <num value="1">(1)</num> <content>the name of the person contacting the regulatory authority or member or employee of the regulatory authority;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c14/scD/s14.153/2"> <num value="2">(2)</num> <content>the name of the business entity represented;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c14/scD/s14.153/3"> <num value="3">(3)</num> <content>a brief description of the subject matter of the communication; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c14/scD/s14.153/4"> <num value="4">(4)</num> <content>the action, if any, requested by the public utility, affiliate, or representative.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c14/scD/s14.153/c"> <num value="c">(c)</num> <content>Records compiled under Subsection (b) shall be available to the public monthly.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c14/scD/s14.154"> <num value="14.154">Sec. 14.154.</num> <heading>JURISDICTION OVER AFFILIATE</heading> <subsection identifier="/us/tx/ut/t2/c14/scD/s14.154/a"> <num value="a">(a)</num> <content>The commission has jurisdiction over an affiliate that has a transaction with a public utility under the commission's jurisdiction to the extent of access to a record of the affiliate relating to the transaction, including a record of joint or general expenses, any portion of which may be applicable to the transaction.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c14/scD/s14.154/b"> <num value="b">(b)</num> <content>A record obtained by the commission relating to sale of electrical energy at wholesale by an affiliate to the public utility is confidential and is not subject to disclosure under Chapter 552, Government Code.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c14/scE"> <num value="E">SUBCHAPTER E.</num> <heading>AUDITS AND INSPECTIONS</heading> <section identifier="/us/tx/ut/t2/c14/scE/s14.201"> <num value="14.201">Sec. 14.201.</num> <heading>INQUIRY INTO MANAGEMENT AND AFFAIRS</heading> <content>A regulatory authority may inquire into the management and affairs of each public utility and shall keep itself informed as to the manner and method in which each public utility is managed and its affairs are conducted.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c14/scE/s14.202"> <num value="14.202">Sec. 14.202.</num> <heading>MANAGEMENT AUDITS BY COMMISSION</heading> <subsection identifier="/us/tx/ut/t2/c14/scE/s14.202/a"> <num value="a">(a)</num> <chapeau>The commission shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c14/scE/s14.202/1"> <num value="1">(1)</num> <content>inquire into the management of the business of each public utility under its jurisdiction;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c14/scE/s14.202/2"> <num value="2">(2)</num> <content>keep itself informed as to the manner and method in which the utility's business is managed; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c14/scE/s14.202/3"> <num value="3">(3)</num> <content>obtain from the public utility any information necessary to enable the commission to perform a management audit.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c14/scE/s14.202/b"> <num value="b">(b)</num> <content>The commission may audit a utility under its jurisdiction as frequently as needed. Six months after an audit, the utility shall report to the commission on the status of the implementation of the recommendations of the audit and shall file subsequent reports at times the commission considers appropriate.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c14/scE/s14.203"> <num value="14.203">Sec. 14.203.</num> <heading>AUDIT OF ACCOUNTS</heading> <content>A regulatory authority may require the examination and audit of the accounts of a public or municipally owned utility.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c14/scE/s14.204"> <num value="14.204">Sec. 14.204.</num> <heading>INSPECTION</heading> <subsection identifier="/us/tx/ut/t2/c14/scE/s14.204/a"> <num value="a">(a)</num> <chapeau>A regulatory authority and, to the extent authorized by the regulatory authority, its counsel, agent, or employee, may:</chapeau> <paragraph identifier="/us/tx/ut/t2/c14/scE/s14.204/1"> <num value="1">(1)</num> <content>inspect and obtain copies of the papers, books, accounts, documents, and other business records of a public utility within its jurisdiction; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c14/scE/s14.204/2"> <num value="2">(2)</num> <content>inspect the plant, equipment, and other property of a public utility within its jurisdiction.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c14/scE/s14.204/b"> <num value="b">(b)</num> <content>An action under this section must be conducted at a reasonable time for a reasonable purpose.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c14/scE/s14.205"> <num value="14.205">Sec. 14.205.</num> <heading>EXAMINATIONS UNDER OATH</heading> <chapeau>In connection with an action taken under Section 14.204, the regulatory authority may:</chapeau> <paragraph identifier="/us/tx/ut/t2/c14/scE/s14.205/1"> <num value="1">(1)</num> <content>examine under oath an officer, agent, or employee of a public utility; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c14/scE/s14.205/2"> <num value="2">(2)</num> <content>authorize the person conducting the action to make the examination under oath.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c14/scE/s14.206"> <num value="14.206">Sec. 14.206.</num> <heading>ENTERING PREMISES OF PUBLIC UTILITY</heading> <subsection identifier="/us/tx/ut/t2/c14/scE/s14.206/a"> <num value="a">(a)</num> <content>A member, agent, or employee of a regulatory authority may enter the premises occupied by a public utility to conduct an inspection, examination, or test or to exercise any other authority provided by this title.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c14/scE/s14.206/b"> <num value="b">(b)</num> <content>A member, agent, or employee of the regulatory authority may act under this section only during reasonable hours and after reasonable notice to the public utility.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c14/scE/s14.206/c"> <num value="c">(c)</num> <content>A public utility is entitled to be represented when an inspection, examination, or test is conducted on its premises. The utility is entitled to a reasonable time to secure a representative before the inspection, examination, or test begins.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c14/scE/s14.207"> <num value="14.207">Sec. 14.207.</num> <heading>PRODUCTION OF OUT-OF-STATE RECORDS</heading> <subsection identifier="/us/tx/ut/t2/c14/scE/s14.207/a"> <num value="a">(a)</num> <content>A regulatory authority may require, by order or subpoena served on a public utility, the production, at the time and place in this state that the regulatory authority designates, of any books, accounts, papers, or records kept by that public utility outside this state or, if ordered by the commission, verified copies of the books, accounts, papers, or records.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c14/scE/s14.207/b"> <num value="b">(b)</num> <content>A public utility that fails or refuses to comply with an order or subpoena under this section violates this title.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t2/c15"> <num value="15">CHAPTER 15.</num> <heading>JUDICIAL REVIEW, ENFORCEMENT, AND PENALTIES</heading> <subchapter identifier="/us/tx/ut/t2/c15/scA"> <num value="A">SUBCHAPTER A.</num> <heading>JUDICIAL REVIEW</heading> <section identifier="/us/tx/ut/t2/c15/scA/s15.001"> <num value="15.001">Sec. 15.001.</num> <heading>RIGHT TO JUDICIAL REVIEW</heading> <content>Any party to a proceeding before the commission is entitled to judicial review under the substantial evidence rule.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c15/scA/s15.002"> <num value="15.002">Sec. 15.002.</num> <heading>COMMISSION AS DEFENDANT</heading> <content>The commission must be a defendant in a proceeding for judicial review.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c15/scA/s15.003"> <num value="15.003">Sec. 15.003.</num> <heading>COSTS AND ATTORNEY'S FEES</heading> <subsection identifier="/us/tx/ut/t2/c15/scA/s15.003/a"> <num value="a">(a)</num> <content>A party represented by counsel who alleges that existing rates are excessive or that rates prescribed by the commission are excessive and who prevails in a proceeding for review of a commission order or decision is entitled in the same action to recover against the regulation fund reasonable fees for attorneys and expert witnesses and other costs for the party's efforts before the commission and the court.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scA/s15.003/b"> <num value="b">(b)</num> <content>The court shall set the amount of attorney's fees awarded under Subsection (a).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scA/s15.003/c"> <num value="c">(c)</num> <content>If a court finds that an action under Section 15.001 or this section was groundless and brought in bad faith and for the purpose of harassment, the court may award reasonable attorney's fees to the defendant public utility.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c15/scA/s15.004"> <num value="15.004">Sec. 15.004.</num> <heading>JUDICIAL STAY OR SUSPENSION</heading> <content>While an appeal of an order, ruling, or decision of a regulatory authority is pending, the district court, court of appeals, or supreme court, as appropriate, may stay or suspend all or part of the operation of the order, ruling, or decision. In granting or refusing a stay or suspension, the court shall act in accordance with the practice of a court exercising equity jurisdiction.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c15/scB"> <num value="B">SUBCHAPTER B.</num> <heading>ENFORCEMENT AND PENALTIES</heading> <section identifier="/us/tx/ut/t2/c15/scB/s15.021"> <num value="15.021">Sec. 15.021.</num> <heading>ACTION TO ENJOIN OR REQUIRE COMPLIANCE</heading> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.021/a"> <num value="a">(a)</num> <chapeau>The attorney general, on the request of the commission, shall apply in the name of the commission for a court order under Subsection (b) if the commission determines that a public utility or other person is:</chapeau> <paragraph identifier="/us/tx/ut/t2/c15/scB/s15.021/1"> <num value="1">(1)</num> <content>engaging in or about to engage in an act that violates this title or an order or rule of the commission entered or adopted under this title; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c15/scB/s15.021/2"> <num value="2">(2)</num> <content>failing to comply with the requirements of this title or a rule or order of the commission.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.021/b"> <num value="b">(b)</num> <chapeau>A court, in an action under this section, may:</chapeau> <paragraph identifier="/us/tx/ut/t2/c15/scB/s15.021/1"> <num value="1">(1)</num> <content>prohibit the commencement or continuation of an act that violates this title or an order or rule of the commission entered or adopted under this title; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c15/scB/s15.021/2"> <num value="2">(2)</num> <content>require compliance with a provision of this title or an order or rule of the commission.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.021/c"> <num value="c">(c)</num> <content>The remedy under this section is in addition to any other remedy provided under this title.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c15/scB/s15.022"> <num value="15.022">Sec. 15.022.</num> <heading>CONTEMPT</heading> <chapeau>The commission may file a court action for contempt against a person who:</chapeau> <paragraph identifier="/us/tx/ut/t2/c15/scB/s15.022/1"> <num value="1">(1)</num> <content>fails to comply with a lawful order of the commission;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c15/scB/s15.022/2"> <num value="2">(2)</num> <content>fails to comply with a subpoena or subpoena duces tecum; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c15/scB/s15.022/3"> <num value="3">(3)</num> <content>refuses to testify about a matter on which the person may be lawfully interrogated.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c15/scB/s15.023"> <num value="15.023">Sec. 15.023.</num> <heading>ADMINISTRATIVE PENALTY, DISGORGEMENT ORDER, OR MITIGATION PLAN</heading> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.023/a"> <num value="a">(a)</num> <content>The commission may impose an administrative penalty against a person regulated under this title who violates this title or a rule or order adopted under this title.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.023/b"> <num value="b">(b)</num> <content>The penalty for a violation may be in an amount not to exceed $25,000. Each day a violation continues or occurs is a separate violation for purposes of imposing a penalty.</content> <continuation>(b-1) Notwithstanding Subsection (b), the penalty for a violation of a voluntary mitigation plan entered into under Subsection (f) or of a provision of Section 35.0021 or 38.075 may be in an amount not to exceed $1,000,000 for a violation. Each day a violation continues or occurs is a separate violation for purposes of imposing a penalty.</continuation> <continuation>(b-2) Notwithstanding Subsection (b), the penalty for a violation of Section 39.360 in which a business entity fails to submit all required information to or knowingly submits false information to an independent organization certified under Section 39.151 may be in an amount not to exceed $1 million for each violation.</continuation> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.023/c"> <num value="c">(c)</num> <chapeau>The commission by rule shall establish a classification system for violations that includes a range of administrative penalties that may be assessed for each class of violation based on:</chapeau> <paragraph identifier="/us/tx/ut/t2/c15/scB/s15.023/1"> <num value="1">(1)</num> <chapeau>the seriousness of the violation, including:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c15/scB/s15.023/A"> <num value="A">(A)</num> <content>the nature, circumstances, extent, and gravity of a prohibited act; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c15/scB/s15.023/B"> <num value="B">(B)</num> <content>the hazard or potential hazard created to the health, safety, or economic welfare of the public;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c15/scB/s15.023/2"> <num value="2">(2)</num> <content>the economic harm to property or the environment caused by the violation;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c15/scB/s15.023/3"> <num value="3">(3)</num> <content>the history of previous violations;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c15/scB/s15.023/4"> <num value="4">(4)</num> <content>the amount necessary to deter future violations;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c15/scB/s15.023/5"> <num value="5">(5)</num> <content>efforts to correct the violation; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c15/scB/s15.023/6"> <num value="6">(6)</num> <content>any other matter that justice may require.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.023/d"> <num value="d">(d)</num> <content>The classification system established under Subsection (c) shall provide that a penalty in an amount that exceeds $5,000 may be assessed only if the violation is included in the highest class of violations in the classification system.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.023/e"> <num value="e">(e)</num> <content>For a violation of Section 39.157, the commission shall, in addition to the assessment of a penalty, order disgorgement of all excess revenue resulting from the violation. For any other violation of the statutes, rules, or protocols relating to wholesale electric markets, the commission may, in addition to the assessment of a penalty, order disgorgement of all excess revenue resulting from the violation.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.023/f"> <num value="f">(f)</num> <content>The commission and a person may develop and enter into a voluntary mitigation plan relating to a violation of Section 39.157 or rules adopted by the commission under that section. The commission may approve the plan only if the commission determines that the plan is in the public interest. The voluntary mitigation plan must be reviewed at least once every two years and not later than the 90th day after the implementation date of a wholesale market design change. As part of the review, the commission must determine whether the voluntary mitigation plan remains in the public interest. If the commission determines that the voluntary mitigation plan is no longer in the public interest, the commission and the person must agree to a modification of the plan or the commission must terminate the plan. Adherence to the plan must be considered in determining whether a violation occurred and, if so, the penalty to be assessed.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.023/g"> <num value="g">(g)</num> <content>In this subchapter, "excess revenue" means revenue in excess of revenue that would have occurred absent a violation.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2005, 79th Leg., Ch. 797 (S.B. 408), Sec. 7, eff. September 1, 2005. Acts 2011, 82nd Leg., R.S., Ch. 996 (H.B. 2133), Sec. 1, eff. September 1, 2011. Acts 2011, 82nd Leg., R.S., Ch. 996 (H.B. 2133), Sec. 2, eff. September 1, 2011. Acts 2021, 87th Leg., R.S., Ch. 426 (S.B. 3), Sec. 7, eff. June 8, 2021. Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 7, eff. September 1, 2023. Acts 2023, 88th Leg., R.S., Ch. 959 (S.B. 2011), Sec. 1, eff. September 1, 2023. Acts 2025, 89th Leg., R.S., Ch. 1020 (S.B. 2368), Sec. 2, eff. September 1, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c15/scB/s15.024"> <num value="15.024">Sec. 15.024.</num> <heading>ADMINISTRATIVE PENALTY ASSESSMENT OR DISGORGEMENT ORDER PROCEDURE</heading> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.024/a"> <num value="a">(a)</num> <content>If the executive director determines that a violation has occurred, the executive director may issue to the commission a report that states the facts on which the determination is based and the executive director's recommendation on the imposition of an administrative penalty, including a recommendation on the amount of the penalty.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.024/b"> <num value="b">(b)</num> <chapeau>Not later than the 14th day after the date the report is issued, the executive director shall give written notice of the report to the person against whom the penalty may be assessed. The notice may be given by regular or certified mail. The notice must:</chapeau> <paragraph identifier="/us/tx/ut/t2/c15/scB/s15.024/1"> <num value="1">(1)</num> <content>include a brief summary of the alleged violation;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c15/scB/s15.024/2"> <num value="2">(2)</num> <content>state the amount of the recommended penalty; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c15/scB/s15.024/3"> <num value="3">(3)</num> <content>inform the person that the person has a right to a hearing on the occurrence of the violation, the amount of the penalty, or both the occurrence of the violation and the amount of the penalty.</content> <continuation>(b-1) If the commission sends written notice to a person by mail addressed to the person's mailing address as maintained in the commission's records, the person is deemed to have received notice:</continuation> </paragraph> <paragraph identifier="/us/tx/ut/t2/c15/scB/s15.024/1"> <num value="1">(1)</num> <content>on the fifth day after the date that the commission sent the written notice, for notice sent by regular mail; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c15/scB/s15.024/2"> <num value="2">(2)</num> <content>on the date the written notice is received or delivery is refused, for notice sent by certified mail.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.024/c"> <num value="c">(c)</num> <content>A penalty may not be assessed under this section if the person against whom the penalty may be assessed remedies the violation before the 31st day after the date the person receives the notice under Subsection (b). A person who claims to have remedied an alleged violation has the burden of proving to the commission that the alleged violation was remedied and was accidental or inadvertent. This subsection does not apply to a violation of Chapter 17, 55, or 64.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.024/d"> <num value="d">(d)</num> <content>Not later than the 20th day after the date the person receives the notice, the person may accept the determination and recommended penalty of the executive director in writing or may make a written request for a hearing on the occurrence of the violation, the amount of the penalty, or both the occurrence of the violation and the amount of the penalty.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.024/e"> <num value="e">(e)</num> <content>If the person accepts the executive director's determination and recommended penalty or fails to timely respond to the notice, the commission by order shall approve the determination and impose the recommended penalty or order a hearing on the determination and the recommended penalty.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.024/f"> <num value="f">(f)</num> <content>If the person requests a hearing or the commission orders a hearing under Subsection (e), the commission shall refer the matter to the State Office of Administrative Hearings for a hearing and give notice of the referral to the person. The parties to a proceeding under this subchapter shall be limited to the person and the commission, including the independent market monitor. The hearing shall be held by an administrative law judge of the State Office of Administrative Hearings and notice of the hearing must be provided in accordance with Chapter 2001, Government Code. The administrative law judge shall make findings of fact and conclusions of law and promptly issue to the commission a proposal for a decision about the occurrence of the violation and the amount of a proposed penalty. Based on the findings of fact, conclusions of law, and proposal for a decision, the commission by order may find that a violation has occurred and impose a penalty or disgorgement order or may find that no violation occurred.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.024/g"> <num value="g">(g)</num> <content>The notice of the commission's order shall be given to the person as provided by Chapter 2001, Government Code, and must include a statement of the right of the person to judicial review of the order.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 1212, Sec. 3, eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 1579, Sec. 2, eff. Aug. 30, 1999. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 91 (S.B. 1303), Sec. 25.001, eff. September 1, 2011. Acts 2011, 82nd Leg., R.S., Ch. 996 (H.B. 2133), Sec. 3, eff. September 1, 2011. Acts 2011, 82nd Leg., R.S., Ch. 996 (H.B. 2133), Sec. 4, eff. September 1, 2011. Acts 2019, 86th Leg., R.S., Ch. 81 (S.B. 1358), Sec. 1, eff. September 1, 2019.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c15/scB/s15.025"> <num value="15.025">Sec. 15.025.</num> <heading>PAYMENT OF ADMINISTRATIVE PENALTY</heading> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.025/a"> <num value="a">(a)</num> <chapeau>Not later than the 30th day after the date the commission's order imposing an administrative penalty is final as provided by Section 2001.144, Government Code, the person shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c15/scB/s15.025/1"> <num value="1">(1)</num> <content>pay the amount of the penalty;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c15/scB/s15.025/2"> <num value="2">(2)</num> <chapeau>pay the amount of the penalty and file a petition for judicial review contesting:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c15/scB/s15.025/A"> <num value="A">(A)</num> <content>the occurrence of the violation;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c15/scB/s15.025/B"> <num value="B">(B)</num> <content>the amount of the penalty; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c15/scB/s15.025/C"> <num value="C">(C)</num> <content>both the occurrence of the violation and the amount of the penalty; or</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c15/scB/s15.025/3"> <num value="3">(3)</num> <chapeau>without paying the amount of the penalty, file a petition for judicial review contesting:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c15/scB/s15.025/A"> <num value="A">(A)</num> <content>the occurrence of the violation;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c15/scB/s15.025/B"> <num value="B">(B)</num> <content>the amount of the penalty; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c15/scB/s15.025/C"> <num value="C">(C)</num> <content>both the occurrence of the violation and the amount of the penalty.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.025/b"> <num value="b">(b)</num> <chapeau>Not later than the 30th day after the date the commission's order is final as provided by Section 2001.144, Government Code, a person who acts under Subsection (a)(3) may:</chapeau> <paragraph identifier="/us/tx/ut/t2/c15/scB/s15.025/1"> <num value="1">(1)</num> <chapeau>stay enforcement of the penalty by:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c15/scB/s15.025/A"> <num value="A">(A)</num> <content>paying the amount of the penalty to the court for placement in an escrow account; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c15/scB/s15.025/B"> <num value="B">(B)</num> <content>giving to the court a supersedeas bond that is approved by the court for the amount of the penalty and that is effective until all judicial review of the commission's order is final; or</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c15/scB/s15.025/2"> <num value="2">(2)</num> <chapeau>request the court to stay enforcement of the penalty by:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c15/scB/s15.025/A"> <num value="A">(A)</num> <content>filing with the court a sworn affidavit of the person stating that the person is financially unable to pay the amount of the penalty and is financially unable to give the supersedeas bond; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c15/scB/s15.025/B"> <num value="B">(B)</num> <content>giving a copy of the affidavit to the executive director by certified mail.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.025/c"> <num value="c">(c)</num> <content>The executive director, on receipt of a copy of an affidavit under Subsection (b)(2), may file with the court, not later than the fifth day after the date the copy is received, a contest to the affidavit. The court shall hold a hearing on the facts alleged in the affidavit as soon as practicable and shall stay the enforcement of the penalty on finding that the alleged facts are true. The person who files an affidavit has the burden of proving that the person is financially unable to pay the amount of the penalty and to give a supersedeas bond.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.025/d"> <num value="d">(d)</num> <content>If the person does not pay the amount of the penalty and the enforcement of the penalty is not stayed, the executive director may refer the matter to the attorney general for collection of the amount of the penalty.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.025/e"> <num value="e">(e)</num> <content>Any excess revenue ordered disgorged under this section for a violation of the statutes, rules, or protocols relating to wholesale electric markets shall be returned to the affected wholesale electric market participants to be used to reduce costs or fees incurred by retail electric customers. The commission shall adopt rules to prescribe how revenue shall be returned to the affected wholesale electric market participants under this subsection.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.025/f"> <num value="f">(f)</num> <content>For purposes of this section and Section 15.026, a reference to a penalty shall be construed to include disgorgement.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 996 (H.B. 2133), Sec. 5, eff. September 1, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c15/scB/s15.026"> <num value="15.026">Sec. 15.026.</num> <heading>JUDICIAL REVIEW OF ADMINISTRATIVE PENALTY</heading> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.026/a"> <num value="a">(a)</num> <chapeau>Judicial review of a commission order imposing an administrative penalty or disgorgement is:</chapeau> <paragraph identifier="/us/tx/ut/t2/c15/scB/s15.026/1"> <num value="1">(1)</num> <content>instituted by filing a petition as provided by Subchapter G, Chapter 2001, Government Code; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c15/scB/s15.026/2"> <num value="2">(2)</num> <content>under the substantial evidence rule.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.026/b"> <num value="b">(b)</num> <content>If the court sustains the occurrence of the violation, the court may uphold or reduce the amount of the penalty or disgorgement and order the person to pay the full or reduced amount of the penalty or disgorgement. If the court does not sustain the occurrence of the violation, the court shall order that no penalty or disgorgement is owed.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.026/c"> <num value="c">(c)</num> <content>When the judgment of the court becomes final, the court shall proceed under this subsection. If the person paid the amount of the penalty and that amount is reduced or is not upheld by the court, the court shall order that the appropriate amount plus accrued interest be remitted to the person. The rate of the interest is the rate charged on loans to depository institutions by the New York Federal Reserve Bank, and the interest shall be paid for the period beginning on the date the penalty was paid and ending on the date the penalty is remitted. If the person gave a supersedeas bond and the amount of the penalty is not upheld by the court, the court shall order the release of the bond. If the person gave a supersedeas bond and the amount of the penalty is reduced, the court shall order the release of the bond after the person pays the amount.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 996 (H.B. 2133), Sec. 6, eff. September 1, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c15/scB/s15.027"> <num value="15.027">Sec. 15.027.</num> <heading>ADMINISTRATIVE PENALTY COLLECTION; GENERAL PROVISIONS</heading> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.027/a"> <num value="a">(a)</num> <content>An administrative penalty collected under this subchapter shall be sent to the comptroller.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.027/b"> <num value="b">(b)</num> <content>A proceeding relating to an administrative penalty under this subchapter is subject to Chapter 2001, Government Code.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.027/c"> <num value="c">(c)</num> <content>The executive director may delegate any power or duty relating to an administrative penalty given the executive director by this subchapter to a person designated by the executive director.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c15/scB/s15.028"> <num value="15.028">Sec. 15.028.</num> <heading>CIVIL PENALTY AGAINST PUBLIC UTILITY, PAY TELEPHONE SERVICE PROVIDER, OR AFFILIATE</heading> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.028/a"> <num value="a">(a)</num> <content>A public utility, customer-owned pay telephone service provider under Section 55.178, or affiliate is subject to a civil penalty if the utility, provider, or affiliate knowingly violates this title, fails to perform a duty imposed on it, or fails or refuses to obey an order, rule, direction, or requirement of the commission or a decree or judgment of a court.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.028/b"> <num value="b">(b)</num> <content>A civil penalty under this section shall be in an amount of not less than $1,000 and not more than $5,000 for each violation.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.028/c"> <num value="c">(c)</num> <content>A public utility or affiliate commits a separate violation each day it continues to violate Subsection (a).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.028/d"> <num value="d">(d)</num> <content>The attorney general shall file in the name of the commission a suit on the attorney general's own initiative or at the request of the commission to recover the civil penalty under this section.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c15/scB/s15.029"> <num value="15.029">Sec. 15.029.</num> <heading>CIVIL PENALTY FOR VIOLATING SECTION 12.055 OR 12.154</heading> <chapeau>055 OR 12.154. (a) A member of the commission or an officer or director of a public utility or affiliate who knowingly violates Section 12.055 or 12.154 is subject to a civil penalty of $1,000 for each violation.</chapeau> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.029/b"> <num value="b">(b)</num> <content>A person other than a person subject to Subsection (a) who knowingly violates Section 12.154 is subject to a civil penalty of $500 for each violation.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.029/c"> <num value="c">(c)</num> <content>A member, officer, or employee of the commission who in any action is found by a preponderance of the evidence to have violated a provision of Section 12.055 or 12.154 shall be removed from the person's office or employment.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.029/d"> <num value="d">(d)</num> <content>A civil penalty under this section is recoverable in a suit filed in the name of the commission by the attorney general on the attorney general's own initiative or at the request of the commission.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c15/scB/s15.030"> <num value="15.030">Sec. 15.030.</num> <heading>OFFENSE</heading> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.030/a"> <num value="a">(a)</num> <content>A person commits an offense if the person wilfully and knowingly violates this title.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.030/b"> <num value="b">(b)</num> <content>This section does not apply to an offense described by Section 55.138.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.030/c"> <num value="c">(c)</num> <content>An offense under this section is a felony of the third degree.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c15/scB/s15.031"> <num value="15.031">Sec. 15.031.</num> <heading>PLACE FOR SUIT</heading> <chapeau>A suit for an injunction or a penalty under this title may be brought in:</chapeau> <paragraph identifier="/us/tx/ut/t2/c15/scB/s15.031/1"> <num value="1">(1)</num> <content>Travis County;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c15/scB/s15.031/2"> <num value="2">(2)</num> <content>a county in which the violation is alleged to have occurred; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c15/scB/s15.031/3"> <num value="3">(3)</num> <content>a county in which a defendant resides.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c15/scB/s15.032"> <num value="15.032">Sec. 15.032.</num> <heading>PENALTIES CUMULATIVE</heading> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.032/a"> <num value="a">(a)</num> <content>A penalty that accrues under this title is cumulative of any other penalty.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.032/b"> <num value="b">(b)</num> <content>A suit for the recovery of a penalty does not bar or affect the recovery of any other penalty or bar a criminal prosecution against any person.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c15/scB/s15.033"> <num value="15.033">Sec. 15.033.</num> <heading>DISPOSITION OF FINES AND PENALTIES</heading> <content>A fine or penalty collected under this title, other than a fine or penalty collected in a criminal proceeding or a penalty collected under Section 15.027(a), shall be paid to the commission.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c15/scB/s15.034"> <num value="15.034">Sec. 15.034.</num> <heading>CONFIDENTIALITY OF ENFORCEMENT INFORMATION</heading> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.034/a"> <num value="a">(a)</num> <content>Information and material in the possession of or obtained or compiled by the commission that is related to a commission enforcement proceeding under this subchapter is confidential and not subject to disclosure under Chapter 552, Government Code.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scB/s15.034/b"> <num value="b">(b)</num> <chapeau>Information and material in the possession of or obtained or compiled by the commission that is related to a commission enforcement proceeding under this subchapter is not subject to disclosure, discovery, subpoena, or any other means of legal compulsion for release, except:</chapeau> <paragraph identifier="/us/tx/ut/t2/c15/scB/s15.034/1"> <num value="1">(1)</num> <content>to the commission or an employee or agent of the commission; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c15/scB/s15.034/2"> <num value="2">(2)</num> <chapeau>at the commission's discretion, to:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c15/scB/s15.034/A"> <num value="A">(A)</num> <content>a person involved in the enforcement proceeding;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c15/scB/s15.034/B"> <num value="B">(B)</num> <content>a law enforcement agency; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c15/scB/s15.034/C"> <num value="C">(C)</num> <content>a member of the legislature.</content> </subparagraph> </paragraph> </subsection> <sourceCredit>Added by Acts 2025, 89th Leg., R.S., Ch. 1020 (S.B. 2368), Sec. 3, eff. September 1, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c15/scB/s15.035"> <num value="15.035">Sec. 15.035.</num> <heading>APPLICABILITY</heading> <chapeau>For the purposes of imposing an administrative penalty under this subchapter, "person" includes:</chapeau> <paragraph identifier="/us/tx/ut/t2/c15/scB/s15.035/1"> <num value="1">(1)</num> <content>an electric utility as defined by Section 31.002;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c15/scB/s15.035/2"> <num value="2">(2)</num> <content>a municipally owned utility; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c15/scB/s15.035/3"> <num value="3">(3)</num> <content>an electric cooperative.</content> </paragraph> <sourceCredit>Added by Acts 2025, 89th Leg., R.S., Ch. 1020 (S.B. 2368), Sec. 3, eff. September 1, 2025.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c15/scC"> <num value="C">SUBCHAPTER C.</num> <heading>COMPLAINTS</heading> <section identifier="/us/tx/ut/t2/c15/scC/s15.051"> <num value="15.051">Sec. 15.051.</num> <heading>COMPLAINT BY AFFECTED PERSON</heading> <subsection identifier="/us/tx/ut/t2/c15/scC/s15.051/a"> <num value="a">(a)</num> <content>An affected person may complain to the regulatory authority in writing setting forth an act or omission by a public utility in violation or claimed violation of a law that the regulatory authority has jurisdiction to administer or of an order, ordinance, or rule of the regulatory authority.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scC/s15.051/b"> <num value="b">(b)</num> <chapeau>The commission shall keep for a reasonable period information about each complaint filed with the commission that the commission has authority to resolve. The information shall include:</chapeau> <paragraph identifier="/us/tx/ut/t2/c15/scC/s15.051/1"> <num value="1">(1)</num> <content>the date the complaint is received;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c15/scC/s15.051/2"> <num value="2">(2)</num> <content>the name of the complainant;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c15/scC/s15.051/3"> <num value="3">(3)</num> <content>the subject matter of the complaint;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c15/scC/s15.051/4"> <num value="4">(4)</num> <content>a record of each person contacted in relation to the complaint;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c15/scC/s15.051/5"> <num value="5">(5)</num> <content>a summary of the results of the review or investigation of the complaint; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c15/scC/s15.051/6"> <num value="6">(6)</num> <content>if the commission took no action on the complaint, an explanation of the reason the complaint was closed without action.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scC/s15.051/c"> <num value="c">(c)</num> <content>The commission shall keep a file about each written complaint filed with the commission that the commission has authority to resolve. The commission shall provide to the person filing the complaint and to each person or entity complained about information concerning the commission's policies and procedures on complaint investigation and resolution. The commission, at least quarterly and until final disposition of the complaint, shall notify the person filing the complaint and each person or entity complained about of the status of the complaint unless the notice would jeopardize an undercover investigation.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2005, 79th Leg., Ch. 797 (S.B. 408), Sec. 8, eff. September 1, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c15/scC/s15.052"> <num value="15.052">Sec. 15.052.</num> <heading>COMPLAINT REGARDING RECREATIONAL VEHICLE PARK OWNER</heading> <subsection identifier="/us/tx/ut/t2/c15/scC/s15.052/a"> <num value="a">(a)</num> <content>An affected person may complain to the regulatory authority in writing setting forth an act or omission by a recreational vehicle park owner who provides metered electric service under Subchapter C, Chapter 184, in violation or claimed violation of a law that the regulatory authority has jurisdiction to administer or of an order, ordinance, or rule of the regulatory authority.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scC/s15.052/b"> <num value="b">(b)</num> <content>The commission shall keep for a reasonable period an information file about each complaint filed with the commission relating to a recreational vehicle park owner.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scC/s15.052/c"> <num value="c">(c)</num> <content>The commission, at least quarterly and until final disposition of the written complaint, shall notify the parties to the complaint of the status of the complaint unless the notice would jeopardize an undercover investigation.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c15/scD"> <num value="D">SUBCHAPTER D.</num> <heading>CEASE AND DESIST ORDERS</heading> <section identifier="/us/tx/ut/t2/c15/scD/s15.101"> <num value="15.101">Sec. 15.101.</num> <heading>APPLICATION OF SUBCHAPTER</heading> <content>This subchapter applies only to a person to whom Subtitle B applies.</content> <sourceCredit>Added by Acts 2013, 83rd Leg., R.S., Ch. 170 (H.B. 1600), Sec. 1.06, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c15/scD/s15.102"> <num value="15.102">Sec. 15.102.</num> <heading>RULES</heading> <content>The commission shall adopt rules to implement this subchapter.</content> <sourceCredit>Added by Acts 2013, 83rd Leg., R.S., Ch. 170 (H.B. 1600), Sec. 1.06, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c15/scD/s15.103"> <num value="15.103">Sec. 15.103.</num> <heading>PROCEEDINGS UNDER OTHER LAW</heading> <content>The commission may proceed solely under this subchapter or under this subchapter in conjunction with other applicable law.</content> <sourceCredit>Added by Acts 2013, 83rd Leg., R.S., Ch. 170 (H.B. 1600), Sec. 1.06, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c15/scD/s15.104"> <num value="15.104">Sec. 15.104.</num> <heading>AUTHORITY TO ISSUE ORDER</heading> <subsection identifier="/us/tx/ut/t2/c15/scD/s15.104/a"> <num value="a">(a)</num> <chapeau>The commission on its own motion may issue a cease and desist order:</chapeau> <paragraph identifier="/us/tx/ut/t2/c15/scD/s15.104/1"> <num value="1">(1)</num> <content>after providing notice and an opportunity for a hearing if practicable or without notice or opportunity for a hearing; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c15/scD/s15.104/2"> <num value="2">(2)</num> <chapeau>if the commission determines that the conduct of a person:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c15/scD/s15.104/A"> <num value="A">(A)</num> <content>poses a threat to continuous and adequate electric service;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c15/scD/s15.104/B"> <num value="B">(B)</num> <content>is hazardous;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c15/scD/s15.104/C"> <num value="C">(C)</num> <content>creates an immediate danger to the public safety; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c15/scD/s15.104/D"> <num value="D">(D)</num> <content>is causing or can be reasonably expected to cause an immediate injury to a customer of electric services and that the injury is incapable of being repaired or rectified by monetary compensation.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scD/s15.104/b"> <num value="b">(b)</num> <content>The commission by order or rule may delegate to the executive director the authority to issue cease and desist orders under this subchapter.</content> </subsection> <sourceCredit>Added by Acts 2013, 83rd Leg., R.S., Ch. 170 (H.B. 1600), Sec. 1.06, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c15/scD/s15.105"> <num value="15.105">Sec. 15.105.</num> <heading>NOTICE</heading> <subsection identifier="/us/tx/ut/t2/c15/scD/s15.105/a"> <num value="a">(a)</num> <content>Notice of a proposed order must be given not later than the 10th day before the date set for a hearing if the commission requires notice and hearing before issuing the order.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scD/s15.105/b"> <num value="b">(b)</num> <chapeau>On issuance of an order under Section 15.104 with or without a hearing, the commission shall serve on the person affected by the order an order that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c15/scD/s15.105/1"> <num value="1">(1)</num> <content>contains a statement of the charges; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c15/scD/s15.105/2"> <num value="2">(2)</num> <content>requires the person immediately to cease and desist from the acts, methods, or practices stated in the order.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scD/s15.105/c"> <num value="c">(c)</num> <content>The commission shall serve the order by registered or certified mail, return receipt requested, to the person's last known address.</content> </subsection> <sourceCredit>Added by Acts 2013, 83rd Leg., R.S., Ch. 170 (H.B. 1600), Sec. 1.06, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c15/scD/s15.106"> <num value="15.106">Sec. 15.106.</num> <heading>HEARING</heading> <subsection identifier="/us/tx/ut/t2/c15/scD/s15.106/a"> <num value="a">(a)</num> <content>Chapter 2001, Government Code, does not apply to the issuance of a cease and desist order under this subchapter without a hearing. A hearing conducted before or after issuance of an order under this subchapter is a contested case under Chapter 2001, Government Code.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scD/s15.106/b"> <num value="b">(b)</num> <chapeau>If the commission issues an order under this subchapter without a hearing, the person affected by the order may request a hearing to affirm, modify, or set aside the order. A request must be submitted not later than the 30th day after the date the person receives the order. The commission shall set the hearing for a date that is:</chapeau> <paragraph identifier="/us/tx/ut/t2/c15/scD/s15.106/1"> <num value="1">(1)</num> <content>not later than the 10th day after the date the commission receives a request for a hearing; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c15/scD/s15.106/2"> <num value="2">(2)</num> <content>agreed to by the person and the commission.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scD/s15.106/c"> <num value="c">(c)</num> <content>At or following the hearing, the commission shall wholly or partly affirm, modify, or set aside the order. If the person affected by an order does not request a hearing in the manner provided by Subsection (b) and the commission does not hold a hearing on the order, the order is affirmed without further action by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c15/scD/s15.106/d"> <num value="d">(d)</num> <content>The commission may hold a hearing under this subchapter or may authorize the State Office of Administrative Hearings to hold the hearing.</content> </subsection> <sourceCredit>Added by Acts 2013, 83rd Leg., R.S., Ch. 170 (H.B. 1600), Sec. 1.06, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c15/scD/s15.107"> <num value="15.107">Sec. 15.107.</num> <heading>EFFECT OF ORDER PENDING HEARING</heading> <content>Pending a hearing under this subchapter, an order continues in effect unless the order is stayed by the commission.</content> <sourceCredit>Added by Acts 2013, 83rd Leg., R.S., Ch. 170 (H.B. 1600), Sec. 1.06, eff. September 1, 2013.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t2/c16"> <num value="16">CHAPTER 16.</num> <heading>COMMISSION FINANCING</heading> <subchapter identifier="/us/tx/ut/t2/c16/scA"> <num value="A">SUBCHAPTER A.</num> <heading>ASSESSMENT ON PUBLIC UTILITIES</heading> <section identifier="/us/tx/ut/t2/c16/scA/s16.001"> <num value="16.001">Sec. 16.001.</num> <heading>ASSESSMENT ON PUBLIC UTILITIES</heading> <subsection identifier="/us/tx/ut/t2/c16/scA/s16.001/a"> <num value="a">(a)</num> <content>To defray the expenses incurred in the administration of this title, an assessment is imposed on each public utility, retail electric provider, and electric cooperative within the jurisdiction of the commission that serves the ultimate consumer, including each interexchange telecommunications carrier.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c16/scA/s16.001/b"> <num value="b">(b)</num> <content>An assessment under this section is equal to one-sixth of one percent of the public utility's, retail electric provider's, or electric cooperative's gross receipts from rates charged to the ultimate consumer in this state.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c16/scA/s16.001/c"> <num value="c">(c)</num> <content>An interexchange telecommunications carrier that does not provide local exchange telephone service may collect the fee imposed under this section as an additional item separately stated on the customer bill as "utility gross receipts assessment."</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 405, Sec. 10, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c16/scA/s16.002"> <num value="16.002">Sec. 16.002.</num> <heading>PAYMENT DATES</heading> <subsection identifier="/us/tx/ut/t2/c16/scA/s16.002/a"> <num value="a">(a)</num> <content>The assessment is due August 15.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c16/scA/s16.002/b"> <num value="b">(b)</num> <content>A public utility may instead make quarterly payments due August 15, November 15, February 15, and May 15.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c16/scA/s16.003"> <num value="16.003">Sec. 16.003.</num> <heading>LATE PAYMENT PENALTY</heading> <subsection identifier="/us/tx/ut/t2/c16/scA/s16.003/a"> <num value="a">(a)</num> <content>An additional fee equal to 10 percent of the amount due shall be assessed for any late payment of an assessment required under this subchapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c16/scA/s16.003/b"> <num value="b">(b)</num> <content>An assessment delinquent for more than 30 days accrues interest at an annual rate of 12 percent on the amount of the assessment and penalty due.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c16/scA/s16.004"> <num value="16.004">Sec. 16.004.</num> <heading>COLLECTION BY COMPTROLLER</heading> <content>The comptroller shall collect the assessment and any penalty or interest due under this subchapter.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c16/scB"> <num value="B">SUBCHAPTER B.</num> <heading>GRANTS AND OTHER FINANCIAL ASSISTANCE</heading> <section identifier="/us/tx/ut/t2/c16/scB/s16.021"> <num value="16.021">Sec. 16.021.</num> <heading>GRANTS OF FEDERAL FUNDS</heading> <subsection identifier="/us/tx/ut/t2/c16/scB/s16.021/a"> <num value="a">(a)</num> <content>The commission may apply to an appropriate agency or officer of the United States to receive and spend federal funds available by grant or other similar form of financial assistance.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c16/scB/s16.021/b"> <num value="b">(b)</num> <content>This section does not impair the ability of the commission to contract with or receive assistance from a state, local, or other authorized source of funds.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c16/scC"> <num value="C">SUBCHAPTER C.</num> <heading>MONEY DISPOSITION, ACCOUNTING, AND BUDGET</heading> <section identifier="/us/tx/ut/t2/c16/scC/s16.041"> <num value="16.041">Sec. 16.041.</num> <heading>APPLICATION OF STATE FUNDS REFORM ACT</heading> <content>Money paid to the commission or to the office under this title is subject to Subchapter F, Chapter 404, Government Code.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c16/scC/s16.042"> <num value="16.042">Sec. 16.042.</num> <heading>ACCOUNTING RECORDS</heading> <content>The commission shall keep the accounting records required by the comptroller.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c16/scC/s16.043"> <num value="16.043">Sec. 16.043.</num> <heading>AUDIT</heading> <content>The financial transactions of the commission are subject to audit by the state auditor under Chapter 321, Government Code.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c16/scC/s16.044"> <num value="16.044">Sec. 16.044.</num> <heading>APPROVAL OF BUDGET</heading> <content>The commission budget is subject to legislative approval as part of the General Appropriations Act.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t2/c17"> <num value="17">CHAPTER 17.</num> <heading>CUSTOMER PROTECTION</heading> <subchapter identifier="/us/tx/ut/t2/c17/scA"> <num value="A">SUBCHAPTER A.</num> <heading>GENERAL PROVISIONS</heading> <section identifier="/us/tx/ut/t2/c17/scA/s17.001"> <num value="17.001">Sec. 17.001.</num> <heading>CUSTOMER PROTECTION POLICY</heading> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.001/a"> <num value="a">(a)</num> <content>The legislature finds that new developments in telecommunications services and the production and delivery of electricity, as well as changes in market structure, marketing techniques, and technology, make it essential that customers have safeguards against fraudulent, unfair, misleading, deceptive, or anticompetitive business practices and against businesses that do not have the technical and financial resources to provide adequate service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.001/b"> <num value="b">(b)</num> <content>The purpose of this chapter is to establish retail customer protection standards and confer on the commission authority to adopt and enforce rules to protect retail customers from fraudulent, unfair, misleading, deceptive, or anticompetitive practices.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.001/c"> <num value="c">(c)</num> <content>Nothing in this section shall be construed to abridge customer rights set forth in commission rules in effect at the time of the enactment of this chapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.001/d"> <num value="d">(d)</num> <content>This chapter does not limit the constitutional, statutory, and common law authority of the office of the attorney general.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.001/e"> <num value="e">(e)</num> <content>Nothing in this chapter authorizes a customer to receive retail electric service from a person other than a certificated retail electric utility.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1579, Sec. 3, eff. Aug. 30, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c17/scA/s17.002"> <num value="17.002">Sec. 17.002.</num> <heading>DEFINITIONS</heading> <chapeau>In this chapter:</chapeau> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.002/1"> <num value="1">(1)</num> <content>"Billing agent" means any entity that submits charges to the billing utility on behalf of itself or any provider of a product or service.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.002/2"> <num value="2">(2)</num> <content>"Billing utility" means any telecommunications provider, as defined by Section 51.002, retail electric provider, or electric utility that issues a bill directly to a customer for any telecommunications or electric product or service.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.002/3"> <num value="3">(3)</num> <content>"Certificated telecommunications utility" means a telecommunications utility that has been granted either a certificate of convenience and necessity, a certificate of operating authority, or a service provider certificate of operating authority.</content> <continuation>(3-a) "Critical care residential customer" means a residential customer who has a person permanently residing in the customer's home who has been diagnosed by a physician as being dependent upon an electric-powered medical device to sustain life.</continuation> <continuation>(3-b) "Critical load industrial customer" means an industrial customer for whom an interruption or suspension of electric service will create a dangerous or life-threatening condition on the customer's premises.</continuation> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.002/4"> <num value="4">(4)</num> <content>"Customer" means any person in whose name telephone or retail electric service is billed, including individuals, governmental units at all levels of government, corporate entities, and any other entity with legal capacity to be billed for telephone or retail electric service.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.002/5"> <num value="5">(5)</num> <content>"Electric utility" has the meaning assigned by Section 31.002.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.002/6"> <num value="6">(6)</num> <content>"Retail electric provider" means a person that sells electric energy to retail customers in this state after the legislature authorizes a customer to receive retail electric service from a person other than a certificated retail electric utility.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.002/7"> <num value="7">(7)</num> <content>"Service provider" means any entity that offers a product or service to a customer and that directly or indirectly charges to or collects from a customer's bill an amount for the product or service on a customer's bill received from a billing utility.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.002/8"> <num value="8">(8)</num> <content>"Telecommunications utility" has the meaning assigned by Section 51.002.</content> </paragraph> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1579, Sec. 3, eff. Aug. 30, 1999. Amended by: Acts 2021, 87th Leg., R.S., Ch. 426 (S.B. 3), Sec. 8, eff. June 8, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c17/scA/s17.003"> <num value="17.003">Sec. 17.003.</num> <heading>CUSTOMER AWARENESS</heading> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.003/a"> <num value="a">(a)</num> <content>The commission shall promote public awareness of changes in the electric and telecommunications markets, provide customers with information necessary to make informed choices about available options, and ensure that customers have an adequate understanding of their rights.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.003/b"> <num value="b">(b)</num> <content>The commission shall compile a report on customer service at least once each year showing the comparative customer information from reports given to the commission it deems necessary.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.003/c"> <num value="c">(c)</num> <content>The commission shall adopt and enforce rules to require a certificated telecommunications utility, a retail electric provider, or an electric utility to give clear, uniform, and understandable information to customers about rates, terms, services, customer rights, and other necessary information as determined by the commission. The rules must include a list of defined terms common to the telecommunications and electricity industries and require that applicable terms be labeled uniformly on each retail bill sent to a customer by a certificated telecommunications utility, retail electric provider, or electric utility to facilitate consumer understanding of relevant billing elements.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.003/d"> <num value="d">(d)</num> <content>Customer awareness efforts by the commission shall be conducted in English and Spanish and any other language as necessary.</content> <continuation>(d-1) An electric utility providing electric delivery service for a retail electric provider, as defined by Section 31.002, shall provide to the retail electric provider, and the retail electric provider shall periodically provide to the retail electric provider's retail customers together with bills sent to the customers, information about:</continuation> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.003/1"> <num value="1">(1)</num> <content>the electric utility's procedures for implementing involuntary load shedding initiated by the independent organization certified under Section 39.151 for the ERCOT power region;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.003/2"> <num value="2">(2)</num> <content>the types of customers who may be considered critical care residential customers, critical load industrial customers, or critical load according to commission rules adopted under Section 38.076;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.003/3"> <num value="3">(3)</num> <content>the procedure for a customer to apply to be considered a critical care residential customer, a critical load industrial customer, or critical load according to commission rules adopted under Section 38.076;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.003/4"> <num value="4">(4)</num> <content>reducing electricity use at times when involuntary load shedding events may be implemented; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.003/5"> <num value="5">(5)</num> <content>the procedure for a customer to request vegetation management near a transmission or distribution line.</content> <continuation>(d-2) A retail electric utility shall periodically provide with bills sent to retail customers of the utility information about the procedure for a customer to request vegetation management near a transmission or distribution line.</continuation> </paragraph> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1579, Sec. 3, eff. Aug. 30, 1999. Amended by: Acts 2009, 81st Leg., R.S., Ch. 648 (H.B. 1822), Sec. 1, eff. September 1, 2009. Acts 2021, 87th Leg., R.S., Ch. 426 (S.B. 3), Sec. 9, eff. June 8, 2021. Acts 2025, 89th Leg., R.S., Ch. 564 (H.B. 1606), Sec. 1, eff. September 1, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c17/scA/s17.004"> <num value="17.004">Sec. 17.004.</num> <heading>CUSTOMER PROTECTION STANDARDS</heading> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.004/a"> <num value="a">(a)</num> <chapeau>All buyers of telecommunications and retail electric services are entitled to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.004/1"> <num value="1">(1)</num> <content>protection from fraudulent, unfair, misleading, deceptive, or anticompetitive practices, including protection from being billed for services that were not authorized or provided;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.004/2"> <num value="2">(2)</num> <content>choice of a telecommunications service provider, a retail electric provider, or an electric utility, where that choice is permitted by law, and to have that choice honored;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.004/3"> <num value="3">(3)</num> <content>information in English and Spanish and any other language as the commission deems necessary concerning rates, key terms and conditions, and the basis for any claim of environmental benefits of certain production facilities;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.004/4"> <num value="4">(4)</num> <content>protection from discrimination on the basis of race, color, sex, nationality, religion, marital status, income level, or source of income and from unreasonable discrimination on the basis of geographic location;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.004/5"> <num value="5">(5)</num> <content>impartial and prompt resolution of disputes with a certificated telecommunications utility, a retail electric provider, or an electric utility and disputes with a telecommunications service provider related to unauthorized charges and switching of service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.004/6"> <num value="6">(6)</num> <content>privacy of customer consumption and credit information;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.004/7"> <num value="7">(7)</num> <content>accuracy of metering and billing;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.004/8"> <num value="8">(8)</num> <content>bills presented in a clear, readable format and easy-to-understand language that uses defined terms as required by commission rules adopted under Section 17.003;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.004/9"> <num value="9">(9)</num> <content>information in English and Spanish and any other language as the commission deems necessary concerning low-income assistance programs and deferred payment plans;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.004/10"> <num value="10">(10)</num> <content>all consumer protections and disclosures established by the Fair Credit Reporting Act (15 U.S.C. Section 1681 et seq.) and the Truth in Lending Act (15 U.S.C. Section 1601 et seq.); and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.004/11"> <num value="11">(11)</num> <content>after retail competition begins as authorized by the legislature, programs provided by retail electric providers that offer eligible low-income customers energy efficiency programs, an affordable rate package, and bill payment assistance programs designed to reduce uncollectible accounts.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.004/b"> <num value="b">(b)</num> <content>The commission may adopt and enforce rules as necessary or appropriate to carry out this section, including rules for minimum service standards for a certificated telecommunications utility, a retail electric provider, or an electric utility relating to customer deposits and the extension of credit, switching fees, levelized billing programs, and termination of service and to energy efficiency programs, an affordable rate package, and bill payment assistance programs for low-income customers. The commission may waive language requirements for good cause.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.004/c"> <num value="c">(c)</num> <content>The commission shall request the comments of the office of the attorney general in developing the rules that may be necessary or appropriate to carry out this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.004/d"> <num value="d">(d)</num> <content>The commission shall coordinate its enforcement efforts regarding the prosecution of fraudulent, misleading, deceptive, and anticompetitive business practices with the office of the attorney general in order to ensure consistent treatment of specific alleged violations.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.004/e"> <num value="e">(e)</num> <content>Nothing in this section shall be construed to abridge customer rights set forth in commission rules or to abridge the rights of low-income customers to receive benefits through pending or operating programs in effect at the time of the enactment of this chapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.004/f"> <num value="f">(f)</num> <content>The commission shall adopt rules to provide automatic enrollment of eligible utility customers for lifeline telephone service and reduced electric rates available to low-income households. Each state agency, on the request of the commission, shall assist in the adoption and implementation of those rules.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.004/g"> <num value="g">(g)</num> <content>Notwithstanding any other provision of this title, the rules adopted under Subsection (b) shall provide full, concurrent reimbursement for the costs of any programs provided under Subsection (a)(11) and for reimbursement for the difference between any affordable rate package provided under Subsection (a)(11) and any rates otherwise applicable.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1579, Sec. 3, eff. Aug. 30, 1999. Amended by: Acts 2009, 81st Leg., R.S., Ch. 648 (H.B. 1822), Sec. 2, eff. September 1, 2009.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c17/scA/s17.005"> <num value="17.005">Sec. 17.005.</num> <heading>PROTECTIONS FOR CUSTOMERS OF MUNICIPALLY OWNED UTILITIES</heading> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.005/a"> <num value="a">(a)</num> <content>A municipally owned utility may not be deemed to be a "service provider" or "billing agent" for purposes of Sections 17.156(b) and (e).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.005/b"> <num value="b">(b)</num> <content>The governing body of a municipally owned utility shall adopt, implement, and enforce rules that shall have the effect of accomplishing the objectives set out in Sections 17.004(a) and (b) and 17.102, as to the municipally owned utility within its certificated service area.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.005/c"> <num value="c">(c)</num> <content>The governing body of a municipally owned utility or its designee shall perform the dispute resolution function provided for by Section 17.157 for disputes arising from services provided by the municipally owned utility to electric customers served within the municipally owned utility's certificated service area.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.005/d"> <num value="d">(d)</num> <content>With respect to electric customers served by a municipally owned utility outside its certificated service area or otherwise served through others' distribution facilities, after retail competition begins as authorized by the legislature, the provisions of this chapter as administered by the commission apply.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.005/e"> <num value="e">(e)</num> <content>Nothing in this chapter shall be deemed to apply to a wholesale customer of a municipally owned utility.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.005/f"> <num value="f">(f)</num> <chapeau>A municipally owned utility shall periodically provide with bills sent to retail customers of the utility information about:</chapeau> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.005/1"> <num value="1">(1)</num> <content>the utility's procedure for implementing involuntary load shedding;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.005/2"> <num value="2">(2)</num> <content>the types of customers who may be considered critical care residential customers, critical load industrial customers, or critical load according to commission rules adopted under Section 38.076;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.005/3"> <num value="3">(3)</num> <content>the procedure for a customer to apply to be considered a critical care residential customer, a critical load industrial customer, or critical load according to commission rules adopted under Section 38.076;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.005/4"> <num value="4">(4)</num> <content>reducing electricity use at times when involuntary load shedding events may be implemented; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.005/5"> <num value="5">(5)</num> <content>the procedure for a customer to request vegetation management near a transmission or distribution line.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1579, Sec. 3, eff. Aug. 30, 1999. Amended by: Acts 2021, 87th Leg., R.S., Ch. 426 (S.B. 3), Sec. 10, eff. June 8, 2021. Acts 2025, 89th Leg., R.S., Ch. 564 (H.B. 1606), Sec. 2, eff. September 1, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c17/scA/s17.006"> <num value="17.006">Sec. 17.006.</num> <heading>PROTECTIONS FOR CUSTOMERS OF ELECTRIC COOPERATIVES</heading> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.006/a"> <num value="a">(a)</num> <content>An electric cooperative shall not be deemed to be a "service provider" or "billing agent" for purposes of Sections 17.156(b) and (e).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.006/b"> <num value="b">(b)</num> <content>The electric cooperative shall adopt, implement, and enforce rules that shall have the effect of accomplishing the objectives set out in Sections 17.004(a) and (b) and 17.102.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.006/c"> <num value="c">(c)</num> <content>The board of directors of the electric cooperative or its designee shall perform the dispute resolution function provided for by Section 17.157 for electric customers served by the electric cooperative within its certificated service area.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.006/d"> <num value="d">(d)</num> <content>With respect to electric customers served by an electric cooperative outside its certificated service area or otherwise served through others' distribution facilities, after the legislature authorizes retail competition, the provisions of this chapter as administered by the commission shall apply.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.006/e"> <num value="e">(e)</num> <content>Nothing in this chapter shall be deemed to apply to a wholesale customer of an electric cooperative.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.006/f"> <num value="f">(f)</num> <chapeau>An electric cooperative shall periodically provide with bills sent to retail customers of the cooperative information about:</chapeau> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.006/1"> <num value="1">(1)</num> <content>the cooperative's procedure for implementing involuntary load shedding;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.006/2"> <num value="2">(2)</num> <content>the types of customers who may be considered critical care residential customers, critical load industrial customers, or critical load according to commission rules adopted under Section 38.076;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.006/3"> <num value="3">(3)</num> <content>the procedure for a customer to apply to be considered a critical care residential customer, a critical load industrial customer, or critical load according to commission rules adopted under Section 38.076;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.006/4"> <num value="4">(4)</num> <content>reducing electricity use at times when involuntary load shedding events may be implemented; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.006/5"> <num value="5">(5)</num> <content>the procedure for a customer to request vegetation management near a transmission or distribution line.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1579, Sec. 3, eff. Aug. 30, 1999. Amended by: Acts 2021, 87th Leg., R.S., Ch. 426 (S.B. 3), Sec. 11, eff. June 8, 2021. Acts 2025, 89th Leg., R.S., Ch. 564 (H.B. 1606), Sec. 3, eff. September 1, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c17/scA/s17.007"> <num value="17.007">Sec. 17.007.</num> <heading>IDENTIFICATION PROCESS FOR CUSTOMER SERVICE BENEFITS</heading> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.007/a"> <num value="a">(a)</num> <content>The Health and Human Services Commission, on request of the commission, shall assist in developing an automatic process for identifying low-income customers to retail electric providers and certificated telecommunications utilities to enable those providers and utilities to offer customer service, discounts, bill payment assistance, or other methods of assistance.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.007/b"> <num value="b">(b)</num> <content>The commission and the Health and Human Services Commission shall continue the memorandum of understanding entered into by those agencies in effect on January 1, 2017, that establishes the respective duties of those agencies in relation to the automatic process, and may amend the memorandum of understanding as necessary to achieve the goals of this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.007/c"> <num value="c">(c)</num> <content>The commission may not require a retail electric provider or a certificated telecommunications utility to offer customer service, discounts, bill payment assistance, targeted bill messaging, or other benefits for which the provider or utility is not reimbursed.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.007/d"> <num value="d">(d)</num> <chapeau>The commission may not submit a request to the Health and Human Services Commission to provide for a process to identify low-income electric customers for a fiscal year unless:</chapeau> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.007/1"> <num value="1">(1)</num> <content>the commission receives a request from one or more retail electric providers not later than July 31 of the previous fiscal year for a list of low-income electric customers to be developed; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.007/2"> <num value="2">(2)</num> <content>each retail electric provider that submits a request to the commission under Subdivision (1) agrees to reimburse the commission for the cost of development of the list on terms agreed to by the commission and the provider.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2001, 77th Leg., ch. 1451, Sec. 1, eff. Sept. 1, 2001. Amended by: Acts 2017, 85th Leg., R.S., Ch. 48 (S.B. 1976), Sec. 1, eff. September 1, 2017.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c17/scA/s17.008"> <num value="17.008">Sec. 17.008.</num> <heading>PROTECTION OF RESIDENTIAL ELECTRIC SERVICE APPLICANTS AND CUSTOMERS</heading> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.008/a"> <num value="a">(a)</num> <chapeau>In this section and in Section 17.009:</chapeau> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.008/1"> <num value="1">(1)</num> <chapeau>"Credit history":</chapeau> <subparagraph identifier="/us/tx/ut/t2/c17/scA/s17.008/A"> <num value="A">(A)</num> <content>means information regarding an individual's past history of:</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.008/i"> <num value="i">(i)</num> <chapeau>financial responsibility;</chapeau> <clause identifier="/us/tx/ut/t2/c17/scA/s17.008/ii"> <num value="ii">(ii)</num> <content>payment habits; or</content> </clause> <clause identifier="/us/tx/ut/t2/c17/scA/s17.008/iii"> <num value="iii">(iii)</num> <content>creditworthiness; and</content> </clause> <subparagraph identifier="/us/tx/ut/t2/c17/scA/s17.008/B"> <num value="B">(B)</num> <content>does not include an individual's outstanding balance for retail electric or telecommunications service.</content> </subparagraph> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.008/2"> <num value="2">(2)</num> <content>"Credit score" means a score, grade, or value that is derived by a consumer reporting agency, as defined under Section 603(f) of the Fair Credit Reporting Act (15 U.S.C. Section 1681a(f)), using data from a credit history in any type of model, method, or program for the purpose of grading or ranking credit report data, whether derived electronically, from an algorithm, through a computer software application model or program, or through any other analogous process.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.008/3"> <num value="3">(3)</num> <content>"Utility payment data" means a measure that is derived by a consumer reporting agency, as defined under Section 603(f) of the Fair Credit Reporting Act (15 U.S.C. Section 1681a(f)), from a model specifically designed to correlate to utility payment histories.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.008/b"> <num value="b">(b)</num> <content>A retail electric provider may not deny an applicant's request to become a residential electric service customer on the basis of the applicant's credit history or credit score, but may use the applicant's utility payment data until the later of January 1, 2007, or the date on which the price to beat is no longer in effect in the geographic area in which the customer is located.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.008/c"> <num value="c">(c)</num> <content>Notwithstanding Subsection (b), while a retail electric provider is required to provide service to a geographic area as the affiliated retail electric provider, the provider may not deny an applicant's request to become a residential electric service customer within that geographic area on the basis of the applicant's credit history, credit score, or utility payment data.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.008/d"> <num value="d">(d)</num> <content>After the date described in Subsection (b), a retail electric provider, including an affiliated retail electric provider, may not deny an applicant's request to become a residential electric service customer on the basis of the applicant's credit history, credit score, or utility payment data but may use the applicant's electric bill payment history.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.008/e"> <num value="e">(e)</num> <chapeau>A retail electric provider may not use a credit score, a credit history, or utility payment data as the basis for determining the price for month-to-month electric service or electric service that includes a fixed price commitment of 12 months or less:</chapeau> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.008/1"> <num value="1">(1)</num> <content>for an existing residential customer; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.008/2"> <num value="2">(2)</num> <content>in response to an applicant's request to become a residential electric service customer.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.008/f"> <num value="f">(f)</num> <content>After the date described in Subsection (b), on request by a customer or former customer in this state, a retail electric provider or electric utility shall timely provide to the customer or former customer bill payment history information with the retail electric provider or electric utility during the preceding 12-month period. Bill payment history information may be obtained by the customer or former customer once during each 12-month period without charge. If additional copies of bill payment history information are requested during a 12-month period, the electric service provider may charge the customer or former customer a reasonable fee for each copy.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.008/g"> <num value="g">(g)</num> <content>On request by a retail electric provider, another retail electric provider or electric utility shall timely verify information that purports to show a customer's service and bill payment history with the retail electric provider or electric utility.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.008/h"> <num value="h">(h)</num> <content>This section does not limit a retail electric provider's authority to require a deposit or advance payment as a condition of service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.008/i"> <num value="i">(i)</num> <content>Notwithstanding Subsection (e), a retail electric provider may provide rewards, benefits, or credits to residential electric service customers on the basis of the customer's payment history for retail electric service to that provider.</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., Ch. 926 (H.B. 412), Sec. 1, eff. September 1, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c17/scA/s17.009"> <num value="17.009">Sec. 17.009.</num> <heading>PROTECTION OF RESIDENTIAL TELEPHONE SERVICE APPLICANTS AND CUSTOMERS</heading> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.009/a"> <num value="a">(a)</num> <content>A provider of basic local telecommunications services and nonbasic network services may not deny an applicant's request to become a residential customer on the basis of the applicant's credit history or credit score.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.009/b"> <num value="b">(b)</num> <chapeau>A provider of basic local telecommunications services and nonbasic network services may not use a credit score or credit history as the basis for determining price for service:</chapeau> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.009/1"> <num value="1">(1)</num> <content>for an existing residential customer; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.009/2"> <num value="2">(2)</num> <content>in response to an applicant's request to become a residential customer.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.009/c"> <num value="c">(c)</num> <content>This section does not limit the authority of a provider of basic local telecommunications services and nonbasic network services to require a deposit, advance payment, or credit limit as a condition of service.</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., Ch. 926 (H.B. 412), Sec. 1, eff. September 1, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c17/scA/s17.010"> <num value="17.010">Sec. 17.010.</num> <heading>DISASTER BILLING AWARENESS</heading> <chapeau>The commission in cooperation with the Texas Division of Emergency Management shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.010/1"> <num value="1">(1)</num> <content>promote public awareness of bill payment assistance available during a disaster for electric, water, and wastewater services, including assistance for consumers on level billing plans; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.010/2"> <num value="2">(2)</num> <content>provide the public with information about billing practices during a disaster to ensure that consumers of electric, water, and wastewater services have an adequate understanding of their rights.</content> </paragraph> <sourceCredit>Added by Acts 2019, 86th Leg., R.S., Ch. 285 (H.B. 2320), Sec. 2, eff. September 1, 2019.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c17/scA/s17.011"> <num value="17.011">Sec. 17.011.</num> <heading>TRANSPARENCY AND BEST PRACTICES GUIDE FOR ROOFTOP SOLAR SYSTEMS FOR HOMES</heading> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.011/a"> <num value="a">(a)</num> <content>In this section, "solar energy device" has the meaning assigned by Section 185.001.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.011/b"> <num value="b">(b)</num> <chapeau>The commission shall develop and periodically update a guide to provide customers with:</chapeau> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.011/1"> <num value="1">(1)</num> <content>basic information, best practices, and guidelines to consider when deciding whether to install a solar energy device for a home; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.011/2"> <num value="2">(2)</num> <content>a list of resources for obtaining more detailed information on solar energy devices.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.011/c"> <num value="c">(c)</num> <chapeau>The guide must include the following information:</chapeau> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.011/1"> <num value="1">(1)</num> <chapeau>suggested questions to ask the electric cooperative, electric utility, municipally owned utility, or retail electric provider that serves the customer about services relating to home solar energy devices, including whether the cooperative, utility, or provider:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c17/scA/s17.011/A"> <num value="A">(A)</num> <content>offers net metering or a buyback program for excess power put onto the grid by a solar energy device;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c17/scA/s17.011/B"> <num value="B">(B)</num> <content>provides rebates or incentives for the installation of a solar energy device; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c17/scA/s17.011/C"> <num value="C">(C)</num> <content>can clearly identify the services related to home solar energy devices it does or does not provide;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.011/2"> <num value="2">(2)</num> <chapeau>design elements of solar energy devices to consider for maximizing efficiency, including:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c17/scA/s17.011/A"> <num value="A">(A)</num> <content>the condition, direction, orientation, and tilt of the roof on which the device is installed;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c17/scA/s17.011/B"> <num value="B">(B)</num> <content>shade analysis;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c17/scA/s17.011/C"> <num value="C">(C)</num> <content>square footage of the roof; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c17/scA/s17.011/D"> <num value="D">(D)</num> <content>maintenance requirements;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.011/3"> <num value="3">(3)</num> <chapeau>financial considerations for customers considering installing a solar energy device, including:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c17/scA/s17.011/A"> <num value="A">(A)</num> <content>financing options, including the costs and benefits of purchasing or leasing a solar energy device;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c17/scA/s17.011/B"> <num value="B">(B)</num> <content>estimations of the appropriate size of a solar energy device system in relation to home size and power needs;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c17/scA/s17.011/C"> <num value="C">(C)</num> <content>federal and state tax credits;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c17/scA/s17.011/D"> <num value="D">(D)</num> <content>continuing costs, including fees, interest rates, and costs of regular maintenance and repairs; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c17/scA/s17.011/E"> <num value="E">(E)</num> <content>the expected life of different types of solar energy devices; and</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.011/4"> <num value="4">(4)</num> <content>a contact telephone number and e-mail address for an employee or division of the commission who can provide customers with information about solar energy devices in this state.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.011/d"> <num value="d">(d)</num> <content>The commission shall publish the guide on the commission's Internet website.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scA/s17.011/e"> <num value="e">(e)</num> <chapeau>For at least 12 months after the commission publishes each version of the guide, each electric utility that issues a bill directly to a customer for any electric product or service and each electric cooperative, municipally owned utility, and retail electric provider shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.011/1"> <num value="1">(1)</num> <content>include a link to the guide on the utility's, cooperative's, or provider's Internet website; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scA/s17.011/2"> <num value="2">(2)</num> <content>provide information about accessing the guide with each bill.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2025, 89th Leg., R.S., Ch. 18 (S.B. 1697), Sec. 1, eff. September 1, 2025.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c17/scB"> <num value="B">SUBCHAPTER B.</num> <heading>CERTIFICATION, REGISTRATION, AND REPORTING REQUIREMENTS</heading> <section identifier="/us/tx/ut/t2/c17/scB/s17.051"> <num value="17.051">Sec. 17.051.</num> <heading>ADOPTION OF RULES</heading> <subsection identifier="/us/tx/ut/t2/c17/scB/s17.051/a"> <num value="a">(a)</num> <content>The commission shall adopt rules relating to certification, registration, and reporting requirements for a certificated telecommunications utility, a retail electric provider, or an electric utility, as well as all telecommunications utilities that are not dominant carriers, pay telephone providers, qualifying facilities that are selling capacity into the wholesale or retail market, exempt wholesale generators, and power marketers.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scB/s17.051/b"> <num value="b">(b)</num> <content>The rules adopted under Subsections (a) and (c) shall be consistent with and no less effective than federal law and may not require the disclosure of highly sensitive competitive or trade secret information.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scB/s17.051/c"> <num value="c">(c)</num> <content>The commission shall adopt rules governing the local registration of retail electric providers under Section 39.358.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1579, Sec. 3, eff. Aug. 30, 1999. Amended by Acts 2003, 78th Leg., ch. 48, Sec. 1, eff. Sept. 1, 2003.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c17/scB/s17.052"> <num value="17.052">Sec. 17.052.</num> <heading>SCOPE OF RULES</heading> <chapeau>The commission may adopt and enforce rules to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c17/scB/s17.052/1"> <num value="1">(1)</num> <content>require certification or registration with the commission as a condition of doing business in this state, except that this requirement does not apply to municipally owned utilities;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scB/s17.052/2"> <num value="2">(2)</num> <content>amend certificates or registrations to reflect changed ownership and control;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scB/s17.052/3"> <num value="3">(3)</num> <content>establish rules for customer service and protection;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scB/s17.052/4"> <num value="4">(4)</num> <content>suspend or revoke certificates or registrations for repeated violations of this chapter or commission rules, except that the commission may not revoke a certificate of convenience and necessity of an electric utility except as provided by Section 37.059 or a certificate of convenience and necessity of a telecommunications utility except as provided by Section 54.008; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scB/s17.052/5"> <num value="5">(5)</num> <content>order disconnection of a pay telephone service provider's pay telephones or revocation of certification or registration for repeated violations of this chapter or commission rules.</content> </paragraph> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1579, Sec. 3, eff. Aug. 30, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c17/scB/s17.053"> <num value="17.053">Sec. 17.053.</num> <heading>REPORTS</heading> <content>The commission may require a telecommunications service provider, a retail electric provider, or an electric utility to submit reports to the commission concerning any matter over which it has authority under this chapter.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1579, Sec. 3, eff. Aug. 30, 1999.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c17/scC"> <num value="C">SUBCHAPTER C.</num> <heading>CUSTOMER'S RIGHT TO CHOICE</heading> <section identifier="/us/tx/ut/t2/c17/scC/s17.101"> <num value="17.101">Sec. 17.101.</num> <heading>POLICY</heading> <content>It is the policy of this state that all customers be protected from the unauthorized switching of a telecommunications service provider, a retail electric provider, or an electric utility selected by the customer to provide service, where choice is permitted by law.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1579, Sec. 3, eff. Aug. 30, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c17/scC/s17.102"> <num value="17.102">Sec. 17.102.</num> <heading>RULES RELATING TO CHOICE</heading> <chapeau>The commission shall adopt and enforce rules that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c17/scC/s17.102/1"> <num value="1">(1)</num> <content>ensure that customers are protected from deceptive practices employed in obtaining authorizations of service and in the verification of change orders, including negative option marketing, sweepstakes, and contests that cause customers to unknowingly change their telecommunications service provider, retail electric provider, or electric utility, where choice is permitted by law;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scC/s17.102/2"> <num value="2">(2)</num> <content>provide for clear, easily understandable identification, in each bill sent to a customer, of all telecommunications service providers, retail electric providers, or electric utilities submitting charges on the bill;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scC/s17.102/3"> <num value="3">(3)</num> <content>ensure that every service provider submitting charges on the bill is clearly and easily identified on the bill along with its services, products, and charges, using defined terms as required by commission rules adopted under Section 17.003;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scC/s17.102/4"> <num value="4">(4)</num> <content>provide that unauthorized changes in service be remedied at no cost to the customer within a period established by the commission;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scC/s17.102/5"> <num value="5">(5)</num> <content>require refunds or credits to the customer in the event of an unauthorized change; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scC/s17.102/6"> <num value="6">(6)</num> <content>provide for penalties for violations of commission rules adopted under this section, including fines and revocation of certificates or registrations, by this action denying the certificated telecommunications utility, the retail electric provider, or the electric utility the right to provide service in this state, except that the commission may not revoke a certificate of convenience and necessity of an electric utility except as provided by Section 37.059 or a certificate of convenience and necessity of a telecommunications utility except as provided by Section 54.008.</content> </paragraph> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1579, Sec. 3, eff. Aug. 30, 1999. Amended by: Acts 2009, 81st Leg., R.S., Ch. 648 (H.B. 1822), Sec. 3, eff. September 1, 2009.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c17/scD"> <num value="D">SUBCHAPTER D.</num> <heading>PROTECTION AGAINST UNAUTHORIZED CHARGES</heading> <section identifier="/us/tx/ut/t2/c17/scD/s17.151"> <num value="17.151">Sec. 17.151.</num> <heading>REQUIREMENTS FOR SUBMITTING CHARGES</heading> <subsection identifier="/us/tx/ut/t2/c17/scD/s17.151/a"> <num value="a">(a)</num> <chapeau>A service provider, retail electric provider, or billing agent may submit charges for a new product or service to be billed on a customer's telephone or retail electric bill on or after the effective date of this section only if:</chapeau> <paragraph identifier="/us/tx/ut/t2/c17/scD/s17.151/1"> <num value="1">(1)</num> <content>the service provider offering the product or service has thoroughly informed the customer of the product or service being offered, including all associated charges, and has explicitly informed the customer that the associated charges for the product or service will appear on the customer's telephone or electric bill;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scD/s17.151/2"> <num value="2">(2)</num> <content>the customer has clearly and explicitly consented to obtain the product or service offered and to have the associated charges appear on the customer's telephone or electric bill and the consent has been verified as provided by Subsection (b);</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scD/s17.151/3"> <num value="3">(3)</num> <chapeau>the service provider offering the product or service and any billing agent for the service provider:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c17/scD/s17.151/A"> <num value="A">(A)</num> <content>has provided the customer with a toll-free telephone number the customer may call and an address to which the customer may write to resolve any billing dispute and to answer questions; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c17/scD/s17.151/B"> <num value="B">(B)</num> <content>has contracted with the billing utility to bill for products and services on the billing utility's bill as provided by Subsection (c); and</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scD/s17.151/4"> <num value="4">(4)</num> <content>the service provider, retail electric provider, or billing agent uses defined terms on the bill as required by commission rules adopted under Section 17.003.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scD/s17.151/b"> <num value="b">(b)</num> <chapeau>The customer consent required by Subsection (a)(2) must be verified by the service provider offering the product or service by authorization from the customer. A record of the customer consent, including verification, must be maintained by the service provider offering the product or service for a period of at least 24 months immediately after the consent and verification have been obtained. The method of obtaining customer consent and verification must include one or more of the following:</chapeau> <paragraph identifier="/us/tx/ut/t2/c17/scD/s17.151/1"> <num value="1">(1)</num> <content>written authorization from the customer;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scD/s17.151/2"> <num value="2">(2)</num> <content>toll-free electronic authorization placed from the telephone number that is the subject of the product or service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scD/s17.151/3"> <num value="3">(3)</num> <content>oral authorization obtained by an independent third party; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scD/s17.151/4"> <num value="4">(4)</num> <content>any other method of authorization approved by the commission or the Federal Communications Commission.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scD/s17.151/c"> <num value="c">(c)</num> <content>The contract required by Subsection (a)(3)(B) must include the service provider's name, business address, and business telephone number and shall be maintained by the billing utility for as long as the billing for the products and services continues and for the 24 months immediately following the permanent discontinuation of the billing.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scD/s17.151/d"> <num value="d">(d)</num> <content>A service provider offering a product or service to be charged on a customer's telephone or electric bill and any billing agent for the service provider may not use any fraudulent, unfair, misleading, deceptive, or anticompetitive marketing practice to obtain customers, including the use of negative option marketing, sweepstakes, and contests.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scD/s17.151/e"> <num value="e">(e)</num> <content>Unless verification is required by federal law or rules implementing federal law, Subsection (b) does not apply to customer-initiated transactions with a certificated telecommunications provider or an electric utility for which the service provider has the appropriate documentation.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scD/s17.151/f"> <num value="f">(f)</num> <content>If a service provider is notified by a billing utility that a customer has reported to the billing utility that a charge made by the service provider is unauthorized, the service provider shall cease to charge the customer for the unauthorized product or service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scD/s17.151/g"> <num value="g">(g)</num> <content>This section does not apply to message telecommunications services charges that are initiated by dialing 1+, 0+, 0-, 1010XXX, or collect calls and charges for video services if the service provider has the necessary call detail record to establish the billing for the call or service.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1579, Sec. 3, eff. Aug. 30, 1999. Amended by: Acts 2009, 81st Leg., R.S., Ch. 648 (H.B. 1822), Sec. 4, eff. September 1, 2009.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c17/scD/s17.152"> <num value="17.152">Sec. 17.152.</num> <heading>RESPONSIBILITIES OF BILLING UTILITY</heading> <subsection identifier="/us/tx/ut/t2/c17/scD/s17.152/a"> <num value="a">(a)</num> <chapeau>If a customer's telephone or retail electric bill is charged for any product or service without proper customer consent or verification, the billing utility, on its knowledge or notification of any unauthorized charge, shall promptly, not later than 45 days after the date of knowledge or notification of the charge:</chapeau> <paragraph identifier="/us/tx/ut/t2/c17/scD/s17.152/1"> <num value="1">(1)</num> <content>notify the service provider to cease charging the customer for the unauthorized product or service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scD/s17.152/2"> <num value="2">(2)</num> <content>remove any unauthorized charge from the customer's bill;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scD/s17.152/3"> <num value="3">(3)</num> <content>refund or credit to the customer all money that has been paid by the customer for any unauthorized charge, and if the unauthorized charge is not adjusted within three billing cycles, shall pay interest on the amount of the unauthorized charge;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scD/s17.152/4"> <num value="4">(4)</num> <content>on the customer's request, provide the customer with all billing records under its control related to any unauthorized charge within 15 business days after the date of the removal of the unauthorized charge from the customer's bill; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scD/s17.152/5"> <num value="5">(5)</num> <content>maintain for at least 24 months a record of every customer who has experienced any unauthorized charge for a product or service on the customer's telephone or electric bill and who has notified the billing utility of the unauthorized charge.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scD/s17.152/b"> <num value="b">(b)</num> <chapeau>A record required by Subsection (a)(5) shall contain for each unauthorized charge:</chapeau> <paragraph identifier="/us/tx/ut/t2/c17/scD/s17.152/1"> <num value="1">(1)</num> <content>the name of the service provider that offered the product or service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scD/s17.152/2"> <num value="2">(2)</num> <content>any affected telephone numbers or addresses;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scD/s17.152/3"> <num value="3">(3)</num> <content>the date the customer requested that the billing utility remove the unauthorized charge;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scD/s17.152/4"> <num value="4">(4)</num> <content>the date the unauthorized charge was removed from the customer's telephone or electric bill; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scD/s17.152/5"> <num value="5">(5)</num> <content>the date any money that the customer paid for the unauthorized charges was refunded or credited to the customer.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scD/s17.152/c"> <num value="c">(c)</num> <chapeau>A billing utility may not:</chapeau> <paragraph identifier="/us/tx/ut/t2/c17/scD/s17.152/1"> <num value="1">(1)</num> <content>disconnect or terminate telecommunications or electric service to any customer for nonpayment of an unauthorized charge; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scD/s17.152/2"> <num value="2">(2)</num> <content>file an unfavorable credit report against a customer who has not paid charges the customer has alleged were unauthorized unless the dispute regarding the unauthorized charge is ultimately resolved against the customer, except that the customer shall remain obligated to pay any charges that are not in dispute, and this subsection does not apply to those undisputed charges.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1579, Sec. 3, eff. Aug. 30, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c17/scD/s17.153"> <num value="17.153">Sec. 17.153.</num> <heading>RECORDS OF DISPUTED CHARGES</heading> <subsection identifier="/us/tx/ut/t2/c17/scD/s17.153/a"> <num value="a">(a)</num> <content>Every service provider shall maintain a record of every disputed charge for a product or service placed on a customer's bill.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scD/s17.153/b"> <num value="b">(b)</num> <chapeau>The record required under Subsection (a) shall contain for every disputed charge:</chapeau> <paragraph identifier="/us/tx/ut/t2/c17/scD/s17.153/1"> <num value="1">(1)</num> <content>any affected telephone numbers or addresses;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scD/s17.153/2"> <num value="2">(2)</num> <content>the date the customer requested that the billing utility remove the unauthorized charge;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scD/s17.153/3"> <num value="3">(3)</num> <content>the date the unauthorized charge was removed from the customer's telephone or retail electric bill; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scD/s17.153/4"> <num value="4">(4)</num> <content>the date action was taken to refund or credit to the customer any money that the customer paid for the unauthorized charges.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scD/s17.153/c"> <num value="c">(c)</num> <content>The record required by Subsection (a) shall be maintained for at least 24 months following the completion of all steps required by Section 17.152(a).</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1579, Sec. 3, eff. Aug. 30, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c17/scD/s17.154"> <num value="17.154">Sec. 17.154.</num> <heading>NOTICE</heading> <subsection identifier="/us/tx/ut/t2/c17/scD/s17.154/a"> <num value="a">(a)</num> <content>A billing utility shall provide notice of a customer's rights under this section in the manner prescribed by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scD/s17.154/b"> <num value="b">(b)</num> <content>Notice of a customer's rights must be provided by mail to each residential and retail business customer within 60 days of the effective date of this section or by inclusion in the publication of the telephone directory next following the effective date of this section. In addition, each billing utility shall send the notice to new customers at the time service is initiated or to any customer at that customer's request.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1579, Sec. 3, eff. Aug. 30, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c17/scD/s17.155"> <num value="17.155">Sec. 17.155.</num> <heading>PROVIDING COPY OF RECORDS</heading> <content>A billing utility shall provide a copy of records maintained under Sections 17.151(c), 17.152, and 17.154 to the commission staff on request. A service provider shall provide a copy of records maintained under Sections 17.151(b) and 17.153 to the commission on request.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1579, Sec. 3, eff. Aug. 30, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c17/scD/s17.156"> <num value="17.156">Sec. 17.156.</num> <heading>VIOLATIONS</heading> <subsection identifier="/us/tx/ut/t2/c17/scD/s17.156/a"> <num value="a">(a)</num> <content>If the commission finds that a billing utility violated this subchapter, the commission may implement penalties and other enforcement actions under Chapter 15.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scD/s17.156/b"> <num value="b">(b)</num> <content>If the commission finds that any other service provider or billing agent subject to this subchapter has violated this subchapter or has knowingly provided false information to the commission on matters subject to this subchapter, the commission may enforce the provisions of Chapter 15 against the service provider or billing agent as if it were regulated by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scD/s17.156/c"> <num value="c">(c)</num> <content>Neither the authority granted under this section nor any other provision of this subchapter shall be construed to grant the commission jurisdiction to regulate service providers or billing agents who are not otherwise subject to commission regulation, other than as specifically provided by this chapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scD/s17.156/d"> <num value="d">(d)</num> <content>If the commission finds that a billing utility or service provider repeatedly violates this subchapter, the commission may, if the action is consistent with the public interest, suspend, restrict, or revoke the registration or certificate of the telecommunications service provider, retail electric provider, or electric utility, by this action denying the telecommunications service provider, retail electric provider, or electric utility the right to provide service in this state, except that the commission may not revoke a certificate of convenience and necessity of an electric utility except as provided by Section 37.059 or a certificate of convenience and necessity of a telecommunications utility except as provided by Section 54.008.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scD/s17.156/e"> <num value="e">(e)</num> <content>If the commission finds that a service provider or billing agent has repeatedly violated any provision of this subchapter, the commission may order the billing utility to terminate billing and collection services for that service provider or billing agent.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scD/s17.156/f"> <num value="f">(f)</num> <content>Nothing in this subchapter shall be construed to preclude a billing utility from taking action on its own to terminate or restrict its billing and collection services.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1579, Sec. 3, eff. Aug. 30, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c17/scD/s17.157"> <num value="17.157">Sec. 17.157.</num> <heading>DISPUTES</heading> <subsection identifier="/us/tx/ut/t2/c17/scD/s17.157/a"> <num value="a">(a)</num> <content>The commission may resolve disputes between a retail customer and a billing utility, service provider, telecommunications utility, retail electric provider, or electric utility.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scD/s17.157/b"> <num value="b">(b)</num> <chapeau>In exercising its authority under Subsection (a), the commission may:</chapeau> <paragraph identifier="/us/tx/ut/t2/c17/scD/s17.157/1"> <num value="1">(1)</num> <content>order a billing utility, service provider, retail electric provider, or electric utility to produce information or records;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scD/s17.157/2"> <num value="2">(2)</num> <content>require that all contracts, bills, and other communications from a billing utility, service provider, retail electric provider, or electric utility display a working toll-free telephone number that customers may call with complaints and inquiries;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scD/s17.157/3"> <num value="3">(3)</num> <content>require a billing utility, service provider, retail electric provider, or electric utility to refund or credit overcharges or unauthorized charges with interest if the billing utility, service provider, retail electric provider, or electric utility has failed to comply with commission rules or a contract with the customer;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scD/s17.157/4"> <num value="4">(4)</num> <content>order appropriate relief to ensure that a customer's choice of a telecommunications service provider, a retail electric provider, or an electric utility that encompasses a geographic area in which more than one provider has been certificated is honored;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scD/s17.157/5"> <num value="5">(5)</num> <content>require the continuation of service to a residential or small commercial customer while a dispute is pending regarding charges the customer has alleged were unauthorized; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scD/s17.157/6"> <num value="6">(6)</num> <content>investigate an alleged violation.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scD/s17.157/c"> <num value="c">(c)</num> <content>The commission shall adopt procedures for the resolution of disputes in a timely manner, which in no event shall exceed 60 days.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1579, Sec. 3, eff. Aug. 30, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c17/scD/s17.158"> <num value="17.158">Sec. 17.158.</num> <heading>CONSISTENCY WITH FEDERAL LAW</heading> <content>Rules adopted by the commission under this subchapter shall be consistent with and not more burdensome than applicable federal laws and rules.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1579, Sec. 3, eff. Aug. 30, 1999.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c17/scE"> <num value="E">SUBCHAPTER E.</num> <heading>PROTECTION AGAINST UTILITY SERVICE DISCONNECTION</heading> <section identifier="/us/tx/ut/t2/c17/scE/s17.201"> <num value="17.201">Sec. 17.201.</num> <heading>DEFINITION</heading> <content>In this subchapter, "nonsubmetered master metered multifamily property" means an apartment, a leased or owner-occupied condominium, or one or more buildings containing at least 10 dwellings that receive electric utility service that is master metered but not submetered.</content> <sourceCredit>Added by Acts 2013, 83rd Leg., R.S., Ch. 322 (H.B. 1772), Sec. 2, eff. January 1, 2014.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c17/scE/s17.202"> <num value="17.202">Sec. 17.202.</num> <heading>NOTICE OF DISCONNECTION TO MUNICIPALITIES FOR NONSUBMETERED MASTER METERED MULTIFAMILY PROPERTIES</heading> <subsection identifier="/us/tx/ut/t2/c17/scE/s17.202/a"> <num value="a">(a)</num> <chapeau>A retail electric provider or a vertically integrated electric utility, not including a municipally owned utility or an electric cooperative, in an area where customer choice has not been introduced shall send a written notice of service disconnection to a municipality before the retail electric provider or vertically integrated electric utility disconnects service to a nonsubmetered master metered multifamily property for nonpayment if:</chapeau> <paragraph identifier="/us/tx/ut/t2/c17/scE/s17.202/1"> <num value="1">(1)</num> <content>the property is located in the municipality; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c17/scE/s17.202/2"> <num value="2">(2)</num> <content>the municipality establishes an authorized representative to receive the notice as described by Section 17.203(c).</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scE/s17.202/b"> <num value="b">(b)</num> <content>The retail electric provider or vertically integrated electric utility in an area where customer choice has not been introduced shall send the notice required by this section not later than the 10th day before the date electric service is scheduled for disconnection.</content> </subsection> <sourceCredit>Added by Acts 2013, 83rd Leg., R.S., Ch. 322 (H.B. 1772), Sec. 2, eff. January 1, 2014.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c17/scE/s17.203"> <num value="17.203">Sec. 17.203.</num> <heading>ADDITIONAL SAFEGUARDS</heading> <subsection identifier="/us/tx/ut/t2/c17/scE/s17.203/a"> <num value="a">(a)</num> <content>The customer safeguards provided by this subchapter are in addition to safeguards provided by other law or agency rules.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scE/s17.203/b"> <num value="b">(b)</num> <content>This subchapter does not prohibit a municipality or the commission from adopting customer safeguards that exceed the safeguards provided by this chapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c17/scE/s17.203/c"> <num value="c">(c)</num> <content>The commission by rule shall develop a mechanism by which a municipality may provide the commission with the contact information of the municipality's authorized representative to whom the notice required by Section 17.202 must be sent. The commission shall make the contact information available to the public.</content> </subsection> <sourceCredit>Added by Acts 2013, 83rd Leg., R.S., Ch. 322 (H.B. 1772), Sec. 2, eff. January 1, 2014.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t2/c18"> <num value="18">CHAPTER 18.</num> <heading>TEXAS ENERGY WASTE ADVISORY COMMITTEE</heading> <section identifier="/us/tx/ut/t2/c18/s18.001"> <num value="18.001">Sec. 18.001.</num> <heading>DEFINITION</heading> <content>In this chapter, "committee" means the Texas Energy Waste Advisory Committee.</content> <sourceCredit>Added by Acts 2025, 89th Leg., R.S., Ch. 682 (H.B. 5323), Sec. 1, eff. September 1, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c18/s18.002"> <num value="18.002">Sec. 18.002.</num> <heading>ESTABLISHMENT OF COMMITTEE</heading> <content>The Texas Energy Waste Advisory Committee is created to make recommendations for coordinating and improving state agency and interagency programs that reduce energy waste, increase energy efficiency, and enhance demand response programs in order to increase reliability of electric service in the ERCOT power region in accordance with Section 39.159.</content> <sourceCredit>Added by Acts 2025, 89th Leg., R.S., Ch. 682 (H.B. 5323), Sec. 1, eff. September 1, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c18/s18.003"> <num value="18.003">Sec. 18.003.</num> <heading>COMMITTEE MEMBERSHIP</heading> <subsection identifier="/us/tx/ut/t2/c18/s18.003/a"> <num value="a">(a)</num> <chapeau>The committee is composed of eight ex officio members as follows:</chapeau> <paragraph identifier="/us/tx/ut/t2/c18/s18.003/1"> <num value="1">(1)</num> <content>the presiding officer of the commission;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c18/s18.003/2"> <num value="2">(2)</num> <content>the chief executive officer of the independent organization certified under Section 39.151 for the ERCOT power region;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c18/s18.003/3"> <num value="3">(3)</num> <content>the comptroller;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c18/s18.003/4"> <num value="4">(4)</num> <content>the executive director of the Texas Facilities Commission;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c18/s18.003/5"> <num value="5">(5)</num> <content>the executive director of the Texas Department of Licensing and Regulation;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c18/s18.003/6"> <num value="6">(6)</num> <content>the director of the Texas Department of Housing and Community Affairs;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c18/s18.003/7"> <num value="7">(7)</num> <content>the presiding officer of the Texas Commission on Environmental Quality; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c18/s18.003/8"> <num value="8">(8)</num> <content>the commissioner of the General Land Office.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c18/s18.003/b"> <num value="b">(b)</num> <content>An ex officio member may designate an employee of the member's agency or office to serve in the member's place.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c18/s18.003/c"> <num value="c">(c)</num> <content>The presiding officer of the commission or an employee of the commission designated by the presiding officer shall serve as the chair of the committee.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c18/s18.003/d"> <num value="d">(d)</num> <content>The committee shall meet quarterly at the call of the chair.</content> </subsection> <sourceCredit>Added by Acts 2025, 89th Leg., R.S., Ch. 682 (H.B. 5323), Sec. 1, eff. September 1, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c18/s18.004"> <num value="18.004">Sec. 18.004.</num> <heading>PROGRAM EVALUATION AND RECOMMENDATIONS</heading> <chapeau>To improve the reliability of electric service in the ERCOT power region, the committee shall solicit information from and make recommendations to the following state agencies and organizations regarding state programs that have the potential to reduce demand for electricity in the ERCOT wholesale market during high risk hours identified by the commission:</chapeau> <paragraph identifier="/us/tx/ut/t2/c18/s18.004/1"> <num value="1">(1)</num> <content>the commission;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c18/s18.004/2"> <num value="2">(2)</num> <content>the independent organization certified under Section 39.151 for the ERCOT power region;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c18/s18.004/3"> <num value="3">(3)</num> <content>the comptroller;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c18/s18.004/4"> <num value="4">(4)</num> <content>the State Energy Conservation Office;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c18/s18.004/5"> <num value="5">(5)</num> <content>the Texas Facilities Commission;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c18/s18.004/6"> <num value="6">(6)</num> <content>the Texas Department of Licensing and Regulation;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c18/s18.004/7"> <num value="7">(7)</num> <content>the Texas Department of Housing and Community Affairs;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c18/s18.004/8"> <num value="8">(8)</num> <content>the Texas Commission on Environmental Quality; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c18/s18.004/9"> <num value="9">(9)</num> <content>the General Land Office.</content> </paragraph> <sourceCredit>Added by Acts 2025, 89th Leg., R.S., Ch. 682 (H.B. 5323), Sec. 1, eff. September 1, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c18/s18.005"> <num value="18.005">Sec. 18.005.</num> <heading>ADMINISTRATIVE SUPPORT</heading> <content>The commission shall provide the committee with administrative support, including meeting space and staff necessary to assist the committee in carrying out the committee's duties under this chapter.</content> <sourceCredit>Added by Acts 2025, 89th Leg., R.S., Ch. 682 (H.B. 5323), Sec. 1, eff. September 1, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c18/s18.006"> <num value="18.006">Sec. 18.006.</num> <heading>CONFIDENTIALITY OF CERTAIN INFORMATION</heading> <subsection identifier="/us/tx/ut/t2/c18/s18.006/a"> <num value="a">(a)</num> <content>Except as provided by Subsection (b), the committee is not subject to Chapter 551 or 552, Government Code.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c18/s18.006/b"> <num value="b">(b)</num> <content>Information written, produced, collected, assembled, or maintained under law or in connection with the transaction of official business by the committee or an officer or employee of the committee is subject to Section 552.008, Government Code, in the same manner as public information.</content> </subsection> <sourceCredit>Added by Acts 2025, 89th Leg., R.S., Ch. 682 (H.B. 5323), Sec. 1, eff. September 1, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c18/s18.007"> <num value="18.007">Sec. 18.007.</num> <heading>REPORT</heading> <content>Not later than December 1 of each even-numbered year, the committee shall provide to the legislature a report on the committee's activities and recommendations.</content> <sourceCredit>Added by Acts 2025, 89th Leg., R.S., Ch. 682 (H.B. 5323), Sec. 1, eff. September 1, 2025.</sourceCredit> </section> </chapter> <chapter identifier="/us/tx/ut/t2/c31"> <num value="31">CHAPTER 31.</num> <heading>GENERAL PROVISIONS</heading> <subchapter identifier="/us/tx/ut/t2/c31/scA"> <num value="A">SUBCHAPTER A.</num> <heading>GENERAL PROVISIONS</heading> <section identifier="/us/tx/ut/t2/c31/scA/s31.001"> <num value="31.001">Sec. 31.001.</num> <heading>LEGISLATIVE FINDINGS; PURPOSE OF SUBTITLE</heading> <subsection identifier="/us/tx/ut/t2/c31/scA/s31.001/a"> <num value="a">(a)</num> <content>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.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c31/scA/s31.001/b"> <num value="b">(b)</num> <content>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.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c31/scA/s31.001/c"> <num value="c">(c)</num> <content>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.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c31/scA/s31.002"> <num value="31.002">Sec. 31.002.</num> <heading>DEFINITIONS</heading> <chapeau>In this subtitle:</chapeau> <paragraph identifier="/us/tx/ut/t2/c31/scA/s31.002/1"> <num value="1">(1)</num> <content>"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.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c31/scA/s31.002/2"> <num value="2">(2)</num> <content>"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.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c31/scA/s31.002/3"> <num value="3">(3)</num> <chapeau>"Aggregation" includes the following:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c31/scA/s31.002/A"> <num value="A">(A)</num> <content>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</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c31/scA/s31.002/B"> <num value="B">(B)</num> <content>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.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c31/scA/s31.002/4"> <num value="4">(4)</num> <content>"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.</content> <continuation>(4-a) "Distributed natural gas generation facility" means a facility installed on the customer's side of the meter that uses natural gas to generate not more than 2,000 kilowatts of electricity.</continuation> <continuation>(4-b) "Electric generation equipment lessor or operator" means a person who rents to or operates for compensation on behalf of a third party electric generation equipment that:</continuation> <subparagraph identifier="/us/tx/ut/t2/c31/scA/s31.002/A"> <num value="A">(A)</num> <content>is used on a site of the third party until the third party is able to obtain sufficient electricity service;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c31/scA/s31.002/B"> <num value="B">(B)</num> <content>produces electricity on site to be consumed by the third party and not resold; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c31/scA/s31.002/C"> <num value="C">(C)</num> <content>does not interconnect with the electric transmission or distribution system.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c31/scA/s31.002/5"> <num value="5">(5)</num> <content>"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.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c31/scA/s31.002/6"> <num value="6">(6)</num> <chapeau>"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:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c31/scA/s31.002/A"> <num value="A">(A)</num> <content>a municipal corporation;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c31/scA/s31.002/B"> <num value="B">(B)</num> <content>a qualifying facility;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c31/scA/s31.002/C"> <num value="C">(C)</num> <content>a power generation company;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c31/scA/s31.002/D"> <num value="D">(D)</num> <content>an exempt wholesale generator;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c31/scA/s31.002/E"> <num value="E">(E)</num> <content>a power marketer;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c31/scA/s31.002/F"> <num value="F">(F)</num> <content>a corporation described by Section 32.053 to the extent the corporation sells electricity exclusively at wholesale and not to the ultimate consumer;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c31/scA/s31.002/G"> <num value="G">(G)</num> <content>an electric cooperative;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c31/scA/s31.002/H"> <num value="H">(H)</num> <content>a retail electric provider;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c31/scA/s31.002/I"> <num value="I">(I)</num> <content>this state or an agency of this state; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c31/scA/s31.002/J"> <num value="J">(J)</num> <content>a person not otherwise an electric utility who:</content> </subparagraph> </paragraph> <subsection identifier="/us/tx/ut/t2/c31/scA/s31.002/i"> <num value="i">(i)</num> <chapeau>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;</chapeau> <clause identifier="/us/tx/ut/t2/c31/scA/s31.002/ii"> <num value="ii">(ii)</num> <content>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;</content> </clause> <clause identifier="/us/tx/ut/t2/c31/scA/s31.002/iii"> <num value="iii">(iii)</num> <content>owns or operates in this state a recreational vehicle park that provides metered electric service in accordance with Subchapter C, Chapter 184;</content> </clause> <clause identifier="/us/tx/ut/t2/c31/scA/s31.002/iv"> <num value="iv">(iv)</num> <content>owns or operates equipment used solely to provide electricity charging service for consumption by an alternatively fueled vehicle, as defined by Section 502.004, Transportation Code; or</content> </clause> </subsection> <subsection identifier="/us/tx/ut/t2/c31/scA/s31.002/v"> <num value="v">(v)</num> <chapeau>is an electric generation equipment lessor or operator.</chapeau> <paragraph identifier="/us/tx/ut/t2/c31/scA/s31.002/7"> <num value="7">(7)</num> <chapeau>"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:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c31/scA/s31.002/A"> <num value="A">(A)</num> <content>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</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c31/scA/s31.002/B"> <num value="B">(B)</num> <content>has:</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c31/scA/s31.002/i"> <num value="i">(i)</num> <chapeau>applied to the Federal Energy Regulatory Commission for a determination under 15 U.S.C. Section 79z-5a; or</chapeau> <clause identifier="/us/tx/ut/t2/c31/scA/s31.002/ii"> <num value="ii">(ii)</num> <content>registered as an exempt wholesale generator as required by Section 35.032.</content> </clause> <paragraph identifier="/us/tx/ut/t2/c31/scA/s31.002/8"> <num value="8">(8)</num> <content>"Freeze period" means the period beginning on January 1, 1999, and ending on December 31, 2001.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c31/scA/s31.002/9"> <num value="9">(9)</num> <content>"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.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c31/scA/s31.002/10"> <num value="10">(10)</num> <chapeau>"Power generation company" means a person, including a person who owns or operates a distributed natural gas generation facility, that:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c31/scA/s31.002/A"> <num value="A">(A)</num> <content>generates electricity that is intended to be sold at wholesale, including the owner or operator of electric energy storage equipment or facilities to which Subchapter E, Chapter 35, applies;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c31/scA/s31.002/B"> <num value="B">(B)</num> <content>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</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c31/scA/s31.002/C"> <num value="C">(C)</num> <content>does not have a certificated service area, although its affiliated electric utility or transmission and distribution utility may have a certificated service area.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c31/scA/s31.002/11"> <num value="11">(11)</num> <chapeau>"Power marketer" means a person who:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c31/scA/s31.002/A"> <num value="A">(A)</num> <content>becomes an owner of electric energy in this state for the purpose of selling the electric energy at wholesale;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c31/scA/s31.002/B"> <num value="B">(B)</num> <content>does not own generation, transmission, or distribution facilities in this state;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c31/scA/s31.002/C"> <num value="C">(C)</num> <content>does not have a certificated service area; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c31/scA/s31.002/D"> <num value="D">(D)</num> <content>has:</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c31/scA/s31.002/i"> <num value="i">(i)</num> <chapeau>been granted authority by the Federal Energy Regulatory Commission to sell electric energy at market-based rates; or</chapeau> <clause identifier="/us/tx/ut/t2/c31/scA/s31.002/ii"> <num value="ii">(ii)</num> <content>registered as a power marketer under Section 35.032.</content> </clause> <paragraph identifier="/us/tx/ut/t2/c31/scA/s31.002/12"> <num value="12">(12)</num> <content>"Power region" means a contiguous geographical area which is a distinct region of the North American Electric Reliability Council.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c31/scA/s31.002/13"> <num value="13">(13)</num> <content>"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 a purchaser of the cogenerator's thermal output is not for that reason considered to be a retail electric provider or a power generation company.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c31/scA/s31.002/14"> <num value="14">(14)</num> <content>"Qualifying facility" means a qualifying cogenerator or qualifying small power producer.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c31/scA/s31.002/15"> <num value="15">(15)</num> <content>"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.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c31/scA/s31.002/16"> <num value="16">(16)</num> <content>"Retail customer" means the separately metered end-use customer who purchases and ultimately consumes electricity.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c31/scA/s31.002/17"> <num value="17">(17)</num> <content>"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 but may aggregate distributed energy resources under Section 39.3515. The term does not include a person not otherwise a retail electric provider who owns or operates equipment used solely to provide electricity charging service for consumption by an alternatively fueled vehicle, as defined by Section 502.004, Transportation Code.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c31/scA/s31.002/18"> <num value="18">(18)</num> <content>"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.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c31/scA/s31.002/19"> <num value="19">(19)</num> <content>"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.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c31/scA/s31.002/20"> <num value="20">(20)</num> <content>"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."</content> </paragraph> </subsection> <sourceCredit>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. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 890 (S.B. 365), Sec. 1, eff. September 1, 2011. Acts 2011, 82nd Leg., R.S., Ch. 1069 (S.B. 943), Sec. 1, eff. September 1, 2011. Acts 2013, 83rd Leg., R.S., Ch. 979 (H.B. 2049), Sec. 1, eff. September 1, 2013. Acts 2021, 87th Leg., R.S., Ch. 255 (H.B. 1572), Sec. 1, eff. September 1, 2021. Acts 2021, 87th Leg., R.S., Ch. 389 (S.B. 1202), Sec. 1, eff. September 1, 2021. Acts 2023, 88th Leg., R.S., Ch. 768 (H.B. 4595), Sec. 22.001, eff. September 1, 2023. Acts 2023, 88th Leg., R.S., Ch. 945 (S.B. 1699), Sec. 1, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c31/scA/s31.0021"> <num value="31.0021">Sec. 31.0021.</num> <heading>CHARGING SERVICE</heading> <content>The commission by rule may exempt from the definition of "electric utility" or "retail electric provider" under Section 31.002 a provider who owns or operates equipment used solely to provide electricity charging service for a mode of transportation.</content> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 389 (S.B. 1202), Sec. 2, eff. September 1, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c31/scA/s31.004"> <num value="31.004">Sec. 31.004.</num> <heading>ENERGY-EFFICIENT SCHOOL FACILITIES</heading> <subsection identifier="/us/tx/ut/t2/c31/scA/s31.004/a"> <num value="a">(a)</num> <content>The commission may serve as a resource center to assist school districts in developing energy-efficient facilities.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c31/scA/s31.004/b"> <num value="b">(b)</num> <chapeau>As a resource center under this section, the commission may:</chapeau> <paragraph identifier="/us/tx/ut/t2/c31/scA/s31.004/1"> <num value="1">(1)</num> <content>present programs to school districts relating to managing energy, training school-plant operators, and designing energy-efficient buildings;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c31/scA/s31.004/2"> <num value="2">(2)</num> <content>provide school districts with technical assistance in managing energy;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c31/scA/s31.004/3"> <num value="3">(3)</num> <content>collect and distribute information relating to energy management in school facilities; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c31/scA/s31.004/4"> <num value="4">(4)</num> <content>offer energy resource workshops to educators and make available to educators a film library on energy-related matters and energy education lesson packages.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c31/scA/s31.004/c"> <num value="c">(c)</num> <content>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.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2007, 80th Leg., R.S., Ch. 939 (H.B. 3693), Sec. 18, eff. September 1, 2007.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c31/scA/s31.005"> <num value="31.005">Sec. 31.005.</num> <heading>CUSTOMER-OPTION PROGRAMS</heading> <subsection identifier="/us/tx/ut/t2/c31/scA/s31.005/a"> <num value="a">(a)</num> <chapeau>This section applies to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c31/scA/s31.005/1"> <num value="1">(1)</num> <content>a municipally owned electric utility;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c31/scA/s31.005/2"> <num value="2">(2)</num> <content>an electric cooperative;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c31/scA/s31.005/3"> <num value="3">(3)</num> <content>an electric utility;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c31/scA/s31.005/4"> <num value="4">(4)</num> <content>a power marketer;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c31/scA/s31.005/5"> <num value="5">(5)</num> <content>a retail electric provider; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c31/scA/s31.005/6"> <num value="6">(6)</num> <content>a transmission and distribution utility.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c31/scA/s31.005/b"> <num value="b">(b)</num> <chapeau>An entity to which this section applies shall consider establishing customer-option programs that encourage the reduction of air contaminant emissions, such as:</chapeau> <paragraph identifier="/us/tx/ut/t2/c31/scA/s31.005/1"> <num value="1">(1)</num> <content>an appliance retirement and recycling program;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c31/scA/s31.005/2"> <num value="2">(2)</num> <content>a solar water heating market transformation program;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c31/scA/s31.005/3"> <num value="3">(3)</num> <content>an air conditioning tune-up program;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c31/scA/s31.005/4"> <num value="4">(4)</num> <content>a program that allows the use of on-site energy storage as an eligible efficiency measure in existing programs;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c31/scA/s31.005/5"> <num value="5">(5)</num> <content>a program that encourages the deployment of advanced electricity meters;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c31/scA/s31.005/6"> <num value="6">(6)</num> <content>a program that encourages the installation of cool roofing materials;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c31/scA/s31.005/7"> <num value="7">(7)</num> <content>a program that establishes lighting limits;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c31/scA/s31.005/8"> <num value="8">(8)</num> <content>a distributed energy generation technology program; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c31/scA/s31.005/9"> <num value="9">(9)</num> <content>a program that encourages the use of high-efficiency building distribution transformers and variable air volume fan controls.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., Ch. 1095 (H.B. 2129), Sec. 6, eff. September 1, 2005.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c31/scB"> <num value="B">SUBCHAPTER B.</num> <heading>CYBERSECURITY</heading> <section identifier="/us/tx/ut/t2/c31/scB/s31.051"> <num value="31.051">Sec. 31.051.</num> <heading>DEFINITION</heading> <chapeau>In this subchapter, "utility" means:</chapeau> <paragraph identifier="/us/tx/ut/t2/c31/scB/s31.051/1"> <num value="1">(1)</num> <content>an electric cooperative;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c31/scB/s31.051/2"> <num value="2">(2)</num> <content>an electric utility;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c31/scB/s31.051/3"> <num value="3">(3)</num> <content>a municipally owned electric utility; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c31/scB/s31.051/4"> <num value="4">(4)</num> <content>a transmission and distribution utility.</content> </paragraph> <sourceCredit>Added by Acts 2019, 86th Leg., R.S., Ch. 509 (S.B. 64), Sec. 22, eff. September 1, 2019.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c31/scB/s31.052"> <num value="31.052">Sec. 31.052.</num> <heading>CYBERSECURITY COORDINATION PROGRAM FOR UTILITIES</heading> <subsection identifier="/us/tx/ut/t2/c31/scB/s31.052/a"> <num value="a">(a)</num> <chapeau>The commission shall establish a program to monitor cybersecurity efforts among utilities in this state. The program shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c31/scB/s31.052/1"> <num value="1">(1)</num> <content>provide guidance on best practices in cybersecurity and facilitate the sharing of cybersecurity information between utilities; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c31/scB/s31.052/2"> <num value="2">(2)</num> <chapeau>provide guidance on best practices for cybersecurity controls for supply chain risk management of cybersecurity systems used by utilities, which may include, as applicable, best practices related to:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c31/scB/s31.052/A"> <num value="A">(A)</num> <content>software integrity and authenticity;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c31/scB/s31.052/B"> <num value="B">(B)</num> <content>vendor risk management and procurement controls, including notification by vendors of incidents related to the vendor's products and services; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c31/scB/s31.052/C"> <num value="C">(C)</num> <content>vendor remote access.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c31/scB/s31.052/b"> <num value="b">(b)</num> <content>The commission may collaborate with the state cybersecurity coordinator and the cybersecurity council established under Chapter 2054, Government Code, in implementing the program.</content> </subsection> <sourceCredit>Added by Acts 2019, 86th Leg., R.S., Ch. 509 (S.B. 64), Sec. 22, eff. September 1, 2019.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t2/c32"> <num value="32">CHAPTER 32.</num> <heading>JURISDICTION AND POWERS OF COMMISSION AND OTHER REGULATORY AUTHORITIES</heading> <subchapter identifier="/us/tx/ut/t2/c32/scA"> <num value="A">SUBCHAPTER A.</num> <heading>COMMISSION JURISDICTION</heading> <section identifier="/us/tx/ut/t2/c32/scA/s32.001"> <num value="32.001">Sec. 32.001.</num> <heading>COMMISSION JURISDICTION</heading> <subsection identifier="/us/tx/ut/t2/c32/scA/s32.001/a"> <num value="a">(a)</num> <chapeau>Except as provided by Section 32.002, the commission has exclusive original jurisdiction over the rates, operations, and services of an electric utility in:</chapeau> <paragraph identifier="/us/tx/ut/t2/c32/scA/s32.001/1"> <num value="1">(1)</num> <content>areas outside a municipality; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c32/scA/s32.001/2"> <num value="2">(2)</num> <content>areas inside a municipality that surrenders its jurisdiction to the commission under Section 33.002.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c32/scA/s32.001/b"> <num value="b">(b)</num> <content>The commission has exclusive appellate jurisdiction to review an order or ordinance of a municipality exercising exclusive original jurisdiction under this subtitle.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c32/scA/s32.0015"> <num value="32.0015">Sec. 32.0015.</num> <heading>REGULATION OF SUCCESSOR ELECTRIC UTILITY OR ELECTRIC COOPERATIVE</heading> <content>If an electric utility purchases, acquires, merges, or consolidates with or acquires 50 percent or more of the stock of an electric utility or electric cooperative, the commission shall regulate the successor electric utility or electric cooperative in the same manner that the commission would regulate the entity that was subject to the stricter regulation before the purchase, acquisition, merger, or consolidation.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 12, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c32/scA/s32.002"> <num value="32.002">Sec. 32.002.</num> <heading>LIMITATION ON COMMISSION JURISDICTION</heading> <chapeau>Except as otherwise provided by this title, this subtitle does not authorize the commission to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c32/scA/s32.002/1"> <num value="1">(1)</num> <content>regulate or supervise a rate or service of a municipally owned utility; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c32/scA/s32.002/2"> <num value="2">(2)</num> <content>affect the jurisdiction, power, or duty of a municipality exercising exclusive original jurisdiction in that municipality's regulation and supervision of an electric utility in the municipality.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c32/scA/s32.003"> <num value="32.003">Sec. 32.003.</num> <heading>EXEMPT AREA JURISDICTION</heading> <chapeau>Notwithstanding an election under Subchapter A, Chapter 33, by a municipality on the issue of surrendering its jurisdiction, the commission may:</chapeau> <paragraph identifier="/us/tx/ut/t2/c32/scA/s32.003/1"> <num value="1">(1)</num> <content>consider an electric utility's revenues and return on investment in an area exempt from commission regulation in establishing rates and charges in an area that is not exempt from commission regulation; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c32/scA/s32.003/2"> <num value="2">(2)</num> <content>exercise necessary powers to give effect to an order under this title for the benefit of an area that is not exempt from commission regulation.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c32/scA/s32.004"> <num value="32.004">Sec. 32.004.</num> <heading>ASSISTANCE TO MUNICIPALITY</heading> <content>On request of a municipality, the commission may advise and assist the municipality with respect to a question or proceeding arising under this title. Assistance provided by the commission may include aid to a municipality on a matter pending before the commission, a court, or the municipality's governing body, such as making a staff member available as a witness or otherwise providing evidence to the municipality.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c32/scB"> <num value="B">SUBCHAPTER B.</num> <heading>EXEMPTIONS FROM COMMISSION JURISDICTION</heading> <section identifier="/us/tx/ut/t2/c32/scB/s32.051"> <num value="32.051">Sec. 32.051.</num> <heading>EXEMPTION OF RIVER AUTHORITY FROM WHOLESALE RATE REGULATION</heading> <content>Notwithstanding any other provision of this title, the commission may not directly or indirectly regulate revenue requirements, rates, fuel costs, fuel charges, or fuel acquisitions that are related to the generation and sale of electricity at wholesale, and not to ultimate consumers, by a river authority operating a steam generating plant on or before January 1, 1999.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 405, Sec. 13, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c32/scB/s32.052"> <num value="32.052">Sec. 32.052.</num> <heading>ABILITY OF CERTAIN RIVER AUTHORITIES TO CONSTRUCT IMPROVEMENTS</heading> <chapeau>A river authority operating a steam generating plant on or before January 1, 1999, may acquire, finance, construct, rebuild, repower, and use new or existing power plants, equipment, transmission lines, or other assets to sell electricity exclusively at wholesale to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c32/scB/s32.052/1"> <num value="1">(1)</num> <content>a purchaser in San Saba, Llano, Burnet, Travis, Bastrop, Blanco, Colorado, or Fayette County; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c32/scB/s32.052/2"> <num value="2">(2)</num> <content>a purchaser in an area served by the river authority on January 1, 1975.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 405, Sec. 13, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c32/scB/s32.053"> <num value="32.053">Sec. 32.053.</num> <heading>ABILITY OF CERTAIN RIVER AUTHORITY AFFILIATES TO CONSTRUCT IMPROVEMENTS</heading> <subsection identifier="/us/tx/ut/t2/c32/scB/s32.053/a"> <num value="a">(a)</num> <chapeau>This section applies only to a corporation that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c32/scB/s32.053/1"> <num value="1">(1)</num> <content>sells electricity exclusively at wholesale, and not to ultimate consumers;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c32/scB/s32.053/2"> <num value="2">(2)</num> <content>is authorized by Chapter 152, Water Code; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c32/scB/s32.053/3"> <num value="3">(3)</num> <content>acts on behalf of a river authority.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c32/scB/s32.053/b"> <num value="b">(b)</num> <chapeau>Notwithstanding a river authority's enabling legislation or Chapter 152, Water Code, a corporation may:</chapeau> <paragraph identifier="/us/tx/ut/t2/c32/scB/s32.053/1"> <num value="1">(1)</num> <content>acquire, finance, construct, rebuild, repower, operate, or sell a facility directly related to the generation of electricity;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c32/scB/s32.053/2"> <num value="2">(2)</num> <content>sell, at wholesale only, the output of the facility to a purchaser, other than an ultimate consumer, at any location in this state; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c32/scB/s32.053/3"> <num value="3">(3)</num> <content>purchase and sell electricity, at wholesale only, to a purchaser, other than an ultimate consumer, at any location in this state.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c32/scB/s32.053/c"> <num value="c">(c)</num> <content>This subchapter does not prevent a corporation from purchasing transmission and related services from a river authority.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c32/scB/s32.053/d"> <num value="d">(d)</num> <content>Except as provided by this section, the development, financing, ownership, and operation of a facility by a corporation is subject to all other applicable laws.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c32/scB/s32.053/e"> <num value="e">(e)</num> <content>The property, gross receipts, and income of a corporation acting on behalf of a river authority under this section are subject to, and the corporation shall pay, taxes and assessments of the federal government, this state, a political subdivision of this state, or a taxing district of this state on the same basis as an exempt wholesale generator.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c32/scB/s32.053/f"> <num value="f">(f)</num> <content>The proceeds from the sale of bonds or other obligations the interest on which is exempt from taxation and that are issued by a corporation or river authority subject to this section, other than a bond or obligation available to an investor-owned utility or exempt wholesale generator, may not be used by the corporation to finance the construction or acquisition of or the rebuilding or repowering of a facility for the generation of electricity by the corporation.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c32/scB/s32.053/g"> <num value="g">(g)</num> <content>Notwithstanding any other law, the board of directors of a river authority may sell, lease, loan, or otherwise transfer some, all, or substantially all of the electric generation property of the river authority to a nonprofit corporation authorized under this section or Chapter 152, Water Code. The property transfer shall be made under terms and conditions approved by the board of directors of the river authority.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c32/scB/s32.053/h"> <num value="h">(h)</num> <content>Subsections (a)-(f) do not apply to a corporation created under Chapter 152, Water Code, to serve an area described in Section 32.052.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 405, Sec. 14, eff. Sept. 1, 1999; Acts 2001, 77th Leg., ch. 1420, Sec. 8.400, eff. Sept. 1, 2001.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c32/scB/s32.054"> <num value="32.054">Sec. 32.054.</num> <heading>RESTRICTIONS ON AUTHORITY OF CORPORATIONS OR RIVER AUTHORITY</heading> <subsection identifier="/us/tx/ut/t2/c32/scB/s32.054/a"> <num value="a">(a)</num> <content>This subchapter does not authorize a river authority to acquire, install, construct, make additions to, or operate steam generating plants having an aggregate capacity greater than 5,000 megawatts to serve a purchaser in the area served by the river authority on January 1, 1975.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c32/scB/s32.054/b"> <num value="b">(b)</num> <content>A river authority or a corporation acting on behalf of a river authority under this subchapter may provide retail service only to a retail customer served by the river authority or corporation on September 1, 1995.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c32/scB/s32.054/c"> <num value="c">(c)</num> <content>Except as provided by this subchapter, this subchapter does not limit a power granted a river authority in its enabling legislation or other applicable law.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c32/scC"> <num value="C">SUBCHAPTER C.</num> <heading>REQUIRED REPORTS AND FILINGS</heading> <section identifier="/us/tx/ut/t2/c32/scC/s32.101"> <num value="32.101">Sec. 32.101.</num> <heading>TARIFF FILINGS</heading> <subsection identifier="/us/tx/ut/t2/c32/scC/s32.101/a"> <num value="a">(a)</num> <chapeau>An electric utility shall file with each regulatory authority a tariff showing each rate that is:</chapeau> <paragraph identifier="/us/tx/ut/t2/c32/scC/s32.101/1"> <num value="1">(1)</num> <content>subject to the regulatory authority's original or appellate jurisdiction; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c32/scC/s32.101/2"> <num value="2">(2)</num> <content>in effect for a utility service, product, or commodity offered by the utility.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c32/scC/s32.101/b"> <num value="b">(b)</num> <chapeau>The electric utility shall file as a part of the tariff required under Subsection (a) each rule that relates to or affects:</chapeau> <paragraph identifier="/us/tx/ut/t2/c32/scC/s32.101/1"> <num value="1">(1)</num> <content>a rate of the utility; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c32/scC/s32.101/2"> <num value="2">(2)</num> <content>a utility service, product, or commodity furnished by the electric utility.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c32/scC/s32.101/c"> <num value="c">(c)</num> <content>The commission shall consider customer names and addresses, prices, individual customer contracts, and expected load and usage data as highly sensitive trade secrets. That information is not subject to disclosure under Chapter 552, Government Code.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c32/scC/s32.102"> <num value="32.102">Sec. 32.102.</num> <heading>DEPRECIATION ACCOUNT</heading> <chapeau>The commission shall require each electric or municipally owned utility to carry a proper and adequate depreciation account in accordance with:</chapeau> <paragraph identifier="/us/tx/ut/t2/c32/scC/s32.102/1"> <num value="1">(1)</num> <content>the rates and methods prescribed by the commission under Section 36.056; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c32/scC/s32.102/2"> <num value="2">(2)</num> <content>any other rule the commission adopts.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c32/scC/s32.103"> <num value="32.103">Sec. 32.103.</num> <heading>ACCOUNTS OF PROFITS AND LOSSES</heading> <content>An electric or municipally owned utility shall keep separate accounts showing profits or losses from the sale or lease of merchandise, including an appliance, a fixture, or equipment.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c32/scC/s32.104"> <num value="32.104">Sec. 32.104.</num> <heading>REPORT OF CERTAIN EXPENSES</heading> <chapeau>A regulatory authority may require an electric utility to annually report the utility's expenditures for:</chapeau> <paragraph identifier="/us/tx/ut/t2/c32/scC/s32.104/1"> <num value="1">(1)</num> <content>business gifts and entertainment; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c32/scC/s32.104/2"> <num value="2">(2)</num> <content>advertising or public relations, including expenditures for institutional and consumption-inducing purposes.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t2/c33"> <num value="33">CHAPTER 33.</num> <heading>JURISDICTION AND POWERS OF MUNICIPALITY</heading> <subchapter identifier="/us/tx/ut/t2/c33/scA"> <num value="A">SUBCHAPTER A.</num> <heading>GENERAL PROVISIONS</heading> <section identifier="/us/tx/ut/t2/c33/scA/s33.001"> <num value="33.001">Sec. 33.001.</num> <heading>MUNICIPAL JURISDICTION</heading> <subsection identifier="/us/tx/ut/t2/c33/scA/s33.001/a"> <num value="a">(a)</num> <content>To provide fair, just, and reasonable rates and adequate and efficient services, the governing body of a municipality has exclusive original jurisdiction over the rates, operations, and services of an electric utility in areas in the municipality, subject to the limitations imposed by this title.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scA/s33.001/b"> <num value="b">(b)</num> <content>Repealed by Acts 2021, 87th Leg., R.S., Ch. 727 (H.B. 3853), Sec. 2, eff. June 15, 2021.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 1, eff. September 7, 2005. Acts 2021, 87th Leg., R.S., Ch. 727 (H.B. 3853), Sec. 2, eff. June 15, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c33/scA/s33.002"> <num value="33.002">Sec. 33.002.</num> <heading>SURRENDER OF MUNICIPAL JURISDICTION TO COMMISSION</heading> <subsection identifier="/us/tx/ut/t2/c33/scA/s33.002/a"> <num value="a">(a)</num> <content>A municipality shall regulate all local utility service in the municipality until the commission assumes jurisdiction over a local utility under this subtitle.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scA/s33.002/b"> <num value="b">(b)</num> <content>A municipality may elect to have the commission exercise exclusive original jurisdiction over electric utility rates, operations, and services in the municipality by ordinance or by submitting the question of the surrender of its jurisdiction to the voters at a municipal election.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scA/s33.002/c"> <num value="c">(c)</num> <content>The governing body of a municipality shall submit at a municipal election the question of surrendering its jurisdiction to the commission if the governing body receives a petition signed by a number of qualified voters of the municipality equal to at least the lesser of 20,000 or 10 percent of the number of voters voting in the last preceding general election in the municipality.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c33/scA/s33.003"> <num value="33.003">Sec. 33.003.</num> <heading>REINSTATEMENT OF MUNICIPAL JURISDICTION</heading> <subsection identifier="/us/tx/ut/t2/c33/scA/s33.003/a"> <num value="a">(a)</num> <content>A municipality that surrenders its jurisdiction to the commission may at any time reinstate its jurisdiction by a vote of the electorate.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scA/s33.003/b"> <num value="b">(b)</num> <content>A municipality that reinstates its jurisdiction under Subsection (a) may not surrender that jurisdiction before the fifth anniversary of the date of the election in which the municipality elected to reinstate its jurisdiction.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scA/s33.003/c"> <num value="c">(c)</num> <content>A municipality may not, by a vote of the electorate, reinstate the jurisdiction of the governing body during the time a case involving the municipality is pending before the commission.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c33/scA/s33.004"> <num value="33.004">Sec. 33.004.</num> <heading>AREA EXEMPT FROM COMMISSION REGULATION</heading> <subsection identifier="/us/tx/ut/t2/c33/scA/s33.004/a"> <num value="a">(a)</num> <content>If a municipality does not surrender its jurisdiction, local utility service in the municipality is exempt from regulation by the commission under this subtitle to the extent that this subtitle applies to local service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scA/s33.004/b"> <num value="b">(b)</num> <content>The municipality may exercise in the exempt area the same regulatory powers under the same standards and rules as the commission or under other consistent standards and rules.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c33/scA/s33.005"> <num value="33.005">Sec. 33.005.</num> <heading>EXEMPT AREA REPORTING</heading> <subsection identifier="/us/tx/ut/t2/c33/scA/s33.005/a"> <num value="a">(a)</num> <content>An electric utility serving an area exempt from commission regulation is subject to the reporting requirements of this title.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scA/s33.005/b"> <num value="b">(b)</num> <chapeau>A report must be filed with:</chapeau> <paragraph identifier="/us/tx/ut/t2/c33/scA/s33.005/1"> <num value="1">(1)</num> <content>the governing body of the municipality; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c33/scA/s33.005/2"> <num value="2">(2)</num> <content>the commission.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c33/scA/s33.006"> <num value="33.006">Sec. 33.006.</num> <heading>COMMISSION POWERS IN NONEXEMPT AREAS</heading> <content>This subchapter does not limit the duty and power of the commission to regulate the service and rates of a municipally regulated electric utility for service provided to another area in this state.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c33/scA/s33.007"> <num value="33.007">Sec. 33.007.</num> <heading>ALLOWABLE CHARGES</heading> <chapeau>A municipality that performs a regulatory function under this title may make each charge that is authorized by:</chapeau> <paragraph identifier="/us/tx/ut/t2/c33/scA/s33.007/1"> <num value="1">(1)</num> <content>this title; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c33/scA/s33.007/2"> <num value="2">(2)</num> <content>the applicable franchise agreement.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c33/scA/s33.008"> <num value="33.008">Sec. 33.008.</num> <heading>FRANCHISE CHARGES</heading> <subsection identifier="/us/tx/ut/t2/c33/scA/s33.008/a"> <num value="a">(a)</num> <chapeau>Following the end of the freeze period for a municipality that has been served by an electric utility, and following the date a municipally owned utility or an electric cooperative has implemented customer choice for a municipality that has been served by that municipally owned utility or electric cooperative, a municipality may impose on an electric utility, transmission and distribution utility, municipally owned utility, or electric cooperative, as appropriate, that provides distribution service within the municipality a reasonable charge as specified in Subsection (b) for the use of a municipal street, alley, or public way to deliver electricity to a retail customer. A municipality may not impose a charge on:</chapeau> <paragraph identifier="/us/tx/ut/t2/c33/scA/s33.008/1"> <num value="1">(1)</num> <content>an electric utility, or transmission and distribution utility, municipally owned utility, or electric cooperative for electric service provided outside the municipality;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c33/scA/s33.008/2"> <num value="2">(2)</num> <content>a qualifying facility;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c33/scA/s33.008/3"> <num value="3">(3)</num> <content>an exempt wholesale generator;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c33/scA/s33.008/4"> <num value="4">(4)</num> <content>a power marketer;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c33/scA/s33.008/5"> <num value="5">(5)</num> <content>a retail electric provider;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c33/scA/s33.008/6"> <num value="6">(6)</num> <content>a power generation company;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c33/scA/s33.008/7"> <num value="7">(7)</num> <content>a person that generates electricity on and after January 1, 2002; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c33/scA/s33.008/8"> <num value="8">(8)</num> <content>an aggregator, as that term is defined by Section 39.353.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scA/s33.008/b"> <num value="b">(b)</num> <content>If a municipality collected a charge or fee for a franchise to use a municipal street, alley, or public way from an electric utility, a municipally owned utility, or an electric cooperative before the end of the freeze period, the municipality, after the end of the freeze period or after implementation of customer choice by the municipally owned utility or electric cooperative, as appropriate, is entitled to collect from each electric utility, transmission and distribution utility, municipally owned utility, or electric cooperative that uses the municipality's streets, alleys, or public ways to provide distribution service a charge based on each kilowatt hour of electricity delivered by the utility to each retail customer whose consuming facility's point of delivery is located within the municipality's boundaries. The charge imposed shall be equal to the total electric franchise fee revenue due the municipality from electric utilities, municipally owned utilities, or electric cooperatives, as appropriate, for calendar year 1998 divided by the total kilowatt hours delivered during 1998 by the applicable electric utility, municipally owned utility, or electric cooperative to retail customers whose consuming facilities' points of delivery were located within the municipality's boundaries. The compensation a municipality may collect from each electric utility, transmission and distribution utility, municipally owned utility, or electric cooperative providing distribution service shall be equal to the charge per kilowatt hour determined for 1998 multiplied times the number of kilowatt hours delivered within the municipality's boundaries.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scA/s33.008/c"> <num value="c">(c)</num> <content>The municipal franchise charges authorized by this section shall be considered a reasonable and necessary operating expense of each electric utility, transmission and distribution utility, municipally owned utility, or electric cooperative that is subject to a charge under this section. The charge shall be included in the nonbypassable delivery charges that a customer's retail electric provider must pay under Section 39.107 to the utility serving the customer.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scA/s33.008/d"> <num value="d">(d)</num> <content>The municipal franchise charges authorized by this section are in lieu of any franchise charges or fees payable under a franchise agreement in effect before the expiration of the freeze period or, as appropriate, before the implementation of customer choice by a municipally owned utility or electric cooperative. Except as otherwise provided by this section, this section does not affect a provision of a franchise agreement in effect before the end of the freeze period or, as appropriate, before the implementation of customer choice by a municipally owned utility or electric cooperative.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scA/s33.008/e"> <num value="e">(e)</num> <content>A municipality may conduct an audit or other inquiry or may pursue any cause of action in relation to an electric utility's, transmission and distribution utility's, municipally owned utility's, or electric cooperative's payment of charges authorized by this section only if such audit, inquiry, or pursuit of a cause of action concerns a payment made less than two years before commencement of such audit, inquiry, or pursuit of a cause of action; provided, however, that this subsection does not apply to an audit, inquiry, or cause of action commenced before September 1, 1999. An electric utility, transmission and distribution utility, municipally owned utility, or electric cooperative shall, on request of the municipality in connection with a municipal audit, identify the service provider and the type of service delivered for any service in addition to electricity delivered directly to retail customers through the utility's electricity-conducting facilities that are located in the municipality's streets, alleys, or public ways and for which the utility receives compensation.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scA/s33.008/f"> <num value="f">(f)</num> <content>Notwithstanding any other provision of this section, on the expiration of a franchise agreement existing on September 1, 1999, an electric utility, transmission and distribution utility, municipally owned utility, or electric cooperative and a municipality may mutually agree to a different level of compensation or to a different method for determining the amount the municipality may charge for the use of a municipal street, alley, or public way in connection with the delivery of electricity at retail within the municipality.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scA/s33.008/g"> <num value="g">(g)</num> <content>After the end of the freeze period or after implementation of customer choice by the municipally owned utility or electric cooperative, as appropriate, a newly incorporated municipality or a municipality that has not previously collected compensation for the delivery of electricity at retail within the municipality may adopt and collect compensation based on the same rate per kilowatt hour that is collected by any other municipality in the same county that is served by the same electric utility, transmission and distribution utility, municipally owned utility, or electric cooperative.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scA/s33.008/h"> <num value="h">(h)</num> <content>In this section, "distribution service" means the delivery of electricity to all retail customers.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 15, eff. Sept. 1, 1999.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c33/scB"> <num value="B">SUBCHAPTER B.</num> <heading>RATE DETERMINATION</heading> <section identifier="/us/tx/ut/t2/c33/scB/s33.021"> <num value="33.021">Sec. 33.021.</num> <heading>RATE DETERMINATION</heading> <subsection identifier="/us/tx/ut/t2/c33/scB/s33.021/a"> <num value="a">(a)</num> <content>A municipality regulating an electric utility under this subtitle shall require the utility to submit information as necessary to make a reasonable determination of rate base, expenses, investment, and rate of return in the municipality.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scB/s33.021/b"> <num value="b">(b)</num> <content>A municipality shall make a determination under Subsection (a) using the procedures and requirements prescribed by this title.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scB/s33.021/c"> <num value="c">(c)</num> <content>A municipality shall retain personnel necessary to make the determination of reasonable rates.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c33/scB/s33.0211"> <num value="33.0211">Sec. 33.0211.</num> <heading>RATES AND FEES CHARGED BY CERTAIN MUNICIPALLY OWNED UTILITIES</heading> <subsection identifier="/us/tx/ut/t2/c33/scB/s33.0211/a"> <num value="a">(a)</num> <content>This section applies only to a municipally owned utility that is located in a municipality that is considered to be a defunding municipality under Chapter 109, Local Government Code.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scB/s33.0211/b"> <num value="b">(b)</num> <chapeau>The governing body of a municipally owned utility may not charge a customer:</chapeau> <paragraph identifier="/us/tx/ut/t2/c33/scB/s33.0211/1"> <num value="1">(1)</num> <content>at a rate higher than the rate the customer was charged or would have been charged on January 1 of the year that the municipality was determined to be a defunding municipality;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c33/scB/s33.0211/2"> <num value="2">(2)</num> <content>any customer fees in amounts higher than the customer fees the customer was charged or would have been charged on January 1 of the year that the municipality was determined to be a defunding municipality; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c33/scB/s33.0211/3"> <num value="3">(3)</num> <content>any types of customer fees that the customer was not charged or would not have been charged on January 1 of the year that the municipality was determined to be a defunding municipality.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scB/s33.0211/c"> <num value="c">(c)</num> <chapeau>If a municipally owned utility has not transferred funds to the defunding municipality described by Subsection (a) in the immediately preceding 12 months, the municipally owned utility may increase its rates to account for:</chapeau> <paragraph identifier="/us/tx/ut/t2/c33/scB/s33.0211/1"> <num value="1">(1)</num> <content>pass-through charges imposed by a state regulatory body or the independent organization certified under Section 39.151;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c33/scB/s33.0211/2"> <num value="2">(2)</num> <content>fuel, hedging, or wholesale power cost increases; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c33/scB/s33.0211/3"> <num value="3">(3)</num> <content>fulfillment of debt obligations or compliance with Chapter 1502, Government Code.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scB/s33.0211/d"> <num value="d">(d)</num> <content>A municipally owned utility that increases rates under Subsection (c) may not transfer funds to the defunding municipality described by Subsection (a) until the date the criminal justice division of the governor's office issues a written determination in accordance with Section 109.005, Local Government Code, finding that the municipality described by Subsection (a) has reversed the reduction described by Section 109.003(1), Local Government Code.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 199 (H.B. 1900), Sec. 5.01, eff. September 1, 2021. Amended by: Acts 2023, 88th Leg., R.S., Ch. 768 (H.B. 4595), Sec. 22.002, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c33/scB/s33.022"> <num value="33.022">Sec. 33.022.</num> <heading>CONSIDERATION OF REVENUES AND RETURN FROM NONEXEMPT AREA</heading> <content>In establishing rates and charges in an area exempt from commission regulation, the governing body may consider an electric utility's revenues and return on investment in an area that is not exempt from commission regulation.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c33/scB/s33.023"> <num value="33.023">Sec. 33.023.</num> <heading>RATEMAKING PROCEEDINGS</heading> <subsection identifier="/us/tx/ut/t2/c33/scB/s33.023/a"> <num value="a">(a)</num> <chapeau>The governing body of a municipality participating in or conducting a ratemaking proceeding may engage rate consultants, accountants, auditors, attorneys, and engineers to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c33/scB/s33.023/1"> <num value="1">(1)</num> <content>conduct investigations, present evidence, and advise and represent the governing body; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c33/scB/s33.023/2"> <num value="2">(2)</num> <content>assist the governing body with litigation in an electric utility ratemaking proceeding before the governing body, a regulatory authority, or a court.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scB/s33.023/b"> <num value="b">(b)</num> <content>The electric utility in the ratemaking proceeding shall reimburse the governing body of the municipality for the reasonable cost of the services of a person engaged under Subsection (a) to the extent the applicable regulatory authority determines is reasonable.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c33/scB/s33.024"> <num value="33.024">Sec. 33.024.</num> <heading>STATEMENT OF INTENT</heading> <subsection identifier="/us/tx/ut/t2/c33/scB/s33.024/a"> <num value="a">(a)</num> <content>Not later than the 31st day before the date an electric utility files a statement of intent under Section 36.102, the electric utility shall provide notice of intent to file the statement to each municipality having original jurisdiction.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scB/s33.024/b"> <num value="b">(b)</num> <content>Not later than the 30th day after the date a municipality receives notice under Subsection (a), the municipality may request that the electric utility file with the municipality a statement of intent in accordance with Section 36.102.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scB/s33.024/c"> <num value="c">(c)</num> <content>If requested by a municipality under Subsection (b), the electric utility shall file the statement of intent with the municipality at the same time the statement is filed with the commission.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c33/scB/s33.025"> <num value="33.025">Sec. 33.025.</num> <heading>MUNICIPAL STANDING</heading> <subsection identifier="/us/tx/ut/t2/c33/scB/s33.025/a"> <num value="a">(a)</num> <content>A municipality has standing in each case before the commission that relates to an electric utility providing service in the municipality.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scB/s33.025/b"> <num value="b">(b)</num> <chapeau>A municipality's standing is subject to the right of the commission to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c33/scB/s33.025/1"> <num value="1">(1)</num> <content>determine standing in a case involving a retail service area dispute that involves two or more electric utilities; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c33/scB/s33.025/2"> <num value="2">(2)</num> <content>consolidate municipalities on an issue of common interest.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c33/scB/s33.026"> <num value="33.026">Sec. 33.026.</num> <heading>JUDICIAL REVIEW</heading> <content>A municipality is entitled to judicial review of a commission order relating to an electric utility providing services in the municipality as provided by Section 15.001.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c33/scC"> <num value="C">SUBCHAPTER C.</num> <heading>APPEAL OF MUNICIPAL ORDER</heading> <section identifier="/us/tx/ut/t2/c33/scC/s33.051"> <num value="33.051">Sec. 33.051.</num> <heading>APPEAL BY PARTY</heading> <content>A party to a rate proceeding before a municipality's governing body may appeal the governing body's decision to the commission.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c33/scC/s33.052"> <num value="33.052">Sec. 33.052.</num> <heading>APPEAL BY RESIDENTS</heading> <content>The residents of a municipality may appeal to the commission the decision of the municipality's governing body in a rate proceeding by filing with the commission a petition for review signed by a number of qualified voters of the municipality equal to at least the lesser of 20,000 or 10 percent of the qualified voters of the municipality.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c33/scC/s33.053"> <num value="33.053">Sec. 33.053.</num> <heading>FILING OF APPEAL</heading> <subsection identifier="/us/tx/ut/t2/c33/scC/s33.053/a"> <num value="a">(a)</num> <content>An appeal under this subchapter is initiated by filing a petition for review with the commission and serving a copy of the petition on each party to the original rate proceeding.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scC/s33.053/b"> <num value="b">(b)</num> <content>The appeal must be initiated not later than the 30th day after the date of the final decision by the governing body of the municipality.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c33/scC/s33.054"> <num value="33.054">Sec. 33.054.</num> <heading>HEARING AND ORDER</heading> <subsection identifier="/us/tx/ut/t2/c33/scC/s33.054/a"> <num value="a">(a)</num> <content>An appeal under this subchapter, Subchapter D, or Subchapter E is de novo and based on the test year presented to the municipality.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scC/s33.054/b"> <num value="b">(b)</num> <content>The commission shall enter a final order establishing the rates the commission determines the municipality should have set in the ordinance to which the appeal applies.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scC/s33.054/c"> <num value="c">(c)</num> <content>In a proceeding involving the rates of a municipally owned utility, the commission must enter a final order on or before the 185th day after the date the appeal is perfected or the utility files a rate application as prescribed by Section 33.104.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scC/s33.054/d"> <num value="d">(d)</num> <content>In a proceeding in which a rate change is concurrently sought from the commission under the commission's original jurisdiction, the commission must enter a final order on or before the later of the 120th day after the date the appeal is perfected or the date final action must be taken in the proceeding filed with the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scC/s33.054/e"> <num value="e">(e)</num> <content>In a proceeding not governed by Subsection (c) or (d), the commission must enter a final order on or before the 185th day after the date the appeal is perfected.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scC/s33.054/f"> <num value="f">(f)</num> <content>If the commission fails to enter a final order before the expiration of the applicable period prescribed by Subsections (c)-(e), the rates proposed by the utility are considered to be approved by the commission and take effect on the expiration of that period.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c33/scC/s33.055"> <num value="33.055">Sec. 33.055.</num> <heading>APPLICABILITY OF RATES</heading> <subsection identifier="/us/tx/ut/t2/c33/scC/s33.055/a"> <num value="a">(a)</num> <content>Temporary or permanent rates set by the commission are prospective and observed from the date of the applicable commission order, except an interim rate order necessary to effect uniform system-wide rates or to provide an electric utility the opportunity to avoid confiscation during the period beginning on the date a petition for review is filed with the commission and ending on the date of a final order establishing rates.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scC/s33.055/b"> <num value="b">(b)</num> <chapeau>The commission shall order interim rates on a prima facie showing by the electric utility that it has experienced confiscation during that period. The electric utility shall refund or credit against future bills:</chapeau> <paragraph identifier="/us/tx/ut/t2/c33/scC/s33.055/1"> <num value="1">(1)</num> <content>money collected under the interim rates in excess of the rate finally ordered; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c33/scC/s33.055/2"> <num value="2">(2)</num> <content>interest on that money, at the current rate as determined by the commission.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scC/s33.055/c"> <num value="c">(c)</num> <content>In this section, "confiscation" includes negative cash flow experienced by an electric utility at any time a rate case proceeding is pending.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c33/scD"> <num value="D">SUBCHAPTER D.</num> <heading>PROVISIONS APPLICABLE TO APPEAL BY RATEPAYERS OUTSIDE MUNICIPALITY</heading> <section identifier="/us/tx/ut/t2/c33/scD/s33.101"> <num value="33.101">Sec. 33.101.</num> <heading>APPEAL BY RATEPAYERS OUTSIDE MUNICIPALITY</heading> <subsection identifier="/us/tx/ut/t2/c33/scD/s33.101/a"> <num value="a">(a)</num> <content>The ratepayers of a municipally owned utility who are outside the municipality may appeal to the commission an action of the governing body of the municipality affecting the municipally owned utility's rates by filing with the commission a petition for review signed by a number of ratepayers served by the utility outside the municipality equal to at least the lesser of 10,000 or five percent of those ratepayers.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scD/s33.101/b"> <num value="b">(b)</num> <content>A petition for review is properly signed if signed by a person or the spouse of a person in whose name residential utility service is carried.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scD/s33.101/c"> <num value="c">(c)</num> <content>For purposes of this section, each person who receives a separate bill is a ratepayer. A person who receives more than one bill may not be counted as more than one ratepayer.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c33/scD/s33.102"> <num value="33.102">Sec. 33.102.</num> <heading>IDENTIFICATION OF RATEPAYERS OUTSIDE MUNICIPALITY</heading> <subsection identifier="/us/tx/ut/t2/c33/scD/s33.102/a"> <num value="a">(a)</num> <chapeau>A municipality that owns a utility shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c33/scD/s33.102/1"> <num value="1">(1)</num> <content>disclose to any person, on request, the number of ratepayers who reside outside the municipality; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c33/scD/s33.102/2"> <num value="2">(2)</num> <content>provide to any person, on request, a list of the names and addresses of the ratepayers who reside outside the municipality.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scD/s33.102/b"> <num value="b">(b)</num> <content>The municipality may not charge a fee for disclosing the information under Subsection (a)(1). The municipality may charge a reasonable fee for providing information under Subsection (a)(2).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scD/s33.102/c"> <num value="c">(c)</num> <content>The municipality shall provide information requested under Subsection (a)(1) by telephone or in writing, as preferred by the person making the request.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c33/scD/s33.103"> <num value="33.103">Sec. 33.103.</num> <heading>FILING OF APPEAL</heading> <subsection identifier="/us/tx/ut/t2/c33/scD/s33.103/a"> <num value="a">(a)</num> <content>Not later than the 14th day after the date a governing body of a municipality makes a final decision, the municipality shall issue a written report stating the effect of the decision on each class of ratepayer.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scD/s33.103/b"> <num value="b">(b)</num> <content>An appeal under this subchapter is initiated by filing a petition for review with the commission and serving a copy of the petition on each party to the original rate proceeding.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scD/s33.103/c"> <num value="c">(c)</num> <content>The appeal must be initiated not later than the 45th day after the date the municipality issues the written report required by Subsection (a).</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c33/scD/s33.104"> <num value="33.104">Sec. 33.104.</num> <heading>RATE APPLICATION</heading> <content>Not later than the 90th day after the date a petition for review is filed that complies with Section 33.103, the municipality shall file with the commission a rate application that complies in all material respects with the rules and forms prescribed by the commission. The commission may, for good cause shown, extend the period for filing a rate application.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c33/scE"> <num value="E">SUBCHAPTER E.</num> <heading>RATE DETERMINATION AND APPEAL OF ORDERS OF CERTAIN MUNICIPAL UTILITIES</heading> <section identifier="/us/tx/ut/t2/c33/scE/s33.121"> <num value="33.121">Sec. 33.121.</num> <heading>APPLICATION OF COMMISSION REVIEW</heading> <chapeau>A municipally owned utility is subject to this subchapter if the utility is a utility:</chapeau> <paragraph identifier="/us/tx/ut/t2/c33/scE/s33.121/1"> <num value="1">(1)</num> <content>whose rates are appealed under Subchapter D;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c33/scE/s33.121/2"> <num value="2">(2)</num> <content>for which the commission orders a decrease in annual nonfuel base revenues that exceeds the greater of $25,000,000 or 10 percent of the utility's nonfuel base revenues, as computed on a total system basis without regard to the utility's municipal boundaries and established in the appealed rate ordinance; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c33/scE/s33.121/3"> <num value="3">(3)</num> <content>for which the commission finds that the rates paid by the combined residential or other major customer class, other than a class in which the municipality is the customer of the municipally owned utility, are removed from cost-of-service levels to the extent that, under the nonfuel base revenue requirement adopted by the commission as computed on a total system basis without regard to the municipality's boundaries, a change in nonfuel base rate revenues in excess of 50 percent from adjusted test year levels would be required to move that class to a relative rate of return of unity (1.00 or 100 percent) under the cost-of-service methodology adopted by the commission in an appeal under Subchapter D.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c33/scE/s33.122"> <num value="33.122">Sec. 33.122.</num> <heading>REVIEW OF CERTAIN RATE DECISIONS</heading> <subsection identifier="/us/tx/ut/t2/c33/scE/s33.122/a"> <num value="a">(a)</num> <content>Except as provided by Subsections (b)-(f), for a period of 10 years beginning on the later of August 28, 1989, or the effective date of the rate ordinance that is the subject of the commission's final order invoking the application of this section, the commission has appellate jurisdiction over the rates charged by the municipally owned utility, both inside and outside the municipality, in the same manner and subject to the same commission powers and authority provided by this subtitle for an electric utility.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scE/s33.122/b"> <num value="b">(b)</num> <content>The commission has jurisdiction to review the cost allocation and rate design methodologies adopted by the governing body of a municipally owned utility subject to this section. If the commission finds that the cost-of-service methodologies result in rates that are unjust, unreasonable, or unreasonably discriminatory, or unduly preferential to a customer class, the commission may order the implementation of ratesetting methodologies the commission finds reasonable.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scE/s33.122/c"> <num value="c">(c)</num> <content>The commission shall ensure that a customer class, other than a class in which the municipality is the customer of the municipally owned utility, does not pay rates that result in a relative rate of return of more than 115 percent under the cost-of-service methodology found reasonable by the commission. A customer class may not experience a percentage base rate increase that is greater than 1-1/2 times the system average base increase. In moving an above-cost class toward cost-of-service levels, each class farthest above cost shall be moved sequentially toward cost so that no above-cost class moves toward cost until no other class is further removed from cost.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scE/s33.122/d"> <num value="d">(d)</num> <content>A municipality subject to this section may design residential rates, as a matter of intra-class rate design, to accomplish reasonable energy conservation goals, notwithstanding any other provision of this title.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scE/s33.122/e"> <num value="e">(e)</num> <content>The commission's jurisdiction under this section may be invoked by any party to a local rate proceeding required by this section in the same manner as an appeal of the rates of an electric utility under Section 33.051.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scE/s33.122/f"> <num value="f">(f)</num> <chapeau>The commission's jurisdiction under this section does not extend to a municipally owned utility's:</chapeau> <paragraph identifier="/us/tx/ut/t2/c33/scE/s33.122/1"> <num value="1">(1)</num> <content>revenue requirements, whether base rate or fuel revenues;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c33/scE/s33.122/2"> <num value="2">(2)</num> <content>invested capital;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c33/scE/s33.122/3"> <num value="3">(3)</num> <content>return on invested capital;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c33/scE/s33.122/4"> <num value="4">(4)</num> <content>debt service coverage ratio; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c33/scE/s33.122/5"> <num value="5">(5)</num> <content>level of transfer of revenues from the utility to the municipality's general fund.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scE/s33.122/g"> <num value="g">(g)</num> <content>The governing body of a municipally owned utility subject to this section shall establish procedures similar to the procedures of a municipality that retains original jurisdiction under Section 33.001 to regulate an electric utility operating in the municipality. The procedures must include a public hearing process in which an affected ratepayer is granted party status on request and is grouped for purposes of participation in accordance with common or divergent interests, including the particular interests of all-electric residential ratepayers and residential ratepayers outside the municipality.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scE/s33.122/h"> <num value="h">(h)</num> <content>This section does not require the governing body of a municipality or the governing board of a municipally owned utility subject to this section to adopt procedures that require the use of the Texas Rules of Evidence, the Texas Rules of Civil Procedure, or the presentation of sworn testimony or any other form of sworn evidence.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scE/s33.122/i"> <num value="i">(i)</num> <content>The governing body of a municipally owned utility subject to this section shall appoint a consumer advocate to represent the interests of residential and small commercial ratepayers in the municipality's local rate proceedings. The consumer advocate's reasonable costs of participating in a proceeding, including the reasonable costs of ratemaking consultants and expert witnesses, shall be funded by and recovered from residential and small commercial ratepayers.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scE/s33.122/j"> <num value="j">(j)</num> <content>The commission shall adopt rules applicable to a party to an appeal under Subchapter D that provide for the public disclosure of financial and in-kind contributions and expenditures related to preparing and filing an appeal petition and preparing expert testimony or legal representation for an appeal. A party or customer who is a member of a party who makes a financial contribution or in-kind contribution to assist in an appeal by another party or customer class under Subchapter D shall be required, on a finding of the commission to that effect, to pay the municipally owned utility a penalty equivalent in amount to two times the amount of the contribution.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scE/s33.122/k"> <num value="k">(k)</num> <content>This section does not limit the right of a party or customer to spend money to represent its own interests following the filing of a petition with the commission under Subchapter D.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c33/scE/s33.123"> <num value="33.123">Sec. 33.123.</num> <heading>REVIEW OF CERTAIN DECISIONS FOR RATES CHARGED OUTSIDE MUNICIPALITY</heading> <subsection identifier="/us/tx/ut/t2/c33/scE/s33.123/a"> <num value="a">(a)</num> <content>For a period of 10 years beginning on the later of August 28, 1989, or the effective date of the rate ordinance that is the subject of the commission's final order invoking the application of this section, the commission has appellate jurisdiction over the rates charged by the municipally owned utility, outside the municipality, as provided by this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scE/s33.123/b"> <num value="b">(b)</num> <content>Except as otherwise provided by this section, a ratepayer of a municipally owned utility subject to this section who resides outside the municipality may appeal any action of the governing body of a municipality affecting the rates charged by the municipally owned utility outside the municipality by filing a petition for review with the commission in the manner provided for an appeal under Subchapter D. The petition must plainly disclose that the cost of the appeal will be funded by a surcharge on the monthly electric bills of ratepayers outside the municipality as prescribed by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scE/s33.123/c"> <num value="c">(c)</num> <content>After the commission approves the sufficiency of a petition, the appellants shall submit to the office for approval a budget itemizing the scope and expected cost of consultant services to be purchased by the appellants in the appeal.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scE/s33.123/d"> <num value="d">(d)</num> <content>Not later than the 120th day after the date the commission enters its final order, the municipality shall assess a onetime surcharge on a per capita basis among residential ratepayers who reside outside the municipality to pay the reasonable consultant and legal costs approved by the counsellor. The municipality shall reimburse the appellants for incurred costs not later than the 90th day after the date the commission enters its final order.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scE/s33.123/e"> <num value="e">(e)</num> <chapeau>A municipality may not:</chapeau> <paragraph identifier="/us/tx/ut/t2/c33/scE/s33.123/1"> <num value="1">(1)</num> <content>include the costs associated with its defense of an appeal under this section in the rates charged a ratepayer outside the municipality; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c33/scE/s33.123/2"> <num value="2">(2)</num> <content>if the municipality appeals an order entered by the commission under this section, include the costs associated with its appeal in the rates charged a ratepayer outside the municipality.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scE/s33.123/f"> <num value="f">(f)</num> <content>A ratepayer who brings an appeal under this section may not receive funding for rate case expenses except from a residential ratepayer who resides outside the municipality or from another municipality inside whose boundaries the municipally owned utility provides service. The commission shall adopt rules for reporting financial and in-kind contributions in support of an appeal under this section. If the commission finds that an appellant has received contributions from a source other than from a ratepayer who resides outside the municipality or from another municipality, the appeal and each commission order entered in the appeal are void.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scE/s33.123/g"> <num value="g">(g)</num> <content>The commission has jurisdiction in an appeal under this section to review and ensure that the revenue requirements of a municipally owned utility subject to this section are reasonable. The jurisdiction under this subsection does not extend to regulating the use and level of a transfer of the utility's revenues to the municipality's general fund.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scE/s33.123/h"> <num value="h">(h)</num> <content>The commission has jurisdiction to review the cost allocation and rate design methodologies adopted by the governing body of a municipally owned utility subject to this section. If the commission finds that the cost-of-service methodologies result in rates that are unjust, unreasonable, or unreasonably discriminatory or unduly preferential to a customer class, the commission may order the implementation of ratesetting methodologies the commission finds reasonable. The commission's jurisdiction under this subsection does not include intra-class residential rate design.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scE/s33.123/i"> <num value="i">(i)</num> <content>An intervenor in an appeal under this section is limited to presenting evidence on cost allocation and rate design methodologies, except that an intervenor may present evidence in support of the municipality on an issue related to utility revenues.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c33/scE/s33.123/j"> <num value="j">(j)</num> <content>A ratepayer of a municipally owned utility subject to this section who resides outside the municipality may elect to petition for review under either this section or Subchapter D when appealing a rate ordinance or other ratesetting action of the governing body of a municipality.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t2/c34"> <num value="34">CHAPTER 34.</num> <heading>FACILITY FUNDING</heading> <subchapter identifier="/us/tx/ut/t2/c34/scA"> <num value="A">SUBCHAPTER A.</num> <heading>TEXAS ENERGY FUND; GRANTS AND LOANS</heading> <section identifier="/us/tx/ut/t2/c34/scA/s34.0101"> <num value="34.0101">Sec. 34.0101.</num> <heading>DEFINITIONS</heading> <chapeau>In this subchapter:</chapeau> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0101/1"> <num value="1">(1)</num> <content>"Advisory committee" means the Texas Energy Fund Advisory Committee.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0101/2"> <num value="2">(2)</num> <content>"Fund" means the Texas energy fund established by Section 49-q, Article III, Texas Constitution.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0101/3"> <num value="3">(3)</num> <content>"Trust company" means the Texas Treasury Safekeeping Trust Company.</content> </paragraph> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 465 (S.B. 2627), Sec. 2, eff. November 7, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c34/scA/s34.0102"> <num value="34.0102">Sec. 34.0102.</num> <heading>FUND</heading> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0102/a"> <num value="a">(a)</num> <content>The fund is a special fund in the state treasury outside the general revenue fund to be administered and used by the commission for the purposes authorized by this chapter. The commission may establish separate accounts in the fund.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0102/b"> <num value="b">(b)</num> <content>The fund and the fund's accounts are kept and held by the trust company for and in the name of the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0102/c"> <num value="c">(c)</num> <content>Money deposited to the credit of the fund may be used only as provided by this chapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0102/d"> <num value="d">(d)</num> <chapeau>The fund consists of:</chapeau> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0102/1"> <num value="1">(1)</num> <content>money appropriated, credited, transferred, or deposited to the credit of the fund by or as authorized by law, including money from any source transferred or deposited to the credit of the fund at the commission's discretion;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0102/2"> <num value="2">(2)</num> <content>revenue that the legislature by statute dedicates for deposit to the credit of the fund;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0102/3"> <num value="3">(3)</num> <content>investment earnings and interest earned on money in the fund; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0102/4"> <num value="4">(4)</num> <content>gifts, grants, and donations contributed to the fund.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 465 (S.B. 2627), Sec. 2, eff. November 7, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c34/scA/s34.0103"> <num value="34.0103">Sec. 34.0103.</num> <heading>GRANTS FOR FACILITIES OUTSIDE ERCOT POWER REGION</heading> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0103/a"> <num value="a">(a)</num> <chapeau>The commission may use money in the fund without further appropriation to provide grants to be used for transmission and distribution infrastructure and electric generating facilities in this state outside the ERCOT power region for:</chapeau> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0103/1"> <num value="1">(1)</num> <content>facility modernization;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0103/2"> <num value="2">(2)</num> <content>facility weatherization;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0103/3"> <num value="3">(3)</num> <content>reliability and resiliency facility enhancements; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0103/4"> <num value="4">(4)</num> <content>vegetation management.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0103/b"> <num value="b">(b)</num> <chapeau>In evaluating an application for a grant under this section, the commission:</chapeau> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0103/1"> <num value="1">(1)</num> <content>shall evaluate whether the project for which the grant is requested is reasonable; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0103/2"> <num value="2">(2)</num> <content>may consider any other appropriate factors.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0103/c"> <num value="c">(c)</num> <content>Information submitted to the commission at any time for the purpose of enabling the commission to make a determination on the award of a grant under this section is confidential and not subject to disclosure under Chapter 552, Government Code.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0103/d"> <num value="d">(d)</num> <chapeau>Proceeds of a grant received under this section may not be used for:</chapeau> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0103/1"> <num value="1">(1)</num> <content>compliance with weatherization standards adopted before December 1, 2023; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0103/2"> <num value="2">(2)</num> <content>debt payments.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 465 (S.B. 2627), Sec. 2, eff. November 7, 2023. Amended by: Acts 2025, 89th Leg., R.S., Ch. 337 (S.B. 2268), Sec. 1, eff. June 12, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c34/scA/s34.0104"> <num value="34.0104">Sec. 34.0104.</num> <heading></heading> <chapeau>For expiration of this section, see Subsection (m).</chapeau> <continuation>Sec. 34.0104. LOANS FOR ERCOT POWER REGION. (a) The commission may use money in the fund without further appropriation to provide loans to finance upgrades to existing dispatchable electric generating facilities providing power for the ERCOT power region that result in a net increase of at least 100 megawatts of capacity for each facility or the construction of dispatchable electric generating facilities providing power for the ERCOT power region that each have a generation capacity of at least 100 megawatts. For the purposes of this section, a generating facility is considered to be dispatchable if the facility's output can be controlled primarily by forces under human control. An electric energy storage facility is not eligible for a loan under this section.</continuation> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0104/b"> <num value="b">(b)</num> <chapeau>The commission may provide a construction loan under this section only:</chapeau> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0104/1"> <num value="1">(1)</num> <content>for construction of a facility that will have a generation capacity of at least 100 megawatts and that does not meet the planning model requirements necessary to be included in the Capacity Demand and Reserves Report of the independent organization certified under Section 39.151 for the ERCOT power region before June 1, 2023;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0104/2"> <num value="2">(2)</num> <content>in an amount that does not exceed 60 percent of the estimated cost of the facility to be constructed; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0104/3"> <num value="3">(3)</num> <content>if the agreement ensures that the loan is to be the senior debt secured by the facility.</content> <continuation>(b-1) Notwithstanding Subsection (b)(3):</continuation> </paragraph> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0104/1"> <num value="1">(1)</num> <content>a construction loan provided to a municipally owned utility, or an instrumentality of a municipal corporation established for the benefit of a municipally owned utility, may be in the form of a public security, as defined by Section 1201.002, Government Code, issued by the loan applicant if the public security is payable on a parity basis with other debt of the loan applicant secured by a senior lien on net revenues of the facility or the loan applicant's utility system; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0104/2"> <num value="2">(2)</num> <content>a construction loan provided to an electric cooperative may be secured by a senior lien on substantially all electric system assets of the electric cooperative, including the facility for which the loan is provided, payable on a parity basis with other debt of the loan applicant secured by a senior lien.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0104/c"> <num value="c">(c)</num> <chapeau>The commission shall evaluate an application for a loan under this section based on:</chapeau> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0104/1"> <num value="1">(1)</num> <chapeau>the applicant's:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c34/scA/s34.0104/A"> <num value="A">(A)</num> <content>quality of services and management;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c34/scA/s34.0104/B"> <num value="B">(B)</num> <content>efficiency of operations;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c34/scA/s34.0104/C"> <num value="C">(C)</num> <content>history of electricity generation operations in this state and this country;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c34/scA/s34.0104/D"> <num value="D">(D)</num> <content>resource operation attributes;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c34/scA/s34.0104/E"> <num value="E">(E)</num> <content>ability to address regional and reliability needs;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c34/scA/s34.0104/F"> <num value="F">(F)</num> <content>access to resources essential for operating the facility for which the loan is requested, such as land, water, and reliable infrastructure, as applicable; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c34/scA/s34.0104/G"> <num value="G">(G)</num> <content>evidence of creditworthiness and ability to repay the loan on the terms established in the loan agreement, including the applicant's total assets, total liabilities, net worth, and credit ratings issued by major credit rating agencies;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0104/2"> <num value="2">(2)</num> <content>the generation capacity and estimated costs of the project for which the loan is requested; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0104/3"> <num value="3">(3)</num> <content>any other factors the commission considers appropriate.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0104/d"> <num value="d">(d)</num> <content>Outstanding loans provided under this section may not support the addition or construction of more than 10,000 megawatts of generation capacity.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0104/e"> <num value="e">(e)</num> <content>An electric utility other than a river authority may not receive a loan under this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0104/f"> <num value="f">(f)</num> <chapeau>A loan provided under this section must:</chapeau> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0104/1"> <num value="1">(1)</num> <content>have a term of 20 years;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0104/2"> <num value="2">(2)</num> <content>be payable ratably starting on the third anniversary of the estimated commercial operation date of the facility for which the loan was provided, as stated in the loan application; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0104/3"> <num value="3">(3)</num> <content>bear an interest rate of three percent.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0104/g"> <num value="g">(g)</num> <content>The commission shall require each recipient of a loan under this section to deposit in an escrow account held by the comptroller an amount of money equal to three percent of the estimated cost of the project for which the loan is provided. The deposit must be made before the initial loan funds are disbursed. The loan recipient may not withdraw the deposit unless authorized by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0104/h"> <num value="h">(h)</num> <chapeau>For money deposited under Subsection (g) for a loan for the construction of a new facility, the commission:</chapeau> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0104/1"> <num value="1">(1)</num> <content>shall authorize the loan recipient to withdraw the deposit from the escrow account if the facility for which the loan was provided is interconnected in the ERCOT power region before the fourth anniversary of the date the initial loan funds were disbursed; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0104/2"> <num value="2">(2)</num> <content>after the fourth anniversary of the date the initial loan funds were disbursed, may authorize the loan recipient to withdraw the deposit from the escrow account if the facility for which the loan was provided is interconnected in the ERCOT power region not later than the fifth anniversary of the date the initial loan funds were disbursed and the commission determines that extenuating circumstances justify the delay in completion.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0104/i"> <num value="i">(i)</num> <chapeau>For money deposited under Subsection (g) for a loan for an upgrade to an existing facility, the commission:</chapeau> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0104/1"> <num value="1">(1)</num> <content>shall authorize the loan recipient to withdraw the deposit from the escrow account if the project for which the loan was provided is completed before the third anniversary of the date the initial loan funds were disbursed; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0104/2"> <num value="2">(2)</num> <content>after the third anniversary of the date the initial loan funds were disbursed, may authorize the loan recipient to withdraw the deposit from the escrow account if the project for which the loan was provided is completed not later than the fourth anniversary of the date the initial loan funds were disbursed and the commission determines that extenuating circumstances justify the delay in completion.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0104/j"> <num value="j">(j)</num> <content>The comptroller shall deposit to the credit of the fund any escrow funds described by Subsection (g) that the commission may not authorize to be withdrawn by a loan recipient.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0104/k"> <num value="k">(k)</num> <content>Information submitted to the commission at any time for the purpose of enabling the commission to make a determination on the award of a loan under this section is confidential and not subject to disclosure under Chapter 552, Government Code.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0104/l"> <num value="l">(l)</num> <content>The commission may disburse the initial funds for a loan under this section after December 31, 2025, if the commission determines that market factors necessitate an extension of the deadline for disbursement of initial funds. An applicant may request disbursement of initial funds after December 31, 2025. The commission shall approve or deny the request on a case-by-case basis.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0104/m"> <num value="m">(m)</num> <content>This section expires September 1, 2050.</content> </subsection> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 465 (S.B. 2627), Sec. 2, eff. November 7, 2023. Amended by: Acts 2025, 89th Leg., R.S., Ch. 337 (S.B. 2268), Sec. 2, eff. June 12, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c34/scA/s34.0105"> <num value="34.0105">Sec. 34.0105.</num> <heading></heading> <chapeau>For expiration of this section, see Subsection (j).</chapeau> <continuation>Sec. 34.0105. COMPLETION BONUS GRANTS. (a) The commission shall provide, using money available in the fund for the purpose without further appropriation, a completion bonus grant for the construction of dispatchable electric generating facilities in the ERCOT power region. For the purposes of this section, a generating facility is considered to be dispatchable if the facility's output can be controlled primarily by forces under human control. An electric energy storage facility is not eligible for a grant under this section.</continuation> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0105/b"> <num value="b">(b)</num> <content>The amount of a grant under this section must be based on the megawatts of capacity provided to the ERCOT power region by the facility.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0105/c"> <num value="c">(c)</num> <chapeau>The commission may provide a grant under this section only for construction of a facility that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0105/1"> <num value="1">(1)</num> <content>will have a generation capacity of at least 100 megawatts; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0105/2"> <num value="2">(2)</num> <content>does not meet the planning model requirements necessary to be included in the Capacity Demand and Reserves Report of the independent organization certified under Section 39.151 for the ERCOT power region before June 1, 2023.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0105/d"> <num value="d">(d)</num> <chapeau>The commission shall evaluate an application for a grant under this section based on:</chapeau> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0105/1"> <num value="1">(1)</num> <chapeau>the applicant's:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c34/scA/s34.0105/A"> <num value="A">(A)</num> <content>quality of services and management;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c34/scA/s34.0105/B"> <num value="B">(B)</num> <content>efficiency of operations;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c34/scA/s34.0105/C"> <num value="C">(C)</num> <content>history of electricity generation operations in this state and this country;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c34/scA/s34.0105/D"> <num value="D">(D)</num> <content>resource operation attributes; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c34/scA/s34.0105/E"> <num value="E">(E)</num> <content>ability to address regional and reliability needs;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0105/2"> <num value="2">(2)</num> <content>the generation capacity and estimated construction costs of the facility for which the grant is requested; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0105/3"> <num value="3">(3)</num> <content>any other factors the commission considers appropriate.</content> <continuation>(d-1) Grants provided under this section may not support the construction of more than 10,000 megawatts of generation capacity.</continuation> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0105/e"> <num value="e">(e)</num> <content>Information submitted to the commission at any time for the purpose of enabling the commission to make a determination on the award of a grant under this section is confidential and not subject to disclosure under Chapter 552, Government Code.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0105/f"> <num value="f">(f)</num> <chapeau>Unless the commission determines that extenuating circumstances justify extending the deadlines provided by this subsection, the commission may not provide a grant under this section of more than:</chapeau> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0105/1"> <num value="1">(1)</num> <content>$120,000 per megawatt of capacity provided by a facility that is interconnected in the ERCOT power region before June 1, 2026; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0105/2"> <num value="2">(2)</num> <content>$80,000 per megawatt of capacity provided by a facility that is interconnected in the ERCOT power region on or after June 1, 2026, and before June 1, 2029.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0105/g"> <num value="g">(g)</num> <content>Unless the commission determines that extenuating circumstances justify extending the deadline provided by this subsection, the commission may not provide a grant under this section for a facility that is interconnected in the ERCOT power region on or after June 1, 2029.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0105/h"> <num value="h">(h)</num> <content>The commission shall provide for the proceeds of each grant awarded under this section to be disbursed to the grant recipient by equal annual payments over a 10-year period that begins on the first anniversary of the commercial operations date of the facility for which the grant is provided. The annual payments are subject to being withheld or discounted in accordance with Subsection (i). The total of the annual disbursements may not exceed the maximum amount as limited by Subsection (f).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0105/i"> <num value="i">(i)</num> <content>The commission by rule shall establish performance standards for grant recipients based on reliability metrics, appropriate for the types of facilities for which grants may be provided, for performance during the 100 hours with the least quantity of operating reserves for each year. The commission may not disburse a grant recipient's annual payment under Subsection (h) if the performance of the facility for which the grant was provided is equal to or below the median performance standard established under this subsection during a test period designated by the commission for that year. The commission may disburse a discounted amount of a grant recipient's annual payment under Subsection (h) if the performance of the facility for which the grant was provided is above the median performance standard established under this subsection during a test period designated by the commission for that year but less than an optimal performance standard established by the commission. The commission shall by rule adopt a system for determining the amount by which the commission will discount an annual payment based on facility performance under this subsection.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0105/j"> <num value="j">(j)</num> <content>This section expires December 1, 2040.</content> </subsection> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 465 (S.B. 2627), Sec. 2, eff. November 7, 2023. Amended by: Acts 2025, 89th Leg., R.S., Ch. 337 (S.B. 2268), Sec. 3, eff. June 12, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c34/scA/s34.0106"> <num value="34.0106">Sec. 34.0106.</num> <heading>LOAN AND GRANT RESTRICTIONS</heading> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0106/a"> <num value="a">(a)</num> <content>If the commission has more than four pending applications for loans to be made from the fund on the date the commission awards a loan, the amount of the loan awarded may not exceed 25 percent of the fund balance on that date.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0106/b"> <num value="b">(b)</num> <chapeau>The commission may not provide a loan or a grant under this chapter:</chapeau> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0106/1"> <num value="1">(1)</num> <content>for a facility that will be used primarily to serve an industrial load or private use network; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0106/2"> <num value="2">(2)</num> <content>for the construction or operation of a natural gas transmission pipeline.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0106/c"> <num value="c">(c)</num> <content>The commission shall require each recipient of a loan under this chapter to enter into a debt covenant that requires the recipient to meet facility performance standards adopted by the commission. The commission by rule shall adopt performance standards for the purposes of this subsection based on reliability metrics appropriate for the types of facilities for which loans may be provided.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0106/d"> <num value="d">(d)</num> <content>Each facility for which a loan or grant is provided under Section 34.0104 or 34.0105 must participate in the ERCOT wholesale electricity market.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0106/e"> <num value="e">(e)</num> <chapeau>The commission may provide from the fund:</chapeau> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0106/1"> <num value="1">(1)</num> <content>for grants under Section 34.0103, not more than $1 billion;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0106/2"> <num value="2">(2)</num> <content>for loans and grants under Sections 34.0104 and 34.0105, not more than $7.2 billion; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0106/3"> <num value="3">(3)</num> <content>for grants or loans under Subchapter B, not more than $1.8 billion.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 465 (S.B. 2627), Sec. 2, eff. November 7, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c34/scA/s34.0107"> <num value="34.0107">Sec. 34.0107.</num> <heading>MANAGEMENT AND INVESTMENT OF FUND</heading> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0107/a"> <num value="a">(a)</num> <content>The trust company shall hold and invest the fund, and any accounts established in the fund, for and in the name of the commission, taking into account the purposes for which money in the fund may be used. The fund may be invested with the state treasury pool and commingled with other investments.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0107/b"> <num value="b">(b)</num> <content>The overall objective for the investment of the fund is to maintain sufficient liquidity to meet the needs of the fund while striving to preserve the purchasing power of the fund over a full economic cycle.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0107/c"> <num value="c">(c)</num> <content>In managing the assets of the fund, the trust company may acquire, exchange, sell, supervise, manage, or retain any kind of investment that a prudent investor, exercising reasonable care, skill, and caution, would acquire or retain in light of the purposes, terms, distribution requirements, and other circumstances of the fund then prevailing, taking into consideration the investment of all the assets of the fund rather than a single investment.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0107/d"> <num value="d">(d)</num> <content>The reasonable expenses of managing the fund's assets shall be paid from the fund.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0107/e"> <num value="e">(e)</num> <content>The trust company annually shall provide a written report to the commission and to the advisory committee with respect to the investment of the fund.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0107/f"> <num value="f">(f)</num> <content>The trust company shall adopt a written investment policy that is appropriate for the fund. The trust company shall present the investment policy to the investment advisory board established under Section 404.028, Government Code. The investment advisory board shall submit to the trust company recommendations regarding the policy.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0107/g"> <num value="g">(g)</num> <content>The commission annually shall provide to the trust company a forecast of the cash flows into and out of the fund. The commission shall provide updates to the forecasts as appropriate to ensure that the trust company is able to achieve the objective specified by Subsection (b).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0107/h"> <num value="h">(h)</num> <content>The trust company shall disburse money from the fund as directed by the commission.</content> </subsection> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 465 (S.B. 2627), Sec. 2, eff. November 7, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c34/scA/s34.0108"> <num value="34.0108">Sec. 34.0108.</num> <heading>RECEIVERSHIP OF DEFAULT GENERATING FACILITY</heading> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0108/a"> <num value="a">(a)</num> <chapeau>In this section, "default" means:</chapeau> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0108/1"> <num value="1">(1)</num> <content>default in payment of the principal of or interest on a loan; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0108/2"> <num value="2">(2)</num> <content>a failure to perform any of the terms of a loan.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0108/b"> <num value="b">(b)</num> <content>The state, including the commission, the advisory committee, and the trust company, may not retain an ownership interest in a project or facility for which a loan is provided under this chapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0108/c"> <num value="c">(c)</num> <content>In the event of a default on a loan made under this chapter, at the request of the commission, the attorney general shall bring suit in a district court in Travis County for the appointment of a receiver to collect the assets and carry on the business of a loan recipient if the action is necessary to cure a default by the recipient.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0108/d"> <num value="d">(d)</num> <chapeau>The court shall vest a receiver appointed by the court with any power or duty the court finds necessary to cure the default, including the power or duty to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0108/1"> <num value="1">(1)</num> <content>perform audits;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0108/2"> <num value="2">(2)</num> <content>direct ongoing operation of the assets;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0108/3"> <num value="3">(3)</num> <content>fund reserve accounts;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0108/4"> <num value="4">(4)</num> <content>make payments of the principal of or interest on bonds, securities, or other obligations; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0108/5"> <num value="5">(5)</num> <content>take any other action necessary to prevent or to remedy the default, including the sale of assets.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0108/e"> <num value="e">(e)</num> <content>The receiver shall execute a bond in an amount to be set by the court to ensure the proper performance of the receiver's duties.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0108/f"> <num value="f">(f)</num> <content>After appointment and execution of bond, the receiver shall take possession of the books, records, accounts, and assets of the defaulting loan recipient specified by the court. Until discharged by the court, the receiver shall perform the duties that the court directs and shall strictly observe the final order involved.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0108/g"> <num value="g">(g)</num> <content>On a showing of good cause by the defaulting loan recipient, the court may dissolve the receivership.</content> </subsection> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 465 (S.B. 2627), Sec. 2, eff. November 7, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c34/scA/s34.0109"> <num value="34.0109">Sec. 34.0109.</num> <heading>TEXAS ENERGY FUND ADVISORY COMMITTEE</heading> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0109/a"> <num value="a">(a)</num> <chapeau>The advisory committee is composed of the following six members:</chapeau> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0109/1"> <num value="1">(1)</num> <chapeau>three members of the senate appointed by the lieutenant governor, including:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c34/scA/s34.0109/A"> <num value="A">(A)</num> <content>a member of the committee of the senate having primary jurisdiction over matters relating to the generation of electricity; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c34/scA/s34.0109/B"> <num value="B">(B)</num> <content>a member of the committee of the senate having primary jurisdiction over finance; and</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0109/2"> <num value="2">(2)</num> <chapeau>three members of the house of representatives appointed by the speaker of the house of representatives, including:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c34/scA/s34.0109/A"> <num value="A">(A)</num> <content>a member of the committee of the house of representatives having primary jurisdiction over the generation of electricity; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c34/scA/s34.0109/B"> <num value="B">(B)</num> <content>a member of the committee of the house of representatives having primary jurisdiction over finance.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0109/b"> <num value="b">(b)</num> <content>A member of the advisory committee serves at the will of the person who appointed the member.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0109/c"> <num value="c">(c)</num> <content>The lieutenant governor shall appoint a co-presiding officer of the advisory committee from among the members appointed by the lieutenant governor. The speaker of the house of representatives shall appoint a co-presiding officer of the advisory committee from among the members appointed by the speaker.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0109/d"> <num value="d">(d)</num> <content>The advisory committee may hold public hearings, formal meetings, and work sessions. Either co-presiding officer of the advisory committee may call a public hearing, formal meeting, or work session of the advisory committee at any time. The advisory committee may not take formal action at a public hearing, formal meeting, or work session unless a quorum of the committee is present.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0109/e"> <num value="e">(e)</num> <content>Except as otherwise provided by this subsection, a member of the advisory committee is not entitled to receive compensation for service on the committee or reimbursement for expenses incurred in the performance of official duties as a member of the committee. Service on the advisory committee by a member of the senate or house of representatives is considered legislative service for which the member is entitled to reimbursement and other benefits in the same manner and to the same extent as for other legislative service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0109/f"> <num value="f">(f)</num> <chapeau>The advisory committee:</chapeau> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0109/1"> <num value="1">(1)</num> <content>may provide comments and recommendations to the commission for the commission to use in adopting rules regarding the use of the fund or on any other matter; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0109/2"> <num value="2">(2)</num> <content>shall review the overall operation, function, and structure of the fund at least semiannually.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0109/g"> <num value="g">(g)</num> <content>The advisory committee may adopt rules, procedures, and policies as needed to administer this section and implement its responsibilities.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0109/h"> <num value="h">(h)</num> <content>Chapter 2110, Government Code, does not apply to the size, composition, or duration of the advisory committee.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0109/i"> <num value="i">(i)</num> <content>The advisory committee is subject to Chapter 325, Government Code (Texas Sunset Act). Unless continued in existence as provided by that chapter, the advisory committee is abolished September 1, 2035.</content> </subsection> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 465 (S.B. 2627), Sec. 2, eff. November 7, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c34/scA/s34.0110"> <num value="34.0110">Sec. 34.0110.</num> <heading>RULES</heading> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0110/a"> <num value="a">(a)</num> <chapeau>The commission by rule may establish procedures for:</chapeau> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0110/1"> <num value="1">(1)</num> <content>the application for and award of a grant or loan under this chapter; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c34/scA/s34.0110/2"> <num value="2">(2)</num> <content>the administration of the fund.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scA/s34.0110/b"> <num value="b">(b)</num> <content>The commission shall give full consideration to comments and recommendations of the advisory committee.</content> </subsection> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 465 (S.B. 2627), Sec. 2, eff. November 7, 2023.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c34/scB"> <num value="B">SUBCHAPTER B.</num> <heading>TEXAS POWER PROMISE: BACKUP POWER PACKAGES</heading> <section identifier="/us/tx/ut/t2/c34/scB/s34.0201"> <num value="34.0201">Sec. 34.0201.</num> <heading>DEFINITION</heading> <content>In this subchapter, "Texas backup power package" means a stand-alone, behind-the-meter, multiday backup power source that can be used for islanding.</content> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 465 (S.B. 2627), Sec. 2, eff. November 7, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c34/scB/s34.0202"> <num value="34.0202">Sec. 34.0202.</num> <heading>PURPOSE</heading> <content>The purpose of this subchapter is to facilitate and provide funding for the design, procurement, installation, and use of Texas backup power packages to ensure the reliability or adequacy of an electric power grid in this state for facilities on which communities rely for health, safety, and well-being.</content> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 465 (S.B. 2627), Sec. 2, eff. November 7, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c34/scB/s34.0203"> <num value="34.0203">Sec. 34.0203.</num> <heading>COMMISSION DUTIES</heading> <subsection identifier="/us/tx/ut/t2/c34/scB/s34.0203/a"> <num value="a">(a)</num> <content>The commission shall convene an advisory committee in the manner provided by Chapter 2110, Government Code.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scB/s34.0203/b"> <num value="b">(b)</num> <content>The advisory committee shall recommend criteria for the commission to employ in making a grant or loan under this subchapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scB/s34.0203/c"> <num value="c">(c)</num> <chapeau>The commission shall contract with a research entity that has experience in microgrid design to analyze critical facility characteristics and requirements in this state and develop for Texas backup power packages:</chapeau> <paragraph identifier="/us/tx/ut/t2/c34/scB/s34.0203/1"> <num value="1">(1)</num> <content>sets of specifications for standard backup power packages of various sizes that can serve most critical facilities in this state; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c34/scB/s34.0203/2"> <num value="2">(2)</num> <content>specifications for standard interconnection, communications, and controls for Texas backup power packages.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 465 (S.B. 2627), Sec. 2, eff. November 7, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c34/scB/s34.0204"> <num value="34.0204">Sec. 34.0204.</num> <heading>TEXAS BACKUP POWER PACKAGES</heading> <chapeau>The commission may use money in the Texas energy fund without further appropriation to provide a grant or loan for the operation of a Texas backup power package that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c34/scB/s34.0204/1"> <num value="1">(1)</num> <content>is engineered to minimize operation costs;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c34/scB/s34.0204/2"> <num value="2">(2)</num> <content>uses interconnection technology and controls that enable immediate islanding from the power grid and stand-alone operation for the host facility;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c34/scB/s34.0204/3"> <num value="3">(3)</num> <content>is capable of operating for at least 48 continuous hours without refueling or connecting to a separate power source;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c34/scB/s34.0204/4"> <num value="4">(4)</num> <content>is designed so that one or more Texas backup power packages can be aggregated on-site to serve not more than 2.5 megawatts of load at the host facility;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c34/scB/s34.0204/5"> <num value="5">(5)</num> <chapeau>provides power sourced from:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c34/scB/s34.0204/A"> <num value="A">(A)</num> <content>a combination of natural gas or propane with photovoltaic panels and battery storage; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c34/scB/s34.0204/B"> <num value="B">(B)</num> <content>battery storage on an electric school bus; and</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c34/scB/s34.0204/6"> <num value="6">(6)</num> <content>is not used by the owner or host facility for the sale of energy or ancillary services.</content> </paragraph> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 465 (S.B. 2627), Sec. 2, eff. November 7, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c34/scB/s34.0205"> <num value="34.0205">Sec. 34.0205.</num> <heading>GRANTS AND LOANS</heading> <subsection identifier="/us/tx/ut/t2/c34/scB/s34.0205/a"> <num value="a">(a)</num> <content>The commission by rule may establish procedures for the application for and award of a grant or loan under this subchapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scB/s34.0205/b"> <num value="b">(b)</num> <content>The amount of a grant provided under this subchapter may not exceed $500 per kilowatt of capacity.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scB/s34.0205/c"> <num value="c">(c)</num> <content>The commission may provide a loan under this subchapter for procurement and operating costs.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scB/s34.0205/d"> <num value="d">(d)</num> <content>The commission shall maintain and publish a list of approved vendors eligible to assist with the sale, installation, operation, and ongoing maintenance of Texas backup power packages.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scB/s34.0205/e"> <num value="e">(e)</num> <chapeau>The commission may not provide a grant or loan under this subchapter for:</chapeau> <paragraph identifier="/us/tx/ut/t2/c34/scB/s34.0205/1"> <num value="1">(1)</num> <content>a commercial energy system, a private school, or a for-profit entity that does not directly serve public safety and human health; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c34/scB/s34.0205/2"> <num value="2">(2)</num> <content>a source of backup power that does not follow the design and use standards of a Texas backup power package.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c34/scB/s34.0205/f"> <num value="f">(f)</num> <content>Information submitted to the commission at any time for the purpose of enabling the commission to make a determination on the award of a grant or loan under this subchapter is confidential and not subject to disclosure under Chapter 552, Government Code.</content> </subsection> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 465 (S.B. 2627), Sec. 2, eff. November 7, 2023. Amended by: Acts 2025, 89th Leg., R.S., Ch. 337 (S.B. 2268), Sec. 4, eff. June 12, 2025.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t2/c35"> <num value="35">CHAPTER 35.</num> <heading>ENERGY PROVIDERS</heading> <subchapter identifier="/us/tx/ut/t2/c35/scA"> <num value="A">SUBCHAPTER A.</num> <heading>COMPETITION AND TRANSMISSION ACCESS IN THE WHOLESALE MARKET</heading> <section identifier="/us/tx/ut/t2/c35/scA/s35.001"> <num value="35.001">Sec. 35.001.</num> <heading>DEFINITION</heading> <content>In this subchapter, "electric utility" includes a municipally owned utility and an electric cooperative.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 405, Sec. 16, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c35/scA/s35.002"> <num value="35.002">Sec. 35.002.</num> <heading>RIGHT TO COMPETE AT WHOLESALE</heading> <content>A provider of generation, including an electric utility affiliate, exempt wholesale generator, and qualifying facility, may compete for the business of selling power.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c35/scA/s35.0021"> <num value="35.0021">Sec. 35.0021.</num> <heading>WEATHER EMERGENCY PREPAREDNESS</heading> <subsection identifier="/us/tx/ut/t2/c35/scA/s35.0021/a"> <num value="a">(a)</num> <content>This section applies only to a municipally owned utility, electric cooperative, power generation company, or exempt wholesale generator that sells electric energy at wholesale in the ERCOT power region.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scA/s35.0021/b"> <num value="b">(b)</num> <content>The commission by rule shall require each provider of electric generation service described by Subsection (a) to implement measures to prepare the provider's generation assets to provide adequate electric generation service during a weather emergency according to reliability standards adopted by the commission. In adopting the rules, the commission shall take into consideration weather predictions produced by the office of the state climatologist.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scA/s35.0021/c"> <num value="c">(c)</num> <chapeau>The independent organization certified under Section 39.151 for the ERCOT power region shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c35/scA/s35.0021/1"> <num value="1">(1)</num> <content>inspect generation assets in the ERCOT power region for compliance with the reliability standards;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c35/scA/s35.0021/2"> <num value="2">(2)</num> <content>provide the owner of a generation asset with a reasonable period of time in which to remedy any violation the independent organization discovers in an inspection; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c35/scA/s35.0021/3"> <num value="3">(3)</num> <content>report to the commission any violation.</content> <continuation>(c-1) The independent organization certified under Section 39.151 for the ERCOT power region shall prioritize inspections conducted under Subsection (c)(1) based on risk level, as determined by the organization.</continuation> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scA/s35.0021/d"> <num value="d">(d)</num> <chapeau>The commission by rule shall require a provider of electric generation service described by Subsection (a) for a generation asset that experiences repeated or major weather-related forced interruptions of service to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c35/scA/s35.0021/1"> <num value="1">(1)</num> <content>contract with a person who is not an employee of the provider to assess the provider's weatherization plans, procedures, and operations for that asset; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c35/scA/s35.0021/2"> <num value="2">(2)</num> <content>submit the assessment to the commission and the independent organization certified under Section 39.151 for the ERCOT power region.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scA/s35.0021/e"> <num value="e">(e)</num> <content>The commission may require a provider of electric generation service described by Subsection (a) to implement appropriate recommendations included in an assessment submitted to the commission under Subsection (d).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scA/s35.0021/f"> <num value="f">(f)</num> <content>The independent organization certified under Section 39.151 for the ERCOT power region shall review, coordinate, and approve or deny requests by providers of electric generation service described by Subsection (a) for a planned power outage during any season and for any period of time.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scA/s35.0021/g"> <num value="g">(g)</num> <content>The commission shall impose an administrative penalty on an entity, including a municipally owned utility or an electric cooperative, that violates a rule adopted under this section and does not remedy that violation within a reasonable period of time.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 426 (S.B. 3), Sec. 13, eff. June 8, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c35/scA/s35.0022"> <num value="35.0022">Sec. 35.0022.</num> <heading>SERVICE INTERRUPTION NOTIFICATIONS</heading> <subsection identifier="/us/tx/ut/t2/c35/scA/s35.0022/a"> <num value="a">(a)</num> <content>This section applies only to a provider of electric generation service described by Section 35.0021(a).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scA/s35.0022/b"> <num value="b">(b)</num> <content>The commission by rule shall require a provider of electric generation service to provide to the independent organization certified under Section 39.151 for the ERCOT power region the reason for each unplanned service interruption. Not later than the third business day after the service is restored, the independent organization shall include the reason for each unplanned service interruption in a publicly available report published on the independent organization's Internet website.</content> </subsection> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 8, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c35/scA/s35.003"> <num value="35.003">Sec. 35.003.</num> <heading>PURCHASE FROM AFFILIATE; UNDUE PREFERENCE PROHIBITED</heading> <subsection identifier="/us/tx/ut/t2/c35/scA/s35.003/a"> <num value="a">(a)</num> <content>An electric utility may purchase power from an affiliate in accordance with this title.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scA/s35.003/b"> <num value="b">(b)</num> <content>An electric utility may not grant an undue preference to a person in connection with the utility's purchase or sale of electric energy at wholesale or other utility service.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c35/scA/s35.004"> <num value="35.004">Sec. 35.004.</num> <heading>PROVISION OF TRANSMISSION SERVICE</heading> <subsection identifier="/us/tx/ut/t2/c35/scA/s35.004/a"> <num value="a">(a)</num> <content>An electric utility or transmission and distribution utility that owns or operates transmission facilities shall provide wholesale transmission service at rates and terms, including terms of access, that are comparable to the rates and terms of the utility's own use of its system.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scA/s35.004/b"> <num value="b">(b)</num> <content>The commission shall ensure that an electric utility or transmission and distribution utility provides nondiscriminatory access to wholesale transmission service for qualifying facilities, exempt wholesale generators, power marketers, power generation companies, retail electric providers, and other electric utilities or transmission and distribution utilities.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scA/s35.004/c"> <num value="c">(c)</num> <content>When an electric utility, electric cooperative, or transmission and distribution utility provides wholesale transmission service within ERCOT at the request of a third party, the commission shall ensure that the utility recovers the utility's reasonable costs in providing wholesale transmission services necessary for the transaction from the entity for which the transmission is provided so that the utility's other customers do not bear the costs of the service.</content> <continuation>(c-1) The commission by rule shall ensure that a large load customer who is subject to the standards adopted under Section 37.0561 contributes to the recovery of the interconnecting electric utility's costs to interconnect the large load to the utility's system.</continuation> <continuation>(c-2) An electric cooperative or municipally owned utility that has not adopted customer choice shall pass through to a large load customer who is subject to the standards adopted under Section 37.0561 the reasonable costs to interconnect the large load in a manner determined by the electric cooperative or municipally owned utility.</continuation> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scA/s35.004/d"> <num value="d">(d)</num> <content>The commission shall price wholesale transmission services within ERCOT based on the postage stamp method of pricing under which a transmission-owning utility's rate is based on the ERCOT utilities' combined annual costs of transmission, other than costs described by Subsections (d-2) and (d-3), divided by the total demand placed on the combined transmission systems of all such transmission-owning utilities within a power region. An electric utility subject to the freeze period imposed by Section 39.052 may treat transmission costs in excess of transmission revenues during the freeze period as an expense for purposes of determining annual costs in the annual report filed under Section 39.257. Notwithstanding Section 36.201, the commission may approve wholesale rates that may be periodically adjusted to ensure timely recovery of transmission investment. Notwithstanding Section 36.054(a), if the commission determines that conditions warrant the action, the commission may authorize the inclusion of construction work in progress in the rate base for transmission investment required by the commission under Section 39.203(e).</content> <continuation>(d-1) The commission by rule shall establish a reasonable allowance for transmission-owning utility costs incurred to interconnect generation resources directly with the ERCOT transmission system at transmission voltage. The allowance must take into account:</continuation> <paragraph identifier="/us/tx/ut/t2/c35/scA/s35.004/1"> <num value="1">(1)</num> <content>the potential to reduce the costs to consumers of generation interconnection;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c35/scA/s35.004/2"> <num value="2">(2)</num> <content>historical generation interconnection costs; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c35/scA/s35.004/3"> <num value="3">(3)</num> <content>any other factor that the commission considers reasonable to accomplish the goal of this subsection.</content> <continuation>(d-2) Costs in excess of the transmission-owning utility allowance provided by Subsection (d-1) incurred to interconnect generation resources with the ERCOT transmission system must be directly assigned to and collected from the generation resource interconnecting through the facilities.</continuation> <continuation>(d-3) Not later than September 1 of every fifth year, the commission shall review and may adjust the allowance provided by Subsection (d-1) to account for inflation or supply chain issues.</continuation> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scA/s35.004/e"> <num value="e">(e)</num> <content>In this section, "ancillary services" means services necessary to facilitate the transmission of electric energy including load following, standby power, backup power, reactive power, and any other services as the commission may determine by rule.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scA/s35.004/f"> <num value="f">(f)</num> <content>The commission shall ensure that ancillary services necessary to facilitate the transmission of electric energy are available at reasonable prices with terms and conditions that are not unreasonably preferential, prejudicial, discriminatory, predatory, or anticompetitive. On the introduction of customer choice in the ERCOT power region, acquisition of generation-related ancillary services on a nondiscriminatory basis by the independent organization in ERCOT on behalf of entities selling electricity at retail shall be deemed to meet the requirements of this subsection.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scA/s35.004/g"> <num value="g">(g)</num> <chapeau>The commission shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c35/scA/s35.004/1"> <num value="1">(1)</num> <content>review the type, volume, and cost of ancillary services to determine whether those services will continue to meet the needs of the electricity market in the ERCOT power region; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c35/scA/s35.004/2"> <num value="2">(2)</num> <content>evaluate whether additional services are needed for reliability in the ERCOT power region while providing adequate incentives for dispatchable generation.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scA/s35.004/h"> <num value="h">(h)</num> <content>The commission shall require the independent organization certified under Section 39.151 for the ERCOT power region to modify the design, procurement, and cost allocation of ancillary services for the region in a manner consistent with cost-causation principles and on a nondiscriminatory basis.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 405, Sec. 17, eff. Sept. 1, 1999; Acts 2003, 78th Leg., ch. 295, Sec. 1, eff. June 18, 2003. Amended by: Acts 2021, 87th Leg., R.S., Ch. 426 (S.B. 3), Sec. 14, eff. June 8, 2021. Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 9, eff. September 1, 2023. Acts 2025, 89th Leg., R.S., Ch. 953 (S.B. 6), Sec. 1, eff. June 20, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c35/scA/s35.005"> <num value="35.005">Sec. 35.005.</num> <heading>AUTHORITY TO ORDER TRANSMISSION SERVICE</heading> <subsection identifier="/us/tx/ut/t2/c35/scA/s35.005/a"> <num value="a">(a)</num> <content>The commission may require an electric utility to provide transmission service at wholesale to another electric utility, a qualifying facility, an exempt wholesale generator, or a power marketer and may determine whether terms for the transmission service are reasonable.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scA/s35.005/b"> <num value="b">(b)</num> <content>The commission may require transmission service at wholesale, including the construction or enlargement of a facility.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scA/s35.005/c"> <num value="c">(c)</num> <content>The commission may not issue a decision or rule relating to transmission service that is contrary to an applicable decision, rule, or policy statement of a federal regulatory agency having jurisdiction.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scA/s35.005/d"> <num value="d">(d)</num> <content>This subsection applies only to a facility in the ERCOT power region for which a loan or grant is provided under Subchapter A, Chapter 34. The independent organization certified under Section 39.151 for the ERCOT power region shall work with electric utilities to ensure that each facility in the ERCOT power region for which a loan or grant is provided is fully interconnected in the region not later than the date the facility is ready for commercial operation. The independent organization certified under Section 39.151 for the ERCOT power region shall give priority to interconnecting each facility for which a loan or grant is provided except that the organization shall prioritize transmission projects that the organization has formally designated as critical for reliability over a facility for which a loan or grant is provided. An electric utility that enters into an interconnection agreement for a facility for which a loan or grant is provided shall give priority to interconnecting the facility and complete construction of any other facilities necessary to interconnect the facility not later than the date the facility is ready for commercial operation except that the utility shall prioritize transmission projects that the independent organization certified under Section 39.151 for the ERCOT power region has formally designated as critical for reliability over a facility for which a loan or grant is provided.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scA/s35.005/e"> <num value="e">(e)</num> <content>If the commission receives an application under Chapter 37 for a certificate of convenience and necessity related to facilities necessary to interconnect a facility to which Subsection (d) applies and does not approve the application before the 90th day after the date the commission received the application, the deadline established by Subsection (d) is extended one day for each day after the 90th day in which the commission does not approve the application.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scA/s35.005/f"> <num value="f">(f)</num> <content>The commission may extend the deadline established by Subsection (d) after notice, hearing, and a determination on a showing of good cause that fully interconnecting the facility before the deadline is not feasible.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scA/s35.005/g"> <num value="g">(g)</num> <content>In this subsection, "Texas backup power package" has the meaning assigned by Section 34.0201. The commission by rule shall adopt procedures to expedite an electric utility interconnection request for a Texas backup power package for which a loan or grant is awarded under Chapter 34.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 405, Sec. 18, eff. Sept. 1, 1999. Amended by: Acts 2023, 88th Leg., R.S., Ch. 465 (S.B. 2627), Sec. 3, eff. November 7, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c35/scA/s35.006"> <num value="35.006">Sec. 35.006.</num> <heading>RULES RELATED TO WHOLESALE TRANSMISSION SERVICE, RATES, AND ACCESS</heading> <subsection identifier="/us/tx/ut/t2/c35/scA/s35.006/a"> <num value="a">(a)</num> <chapeau>The commission shall adopt rules relating to wholesale transmission service, rates, and access. The rules:</chapeau> <paragraph identifier="/us/tx/ut/t2/c35/scA/s35.006/1"> <num value="1">(1)</num> <content>must be consistent with the standards in this subchapter;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c35/scA/s35.006/2"> <num value="2">(2)</num> <content>may not be contrary to federal law, including any applicable decision, rule, or policy statement of a federal regulatory agency having jurisdiction;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c35/scA/s35.006/3"> <num value="3">(3)</num> <content>must require transmission services that are not less than the transmission services the Federal Energy Regulatory Commission may require in similar circumstances;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c35/scA/s35.006/4"> <num value="4">(4)</num> <content>must require that an electric utility provide all ancillary services associated with the utility's discounted wholesale sales at the same prices and under the same terms as the services are provided to a third person; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c35/scA/s35.006/5"> <num value="5">(5)</num> <content>must require that an electric utility provide all ancillary services associated with the utility's discounted wholesale sales to a third person on request.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scA/s35.006/b"> <num value="b">(b)</num> <content>The commission shall adopt rules relating to the registration and reporting requirements of a qualifying facility, exempt wholesale generator, and power marketer.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c35/scA/s35.007"> <num value="35.007">Sec. 35.007.</num> <heading>TARIFFS REQUIRED</heading> <subsection identifier="/us/tx/ut/t2/c35/scA/s35.007/a"> <num value="a">(a)</num> <content>Except as provided by Subsection (b), an electric utility that owns or operates a transmission facility shall file a tariff in compliance with commission rules adopted under Section 35.006.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scA/s35.007/b"> <num value="b">(b)</num> <content>An electric utility is not required to file a tariff under this section if the utility's terms for access and pricing for wholesale transmission service are included in another electric utility's tariff.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scA/s35.007/c"> <num value="c">(c)</num> <content>An electric utility shall file a tariff required by this section with the appropriate state or federal regulatory agency having jurisdiction over the utility's transmission service.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c35/scA/s35.008"> <num value="35.008">Sec. 35.008.</num> <heading>ALTERNATIVE DISPUTE RESOLUTION</heading> <content>The commission may require that each party to a dispute concerning prices or terms of wholesale transmission service engage in a nonbinding alternative dispute resolution process before seeking resolution of the dispute by the commission.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c35/scA/s35.009"> <num value="35.009">Sec. 35.009.</num> <heading>AMOUNTS PAID IN LIEU OF AD VALOREM TAXES FOR CERTAIN FACILITIES</heading> <chapeau>A municipally owned utility that is required to apply for a certificate of public convenience and necessity to construct, install, or extend a transmission facility within ERCOT under Chapter 37 is entitled to recover, through the utility's wholesale transmission rate, reasonable payments made to a taxing entity in lieu of ad valorem taxes on that transmission facility, provided that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c35/scA/s35.009/1"> <num value="1">(1)</num> <content>the utility enters into a written agreement with the governing body of the taxing entity related to the payments;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c35/scA/s35.009/2"> <num value="2">(2)</num> <content>the amount paid is the same as the amount the utility would have to pay to the taxing entity on that transmission facility if the facility were subject to ad valorem taxation;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c35/scA/s35.009/3"> <num value="3">(3)</num> <content>the governing body of the taxing entity is not the governing body of the utility; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c35/scA/s35.009/4"> <num value="4">(4)</num> <content>the utility provides the commission with a copy of the written agreement and any other information the commission considers necessary in relation to the agreement.</content> </paragraph> <sourceCredit>Added by Acts 2015, 84th Leg., R.S., Ch. 1162 (S.B. 776), Sec. 2, eff. September 1, 2015.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c35/scA/s35.010"> <num value="35.010">Sec. 35.010.</num> <heading>COSTS RELATED TO REPORTING ON SAFETY PROCESSES AND INSPECTIONS FOR CERTAIN UTILITIES</heading> <subsection identifier="/us/tx/ut/t2/c35/scA/s35.010/a"> <num value="a">(a)</num> <content>This section applies only to a municipally owned utility or electric cooperative that has wholesale transmission rates established by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scA/s35.010/b"> <num value="b">(b)</num> <content>Costs incurred by a municipally owned utility or electric cooperative to comply with Section 38.102 shall be recorded as a regulatory asset for timely recovery in wholesale transmission rates established by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scA/s35.010/c"> <num value="c">(c)</num> <content>The commission may adopt rules relating to the recording of regulatory assets under this section.</content> </subsection> <sourceCredit>Added by Acts 2019, 86th Leg., R.S., Ch. 1320 (H.B. 4150), Sec. 2, eff. September 1, 2019.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c35/scB"> <num value="B">SUBCHAPTER B.</num> <heading>EXEMPT WHOLESALE GENERATORS, DISTRIBUTED NATURAL GAS GENERATION FACILITIES, AND POWER MARKETERS</heading> <section identifier="/us/tx/ut/t2/c35/scB/s35.031"> <num value="35.031">Sec. 35.031.</num> <heading>AUTHORITY TO OPERATE</heading> <content>An exempt wholesale generator or power marketer may sell electric energy only at wholesale.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c35/scB/s35.032"> <num value="35.032">Sec. 35.032.</num> <heading>COMMISSION REGISTRATION AND REQUIRED REPORTS</heading> <subsection identifier="/us/tx/ut/t2/c35/scB/s35.032/a"> <num value="a">(a)</num> <chapeau>An exempt wholesale generator or power marketer that sells electric energy in this state shall, not later than the 30th day after the date it becomes subject to this section:</chapeau> <paragraph identifier="/us/tx/ut/t2/c35/scB/s35.032/1"> <num value="1">(1)</num> <content>register with the commission; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c35/scB/s35.032/2"> <num value="2">(2)</num> <content>provide to the commission proof that it has registered with the Federal Energy Regulatory Commission or has been authorized by the Federal Energy Regulatory Commission to sell electric energy at market-based rates.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scB/s35.032/b"> <num value="b">(b)</num> <chapeau>The exempt wholesale generator or power marketer may register by filing with the commission:</chapeau> <paragraph identifier="/us/tx/ut/t2/c35/scB/s35.032/1"> <num value="1">(1)</num> <content>a description of the location of any facility used to provide service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c35/scB/s35.032/2"> <num value="2">(2)</num> <content>a description of the type of service provided;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c35/scB/s35.032/3"> <num value="3">(3)</num> <content>a copy of any information filed with the Federal Energy Regulatory Commission in connection with registration with that commission; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c35/scB/s35.032/4"> <num value="4">(4)</num> <content>other information required by commission rule.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scB/s35.032/c"> <num value="c">(c)</num> <content>An exempt wholesale generator or power marketer required to register under Subsection (a) shall file any report required by commission rule.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c35/scB/s35.033"> <num value="35.033">Sec. 35.033.</num> <heading>AFFILIATE WHOLESALE PROVIDER</heading> <content>An affiliate of an electric utility may be an exempt wholesale generator or power marketer and may sell electric energy to its affiliated electric utility in accordance with laws governing wholesale sales of electric energy.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 405, Sec. 19, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c35/scB/s35.034"> <num value="35.034">Sec. 35.034.</num> <heading>TRANSFER OF ASSETS</heading> <subsection identifier="/us/tx/ut/t2/c35/scB/s35.034/a"> <num value="a">(a)</num> <chapeau>Unless an electric utility receives commission approval under Subsection (b), the utility may not sell or transfer a facility to an affiliate or otherwise consider the facility to be an eligible facility as defined by federal law if on May 27, 1995, the utility had a rate or charge in effect:</chapeau> <paragraph identifier="/us/tx/ut/t2/c35/scB/s35.034/1"> <num value="1">(1)</num> <content>for or in connection with the construction of the facility;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c35/scB/s35.034/2"> <num value="2">(2)</num> <content>for electric energy produced by the construction of the facility; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c35/scB/s35.034/3"> <num value="3">(3)</num> <content>for electric energy produced by the facility other than a portion of a rate or charge that represents recovery of the cost of a wholesale rate or charge.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scB/s35.034/b"> <num value="b">(b)</num> <chapeau>The commission, after notice and hearing, may allow an electric utility to sell or transfer a facility governed by Subsection (a) to an affiliate or otherwise allow the facility to become an eligible facility only if the transaction:</chapeau> <paragraph identifier="/us/tx/ut/t2/c35/scB/s35.034/1"> <num value="1">(1)</num> <content>will benefit ratepayers of the utility making the sale or transfer;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c35/scB/s35.034/2"> <num value="2">(2)</num> <content>is in the public interest; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c35/scB/s35.034/3"> <num value="3">(3)</num> <content>otherwise complies with state law.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scB/s35.034/c"> <num value="c">(c)</num> <content>For purposes of this section, "electric utility" does not include a river authority.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 405, Sec. 20, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c35/scB/s35.035"> <num value="35.035">Sec. 35.035.</num> <heading>VALUATION AND ACCOUNTING OF TRANSFERRED ASSETS</heading> <subsection identifier="/us/tx/ut/t2/c35/scB/s35.035/a"> <num value="a">(a)</num> <content>A transfer of assets from an electric utility to an affiliated exempt wholesale generator or power marketer shall be valued at the greater of net book cost or fair market value.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scB/s35.035/b"> <num value="b">(b)</num> <content>A transfer of assets from an exempt wholesale generator or power marketer to an affiliated electric utility shall be valued at the lesser of net book cost or fair market value.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scB/s35.035/c"> <num value="c">(c)</num> <content>At the time that a transfer of assets between an electric utility and an affiliated exempt wholesale generator or power marketer is approved, the commission shall order the utility to adjust its rates so that the utility's tariffs reflect benefits from the proceeds of the sale and exclude any costs associated with the transferred facility.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scB/s35.035/d"> <num value="d">(d)</num> <content>For purposes of this section, "electric utility" does not include a river authority.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 405, Sec. 21, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c35/scB/s35.036"> <num value="35.036">Sec. 35.036.</num> <heading>DISTRIBUTED NATURAL GAS GENERATION FACILITIES</heading> <subsection identifier="/us/tx/ut/t2/c35/scB/s35.036/a"> <num value="a">(a)</num> <content>A person who owns or operates a distributed natural gas generation facility may sell electric power generated by the facility. The electric utility, electric cooperative, or retail electric provider that provides retail electricity service to the facility may purchase electric power tendered to it by the owner or operator of the facility at a value agreed to by the electric utility, electric cooperative, or retail electric provider and the owner or operator of the facility. The value of the electric power may be based wholly or partly on the clearing price of energy at the time of day and at the location at which the electric power is made available to the electric grid.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scB/s35.036/b"> <num value="b">(b)</num> <content>At the request of the owner or operator of the distributed natural gas generation facility, the electric utility or electric cooperative shall allow the owner or operator of the facility to use transmission and distribution facilities to transmit the electric power to another entity that is acceptable to the owner or operator in accordance with commission rules or a tariff approved by the Federal Energy Regulatory Commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scB/s35.036/c"> <num value="c">(c)</num> <content>Subject to Subsections (e) and (f), if the owner or operator of a distributed natural gas generation facility requests to be interconnected to an electric utility or electric cooperative that does not have a transmission tariff approved by the Federal Energy Regulatory Commission, the electric utility or electric cooperative may recover from the owner or operator of the facility the reasonable costs of interconnecting the facility with the electric utility or electric cooperative that are necessary for and directly attributable to the interconnection of the facility.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scB/s35.036/d"> <num value="d">(d)</num> <chapeau>Subject to Subsections (e) and (f), an electric utility or electric cooperative may recover from the owner or operator of a distributed natural gas generation facility the reasonable costs of electric facility upgrades and improvements if:</chapeau> <paragraph identifier="/us/tx/ut/t2/c35/scB/s35.036/1"> <num value="1">(1)</num> <content>the rated capacity of the distributed natural gas generation facility is greater than the rated capacity of the electric utility or electric cooperative; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c35/scB/s35.036/2"> <num value="2">(2)</num> <content>the costs are necessary for and directly attributable to accommodating the distributed natural gas generation facility's capacity.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scB/s35.036/e"> <num value="e">(e)</num> <chapeau>An electric utility or electric cooperative may recover costs under Subsection (c) or (d) only if:</chapeau> <paragraph identifier="/us/tx/ut/t2/c35/scB/s35.036/1"> <num value="1">(1)</num> <content>the electric utility or electric cooperative provides a written good faith cost estimate to the owner or operator of the distributed natural gas generation facility; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c35/scB/s35.036/2"> <num value="2">(2)</num> <content>the owner or operator of the distributed natural gas generation facility agrees in writing to pay the reasonable and necessary costs of interconnection or capacity accommodation requested by the owner or operator and described in the estimate before the electric utility or electric cooperative incurs the costs.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scB/s35.036/f"> <num value="f">(f)</num> <content>If an electric utility or electric cooperative seeks to recover from the owner or operator of a distributed natural gas generation facility an amount that exceeds the amount in the estimate provided under Subsection (e) by more than five percent, the commission shall resolve the dispute at the request of the owner or operator of the facility.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scB/s35.036/g"> <num value="g">(g)</num> <content>A distributed natural gas generation facility must comply with emissions limitations established by the Texas Commission on Environmental Quality for a standard emissions permit for an electric generation facility unit installed after January 1, 1995.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scB/s35.036/h"> <num value="h">(h)</num> <content>This section does not require an electric cooperative to transmit electricity to a retail point of delivery in the certificated service area of the electric cooperative if the electric cooperative has not adopted customer choice.</content> </subsection> <sourceCredit>Added by Acts 2011, 82nd Leg., R.S., Ch. 890 (S.B. 365), Sec. 3, eff. September 1, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c35/scB/s35.037"> <num value="35.037">Sec. 35.037.</num> <heading>INTERCONNECTION AND OPERATION OF CERTAIN DISTRIBUTED GENERATION FACILITIES FOR FOOD SUPPLY CHAIN</heading> <subsection identifier="/us/tx/ut/t2/c35/scB/s35.037/a"> <num value="a">(a)</num> <chapeau>In this section:</chapeau> <paragraph identifier="/us/tx/ut/t2/c35/scB/s35.037/1"> <num value="1">(1)</num> <chapeau>"Customer" means a retail electric customer:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c35/scB/s35.037/A"> <num value="A">(A)</num> <content>with a distributed generation facility installed on the retail electric customer's side of the meter; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c35/scB/s35.037/B"> <num value="B">(B)</num> <content>that has a primary purpose of or derives a material source of revenue from:</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scB/s35.037/i"> <num value="i">(i)</num> <chapeau>retail grocery sales; or</chapeau> <clause identifier="/us/tx/ut/t2/c35/scB/s35.037/ii"> <num value="ii">(ii)</num> <content>food manufacturing or distribution for retail grocery sales.</content> </clause> <paragraph identifier="/us/tx/ut/t2/c35/scB/s35.037/2"> <num value="2">(2)</num> <chapeau>"Distributed generation facility" means a facility installed on the customer's side of the meter but separately metered from the customer:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c35/scB/s35.037/A"> <num value="A">(A)</num> <content>with a nameplate capacity of at least 250 kilowatts and not more than 10 megawatts;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c35/scB/s35.037/B"> <num value="B">(B)</num> <content>that is capable of generating and providing backup or supplementary power to the customer's premises; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c35/scB/s35.037/C"> <num value="C">(C)</num> <content>that is owned or operated by a person registered as a power generation company in accordance with Section 39.351.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scB/s35.037/b"> <num value="b">(b)</num> <content>This section only applies in the ERCOT power region in areas where retail customer choice has not been implemented.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scB/s35.037/c"> <num value="c">(c)</num> <content>A person who owns or operates a distributed generation facility served by a municipally owned utility or electric cooperative in the ERCOT power region may sell electric power generated by the distributed generation facility at wholesale, including the provision of ancillary services, subject to the limitations of this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scB/s35.037/d"> <num value="d">(d)</num> <chapeau>A person who owns or operates a distributed generation facility may sell electric power generated by the distributed generation facility at wholesale to a municipally owned utility or electric cooperative certificated for retail service to the area where the distributed generation facility is located or to a related generation and transmission electric cooperative. The municipally owned utility or electric cooperative shall purchase at wholesale the quantity of electric power generated by the distributed generation facility needed to satisfy the full electric requirements of the customer on whose side of the meter the distributed generation facility is installed and operated at a wholesale price agreed to by the customer and shall resell that quantity of power at retail to the customer at the rate applicable to the customer for retail service, which must at minimum include all amounts paid for the wholesale electric power, during:</chapeau> <paragraph identifier="/us/tx/ut/t2/c35/scB/s35.037/1"> <num value="1">(1)</num> <content>an emergency declared by the independent organization certified under Section 39.151 for the ERCOT power region that creates the potential for interruption of service to the customer;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c35/scB/s35.037/2"> <num value="2">(2)</num> <content>any service interruption at the customer's premises;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c35/scB/s35.037/3"> <num value="3">(3)</num> <content>construction on the customer's premises that creates the potential for interruption of service to the customer;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c35/scB/s35.037/4"> <num value="4">(4)</num> <content>maintenance and testing of the distributed generation facility; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c35/scB/s35.037/5"> <num value="5">(5)</num> <content>additional times mutually agreed on by the owner or operator of the distributed generation facility and the municipally owned utility or electric cooperative.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scB/s35.037/e"> <num value="e">(e)</num> <content>The customer shall provide written notice as soon as reasonably practicable to the municipally owned utility or electric cooperative of a circumstance described by Subsection (d)(3) or (4).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scB/s35.037/f"> <num value="f">(f)</num> <content>In addition to a sale authorized under Subsection (d), on request by an owner or operator of a distributed generation facility, the municipally owned utility or electric cooperative shall provide wholesale transmission service to the distributed generation facility owner in the same manner as to other power generation companies for the sale of power from the distributed generation facility at wholesale, including for the provision of ancillary services, in the ERCOT market. The distributed generation facility owner shall comply with all applicable commission rules and protocols and with governing documents of the independent organization certified under Section 39.151 for the ERCOT power region. This section does not require a municipally owned utility or electric cooperative to transmit electricity to a retail point of delivery in the certificated service area of the municipally owned utility or electric cooperative.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scB/s35.037/g"> <num value="g">(g)</num> <content>In addition to a sale authorized under Subsection (d) or (f), a municipally owned utility or electric cooperative or related generation and transmission electric cooperative may purchase electric power provided by the owner or operator of the distributed generation facility at wholesale at a mutually agreed on price. The price may be based wholly or partly on the ERCOT market clearing price of energy at the time of day and at the location at which the electric power is made available.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scB/s35.037/h"> <num value="h">(h)</num> <content>A municipally owned utility or electric cooperative shall make available a standard interconnection application and agreement for distributed generation facilities that is substantially similar to the commission's interconnection agreement form and consistent with this section to facilitate the connection of distributed generation facilities. A municipally owned utility or electric cooperative shall allow interconnection of a distributed generation facility and provide to a distributed generation facility on a nondiscriminatory basis wholesale transmission service, including at distribution voltage, in the same manner as for other power generation companies to transmit to the ERCOT power grid the electric power generated by the distributed generation facility. A municipally owned utility or electric cooperative may recover from the owner or operator of the distributed generation facility all reasonable costs necessary for and directly attributable to the interconnection of the facility, including the reasonable costs of necessary system upgrades and improvements directly attributable to the distributed generation facility.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scB/s35.037/i"> <num value="i">(i)</num> <content>Not later than the 30th day after the date a complete application for interconnection of a distributed generation facility is received, the municipally owned utility or electric cooperative shall provide the applicant with a written good faith cost estimate for interconnection-related costs. The municipally owned utility or electric cooperative may not incur any interconnection-related costs without entering into a written agreement for the payment of those costs by the applicant.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scB/s35.037/j"> <num value="j">(j)</num> <chapeau>The process to interconnect a distributed generation facility must be completed not later than the 240th day after the date the municipally owned utility or electric cooperative receives payment of all estimated costs to complete the interconnection, except that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c35/scB/s35.037/1"> <num value="1">(1)</num> <content>the period may be extended by written agreement between the parties; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c35/scB/s35.037/2"> <num value="2">(2)</num> <content>the period may be extended after a good faith showing by the municipally owned utility or electric cooperative that the interconnection requires improvements, upgrades, or construction of new facilities that cannot reasonably be completed within that period, in which case the period may be extended for a time not to exceed the time necessary for the improvements, upgrades, or construction of new facilities to be completed.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scB/s35.037/k"> <num value="k">(k)</num> <content>A municipally owned utility or electric cooperative shall charge the owner or operator of a distributed generation facility rates on a reasonable and nondiscriminatory basis for providing wholesale transmission service to the distributed generation facility owner in the same manner as for other power generation companies to transmit to the ERCOT power grid the electric power generated by the distributed generation facility in accordance with a tariff filed by the municipally owned utility or electric cooperative with the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scB/s35.037/l"> <num value="l">(l)</num> <content>The owner or operator of the distributed generation facility shall contract with the municipally owned utility or electric cooperative or the municipally owned utility's or electric cooperative's designee for any scheduling, settlement, communication, telemetry, or other services required to participate in the ERCOT wholesale market, but only to the extent that the utility, cooperative, or designee offers the services on a nondiscriminatory basis and at a commercially reasonable cost. If the municipally owned utility or electric cooperative or the municipally owned utility's or electric cooperative's designee does not offer or declines to offer the services, or fails to do so on a nondiscriminatory basis and at a commercially reasonable cost as determined by quotes from at least three third parties providing the same services, the owner or operator of the distributed generation facility may contract with a third party provider to obtain the services.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scB/s35.037/m"> <num value="m">(m)</num> <content>A distributed generation facility must comply with emissions limitations established by the Texas Commission on Environmental Quality for a standard emissions permit for an electric generation facility unit installed after January 1, 1995.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scB/s35.037/n"> <num value="n">(n)</num> <chapeau>A municipally owned utility or electric cooperative is not required to interconnect a distributed generation facility under this section if, on the date the utility or cooperative receives an application for interconnection of the facility, the municipally owned utility or electric cooperative has interconnected distributed generation facilities with an aggregate capacity that equals the lesser amount of:</chapeau> <paragraph identifier="/us/tx/ut/t2/c35/scB/s35.037/1"> <num value="1">(1)</num> <content>5 percent of the municipally owned utility's or electric cooperative's average of the 15-minute summer peak load coincident with the independent system operator's 15-minute summer peak load in each of the months of June, July, August, and September; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c35/scB/s35.037/2"> <num value="2">(2)</num> <content>300 megawatts, adjusted annually by the percentage of total system load growth in the ERCOT power region beginning in 2022.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scB/s35.037/o"> <num value="o">(o)</num> <content>A municipally owned utility or electric cooperative that, on the date the utility or cooperative receives an application for interconnection of a distributed generation facility, has interconnected distributed generation facilities with an aggregate capacity less than the threshold described by Subsection (n) is required to increase that capacity only up to that threshold.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scB/s35.037/p"> <num value="p">(p)</num> <content>This section is not intended to change registration standards or other qualifications required by the independent organization certified under Section 39.151 for the ERCOT power region related to the participation of distributed generation facilities in the wholesale market. This section is not intended to allow distributed generation facilities to participate in a manner that is not technically feasible or that is otherwise in conflict with wholesale rules and requirements adopted by the independent organization certified under Section 39.151 for the ERCOT power region.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 561 (S.B. 398), Sec. 3, eff. September 1, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c35/scB/s35.038"> <num value="35.038">Sec. 35.038.</num> <heading>FACILITATING CERTAIN INTERCOMPANY LANDFILL GAS-TO-ELECTRICITY USE</heading> <subsection identifier="/us/tx/ut/t2/c35/scB/s35.038/a"> <num value="a">(a)</num> <content>This section only applies in a county with a population of more than 1.2 million in which a national wildlife refuge is wholly or partly located.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scB/s35.038/b"> <num value="b">(b)</num> <chapeau>Notwithstanding any other provision of this title, and for the purposes of reducing environmental emissions, putting to a beneficial purpose landfill gas as an electric generation fuel that would otherwise be flared, enabling the operation of electric generation to a greater degree, and enhancing the reliability and resilience of electric service in this state, a person who is not an electric utility and who owns and operates equipment or facilities to produce, generate, transmit, distribute, store, sell, or furnish electricity produced by the use of landfill methane gas may:</chapeau> <paragraph identifier="/us/tx/ut/t2/c35/scB/s35.038/1"> <num value="1">(1)</num> <content>use the equipment or facilities to provide electricity and electric service to the person and to the person's affiliates without being considered to be an electric utility, a public utility, a retail electric provider, a power marketer, or a person providing aggregation;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c35/scB/s35.038/2"> <num value="2">(2)</num> <content>interconnect the equipment or facilities in a timely manner and on reasonable and nondiscriminatory terms and conditions with any electric utility, municipally owned utility, or electric cooperative that has a retail service area for any portion of the equipment or facilities; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c35/scB/s35.038/3"> <num value="3">(3)</num> <content>receive backup, supplemental, or other electric service for any of the person's or the person's affiliates' facilities that consume electricity from any electric utility, municipally owned utility, or electric cooperative that has a retail service area for any portion of the person's facilities or equipment that are interconnected regardless of whether those facilities are in the same retail service area as the location of the interconnection point.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scB/s35.038/c"> <num value="c">(c)</num> <content>Backup, supplemental, or other electric service provided under this section through an interconnection for a person's electricity-consuming facilities that are connected to the person's interconnected equipment or facilities does not constitute a service area encroachment or other violation of law by the electric utility, municipally owned utility, or electric cooperative supplying the backup, supplemental, or other electric service.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 426 (S.B. 3), Sec. 15, eff. June 8, 2021. Amended by: Acts 2023, 88th Leg., R.S., Ch. 644 (H.B. 4559), Sec. 270, eff. September 1, 2023. Redesignated from Utilities Code, Section 35.037 by Acts 2023, 88th Leg., R.S., Ch. 768 (H.B. 4595), Sec. 24.001(61), eff. September 1, 2023.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c35/scC"> <num value="C">SUBCHAPTER C.</num> <heading>QUALIFYING FACILITIES</heading> <section identifier="/us/tx/ut/t2/c35/scC/s35.061"> <num value="35.061">Sec. 35.061.</num> <heading>ENCOURAGEMENT OF ECONOMICAL PRODUCTION</heading> <content>The commission shall adopt and enforce rules to encourage the economical production of electric energy by qualifying facilities.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c35/scC/s35.062"> <num value="35.062">Sec. 35.062.</num> <heading>APPLICATION FOR CERTIFICATION</heading> <subsection identifier="/us/tx/ut/t2/c35/scC/s35.062/a"> <num value="a">(a)</num> <content>An electric utility or a qualifying facility may submit to the commission for certification a copy of an agreement between the utility and facility for the purchase of capacity.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scC/s35.062/b"> <num value="b">(b)</num> <content>An agreement submitted for certification under this section may provide that the agreement is contingent on certification by the commission.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c35/scC/s35.063"> <num value="35.063">Sec. 35.063.</num> <heading>HEARING</heading> <subsection identifier="/us/tx/ut/t2/c35/scC/s35.063/a"> <num value="a">(a)</num> <content>The commission, on its own motion or on the request of a party to the agreement or another affected person, may conduct a hearing on an agreement for which certification is sought under Section 35.062.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scC/s35.063/b"> <num value="b">(b)</num> <content>A request for a hearing or a commission decision to hold a hearing must be made not later than the 90th day after the date the agreement is submitted to the commission.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c35/scC/s35.064"> <num value="35.064">Sec. 35.064.</num> <heading>CERTIFICATION STANDARDS</heading> <chapeau>The commission shall certify an agreement submitted under Section 35.062 if the agreement:</chapeau> <paragraph identifier="/us/tx/ut/t2/c35/scC/s35.064/1"> <num value="1">(1)</num> <content>provides for payments over the contract term that are equal to or less than the electric utility's avoided costs, as established by the commission and in effect at the time the agreement was signed; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c35/scC/s35.064/2"> <num value="2">(2)</num> <content>provides the electric utility the opportunity to acquire the cogeneration or small-power production installation before the installation is offered to another purchaser or provides other sufficient assurance that the electric utility will be provided with a comparable supply of electricity, if the qualifying facility ceases to operate the installation.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c35/scC/s35.065"> <num value="35.065">Sec. 35.065.</num> <heading>DEADLINES FOR COMMISSION ACTION</heading> <subsection identifier="/us/tx/ut/t2/c35/scC/s35.065/a"> <num value="a">(a)</num> <content>Except as provided by Subsection (b), the commission shall make its determination regarding whether a certification should be granted under Section 35.064 not later than the 90th day after the date the agreement is submitted.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scC/s35.065/b"> <num value="b">(b)</num> <content>If a hearing is held under Section 35.063, the commission shall make its determination regarding whether a certification should be granted not later than the 120th day after the date the agreement is submitted, except that this deadline is extended by two days for each day in excess of five days on which the commission conducts a hearing on the merits of the certification.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scC/s35.065/c"> <num value="c">(c)</num> <content>If the commission does not make a determination by the date provided by Subsection (a) or (b), as applicable, the agreement is considered to meet the requirements of Section 35.064 and the certification is considered granted.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c35/scC/s35.066"> <num value="35.066">Sec. 35.066.</num> <heading>TERM OF CERTIFICATION</heading> <chapeau>A certification of an agreement granted under this subchapter is effective until the earlier of:</chapeau> <paragraph identifier="/us/tx/ut/t2/c35/scC/s35.066/1"> <num value="1">(1)</num> <content>the expiration date of the agreement; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c35/scC/s35.066/2"> <num value="2">(2)</num> <content>the 15th anniversary of the date of the certification.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c35/scE"> <num value="E">SUBCHAPTER E.</num> <heading>ELECTRIC ENERGY STORAGE</heading> <section identifier="/us/tx/ut/t2/c35/scE/s35.151"> <num value="35.151">Sec. 35.151.</num> <heading>ELECTRIC ENERGY STORAGE</heading> <chapeau>This subchapter applies only to the ownership or operation of electric energy storage equipment or facilities in the ERCOT power region that are intended to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c35/scE/s35.151/1"> <num value="1">(1)</num> <content>provide energy or ancillary services at wholesale, including electric energy storage equipment or facilities listed on a power generation company's registration with the commission or, for an exempt wholesale generator, on the generator's registration with the Federal Energy Regulatory Commission; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c35/scE/s35.151/2"> <num value="2">(2)</num> <content>provide reliable delivery of electric energy to distribution customers.</content> </paragraph> <sourceCredit>Added by Acts 2011, 82nd Leg., R.S., Ch. 1069 (S.B. 943), Sec. 2, eff. September 1, 2011. Amended by: Acts 2021, 87th Leg., R.S., Ch. 562 (S.B. 415), Sec. 1, eff. September 1, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c35/scE/s35.152"> <num value="35.152">Sec. 35.152.</num> <heading>GENERATION ASSETS</heading> <subsection identifier="/us/tx/ut/t2/c35/scE/s35.152/a"> <num value="a">(a)</num> <content>Electric energy storage equipment or facilities that are intended to be used to sell energy or ancillary services at wholesale are generation assets.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scE/s35.152/b"> <num value="b">(b)</num> <chapeau>The owner or operator of electric energy storage equipment or facilities that are generation assets under Subsection (a) is a power generation company and is required to register under Section 39.351(a). The owner or operator of the equipment or facilities is entitled to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c35/scE/s35.152/1"> <num value="1">(1)</num> <content>interconnect the equipment or facilities;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c35/scE/s35.152/2"> <num value="2">(2)</num> <content>obtain transmission service for the equipment or facilities; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c35/scE/s35.152/3"> <num value="3">(3)</num> <content>use the equipment or facilities to sell electricity or ancillary services at wholesale in a manner consistent with the provisions of this title and commission rules applicable to a power generation company or an exempt wholesale generator.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scE/s35.152/c"> <num value="c">(c)</num> <content>Notwithstanding Subsection (a), this section does not affect a determination made by the commission in a final order issued before December 31, 2010.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scE/s35.152/d"> <num value="d">(d)</num> <content>Subsection (b) does not require a municipally owned utility or an electric cooperative that owns or operates electric energy storage equipment or facilities described by Subsection (a) to register as a power generation company under Section 39.351(a).</content> </subsection> <sourceCredit>Added by Acts 2011, 82nd Leg., R.S., Ch. 1069 (S.B. 943), Sec. 2, eff. September 1, 2011. Amended by: Acts 2019, 86th Leg., R.S., Ch. 77 (S.B. 1012), Sec. 1, eff. September 1, 2019.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c35/scE/s35.153"> <num value="35.153">Sec. 35.153.</num> <heading>CONTRACTS FOR ELECTRIC ENERGY STORAGE FOR RELIABILITY SERVICES</heading> <subsection identifier="/us/tx/ut/t2/c35/scE/s35.153/a"> <num value="a">(a)</num> <content>A transmission and distribution utility, with prior approval of the commission, may contract with a power generation company to provide electric energy from an electric energy storage facility to ensure reliable service to distribution customers.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scE/s35.153/b"> <num value="b">(b)</num> <content>The commission may not authorize ownership of an electric energy storage facility by a transmission and distribution utility.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scE/s35.153/c"> <num value="c">(c)</num> <content>Before entering into a contract under Subsection (a), the transmission and distribution utility must issue a request for proposals for use of an electric energy storage facility to meet the utility's reliability needs.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scE/s35.153/d"> <num value="d">(d)</num> <content>A transmission and distribution utility may enter into a contract under Subsection (a) only if use of an electric energy storage facility is more cost-effective than construction or modification of traditional distribution facilities.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scE/s35.153/e"> <num value="e">(e)</num> <content>A transmission and distribution utility may not enter into a contract under Subsection (a) that reserves an amount of capacity exceeding the amount of capacity required to ensure reliable service to the utility's distribution customers.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scE/s35.153/f"> <num value="f">(f)</num> <content>A power generation company that owns or operates an electric energy storage facility subject to a contract under Subsection (a) may sell electric energy or ancillary services through use of the facility only to the extent that the company reserves capacity as required by the contract.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scE/s35.153/g"> <num value="g">(g)</num> <content>A power generation company that owns or operates an electric energy storage facility subject to a contract under Subsection (a) may not discharge the facility to satisfy the contract's requirements unless directed by the transmission and distribution utility.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scE/s35.153/h"> <num value="h">(h)</num> <content>A contract under Subsection (a) must require a power generation company that owns or operates an electric energy storage facility to reimburse a transmission and distribution utility for the cost of an administrative penalty assessed against the utility for a violation caused by the facility's failure to meet the requirements of the agreement.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scE/s35.153/i"> <num value="i">(i)</num> <content>In establishing the rates of a transmission and distribution utility, a regulatory authority shall review a contract between the utility and a power generation company under Subsection (a). The utility has the burden of proof to establish that the costs of the contract are reasonable and necessary. The regulatory authority may authorize a transmission and distribution utility to include a reasonable return on the payments required under the contract only if the contract terms satisfy the relevant accounting standards for a capital lease or finance lease.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scE/s35.153/j"> <num value="j">(j)</num> <content>The total amount of electric energy storage capacity reserved by contracts under Subsection (a) may not exceed 100 megawatts. The commission shall by rule establish the maximum amount of electric energy storage capacity allotted to each transmission and distribution utility.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c35/scE/s35.153/k"> <num value="k">(k)</num> <content>The commission shall adopt rules as necessary to implement this section and establish criteria for approving contracts under Subsection (a).</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 562 (S.B. 415), Sec. 2, eff. September 1, 2021.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t2/c36"> <num value="36">CHAPTER 36.</num> <heading>RATES</heading> <subchapter identifier="/us/tx/ut/t2/c36/scA"> <num value="A">SUBCHAPTER A.</num> <heading>GENERAL PROVISIONS</heading> <section identifier="/us/tx/ut/t2/c36/scA/s36.001"> <num value="36.001">Sec. 36.001.</num> <heading>AUTHORIZATION TO ESTABLISH AND REGULATE RATES</heading> <subsection identifier="/us/tx/ut/t2/c36/scA/s36.001/a"> <num value="a">(a)</num> <chapeau>The regulatory authority may establish and regulate rates of an electric utility and may adopt rules for determining:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scA/s36.001/1"> <num value="1">(1)</num> <content>the classification of customers and services; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scA/s36.001/2"> <num value="2">(2)</num> <content>the applicability of rates.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scA/s36.001/b"> <num value="b">(b)</num> <content>A rule or order of the regulatory authority may not conflict with a ruling of a federal regulatory body.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scA/s36.002"> <num value="36.002">Sec. 36.002.</num> <heading>COMPLIANCE WITH TITLE</heading> <content>An electric utility may not charge or receive a rate for utility service except as provided by this title.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scA/s36.003"> <num value="36.003">Sec. 36.003.</num> <heading>JUST AND REASONABLE RATES</heading> <subsection identifier="/us/tx/ut/t2/c36/scA/s36.003/a"> <num value="a">(a)</num> <content>The regulatory authority shall ensure that each rate an electric utility or two or more electric utilities jointly make, demand, or receive is just and reasonable.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scA/s36.003/b"> <num value="b">(b)</num> <content>A rate may not be unreasonably preferential, prejudicial, or discriminatory but must be sufficient, equitable, and consistent in application to each class of consumer.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scA/s36.003/c"> <num value="c">(c)</num> <chapeau>An electric utility may not:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scA/s36.003/1"> <num value="1">(1)</num> <content>grant an unreasonable preference or advantage concerning rates to a person in a classification;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scA/s36.003/2"> <num value="2">(2)</num> <content>subject a person in a classification to an unreasonable prejudice or disadvantage concerning rates; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scA/s36.003/3"> <num value="3">(3)</num> <content>establish or maintain an unreasonable difference concerning rates between localities or between classes of service.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scA/s36.003/d"> <num value="d">(d)</num> <content>In establishing an electric utility's rates, the commission may treat as a single class two or more municipalities that an electric utility serves if the commission considers that treatment to be appropriate.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scA/s36.003/e"> <num value="e">(e)</num> <content>A charge to an individual customer for retail or wholesale electric service that is less than the rate approved by the regulatory authority does not constitute an impermissible difference, preference, or advantage.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scA/s36.004"> <num value="36.004">Sec. 36.004.</num> <heading>EQUALITY OF RATES AND SERVICES</heading> <subsection identifier="/us/tx/ut/t2/c36/scA/s36.004/a"> <num value="a">(a)</num> <content>An electric utility may not directly or indirectly charge, demand, or receive from a person a greater or lesser compensation for a service provided or to be provided by the utility than the compensation prescribed by the applicable tariff filed under Section 32.101.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scA/s36.004/b"> <num value="b">(b)</num> <content>A person may not knowingly receive or accept a service from an electric utility for a compensation greater or less than the compensation prescribed by the tariff.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scA/s36.004/c"> <num value="c">(c)</num> <content>Notwithstanding Subsections (a) and (b), an electric utility may charge an individual customer for wholesale or retail electric service in accordance with Section 36.007.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scA/s36.004/d"> <num value="d">(d)</num> <content>This title does not prevent a cooperative corporation from returning to its members net earnings resulting from its operations in proportion to the members' purchases from or through the corporation.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scA/s36.005"> <num value="36.005">Sec. 36.005.</num> <heading>RATES FOR AREA NOT IN MUNICIPALITY</heading> <content>Without the approval of the commission, an electric utility's rates for an area not in a municipality may not exceed 115 percent of the average of all rates for similar services for all municipalities served by the same utility in the same county as that area.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scA/s36.006"> <num value="36.006">Sec. 36.006.</num> <heading>BURDEN OF PROOF</heading> <chapeau>In a proceeding involving a proposed rate change, the electric utility has the burden of proving that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scA/s36.006/1"> <num value="1">(1)</num> <content>the rate change is just and reasonable, if the utility proposes the change; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scA/s36.006/2"> <num value="2">(2)</num> <content>an existing rate is just and reasonable, if the proposal is to reduce the rate.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scA/s36.007"> <num value="36.007">Sec. 36.007.</num> <heading>DISCOUNTED WHOLESALE OR RETAIL RATES</heading> <subsection identifier="/us/tx/ut/t2/c36/scA/s36.007/a"> <num value="a">(a)</num> <content>On application by an electric utility, a regulatory authority may approve wholesale or retail tariffs or contracts containing charges that are less than rates approved by the regulatory authority but not less than the utility's marginal cost. The charges must be in accordance with the principles of this title and may not be unreasonably preferential, prejudicial, discriminatory, predatory, or anticompetitive.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scA/s36.007/b"> <num value="b">(b)</num> <content>The method for computing the marginal cost of the electric utility consists of energy and capacity components. The energy component includes variable operation and maintenance expense and marginal fuel or the energy component of purchased power. The capacity component is based on the annual economic value of deferring, accelerating, or avoiding the next increment of needed capacity, without regard to whether the capacity is purchased or built.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scA/s36.007/c"> <num value="c">(c)</num> <content>The commission shall ensure that the method for determining marginal cost is consistently applied among utilities but may recognize the individual load and resource requirements of the electric utility.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scA/s36.007/d"> <num value="d">(d)</num> <content>Notwithstanding any other provision of this title, the commission shall ensure that the electric utility's allocable costs of serving customers paying discounted rates under this section are not borne by the utility's other customers.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scA/s36.008"> <num value="36.008">Sec. 36.008.</num> <heading>STATE TRANSMISSION SYSTEM</heading> <content>In establishing rates for an electric utility, the commission may review the state's transmission system and make recommendations to the utility on the need to build new power lines, upgrade power lines, and make other necessary improvements and additions.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 405, Sec. 23, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scA/s36.009"> <num value="36.009">Sec. 36.009.</num> <heading>BILLING DEMAND FOR CERTAIN UTILITY CUSTOMERS</heading> <chapeau>Notwithstanding any other provision of this code, the commission by rule shall require a transmission and distribution utility to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scA/s36.009/1"> <num value="1">(1)</num> <content>waive the application of demand ratchet provisions for each nonresidential secondary service customer that has a maximum load factor equal to or below a factor set by commission rule;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scA/s36.009/2"> <num value="2">(2)</num> <content>implement procedures to verify annually whether each nonresidential secondary service customer has a maximum load factor that qualifies the customer for the waiver described by Subdivision (1);</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scA/s36.009/3"> <num value="3">(3)</num> <chapeau>specify in the utility's tariff whether the utility's nonresidential secondary service customers that qualify for the waiver described by Subdivision (1) are to be billed for distribution service charges on the basis of:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c36/scA/s36.009/A"> <num value="A">(A)</num> <content>kilowatts;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c36/scA/s36.009/B"> <num value="B">(B)</num> <content>kilowatt-hours; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c36/scA/s36.009/C"> <num value="C">(C)</num> <content>kilovolt-amperes; and</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scA/s36.009/4"> <num value="4">(4)</num> <content>modify the utility's tariff in the utility's next base rate case to implement the waiver described by Subdivision (1) and make the specification required by Subdivision (3).</content> </paragraph> <sourceCredit>Added by Acts 2011, 82nd Leg., R.S., Ch. 150 (H.B. 1064), Sec. 1, eff. May 28, 2011.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c36/scB"> <num value="B">SUBCHAPTER B.</num> <heading>COMPUTATION OF RATES</heading> <section identifier="/us/tx/ut/t2/c36/scB/s36.051"> <num value="36.051">Sec. 36.051.</num> <heading>ESTABLISHING OVERALL REVENUES</heading> <content>In establishing an electric utility's rates, the regulatory authority shall establish the utility's overall revenues at an amount that will permit the utility a reasonable opportunity to earn a reasonable return on the utility's invested capital used and useful in providing service to the public in excess of the utility's reasonable and necessary operating expenses.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scB/s36.052"> <num value="36.052">Sec. 36.052.</num> <heading>ESTABLISHING REASONABLE RETURN</heading> <chapeau>In establishing a reasonable return on invested capital, the regulatory authority shall consider applicable factors, including:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.052/1"> <num value="1">(1)</num> <content>the efforts and achievements of the utility in conserving resources;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.052/2"> <num value="2">(2)</num> <content>the quality of the utility's services;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.052/3"> <num value="3">(3)</num> <content>the efficiency of the utility's operations; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.052/4"> <num value="4">(4)</num> <content>the quality of the utility's management.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 405, Sec. 24, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scB/s36.053"> <num value="36.053">Sec. 36.053.</num> <heading>COMPONENTS OF INVESTED CAPITAL</heading> <subsection identifier="/us/tx/ut/t2/c36/scB/s36.053/a"> <num value="a">(a)</num> <content>Electric utility rates shall be based on the original cost, less depreciation, of property used by and useful to the utility in providing service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scB/s36.053/b"> <num value="b">(b)</num> <content>The original cost of property shall be determined at the time the property is dedicated to public use, whether by the utility that is the present owner or by a predecessor.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scB/s36.053/c"> <num value="c">(c)</num> <content>In this section, the term "original cost" means the actual money cost or the actual money value of consideration paid other than money.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scB/s36.053/d"> <num value="d">(d)</num> <content>If the commission issues a certificate of convenience and necessity or if the commission, acting under the authority formerly provided by Section 39.203(e), ordered an electric utility or a transmission and distribution utility to construct or enlarge transmission or transmission-related facilities to facilitate meeting the goal for generating capacity from renewable energy technologies under former Section 39.904(a), the commission shall find that the facilities are used and useful to the utility in providing service for purposes of this section and are prudent and includable in the rate base, regardless of the extent of the utility's actual use of the facilities.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2005, 79th Leg., 1st C.S., Ch. 1 (S.B. 20), Sec. 1, eff. September 1, 2005. Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 10, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scB/s36.054"> <num value="36.054">Sec. 36.054.</num> <heading>CONSTRUCTION WORK IN PROGRESS</heading> <subsection identifier="/us/tx/ut/t2/c36/scB/s36.054/a"> <num value="a">(a)</num> <content>Construction work in progress, at cost as recorded on the electric utility's books, may be included in the utility's rate base. The inclusion of construction work in progress is an exceptional form of rate relief that the regulatory authority may grant only if the utility demonstrates that inclusion is necessary to the utility's financial integrity.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scB/s36.054/b"> <num value="b">(b)</num> <content>Construction work in progress may not be included in the rate base for a major project under construction to the extent that the project has been inefficiently or imprudently planned or managed.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scB/s36.055"> <num value="36.055">Sec. 36.055.</num> <heading>SEPARATIONS AND ALLOCATIONS</heading> <content>Costs of facilities, revenues, expenses, taxes, and reserves shall be separated or allocated as prescribed by the regulatory authority.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scB/s36.056"> <num value="36.056">Sec. 36.056.</num> <heading>DEPRECIATION, AMORTIZATION, AND DEPLETION</heading> <subsection identifier="/us/tx/ut/t2/c36/scB/s36.056/a"> <num value="a">(a)</num> <content>The commission shall establish proper and adequate rates and methods of depreciation, amortization, or depletion for each class of property of an electric or municipally owned utility.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scB/s36.056/b"> <num value="b">(b)</num> <content>The rates and methods established under this section and the depreciation account required by Section 32.102 shall be used uniformly and consistently throughout rate-setting and appeal proceedings.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scB/s36.057"> <num value="36.057">Sec. 36.057.</num> <heading>NET INCOME; DETERMINATION OF REVENUES AND EXPENSES</heading> <subsection identifier="/us/tx/ut/t2/c36/scB/s36.057/a"> <num value="a">(a)</num> <content>An electric utility's net income is the total revenues of the utility less all reasonable and necessary expenses as determined by the regulatory authority.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scB/s36.057/b"> <num value="b">(b)</num> <content>The regulatory authority shall determine revenues and expenses in a manner consistent with this subchapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scB/s36.057/c"> <num value="c">(c)</num> <content>The regulatory authority may adopt reasonable rules with respect to whether an expense is allowed for ratemaking purposes.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scB/s36.058"> <num value="36.058">Sec. 36.058.</num> <heading>CONSIDERATION OF PAYMENT TO AFFILIATE</heading> <subsection identifier="/us/tx/ut/t2/c36/scB/s36.058/a"> <num value="a">(a)</num> <chapeau>Except as provided by Subsection (b), the regulatory authority may not allow as capital cost or as expense a payment to an affiliate for:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.058/1"> <num value="1">(1)</num> <content>the cost of a service, property, right, or other item; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.058/2"> <num value="2">(2)</num> <content>interest expense.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scB/s36.058/b"> <num value="b">(b)</num> <content>The regulatory authority may allow a payment described by Subsection (a) only to the extent that the regulatory authority finds the payment is reasonable and necessary for each item or class of items as determined by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scB/s36.058/c"> <num value="c">(c)</num> <chapeau>A finding under Subsection (b) must include:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.058/1"> <num value="1">(1)</num> <content>a specific finding of the reasonableness and necessity of each item or class of items allowed; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.058/2"> <num value="2">(2)</num> <chapeau>a finding that the price to the electric utility is not higher than the prices charged by the supplying affiliate for the same item or class of items to:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c36/scB/s36.058/A"> <num value="A">(A)</num> <content>its other affiliates or divisions; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c36/scB/s36.058/B"> <num value="B">(B)</num> <content>a nonaffiliated person within the same market area or having the same market conditions.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scB/s36.058/d"> <num value="d">(d)</num> <chapeau>In making a finding regarding an affiliate transaction, the regulatory authority shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.058/1"> <num value="1">(1)</num> <content>determine the extent to which the conditions and circumstances of that transaction are reasonably comparable relative to quantity, terms, date of contract, and place of delivery; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.058/2"> <num value="2">(2)</num> <content>allow for appropriate differences based on that determination.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scB/s36.058/e"> <num value="e">(e)</num> <content>This section does not require a finding to be made before payments made by an electric utility to an affiliate are included in the utility's charges to consumers if there is a mechanism for making the charges subject to refund pending the making of the finding.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scB/s36.058/f"> <num value="f">(f)</num> <chapeau>If the regulatory authority finds that an affiliate expense for the test period is unreasonable, the regulatory authority shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.058/1"> <num value="1">(1)</num> <content>determine the reasonable level of the expense; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.058/2"> <num value="2">(2)</num> <content>include that expense in determining the electric utility's cost of service.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 405, Sec. 25, eff. Sept. 1, 1999. Amended by: Acts 2005, 79th Leg., Ch. 413 (S.B. 1668), Sec. 1, eff. June 17, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scB/s36.059"> <num value="36.059">Sec. 36.059.</num> <heading>TREATMENT OF CERTAIN TAX BENEFITS</heading> <subsection identifier="/us/tx/ut/t2/c36/scB/s36.059/a"> <num value="a">(a)</num> <chapeau>In determining the allocation of tax savings derived from liberalized depreciation and amortization, the investment tax credit, and the application of similar methods, the regulatory authority shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.059/1"> <num value="1">(1)</num> <content>balance equitably the interests of present and future customers; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.059/2"> <num value="2">(2)</num> <content>apportion accordingly the benefits between consumers and the electric or municipally owned utility.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scB/s36.059/b"> <num value="b">(b)</num> <content>If an electric utility or a municipally owned utility retains a portion of the investment tax credit, that portion shall be deducted from the original cost of the facilities or other addition to the rate base to which the credit applied to the extent allowed by the Internal Revenue Code.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scB/s36.060"> <num value="36.060">Sec. 36.060.</num> <heading>CONSOLIDATED INCOME TAX RETURNS</heading> <subsection identifier="/us/tx/ut/t2/c36/scB/s36.060/a"> <num value="a">(a)</num> <content>If an expense is allowed to be included in utility rates or an investment is included in the utility rate base, the related income tax benefit must be included in the computation of income tax expense to reduce the rates. If an expense is not allowed to be included in utility rates or an investment is not included in the utility rate base, the related income tax benefit may not be included in the computation of income tax expense to reduce the rates. The income tax expense shall be computed using the statutory income tax rates.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scB/s36.060/b"> <num value="b">(b)</num> <content>The amount of income tax that a consolidated group of which an electric utility is a member saves, because the consolidated return eliminates the intercompany profit on purchases by the utility from an affiliate, shall be applied to reduce the cost of the property or service purchased from the affiliate.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scB/s36.060/c"> <num value="c">(c)</num> <content>The investment tax credit allowed against federal income taxes, to the extent retained by the electric utility, shall be applied as a reduction in the rate-based contribution of the assets to which the credit applies, to the extent and at the rate allowed by the Internal Revenue Code.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2013, 83rd Leg., R.S., Ch. 787 (S.B. 1364), Sec. 1, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scB/s36.061"> <num value="36.061">Sec. 36.061.</num> <heading>ALLOWANCE OF CERTAIN EXPENSES</heading> <subsection identifier="/us/tx/ut/t2/c36/scB/s36.061/a"> <num value="a">(a)</num> <chapeau>The regulatory authority may not allow as a cost or expense for ratemaking purposes:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.061/1"> <num value="1">(1)</num> <content>an expenditure for legislative advocacy; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.061/2"> <num value="2">(2)</num> <content>an expenditure described by Section 32.104 that the regulatory authority determines to be not in the public interest.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scB/s36.061/b"> <num value="b">(b)</num> <chapeau>The regulatory authority may allow as a cost or expense:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.061/1"> <num value="1">(1)</num> <content>reasonable charitable or civic contributions not to exceed the amount approved by the regulatory authority; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.061/2"> <num value="2">(2)</num> <content>reasonable costs of participating in a proceeding under this title not to exceed the amount approved by the regulatory authority.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scB/s36.061/c"> <num value="c">(c)</num> <chapeau>An electric utility located in a portion of this state not subject to retail competition may establish a bill payment assistance program for a customer who is a military veteran who a medical doctor certifies has a significantly decreased ability to regulate the individual's body temperature because of severe burns received in combat. A regulatory authority shall allow as a cost or expense a cost or expense of the bill payment assistance program. The electric utility is entitled to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.061/1"> <num value="1">(1)</num> <content>fully recover all costs and expenses related to the bill payment assistance program;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.061/2"> <num value="2">(2)</num> <content>defer each cost or expense related to the bill payment assistance program not explicitly included in base rates; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.061/3"> <num value="3">(3)</num> <content>apply carrying charges at the utility's weighted average cost of capital to the extent related to the bill payment assistance program.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2013, 83rd Leg., R.S., Ch. 597 (S.B. 981), Sec. 1, eff. June 14, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scB/s36.062"> <num value="36.062">Sec. 36.062.</num> <heading>CONSIDERATION OF CERTAIN EXPENSES</heading> <chapeau>The regulatory authority may not consider for ratemaking purposes:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.062/1"> <num value="1">(1)</num> <content>an expenditure for legislative advocacy, made directly or indirectly, including legislative advocacy expenses included in trade association dues;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.062/2"> <num value="2">(2)</num> <content>a payment made to cover costs of an accident, equipment failure, or negligence at a utility facility owned by a person or governmental entity not selling power in this state, other than a payment made under an insurance or risk-sharing arrangement executed before the date of loss;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.062/3"> <num value="3">(3)</num> <content>an expenditure for costs of processing a refund or credit under Section 36.110; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.062/4"> <num value="4">(4)</num> <content>any other expenditure, including an executive salary, advertising expense, legal expense, or civil penalty or fine, the regulatory authority finds to be unreasonable, unnecessary, or not in the public interest.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scB/s36.063"> <num value="36.063">Sec. 36.063.</num> <heading>CONSIDERATION OF PROFIT OR LOSS FROM SALE OR LEASE OF MERCHANDISE</heading> <content>In establishing an electric or municipally owned utility's rates, the regulatory authority may not consider any profit or loss that results from the sale or lease of merchandise, including appliances, fixtures, or equipment, to the extent that merchandise is not integral to providing utility service.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scB/s36.064"> <num value="36.064">Sec. 36.064.</num> <heading>SELF-INSURANCE</heading> <subsection identifier="/us/tx/ut/t2/c36/scB/s36.064/a"> <num value="a">(a)</num> <chapeau>An electric utility may self-insure all or part of:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.064/1"> <num value="1">(1)</num> <content>the utility's potential liability or catastrophic property loss, including windstorm, fire, wildfire, and explosion losses, that could not have been reasonably anticipated and included under operating and maintenance expenses; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.064/2"> <num value="2">(2)</num> <content>potential damages the utility may be liable for resulting from personal injury or property damage caused by a wildfire.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scB/s36.064/b"> <num value="b">(b)</num> <chapeau>The commission shall approve a self-insurance plan under this section if the commission finds:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.064/1"> <num value="1">(1)</num> <content>the coverage is in the public interest;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.064/2"> <num value="2">(2)</num> <chapeau>one of the following:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c36/scB/s36.064/A"> <num value="A">(A)</num> <content>the plan, considering all costs, is a lower cost alternative to purchasing commercial insurance;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c36/scB/s36.064/B"> <num value="B">(B)</num> <content>commercial insurance alone is insufficient to cover potential liability, damages, or catastrophic property loss; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c36/scB/s36.064/C"> <num value="C">(C)</num> <content>the electric utility cannot obtain commercial insurance for a reasonable premium; and</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.064/3"> <num value="3">(3)</num> <content>ratepayers will receive the benefits of the savings.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scB/s36.064/c"> <num value="c">(c)</num> <chapeau>In computing an electric utility's reasonable and necessary expenses under this subchapter, the regulatory authority, to the extent the regulatory authority finds is in the public interest, shall allow as a necessary expense the money credited to a reserve account for self-insurance. The regulatory authority shall determine reasonableness under this subsection:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.064/1"> <num value="1">(1)</num> <content>from information provided at the time the self-insurance plan and reserve account are established; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.064/2"> <num value="2">(2)</num> <content>on the filing of a rate case by an electric utility that has a reserve account.</content> <continuation>(c-1) In approving a self-insurance plan under this section, the commission shall prioritize the consideration of the presence and potential extent of wildfire losses, including:</continuation> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.064/1"> <num value="1">(1)</num> <content>historical data;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.064/2"> <num value="2">(2)</num> <content>actuarial studies and analyses; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.064/3"> <num value="3">(3)</num> <content>the risk of the electric utility's exposure to losses from multiple types of disasters occurring within the utility's service territory.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scB/s36.064/d"> <num value="d">(d)</num> <chapeau>After a reserve account for self-insurance is established, the regulatory authority shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.064/1"> <num value="1">(1)</num> <content>determine whether the reserve account has a surplus or shortage under Subsection (e); and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.064/2"> <num value="2">(2)</num> <content>subtract any surplus from or add any shortage to the utility's rate base.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scB/s36.064/e"> <num value="e">(e)</num> <content>A surplus in the reserve account exists if the charges against the account are less than the money credited to the account. A shortage in the reserve account exists if the charges against the account are greater than the money credited to the account.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scB/s36.064/f"> <num value="f">(f)</num> <content>The allowance for self-insurance under this title for ratemaking purposes is not applicable to nuclear plant investment.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scB/s36.064/g"> <num value="g">(g)</num> <content>The commission shall adopt rules governing self-insurance under this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scB/s36.064/h"> <num value="h">(h)</num> <content>Subsection (a)(2) does not authorize an electric utility to self-insure under this section for damages from a wildfire event the utility caused intentionally, recklessly, or with gross negligence.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2025, 89th Leg., R.S., Ch. 1072 (H.B. 145), Sec. 1, eff. June 20, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scB/s36.065"> <num value="36.065">Sec. 36.065.</num> <heading>PENSION AND OTHER POSTEMPLOYMENT BENEFITS</heading> <subsection identifier="/us/tx/ut/t2/c36/scB/s36.065/a"> <num value="a">(a)</num> <content>The regulatory authority shall include in the rates of an electric utility expenses for pension and other postemployment benefits, as determined by actuarial or other similar studies in accordance with generally accepted accounting principles, in an amount the regulatory authority finds reasonable. Expenses for pension and other postemployment benefits include, in an amount found reasonable by the regulatory authority, the benefits attributable to the service of employees who were employed by the predecessor integrated electric utility of an electric utility before the utility's unbundling under Chapter 39 irrespective of the business activity performed by the employee or the affiliate to which the employee was transferred on or after the unbundling.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scB/s36.065/b"> <num value="b">(b)</num> <chapeau>An electric utility may establish one or more reserve accounts for expenses for pension and other postemployment benefits. An electric utility shall periodically record in the reserve account any difference between:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.065/1"> <num value="1">(1)</num> <content>the annual amount of pension and other postemployment benefits approved as an expense in the electric utility's last general rate proceeding or, if that amount cannot be determined from the regulatory authority's order, the amount recorded for pension and other postemployment benefits under generally accepted accounting principles during the first year that rates from the electric utility's last general rate proceeding are in effect; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.065/2"> <num value="2">(2)</num> <content>the annual amount of pension and other postemployment benefits as determined by actuarial or other similar studies that are chargeable to the electric utility's expense.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scB/s36.065/c"> <num value="c">(c)</num> <content>A surplus in the reserve account exists if the amount of pension and other postemployment benefits under Subsection (b)(1) is greater than the amount determined under Subsection (b)(2). A shortage in the reserve account exists if the amount of pension and other postemployment benefits under Subsection (b)(1) is less than the amount determined under Subsection (b)(2).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scB/s36.065/d"> <num value="d">(d)</num> <chapeau>If a reserve account for pension and other postemployment benefits is established, the regulatory authority at a subsequent general rate proceeding shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.065/1"> <num value="1">(1)</num> <content>review the amounts recorded to the reserve account to determine whether the amounts are reasonable expenses;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.065/2"> <num value="2">(2)</num> <content>determine whether the reserve account has a surplus or shortage under Subsection (c); and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.065/3"> <num value="3">(3)</num> <content>subtract any surplus from or add any shortage to the electric utility's rate base with the surplus or shortage amortized over a reasonable time.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., Ch. 385 (S.B. 1447), Sec. 1, eff. June 17, 2005. Amended by: Acts 2017, 85th Leg., R.S., Ch. 51 (S.B. 1002), Sec. 1, eff. May 22, 2017.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scB/s36.066"> <num value="36.066">Sec. 36.066.</num> <heading>COSTS RELATED TO REPORTING ON SAFETY PROCESSES AND INSPECTIONS FOR CERTAIN UTILITIES</heading> <subsection identifier="/us/tx/ut/t2/c36/scB/s36.066/a"> <num value="a">(a)</num> <content>Costs incurred by an electric utility to comply with Section 38.102 shall be recorded as a regulatory asset for timely recovery in rates established by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scB/s36.066/b"> <num value="b">(b)</num> <content>The commission may adopt rules relating to the recording of regulatory assets under this section.</content> </subsection> <sourceCredit>Added by Acts 2019, 86th Leg., R.S., Ch. 1320 (H.B. 4150), Sec. 3, eff. September 1, 2019.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scB/s36.067"> <num value="36.067">Sec. 36.067.</num> <heading>CONSIDERATION OF COMPENSATION AND BENEFIT EXPENSES</heading> <subsection identifier="/us/tx/ut/t2/c36/scB/s36.067/a"> <num value="a">(a)</num> <chapeau>In this section, "employee compensation and benefits" includes base salaries, wages, incentive compensation, and benefits. The term does not include:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.067/1"> <num value="1">(1)</num> <content>pension or other postemployment benefits; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scB/s36.067/2"> <num value="2">(2)</num> <chapeau>incentive compensation for an officer of an electric utility related to attaining:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c36/scB/s36.067/A"> <num value="A">(A)</num> <content>financial metrics; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c36/scB/s36.067/B"> <num value="B">(B)</num> <content>metrics adverse to customers' interests as determined by the commission.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scB/s36.067/b"> <num value="b">(b)</num> <content>When establishing an electric utility's rates, the regulatory authority shall presume that employee compensation and benefits expenses are reasonable and necessary if the expenses are consistent with market compensation studies issued not earlier than three years before the initiation of the proceeding to establish the rates.</content> </subsection> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 3 (S.B. 1016), Sec. 1, eff. May 5, 2023.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c36/scC"> <num value="C">SUBCHAPTER C.</num> <heading>GENERAL PROCEDURES FOR RATE CHANGES PROPOSED BY UTILITY</heading> <section identifier="/us/tx/ut/t2/c36/scC/s36.101"> <num value="36.101">Sec. 36.101.</num> <heading>DEFINITION</heading> <content>In this subchapter, "major change" means an increase in rates that would increase the aggregate revenues of the applicant more than the greater of $100,000 or 2-1/2 percent. The term does not include an increase in rates that the regulatory authority allows to go into effect or the electric utility makes under an order of the regulatory authority after hearings held with public notice.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scC/s36.102"> <num value="36.102">Sec. 36.102.</num> <heading>STATEMENT OF INTENT TO CHANGE RATES</heading> <subsection identifier="/us/tx/ut/t2/c36/scC/s36.102/a"> <num value="a">(a)</num> <content>Except as provided by Section 33.024, an electric utility may not change its rates unless the utility files a statement of its intent with the regulatory authority that has original jurisdiction over those rates at least 35 days before the effective date of the proposed change.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scC/s36.102/b"> <num value="b">(b)</num> <content>The electric utility shall also mail or deliver a copy of the statement of intent to the appropriate officer of each affected municipality.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scC/s36.102/c"> <num value="c">(c)</num> <chapeau>The statement of intent must include:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scC/s36.102/1"> <num value="1">(1)</num> <content>proposed revisions of tariffs; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scC/s36.102/2"> <num value="2">(2)</num> <chapeau>a detailed statement of:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c36/scC/s36.102/A"> <num value="A">(A)</num> <content>each proposed change;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c36/scC/s36.102/B"> <num value="B">(B)</num> <content>the effect the proposed change is expected to have on the revenues of the utility;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c36/scC/s36.102/C"> <num value="C">(C)</num> <content>each class and number of utility consumers affected; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c36/scC/s36.102/D"> <num value="D">(D)</num> <content>any other information required by the regulatory authority's rules.</content> </subparagraph> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scC/s36.103"> <num value="36.103">Sec. 36.103.</num> <heading>NOTICE OF INTENT TO CHANGE RATES</heading> <subsection identifier="/us/tx/ut/t2/c36/scC/s36.103/a"> <num value="a">(a)</num> <chapeau>The electric utility shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scC/s36.103/1"> <num value="1">(1)</num> <content>publish, in conspicuous form and place, notice to the public of the proposed change once each week for four successive weeks before the effective date of the proposed change in a newspaper having general circulation in each county containing territory affected by the proposed change; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scC/s36.103/2"> <num value="2">(2)</num> <content>mail notice of the proposed change to any other affected person as required by the regulatory authority's rules.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scC/s36.103/b"> <num value="b">(b)</num> <content>The regulatory authority may waive the publication of notice requirement prescribed by Subsection (a) in a proceeding that involves only a rate reduction for each affected ratepayer. The applicant shall give notice of the proposed rate change by mail to each affected utility customer.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scC/s36.103/c"> <num value="c">(c)</num> <content>The regulatory authority by rule shall define other proceedings for which the publication of notice requirement prescribed by Subsection (a) may be waived on a showing of good cause. A waiver may not be granted in a proceeding involving a rate increase to any class or category of ratepayer.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scC/s36.104"> <num value="36.104">Sec. 36.104.</num> <heading>EARLY EFFECTIVE DATE OF RATE CHANGE</heading> <subsection identifier="/us/tx/ut/t2/c36/scC/s36.104/a"> <num value="a">(a)</num> <chapeau>For good cause shown, the regulatory authority may allow a rate change, other than a major change, to take effect:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scC/s36.104/1"> <num value="1">(1)</num> <content>before the end of the 35-day period prescribed by Section 36.102; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scC/s36.104/2"> <num value="2">(2)</num> <content>under conditions the regulatory authority prescribes, subject to suspension as provided by this subchapter.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scC/s36.104/b"> <num value="b">(b)</num> <content>The electric utility shall immediately revise its tariffs to include the change.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scC/s36.105"> <num value="36.105">Sec. 36.105.</num> <heading>DETERMINATION OF PROPRIETY OF RATE CHANGE; HEARING</heading> <subsection identifier="/us/tx/ut/t2/c36/scC/s36.105/a"> <num value="a">(a)</num> <content>If a tariff changing rates is filed with a regulatory authority, the regulatory authority shall, on complaint by an affected person, or may, on its own motion, not later than the 30th day after the effective date of the change, enter on a hearing to determine the propriety of the change.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scC/s36.105/b"> <num value="b">(b)</num> <content>The regulatory authority shall hold a hearing in every case in which the change constitutes a major change. The regulatory authority may, however, use an informal proceeding if the regulatory authority does not receive a complaint before the 46th day after the date notice of the change is filed.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scC/s36.105/c"> <num value="c">(c)</num> <content>The regulatory authority shall give reasonable notice of the hearing, including notice to the governing body of each affected municipality and county. The electric utility is not required to provide a formal answer or file any other formal pleading in response to the notice, and the absence of an answer does not affect an order for a hearing.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scC/s36.106"> <num value="36.106">Sec. 36.106.</num> <heading>REGIONAL HEARING</heading> <content>The commission shall hold a regional hearing at an appropriate location in a case in which the commission determines it is in the public interest to hear testimony at a regional hearing for inclusion in the record.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scC/s36.107"> <num value="36.107">Sec. 36.107.</num> <heading>PREFERENCE TO HEARING</heading> <chapeau>The regulatory authority shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scC/s36.107/1"> <num value="1">(1)</num> <content>give preference to a hearing under this subchapter and to deciding questions arising under this subchapter and Subchapter E over any other question pending before it; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scC/s36.107/2"> <num value="2">(2)</num> <content>decide the questions as quickly as possible.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scC/s36.108"> <num value="36.108">Sec. 36.108.</num> <heading>RATE SUSPENSION; DEADLINE</heading> <subsection identifier="/us/tx/ut/t2/c36/scC/s36.108/a"> <num value="a">(a)</num> <chapeau>Pending the hearing and a decision:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scC/s36.108/1"> <num value="1">(1)</num> <content>the local regulatory authority, after delivering to the electric utility a written statement of the regulatory authority's reasons, may suspend the rate change for not longer than 90 days after the date the rate change would otherwise be effective; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scC/s36.108/2"> <num value="2">(2)</num> <content>the commission may suspend the rate change for not longer than 150 days after the date the rate change would otherwise be effective.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scC/s36.108/b"> <num value="b">(b)</num> <content>The 150-day period prescribed by Subsection (a)(2) shall be extended two days for each day the actual hearing on the merits of the case exceeds 15 days.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scC/s36.108/c"> <num value="c">(c)</num> <content>If the regulatory authority does not make a final determination concerning a rate change before expiration of the applicable suspension period, the regulatory authority is considered to have approved the change. This approval is subject to the authority of the regulatory authority thereafter to continue a hearing in progress.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scC/s36.109"> <num value="36.109">Sec. 36.109.</num> <heading>TEMPORARY RATES</heading> <subsection identifier="/us/tx/ut/t2/c36/scC/s36.109/a"> <num value="a">(a)</num> <content>The regulatory authority may establish temporary rates to be in effect during the applicable suspension period under Section 36.108.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scC/s36.109/b"> <num value="b">(b)</num> <content>If the regulatory authority does not establish temporary rates, the rates in effect when the suspended tariff was filed continue in effect during the suspension period.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scC/s36.110"> <num value="36.110">Sec. 36.110.</num> <heading>BONDED RATES</heading> <subsection identifier="/us/tx/ut/t2/c36/scC/s36.110/a"> <num value="a">(a)</num> <chapeau>An electric utility may put a changed rate into effect throughout the area in which the utility sought to change its rates, including an area over which the commission is exercising appellate or original jurisdiction, by filing a bond with the commission if:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scC/s36.110/1"> <num value="1">(1)</num> <content>the 150-day suspension period has been extended under Section 36.108(b); and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scC/s36.110/2"> <num value="2">(2)</num> <content>the commission fails to make a final determination before the 151st day after the date the rate change would otherwise be effective.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scC/s36.110/b"> <num value="b">(b)</num> <content>The bonded rate may not exceed the proposed rate.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scC/s36.110/c"> <num value="c">(c)</num> <chapeau>The bond must be:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scC/s36.110/1"> <num value="1">(1)</num> <content>payable to the commission in an amount, in a form, and with a surety approved by the commission; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scC/s36.110/2"> <num value="2">(2)</num> <content>conditioned on refund.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scC/s36.110/d"> <num value="d">(d)</num> <chapeau>The electric utility shall refund or credit against future bills:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scC/s36.110/1"> <num value="1">(1)</num> <content>money collected under the bonded rates in excess of the rate finally ordered; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scC/s36.110/2"> <num value="2">(2)</num> <content>interest on that money, at the current interest rate as determined by the commission.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scC/s36.111"> <num value="36.111">Sec. 36.111.</num> <heading>ESTABLISHMENT OF FINAL RATES</heading> <subsection identifier="/us/tx/ut/t2/c36/scC/s36.111/a"> <num value="a">(a)</num> <chapeau>If, after hearing, the regulatory authority finds the rates are unreasonable or in violation of law, the regulatory authority shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scC/s36.111/1"> <num value="1">(1)</num> <content>enter an order establishing the rates the electric utility shall charge or apply for the service in question; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scC/s36.111/2"> <num value="2">(2)</num> <content>serve a copy of the order on the electric utility.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scC/s36.111/b"> <num value="b">(b)</num> <content>The rates established in the order shall be observed thereafter until changed as provided by this title.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scC/s36.112"> <num value="36.112">Sec. 36.112.</num> <heading></heading> <chapeau>For expiration of this section, see Subsection (g).</chapeau> <continuation>Sec. 36.112. COST RECOVERY AND RATE ADJUSTMENT STANDARDS AND PROCEDURES FOR CERTAIN NON-ERCOT UTILITIES. (a) This section applies only to an electric utility that operates solely outside of ERCOT.</continuation> <subsection identifier="/us/tx/ut/t2/c36/scC/s36.112/b"> <num value="b">(b)</num> <chapeau>In establishing the base rates of the electric utility under this subchapter or Subchapter D, the regulatory authority shall determine the utility's revenue requirement based on, at the election of the utility:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scC/s36.112/1"> <num value="1">(1)</num> <content>information submitted for a test year; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scC/s36.112/2"> <num value="2">(2)</num> <content>information submitted for a test year, updated to include information that reflects the most current actual or estimated information regarding increases and decreases in the utility's cost of service, including expenses, capital investment, cost of capital, and sales.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scC/s36.112/c"> <num value="c">(c)</num> <content>An electric utility that elects to provide updated information under Subsection (b)(2) must provide the information for a period ending not later than the 30th day before the date the applicable rate proceeding is filed.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scC/s36.112/d"> <num value="d">(d)</num> <content>An electric utility that includes estimated information in the initial filing of a proceeding shall supplement the filing with actual information not later than the 45th day after the date the initial filing was made. The regulatory authority shall extend the deadline for concluding the rate proceeding for a period of time equal to the period between the date the initial filing of the proceeding was made and the date of the supplemental filing, except that the extension period may not exceed 45 days.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scC/s36.112/e"> <num value="e">(e)</num> <content>An electric utility that makes an election under Subsection (b) is not precluded from proposing known and measurable adjustments to the utility's historical rate information as permitted by this title and regulatory authority rules.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scC/s36.112/f"> <num value="f">(f)</num> <content>Without limiting the availability of known and measurable adjustments described by Subsection (e), the regulatory authority shall allow an affected electric utility to make a known and measurable adjustment to include in the utility's rates the prudent capital investment, a reasonable return on such capital investment, depreciation expense, reasonable and necessary operating expenses, and all attendant impacts, including any offsetting revenue, as determined by the regulatory authority, associated with a newly constructed or acquired natural gas-fired generation facility. The regulatory authority is required to allow the adjustment only if the facility is in service before the effective date of new rates. The adjustment may be made regardless of whether the investment is less than 10 percent of the utility's rate base before the date of the adjustment.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scC/s36.112/g"> <num value="g">(g)</num> <content>This section expires September 1, 2031.</content> </subsection> <sourceCredit>Added by Acts 2015, 84th Leg., R.S., Ch. 733 (H.B. 1535), Sec. 1, eff. June 17, 2015. Amended by: Acts 2019, 86th Leg., R.S., Ch. 1067 (H.B. 1397), Sec. 1, eff. June 14, 2019.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c36/scD"> <num value="D">SUBCHAPTER D.</num> <heading>RATE CHANGES PROPOSED BY REGULATORY AUTHORITY</heading> <section identifier="/us/tx/ut/t2/c36/scD/s36.151"> <num value="36.151">Sec. 36.151.</num> <heading>UNREASONABLE OR VIOLATIVE EXISTING RATES</heading> <subsection identifier="/us/tx/ut/t2/c36/scD/s36.151/a"> <num value="a">(a)</num> <chapeau>If the regulatory authority, on its own motion or on complaint by an affected person, after reasonable notice and hearing, finds that the existing rates of an electric utility for a service are unreasonable or in violation of law, the regulatory authority shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scD/s36.151/1"> <num value="1">(1)</num> <content>enter an order establishing the just and reasonable rates to be observed thereafter, including maximum or minimum rates; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scD/s36.151/2"> <num value="2">(2)</num> <content>serve a copy of the order on the electric utility.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scD/s36.151/b"> <num value="b">(b)</num> <content>The rates established under Subsection (a) constitute the legal rates of the electric utility until changed as provided by this title.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scD/s36.152"> <num value="36.152">Sec. 36.152.</num> <heading>INVESTIGATING COSTS OF OBTAINING SERVICE FROM ANOTHER SOURCE</heading> <content>If an electric utility does not produce or generate the service that it distributes, transmits, or furnishes to the public for compensation but obtains the service from another source, the regulatory authority may investigate the cost of that production or generation in an investigation of the reasonableness of the electric utility's rates.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scD/s36.153"> <num value="36.153">Sec. 36.153.</num> <heading>RATE-FILING PACKAGE</heading> <subsection identifier="/us/tx/ut/t2/c36/scD/s36.153/a"> <num value="a">(a)</num> <content>An electric utility shall file a rate-filing package with the regulatory authority not later than the 120th day after the date the authority notifies the utility that the authority will proceed with an inquiry under Section 36.151.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scD/s36.153/b"> <num value="b">(b)</num> <content>The regulatory authority may grant an extension of the 120-day period prescribed by Subsection (a) or waive the rate-filing package requirement on agreement of the parties.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scD/s36.154"> <num value="36.154">Sec. 36.154.</num> <heading>DEADLINE</heading> <subsection identifier="/us/tx/ut/t2/c36/scD/s36.154/a"> <num value="a">(a)</num> <content>The regulatory authority shall make a final determination not later than the 185th day after the date the electric utility files the rate-filing package required by Section 36.153.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scD/s36.154/b"> <num value="b">(b)</num> <content>The deadline prescribed by Subsection (a) is extended two days for each day the actual hearing on the merits of the case exceeds 15 days.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scD/s36.155"> <num value="36.155">Sec. 36.155.</num> <heading>INTERIM ORDER ESTABLISHING TEMPORARY RATES</heading> <subsection identifier="/us/tx/ut/t2/c36/scD/s36.155/a"> <num value="a">(a)</num> <content>At any time after an initial complaint is filed under Section 36.151, the regulatory authority may issue an interim order establishing temporary rates for the electric utility to be in effect until a final determination is made.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scD/s36.155/b"> <num value="b">(b)</num> <chapeau>On issuance of a final order, the regulatory authority:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scD/s36.155/1"> <num value="1">(1)</num> <chapeau>may require the electric utility to refund to customers or to credit against future bills:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c36/scD/s36.155/A"> <num value="A">(A)</num> <content>money collected under the temporary rates in excess of the rate finally ordered; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c36/scD/s36.155/B"> <num value="B">(B)</num> <content>interest on that money, at the current interest rate as determined by the commission; or</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scD/s36.155/2"> <num value="2">(2)</num> <chapeau>shall authorize the electric utility to surcharge bills to recover:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c36/scD/s36.155/A"> <num value="A">(A)</num> <content>the amount by which the money collected under the temporary rates is less than the money that would have been collected under the rate finally ordered; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c36/scD/s36.155/B"> <num value="B">(B)</num> <content>interest on that amount, at the current interest rate as determined by the commission.</content> </subparagraph> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scD/s36.156"> <num value="36.156">Sec. 36.156.</num> <heading>AUTOMATIC TEMPORARY RATES</heading> <subsection identifier="/us/tx/ut/t2/c36/scD/s36.156/a"> <num value="a">(a)</num> <chapeau>The rates charged by the electric utility on the 185th day after the date the utility files the rate-filing package required by Section 36.153 automatically become temporary rates if:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scD/s36.156/1"> <num value="1">(1)</num> <content>the 185-day period has been extended under Section 36.154(b); and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scD/s36.156/2"> <num value="2">(2)</num> <content>the regulatory authority has not issued a final order or established temporary rates for the electric utility on or before the 185th day.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scD/s36.156/b"> <num value="b">(b)</num> <chapeau>On issuance of a final order, the regulatory authority:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scD/s36.156/1"> <num value="1">(1)</num> <chapeau>shall require the electric utility to refund to customers or to credit against future bills:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c36/scD/s36.156/A"> <num value="A">(A)</num> <content>money collected under the temporary rates in excess of the rate finally ordered; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c36/scD/s36.156/B"> <num value="B">(B)</num> <content>interest on that money, at the current interest rate as determined by the commission; or</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scD/s36.156/2"> <num value="2">(2)</num> <chapeau>shall authorize the electric utility to surcharge bills to recover:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c36/scD/s36.156/A"> <num value="A">(A)</num> <content>the amount by which the money collected under the temporary rates is less than the money that would have been collected under the rate finally ordered; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c36/scD/s36.156/B"> <num value="B">(B)</num> <content>interest on that amount, at the current interest rate as determined by the commission.</content> </subparagraph> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scD/s36.157"> <num value="36.157">Sec. 36.157.</num> <heading>RATE REVIEW SCHEDULE</heading> <subsection identifier="/us/tx/ut/t2/c36/scD/s36.157/a"> <num value="a">(a)</num> <content>This section applies only to an electric utility, other than a river authority, that operates solely inside ERCOT.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scD/s36.157/b"> <num value="b">(b)</num> <chapeau>Notwithstanding any other provision of this title, not later than June 1, 2018, the commission by rule shall establish a schedule that requires an electric utility to make periodic filings with the commission to modify or review base rates charged by the electric utility. The schedule may be established on the basis of:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scD/s36.157/1"> <num value="1">(1)</num> <content>the period since the commission entered the commission's final order in the electric utility's most recent base rate proceeding;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scD/s36.157/2"> <num value="2">(2)</num> <content>whether the electric utility has earned materially more than the utility's authorized rate of return on equity as demonstrated by earnings monitoring reports; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scD/s36.157/3"> <num value="3">(3)</num> <content>other criteria that the commission determines is in the public interest.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scD/s36.157/c"> <num value="c">(c)</num> <chapeau>The commission shall extend the date for the proceeding required by Subsection (b) by one year on a year-to-year basis if, 180 days before the date the proceeding is required, the electric utility's most recent earnings monitoring report shows the electric utility is earning, on a weather-normalized basis, less than 50 basis points above:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scD/s36.157/1"> <num value="1">(1)</num> <content>for a transmission and distribution utility, the average of the most recent commission-approved rate of return on equity for each transmission and distribution utility with 175,000 or more metered customers; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scD/s36.157/2"> <num value="2">(2)</num> <content>for a transmission-only utility, the average of the most recent commission-approved rate of return on equity for each transmission-only utility.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scD/s36.157/d"> <num value="d">(d)</num> <content>The commission may extend the date for the proceeding required by Subsection (b) for good cause shown or because of resource constraints of the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scD/s36.157/e"> <num value="e">(e)</num> <content>This section does not limit the ability of a regulatory authority to initiate a base rate proceeding at any time under this title.</content> </subsection> <sourceCredit>Added by Acts 2017, 85th Leg., R.S., Ch. 200 (S.B. 735), Sec. 1, eff. May 27, 2017.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c36/scE"> <num value="E">SUBCHAPTER E.</num> <heading>COST RECOVERY AND RATE ADJUSTMENT</heading> <section identifier="/us/tx/ut/t2/c36/scE/s36.201"> <num value="36.201">Sec. 36.201.</num> <heading>AUTOMATIC ADJUSTMENT FOR CHANGES IN COSTS</heading> <content>Except as permitted by Section 36.204, the commission may not establish a rate or tariff that authorizes an electric utility to automatically adjust and pass through to the utility's customers a change in the utility's fuel or other costs.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 405, Sec. 26, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scE/s36.202"> <num value="36.202">Sec. 36.202.</num> <heading>ADJUSTMENT FOR CHANGE IN TAX LIABILITY</heading> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.202/a"> <num value="a">(a)</num> <chapeau>The commission, on its own motion or on the petition of an electric utility, shall provide for the adjustment of the utility's billing to reflect an increase or decrease in the utility's tax liability to this state if the increase or decrease:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.202/1"> <num value="1">(1)</num> <content>results from Chapter 5, Acts of the 72nd Legislature, 1st Called Session, 1991; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.202/2"> <num value="2">(2)</num> <content>is attributable to an activity subject to the commission's jurisdiction.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.202/b"> <num value="b">(b)</num> <chapeau>The commission shall apportion pro rata to each type and class of service provided by the utility any billing adjustment under this section. The adjustment:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.202/1"> <num value="1">(1)</num> <content>shall be made effective at the same time as the increase or decrease of tax liability described by Subsection (a)(1) or as soon after that increase or decrease as is reasonably practical; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.202/2"> <num value="2">(2)</num> <content>remains effective only until the commission alters the adjustment as provided by this section or enters an order for the utility under Subchapter C or D.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.202/c"> <num value="c">(c)</num> <chapeau>Each year after an original adjustment, the commission shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.202/1"> <num value="1">(1)</num> <content>review the utility's increase or decrease of tax liability described by Subsection (a)(1); and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.202/2"> <num value="2">(2)</num> <content>alter the adjustment as necessary to reflect the increase or decrease.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.202/d"> <num value="d">(d)</num> <content>A proceeding under this section is not a rate case under Subchapter C.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scE/s36.203"> <num value="36.203">Sec. 36.203.</num> <heading>FUEL AND PURCHASED POWER COST RECOVERY; ADJUSTMENT OF FUEL FACTOR</heading> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.203/a"> <num value="a">(a)</num> <content>Section 36.201 does not prohibit the commission from reviewing and providing for adjustments of an electric utility's fuel factor.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.203/b"> <num value="b">(b)</num> <chapeau>The commission by rule shall implement procedures that provide for the timely adjustment of an electric utility's fuel factor. The rules must require that the findings required by Section 36.058 regarding fuel transactions with affiliated interests be made in a fuel reconciliation proceeding or in a rate case filed under Subchapter C or D. The rules must ensure that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.203/1"> <num value="1">(1)</num> <content>the utility collects as contemporaneously as reasonably possible the electric fuel and purchased power costs that the utility incurs and that the commission determines are eligible;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.203/2"> <num value="2">(2)</num> <content>the total of the utility's eligible electric fuel and purchased power costs, including any under-collected or over-collected amounts to be recovered through an interim fuel adjustment, is allocated among customer classes based on actual historical calendar month usage;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.203/3"> <num value="3">(3)</num> <chapeau>any material balance of amounts under-collected or over-collected for eligible electric fuel and purchased power costs is collected from or refunded to customers through an interim fuel adjustment:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c36/scE/s36.203/A"> <num value="A">(A)</num> <content>not later than the 90th day after the date the balance is accrued; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c36/scE/s36.203/B"> <num value="B">(B)</num> <content>if the adjustment would result in a total bill increase of 10 percent or more compared to the total bill in the month before implementation, not later than a date ordered by the commission which must be after the 90th day after the date the balance is accrued; and</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.203/4"> <num value="4">(4)</num> <content>an affected party will receive notice and have the opportunity to request a hearing before the commission.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.203/c"> <num value="c">(c)</num> <content>Notwithstanding Subsection (b)(3), on a finding that an electric utility has an under-collected balance that is the result of extraordinary electric fuel and purchased power costs that are unlikely to continue, the commission may approve an interim fuel adjustment that would defer recovery to take place over a period longer than 90 days.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.203/d"> <num value="d">(d)</num> <content>The commission is not required to hold a hearing on the adjustment of an electric utility's fuel factor under this section. If the commission holds a hearing, the commission may consider at the hearing any evidence that is appropriate and in the public interest.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.203/e"> <num value="e">(e)</num> <content>A customer of the electric utility, a municipality with original jurisdiction over the utility, or the office may protest a fuel factor or interim fuel adjustment proposed under this section. The prudence of costs may not be considered in a fuel factor or interim fuel adjustment proceeding and may only be considered in a fuel reconciliation proceeding under Subsection (h) or another appropriate proceeding.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.203/f"> <num value="f">(f)</num> <content>The sole issue that may be considered on a protest of a fuel factor under Subsection (e) is whether the factor reasonably reflects costs the electric utility will incur so that the utility will not substantially under-collect or over-collect the utility's reasonably stated fuel and purchased power costs on an ongoing basis. The commission may adjust the utility's fuel factor based on its determination on that issue.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.203/g"> <num value="g">(g)</num> <content>The commission shall hold a hearing on a protest of an interim fuel adjustment under Subsection (e) if the adjustment would result in a total bill increase of 10 percent or more as described by Subsection (b)(3) or if the adjustment results from extraordinary electric fuel and purchased power costs as described by Subsection (c). In response to a protest of an interim fuel adjustment, if the commission finds that the electric utility is in a state of material under-collection or over-collection of the utility's reasonably stated eligible fuel and purchased power costs and is projected to remain in that state on an ongoing basis, the commission shall order the utility to establish or modify an interim fuel adjustment to address the under-collection or over-collection in a manner consistent with this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.203/h"> <num value="h">(h)</num> <content>An electric utility shall apply to reconcile the utility's electric fuel and purchased power costs at least once every two years. The application must be made not later than the 180th day after the last day of the period to be reconciled. The commission may by rule establish the calendar year timing of the reconciliation period for each electric utility subject to this section to facilitate efficient work by the commission. To the extent a reconciliation results in a change to the electric utility's under-collected or over-collected fuel balance, that change may be incorporated into an interim fuel adjustment as directed by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.203/i"> <num value="i">(i)</num> <content>A proceeding under this section is not a rate case under Subchapter C.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2023, 88th Leg., R.S., Ch. 233 (H.B. 2073), Sec. 1, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scE/s36.204"> <num value="36.204">Sec. 36.204.</num> <heading>COST RECOVERY AND INCENTIVES</heading> <chapeau>In establishing rates for an electric utility, the commission may:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.204/1"> <num value="1">(1)</num> <content>allow timely recovery of the reasonable costs of conservation, load management, and purchased power, notwithstanding Section 36.201; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.204/2"> <num value="2">(2)</num> <content>authorize additional incentives for conservation, load management, purchased power, and renewable resources.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 405, Sec. 27, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scE/s36.205"> <num value="36.205">Sec. 36.205.</num> <heading>PURCHASED POWER COST RECOVERY</heading> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.205/a"> <num value="a">(a)</num> <chapeau>This section applies only to an increase or decrease in the cost of purchased electricity that has been:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.205/1"> <num value="1">(1)</num> <content>accepted by a federal regulatory authority; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.205/2"> <num value="2">(2)</num> <content>approved after a hearing by the commission.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.205/b"> <num value="b">(b)</num> <content>The commission may use any appropriate method to provide for the adjustment of the cost of purchased electricity on terms determined by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.205/c"> <num value="c">(c)</num> <chapeau>Purchased electricity costs may be recovered:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.205/1"> <num value="1">(1)</num> <content>concurrently with the effective date of the changed costs to the purchasing electric utility; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.205/2"> <num value="2">(2)</num> <content>as soon after the effective date as reasonably practical.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.205/d"> <num value="d">(d)</num> <content>The commission may provide a mechanism to allow an electric utility that has a noncontiguous geographical service area and that purchases power for resale for that noncontiguous service area from electric utilities that are not members of the Electric Reliability Council of Texas to recover purchased power costs for the area in a manner that reflects the purchased power cost for that specific geographical noncontiguous area. The commission may not require an electric cooperative corporation to use the mechanism provided under this section unless the electric cooperative corporation requests its use.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.205/e"> <num value="e">(e)</num> <content>Notwithstanding Subsection (a), an electric utility may apply to the commission for review and approval of an agreement between the electric utility and another person for the purchase of power by the electric utility if approval by the commission is a pre-condition to the effectiveness of the electric utility's right or obligation to purchase power under the agreement. This subsection applies only to an agreement with a term of three years or more. The commission by rule shall implement this subsection consistent with the standards and procedures in the commission's rules governing contested cases on certificates of convenience and necessity for generating facilities adopted under Sections 37.056 and 37.058. This subsection expires September 1, 2033.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2023, 88th Leg., R.S., Ch. 1157 (S.B. 1094), Sec. 1, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scE/s36.206"> <num value="36.206">Sec. 36.206.</num> <heading>MARK-UPS</heading> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.206/a"> <num value="a">(a)</num> <chapeau>A cost recovery factor established for the recovery of purchased power costs may include:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.206/1"> <num value="1">(1)</num> <content>the cost the electric utility incurs in purchasing capacity and energy;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.206/2"> <num value="2">(2)</num> <content>a mark-up added to the cost or another mechanism the commission determines will reasonably compensate the utility for any financial risk associated with purchased power obligations; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.206/3"> <num value="3">(3)</num> <content>the value added by the utility in making the purchased power available to customers.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.206/b"> <num value="b">(b)</num> <content>The mark-ups and cost recovery factors, if allowed, may be those necessary to encourage the electric utility to include economical purchased power as part of the utility's energy and capacity resource supply plan.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scE/s36.207"> <num value="36.207">Sec. 36.207.</num> <heading>USE OF MARK-UPS</heading> <content>Any mark-ups approved under Section 36.206 are an exceptional form of rate relief that the electric utility may recover from ratepayers only on a finding by the commission that the relief is necessary to maintain the utility's financial integrity.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 405, Sec. 28, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scE/s36.208"> <num value="36.208">Sec. 36.208.</num> <heading>PAYMENT TO QUALIFYING FACILITY</heading> <chapeau>In establishing an electric utility's rates, the regulatory authority shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.208/1"> <num value="1">(1)</num> <content>consider a payment made to a qualifying facility under an agreement certified under Subchapter C, Chapter 35, to be a reasonable and necessary operating expense of the electric utility during the period for which the certification is effective; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.208/2"> <num value="2">(2)</num> <content>allow full, concurrent, and monthly recovery of the amount of the payment.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scE/s36.209"> <num value="36.209">Sec. 36.209.</num> <heading>RECOVERY BY CERTAIN NON-ERCOT UTILITIES OF CERTAIN TRANSMISSION COSTS</heading> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.209/a"> <num value="a">(a)</num> <content>This section applies only to an electric utility that operates solely outside of ERCOT in areas of this state included in the Southeastern Electric Reliability Council, the Southwest Power Pool, or the Western Electricity Coordinating Council and that owns or operates transmission facilities.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.209/b"> <num value="b">(b)</num> <content>The commission, after notice and hearing, may allow an electric utility to recover on an annual basis its reasonable and necessary expenditures for transmission infrastructure improvement costs and changes in wholesale transmission charges to the electric utility under a tariff approved by a federal regulatory authority to the extent that the costs or charges have not otherwise been recovered. The commission may allow the electric utility to recover only the costs allocable to retail customers in the state and may not allow the electric utility to over-recover costs.</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., Ch. 1024 (H.B. 989), Sec. 1, eff. June 18, 2005. Amended by: Acts 2009, 81st Leg., R.S., Ch. 1226 (S.B. 1492), Sec. 1, eff. June 19, 2009.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scE/s36.210"> <num value="36.210">Sec. 36.210.</num> <heading>PERIODIC RATE ADJUSTMENTS</heading> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.210/a"> <num value="a">(a)</num> <chapeau>The commission, on the petition of an electric utility, may approve a tariff or rate schedule in which a nonfuel rate may be periodically adjusted upward or downward, based on changes in the parts of the utility's invested capital, as described by Section 36.053, that are categorized or functionalized as distribution plant, distribution-related intangible plant, and distribution-related communication equipment and networks in accordance with commission rules adopted after consideration of the uniform system of accounts prescribed by the Federal Energy Regulatory Commission. A periodic rate adjustment must:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.210/1"> <num value="1">(1)</num> <content>be approved or denied in accordance with a procedure that allows for participation by the office and affected parties;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.210/2"> <num value="2">(2)</num> <content>take into account changes in the number of an electric utility's customers and the effects, on a weather-normalized basis, that energy consumption and energy demand have on the amount of revenue recovered through the electric utility's base rates;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.210/3"> <num value="3">(3)</num> <content>be consistent with the manner in which costs for invested capital described by this subsection were allocated to each rate class, as approved by the commission, in an electric utility's most recent base rate statement of intent proceeding with changes to residential and commercial class rates reflected in volumetric charges to the extent that residential and commercial class rates are collected in that manner based on the electric utility's most recent base rate statement of intent proceeding;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.210/4"> <num value="4">(4)</num> <content>not diminish the ability of the commission or a regulatory authority, on its own motion or on complaint by an affected person as provided by Subchapter D, after reasonable notice and hearing, to change the existing rates of an electric utility for a service after finding that the rates are unreasonable or in violation of law;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.210/5"> <num value="5">(5)</num> <content>be applied by an electric utility on a system-wide basis; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.210/6"> <num value="6">(6)</num> <chapeau>be supported by the sworn statement of an appropriate employee of the electric utility that affirms that:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c36/scE/s36.210/A"> <num value="A">(A)</num> <content>the filing is in compliance with the provisions of the tariff or rate schedule; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c36/scE/s36.210/B"> <num value="B">(B)</num> <content>the filing is true and correct to the best of the employee's knowledge, information, and belief.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.210/b"> <num value="b">(b)</num> <chapeau>An electric utility in the ERCOT power region, or an unbundled electric utility outside the ERCOT power region in whose service area retail competition is available, that requests a periodic rate adjustment under this section shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.210/1"> <num value="1">(1)</num> <content>except as provided by Subsection (f)(3) and to the extent possible, implement simultaneously all nonfuel rates to be adjusted in a 12-month period that are charged by the utility to retail electric providers; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.210/2"> <num value="2">(2)</num> <content>provide notice to retail electric providers of the approved rates not later than the 45th day before the date the rates take effect.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.210/c"> <num value="c">(c)</num> <content>A periodic rate adjustment approved under this section may not be used to adjust the portion of a nonfuel rate relating to the generation of electricity.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.210/d"> <num value="d">(d)</num> <content>An electric utility may adjust the utility's rates under this section not more than twice per year.</content> <continuation>(d-1) Repealed by Acts 2023, 88th Leg., R.S., Ch. 1154 (S.B. 1015), Sec. 2, eff. June 18, 2023.</continuation> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.210/e"> <num value="e">(e)</num> <content>A periodic rate adjustment approved under this section may not include indirect corporate costs or capitalized operations and maintenance expenses.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.210/f"> <num value="f">(f)</num> <chapeau>Nothing in this section is intended to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.210/1"> <num value="1">(1)</num> <content>conflict with a provision contained in a financing order issued under Subchapter I of this chapter or Subchapter G or J, Chapter 39;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.210/2"> <num value="2">(2)</num> <content>affect the limitation on the commission's jurisdiction under Section 32.002;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.210/3"> <num value="3">(3)</num> <content>include in a periodic rate adjustment authorized by this section costs adjusted under a transmission cost-of-service adjustment approved under Section 35.004(d);</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.210/4"> <num value="4">(4)</num> <content>limit the jurisdiction of a municipality over the rates, operations, and services of an electric utility as provided by Section 33.001;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.210/5"> <num value="5">(5)</num> <content>limit the ability of a municipality to obtain a reimbursement under Section 33.023 for the reasonable cost of services of a person engaged in an activity described by that section; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.210/6"> <num value="6">(6)</num> <chapeau>prevent the commission from:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c36/scE/s36.210/A"> <num value="A">(A)</num> <content>reviewing the investment costs included in a periodic rate adjustment or in the following comprehensive base rate proceeding to determine whether the costs were prudent, reasonable, and necessary; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c36/scE/s36.210/B"> <num value="B">(B)</num> <content>refunding to customers any amount improperly recovered through the periodic rate adjustments, with appropriate carrying costs.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.210/g"> <num value="g">(g)</num> <chapeau>The commission shall adopt rules necessary to implement this section. The rules must provide for:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.210/1"> <num value="1">(1)</num> <content>a procedure by which a tariff or rate schedule is to be reviewed and approved;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.210/2"> <num value="2">(2)</num> <content>filing requirements and discovery consistent with Subsection (a);</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.210/3"> <num value="3">(3)</num> <content>an earnings monitoring report that allows the commission to reasonably determine whether a utility is earning in excess of the utility's allowed return on investment as normalized for weather;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.210/4"> <num value="4">(4)</num> <content>denial of the electric utility's filing if the electric utility is earning more than the utility's authorized rate of return on investment, on a weather-normalized basis, at the time the periodic rate adjustment request is filed; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.210/5"> <num value="5">(5)</num> <content>a mechanism by which the commission may refund customers any amounts determined to be improperly recovered through a periodic rate adjustment, including any interest on the amounts.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.210/h"> <num value="h">(h)</num> <content>An electric utility may file a request for a periodic rate adjustment under this section on any day on which the commission is open for business, except that if the utility has a base rate proceeding pending, the utility may not file the request before the 185th day after the date the base rate proceeding was initiated. The electric utility may revise a request to reflect the final order issued in the base rate proceeding. The fact that an electric utility has a base rate proceeding pending during a proceeding conducted under this section does not establish grounds for dismissal of either proceeding.</content> <continuation>(h-1) Repealed by Acts 2017, 85th Leg., R.S., Ch. 200 (S.B. 735), Sec. 5, eff. May 27, 2017.</continuation> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.210/i"> <num value="i">(i)</num> <content>The commission shall enter a final order on a request for a periodic rate adjustment under this section not later than the 60th day after the date the request is filed. The commission may extend the deadline for not more than 15 days for good cause.</content> </subsection> <sourceCredit>Added by Acts 2011, 82nd Leg., R.S., Ch. 196 (S.B. 1693), Sec. 1, eff. May 28, 2011. Amended by: Acts 2015, 84th Leg., R.S., Ch. 20 (S.B. 774), Sec. 1, eff. September 1, 2015. Acts 2017, 85th Leg., R.S., Ch. 200 (S.B. 735), Sec. 2, eff. May 27, 2017. Acts 2017, 85th Leg., R.S., Ch. 200 (S.B. 735), Sec. 5, eff. May 27, 2017. Acts 2023, 88th Leg., R.S., Ch. 1154 (S.B. 1015), Sec. 1, eff. June 18, 2023. Acts 2023, 88th Leg., R.S., Ch. 1154 (S.B. 1015), Sec. 2, eff. June 18, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scE/s36.211"> <num value="36.211">Sec. 36.211.</num> <heading></heading> <chapeau>For expiration of this section, see Subsection (f).</chapeau> <continuation>Sec. 36.211. RELATION BACK OF RATES FOR CERTAIN NON-ERCOT UTILITIES. (a) This section applies only to an electric utility that operates solely outside of ERCOT.</continuation> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.211/b"> <num value="b">(b)</num> <content>In a rate proceeding under Subchapter D, or if requested by an electric utility in the utility's statement of intent initiating a rate proceeding under Subchapter C, notwithstanding Section 36.109(a), the final rate set in the proceeding, whether a rate increase or rate decrease, shall be made effective for consumption on and after the 155th day after the date the rate-filing package is filed.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.211/c"> <num value="c">(c)</num> <chapeau>The regulatory authority shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.211/1"> <num value="1">(1)</num> <content>require the electric utility to refund to customers money collected in excess of the rate finally ordered on or after the 155th day after the date the rate-filing package is filed; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.211/2"> <num value="2">(2)</num> <content>authorize the electric utility to surcharge bills to recover the amount by which the money collected on or after the 155th day after the date the rate-filing package is filed is less than the money that would have been collected under the rate finally ordered.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.211/d"> <num value="d">(d)</num> <content>The regulatory authority may require refunds or surcharges of amounts determined under Subsection (c) over a period not to exceed 18 months, along with appropriate carrying costs. The regulatory authority shall make any adjustments necessary to prevent over-recovery of amounts reflected in riders in effect for the electric utility during the pendency of the rate proceeding.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.211/e"> <num value="e">(e)</num> <content>A utility may not assess more than one surcharge authorized by Subsection (c)(2) at the same time.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.211/f"> <num value="f">(f)</num> <content>This section expires September 1, 2031.</content> </subsection> <sourceCredit>Added by Acts 2015, 84th Leg., R.S., Ch. 733 (H.B. 1535), Sec. 2, eff. June 17, 2015. Amended by: Acts 2019, 86th Leg., R.S., Ch. 1067 (H.B. 1397), Sec. 2, eff. June 14, 2019.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scE/s36.212"> <num value="36.212">Sec. 36.212.</num> <heading></heading> <chapeau>For expiration of this section, see Subsection (g).</chapeau> <continuation>Sec. 36.212. RATE CASE REQUIREMENT FOR CERTAIN NON-ERCOT UTILITIES. (a) This section applies only to an electric utility that operates solely outside of ERCOT.</continuation> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.212/b"> <num value="b">(b)</num> <chapeau>The commission shall require an electric utility to make the filings with regulatory authorities required by Subchapter B, Chapter 33, and to file a rate-filing package under Subchapter D with the commission to initiate a comprehensive base rate proceeding before all of the utility's regulatory authorities:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.212/1"> <num value="1">(1)</num> <content>on or before the fourth anniversary of the date of the final order in the electric utility's most recent comprehensive base rate proceeding; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.212/2"> <num value="2">(2)</num> <content>if, before the anniversary described by Subdivision (1), the electric utility earns materially more than the utility's authorized rate of return on investment, on a weather-normalized basis, in the utility's two most recent consecutive commission earnings monitoring reports.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.212/c"> <num value="c">(c)</num> <content>The electric utility must make the filings described by Subsection (b) not later than the 120th day after the date the commission notifies the utility of the requirement described by Subsection (b). The 120-day period may be extended in the manner provided by Section 36.153(b).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.212/d"> <num value="d">(d)</num> <content>The commission may extend the time period described by Subsection (b)(1) and set a new deadline if the commission determines that a comprehensive base rate case would not result in materially different rates. The commission shall give interested parties a reasonable opportunity to present materials and argument before making a determination under this subsection.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.212/e"> <num value="e">(e)</num> <content>The commission shall adopt rules implementing this section, including appropriate notice and scheduling requirements.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.212/f"> <num value="f">(f)</num> <content>This section does not limit the authority of a regulatory authority under Subchapter D.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.212/g"> <num value="g">(g)</num> <content>This section expires September 1, 2031.</content> </subsection> <sourceCredit>Added by Acts 2015, 84th Leg., R.S., Ch. 733 (H.B. 1535), Sec. 3, eff. June 17, 2015. Amended by: Acts 2019, 86th Leg., R.S., Ch. 1067 (H.B. 1397), Sec. 3, eff. June 14, 2019.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scE/s36.213"> <num value="36.213">Sec. 36.213.</num> <heading>ADJUSTMENT FOR CYBERSECURITY MONITOR COSTS FOR CERTAIN UTILITIES</heading> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.213/a"> <num value="a">(a)</num> <content>This section does not apply to an electric utility that operates solely outside of ERCOT and has not elected to participate in the cybersecurity monitor program under Section 39.1516.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.213/b"> <num value="b">(b)</num> <content>The commission, on its own motion or on the petition of an electric utility, shall allow the electric utility to recover reasonable and necessary costs incurred in connection with activities under Section 39.1516.</content> </subsection> <sourceCredit>Added by Acts 2019, 86th Leg., R.S., Ch. 610 (S.B. 936), Sec. 1, eff. September 1, 2019.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scE/s36.214"> <num value="36.214">Sec. 36.214.</num> <heading></heading> <chapeau>For expiration of this section, see Subsection (h).</chapeau> <continuation>Sec. 36.214. RECOVERY OF GENERATION INVESTMENT BY NON-ERCOT UTILITIES. (a) This section applies only to an electric utility that operates solely outside of ERCOT.</continuation> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.214/b"> <num value="b">(b)</num> <content>An electric utility may file, and the commission may approve, an application for a rider to recover the electric utility's investment in a power generation facility.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.214/c"> <num value="c">(c)</num> <content>An application under Subsection (b) may be filed by the electric utility and approved by the commission before the electric utility places the power generation facility in service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.214/d"> <num value="d">(d)</num> <content>Any rider approved under Subsection (b) shall take effect on the date the power generation facility begins providing service to the electric utility's customers.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.214/e"> <num value="e">(e)</num> <content>Amounts recovered through a rider approved under Subsection (b) are subject to reconciliation in the first comprehensive base rate proceeding for the electric utility that occurs after approval of the rider. During the reconciliation, the commission shall determine if the amounts recovered through the rider are reasonable and necessary.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.214/f"> <num value="f">(f)</num> <content>If a rider approved under Subsection (b) includes incremental recovery for a power generation facility greater than $200 million on a Texas jurisdictional basis, the electric utility that filed the rider shall initiate a comprehensive base rate proceeding at the commission not later than 18 months after the date the rider takes effect.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.214/g"> <num value="g">(g)</num> <content>The commission shall adopt rules as necessary to implement this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.214/h"> <num value="h">(h)</num> <content>This section expires September 1, 2031.</content> </subsection> <sourceCredit>Added by Acts 2019, 86th Leg., R.S., Ch. 1067 (H.B. 1397), Sec. 4, eff. June 14, 2019. Redesignated from Utilities Code, Section 36.213 by Acts 2021, 87th Leg., R.S., Ch. 915 (H.B. 3607), Sec. 21.001(111), eff. September 1, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scE/s36.215"> <num value="36.215">Sec. 36.215.</num> <heading>RECOVERY OF INVESTMENT IN DISTRIBUTED GENERATION AND RATES FOR BACKUP ELECTRIC SERVICE FOR CERTAIN NON-ERCOT UTILITIES</heading> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.215/a"> <num value="a">(a)</num> <chapeau>In this section:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.215/1"> <num value="1">(1)</num> <chapeau>"Customer-sited distributed generation facility" means a dispatchable generation facility that is installed on the electric utility's side of the retail meter and owned and operated by the electric utility:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c36/scE/s36.215/A"> <num value="A">(A)</num> <content>with a nameplate capacity of not more than 10 megawatts;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c36/scE/s36.215/B"> <num value="B">(B)</num> <content>that is capable of generating and providing backup electric service to a customer during a power grid outage; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c36/scE/s36.215/C"> <num value="C">(C)</num> <content>sited at or adjacent to the customer's premises.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.215/2"> <num value="2">(2)</num> <content>"Host customer" means a customer receiving backup electric service under this section.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.215/b"> <num value="b">(b)</num> <content>This section applies only to an electric utility that operates solely outside of ERCOT in areas of this state included in the Southeastern Electric Reliability Council.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.215/c"> <num value="c">(c)</num> <content>An electric utility may provide backup electric service to a nonresidential retail customer through a customer-sited distributed generation facility.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.215/d"> <num value="d">(d)</num> <chapeau>The commission, on the petition of an electric utility, shall establish just and reasonable rates for backup electric service supplied using a customer-sited distributed generation facility, consistent with this chapter, provided that costs are allocated as follows:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.215/1"> <num value="1">(1)</num> <content>if the facility is capable of directly supplying energy to the distribution system or of disconnecting the host customer from the distribution system when not being used to supply backup electric service to the host customer and thereby reducing system load, the commission shall allocate the cost of owning and operating the facility between the host customer and the electric utility's broader customer base, including an allocation of any margins from energy sales attributable to the facility to the host customer in reasonable proportion to the allocation of nonfuel costs as provided by Subdivision (2); and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.215/2"> <num value="2">(2)</num> <content>the allocation of nonfuel costs to the host customer must be based on the cost to purchase, install, interconnect, own, operate, and maintain the facility that is above the electric utility's levelized avoided cost to install, own, operate, and maintain a single-cycle combustion turbine, on a per kilowatt basis, grossed up for avoided line losses based on the utility's transmission and distribution line loss factors last approved by the commission.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scE/s36.215/e"> <num value="e">(e)</num> <chapeau>In a rate proceeding in which an electric utility seeks to recover the utility's investment in a customer-sited distributed generation facility that is interconnected to the utility's distribution system:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.215/1"> <num value="1">(1)</num> <content>the full cost of the utility's investment is eligible for recovery; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scE/s36.215/2"> <num value="2">(2)</num> <content>the cost of the facility and backup electric service revenues must be allocated among customer classes on the same basis used to allocate the utility's distribution-level investments.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 103 (S.B. 1866), Sec. 1, eff. May 19, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scE/s36.216"> <num value="36.216">Sec. 36.216.</num> <heading></heading> <content>Text of section as added by Acts 2025, 89th Leg., R.S., Ch. 680 (H.B. 5247), Sec. 1</content> <sourceCredit>For text of section as added by Acts 2025, 89th Leg., R.S., Ch. 1010 (S.B. 1856), Sec. 1, see other Sec. 36.216. For expiration of this section, see Subsection (n). Sec. 36.216. SINGLE CAPITAL INVESTMENT PROCEDURE FOR CERTAIN UTILITIES. (a) This section applies only to an electric utility, other than a river authority, that: (1) operates solely inside ERCOT; and (2) was identified by the commission as responsible for constructing transmission as part of the reliability plan for the Permian Basin approved by the commission under Section 39.167, as added by Chapter 892 (H.B. 5066), Acts of the 88th Legislature, Regular Session, 2023. (b) An electric utility that makes total capital expenditures that exceed 300 percent of annual depreciation in a calendar year may elect in the following calendar year to file a single annual proceeding to adjust nonfuel rates on a system-wide basis to reflect changes in transmission and distribution invested capital in lieu of adjustments to retail and wholesale transmission and distribution rates authorized under Section 36.210, Section 38.078, as added by Chapter 836 (H.B. 2555), Acts of the 88th Legislature, Regular Session, 2023, and commission rules adopted under Section 35.004. (c) An electric utility seeking to make an election under this section shall: (1) except as provided by Subsection (d), use the filing requirements adopted by the commission for the adjustment proceedings described by Subsection (b); (2) file a notice with the commission of the utility's intent to make the election and supporting documentation of the capital expenditures described by Subsection (b) at least 60 days before the date the utility makes a filing under Subsection (b); (3) provide evidence of the utility's ongoing eligibility in the annual proceeding under Subsection (b); and (4) notify the commission if the utility determines that the utility no longer qualifies for continued use of the adjustment under this section. (d) An electric utility that makes an election under this section: (1) may defer all or a portion of the costs, including depreciation expense and carrying costs, associated with the transmission and distribution invested capital at the utility's weighted average cost of capital established in the commission's final order in the utility's most recent base rate proceeding for invested capital, as described by Section 36.053, not currently reflected in the utility's rates for recovery as a regulatory asset; and (2) shall: (A) update the allocation of costs among customer classes to reflect customer growth; and (B) take into account changes in the number of the utility's customers and the effects, on a weather-normalized basis, that energy consumption and energy demand have on the amount of revenue recovered through the utility's base rates. (e) Unless otherwise agreed to by an electric utility that makes an election under this section, the commission shall: (1) include the regulatory asset in rates set under this section; and (2) authorize amortization of the regulatory asset over: (A) a period not to exceed 18 months; or (B) if a recovery period described by Paragraph (A) would cause the utility to earn more than the utility's allowed return on investment as normalized for weather, a longer recovery period. (f) During a period when an electric utility that makes an election under this section earns more than the utility's allowed return on investment, on a weather-adjusted basis, the utility shall apply the over-earnings to the balance of the regulatory asset under Subsections (d) and (e). (g) The commission shall approve an adjustment under this section not later than the 120th day after the date an electric utility files a request for the adjustment. (h) The electric utility shall provide notice to retail electric providers of rates approved under this section not later than the 45th day before the date the rates take effect. (i) If the commission does not issue a final order in the period described by Subsection (g) and the electric utility complies with Subsection (h), the utility may place the requested rates into effect on a temporary basis not earlier than the 165th day after filing the request. The utility shall refund or credit against future bills any difference between the temporary rate and the final rate along with interest at the current interest rate as determined by the commission. (j) An electric utility that makes an election under this section may not petition for another adjustment under this section, Section 36.210, Section 38.078, as added by Chapter 836 (H.B. 2555), Acts of the 88th Legislature, Regular Session, 2023, or commission rules adopted under Section 35.004 before the first anniversary of the date the utility files a request under Subsection (b). (k) Notwithstanding any other law, in setting the rate of return in a comprehensive base rate proceeding for an electric utility receiving a rate adjustment under this section, the commission may expressly consider the effect of the adjustment on the utility's financial risk and rate of return. (l) An electric utility's use of this section terminates when the utility no longer qualifies for an adjustment under this section, except that the utility's rates in effect on the date the utility no longer qualifies remain in effect until modified in a future proceeding. (m) Nothing in this section is intended to: (1) conflict with a provision of a financing order issued under Subchapter I; (2) affect the limitation on the commission's jurisdiction under Section 32.002; (3) limit the jurisdiction of a municipality over the rates, operations, and services of an electric utility under Section 33.001 or limit the ability of a municipality to obtain a reimbursement under Section 33.023; (4) prevent an electric utility, including a river authority, from requesting cost recovery or rate relief under a mechanism authorized under Chapter 36 or other provisions of this title if the utility or authority is ineligible or becomes ineligible to make an election under this section; or (5) prevent the commission from: (A) reviewing the investment costs included in an adjustment under this section in the electric utility's next comprehensive base rate proceeding to determine whether the costs were prudent, reasonable, and necessary; (B) refunding to customers any amount improperly recovered through an adjustment under this section, with appropriate carrying costs; or (C) if applicable, refunding to customers the realized equity portion of carrying costs deferred under Subsection (d)(1) on a transmission project associated with the reliability plan described by Subsection (a) if the in-service date is unreasonably delayed beyond December 31, 2030, due to the utility's actions, unless the utility demonstrates through contemporaneous documentation of the utility's analysis and decision-making that the delay is necessary to maximize the load serving capability of other transmission projects. (n) This section expires December 31, 2035. Added by Acts 2025, 89th Leg., R.S., Ch. 680 (H.B. 5247), Sec. 1, eff. June 20, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scE/s36.216"> <num value="36.216">Sec. 36.216.</num> <heading></heading> <content>Text of section as added by Acts 2025, 89th Leg., R.S., Ch. 1010 (S.B. 1856), Sec. 1</content> <sourceCredit>For text of section as added by Acts 2025, 89th Leg., R.S., Ch. 680 (H.B. 5247), Sec. 1, see other Sec. 36.216. For expiration of this section, see Subsection (p). Sec. 36.216. RECOVERY OF ANNUAL CAPACITY-RELATED COSTS. (a) This section applies only to an electric utility that operates solely outside of ERCOT in areas of this state included in the Southeastern Electric Reliability Council. (b) It is the intent of the legislature that certain changes to the level of an electric utility's capacity-related costs and capacity-related revenues due to wholesale rate decisions and determinations by a federal agency or a regional transmission organization subject to federal jurisdiction should be timely reflected in the utility's rates. (c) On application by an electric utility that has not exceeded the utility's authorized return on equity as shown in the utility's most recent earnings monitoring report at the time of the application, the commission shall establish a capacity cost recovery rider that must be annually updated and that allows: (1) recovery of the utility's costs that are eligible as provided by Subsection (d); and (2) return to ratepayers of the utility's revenues that are eligible as provided by Subsection (d). (d) In this section, eligible costs and revenues are capacity-related costs and revenues associated with the electric utility's participation in a multi-state capacity auction operated by a regional transmission organization or independent system organization authorized by the Federal Energy Regulatory Commission, to the extent the costs and revenues are not already being recovered through the utility's base rates. (e) Amounts recovered through a capacity cost recovery rider are subject to reconciliation in the next base rate proceeding for the electric utility. As part of the reconciliation, the commission shall review the costs and revenues to determine if they were reasonable and prudently incurred and to ensure the electric utility is only recovering costs allocable to retail customers in this state and is not over-recovering costs. In each base rate proceeding following the establishment of a capacity cost recovery rider, the commission shall remove from the electric utility's base rates all cost and revenue items eligible for recovery through the electric utility's capacity cost recovery rider. (f) The annual revenue requirement and rates for a proposed capacity cost recovery rider must include: (1) the electric utility's calculated costs and revenues for the upcoming year beginning on the June 1 associated with the utility's participation in a multi-state capacity auction; and (2) a true-up amount that accounts for any difference between the utility's actual eligible costs and revenues and the utility's actual collections under any capacity cost recovery rider put into effect two years before the proposed effective date of the proposed rider, plus: (A) an amount to account for any mathematical error identified in the utility's most recent capacity cost recovery rider application proceeding; and (B) an amount to account for any refunds or surcharges ordered by the Federal Energy Regulatory Commission or by a regional transmission organization or independent system organization related to a previous year's capacity auction that: (i) are identified on a regional transmission organization or independent system operator settlement statement; or (ii) were directed by a Federal Energy Regulatory Commission order issued in the preceding 12-month period. (g) The capacity cost recovery rider charges must be derived using: (1) the same production demand allocation factors approved in the electric utility's most recent base rate case; and (2) the projected billing determinants for the rate effective period. (h) The billing determinants must be derived using each customer class's projected kilowatt-hour usage, except for customer classes with demand meters for which the billing determinants must be derived using each customer class's projected kilowatt billing demand. (i) Until the time the electric utility removes from base rates the costs eligible for rider recovery under Subsection (d), and the costs eligible for rider recovery described in Subsection (g)(2), and these costs are recovered solely through the capacity cost recovery rider, the calculation of the capacity cost recovery rider must include a load growth adjustment to take into account changes in the number of the utility's customers and the effects, on a weather-normalized basis, that energy consumption and energy demand have on the amount of revenue recovered through the utility's base rates. (j) The commission shall process an application to establish or update a capacity cost recovery rider in accordance with Subsections (k)-(o). (k) For a capacity cost recovery rider that will include an electric utility's costs to be incurred beginning on June 1 of a given year, the utility must submit the rider application not later than: (1) May 15 of that year; or (2) if the regional transmission organization or independent system operator publishes its capacity auction cost results after the 20th business day of April of that year, a date that is the same number of days after May 15 of that year as the number of days after the 20th business day of April the results were published. (l) The application must be fully documented, including testimony and all supporting work papers in native format. (m) A response to the electric utility's filing that is made by commission staff or an intervenor: (1) must be filed not later than the 15th day after the date of the utility's filing; and (2) may address only whether the application conforms with any rule the commission adopts to implement this section and the mathematical accuracy of the utility's proposed capacity cost recovery rider revenue requirement and rates. (n) Any other inaccuracy identified under Subsection (m)(2) may be addressed only in the electric utility's next capacity cost recovery rider application. (o) The commission may review costs and revenues and shall issue an order approving, modifying, or denying an electric utility's proposed or updated capacity cost recovery rider not later than the 60th day after the date the application is filed. (p) This section expires September 1, 2035. Added by Acts 2025, 89th Leg., R.S., Ch. 1010 (S.B. 1856), Sec. 1, eff. June 20, 2025.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c36/scH"> <num value="H">SUBCHAPTER H.</num> <heading>RATES FOR GOVERNMENTAL ENTITIES</heading> <section identifier="/us/tx/ut/t2/c36/scH/s36.351"> <num value="36.351">Sec. 36.351.</num> <heading>DISCOUNTED RATES FOR CERTAIN INSTITUTIONS OF HIGHER EDUCATION</heading> <subsection identifier="/us/tx/ut/t2/c36/scH/s36.351/a"> <num value="a">(a)</num> <content>Notwithstanding any other provision of this title, each electric utility and municipally owned utility shall discount charges for electric service provided to a facility of a four-year state university, upper-level institution, Texas State Technical College, or college.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scH/s36.351/b"> <num value="b">(b)</num> <content>The discount is a 20-percent reduction of the utility's base rates that would otherwise be paid under the applicable tariffed rate.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scH/s36.351/c"> <num value="c">(c)</num> <content>An electric or municipally owned utility is exempt from this section if the 20-percent discount results in a reduction equal to more than one percent of the utility's total annual revenues.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scH/s36.351/d"> <num value="d">(d)</num> <content>A municipally owned utility is exempt from this section if the municipally owned utility, on September 1, 1995, discounted base commercial rates for electric service provided to all four-year state universities or colleges in its service area by 20 percent or more.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scH/s36.351/e"> <num value="e">(e)</num> <content>This section does not apply to a rate charged to an institution of higher education by a municipally owned utility that provides a discounted rate to the state for electric services below rates in effect on January 1, 1995, if the discounted rate provides a greater financial discount to the state than is provided to the institution of higher education through the discount provided by this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scH/s36.351/f"> <num value="f">(f)</num> <content>An investor-owned electric utility may not recover from residential customers or any other customer class the assigned and allocated costs of serving a state university or college that receives a discount under this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scH/s36.351/g"> <num value="g">(g)</num> <content>Each electric utility shall file tariffs with the commission reflecting the discount required under this section. The initial tariff filing is not a rate change for purposes of Subchapter C.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scH/s36.352"> <num value="36.352">Sec. 36.352.</num> <heading>SPECIAL RATE CLASS</heading> <content>Notwithstanding any other provision of this title, if the commission, on or before September 1, 1995, approved the establishment of a separate rate class for electric service for a university and grouped public schools in a separate rate class, the commission shall include community colleges in the rate class with public school customers.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scH/s36.353"> <num value="36.353">Sec. 36.353.</num> <heading>PAYMENT IN LIEU OF TAX</heading> <subsection identifier="/us/tx/ut/t2/c36/scH/s36.353/a"> <num value="a">(a)</num> <content>A payment made in lieu of a tax by a municipally owned utility to the municipality by which the utility is owned may not be considered an expense of operation in establishing the utility's rate for providing utility service to a school district or hospital district.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scH/s36.353/b"> <num value="b">(b)</num> <content>A rate a municipally owned utility receives from a school district or hospital district may not be used to make or to cover the cost of making payments in lieu of taxes to the municipality that owns the utility.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scH/s36.354"> <num value="36.354">Sec. 36.354.</num> <heading>DISCOUNTED RATES FOR MILITARY BASES</heading> <subsection identifier="/us/tx/ut/t2/c36/scH/s36.354/a"> <num value="a">(a)</num> <content>Notwithstanding any other provision of this title, each municipally owned utility, electric cooperative, or electric utility in an area where customer choice is not available or the commission has delayed the implementation of full customer choice in accordance with Section 39.103 shall discount charges for electric service provided to a military base.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scH/s36.354/b"> <num value="b">(b)</num> <content>The discount under Subsection (a) is a 20 percent reduction of the base commercial rate that the municipally owned utility, electric cooperative, or electric utility would otherwise charge the military installation.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scH/s36.354/c"> <num value="c">(c)</num> <content>An electric utility, municipally owned utility, or electric cooperative may assess a surcharge to all of the utility's retail customers in the state to recover the difference in revenue between the revenues from the discounted rate for military bases provided under Subsection (a) and the base commercial rate. This subsection does not apply to an electric utility, municipally owned utility, or electric cooperative that was providing electric service to a military base on December 31, 2002, at a rate constituting a discount of 20 percent or more from the utility's base commercial rate that the utility would otherwise charge the military base.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scH/s36.354/d"> <num value="d">(d)</num> <content>Each electric utility shall file a tariff with the commission reflecting the discount required by Subsection (a) and may file a tariff reflecting the surcharge provided by Subsection (c). Not later than the 30th day after the date the commission receives the electric utility's tariff reflecting the surcharge, the commission shall approve the tariff. A proceeding under this subsection is not a rate change for purposes of Subchapter C.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scH/s36.354/e"> <num value="e">(e)</num> <chapeau>An electric utility, municipally owned utility, or electric cooperative is exempt from the requirements of Subsection (a) if:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scH/s36.354/1"> <num value="1">(1)</num> <content>the 20 percent discount would result in a reduction of revenue in an amount that is greater than one percent of the utility's total annual revenues; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scH/s36.354/2"> <num value="2">(2)</num> <chapeau>the utility:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c36/scH/s36.354/A"> <num value="A">(A)</num> <content>was providing electric service to a military base on December 31, 2002, at a rate constituting a discount of 20 percent or more from the utility's base commercial rate that the utility would otherwise charge the military base; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c36/scH/s36.354/B"> <num value="B">(B)</num> <content>continues to provide electric service to the military base at a rate constituting a discount of 20 percent or more from the utility's base commercial rate that the utility would otherwise charge the military base.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scH/s36.354/f"> <num value="f">(f)</num> <content>Each electric utility shall provide the Texas Military Preparedness Commission with the base commercial rate that the utility would otherwise charge the military base and the rate the utility is charging the military base.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scH/s36.354/g"> <num value="g">(g)</num> <chapeau>For the purposes of this section, the term "military base" does not include a military base:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scH/s36.354/1"> <num value="1">(1)</num> <content>that has been closed or realigned under the Defense Base Closure and Realignment Act of 1990 (10 U.S.C. Section 2687) and its subsequent amendments;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scH/s36.354/2"> <num value="2">(2)</num> <content>that is administered by an authority established by a municipality under Chapter 379B, Local Government Code;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scH/s36.354/3"> <num value="3">(3)</num> <content>that is operated by or for the benefit of the Texas National Guard, as defined by Section 437.001, Government Code, unless the base is served by a municipally owned utility owned by a city with a population of 900,000 or more; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scH/s36.354/4"> <num value="4">(4)</num> <content>for which a municipally owned utility has acquired the electric distribution system under 10 U.S.C. Section 2688.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2003, 78th Leg., ch. 149, Sec. 21, eff. May 27, 2003. Amended by: Acts 2013, 83rd Leg., R.S., Ch. 1217 (S.B. 1536), Sec. 3.23, eff. September 1, 2013. Acts 2023, 88th Leg., R.S., Ch. 644 (H.B. 4559), Sec. 271, eff. September 1, 2023.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c36/scI"> <num value="I">SUBCHAPTER I.</num> <heading>SECURITIZATION FOR RECOVERY OF SYSTEM</heading> <section identifier="/us/tx/ut/t2/c36/scI/s123414.112470"> <num value="123414.112470">Sec. 123414.112470.</num> <heading></heading> <content>RESTORATION COSTS</content> </section> <section identifier="/us/tx/ut/t2/c36/scI/s36.401"> <num value="36.401">Sec. 36.401.</num> <heading>SECURITIZATION FOR RECOVERY OF SYSTEM RESTORATION COSTS; PURPOSE</heading> <subsection identifier="/us/tx/ut/t2/c36/scI/s36.401/a"> <num value="a">(a)</num> <content>The purpose of this subchapter is to enable an electric utility to obtain timely recovery of system restoration costs and to use securitization financing to recover these costs, because that type of debt will lower the carrying costs associated with the recovery of these costs, relative to the costs that would be incurred using conventional financing methods. The proceeds of the transition bonds may be used only for the purposes of reducing the amount of recoverable system restoration costs, as determined by the commission in accordance with this subchapter, including the refinancing or retirement of utility debt or equity.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scI/s36.401/b"> <num value="b">(b)</num> <chapeau>It is the intent of the legislature that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scI/s36.401/1"> <num value="1">(1)</num> <content>securitization of system restoration costs will be accomplished using the same procedures, standards, and protections for securitization authorized under Subchapter G, Chapter 39, as in effect on the effective date of this section, except as provided by this subchapter; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scI/s36.401/2"> <num value="2">(2)</num> <content>the commission will ensure that securitization of system restoration costs provides greater tangible and quantifiable benefits to ratepayers than would have been achieved without the issuance of transition bonds.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2009, 81st Leg., R.S., Ch. 1 (S.B. 769), Sec. 1, eff. April 16, 2009.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scI/s36.402"> <num value="36.402">Sec. 36.402.</num> <heading>SYSTEM RESTORATION COSTS; STANDARDS AND DEFINITIONS</heading> <subsection identifier="/us/tx/ut/t2/c36/scI/s36.402/a"> <num value="a">(a)</num> <content>In this subchapter, "system restoration costs" means reasonable and necessary costs, including costs expensed, charged to self-insurance reserves, deferred, capitalized, or otherwise financed, that are incurred by an electric utility due to any activity or activities conducted by or on behalf of the electric utility in connection with the restoration of service and infrastructure associated with electric power outages affecting customers of the electric utility as the result of any tropical storm or hurricane, ice or snow storm, flood, or other weather-related event or natural disaster that occurred in calendar year 2008 or thereafter. System restoration costs include mobilization, staging, and construction, reconstruction, replacement, or repair of electric generation, transmission, distribution, or general plant facilities. System restoration costs shall include reasonable estimates of the costs of an activity or activities conducted or expected to be conducted by or on behalf of the electric utility in connection with the restoration of service or infrastructure associated with electric power outages, but such estimates shall be subject to true-up and reconciliation after the actual costs are known. System restoration costs include reasonable and necessary weatherization and storm-hardening costs incurred, as well as reasonable estimates of costs to be incurred, by the electric utility, but such estimates shall be subject to true-up and reconciliation after the actual costs are known.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scI/s36.402/b"> <num value="b">(b)</num> <content>System restoration costs shall include carrying costs at the electric utility's weighted average cost of capital as last approved by the commission in a general rate proceeding from the date on which the system restoration costs were incurred until the date that transition bonds are issued or until system restoration costs are otherwise recovered pursuant to the provisions of this subchapter.</content> <continuation>(b-1) Notwithstanding Subsection (b), if an electric utility fails to comply with the standards required by Section 38.006 and the utility's system is damaged by a weather-related event or natural disaster, the commission may at the utility's next rate proceeding reduce the utility's return on equity for infrastructure used or installed to repair or replace the damaged portion of the system.</continuation> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scI/s36.402/c"> <num value="c">(c)</num> <chapeau>To the extent a utility subject to this subchapter receives insurance proceeds, governmental grants, or any other source of funding that compensate it for system restoration costs, those amounts shall be used to reduce the utility's system restoration costs recoverable from customers. If the timing of a utility's receipt of those amounts prevents their inclusion as a reduction to the system restoration costs that are securitized, or the commission later determines as a result of the true-up and reconciliation provided for in Subsection (a) that the actual costs incurred are less than estimated costs included in the determination of system restoration costs, the commission shall take those amounts into account in:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scI/s36.402/1"> <num value="1">(1)</num> <content>the utility's next base rate proceeding; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scI/s36.402/2"> <num value="2">(2)</num> <content>any subsequent proceeding, other than a true-up proceeding under Section 39.307, in which the commission considers system restoration costs.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scI/s36.402/d"> <num value="d">(d)</num> <content>If the commission determines that the insurance proceeds, governmental grants, or other sources of funding that compensate the electric utility for system restoration costs, or the amount resulting from a true-up of estimated system restoration costs are of a magnitude to justify a separate tariff rider, the commission may establish a tariff rider to credit such amounts against charges, other than transition charges or system restoration charges as defined in Section 36.403, being collected from customers.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scI/s36.402/e"> <num value="e">(e)</num> <content>To the extent that the electric utility receives insurance proceeds, governmental grants, or any other source of funding that is used to reduce system restoration costs, the commission shall impute interest on those amounts at the same cost of capital included in the utility's system restoration costs until the date that those amounts are used to reduce the amount of system restoration costs that are securitized or otherwise reflected in the rates of the utility.</content> </subsection> <sourceCredit>Added by Acts 2009, 81st Leg., R.S., Ch. 1 (S.B. 769), Sec. 1, eff. April 16, 2009. Amended by: Acts 2021, 87th Leg., R.S., Ch. 198 (H.B. 1510), Sec. 1, eff. June 1, 2021. Acts 2025, 89th Leg., R.S., Ch. 856 (S.B. 1789), Sec. 1, eff. September 1, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scI/s36.403"> <num value="36.403">Sec. 36.403.</num> <heading>STANDARDS AND PROCEDURES GOVERNING SECURITIZATION AND RECOVERY OF SYSTEM RESTORATION COSTS</heading> <subsection identifier="/us/tx/ut/t2/c36/scI/s36.403/a"> <num value="a">(a)</num> <content>The procedures and standards of this subchapter and the provisions of Subchapter G, Chapter 39, govern an electric utility's application for, and the commission's issuance of, a financing order to provide for the securitization of system restoration costs, or to otherwise provide for the recovery of system restoration costs.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scI/s36.403/b"> <num value="b">(b)</num> <content>Subject to the standards, procedures, and tests contained in this subchapter and Subchapter G, Chapter 39, the commission shall adopt a financing order on the application of the electric utility to recover its system restoration costs. If on its own motion or complaint by an affected person, the commission determines that it is likely that securitization of system restoration costs would meet the tests contained in Section 36.401(b), the commission shall require the utility to file an application for a financing order. On the commission's issuance of a financing order allowing for recovery and securitization of system restoration costs, the provisions of this subchapter and Subchapter G, Chapter 39, continue to govern the financing order and the rights and interests established in the order, and this subchapter and Subchapter G, Chapter 39, continue to govern any transition bonds issued pursuant to the financing order. To the extent any conflict exists between the provisions of this subchapter and Subchapter G, Chapter 39, in cases involving the securitization of system restoration costs, the provisions of this subchapter control.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scI/s36.403/c"> <num value="c">(c)</num> <content>For purposes of this subchapter, "financing order," as defined by Section 39.302 and as used in Subchapter G, Chapter 39, includes a financing order authorizing the securitization of system restoration costs.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scI/s36.403/d"> <num value="d">(d)</num> <chapeau>For purposes of this subchapter, "qualified costs," as defined by Section 39.302 and as used in Subchapter G, Chapter 39, includes 100 percent of the electric utility's system restoration costs, net of any insurance proceeds, governmental grants, or other source of funding that compensate the utility for system restoration costs, received by the utility at the time it files an application for a financing order. Qualified costs also include the costs of issuing, supporting, and servicing transition bonds and any costs of retiring and refunding existing debt and equity securities of an electric utility subject to this subchapter in connection with the issuance of transition bonds. For purposes of this subchapter, the term qualified costs also includes:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scI/s36.403/1"> <num value="1">(1)</num> <content>the costs to the commission of acquiring professional services for the purpose of evaluating proposed transactions under this subchapter; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scI/s36.403/2"> <num value="2">(2)</num> <content>costs associated with ancillary agreements such as any bond insurance policy, letter of credit, reserve account, surety bond, swap arrangement, hedging arrangement, liquidity or credit support arrangement, or other financial arrangement entered into in connection with the issuance or payment of transition bonds.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scI/s36.403/e"> <num value="e">(e)</num> <content>For purposes of this subchapter, "transition bonds," as defined by Section 39.302 and as used in Subchapter G, Chapter 39, includes transition bonds issued in association with the recovery of system restoration costs. Transition bonds issued to securitize system restoration costs may be called "system restoration bonds" or may be called by any other name acceptable to the issuer and the underwriters of the transition bonds.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scI/s36.403/f"> <num value="f">(f)</num> <content>For purposes of this subchapter, "transition charges," as defined by Section 39.302 and as used in Subchapter G, Chapter 39, includes nonbypassable amounts to be charged for the use of electric services, approved by the commission under a financing order to recover system restoration costs, that shall be collected by an electric utility, its successors, an assignee, or other collection agents as provided for in the financing order. Transition charges approved by the commission under a financing order to recover system restoration costs may be called "system restoration charges" or may be called by any other name acceptable to the issuer and the underwriters of the transition bonds.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scI/s36.403/g"> <num value="g">(g)</num> <content>Notwithstanding Section 39.303(c), system restoration costs shall be functionalized and allocated to customers in the same manner as the corresponding facilities and related expenses are functionalized and allocated in the electric utility's current base rates. For an electric utility operating within the Electric Reliability Council of Texas, system restoration costs that are properly includable in the transmission cost of service mechanism adopted under Section 35.004 and associated deferred costs not included under Section 35.004 shall be recovered under the method of pricing provided for in that section and commission rules promulgated under that section; provided, however, that an electric utility operating under a rate freeze or other limitation on its ability to pass through wholesale costs to its customers may defer such costs and accrue carrying costs at its weighted average cost of capital as last approved by the commission in a general rate proceeding until such time as the freeze or limitation expires.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scI/s36.403/h"> <num value="h">(h)</num> <content>The amount of any accumulated deferred federal income taxes offset, used to determine the securitization total, may not be considered in future rate proceedings. Any tax obligation of the electric utility arising from its receipt of securitization bond proceeds, or from the collection and remittance of transition charges, shall be recovered by the electric utility through the commission's implementation of this subchapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scI/s36.403/i"> <num value="i">(i)</num> <content>Notwithstanding a rate freeze or limitations on an electric utility's ability to change rates authorized or imposed by any other provision of this title or by a regulatory authority, an electric utility is entitled to recover system restoration costs consistent with the provisions of this subchapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scI/s36.403/j"> <num value="j">(j)</num> <content>If in the course of a proceeding to adopt a financing order the commission determines that the recovery of all or any portion of an electric utility's system restoration costs, using securitization, is not beneficial to ratepayers of the electric utility, under one or more of the tests applied to determine those benefits, the commission shall nonetheless use the proceeding to issue an order permitting the electric utility to recover the remainder of its system restoration costs through an appropriate customer surcharge mechanism, including carrying costs at the electric utility's weighted average cost of capital as last approved by the commission in a general rate proceeding, to the extent that the electric utility has not securitized those costs. A rate proceeding under Subchapter C or D shall not be required to determine and implement this surcharge mechanism. On the final implementation of rates resulting from the filing of a rate proceeding under Subchapter C or D that provides for the recovery of all remaining system restoration costs, a rider or surcharge mechanism adopted under this subsection shall expire. This subsection is limited to instances in which an electric utility has incurred system restoration costs of $100 million or more in any calendar year after January 1, 2008.</content> </subsection> <sourceCredit>Added by Acts 2009, 81st Leg., R.S., Ch. 1 (S.B. 769), Sec. 1, eff. April 16, 2009.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scI/s36.404"> <num value="36.404">Sec. 36.404.</num> <heading>NONBYPASSABLE CHARGES</heading> <content>The commission shall include terms in the financing order to ensure that the imposition and collection of transition charges associated with the recovery of system restoration costs are nonbypassable by imposing restrictions on bypassability of the type provided for in Chapter 39 or by alternative means of ensuring nonbypassability, as the commission considers appropriate, consistent with the purposes of securitization.</content> <sourceCredit>Added by Acts 2009, 81st Leg., R.S., Ch. 1 (S.B. 769), Sec. 1, eff. April 16, 2009.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scI/s36.405"> <num value="36.405">Sec. 36.405.</num> <heading>DETERMINATION OF SYSTEM RESTORATION COSTS</heading> <subsection identifier="/us/tx/ut/t2/c36/scI/s36.405/a"> <num value="a">(a)</num> <content>An electric utility is entitled to recover system restoration costs consistent with the provisions of this subchapter and is entitled to seek recovery of amounts not recovered under this subchapter, including system restoration costs not yet incurred at the time an application is filed under Subsection (b), in its next base rate proceeding or through any other proceeding authorized by Subchapter C or D.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scI/s36.405/b"> <num value="b">(b)</num> <content>An electric utility may file an application with the commission seeking a determination of the amount of system restoration costs eligible for recovery and securitization. The commission may by rule prescribe the form of the application and the information reasonably needed to support the application; provided, however, that if such a rule is not in effect, the electric utility shall not be precluded from filing its application and such application cannot be rejected as being incomplete.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scI/s36.405/c"> <num value="c">(c)</num> <content>The commission shall issue an order determining the amount of system restoration costs eligible for recovery and securitization not later than the 150th day after the date an electric utility files its application. The 150-day period begins on the date the electric utility files the application, even if the filing occurs before the effective date of this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scI/s36.405/d"> <num value="d">(d)</num> <content>An electric utility may file an application for a financing order prior to the expiration of the 150-day period provided for in Subsection (c). The commission shall issue a financing order not later than 90 days after the utility files its request for a financing order; provided, however, that the commission need not issue the financing order until it has determined the amount of system restoration costs eligible for recovery and securitization.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scI/s36.405/e"> <num value="e">(e)</num> <content>To the extent the commission has made a determination of the eligible system restoration costs of an electric utility before the effective date of this section, that determination may provide the basis for the utility's application for a financing order pursuant to this subchapter and Subchapter G, Chapter 39. A previous commission determination does not preclude the utility from requesting recovery of additional system restoration costs eligible for recovery under this subchapter, but not previously authorized by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scI/s36.405/f"> <num value="f">(f)</num> <content>A rate proceeding under Subchapter C or D shall not be required to determine the amount of recoverable system restoration costs, as provided by this section, or for the issuance of a financing order.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scI/s36.405/g"> <num value="g">(g)</num> <content>A commission order under this subchapter is not subject to rehearing. A commission order may be reviewed by appeal only to a Travis County district court by a party to the proceeding filed within 15 days after the order is signed by the commission. The judgment of the district court may be reviewed only by direct appeal to the Supreme Court of Texas filed within 15 days after entry of judgment. All appeals shall be heard and determined by the district court and the Supreme Court of Texas as expeditiously as possible with lawful precedence over other matters. Review on appeal shall be based solely on the record before the commission and briefs to the court and shall be limited to whether the order conforms to the constitution and laws of this state and the United States and is within the authority of the commission under this chapter.</content> </subsection> <sourceCredit>Added by Acts 2009, 81st Leg., R.S., Ch. 1 (S.B. 769), Sec. 1, eff. April 16, 2009.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scI/s36.406"> <num value="36.406">Sec. 36.406.</num> <heading>SEVERABILITY</heading> <content>Effective on the date the first utility transition bonds associated with system restoration costs are issued under this subchapter, if any provision in this title or portion of this title is held to be invalid or is invalidated, superseded, replaced, repealed, or expires for any reason, that occurrence does not affect the validity or continuation of this subchapter, Subchapter G, Chapter 39, as it applies to this subchapter, or any part of those provisions, or any other provision of this title that is relevant to the issuance, administration, payment, retirement, or refunding of transition bonds or to any actions of the electric utility, its successors, an assignee, a collection agent, or a financing party, and those provisions shall remain in full force and effect.</content> <sourceCredit>Added by Acts 2009, 81st Leg., R.S., Ch. 1 (S.B. 769), Sec. 1, eff. April 16, 2009.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c36/scJ"> <num value="J">SUBCHAPTER J.</num> <heading>LOWER-COST FINANCING MECHANISM FOR SECURITIZATION FOR RECOVERY OF SYSTEM RESTORATION COSTS</heading> <section identifier="/us/tx/ut/t2/c36/scJ/s36.451"> <num value="36.451">Sec. 36.451.</num> <heading>PURPOSE AND APPLICABILITY</heading> <subsection identifier="/us/tx/ut/t2/c36/scJ/s36.451/a"> <num value="a">(a)</num> <content>Except as otherwise specifically provided by this subchapter, the same procedures, standards, and protections for securitization authorized by Subchapter I of this chapter and, to the extent made applicable to Subchapter I of this chapter, by Subchapter G, Chapter 39, apply to the lower-cost financing mechanism for securitization of transition costs or system restoration costs as provided by Subchapter I. To the extent of any conflict between the provisions of this subchapter and Subchapter I of this chapter or, to the extent made applicable by Subchapter I of this chapter, Subchapter G, Chapter 39, in cases involving the securitization of system restoration costs under this subchapter, the provisions of this subchapter control.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scJ/s36.451/b"> <num value="b">(b)</num> <content>The purpose of this subchapter is to make available a lower-cost, supplemental financing mechanism to allow an electric utility to obtain timely recovery of system restoration costs under Subchapter I through securitization and the issuance of transition bonds or system restoration bonds by an issuer other than the electric utility or an affiliated special purpose entity. Financing of system restoration costs under this subchapter is a valid and essential public purpose.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scJ/s36.451/c"> <num value="c">(c)</num> <content>The Texas Electric Utility System Restoration Corporation is created under this subchapter as a special purpose public corporation and instrumentality of the state for the essential public purpose of providing a lower-cost, supplemental financing mechanism available to the commission and an electric utility to attract low-cost capital to finance system restoration costs.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scJ/s36.451/d"> <num value="d">(d)</num> <content>In approving securitization under this subchapter, the commission shall ensure that customers are not harmed as a result of any financing through the Texas Electric Utility System Restoration Corporation and that any financial savings or other benefits are appropriately reflected in customer rates.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scJ/s36.451/e"> <num value="e">(e)</num> <content>System restoration bonds issued under this subchapter will be solely the obligation of the issuer and the corporation as borrower, if applicable, and will not be a debt of or a pledge of the faith and credit of the state.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scJ/s36.451/f"> <num value="f">(f)</num> <content>System restoration bonds issued under this subchapter shall be nonrecourse to the credit or any assets of the state and the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scJ/s36.451/g"> <num value="g">(g)</num> <content>This subchapter does not limit or impair the commission's jurisdiction under this title to regulate the rates charged and the services rendered by electric utilities in this state.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scJ/s36.451/h"> <num value="h">(h)</num> <content>An electric utility receiving the proceeds of securitization financing under this subchapter is not required to provide utility services to the corporation or the state as a result of receiving such proceeds except in the role of the corporation or the state as a customer of the electric utility. This subchapter does not create an obligation of the corporation or an issuer to provide electric services to the electric utility or its customers.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scJ/s36.451/i"> <num value="i">(i)</num> <content>Notwithstanding Section 36.403(j), an electric utility may apply for securitization and the issuance of system restoration bonds under this subchapter for estimated and actual system restoration costs of $50 million or more in any calendar year.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 198 (H.B. 1510), Sec. 2, eff. June 1, 2021. Amended by: Acts 2025, 89th Leg., R.S., Ch. 71 (S.B. 1963), Sec. 1, eff. September 1, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scJ/s36.452"> <num value="36.452">Sec. 36.452.</num> <heading>DEFINITIONS</heading> <subsection identifier="/us/tx/ut/t2/c36/scJ/s36.452/a"> <num value="a">(a)</num> <chapeau>In this subchapter:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scJ/s36.452/1"> <num value="1">(1)</num> <content>"Corporation" means the Texas Electric Utility System Restoration Corporation.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scJ/s36.452/2"> <num value="2">(2)</num> <content>"Issuer" means the corporation or any other corporation, public trust, public instrumentality, or entity that issues system restoration bonds approved by a financing order.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scJ/s36.452/b"> <num value="b">(b)</num> <content>For the purposes of this subchapter, "qualified costs," as defined by Section 39.302 and as used in Subchapter G, Chapter 39, also includes all costs of establishing, maintaining, and operating the corporation and all costs of the corporation and an issuer in connection with the issuance and servicing of the system restoration bonds, all as approved in the financing order.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scJ/s36.452/c"> <num value="c">(c)</num> <content>Except as otherwise specifically provided by this subchapter, any defined terms provided by Subchapter I of this chapter and, if made applicable by Subchapter I of this chapter, Subchapter G, Chapter 39, have the same meaning in this subchapter.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 198 (H.B. 1510), Sec. 2, eff. June 1, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scJ/s36.453"> <num value="36.453">Sec. 36.453.</num> <heading>CREATION OF CORPORATION</heading> <subsection identifier="/us/tx/ut/t2/c36/scJ/s36.453/a"> <num value="a">(a)</num> <chapeau>The corporation is a nonprofit corporation and instrumentality of the state, and shall perform the essential governmental function of financing system restoration costs in accordance with this subchapter. The corporation:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scJ/s36.453/1"> <num value="1">(1)</num> <content>shall perform only functions consistent with this subchapter;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scJ/s36.453/2"> <num value="2">(2)</num> <content>shall exercise its powers through a governing board;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scJ/s36.453/3"> <num value="3">(3)</num> <content>is subject to the regulation of the commission; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scJ/s36.453/4"> <num value="4">(4)</num> <content>has a legal existence as a public corporate body and instrumentality of the state separate and distinct from the state.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scJ/s36.453/b"> <num value="b">(b)</num> <content>Assets of the corporation may not be considered part of any state fund. The state may not budget for or provide any state money to the corporation. The debts, claims, obligations, and liabilities of the corporation may not be considered to be a debt of the state or a pledge of its credit.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scJ/s36.453/c"> <num value="c">(c)</num> <chapeau>The corporation must be self-funded. Before the imposition of transition charges or system restoration charges, the corporation may accept and expend for its operating expenses money that may be received from any source, including financing agreements with the state, a commercial bank, or another entity to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scJ/s36.453/1"> <num value="1">(1)</num> <content>finance the corporation's obligations until the corporation receives sufficient transition property to cover its operating expenses as financing costs; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scJ/s36.453/2"> <num value="2">(2)</num> <content>repay any short-term borrowing under any such financing agreements.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scJ/s36.453/d"> <num value="d">(d)</num> <content>The corporation has the powers, rights, and privileges provided for a corporation organized under Chapter 22, Business Organizations Code, subject to the express exceptions and limitations provided by this subchapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scJ/s36.453/e"> <num value="e">(e)</num> <content>An organizer selected by the executive director of the commission shall prepare the certificate of formation of the corporation under Chapters 3 and 22, Business Organizations Code. The certificate of formation must be consistent with the provisions of this subchapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scJ/s36.453/f"> <num value="f">(f)</num> <content>State officers and agencies are authorized to render services to the corporation, within their respective functions, as may be requested by the commission or the corporation.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scJ/s36.453/g"> <num value="g">(g)</num> <chapeau>The corporation or an issuer may:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scJ/s36.453/1"> <num value="1">(1)</num> <content>retain professionals, financial advisors, and accountants the corporation or issuer considers necessary to fulfill the corporation's or issuer's duties under this subchapter; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scJ/s36.453/2"> <num value="2">(2)</num> <content>determine the duties and compensation of a person retained under Subdivision (1), subject to the approval of the commission.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scJ/s36.453/h"> <num value="h">(h)</num> <content>The corporation is governed by a board of five directors appointed by the commission for two-year terms.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scJ/s36.453/i"> <num value="i">(i)</num> <content>An official action of the board requires the favorable vote of a majority of the directors present and voting at a meeting of the board.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 198 (H.B. 1510), Sec. 2, eff. June 1, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scJ/s36.454"> <num value="36.454">Sec. 36.454.</num> <heading>POWERS AND DUTIES OF CORPORATION</heading> <subsection identifier="/us/tx/ut/t2/c36/scJ/s36.454/a"> <num value="a">(a)</num> <content>The corporation, in each instance subject to the prior authorization of the commission, shall participate in the financial transactions authorized by this subchapter. The corporation may not engage in business activities except those activities provided for in this subchapter and those ancillary and incidental thereto. The corporation or an issuer may not apply proceeds of system restoration bonds or system restoration charges to a purpose not specified in a financing order, to a purpose in an amount that exceeds the amount allowed for such purpose in the order, or to a purpose in contravention of the order.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scJ/s36.454/b"> <num value="b">(b)</num> <content>The board of the corporation, under the provisions of this subchapter, may employ or retain persons as are necessary to perform the duties of the corporation.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scJ/s36.454/c"> <num value="c">(c)</num> <chapeau>The corporation may:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scJ/s36.454/1"> <num value="1">(1)</num> <chapeau>acquire, sell, pledge, or transfer transition property as necessary to effect the purposes of this subchapter and, in connection with the action, agree to such terms and conditions as the corporation deems necessary and proper, consistent with the terms of a financing order:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c36/scJ/s36.454/A"> <num value="A">(A)</num> <content>to acquire transition property and to pledge such transition property, and any other collateral:</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scJ/s36.454/i"> <num value="i">(i)</num> <chapeau>to secure payment of system restoration bonds issued by the corporation, together with payment of any other qualified costs; or</chapeau> <clause identifier="/us/tx/ut/t2/c36/scJ/s36.454/ii"> <num value="ii">(ii)</num> <content>to secure repayment of any borrowing from any other issuer of system restoration bonds; or</content> </clause> <subparagraph identifier="/us/tx/ut/t2/c36/scJ/s36.454/B"> <num value="B">(B)</num> <content>to sell the transition property to another issuer, which may in turn pledge that transition property, together with any other collateral, to the repayment of system restoration bonds issued by the issuer together with any other qualified costs;</content> </subparagraph> <paragraph identifier="/us/tx/ut/t2/c36/scJ/s36.454/2"> <num value="2">(2)</num> <content>issue system restoration bonds on terms and conditions consistent with a financing order;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scJ/s36.454/3"> <num value="3">(3)</num> <content>borrow funds from an issuer of system restoration bonds to acquire transition property, and pledge that transition property to the repayment of any borrowing from an issuer, together with any related qualified costs, all on terms and conditions consistent with a financing order;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scJ/s36.454/4"> <num value="4">(4)</num> <content>sue or be sued in its corporate name;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scJ/s36.454/5"> <num value="5">(5)</num> <content>intervene as a party before the commission or any court in this state in any matter involving the corporation's powers and duties;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scJ/s36.454/6"> <num value="6">(6)</num> <content>negotiate and become a party to contracts as necessary, convenient, or desirable to carry out the purposes of this subchapter; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scJ/s36.454/7"> <num value="7">(7)</num> <content>engage in corporate actions or undertakings that are permitted for nonprofit corporations in this state and that are not prohibited by, or contrary to, this subchapter.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scJ/s36.454/d"> <num value="d">(d)</num> <content>The corporation shall maintain separate accounts and records relating to each electric utility that collects system restoration charges for all charges, revenues, assets, liabilities, and expenses relating to that utility's related system restoration bond issuances.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scJ/s36.454/e"> <num value="e">(e)</num> <content>The board of the corporation may not authorize any rehabilitation, liquidation, or dissolution of the corporation and a rehabilitation, liquidation, or dissolution of the corporation may not take effect as long as any system restoration bonds are outstanding unless adequate protection and provision have been made for the payment of the bonds pursuant to the documents authorizing the issuance of the bonds. In the event of any rehabilitation, liquidation, or dissolution, the assets of the corporation must be applied first to pay all debts, liabilities, and obligations of the corporation, including the establishment of reasonable reserves for any contingent liabilities or obligations, and all remaining funds of the corporation must be applied and distributed as provided by an order of the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scJ/s36.454/f"> <num value="f">(f)</num> <content>Before the date that is two years and one day after the date that the corporation no longer has any payment obligation with respect to any system restoration bonds, including any obligation to an issuer of any system restoration bonds outstanding, the corporation may not file a voluntary petition under federal bankruptcy law and neither any public official nor any organization, entity, or other person may authorize the corporation to be or to become a debtor under federal bankruptcy law during that period. The state covenants that it will not limit or alter the denial of authority under this subsection or Subsection (e), and the provisions of this subsection and Subsection (e) are hereby made a part of the contractual obligation that is subject to the state pledge set forth in Section 39.310.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scJ/s36.454/g"> <num value="g">(g)</num> <content>The corporation shall prepare and submit to the commission for approval an annual operating budget. If requested by the commission, the corporation shall prepare and submit an annual report containing the annual operating and financial statements of the corporation and any other appropriate information.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 198 (H.B. 1510), Sec. 2, eff. June 1, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scJ/s36.455"> <num value="36.455">Sec. 36.455.</num> <heading>COMMISSION REGULATION OF CORPORATION</heading> <content>The commission shall regulate the corporation as provided by this subchapter and consistent with the manner in which it regulates public utilities. Notwithstanding the regulation authorized by this section, the corporation is not a public utility.</content> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 198 (H.B. 1510), Sec. 2, eff. June 1, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scJ/s36.456"> <num value="36.456">Sec. 36.456.</num> <heading>FINANCING ORDER</heading> <subsection identifier="/us/tx/ut/t2/c36/scJ/s36.456/a"> <num value="a">(a)</num> <content>This section applies to the commission's issuance of a financing order under this subchapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scJ/s36.456/b"> <num value="b">(b)</num> <content>Except as otherwise specifically provided by this subchapter, the provisions of Subchapter I of this chapter and, to the extent made applicable to Subchapter I of this chapter, Subchapter G, Chapter 39, that address the commission's issuance of a financing order apply to the commission's issuance of a financing order under this subchapter.</content> <continuation>(b-1) Notwithstanding Sections 36.405(c) and (d), an electric utility may file an application with the commission under this subchapter for:</continuation> <paragraph identifier="/us/tx/ut/t2/c36/scJ/s36.456/1"> <num value="1">(1)</num> <content>a determination of the amount of estimated and actual system restoration costs eligible for recovery and securitization; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scJ/s36.456/2"> <num value="2">(2)</num> <content>a financing order that authorizes the securitization of estimated and actual system restoration costs, the issuance of system restoration bonds, and the creation of system restoration charges for the recovery of qualified costs.</content> <continuation>(b-2) For an application filed under Subsection (b-1), the commission shall issue an order that determines the amount of estimated and actual system restoration costs eligible for recovery and securitization and a financing order that authorizes the securitization of estimated and actual system restoration costs, the issuance of system restoration bonds, and the creation of system restoration charges for the recovery of qualified costs not later than the 150th day after the date the application is filed.</continuation> <continuation>(b-3) For an application filed under Subsection (b-1), the estimated system restoration costs shall be subject to true-up and reconciliation and system restoration charges shall be adjusted after the actual system restoration costs are known.</continuation> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scJ/s36.456/c"> <num value="c">(c)</num> <content>The corporation and any issuer must be a party to the commission's proceedings that address the issuance of a financing order along with the relevant electric utility.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scJ/s36.456/d"> <num value="d">(d)</num> <chapeau>In addition to the requirements of Subchapter I, as applicable, a financing order issued under this subchapter must:</chapeau> <paragraph identifier="/us/tx/ut/t2/c36/scJ/s36.456/1"> <num value="1">(1)</num> <content>require the sale, assignment, or other transfer to the corporation of certain specified transition property created by the financing order in the manner contemplated by Section 39.308, and, following that sale, assignment, or transfer, require that system restoration charges paid under any financing order be created, assessed, and collected as the property of the corporation, subject to subsequent sale, assignment, or transfer by the corporation as authorized under this subchapter;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c36/scJ/s36.456/2"> <num value="2">(2)</num> <chapeau>authorize:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c36/scJ/s36.456/A"> <num value="A">(A)</num> <content>the issuance of system restoration bonds by the corporation secured by a pledge of specified transition property, and the application of the proceeds of those system restoration bonds, net of issuance costs, to the acquisition of the transition property from the electric utility; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c36/scJ/s36.456/B"> <num value="B">(B)</num> <content>the acquisition of specified transition property from the electric utility by the corporation financed:</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scJ/s36.456/i"> <num value="i">(i)</num> <chapeau>by a loan by an issuer to the corporation of the proceeds of system restoration bonds, net of issuance costs, secured by a pledge of the specified transition property; or</chapeau> <clause identifier="/us/tx/ut/t2/c36/scJ/s36.456/ii"> <num value="ii">(ii)</num> <content>by the acquisition by an issuer from the corporation of the transition property financed from the net proceeds of transition bonds issued by the issuer; and</content> </clause> <paragraph identifier="/us/tx/ut/t2/c36/scJ/s36.456/3"> <num value="3">(3)</num> <content>authorize the electric utility to serve as collection agent to collect the system restoration charges and transfer the collected charges to the corporation, the issuer, or a financing party, as appropriate.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scJ/s36.456/e"> <num value="e">(e)</num> <content>After issuance of the financing order, the corporation shall arrange for the issuance of system restoration bonds as specified in the financing order by it or another issuer selected by the corporation and approved by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c36/scJ/s36.456/f"> <num value="f">(f)</num> <content>System restoration bonds issued pursuant to a financing order under this section are secured only by the related transition property and any other funds pledged under the bond documents. No assets of the state or electric utility are subject to claims by such bondholders. Notwithstanding the provisions of Subchapter G, Chapter 39, following assignment of the transition property, the electric utility does not have any beneficial interest or claim of right in such system restoration charges or in any transition property.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 198 (H.B. 1510), Sec. 2, eff. June 1, 2021. Amended by: Acts 2025, 89th Leg., R.S., Ch. 71 (S.B. 1963), Sec. 2, eff. September 1, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c36/scJ/s36.457"> <num value="36.457">Sec. 36.457.</num> <heading>SEVERABILITY</heading> <content>Effective on the date the first system restoration bonds associated with system restoration costs are issued under this subchapter, if any provision in this title or portion of this title is held to be invalid or is invalidated, superseded, replaced, repealed, or expires for any reason, that occurrence does not affect the validity or continuation of this subchapter, Subchapter I of this chapter, as that subchapter applies to this subchapter, Subchapter G, Chapter 39, as that subchapter applies to this subchapter, or any part of those provisions, or any other provision of this title that is relevant to the issuance, administration, payment, retirement, or refunding of system restoration bonds or to any actions of the electric utility, its successors, an assignee, a collection agent, the corporation, an issuer, or a financing party, and those provisions shall remain in full force and effect.</content> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 198 (H.B. 1510), Sec. 2, eff. June 1, 2021.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t2/c37"> <num value="37">CHAPTER 37.</num> <heading>CERTIFICATES OF CONVENIENCE AND NECESSITY</heading> <subchapter identifier="/us/tx/ut/t2/c37/scA"> <num value="A">SUBCHAPTER A.</num> <heading>DEFINITIONS</heading> <section identifier="/us/tx/ut/t2/c37/scA/s37.001"> <num value="37.001">Sec. 37.001.</num> <heading>DEFINITIONS</heading> <chapeau>In this chapter:</chapeau> <paragraph identifier="/us/tx/ut/t2/c37/scA/s37.001/1"> <num value="1">(1)</num> <content>"Certificate" means a certificate of convenience and necessity.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c37/scA/s37.001/2"> <num value="2">(2)</num> <content>"Electric utility" includes an electric cooperative.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c37/scA/s37.001/3"> <num value="3">(3)</num> <content>"Retail electric utility" means a person, political subdivision, electric cooperative, or agency that operates, maintains, or controls in this state a facility to provide retail electric utility service. The term does not include a corporation described by Section 32.053 to the extent that the corporation sells electricity exclusively at wholesale and not to the ultimate consumer. A qualifying cogenerator that sells electric energy at retail to the sole purchaser of the cogenerator's thermal output under Sections 35.061 and 36.007 is not for that reason considered to be a retail electric utility. The owner or operator of a qualifying cogeneration facility who was issued the necessary environmental permits from the Texas Natural Resource Conservation Commission after January 1, 1998, and who commenced construction of such qualifying facility before July 1, 1998, may provide electricity to the purchasers of the thermal output of that qualifying facility and shall not for that reason be considered an electric utility or a retail electric utility, provided that the purchasers of the thermal output are owners of manufacturing or process operation facilities that are located on a site entirely owned before September, 1987, by one owner who retained ownership after September, 1987, of some portion of the facilities and that those facilities now share some integrated operations, such as the provision of services and raw materials. A person who is an electric generation equipment lessor or operator is not for that reason considered to be a retail electric utility. A person who owns or operates equipment used solely to provide electricity charging service for consumption by an alternatively fueled vehicle, as defined by Section 502.004, Transportation Code, is not for that reason considered to be a retail electric utility.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 405, Sec. 29, eff. Sept. 1, 1999. Amended by: Acts 2021, 87th Leg., R.S., Ch. 255 (H.B. 1572), Sec. 2, eff. September 1, 2021. Acts 2021, 87th Leg., R.S., Ch. 389 (S.B. 1202), Sec. 3, eff. September 1, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c37/scA/s37.002"> <num value="37.002">Sec. 37.002.</num> <heading>CHARGING SERVICE</heading> <content>The commission may by rule exempt from the definition of "retail electric utility" under Section 37.001 a provider who owns or operates equipment used solely to provide electricity charging service for a mode of transportation.</content> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 389 (S.B. 1202), Sec. 4, eff. September 1, 2021.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c37/scB"> <num value="B">SUBCHAPTER B.</num> <heading>CERTIFICATE OF CONVENIENCE AND NECESSITY</heading> <section identifier="/us/tx/ut/t2/c37/scB/s37.051"> <num value="37.051">Sec. 37.051.</num> <heading>CERTIFICATE REQUIRED</heading> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.051/a"> <num value="a">(a)</num> <content>An electric utility may not directly or indirectly provide service to the public under a franchise or permit unless the utility first obtains from the commission a certificate that states that the public convenience and necessity requires or will require the installation, operation, or extension of the service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.051/b"> <num value="b">(b)</num> <content>Except as otherwise provided by this chapter, a retail electric utility may not furnish or make available retail electric utility service to an area in which retail electric utility service is being lawfully furnished by another retail electric utility unless the utility first obtains a certificate that includes the area in which the consuming facility is located.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.051/c"> <num value="c">(c)</num> <content>Notwithstanding any other provision of this chapter, including Subsection (a), an electric cooperative is not required to obtain a certificate of public convenience and necessity for the construction, installation, operation, or extension of any generating facilities or necessary interconnection facilities.</content> <continuation>(c-1) Notwithstanding any other provision of this title except Section 11.009, and except as provided by Subsection (c-2), a person, including an electric utility or municipally owned utility, may not interconnect a facility to the ERCOT transmission grid that enables additional power to be imported into or exported out of the ERCOT power grid unless the person obtains a certificate from the commission stating that public convenience and necessity requires or will require the interconnection. The person must apply for the certificate not later than the 180th day before the date the person seeks any order from the Federal Energy Regulatory Commission related to the interconnection. The commission shall apply Section 37.056 in considering an application under this subsection. In addition, the commission must determine that the application is consistent with the public interest before granting the certificate. The commission may adopt rules necessary to implement this subsection. This subsection does not apply to a facility that is in service on December 31, 2014.</continuation> <continuation>(c-2) The commission, not later than the 185th day after the date the application is filed, shall approve an application filed under Subsection (c-1) for a facility that is to be constructed under an interconnection agreement appended to an offer of settlement approved in a final order of the Federal Energy Regulatory Commission that was issued in Docket No. TX11-01-001 on or before December 31, 2014, directing physical connection between the ERCOT and SERC regions under Sections 210, 211, and 212 of the Federal Power Act (16 U.S.C. Sections 824i, 824j, and 824k). In approving the application, the commission may prescribe reasonable conditions to protect the public interest that are consistent with the final order of the Federal Energy Regulatory Commission.</continuation> <continuation>(c-3) Nothing in Subsection (c-1) or (c-2) is intended to restrict the authority of the commission or the independent organization certified under Section 39.151 for the ERCOT power region to adopt rules or protocols of general applicability.</continuation> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.051/d"> <num value="d">(d)</num> <content>Repealed by Acts 2019, 86th Leg., R.S., Ch. 44 (S.B. 1938), Sec. 8, eff. May 16, 2019.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.051/e"> <num value="e">(e)</num> <content>Repealed by Acts 2019, 86th Leg., R.S., Ch. 44 (S.B. 1938), Sec. 8, eff. May 16, 2019.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.051/f"> <num value="f">(f)</num> <content>Repealed by Acts 2019, 86th Leg., R.S., Ch. 44 (S.B. 1938), Sec. 8, eff. May 16, 2019.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.051/g"> <num value="g">(g)</num> <content>A municipally owned utility or a municipal power agency created under Chapter 163 may not directly or indirectly construct, install, or extend a transmission facility outside of the municipal boundaries of the municipality that owns the municipally owned utility, or the power agency's boundaries, which for the purposes of this subsection consist of the municipal boundaries of the participating public entities, unless the municipally owned utility or power agency first obtains from the commission, through the application process provided by Section 37.053, a certificate that states that the public convenience and necessity requires or will require the transmission facility. Section 37.056 applies to an application under this subsection. This subsection does not apply to a transmission facility placed in service after September 1, 2015, that is developed to interconnect a new natural gas generation facility to the ERCOT transmission grid and for which, on or before January 1, 2015, a municipally owned utility was contractually obligated to purchase at least 190 megawatts of capacity.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.051/h"> <num value="h">(h)</num> <chapeau>The commission shall adopt rules as necessary to provide exemptions to the application of Subsection (g) that are similar to the exemptions to the application of this section to an electric utility, including exemptions for:</chapeau> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.051/1"> <num value="1">(1)</num> <content>upgrades to an existing transmission line that do not require any additional land, right-of-way, easement, or other property not owned by the municipally owned utility; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.051/2"> <num value="2">(2)</num> <content>the construction, installation, or extension of a transmission facility that is entirely located not more than 10 miles outside of a municipally owned utility's certificated service area that occurs before September 1, 2021.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.051/i"> <num value="i">(i)</num> <content>The commission, not later than the 185th day after the date the application is filed, shall approve an application filed under Subsection (g) for a facility that is to be constructed under an interconnection agreement appended to an offer of settlement approved in a final order of the Federal Energy Regulatory Commission that was issued in Docket No. TX11-01-001 on or before December 31, 2014, directing physical connection between the ERCOT and SERC regions under Sections 210, 211, and 212 of the Federal Power Act (16 U.S.C. Sections 824i, 824j, and 824k). In approving the application, the commission may prescribe reasonable conditions to protect the public interest that are consistent with the final order of the Federal Energy Regulatory Commission.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 405, Sec. 30, eff. Sept. 1, 1999. Amended by: Acts 2009, 81st Leg., R.S., Ch. 1170 (H.B. 3309), Sec. 2, eff. June 19, 2009. Acts 2015, 84th Leg., R.S., Ch. 1162 (S.B. 776), Sec. 1, eff. September 1, 2015. Acts 2015, 84th Leg., R.S., Ch. 1275 (S.B. 933), Sec. 1, eff. September 1, 2015. Acts 2019, 86th Leg., R.S., Ch. 44 (S.B. 1938), Sec. 1, eff. May 16, 2019. Acts 2019, 86th Leg., R.S., Ch. 44 (S.B. 1938), Sec. 8, eff. May 16, 2019.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c37/scB/s37.052"> <num value="37.052">Sec. 37.052.</num> <heading>EXCEPTIONS TO CERTIFICATE REQUIREMENT FOR SERVICE EXTENSION</heading> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.052/a"> <num value="a">(a)</num> <chapeau>An electric utility is not required to obtain a certificate for an:</chapeau> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.052/1"> <num value="1">(1)</num> <chapeau>extension into territory that is:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c37/scB/s37.052/A"> <num value="A">(A)</num> <content>contiguous to the territory the electric utility serves;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c37/scB/s37.052/B"> <num value="B">(B)</num> <content>not receiving similar service from another electric utility; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c37/scB/s37.052/C"> <num value="C">(C)</num> <content>not in another electric utility's certificated area;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.052/2"> <num value="2">(2)</num> <content>extension in or to territory the utility serves or is authorized to serve under a certificate; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.052/3"> <num value="3">(3)</num> <content>operation, extension, or service in progress on September 1, 1975.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.052/b"> <num value="b">(b)</num> <chapeau>An extension allowed under Subsection (a) is limited to a device used:</chapeau> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.052/1"> <num value="1">(1)</num> <content>to interconnect existing facilities; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.052/2"> <num value="2">(2)</num> <content>solely to transmit electric utility services from an existing facility to a customer of retail electric utility service.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.052/c"> <num value="c">(c)</num> <chapeau>An electric utility is not required to amend the utility's certificate of public convenience and necessity to construct a transmission line that connects the utility's existing transmission facilities to a substation or metering point if:</chapeau> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.052/1"> <num value="1">(1)</num> <chapeau>the transmission line does not exceed:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c37/scB/s37.052/A"> <num value="A">(A)</num> <content>five miles in length, if the line connects to a load-serving substation or metering point; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c37/scB/s37.052/B"> <num value="B">(B)</num> <content>two miles in length, if the line connects to a generation substation or metering point;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.052/2"> <num value="2">(2)</num> <content>each landowner whose property would be directly affected by the transmission line, as provided by commission rules, provides written consent for the transmission line; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.052/3"> <num value="3">(3)</num> <content>all rights-of-way necessary for construction of the transmission line have been purchased.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2021, 87th Leg., R.S., Ch. 876 (S.B. 1281), Sec. 1, eff. September 1, 2021. Acts 2025, 89th Leg., R.S., Ch. 610 (H.B. 3092), Sec. 1, eff. September 1, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c37/scB/s37.0521"> <num value="37.0521">Sec. 37.0521.</num> <heading>EXCEPTION FOR RETAIL SALES BY CERTAIN QUALIFYING COGENERATORS</heading> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.0521/a"> <num value="a">(a)</num> <content>Notwithstanding Section 37.001(3), a qualifying cogenerator may sell electric energy at retail to more than one purchaser of the cogenerator's thermal output.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.0521/b"> <num value="b">(b)</num> <chapeau>Selling electric energy at retail to more than one purchaser does not, as a result of that sale, subject a qualifying cogenerator to regulation as:</chapeau> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.0521/1"> <num value="1">(1)</num> <content>a retail electric provider or power generation company; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.0521/2"> <num value="2">(2)</num> <content>a retail electric utility under Chapter 37.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.0521/c"> <num value="c">(c)</num> <chapeau>This section does not apply to sales in an area:</chapeau> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.0521/1"> <num value="1">(1)</num> <content>in which customer choice has not been adopted and where a municipally owned utility or an electric cooperative is certificated to provide retail electric utility service; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.0521/2"> <num value="2">(2)</num> <content>that is served by an electric utility that operates solely outside of ERCOT.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2013, 83rd Leg., R.S., Ch. 979 (H.B. 2049), Sec. 2, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c37/scB/s37.053"> <num value="37.053">Sec. 37.053.</num> <heading>APPLICATION FOR CERTIFICATE</heading> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.053/a"> <num value="a">(a)</num> <content>An electric utility that wants to obtain or amend a certificate must submit an application to the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.053/b"> <num value="b">(b)</num> <content>The applicant shall file with the commission evidence the commission requires to show the applicant has received the consent, franchise, or permit required by the proper municipal or other public authority.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.053/c"> <num value="c">(c)</num> <content>The commission may not require the applicant to designate a preferred route for a proposed transmission line facility.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.053/d"> <num value="d">(d)</num> <content>For transmission facilities ordered or approved by the commission under Chapter 37 or 39, the rights extended to an electric corporation under Section 181.004 include all public land, except land owned by the state, on which the commission has approved the construction of the line. This subsection does not limit a municipality's rights or an electric utility's obligations under Chapter 33. Nothing in this subsection shall be interpreted to prevent a public entity from expressing a route preference in a proceeding under this chapter.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2009, 81st Leg., R.S., Ch. 1170 (H.B. 3309), Sec. 3, eff. June 19, 2009. Acts 2011, 82nd Leg., R.S., Ch. 949 (H.B. 971), Sec. 1, eff. June 17, 2011. Acts 2019, 86th Leg., R.S., Ch. 44 (S.B. 1938), Sec. 2, eff. May 16, 2019.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c37/scB/s37.054"> <num value="37.054">Sec. 37.054.</num> <heading>NOTICE AND HEARING ON APPLICATION</heading> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.054/a"> <num value="a">(a)</num> <chapeau>When an application for a certificate is filed, the commission shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.054/1"> <num value="1">(1)</num> <content>give notice of the application to interested parties and to the office; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.054/2"> <num value="2">(2)</num> <chapeau>if requested:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c37/scB/s37.054/A"> <num value="A">(A)</num> <content>set a time and place for a hearing; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c37/scB/s37.054/B"> <num value="B">(B)</num> <content>give notice of the hearing.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.054/b"> <num value="b">(b)</num> <content>A person or electric cooperative interested in the application may intervene at the hearing.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.054/c"> <num value="c">(c)</num> <chapeau>In addition to any notice provided under Subsection (a), the commission shall require the applicant to provide written notice of each substation proposed to be authorized by a certificate of convenience and necessity to each owner of:</chapeau> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.054/1"> <num value="1">(1)</num> <content>property adjacent to the property on which the substation will be located; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.054/2"> <num value="2">(2)</num> <content>property located directly across a highway, road, or street that is adjacent to the property on which the substation will be located.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 405, Sec. 31, eff. Sept. 1, 1999. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 416 (S.B. 855), Sec. 2, eff. June 17, 2011. Acts 2023, 88th Leg., R.S., Ch. 1053 (S.B. 365), Sec. 1, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c37/scB/s37.0541"> <num value="37.0541">Sec. 37.0541.</num> <heading>CONSOLIDATION OF CERTAIN PROCEEDINGS</heading> <content>The commission shall consolidate the proceeding on an application to obtain or amend a certificate of convenience and necessity for the construction of a transmission line with the proceeding on another application to obtain or amend a certificate of convenience and necessity for the construction of a transmission line if it is apparent from the applications or a motion to intervene in either proceeding that the transmission lines that are the subject of the separate proceedings share a common point of interconnection.</content> <sourceCredit>Added by Acts 2009, 81st Leg., R.S., Ch. 1170 (H.B. 3309), Sec. 1, eff. June 19, 2009. Amended by: Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 11, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c37/scB/s37.055"> <num value="37.055">Sec. 37.055.</num> <heading>REQUEST FOR PRELIMINARY ORDER</heading> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.055/a"> <num value="a">(a)</num> <content>An electric utility that wants to exercise a right or privilege under a franchise or permit that the utility anticipates obtaining but has not been granted may apply to the commission for a preliminary order under this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.055/b"> <num value="b">(b)</num> <content>The commission may issue a preliminary order declaring that the commission, on application and under commission rules, will grant the requested certificate on terms the commission designates, after the electric utility obtains the franchise or permit.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.055/c"> <num value="c">(c)</num> <content>The commission shall grant the certificate on presentation of evidence satisfactory to the commission that the electric utility has obtained the franchise or permit.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2009, 81st Leg., R.S., Ch. 1170 (H.B. 3309), Sec. 4, eff. June 19, 2009. Acts 2019, 86th Leg., R.S., Ch. 44 (S.B. 1938), Sec. 3, eff. May 16, 2019.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c37/scB/s37.056"> <num value="37.056">Sec. 37.056.</num> <heading>GRANT OR DENIAL OF CERTIFICATE</heading> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.056/a"> <num value="a">(a)</num> <content>The commission may approve an application and grant a certificate only if the commission finds that the certificate is necessary for the service, accommodation, convenience, or safety of the public.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.056/b"> <num value="b">(b)</num> <chapeau>The commission may:</chapeau> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.056/1"> <num value="1">(1)</num> <content>grant the certificate as requested;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.056/2"> <num value="2">(2)</num> <content>grant the certificate for the construction of a portion of the requested system, facility, or extension or the partial exercise of the requested right or privilege; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.056/3"> <num value="3">(3)</num> <content>refuse to grant the certificate.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.056/c"> <num value="c">(c)</num> <chapeau>The commission shall grant each certificate on a nondiscriminatory basis after considering:</chapeau> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.056/1"> <num value="1">(1)</num> <content>the adequacy of existing service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.056/2"> <num value="2">(2)</num> <content>the need for additional service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.056/3"> <num value="3">(3)</num> <content>the effect of granting the certificate on the recipient of the certificate and any electric utility serving the proximate area; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.056/4"> <num value="4">(4)</num> <chapeau>other factors, such as:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c37/scB/s37.056/A"> <num value="A">(A)</num> <content>community values;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c37/scB/s37.056/B"> <num value="B">(B)</num> <content>recreational and park areas;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c37/scB/s37.056/C"> <num value="C">(C)</num> <content>historical and aesthetic values;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c37/scB/s37.056/D"> <num value="D">(D)</num> <content>environmental integrity;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c37/scB/s37.056/E"> <num value="E">(E)</num> <content>the probable improvement of service or lowering of cost to consumers in the area if the certificate is granted, including any potential economic or reliability benefits associated with dual fuel and fuel storage capabilities in areas outside the ERCOT power region; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c37/scB/s37.056/F"> <num value="F">(F)</num> <content>the need for extending transmission service where existing or projected electrical loads will be underserved, including where:</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.056/i"> <num value="i">(i)</num> <chapeau>the existing transmission service is unreasonably remote;</chapeau> <clause identifier="/us/tx/ut/t2/c37/scB/s37.056/ii"> <num value="ii">(ii)</num> <content>the available capacity is unreasonably limited at transmission or distribution voltage level; or</content> </clause> <clause identifier="/us/tx/ut/t2/c37/scB/s37.056/iii"> <num value="iii">(iii)</num> <content>the electrical load cannot be interconnected in a timely manner.</content> <continuation>(c-1) In considering the need for additional service under Subsection (c)(2) for a reliability transmission project that serves the ERCOT power region or under Subsection (c)(4)(F), the commission must consider the historical load, forecasted load growth, and additional load currently seeking interconnection, including load for which the electric utility has yet to sign an interconnection agreement, as determined by the electric utility with the responsibility for serving the load.</continuation> </clause> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.056/d"> <num value="d">(d)</num> <content>The commission by rule shall establish criteria, in addition to the criteria described by Subsection (c), for granting a certificate for a transmission project that serves the ERCOT power region and that is not necessary to meet state or federal reliability standards. The criteria must include a comparison of the estimated cost of the transmission project for consumers and the estimated congestion cost savings for consumers that may result from the transmission project, considering both current and future expected congestion levels and the transmission project's ability to reduce those congestion levels. The commission shall include with its decision on an application for a certificate to which this subsection applies findings on the criteria.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.056/e"> <num value="e">(e)</num> <content>A certificate to build, own, or operate a new transmission facility that directly interconnects with an existing electric utility facility or municipally owned utility facility may be granted only to the owner of that existing facility. If a new transmission facility will directly interconnect with facilities owned by different electric utilities or municipally owned utilities, each entity shall be certificated to build, own, or operate the new facility in separate and discrete equal parts unless they agree otherwise.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.056/f"> <num value="f">(f)</num> <content>Notwithstanding Subsection (e), if a new transmission line, whether single or double circuit, will create the first interconnection between a load-serving station and an existing transmission facility, the entity with a load-serving responsibility or an electric cooperative that has a member with a load-serving responsibility at the load-serving station shall be certificated to build, own, or operate the new transmission line and the load-serving station. The owner of the existing transmission facility shall be certificated to build, own, or operate the station or tap at the existing transmission facility to provide the interconnection, unless after a reasonable period of time the owner of the existing transmission facility is unwilling to build, and then the entity with the load-serving responsibility or an electric cooperative that has a member with a load-serving responsibility may be certificated to build the interconnection facility.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.056/g"> <num value="g">(g)</num> <content>Notwithstanding any other provision of this section, an electric utility or municipally owned utility that is authorized to build, own, or operate a new transmission facility under Subsection (e) or (f) may designate another electric utility that is currently certificated by the commission within the same electric power region, coordinating council, independent system operator, or power pool or a municipally owned utility to build, own, or operate a portion or all of such new transmission facility, subject to any requirements adopted by the commission by rule.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.056/h"> <num value="h">(h)</num> <content>The division of any required certification of facilities described in this section shall apply unless each entity agrees otherwise. Nothing in this section is intended to require a certificate for facilities that the commission has determined by rule do not require certification to build, own, or operate.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.056/i"> <num value="i">(i)</num> <content>Notwithstanding any other provision of this section, an electric cooperative may be certificated to build, own, or operate a new facility in place of any other electric cooperative if both cooperatives agree.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 2003, 78th Leg., ch. 295, Sec. 2, eff. June 18, 2003. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 949 (H.B. 971), Sec. 2(a), eff. June 17, 2011. Acts 2019, 86th Leg., R.S., Ch. 44 (S.B. 1938), Sec. 4, eff. May 16, 2019. Acts 2021, 87th Leg., R.S., Ch. 198 (H.B. 1510), Sec. 3, eff. June 1, 2021. Acts 2021, 87th Leg., R.S., Ch. 876 (S.B. 1281), Sec. 2, eff. September 1, 2021. Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 12, eff. September 1, 2023. Acts 2023, 88th Leg., R.S., Ch. 892 (H.B. 5066), Sec. 1, eff. June 13, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c37/scB/s37.0561"> <num value="37.0561">Sec. 37.0561.</num> <heading>PLANNING FOR AND INTERCONNECTION OF LARGE LOADS</heading> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.0561/a"> <num value="a">(a)</num> <content>For the purposes of this section, a large load customer includes an entity requesting an interconnection that exceeds the demand threshold adopted under Subsection (c) and a successor in interest to such an entity.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.0561/b"> <num value="b">(b)</num> <content>The commission by rule shall establish standards for interconnecting large load customers in the ERCOT power region in a manner designed to support business development in this state while minimizing the potential for stranded infrastructure costs and maintaining system reliability.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.0561/c"> <num value="c">(c)</num> <content>The standards must apply only to customers requesting a new or expanded interconnection where the total load at a single site would exceed a demand threshold established by the commission based on the size of loads that significantly impact transmission needs in the ERCOT power region. The commission shall establish a demand threshold of 75 megawatts unless the commission determines that a lower threshold is necessary to accomplish the purposes described by Subsection (b).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.0561/d"> <num value="d">(d)</num> <content>The standards must require each large load customer subject to Subsection (c) to disclose to the interconnecting electric utility or municipally owned utility whether the customer is pursuing a substantially similar request for electric service in this state the approval of which would result in the customer materially changing, delaying, or withdrawing the interconnection request. The disclosure may withhold or anonymize competitively sensitive details. The commission by rule shall prohibit an electric utility or municipally owned utility from selling, sharing, or disclosing information submitted to the utility under this subsection other than a disclosure to the commission or the independent organization certified under Section 39.151 for the ERCOT power region, subject to appropriate confidentiality protections.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.0561/e"> <num value="e">(e)</num> <chapeau>The standards must require each interconnected large load customer subject to Subsection (c) to disclose to the interconnecting electric utility or municipally owned utility information about the customer's on-site backup generating facilities and require the interconnecting electric utility or municipally owned utility to provide the information to the independent organization certified under Section 39.151 for the ERCOT power region. For the purposes of this subsection, "on-site backup generating facilities" means generation that is not capable of exporting energy to the ERCOT transmission grid and that, in the aggregate, can serve at least 50 percent of on-site demand. The independent organization shall establish a threshold before or during an energy emergency alert at which the organization may issue reasonable notice that large load customers with on-site backup generating facilities may be directed to either deploy the customer's on-site backup generating facilities or curtail load. After the independent organization deploys all available market services, except for frequency responsive services, the independent organization may direct the applicable electric utility or municipally owned utility to require the large load customer to either deploy the customer's on-site backup generating facilities or curtail load. The independent organization shall include a deployment under this section as firm load shed when calculating any price adjustments for reliability deployments. This subsection does not:</chapeau> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.0561/1"> <num value="1">(1)</num> <content>authorize or require a violation of any emissions limitation in state or federal law or a violation of any other environmental regulation; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.0561/2"> <num value="2">(2)</num> <content>prohibit a large load customer from participating in a service authorized by Section 39.170(b).</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.0561/f"> <num value="f">(f)</num> <content>The standards must set a flat study fee of at least $100,000 to be paid to the interconnecting electric utility or municipally owned utility for initial transmission screening studies for large loads subject to Subsection (c). A large load customer that requests additional capacity following the screening study must pay an additional study fee based on the new request. The interconnecting electric utility or municipally owned utility shall apply any unused portion of the initial transmission screening study fee as a credit toward satisfying financial obligations for procurement or interconnection agreements at the same geographic site.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.0561/g"> <num value="g">(g)</num> <content>The standards must include a method for a large load customer subject to Subsection (c) to demonstrate site control for the proposed load location through an ownership interest, lease, or another legal interest acceptable to the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.0561/h"> <num value="h">(h)</num> <chapeau>The standards must include uniform financial commitment requirements for the development of transmission infrastructure needed to serve a large load customer subject to Subsection (c). The standards must provide that satisfactory proof of financial commitment may include:</chapeau> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.0561/1"> <num value="1">(1)</num> <content>security provided on a dollar per megawatt basis as set by the commission;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.0561/2"> <num value="2">(2)</num> <content>contribution in aid of construction;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.0561/3"> <num value="3">(3)</num> <content>security provided under an agreement that requires a large load customer to pay for significant equipment or services in advance of signing an agreement to establish electric delivery service; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.0561/4"> <num value="4">(4)</num> <content>a form of financial commitment acceptable to the commission other than those provided by Subdivisions (1)-(3).</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.0561/i"> <num value="i">(i)</num> <chapeau>Security provided under Subsection (h)(1) must be refunded, in whole or in part, after the security is applied to any outstanding amounts owed:</chapeau> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.0561/1"> <num value="1">(1)</num> <content>as the large load customer meets the customer's load ramp milestones and sustains operations for a prescribed period as determined by the commission;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.0561/2"> <num value="2">(2)</num> <content>if the large load customer withdraws the customer's request for all or a portion of the requested capacity; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.0561/3"> <num value="3">(3)</num> <content>if capacity subject to a financial commitment will be reallocated to one or more other customers.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.0561/j"> <num value="j">(j)</num> <content>The commission shall establish uniform requirements for determining when capacity that is subject to an outstanding financial commitment under this section may be reallocated.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.0561/k"> <num value="k">(k)</num> <content>The standards must establish a procedure to allow the independent organization certified under Section 39.151 for the ERCOT power region to access any information collected by the interconnecting electric utility or municipally owned utility to ensure compliance with the standards for transmission planning analysis. Any customer-specific or competitively sensitive information obtained under this subsection is confidential and not subject to disclosure under Chapter 552, Government Code.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.0561/l"> <num value="l">(l)</num> <content>The commission may not limit the authority of a municipally owned utility or an electric cooperative to impose electric service requirements for large load customers on their systems in addition to the standards adopted under this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.0561/m"> <num value="m">(m)</num> <content>Notwithstanding the forecasted load growth and additional load currently seeking interconnection required to be considered under Section 37.056(c-1), the commission by rule shall establish criteria by which the independent organization certified under Section 39.151 for the ERCOT power region includes forecasted large load of any peak demand in the organization's transmission planning and resource adequacy models and reports.</content> </subsection> <sourceCredit>Added by Acts 2025, 89th Leg., R.S., Ch. 953 (S.B. 6), Sec. 2, eff. June 20, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c37/scB/s37.057"> <num value="37.057">Sec. 37.057.</num> <heading>DEADLINE FOR APPLICATION FOR NEW TRANSMISSION FACILITY</heading> <content>The commission must approve or deny an application for a certificate for a new transmission facility not later than the 180th day after the date the application is filed. If the commission does not approve or deny the application on or before that date, a party may seek a writ of mandamus in a district court of Travis County to compel the commission to decide on the application.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2009, 81st Leg., R.S., Ch. 1170 (H.B. 3309), Sec. 4, eff. June 19, 2009. Acts 2019, 86th Leg., R.S., Ch. 44 (S.B. 1938), Sec. 5, eff. May 16, 2019. Acts 2023, 88th Leg., R.S., Ch. 348 (S.B. 1076), Sec. 1, eff. June 2, 2023. Acts 2023, 88th Leg., R.S., Ch. 892 (H.B. 5066), Sec. 2, eff. June 13, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c37/scB/s37.058"> <num value="37.058">Sec. 37.058.</num> <heading>CERTIFICATE AND DETERMINATION ISSUED TO CERTAIN NON-ERCOT UTILITIES FOR GENERATING FACILITY</heading> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.058/a"> <num value="a">(a)</num> <content>This section applies only to an electric utility that operates solely outside of ERCOT.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.058/b"> <num value="b">(b)</num> <chapeau>An electric utility may file with the commission a request that the commission:</chapeau> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.058/1"> <num value="1">(1)</num> <content>grant a certificate for an electric generating facility;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.058/2"> <num value="2">(2)</num> <content>make a public interest determination for the purchase of an existing electric generating facility under Section 14.101; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.058/3"> <num value="3">(3)</num> <content>both grant a certificate and make a determination.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.058/c"> <num value="c">(c)</num> <content>Notwithstanding any other law, in a proceeding involving the purchase of an existing electric generating facility, the commission shall issue a final order on a certificate for the facility or making a determination on the facility required by Section 14.101, as applicable, not later than the 181st day after the date a request for the certificate or determination is filed with the commission under Subsection (b). For generating facilities granted a certificate under this subsection, notwithstanding Section 36.053, the utility's recoverable invested capital included in rates shall be determined by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.058/d"> <num value="d">(d)</num> <content>Notwithstanding any other law, in a proceeding involving a newly constructed generating facility, the commission shall issue a final order on a certificate for the facility not later than the 366th day after the date a request for the certificate is filed with the commission under Subsection (b).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.058/e"> <num value="e">(e)</num> <content>Notwithstanding any other provision of this title, an electric utility operating solely outside of the ERCOT power region may, but shall not be required to, obtain a certificate to install, own, or operate a generation facility with a capacity of 10 megawatts or less.</content> </subsection> <sourceCredit>Added by Acts 2015, 84th Leg., R.S., Ch. 733 (H.B. 1535), Sec. 4, eff. June 17, 2015. Amended by: Acts 2021, 87th Leg., R.S., Ch. 198 (H.B. 1510), Sec. 4, eff. June 1, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c37/scB/s37.059"> <num value="37.059">Sec. 37.059.</num> <heading>REVOCATION OR AMENDMENT OF CERTIFICATE</heading> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.059/a"> <num value="a">(a)</num> <content>The commission may revoke or amend a certificate after notice and hearing if the commission finds that the certificate holder has never provided or is no longer providing service in all or any part of the certificated area.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.059/b"> <num value="b">(b)</num> <content>The commission may require one or more electric utilities to provide service in an area affected by the revocation or amendment of a certificate.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c37/scB/s37.060"> <num value="37.060">Sec. 37.060.</num> <heading>DIVISION OF MULTIPLY CERTIFICATED SERVICE AREAS</heading> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.060/a"> <num value="a">(a)</num> <content>This subsection and Subsections (b)-(g) apply only to areas in which each retail electric utility that is authorized to provide retail electric utility service to the area is providing customer choice. For purposes of this subsection, an electric cooperative or a municipally owned electric utility shall be deemed to be providing customer choice if it has approved a resolution adopting customer choice that is effective on January 1, 2002, or effective within 24 months after the date of the resolution adopting customer choice. All other retail electric utilities shall be deemed to be providing customer choice if customer choice will be allowed for customers of the retail electric utility on January 1, 2002. In areas in which each certificated retail electric utility is providing customer choice, the commission, if requested by a retail electric utility, shall examine all areas within the service area of the retail electric utility making the request that are also certificated to one or more other retail electric utilities and, after notice and hearing, shall amend the retail electric utilities' certificates so that only one retail electric utility is certificated to provide distribution services in any such area. Only retail electric utilities certificated to serve an area on June 1, 1999, may continue to serve the area or portion of the area under an amended certificate issued under this subsection.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.060/b"> <num value="b">(b)</num> <content>This section does not apply in any area in which a municipally owned utility is certificated to provide retail electric utility service if the municipally owned utility serving the area files with the commission by October 1, 2001, a request that areas within the certificated service area of the municipally owned utility remain as presently certificated.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.060/c"> <num value="c">(c)</num> <content>The commission shall enter its order dividing multiply certificated areas within one year of the date a request is received.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.060/d"> <num value="d">(d)</num> <content>In amending certificates under this section, the commission shall take into consideration the factors prescribed by Section 37.056.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.060/e"> <num value="e">(e)</num> <content>Notwithstanding Section 37.059, the commission shall revoke certificates to the extent necessary to achieve the division of retail electric service areas as provided by this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.060/f"> <num value="f">(f)</num> <content>Unless otherwise agreed by the affected retail electric utilities, each retail electric utility shall be allowed to continue to provide service to the location of electricity-consuming facilities it is serving on the date an application for division of the affected multiply certificated service areas is filed. No customer located within the affected multiply certificated service areas shall be permitted to switch from one retail electric utility to another while an application for division of the affected multiply certificated service areas is pending.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.060/g"> <num value="g">(g)</num> <content>If on June 1, 1999, retail service is being provided in an area by another retail electric utility with the written consent of the retail electric utility certificated to serve the area, that consent shall be filed with the commission. On notification of that consent and a request by an affected retail electric utility to amend the relevant certificates, the commission may grant an exception or amend a retail electric utility's certificate. This provision shall not be construed to limit the commission's authority to grant exceptions or to amend a retail electric utility's certificate, upon request and notification, for areas to which retail service is being provided pursuant to written consent granted after June 1, 1999.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.060/h"> <num value="h">(h)</num> <content>The commission may not grant an additional retail electric utility certificate to serve an area if the effect of the grant would cause the area to be multiply certificated unless the commission finds that the certificate holders are not providing service to any part of the area for which a certificate is sought and are not capable of providing adequate service to the area in accordance with applicable standards. However, neither this subsection nor the deadline of June 1, 1999, provided by Subsection (a) shall apply to any application for multiple certification filed with the commission on or before February 1, 1999, and those applications may be processed in accordance with applicable law in effect on the date the application was filed. Applications for multiple certification filed with the commission on or before February 1, 1999, may not be amended to expand the area for which a certificate is sought except for contiguous areas within municipalities that provide consent, as required by Section 37.053(b), not later than June 1, 1999.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.060/i"> <num value="i">(i)</num> <chapeau>Notwithstanding any other provision of this section, if requested by a municipally owned utility, the commission shall examine all areas within the municipally owned utility's service area that are also certificated to one or more other retail electric utilities and, after notice and hearing, may amend the retail electric utilities' certificates so that only one retail electric utility is certificated to provide distribution services in the area, provided that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.060/1"> <num value="1">(1)</num> <content>the application is filed with the commission within 12 months of the effective date of this provision and is limited to single certification of the area within the municipality's boundaries as of February 1, 1999;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.060/2"> <num value="2">(2)</num> <content>the commission preserves the right of an electric utility or an electric cooperative to serve its existing customers, including any property owned or leased by any customer; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.060/3"> <num value="3">(3)</num> <content>the municipality is a member city of a municipal power agency, as that term is used in Section 40.059.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 32, eff. Sept. 1, 1999. Amended by Acts 2001, 77th Leg., ch. 796, Sec. 1, eff. June 14, 2001.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c37/scB/s37.061"> <num value="37.061">Sec. 37.061.</num> <heading>EXISTING SERVICE AREA AGREEMENTS</heading> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.061/a"> <num value="a">(a)</num> <chapeau>Notwithstanding any other provision of this title, the commission shall allow a municipally owned utility to amend the service area boundaries of its certificate if:</chapeau> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.061/1"> <num value="1">(1)</num> <content>the municipally owned utility was the holder of a certificate as of January 1, 1999;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.061/2"> <num value="2">(2)</num> <content>the municipally owned utility has an agreement existing before January 1, 1999, with a public utility serving the area that the public utility will not contest an application to amend the certificate to add municipal territory; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c37/scB/s37.061/3"> <num value="3">(3)</num> <content>the area for which a certificate is requested is not certificated to a retail electric utility that is not a party to the agreement and that has not consented in writing to certification of the area to the municipality.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scB/s37.061/b"> <num value="b">(b)</num> <content>The commission may not amend the certificate of the public utility serving the affected area based on the granting of a certificate to the municipally owned utility.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 32, eff. Sept. 1, 1999.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c37/scC"> <num value="C">SUBCHAPTER C.</num> <heading>MUNICIPALITIES</heading> <section identifier="/us/tx/ut/t2/c37/scC/s37.101"> <num value="37.101">Sec. 37.101.</num> <heading>SERVICE IN ANNEXED OR INCORPORATED AREA</heading> <subsection identifier="/us/tx/ut/t2/c37/scC/s37.101/a"> <num value="a">(a)</num> <content>If an area is or will be included within a municipality as the result of annexation, incorporation, or another reason, each electric utility and each electric cooperative that holds or is entitled to hold a certificate under this title to provide service or operate a facility in the area before the inclusion has the right to continue to provide the service or operate the facility and extend service within the utility's or cooperative's certificated area in the annexed or incorporated area under the rights granted by the certificate and this title.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scC/s37.101/b"> <num value="b">(b)</num> <chapeau>Notwithstanding any other law, an electric utility has the right to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c37/scC/s37.101/1"> <num value="1">(1)</num> <content>continue and extend service within the utility's certificated area; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c37/scC/s37.101/2"> <num value="2">(2)</num> <content>use roads, streets, highways, alleys, and public property to furnish retail electric utility service.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scC/s37.101/c"> <num value="c">(c)</num> <chapeau>The governing body of a municipality may require an electric utility to relocate the utility's facility at the utility's expense to permit the widening or straightening of a street by:</chapeau> <paragraph identifier="/us/tx/ut/t2/c37/scC/s37.101/1"> <num value="1">(1)</num> <content>giving the electric utility 30 days' notice; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c37/scC/s37.101/2"> <num value="2">(2)</num> <content>specifying the new location for the facility along the right-of-way of the street.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scC/s37.101/d"> <num value="d">(d)</num> <chapeau>This section does not:</chapeau> <paragraph identifier="/us/tx/ut/t2/c37/scC/s37.101/1"> <num value="1">(1)</num> <content>limit the power of a city, town, or village to incorporate or of a municipality to extend its boundaries by annexation; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c37/scC/s37.101/2"> <num value="2">(2)</num> <content>prohibit a municipality from levying a tax or other special charge for the use of the streets as authorized by Section 182.025, Tax Code.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 405, Sec. 33, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c37/scC/s37.102"> <num value="37.102">Sec. 37.102.</num> <heading>GRANT OF CERTIFICATE FOR CERTAIN MUNICIPALITIES</heading> <subsection identifier="/us/tx/ut/t2/c37/scC/s37.102/a"> <num value="a">(a)</num> <content>If a municipal corporation offers retail electric utility service in a municipality having a population of more than 151,000 that is located in a county having a population of more than 2.5 million, the commission shall singly certificate areas in the municipality's boundaries in which more than one electric utility provides electric utility service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scC/s37.102/b"> <num value="b">(b)</num> <content>In singly certificating an area under Subsection (a), the commission shall preserve the right of an electric utility to serve the customers the electric utility was serving on June 17, 1983. This subsection does not apply to a customer at least partially served by a nominal 69,000 volts system who gave notice of termination to the utility servicing that customer before June 17, 1983.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 1163 (H.B. 2702), Sec. 179, eff. September 1, 2011. Acts 2023, 88th Leg., R.S., Ch. 644 (H.B. 4559), Sec. 272, eff. September 1, 2023.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c37/scD"> <num value="D">SUBCHAPTER D.</num> <heading>REGULATION OF SERVICES, AREAS, AND FACILITIES</heading> <section identifier="/us/tx/ut/t2/c37/scD/s37.151"> <num value="37.151">Sec. 37.151.</num> <heading>PROVISION OF SERVICE</heading> <chapeau>Except as provided by Sections 37.152 and 37.153, a certificate holder shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c37/scD/s37.151/1"> <num value="1">(1)</num> <content>serve every consumer in the utility's certificated area; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c37/scD/s37.151/2"> <num value="2">(2)</num> <content>provide continuous and adequate service in that area.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2009, 81st Leg., R.S., Ch. 1170 (H.B. 3309), Sec. 4, eff. June 19, 2009. Acts 2019, 86th Leg., R.S., Ch. 44 (S.B. 1938), Sec. 6, eff. May 16, 2019.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c37/scD/s37.152"> <num value="37.152">Sec. 37.152.</num> <heading>GROUNDS FOR REDUCTION OF SERVICE</heading> <subsection identifier="/us/tx/ut/t2/c37/scD/s37.152/a"> <num value="a">(a)</num> <chapeau>Unless the commission issues a certificate that the present and future convenience and necessity will not be adversely affected, a certificate holder may not discontinue, reduce, or impair service to any part of the holder's certificated service area except for:</chapeau> <paragraph identifier="/us/tx/ut/t2/c37/scD/s37.152/1"> <num value="1">(1)</num> <content>nonpayment of charges;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c37/scD/s37.152/2"> <num value="2">(2)</num> <content>nonuse; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c37/scD/s37.152/3"> <num value="3">(3)</num> <content>another similar reason that occurs in the usual course of business.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scD/s37.152/b"> <num value="b">(b)</num> <content>A discontinuance, reduction, or impairment of service must be in compliance with and subject to any condition or restriction the commission prescribes.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c37/scD/s37.153"> <num value="37.153">Sec. 37.153.</num> <heading>REQUIRED REFUSAL OF SERVICE</heading> <content>A certificate holder shall refuse to serve a customer in the holder's certificated area if the holder is prohibited from providing the service under Section 212.012, 232.029, or 232.0291, Local Government Code.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2005, 79th Leg., Ch. 708 (S.B. 425), Sec. 13, eff. September 1, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c37/scD/s37.154"> <num value="37.154">Sec. 37.154.</num> <heading>TRANSFER OF CERTIFICATE</heading> <subsection identifier="/us/tx/ut/t2/c37/scD/s37.154/a"> <num value="a">(a)</num> <content>An electric utility or municipally owned utility may sell, assign, or lease a certificate or a right obtained under a certificate if the purchaser, assignee, or lessee is already certificated by the commission to provide electric service within the same electric power region, coordinating council, independent system operator, or power pool, or if the purchaser, assignee, or lessee is an electric cooperative or municipally owned utility. As part of a transaction subject to Sections 39.262(l)-(o) and 39.915, the commission may approve a sale, assignment, or lease to an entity that has not been previously certificated if the approval will not diminish the retail rate jurisdiction of this state. Any purchase, assignment, or lease under this section requires that the commission determine that the purchaser, assignee, or lessee can provide adequate service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scD/s37.154/b"> <num value="b">(b)</num> <content>A sale, assignment, or lease of a certificate or a right is subject to conditions the commission prescribes.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2019, 86th Leg., R.S., Ch. 44 (S.B. 1938), Sec. 7, eff. May 16, 2019.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c37/scD/s37.155"> <num value="37.155">Sec. 37.155.</num> <heading>APPLICATION OF CONTRACTS</heading> <chapeau>A contract approved by the commission between retail electric utilities that designates areas and customers to be served by the utilities:</chapeau> <paragraph identifier="/us/tx/ut/t2/c37/scD/s37.155/1"> <num value="1">(1)</num> <content>is valid and enforceable; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c37/scD/s37.155/2"> <num value="2">(2)</num> <content>shall be incorporated into the appropriate areas of certification.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c37/scD/s37.156"> <num value="37.156">Sec. 37.156.</num> <heading>INTERFERENCE WITH ANOTHER UTILITY</heading> <chapeau>If an electric utility constructing or extending the utility's lines, plant, or system interferes or attempts to interfere with the operation of a line, plant, or system of another utility, the commission by order may:</chapeau> <paragraph identifier="/us/tx/ut/t2/c37/scD/s37.156/1"> <num value="1">(1)</num> <content>prohibit the construction or extension; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c37/scD/s37.156/2"> <num value="2">(2)</num> <content>prescribe terms for locating the affected lines, plants, or systems.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c37/scD/s37.157"> <num value="37.157">Sec. 37.157.</num> <heading>MAPS</heading> <subsection identifier="/us/tx/ut/t2/c37/scD/s37.157/a"> <num value="a">(a)</num> <content>An electric utility shall file with the commission one or more maps that show each utility facility and that separately illustrate each utility facility for the generation, transmission, or distribution of the utility's services on a date the commission orders.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c37/scD/s37.157/b"> <num value="b">(b)</num> <content>Each electric utility, transmission and distribution utility, electric cooperative, and municipally owned utility shall provide the utility's service area boundary map, using good faith efforts, in a geographic information system format to the commission. The service area boundary map may be provided to the commission in a geodatabase feature class or shapefile.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2023, 88th Leg., R.S., Ch. 85 (S.B. 1093), Sec. 1, eff. May 19, 2023.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t2/c38"> <num value="38">CHAPTER 38.</num> <heading>REGULATION OF ELECTRIC SERVICES</heading> <subchapter identifier="/us/tx/ut/t2/c38/scA"> <num value="A">SUBCHAPTER A.</num> <heading>STANDARDS</heading> <section identifier="/us/tx/ut/t2/c38/scA/s38.001"> <num value="38.001">Sec. 38.001.</num> <heading>GENERAL STANDARD</heading> <content>An electric utility and an electric cooperative shall furnish service, instrumentalities, and facilities that are safe, adequate, efficient, and reasonable.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 405, Sec. 34, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c38/scA/s38.002"> <num value="38.002">Sec. 38.002.</num> <heading>AUTHORITY OF REGULATORY AUTHORITY CONCERNING STANDARDS</heading> <chapeau>A regulatory authority, on its own motion or on complaint and after reasonable notice and hearing, may:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.002/1"> <num value="1">(1)</num> <content>adopt just and reasonable standards, classifications, rules, or practices an electric utility must follow in furnishing a service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.002/2"> <num value="2">(2)</num> <content>adopt adequate and reasonable standards for measuring a condition, including quantity, quality, pressure, and initial voltage, relating to the furnishing of a service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.002/3"> <num value="3">(3)</num> <content>adopt reasonable rules for examining, testing, and measuring a service; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.002/4"> <num value="4">(4)</num> <content>adopt or approve reasonable rules, specifications, and standards to ensure the accuracy of equipment, including meters and instruments, used to measure a service.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c38/scA/s38.003"> <num value="38.003">Sec. 38.003.</num> <heading>RULE OR STANDARD</heading> <subsection identifier="/us/tx/ut/t2/c38/scA/s38.003/a"> <num value="a">(a)</num> <content>An electric utility may not impose a rule except as provided by this title.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scA/s38.003/b"> <num value="b">(b)</num> <content>An electric utility may file with the regulatory authority a standard, classification, rule, or practice the utility follows.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scA/s38.003/c"> <num value="c">(c)</num> <chapeau>The standard, classification, rule, or practice continues in force until:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.003/1"> <num value="1">(1)</num> <content>amended by the utility; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.003/2"> <num value="2">(2)</num> <content>changed by the regulatory authority as provided by this title.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c38/scA/s38.004"> <num value="38.004">Sec. 38.004.</num> <heading>MINIMUM CLEARANCE STANDARD</heading> <subsection identifier="/us/tx/ut/t2/c38/scA/s38.004/a"> <num value="a">(a)</num> <content>Notwithstanding any other law, a transmission or distribution line owned by an electric utility or an electric cooperative must be constructed, operated, and maintained, as to clearances, in the manner described by the National Electrical Safety Code Standard ANSI (c)(2), as adopted by the American National Safety Institute and in effect at the time of construction.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scA/s38.004/b"> <num value="b">(b)</num> <chapeau>An electric utility, municipally owned utility, or electric cooperative shall meet the minimum clearance requirements specified in Rule 232 of the National Electrical Safety Code Standard ANSI (c)(2) in the construction of any transmission or distribution line over the following lakes:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/1"> <num value="1">(1)</num> <content>Abilene;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/2"> <num value="2">(2)</num> <content>Alan Henry;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/3"> <num value="3">(3)</num> <content>Alvarado Park;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/4"> <num value="4">(4)</num> <content>Amistad;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/5"> <num value="5">(5)</num> <content>Amon G. Carter;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/6"> <num value="6">(6)</num> <content>Aquilla;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/7"> <num value="7">(7)</num> <content>Arlington;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/8"> <num value="8">(8)</num> <content>Arrowhead;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/9"> <num value="9">(9)</num> <content>Athens;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/10"> <num value="10">(10)</num> <content>Austin;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/11"> <num value="11">(11)</num> <content>Averhoff;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/12"> <num value="12">(12)</num> <content>B. A. Steinhagen;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/13"> <num value="13">(13)</num> <content>Bachman;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/14"> <num value="14">(14)</num> <content>Balmorhea;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/15"> <num value="15">(15)</num> <content>Bardwell;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/16"> <num value="16">(16)</num> <content>Bastrop;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/17"> <num value="17">(17)</num> <content>Baylor Creek;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/18"> <num value="18">(18)</num> <content>Belton;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/19"> <num value="19">(19)</num> <content>Benbrook;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/20"> <num value="20">(20)</num> <content>Big Creek;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/21"> <num value="21">(21)</num> <content>Bob Sandlin;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/22"> <num value="22">(22)</num> <content>Bonham;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/23"> <num value="23">(23)</num> <content>Bonham State Park;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/24"> <num value="24">(24)</num> <content>Brady Creek;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/25"> <num value="25">(25)</num> <content>Brandy Branch;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/26"> <num value="26">(26)</num> <content>Braunig;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/27"> <num value="27">(27)</num> <content>Brazos;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/28"> <num value="28">(28)</num> <content>Bridgeport;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/29"> <num value="29">(29)</num> <content>Brownwood;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/30"> <num value="30">(30)</num> <content>Bryan;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/31"> <num value="31">(31)</num> <content>Bryson;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/32"> <num value="32">(32)</num> <content>Buchanan;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/33"> <num value="33">(33)</num> <content>Buffalo Creek;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/34"> <num value="34">(34)</num> <content>Buffalo Springs;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/35"> <num value="35">(35)</num> <content>Caddo;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/36"> <num value="36">(36)</num> <content>Calaveras;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/37"> <num value="37">(37)</num> <content>Canyon;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/38"> <num value="38">(38)</num> <content>Casa Blanca;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/39"> <num value="39">(39)</num> <content>Cedar Creek;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/40"> <num value="40">(40)</num> <content>Champion Creek;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/41"> <num value="41">(41)</num> <content>Choke Canyon;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/42"> <num value="42">(42)</num> <content>Cisco;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/43"> <num value="43">(43)</num> <content>Cleburne State Park;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/44"> <num value="44">(44)</num> <content>Clyde;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/45"> <num value="45">(45)</num> <content>Coffee Mill;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/46"> <num value="46">(46)</num> <content>Coleman;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/47"> <num value="47">(47)</num> <content>Coleto Creek;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/48"> <num value="48">(48)</num> <content>Colorado City;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/49"> <num value="49">(49)</num> <content>Conroe;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/50"> <num value="50">(50)</num> <content>Cooper;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/51"> <num value="51">(51)</num> <content>Corpus Christi;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/52"> <num value="52">(52)</num> <content>Crook;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/53"> <num value="53">(53)</num> <content>Cypress Springs;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/54"> <num value="54">(54)</num> <content>Daniel;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/55"> <num value="55">(55)</num> <content>Davy Crockett;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/56"> <num value="56">(56)</num> <content>Diversion;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/57"> <num value="57">(57)</num> <content>Dunlap;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/58"> <num value="58">(58)</num> <content>Eagle Mountain;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/59"> <num value="59">(59)</num> <content>E. V. Spence;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/60"> <num value="60">(60)</num> <content>Fairfield;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/61"> <num value="61">(61)</num> <content>Falcon;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/62"> <num value="62">(62)</num> <content>Fayette County;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/63"> <num value="63">(63)</num> <content>Findley;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/64"> <num value="64">(64)</num> <content>Fork;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/65"> <num value="65">(65)</num> <content>Fort Parker State Park;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/66"> <num value="66">(66)</num> <content>Fort Phantom Hill;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/67"> <num value="67">(67)</num> <content>Fryer;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/68"> <num value="68">(68)</num> <content>Georgetown;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/69"> <num value="69">(69)</num> <content>Gibbons Creek;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/70"> <num value="70">(70)</num> <content>Gilmer;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/71"> <num value="71">(71)</num> <content>Gladewater;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/72"> <num value="72">(72)</num> <content>Gonzales;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/73"> <num value="73">(73)</num> <content>Graham;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/74"> <num value="74">(74)</num> <content>Granbury;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/75"> <num value="75">(75)</num> <content>Granger;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/76"> <num value="76">(76)</num> <content>Grapevine;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/77"> <num value="77">(77)</num> <content>Greenbelt;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/78"> <num value="78">(78)</num> <content>Halbert;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/79"> <num value="79">(79)</num> <content>Hawkins;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/80"> <num value="80">(80)</num> <content>Holbrook;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/81"> <num value="81">(81)</num> <content>Hords Creek;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/82"> <num value="82">(82)</num> <content>Houston;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/83"> <num value="83">(83)</num> <content>Houston County;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/84"> <num value="84">(84)</num> <content>Hubbard Creek;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/85"> <num value="85">(85)</num> <content>Inks;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/86"> <num value="86">(86)</num> <content>Jacksboro;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/87"> <num value="87">(87)</num> <content>Jacksonville;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/88"> <num value="88">(88)</num> <content>J. B. Thomas;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/89"> <num value="89">(89)</num> <content>Joe Pool;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/90"> <num value="90">(90)</num> <content>Kemp;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/91"> <num value="91">(91)</num> <content>Kickapoo;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/92"> <num value="92">(92)</num> <content>Kirby;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/93"> <num value="93">(93)</num> <content>Kurth;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/94"> <num value="94">(94)</num> <content>Lady Bird;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/95"> <num value="95">(95)</num> <content>Lake O' The Pines;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/96"> <num value="96">(96)</num> <content>Lavon;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/97"> <num value="97">(97)</num> <content>Leon;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/98"> <num value="98">(98)</num> <content>Lewisville;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/99"> <num value="99">(99)</num> <content>Limestone;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/100"> <num value="100">(100)</num> <content>Livingston;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/101"> <num value="101">(101)</num> <content>Lone Star;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/102"> <num value="102">(102)</num> <content>Lost Creek;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/103"> <num value="103">(103)</num> <content>Lyndon B. Johnson;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/104"> <num value="104">(104)</num> <content>Mackenzie;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/105"> <num value="105">(105)</num> <content>Marble Falls;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/106"> <num value="106">(106)</num> <content>Marine Creek;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/107"> <num value="107">(107)</num> <content>Martin Creek;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/108"> <num value="108">(108)</num> <content>McClellan;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/109"> <num value="109">(109)</num> <content>Medina;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/110"> <num value="110">(110)</num> <content>Meredith;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/111"> <num value="111">(111)</num> <content>Meridian State Park;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/112"> <num value="112">(112)</num> <content>Mexia;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/113"> <num value="113">(113)</num> <content>Mill Creek;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/114"> <num value="114">(114)</num> <content>Millers Creek;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/115"> <num value="115">(115)</num> <content>Mineral Wells;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/116"> <num value="116">(116)</num> <content>Monticello;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/117"> <num value="117">(117)</num> <content>Moss;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/118"> <num value="118">(118)</num> <content>Mountain Creek;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/119"> <num value="119">(119)</num> <content>Muenster;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/120"> <num value="120">(120)</num> <content>Murvaul;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/121"> <num value="121">(121)</num> <content>Nacogdoches;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/122"> <num value="122">(122)</num> <content>Naconiche;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/123"> <num value="123">(123)</num> <content>Nasworthy;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/124"> <num value="124">(124)</num> <content>Navarro Mills;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/125"> <num value="125">(125)</num> <content>New Ballinger;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/126"> <num value="126">(126)</num> <content>Nocona;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/127"> <num value="127">(127)</num> <content>Oak Creek;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/128"> <num value="128">(128)</num> <content>O. C. Fisher;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/129"> <num value="129">(129)</num> <content>O. H. Ivie;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/130"> <num value="130">(130)</num> <content>Palestine;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/131"> <num value="131">(131)</num> <content>Palo Duro;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/132"> <num value="132">(132)</num> <content>Palo Pinto;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/133"> <num value="133">(133)</num> <content>Pat Cleburne;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/134"> <num value="134">(134)</num> <content>Pat Mayse;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/135"> <num value="135">(135)</num> <content>Pinkston;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/136"> <num value="136">(136)</num> <content>Placid;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/137"> <num value="137">(137)</num> <content>Possum Kingdom;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/138"> <num value="138">(138)</num> <content>Proctor;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/139"> <num value="139">(139)</num> <content>Purtis Creek;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/140"> <num value="140">(140)</num> <content>Quitman;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/141"> <num value="141">(141)</num> <content>Raven;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/142"> <num value="142">(142)</num> <content>Ray Hubbard;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/143"> <num value="143">(143)</num> <content>Ray Roberts;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/144"> <num value="144">(144)</num> <content>Red Bluff;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/145"> <num value="145">(145)</num> <content>Richland-Chambers;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/146"> <num value="146">(146)</num> <content>Sam Rayburn;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/147"> <num value="147">(147)</num> <content>Sheldon;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/148"> <num value="148">(148)</num> <content>Somerville;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/149"> <num value="149">(149)</num> <content>Squaw Creek;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/150"> <num value="150">(150)</num> <content>Stamford;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/151"> <num value="151">(151)</num> <content>Stillhouse Hollow;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/152"> <num value="152">(152)</num> <content>Striker;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/153"> <num value="153">(153)</num> <content>Sulphur Springs;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/154"> <num value="154">(154)</num> <content>Sweetwater;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/155"> <num value="155">(155)</num> <content>Tawakoni;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/156"> <num value="156">(156)</num> <content>Texana;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/157"> <num value="157">(157)</num> <content>Texoma;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/158"> <num value="158">(158)</num> <content>Timpson;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/159"> <num value="159">(159)</num> <content>Toledo Bend;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/160"> <num value="160">(160)</num> <content>Tradinghouse Creek;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/161"> <num value="161">(161)</num> <content>Travis;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/162"> <num value="162">(162)</num> <content>Twin Buttes;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/163"> <num value="163">(163)</num> <content>Tyler;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/164"> <num value="164">(164)</num> <content>Waco;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/165"> <num value="165">(165)</num> <content>Walter E. Long;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/166"> <num value="166">(166)</num> <content>Waxahachie;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/167"> <num value="167">(167)</num> <content>Weatherford;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/168"> <num value="168">(168)</num> <content>Welsh;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/169"> <num value="169">(169)</num> <content>Wheeler Branch;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/170"> <num value="170">(170)</num> <content>White River;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/171"> <num value="171">(171)</num> <content>White Rock;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/172"> <num value="172">(172)</num> <content>Whitney;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/173"> <num value="173">(173)</num> <content>Wichita;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/174"> <num value="174">(174)</num> <content>Winnsboro;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/175"> <num value="175">(175)</num> <content>Winters-Elm Creek;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/176"> <num value="176">(176)</num> <content>Wood;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/177"> <num value="177">(177)</num> <content>Worth; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.004/178"> <num value="178">(178)</num> <content>Wright Patman.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 405, Sec. 35, eff. Sept. 1, 1999. Amended by: Acts 2019, 86th Leg., R.S., Ch. 1320 (H.B. 4150), Sec. 4, eff. September 1, 2019.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c38/scA/s38.005"> <num value="38.005">Sec. 38.005.</num> <heading>ELECTRIC SERVICE RELIABILITY MEASURES</heading> <subsection identifier="/us/tx/ut/t2/c38/scA/s38.005/a"> <num value="a">(a)</num> <chapeau>The commission shall implement service quality and reliability standards relating to the delivery of electricity to retail customers by electric utilities and transmission and distribution utilities. The commission by rule shall develop reliability standards, including:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.005/1"> <num value="1">(1)</num> <content>the system-average interruption frequency index (SAIFI);</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.005/2"> <num value="2">(2)</num> <content>the system-average interruption duration index (SAIDI);</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.005/3"> <num value="3">(3)</num> <content>achievement of average response time for customer service requests or inquiries; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.005/4"> <num value="4">(4)</num> <content>other standards that the commission finds reasonable and appropriate.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scA/s38.005/b"> <num value="b">(b)</num> <chapeau>The commission may take appropriate enforcement action under this section, including action against a utility, if any of the utility's feeders with 10 or more customers has had a SAIDI or SAIFI average that is more than 200 percent greater than the system average of all feeders during any two-year period. In determining the appropriate enforcement action, the commission shall consider:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.005/1"> <num value="1">(1)</num> <content>the feeder's operating and maintenance history;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.005/2"> <num value="2">(2)</num> <content>the cause of each interruption in the feeder's service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.005/3"> <num value="3">(3)</num> <content>the duration of each interruption in the feeder's service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.005/4"> <num value="4">(4)</num> <content>any action taken by a utility to address the feeder's performance;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.005/5"> <num value="5">(5)</num> <content>the estimated cost and benefit of remediating a feeder's performance; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.005/6"> <num value="6">(6)</num> <content>any other relevant factor as determined by the commission.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scA/s38.005/c"> <num value="c">(c)</num> <content>The standards implemented under Subsection (a) shall require each electric utility and transmission and distribution utility subject to this section to maintain adequately trained and experienced personnel throughout the utility's service area so that the utility is able to fully and adequately comply with the appropriate service quality and reliability standards.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scA/s38.005/d"> <num value="d">(d)</num> <content>The standards shall ensure that electric utilities do not neglect any local neighborhood or geographic area, including rural areas, communities of less than 1,000 persons, and low-income areas, with regard to system reliability.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scA/s38.005/e"> <num value="e">(e)</num> <content>The commission may require each electric utility and transmission and distribution utility to supply data to assist the commission in developing the reliability standards.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scA/s38.005/f"> <num value="f">(f)</num> <content>Each electric utility, transmission and distribution utility, electric cooperative, municipally owned utility, and generation provider shall be obligated to comply with any operational criteria duly established by the independent organization as defined by Section 39.151 or adopted by the commission.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 36, eff. Sept. 1, 1999. Amended by: Acts 2009, 81st Leg., R.S., Ch. 424 (H.B. 2052), Sec. 1, eff. June 19, 2009. Acts 2025, 89th Leg., R.S., Ch. 856 (S.B. 1789), Sec. 2, eff. September 1, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c38/scA/s38.006"> <num value="38.006">Sec. 38.006.</num> <heading>STRUCTURAL INTEGRITY STANDARDS FOR TRANSMISSION AND DISTRIBUTION POLES</heading> <subsection identifier="/us/tx/ut/t2/c38/scA/s38.006/a"> <num value="a">(a)</num> <content>This section applies only to an electric utility, municipally owned utility, or electric cooperative that operates transmission or distribution assets.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scA/s38.006/b"> <num value="b">(b)</num> <content>The commission by rule shall adopt standards for the structural integrity of transmission and distribution poles.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scA/s38.006/c"> <num value="c">(c)</num> <chapeau>The standards adopted under this section must:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.006/1"> <num value="1">(1)</num> <chapeau>require an electric utility to:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c38/scA/s38.006/A"> <num value="A">(A)</num> <content>inspect, maintain, remediate, and replace transmission and distribution poles as necessary on a timeline established by the commission; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c38/scA/s38.006/B"> <num value="B">(B)</num> <content>maintain records of the actions described by Paragraph (A);</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.006/2"> <num value="2">(2)</num> <content>account for geographic and weather characteristics of this state;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.006/3"> <num value="3">(3)</num> <content>consider national guidelines such as the National Electrical Safety Code and guidelines developed by the Rural Utilities Service of the United States Department of Agriculture;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.006/4"> <num value="4">(4)</num> <content>establish a classification system to assess the serviceability of transmission and distribution poles that accounts for pole maintenance and extending the service life of transmission and distribution poles; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.006/5"> <num value="5">(5)</num> <content>consider the characteristics of electric utility, municipally owned utility, and electric cooperative transmission and distribution systems throughout this state.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scA/s38.006/d"> <num value="d">(d)</num> <content>The governing body of a municipally owned utility or an electric cooperative shall adopt for the utility or cooperative, as applicable, the standards adopted by the commission under Subsection (b). If the commission revises the standards adopted under Subsection (b), the governing body of each municipally owned utility and electric cooperative shall adopt the revised standards not later than the 120th day after the effective date of the commission's revised standards.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scA/s38.006/e"> <num value="e">(e)</num> <chapeau>Not later than May 1 of each year, each electric utility, municipally owned utility, and electric cooperative shall submit to the commission a report on:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.006/1"> <num value="1">(1)</num> <content>the implementation of the utility's or cooperative's transmission and distribution pole maintenance schedule;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.006/2"> <num value="2">(2)</num> <content>the results of the utility's or cooperative's inspection of transmission and distribution poles, including the number of poles inspected and any remediation or replacement action taken; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scA/s38.006/3"> <num value="3">(3)</num> <content>any other information the commission requires.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scA/s38.006/f"> <num value="f">(f)</num> <content>A municipally owned utility or electric cooperative shall include with the first report required under Subsection (e) after the utility or cooperative adopts initial or revised standards under Subsection (d) an attestation from the utility's or cooperative's highest-ranking representative, official, or officer with binding authority over the utility or cooperative stating that the utility or cooperative has adopted standards in compliance with this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scA/s38.006/g"> <num value="g">(g)</num> <content>The commission may impose an administrative penalty under Section 15.023 against a municipally owned utility or electric cooperative for a violation of this section or a rule adopted under this section.</content> </subsection> <sourceCredit>Added by Acts 2025, 89th Leg., R.S., Ch. 856 (S.B. 1789), Sec. 3, eff. September 1, 2025.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c38/scB"> <num value="B">SUBCHAPTER B.</num> <heading>PROHIBITIONS ON PREFERENCES AND DISCRIMINATION</heading> <section identifier="/us/tx/ut/t2/c38/scB/s38.021"> <num value="38.021">Sec. 38.021.</num> <heading>UNREASONABLE PREFERENCE OR PREJUDICE CONCERNING SERVICE PROHIBITED</heading> <chapeau>In providing a service to persons in a classification, an electric utility may not:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scB/s38.021/1"> <num value="1">(1)</num> <content>grant an unreasonable preference or advantage to a person in the classification; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scB/s38.021/2"> <num value="2">(2)</num> <content>subject a person in the classification to an unreasonable prejudice or disadvantage.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c38/scB/s38.022"> <num value="38.022">Sec. 38.022.</num> <heading>DISCRIMINATION AND RESTRICTION ON COMPETITION</heading> <chapeau>An electric utility may not:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scB/s38.022/1"> <num value="1">(1)</num> <content>discriminate against a person or electric cooperative who sells or leases equipment or performs services in competition with the electric utility; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scB/s38.022/2"> <num value="2">(2)</num> <content>engage in a practice that tends to restrict or impair that competition.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 405, Sec. 37, eff. Sept. 1, 1999.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c38/scC"> <num value="C">SUBCHAPTER C.</num> <heading>EXAMINATIONS, TESTS, AND INSPECTIONS</heading> <section identifier="/us/tx/ut/t2/c38/scC/s38.051"> <num value="38.051">Sec. 38.051.</num> <heading>EXAMINATION AND TEST OF INSTRUMENT OR EQUIPMENT; INSPECTION</heading> <subsection identifier="/us/tx/ut/t2/c38/scC/s38.051/a"> <num value="a">(a)</num> <chapeau>A regulatory authority may:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scC/s38.051/1"> <num value="1">(1)</num> <content>examine and test equipment, including meters and instruments, used to measure service of an electric utility; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scC/s38.051/2"> <num value="2">(2)</num> <content>set up and use on the premises occupied by an electric utility an apparatus or appliance necessary for the examination or test.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scC/s38.051/b"> <num value="b">(b)</num> <content>The electric utility is entitled to be represented at an examination, test, or inspection made under this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scC/s38.051/c"> <num value="c">(c)</num> <content>The electric utility and its officers and employees shall facilitate the examination, test, or inspection by giving reasonable aid to the regulatory authority and to any person designated by the regulatory authority for the performance of those duties.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c38/scC/s38.052"> <num value="38.052">Sec. 38.052.</num> <heading>INSPECTION FOR CONSUMER</heading> <subsection identifier="/us/tx/ut/t2/c38/scC/s38.052/a"> <num value="a">(a)</num> <chapeau>A consumer may have a meter or other measuring device tested by an electric utility:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scC/s38.052/1"> <num value="1">(1)</num> <content>once without charge, after a reasonable period of presumed accuracy the regulatory authority establishes by rule; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scC/s38.052/2"> <num value="2">(2)</num> <content>at a shorter interval on payment of a reasonable fee established by the regulatory authority.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scC/s38.052/b"> <num value="b">(b)</num> <content>The regulatory authority shall establish reasonable fees to be paid for other examining or testing of a measuring device on the request of a consumer.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scC/s38.052/c"> <num value="c">(c)</num> <content>If the consumer requests the test under Subsection (a)(2) and the measuring device is found unreasonably defective or incorrect to the substantial disadvantage of the consumer, the fee the consumer paid at the time of the request shall be refunded.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c38/scD"> <num value="D">SUBCHAPTER D.</num> <heading>IMPROVEMENTS IN SERVICE</heading> <section identifier="/us/tx/ut/t2/c38/scD/s38.071"> <num value="38.071">Sec. 38.071.</num> <heading>IMPROVEMENTS IN SERVICE; INTERCONNECTING SERVICE</heading> <chapeau>The commission, after notice and hearing, may:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.071/1"> <num value="1">(1)</num> <chapeau>order an electric utility to provide specified improvements in its service in a specified area if:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c38/scD/s38.071/A"> <num value="A">(A)</num> <content>service in the area is inadequate or substantially inferior to service in a comparable area; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c38/scD/s38.071/B"> <num value="B">(B)</num> <content>requiring the company to provide the improved service is reasonable; or</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.071/2"> <num value="2">(2)</num> <content>order two or more electric utilities or electric cooperatives to establish specified facilities for interconnecting service.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 405, Sec. 38, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c38/scD/s38.072"> <num value="38.072">Sec. 38.072.</num> <heading>PRIORITIES FOR POWER RESTORATION TO CERTAIN MEDICAL FACILITIES</heading> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.072/a"> <num value="a">(a)</num> <chapeau>In this section:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.072/1"> <num value="1">(1)</num> <content>"Assisted living facility" has the meaning assigned by Section 247.002, Health and Safety Code.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.072/2"> <num value="2">(2)</num> <content>"End stage renal disease facility" has the meaning assigned by Section 251.001, Health and Safety Code.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.072/3"> <num value="3">(3)</num> <content>"Extended power outage" has the meaning assigned by Section 13.1395, Water Code.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.072/4"> <num value="4">(4)</num> <content>"Hospice services" has the meaning assigned by Section 142.001, Health and Safety Code.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.072/5"> <num value="5">(5)</num> <content>"Nursing facility" has the meaning assigned by Section 242.301, Health and Safety Code.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.072/b"> <num value="b">(b)</num> <chapeau>The commission by rule shall require an electric utility to give to the following the same priority that it gives to a hospital in the utility's emergency operations plan for restoring power after an extended power outage:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.072/1"> <num value="1">(1)</num> <content>a nursing facility;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.072/2"> <num value="2">(2)</num> <content>an assisted living facility;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.072/3"> <num value="3">(3)</num> <content>an end stage renal disease facility; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.072/4"> <num value="4">(4)</num> <content>a facility that provides hospice services.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.072/c"> <num value="c">(c)</num> <content>The rules adopted by the commission under Subsection (b) must allow an electric utility to exercise the electric utility's discretion to prioritize power restoration for a facility after an extended power outage in accordance with the facility's needs and with the characteristics of the geographic area in which power must be restored.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.072/d"> <num value="d">(d)</num> <content>A municipally owned utility shall report the emergency operations plan for restoring power to a facility listed in Subsection (b) to the municipality's governing body or the body vested with the power to manage and operate the municipally owned utility.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.072/e"> <num value="e">(e)</num> <content>An electric cooperative shall report the emergency operations plan for restoring power to a facility listed in Subsection (b) to the board of directors of the electric cooperative.</content> </subsection> <sourceCredit>Added by Acts 2011, 82nd Leg., R.S., Ch. 640 (S.B. 937), Sec. 1, eff. September 1, 2011. Amended by: Acts 2021, 87th Leg., R.S., Ch. 961 (S.B. 1876), Sec. 3, eff. September 1, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c38/scD/s38.0725"> <num value="38.0725">Sec. 38.0725.</num> <heading>LIST OF PRIORITY FACILITIES</heading> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.0725/a"> <num value="a">(a)</num> <chapeau>In this section, "priority facility" means:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.0725/1"> <num value="1">(1)</num> <content>a facility listed in Section 38.072(b); or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.0725/2"> <num value="2">(2)</num> <chapeau>a facility for which electric service is considered crucial for the protection or maintenance of public safety, including:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c38/scD/s38.0725/A"> <num value="A">(A)</num> <content>a hospital;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c38/scD/s38.0725/B"> <num value="B">(B)</num> <content>a police station;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c38/scD/s38.0725/C"> <num value="C">(C)</num> <content>a fire station;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c38/scD/s38.0725/D"> <num value="D">(D)</num> <content>a critical water or wastewater facility; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c38/scD/s38.0725/E"> <num value="E">(E)</num> <content>a confinement facility operated by or under a contract with any division of the Texas Department of Criminal Justice.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.0725/b"> <num value="b">(b)</num> <chapeau>An electric utility shall maintain a list of priority facilities in the utility's retail service area that includes the following information:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.0725/1"> <num value="1">(1)</num> <content>the name of each priority facility;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.0725/2"> <num value="2">(2)</num> <content>the type of each priority facility; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.0725/3"> <num value="3">(3)</num> <content>the address of each priority facility.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.0725/c"> <num value="c">(c)</num> <content>An electric utility shall provide on the utility's Internet website a mechanism for a facility to request that the utility add the facility to the priority facility list. The electric utility shall add the requested facility to the list only if the facility is a priority facility.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.0725/d"> <num value="d">(d)</num> <content>On request from a facility, an electric utility shall disclose to the facility not later than the 14th day after the date the utility receives the request whether the facility is on the priority facility list.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.0725/e"> <num value="e">(e)</num> <content>Notwithstanding any other law, on a declaration of a natural disaster or other emergency by the governor affecting the service area of the electric utility, the utility shall provide the list of priority facilities to the Texas Division of Emergency Management.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.0725/f"> <num value="f">(f)</num> <content>A priority facility list submitted to the Texas Division of Emergency Management under this section is confidential and not subject to disclosure under Chapter 552, Government Code. The commission may establish additional processes for protecting consumer information under this section as the commission determines necessary.</content> </subsection> <sourceCredit>Added by Acts 2025, 89th Leg., R.S., Ch. 562 (H.B. 1584), Sec. 1, eff. September 1, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c38/scD/s38.073"> <num value="38.073">Sec. 38.073.</num> <heading>AUTHORITY OF COMMISSION DURING AN EMERGENCY</heading> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.073/a"> <num value="a">(a)</num> <content>On a declaration of a natural disaster or other emergency by the governor, the commission may require an electric utility, municipally owned utility, electric cooperative, qualifying facility, power generation company, exempt wholesale generator, or power marketer to sell electricity to an electric utility, municipally owned utility, or electric cooperative that is unable to supply power to meet customer demand due to the natural disaster or other emergency. Any plant, property, equipment, or other items used to receive or deliver electricity under this subsection are used and useful in delivering service to the public, and the commission shall allow timely recovery for the costs of those items. The commission may order an electric utility, municipally owned utility, or electric cooperative to provide interconnection service to another electric utility, municipally owned utility, or electric cooperative to facilitate a sale of electricity under this section. If the commission does not order the sale of electricity during a declared emergency as described by this subsection, the commission shall promptly submit to the legislature a report describing the reasons why the commission did not make that order.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.073/b"> <num value="b">(b)</num> <content>If an entity receives electricity under Subsection (a), the receiving entity shall reimburse the supplying entity for the actual cost of providing the electricity. The entity receiving the electricity is responsible for any transmission and distribution service charges specifically incurred in relation to providing the electricity.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.073/c"> <num value="c">(c)</num> <chapeau>An entity that pays for electricity received under Subsection (b) and that is regulated by the commission may fully recover the cost of the electricity in a timely manner by:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.073/1"> <num value="1">(1)</num> <content>including the cost in the entity's fuel cost under Section 36.203; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.073/2"> <num value="2">(2)</num> <content>notwithstanding Section 36.201, imposing a different surcharge.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2009, 81st Leg., R.S., Ch. 1226 (S.B. 1492), Sec. 2, eff. June 19, 2009. Added by Acts 2009, 81st Leg., R.S., Ch. 1280 (H.B. 1831), Sec. 2.02, eff. September 1, 2009.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c38/scD/s38.074"> <num value="38.074">Sec. 38.074.</num> <heading>CRITICAL NATURAL GAS FACILITIES AND ENTITIES</heading> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.074/a"> <num value="a">(a)</num> <content>The commission shall collaborate with the Railroad Commission of Texas to adopt rules to establish a process to designate certain natural gas facilities and entities associated with providing natural gas in this state as critical during energy emergencies.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.074/b"> <num value="b">(b)</num> <chapeau>The rules must:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.074/1"> <num value="1">(1)</num> <content>ensure that the independent organization certified under Section 39.151 for the ERCOT power region and each electric utility, municipally owned utility, and electric cooperative providing service in the ERCOT power region is provided with the information required by Section 81.073, Natural Resources Code;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.074/2"> <num value="2">(2)</num> <content>provide for prioritizing for load-shed purposes during an energy emergency the facilities and entities designated under Subsection (a); and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.074/3"> <num value="3">(3)</num> <content>provide discretion to an electric utility, municipally owned utility, or electric cooperative providing service in the ERCOT power region to prioritize power delivery and power restoration among the facilities and entities designated under Subsection (a) on the utility's or cooperative's systems, as circumstances require.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 426 (S.B. 3), Sec. 16, eff. June 8, 2021. Added by Acts 2021, 87th Leg., R.S., Ch. 931 (H.B. 3648), Sec. 2, eff. June 18, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c38/scD/s38.075"> <num value="38.075">Sec. 38.075.</num> <heading>WEATHER EMERGENCY PREPAREDNESS</heading> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.075/a"> <num value="a">(a)</num> <content>The commission by rule shall require each electric cooperative, municipally owned utility, and transmission and distribution utility providing transmission service in the ERCOT power region to implement measures to prepare the cooperative's or utility's facilities to maintain service quality and reliability during a weather emergency according to standards adopted by the commission. In adopting the rules, the commission shall take into consideration weather predictions produced by the office of the state climatologist.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.075/b"> <num value="b">(b)</num> <chapeau>The independent organization certified under Section 39.151 for the ERCOT power region shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.075/1"> <num value="1">(1)</num> <content>inspect the facilities of each electric cooperative, municipally owned utility, and transmission and distribution utility providing transmission service in the ERCOT power region for compliance with the reliability standards;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.075/2"> <num value="2">(2)</num> <content>provide the owner of a facility described by Subdivision (1) with a reasonable period of time in which to remedy any violation the independent organization discovers in an inspection; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.075/3"> <num value="3">(3)</num> <content>report to the commission any violation that is not remedied in a reasonable period of time.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.075/c"> <num value="c">(c)</num> <content>The independent organization certified under Section 39.151 for the ERCOT power region shall prioritize inspections conducted under Subsection (b)(1) based on risk level, as determined by the organization.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.075/d"> <num value="d">(d)</num> <content>The commission shall impose an administrative penalty on an entity, including a municipally owned utility or an electric cooperative, that violates a rule adopted under this section and does not remedy that violation within a reasonable period of time.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.075/e"> <num value="e">(e)</num> <content>Notwithstanding any other provision of this subtitle, the commission shall allow a transmission and distribution utility to design and operate a load management program for nonresidential customers to be used where the independent organization certified under Section 39.151 for the ERCOT power region has declared a Level 2 Emergency or a higher level of emergency or has otherwise directed the transmission and distribution utility to shed load. A transmission and distribution utility implementing a load management program under this subsection shall be permitted to recover the reasonable and necessary costs of the load management program under Chapter 36. A load management program operated under this subsection is not considered a competitive service.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 426 (S.B. 3), Sec. 16, eff. June 8, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c38/scD/s38.076"> <num value="38.076">Sec. 38.076.</num> <heading>INVOLUNTARY AND VOLUNTARY LOAD SHEDDING</heading> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.076/a"> <num value="a">(a)</num> <content>The commission by rule shall adopt a system to allocate load shedding among electric cooperatives, municipally owned utilities, and transmission and distribution utilities providing transmission service in the ERCOT power region during an involuntary load shedding event initiated by the independent organization certified under Section 39.151 for the region during an energy emergency.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.076/b"> <num value="b">(b)</num> <content>The system must provide for allocation of the load shedding obligation to each electric cooperative, municipally owned utility, and transmission and distribution utility in different seasons based on historical seasonal peak demand in the service territory of the electric cooperative, municipally owned utility, or transmission and distribution utility.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.076/c"> <num value="c">(c)</num> <chapeau>The commission by rule shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.076/1"> <num value="1">(1)</num> <content>categorize types of critical load that may be given the highest priority for power restoration; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.076/2"> <num value="2">(2)</num> <chapeau>require electric cooperatives, municipally owned utilities, and transmission and distribution utilities providing transmission service in the ERCOT power region to submit to the commission and the independent organization certified under Section 39.151 for the region:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c38/scD/s38.076/A"> <num value="A">(A)</num> <content>customers or circuits the cooperative or utility has designated as critical load; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c38/scD/s38.076/B"> <num value="B">(B)</num> <content>a plan for participating in load shedding in response to an involuntary load shedding event described by Subsection (a).</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.076/d"> <num value="d">(d)</num> <chapeau>The commission by rule shall require electric cooperatives and municipally owned utilities providing transmission service in the ERCOT power region to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.076/1"> <num value="1">(1)</num> <content>maintain lists of customers willing to voluntarily participate in voluntary load reduction; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.076/2"> <num value="2">(2)</num> <content>coordinate with municipalities, businesses, and customers that consume large amounts of electricity to encourage voluntary load reduction.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.076/e"> <num value="e">(e)</num> <content>This section does not abridge, enlarge, or modify the obligation of an electric cooperative, a municipally owned utility, or a transmission and distribution utility to comply with federal reliability standards.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.076/f"> <num value="f">(f)</num> <content>After each load shedding event, the commission may conduct an examination of the implementation of load shedding, including whether each electric cooperative, municipally owned utility, and transmission and distribution utility complied with its plan as filed with the commission under Subsection (c)(2).</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 426 (S.B. 3), Sec. 16, eff. June 8, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c38/scD/s38.077"> <num value="38.077">Sec. 38.077.</num> <heading>RELIABILITY EXERCISES</heading> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.077/a"> <num value="a">(a)</num> <content>In this section, "critical facility" means a transmission substation and any associated control centers that, if rendered inoperable or damaged because of a physical attack, could cause widespread instability, uncontrolled separation, or cascading outages within an interconnection.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.077/b"> <num value="b">(b)</num> <content>The commission and the independent organization certified for the ERCOT power region under Section 39.151 shall conduct simulated or tabletop load shedding exercises with providers of electric generation service and transmission and distribution service in the ERCOT power region.</content> <continuation>The commission shall ensure that each year at least one simulated or tabletop load shedding exercise is conducted during a summer month and one simulated or tabletop load shedding exercise is conducted during a winter month.</continuation> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.077/c"> <num value="c">(c)</num> <content>The commission and the independent organization certified for the ERCOT power region under Section 39.151 shall conduct simulated or tabletop exercises with providers of electric generation service and transmission and distribution service in the ERCOT power region to mitigate and prepare for a threat of an attack or an actual physical attack on a critical facility. The exercises required by this subsection are in addition to the exercises required by Subsection (b) and any requirements of the North American Electric Reliability Corporation Critical Infrastructure Protection plan standards. The commission and the independent organization shall conduct the exercises under this subsection at least once every two years.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.077/d"> <num value="d">(d)</num> <chapeau>A simulated or tabletop exercise conducted under Subsection (c) must identify the roles and responsibilities of the following in the event of a threat of an attack or an actual physical attack on a critical facility:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.077/1"> <num value="1">(1)</num> <content>transmission and distribution service providers;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.077/2"> <num value="2">(2)</num> <content>providers of electric generation service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.077/3"> <num value="3">(3)</num> <content>law enforcement;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.077/4"> <num value="4">(4)</num> <content>the independent organization certified for the ERCOT power region under Section 39.151; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.077/5"> <num value="5">(5)</num> <content>the commission.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.077/e"> <num value="e">(e)</num> <content>A transmission and distribution service provider is not required to disclose the specific location of the provider's critical substations to the commission or the independent organization certified for the ERCOT power region under Section 39.151 for the purposes of a simulated or tabletop exercise conducted under Subsection (c).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.077/f"> <num value="f">(f)</num> <content>Each provider of electric generation service and of transmission and distribution service that participates in a simulated or tabletop exercise conducted under Subsection (c) shall provide to the independent organization certified for the ERCOT power region under Section 39.151 a written attestation that the provider has coordinated with law enforcement when identifying roles and responsibilities under Subsection (d).</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 426 (S.B. 3), Sec. 16, eff. June 8, 2021. Amended by: Acts 2025, 89th Leg., R.S., Ch. 760 (S.B. 75), Sec. 2, eff. June 20, 2025. Acts 2025, 89th Leg., R.S., Ch. 1014 (S.B. 2148), Sec. 1, eff. June 20, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c38/scD/s38.078"> <num value="38.078">Sec. 38.078.</num> <heading>CIRCUIT SEGMENTATION STUDY AND COST RECOVERY</heading> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.078/a"> <num value="a">(a)</num> <content>Not later than September 15, 2023, the commission shall direct each transmission and distribution utility to perform a circuit segmentation study.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.078/b"> <num value="b">(b)</num> <chapeau>A circuit segmentation study must:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.078/1"> <num value="1">(1)</num> <content>use an engineering analysis to examine whether and how the transmission and distribution utility's transmission and distribution systems can be segmented and sectionalized to manage and rotate outages more evenly across all customers and circuits, while maintaining the protections offered to critical facilities;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.078/2"> <num value="2">(2)</num> <content>include an engineering analysis of the feasibility of using sectionalization, automated reclosers, and other technology to break up the circuits that host significant numbers of critical facilities into smaller segments for outage management purposes to enable more granular and flexible outage management;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.078/3"> <num value="3">(3)</num> <content>identify feeders with critical facilities that, if equipped with facility-specific backup power systems and segmentation, can enhance the utility's outage management flexibility; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.078/4"> <num value="4">(4)</num> <content>include an estimate of the time, capital cost, and expected improvements to load-shed management associated with the circuit segmentation study.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.078/c"> <num value="c">(c)</num> <content>Each transmission and distribution utility shall submit a report of the conclusions of the utility's study to the commission not later than September 1, 2024.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.078/d"> <num value="d">(d)</num> <content>The commission shall review each circuit segmentation study not later than March 15, 2025.</content> </subsection> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 13, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c38/scD/s38.079"> <num value="38.079">Sec. 38.079.</num> <heading>TRANSMISSION AND DISTRIBUTION SYSTEM RESILIENCY PLAN AND COST RECOVERY</heading> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.079/a"> <num value="a">(a)</num> <content>In this section, "plan" means a transmission and distribution system resiliency plan described by Subsection (b).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.079/b"> <num value="b">(b)</num> <chapeau>An electric utility may file, in a manner authorized by commission rule, a plan to enhance the resiliency of the utility's transmission and distribution system through at least one of the following methods:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.079/1"> <num value="1">(1)</num> <content>hardening electrical transmission and distribution facilities;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.079/2"> <num value="2">(2)</num> <content>modernizing electrical transmission and distribution facilities;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.079/3"> <num value="3">(3)</num> <content>undergrounding certain electrical distribution lines;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.079/4"> <num value="4">(4)</num> <content>lightning mitigation measures;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.079/5"> <num value="5">(5)</num> <content>flood mitigation measures;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.079/6"> <num value="6">(6)</num> <content>information technology;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.079/7"> <num value="7">(7)</num> <content>cybersecurity measures;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.079/8"> <num value="8">(8)</num> <content>physical security measures;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.079/9"> <num value="9">(9)</num> <content>vegetation management; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.079/10"> <num value="10">(10)</num> <content>wildfire mitigation and response.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.079/c"> <num value="c">(c)</num> <content>A plan must explain the systematic approach the electric utility will use to carry out the plan during at least a three-year period.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.079/d"> <num value="d">(d)</num> <chapeau>In determining whether to approve a plan filed under this section, the commission shall consider:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.079/1"> <num value="1">(1)</num> <content>the extent to which the plan is expected to enhance system resiliency, including whether the plan prioritizes areas of lower performance; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.079/2"> <num value="2">(2)</num> <content>the estimated costs of implementing the measures proposed in the plan.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.079/e"> <num value="e">(e)</num> <content>The commission shall issue an order to approve, modify, or deny a plan filed under Subsection (b) and any associated rider described by Subsection (i) not later than the 180th day after the plan is filed with the commission. The commission may approve a plan only if the commission determines that approving the plan is in the public interest.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.079/f"> <num value="f">(f)</num> <content>For a plan approved by the commission, with or without modification, an electric utility may request a good cause exception on implementing all or some of the measures in the plan if operational needs, business needs, financial conditions, or supply chain or labor conditions dictate the exception. The commission's denial of a plan is not considered to be a finding of the prudence or imprudence of a measure or cost in the plan for the purposes of Chapter 36 or this chapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.079/g"> <num value="g">(g)</num> <content>An electric utility for which the commission has approved a plan under this section may request that the commission review an updated plan submitted by the electric utility. The updated plan must comply with any applicable commission rules and take effect on a date that is not earlier than the third anniversary of the approval date of the utility's most recently approved plan. The commission shall review and approve, modify, or deny the updated plan in the manner provided by Subsections (d), (e), and (f).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.079/h"> <num value="h">(h)</num> <content>An electric utility's implementation of a plan approved under this section may be reviewed for the purposes of Chapter 36 or this chapter. If the commission determines that the costs to implement an approved plan were imprudently incurred or otherwise unreasonable, those costs are subject to disallowance.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.079/i"> <num value="i">(i)</num> <content>Notwithstanding any other law, an electric utility may file with a plan an application for a rider to recover the electric utility's distribution investment that is made to implement a plan and is used and useful to the electric utility in providing service to the public. The electric utility may file the application before the electric utility places into service the distribution investment to implement an approved plan. The commission may approve the rider application before the electric utility places into service the distribution investment to implement an approved plan. The commission may not approve a rider that would allow an electric utility to begin recovering the distribution investment before the utility begins to use the investment to provide service to the public. If the commission approves or modifies the plan, the commission shall determine the appropriate terms of the rider in the approval order. The commission shall adopt a procedure for reconciliation of an electric utility's distribution-related costs to implement an approved plan.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.079/j"> <num value="j">(j)</num> <content>As part of a review described by Subsection (g), the commission shall reconcile the rider authorized under Subsection (i) to determine the electric utility's reasonably and prudently incurred plan costs.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.079/k"> <num value="k">(k)</num> <content>If an electric utility that files a plan with the commission does not apply for a rider under Subsection (i), after commission review, the utility may defer all or a portion of the distribution-related costs relating to the implementation of the plan for future recovery as a regulatory asset, including depreciation expense and carrying costs at the utility's weighted average cost of capital established in the commission's final order in the utility's most recent base rate proceeding in a manner consistent with Chapter 36, and use commission authorized cost recovery alternatives under Sections 36.209 and 36.210 or another general rate proceeding.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.079/l"> <num value="l">(l)</num> <content>Plan costs considered by the commission to be reasonable and prudent may include only incremental costs that are not already being recovered through the electric utility's base rates or any other rate rider and must be allocated to customer classes pursuant to the rate design most recently approved by the commission.</content> </subsection> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 836 (H.B. 2555), Sec. 2, eff. June 13, 2023. Redesignated from Utilities Code, Section 38.078 by Acts 2025, 89th Leg., R.S., Ch. 204 (H.B. 1620), Sec. 22.001(67), eff. September 1, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c38/scD/s38.080"> <num value="38.080">Sec. 38.080.</num> <heading>WILDFIRE MITIGATION PLAN</heading> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.080/a"> <num value="a">(a)</num> <chapeau>In this section:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.080/1"> <num value="1">(1)</num> <content>"Division" means the Texas Division of Emergency Management.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.080/2"> <num value="2">(2)</num> <content>"First responder" has the meaning assigned by Section 418.251, Government Code.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.080/3"> <num value="3">(3)</num> <content>"Plan" means a wildfire mitigation plan described by Subsection (b).</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.080/4"> <num value="4">(4)</num> <content>"Wildfire risk area" means an area determined by the division or an electric utility, municipally owned utility, or electric cooperative to be at an elevated risk for wildfire.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.080/b"> <num value="b">(b)</num> <chapeau>An electric utility, municipally owned utility, or electric cooperative that owns a transmission or distribution facility in a wildfire risk area shall file with the commission a wildfire mitigation plan that includes the following:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.080/1"> <num value="1">(1)</num> <content>a description of each area to which the utility or cooperative provides transmission or distribution service that is in a wildfire risk area and the utility's or cooperative's process for periodically inspecting the utility's or cooperative's transmission and distribution facilities in those areas;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.080/2"> <num value="2">(2)</num> <content>a detailed plan for vegetation management in the wildfire risk area;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.080/3"> <num value="3">(3)</num> <content>a detailed operations plan for reducing the likelihood of wildfire ignition from the utility's or cooperative's facilities and for responding to a wildfire;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.080/4"> <num value="4">(4)</num> <content>a description of the procedures the utility or cooperative intends to use to restore the utility's or cooperative's system during and after a wildfire event, including contact information for the utility or cooperative that may be used for coordination with the division and first responders;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.080/5"> <num value="5">(5)</num> <content>the utility's or cooperative's community outreach and public awareness plan regarding wildfire risks and actual wildfires affecting the utility's or cooperative's service territory or system, including a specific communications plan for responding to a wildfire event;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.080/6"> <num value="6">(6)</num> <content>any infrastructure report, maintenance report, or transmission or distribution pole maintenance plan required by the commission;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.080/7"> <num value="7">(7)</num> <content>an analysis of the wildfire mitigation plan prepared by an independent expert in fire risk mitigation;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.080/8"> <num value="8">(8)</num> <content>a description of procedures for de-energizing power lines and disabling reclosers to mitigate potential wildfires or implement a public safety power shut-off plan;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.080/9"> <num value="9">(9)</num> <content>a description of the procedures and standards that the utility or cooperative will use to inspect and operate the utility's or cooperative's infrastructure to mitigate the risk of wildfires;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.080/10"> <num value="10">(10)</num> <content>a description of how the utility or cooperative will monitor compliance with the wildfire mitigation plan; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.080/11"> <num value="11">(11)</num> <content>any other information the commission may require.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.080/c"> <num value="c">(c)</num> <chapeau>The commission shall issue an order not later than the 180th day after a plan is filed with the commission that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.080/1"> <num value="1">(1)</num> <content>approves the plan if the commission finds that approval is in the public interest; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.080/2"> <num value="2">(2)</num> <content>modifies or rejects the plan as necessary to be consistent with the public interest.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.080/d"> <num value="d">(d)</num> <content>An electric utility, municipally owned utility, or electric cooperative that does not implement a plan approved under this section is subject to an administrative penalty as provided by Chapter 15.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.080/e"> <num value="e">(e)</num> <content>The commission may accept in place of the information required under Subsection (b) any information required under other law that is substantially similar to the information required under that subsection.</content> </subsection> <sourceCredit>Added by Acts 2025, 89th Leg., R.S., Ch. 1072 (H.B. 145), Sec. 2, eff. June 20, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c38/scD/s38.081"> <num value="38.081">Sec. 38.081.</num> <heading>EVIDENCE IN ACTIONS FOR DAMAGES CAUSED BY WILDFIRE</heading> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.081/a"> <num value="a">(a)</num> <content>An electric utility, municipally owned utility, or electric cooperative that submits and obtains commission approval for a wildfire mitigation plan under Section 38.080 may use the plan as evidence in an action brought against the utility or cooperative for damages resulting from a wildfire ignited or propagated by the utility's or cooperative's facility.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.081/b"> <num value="b">(b)</num> <chapeau>Subject to any applicable tariff provision, in an action for damages resulting from a wildfire ignited or propagated by an electric utility's, municipally owned utility's, or electric cooperative's facility, the utility or cooperative is not liable for damages resulting from the wildfire if the trier of fact in the action finds that the utility or cooperative:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.081/1"> <num value="1">(1)</num> <content>submitted, obtained commission approval for, and implemented a wildfire mitigation plan under Section 38.080;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.081/2"> <num value="2">(2)</num> <content>was in compliance with relevant measures of the utility's or cooperative's wildfire mitigation plan with respect to the specific equipment found to have ignited or propagated the wildfire; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.081/3"> <num value="3">(3)</num> <content>did not cause the wildfire intentionally, recklessly, or with negligence.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.081/c"> <num value="c">(c)</num> <chapeau>Subsections (a) and (b) do not apply to an electric utility, municipally owned utility, or electric cooperative that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.081/1"> <num value="1">(1)</num> <content>does not file a wildfire mitigation plan under Section 38.080; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scD/s38.081/2"> <num value="2">(2)</num> <content>files a plan that is rejected by the commission.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scD/s38.081/d"> <num value="d">(d)</num> <content>Notwithstanding any other provision of this section, this section does not affect an express contractual right of a person or entity involving a communications facility or the shared use of an electric facility or pole attachment.</content> </subsection> <sourceCredit>Added by Acts 2025, 89th Leg., R.S., Ch. 1072 (H.B. 145), Sec. 2, eff. June 20, 2025.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c38/scE"> <num value="E">SUBCHAPTER E.</num> <heading>INFRASTRUCTURE IMPROVEMENT AND MAINTENANCE</heading> <section identifier="/us/tx/ut/t2/c38/scE/s38.101"> <num value="38.101">Sec. 38.101.</num> <heading>REPORT ON INFRASTRUCTURE IMPROVEMENT AND MAINTENANCE</heading> <subsection identifier="/us/tx/ut/t2/c38/scE/s38.101/a"> <num value="a">(a)</num> <chapeau>Not later than May 1 of each year, each electric utility shall submit to the commission a report describing the utility's activities related to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scE/s38.101/1"> <num value="1">(1)</num> <content>identifying areas that are susceptible to damage during severe weather and hardening transmission and distribution facilities in those areas; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scE/s38.101/2"> <num value="2">(2)</num> <content>vegetation management.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scE/s38.101/b"> <num value="b">(b)</num> <content>Each electric utility shall include in a report required under Subsection (a) a summary of the utility's activities related to preparing for emergency operations.</content> </subsection> <sourceCredit>Added by Acts 2009, 81st Leg., R.S., Ch. 1280 (H.B. 1831), Sec. 2.03, eff. September 1, 2009. Amended by: Acts 2025, 89th Leg., R.S., Ch. 856 (S.B. 1789), Sec. 5, eff. September 1, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c38/scE/s38.102"> <num value="38.102">Sec. 38.102.</num> <heading>REPORTS ON SAFETY PROCESSES AND INSPECTIONS</heading> <subsection identifier="/us/tx/ut/t2/c38/scE/s38.102/a"> <num value="a">(a)</num> <chapeau>Each electric utility, municipally owned utility, and electric cooperative that owns or operates overhead transmission or distribution assets shall submit to the commission a report that includes:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scE/s38.102/1"> <num value="1">(1)</num> <content>a summary description of hazard recognition training documents provided by the utility or electric cooperative to its employees related to overhead transmission and distribution facilities; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scE/s38.102/2"> <num value="2">(2)</num> <content>a summary description of training programs provided to employees by the utility or electric cooperative related to the National Electrical Safety Code for the construction of electric transmission and distribution lines.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scE/s38.102/b"> <num value="b">(b)</num> <content>An electric utility, municipally owned utility, or electric cooperative shall submit an updated report not later than the 30th day after the date the utility or electric cooperative finalizes a material change to a document or program included in a report submitted under Subsection (a).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scE/s38.102/c"> <num value="c">(c)</num> <chapeau>Not later than May 1 every five years, each electric utility, municipally owned utility, and electric cooperative that owns or operates overhead transmission facilities greater than 60 kilovolts shall submit to the commission a report for the preceding five-year period ending on December 31 of the preceding calendar year that includes:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scE/s38.102/1"> <num value="1">(1)</num> <content>the percentage of overhead transmission facilities greater than 60 kilovolts inspected for compliance with the National Electrical Safety Code relating to vertical clearance in the reporting period; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scE/s38.102/2"> <num value="2">(2)</num> <content>the percentage of the overhead transmission facilities greater than 60 kilovolts anticipated to be inspected for compliance with the National Electrical Safety Code relating to vertical clearance during the five-year period beginning on January 1 of the year in which the report is submitted.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scE/s38.102/d"> <num value="d">(d)</num> <chapeau>Subject to Subsection (f), not later than May 1 of each year, each electric utility, municipally owned utility, or electric cooperative that owns or operates overhead transmission facilities greater than 60 kilovolts shall submit to the commission a report on the overhead transmission facilities for the preceding calendar year that includes information regarding:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scE/s38.102/1"> <num value="1">(1)</num> <content>the number of identified occurrences of noncompliance with Section 38.004 regarding the vertical clearance requirements of the National Electrical Safety Code for overhead transmission facilities;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scE/s38.102/2"> <num value="2">(2)</num> <content>whether the utility or electric cooperative has actual knowledge that any portion of the utility's or electric cooperative's transmission system is not in compliance with Section 38.004 regarding the vertical clearance requirements of the National Electrical Safety Code; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scE/s38.102/3"> <num value="3">(3)</num> <content>whether the utility or electric cooperative has actual knowledge of any violations of easement agreements with the United States Army Corps of Engineers relating to Section 38.004 regarding the vertical clearance requirements of the National Electrical Safety Code for overhead transmission facilities.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scE/s38.102/e"> <num value="e">(e)</num> <chapeau>Subject to Subsection (f), not later than May 1 of each year, each electric utility, municipally owned utility, or electric cooperative that owns or operates overhead transmission facilities greater than 60 kilovolts or distribution facilities greater than 1 kilovolt shall submit to the commission a report for the preceding calendar year that includes:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scE/s38.102/1"> <num value="1">(1)</num> <content>the number of fatalities or injuries of individuals other than employees, contractors, or other persons qualified to work in proximity to overhead high voltage lines involving transmission or distribution assets related to noncompliance with the requirements of Section 38.004; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scE/s38.102/2"> <num value="2">(2)</num> <content>a description of corrective actions taken or planned to prevent the reoccurrence of fatalities or injuries described by Subdivision (1).</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scE/s38.102/f"> <num value="f">(f)</num> <content>Violations resulting from, and incidents, fatalities, or injuries attributable to a violation resulting from, a natural disaster, weather event, or man-made act or force outside of a utility's or electric cooperative's control are not required to be included in the portions of the reports required under Subsections (d) and (e).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scE/s38.102/g"> <num value="g">(g)</num> <content>Not later than September 1, each year the commission shall make the reports publicly available on the commission's Internet website.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scE/s38.102/h"> <num value="h">(h)</num> <content>A report, and any required information contained in a report, made on an incident or violation under this section is not admissible in a civil or criminal proceeding against the electric utility, municipally owned utility, or electric cooperative, or the utility's or electric cooperative's employees, directors, or officers. The commission may otherwise take enforcement actions under the commission's authority.</content> </subsection> <sourceCredit>Added by Acts 2019, 86th Leg., R.S., Ch. 1320 (H.B. 4150), Sec. 5, eff. September 1, 2019.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c38/scE/s38.103"> <num value="38.103">Sec. 38.103.</num> <heading>DISTRIBUTION POLE PLAN</heading> <subsection identifier="/us/tx/ut/t2/c38/scE/s38.103/a"> <num value="a">(a)</num> <content>Each electric cooperative, electric utility, and municipally owned utility that distributes electric energy to the public shall submit to the commission a plan for the management and inspection of distribution poles the cooperative or utility owns in the cooperative's or utility's distribution system.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scE/s38.103/b"> <num value="b">(b)</num> <chapeau>Each plan submitted under Subsection (a) must include:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scE/s38.103/1"> <num value="1">(1)</num> <content>a statement of the plan's scope and objectives for ensuring public safety through the effective management, inspection, maintenance, and repair of distribution poles;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scE/s38.103/2"> <num value="2">(2)</num> <content>the roles and responsibilities of individuals responsible for overseeing and executing the plan;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scE/s38.103/3"> <num value="3">(3)</num> <content>processes for training and certifying personnel, including third-party vendors, who inspect distribution poles;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scE/s38.103/4"> <num value="4">(4)</num> <content>an estimated timeline for completing inspections and remedial action required for any pole identified as unreliable, unsafe, or needing repair;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scE/s38.103/5"> <num value="5">(5)</num> <content>processes for documenting and responding to a report or complaint made by a landowner regarding the condition or repair of a distribution pole;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scE/s38.103/6"> <num value="6">(6)</num> <content>for a plan submitted by an electric utility, the estimated cost of implementing the plan; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scE/s38.103/7"> <num value="7">(7)</num> <content>a description of the cooperative's or utility's methods to monitor compliance with the plan.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scE/s38.103/c"> <num value="c">(c)</num> <content>Not later than May 1 of each year, an entity to which this section applies shall submit an update to the commission detailing the entity's compliance with the plan's objectives, the costs of implementing the plan to date, and the results of the entity's inspection of distribution poles, including the number of poles inspected and any remediation or replacement action taken. An electric utility may submit the update in a report required under Section 38.101.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scE/s38.103/d"> <num value="d">(d)</num> <content>The commission shall review each plan and update submitted under this section to determine whether the entity that submitted the plan or update is in compliance with the plan's objectives described by Subsection (b)(1) and notify the entity whether or not the entity is in compliance with those objectives.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scE/s38.103/e"> <num value="e">(e)</num> <content>The commission may accept in place of the information required under this section any information required under other law that is substantially similar to the information required under this section.</content> </subsection> <sourceCredit>Added by Acts 2025, 89th Leg., R.S., Ch. 919 (H.B. 144), Sec. 2, eff. June 20, 2025.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c38/scF"> <num value="F">SUBCHAPTER F.</num> <heading>TEXAS ELECTRICITY SUPPLY CHAIN SECURITY AND MAPPING COMMITTEE</heading> <section identifier="/us/tx/ut/t2/c38/scF/s38.201"> <num value="38.201">Sec. 38.201.</num> <heading>TEXAS ELECTRICITY SUPPLY CHAIN SECURITY AND MAPPING COMMITTEE</heading> <subsection identifier="/us/tx/ut/t2/c38/scF/s38.201/a"> <num value="a">(a)</num> <chapeau>In this subchapter, "electricity supply chain" means:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scF/s38.201/1"> <num value="1">(1)</num> <content>facilities and methods used for producing, treating, processing, pressurizing, storing, or transporting natural gas for delivery to electric generation facilities;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scF/s38.201/2"> <num value="2">(2)</num> <content>critical infrastructure necessary to maintain electricity service; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scF/s38.201/3"> <num value="3">(3)</num> <content>roads necessary to access facilities in the electricity supply chain.</content> <continuation>(a-1) A reference in this subchapter to the "electricity supply chain" includes water and wastewater treatment plants.</continuation> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scF/s38.201/b"> <num value="b">(b)</num> <chapeau>The Texas Electricity Supply Chain Security and Mapping Committee is established to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scF/s38.201/1"> <num value="1">(1)</num> <content>map this state's electricity supply chain;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scF/s38.201/2"> <num value="2">(2)</num> <content>identify critical infrastructure sources in the electricity supply chain;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scF/s38.201/3"> <num value="3">(3)</num> <content>establish best practices to prepare facilities in the electricity supply chain to maintain service in an extreme weather event and recommend oversight and compliance standards for those facilities; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scF/s38.201/4"> <num value="4">(4)</num> <content>designate priority service needs to prepare for, respond to, and recover from an extreme weather event.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scF/s38.201/c"> <num value="c">(c)</num> <chapeau>The committee is composed of:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scF/s38.201/1"> <num value="1">(1)</num> <content>the executive director of the commission;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scF/s38.201/2"> <num value="2">(2)</num> <content>the executive director of the Railroad Commission of Texas;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scF/s38.201/3"> <num value="3">(3)</num> <content>the president and the chief executive officer of the independent organization certified under Section 39.151 for the ERCOT power region;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scF/s38.201/4"> <num value="4">(4)</num> <content>the chief of the Texas Division of Emergency Management; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scF/s38.201/5"> <num value="5">(5)</num> <content>the executive director of the Texas Department of Transportation.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scF/s38.201/d"> <num value="d">(d)</num> <content>Each member of the committee may designate a personal representative from the member's organization to represent the member on the committee. A member is responsible for the acts and omissions of the designee related to the designee's representation on the committee.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scF/s38.201/e"> <num value="e">(e)</num> <content>The executive director of the commission serves as the chair of the committee. The executive director of the Railroad Commission of Texas serves as vice chair of the committee.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 426 (S.B. 3), Sec. 17, eff. June 8, 2021. Amended by: Acts 2023, 88th Leg., R.S., Ch. 85 (S.B. 1093), Sec. 2, eff. May 19, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c38/scF/s38.202"> <num value="38.202">Sec. 38.202.</num> <heading>ADMINISTRATION</heading> <subsection identifier="/us/tx/ut/t2/c38/scF/s38.202/a"> <num value="a">(a)</num> <content>The committee shall meet at least once each calendar quarter at a time determined by the committee and at the call of the chair.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scF/s38.202/b"> <num value="b">(b)</num> <content>A member who is an ex officio member from a state agency shall be reimbursed for actual and necessary expenses in carrying out committee responsibilities from money appropriated for that purpose in the agency's budget. Other members of the committee may receive reimbursement for actual and necessary expenses in carrying out committee responsibilities from money appropriated for that purpose.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scF/s38.202/c"> <num value="c">(c)</num> <content>The commission, the Railroad Commission of Texas, the Texas Division of Emergency Management, and the Texas Department of Transportation shall provide staff as necessary to assist the committee in carrying out the committee's duties and responsibilities.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scF/s38.202/d"> <num value="d">(d)</num> <content>The independent organization certified under Section 39.151 for the ERCOT power region shall provide staff as necessary to assist the committee in carrying out the committee's duties and responsibilities.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scF/s38.202/e"> <num value="e">(e)</num> <content>Except as otherwise provided by this subchapter, the committee is not subject to Chapters 2001, 551, and 552, Government Code.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scF/s38.202/f"> <num value="f">(f)</num> <content>Information written, produced, collected, assembled, or maintained under law or in connection with the transaction of official business by the committee or an officer or employee of the committee is subject to Section 552.008, Government Code. This subsection does not apply to the physical locations of critical facilities, maps created under this subchapter, or proprietary information created or gathered during the mapping process.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 426 (S.B. 3), Sec. 17, eff. June 8, 2021. Amended by: Acts 2023, 88th Leg., R.S., Ch. 85 (S.B. 1093), Sec. 3, eff. May 19, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c38/scF/s38.203"> <num value="38.203">Sec. 38.203.</num> <heading>POWERS AND DUTIES OF COMMITTEE</heading> <subsection identifier="/us/tx/ut/t2/c38/scF/s38.203/a"> <num value="a">(a)</num> <chapeau>The committee shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scF/s38.203/1"> <num value="1">(1)</num> <content>map the state's electricity supply chain in order to designate priority electricity service needs during extreme weather events;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scF/s38.203/2"> <num value="2">(2)</num> <content>identify and designate the sources in the electricity supply chain necessary to operate critical infrastructure, as defined by Section 421.001, Government Code;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scF/s38.203/3"> <num value="3">(3)</num> <content>develop a communication system between critical infrastructure sources, the commission, and the independent organization certified under Section 39.151 for the ERCOT power region to ensure that electricity and natural gas supplies in the electricity supply chain are prioritized to those sources during an extreme weather event; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scF/s38.203/4"> <num value="4">(4)</num> <content>establish best practices to prepare facilities in the electricity supply chain to maintain service in an extreme weather event and recommend oversight and compliance standards for those facilities.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scF/s38.203/b"> <num value="b">(b)</num> <content>The committee shall update the electricity supply chain map at least once each year.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scF/s38.203/c"> <num value="c">(c)</num> <chapeau>The commission shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scF/s38.203/1"> <num value="1">(1)</num> <content>create and maintain a database identifying critical infrastructure sources with priority electricity needs to be used during an extreme weather event; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scF/s38.203/2"> <num value="2">(2)</num> <content>update the database at least once each year.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scF/s38.203/d"> <num value="d">(d)</num> <content>The information maintained in the database is confidential under Section 418.181, Government Code, and not subject to disclosure under Chapter 552, Government Code.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scF/s38.203/e"> <num value="e">(e)</num> <content>The committee shall provide the Texas Energy Reliability Council with access to the electricity supply chain map.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scF/s38.203/f"> <num value="f">(f)</num> <chapeau>On request, the committee shall provide view-only access to the electricity supply chain map to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scF/s38.203/1"> <num value="1">(1)</num> <content>an electric utility, a transmission and distribution utility, an electric cooperative, or a municipally owned utility;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scF/s38.203/2"> <num value="2">(2)</num> <content>an operator of a gas supply chain facility, as defined by Section 86.044, Natural Resources Code; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scF/s38.203/3"> <num value="3">(3)</num> <content>an operator of a gas pipeline facility described by Section 121.2015.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scF/s38.203/g"> <num value="g">(g)</num> <content>Access to the electricity supply chain map by an entity described by Subsection (f)(1) is limited to the critical natural gas facilities on the map that are located in the requesting entity's service area.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scF/s38.203/h"> <num value="h">(h)</num> <content>The committee may not provide an entity described by Subsection (f)(1) with access to the electricity supply chain map unless the entity has complied with Section 37.157.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scF/s38.203/i"> <num value="i">(i)</num> <content>Access to the electricity supply chain map by an operator described by Subsections (f)(2) and (3) is limited to the critical natural gas facilities operated by the requesting operator.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 426 (S.B. 3), Sec. 17, eff. June 8, 2021. Amended by: Acts 2023, 88th Leg., R.S., Ch. 85 (S.B. 1093), Sec. 4, eff. May 19, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c38/scF/s38.204"> <num value="38.204">Sec. 38.204.</num> <heading>MAPPING REPORT</heading> <subsection identifier="/us/tx/ut/t2/c38/scF/s38.204/a"> <num value="a">(a)</num> <chapeau>Not later than January 1, 2022, the committee shall submit a report to the governor, the lieutenant governor, the speaker of the house of representatives, the legislature, and the Texas Energy Reliability Council on the activities and findings of the committee. The report must:</chapeau> <paragraph identifier="/us/tx/ut/t2/c38/scF/s38.204/1"> <num value="1">(1)</num> <content>provide an overview of the committee's findings regarding mapping the electricity supply chain and identifying sources necessary to operate critical infrastructure;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scF/s38.204/2"> <num value="2">(2)</num> <content>recommend a clear and thorough communication system for the commission, the Railroad Commission of Texas, the Texas Division of Emergency Management, and the independent organization certified under Section 39.151 for the ERCOT power region and critical infrastructure sources in this state to ensure that electricity supply is prioritized to those sources during extreme weather events; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c38/scF/s38.204/3"> <num value="3">(3)</num> <content>include a list of the established best practices and recommended oversight and compliance standards adopted under Section 38.203(a)(4).</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c38/scF/s38.204/b"> <num value="b">(b)</num> <content>The report is public information except for portions considered confidential under Chapter 552, Government Code, or other state or federal law.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 426 (S.B. 3), Sec. 17, eff. June 8, 2021.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t2/c39"> <num value="39">CHAPTER 39.</num> <heading>RESTRUCTURING OF ELECTRIC UTILITY INDUSTRY</heading> <subchapter identifier="/us/tx/ut/t2/c39/scA"> <num value="A">SUBCHAPTER A.</num> <heading>GENERAL PROVISIONS</heading> <section identifier="/us/tx/ut/t2/c39/scA/s39.001"> <num value="39.001">Sec. 39.001.</num> <heading>LEGISLATIVE POLICY AND PURPOSE</heading> <subsection identifier="/us/tx/ut/t2/c39/scA/s39.001/a"> <num value="a">(a)</num> <content>The legislature finds that the production and sale of electricity is not a monopoly warranting regulation of rates, operations, and services and that the public interest in competitive electric markets requires that, except for transmission and distribution services and for the recovery of stranded costs, electric services and their prices should be determined by customer choices and the normal forces of competition. As a result, this chapter is enacted to protect the public interest during the transition to and in the establishment of a fully competitive electric power industry.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scA/s39.001/b"> <num value="b">(b)</num> <chapeau>The legislature finds that it is in the public interest to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scA/s39.001/1"> <num value="1">(1)</num> <content>implement on January 1, 2002, a competitive retail electric market that allows each retail customer to choose the customer's provider of electricity and that encourages full and fair competition among all providers of electricity;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scA/s39.001/2"> <num value="2">(2)</num> <content>allow utilities with uneconomic generation-related assets and purchased power contracts to recover the reasonable excess costs over market of those assets and purchased power contracts;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scA/s39.001/3"> <num value="3">(3)</num> <content>educate utility customers about anticipated changes in the provision of retail electric service to ensure that the benefits of the competitive market reach all customers; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scA/s39.001/4"> <num value="4">(4)</num> <content>protect the competitive process in a manner that ensures the confidentiality of competitively sensitive information during the transition to a competitive market and after the commencement of customer choice.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scA/s39.001/c"> <num value="c">(c)</num> <content>Regulatory authorities, excluding the governing body of a municipally owned electric utility that has not opted for customer choice or the body vested with power to manage and operate a municipally owned electric utility that has not opted for customer choice, may not make rules or issue orders regulating competitive electric services, prices, or competitors or restricting or conditioning competition except as authorized in this title and may not discriminate against any participant or type of participant during the transition to a competitive market and in the competitive market.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scA/s39.001/d"> <num value="d">(d)</num> <content>Regulatory authorities, excluding the governing body of a municipally owned electric utility that has not opted for customer choice or the body vested with power to manage and operate a municipally owned electric utility that has not opted for customer choice, shall authorize or order competitive rather than regulatory methods to achieve the goals of this chapter to the greatest extent feasible and shall adopt rules and issue orders that are both practical and limited so as to impose the least impact on competition.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scA/s39.001/e"> <num value="e">(e)</num> <chapeau>Judicial review of competition rules adopted by the commission shall be conducted under Chapter 2001, Government Code, except as otherwise provided by this chapter. Judicial review of the validity of competition rules shall be commenced in the Court of Appeals for the Fifteenth Court of Appeals District and shall be limited to the commission's rulemaking record. The rulemaking record consists of:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scA/s39.001/1"> <num value="1">(1)</num> <content>the notice of the proposed rule;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scA/s39.001/2"> <num value="2">(2)</num> <content>the comments of all interested persons;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scA/s39.001/3"> <num value="3">(3)</num> <content>all studies, reports, memoranda, or other materials on which the commission relied in adopting the rule; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scA/s39.001/4"> <num value="4">(4)</num> <content>the order adopting the rule.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scA/s39.001/f"> <num value="f">(f)</num> <content>A person who challenges the validity of a competition rule must file a notice of appeal with the court of appeals and serve the notice on the commission not later than the 15th day after the date on which the rule as adopted is published in the Texas Register. The notice of appeal shall designate the person challenging the rule as the appellant and the commission as the appellee. The commission shall prepare the rulemaking record and file it with the court of appeals not later than the 30th day after the date the notice of appeal is served on the commission. The court of appeals shall hear and determine each appeal as expeditiously as possible with lawful precedence over other matters. The appellant, and any person who is permitted by the court to intervene in support of the appellant's claims, shall file and serve briefs not later than the 30th day after the date the commission files the rulemaking record. The commission, and any person who is permitted by the court to intervene in support of the rule, shall file and serve briefs not later than the 60th day after the date the appellant files the appellant's brief. The court of appeals may, on its own motion or on motion of any person for good cause, modify the filing deadlines prescribed by this subsection. The court of appeals shall render judgment affirming the rule or reversing and, if appropriate on reversal, remanding the rule to the commission for further proceedings, consistent with the court's opinion and judgment. The Texas Rules of Appellate Procedure apply to an appeal brought under this section to the extent not inconsistent with this section.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999. Amended by: Acts 2023, 88th Leg., R.S., Ch. 459 (S.B. 1045), Sec. 1.13, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scA/s39.002"> <num value="39.002">Sec. 39.002.</num> <heading>APPLICABILITY</heading> <content>This chapter, other than Sections 39.151, 39.1516, 39.155, 39.157(e), 39.161, 39.162, 39.163, 39.169, 39.170, 39.203, 39.9051, 39.9052, and 39.914(e), and Subchapters M and N, does not apply to a municipally owned utility or an electric cooperative. Sections 39.157(e) and 39.203 apply only to a municipally owned utility or an electric cooperative that is offering customer choice. If there is a conflict between the specific provisions of this chapter and any other provisions of this title, except for Chapters 40 and 41, the provisions of this chapter control.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999. Amended by: Acts 2007, 80th Leg., R.S., Ch. 939 (H.B. 3693), Sec. 19, eff. September 1, 2007. Acts 2019, 86th Leg., R.S., Ch. 467 (H.B. 4170), Sec. 16.001, eff. September 1, 2019. Acts 2019, 86th Leg., R.S., Ch. 610 (S.B. 936), Sec. 2, eff. September 1, 2019. Acts 2021, 87th Leg., R.S., Ch. 908 (H.B. 4492), Sec. 2, eff. June 16, 2021. Acts 2021, 87th Leg., R.S., Ch. 950 (S.B. 1580), Sec. 2, eff. June 18, 2021. Reenacted and amended by Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 14, eff. September 1, 2023. Reenacted and amended by Acts 2023, 88th Leg., R.S., Ch. 768 (H.B. 4595), Sec. 22.003(a), eff. September 1, 2023. Amended by: Acts 2025, 89th Leg., R.S., Ch. 953 (S.B. 6), Sec. 3, eff. June 20, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scA/s39.003"> <num value="39.003">Sec. 39.003.</num> <heading>CONTESTED CASES</heading> <content>Unless specifically provided otherwise, each commission proceeding under this chapter, other than a rulemaking proceeding, report, notification, or registration, shall be conducted as a contested case and the burden of proof is on the incumbent electric utility.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scA/s39.004"> <num value="39.004">Sec. 39.004.</num> <heading>HIRING ASSISTANCE FOR REGIONAL PROCEEDINGS</heading> <subsection identifier="/us/tx/ut/t2/c39/scA/s39.004/a"> <num value="a">(a)</num> <chapeau>The commission may retain any consultant, accountant, auditor, engineer, or attorney the commission considers necessary to represent the commission in a proceeding before a regional transmission organization, or before a court reviewing proceedings of a regional transmission organization, related to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scA/s39.004/1"> <num value="1">(1)</num> <content>the relationship of an electric utility to a power region, regional transmission organization, or independent system operator;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scA/s39.004/2"> <num value="2">(2)</num> <content>the approval of an agreement among an electric utility and the electric utility's affiliates concerning the coordination of the operations of the electric utility and the electric utility's affiliates; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scA/s39.004/3"> <num value="3">(3)</num> <content>other matters related to an electric utility that may affect the ultimate rates paid by retail customers in this state.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scA/s39.004/b"> <num value="b">(b)</num> <chapeau>Assistance for which a consultant, accountant, auditor, engineer, or attorney may be retained under Subsection (a) may include:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scA/s39.004/1"> <num value="1">(1)</num> <content>conducting a study;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scA/s39.004/2"> <num value="2">(2)</num> <content>conducting an investigation;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scA/s39.004/3"> <num value="3">(3)</num> <content>presenting evidence;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scA/s39.004/4"> <num value="4">(4)</num> <content>advising the commission; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scA/s39.004/5"> <num value="5">(5)</num> <content>representing the commission.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scA/s39.004/c"> <num value="c">(c)</num> <content>The electric utility that is the subject of the proceeding shall pay timely the reasonable costs of the services of a person retained under Subsection (a), as determined by the commission. The total costs an electric utility is required to pay under this subsection may not exceed $1.5 million in a 12-month period.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scA/s39.004/d"> <num value="d">(d)</num> <content>The commission shall allow an electric utility to recover both the total costs the electric utility paid under Subsection (c) and the carrying charges for those costs through a rider established annually to recover the costs paid and carrying charges incurred during the preceding calendar year. The rider may not be implemented before the rider is reviewed and approved by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scA/s39.004/e"> <num value="e">(e)</num> <content>The commission shall consult the attorney general before the commission retains a consultant, accountant, auditor, or engineer under Subsection (a). The retention of an attorney under Subsection (a) is subject to the approval of the attorney general under Section 402.0212, Government Code.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scA/s39.004/f"> <num value="f">(f)</num> <content>The commission shall be precluded from engaging any individual who is required to register under Section 305.003, Government Code.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scA/s39.004/g"> <num value="g">(g)</num> <content>Notwithstanding Sections 39.402(a), 39.452(d), and 39.502(b), this section applies to an electric utility to which Subchapter I, J, or K applies.</content> </subsection> <sourceCredit>Added by Acts 2025, 89th Leg., R.S., Ch. 665 (H.B. 4668), Sec. 1, eff. June 20, 2025.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c39/scB"> <num value="B">SUBCHAPTER B.</num> <heading>TRANSITION TO COMPETITIVE RETAIL ELECTRIC MARKET</heading> <section identifier="/us/tx/ut/t2/c39/scB/s39.051"> <num value="39.051">Sec. 39.051.</num> <heading>UNBUNDLING</heading> <subsection identifier="/us/tx/ut/t2/c39/scB/s39.051/a"> <num value="a">(a)</num> <content>On or before September 1, 2000, each electric utility shall separate from its regulated utility activities its customer energy services business activities that are otherwise also already widely available in the competitive market.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scB/s39.051/b"> <num value="b">(b)</num> <chapeau>Not later than January 1, 2002, each electric utility shall separate its business activities from one another into the following units:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scB/s39.051/1"> <num value="1">(1)</num> <content>a power generation company;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scB/s39.051/2"> <num value="2">(2)</num> <content>a retail electric provider; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scB/s39.051/3"> <num value="3">(3)</num> <content>a transmission and distribution utility.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scB/s39.051/c"> <num value="c">(c)</num> <chapeau>An electric utility may accomplish the separation required by Subsection (b) either through the creation of separate nonaffiliated companies or separate affiliated companies owned by a common holding company or through the sale of assets to a third party. An electric utility may create separate transmission and distribution utilities. Notwithstanding any other provision of this chapter, an electric utility that does not have stranded costs described by Section 39.254 and that on September 1, 2005, has not finalized unbundling pursuant to a commission order approving an unbundling plan may also meet the requirements of Subsection (b) for generation facilities existing on September 1, 2005, in the Electric Reliability Council of Texas if it meets and maintains compliance with the following requirements:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scB/s39.051/1"> <num value="1">(1)</num> <content>the electric utility has no more than 400 megawatts of Texas jurisdictional capacity from generating units within the Electric Reliability Council of Texas that have not been mothballed or retired;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scB/s39.051/2"> <num value="2">(2)</num> <content>the electric utility has a contract or contracts with separate nonaffiliated companies or separate affiliated companies for the sale of all of the output from its generating units that have not been mothballed or retired with a contract term that is no shorter than 20 years or the life of the generating units, whichever is shorter; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scB/s39.051/3"> <num value="3">(3)</num> <content>the electric utility has a separate division within the electric utility for its generation business activities.</content> <continuation>(c-1) A separate division described by Subsection (c)(3) is subject to Subsection (d) and, for the purposes of this chapter, is considered a separate affiliated power generation company and a competitive affiliate.</continuation> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scB/s39.051/d"> <num value="d">(d)</num> <content>Each electric utility shall unbundle under this section in a manner that provides for a separation of personnel, information flow, functions, and operations, consistent with Section 39.157(d).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scB/s39.051/e"> <num value="e">(e)</num> <content>Each electric utility shall file with the commission a plan to implement this section by January 10, 2000.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scB/s39.051/f"> <num value="f">(f)</num> <content>The commission shall adopt the utility's plan for business separation required by Subsection (b), adopt the plan with changes, or reject the plan and require the utility to file a new plan.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scB/s39.051/g"> <num value="g">(g)</num> <content>Transactions by electric utilities involving sales, transfers, or other disposition of assets to accomplish the purposes of this section are not subject to Section 14.101, 35.034, or 35.035.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999. Amended by: Acts 2005, 79th Leg., Ch. 413 (S.B. 1668), Sec. 3, eff. June 17, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scB/s39.052"> <num value="39.052">Sec. 39.052.</num> <heading>FREEZE ON EXISTING RETAIL BASE RATE TARIFFS</heading> <subsection identifier="/us/tx/ut/t2/c39/scB/s39.052/a"> <num value="a">(a)</num> <content>Until January 1, 2002, an electric utility shall provide retail electric service within its certificated service area in accordance with the electric utility's retail base rate tariffs in effect on September 1, 1999, including its purchased power cost recovery factor.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scB/s39.052/b"> <num value="b">(b)</num> <content>During the freeze period, an electric utility may not increase its retail base rates above the rates provided by this section except for losses caused by force majeure as provided by Section 39.055.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scB/s39.052/c"> <num value="c">(c)</num> <content>Notwithstanding any other provision of this title, during the freeze period the regulatory authority may not reduce the retail base rates of an electric utility, except as may be ordered as stipulated to by an electric utility in a proceeding for which a final order had not been issued by January 1, 1999.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scB/s39.052/d"> <num value="d">(d)</num> <content>During the freeze period, the retail base rates, overall revenues, return on invested capital, and net income of an electric utility are not subject to complaint, hearing, or determination as to reasonableness.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scB/s39.052/e"> <num value="e">(e)</num> <content>An electric utility that has a rate proceeding pending before the commission as of January 2, 1999, shall provide service in accordance with the tariffs approved in that proceeding from the date of approval until the end of the freeze period.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scB/s39.052/f"> <num value="f">(f)</num> <content>Nothing in this section affects the authority of the commission to fulfill its obligations under Section 39.262.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scB/s39.052/g"> <num value="g">(g)</num> <content>Nothing in this section shall deny a utility its right to have the commission conduct proceedings and issue a final order pertaining to any matter that may be remanded to the commission by a court having jurisdiction, except that the final order may not affect the rates charged to customers during the freeze period but shall be taken into account during the utility's true-up proceeding under Section 39.262.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scB/s39.052/h"> <num value="h">(h)</num> <content>Nothing in this title shall be construed to prevent an electric utility or a transmission and distribution utility from filing, and the commission from approving, a change in wholesale transmission service rates during the freeze period.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scB/s39.053"> <num value="39.053">Sec. 39.053.</num> <heading>COST RECOVERY ADJUSTMENTS</heading> <content>This subchapter does not limit or alter the ability of an electric utility during the freeze period to revise its fuel factor or to reconcile fuel expenses and to either refund fuel overcollections or surcharge fuel undercollections to customers, as authorized by its tariffs and Sections 36.203 and 36.205.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scB/s39.054"> <num value="39.054">Sec. 39.054.</num> <heading>RETAIL ELECTRIC SERVICE DURING FREEZE PERIOD</heading> <subsection identifier="/us/tx/ut/t2/c39/scB/s39.054/a"> <num value="a">(a)</num> <content>An electric utility shall provide retail electric service during the freeze period in accordance with any contract terms applicable to a particular retail customer approved by the regulatory authority and in effect on December 31, 1998.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scB/s39.054/b"> <num value="b">(b)</num> <content>Nothing in Sections 39.052(c) and (d) shall be construed to restrict any customer's right to complain during the freeze period to the regulatory authority regarding the quality of retail electric service provided by the electric utility or the applicability of an electric utility's particular tariff to the customer.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scB/s39.054/c"> <num value="c">(c)</num> <content>Nothing in this title shall be construed to restrict an electric utility, voluntarily and at its sole discretion, from offering new services or new tariff options to its customers during the freeze period, consistent with Section 39.051(a).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scB/s39.054/d"> <num value="d">(d)</num> <content>Any offering of new services or tariff options under this section shall be equal to or greater than an electric utility's long-run marginal cost and may not be unreasonably preferential, prejudicial, discriminatory, predatory, or anticompetitive.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scB/s39.054/e"> <num value="e">(e)</num> <content>Revenue from any new offering under this section shall be accounted for in a manner consistent with Section 36.007.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scB/s39.055"> <num value="39.055">Sec. 39.055.</num> <heading>FORCE MAJEURE</heading> <subsection identifier="/us/tx/ut/t2/c39/scB/s39.055/a"> <num value="a">(a)</num> <content>An electric utility may recover losses resulting from force majeure through an increase in its retail base rates during the freeze period.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scB/s39.055/b"> <num value="b">(b)</num> <content>Notwithstanding Subchapter C, Chapter 36, the regulatory authority, after a hearing to determine the electric utility's losses from force majeure, shall permit the utility to fully collect any approved force majeure increase through an appropriate customer surcharge mechanism.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scB/s39.055/c"> <num value="c">(c)</num> <content>For purposes of this section, "force majeure" means a major event or combination of major events, including new or expanded state or federal statutory or regulatory requirements; hurricanes, tornadoes, ice storms, or other natural disasters; or acts of war, terrorism, or civil disturbance, beyond the control of an electric utility that the regulatory authority finds increases the utility's total reasonable and necessary nonfuel costs or decreases the utility's total nonfuel revenues related to the generation and delivery of electricity by more than 10 percent for any calendar year during the freeze period. The term does not include any changes in general economic conditions such as inflation, interest rates, or other factors of general application.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c39/scC"> <num value="C">SUBCHAPTER C.</num> <heading>RETAIL COMPETITION</heading> <section identifier="/us/tx/ut/t2/c39/scC/s39.101"> <num value="39.101">Sec. 39.101.</num> <heading>CUSTOMER SAFEGUARDS</heading> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.101/a"> <num value="a">(a)</num> <chapeau>Before customer choice begins on January 1, 2002, the commission shall ensure that retail customer protections are established that entitle a customer:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.101/1"> <num value="1">(1)</num> <content>to safe, reliable, and reasonably priced electricity, including protection against service disconnections in an extreme weather emergency as provided by Subsection (h) or in cases of medical emergency or nonpayment for unrelated services;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.101/2"> <num value="2">(2)</num> <content>to privacy of customer consumption and credit information;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.101/3"> <num value="3">(3)</num> <content>to bills presented in a clear format and in language readily understandable by customers;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.101/4"> <num value="4">(4)</num> <content>to the option to have all electric services on a single bill, except in those instances where multiple bills are allowed under Chapters 40 and 41;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.101/5"> <num value="5">(5)</num> <content>to protection from discrimination on the basis of race, color, sex, nationality, religion, or marital status;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.101/6"> <num value="6">(6)</num> <content>to accuracy of metering and billing;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.101/7"> <num value="7">(7)</num> <content>to information in English and Spanish and any other language as necessary concerning rates, key terms and conditions, in a standard format that will permit comparisons between price and service offerings, and the environmental impact of certain production facilities;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.101/8"> <num value="8">(8)</num> <content>to information in English and Spanish and any other language as necessary concerning low-income assistance programs and deferred payment plans; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.101/9"> <num value="9">(9)</num> <content>to other information or protections necessary to ensure high-quality service to customers.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.101/b"> <num value="b">(b)</num> <chapeau>A customer is entitled:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.101/1"> <num value="1">(1)</num> <content>to be informed about rights and opportunities in the transition to a competitive electric industry;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.101/2"> <num value="2">(2)</num> <content>to choose the customer's retail electric provider consistent with this chapter, to have that choice honored, and to assume that the customer's chosen provider will not be changed without the customer's informed consent;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.101/3"> <num value="3">(3)</num> <content>to have access to providers of energy efficiency services, to on-site distributed generation, and to providers of energy generated by renewable energy resources;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.101/4"> <num value="4">(4)</num> <content>to be served by a provider of last resort that offers a commission-approved standard service package;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.101/5"> <num value="5">(5)</num> <content>to receive sufficient information to make an informed choice of service provider;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.101/6"> <num value="6">(6)</num> <content>to be protected from unfair, misleading, or deceptive practices, including protection from being billed for services that were not authorized or provided;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.101/7"> <num value="7">(7)</num> <content>to have an impartial and prompt resolution of disputes with its chosen retail electric provider and transmission and distribution utility;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.101/8"> <num value="8">(8)</num> <content>to participation in demand response programs through retail electric providers that offer demand response programs; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.101/9"> <num value="9">(9)</num> <content>to receive notice from the retail electric provider that serves the customer when the independent organization certified under Section 39.151 for the ERCOT power region issues an emergency energy alert.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.101/c"> <num value="c">(c)</num> <content>A retail electric provider, power generation company, aggregator, or other entity that provides retail electric service may not refuse to provide retail electric or electric generation service or otherwise discriminate in the provision of electric service to any customer because of race, creed, color, national origin, ancestry, sex, marital status, lawful source of income, disability, or familial status. A retail electric provider, power generation company, aggregator, or other entity that provides retail electric service may not refuse to provide retail electric or electric generation service to a customer because the customer is located in an economically distressed geographic area or qualifies for low-income affordability or energy efficiency services. The commission shall require a provider to comply with this subsection as a condition of certification or registration.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.101/d"> <num value="d">(d)</num> <chapeau>A retail electric provider, power generation company, aggregator, or other entity that provides retail electric service shall submit reports to the commission and the office annually and on request relating to the person's compliance with this section. The commission by rule shall specify the form in which a report must be submitted. A report must include:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.101/1"> <num value="1">(1)</num> <content>information regarding the extent of the person's coverage;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.101/2"> <num value="2">(2)</num> <content>information regarding the service provided, compiled by zip code and census tract; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.101/3"> <num value="3">(3)</num> <content>any other information the commission or the office considers relevant to determine compliance.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.101/e"> <num value="e">(e)</num> <content>The commission has the authority to adopt and enforce such rules as may be necessary or appropriate to carry out Subsections (a)-(d), including rules for minimum service standards for a retail electric provider relating to customer deposits and the extension of credit, switching fees, levelized billing programs, interconnection and use of on-site generation, termination of service, and quality of service. The commission has jurisdiction over all providers of electric service in enforcing Subsections (a)-(d) and may assess civil and administrative penalties under Section 15.023 and seek civil penalties under Section 15.028.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.101/f"> <num value="f">(f)</num> <content>On or before June 30, 2001, the commission shall modify its current rules regarding customer protections to ensure that at least the same level of customer protection against potential abuses and the same quality of service that exists on December 31, 1999, is maintained in a restructured electric industry.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.101/g"> <num value="g">(g)</num> <content>Compliance with Subsections (a)-(e) by a provider of electric service which is a municipally owned utility shall be administered solely by the governing body of the municipally owned utility, which shall adopt, implement, and enforce, as to the municipally owned utility, rules having the effect of accomplishing the objectives of Subsections (a)-(e). Reports containing the information required by Subsection (d) shall be filed by the municipally owned utility with the governing body.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.101/h"> <num value="h">(h)</num> <chapeau>A retail electric provider, power generation company, aggregator, or other entity that provides retail electric service may not disconnect service to a residential customer during an extreme weather emergency or on a weekend day. The entity providing service shall defer collection of the full payment of bills that are due during an extreme weather emergency until after the emergency is over and shall work with customers to establish a pay schedule for deferred bills. For purposes of this subsection, "extreme weather emergency" means a period when:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.101/1"> <num value="1">(1)</num> <content>the previous day's highest temperature did not exceed 32 degrees Fahrenheit and the temperature is predicted to remain at or below that level for the next 24 hours according to the nearest National Weather Service reports; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.101/2"> <num value="2">(2)</num> <content>the National Weather Service issues a heat advisory for any county in the relevant service territory, or when such an advisory has been issued on any one of the previous two calendar days.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999. Amended by: Acts 2023, 88th Leg., R.S., Ch. 945 (S.B. 1699), Sec. 2, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scC/s39.102"> <num value="39.102">Sec. 39.102.</num> <heading>RETAIL CUSTOMER CHOICE</heading> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.102/a"> <num value="a">(a)</num> <content>Each retail customer in this state, except retail customers of electric cooperatives and municipally owned utilities that have not opted for customer choice, shall have customer choice on and after January 1, 2002.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.102/b"> <num value="b">(b)</num> <content>The affiliated retail electric provider of the electric utility serving a retail customer on December 31, 2001, may continue to serve that customer until the customer chooses service from a different retail electric provider, an electric cooperative offering customer choice, or a municipally owned utility offering customer choice.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.102/c"> <num value="c">(c)</num> <content>An electric utility that has in effect a systemwide freeze for residential and commercial customers in effect September 1, 1997, extending beyond December 31, 2001, that has been found by a regulatory authority to be in the public interest is not subject to this chapter. At the expiration of the utility's freeze period, the utility shall be subject to this chapter and, at that time, has no claim for stranded cost recovery.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.102/d"> <num value="d">(d)</num> <content>The commission shall oversee the compliance with this chapter by electric utilities that were not subject to this chapter before September 1, 2003, and in so doing shall establish schedules and procedures and require commission approvals as it deems necessary to achieve the objectives of this chapter. This subsection does not apply to an electric utility to which Subsection (c) applies.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.102/e"> <num value="e">(e)</num> <chapeau>In establishing a schedule under Subsection (d), the commission shall consider:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.102/1"> <num value="1">(1)</num> <content>the effect of customer choice on the reliability of service provided by the electric utility;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.102/2"> <num value="2">(2)</num> <content>whether the electric utility's service area is located in more than one power region;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.102/3"> <num value="3">(3)</num> <content>whether any applicable power region has been certified as a qualifying power region under Section 39.152(a);</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.102/4"> <num value="4">(4)</num> <content>whether other electric utilities in the power region offer retail customer choice; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.102/5"> <num value="5">(5)</num> <content>any other relevant factor.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999. Amended by Acts 2003, 78th Leg., ch. 1327, Sec. 2, eff. Sept. 1, 2003.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scC/s39.1025"> <num value="39.1025">Sec. 39.1025.</num> <heading>LIMITATIONS ON TELEPHONE SOLICITATION</heading> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.1025/a"> <num value="a">(a)</num> <content>A person may not make or cause to be made a telephone solicitation to a nonresidential electric customer who has given notice to the commission of the customer's objection to receiving telephone solicitations relating to the customer's choice of retail electric providers.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.1025/b"> <num value="b">(b)</num> <content>The commission shall establish and provide for the operation of a database to compile a list of nonresidential electric customers who object to receiving telephone solicitations. The commission may operate the database or contract with another entity to operate the database.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.1025/c"> <num value="c">(c)</num> <content>A customer shall pay a fee of not more than $5 for inclusion in the database. The commission shall prescribe the amount of the fee.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999. Amended by: Acts 2005, 79th Leg., Ch. 171 (H.B. 210), Sec. 3, eff. May 27, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scC/s39.103"> <num value="39.103">Sec. 39.103.</num> <heading>COMMISSION AUTHORITY TO DELAY COMPETITION AND SET NEW RATES</heading> <content>If the commission determines under Section 39.104 that a power region is unable to offer fair competition and reliable service to all retail customer classes on January 1, 2002, the commission shall delay customer choice for the power region and may on or after January 1, 2002, establish new rates for all electric utilities in the power region as provided by Chapter 36.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scC/s39.104"> <num value="39.104">Sec. 39.104.</num> <heading>CUSTOMER CHOICE PILOT PROJECTS</heading> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.104/a"> <num value="a">(a)</num> <content>Customer choice pilot projects may be used to allow the commission to evaluate the ability of each power region and electric utility to implement customer choice. However, in a multiply certificated area, an electric utility may not include customers that were served by an electric cooperative or a municipally owned utility on May 1, 1999.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.104/b"> <num value="b">(b)</num> <content>The commission shall require each electric utility to offer customer choice in its service area within this state amounting to five percent of the utility's combined load of all customer classes within this state beginning on June 1, 2001.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.104/c"> <num value="c">(c)</num> <content>The load designated for customer choice under this section shall be distributed among all customer classes of a utility consistent with the purpose of this section and subject to commission approval.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.104/d"> <num value="d">(d)</num> <content>Customers participating in a pilot project under this section may buy electric energy from any retail electric provider certified by the commission under Section 39.352, including an affiliated retail electric provider; provided, however, that a retail electric provider may not participate in a pilot project in the certificated service area served by the electric utility with which it is affiliated.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.104/e"> <num value="e">(e)</num> <content>Each utility operating a pilot project under this section shall charge residential and small commercial customers in accordance with Section 39.052.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.104/f"> <num value="f">(f)</num> <content>The commission may prescribe reporting requirements it considers necessary to evaluate a pilot project consistent with the purpose of this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.104/g"> <num value="g">(g)</num> <content>Customers having customer choice under this section shall be billed as provided by Section 39.107.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.104/h"> <num value="h">(h)</num> <content>The commission may prescribe terms and conditions it considers necessary to prohibit anticompetitive practices and to encourage customer choice offered under this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.104/i"> <num value="i">(i)</num> <content>Notwithstanding any other provision of this title, a retail electric provider participating in a pilot project under this section is not an electric utility or a retail electric utility.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.104/j"> <num value="j">(j)</num> <content>Twenty percent of the load designated for customer choice under this section shall be initially set aside for aggregated loads.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scC/s39.105"> <num value="39.105">Sec. 39.105.</num> <heading>LIMITATION ON SALE OF ELECTRICITY</heading> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.105/a"> <num value="a">(a)</num> <content>After January 1, 2002, a transmission and distribution utility may not sell electricity or otherwise participate in the market for electricity except for the purpose of buying electricity to serve its own needs.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.105/b"> <num value="b">(b)</num> <content>A person or retail electric utility may not provide, furnish, or make available electric service at retail within the certificated service area of an electric cooperative that has not adopted customer choice or a municipally owned utility that has not adopted customer choice. However, this subsection does not prohibit the provision of electric service in multiply certificated service areas to customers of any other retail electric utility.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scC/s39.106"> <num value="39.106">Sec. 39.106.</num> <heading>PROVIDER OF LAST RESORT</heading> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.106/a"> <num value="a">(a)</num> <content>The commission shall designate retail electric providers in areas of the state in which customer choice is in effect to serve as providers of last resort.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.106/b"> <num value="b">(b)</num> <content>A provider of last resort shall offer a standard retail service package for each class of customers designated by the commission at a fixed, nondiscountable rate approved by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.106/c"> <num value="c">(c)</num> <content>A provider of last resort shall provide the standard retail service package to any requesting customer in the territory for which it is the provider of last resort.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.106/d"> <num value="d">(d)</num> <content>The commission shall designate the provider or providers of last resort not later than June 1, 2001.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.106/e"> <num value="e">(e)</num> <content>The commission shall determine the procedures and criteria, which may include the solicitation of bids, for designating a provider or providers of last resort. The commission may redesignate the provider of last resort according to a schedule it considers appropriate.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.106/f"> <num value="f">(f)</num> <content>In the event that no retail electric provider applies to be the provider of last resort for a given area of the state on reasonable terms and conditions, the commission may require a retail electric provider to become the provider of last resort as a condition of receiving or maintaining a certificate under Section 39.352.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.106/g"> <num value="g">(g)</num> <content>In the event that a retail electric provider fails to serve any or all of its customers, the provider of last resort shall offer that customer the standard retail service package for that customer class with no interruption of service to any customer.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scC/s39.107"> <num value="39.107">Sec. 39.107.</num> <heading>METERING AND BILLING SERVICES</heading> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.107/a"> <num value="a">(a)</num> <content>On introduction of customer choice in a service area, metering services for the area shall continue to be provided by the transmission and distribution utility affiliate of the electric utility that was serving the area before the introduction of customer choice. Metering services provided to commercial and industrial customers that are required by the independent system operator to have an interval data recorder meter may be provided on a competitive basis.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.107/b"> <num value="b">(b)</num> <content>Metering services provided to residential customers and to nonresidential customers other than those required by the independent system operator to have an interval data recorder meter shall continue to be provided by the transmission and distribution utility affiliate of the electric utility that was serving the area before the introduction of customer choice. Retail electric providers serving residential and nonresidential customers other than those required by the independent system operator to have an interval data recorder meter may request that the transmission and distribution utility provide specialized meters, meter features, or add-on accessories so long as they are technically feasible and generally available in the market and provided that the retail electric provider pays the differential cost of such a meter or accessory. Metering and billing services provided to residential customers shall be governed by the customer safeguards adopted by the commission under Section 39.101. All meter data, including all data generated, provided, or otherwise made available, by advanced meters and meter information networks, shall belong to a customer, including data used to calculate charges for service, historical load data, and any other proprietary customer information. A customer may authorize its data to be provided to one or more retail electric providers under rules and charges established by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.107/c"> <num value="c">(c)</num> <content>Beginning on the date of introduction of customer choice in a service area, tenants of leased or rented property that is separately metered shall have the right to choose a retail electric provider, an electric cooperative offering customer choice, or a municipally owned utility offering customer choice, and the owner of the property must grant reasonable and nondiscriminatory access to transmission and distribution utilities, retail electric providers, electric cooperatives, and municipally owned utilities for metering purposes.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.107/d"> <num value="d">(d)</num> <content>Beginning on the date of introduction of customer choice in a service area, a transmission and distribution utility, or an electric cooperative or municipally owned utility providing the customer's energy requirements shall bill a customer's retail electric provider for nonbypassable delivery charges as determined under Section 39.201. The retail electric provider or the electric cooperative or municipally owned utility, as appropriate, must pay these charges.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.107/e"> <num value="e">(e)</num> <content>A transmission and distribution utility may bill retail customers at the request of a retail electric provider or, if an electric cooperative or municipally owned utility is providing the customer's energy requirements, at the request of the electric cooperative or municipally owned utility. A transmission and distribution utility that provides billing service on such request shall offer billing service on comparable terms and conditions to those of any such requesting retail electric provider or, as applicable, the electric cooperative or municipally owned utility providing energy requirements to a customer served by the transmission and distribution utility.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.107/f"> <num value="f">(f)</num> <content>Beginning on the date of introduction of customer choice in a service area, any charges for metering and billing services shall comply with rules adopted by the commission relating to nondiscriminatory rates of service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.107/g"> <num value="g">(g)</num> <content>Metered electric service sold to residential customers on a prepaid basis may not be sold at a price that is higher than the price charged by the provider of last resort.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.107/h"> <num value="h">(h)</num> <content>The commission shall establish a nonbypassable surcharge for an electric utility or transmission and distribution utility to use to recover reasonable and necessary costs incurred in deploying advanced metering and meter information networks to residential customers and nonresidential customers other than those required by the independent system operator to have an interval data recorder meter. The commission shall ensure that the nonbypassable surcharge reflects a deployment of advanced meters that is no more than one-third of the utility's total meters over each calendar year and shall ensure that the nonbypassable surcharge does not result in the utility recovering more than its actual, fully allocated meter and meter information network costs. The expenses must be allocated to the customer classes receiving the services, based on the electric utility's most recently approved tariffs.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.107/i"> <num value="i">(i)</num> <content>Subject to the restrictions in Subsection (h), it is the intent of the legislature that net metering and advanced meter information networks be deployed as rapidly as possible to allow customers to better manage energy use and control costs, and to facilitate demand response initiatives.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.107/j"> <num value="j">(j)</num> <content>Notwithstanding Subsection (b), a nonresidential customer may have a meter installed and metering services provided on a competitive basis as part of an energy savings performance contract.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.107/k"> <num value="k">(k)</num> <content>The commission by rule shall prohibit an electric utility or transmission and distribution utility from selling, sharing, or disclosing information generated, provided, or otherwise collected from an advanced metering system or meter information network, including information used to calculate charges for service, historical load data, and any other customer information. The commission shall allow an electric utility or transmission and distribution utility to share information with an affiliated corporation, or other third-party entity, if the information is to be used only for the purpose of providing electric utility service to the customer or other customer-approved services.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999. Amended by: Acts 2005, 79th Leg., Ch. 1095 (H.B. 2129), Sec. 7, eff. September 1, 2005. Acts 2007, 80th Leg., R.S., Ch. 527 (S.B. 831), Sec. 10, eff. June 16, 2007. Acts 2007, 80th Leg., R.S., Ch. 939 (H.B. 3693), Sec. 20, eff. September 1, 2007. Acts 2009, 81st Leg., R.S., Ch. 87 (S.B. 1969), Sec. 27.001(110), eff. September 1, 2009. Acts 2013, 83rd Leg., R.S., Ch. 170 (H.B. 1600), Sec. 1.07, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scC/s39.108"> <num value="39.108">Sec. 39.108.</num> <heading>CONTRACTUAL OBLIGATIONS</heading> <chapeau>This chapter may not:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.108/1"> <num value="1">(1)</num> <content>interfere with or abrogate the rights or obligations of any party, including a retail or wholesale customer, to a contract with an investor-owned electric utility, river authority, municipally owned utility, or electric cooperative;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.108/2"> <num value="2">(2)</num> <content>interfere with or abrogate the rights or obligations of a party under a contract or agreement concerning certificated utility service areas; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.108/3"> <num value="3">(3)</num> <content>result in a change in wholesale power costs to wholesale customers in Texas purchasing electricity under wholesale power contracts the pricing provisions of which are based on formulary rates, fuel adjustments, or average system costs.</content> </paragraph> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scC/s39.109"> <num value="39.109">Sec. 39.109.</num> <heading>NEW OWNER OR SUCCESSOR</heading> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.109/a"> <num value="a">(a)</num> <content>To ensure the continued safe and reliable operation of electric generating facilities, the commission shall require a generating facility that is transferred to a new owner or successor in interest between June 1, 1999, and January 1, 2002, to continue to be operated and maintained by the same operating personnel for not less than two years, except that the personnel may be dismissed for cause.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.109/b"> <num value="b">(b)</num> <content>This section shall apply only if the facility is actually operated during the two-year period after the sale.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.109/c"> <num value="c">(c)</num> <content>This section shall not require that the purchaser cause the facility to be operated in whole or in part, nor shall it preclude a temporary closure of the facility during the two-year period.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.109/d"> <num value="d">(d)</num> <content>This section shall not create any obligation extending after the two-year period following the sale.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scC/s39.110"> <num value="39.110">Sec. 39.110.</num> <heading>WHOLESALE INDEXED PRODUCTS PROHIBITED</heading> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.110/a"> <num value="a">(a)</num> <content>In this section, "wholesale indexed product" means a retail electric product in which the price a customer pays for electricity includes a direct pass-through of real-time settlement point prices determined by the independent organization certified under Section 39.151 for the ERCOT power region.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.110/b"> <num value="b">(b)</num> <content>An aggregator, a broker, or a retail electric provider may not offer a wholesale indexed product to a residential or small commercial customer.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.110/c"> <num value="c">(c)</num> <content>An aggregator, a broker, or a retail electric provider may enroll a customer other than a residential and small commercial customer in a wholesale indexed product only if the provider, aggregator, or broker obtains before the customer's enrollment an acknowledgment signed by the customer that the customer accepts the potential price risks associated with a wholesale indexed product.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.110/d"> <num value="d">(d)</num> <content>An acknowledgment required by Subsection (c) must include the following statement, in clear, boldfaced text:</content> <continuation>"I understand that the volatility and fluctuation of wholesale energy pricing may cause my energy bill to be multiple times higher in a month in which wholesale energy prices are high. I understand that I will be responsible for charges caused by fluctuations in wholesale energy prices."</continuation> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.110/e"> <num value="e">(e)</num> <content>An acknowledgment required by Subsection (c) may be included as an addendum to a contract.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.110/f"> <num value="f">(f)</num> <content>A retail electric provider that provides a wholesale indexed product to a customer must keep on file the acknowledgment required by Subsection (c) for each customer while the customer is enrolled with the retail electric provider in the wholesale indexed product.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 132 (H.B. 16), Sec. 1, eff. September 1, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scC/s39.112"> <num value="39.112">Sec. 39.112.</num> <heading>NOTICE OF EXPIRATION AND PRICE CHANGE</heading> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.112/a"> <num value="a">(a)</num> <content>In this section, "fixed rate product" means a retail electric product with a term of at least three months for which the price for each billing period, including recurring charges, does not change throughout the term of the contract, except that the price may vary to reflect actual changes in transmission and distribution utility charges, changes to ERCOT or Texas Regional Entity administrative fees charged to loads, or changes to federal, state, or local laws that result in new or modified fees or costs that are not within the retail electric provider's control.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.112/b"> <num value="b">(b)</num> <content>A retail electric provider shall provide a residential customer who has a fixed rate product with at least three written notices of the date the fixed rate product will expire. The notices must be provided during the last third of the contract period and in intervals that allow for, as practicable, even distribution of the notices throughout the last third of the contract period. The final notice for a contract with a period of more than four months must be provided at least 30 days before the date that the contract will expire. The final notice for a contract with a period of less than four months must be provided at least 15 days before the date that the contract will expire.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.112/c"> <num value="c">(c)</num> <content>The retail electric provider must provide each notice required by Subsection (b) to the customer by mail at the customer's billing address, unless the customer has opted to receive communications electronically from the retail electric provider.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.112/d"> <num value="d">(d)</num> <content>If the retail electric provider has access to customer contact information that allows the provider to send the customer a text message or call the customer, and the customer has agreed to receive notices by text message or call, the retail electric provider may provide additional notice to the customer by text message or call of the date the fixed rate product will expire. Notice provided by text message or call does not constitute notice under Subsection (b).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.112/e"> <num value="e">(e)</num> <chapeau>A notice required by Subsection (b) must:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.112/1"> <num value="1">(1)</num> <content>for a notice provided by mail, include in a manner visible from the outside of the envelope in which the notice is sent, a statement that reads: "Contract Expiration Notice. See Enclosed.";</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.112/2"> <num value="2">(2)</num> <content>if included with a customer's bill, be printed on a separate page or included as a separate document;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.112/3"> <num value="3">(3)</num> <content>include a description of any fees or charges associated with the early termination of the customer's fixed rate product; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.112/4"> <num value="4">(4)</num> <content>describe any renewal offers the retail electric provider chooses to make available to the customer and identify methods by which the customer may obtain the contract documents for each of the offered products.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.112/f"> <num value="f">(f)</num> <content>The final notice provided under Subsection (b) must include the pricing terms for the default renewal product required by Subsection (h).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.112/g"> <num value="g">(g)</num> <content>A retail electric provider shall include on each billing statement, in boldfaced and underlined text, the end date of the fixed rate product.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.112/h"> <num value="h">(h)</num> <chapeau>Except as provided by Subsection (j), if a customer does not select another retail electric product before the expiration of the customer's contract term with a retail electric provider, the provider shall automatically serve the customer through a default renewal product that the customer may cancel at any time without a fee. The default renewal product must be:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.112/1"> <num value="1">(1)</num> <content>a month-to-month product in which the price the customer pays for electricity may vary between billing cycles; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.112/2"> <num value="2">(2)</num> <content>based on clear terms designed to be easily understood by the average customer.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.112/i"> <num value="i">(i)</num> <content>A retail electric provider shall include in each contract for service the terms of the default renewal product that the customer will automatically be enrolled in under Subsection (h) if the customer does not select another retail electric product before the expiration of the contract term.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.112/j"> <num value="j">(j)</num> <chapeau>If a retail electric provider does not provide notice of the expiration of a customer's contract with the provider in accordance with this section and the customer does not select another retail electric product before the expiration of the customer's contract term with the provider, the retail electric provider must continue to serve the customer under the pricing terms of the fixed rate product contract until:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.112/1"> <num value="1">(1)</num> <content>the provider provides notice of the expiration of the contract in accordance with this section; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.112/2"> <num value="2">(2)</num> <content>the customer selects another retail electric product.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.112/k"> <num value="k">(k)</num> <content>No provision in this section shall be construed to prohibit the commission from adopting rules that would provide a greater degree of customer protection.</content> </subsection> <sourceCredit>Added by Acts 2009, 81st Leg., R.S., Ch. 648 (H.B. 1822), Sec. 5, eff. September 1, 2009. Amended by: Acts 2021, 87th Leg., R.S., Ch. 132 (H.B. 16), Sec. 2, eff. September 1, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scC/s39.113"> <num value="39.113">Sec. 39.113.</num> <heading>RATE TRANSPARENCY</heading> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.113/a"> <num value="a">(a)</num> <chapeau>A transmission and distribution utility shall provide with each statement of intent to change rates filed under Chapter 36, and any other filing made with a regulatory authority under this subtitle regarding a change in the utility's rates, a stand-alone document that shows:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.113/1"> <num value="1">(1)</num> <content>the change in rate that the filing would apply to each rate class;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.113/2"> <num value="2">(2)</num> <content>the time period during which the proposed change will be in effect;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.113/3"> <num value="3">(3)</num> <content>for a base rate increase, the anticipated total amount of revenue the utility will receive from the increase during the four-year period following the proposed implementation date of the change;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.113/4"> <num value="4">(4)</num> <content>for a change other than a base rate change, the anticipated total amount of revenue the utility will receive from the change during the period in which the change is in effect;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.113/5"> <num value="5">(5)</num> <content>the delivery charges being imposed by the utility at the time of the filing for an average residential customer;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.113/6"> <num value="6">(6)</num> <content>the anticipated delivery charges that would be imposed by the utility for an average residential customer after the change; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scC/s39.113/7"> <num value="7">(7)</num> <content>the difference between the amounts shown under Subdivisions (5) and (6).</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.113/b"> <num value="b">(b)</num> <content>The commission shall require the document required by Subsection (a) to be filed in a format easily understood by the public.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.113/c"> <num value="c">(c)</num> <content>If the regulatory authority proposes to enter an order approving a change in rates described by Subsection (a) that differs from the change initially proposed by the transmission and distribution utility, the regulatory authority shall require the utility to provide to the regulatory authority a new stand-alone document that includes the information required by Subsection (a) for the proposed change.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scC/s39.113/d"> <num value="d">(d)</num> <content>The commission shall provide, and update at least monthly, on the commission's Internet website or the commission's Power to Choose Internet website information on the rates of transmission and distribution utilities in a format easily understood by the public.</content> </subsection> <sourceCredit>Added by Acts 2025, 89th Leg., R.S., Ch. 1008 (S.B. 1664), Sec. 1, eff. September 1, 2025.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c39/scD"> <num value="D">SUBCHAPTER D.</num> <heading>MARKET STRUCTURE</heading> <section identifier="/us/tx/ut/t2/c39/scD/s39.151"> <num value="39.151">Sec. 39.151.</num> <heading>ESSENTIAL ORGANIZATIONS</heading> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.151/a"> <num value="a">(a)</num> <chapeau>A power region must establish one or more independent organizations to perform the following functions:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.151/1"> <num value="1">(1)</num> <content>ensure access to the transmission and distribution systems for all buyers and sellers of electricity on nondiscriminatory terms;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.151/2"> <num value="2">(2)</num> <content>ensure the reliability and adequacy of the regional electrical network;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.151/3"> <num value="3">(3)</num> <content>ensure that information relating to a customer's choice of retail electric provider is conveyed in a timely manner to the persons who need that information; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.151/4"> <num value="4">(4)</num> <content>ensure that electricity production and delivery are accurately accounted for among the generators and wholesale buyers and sellers in the region.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.151/b"> <num value="b">(b)</num> <content>"Independent organization" means an independent system operator or other person that is sufficiently independent of any producer or seller of electricity that its decisions will not be unduly influenced by any producer or seller.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.151/c"> <num value="c">(c)</num> <content>The commission shall certify an independent organization or organizations to perform the functions prescribed by this section. The commission shall apply the provisions of this section and Sections 39.1511, 39.1512, and 39.1515 so as to avoid conflict with a ruling of a federal regulatory body.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.151/d"> <num value="d">(d)</num> <content>The commission shall adopt and enforce rules relating to the reliability of the regional electrical network and accounting for the production and delivery of electricity among generators and all other market participants, or may delegate those responsibilities to an independent organization. An independent organization certified by the commission is directly responsible and accountable to the commission. The commission has complete authority to oversee and investigate the independent organization's finances, budget, and operations as necessary to ensure the organization's accountability and to ensure that the organization adequately performs the organization's functions and duties. The independent organization shall fully cooperate with the commission in the commission's oversight and investigatory functions. The commission may take appropriate action against an independent organization that does not adequately perform the organization's functions or duties or does not comply with this section, including decertifying the organization or assessing an administrative penalty against the organization. The commission by rule shall adopt procedures governing decertification of an independent organization, selecting and certifying a successor organization, and transferring assets to the successor organization to ensure continuity of operations in the region. The commission may not implement, by order or by rule, a requirement that is contrary to an applicable federal law or rule.</content> <continuation>(d-1) The commission shall require an independent organization certified by the commission under this section to submit to the commission the organization's entire proposed annual budget. The commission shall review the proposed budgets either annually or biennially and may approve, disapprove, or modify any item included in a proposed budget. The commission by rule shall establish the type of information or documents needed to effectively evaluate the proposed budget and reasonable dates for the submission of that information or those documents. The commission shall establish a procedure to provide public notice of and public participation in the budget review process.</continuation> <continuation>(d-2) Except as otherwise agreed to by the commission and an independent organization certified by the commission under this section, the organization must submit to the commission for review and approval proposals for obtaining debt financing or for refinancing existing debt. The commission may approve, disapprove, or modify a proposal.</continuation> <continuation>(d-3) An independent organization certified by the commission under this section shall develop proposed performance measures to track the organization's operations. The independent organization must submit the proposed performance measures to the commission for review and approval. The commission shall review the organization's performance as part of the budget review process under Subsection (d-1). The commission shall prepare a report at the time the commission approves the organization's budget detailing the organization's performance and submit the report to the lieutenant governor, the speaker of the house of representatives, and each house and senate standing committee that has jurisdiction over electric utility issues.</continuation> <continuation>(d-4) The commission may:</continuation> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.151/1"> <num value="1">(1)</num> <content>require an independent organization to provide reports and information relating to the independent organization's performance of the functions prescribed by this section and relating to the organization's revenues, expenses, and other financial matters;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.151/2"> <num value="2">(2)</num> <content>prescribe a system of accounts for an independent organization;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.151/3"> <num value="3">(3)</num> <content>conduct audits of an independent organization's performance of the functions prescribed by this section or relating to its revenues, expenses, and other financial matters and may require an independent organization to conduct such an audit;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.151/4"> <num value="4">(4)</num> <content>inspect an independent organization's facilities, records, and accounts during reasonable hours and after reasonable notice to the independent organization;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.151/5"> <num value="5">(5)</num> <content>assess administrative penalties against an independent organization that violates this title or a rule or order adopted by the commission and, at the request of the commission, the attorney general may apply for a court order to require an independent organization to comply with commission rules and orders in the manner provided by Chapter 15; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.151/6"> <num value="6">(6)</num> <content>resolve disputes between an affected person and an independent organization and adopt procedures for the efficient resolution of such disputes.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.151/e"> <num value="e">(e)</num> <content>After approving the budget of an independent organization under Subsection (d-1), the commission shall authorize the organization to charge to wholesale buyers and sellers a system administration fee, within a range determined by the commission, that is reasonable and competitively neutral to fund the independent organization's approved budget. The commission shall investigate the organization's cost efficiencies, salaries and benefits, and use of debt financing and may require the organization to provide any information needed to effectively evaluate the reasonableness and neutrality of the fee or to evaluate the effectiveness or efficiency of the organization. The commission shall work with the organization to establish the detail of information, both current and historical, and the time frames the commission needs to effectively evaluate the fee. The commission shall require the organization to closely match actual revenues generated by the fee and other sources of revenue with revenue necessary to fund the budget, taking into account the effect of a fee change on market participants and consumers, to ensure that the budget year does not end with surplus or insufficient funds. The commission shall require the organization to submit to the commission, on a schedule determined by the commission, reports that compare actual expenditures with budgeted expenditures.</content> <continuation>(e-1) The review and approval of a proposed budget under Subsection (d-1) or a proceeding to authorize and set the range for the amount of a fee under Subsection (e) is not a contested case for purposes of Chapter 2001, Government Code.</continuation> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.151/f"> <num value="f">(f)</num> <content>In implementing this section, the commission may cooperate with the utility regulatory commission of another state or the federal government and may hold a joint hearing or make a joint investigation with that commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.151/g"> <num value="g">(g)</num> <content>To maintain certification as an independent organization for the ERCOT power region under this section, an organization's governing body must be composed of persons selected by the ERCOT board selection committee.</content> <continuation>(g-1) The bylaws of an independent organization certified for the ERCOT power region must be approved by and reflect the input of the commission. The bylaws must require that every member of the governing body be a resident of this state and must prohibit a legislator from serving as a member. The governing body must be composed of:</continuation> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.151/1"> <num value="1">(1)</num> <chapeau>two members of the commission as ex officio nonvoting members:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c39/scD/s39.151/A"> <num value="A">(A)</num> <content>one of whom must be the presiding officer of the commission; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scD/s39.151/B"> <num value="B">(B)</num> <content>one of whom must be designated by the presiding officer of the commission to serve a one-year term on the governing body;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.151/2"> <num value="2">(2)</num> <content>the counsellor as an ex officio voting member representing residential and small commercial consumer interests;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.151/3"> <num value="3">(3)</num> <content>the chief executive officer of the independent organization as an ex officio nonvoting member; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.151/4"> <num value="4">(4)</num> <chapeau>eight members selected by the selection committee under Section 39.1513 with executive-level experience in any of the following professions:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c39/scD/s39.151/A"> <num value="A">(A)</num> <content>finance;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scD/s39.151/B"> <num value="B">(B)</num> <content>business;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scD/s39.151/C"> <num value="C">(C)</num> <content>engineering, including electrical engineering;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scD/s39.151/D"> <num value="D">(D)</num> <content>trading;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scD/s39.151/E"> <num value="E">(E)</num> <content>risk management;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scD/s39.151/F"> <num value="F">(F)</num> <content>law; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scD/s39.151/G"> <num value="G">(G)</num> <content>electric market design.</content> <continuation>(g-2) Members of the governing body are entitled to receive a salary for their service.</continuation> <continuation>(g-3) A person does not qualify for selection as a member of the governing body of an independent organization for the ERCOT power region if the person has a fiduciary duty or assets in the electricity market for that region.</continuation> <continuation>(g-4) To maintain certification as an independent organization under this section, the organization's governing body may not include more than two members who are employed by an institution of higher education, as defined by Section 61.003, Education Code, in a professorial role.</continuation> <continuation>(g-5) A former member of the governing body of an independent organization certified under this section may not, before the second anniversary of the date the member ceases to be a member of the governing body, engage in an activity that requires registration under Chapter 305, Government Code.</continuation> <continuation>(g-6) In this subsection, a reference to a protocol includes a rule. Protocols adopted by an independent organization and enforcement actions taken by the organization under delegated authority from the commission are subject to commission oversight and review and may not take effect before receiving commission approval. To maintain certification as an independent organization under this section, the organization's governing body must establish and implement a formal process for adopting new protocols or revisions to existing protocols. The process must require that new or revised protocols may not take effect until the commission approves a market impact statement describing the new or revised protocols. The commission may approve, reject, or remand with suggested modifications to the independent organization's governing body protocols adopted by the organization.</continuation> <continuation>(g-7) The presiding officer of the commission shall designate commissioners to serve terms on the independent organization's governing body under Subsection (g-1)(1)(B) in the order in which the commissioners were first appointed to the commission. A commissioner may not serve an additional term until each commissioner has served a term.</continuation> <continuation>(g-8) To maintain certification as an independent organization under this section, the organization must:</continuation> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.151/1"> <num value="1">(1)</num> <content>identify all employee positions in the organization that are critical to the security of the electric grid; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.151/2"> <num value="2">(2)</num> <chapeau>before hiring a person for a position described by Subdivision (1), obtain:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c39/scD/s39.151/A"> <num value="A">(A)</num> <content>from the Department of Public Safety or a private vendor, criminal history record information relating to the prospective employee and any other background information considered necessary by the independent organization or required by the commission; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scD/s39.151/B"> <num value="B">(B)</num> <content>from the prospective employee, an attestation regarding:</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.151/i"> <num value="i">(i)</num> <chapeau>any former travel by the prospective employee to a country described by Section 117.002(a)(2)(A)(i), Business & Commerce Code; and</chapeau> <clause identifier="/us/tx/ut/t2/c39/scD/s39.151/ii"> <num value="ii">(ii)</num> <content>any relationship between the prospective employee and a foreign governmental entity or foreign political organization.</content> </clause> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.151/h"> <num value="h">(h)</num> <content>The ERCOT independent system operator may meet the criteria relating to the other functions of an independent organization provided by Subsection (a) by adopting procedures and acquiring resources needed to carry out those functions, consistent with any rules or orders of the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.151/i"> <num value="i">(i)</num> <content>The commission may delegate authority to the existing independent system operator in ERCOT to enforce operating standards within the ERCOT regional electrical network and to establish and oversee transaction settlement procedures. The commission may establish the terms and conditions for the ERCOT independent system operator's authority to oversee utility dispatch functions after the introduction of customer choice.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.151/j"> <num value="j">(j)</num> <content>A retail electric provider, municipally owned utility, electric cooperative, power marketer, transmission and distribution utility, or power generation company shall observe all scheduling, operating, planning, reliability, and settlement policies, rules, guidelines, and procedures established by the independent system operator in ERCOT. Failure to comply with this subsection may result in the revocation, suspension, or amendment of a certificate as provided by Section 39.356 or in the imposition of an administrative penalty as provided by Section 39.357.</content> <continuation>(j-1) Notwithstanding Subsection (j) of this section, Section 39.653(c), or any other law, the independent system operator in the ERCOT power region may not reduce payments to or uplift short-paid amounts to a municipally owned utility that becomes subject to the jurisdiction of that independent system operator on or after May 29, 2021, and before December 30, 2021, related to a default on a payment obligation by a market participant that occurred before May 29, 2021.</continuation> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.151/k"> <num value="k">(k)</num> <content>To the extent the commission has authority over an independent organization outside of ERCOT, the commission may delegate authority to the independent organization consistent with Subsection (i).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.151/l"> <num value="l">(l)</num> <content>No operational criteria, protocols, or other requirement established by an independent organization, including the ERCOT independent system operator, may adversely affect or impede any manufacturing or other internal process operation associated with an industrial generation facility, except to the minimum extent necessary to assure reliability of the transmission network.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.151/m"> <num value="m">(m)</num> <content>A power region outside of ERCOT shall be deemed to have met the requirement to establish an independent organization to perform the transmission functions specified in Subsection (a) if the Federal Energy Regulatory Commission has approved a regional transmission organization for the region and found that the regional transmission organization meets the requirements of Subsection (a).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.151/n"> <num value="n">(n)</num> <content>An independent organization certified by the commission under this section is subject to review under Chapter 325, Government Code (Texas Sunset Act), but is not abolished under that chapter. The independent organization shall be reviewed during the periods in which the Public Utility Commission of Texas is reviewed.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.151/o"> <num value="o">(o)</num> <chapeau>An independent organization certified by the commission under this section shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.151/1"> <num value="1">(1)</num> <content>conduct internal cybersecurity risk assessment, vulnerability testing, and employee training to the extent the independent organization is not otherwise required to do so under applicable state and federal cybersecurity and information security laws; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.151/2"> <num value="2">(2)</num> <content>submit a report annually to the commission on the independent organization's compliance with applicable cybersecurity and information security laws.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.151/p"> <num value="p">(p)</num> <content>Information submitted in a report under Subsection (o) is confidential and not subject to disclosure under Chapter 552, Government Code.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999. Amended by: Acts 2005, 79th Leg., Ch. 797 (S.B. 408), Sec. 9, eff. September 1, 2005. Acts 2011, 82nd Leg., R.S., Ch. 1232 (S.B. 652), Sec. 1.09(a), eff. June 17, 2011. Acts 2013, 83rd Leg., R.S., Ch. 170 (H.B. 1600), Sec. 1.08, eff. September 1, 2013. Acts 2019, 86th Leg., R.S., Ch. 509 (S.B. 64), Sec. 23, eff. September 1, 2019. Acts 2021, 87th Leg., R.S., Ch. 425 (S.B. 2), Sec. 3, eff. June 8, 2021. Acts 2021, 87th Leg., R.S., Ch. 908 (H.B. 4492), Sec. 3, eff. June 16, 2021. Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 15, eff. September 1, 2023. Acts 2023, 88th Leg., R.S., Ch. 464 (S.B. 2013), Sec. 4, eff. June 9, 2023. Acts 2025, 89th Leg., R.S., Ch. 204 (H.B. 1620), Sec. 22.001(68), eff. September 1, 2025. Acts 2025, 89th Leg., R.S., Ch. 1020 (S.B. 2368), Sec. 4, eff. September 1, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scD/s39.1511"> <num value="39.1511">Sec. 39.1511.</num> <heading>PUBLIC MEETINGS OF THE GOVERNING BODY OF AN INDEPENDENT ORGANIZATION</heading> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1511/a"> <num value="a">(a)</num> <content>Meetings of the governing body of an independent organization certified under Section 39.151 and meetings of a subcommittee that includes a member of the governing body must be open to the public. The bylaws of the independent organization and the rules of the commission may provide for the governing body or subcommittee to enter into executive session closed to the public only to address risk management or a matter that the independent organization would be authorized to consider in a closed meeting if the independent organization were governed under Chapter 551, Government Code.</content> <continuation>(a-1) An independent organization's governing body or a subcommittee may adopt a policy allowing the governing body or subcommittee to enter into an executive session closed to the public and commissioners, including the commissioners serving as ex officio nonvoting members, only to address a contested case, as defined by Section 2001.003, Government Code, or a personnel matter that is unrelated to members of the governing body.</continuation> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1511/b"> <num value="b">(b)</num> <content>The bylaws of the independent organization and rules of the commission must ensure that a person interested in the activities of the independent organization has an opportunity to obtain at least seven days' advance notice of meetings and the planned agendas of the meetings and an opportunity to comment on matters under discussion at the meetings. The bylaws and commission rules governing meetings of the governing body may provide for a shorter period of advance notice and for meetings by teleconference technology for governing body meetings to take action on urgent matters. The bylaws and rules must require actions taken on short notice or at teleconference meetings to be ratified at the governing body's next regular meeting. The notice requirements may be met by a timely electronic posting on the Internet.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1511/c"> <num value="c">(c)</num> <content>The commission shall ensure that an independent organization certified under Section 39.151 makes publicly accessible without charge live Internet video of all public meetings subject to this section for viewing from an Internet website.</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., Ch. 797 (S.B. 408), Sec. 10, eff. September 1, 2005. Amended by: Acts 2009, 81st Leg., R.S., Ch. 400 (H.B. 1783), Sec. 2, eff. September 1, 2009. Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 16, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scD/s39.1512"> <num value="39.1512">Sec. 39.1512.</num> <heading>DISCLOSURE OF INTEREST IN MATTER BEFORE INDEPENDENT ORGANIZATION'S GOVERNING BODY; PARTICIPATION IN DECISION</heading> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1512/a"> <num value="a">(a)</num> <content>If a matter comes before the governing body of an independent organization certified under Section 39.151 and a member has a direct interest in that matter or is employed by or has a substantial financial interest in a person who has a direct interest in that matter, that member shall publicly disclose the fact of that interest to the governing body at a public meeting of the body. The member shall recuse himself or herself from the governing body's deliberations and actions on the matter and may not vote on the matter or otherwise participate in a governing body decision on the matter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1512/b"> <num value="b">(b)</num> <content>A disclosure made under Subsection (a) shall be entered in the minutes of the meeting at which the disclosure is made.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1512/c"> <num value="c">(c)</num> <content>The fact that a member is recused from a vote or decision by application of this section does not affect the existence of a quorum.</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., Ch. 797 (S.B. 408), Sec. 10, eff. September 1, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scD/s39.1513"> <num value="39.1513">Sec. 39.1513.</num> <heading>ERCOT BOARD SELECTION COMMITTEE</heading> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1513/a"> <num value="a">(a)</num> <chapeau>The ERCOT board selection committee is composed of:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1513/1"> <num value="1">(1)</num> <content>one member appointed by the governor;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1513/2"> <num value="2">(2)</num> <content>one member appointed by the lieutenant governor; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1513/3"> <num value="3">(3)</num> <content>one member appointed by the speaker of the house of representatives.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1513/b"> <num value="b">(b)</num> <content>A person may not be appointed as a member of the committee unless the person is a resident of this state.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1513/c"> <num value="c">(c)</num> <content>A member of the committee is not entitled to compensation for serving as a member but is entitled to reimbursement for actual and necessary expenses incurred in performing the official duties of office.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1513/d"> <num value="d">(d)</num> <content>The committee shall select members eligible under Section 39.151 to serve on the governing body of an independent organization certified under that section for the ERCOT power region and shall designate the chair and vice chair of the governing body from those members.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1513/e"> <num value="e">(e)</num> <content>The ERCOT board selection committee shall retain an outside consulting firm to help select members of the governing body under Subsection (d).</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 425 (S.B. 2), Sec. 4, eff. June 8, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scD/s39.1514"> <num value="39.1514">Sec. 39.1514.</num> <heading>COMMISSION DIRECTIVES TO INDEPENDENT ORGANIZATION</heading> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1514/a"> <num value="a">(a)</num> <chapeau>The commission may not use a verbal directive to direct an independent organization certified under Section 39.151 to take an official action. The commission may direct the organization to take an official action only through:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1514/1"> <num value="1">(1)</num> <content>a contested case;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1514/2"> <num value="2">(2)</num> <content>rulemaking; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1514/3"> <num value="3">(3)</num> <content>a memorandum or written order adopted by a majority vote.</content> <continuation>(a-1) The commission must use a contested case or rulemaking process to direct an independent organization certified under Section 39.151 to take an official action that will create a new cost or fee, increase an existing cost or fee, or impose significant operational obligations on an entity.</continuation> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1514/b"> <num value="b">(b)</num> <chapeau>The commission by rule shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1514/1"> <num value="1">(1)</num> <content>specify the types of directives the commission may issue through a contested case, rulemaking, memorandum, or written order, in accordance with Subsection (a-1);</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1514/2"> <num value="2">(2)</num> <content>require that proposed commission directives be included as an item on a commission meeting agenda and require the commission to allow members of the public an opportunity to comment on the agenda item; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1514/3"> <num value="3">(3)</num> <content>establish a reasonable timeline for the release before a commission meeting of discussion materials relevant to any proposed commission directives included as agenda items for that meeting.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1514/c"> <num value="c">(c)</num> <content>Notwithstanding another provision of this section, the commission may use a verbal directive to direct an independent organization to take an official action in an urgent or emergency situation that poses an imminent threat to public health, public safety, or the reliability of the power grid. If the commission uses a verbal directive, the commission shall provide written documentation of the directive to the independent organization not later than 72 hours after the urgent or emergency situation ends. The commission by rule shall establish criteria for determining whether a situation is urgent or an emergency under this subsection and establish a process by which the commission will issue directives to the independent organization under this subsection.</content> </subsection> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 17, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scD/s39.1515"> <num value="39.1515">Sec. 39.1515.</num> <heading>WHOLESALE ELECTRIC MARKET MONITOR</heading> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1515/a"> <num value="a">(a)</num> <content>An independent organization certified under Section 39.151 shall contract with an entity selected by the commission to act as the commission's wholesale electric market monitor to detect and prevent market manipulation strategies, recommend measures to enhance the efficiency of the wholesale market, and provide independent analysis of any material changes proposed to the wholesale market. The commission may not restrict the market monitor from appearing or speaking before or providing analysis to the legislature. The independent organization may not substantially modify the market monitor's contract unless the modification is approved by a majority of the commissioners.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1515/b"> <num value="b">(b)</num> <chapeau>The independent organization shall provide to the personnel of the market monitor:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1515/1"> <num value="1">(1)</num> <content>full access to the organization's main operations center and the organization's records that concern operations, settlement, and reliability; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1515/2"> <num value="2">(2)</num> <content>other support and cooperation the commission determines is necessary for the market monitor to perform the market monitor's functions.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1515/c"> <num value="c">(c)</num> <content>The independent organization shall use money from the fee authorized by Section 39.151(e) to pay for the market monitor's activities.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1515/d"> <num value="d">(d)</num> <chapeau>The commission is responsible for ensuring that the market monitor has the resources, expertise, and authority necessary to monitor the wholesale electric market effectively and shall adopt rules and perform oversight of the market monitor as necessary. The market monitor shall operate under the supervision and oversight of the commission. The commission shall retain all enforcement authority conferred under this title, and this section may not be construed to confer enforcement authority on the market monitor or to authorize the commission to delegate the commission's enforcement authority to the market monitor. The commission by rule shall define:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1515/1"> <num value="1">(1)</num> <content>the market monitor's monitoring responsibilities, including reporting obligations and limitations;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1515/2"> <num value="2">(2)</num> <content>the standards for funding the market monitor, including staffing requirements;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1515/3"> <num value="3">(3)</num> <content>qualifications for personnel of the market monitor; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1515/4"> <num value="4">(4)</num> <content>ethical standards for the market monitor and the personnel of the market monitor.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1515/e"> <num value="e">(e)</num> <content>In adopting rules governing the standards for funding the market monitor, the commission shall consult with a subcommittee of the independent organization's governing body to receive information on how money is or should be spent for monitoring functions. Rules governing ethical standards must include provisions designed to ensure that the personnel of the market monitor are professionally and financially independent from market participants. The commission shall develop and implement policies that clearly separate the policymaking responsibilities of the commission and the monitoring, analysis, and reporting responsibilities of the market monitor.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1515/f"> <num value="f">(f)</num> <content>The market monitor immediately shall report in writing directly to the commission and commission staff all potential market manipulations and all discovered or potential violations of commission rules or rules of the independent organization.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1515/g"> <num value="g">(g)</num> <content>The personnel of the market monitor may communicate with commission staff on any matter without restriction.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1515/h"> <num value="h">(h)</num> <content>The market monitor annually shall submit to the commission and the independent organization a report that identifies market design flaws and recommends methods to correct the flaws. The commission and the independent organization shall review the report and evaluate whether changes to rules of the commission or the independent organization should be made.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1515/i"> <num value="i">(i)</num> <chapeau>Not later than December 1 of each year, the commission shall submit a report to the legislature that describes for the 12-month period preceding the report's submission:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1515/1"> <num value="1">(1)</num> <content>the number of instances in which the market monitor reported potential market manipulation to the commission or commission staff;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1515/2"> <num value="2">(2)</num> <content>the statutes, commission rules, and rules of the independent organization alleged to have been violated by the reported entities; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1515/3"> <num value="3">(3)</num> <content>the number of instances reported under Subdivision (1) for which the commission instituted a formal investigation on its own motion or commission staff initiated an enforcement action.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., Ch. 797 (S.B. 408), Sec. 10, eff. September 1, 2005. Amended by: Acts 2013, 83rd Leg., R.S., Ch. 170 (H.B. 1600), Sec. 1.09, eff. September 1, 2013. Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 18, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scD/s39.1516"> <num value="39.1516">Sec. 39.1516.</num> <heading>CYBERSECURITY MONITOR</heading> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1516/a"> <num value="a">(a)</num> <chapeau>In this section, "monitored utility" means:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1516/1"> <num value="1">(1)</num> <content>a transmission and distribution utility;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1516/2"> <num value="2">(2)</num> <content>a corporation described in Section 32.053;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1516/3"> <num value="3">(3)</num> <content>a municipally owned utility or electric cooperative that owns or operates equipment or facilities in the ERCOT power region to transmit electricity at 60 or more kilovolts; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1516/4"> <num value="4">(4)</num> <content>an electric utility, municipally owned utility, or electric cooperative that operates solely outside the ERCOT power region that has elected to participate under Subsection (d).</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1516/b"> <num value="b">(b)</num> <chapeau>The commission and the independent organization certified under Section 39.151 shall contract with an entity selected by the commission to act as the commission's cybersecurity monitor to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1516/1"> <num value="1">(1)</num> <content>manage a comprehensive cybersecurity outreach program for monitored utilities;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1516/2"> <num value="2">(2)</num> <content>meet regularly with monitored utilities to discuss emerging threats, best business practices, and training opportunities;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1516/3"> <num value="3">(3)</num> <content>review self-assessments voluntarily disclosed by monitored utilities of cybersecurity efforts;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1516/4"> <num value="4">(4)</num> <content>research and develop best business practices regarding cybersecurity; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1516/5"> <num value="5">(5)</num> <content>report to the commission on monitored utility cybersecurity preparedness.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1516/c"> <num value="c">(c)</num> <content>The independent organization certified under Section 39.151 shall provide to the cybersecurity monitor any access, information, support, and cooperation that the commission determines is necessary for the monitor to perform the functions described by Subsection (b). The independent organization shall use funds from the fee authorized by Section 39.151(e) to pay for the cybersecurity monitor's activities.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1516/d"> <num value="d">(d)</num> <chapeau>An electric utility, municipally owned utility, or electric cooperative that operates solely outside the ERCOT power region may elect to participate in the cybersecurity monitor program or to discontinue participation. The commission shall adopt rules establishing:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1516/1"> <num value="1">(1)</num> <content>procedures for an electric utility, municipally owned utility, or electric cooperative to notify the commission, the independent organization certified under Section 39.151, and the cybersecurity monitor that the utility or cooperative elects to participate or to discontinue participation; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1516/2"> <num value="2">(2)</num> <content>a mechanism to require an electric utility, municipally owned utility, or electric cooperative that elects to participate to contribute to the costs incurred by the independent organization under this section.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1516/e"> <num value="e">(e)</num> <content>The cybersecurity monitor shall operate under the supervision and oversight of the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1516/f"> <num value="f">(f)</num> <content>The commission shall adopt rules as necessary to implement this section and may enforce the provisions of this section in the manner provided by this title. This section does not grant enforcement authority to the cybersecurity monitor or authorize the commission to delegate the commission's enforcement authority to the cybersecurity monitor. This section does not grant enforcement authority to the commission beyond authority explicitly provided for in this title.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1516/g"> <num value="g">(g)</num> <content>The staff of the cybersecurity monitor may communicate with commission staff about any cybersecurity information without restriction. Commission staff shall maintain the confidentiality of the cybersecurity information. Notwithstanding any other law, commission staff may not disclose information obtained under this section in an open meeting or through a response to a public information request.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1516/h"> <num value="h">(h)</num> <content>Information written, produced, collected, assembled, or maintained under Subsection (b), (c), or (g) is confidential and not subject to disclosure under Chapter 552, Government Code. A governmental body is not required to conduct an open meeting under Chapter 551, Government Code, to deliberate a matter described by Subsection (b), (c), or (g).</content> </subsection> <sourceCredit>Added by Acts 2019, 86th Leg., R.S., Ch. 610 (S.B. 936), Sec. 3, eff. September 1, 2019.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scD/s39.152"> <num value="39.152">Sec. 39.152.</num> <heading>QUALIFYING POWER REGIONS</heading> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.152/a"> <num value="a">(a)</num> <chapeau>The commission shall certify a power region if:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.152/1"> <num value="1">(1)</num> <content>a sufficient number of interconnected utilities in the power region fall under the operational control of an independent organization as described by Section 39.151;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.152/2"> <num value="2">(2)</num> <content>the power region has a generally applicable tariff that guarantees open and nondiscriminatory access for all users to transmission and distribution facilities in the power region as provided by Section 39.203; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.152/3"> <num value="3">(3)</num> <content>no person owns and controls more than 20 percent of the installed generation capacity located in or capable of delivering electricity to a power region, as determined according to Section 39.154.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.152/b"> <num value="b">(b)</num> <content>In determining whether a power region not entirely within the state meets the requirements of this section, the commission shall consider the extent to which the available transmission facilities limit the delivery of electricity from generators located outside the state to areas of the power region within the state.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.152/c"> <num value="c">(c)</num> <content>For a power region outside of ERCOT, the requirements of Subsection (a)(2) shall be deemed to have been met if power aggregating to approximately 50,000 megawatts can be delivered to the portion of the power region that is in this state through the payment of not more than one transmission tariff.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.152/d"> <num value="d">(d)</num> <content>For a power region outside of ERCOT, a power generation company that is affiliated with an electric utility may elect to demonstrate that it meets the requirements of Subsection (a)(3) by showing that it does not own and control more than 20 percent of the installed capacity in a geographic market that includes the power region, using the guidelines, standards, and methods adopted by the Federal Energy Regulatory Commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.152/e"> <num value="e">(e)</num> <content>In a power region outside of ERCOT, if customer choice is introduced before the requirements of Subsection (a) are met, an affiliated retail electric provider may not compete for retail customers in any area of the power region that is within this state and outside of the affiliated transmission and distribution utility's certificated service area unless the affiliated power generation company makes a commitment to maintain and does maintain rates that are based on cost of service for any electric cooperative or municipally owned utility that was a wholesale customer on January 1, 1999, and was purchasing power at rates that were based on cost of service. This subsection requires a power generation company to sell power at rates that are based on cost of service, notwithstanding the expiration of a contract for that service, until the requirements of Subsection (a) are met.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scD/s39.153"> <num value="39.153">Sec. 39.153.</num> <heading>CAPACITY AUCTION</heading> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.153/a"> <num value="a">(a)</num> <content>Each electric utility subject to this section shall sell at auction, at least 60 days before the date set for customer choice to begin, entitlements to at least 15 percent of the electric utility's Texas jurisdictional installed generation capacity. For the purposes of this section, the term "electric utility" includes any affiliated power generation company that is unbundled from the electric utility in accordance with Section 39.051, but does not include any entity owning less than 400 megawatts of installed generation capacity.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.153/b"> <num value="b">(b)</num> <content>The obligation to auction the entitlements shall continue until the earlier of 60 months after the date customer choice is introduced or the date the commission determines that 40 percent or more of the electric power consumed by residential and small commercial customers within the affiliated transmission and distribution utility's certificated service area before the onset of customer choice is provided by nonaffiliated retail electric providers.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.153/c"> <num value="c">(c)</num> <content>An affiliate of the electric utility selling entitlements in the auction required by this section may not purchase entitlements from the affiliated electric utility at the auction. Entitlements may only be purchased by entities lawfully able to sell electricity in Texas.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.153/d"> <num value="d">(d)</num> <content>An electric utility may choose to auction additional entitlements beyond those required by Subsection (a) or continue to auction entitlements after the period required by Subsection (b) in order to comply with Section 39.154.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.153/e"> <num value="e">(e)</num> <chapeau>The commission shall adopt rules by December 31, 2000, that define the scope of the capacity entitlements to be auctioned. Entitlements may be auctioned in blocks of less than 15 percent. The rules shall state the minimum amount of capacity that can be sold at auction as an entitlement. At a minimum, the rules shall provide that the entitlements:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.153/1"> <num value="1">(1)</num> <content>may be sold and purchased in periods of not less than one month nor more than four years;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.153/2"> <num value="2">(2)</num> <content>may be resold to any lawful purchaser, except for a retail electric provider affiliated with the electric utility that originally auctioned the entitlement;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.153/3"> <num value="3">(3)</num> <content>include no possessory interest in the unit from which the power is produced;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.153/4"> <num value="4">(4)</num> <content>include no obligations of a possessory owner of an interest in the unit from which the power is produced; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.153/5"> <num value="5">(5)</num> <content>give the purchaser the right to designate the dispatch of the entitlement, subject to planned outages, outages beyond the control of the utility operating the unit, and other considerations subject to the oversight of the applicable independent organization.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.153/f"> <num value="f">(f)</num> <chapeau>The commission shall adopt rules by December 31, 2000, that prescribe the procedure for the auction of the entitlements. The rules shall include:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.153/1"> <num value="1">(1)</num> <content>a process for conducting the auction or auctions, including who shall conduct it, how often it shall be conducted, and how winning bidders shall be determined;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.153/2"> <num value="2">(2)</num> <content>a process for the electric utility to designate which generation units or combination of units are offered for auction;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.153/3"> <num value="3">(3)</num> <content>a provision for the utility to establish an opening bid price based on the electric utility's expected cost, with the commission prescribing the means for determining the opening bid price, which may not include return on equity; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.153/4"> <num value="4">(4)</num> <content>a provision that allows a bidder to specify the magnitude and term of the entitlement, subject to the conditions established in Subsection (e).</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.153/g"> <num value="g">(g)</num> <content>In adopting the process under Subsection (f)(2), the commission shall consider the furtherance of the development of the competitive market, the cost of transmission, physical constraints of the transmission system, the proximity of the generation to load, economic efficiency, and any other factors the commission finds relevant. The process may provide for commission approval of the designation before auction. The commission may consult with the applicable independent organization to develop the process.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scD/s39.154"> <num value="39.154">Sec. 39.154.</num> <heading>LIMITATION OF OWNERSHIP OF INSTALLED CAPACITY</heading> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.154/a"> <num value="a">(a)</num> <content>Beginning on the date of introduction of customer choice, a power generation company may not own and control more than 20 percent of the installed generation capacity located in, or capable of delivering electricity to, a power region.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.154/b"> <num value="b">(b)</num> <content>In a power region not entirely within the state, the commission may waive or modify the requirement in Subsection (a) on a finding of good cause.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.154/c"> <num value="c">(c)</num> <content>In determining the percentage shares of installed generation capacity under this section, the commission shall combine capacity owned and controlled by a power generation company and any entity that is affiliated with that power generation company within the power region, reduced by the installed generation capacity of those facilities that are made subject to capacity auctions under Sections 39.153(a) and (d).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.154/d"> <num value="d">(d)</num> <chapeau>In this chapter, "installed generation capacity" means all potentially marketable electric generation capacity, including the capacity of:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.154/1"> <num value="1">(1)</num> <content>generating facilities that are connected with a transmission or distribution system;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.154/2"> <num value="2">(2)</num> <content>generating facilities used to generate electricity for consumption by the person owning or controlling the facility; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.154/3"> <num value="3">(3)</num> <content>generating facilities that will be connected with a transmission or distribution system and operating within 12 months.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.154/e"> <num value="e">(e)</num> <content>In determining the percentage shares of installed generation capacity owned and controlled by a power generation company under this section and Section 39.156, the commission shall, for purposes of calculating the numerator, reduce the installed generation capacity owned and controlled by that power generation company by the installed generation capacity of any "grandfathered facility" within an ozone nonattainment area as of September 1, 1999, for which that power generation company has commenced complying or made a binding commitment to comply with Section 39.264. This subsection applies only to a power generation company that is affiliated with an electric utility that owned and controlled more than 27 percent of the installed generation capacity in the power region on January 1, 1999.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scD/s39.155"> <num value="39.155">Sec. 39.155.</num> <heading>COMMISSION ASSESSMENT OF MARKET POWER</heading> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.155/a"> <num value="a">(a)</num> <content>Each person, municipally owned utility, electric cooperative, and river authority that owns generation facilities and offers electricity for sale in this state shall report to the commission its installed generation capacity, the total amount of capacity available for sale to others, the total amount of capacity under contract to others, the total amount of capacity dedicated to its own use, its annual wholesale power sales in the state, its annual retail power sales in the state, and any other information necessary for the commission to assess market power or the development of a competitive retail market in the state. The commission shall by rule prescribe the nature and detail of the reporting requirements and shall administer those reporting requirements in a manner that ensures the confidentiality of competitively sensitive information.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.155/b"> <num value="b">(b)</num> <content>Repealed by Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 46(a)(3), eff. September 1, 2023.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.155/c"> <num value="c">(c)</num> <content>Before the date of introduction of customer choice in a power region other than ERCOT, each electric utility owning transmission and distribution facilities in that region shall submit an annual report to the commission identifying existing and potential transmission and distribution constraints and system needs in the power region, alternatives for meeting system needs, and recommendations for meeting system needs as directed by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.155/d"> <num value="d">(d)</num> <content>In a qualifying power region, the report required by Subsection (c) shall be submitted by the independent organization or organizations having authority over the power region or discrete areas thereof.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999. Amended by: Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 19, eff. September 1, 2023. Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 46(a)(3), eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scD/s39.156"> <num value="39.156">Sec. 39.156.</num> <heading>MARKET POWER MITIGATION PLAN</heading> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.156/a"> <num value="a">(a)</num> <content>In this section, "market power mitigation plan" or "plan" means a written proposal by an electric utility or a power generation company for reducing its ownership and control of installed generation capacity as required by Section 39.154.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.156/b"> <num value="b">(b)</num> <content>An electric utility or power generation company owning and controlling more than 20 percent of the generation capacity located in, or capable of delivering electricity to, a power region shall file a market power mitigation plan with the commission not later than December 1, 2000.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.156/c"> <num value="c">(c)</num> <chapeau>The plan may provide for:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.156/1"> <num value="1">(1)</num> <content>the sale of generation assets to a nonaffiliated person;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.156/2"> <num value="2">(2)</num> <content>the exchange of generation assets with a nonaffiliated person located in a different power region;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.156/3"> <num value="3">(3)</num> <content>the auctioning of generation capacity entitlements as part of a capacity auction required by Section 39.153;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.156/4"> <num value="4">(4)</num> <content>the sale of the right to capacity to a nonaffiliated person for at least four years; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.156/5"> <num value="5">(5)</num> <content>any reasonable method of mitigation.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.156/d"> <num value="d">(d)</num> <content>For the purposes of this section, generation capacity shall be net of the generation capacity subject to an auction under Section 39.153.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.156/e"> <num value="e">(e)</num> <content>The plan shall be in a form prescribed by the commission and shall provide information the commission finds reasonably necessary to evaluate the plan.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.156/f"> <num value="f">(f)</num> <content>The commission shall approve, modify, or reject a plan within 180 days after the date of a filing under Subsection (b). The commission may not modify a plan to require divestiture by the electric utility or the power generation company.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.156/g"> <num value="g">(g)</num> <chapeau>In reaching its determination under Subsection (f), the commission shall consider:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.156/1"> <num value="1">(1)</num> <content>the degree to which the electric utility's or power generation company's stranded costs, if any, are minimized;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.156/2"> <num value="2">(2)</num> <content>whether on disposition of the generation assets the reasonable value is likely to be received;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.156/3"> <num value="3">(3)</num> <content>the effect of the plan on the electric utility's or power generation company's federal income taxes;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.156/4"> <num value="4">(4)</num> <content>the effect of the plan on current and potential competitors in the generation market; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.156/5"> <num value="5">(5)</num> <content>whether the plan is consistent with the public interest.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.156/h"> <num value="h">(h)</num> <content>An electric utility or power generation company with an approved mitigation plan may request to amend or repeal its plan. On a showing of good cause, the commission shall modify or repeal an electric utility's or power generation company's mitigation plan.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.156/i"> <num value="i">(i)</num> <content>If an electric utility's or a power generation company's market power mitigation plan is not approved before January 1 of the year it is to take effect, the commission may order the electric utility or power generation company to auction generation capacity entitlements according to Section 39.153, subject to commission approval, of any capacity exceeding the maximum allowable capacity prescribed by Section 39.154 until the time a mitigation plan is approved.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.156/j"> <num value="j">(j)</num> <content>An auction under Subsection (i) shall be held not later than 60 days after the date the order is entered.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scD/s39.157"> <num value="39.157">Sec. 39.157.</num> <heading>COMMISSION AUTHORITY TO ADDRESS MARKET POWER</heading> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.157/a"> <num value="a">(a)</num> <content>The commission shall monitor market power associated with the generation, transmission, distribution, and sale of electricity in this state. On a finding that market power abuses or other violations of this section are occurring, the commission shall require reasonable mitigation of the market power by ordering the construction of additional transmission or distribution facilities, by seeking an injunction or civil penalties as necessary to eliminate or to remedy the market power abuse or violation as authorized by Chapter 15, by imposing an administrative penalty as authorized by Chapter 15, by ordering the disgorgement of excess revenue as authorized by Chapter 15, or by suspending, revoking, or amending a certificate or registration as authorized by Section 39.356. Section 15.024(c) does not apply to an administrative penalty imposed under this section. For purposes of this subchapter, market power abuses are practices by persons possessing market power that are unreasonably discriminatory or tend to unreasonably restrict, impair, or reduce the level of competition, including practices that tie unregulated products or services to regulated products or services or unreasonably discriminate in the provision of regulated services. For purposes of this section, "market power abuses" include predatory pricing, withholding of production, precluding entry, and collusion. A violation of the code of conduct provided by Subsection (d) that materially impairs the ability of a person to compete in a competitive market shall be deemed to be an abuse of market power. The possession of a high market share in a market open to competition may not, of itself, be deemed to be an abuse of market power; however, this sentence shall not affect the application of state and federal antitrust laws.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.157/b"> <num value="b">(b)</num> <content>Beginning on the date of introduction of customer choice, a person that owns generation facilities may not own transmission or distribution facilities in this state except for those 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 Section 31.002. However, nothing in this chapter shall prohibit a power generation company affiliated with a transmission and distribution utility from owning generation facilities.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.157/c"> <num value="c">(c)</num> <content>The commission shall monitor market shares of installed capacity to ensure that the limitations in Section 39.154 are not exceeded. If the commission finds that a person has violated a limitation in Section 39.154, the commission shall order the person to file, within 60 days of the date of the order, a market power mitigation plan consistent with the requirements in Section 39.156.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.157/d"> <num value="d">(d)</num> <chapeau>Not later than January 10, 2000, the commission shall adopt rules and enforcement procedures to govern transactions or activities between a transmission and distribution utility and its competitive affiliates to avoid potential market power abuses and cross-subsidizations between regulated and competitive activities both during the transition to and after the introduction of competition. Nothing in this subsection is intended to affect or modify the obligations or duties relating to any rules or standards of conduct that may apply to a utility or the utility's affiliates under orders or regulations of the Federal Energy Regulatory Commission or the Securities and Exchange Commission. A utility that is subject to statutes or regulations in other states that conflict with a provision of this section may petition the commission for a waiver of the conflicting provision on a showing of good cause. The rules adopted under this section shall ensure that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.157/1"> <num value="1">(1)</num> <content>a utility makes any products and services, other than corporate support services, that it provides to a competitive affiliate available, contemporaneously and in the same manner, to the competitive affiliate's competitors and applies its tariffs, prices, terms, conditions, and discounts for those products and services in the same manner to all similarly situated entities;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.157/2"> <num value="2">(2)</num> <chapeau>a utility does not:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c39/scD/s39.157/A"> <num value="A">(A)</num> <content>give a competitive affiliate or a competitive affiliate's customers any preferential advantage, access, or treatment regarding services other than corporate support services; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scD/s39.157/B"> <num value="B">(B)</num> <content>act in a manner that is discriminatory or anticompetitive with respect to a nonaffiliated competitor of a competitive affiliate;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.157/3"> <num value="3">(3)</num> <chapeau>a utility providing electric transmission or distribution services:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c39/scD/s39.157/A"> <num value="A">(A)</num> <content>provides those services on nondiscriminatory terms and conditions;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scD/s39.157/B"> <num value="B">(B)</num> <content>does not establish as a condition for the provision of those services the purchase of other goods or services from the utility or the competitive affiliate; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scD/s39.157/C"> <num value="C">(C)</num> <content>does not provide competitive affiliates preferential access to the utility's transmission and distribution systems or to information about those systems;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.157/4"> <num value="4">(4)</num> <content>a utility does not release any proprietary customer information to a competitive affiliate or any other entity, other than an independent organization as defined by Section 39.151 or a provider of corporate support services for the purposes of providing the services, without obtaining prior verifiable authorization, as determined from the commission, from the customer;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.157/5"> <num value="5">(5)</num> <chapeau>a utility does not:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c39/scD/s39.157/A"> <num value="A">(A)</num> <content>communicate with a current or potential customer about products or services offered by a competitive affiliate in a manner that favors a competitive affiliate; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scD/s39.157/B"> <num value="B">(B)</num> <content>allow a competitive affiliate, before September 1, 2005, to use the utility's corporate name, trademark, brand, or logo unless the competitive affiliate includes on employee business cards and in its advertisements of specific services to existing or potential residential or small commercial customers locating within the utility's certificated service area a disclaimer that states, "(Name of competitive affiliate) is not the same company as (name of utility) and is not regulated by the Public Utility Commission of Texas, and you do not have to buy (name of competitive affiliate)'s products to continue to receive quality regulated services from (name of utility).";</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.157/6"> <num value="6">(6)</num> <content>a utility does not conduct joint advertising or promotional activities with a competitive affiliate in a manner that favors the competitive affiliate;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.157/7"> <num value="7">(7)</num> <content>a utility is a separate, independent entity from any competitive affiliates and, except as provided by Subdivisions (8) and (9), does not share employees, facilities, information, or other resources, other than permissible corporate support services, with those competitive affiliates unless the utility can prove to the commission that the sharing will not compromise the public interest;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.157/8"> <num value="8">(8)</num> <content>a utility's office space is physically separated from the office space of the utility's competitive affiliates by being located in separate buildings or, if within the same building, by a method such as having the offices on separate floors or with separate access, unless otherwise approved by the commission;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.157/9"> <num value="9">(9)</num> <chapeau>a utility and a competitive affiliate:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c39/scD/s39.157/A"> <num value="A">(A)</num> <content>may, to the extent the utility implements adequate safeguards precluding employees of a competitive affiliate from gaining access to information in a manner inconsistent with Subsection (g) or (i), share common officers and directors, property, equipment, offices to the extent consistent with Subdivision (8), credit, investment, or financing arrangements to the extent consistent with Subdivision (17), computer systems, information systems, and corporate support services; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scD/s39.157/B"> <num value="B">(B)</num> <content>are not required to enter into prior written contracts or competitive solicitations for non-tariffed transactions between the utility and the competitive affiliate, except that the commission by rule may require the utility and the competitive affiliate to enter into prior written contracts or competitive solicitations for certain classes of transactions, other than corporate support services, that have a per unit value of more than $75,000 or that total more than $1 million;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.157/10"> <num value="10">(10)</num> <content>a utility does not temporarily assign, for less than one year, employees engaged in transmission or distribution system operations to a competitive affiliate unless the employee does not have knowledge of information that is intended to be protected under this section;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.157/11"> <num value="11">(11)</num> <content>a utility does not subsidize the business activities of an affiliate with revenues from a regulated service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.157/12"> <num value="12">(12)</num> <content>a utility and its affiliates fully allocate costs for any shared services, corporate support services, and other items described by Subdivisions (8) and (9);</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.157/13"> <num value="13">(13)</num> <content>a utility and its affiliates keep separate books of accounts and records and the commission may review records relating to a transaction between a utility and an affiliate;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.157/14"> <num value="14">(14)</num> <content>assets transferred or services provided between a utility and an affiliate, other than transfers that facilitate unbundling under Section 39.051 or asset valuation under Section 39.262, are priced at a level that is fair and reasonable to the customers of the utility and reflects the market value of the assets or services or the utility's fully allocated cost to provide those assets or services;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.157/15"> <num value="15">(15)</num> <content>regulated services that a utility provides on a routine or recurring basis are included in a tariff that is subject to commission approval;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.157/16"> <num value="16">(16)</num> <content>each transaction between a utility and a competitive affiliate is conducted at arm's length; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.157/17"> <num value="17">(17)</num> <content>a utility does not allow an affiliate to obtain credit under an arrangement that would include a specific pledge of assets in the rate base of the utility or a pledge of cash reasonably necessary for utility operations.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.157/e"> <num value="e">(e)</num> <content>The commission shall by rule establish a code of conduct that must be observed by electric cooperatives and municipally owned utilities and their affiliates to protect against anticompetitive practices. The rules adopted by the commission under this subsection shall be consistent with Chapters 40 and 41 and may not be more restrictive than the rules adopted under Subsection (d).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.157/f"> <num value="f">(f)</num> <content>Following review of the annual report submitted to it under Section 39.155(c), the commission shall determine whether specific transmission or distribution constraints or bottlenecks within this state give rise to market power in specific geographic markets in the state. The commission, on a finding that specific transmission or distribution constraints or bottlenecks within this state give rise to market power, may order reasonable mitigation of that potential market power by ordering, under Section 39.203(e), one or more electric utilities or transmission and distribution utilities to construct additional transmission or distribution capacity, or both, subject to the certification provisions of this title.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.157/g"> <num value="g">(g)</num> <content>The sharing of corporate support services in accordance with this section may not allow or provide a means for the transfer of confidential information from a utility to an affiliate, create the opportunity for preferential treatment or an unfair competitive advantage, lead to customer confusion, or create significant opportunities for cross-subsidization of affiliates.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.157/h"> <num value="h">(h)</num> <content>A utility or competitive affiliate may not circumvent the provisions or the intent of the provisions of Subsection (d) by using any utility affiliate to provide information, services, or subsidies between the utility and a competitive affiliate.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.157/i"> <num value="i">(i)</num> <chapeau>In this section:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.157/1"> <num value="1">(1)</num> <content>"Competitive affiliate" means an affiliate of a utility that provides services or sells products in a competitive energy-related market in this state, including telecommunications services, to the extent those services are energy related.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.157/2"> <num value="2">(2)</num> <content>"Corporate support services" means services shared by a utility, its parent holding company, or a separate affiliate created to perform corporate support services, with its affiliates of joint corporate oversight, governance, support systems, and personnel. Examples of services that may be shared, to the extent the services comply with the requirements prescribed by Subsections (d) and (g), include human resources, procurement, information technology, regulatory services, administrative services, real estate services, legal services, accounting, environmental services, research and development, internal audit, community relations, corporate communications, financial services, financial planning and management support, corporate services, corporate secretary, lobbying, and corporate planning. Examples of services that may not be shared include engineering, purchasing of electric transmission, transmission and distribution system operations, and marketing.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 996 (H.B. 2133), Sec. 7, eff. September 1, 2011. Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 20, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scD/s39.158"> <num value="39.158">Sec. 39.158.</num> <heading>MERGERS AND CONSOLIDATIONS</heading> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.158/a"> <num value="a">(a)</num> <content>A power generation company that offers electricity for sale in this state in a power region open to customer choice and proposes a transaction to merge, consolidate, or otherwise become affiliated with another power generation company that offers electricity for sale in this state in the same power region shall obtain the approval of the commission before closing if the merged, consolidated, or affiliated entity would own and control more than 10 percent of the total installed generation capacity located in, or capable of delivering electricity to, the power region.</content> <continuation>(a-1) An approval required by Subsection (a) must be requested at least 120 days before the date of the proposed closing of the transaction.</continuation> <continuation>(a-2) The commission shall approve a transaction described by Subsection (a) unless the commission finds that the transaction results in a violation of Section 39.154. If the commission finds that the transaction as proposed would violate Section 39.154, the commission may condition approval of the transaction on adoption of reasonable modifications to the transaction as prescribed by the commission to mitigate potential market power abuses.</continuation> <continuation>(a-3) If the commission does not issue an order consistent with Subsection (a-2) before the 121st day after the date the commission receives a request for approval under Subsection (a), the request is considered approved by the commission.</continuation> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.158/b"> <num value="b">(b)</num> <content>Nothing in this chapter shall be construed to confer immunity from state or federal antitrust laws. This chapter is intended to complement other state and federal antitrust provisions. Therefore, antitrust remedies may also be sought in state or federal court to remedy anticompetitive activities.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.158/c"> <num value="c">(c)</num> <content>This section may not be deemed to authorize commission review or approval of transactions entered into between or among municipally owned utilities, river authorities, special districts created by law, or other political subdivisions, whether or not those transactions may be characterized as mergers, consolidations, or other affiliations, when the transaction is authorized or structured under state law.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.158/d"> <num value="d">(d)</num> <content>Notwithstanding any other provision of this title, an electric utility which, before the effective date of this chapter, entered into a stipulation or agreement in support of approval of a merger which was approved by the commission on or after January 1, 1996, requiring the utility to pass through to ratepayers the savings resulting from the merger of that utility with another utility shall continue to be bound by the terms of that stipulation or agreement. The commission shall ensure that the pass-through of all merger savings required under any such stipulation or agreement shall be fully implemented during the freeze period and shall be reflected in setting the price to beat for that utility.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999. Amended by: Acts 2019, 86th Leg., R.S., Ch. 433 (S.B. 1211), Sec. 1, eff. September 1, 2019.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scD/s39.159"> <num value="39.159">Sec. 39.159.</num> <heading>POWER REGION RELIABILITY AND DISPATCHABLE GENERATION</heading> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.159/a"> <num value="a">(a)</num> <content>For the purposes of this section, a generation facility is considered to be non-dispatchable if the facility's output is controlled primarily by forces outside of human control.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.159/b"> <num value="b">(b)</num> <chapeau>The commission shall ensure that the independent organization certified under Section 39.151 for the ERCOT power region:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.159/1"> <num value="1">(1)</num> <content>establishes requirements to meet the reliability needs of the power region;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.159/2"> <num value="2">(2)</num> <content>periodically, but at least annually, determines the quantity and characteristics of ancillary or reliability services necessary to ensure appropriate reliability during extreme heat and extreme cold weather conditions and during times of low non-dispatchable power production in the power region;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.159/3"> <num value="3">(3)</num> <content>procures ancillary or reliability services on a competitive basis to ensure appropriate reliability during extreme heat and extreme cold weather conditions and during times of low non-dispatchable power production in the power region;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.159/4"> <num value="4">(4)</num> <content>develops appropriate qualification and performance requirements for providing services under Subdivision (3), including appropriate penalties for failure to provide the services; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.159/5"> <num value="5">(5)</num> <content>sizes the services procured under Subdivision (3) to prevent prolonged rotating outages due to net load variability in high demand and low supply scenarios.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.159/c"> <num value="c">(c)</num> <chapeau>The commission shall ensure that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.159/1"> <num value="1">(1)</num> <content>resources that provide services under Subsection (b) are dispatchable and able to meet continuous operating requirements for the season in which the service is procured;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.159/2"> <num value="2">(2)</num> <content>winter resource capability qualifications for a service described by Subsection (b) include on-site fuel storage, dual fuel capability, or fuel supply arrangements to ensure winter performance for several days; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.159/3"> <num value="3">(3)</num> <content>summer resource capability qualifications for a service described by Subsection (b) include facilities or procedures to ensure operation under drought conditions.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.159/d"> <num value="d">(d)</num> <chapeau>The commission shall require the independent organization certified under Section 39.151 for the ERCOT power region to develop and implement an ancillary services program to procure dispatchable reliability reserve services on a day-ahead and real-time basis to account for market uncertainty. Under the required program, the independent organization shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.159/1"> <num value="1">(1)</num> <content>determine the quantity of services necessary based on historical variations in generation availability for each season based on a targeted reliability standard or goal, including intermittency of non-dispatchable generation facilities and forced outage rates, for dispatchable generation facilities;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.159/2"> <num value="2">(2)</num> <chapeau>develop criteria for resource participation that require a resource to:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c39/scD/s39.159/A"> <num value="A">(A)</num> <content>be capable of running for at least four hours at the resource's high sustained limit;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scD/s39.159/B"> <num value="B">(B)</num> <content>be online and dispatchable not more than two hours after being called on for deployment; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scD/s39.159/C"> <num value="C">(C)</num> <content>have the dispatchable flexibility to address inter-hour operational challenges; and</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.159/3"> <num value="3">(3)</num> <content>reduce the amount of reliability unit commitment by the amount of dispatchable reliability reserve services procured under this section.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.159/e"> <num value="e">(e)</num> <content>Notwithstanding Subsection (d)(2)(A), the independent organization certified under Section 39.151 for the ERCOT power region may require a resource to be capable of running for more than four hours as the organization determines is needed.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 426 (S.B. 3), Sec. 18, eff. June 8, 2021. Amended by: Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 21, eff. September 1, 2023. Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 22, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scD/s39.1591"> <num value="39.1591">Sec. 39.1591.</num> <heading>REPORT ON DISPATCHABLE AND NON-DISPATCHABLE GENERATION FACILITIES</heading> <chapeau>Not later than December 1 of each year, the commission shall file a report with the legislature that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1591/1"> <num value="1">(1)</num> <chapeau>includes:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c39/scD/s39.1591/A"> <num value="A">(A)</num> <content>the estimated annual costs incurred by load-serving entities under this subchapter associated with backing up dispatchable and non-dispatchable electric generation facilities to guarantee that a firm amount of electric energy will be available to the ERCOT power grid; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scD/s39.1591/B"> <num value="B">(B)</num> <content>as calculated by the independent system operator, the cumulative annual costs that have been incurred in the ERCOT market to facilitate the transmission of dispatchable and non-dispatchable electricity to load and to interconnect transmission level loads, including a statement of the total cumulative annual costs and of the cumulative annual costs incurred for each type of activity described by this paragraph; and</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1591/2"> <num value="2">(2)</num> <content>documents the status of the implementation of this subchapter, including whether the rules and protocols adopted to implement this subchapter have materially improved the reliability, resilience, and transparency of the electricity market.</content> </paragraph> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 23, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scD/s39.1592"> <num value="39.1592">Sec. 39.1592.</num> <heading>GENERATION RELIABILITY REQUIREMENTS</heading> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1592/a"> <num value="a">(a)</num> <content>This section applies only to an electric generation facility in the ERCOT power region for which a standard generator interconnection agreement is signed on or after January 1, 2027, that has been in operation for at least one year, and that is not a self-generator.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1592/b"> <num value="b">(b)</num> <content>Not later than December 1 of each year, an owner or operator of an electric generation facility, other than a battery energy storage resource, shall demonstrate to the commission the ability of the owner or operator's portfolio to operate or be available to operate when called on for dispatch at or above the seasonal average generation capability during the times of highest reliability risk, as determined by the commission, due to low operation reserves, as determined by the commission. The owner or operator must be allowed to meet the performance requirements described by this subsection by supplementing or contracting with on-site or off-site resources, including battery energy storage resources. The commission shall determine the average generation capability based on expected resource availability and seasonal-rated capacity on a standalone basis.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1592/c"> <num value="c">(c)</num> <chapeau>The commission shall require the independent organization certified under Section 39.151 for the ERCOT power region to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1592/1"> <num value="1">(1)</num> <content>enforce the requirements of Subsection (b) by imposing financial penalties, as determined by the commission, for failing to comply with the performance requirements described by that subsection; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1592/2"> <num value="2">(2)</num> <content>provide financial incentives, as determined by the commission, for exceeding the performance requirements described by that subsection.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1592/d"> <num value="d">(d)</num> <chapeau>The independent organization certified under Section 39.151 for the ERCOT power region may not impose penalties under Subsection (c):</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1592/1"> <num value="1">(1)</num> <content>for resource unavailability due to planned maintenance outages or transmission outages;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1592/2"> <num value="2">(2)</num> <content>on resources that are already subject to performance obligations during the highest reliability risk hours under the day-ahead market rules or other ancillary or reliability services established by the commission or the independent organization; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1592/3"> <num value="3">(3)</num> <content>during hours outside a baseline established by the commission that includes morning and evening ramping periods.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 23, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scD/s39.1593"> <num value="39.1593">Sec. 39.1593.</num> <heading>COST ALLOCATION OF RELIABILITY SERVICES</heading> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1593/a"> <num value="a">(a)</num> <content>The commission shall direct the independent organization certified under Section 39.151 for the ERCOT power region to evaluate with input from a technical advisory committee established under the bylaws of the independent organization that includes market participants whether allocating the costs of ancillary and reliability services, including those procured under Section 39.159, as added by Chapter 426 (S.B. 3), Acts of the 87th Legislature, Regular Session, 2021, using a methodology described by Subsection (b) would result in a net savings to consumers in the ERCOT power region compared to allocating all costs of ancillary and reliability services to load to ensure reliability.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1593/b"> <num value="b">(b)</num> <chapeau>The commission shall evaluate whether to allocate the cost of ancillary and reliability services:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1593/1"> <num value="1">(1)</num> <content>on a semiannual basis among electric generation facilities and load-serving entities in proportion to their contribution to unreliability during the times of highest reliability risk due to low operating reserves by season, as determined by the commission based on a number of hours adopted by the commission for that season; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1593/2"> <num value="2">(2)</num> <content>using another method identified by the commission.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1593/c"> <num value="c">(c)</num> <chapeau>The evaluation must:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1593/1"> <num value="1">(1)</num> <content>use historical ancillary and reliability services data;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1593/2"> <num value="2">(2)</num> <content>consider the causes for ancillary services deployments; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1593/3"> <num value="3">(3)</num> <content>consider the design, procurement, and cost allocation of ancillary services required by Section 35.004(h).</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1593/d"> <num value="d">(d)</num> <content>Not later than December 1, 2026, the commission shall submit a report on the evaluation to the legislature.</content> </subsection> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 23, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scD/s39.1594"> <num value="39.1594">Sec. 39.1594.</num> <heading>RELIABILITY PROGRAM</heading> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1594/a"> <num value="a">(a)</num> <chapeau>Under Section 39.159(b), as added by Chapter 426 (S.B. 3), Acts of the 87th Legislature, Regular Session, 2021, or other law, the commission may not require retail customers or load-serving entities in the ERCOT power region to purchase credits designed to support a required reserve margin or other capacity or reliability requirement unless the commission ensures that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1594/1"> <num value="1">(1)</num> <chapeau>the net cost to the ERCOT market of the credits does not exceed $1 billion annually, less the cost of any interim or bridge solutions that are lawfully implemented, except that the commission may adjust the limit:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c39/scD/s39.1594/A"> <num value="A">(A)</num> <content>proportionally according to the highest net peak demand year-over-year with a base year of 2026; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scD/s39.1594/B"> <num value="B">(B)</num> <content>for inflation with a base year of 2026;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1594/2"> <num value="2">(2)</num> <content>credits are available only for dispatchable generation;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1594/3"> <num value="3">(3)</num> <content>the independent organization certified under Section 39.151 for the ERCOT power region is required to procure the credits centrally in a manner designed to prevent market manipulation by affiliated generation and retail companies;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1594/4"> <num value="4">(4)</num> <content>a generator cannot receive credits that exceed the amount of generation bid into the forward market by that generator;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1594/5"> <num value="5">(5)</num> <content>an electric generating unit can receive a credit only for being available to perform in real time during the tightest intervals of low supply and high demand on the grid, as defined by the commission on a seasonal basis;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1594/6"> <num value="6">(6)</num> <content>a penalty structure is established, resulting in a net benefit to load, for generators that bid into the forward market but do not meet the full obligation;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1594/7"> <num value="7">(7)</num> <content>any program reliability standard reasonably balances the incremental reliability benefits to customers against the incremental costs of the program based on an evaluation by the wholesale electric market monitor;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1594/8"> <num value="8">(8)</num> <content>a single ERCOT-wide clearing price is established for the program and does not differentiate payments or credit values based on locational constraints;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1594/9"> <num value="9">(9)</num> <content>any market changes implemented as a bridge solution for the program are removed not later than the first anniversary of the date the program was implemented;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1594/10"> <num value="10">(10)</num> <content>the independent organization certified under Section 39.151 for the ERCOT power region begins implementing real time co-optimization of energy and ancillary services in the ERCOT wholesale market before the program is implemented;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1594/11"> <num value="11">(11)</num> <content>all elements of the program are initially implemented on a single starting date;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1594/12"> <num value="12">(12)</num> <content>the terms of the program and any associated market rules do not assign costs, credit, or collateral for the program in a manner that provides a cost advantage to load-serving entities who own, or whose affiliates own, generation facilities;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1594/13"> <num value="13">(13)</num> <content>secured financial credit and collateral requirements are adopted for the program to ensure that other market participants do not bear the risk of nonperformance or nonpayment; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1594/14"> <num value="14">(14)</num> <content>the wholesale electric market monitor has the authority and necessary resources to investigate potential instances of market manipulation by program participants, including financial and physical actions, and recommend penalties to the commission.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1594/b"> <num value="b">(b)</num> <content>This section does not require the commission to adopt a reliability program that requires an entity to purchase capacity credits.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1594/c"> <num value="c">(c)</num> <content>The commission and the independent organization certified under Section 39.151 for the ERCOT power region shall consider comments and recommendations from a technical advisory committee established under the bylaws of the independent organization that includes market participants when adopting and implementing a program described by Subsection (a), if any.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1594/d"> <num value="d">(d)</num> <chapeau>Before the commission adopts a program described by Subsection (a), the commission shall require the independent organization certified under Section 39.151 for the ERCOT power region and the wholesale electric market monitor to complete an updated assessment on the cost to and effects on the ERCOT market of the proposed reliability program and submit to the commission and the legislature a report on the costs and benefits of continuing the program. The assessment must include:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1594/1"> <num value="1">(1)</num> <content>an evaluation of the cost of new entry and the effects of the proposed reliability program on consumer costs and the competitive retail market;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1594/2"> <num value="2">(2)</num> <content>a compilation of detailed information regarding cost offsets realized through a reduction in costs in the energy and ancillary services markets and use of reliability unit commitments;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1594/3"> <num value="3">(3)</num> <content>a set of metrics to measure the effects of the proposed reliability program on system reliability;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1594/4"> <num value="4">(4)</num> <content>an evaluation of the cost to retain existing dispatchable resources in the ERCOT power region;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1594/5"> <num value="5">(5)</num> <content>an evaluation of the planned timeline for implementation of real time co-optimization for energy and ancillary services in the ERCOT power region; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1594/6"> <num value="6">(6)</num> <content>anticipated market and reliability effects of new and updated ancillary service products.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1594/e"> <num value="e">(e)</num> <chapeau>If the commission adopts a program described by Subsection (a), the commission by rule shall prohibit a generator that receives credits through the program for a dispatchable electric generating unit operated by the generator from decommissioning or removing from service that unit while the generator participates in the program unless the decommissioning or removal from service begins after September 1, 2028, or the commission finds that the decommissioning or removal from service:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1594/1"> <num value="1">(1)</num> <content>is required by or is a result of federal law; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1594/2"> <num value="2">(2)</num> <content>would alleviate significant financial hardship for the generator.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1594/f"> <num value="f">(f)</num> <chapeau>If the commission adopts a program described by Subsection (a), the wholesale electric market monitor described by Section 39.1515 biennially shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1594/1"> <num value="1">(1)</num> <content>evaluate the incremental reliability benefits of the program for consumers compared to the costs to consumers of the program and the costs in the energy and ancillary services markets; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1594/2"> <num value="2">(2)</num> <content>report the results of each evaluation to the legislature.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 23, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scD/s39.1595"> <num value="39.1595">Sec. 39.1595.</num> <heading>GRID RELIABILITY LEGISLATIVE OVERSIGHT COMMITTEE</heading> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1595/a"> <num value="a">(a)</num> <content>In this section, "committee" means the Grid Reliability Legislative Oversight Committee established under this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1595/b"> <num value="b">(b)</num> <content>The Grid Reliability Legislative Oversight Committee is created to oversee the commission's implementation of legislation related to the regulation of the electricity market in this state enacted by the 87th and 88th Legislatures.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1595/c"> <num value="c">(c)</num> <chapeau>The committee is composed of eight members as follows:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1595/1"> <num value="1">(1)</num> <content>three members of the senate, appointed by the lieutenant governor;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1595/2"> <num value="2">(2)</num> <content>three members of the house of representatives, appointed by the speaker of the house of representatives;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1595/3"> <num value="3">(3)</num> <content>the chair of the committee of the senate having primary jurisdiction over matters relating to the generation of electricity; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1595/4"> <num value="4">(4)</num> <content>the chair of the committee of the house having primary jurisdiction over matters relating to the generation of electricity.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1595/d"> <num value="d">(d)</num> <content>An appointed member of the committee serves at the pleasure of the appointing official.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1595/e"> <num value="e">(e)</num> <content>The committee members described by Subsections (c)(3) and (4) serve as presiding co-chairs.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1595/f"> <num value="f">(f)</num> <content>A member of the committee may not receive compensation for serving on the committee but is entitled to reimbursement for travel expenses incurred by the member while conducting the business of the committee as provided by the General Appropriations Act.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1595/g"> <num value="g">(g)</num> <content>The committee shall meet at least twice each year at the call of either co-chair and shall meet at other times at the call of either co-chair, as that officer determines appropriate.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1595/h"> <num value="h">(h)</num> <content>Chapter 551, Government Code, applies to the committee.</content> </subsection> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 23, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scD/s39.160"> <num value="39.160">Sec. 39.160.</num> <heading></heading> <content>Text of section as added by Acts 2021, 87th Leg., R.S., Ch. 426 (S.B. 3), Sec. 18</content> <sourceCredit>For text of section as added by Acts 2021, 87th Leg., R.S., Ch. 950 (S.B. 1580), Sec. 3, see other Sec. 39.160. Sec. 39.160. WHOLESALE PRICING PROCEDURES. (a) The commission by rule shall establish an emergency pricing program for the wholesale electric market. (b) The emergency pricing program must take effect if the high system-wide offer cap has been in effect for 12 hours in a 24-hour period after initially reaching the high system-wide offer cap. The commission by rule shall determine the criteria for the emergency pricing program to cease. (c) The emergency pricing program may not allow an emergency pricing program cap to exceed any nonemergency high system-wide offer cap. (d) The commission by rule shall establish an ancillary services cap to be in effect during the period an emergency pricing program is in effect. (e) Any wholesale pricing procedure that has a low system-wide offer cap may not allow the low system-wide offer cap to exceed the high system-wide offer cap. (f) The commission shall review each system-wide offer cap program adopted by the commission, including the emergency pricing program, at least once every five years to determine whether to update aspects of the program. (g) The emergency pricing program must allow generators to be reimbursed for reasonable, verifiable operating costs that exceed the emergency cap. Added by Acts 2021, 87th Leg., R.S., Ch. 426 (S.B. 3), Sec. 18, eff. June 8, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scD/s39.161"> <num value="39.161">Sec. 39.161.</num> <heading>CHARGES FOR CERTAIN MARKET PARTICIPANTS</heading> <chapeau>Notwithstanding any other law, no default or uplift charge or repayment may be allocated to or collected from a market participant that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.161/1"> <num value="1">(1)</num> <content>otherwise would be subject to an uplift charge solely as a result of acting as a central counterparty clearinghouse in wholesale market transactions in the ERCOT power region; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.161/2"> <num value="2">(2)</num> <content>is regulated as a derivatives clearing organization, as defined by the Commodity Exchange Act (7 U.S.C. Section 1a).</content> </paragraph> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 950 (S.B. 1580), Sec. 3, eff. June 18, 2021. Redesignated from Utilities Code, Section 39.159 by Acts 2023, 88th Leg., R.S., Ch. 768 (H.B. 4595), Sec. 22.003(b), eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scD/s39.162"> <num value="39.162">Sec. 39.162.</num> <heading>DEFAULT OF MARKET PARTICIPANT</heading> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.162/a"> <num value="a">(a)</num> <content>The commission shall require that all market participants pay or make provision for the full and prompt payment of amounts owed calculated solely according to the protocols in effect during the period of emergency to the independent organization certified under Section 39.151 for the ERCOT power region to qualify, or to continue to qualify, as a market participant in the ERCOT power region.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.162/b"> <num value="b">(b)</num> <content>If a market participant has failed to fully repay all amounts calculated solely under the protocols in effect during the period of emergency of the independent organization certified under Section 39.151 for the ERCOT power region, the independent organization shall report the market participant as in default to the commission. The commission may not allow the independent organization to accept the defaulting market participant's loads or generation for scheduling in the ERCOT power region, or allow the defaulting market participant to be a market participant in the ERCOT power region for any purpose, until all amounts owed to the independent organization by the market participant as calculated under the protocols are paid in full.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.162/c"> <num value="c">(c)</num> <content>The commission and the independent organization certified under Section 39.151 for the ERCOT power region shall pursue collection in full of amounts owed to the independent organization by the defaulting market participant.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 950 (S.B. 1580), Sec. 3, eff. June 18, 2021. Redesignated from Utilities Code, Section 39.160 by Acts 2023, 88th Leg., R.S., Ch. 768 (H.B. 4595), Sec. 22.003(b), eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scD/s39.163"> <num value="39.163">Sec. 39.163.</num> <heading>AMOUNTS OWED TO INDEPENDENT ORGANIZATION BY MARKET PARTICIPANTS</heading> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.163/a"> <num value="a">(a)</num> <content>The commission shall require that all market participants fully and promptly pay to the independent organization certified under Section 39.151 for the ERCOT power region all amounts owed to the independent organization, or provide for the full and prompt payment of those amounts owed, which must be calculated solely according to the protocols of the independent organization in effect during the period of emergency and subject to the jurisdiction of the commission, to qualify, or to continue to qualify, as a market participant in the ERCOT power region.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.163/b"> <num value="b">(b)</num> <content>The independent organization shall report to the commission that a market participant is in default for the failure to pay, or provide for the full and prompt payment of, all amounts owed to the independent organization as calculated in accordance with this section. The commission may not allow the defaulting market participant to continue to be a market participant in the ERCOT power region for any purpose or allow the independent organization to accept the defaulting market participant's loads or generation for scheduling in the ERCOT power region until all amounts owed to the independent organization by the market participant as calculated in this section are fully paid.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.163/c"> <num value="c">(c)</num> <content>The commission and the independent organization shall pursue collection in full of amounts owed to the independent organization by any market participant to reduce the costs that would otherwise be borne by other market participants or their customers.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 908 (H.B. 4492), Sec. 4, eff. June 16, 2021. Redesignated from Utilities Code, Section 39.159 by Acts 2023, 88th Leg., R.S., Ch. 768 (H.B. 4595), Sec. 22.003(c), eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scD/s39.164"> <num value="39.164">Sec. 39.164.</num> <heading>AUDIT OF INDEPENDENT ORGANIZATION CERTIFIED FOR ERCOT POWER REGION</heading> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.164/a"> <num value="a">(a)</num> <content>The commission annually shall have an independent audit made of each independent organization certified under Section 39.151 for the ERCOT power region.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.164/b"> <num value="b">(b)</num> <chapeau>An audit under this section must examine:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.164/1"> <num value="1">(1)</num> <content>the independent organization's financial condition, including the organization's budget and expenses, and the salaries of the organization's employees and board members; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.164/2"> <num value="2">(2)</num> <content>compliance of the independent organization's assets with all applicable commission standards.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.164/c"> <num value="c">(c)</num> <chapeau>Not later than the 60th day after the date an audit under this section is completed the commission shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.164/1"> <num value="1">(1)</num> <content>publish the results of the audit on the commission's Internet website; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.164/2"> <num value="2">(2)</num> <content>submit the results of the audit to the state auditor and members of the standing committees of the legislature with primary jurisdiction over the commission.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 73 (H.B. 2586), Sec. 1, eff. September 1, 2021. Redesignated from Utilities Code, Section 39.159 by Acts 2023, 88th Leg., R.S., Ch. 768 (H.B. 4595), Sec. 22.003(d), eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scD/s39.165"> <num value="39.165">Sec. 39.165.</num> <heading>GRID RELIABILITY ASSESSMENT</heading> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.165/a"> <num value="a">(a)</num> <content>The independent organization certified under Section 39.151 for the ERCOT power region shall conduct a biennial assessment of the ERCOT power grid to assess the grid's reliability in extreme weather scenarios.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.165/b"> <num value="b">(b)</num> <chapeau>Each assessment must:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.165/1"> <num value="1">(1)</num> <content>consider the impact of different levels of thermal and renewable generation availability; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.165/2"> <num value="2">(2)</num> <content>recommend transmission projects that may increase the grid's reliability in extreme weather scenarios.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 876 (S.B. 1281), Sec. 3, eff. September 1, 2021. Redesignated from Utilities Code, Section 39.159 by Acts 2023, 88th Leg., R.S., Ch. 768 (H.B. 4595), Sec. 22.003(e), eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scD/s39.166"> <num value="39.166">Sec. 39.166.</num> <heading>RELIABILITY PLAN FOR REGIONS WITH RAPID ELECTRICAL LOAD GROWTH</heading> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.166/a"> <num value="a">(a)</num> <chapeau>The commission shall direct the independent organization certified under Section 39.151 for the ERCOT power region to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.166/1"> <num value="1">(1)</num> <content>identify each region in which transmission capacity is insufficient to meet the region's existing and forecasted electrical load, as reasonably determined by the certificated transmission service provider; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.166/2"> <num value="2">(2)</num> <content>develop a reliability plan to serve existing and forecasted electrical load in the identified region.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.166/b"> <num value="b">(b)</num> <content>The commission shall develop a plan to implement each reliability plan adopted under Subsection (a) to ensure timely development and approval of necessary transmission service improvements.</content> </subsection> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 892 (H.B. 5066), Sec. 3, eff. June 13, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scD/s39.1675"> <num value="39.1675">Sec. 39.1675.</num> <heading>ELECTRIC INDUSTRY REPORT</heading> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1675/a"> <num value="a">(a)</num> <content>Not later than January 15 of each odd-numbered year, the commission, in consultation with the independent organization certified under Section 39.151 for the ERCOT power region, shall prepare and submit to the legislature an electric industry report.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.1675/b"> <num value="b">(b)</num> <chapeau>Each electric industry report submitted under this section must:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1675/1"> <num value="1">(1)</num> <content>identify existing and potential transmission and distribution constraints and system needs within the ERCOT power region, alternatives for meeting system needs, and recommendations for meeting system needs;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1675/2"> <num value="2">(2)</num> <chapeau>summarize key findings from:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c39/scD/s39.1675/A"> <num value="A">(A)</num> <content>the grid reliability assessment conducted under Section 39.165; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scD/s39.1675/B"> <num value="B">(B)</num> <content>the report required by Section 39.9112;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1675/3"> <num value="3">(3)</num> <content>outline basic information regarding the electric grid and market in this state, including generation capacity, customer demand, and transmission capacity currently installed on the grid and projected in the future; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.1675/4"> <num value="4">(4)</num> <content>be presented in plain language that is readily understandable by a person with limited knowledge of the electric industry.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 24(b), eff. September 1, 2023. Redesignated from Utilities Code, Section 39.166 by Acts 2025, 89th Leg., R.S., Ch. 204 (H.B. 1620), Sec. 22.001(69), eff. September 1, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scD/s39.1678"> <num value="39.1678">Sec. 39.1678.</num> <heading>CONFLICTS OF INTEREST REPORT</heading> <content>The commission and the independent organization certified under Section 39.151 for the ERCOT power region annually shall review statutes, rules, protocols, and bylaws that apply to conflicts of interest for commissioners and for members of the governing body of the independent organization and submit to the legislature a report on the effects the statutes, rules, protocols, and bylaws have on the ability of the commission and the independent organization to fulfill their duties.</content> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 24(b), eff. September 1, 2023. Redesignated from Utilities Code, Section 39.167 by Acts 2025, 89th Leg., R.S., Ch. 204 (H.B. 1620), Sec. 22.001(70), eff. September 1, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scD/s39.168"> <num value="39.168">Sec. 39.168.</num> <heading>RETAIL SALES REPORT</heading> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.168/a"> <num value="a">(a)</num> <chapeau>Each retail electric provider that offers electricity for sale shall report to the commission:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.168/1"> <num value="1">(1)</num> <content>its annual retail sales in this state;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.168/2"> <num value="2">(2)</num> <content>the annual retail sales of its affiliates by number of customers, kilowatts per hour sold, and revenue from kilowatts per hour sold by customer class; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.168/3"> <num value="3">(3)</num> <content>any other information the commission requires relating to affiliations between retail electric providers.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.168/b"> <num value="b">(b)</num> <content>The commission by rule shall prescribe the nature and detail of the reporting requirements. The commission may accept information reported under other law to satisfy the requirements of this section. Information reported under this section is confidential and not subject to disclosure if the information is competitively sensitive information. The commission shall administer the reporting requirements in a manner that ensures the confidentiality of competitively sensitive information.</content> </subsection> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 24(b), eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scD/s39.169"> <num value="39.169">Sec. 39.169.</num> <heading>CO-LOCATION OF LARGE LOAD CUSTOMER WITH EXISTING GENERATION RESOURCE</heading> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.169/a"> <num value="a">(a)</num> <content>A power generation company, municipally owned utility, or electric cooperative must submit a notice to the independent organization certified under Section 39.151 for the ERCOT power region before implementing a net metering arrangement between an operating facility registered with the independent organization as a stand-alone generation resource as of September 1, 2025, and a new large load customer as described by Section 37.0561(c).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.169/b"> <num value="b">(b)</num> <chapeau>This section does not apply to a generation resource:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.169/1"> <num value="1">(1)</num> <content>the registration for which included a co-located large load customer at the time of energization, regardless of whether the load was energized at a later date; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.169/2"> <num value="2">(2)</num> <content>a majority interest of which is owned indirectly or directly as of January 1, 2025, by a parent company of the customer that participates in the new net metering arrangement.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.169/c"> <num value="c">(c)</num> <content>The electric cooperative, transmission and distribution utility, or municipally owned utility that provides electric service at the location of the new net metering arrangement may for reasonable cause including a violation of other law, object to the arrangement, provided however, that no reasonable cause objection may be raised after a final decision by the commission is issued under this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.169/d"> <num value="d">(d)</num> <chapeau>The independent organization certified under Section 39.151 for the ERCOT power region shall study the system impacts of a proposed net metering arrangement and removal of generation for which the independent organization receives a notice under Subsection (a) after the independent organization receives all information regarding the arrangement required by the independent organization to be submitted to the independent organization. The independent organization must complete the study and submit the results to the commission with any associated recommendations not later than the 120th day after the independent organization receives all required information regarding the arrangement. Not later than the 60th day after the date the commission receives the study results from the independent organization, the commission shall approve, deny, or impose reasonable conditions on the proposed net metering arrangement as necessary to maintain system reliability, including transmission security and resource adequacy impacts. The conditions must require a generation resource that makes dispatchable capacity available to the ERCOT power region before the implementation of a net metering arrangement under this section to make at least that amount of dispatchable capacity available to the ERCOT power region after the implementation of the arrangement at the direction of the independent organization in advance of an anticipated emergency condition. The conditions may include:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.169/1"> <num value="1">(1)</num> <content>requiring the retail customer who is served behind-the-meter to reduce load during certain events;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.169/2"> <num value="2">(2)</num> <content>requiring the generation resource to make capacity available to the ERCOT power region during certain events; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.169/3"> <num value="3">(3)</num> <content>requiring customers to be held harmless for stranded or underutilized transmission assets resulting from the behind-the-meter operation.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.169/e"> <num value="e">(e)</num> <content>If the commission does not approve, deny, or impose reasonable conditions on a proposed net metering arrangement before the expiration of the deadline established by Subsection (d), the commission is considered to have approved the arrangement.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.169/f"> <num value="f">(f)</num> <content>If conditions imposed under Subsection (d) are not limited to a specific period, the commission shall review the conditions at least every five years to determine whether the conditions should be extended or rescinded.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.169/g"> <num value="g">(g)</num> <content>The parties to a proceeding under this section are limited to the commission, the independent organization certified under Section 39.151 for the ERCOT power region, the interconnecting electric cooperative, transmission and distribution utility, or municipally owned utility, and a party in the net metering arrangement.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.169/h"> <num value="h">(h)</num> <content>The commission shall post the decision made on each notice submitted under this section on the commission's Internet website. The commission may not post information regarding the decision that is competitively sensitive or otherwise considered confidential.</content> </subsection> <sourceCredit>Added by Acts 2025, 89th Leg., R.S., Ch. 953 (S.B. 6), Sec. 4, eff. June 20, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scD/s39.170"> <num value="39.170">Sec. 39.170.</num> <heading>LARGE LOAD DEMAND MANAGEMENT SERVICE</heading> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.170/a"> <num value="a">(a)</num> <chapeau>The commission shall require the independent organization certified under Section 39.151 for the ERCOT power region to ensure that each electric cooperative, transmission and distribution utility, and municipally owned utility serving a transmission-voltage customer develops a protocol, including the installation of any necessary equipment or technology before the customer is interconnected, to allow the load to be curtailed during firm load shed. The electric cooperative, transmission and distribution utility, or municipally owned utility shall confer with the customer to the extent feasible to shed load in a coordinated manner. This subsection applies only to a load interconnected after December 31, 2025, that is not:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.170/1"> <num value="1">(1)</num> <content>load operated by a critical load industrial customer, as defined by Section 17.002; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.170/2"> <num value="2">(2)</num> <content>designated as a critical natural gas facility under Section 38.074.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.170/b"> <num value="b">(b)</num> <chapeau>The commission shall require the independent organization certified under Section 39.151 for the ERCOT power region to develop a reliability service to competitively procure demand reductions from large load customers with a demand of at least 75 megawatts to be deployed in the event of an anticipated emergency condition. The rules governing this service must:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.170/1"> <num value="1">(1)</num> <content>specify the periods when the service may be used to assist with maintaining reliability during extreme weather events;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.170/2"> <num value="2">(2)</num> <content>ensure that the independent organization provides at least a 24-hour notice to large load customers and requires each large load to remain curtailed for the duration of the energy emergency alert event or until the load can be recalled safely; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scD/s39.170/3"> <num value="3">(3)</num> <content>prohibit participation by any large load customer that curtails in response to the wholesale price of electricity, as determined by the independent organization certified under Section 39.151 for the ERCOT power region, or that otherwise participates in a different reliability or ancillary service.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scD/s39.170/c"> <num value="c">(c)</num> <content>The independent organization certified under Section 39.151 for the ERCOT power region shall include a deployment under this section when calculating any price adjustments for reliability deployments.</content> </subsection> <sourceCredit>Added by Acts 2025, 89th Leg., R.S., Ch. 953 (S.B. 6), Sec. 4, eff. June 20, 2025.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c39/scE"> <num value="E">SUBCHAPTER E.</num> <heading>PRICE REGULATION AFTER COMPETITION</heading> <section identifier="/us/tx/ut/t2/c39/scE/s39.201"> <num value="39.201">Sec. 39.201.</num> <heading>COST OF SERVICE TARIFFS AND CHARGES</heading> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.201/a"> <num value="a">(a)</num> <content>Each electric utility shall, on or before April 1, 2000, file proposed tariffs for its proposed transmission and distribution utility.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.201/b"> <num value="b">(b)</num> <chapeau>The filing under this section shall include supporting cost data for determination of nonbypassable delivery charges, which shall be the sum of:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scE/s39.201/1"> <num value="1">(1)</num> <content>transmission and distribution utility charges by customer class based on a forecasted 2002 test year;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scE/s39.201/2"> <num value="2">(2)</num> <content>a system benefit fund fee; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scE/s39.201/3"> <num value="3">(3)</num> <content>an expected competition transition charge, if any.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.201/c"> <num value="c">(c)</num> <content>Each electric utility shall also identify the unbundled generation and retail energy service costs by customer class.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.201/d"> <num value="d">(d)</num> <content>In accordance with a schedule and procedures it establishes, the commission shall hold a hearing and approve or modify and make effective as of January 1, 2002, the transmission and distribution utility's proposed tariffs for transmission and distribution services, the system benefit fund fee, and the expected competition transition charge as determined under Subsections (g) and (h) and as implemented under Subsections (i)-(l), if any.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.201/e"> <num value="e">(e)</num> <content>The system benefit fund fee shall be that established by the commission under Section 39.903.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.201/f"> <num value="f">(f)</num> <content>The expected competition transition charge shall be that as determined under Subsections (g) and (h) and as implemented under Subsections (i)-(l).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.201/g"> <num value="g">(g)</num> <content>The expected competition transition charge approved by the commission shall be calculated from the amount of stranded costs as defined in Subchapter F that are reasonably projected to exist on the last day of the freeze period modified to reflect any adjustments determined appropriate by the commission under Section 39.261(c).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.201/h"> <num value="h">(h)</num> <content>The electric utility shall use the ECOM administrative model referenced in Section 39.262 to determine estimated stranded costs. The model must include updated company-specific inputs. Natural gas prices used in the model must be market-based natural gas forward prices, where available. Growth rates in generating plant operations and maintenance costs and allocated administrative and general costs shall be benchmarked by comparing those costs to the best available information on cost trends for comparable generating plants. Capital additions shall be benchmarked using the limitation in Section 39.259(b).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.201/i"> <num value="i">(i)</num> <chapeau>An electric utility may:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scE/s39.201/1"> <num value="1">(1)</num> <content>at any time after the start of the freeze period, securitize 100 percent of its regulatory assets as defined by Section 39.302 and up to 75 percent of its estimated stranded costs as defined by this section and recover those charges through a transition charge, in accordance with a financing order issued by the commission under Section 39.303;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scE/s39.201/2"> <num value="2">(2)</num> <content>implement, under bond, a nonbypassable charge of up to 100 percent of its estimated stranded costs; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scE/s39.201/3"> <num value="3">(3)</num> <content>use a combination of the two methods under Subdivisions (1) and (2).</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.201/j"> <num value="j">(j)</num> <content>Any competition transition charge shall be allocated among retail customer classes according to Section 39.253.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.201/k"> <num value="k">(k)</num> <chapeau>In determining the length of time over which stranded costs under Subsection (h) may be recovered, the commission shall consider:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scE/s39.201/1"> <num value="1">(1)</num> <content>the electric utility's rates as of the end of the freeze period;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scE/s39.201/2"> <num value="2">(2)</num> <content>the sum of the transmission and distribution charges and the system benefit fund fees;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scE/s39.201/3"> <num value="3">(3)</num> <content>the proportion of estimated stranded costs to the invested capital of the electric utility; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scE/s39.201/4"> <num value="4">(4)</num> <content>any other factor consistent with the public interest as expressed in this chapter.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.201/l"> <num value="l">(l)</num> <chapeau>Two years after customer choice is introduced, the stranded cost estimate under this section shall be reviewed and, if necessary, adjusted to reflect a final, actual valuation in the true-up proceeding under Section 39.262. If, based on that proceeding, the competition transition charge is not sufficient, the commission may extend the collection period for the charge or, if necessary, increase the charge. Alternatively, if it is found in the true-up proceeding that the competition transition charge is larger than is needed to recover any remaining stranded costs, the commission may:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scE/s39.201/1"> <num value="1">(1)</num> <content>reduce the competition transition charge, to the extent it has not been securitized;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scE/s39.201/2"> <num value="2">(2)</num> <content>reverse, in whole or in part, the depreciation expense that has been redirected under Section 39.256;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scE/s39.201/3"> <num value="3">(3)</num> <content>reduce the transmission and distribution utility's rates; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scE/s39.201/4"> <num value="4">(4)</num> <content>implement a combination of the elements in Subdivisions (1)-(3).</content> </paragraph> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scE/s39.202"> <num value="39.202">Sec. 39.202.</num> <heading>PRICE TO BEAT</heading> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.202/a"> <num value="a">(a)</num> <content>From January 1, 2002, until January 1, 2007, an affiliated retail electric provider shall make available to residential and small commercial customers of its affiliated transmission and distribution utility rates that, on a bundled basis, are six percent less than the affiliated electric utility's corresponding average residential and small commercial rates, on a bundled basis, that were in effect on January 1, 1999, adjusted to reflect the fuel factor determined as provided by Subsection (b) and adjusted for any base rate reduction as stipulated to by an electric utility in a proceeding for which a final order had not been issued by January 1, 1999. These rates on a bundled basis shall be known as the "price to beat" for residential and small commercial customers, except that the "price to beat" for a utility is the rate in effect as a result of a settlement approved by the commission after January 1, 1999, if the commission determines that base rates for that utility have been reduced by more than 12 percent as a result of a final order issued by the commission after October 1, 1998.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.202/b"> <num value="b">(b)</num> <content>The commission shall determine the fuel factor for each electric utility as of December 31, 2001.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.202/c"> <num value="c">(c)</num> <content>After the date of customer choice, each affiliated power generation company shall file a final fuel reconciliation for the period ending the day before the date customer choice is introduced. The final fuel balance from that reconciliation shall be included in the true-up proceeding under Section 39.262.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.202/d"> <num value="d">(d)</num> <content>An affiliated retail electric provider shall make public its price to beat in a manner that provides adequate disclosure as determined by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.202/e"> <num value="e">(e)</num> <chapeau>The affiliated retail electric provider may not charge rates for residential or small commercial customers that are different from the price to beat until the earlier of 36 months after the date customer choice is introduced or:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scE/s39.202/1"> <num value="1">(1)</num> <content>for service to residential customers, the date the commission determines that 40 percent or more of the electric power consumed by residential customers within the affiliated transmission and distribution utility's certificated service area before the onset of customer choice is committed to be served by nonaffiliated retail electric providers; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scE/s39.202/2"> <num value="2">(2)</num> <content>for service to small commercial customers, the date the commission determines that 40 percent or more of the electric power consumed by small commercial customers within the affiliated transmission and distribution utility's certificated service area before the onset of customer choice is committed to be served by nonaffiliated retail electric providers.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.202/f"> <num value="f">(f)</num> <chapeau>Notwithstanding Subsection (e), the affiliated retail electric provider may charge rates that are different from the price to beat for service to aggregated loads of nonresidential customers having an aggregated peak demand greater than 1,000 kilowatts, provided that all affected customers are:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scE/s39.202/1"> <num value="1">(1)</num> <content>commonly owned; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scE/s39.202/2"> <num value="2">(2)</num> <content>franchisees of the same franchisor.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.202/g"> <num value="g">(g)</num> <content>The affiliated retail electric provider may not encourage or provide an incentive to a customer to switch to a nonaffiliated retail electric provider, promote any nonaffiliated retail electric provider, or exchange customers with any nonaffiliated retail electric provider to comply with the requirements of Subsection (e)(1) or (2).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.202/h"> <num value="h">(h)</num> <chapeau>The following standards shall be used for measuring electric power consumption during the period before the onset of customer choice:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scE/s39.202/1"> <num value="1">(1)</num> <content>the consumption of residential and small commercial customers with an annual peak demand less than or equal to 20 kilowatts shall be based on the average annual consumption of those respective groups during the year 2000;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scE/s39.202/2"> <num value="2">(2)</num> <content>consumption for all small commercial customers with an annual peak demand larger than 20 kilowatts shall be based on each customer's usage during the year 2000; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scE/s39.202/3"> <num value="3">(3)</num> <content>for purposes of determining whether an affiliated retail electric provider has met the requirements of Subsection (e)(2), the aggregated loads of nonresidential customers having a peak demand greater than 1,000 kilowatts that are served by the affiliated retail electric provider at a rate different from the price to beat under Subsection (f) shall be deducted from the electric power consumption of small commercial customers during the period before the onset of customer choice.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.202/i"> <num value="i">(i)</num> <content>For purposes of Subsection (h)(2), if less than 12 months of consumption history exists for any such customer, the usage history shall be supplemented with the prior history of that customer's location. For service to a new location, the annual consumption shall be determined as the transmission and distribution utility's estimate of the maximum annual kilowatt demand used in sizing the electric service to that customer multiplied by 8,760 hours, and that product multiplied by the average annual customer load factor for small commercial customers with loads greater than 20 kilowatts for the year 2000.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.202/j"> <num value="j">(j)</num> <content>On determining that its affiliated retail electric provider has met the requirements of Subsection (e)(1) or (2), an electric utility or a transmission and distribution utility shall make a filing with the commission attesting to the fact that those requirements have been met and that the restrictions of Subsection (e)(1) or (2) and the true-up in Section 39.262(e) are no longer applicable. The commission shall adopt appropriate procedures to enable it to accept or reject the filing within 30 days.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.202/k"> <num value="k">(k)</num> <content>Following the true-up proceedings conducted under Section 39.262, the commission may adjust the price to beat.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.202/l"> <num value="l">(l)</num> <content>An affiliated retail electric provider may request that the commission adjust the fuel factor established under Subsection (b) not more than twice a year if the affiliated retail electric provider demonstrates that the existing fuel factor does not adequately reflect significant changes in the market price of natural gas and purchased energy used to serve retail customers.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.202/m"> <num value="m">(m)</num> <content>In a power region outside of ERCOT, if customer choice is introduced before the requirements of Section 39.152(a) are met, an affiliated retail electric provider shall charge rates to customers other than residential and small commercial customers that are no higher than the rates that, on a bundled basis, were in effect on January 1, 1999, adjusted to reflect the fuel factor as provided by Subsection (b) and adjusted for any base rate reduction as stipulated to by an electric utility in a proceeding for which a final order had not been issued by January 1, 1999.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.202/n"> <num value="n">(n)</num> <content>Notwithstanding Subsection (a), in a power region outside of ERCOT, if customer choice is introduced before the requirements of Section 39.152(a) are met, an affiliated retail electric provider shall continue to offer the price to beat to residential and small commercial customers, unless the price is changed by the commission in accordance with this chapter, until the later of 60 months after the date customer choice is introduced or the requirements of Section 39.152(a) are met.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.202/o"> <num value="o">(o)</num> <content>In this section, "small commercial customer" means a commercial customer having a peak demand of 1,000 kilowatts or less.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.202/p"> <num value="p">(p)</num> <content>On finding that a retail electric provider will be unable to maintain its financial integrity if it complies with Subsection (a), the commission shall set the retail electric provider's price to beat at the minimum level that will allow the retail electric provider to maintain its financial integrity. However, in no event shall the price to beat exceed the level of rates, on a bundled basis, charged by the affiliated electric utility on September 1, 1999, adjusted for fuel as provided by Subsection (b).</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scE/s39.203"> <num value="39.203">Sec. 39.203.</num> <heading>TRANSMISSION AND DISTRIBUTION SERVICE</heading> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.203/a"> <num value="a">(a)</num> <content>All transmission and distribution utilities shall provide transmission service at wholesale under Subchapter A, Chapter 35. In addition, on and after January 1, 2002, a transmission and distribution utility shall provide transmission or distribution service, or both, at retail to an electric utility, a retail electric provider, a municipally owned utility, an electric cooperative, or an end-use customer at rates, terms of access, and conditions that are comparable to those that apply to the transmission and distribution utility and its affiliates. A municipally owned utility offering customer choice or an electric cooperative offering customer choice shall likewise provide transmission or distribution service, or both, at retail to all such entities in accordance with the commission's rules applicable to terms and conditions of access and at rates adopted in accordance with Sections 40.055(a)(1) and 41.055(1), respectively.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.203/b"> <num value="b">(b)</num> <content>When necessary to serve a wholesale customer an electric utility, an electric cooperative that has not opted for customer choice, or a municipally owned utility that has not opted for customer choice shall provide wholesale transmission service at distribution voltage. A customer of a municipally owned utility that has not opted for customer choice or of an electric cooperative that has not opted for customer choice may not claim the status of a wholesale customer or be designated as a wholesale customer if the customer is being or has been served under a retail rate schedule of the municipally owned utility or electric cooperative.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.203/c"> <num value="c">(c)</num> <content>On or before January 1, 2002, the commission shall establish for all retail electric utilities offering customer choice reasonable and comparable terms and conditions, in accordance with Section 39.201, that comply with Subsection (a) for open access on distribution facilities and shall establish, for all retail electric utilities offering customer choice other than municipally owned utilities and electric cooperatives, reasonable and comparable rates for open access on distribution facilities.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.203/d"> <num value="d">(d)</num> <content>The terms of access, conditions, and rates established under Subsection (c) shall be comparable to the terms of access, conditions, and rates that the electric utility applies to itself or its affiliates. The rules shall also provide that all ancillary services provided by the utility to itself or its affiliates are also available to third parties on request on a nondiscriminatory basis.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.203/e"> <num value="e">(e)</num> <content>The commission may require an electric utility or a transmission and distribution utility to construct or enlarge facilities to ensure safe and reliable service for the state's electric markets and to reduce transmission constraints within ERCOT in a cost-effective manner where the constraints are such that they are not being resolved through Chapter 37 or the ERCOT transmission planning process. In any proceeding brought under Chapter 37, an electric utility or transmission and distribution utility ordered to construct or enlarge facilities under this subchapter need not prove that the construction ordered is necessary for the service, accommodation, convenience, or safety of the public and need not address the factors listed in Sections 37.056(c)(1)-(3) and (4)(E). Notwithstanding any other law, including Section 37.057, in any proceeding brought under Chapter 37 by an electric utility or a transmission and distribution utility related to an application for a certificate of public convenience and necessity to construct or enlarge transmission or transmission-related facilities under this subsection, the commission shall issue a final order before the 181st day after the date the application is filed with the commission. If the commission does not issue a final order before that date, the application is approved.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.203/f"> <num value="f">(f)</num> <content>The commission's rules must be consistent with the standards of this title and may not be contrary to an applicable decision, rule, or policy statement of a federal regulatory agency having jurisdiction.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.203/g"> <num value="g">(g)</num> <content>Each power region shall have generally applicable tariffs approved by the commission or a federal regulatory agency having jurisdiction that guarantees open and nondiscriminatory access as required by Section 39.152. This subsection may not be deemed to vest in the commission power to set or approve distribution access rates of a municipally owned utility or an electric cooperative that has adopted customer choice.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.203/h"> <num value="h">(h)</num> <content>A customer in a multiply certificated service area may switch its retail distribution service provider among certificated retail electric utilities only by disconnecting from the facilities of one retail electric utility and connecting to the facilities of another retail electric utility.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.203/i"> <num value="i">(i)</num> <content>The commission, in cooperation with transmission and distribution utilities and the ERCOT independent system operator, shall study whether existing transmission and distribution planning processes are sufficient to provide adequate infrastructure for seawater desalination projects. If the commission determines that statutory changes are needed to ensure that adequate infrastructure is developed for projects of that kind, the commission shall include recommendations in the report required by Section 12.203.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999. Amended by Acts 2003, 78th Leg., ch. 295, Sec. 3, eff. June 18, 2003. Amended by: Acts 2005, 79th Leg., 1st C.S., Ch. 1 (S.B. 20), Sec. 2, eff. September 1, 2005. Acts 2015, 84th Leg., R.S., Ch. 829 (H.B. 4097), Sec. 1, eff. June 17, 2015. Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 26, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scE/s39.204"> <num value="39.204">Sec. 39.204.</num> <heading>TARIFFS FOR OPEN ACCESS</heading> <content>Each transmission and distribution utility shall file a tariff implementing the open access rules with the commission or the federal regulatory authority having jurisdiction over the transmission and distribution service of the utility not later than the 90th day before the date customer choice is offered by that utility.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scE/s39.205"> <num value="39.205">Sec. 39.205.</num> <heading>REGULATION OF COSTS FOLLOWING FREEZE PERIOD</heading> <content>At the conclusion of the freeze period, any remaining costs associated with nuclear decommissioning obligations continue to be subject to cost of service rate regulation and shall be included as a nonbypassable charge to retail customers. The commission may adopt rules necessary to ensure that money for decommissioning is prudently collected, managed, and spent for its intended purpose and that money that remains unspent after decommissioning is completed is returned to retail customers.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999. Amended by: Acts 2005, 79th Leg., Ch. 121 (S.B. 1464), Sec. 2, eff. September 1, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scE/s39.206"> <num value="39.206">Sec. 39.206.</num> <heading>NUCLEAR GENERATING UNIT DECOMMISSIONING COST PLAN</heading> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.206/a"> <num value="a">(a)</num> <chapeau>For purposes of this section:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scE/s39.206/1"> <num value="1">(1)</num> <content>"Decommissioning" includes decommissioning and decontamination of a nuclear generating unit consistent with federal Nuclear Regulatory Commission requirements.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scE/s39.206/2"> <num value="2">(2)</num> <content>"Nuclear decommissioning trust" means an external and irrevocable trust created for the purpose of funding decommissioning obligations for a nuclear generating unit, consistent with federal Nuclear Regulatory Commission requirements.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scE/s39.206/3"> <num value="3">(3)</num> <content>"Nuclear generating unit" means an electric generating facility that uses nuclear energy to generate electricity for sale and is licensed by the Nuclear Regulatory Commission.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scE/s39.206/4"> <num value="4">(4)</num> <content>"Power generation company" has the meaning assigned by Section 31.002.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scE/s39.206/5"> <num value="5">(5)</num> <chapeau>"Retail electric customer" means a retail electric customer:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c39/scE/s39.206/A"> <num value="A">(A)</num> <content>in a geographic area of this state in which retail customer choice has been implemented; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scE/s39.206/B"> <num value="B">(B)</num> <content>of a municipally owned utility or electric cooperative that has an agreement to purchase power from a nuclear generating unit.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.206/b"> <num value="b">(b)</num> <content>This section applies only to the first six nuclear generating units the construction of which begins on or after January 1, 2013, and before January 1, 2033, and which are owned in whole or in part by a power generation company that elects to utilize the decommissioning mechanism set forth in this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.206/c"> <num value="c">(c)</num> <content>Nothing in this section shall be construed to require a power generation company to use a commission approved method to provide funds for decommissioning, if the power generation company can otherwise satisfy the decommissioning financial assurance requirements of the federal Nuclear Regulatory Commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.206/d"> <num value="d">(d)</num> <chapeau>A power generation company that owns a nuclear generating unit shall fund out of operating revenues on an annual basis:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scE/s39.206/1"> <num value="1">(1)</num> <content>the costs associated with funding the decommissioning obligations for the nuclear generating unit; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scE/s39.206/2"> <num value="2">(2)</num> <content>the power generation company's portion of the decommissioning costs for the nuclear generating unit in proportion to the company's ownership interest in the nuclear generating unit if the unit is owned by more than one person.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.206/e"> <num value="e">(e)</num> <content>The obligation to fund a nuclear decommissioning trust fund is not dischargeable in bankruptcy.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.206/f"> <num value="f">(f)</num> <content>A power generation company shall establish a nuclear decommissioning trust for a nuclear generating unit it owns or for the proportionate share of a nuclear generating unit of which it owns a part. The funding obligations for the trust must begin before the nuclear generating unit commences its initial fuel load and begins commercial operation to generate power for sale. The terms of the trust must be consistent with trust terms and conditions the federal Nuclear Regulatory Commission requires for providing financial assurance for decommissioning.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.206/g"> <num value="g">(g)</num> <content>The commission by order shall establish for a nuclear generating unit the amount of annual decommissioning funding necessary to meet the decommissioning obligations for the nuclear generating unit over the unit's operating license period as established by the federal Nuclear Regulatory Commission or over a shorter period of time at the election of the power generation company. The power generation company shall perform a study on the cost of decommissioning to establish the decommissioning obligations before the nuclear generating unit begins commercial operation to generate power for sale. The study shall be performed by the power generation company at least once in each three-year period during the unit's operating license period using the most current reasonably available information on the cost of decommissioning. The commission shall conduct a proceeding at least once in each three-year period to review the study and other current reasonably available information on the cost of decommissioning and determine the reasonableness of the study.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.206/h"> <num value="h">(h)</num> <content>A power generation company shall file an annual report to provide the status of the decommissioning trust fund and to update the commission as to its ability to fund the decommissioning trust fund. In determining the amount of the annual decommissioning funding under this subsection, at least once in each three-year period, the commission shall conduct a proceeding to review the balance of each nuclear decommissioning trust and the projected amount of annual decommissioning funding for the associated nuclear generating unit. On the conclusion of the review proceeding, the commission by order shall revise the amount of annual funding for the nuclear generating unit in order to ensure that the nuclear decommissioning trust fund is adequately funded.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.206/i"> <num value="i">(i)</num> <content>A power generation company shall remit the appropriate amount of annual decommissioning funding to the nuclear decommissioning trust created for its proportionate ownership position in a nuclear generating unit in accordance with the commission's funding order issued under Subsection (g) or (h). The commission shall take appropriate actions to ensure proper funding of the nuclear decommissioning trust, including possibly terminating the power generation company's registration to operate, if the company violates this subsection.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.206/j"> <num value="j">(j)</num> <content>A power generation company that owns a nuclear generating unit is the funds administrator of the nuclear decommissioning trust for the associated nuclear generating unit. The company, as funds administrator, shall invest the trust funds in accordance with guidelines established by commission rule and consistent with the federal Nuclear Regulatory Commission guidelines so that the decommissioning funds, plus the amounts earned from investment of the funds, will be available at the time of decommissioning. The commission shall adopt rules to define the company's specific duties as funds administrator and requirements regarding prudent management and investment of nuclear decommissioning trust funds.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.206/k"> <num value="k">(k)</num> <chapeau>The commission shall adopt rules necessary to ensure that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scE/s39.206/1"> <num value="1">(1)</num> <content>a power generation company remits sufficient funds to a nuclear decommissioning trust on an annual basis, including projected earnings to approximate the amount remaining to be accumulated to cover the cost of decommissioning a nuclear generating unit at the end of its operating license period divided by the remaining years of the license and in accordance with applicable state and federal laws and regulations or over a shorter period of time at the election of the power generation company;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scE/s39.206/2"> <num value="2">(2)</num> <content>the periodic cost studies and reviews described in Subsections (g) and (h) include all current reasonably available information as determined necessary and appropriate by the commission;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scE/s39.206/3"> <num value="3">(3)</num> <content>all funds remitted to a nuclear decommissioning trust are prudently managed and spent for their intended purpose;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scE/s39.206/4"> <num value="4">(4)</num> <content>the funds remitted to a nuclear decommissioning trust and the amounts earned from investing the funds, will be available for, and restricted to the purpose of decommissioning of the associated nuclear generating unit, including if the trust or nuclear generating unit is transferred to another person; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scE/s39.206/5"> <num value="5">(5)</num> <content>before a power generation company is allowed to take advantage of the mechanisms in this section, the company meets creditworthiness standards established by the commission to minimize the risk that retail electric customers will be responsible for funding any shortfall in the cost of decommissioning a nuclear generating unit.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.206/l"> <num value="l">(l)</num> <content>In addition to the nuclear decommissioning trust required by Subsection (f), for purposes of Subsection (k), the power generation company and its parent and affiliates shall provide financial assurances that funds will be available to satisfy up to 16 years of annual decommissioning funding in the event the power generation company defaults on its obligation to make annual funding to the decommissioning trust. Within 180 days after the effective date of this section, the commission by rule shall establish the acceptable forms of financial assurance, which shall include, but not be limited to, parent guarantees and support agreements, letters of credit, surety or insurance, and such other requirements necessary to ensure compliance with this section. In establishing the acceptable forms of assurance, and the eligibility requirements for each form of assurance, the commission shall consider the relative risk factors and creditworthiness attributes of potential applicant financial characteristics in order to minimize exposure of retail electric customers to default by power generation companies under this section. The power generation company may choose the manner of financial assurance for which it is eligible under the commission's rules.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.206/m"> <num value="m">(m)</num> <content>In the event the financial assurances provided by Subsection (k) are insufficient to meet the annual funding requirements of the decommissioning trust, the retail electric customers shall be responsible for funding any shortfall in the cost of decommissioning the nuclear generating unit.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.206/n"> <num value="n">(n)</num> <content>The commission shall determine the manner in which any shortfall in the cost of decommissioning a nuclear generating unit shall be recovered from retail electric customers in the state, consistent with law.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.206/o"> <num value="o">(o)</num> <content>For retail electric customers of a municipally owned utility or an electric cooperative that has an agreement to purchase power from a nuclear generating unit, the amount of the shortfall in the cost of decommissioning the nuclear generating unit that the customers are responsible for is limited to a portion of that shortfall that bears the same proportion to the total shortfall as the amount of electric power generated by the nuclear generating unit and purchased by the municipally owned utility or electric cooperative bears to the total amount of power the nuclear generating unit generated.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.206/p"> <num value="p">(p)</num> <content>If retail electric customers in this state become responsible for the costs of decommissioning a nuclear generating unit and incur costs under this section and the nuclear generating unit is operational, as a condition of operating the generating unit, the power generation company or any new owner shall repay the costs the electric customers incurred in the manner determined by the commission. The commission may authorize the repayment to occur over a period established by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.206/q"> <num value="q">(q)</num> <content>The commission shall, in conjunction with the Nuclear Regulatory Commission, investigate the development of a mechanism whereby the State of Texas could ensure that funds for decommissioning will be obtained when necessary in the same manner as if the State of Texas were the licensee under federal law.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scE/s39.206/r"> <num value="r">(r)</num> <chapeau>The commission by rule shall ensure that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scE/s39.206/1"> <num value="1">(1)</num> <content>money for decommissioning a nuclear generating unit is prudently collected, managed, and spent for its intended purposes; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scE/s39.206/2"> <num value="2">(2)</num> <content>decommissioning money that remains unspent after decommissioning of the nuclear generating unit is complete is returned to the power generation company and the retail electric customers based on the proportionate amount of money the power generation company and retail electric customers paid into the fund.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2007, 80th Leg., R.S., Ch. 1019 (H.B. 1386), Sec. 1, eff. September 1, 2007. Amended by: Acts 2013, 83rd Leg., R.S., Ch. 55 (H.B. 994), Sec. 1, eff. May 18, 2013. Acts 2013, 83rd Leg., R.S., Ch. 55 (H.B. 994), Sec. 2, eff. May 18, 2013. Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 27, eff. September 1, 2023.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c39/scF"> <num value="F">SUBCHAPTER F.</num> <heading>RECOVERY OF STRANDED COSTS THROUGH COMPETITION TRANSITION CHARGE</heading> <section identifier="/us/tx/ut/t2/c39/scF/s39.251"> <num value="39.251">Sec. 39.251.</num> <heading>DEFINITIONS</heading> <chapeau>In this subchapter:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.251/1"> <num value="1">(1)</num> <content>"Above market purchased power costs" means wholesale demand and energy costs that a utility is obligated to pay under an existing purchased power contract to the extent the costs are greater than the purchased power market value.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.251/2"> <num value="2">(2)</num> <content>"Existing purchased power contract" means a purchased power contract in effect on January 1, 1999, including any amendments and revisions to that contract resulting from litigation initiated before January 1, 1999.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.251/3"> <num value="3">(3)</num> <content>"Generation assets" means all assets associated with the production of electricity, including generation plants, electrical interconnections of the generation plant to the transmission system, fuel contracts, fuel transportation contracts, water contracts, lands, surface or subsurface water rights, emissions-related allowances, and gas pipeline interconnections.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.251/4"> <num value="4">(4)</num> <content>"Market value" means, for nonnuclear assets and certain nuclear assets, the value the assets would have if bought and sold in a bona fide third-party transaction or transactions on the open market under Section 39.262(h) or, for certain nuclear assets, as described by Section 39.262(i), the value determined under the method provided by that subsection.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.251/5"> <num value="5">(5)</num> <content>"Purchased power market value" means the value of demand and energy bought and sold in a bona fide third-party transaction or transactions on the open market and determined by using the weighted average costs of the highest three offers from the market for purchase of the demand and energy available under the existing purchased power contracts.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.251/6"> <num value="6">(6)</num> <content>"Retail stranded costs" means that part of net stranded cost associated with the provision of retail service.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.251/7"> <num value="7">(7)</num> <content>"Stranded cost" means the positive excess of the net book value of generation assets over the market value of the assets, taking into account all of the electric utility's generation assets, any above market purchased power costs, and any deferred debit related to a utility's discontinuance of the application of Statement of Financial Accounting Standards No. 71 ("Accounting for the Effects of Certain Types of Regulation") for generation-related assets if required by the provisions of this chapter. For purposes of Section 39.262, book value shall be established as of December 31, 2001, or the date a market value is established through a market valuation method under Section 39.262(h), whichever is earlier, and shall include stranded costs incurred under Section 39.263.</content> </paragraph> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scF/s39.252"> <num value="39.252">Sec. 39.252.</num> <heading>RIGHT TO RECOVER STRANDED COSTS</heading> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.252/a"> <num value="a">(a)</num> <content>An electric utility is allowed to recover all of its net, verifiable, nonmitigable stranded costs incurred in purchasing power and providing electric generation service.</content> <continuation>(b)(1) Recovery of retail stranded costs by an electric utility shall be from all existing or future retail customers, including the facilities, premises, and loads of those retail customers, within the utility's geographical certificated service area as it existed on May 1, 1999. A retail customer may not avoid stranded cost recovery charges by switching to new on-site generation except as provided by Section 39.262(k). For purposes of this subchapter, "new on-site generation" means electric generation capacity greater than 10 megawatts capable of being lawfully delivered to the site without use of utility distribution or transmission facilities and which was not, on or before December 31, 1999, either:</continuation> <subparagraph identifier="/us/tx/ut/t2/c39/scF/s39.252/A"> <num value="A">(A)</num> <content>a fully operational facility; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scF/s39.252/B"> <num value="B">(B)</num> <content>a project supported by substantially complete filings for all necessary site-specific environmental permits under the rules of the Texas Natural Resource Conservation Commission in effect at the time of filing.</content> </subparagraph> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.252/2"> <num value="2">(2)</num> <content>If a customer commences taking energy from new on-site generation which materially reduces the customer's use of energy delivered through the utility's facilities, the customer shall pay an amount each month computed by multiplying the output of the on-site generation by the new sum of competition transition charges under Section 39.201 and transition charges under Subchapter G which are in effect during that month. Payment shall be made to the utility, its successors, an assignee, or other collection agent responsible for collecting the competition transition charges and transition charges and shall be collected in addition to the competition transition charges and transition charges applicable to energy actually delivered to the customer through the utility's facilities.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.252/c"> <num value="c">(c)</num> <content>In multiply certificated areas, a retail customer may not avoid stranded cost recovery charges by switching to another electric utility, electric cooperative, or municipally owned utility after May 1, 1999. A customer in a multiply certificated service area that requested to switch providers on or before May 1, 1999, or was not taking service from an electric utility on May 1, 1999, and does not do so after that date is not responsible for paying retail stranded costs of that utility.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.252/d"> <num value="d">(d)</num> <content>An electric utility shall pursue commercially reasonable means to reduce its potential stranded costs, including good faith attempts to renegotiate above-cost fuel and purchased power contracts or the exercise of normal business practices to protect the value of its assets. The commission shall consider the utility's efforts under this subsection when determining the amount of the utility's stranded costs; provided, however, that nothing in this section authorizes the commission to substitute its judgment for a market valuation of generation assets determined under Sections 39.262(h) and (i).</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scF/s39.253"> <num value="39.253">Sec. 39.253.</num> <heading>ALLOCATION OF STRANDED COSTS</heading> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.253/a"> <num value="a">(a)</num> <chapeau>Any capital costs incurred by an electric utility to improve air quality under Section 39.263 or 39.264 that are included in a utility's invested capital in accordance with those sections shall be allocated among customer classes as follows:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.253/1"> <num value="1">(1)</num> <content>50 percent of those costs shall be allocated in accordance with the methodology used to allocate the costs of the underlying assets in the electric utility's most recent commission order addressing rate design; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.253/2"> <num value="2">(2)</num> <content>the remainder shall be allocated on the basis of the energy consumption of the customer classes.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.253/b"> <num value="b">(b)</num> <content>All other retail stranded costs shall be allocated among retail customer classes in accordance with Subsections (c)-(i).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.253/c"> <num value="c">(c)</num> <content>The allocation to the residential class shall be determined by allocating to all customer classes 50 percent of the stranded costs in accordance with the methodology used to allocate the costs of the underlying assets in the electric utility's most recent commission order addressing rate design and allocating the remainder of the stranded costs on the basis of the energy consumption of the classes.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.253/d"> <num value="d">(d)</num> <content>After the allocation to the residential class required by Subsection (c) has been calculated, the remaining stranded costs shall be allocated to the remaining customer classes in accordance with the methodology used to allocate the costs of the underlying assets in the electric utility's most recent commission order addressing rate design. Non-firm industrial customers shall be allocated stranded costs equal to 150 percent of the amount allocated to that class.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.253/e"> <num value="e">(e)</num> <content>After the allocation to the residential class required by Subsection (c) and the allocation to the nonfirm industrial class required by Subsection (d) have been calculated, the remaining stranded costs shall be allocated to the remaining customer classes in accordance with the methodology used to allocate the costs of the underlying assets in the electric utility's most recent commission order addressing rate design.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.253/f"> <num value="f">(f)</num> <content>Notwithstanding any other provision of this section, to the extent that the total retail stranded costs, including regulatory assets, of investor-owned utilities exceed $5 billion on a statewide basis, any stranded costs in excess of $5 billion shall be allocated among retail customer classes in accordance with the methodology used to allocate the costs of the underlying assets in the electric utility's most recent commission order addressing rate design.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.253/g"> <num value="g">(g)</num> <content>The energy consumption of the customer classes used in Subsections (a)(2) and (c) shall be based on the relevant class characteristics as of May 1, 1999, adjusted for normal weather conditions.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.253/h"> <num value="h">(h)</num> <content>For purposes of this section, "stranded costs" includes regulatory assets.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.253/i"> <num value="i">(i)</num> <content>Except as provided by Section 39.262(k), no customer or customer class may avoid the obligation to pay the amount of stranded costs allocated to that customer class.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scF/s39.254"> <num value="39.254">Sec. 39.254.</num> <heading>USE OF REVENUES FOR UTILITIES WITH STRANDED COSTS</heading> <content>This subchapter provides a number of tools to an electric utility to mitigate stranded costs. Each electric utility that was reported by the commission to have positive "excess costs over market" (ECOM), denoted as the "base case" for the amount of stranded costs before full retail competition in 2002 with respect to its Texas jurisdiction, in the April 1998 Report to the Texas Senate Interim Committee on Electric Utility Restructuring entitled "Potentially Strandable Investment (ECOM) Report: 1998 Update," must use these tools to reduce the net book value of, otherwise referred to as "accelerate" the cost recovery of, its stranded costs each year. Any positive difference under the report required by Section 39.257(b) shall be applied to the net book value of generation assets.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scF/s39.255"> <num value="39.255">Sec. 39.255.</num> <heading>USE OF REVENUES FOR UTILITIES WITH NO STRANDED COSTS</heading> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.255/a"> <num value="a">(a)</num> <content>An electric utility that does not have stranded costs described by Section 39.254 shall be permitted to use any positive difference under the report required by Section 39.257(b) on capital expenditures to improve or expand transmission or distribution facilities, or on capital expenditures to improve air quality, as approved by the commission. Any such capital expenditures shall be made in the calendar year immediately following the year for which the report required by Section 39.257 is calculated. The capital expenditures shall be reflected in any future proceeding under this chapter to set transmission or distribution rates as a reduction to the utility's transmission and distribution invested capital, as approved by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.255/b"> <num value="b">(b)</num> <content>To the extent that positive differences under the report required by Section 39.257(b) are not used for capital expenditures, the amounts shall be flowed back to the electric utility's Texas jurisdictional customers through the power cost recovery factor.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.255/c"> <num value="c">(c)</num> <content>This section applies only to the use of positive differences under the report required by Section 39.257(b) for each year during the freeze period.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scF/s39.256"> <num value="39.256">Sec. 39.256.</num> <heading>OPTION TO REDIRECT DEPRECIATION</heading> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.256/a"> <num value="a">(a)</num> <content>For the calendar years of 1998, 1999, 2000, and 2001, an electric utility described by Section 39.254 may redirect all or a part of the depreciation expense relating to transmission and distribution assets to its net generation plant assets.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.256/b"> <num value="b">(b)</num> <content>The electric utility shall report a decision under Subsection (a) to the commission and any other applicable regulatory authority.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.256/c"> <num value="c">(c)</num> <content>Any adjustments made to the book value of transmission and distribution assets or the creation of any related regulatory assets resulting from the redirection under this section shall be accepted and applied by the commission for establishing net invested capital and transmission and distribution rates for retail customers in all future proceedings.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.256/d"> <num value="d">(d)</num> <chapeau>Notwithstanding Subsection (c), the design of post-freeze-period retail rates may not:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.256/1"> <num value="1">(1)</num> <content>shift the allocation of responsibility for stranded costs;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.256/2"> <num value="2">(2)</num> <content>include the adjusted costs in wholesale transmission and distribution rates; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.256/3"> <num value="3">(3)</num> <content>apply the adjustments for the purpose of establishing net invested capital and transmission and distribution rates for wholesale customers.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scF/s39.257"> <num value="39.257">Sec. 39.257.</num> <heading>ANNUAL REPORT</heading> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.257/a"> <num value="a">(a)</num> <content>Beginning with the 1999 calendar year, each electric utility shall file a report with the commission not later than 90 days after the end of each year during the freeze period under a schedule and a format determined by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.257/b"> <num value="b">(b)</num> <content>The report shall identify any positive difference between annual revenues, reduced by the amount of annual revenues under Sections 36.203 and 36.205, the revenues received under the interutility billing process as adopted by the commission to implement Sections 35.004, 35.006, and 35.007, revenues associated with transition charges as defined by Section 39.302, and annual costs.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scF/s39.258"> <num value="39.258">Sec. 39.258.</num> <heading>ANNUAL REPORT: DETERMINATION OF ANNUAL COSTS</heading> <chapeau>For the purposes of determining the annual costs in each annual report, the following amounts shall be used:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.258/1"> <num value="1">(1)</num> <chapeau>the lesser of:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c39/scF/s39.258/A"> <num value="A">(A)</num> <content>the utility's Texas jurisdictional operation and maintenance expense reflected in each utility's Federal Energy Regulatory Commission Form 1 of the report year, plus factoring expenses not included in operation and maintenance, adjusted for:</content> </subparagraph> </paragraph> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.258/i"> <num value="i">(i)</num> <chapeau>costs under Sections 36.062, 36.203, and 36.205; and</chapeau> <clause identifier="/us/tx/ut/t2/c39/scF/s39.258/ii"> <num value="ii">(ii)</num> <content>revenues recorded under the interutility billing process adopted by the commission to implement Sections 35.004, 35.006, and 35.007; or</content> </clause> <subparagraph identifier="/us/tx/ut/t2/c39/scF/s39.258/B"> <num value="B">(B)</num> <content>the Texas jurisdictional operation and maintenance expense reflected in each utility's 1996 Federal Energy Regulatory Commission Form 1, plus factoring expenses not included in operation and maintenance, adjusted for:</content> </subparagraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.258/i"> <num value="i">(i)</num> <chapeau>costs under Sections 36.062, 36.203, and 36.205, and not indexed for inflation;</chapeau> <clause identifier="/us/tx/ut/t2/c39/scF/s39.258/ii"> <num value="ii">(ii)</num> <content>any difference between the annual revenues and the expenses recorded under the interutility billing process adopted by the commission to implement Sections 35.004, 35.006, and 35.007; and</content> </clause> <clause identifier="/us/tx/ut/t2/c39/scF/s39.258/iii"> <num value="iii">(iii)</num> <content>the annual percentage change in the average number of utility customers;</content> </clause> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.258/2"> <num value="2">(2)</num> <content>the amount of nuclear decommissioning expense approved in the electric utility's last rate proceeding before the commission, as may be required to be adjusted to comply with applicable federal regulatory requirements;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.258/3"> <num value="3">(3)</num> <content>the depreciation rates approved in the electric utility's last rate proceeding before the commission;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.258/4"> <num value="4">(4)</num> <content>the amortization expense approved in the electric utility's last rate proceeding before the commission or in any other proceeding in which deferred costs and the amortization of those costs are established, except that if the items are fully amortized during the freeze period, the expense shall be adjusted accordingly;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.258/5"> <num value="5">(5)</num> <content>taxes and fees, including municipal franchise fees to the extent not included in Subdivision (1), other than federal income taxes, and assessments incurred that year;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.258/6"> <num value="6">(6)</num> <content>federal income tax expense, computed according to the stand-alone methodology and using the actual capital structure and actual cost of debt as of December 31 of the report year;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.258/7"> <num value="7">(7)</num> <content>return on invested capital, computed by multiplying invested capital as of December 31 of the report year, determined as provided by Section 39.259, by the cost of capital approved in the electric utility's most recent rate proceeding before the commission in which the cost of capital was specifically adopted, or, in the case of a range, the midpoint of the range, if the final rate order for the proceeding was issued on or after January 1, 1992, or if such an order does not exist, a cost of capital of 9.6 percent shall be used; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.258/8"> <num value="8">(8)</num> <content>the amount resulting from any operation and maintenance expense savings tracker from a merger of two utilities and contained in a settlement agreement approved by the commission before January 1, 1999.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scF/s39.259"> <num value="39.259">Sec. 39.259.</num> <heading>ANNUAL REPORT: DETERMINATION OF INVESTED CAPITAL</heading> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.259/a"> <num value="a">(a)</num> <content>For the purposes of determining invested capital in each annual report, the net plant in service, regulatory assets, and deferred federal income taxes shall be updated each year, and generation-related invested capital shall be reduced by the amount of securitization under Sections 39.201(i) and 39.262(c) to the extent otherwise included in invested capital.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.259/b"> <num value="b">(b)</num> <content>Capital additions to a plant in an amount less than 1-1/2 percent of the electric utility's net plant in service on December 31, 1998, less plant items previously excluded by the commission, for each of the years 1999 through 2001 are presumed prudent.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.259/c"> <num value="c">(c)</num> <content>All other items in invested capital shall be as approved in the electric utility's last rate proceeding before the commission.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scF/s39.260"> <num value="39.260">Sec. 39.260.</num> <heading>USE OF GENERALLY ACCEPTED ACCOUNTING PRINCIPLES</heading> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.260/a"> <num value="a">(a)</num> <content>The definition and identification of invested capital and other terms used in this subchapter and Subchapter G that affect the net book value of generation assets and the treatment of transactions performed under Section 35.035 and other transactions authorized by this title or approved by the regulatory authority that affect the net book value of generation assets during the freeze period shall be treated in accordance with generally accepted accounting principles as modified by regulatory accounting rules generally applicable to utilities.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.260/b"> <num value="b">(b)</num> <content>The principles and criteria described by Subsection (a), including the criteria for applicability of Statement of Financial Accounting Standards No. 71 ("Accounting for the Effects of Certain Types of Regulation"), shall be applied for purposes of this subchapter as they existed on January 1, 1999.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scF/s39.261"> <num value="39.261">Sec. 39.261.</num> <heading>REVIEW OF ANNUAL REPORT</heading> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.261/a"> <num value="a">(a)</num> <content>The annual report filed under this subchapter is a public document and shall be reviewed by the staff of the commission and the office. Both staffs may review work papers and supporting documents and engage in discussions with the utility about the data underlying the reports.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.261/b"> <num value="b">(b)</num> <content>The staff of the commission and the office shall communicate in writing to an electric utility not later than the 180th day after the date the report is filed if they have any disagreements with the data or computations.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.261/c"> <num value="c">(c)</num> <chapeau>The commission shall finalize and resolve any disagreements related to the annual report, consistent with the requirements of Section 39.258, as follows:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.261/1"> <num value="1">(1)</num> <content>for each calendar year, the commission shall finalize the annual report before establishing the competition transition charge under Section 39.201; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.261/2"> <num value="2">(2)</num> <content>for each calendar year, the commission shall finalize the annual report and reflect the result as part of the true-up proceeding under Section 39.262.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scF/s39.262"> <num value="39.262">Sec. 39.262.</num> <heading>TRUE-UP PROCEEDING</heading> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.262/a"> <num value="a">(a)</num> <content>An electric utility, together with its affiliated retail electric provider and its affiliated transmission and distribution utility, may not be permitted to overrecover stranded costs through the procedures established by this section or through the application of the measures provided by the other sections of this chapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.262/b"> <num value="b">(b)</num> <content>After the freeze period, an electric utility located in a power region that is not certified under Section 39.152 shall continue to file annual reports under Sections 39.257, 39.258, and 39.259 as if the freeze period remained in effect, until the time the power region qualifies as certified under Section 39.152. In addition, the commission staff and the office shall continue to review the annual reports as provided by Section 39.261.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.262/c"> <num value="c">(c)</num> <content>After January 10, 2004, at a schedule and under procedures to be determined by the commission, each transmission and distribution utility, its affiliated retail electric provider, and its affiliated power generation company shall jointly file to finalize stranded costs under Subsections (h) and (i) and reconcile those costs with the estimated stranded costs used to develop the competition transition charge in the proceeding held under Section 39.201. Any resulting difference shall be applied to the nonbypassable delivery rates of the transmission and distribution utility, except that at the utility's option, any or all of the amounts recovered under this section may be securitized under Subchapter G.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.262/d"> <num value="d">(d)</num> <chapeau>The affiliated power generation company shall reconcile, and either credit or bill to the transmission and distribution utility, the net sum of:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.262/1"> <num value="1">(1)</num> <content>the former electric utility's final fuel balance determined under Section 39.202(c); and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.262/2"> <num value="2">(2)</num> <content>any difference between the price of power obtained through the capacity auctions under Sections 39.153 and 39.156 and the power cost projections that were employed for the same time period in the ECOM model to estimate stranded costs in the proceeding under Section 39.201.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.262/e"> <num value="e">(e)</num> <content>To the extent that the price to beat exceeded the market price of electricity, the affiliated retail electric provider shall reconcile and credit to the affiliated transmission and distribution utility any positive difference between the price to beat established under Section 39.202, reduced by the nonbypassable delivery charge established under Section 39.201, and the prevailing market price of electricity during the same time period. A reconciliation for the applicable customer class is not required under this subsection for an affiliated retail electric provider that satisfies the requirements of Section 39.202(e)(1) or (2) before the expiration of two years from the introduction of customer choice. If a reconciliation is required, in no event shall the amount credited exceed an amount equal to the number of residential or small commercial customers served by the affiliated transmission and distribution utility that are buying electricity from the affiliated retail electric provider at the price to beat on the second anniversary of the beginning of competition, minus the number of new customers obtained outside the service area, multiplied by $150.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.262/f"> <num value="f">(f)</num> <content>To the extent that any amount of regulatory assets included in a transition charge or competition transition charge exceeds the amount of regulatory assets approved in a rate order which became effective on or before September 1, 1999, the commission shall conduct a review during the true-up proceeding to determine whether such amounts were appropriately calculated and constituted reasonable and necessary costs pursuant to Subchapter B, Chapter 36. If the commission finds that the amount of regulatory assets specified in Section 39.302(5) is subject to modification, a credit or other rate adjustment shall be made to the transmission and distribution utility's nonbypassable delivery rates; provided, however, that no adjustment may be made to a transition charge established under Subchapter G.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.262/g"> <num value="g">(g)</num> <chapeau>Based on the credits or bills received from its affiliates under Subsections (d), (e), and (f), the transmission and distribution utility shall make necessary adjustments to the nonbypassable delivery rates it charges to retail electric providers. If the commission determines that the nonbypassable delivery rates are not sufficient, the commission may extend the original collection period for the charge or, if necessary, increase the charge. Alternatively, if the commission determines that the nonbypassable delivery rates are larger than are needed to recover the transmission and distribution utility's costs, the commission shall correspondingly reduce:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.262/1"> <num value="1">(1)</num> <content>the competition transition charge, to the extent it has not been securitized;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.262/2"> <num value="2">(2)</num> <content>the depreciation expense that has been redirected under Section 39.256;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.262/3"> <num value="3">(3)</num> <content>the transmission and distribution utility's rates; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.262/4"> <num value="4">(4)</num> <content>a combination of the elements in Subdivisions (1)-(3).</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.262/h"> <num value="h">(h)</num> <chapeau>Except as provided in Subsection (i), for the purpose of finalizing the stranded cost estimate used to establish the competition transition charge under Section 39.201, the affiliated power generation company shall quantify its stranded costs using one or more of the following methods:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.262/1"> <num value="1">(1)</num> <content>Sale of Assets. If, at any time after December 31, 1999, an electric utility or its affiliated power generation company has sold some or all of its generation assets, which sale shall include all generating assets associated with each generating plant that is sold, in a bona fide third-party transaction under a competitive offering, the total net value realized from the sale establishes the market value of the generation assets sold. If not all assets are sold, the market value of the remaining generation assets shall be established by one or more of the other methods in this section.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.262/2"> <num value="2">(2)</num> <content>Stock Valuation Method. If, at any time after December 31, 1999, an electric utility or its affiliated power generation company has transferred some or all of its generation assets, including, at the election of the electric utility or power generation company, any fuel and fuel transportation contracts related to those assets, to one or more separate affiliated or nonaffiliated corporations, not less than 51 percent of the common stock of each corporation is spun off and sold to public investors through a national stock exchange, and the common stock has been traded for not less than one year, the resulting average daily closing price of the common stock over 30 consecutive trading days chosen by the commission out of the last 120 consecutive trading days before the filing required under Subsection (c) establishes the market value of the common stock equity in each transferee corporation. The book value of each transferee corporation's debt and preferred stock securities shall be added to the market value of its assets. The market value of each transferee corporation's assets shall be reduced by the corresponding net book value of the assets acquired by each transferee corporation from any entity other than the affiliated electric utility or power generation company. The resulting market value of the assets establishes the market value of the generation assets transferred by the electric utility or power generation company to each separate corporation. If not all assets are disposed of in this manner, the market value of the remaining assets shall be established by one or more of the other methods in this section.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.262/3"> <num value="3">(3)</num> <content>Partial Stock Valuation Method. If, at any time after December 31, 1999, an electric utility or its affiliated power generation company has transferred some or all of its generation assets, including, at the election of the electric utility or power generation company, any fuel and fuel transportation contracts related to those assets, to one or more separate affiliated or nonaffiliated corporations, at least 19 percent, but less than 51 percent, of the common stock of each corporation is spun off and sold to public investors through a national stock exchange, and the common stock has been traded for not less than one year, the resulting average daily closing price of the common stock over 30 consecutive trading days chosen by the commission out of the last 120 consecutive trading days before the filing required under Subsection (c) shall be presumed to establish the market value of the common stock equity in each transferee corporation. The commission may accept the market valuation to conclusively establish the value of the common stock equity in each transferee corporation or convene a valuation panel of three independent financial experts to determine whether the percentage of common stock sold is fairly representative of the total common stock equity or whether a control premium exists for the retained interest. The valuation panel must consist of financial experts, chosen from proposals submitted in response to commission requests, from the top 10 nationally recognized investment banks with demonstrated experience in the United States electric industry as indicated by the dollar amount of public offerings of long-term debt and equity of United States investor-owned electric companies over the immediately preceding three years as ranked by the publications "Securities Data" or "Institutional Investor." If the panel determines that a control premium exists for the retained interest, the panel shall determine the amount of the control premium, and the commission shall adopt the determination but may not increase the market value by a control premium greater than 10 percent. The costs and expenses of the panel, as approved by the commission, shall be paid by each transferee corporation. The determination of the commission based on the finding of the panel conclusively establishes the value of the common stock of each transferee corporation. The book value of each transferee corporation's debt and preferred stock securities shall be added to the market value of its assets. The market value of each transferee corporation's assets shall be reduced by the corresponding net book value of the assets acquired by each transferee corporation from any entity other than the affiliated electric utility or power generation company. The resulting market value of the assets establishes the market value of the generation assets transferred by the electric utility or power generation company to each separate corporation.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.262/4"> <num value="4">(4)</num> <content>Exchange of Assets. If, at any time after December 31, 1999, an electric utility or its affiliated power generation company has transferred some or all of its generation assets, including any fuel and fuel transportation contracts related to those assets, in a bona fide third-party exchange transaction, the stranded costs related to the transferred assets shall be the difference between the book value and the market value of the transferred assets at the time of the exchange, taking into account any other consideration received or given. The market value of the transferred assets may be determined through an appraisal by a nationally recognized independent appraisal firm, if the market value is subject to a market valuation by means of an offer of sale in accordance with this subdivision. To obtain a market valuation by means of an offer of sale, the owner of the asset shall offer it for sale to other parties under procedures that provide broad public notice of the offer and a reasonable opportunity for other parties to bid on the asset. The owner of the asset may establish a reserve price for any offer based on the sum of the appraised value of the asset and the tax impact of selling the asset, as determined by the commission.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.262/i"> <num value="i">(i)</num> <content>Unless an electric utility or its affiliated power generation company combines all of its remaining generation assets into one or more transferee corporations as described in Subsections (h)(2) and (3), the electric utility shall quantify its stranded costs for nuclear assets using the ECOM method. The ECOM method is the estimation model prepared for and described by the commission's April 1998 Report to the Texas Senate Interim Committee on Electric Restructuring entitled "Potentially Strandable Investment (ECOM) Report: 1998 Update." The methodology used in the model must be the same as that used in the 1998 report to determine the "base case." At the time of the proceeding under this section, the ECOM model shall be rerun using updated company-specific inputs required by the model, updating the market price of electricity, and using updated natural gas price forecasts and the capacity cost based on the long-run marginal cost of the most economic new generation technology then available. Natural gas price projections used in the model must be market-based natural gas forward prices, where available. Growth rates in generating plant operations and maintenance costs and allocated administrative and general costs shall be benchmarked by comparing those costs to the best available information on cost trends for comparable generating plants. Capital additions shall be benchmarked using the limitation in Section 39.259(b).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.262/j"> <num value="j">(j)</num> <content>The commission shall issue a final order not later than the 150th day after the date of the filing under this section by the transmission and distribution utility, its affiliated retail electric provider, and its affiliated power generation company, and the resulting order shall be subject to judicial review under Chapter 2001, Government Code.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.262/k"> <num value="k">(k)</num> <content>Notwithstanding Section 39.252, to the extent that a customer's actual load has been lawfully served by a fully operational qualifying facility before September 1, 2001, or by an on-site power production facility with a rated capacity of 10 megawatts or less, any charge for recovery of stranded costs under this section or Subchapter G assessed on that customer after the facility becomes fully operational shall be included only in those tariffs or charges associated with the services actually provided by the transmission and distribution utility, if any, to the customer after the facility became fully operational and may not include any costs associated with the service provided to the customer by the electric utility or its affiliated transmission and distribution utility under their tariffs before the operation of that qualifying facility. To qualify under this subsection, a qualifying facility must have made substantially complete filings on or before December 31, 1999, for all necessary site-specific environmental permits under the rules of the Texas Natural Resource Conservation Commission in effect at the time of filing.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.262/l"> <num value="l">(l)</num> <chapeau>To protect retail customers in this state, and ensure the appropriateness of the nonbypassable rates of electric utilities and transmission and distribution utilities, notwithstanding any other provision of this title, an electric utility or transmission and distribution utility must report to and obtain approval of the commission before closing any transaction in which:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.262/1"> <num value="1">(1)</num> <content>the electric utility or transmission and distribution utility will be merged or consolidated with another electric utility or transmission and distribution utility;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.262/2"> <num value="2">(2)</num> <content>at least 50 percent of the stock of the electric utility or transmission and distribution utility will be transferred or sold; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.262/3"> <num value="3">(3)</num> <content>a controlling interest or operational control of the electric utility or transmission and distribution utility will be transferred.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.262/m"> <num value="m">(m)</num> <content>The commission shall approve a transaction under Subsection (l) if the commission finds that the transaction is in the public interest. In making its determination, the commission shall consider whether the transaction will adversely affect the reliability of service, availability of service, or cost of service of the electric utility or transmission and distribution utility. The commission shall make the determination concerning a transaction under this subsection not later than the 180th day after the date the commission receives the relevant report. The commission may extend the deadline provided by this subsection for not more than 60 days if the commission determines the extension is needed to evaluate additional information, to consider actions taken by other jurisdictions concerning the transaction, to provide for administrative efficiency, or for other good cause. If the commission has not made a determination before the expiration of the deadline provided by or extended under this subsection, the transaction is considered approved.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.262/n"> <num value="n">(n)</num> <content>Subsections (l) and (m) do not apply to a transaction described by Subsection (l) for which a definitive agreement was executed before April 1, 2007, if an electric utility or transmission and distribution utility or a person seeking to acquire or merge with an electric utility or transmission and distribution utility made a filing for review of the transaction under Section 14.101 before May 1, 2007, and the resulting proceeding was not withdrawn.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.262/o"> <num value="o">(o)</num> <content>If an electric utility or transmission and distribution utility or a person seeking to acquire or merge with an electric utility or transmission and distribution utility files with the commission a stipulation, representation, or commitment in advance of or as part of a filing under Subsection (l) or under Section 14.101, the commission may enforce the stipulation, representation, or commitment to the extent that the stipulation, representation, or commitment is consistent with the standards provided by this section and Section 14.101. The commission may reasonably interpret and enforce conditions adopted under this section.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999. Amended by: Acts 2007, 80th Leg., R.S., Ch. 1186 (H.B. 624), Sec. 1, eff. June 15, 2007. Acts 2017, 85th Leg., R.S., Ch. 200 (S.B. 735), Sec. 3, eff. May 27, 2017.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scF/s39.263"> <num value="39.263">Sec. 39.263.</num> <heading>STRANDED COST RECOVERY OF ENVIRONMENTAL CLEANUP COSTS</heading> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.263/a"> <num value="a">(a)</num> <content>Subject to Subsection (c), capital costs incurred by an electric utility to improve air quality before January 1, 2002, are eligible for inclusion as net invested capital under Section 39.259, notwithstanding the limitations imposed under Sections 39.259(b) and (c).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.263/b"> <num value="b">(b)</num> <content>Subject to Subsection (c), capital costs incurred by an electric utility or an affiliated power generation company to improve air quality after January 1, 2002, and before May 1, 2003, are eligible for inclusion in the determination of invested capital in the true-up proceeding under Section 39.262.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.263/c"> <num value="c">(c)</num> <chapeau>Reasonable costs incurred under Subsections (a) and (b) shall be included as invested capital and considered in an electric utility's stranded cost determination only to the extent that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.263/1"> <num value="1">(1)</num> <chapeau>the cost is applied to offset or reduce the emission of airborne contaminants from an electric generating facility, where:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c39/scF/s39.263/A"> <num value="A">(A)</num> <content>the reduction or offset is determined by the Texas Natural Resource Conservation Commission to be an essential component in achieving compliance with a national ambient air quality standard; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scF/s39.263/B"> <num value="B">(B)</num> <content>the reduction or offset is necessary in order for an unpermitted electric generating facility to obtain a permit in the manner provided by Section 39.264;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.263/2"> <num value="2">(2)</num> <content>the retrofit decision is determined to be the most cost-effective after consideration of alternative measures, including the retirement of the generating facility; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.263/3"> <num value="3">(3)</num> <content>the amount and location of resulting emission reductions is consistent with the air quality goals and policies of the Texas Natural Resource Conservation Commission.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.263/d"> <num value="d">(d)</num> <content>If the retirement of a generating facility is the most cost-effective alternative, taking into account the cost of replacement generating capacity, the net book value, including retirement costs and offsetting salvage value, of the affected facility shall be included in the electric utility's stranded cost determination, notwithstanding Section 39.259(c).</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scF/s39.264"> <num value="39.264">Sec. 39.264.</num> <heading>EMISSIONS REDUCTIONS OF "GRANDFATHERED FACILITIES"</heading> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.264/a"> <num value="a">(a)</num> <chapeau>In this section:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.264/1"> <num value="1">(1)</num> <content>"Conservation commission" means the Texas Natural Resource Conservation Commission.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.264/2"> <num value="2">(2)</num> <content>"Electric generating facility" means a facility that generates electric energy for compensation and is owned or operated by a person in this state, including a municipal corporation, electric cooperative, or river authority.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.264/b"> <num value="b">(b)</num> <content>This section applies only to an electric generating facility existing on January 1, 1999, that is not subject to the requirement to obtain a permit under Section 382.0518(g), Health and Safety Code.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.264/c"> <num value="c">(c)</num> <content>It is the intent of the legislature that, for the 12-month period beginning on May 1, 2003, and for each 12-month period after the end of that period, total annual emissions of nitrogen oxides from facilities subject to this section may not exceed levels equal to 50 percent of the total emissions of that pollutant during 1997, as reported to the conservation commission, and total annual emissions of sulphur dioxides from coal-fired facilities subject to this section may not exceed levels equal to 75 percent of the total emissions of that pollutant during 1997, as reported to the conservation commission. The limitations prescribed by this subsection may be met through an emissions allocation and allowance transfer system described by this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.264/d"> <num value="d">(d)</num> <content>A municipal corporation, electric cooperative, or river authority may exclude any electric generating facilities of 25 megawatts or less from the requirements prescribed by this section. Not later than January 1, 2000, a municipal corporation, electric cooperative, or river authority must inform the conservation commission of its intent to exclude those facilities.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.264/e"> <num value="e">(e)</num> <content>The owner or operator of an electric generating facility shall apply to the conservation commission for a permit for the emission of air contaminants on or before September 1, 2000. A permit issued by the conservation commission under this section shall require the facility to achieve emissions reductions or trading emissions allowances as provided by this section. If the facility uses coal as a fuel, the permit must also be conditioned on the facility's emissions meeting opacity limitations provided by conservation commission rules. Notwithstanding Section 382.0518(g), Health and Safety Code, a facility that does not obtain a permit as required by this subsection may not operate after May 1, 2003, unless the conservation commission finds good cause for an extension.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.264/f"> <num value="f">(f)</num> <content>The conservation commission shall develop rules for the permitting of electric generating facilities. The rules adopted under this subsection shall provide, by region, for the allocation of emissions allowances of sulphur dioxides and nitrogen oxides among electric generating facilities and for facilities to trade emissions allowances for those contaminants.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.264/g"> <num value="g">(g)</num> <content>The conservation commission by rule shall establish an East Texas Region, a West Texas Region, and an El Paso Region for allocation of air contaminants under the permitting program under Subsection (f). The East Texas Region must contain all counties traversed by or east of Interstate Highway 35 or Interstate Highway 37, including Bosque, Coryell, Hood, Parker, Somervell, and Wise counties. The West Texas Region includes all of the state not contained in the East Texas Region or the El Paso Region. The El Paso Region includes El Paso County.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.264/h"> <num value="h">(h)</num> <content>Not later than January 1, 2000, the conservation commission shall allocate to each electric generating facility in each region a number of annual emissions allowances, with each allowance equal to one ton of sulphur dioxides or of nitrogen oxides emitted in a year, that permit emissions of the contaminants from the facility in that year. The conservation commission must allocate to each facility a number of emissions allowances equal to an emissions rate measured in pounds per million British thermal units divided by 2,000 and multiplied by the facility's total heat input in terms of million British thermal units during 1997. For the East Texas Region, the emissions rate shall be 0.14 pounds per million British thermal units for nitrogen oxides and 1.38 pounds per million British thermal units for sulphur dioxides. For the West Texas and El Paso regions, the emissions rate shall be 0.195 pounds per million British thermal units for nitrogen oxides. Allowances for sulphur dioxides may only be allocated among coal-fired facilities.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.264/i"> <num value="i">(i)</num> <chapeau>A person, municipal corporation, electric cooperative, or river authority that owns and operates an electric generating facility not covered by this section may elect to designate that facility to become subject to the requirements of this section and to receive emissions allowances for the purpose of complying with the emissions limitations prescribed by Subsection (c). The conservation commission shall adopt rules governing this election that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.264/1"> <num value="1">(1)</num> <content>require an owner or operator of an electric generating facility to designate to the conservation commission in its permit application under Subsection (e) any facilities that will become subject to this section;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.264/2"> <num value="2">(2)</num> <content>require the conservation commission, notwithstanding the allocation mechanism provided by Subsection (h), to allocate additional allowances to facilities governed by this subsection in an amount equal to each facility's actual emissions in tons in 1997;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.264/3"> <num value="3">(3)</num> <content>provide that any unit designated under this subsection may not transfer or bank allowances conserved as a result of reduced utilization or shutdown, except that the allowances may be transferred or carried forward for use in subsequent years to the extent that the reduced utilization or shutdown results from the replacement of thermal energy from the unit designated under this subsection with thermal energy generated by any other unit; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.264/4"> <num value="4">(4)</num> <content>provide that emissions reductions from electing facilities designated in this subsection may only be used to satisfy the emissions reductions for grandfathered facilities defined in Subsection (c) to the extent that reductions used to satisfy the limitations in Subsection (c) are beyond the requirements of any other state or federal standard, or both.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.264/j"> <num value="j">(j)</num> <content>The conservation commission by rule shall permit a facility to trade emissions allocations with other electric generating facilities only in the same region.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.264/k"> <num value="k">(k)</num> <chapeau>The conservation commission by rule shall provide methods for the conservation commission to determine whether a facility complies with the permit issued under this section. The rules must provide for:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.264/1"> <num value="1">(1)</num> <content>monitoring and reporting actual emissions of sulphur dioxides and nitrogen oxides from each facility;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.264/2"> <num value="2">(2)</num> <content>provisions for saving unused allowances for use in later years; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.264/3"> <num value="3">(3)</num> <content>a system for tracking traded allowances.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.264/l"> <num value="l">(l)</num> <content>A facility may not trade an unused allowance for a contaminant for use as a credit for another contaminant.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.264/m"> <num value="m">(m)</num> <content>A person possessing market power shall not withhold emissions allowances from the market in a manner that is unreasonably discriminatory or tends to unreasonably restrict, impair, or reduce the level of competition.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.264/n"> <num value="n">(n)</num> <chapeau>The conservation commission shall penalize a facility that emits an air contaminant that exceeds the facility's allowances for that contaminant by:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.264/1"> <num value="1">(1)</num> <content>enforcing an administrative penalty, in an amount determined by conservation commission rules, for each ton of air contaminant emissions by which the facility exceeds its allocated emissions allowances; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.264/2"> <num value="2">(2)</num> <content>reducing the facility's emissions allowances for the next year by an amount of emissions equal to the excessive emissions in the year the facility emitted the excessive air contaminants.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.264/o"> <num value="o">(o)</num> <chapeau>The conservation commission may penalize a facility that emits an air contaminant that exceeds the facility's allowances for that contaminant by:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.264/1"> <num value="1">(1)</num> <content>ordering the facility to cease operations; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scF/s39.264/2"> <num value="2">(2)</num> <content>taking other enforcement action provided by conservation commission rules.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.264/p"> <num value="p">(p)</num> <content>The conservation commission by rule shall provide for a facility in the El Paso Region to meet emissions allowances by using credits from emissions reductions achieved in Ciudad Juarez, United Mexican States.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.264/q"> <num value="q">(q)</num> <content>If the conservation commission or the United States Environmental Protection Agency determines that reductions in nitrogen oxides emissions in the El Paso Region otherwise required by this section would result in increased ambient ozone levels in El Paso County, facilities in the El Paso Region are exempt from the nitrogen oxides reduction requirements.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.264/r"> <num value="r">(r)</num> <content>An applicant for a permit under Subsection (e) shall publish notice of intent to obtain the permit in accordance with Section 382.056, Health and Safety Code. The conservation commission shall provide an opportunity for a public hearing and the submission of public comment and send notice of a decision on an application for a permit under Subsection (e) in the same manner as provided by Sections 382.0561 and 382.0562, Health and Safety Code. The conservation commission shall review and renew a permit issued under this section in accordance with Section 382.055, Health and Safety Code.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scF/s39.264/s"> <num value="s">(s)</num> <content>This section does not limit the authority of the conservation commission to require further reductions of nitrogen oxides, sulphur dioxides, or any other pollutant from generating facilities subject to this section or Section 39.263.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scF/s39.265"> <num value="39.265">Sec. 39.265.</num> <heading>RIGHTS NOT AFFECTED</heading> <content>This chapter is not intended to alter any rights of utilities to recover stranded costs from wholesale customers.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c39/scG"> <num value="G">SUBCHAPTER G.</num> <heading>SECURITIZATION</heading> <section identifier="/us/tx/ut/t2/c39/scG/s39.301"> <num value="39.301">Sec. 39.301.</num> <heading>PURPOSE</heading> <content>The purpose of this subchapter is to enable utilities to use securitization financing to recover regulatory assets, all other amounts determined under Section 39.262, and any amounts being recovered under a competition transition charge determined as a result of the proceedings under Sections 39.201 and 39.262. This type of debt will lower the carrying costs of the assets relative to the costs that would be incurred using conventional utility financing methods. The proceeds of the transition bonds shall be used solely for the purposes of reducing the amount of recoverable regulatory assets and other amounts, as determined by the commission in accordance with this chapter, through the refinancing or retirement of utility debt or equity. The commission shall ensure that securitization provides tangible and quantifiable benefits to ratepayers, greater than would have been achieved absent the issuance of transition bonds. The commission shall ensure that the structuring and pricing of the transition bonds result in the lowest transition bond charges consistent with market conditions and the terms of the financing order. The amount securitized may not exceed the present value of the revenue requirement over the life of the proposed transition bond associated with the regulatory assets or other amounts sought to be securitized. The present value calculation shall use a discount rate equal to the proposed interest rate on the transition bonds.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999. Amended by: Acts 2007, 80th Leg., R.S., Ch. 1186 (H.B. 624), Sec. 2, eff. June 15, 2007.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scG/s39.302"> <num value="39.302">Sec. 39.302.</num> <heading>DEFINITIONS</heading> <chapeau>In this subchapter:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scG/s39.302/1"> <num value="1">(1)</num> <content>"Assignee" means any individual, corporation, or other legally recognized entity to which an interest in transition property is transferred, other than as security, including any assignee of that party.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scG/s39.302/2"> <num value="2">(2)</num> <content>"Financing order" means an order of the commission adopted under Section 39.201 or 39.262 approving the issuance of transition bonds and the creation of transition charges for the recovery of qualified costs.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scG/s39.302/3"> <num value="3">(3)</num> <content>"Financing party" means a holder of transition bonds, including trustees, collateral agents, and other persons acting for the benefit of the holder.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scG/s39.302/4"> <num value="4">(4)</num> <content>"Qualified costs" means 100 percent of an electric utility's regulatory assets and 75 percent of its recoverable costs determined by the commission under Section 39.201 and any remaining amounts determined under Section 39.262 together with the costs of issuing, supporting, and servicing transition bonds and any costs of retiring and refunding the electric utility's existing debt and equity securities in connection with the issuance of transition bonds. The term includes the costs to the commission of acquiring professional services for the purpose of evaluating proposed transactions under Section 39.201 and this subchapter.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scG/s39.302/5"> <num value="5">(5)</num> <content>"Regulatory assets" means the generation-related portion of the Texas jurisdictional portion of the amount reported by the electric utility in its 1998 annual report on Securities and Exchange Commission Form 10-K as regulatory assets and liabilities, offset by the applicable portion of generation-related investment tax credits permitted under the Internal Revenue Code of 1986.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scG/s39.302/6"> <num value="6">(6)</num> <content>"Transition bonds" means bonds, debentures, notes, certificates of participation or of beneficial interest, or other evidences of indebtedness or ownership that are issued by an electric utility, its successors, or an assignee under a financing order, that have a term not longer than 15 years, and that are secured by or payable from transition property. If certificates of participation, beneficial interest, or ownership are issued, references in this subchapter to principal, interest, or premium shall refer to comparable amounts under those certificates.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scG/s39.302/7"> <num value="7">(7)</num> <content>"Transition charges" means nonbypassable amounts to be charged for the use or availability of electric services, approved by the commission under a financing order to recover qualified costs, that shall be collected by an electric utility, its successors, an assignee, or other collection agents as provided for in the financing order.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scG/s39.302/8"> <num value="8">(8)</num> <content>"Transition property" means the property described in Section 39.304.</content> </paragraph> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999. Amended by: Acts 2007, 80th Leg., R.S., Ch. 1186 (H.B. 624), Sec. 3, eff. June 15, 2007.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scG/s39.303"> <num value="39.303">Sec. 39.303.</num> <heading>FINANCING ORDERS; TERMS</heading> <subsection identifier="/us/tx/ut/t2/c39/scG/s39.303/a"> <num value="a">(a)</num> <content>The commission shall adopt a financing order, on application of a utility to recover the utility's regulatory assets and other amounts determined under Section 39.201 or 39.262, on making a finding that the total amount of revenues to be collected under the financing order is less than the revenue requirement that would be recovered over the remaining life of the regulatory assets or other amounts using conventional financing methods and that the financing order is consistent with the standards in Section 39.301.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scG/s39.303/b"> <num value="b">(b)</num> <content>The financing order shall detail the amount of regulatory assets and other amounts to be recovered and the period over which the nonbypassable transition charges shall be recovered, which period may not exceed 15 years. If an amount determined under Section 39.262 is subject to judicial review at the time of the securitization proceeding, the financing order shall include an adjustment mechanism requiring the utility to adjust its rates, other than transition charges, or provide credits, other than credits to transition charges, in a manner that would refund over the remaining life of the transition bonds any overpayments resulting from securitization of amounts in excess of the amount resulting from a final determination after completion of all appellate reviews. The adjustment mechanism may not affect the stream of revenue available to service the transition bonds. An adjustment may not be made under this subsection until all appellate reviews, including, if applicable, appellate reviews following a commission decision on remand of its original orders, have been completed.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scG/s39.303/c"> <num value="c">(c)</num> <content>Transition charges shall be collected and allocated among customers in the same manner as competition transition charges under Section 39.201.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scG/s39.303/d"> <num value="d">(d)</num> <content>A financing order shall become effective in accordance with its terms, and the financing order, together with the transition charges authorized in the order, shall thereafter be irrevocable and not subject to reduction, impairment, or adjustment by further action of the commission, except as permitted by Section 39.307.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scG/s39.303/e"> <num value="e">(e)</num> <content>The commission shall issue a financing order under Subsections (a) and (g) not later than 90 days after the utility files its request for the financing order.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scG/s39.303/f"> <num value="f">(f)</num> <content>A financing order is not subject to rehearing by the commission. A financing order may be reviewed by appeal only to a Travis County district court by a party to the proceeding filed within 15 days after the financing order is signed by the commission. The judgment of the district court may be reviewed only by direct appeal to the Supreme Court of Texas filed within 15 days after entry of judgment. All appeals shall be heard and determined by the district court and the Supreme Court of Texas as expeditiously as possible with lawful precedence over other matters. Review on appeal shall be based solely on the record before the commission and briefs to the court and shall be limited to whether the financing order conforms to the constitution and laws of this state and the United States and is within the authority of the commission under this chapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scG/s39.303/g"> <num value="g">(g)</num> <content>At the request of an electric utility, the commission may adopt a financing order providing for retiring and refunding transition bonds on making a finding that the future transition charges required to service the new transition bonds, including transaction costs, will be less than the future transition charges required to service the transition bonds being refunded. On the retirement of the refunded transition bonds, the commission shall adjust the related transition charges accordingly.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999. Amended by: Acts 2007, 80th Leg., R.S., Ch. 1186 (H.B. 624), Sec. 4, eff. June 15, 2007.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scG/s39.304"> <num value="39.304">Sec. 39.304.</num> <heading>PROPERTY RIGHTS</heading> <subsection identifier="/us/tx/ut/t2/c39/scG/s39.304/a"> <num value="a">(a)</num> <content>The rights and interests of an electric utility or successor under a financing order, including the right to impose, collect, and receive transition charges authorized in the order, shall be only contract rights until they are first transferred to an assignee or pledged in connection with the issuance of transition bonds, at which time they will become "transition property."</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scG/s39.304/b"> <num value="b">(b)</num> <content>Transition property shall constitute a present property right for purposes of contracts concerning the sale or pledge of property, even though the imposition and collection of transition charges depends on further acts of the utility or others that have not yet occurred. The financing order shall remain in effect and the property shall continue to exist for the same period as the pledge of the state described in Section 39.310.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scG/s39.304/c"> <num value="c">(c)</num> <content>All revenues and collections resulting from transition charges shall constitute proceeds only of the transition property arising from the financing order.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scG/s39.305"> <num value="39.305">Sec. 39.305.</num> <heading>NO SETOFF</heading> <content>The interest of an assignee or pledgee in transition property and in the revenues and collections arising from that property are not subject to setoff, counterclaim, surcharge, or defense by the electric utility or any other person or in connection with the bankruptcy of the electric utility or any other entity. A financing order shall remain in effect and unabated notwithstanding the bankruptcy of the electric utility, its successors, or assignees.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scG/s39.306"> <num value="39.306">Sec. 39.306.</num> <heading>NO BYPASS</heading> <content>A financing order shall include terms ensuring that the imposition and collection of transition charges authorized in the order shall be nonbypassable.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scG/s39.307"> <num value="39.307">Sec. 39.307.</num> <heading>TRUE-UP</heading> <content>A financing order shall include a mechanism requiring that transition charges be reviewed and adjusted at least annually, within 45 days of the anniversary date of the issuance of the transition bonds, to correct any overcollections or undercollections of the preceding 12 months and to ensure the expected recovery of amounts sufficient to timely provide all payments of debt service and other required amounts and charges in connection with the transition bonds.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scG/s39.308"> <num value="39.308">Sec. 39.308.</num> <heading>TRUE SALE</heading> <content>An agreement by an electric utility or assignee to transfer transition property that expressly states that the transfer is a sale or other absolute transfer signifies that the transaction is a true sale and is not a secured transaction and that title, legal and equitable, has passed to the entity to which the transition property is transferred. This true sale shall apply regardless of whether the purchaser has any recourse against the seller, or any other term of the parties' agreement, including the seller's retention of an equity interest in the transition property, the fact that the electric utility acts as the collector of transition charges relating to the transition property, or the treatment of the transfer as a financing for tax, financial reporting, or other purposes.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scG/s39.309"> <num value="39.309">Sec. 39.309.</num> <heading>SECURITY INTERESTS; ASSIGNMENT; COMMINGLING; DEFAULT</heading> <subsection identifier="/us/tx/ut/t2/c39/scG/s39.309/a"> <num value="a">(a)</num> <content>Transition property does not constitute an account or general intangible under Section 9.106, Business & Commerce Code. The creation, granting, perfection, and enforcement of liens and security interests in transition property are governed by this section and not by the Business & Commerce Code.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scG/s39.309/b"> <num value="b">(b)</num> <content>A valid and enforceable lien and security interest in transition property may be created only by a financing order and the execution and delivery of a security agreement with a financing party in connection with the issuance of transition bonds. The lien and security interest shall attach automatically from the time that value is received for the bonds and, on perfection through the filing of notice with the secretary of state in accordance with the rules prescribed under Subsection (d), shall be a continuously perfected lien and security interest in the transition property and all proceeds of the property, whether accrued or not, shall have priority in the order of filing and take precedence over any subsequent judicial or other lien creditor. If notice is filed within 10 days after value is received for the transition bonds, the security interest shall be perfected retroactive to the date value was received, otherwise, the security interest shall be perfected as of the date of filing.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scG/s39.309/c"> <num value="c">(c)</num> <content>Transfer of an interest in transition property to an assignee shall be perfected against all third parties, including subsequent judicial or other lien creditors, when the financing order becomes effective, transfer documents have been delivered to the assignee, and a notice of that transfer has been filed in accordance with the rules prescribed under Subsection (d); provided, however, that if notice of the transfer has not been filed in accordance with this subsection within 10 days after the delivery of transfer documentation, the transfer of the interest is not perfected against third parties until the notice is filed.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scG/s39.309/d"> <num value="d">(d)</num> <content>The secretary of state shall implement this section by establishing and maintaining a separate system of records for the filing of notices under this section and prescribing the rules for those filings based on Chapter 9, Business & Commerce Code, adapted to this subchapter and using the terms defined in this subchapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scG/s39.309/e"> <num value="e">(e)</num> <content>The priority of a lien and security interest perfected under this section is not impaired by any later modification of the financing order under Section 39.307 or by the commingling of funds arising from transition charges with other funds, and any other security interest that may apply to those funds shall be terminated when they are transferred to a segregated account for the assignee or a financing party. If transition property has been transferred to an assignee, any proceeds of that property shall be held in trust for the assignee.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scG/s39.309/f"> <num value="f">(f)</num> <content>If a default or termination occurs under the transition bonds, the financing parties or their representatives may foreclose on or otherwise enforce their lien and security interest in any transition property as if they were secured parties under Chapter 9, Business & Commerce Code, and the commission may order that amounts arising from transition charges be transferred to a separate account for the financing parties' benefit, to which their lien and security interest shall apply. On application by or on behalf of the financing parties, a district court of Travis County shall order the sequestration and payment to them of revenues arising from the transition charges.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scG/s39.310"> <num value="39.310">Sec. 39.310.</num> <heading>PLEDGE OF STATE</heading> <content>Transition bonds are not a debt or obligation of the state and are not a charge on its full faith and credit or taxing power. The state pledges, however, for the benefit and protection of financing parties and the electric utility, that it will not take or permit any action that would impair the value of transition property, or, except as permitted by Section 39.307, reduce, alter, or impair the transition charges to be imposed, collected, and remitted to financing parties, until the principal, interest and premium, and any other charges incurred and contracts to be performed in connection with the related transition bonds have been paid and performed in full. Any party issuing transition bonds is authorized to include this pledge in any documentation relating to those bonds.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scG/s39.311"> <num value="39.311">Sec. 39.311.</num> <heading>TAX EXEMPTION</heading> <content>Transactions involving the transfer and ownership of transition property and the receipt of transition charges are exempt from state and local income, sales, franchise, gross receipts, and other taxes or similar charges.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scG/s39.312"> <num value="39.312">Sec. 39.312.</num> <heading>NOT PUBLIC UTILITY</heading> <content>An assignee or financing party may not be considered to be a public utility or person providing electric service solely by virtue of the transactions described in this subchapter.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scG/s39.313"> <num value="39.313">Sec. 39.313.</num> <heading>SEVERABILITY</heading> <content>Effective on the date the first utility transition bonds are issued under this subchapter, if any provision in this title or portion of this title is held to be invalid or is invalidated, superseded, replaced, repealed, or expires for any reason, that occurrence does not affect the validity or continuation of this subchapter, Section 39.201, 39.251, 39.252, or 39.262, or any part of those provisions, or any other provision of this title that is relevant to the issuance, administration, payment, retirement, or refunding of transition bonds or to any actions of the electric utility, its successors, an assignee, a collection agent, or a financing party, which shall remain in full force and effect.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c39/scH"> <num value="H">SUBCHAPTER H.</num> <heading>CERTIFICATION AND REGISTRATION; PENALTIES</heading> <section identifier="/us/tx/ut/t2/c39/scH/s39.351"> <num value="39.351">Sec. 39.351.</num> <heading>REGISTRATION OF POWER GENERATION COMPANIES</heading> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.351/a"> <num value="a">(a)</num> <chapeau>A person may not generate electricity unless:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scH/s39.351/1"> <num value="1">(1)</num> <content>the person is registered with the commission as a power generation company in accordance with this section; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scH/s39.351/2"> <num value="2">(2)</num> <content>the electricity is generated as part of a registered aggregate distributed energy resource under Section 39.3515.</content> <continuation>(a-1) A person may register as a power generation company by filing the following information with the commission:</continuation> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scH/s39.351/1"> <num value="1">(1)</num> <content>a description of the location of any facility used to generate electricity;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scH/s39.351/2"> <num value="2">(2)</num> <content>a description of the type of services provided;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scH/s39.351/3"> <num value="3">(3)</num> <content>a copy of any information filed with the Federal Energy Regulatory Commission in connection with registration with that commission; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scH/s39.351/4"> <num value="4">(4)</num> <content>any other information required by commission rule, provided that in requiring that information the commission shall protect the competitive process in a manner that ensures the confidentiality of competitively sensitive information.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.351/b"> <num value="b">(b)</num> <content>A power generation company shall comply with the reliability standards adopted by an independent organization certified by the commission to ensure the reliability of the regional electrical network for a power region in which the power generation company is generating or selling electricity.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.351/c"> <num value="c">(c)</num> <content>The commission may establish simplified filing requirements for distributed natural gas generation facilities.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 890 (S.B. 365), Sec. 4, eff. September 1, 2011. Acts 2023, 88th Leg., R.S., Ch. 945 (S.B. 1699), Sec. 3, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scH/s39.3515"> <num value="39.3515">Sec. 39.3515.</num> <heading>AGGREGATE DISTRIBUTED ENERGY RESOURCES</heading> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.3515/a"> <num value="a">(a)</num> <chapeau>A person who aggregates distributed energy resources:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scH/s39.3515/1"> <num value="1">(1)</num> <content>is not required to register as a power generation company to aggregate the resources;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scH/s39.3515/2"> <num value="2">(2)</num> <content>shall comply with rules, guidelines, and registration requirements established by the commission and by Chapter 17 and this chapter; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scH/s39.3515/3"> <num value="3">(3)</num> <content>remains accountable for compliance with the applicable statutes and rules by a subcontractor, an agent, or any other entity compensated by the person for activities conducted on the person's behalf.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.3515/b"> <num value="b">(b)</num> <content>The commission may establish rules and registration requirements for the aggregation of distributed energy resources.</content> </subsection> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 945 (S.B. 1699), Sec. 4, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scH/s39.352"> <num value="39.352">Sec. 39.352.</num> <heading>CERTIFICATION OF RETAIL ELECTRIC PROVIDERS</heading> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.352/a"> <num value="a">(a)</num> <content>After the date of customer choice, a person, including an affiliate of an electric utility, may not provide retail electric service in this state unless the person is certified by the commission as a retail electric provider, in accordance with this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.352/b"> <num value="b">(b)</num> <chapeau>The commission shall issue a certificate to provide retail electric service to a person applying for certification who demonstrates:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scH/s39.352/1"> <num value="1">(1)</num> <content>the financial and technical resources to provide continuous and reliable electric service to customers in the area for which the certification is sought;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scH/s39.352/2"> <num value="2">(2)</num> <content>the managerial and technical ability to supply electricity at retail in accordance with customer contracts;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scH/s39.352/3"> <num value="3">(3)</num> <content>the resources needed to meet the customer protection requirements of this title; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scH/s39.352/4"> <num value="4">(4)</num> <content>ownership or lease of an office located within this state for the purpose of providing customer service, accepting service of process, and making available in that office books and records sufficient to establish the retail electric provider's compliance with the requirements of this subchapter.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.352/c"> <num value="c">(c)</num> <content>A person applying for certification under this section shall comply with all applicable customer protection provisions, disclosure requirements, and marketing guidelines established by the commission and by this title.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.352/d"> <num value="d">(d)</num> <content>Notwithstanding Subsections (b)(1)-(3), if a retail electric provider files with the commission a signed, notarized affidavit from each retail customer with which it has contracted to provide one megawatt or more of capacity stating that the customer is satisfied that the retail electric provider meets the standards prescribed by Subsections (b)(1)-(3) and Subsection (c), the retail electric provider shall be certified for purposes of serving those customers only, so long as it demonstrates that it meets the requirements of Subsection (b)(4).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.352/e"> <num value="e">(e)</num> <content>A retail electric provider may apply for certification any time after September 1, 2000.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.352/f"> <num value="f">(f)</num> <content>The commission shall use any information required in this section in a manner that ensures the confidentiality of competitively sensitive information.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.352/g"> <num value="g">(g)</num> <content>If a retail electric provider serves an aggregate load in excess of 300 megawatts within this state, not less than five percent of the load in megawatt hours must consist of residential customers. This requirement applies to an affiliated retail electric provider only with respect to load served outside of the electric utility's service area, and, in relation to that load, the affiliated retail electric provider shall meet the requirements of this subsection by serving residential customers outside of the electric utility's service area. For the purpose of this subsection, the load served by retail electric providers that are under common ownership shall be combined. A retail electric provider may meet the requirements of this subsection by demonstrating on an annual basis that it serves residential load amounting to five percent of its total load or by demonstrating that another retail electric provider serves sufficient qualifying residential load on its behalf. Qualifying residential load may not include customers served by an affiliated retail electric provider in its own service area. Each retail electric provider shall file reports with the commission that are necessary to implement this subsection. This subsection applies for 36 months after retail competition begins. The commission shall adopt rules to implement this subsection.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999. Amended by: Acts 2019, 86th Leg., R.S., Ch. 467 (H.B. 4170), Sec. 16.002, eff. September 1, 2019.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scH/s39.353"> <num value="39.353">Sec. 39.353.</num> <heading>REGISTRATION OF AGGREGATORS</heading> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.353/a"> <num value="a">(a)</num> <content>A person may not provide aggregation services in the state unless the person is registered with the commission as an aggregator.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.353/b"> <num value="b">(b)</num> <content>In this subchapter, "aggregator" means a person joining two or more customers, other than municipalities and political subdivision corporations, into a single purchasing unit to negotiate the purchase of electricity from retail electric providers. Aggregators may not sell or take title to electricity. Retail electric providers are not aggregators.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.353/c"> <num value="c">(c)</num> <content>A person registering under this section shall comply with all customer protection provisions, all disclosure requirements, and all marketing guidelines established by the commission and by this title.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.353/d"> <num value="d">(d)</num> <content>The commission shall establish terms and conditions it determines necessary to regulate the reliability and integrity of aggregators in the state by June 1, 2000.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.353/e"> <num value="e">(e)</num> <content>An aggregator may register any time after September 1, 2000.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.353/f"> <num value="f">(f)</num> <content>The commission shall have up to 60 days to process applications for registration filed by aggregators.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.353/g"> <num value="g">(g)</num> <content>Registration is not required of a customer that is aggregating loads from its own location or facilities.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.353/h"> <num value="h">(h)</num> <content>The commission shall work with the Texas Department of Economic Development to communicate information about opportunities for operation as aggregators to potential new aggregators, including small and historically underutilized businesses.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scH/s39.3535"> <num value="39.3535">Sec. 39.3535.</num> <heading>MILITARY BASES AGGREGATORS</heading> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.3535/a"> <num value="a">(a)</num> <content>In this section, "military bases aggregator" means a person joining two or more military bases that are located in areas of the state offering customer choice under this chapter into a single purchasing unit to negotiate electricity purchases from retail electric providers.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.3535/b"> <num value="b">(b)</num> <content>It is the policy of this state to encourage military bases located in areas of the state offering customer choice under this chapter to aggregate their facilities into a single purchasing unit as a method to reduce costs of electricity consumed by those bases. The commission shall provide assistance to a military bases aggregator regarding the evaluation of offers from retail electric providers on the request of the military bases aggregator.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.3535/c"> <num value="c">(c)</num> <content>An aggregator registered under another section of this subchapter may provide aggregation services to military bases.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.3535/d"> <num value="d">(d)</num> <content>A person, including a state agency, may register as a military bases aggregator to provide aggregation services exclusively to military bases located in areas of the state offering customer choice under this chapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.3535/e"> <num value="e">(e)</num> <content>A person registered as a military bases aggregator under Subsection (d) is not required to comply with customer protection provisions, disclosure requirements, or marketing guidelines prescribed by this title or established by the commission while providing aggregation services exclusively to military bases.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.3535/f"> <num value="f">(f)</num> <content>The commission shall expedite consideration of an application submitted by an applicant for registration under Subsection (d).</content> </subsection> <sourceCredit>Added by Acts 2003, 78th Leg., ch. 149, Sec. 22, eff. May 27, 2003.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scH/s39.354"> <num value="39.354">Sec. 39.354.</num> <heading>REGISTRATION OF MUNICIPAL AGGREGATORS</heading> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.354/a"> <num value="a">(a)</num> <content>A municipal aggregator may not provide aggregation services in the state unless the municipal aggregator registers with the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.354/b"> <num value="b">(b)</num> <content>In this section, "municipal aggregator" means a person authorized by two or more municipal governing bodies to join the bodies into a single purchasing unit to negotiate the purchase of electricity from retail electric providers or aggregation by a municipality under Chapter 304, Local Government Code.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.354/c"> <num value="c">(c)</num> <content>A municipal aggregator may register any time after September 1, 2000.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999; Acts 2001, 77th Leg., ch. 1420, Sec. 21.002(22), eff. Sept. 1, 2001.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scH/s39.3545"> <num value="39.3545">Sec. 39.3545.</num> <heading>REGISTRATION OF POLITICAL SUBDIVISION AGGREGATORS</heading> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.3545/a"> <num value="a">(a)</num> <content>A political subdivision aggregator may not provide aggregation services in the state unless the political subdivision aggregator registers with the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.3545/b"> <num value="b">(b)</num> <content>In this section, "political subdivision aggregator" means a person or political subdivision corporation authorized by two or more political subdivision governing bodies to join the bodies into a single purchasing unit or multiple purchasing units to negotiate the purchase of electricity from retail electric providers for the facilities of the aggregated political subdivisions or aggregation by a person or political subdivision under Chapter 304, Local Government Code.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.3545/c"> <num value="c">(c)</num> <content>A political subdivision aggregator may register any time after September 1, 2000.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999; Acts 2001, 77th Leg., ch. 1420, Sec. 21.002(23), eff. Sept. 1, 2001.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scH/s39.355"> <num value="39.355">Sec. 39.355.</num> <heading>REGISTRATION OF POWER MARKETERS</heading> <content>A person may not sell electric energy at wholesale as a power marketer unless the person registers with the commission pursuant to Section 35.032.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scH/s39.3555"> <num value="39.3555">Sec. 39.3555.</num> <heading>REGISTRATION OF BROKERS</heading> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.3555/a"> <num value="a">(a)</num> <content>In this section, "brokerage services" means providing advice or procurement services to, or acting on behalf of, a retail electric customer regarding the selection of a retail electric provider, or a product or service offered by a retail electric provider.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.3555/b"> <num value="b">(b)</num> <content>A person may not provide brokerage services, including brokerage services offered online, in this state for compensation or other consideration unless the person is registered with the commission as a broker.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.3555/c"> <num value="c">(c)</num> <content>A retail electric provider may not register as a broker. A broker may not sell or take title to electric energy.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.3555/d"> <num value="d">(d)</num> <chapeau>A retail electric provider may not knowingly provide bids or offers to a person who:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scH/s39.3555/1"> <num value="1">(1)</num> <content>provides brokerage services in this state for compensation or other consideration; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scH/s39.3555/2"> <num value="2">(2)</num> <content>has not registered as a broker with the commission.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.3555/e"> <num value="e">(e)</num> <content>A person who registers under this section shall comply with customer protection provisions, disclosure requirements, and marketing guidelines established by the commission and by this chapter and Chapter 17.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.3555/f"> <num value="f">(f)</num> <content>The commission shall adopt rules as necessary to implement this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.3555/g"> <num value="g">(g)</num> <content>The commission shall process a person's application for registration as a broker not later than the 60th day after the date the person files the application.</content> </subsection> <sourceCredit>Added by Acts 2019, 86th Leg., R.S., Ch. 1373 (S.B. 1497), Sec. 1, eff. September 1, 2019.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scH/s39.356"> <num value="39.356">Sec. 39.356.</num> <heading>REVOCATION OF CERTIFICATION</heading> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.356/a"> <num value="a">(a)</num> <content>The commission may suspend, revoke, or amend a retail electric provider's certificate for significant violations of this title or the rules adopted under this title or of any reliability standard adopted by an independent organization certified by the commission to ensure the reliability of a power region's electrical network, including the failure to observe any scheduling, operating, planning, reliability, or settlement protocols established by the independent organization. The commission may also suspend or revoke a retail electric provider's certificate if the provider no longer has the financial or technical capability to provide continuous and reliable electric service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.356/b"> <num value="b">(b)</num> <content>The commission may suspend or revoke a power generation company's registration for significant violations of this title or the rules adopted under this title or of the reliability standards adopted by an independent organization certified by the commission to ensure the reliability of a power region's electrical network, including the failure to observe any scheduling, operating, planning, reliability, or settlement protocols established by the independent organization.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.356/c"> <num value="c">(c)</num> <content>The commission may suspend or revoke an aggregator's registration for significant violations of this title or of the rules adopted under this title.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scH/s39.357"> <num value="39.357">Sec. 39.357.</num> <heading>ADMINISTRATIVE PENALTY</heading> <content>In addition to the suspension, revocation, or amendment of a certification, the commission may impose an administrative penalty, as provided by Section 15.023, for violations described by Section 39.356.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scH/s39.358"> <num value="39.358">Sec. 39.358.</num> <heading>LOCAL REGISTRATION OF RETAIL ELECTRIC PROVIDER</heading> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.358/a"> <num value="a">(a)</num> <content>A municipality may require a retail electric provider to register with the municipality as a condition of serving residents of the municipality. The municipality may assess a reasonable administrative fee for this purpose.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.358/b"> <num value="b">(b)</num> <content>The municipality may suspend or revoke a retail electric provider's registration and operation in that municipality for significant violations of this chapter or the rules adopted under this chapter.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scH/s39.359"> <num value="39.359">Sec. 39.359.</num> <heading>BILL PAYMENT ASSISTANCE FOR BURNED VETERANS</heading> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.359/a"> <num value="a">(a)</num> <content>A retail electric provider may establish a bill payment assistance program for a customer who is a military veteran who a medical doctor certifies has a significantly decreased ability to regulate the individual's body temperature because of severe burns received in combat.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.359/b"> <num value="b">(b)</num> <content>The commission shall compile a list of programs described by Subsection (a) that are available from retail electric providers. The commission shall publish the list on the commission's Internet website and the office shall provide on the office's Internet website a link to the list.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.359/c"> <num value="c">(c)</num> <content>A retail electric provider shall provide to the commission information necessary to compile the list in the form, manner, and frequency the commission by rule requires.</content> </subsection> <sourceCredit>Added by Acts 2013, 83rd Leg., R.S., Ch. 597 (S.B. 981), Sec. 2, eff. June 14, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scH/s39.360"> <num value="39.360">Sec. 39.360.</num> <heading>TRANSACTIONS WITH CERTAIN FOREIGN-OWNED COMPANIES IN CONNECTION WITH CRITICAL INFRASTRUCTURE</heading> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.360/a"> <num value="a">(a)</num> <content>In this section, "company" and "critical infrastructure" have the meanings assigned by Section 117.001, Business & Commerce Code.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.360/b"> <num value="b">(b)</num> <content>An independent organization certified under Section 39.151 may not register a business entity as a market participant or maintain the registration of a business entity to operate as a market participant in the power region for which the independent organization is certified unless the business entity attests that the entity complies with Chapter 117, Business & Commerce Code.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.360/c"> <num value="c">(c)</num> <content>An independent organization certified under Section 39.151 shall require as a condition of operating as a market participant in the power region for which the independent organization is certified that a business entity report to the independent organization the purchase of any critical electric grid equipment or service from a company described by Section 117.002(a)(2), Business & Commerce Code.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.360/d"> <num value="d">(d)</num> <content>For each purchase reported by a business entity under Subsection (c), the business entity shall submit an attestation to the independent organization that the purchase will not result in access to or control of its critical electric grid equipment by a company described by Section 117.002(a)(2), Business & Commerce Code, excluding access specifically allowed by the business entity for product warranty and support purposes.</content> <continuation>(d-1) An independent organization certified under Section 39.151 may:</continuation> <paragraph identifier="/us/tx/ut/t2/c39/scH/s39.360/1"> <num value="1">(1)</num> <content>require as a condition of market participant registration that a business entity provide the independent organization with additional information to confirm the accuracy of an attestation or report required under Subsection (b), (c), or (d); and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scH/s39.360/2"> <num value="2">(2)</num> <content>disclose information received under Subdivision (1) or any other relevant information to the attorney general or the commission.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.360/e"> <num value="e">(e)</num> <content>Notwithstanding any other law but subject to Section 39.151(d-4)(6), an independent organization certified under Section 39.151 may immediately suspend or terminate a business entity's registration as a market participant or access to any of the independent organization's systems if the independent organization has a reasonable suspicion that the business entity is a company described by Section 2275.0102(a)(2), Government Code.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.360/f"> <num value="f">(f)</num> <content>A contractual provision that limits or contradicts Subsection (e) is contrary to public policy and is unenforceable and void.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.360/g"> <num value="g">(g)</num> <content>An independent organization certified under Section 39.151 may adopt guidelines or procedures relating to the requirements in this section, including the qualification of electric grid equipment or services as critical.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.360/h"> <num value="h">(h)</num> <content>The commission shall adopt any rules necessary to administer this section or authorize an independent organization to carry out a duty imposed by this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.360/i"> <num value="i">(i)</num> <content>The attorney general may conduct periodic audits of the attestations required by Subsection (d) and may prioritize the audits as necessary to protect critical infrastructure.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.360/j"> <num value="j">(j)</num> <content>On request of an independent organization certified under Section 39.151, the attorney general may investigate the accuracy or sufficiency of information provided under this section to the independent organization and disclose any new information obtained in relation to the investigation to the independent organization or the commission.</content> </subsection> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 464 (S.B. 2013), Sec. 5, eff. June 9, 2023. Amended by: Acts 2025, 89th Leg., R.S., Ch. 204 (H.B. 1620), Sec. 21.001, eff. September 1, 2025. Acts 2025, 89th Leg., R.S., Ch. 1020 (S.B. 2368), Sec. 5, eff. September 1, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scH/s39.361"> <num value="39.361">Sec. 39.361.</num> <heading>LARGE FLEXIBLE LOAD REGISTRATION</heading> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.361/a"> <num value="a">(a)</num> <chapeau>In this section:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scH/s39.361/1"> <num value="1">(1)</num> <content>"Virtual currency" has the meaning assigned by Section 12.001, Business & Commerce Code.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scH/s39.361/2"> <num value="2">(2)</num> <content>"Virtual currency mining facility" means a facility that uses electronic equipment to add virtual currency transactions to a distributed ledger.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.361/b"> <num value="b">(b)</num> <chapeau>The commission by rule shall require a person operating a virtual currency mining facility who enters into an agreement for retail electric service in the ERCOT power region to register the facility receiving service as a large flexible load under this section if:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scH/s39.361/1"> <num value="1">(1)</num> <content>the facility requires a total load of more than 75 megawatts; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scH/s39.361/2"> <num value="2">(2)</num> <content>the facility load is interruptible.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.361/c"> <num value="c">(c)</num> <chapeau>The rules must require a person described by Subsection (b) to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scH/s39.361/1"> <num value="1">(1)</num> <content>register the large flexible load with the commission not later than one business day after the date the agreement begins; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scH/s39.361/2"> <num value="2">(2)</num> <chapeau>provide the commission with:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c39/scH/s39.361/A"> <num value="A">(A)</num> <content>the location of the facility; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scH/s39.361/B"> <num value="B">(B)</num> <content>the anticipated demand from the facility for the five-year period beginning on the date of the registration.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.361/d"> <num value="d">(d)</num> <chapeau>The commission by rule shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scH/s39.361/1"> <num value="1">(1)</num> <content>adopt criteria for determining whether a load is interruptible for the purposes of this section based on whether it is possible for the facility operator to choose to interrupt the load; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scH/s39.361/2"> <num value="2">(2)</num> <content>establish a method to ensure compliance with this section.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scH/s39.361/e"> <num value="e">(e)</num> <content>The commission may share with an independent organization certified under Section 39.151 registration information received under this section.</content> </subsection> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 463 (S.B. 1929), Sec. 1, eff. September 1, 2023. Redesignated from Utilities Code, Section 39.360 by Acts 2025, 89th Leg., R.S., Ch. 204 (H.B. 1620), Sec. 22.001(71), eff. September 1, 2025.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c39/scI"> <num value="I">SUBCHAPTER I.</num> <heading>PROVISIONS FOR CERTAIN NON-ERCOT UTILITIES</heading> <section identifier="/us/tx/ut/t2/c39/scI/s39.401"> <num value="39.401">Sec. 39.401.</num> <heading>APPLICABILITY</heading> <content>This subchapter shall apply to investor-owned electric utilities operating solely outside of ERCOT having fewer than six synchronous interconnections with voltage levels above 69 kilovolts systemwide on the effective date of this subchapter. The legislature finds that circumstances exist that require that areas served by such utilities be treated as competitive development areas in which it is not in the public interest to transition to full retail customer choice at this time.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999. Amended by Acts 2001, 77th Leg., ch. 1041, Sec. 1, eff. June 15, 2001.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scI/s39.402"> <num value="39.402">Sec. 39.402.</num> <heading>REGULATION OF UTILITY AND TRANSITION TO COMPETITION</heading> <subsection identifier="/us/tx/ut/t2/c39/scI/s39.402/a"> <num value="a">(a)</num> <content>Until the date on which an electric utility subject to this subchapter is authorized by the commission to implement customer choice, the rates of the utility shall be regulated under traditional cost of service regulation and the utility is subject to all applicable regulatory authority prescribed by this subtitle and Subtitle A, including Chapters 14, 32, 33, 36, and 37. Until the date on which an electric utility subject to this subchapter implements customer choice, the provisions of this chapter, other than this subchapter, Sections 39.1516 and 39.905, and the provisions relating to the duty to obtain a permit from the Texas Commission on Environmental Quality for an electric generating facility and to reduce emissions from an electric generating facility, shall not apply to that utility. That portion of any commission order entered before September 1, 2001, to comply with this subchapter shall be null and void.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scI/s39.402/b"> <num value="b">(b)</num> <content>Until the date on which an electric utility subject to this subchapter implements customer choice, Section 33.008 does not apply and the utility shall pay franchise fees to a municipality as required by the utility's franchise agreement with the municipality. After the date on which an electric utility subject to this subchapter implements customer choice, Section 33.008 applies. However, for purposes of computing the franchise fees as provided by Section 33.008(b), the calendar year immediately preceding the implementation of customer choice shall be substituted for the year 1998.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scI/s39.402/c"> <num value="c">(c)</num> <content>On or after January 1, 2007, an electric utility subject to this subchapter may choose to participate in customer choice. An electric utility that chooses to participate in customer choice shall file a transition to competition plan with the commission. This transition to competition plan shall identify how utilities subject to this subchapter intend to mitigate market power and achieve full customer choice, including specific alternatives for constructing additional transmission facilities, auctioning rights to generation capacity, divesting generation capacity, or any other measure that is consistent with the public interest. The utility shall also include in the transition to competition plan a provision to establish a price to beat for residential customers and commercial customers having a peak load of 1,000 kilowatts or less. The commission may prescribe additional information or provisions that must be included in the plan. The commission shall approve, modify, or reject a plan within 180 days after the date of a filing under this section; provided, however, that if a hearing is requested by any party to the proceeding, the 180-day deadline will be extended one day for each day of hearings. The transition to competition plan may be updated or amended annually, subject to commission approval until the applicable power region is certified as a qualifying power region under Section 39.152.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scI/s39.402/d"> <num value="d">(d)</num> <content>On implementation of customer choice, an electric utility subject to this subchapter is subject to the provisions of this subtitle and Subtitle A to the same extent as other electric utilities, including the provisions of Chapter 37 concerning certificates of convenience and necessity.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scI/s39.402/e"> <num value="e">(e)</num> <chapeau>Notwithstanding Subsection (a), an electric utility subject to this subchapter that elects to deploy advanced metering and meter information networks may recover reasonable and necessary costs incurred in deploying advanced metering and meter information networks. An electric utility that elects to deploy advanced metering or meter information networks is subject to commission rules adopted under Sections 39.107(h) and (k). The commission shall ensure that any deployment plan approved under this section and any related customer surcharge:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scI/s39.402/1"> <num value="1">(1)</num> <content>are not applicable to customer accounts that receive service at transmission voltage; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scI/s39.402/2"> <num value="2">(2)</num> <chapeau>are consistent with commission rules related to advanced metering systems regarding:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c39/scI/s39.402/A"> <num value="A">(A)</num> <content>customer protections;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scI/s39.402/B"> <num value="B">(B)</num> <content>data security, privacy, and ownership; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scI/s39.402/C"> <num value="C">(C)</num> <content>options given consumers to continue to receive service through a non-advanced meter.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scI/s39.402/f"> <num value="f">(f)</num> <content>An electric utility subject to this subchapter that elects to deploy an advanced meter information network shall deploy the network as rapidly as practicable to allow customers to better manage energy use and control costs.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999. Amended by Acts 2001, 77th Leg., ch. 1041, Sec. 1, eff. June 15, 2001. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 182 (S.B. 1150), Sec. 1, eff. May 28, 2011. Acts 2019, 86th Leg., R.S., Ch. 170 (H.B. 986), Sec. 1, eff. May 24, 2019. Acts 2019, 86th Leg., R.S., Ch. 610 (S.B. 936), Sec. 4, eff. September 1, 2019. Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 28, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scI/s39.407"> <num value="39.407">Sec. 39.407.</num> <heading>CUSTOMER CHOICE AND RELEVANT MARKET AND RELATED MATTERS</heading> <subsection identifier="/us/tx/ut/t2/c39/scI/s39.407/a"> <num value="a">(a)</num> <chapeau>If an electric utility chooses on or after January 1, 2007, to participate in customer choice, the commission may not authorize customer choice until the applicable power region has been certified as a qualifying power region under Section 39.152(a). Except as otherwise provided by this subsection, the commission shall certify that the requirements of Section 39.152(a)(3) are met for electric utilities subject to this subchapter only upon a finding that the total capacity owned and controlled by each such electric utility and its affiliates does not exceed 20 percent of the total installed generation capacity within the constrained geographic region served by each such electric utility plus the total available transmission capacity capable of delivering firm power and energy to that constrained geographic region. Not later than May 1, 2002, each electric utility subject to this subchapter shall submit to the electric utility restructuring legislative oversight committee an analysis of the needed transmission facilities necessary to make the electric utility's service area transmission capability comparable to areas within the ERCOT power region. On or after September 1, 2003, each electric utility subject to this subchapter shall file the utility's plans to develop the utility's transmission interconnections with the utility's power region or other adjacent power regions. The commission shall review the plan and not later than the 180th day after the date the plan is filed, determine the additional transmission facilities necessary to provide access to power and energy that is comparable to the access provided in areas within the ERCOT power region; provided, however, that if a hearing is requested by any party to the proceeding, the 180-day deadline will be extended one day for each day of hearings. The commission shall, as a part of the commission's approval of the plan, approve a rate rider mechanism for the recovery of the incremental costs of those facilities after the facilities are completed and in-service. A finding of need under this subsection shall meet the requirements of Sections 37.056(c)(1), (2), and (4)(E). The commission may certify that the requirements of Section 39.152(a)(3) are met for electric utilities subject to this subchapter if the commission finds that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scI/s39.407/1"> <num value="1">(1)</num> <content>each such utility has sufficient transmission facilities to provide customers access to power and energy from capacity controlled by suppliers not affiliated with the incumbent utility that is comparable to the access to power and energy from capacity controlled by suppliers not affiliated with the incumbent utilities in areas of the ERCOT power region; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scI/s39.407/2"> <num value="2">(2)</num> <content>the total capacity owned and controlled by each such electric utility and its affiliates does not exceed 20 percent of the total installed generation capacity within the power region.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scI/s39.407/b"> <num value="b">(b)</num> <content>In the area of a power region served by an electric utility subject to this subchapter, the electric utility may not choose to participate in customer choice unless the affiliated power generation company makes a commitment to maintain and does maintain rates that are based on cost of service for any electric cooperative or municipally owned utility that was a wholesale customer on the date the utility chooses to participate in customer choice and was purchasing power at rates that were based on cost of service. This subsection requires a power generation company to sell power at rates that are based on cost of service, notwithstanding the expiration of a contract for that service, until the requirements of Section 39.152(a) are met.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scI/s39.407/c"> <num value="c">(c)</num> <content>If the requirements of Section 39.152(a) have not been met for an electric utility subject to this subchapter when the electric utility chooses to participate in customer choice, then any power generation company in the power region affiliated with an electric utility subject to this subchapter shall maintain adequate supply and facilities to provide electric service to persons who were retail customers of the electric utility on the date the utility chooses to participate in customer choice. The obligation provided by this subsection remains in effect until the commission determines that the requirements of Section 39.152(a) have been met for the region.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999. Amended by Acts 2001, 77th Leg., ch. 1041, Sec. 1, eff. June 15, 2001.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scI/s39.408"> <num value="39.408">Sec. 39.408.</num> <heading></heading> <chapeau>For expiration of this section, see Subsection (g).</chapeau> <continuation>Sec. 39.408. HIRING ASSISTANCE FOR FEDERAL PROCEEDINGS. (a) The commission may retain any consultant, accountant, auditor, engineer, or attorney the commission considers necessary to represent the commission in a proceeding before the Federal Energy Regulatory Commission, or before a court reviewing proceedings of that federal commission, related to:</continuation> <paragraph identifier="/us/tx/ut/t2/c39/scI/s39.408/1"> <num value="1">(1)</num> <content>the relationship of an electric utility subject to this subchapter to a power region, regional transmission organization, or independent system operator;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scI/s39.408/2"> <num value="2">(2)</num> <content>the approval of an agreement among the electric utility and the electric utility's affiliates concerning the coordination of the operations of the electric utility and the electric utility's affiliates; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scI/s39.408/3"> <num value="3">(3)</num> <content>other matters related to the electric utility subject to this subchapter that may affect the ultimate rates paid by retail customers in this state.</content> </paragraph> <subsection identifier="/us/tx/ut/t2/c39/scI/s39.408/b"> <num value="b">(b)</num> <chapeau>Assistance for which a consultant, accountant, auditor, engineer, or attorney may be retained under Subsection (a) may include:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scI/s39.408/1"> <num value="1">(1)</num> <content>conducting a study;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scI/s39.408/2"> <num value="2">(2)</num> <content>conducting an investigation;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scI/s39.408/3"> <num value="3">(3)</num> <content>presenting evidence;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scI/s39.408/4"> <num value="4">(4)</num> <content>advising the commission; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scI/s39.408/5"> <num value="5">(5)</num> <content>representing the commission.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scI/s39.408/c"> <num value="c">(c)</num> <content>The electric utility shall pay timely the reasonable costs of the services of a person retained under Subsection (a), as determined by the commission. The total costs an electric utility is required to pay under this subsection may not exceed $1.5 million in a 12-month period.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scI/s39.408/d"> <num value="d">(d)</num> <content>The commission shall allow the electric utility to recover both the total costs the electric utility paid under Subsection (c) and the carrying charges for those costs through a rider established annually to recover the costs paid and carrying charges incurred during the preceding calendar year. The rider may not be implemented before the rider is reviewed and approved by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scI/s39.408/e"> <num value="e">(e)</num> <content>The commission shall consult the attorney general before the commission retains a consultant, accountant, auditor, or engineer under Subsection (a). The retention of an attorney under Subsection (a) is subject to the approval of the attorney general under Section 402.0212, Government Code.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scI/s39.408/f"> <num value="f">(f)</num> <content>The commission shall be precluded from engaging any individual who is required to register under Section 305.003, Government Code.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scI/s39.408/g"> <num value="g">(g)</num> <content>This section expires September 1, 2029.</content> </subsection> <sourceCredit>Added by Acts 2015, 84th Leg., R.S., Ch. 849 (S.B. 932), Sec. 1, eff. September 1, 2015. Amended by: Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 29, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scI/s39.409"> <num value="39.409">Sec. 39.409.</num> <heading>RECOUPMENT OF TRANSITION TO COMPETITION COSTS</heading> <content>An electric utility subject to this subchapter is entitled to recover, as provided by this section, all reasonable and necessary expenditures made or incurred before September 1, 2001, to comply with the provisions of this chapter. Not later than December 1, 2001, each electric utility subject to this subchapter may file with the commission an application for recovery detailing the amounts spent or incurred. After notice and hearing, the commission shall review the amounts and, if found to be reasonable and necessary, approve a transition to competition retail rate rider mechanism for the recovery of the approved transition to competition costs. A rate rider implemented to recover approved transition to competition costs shall expire not later than December 31, 2006.</content> <sourceCredit>Added by Acts 2001, 77th Leg., ch. 1041, Sec. 2, eff. June 15, 2001.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scI/s39.410"> <num value="39.410">Sec. 39.410.</num> <heading>CONTRACTUAL OBLIGATIONS</heading> <chapeau>This subchapter may not:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scI/s39.410/1"> <num value="1">(1)</num> <content>interfere with or abrogate the rights or obligations of any party, including a retail or wholesale customer, to a contract with an investor-owned electric utility, river authority, municipally owned utility, or electric cooperative;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scI/s39.410/2"> <num value="2">(2)</num> <content>interfere with or abrogate the rights or obligations of a party under a contract or agreement concerning certificated utility service areas; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scI/s39.410/3"> <num value="3">(3)</num> <content>result in a change in wholesale power costs to wholesale customers in Texas purchasing electricity under wholesale power contracts the pricing provisions of which are based on formulary rates, fuel adjustments, or average system costs.</content> </paragraph> <sourceCredit>Added by Acts 2001, 77th Leg., ch. 1041, Sec. 2, eff. June 15, 2001.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c39/scJ"> <num value="J">SUBCHAPTER J.</num> <heading>TRANSITION TO COMPETITION IN CERTAIN</heading> <section identifier="/us/tx/ut/t2/c39/scJ/s88274.76628"> <num value="88274.76628">Sec. 88274.76628.</num> <heading></heading> <content>NON-ERCOT AREAS</content> </section> <section identifier="/us/tx/ut/t2/c39/scJ/s39.451"> <num value="39.451">Sec. 39.451.</num> <heading>APPLICABILITY</heading> <content>This subchapter applies only to an investor-owned electric utility that is operating solely outside of ERCOT in areas of this state that were included in the Southeastern Electric Reliability Council on January 1, 2005.</content> <sourceCredit>Added by Acts 2005, 79th Leg., Ch. 1072 (H.B. 1567), Sec. 1, eff. June 18, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scJ/s39.452"> <num value="39.452">Sec. 39.452.</num> <heading>REGULATION OF UTILITY AND TRANSITION TO COMPETITION</heading> <subsection identifier="/us/tx/ut/t2/c39/scJ/s39.452/a"> <num value="a">(a)</num> <content>Until the date on which an electric utility subject to this subchapter is authorized by the commission to implement customer choice under Section 39.453, the rates of the electric utility shall be regulated under traditional cost-of-service regulation and the electric utility is subject to all applicable regulatory authority prescribed by this subtitle and Subtitle A, including Chapters 14, 32, 33, 36, and 37.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scJ/s39.452/b"> <num value="b">(b)</num> <content>An electric utility subject to this subchapter shall propose a competitive generation tariff to allow eligible customers the ability to contract for competitive generation. The commission shall approve, reject, or modify the proposed tariff not later than September 1, 2010. The tariffs subject to this subsection may not be considered to offer a discounted rate or rates under Section 36.007, and the utility's rates shall be set, in the proceeding in which the tariff is adopted, to recover any costs unrecovered as a result of the implementation of the tariff. The commission shall ensure that a competitive generation tariff shall not be implemented in a manner that harms the sustainability or competitiveness of manufacturers that choose not to take advantage of competitive generation. Pursuant to the competitive generation tariff, an electric utility subject to this subsection shall purchase competitive generation service, selected by the customer, and provide the generation at retail to the customer. An electric utility subject to this subsection shall provide and price retail transmission service, including necessary ancillary services, to retail customers who choose to take advantage of the competitive generation tariff at a rate that is unbundled from the utility's cost of service. Such customers shall not be considered wholesale transmission customers. Notwithstanding any other provision of this chapter, the commission may not issue a decision relating to a competitive generation tariff that is contrary to an applicable decision, rule, or policy statement of a federal regulatory agency having jurisdiction.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scJ/s39.452/c"> <num value="c">(c)</num> <content>That portion of any commission order issued before the effective date of this section requiring the electric utility to comply with a provision of this chapter is void.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scJ/s39.452/d"> <num value="d">(d)</num> <chapeau>Until the date on which an electric utility subject to this subchapter implements customer choice:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scJ/s39.452/1"> <num value="1">(1)</num> <content>the provisions of this chapter do not apply to that electric utility, other than this subchapter, Sections 39.1516 and 39.905, the provisions relating to the duty to obtain a permit from the Texas Commission on Environmental Quality for an electric generating facility and to reduce emissions from an electric generating facility, and the provisions of Subchapter G that pertain to the recovery and securitization of hurricane reconstruction costs authorized by Sections 39.458-39.463; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scJ/s39.452/2"> <num value="2">(2)</num> <content>the electric utility is not subject to a rate freeze and, subject to the limitation provided by Subsection (b), may file for rate changes under Chapter 36 and for approval of one or more of the rate rider mechanisms authorized by Sections 39.454 and 39.455.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scJ/s39.452/e"> <num value="e">(e)</num> <content>An electric utility subject to this subchapter may proceed with and complete jurisdictional separation to establish two vertically integrated utilities, one of which is solely subject to the retail jurisdiction of the commission and one of which is solely subject to the retail jurisdiction of the Louisiana Public Service Commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scJ/s39.452/f"> <num value="f">(f)</num> <content>Not later than January 1, 2006, an electric utility subject to this subchapter shall file a plan with the commission for identifying the applicable power region or power regions, enumerating the steps to achieve the certification of a power region in accordance with Section 39.453, and specifying the schedule for achieving the certification of a power region. The utility may amend the plan as appropriate. The commission may, on its own motion or the motion of any affected person, initiate a proceeding to certify a qualified power region under Section 39.152 when the conditions supporting such a proceeding exist.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scJ/s39.452/g"> <num value="g">(g)</num> <chapeau>Not later than the earlier of January 1, 2007, or the 90th day after the date the applicable power region is certified in accordance with Section 39.453, the electric utility shall file a transition to competition plan. The transition to competition plan must:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scJ/s39.452/1"> <num value="1">(1)</num> <content>identify how the electric utility intends to mitigate market power and to achieve full customer choice, including specific alternatives for constructing additional transmission facilities, auctioning rights to generation capacity, divesting generation capacity, or any other measure that is consistent with the public interest;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scJ/s39.452/2"> <num value="2">(2)</num> <content>include a provision to reinstate a customer choice pilot project and to establish a price to beat for residential customers and commercial customers having a peak load of 1,000 kilowatts or less; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scJ/s39.452/3"> <num value="3">(3)</num> <content>include any other additional information or provisions that the commission may require.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scJ/s39.452/h"> <num value="h">(h)</num> <content>The commission shall approve, modify, or reject a plan filed under Subsection (g) not later than the 180th day after the date the plan is filed unless a hearing is requested by any party to the proceeding. A modification to the plan by the commission may not be in conflict with the jurisdiction or orders of the Federal Energy Regulatory Commission or result in significant additional cost without allowing for timely recovery for that cost. If a hearing is requested, the 180-day deadline is extended one day for each day of the hearing. The transition to competition plan shall be updated or amended annually, subject to commission approval, until the initiation of customer choice by an electric utility subject to this subchapter. Consistent with its jurisdiction, the commission shall have the authority in approving or modifying the transition to competition plan to require the electric utility to take reasonable steps to facilitate the development of a wholesale generation market within the boundaries of the electric utility's service territory.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scJ/s39.452/i"> <num value="i">(i)</num> <content>Notwithstanding any other provision of this chapter, if the commission has not approved the transition to competition plan under this section before January 1, 2009, an electric utility subject to this subchapter shall cease all activities relating to the transition to competition under this section. The commission may, on its own motion or the motion of any affected person, initiate a proceeding under Section 39.152 to certify a power region to which the utility belongs as a qualified power region when the conditions supporting such a proceeding exist. The commission may not approve a plan under Subsection (g) until the expiration of four years from the time that the commission certifies a power region under Subsection (f). If after the expiration of four years from the time the commission certifies a power region under Subsection (f), and after notice and a hearing, the commission determines consistent with the study required by Section 5, S.B. No. 1492, Acts of the 81st Legislature, Regular Session, 2009, that the electric utility cannot comply with Section 38.073, it shall consider approving a plan under Subsection (g).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scJ/s39.452/j"> <num value="j">(j)</num> <content>Notwithstanding any other provision of this subtitle, in awarding a certificate of convenience and necessity or allowing cost recovery for purchased power by an electric utility subject to this section, the commission shall ensure in its determination that the provisions of Sections 37.056(c)(4)(D) and (E) are met and that the generating facility or the purchased power agreement satisfies the identified reliability needs of the utility.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scJ/s39.452/k"> <num value="k">(k)</num> <chapeau>Notwithstanding Subsection (d), an electric utility subject to this subchapter that elects to deploy advanced metering and meter information networks may recover reasonable and necessary costs incurred in deploying advanced metering and meter information networks. An electric utility that elects to deploy advanced metering or meter information networks is subject to commission rules adopted under Sections 39.107(h) and (k). The commission shall ensure that any deployment plan approved under this section and any related customer surcharge:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scJ/s39.452/1"> <num value="1">(1)</num> <content>are not applicable to customer accounts that receive service at transmission voltage; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scJ/s39.452/2"> <num value="2">(2)</num> <chapeau>are consistent with commission rules related to advanced metering systems regarding:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c39/scJ/s39.452/A"> <num value="A">(A)</num> <content>customer protections;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scJ/s39.452/B"> <num value="B">(B)</num> <content>data security, privacy, and ownership; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scJ/s39.452/C"> <num value="C">(C)</num> <content>options given consumers to continue to receive service through a non-advanced meter.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scJ/s39.452/l"> <num value="l">(l)</num> <content>An electric utility subject to this subchapter that elects to deploy an advanced meter information network shall deploy the network as rapidly as practicable to allow customers to better manage energy use and control costs.</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., Ch. 1072 (H.B. 1567), Sec. 1, eff. June 18, 2005. Amended by: Acts 2006, 79th Leg., 3rd C.S., Ch. 11 (H.B. 163), Sec. 1, eff. May 31, 2006. Acts 2009, 81st Leg., R.S., Ch. 1226 (S.B. 1492), Sec. 3, eff. June 19, 2009. Acts 2017, 85th Leg., R.S., Ch. 31 (S.B. 1145), Sec. 1, eff. May 18, 2017. Acts 2019, 86th Leg., R.S., Ch. 610 (S.B. 936), Sec. 5, eff. September 1, 2019. Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 30, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scJ/s39.4525"> <num value="39.4525">Sec. 39.4525.</num> <heading></heading> <chapeau>For expiration of this section, see Subsection (g).</chapeau> <continuation>Sec. 39.4525. HIRING ASSISTANCE FOR FEDERAL PROCEEDINGS. (a) The commission may retain any consultant, accountant, auditor, engineer, or attorney the commission considers necessary to represent the commission in a proceeding before the Federal Energy Regulatory Commission, or before a court reviewing proceedings of that federal commission, related to:</continuation> <paragraph identifier="/us/tx/ut/t2/c39/scJ/s39.4525/1"> <num value="1">(1)</num> <content>the relationship of an electric utility subject to this subchapter to a power region, regional transmission organization, or independent system operator;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scJ/s39.4525/2"> <num value="2">(2)</num> <content>the approval of an agreement among the electric utility and the electric utility's affiliates concerning the coordination of the operations of the electric utility and the electric utility's affiliates; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scJ/s39.4525/3"> <num value="3">(3)</num> <content>other matters related to the electric utility subject to this subchapter that may affect the ultimate rates paid by retail customers in this state.</content> </paragraph> <subsection identifier="/us/tx/ut/t2/c39/scJ/s39.4525/b"> <num value="b">(b)</num> <chapeau>Assistance for which a consultant, accountant, auditor, engineer, or attorney may be retained under Subsection (a) may include:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scJ/s39.4525/1"> <num value="1">(1)</num> <content>conducting a study;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scJ/s39.4525/2"> <num value="2">(2)</num> <content>conducting an investigation;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scJ/s39.4525/3"> <num value="3">(3)</num> <content>presenting evidence;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scJ/s39.4525/4"> <num value="4">(4)</num> <content>advising the commission; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scJ/s39.4525/5"> <num value="5">(5)</num> <content>representing the commission.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scJ/s39.4525/c"> <num value="c">(c)</num> <content>The electric utility shall pay timely the reasonable costs of the services of a person retained under Subsection (a), as determined by the commission. The total costs an electric utility is required to pay under this subsection may not exceed $1.5 million in a 12-month period.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scJ/s39.4525/d"> <num value="d">(d)</num> <content>The commission shall allow the electric utility to recover both the total costs the electric utility paid under Subsection (c) and the carrying charges for those costs through a rider established annually to recover the costs paid and carrying charges incurred during the preceding calendar year. The rider may not be implemented before the rider is reviewed and approved by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scJ/s39.4525/e"> <num value="e">(e)</num> <content>The commission shall consult the attorney general before the commission retains a consultant, accountant, auditor, or engineer under Subsection (a). The retention of an attorney under Subsection (a) is subject to the approval of the attorney general under Section 402.0212, Government Code.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scJ/s39.4525/f"> <num value="f">(f)</num> <content>The commission shall be precluded from engaging any individual who is required to register under Section 305.003, Government Code.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scJ/s39.4525/g"> <num value="g">(g)</num> <content>This section expires September 1, 2029.</content> </subsection> <sourceCredit>Added by Acts 2011, 82nd Leg., R.S., Ch. 100 (S.B. 1153), Sec. 1, eff. May 20, 2011. Amended by: Acts 2015, 84th Leg., R.S., Ch. 849 (S.B. 932), Sec. 2, eff. September 1, 2015. Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 31, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scJ/s39.453"> <num value="39.453">Sec. 39.453.</num> <heading>CUSTOMER CHOICE AND RELEVANT MARKET AND RELATED MATTERS</heading> <subsection identifier="/us/tx/ut/t2/c39/scJ/s39.453/a"> <num value="a">(a)</num> <content>The commission may not authorize customer choice until the commission certifies the applicable power region as a qualifying power region under Section 39.152(a). Sections 39.152(b)-(d) also apply to the electric utility and commission in determining whether to certify the applicable power region.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scJ/s39.453/b"> <num value="b">(b)</num> <content>The commission shall certify that the requirement of Section 39.152(a)(3) is met for an electric utility subject to this subchapter only if the commission finds that the total capacity owned and controlled by the electric utility and the utility's affiliates does not exceed 20 percent of the total installed generation capacity within the power region of that utility.</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., Ch. 1072 (H.B. 1567), Sec. 1, eff. June 18, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scJ/s39.454"> <num value="39.454">Sec. 39.454.</num> <heading>RECOUPMENT OF TRANSITION TO COMPETITION COSTS</heading> <content>An electric utility subject to this subchapter is entitled to recover, as provided by this section, all reasonable and necessary expenditures made or incurred before the effective date of this section to comply with this chapter, to the extent the costs have not otherwise been recovered. The electric utility may file with the commission an application for recovery that gives details of the amounts spent or incurred. After notice and hearing, the commission shall review the amounts and, if the amounts are found to be reasonable and necessary and not otherwise previously recovered, approve a transition to competition retail rate rider mechanism for the recovery of the approved transition to competition costs. A rate proceeding under Chapter 36 is not required to implement the rider. A rate rider implemented to recover approved transition to competition costs shall provide for recovery of those costs over a period not to exceed 15 years, with appropriate carrying costs.</content> <sourceCredit>Added by Acts 2005, 79th Leg., Ch. 1072 (H.B. 1567), Sec. 1, eff. June 18, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scJ/s39.455"> <num value="39.455">Sec. 39.455.</num> <heading>RECOVERY OF INCREMENTAL CAPACITY COSTS</heading> <content>An electric utility subject to this subchapter is entitled to recover, through a rate rider mechanism, reasonable and necessary costs of incremental resources required to meet load requirements to the extent those costs result in the utility expending more for capacity costs under purchase power agreements than were included in the utility's last base rate case, adjusted for load growth. Any rider under this section shall be implemented after review and approval by the commission, after notice and opportunity for hearing. Following the initial implementation of the rider, an electric utility subject to this subchapter may request revisions semiannually, after notice and opportunity for hearing, on the dates provided in the commission's rules for filing petitions to revise the utility's fuel factor. In conjunction with the utility's fuel reconciliation proceedings, the commission shall reconcile the costs recovered under the rider and the actual incremental capacity costs eligible for recovery under this section. The rider shall expire on the introduction of customer choice or on the implementation of rates resulting from the filing of a Subchapter C, Chapter 36, rate proceeding. In no event may the amount recovered annually under the rider exceed five percent of the utility's annual base rate revenues.</content> <sourceCredit>Added by Acts 2005, 79th Leg., Ch. 1072 (H.B. 1567), Sec. 1, eff. June 18, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scJ/s39.456"> <num value="39.456">Sec. 39.456.</num> <heading>FRANCHISE AGREEMENTS</heading> <content>A municipality, with the agreement of an electric utility, may accelerate the expiration date of a franchise agreement that was in existence on September 1, 1999. Any new franchise agreement must be approved by the governing body of the municipality. To the extent that a new franchise agreement would result in an increase in the payment of franchise fees to the municipality, and subject to the terms of the franchise agreement, either the electric utility or the municipality, without the need for a rate proceeding under Chapter 36, may file with the commission for approval of a rider for the electric utility's recovery of franchise payments resulting from the agreement, so long as such rider is collected only from customers of the electric utility that are located within the boundaries of the municipality.</content> <sourceCredit>Added by Acts 2005, 79th Leg., Ch. 1072 (H.B. 1567), Sec. 1, eff. June 18, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scJ/s39.457"> <num value="39.457">Sec. 39.457.</num> <heading>CONTRACTUAL RIGHTS</heading> <content>In the event that the electric utility subject to this subchapter either merges, consolidates, or otherwise becomes affiliated with another owner of electric generation, or completes the jurisdictional separation authorized by Section 39.452(e) and the resulting vertically integrated utility proposes to join a regional transmission organization, and either action adversely affects the rights or obligations of an electric cooperative under a wholesale generation or transmission agreement entered into before the effective date of this subchapter or otherwise adversely affects the electric cooperative's access to its existing generation resources under said agreements, then the utility shall submit a proposal agreeable to the cooperative and the utility for addressing such rights and obligations in the appropriate regulatory proceeding. Such proposal shall be consistent with applicable law regarding the rights and obligations of the electric cooperative and the utility under such existing generation or transmission agreements.</content> <sourceCredit>Added by Acts 2005, 79th Leg., Ch. 1072 (H.B. 1567), Sec. 1, eff. June 18, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scJ/s39.458"> <num value="39.458">Sec. 39.458.</num> <heading>RECOVERY AND SECURITIZATION OF HURRICANE RECONSTRUCTION COSTS; PURPOSE</heading> <subsection identifier="/us/tx/ut/t2/c39/scJ/s39.458/a"> <num value="a">(a)</num> <content>The purpose of this section and of Sections 39.459-39.463 is to enable an electric utility subject to this subchapter to obtain timely recovery of hurricane reconstruction costs and to use securitization financing to recover these costs, because that type of debt will lower the carrying costs associated with the recovery of hurricane reconstruction costs relative to the costs that would be incurred using conventional financing methods. The proceeds of the transition bonds may be used only for the purposes of reducing the amount of recoverable hurricane reconstruction costs, as determined by the commission in accordance with this subchapter, through the refinancing or retirement of utility debt or equity.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scJ/s39.458/b"> <num value="b">(b)</num> <chapeau>It is the intent of the legislature that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scJ/s39.458/1"> <num value="1">(1)</num> <content>securitization of hurricane reconstruction costs will be subject to the same procedures, standards, and protections for the securitization of stranded costs and regulatory assets under Subchapter G in effect on the effective date of this section, except as provided by this subchapter; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scJ/s39.458/2"> <num value="2">(2)</num> <content>the commission will ensure that securitization of hurricane reconstruction costs provides greater tangible and quantifiable benefits to ratepayers than would have been achieved without the issuance of transition bonds.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2006, 79th Leg., 3rd C.S., Ch. 11 (H.B. 163), Sec. 2, eff. May 31, 2006.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scJ/s39.459"> <num value="39.459">Sec. 39.459.</num> <heading>HURRICANE RECONSTRUCTION COSTS</heading> <subsection identifier="/us/tx/ut/t2/c39/scJ/s39.459/a"> <num value="a">(a)</num> <chapeau>In this subchapter:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scJ/s39.459/1"> <num value="1">(1)</num> <content>"Hurricane reconstruction costs" means reasonable and necessary costs, including costs expensed, charged to the storm reserve, or capitalized, that are incurred by an electric utility subject to this subchapter due to any activity or activities conducted by or on behalf of the electric utility in connection with the restoration of service associated with electric power outages affecting customers of the electric utility as the result of Hurricane Rita, including mobilization, staging, and construction, reconstruction, replacement, or repair of electric generation, transmission, distribution, or general plant facilities.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scJ/s39.459/2"> <num value="2">(2)</num> <content>"Hurricane Rita" means the hurricane of that name that struck the coastal region of this state in September 2005.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scJ/s39.459/b"> <num value="b">(b)</num> <content>If the commission determines it to be appropriate, hurricane reconstruction costs may include carrying costs from the date on which the hurricane reconstruction costs were incurred until the date that transition bonds are issued.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scJ/s39.459/c"> <num value="c">(c)</num> <chapeau>To the extent a utility subject to this subchapter receives insurance proceeds, governmental grants, or any other source of funding that compensates it for hurricane reconstruction costs, those amounts shall be used to reduce the utility's hurricane reconstruction costs recoverable from customers. If the timing of a utility's receipt of those amounts prevents their inclusion as a reduction to the hurricane reconstruction costs that are securitized, the commission shall take those amounts into account in:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scJ/s39.459/1"> <num value="1">(1)</num> <content>the utility's next base rate proceeding; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scJ/s39.459/2"> <num value="2">(2)</num> <content>any proceeding in which the commission considers hurricane reconstruction costs.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2006, 79th Leg., 3rd C.S., Ch. 11 (H.B. 163), Sec. 2, eff. May 31, 2006.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scJ/s39.460"> <num value="39.460">Sec. 39.460.</num> <heading>STANDARDS AND PROCEDURES GOVERNING SECURITIZATION OF HURRICANE RECONSTRUCTION COSTS</heading> <subsection identifier="/us/tx/ut/t2/c39/scJ/s39.460/a"> <num value="a">(a)</num> <content>The procedures and standards of this subchapter and the provisions of Subchapter G govern the application for, and the commission's issuance of, a financing order to provide for the securitization of hurricane reconstruction costs by an electric utility subject to this subchapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scJ/s39.460/b"> <num value="b">(b)</num> <content>Subject to the standards, procedures, and tests contained in this subchapter and Subchapter G, the commission shall adopt a financing order on the application of the utility to recover its hurricane reconstruction costs. On the commission's issuance of a financing order allowing for recovery and securitization of hurricane reconstruction costs, the provisions of this subchapter and Subchapter G continue to govern the financing order and the rights and interests established in the order, and this subchapter and Subchapter G continue to govern any transition bonds issued pursuant to the financing order. To the extent any conflict exists between the provisions of this subchapter and Subchapter G in cases involving the securitization of hurricane reconstruction costs, the provisions of this subchapter control.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scJ/s39.460/c"> <num value="c">(c)</num> <content>For purposes of this subchapter, "financing order," as defined by Section 39.302 and as used in Subchapter G, includes a financing order authorizing the securitization of hurricane reconstruction costs.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scJ/s39.460/d"> <num value="d">(d)</num> <content>For purposes of this subchapter, "qualified costs," as defined by Section 39.302 and as used in Subchapter G, includes 100 percent of the electric utility's hurricane reconstruction costs together with the costs of issuing, supporting, and servicing transition bonds and any costs of retiring and refunding existing debt and equity securities of an electric utility subject to this subchapter in connection with the issuance of transition bonds. For purposes of this subchapter, the term also includes the costs to the commission of acquiring professional services for the purpose of evaluating proposed transactions under this subchapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scJ/s39.460/e"> <num value="e">(e)</num> <content>For purposes of this subchapter, "transition bonds," as defined by Section 39.302 and as used in Subchapter G, includes transition bonds issued in association with the recovery of hurricane reconstruction costs. Transition bonds issued to securitize hurricane reconstruction costs may be called "hurricane reconstruction bonds" or may be called by any other name acceptable to the issuer and the underwriters of the transition bonds.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scJ/s39.460/f"> <num value="f">(f)</num> <content>For purposes of this subchapter, "transition charges," as defined by Section 39.302 and as used in Subchapter G, includes nonbypassable amounts to be charged for the use of electric services, approved by the commission under a financing order to recover hurricane reconstruction costs, that shall be collected by an electric utility subject to this subchapter, its successors, an assignee, or other collection agents as provided for in the financing order.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scJ/s39.460/g"> <num value="g">(g)</num> <content>Notwithstanding Section 39.303(c), hurricane reconstruction costs shall be functionalized and allocated to customers in the same manner as the corresponding facilities and related expenses are functionalized and allocated in the utility's current base rates.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scJ/s39.460/h"> <num value="h">(h)</num> <content>The amount of any accumulated deferred federal income taxes offset, used to determine the securitization total, may not be considered in future rate proceedings. Any tax obligation of the electric utility arising from its receipt of securitization bond proceeds, or from the collection and remittance of transition charges, shall be recovered by the electric utility through the commission's implementation of Section 39.458, Section 39.459, this section, and Sections 39.461-39.463.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scJ/s39.460/i"> <num value="i">(i)</num> <content>If the commission determines that recovery of all or any portion of an electric utility's hurricane reconstruction costs using securitization is not beneficial to ratepayers of the electric utility, under one or more of the tests applied to determine those benefits, the commission shall permit the electric utility to recover the entirety of the hurricane reconstruction costs through an appropriate customer surcharge mechanism, including appropriate carrying costs, provided that the electric utility has not securitized any portion of its hurricane reconstruction costs. A rate proceeding under Chapter 36 may not be required to determine and implement this surcharge mechanism. A rider adopted under this subsection must expire on the implementation of rates resulting from the filing of a Subchapter C, Chapter 36, rate proceeding.</content> </subsection> <sourceCredit>Added by Acts 2006, 79th Leg., 3rd C.S., Ch. 11 (H.B. 163), Sec. 2, eff. May 31, 2006.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scJ/s39.461"> <num value="39.461">Sec. 39.461.</num> <heading>NONBYPASSABLE CHARGES</heading> <content>The commission may include terms in the financing order to ensure that the imposition and collection of transition charges associated with the recovery of hurricane reconstruction costs are nonbypassable by imposing restrictions on bypassability of the type provided for in this chapter or by alternative means of ensuring nonbypassability, as the commission considers appropriate, consistent with the purposes of securitization.</content> <sourceCredit>Added by Acts 2006, 79th Leg., 3rd C.S., Ch. 11 (H.B. 163), Sec. 2, eff. May 31, 2006.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scJ/s39.462"> <num value="39.462">Sec. 39.462.</num> <heading>DETERMINATION OF HURRICANE RECONSTRUCTION COSTS</heading> <subsection identifier="/us/tx/ut/t2/c39/scJ/s39.462/a"> <num value="a">(a)</num> <content>An electric utility subject to this subchapter is entitled to recover hurricane reconstruction costs consistent with the provisions of this subchapter and is entitled to seek recovery of amounts not recovered under this subchapter, including hurricane reconstruction costs not yet incurred at the time an application is filed under Subsection (b), in its next base rate proceeding or through any other proceeding authorized by Subchapter C, Chapter 36.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scJ/s39.462/b"> <num value="b">(b)</num> <content>The commission shall issue an order determining the amount of hurricane reconstruction costs eligible for recovery and securitization not later than the 150th day after the date an electric utility subject to this subchapter files an application seeking that determination. The 150-day period begins on the date the electric utility files the application, even if the filing occurs before the effective date of this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scJ/s39.462/c"> <num value="c">(c)</num> <content>On issuance by the commission of an order determining the amount of eligible hurricane reconstruction costs, an electric utility subject to this subchapter may file an application for a financing order, which shall be governed by the procedures in Subchapter G.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scJ/s39.462/d"> <num value="d">(d)</num> <content>To the extent the commission has made a determination of the eligible hurricane reconstruction costs of an electric utility subject to this subchapter before the effective date of this section, that determination may provide the basis for the utility's application for a financing order pursuant to this subchapter and Subchapter G. A previous commission determination does not preclude the utility from requesting recovery of additional hurricane reconstruction costs eligible for recovery under this subchapter, but not previously authorized by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scJ/s39.462/e"> <num value="e">(e)</num> <content>A rate proceeding under Chapter 36 is not required to determine the amount of recoverable hurricane reconstruction costs as provided by this section.</content> </subsection> <sourceCredit>Added by Acts 2006, 79th Leg., 3rd C.S., Ch. 11 (H.B. 163), Sec. 2, eff. May 31, 2006.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scJ/s39.463"> <num value="39.463">Sec. 39.463.</num> <heading>SEVERABILITY</heading> <content>Effective on the date the first utility transition bonds associated with hurricane reconstruction costs are issued under this subchapter, if any provision in this title or portion of this title is held to be invalid or is invalidated, superseded, replaced, repealed, or expires for any reason, that occurrence does not affect the validity or continuation of this subchapter, Subchapter G as it applies to an electric utility subject to this subchapter, or any part of those provisions, or any other provision of this title that is relevant to the issuance, administration, payment, retirement, or refunding of transition bonds or to any actions of the electric utility, its successors, an assignee, a collection agent, or a financing party, and those provisions shall remain in full force and effect.</content> <sourceCredit>Added by Acts 2006, 79th Leg., 3rd C.S., Ch. 11 (H.B. 163), Sec. 2, eff. May 31, 2006.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c39/scK"> <num value="K">SUBCHAPTER K.</num> <heading>TRANSITION TO COMPETITION FOR CERTAIN</heading> <section identifier="/us/tx/ut/t2/c39/scK/s128690.119195"> <num value="128690.119195">Sec. 128690.119195.</num> <heading></heading> <content>AREAS OUTSIDE OF ERCOT</content> </section> <section identifier="/us/tx/ut/t2/c39/scK/s39.501"> <num value="39.501">Sec. 39.501.</num> <heading>APPLICABILITY</heading> <subsection identifier="/us/tx/ut/t2/c39/scK/s39.501/a"> <num value="a">(a)</num> <chapeau>This subchapter applies to an investor-owned electric utility:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scK/s39.501/1"> <num value="1">(1)</num> <content>that is operating solely outside of ERCOT in areas of this state that were included in the Southwest Power Pool on January 1, 2008;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scK/s39.501/2"> <num value="2">(2)</num> <content>that was not affiliated with the Southeastern Electric Reliability Council on January 1, 2008; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scK/s39.501/3"> <num value="3">(3)</num> <content>to which Subchapter I does not apply.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scK/s39.501/b"> <num value="b">(b)</num> <content>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.</content> </subsection> <sourceCredit>Added by Acts 2009, 81st Leg., R.S., Ch. 128 (S.B. 547), Sec. 1, eff. September 1, 2009.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scK/s39.502"> <num value="39.502">Sec. 39.502.</num> <heading>COST-OF-SERVICE REGULATION</heading> <subsection identifier="/us/tx/ut/t2/c39/scK/s39.502/a"> <num value="a">(a)</num> <content>Until the date on which an electric utility subject to this subchapter is authorized by the commission under Section 39.503(f) to implement retail customer choice, the rates of the utility are subject to regulation under Chapter 36.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scK/s39.502/b"> <num value="b">(b)</num> <content>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 39.1516 and 39.905, do not apply to that utility.</content> </subsection> <sourceCredit>Added by Acts 2009, 81st Leg., R.S., Ch. 128 (S.B. 547), Sec. 1, eff. September 1, 2009. Amended by: Acts 2019, 86th Leg., R.S., Ch. 610 (S.B. 936), Sec. 6, eff. September 1, 2019. Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 32, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scK/s39.5021"> <num value="39.5021">Sec. 39.5021.</num> <heading>METERING</heading> <subsection identifier="/us/tx/ut/t2/c39/scK/s39.5021/a"> <num value="a">(a)</num> <chapeau>Notwithstanding Section 39.502, an electric utility subject to this subchapter that elects to deploy advanced metering and meter information networks may recover reasonable and necessary costs incurred in deploying advanced metering and meter information networks. An electric utility that elects to deploy advanced metering or meter information networks is subject to commission rules adopted under Sections 39.107(h) and (k). The commission shall ensure that any deployment plan approved under this section and any related customer surcharge:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scK/s39.5021/1"> <num value="1">(1)</num> <content>are not applicable to customer accounts that receive service at transmission voltage; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scK/s39.5021/2"> <num value="2">(2)</num> <chapeau>are consistent with commission rules related to advanced metering systems regarding:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c39/scK/s39.5021/A"> <num value="A">(A)</num> <content>customer protections;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scK/s39.5021/B"> <num value="B">(B)</num> <content>data security, privacy, and ownership; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scK/s39.5021/C"> <num value="C">(C)</num> <content>options given consumers to continue to receive service through a non-advanced meter.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scK/s39.5021/b"> <num value="b">(b)</num> <content>An electric utility subject to this subchapter that elects to deploy an advanced meter information network shall deploy the network as rapidly as practicable to allow customers to better manage energy use and control costs.</content> </subsection> <sourceCredit>Added by Acts 2019, 86th Leg., R.S., Ch. 33 (H.B. 1595), Sec. 1, eff. May 14, 2019.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scK/s39.503"> <num value="39.503">Sec. 39.503.</num> <heading>TRANSITION TO COMPETITION</heading> <subsection identifier="/us/tx/ut/t2/c39/scK/s39.503/a"> <num value="a">(a)</num> <content>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 may modify the sequence of events required by Subsections (b)-(e), but not the substance of the requirements. 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.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scK/s39.503/b"> <num value="b">(b)</num> <chapeau>The first stage for the transition to competition consists of the following activities:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scK/s39.503/1"> <num value="1">(1)</num> <content>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;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scK/s39.503/2"> <num value="2">(2)</num> <content>development of retail market protocols to facilitate retail competition; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scK/s39.503/3"> <num value="3">(3)</num> <content>completion of an expedited proceeding to develop non-bypassable delivery rates for the customer choice pilot project to be implemented under Subsection (c)(1).</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scK/s39.503/c"> <num value="c">(c)</num> <chapeau>The second stage for the transition to competition consists of the following activities:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scK/s39.503/1"> <num value="1">(1)</num> <content>initiation of the customer choice pilot project in accordance with Section 39.104;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scK/s39.503/2"> <num value="2">(2)</num> <content>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</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scK/s39.503/3"> <num value="3">(3)</num> <content>implementation of a seams agreement with adjacent power regions to reduce barriers to entry and facilitate competition.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scK/s39.503/d"> <num value="d">(d)</num> <chapeau>The third stage for the transition to competition consists of the following activities:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scK/s39.503/1"> <num value="1">(1)</num> <chapeau>the electric utility filing with the commission:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c39/scK/s39.503/A"> <num value="A">(A)</num> <content>an application for business separation in accordance with Section 39.051;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scK/s39.503/B"> <num value="B">(B)</num> <content>an application for unbundled transmission and distribution rates in accordance with Section 39.201;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scK/s39.503/C"> <num value="C">(C)</num> <content>an application for certification of a qualified power region in accordance with Section 39.152; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scK/s39.503/D"> <num value="D">(D)</num> <content>an application for price-to-beat rates in accordance with Section 39.202;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scK/s39.503/2"> <num value="2">(2)</num> <chapeau>the commission:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c39/scK/s39.503/A"> <num value="A">(A)</num> <content>approving a business separation plan for the utility;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scK/s39.503/B"> <num value="B">(B)</num> <content>setting unbundled transmission and distribution rates for the utility;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scK/s39.503/C"> <num value="C">(C)</num> <content>certifying a qualified power region, which includes conducting a formal evaluation of wholesale market power in the region, in accordance with Section 39.152;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scK/s39.503/D"> <num value="D">(D)</num> <content>setting price-to-beat rates for the utility; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scK/s39.503/E"> <num value="E">(E)</num> <content>determining which competitive energy services must be separated from regulated utility activities in accordance with Section 39.051; and</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scK/s39.503/3"> <num value="3">(3)</num> <content>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.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scK/s39.503/e"> <num value="e">(e)</num> <chapeau>The fourth stage for the transition to competition consists of the following activities:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scK/s39.503/1"> <num value="1">(1)</num> <content>commission evaluation of the results of the pilot project;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scK/s39.503/2"> <num value="2">(2)</num> <content>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</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scK/s39.503/3"> <num value="3">(3)</num> <content>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.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scK/s39.503/f"> <num value="f">(f)</num> <chapeau>The fifth stage for the transition to competition consists of the following activities:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scK/s39.503/1"> <num value="1">(1)</num> <chapeau>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:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c39/scK/s39.503/A"> <num value="A">(A)</num> <content>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</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scK/s39.503/B"> <num value="B">(B)</num> <content>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</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scK/s39.503/2"> <num value="2">(2)</num> <content>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.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2009, 81st Leg., R.S., Ch. 128 (S.B. 547), Sec. 1, eff. September 1, 2009.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scK/s39.504"> <num value="39.504">Sec. 39.504.</num> <heading></heading> <chapeau>For expiration of this section, see Subsection (g).</chapeau> <continuation>Sec. 39.504. HIRING ASSISTANCE FOR FEDERAL PROCEEDINGS. (a) The commission may retain any consultant, accountant, auditor, engineer, or attorney the commission considers necessary to represent the commission in a proceeding before the Federal Energy Regulatory Commission, or before a court reviewing proceedings of that federal commission, related to:</continuation> <paragraph identifier="/us/tx/ut/t2/c39/scK/s39.504/1"> <num value="1">(1)</num> <content>the relationship of an electric utility subject to this subchapter to a power region, regional transmission organization, or independent system operator;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scK/s39.504/2"> <num value="2">(2)</num> <content>the approval of an agreement among the electric utility and the electric utility's affiliates concerning the coordination of the operations of the electric utility and the electric utility's affiliates; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scK/s39.504/3"> <num value="3">(3)</num> <content>other matters related to the electric utility subject to this subchapter that may affect the ultimate rates paid by retail customers in this state.</content> </paragraph> <subsection identifier="/us/tx/ut/t2/c39/scK/s39.504/b"> <num value="b">(b)</num> <chapeau>Assistance for which a consultant, accountant, auditor, engineer, or attorney may be retained under Subsection (a) may include:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scK/s39.504/1"> <num value="1">(1)</num> <content>conducting a study;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scK/s39.504/2"> <num value="2">(2)</num> <content>conducting an investigation;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scK/s39.504/3"> <num value="3">(3)</num> <content>presenting evidence;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scK/s39.504/4"> <num value="4">(4)</num> <content>advising the commission; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scK/s39.504/5"> <num value="5">(5)</num> <content>representing the commission.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scK/s39.504/c"> <num value="c">(c)</num> <content>The electric utility shall pay timely the reasonable costs of the services of a person retained under Subsection (a), as determined by the commission. The total costs an electric utility is required to pay under this subsection may not exceed $1.5 million in a 12-month period.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scK/s39.504/d"> <num value="d">(d)</num> <content>The commission shall allow the electric utility to recover both the total costs the electric utility paid under Subsection (c) and the carrying charges for those costs through a rider established annually to recover the costs paid and carrying charges incurred during the preceding calendar year. The rider may not be implemented before the rider is reviewed and approved by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scK/s39.504/e"> <num value="e">(e)</num> <content>The commission shall consult the attorney general before the commission retains a consultant, accountant, auditor, or engineer under Subsection (a). The retention of an attorney under Subsection (a) is subject to the approval of the attorney general under Section 402.0212, Government Code.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scK/s39.504/f"> <num value="f">(f)</num> <content>The commission shall be precluded from engaging any individual who is required to register under Section 305.003, Government Code.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scK/s39.504/g"> <num value="g">(g)</num> <content>This section expires September 1, 2029.</content> </subsection> <sourceCredit>Added by Acts 2015, 84th Leg., R.S., Ch. 849 (S.B. 932), Sec. 3, eff. September 1, 2015. Amended by: Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 33, eff. September 1, 2023.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c39/scL"> <num value="L">SUBCHAPTER L.</num> <heading>TRANSITION TO COMPETITION AND OTHER PROVISIONS FOR CERTAIN AREAS OUTSIDE OF ERCOT</heading> <section identifier="/us/tx/ut/t2/c39/scL/s39.551"> <num value="39.551">Sec. 39.551.</num> <heading>APPLICABILITY</heading> <subsection identifier="/us/tx/ut/t2/c39/scL/s39.551/a"> <num value="a">(a)</num> <chapeau>This subchapter applies only to an investor-owned electric utility:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scL/s39.551/1"> <num value="1">(1)</num> <content>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;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scL/s39.551/2"> <num value="2">(2)</num> <content>that was not affiliated with ERCOT on January 1, 2011; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scL/s39.551/3"> <num value="3">(3)</num> <content>to which Subchapters I, J, and K do not apply.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scL/s39.551/b"> <num value="b">(b)</num> <content>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.</content> </subsection> <sourceCredit>Added by Acts 2011, 82nd Leg., R.S., Ch. 1113 (S.B. 1910), Sec. 1, eff. June 17, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scL/s39.552"> <num value="39.552">Sec. 39.552.</num> <heading>COST-OF-SERVICE REGULATION</heading> <subsection identifier="/us/tx/ut/t2/c39/scL/s39.552/a"> <num value="a">(a)</num> <content>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.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scL/s39.552/b"> <num value="b">(b)</num> <content>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 39.1516 and 39.905, do not apply to that utility.</content> </subsection> <sourceCredit>Added by Acts 2011, 82nd Leg., R.S., Ch. 1113 (S.B. 1910), Sec. 1, eff. June 17, 2011. Amended by: Acts 2019, 86th Leg., R.S., Ch. 610 (S.B. 936), Sec. 7, eff. September 1, 2019. Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 34, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scL/s39.5521"> <num value="39.5521">Sec. 39.5521.</num> <heading>METERING</heading> <subsection identifier="/us/tx/ut/t2/c39/scL/s39.5521/a"> <num value="a">(a)</num> <chapeau>Notwithstanding Section 39.552, an electric utility subject to this subchapter that elects to deploy advanced metering and meter information networks may recover reasonable and necessary costs incurred in deploying advanced metering and meter information networks. An electric utility that elects to deploy advanced metering or meter information networks is subject to commission rules adopted under Sections 39.107(h) and (k). The commission shall ensure that any deployment plan approved under this section and any related customer surcharge:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scL/s39.5521/1"> <num value="1">(1)</num> <content>are not applicable to customer accounts that receive service at transmission voltage; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scL/s39.5521/2"> <num value="2">(2)</num> <chapeau>are consistent with commission rules related to advanced metering systems regarding:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c39/scL/s39.5521/A"> <num value="A">(A)</num> <content>customer protections;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scL/s39.5521/B"> <num value="B">(B)</num> <content>data security, privacy, and ownership; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scL/s39.5521/C"> <num value="C">(C)</num> <content>options given consumers to continue to receive service through a non-advanced meter.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scL/s39.5521/b"> <num value="b">(b)</num> <content>An electric utility subject to this subchapter that elects to deploy an advanced meter information network shall deploy the network as rapidly as practicable to allow customers to better manage energy use and control costs.</content> </subsection> <sourceCredit>Added by Acts 2019, 86th Leg., R.S., Ch. 168 (H.B. 853), Sec. 1, eff. May 24, 2019.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scL/s39.553"> <num value="39.553">Sec. 39.553.</num> <heading>TRANSITION TO COMPETITION</heading> <subsection identifier="/us/tx/ut/t2/c39/scL/s39.553/a"> <num value="a">(a)</num> <content>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.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scL/s39.553/b"> <num value="b">(b)</num> <chapeau>The first stage for the transition to competition consists of the following activities:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scL/s39.553/1"> <num value="1">(1)</num> <content>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;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scL/s39.553/2"> <num value="2">(2)</num> <content>development of retail market protocols to facilitate retail competition; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scL/s39.553/3"> <num value="3">(3)</num> <content>completion of an expedited proceeding to develop nonbypassable delivery rates for the customer choice pilot project to be implemented under Subsection (c)(1).</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scL/s39.553/c"> <num value="c">(c)</num> <chapeau>The second stage for the transition to competition consists of the following activities:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scL/s39.553/1"> <num value="1">(1)</num> <content>initiation of the customer choice pilot project in accordance with Section 39.104;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scL/s39.553/2"> <num value="2">(2)</num> <content>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</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scL/s39.553/3"> <num value="3">(3)</num> <content>implementation of a seams agreement with adjacent power regions to reduce barriers to entry and facilitate competition.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scL/s39.553/d"> <num value="d">(d)</num> <chapeau>The third stage for the transition to competition consists of the following activities:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scL/s39.553/1"> <num value="1">(1)</num> <chapeau>the electric utility filing with the commission:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c39/scL/s39.553/A"> <num value="A">(A)</num> <content>an application for business separation in accordance with Section 39.051;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scL/s39.553/B"> <num value="B">(B)</num> <content>an application for unbundled transmission and distribution rates in accordance with Section 39.201;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scL/s39.553/C"> <num value="C">(C)</num> <content>an application for certification of a qualified power region in accordance with Section 39.152; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scL/s39.553/D"> <num value="D">(D)</num> <content>an application for price-to-beat rates in accordance with Section 39.202;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scL/s39.553/2"> <num value="2">(2)</num> <chapeau>the commission:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c39/scL/s39.553/A"> <num value="A">(A)</num> <content>approving a business separation plan for the utility;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scL/s39.553/B"> <num value="B">(B)</num> <content>setting unbundled transmission and distribution rates for the utility;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scL/s39.553/C"> <num value="C">(C)</num> <content>certifying a qualified power region, which includes conducting a formal evaluation of wholesale market power in the region, in accordance with Section 39.152;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scL/s39.553/D"> <num value="D">(D)</num> <content>setting price-to-beat rates for the utility; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scL/s39.553/E"> <num value="E">(E)</num> <content>determining which competitive energy services must be separated from regulated utility activities in accordance with Section 39.051; and</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scL/s39.553/3"> <num value="3">(3)</num> <content>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.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scL/s39.553/e"> <num value="e">(e)</num> <chapeau>The fourth stage for the transition to competition consists of the following activities:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scL/s39.553/1"> <num value="1">(1)</num> <content>commission evaluation of the results of the pilot project;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scL/s39.553/2"> <num value="2">(2)</num> <content>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</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scL/s39.553/3"> <num value="3">(3)</num> <content>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.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scL/s39.553/f"> <num value="f">(f)</num> <chapeau>The fifth stage for the transition to competition consists of the following activities:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scL/s39.553/1"> <num value="1">(1)</num> <chapeau>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:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c39/scL/s39.553/A"> <num value="A">(A)</num> <content>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</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scL/s39.553/B"> <num value="B">(B)</num> <content>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</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scL/s39.553/2"> <num value="2">(2)</num> <content>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.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2011, 82nd Leg., R.S., Ch. 1113 (S.B. 1910), Sec. 1, eff. June 17, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scL/s39.554"> <num value="39.554">Sec. 39.554.</num> <heading>INTERCONNECTION OF DISTRIBUTED RENEWABLE GENERATION</heading> <subsection identifier="/us/tx/ut/t2/c39/scL/s39.554/a"> <num value="a">(a)</num> <chapeau>In this section:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scL/s39.554/1"> <num value="1">(1)</num> <content>"Distributed renewable generation" has the meaning assigned by Section 39.916.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scL/s39.554/2"> <num value="2">(2)</num> <content>"Distributed renewable generation owner" means an owner of distributed renewable generation that is a retail electric customer.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scL/s39.554/3"> <num value="3">(3)</num> <content>"Interconnection" has the meaning assigned by Section 39.916.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scL/s39.554/b"> <num value="b">(b)</num> <content>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.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scL/s39.554/c"> <num value="c">(c)</num> <chapeau>An electric utility that approves an application of a distributed renewable generation owner under Subsection (b):</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scL/s39.554/1"> <num value="1">(1)</num> <content>shall install, maintain, and retain ownership of the meter and metering equipment; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scL/s39.554/2"> <num value="2">(2)</num> <content>may install load research metering equipment on the premises of the owner, at no expense to the owner.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scL/s39.554/d"> <num value="d">(d)</num> <chapeau>At the request of an electric utility that approves an application of a distributed renewable generation owner under Subsection (b), the owner shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scL/s39.554/1"> <num value="1">(1)</num> <content>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</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scL/s39.554/2"> <num value="2">(2)</num> <content>provide, at no expense to the utility, a suitable location for the utility to install meters and equipment associated with billing and load research.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scL/s39.554/e"> <num value="e">(e)</num> <chapeau>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:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scL/s39.554/1"> <num value="1">(1)</num> <chapeau>the owner:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c39/scL/s39.554/A"> <num value="A">(A)</num> <content>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</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scL/s39.554/B"> <num value="B">(B)</num> <content>has a qualifying facility with a design capacity of not more than 50 kilowatts; and</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scL/s39.554/2"> <num value="2">(2)</num> <chapeau>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:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c39/scL/s39.554/A"> <num value="A">(A)</num> <content>the owner's estimated annual kilowatt hour consumption for a new apartment house or qualifying facility; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scL/s39.554/B"> <num value="B">(B)</num> <content>the amount of electricity the owner consumed in the year before installation of the distributed renewable generation or qualifying facility.</content> </subparagraph> </paragraph> </subsection> <sourceCredit>Text of subsection effective until September 01, 2026 (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). Text of subsection effective on September 01, 2026 (f) Unless the commission approves an alternative method for compensating a distributed renewable generation owner for electricity generated by distributed renewable generation or a qualifying facility, 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. Text of subsection effective on September 01, 2026 (i) Before approving an alternative method for compensating a distributed renewable generation owner for electricity generated by distributed renewable generation or a qualifying facility, the commission shall require the electric utility to conduct and submit to the commission a comprehensive cost-benefit analysis using established best practices to justify the rates of compensation and any associated fees. The commission must consider the comprehensive cost-benefit analysis before approving alternative rates for compensating distributed renewable generation owners or the continuation of net metering, including any rates or fees that apply only to distributed renewable generation owners and reflect the value provided by the distributed renewable generation or qualifying facility. Added by Acts 2011, 82nd Leg., R.S., Ch. 1113 (S.B. 1910), Sec. 1, eff. June 17, 2011. Amended by: Acts 2025, 89th Leg., R.S., Ch. 82 (H.B. 912), Sec. 1, eff. September 1, 2026.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scL/s39.555"> <num value="39.555">Sec. 39.555.</num> <heading>MARKETING OF ENERGY EFFICIENCY AND RENEWABLE ENERGY PROGRAMS</heading> <content>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.</content> <sourceCredit>Added by Acts 2011, 82nd Leg., R.S., Ch. 1113 (S.B. 1910), Sec. 1, eff. June 17, 2011.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c39/scM"> <num value="M">SUBCHAPTER M.</num> <heading>WINTER STORM URI DEFAULT BALANCE FINANCING</heading> <section identifier="/us/tx/ut/t2/c39/scM/s39.601"> <num value="39.601">Sec. 39.601.</num> <heading>PURPOSE</heading> <subsection identifier="/us/tx/ut/t2/c39/scM/s39.601/a"> <num value="a">(a)</num> <chapeau>The purpose of this subchapter is to address the Winter Storm Uri default balance, as defined by Section 39.602, in a manner that benefits the public interest by:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scM/s39.601/1"> <num value="1">(1)</num> <content>enabling the independent organization to finance the payment of the default balance with debt obligations; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scM/s39.601/2"> <num value="2">(2)</num> <content>authorizing the commission to contract with the comptroller under Section 404.0241, Government Code, to finance the payment of the default balance with debt obligations.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scM/s39.601/b"> <num value="b">(b)</num> <chapeau>Financing the default balance in the manner provided by this subchapter will:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scM/s39.601/1"> <num value="1">(1)</num> <content>allow wholesale market participants that are owed money to be paid in a more timely manner;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scM/s39.601/2"> <num value="2">(2)</num> <content>replenish financial revenue auction receipts temporarily used by the independent organization to reduce the Winter Storm Uri-related amounts short-paid to the wholesale market participants; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scM/s39.601/3"> <num value="3">(3)</num> <content>allow the wholesale market to repay the default balance over time.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scM/s39.601/c"> <num value="c">(c)</num> <content>The legislature finds that the financing authorized by this subchapter serves the public purpose of preserving the integrity of the electricity market in the ERCOT power region.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scM/s39.601/d"> <num value="d">(d)</num> <content>The proceeds of debt obligations issued under this subchapter must be used solely for the purpose of financing default balances that otherwise would be or have been uplifted to the wholesale market.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scM/s39.601/e"> <num value="e">(e)</num> <content>The commission shall ensure that the structuring and pricing of debt obligations issued under this subchapter result in the lowest financing costs consistent with market conditions and the terms of the commission's order. The present value calculation must use a discount rate equal to the proposed interest rate on the debt obligations.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 908 (H.B. 4492), Sec. 5, eff. June 16, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scM/s39.602"> <num value="39.602">Sec. 39.602.</num> <heading>DEFINITIONS</heading> <chapeau>In this subchapter:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scM/s39.602/1"> <num value="1">(1)</num> <chapeau>"Default balance" means an amount of money of not more than $800 million that includes only:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c39/scM/s39.602/A"> <num value="A">(A)</num> <content>amounts owed to the independent organization by competitive wholesale market participants from the period of emergency that otherwise would be or have been uplifted to other wholesale market participants;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scM/s39.602/B"> <num value="B">(B)</num> <content>financial revenue auction receipts used by the independent organization to temporarily reduce amounts short-paid to wholesale market participants related to the period of emergency; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scM/s39.602/C"> <num value="C">(C)</num> <content>reasonable costs incurred by a state agency or the independent organization to implement a debt obligation order under Sections 39.603 and 39.604, including the cost of retiring or refunding existing debt.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scM/s39.602/2"> <num value="2">(2)</num> <content>"Default charges" means charges assessed to wholesale market participants to repay amounts financed under this subchapter to pay the default balance.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scM/s39.602/3"> <num value="3">(3)</num> <content>"Independent organization" means the independent organization certified under Section 39.151 for the ERCOT power region.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scM/s39.602/4"> <num value="4">(4)</num> <content>"Period of emergency" means the period beginning 12:01 a.m., February 12, 2021, and ending 11:59 p.m., February 20, 2021.</content> </paragraph> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 908 (H.B. 4492), Sec. 5, eff. June 16, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scM/s39.603"> <num value="39.603">Sec. 39.603.</num> <heading>DEBT OBLIGATION ORDER</heading> <subsection identifier="/us/tx/ut/t2/c39/scM/s39.603/a"> <num value="a">(a)</num> <chapeau>On application by the independent organization, the commission by order may authorize the independent organization to establish a debt financing mechanism to finance the default balance if the commission finds that the debt obligations are needed to preserve the integrity of the wholesale market and the public interest, after considering:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scM/s39.603/1"> <num value="1">(1)</num> <content>the need to timely replenish financial revenue auction receipts used by the independent organization to reduce amounts short-paid to wholesale market participants;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scM/s39.603/2"> <num value="2">(2)</num> <content>the interests of wholesale market participants that are owed balances; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scM/s39.603/3"> <num value="3">(3)</num> <content>the potential effects of uplifting those balances to the wholesale market without a financing vehicle.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scM/s39.603/b"> <num value="b">(b)</num> <chapeau>The order must state:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scM/s39.603/1"> <num value="1">(1)</num> <content>the default balance to be financed; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scM/s39.603/2"> <num value="2">(2)</num> <content>the period over which the default charges must be assessed to repay the debt obligations, which may not exceed 30 years.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scM/s39.603/c"> <num value="c">(c)</num> <content>The order must include an adjustment mechanism requiring the independent organization to adjust default charges to refund, over the remaining period of the default charges, any payments made by a market participant toward unpaid obligations from the period of emergency that were included in the financed default balance.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scM/s39.603/d"> <num value="d">(d)</num> <content>The independent organization shall collect from and allocate among wholesale market participants the default charges using the same allocated pro rata share methodology under which the charges would otherwise be uplifted under the protocols in effect on March 1, 2021. The default charges must be assessed on all wholesale market participants, including market participants who are in default but still participating in the wholesale market and who enter the market after a debt obligation order is issued under this subchapter, and may be based on periodically updated transaction data to prevent market participants from engaging in behavior designed to avoid the default charges.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scM/s39.603/e"> <num value="e">(e)</num> <content>Not later than the 30th day after the date the independent organization receives a default charge payment from a wholesale market participant, the independent organization shall remit the payment to the comptroller toward repayment of debt obligations in which the comptroller made an investment under Section 404.0241(b-1), Government Code, if applicable.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scM/s39.603/f"> <num value="f">(f)</num> <chapeau>Notwithstanding another provision of this subchapter, default charges may not be collected from or allocated to a market participant that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scM/s39.603/1"> <num value="1">(1)</num> <content>otherwise would be subject to a default charge solely as a result of acting as a central counterparty clearinghouse in wholesale market transactions in the ERCOT power region; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scM/s39.603/2"> <num value="2">(2)</num> <content>is regulated as a derivatives clearing organization, as defined by Section 1a, Commodity Exchange Act (7 U.S.C. Section 1a).</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scM/s39.603/g"> <num value="g">(g)</num> <content>Not later than the 90th day after the date the independent organization files an application for an order under Subsection (a), the commission shall issue an order described by Subsection (a) or an order denying the application. The order becomes effective in accordance with its terms and the order, together with the default charges authorized in the order, shall be irrevocable and not subject to reduction, impairment, or adjustment by further action of the commission after the order takes effect. Notwithstanding this requirement, the commission may refinance any debt obligations created by an order issued under this subchapter if the commission determines that the refinancing is in the public interest, considering the interest of both the ERCOT market and the state's interest in the economic stabilization fund, and otherwise meets the requirements of this subchapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scM/s39.603/h"> <num value="h">(h)</num> <content>An order described by Subsection (a) or (g) is not subject to rehearing by the commission. The order may be reviewed by appeal by a party to the proceeding to a Travis County district court that is filed not later than the 15th day after the date the order is signed by the commission. The judgment of the district court may be reviewed only by a direct appeal to the Supreme Court of Texas that is filed not later than the 15th day after the date of the entry of judgment. All appeals shall be heard and determined by the district court and the Supreme Court of Texas as expeditiously as possible with lawful precedence over other matters. Review on appeal shall be based solely on the record before the commission and briefs to the court and shall be limited to whether the order conforms to the constitution and laws of this state and the United States and is within the authority of the commission under this chapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scM/s39.603/i"> <num value="i">(i)</num> <content>A debt obligation issued under this section is a nonrecourse debt secured solely by the default charges explicitly assessed to repay the obligation. The independent organization's obligations authorized under this section do not create personal liability for the independent organization.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 908 (H.B. 4492), Sec. 5, eff. June 16, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scM/s39.604"> <num value="39.604">Sec. 39.604.</num> <heading>COMMISSION-AUTHORIZED FINANCING</heading> <subsection identifier="/us/tx/ut/t2/c39/scM/s39.604/a"> <num value="a">(a)</num> <content>The commission may contract with another state agency with expertise in public financing to establish a debt financing mechanism for the payment of the default balance as defined in this subchapter, under an order that meets the requirements of Section 39.603. This section does not apply to a default balance securitized under Subchapter D, Chapter 41.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scM/s39.604/b"> <num value="b">(b)</num> <content>The contracted state agency and any issuer, along with the independent organization, must be a party to the commission's proceedings that address the issuance of an order.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scM/s39.604/c"> <num value="c">(c)</num> <chapeau>In addition to the other applicable requirements of this subtitle, an order issued under this section must:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scM/s39.604/1"> <num value="1">(1)</num> <content>require the sale, assignment, or other transfer to the contracted state agency of default charges created by the order and, following that sale, assignment, or transfer, require that default charges paid under any order be created, assessed, and collected as the property of the contracted state agency, subject to subsequent sale, assignment, or transfer by the contracted state agency as authorized under this subchapter;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scM/s39.604/2"> <num value="2">(2)</num> <chapeau>authorize:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c39/scM/s39.604/A"> <num value="A">(A)</num> <content>the issuance of debt obligations by the contracted state agency secured by a pledge of default charge revenue, and the application of the proceeds of those debt obligations, net of issuance costs, to the independent organization; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scM/s39.604/B"> <num value="B">(B)</num> <content>the acquisition of default charge revenue from the independent organization by the contracted state agency, financed:</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scM/s39.604/i"> <num value="i">(i)</num> <chapeau>by a loan by an issuer to the contracted state agency of the proceeds of debt obligations, net of issuance costs; or</chapeau> <clause identifier="/us/tx/ut/t2/c39/scM/s39.604/ii"> <num value="ii">(ii)</num> <content>by the acquisition by an issuer from the contracted state agency of the default charge revenue and in each case the pledge of the revenue to the repayment of the loan or other debt obligation, as applicable; and</content> </clause> <paragraph identifier="/us/tx/ut/t2/c39/scM/s39.604/3"> <num value="3">(3)</num> <content>authorize the independent organization to serve as collection agent to collect the default charges and transfer the collected default charges to the contracted state agency or the issuer, as appropriate.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scM/s39.604/d"> <num value="d">(d)</num> <content>After issuance of the order, the contracted state agency shall arrange for the issuance of debt obligations, as specified by the order, by the contracted state agency or another issuer selected by the contracted state agency and approved by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scM/s39.604/e"> <num value="e">(e)</num> <content>Debt obligations issued pursuant to an order issued under this section are secured only by the default charge revenue and any other funds pledged under the bond documents. No assets of the state or the independent organization are subject to claims by the holders of the debt obligations. Following assignment of the default charge revenue, the independent organization does not have any beneficial interest or claim of right in the revenue.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scM/s39.604/f"> <num value="f">(f)</num> <content>Effective on the date the first debt obligations are issued under this subchapter, if any provision of this title or portion of this title is held to be invalid or is invalidated, superseded, replaced, or repealed, or expires for any reason, that occurrence does not affect the validity or continuation of this subchapter or any other provision of this title that is relevant to the issuance, administration, payment, retirement, or refunding of debt obligations authorized under this subchapter or to any actions of the independent organization, its successors, an assignee, a collection agent, the contracted state agency, or an issuer and those provisions shall remain in full force and effect.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 908 (H.B. 4492), Sec. 5, eff. June 16, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scM/s39.605"> <num value="39.605">Sec. 39.605.</num> <heading>DEFAULT CHARGES NONBYPASSABLE</heading> <chapeau>An order issued under Section 39.603 or 39.604 must:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scM/s39.605/1"> <num value="1">(1)</num> <content>include terms ensuring that the imposition and collection of default charges authorized in the order shall be nonbypassable by wholesale market participants; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scM/s39.605/2"> <num value="2">(2)</num> <content>authorize the independent organization to establish appropriate fees and other methods for pursuing amounts owed from entities exiting the wholesale market.</content> </paragraph> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 908 (H.B. 4492), Sec. 5, eff. June 16, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scM/s39.606"> <num value="39.606">Sec. 39.606.</num> <heading>TRUE-UP MECHANISM</heading> <chapeau>An order issued under Section 39.603 or 39.604 must include a mechanism requiring that default charges be reviewed and adjusted at least annually, not later than the 45th day after the anniversary date of the issuance of the order, to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scM/s39.606/1"> <num value="1">(1)</num> <content>correct over-collections or under-collections over the preceding 12 months; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scM/s39.606/2"> <num value="2">(2)</num> <content>ensure the expected recovery of amounts sufficient to timely provide all payments of debt service.</content> </paragraph> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 908 (H.B. 4492), Sec. 5, eff. June 16, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scM/s39.607"> <num value="39.607">Sec. 39.607.</num> <heading>TAX EXEMPTION</heading> <content>The transfer and receipt of default charges are exempt from state and local sales and use, franchise, and gross receipts taxes.</content> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 908 (H.B. 4492), Sec. 5, eff. June 16, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scM/s39.608"> <num value="39.608">Sec. 39.608.</num> <heading>PROPERTY RIGHTS</heading> <subsection identifier="/us/tx/ut/t2/c39/scM/s39.608/a"> <num value="a">(a)</num> <content>The rights and interests of the independent organization or its successor under a debt obligation order issued under this subchapter, including the right to impose, collect, and receive default charges, shall be only contract rights until they are first transferred to an assignee or pledged in connection with an investment agreement entered into under Section 404.0241, Government Code, or the issuance of debt obligations, at which time they will become default property, as described by Subsection (b).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scM/s39.608/b"> <num value="b">(b)</num> <content>Default property shall constitute a present property right for purposes of contracts concerning the sale or pledge of property, even though the imposition and collection of default charges depends on further acts of the independent organization or others that have not yet occurred. A debt obligation order issued under this subchapter shall remain in effect and the property shall continue to exist for the same period as the pledge of the state described by Section 39.609.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scM/s39.608/c"> <num value="c">(c)</num> <content>All revenues and collections resulting from default charges shall constitute proceeds only of the default property arising from the debt obligation order.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 908 (H.B. 4492), Sec. 5, eff. June 16, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scM/s39.609"> <num value="39.609">Sec. 39.609.</num> <heading>PLEDGE OF STATE</heading> <content>Debt obligations issued pursuant to this subchapter, including any bonds, are not a debt or obligation of the state and are not a charge on its full faith and credit or taxing power. The state pledges, however, for the benefit and protection of financing parties and the independent organization that it will not take or permit any action that would impair the value of default property, or reduce, alter, or impair the default charges to be imposed, collected, and remitted to financing parties, until the principal, interest and premium, and any other charges incurred and contracts to be performed in connection with the related debt obligations have been paid and performed in full. Any party issuing a debt obligation under this subchapter is authorized to include this pledge in any documentation relating to the obligation.</content> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 908 (H.B. 4492), Sec. 5, eff. June 16, 2021.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c39/scN"> <num value="N">SUBCHAPTER N.</num> <heading>WINTER STORM URI UPLIFT FINANCING</heading> <section identifier="/us/tx/ut/t2/c39/scN/s39.651"> <num value="39.651">Sec. 39.651.</num> <heading>PURPOSE; USE OF PROCEEDS</heading> <subsection identifier="/us/tx/ut/t2/c39/scN/s39.651/a"> <num value="a">(a)</num> <chapeau>The purpose of this subchapter is to address the Winter Storm Uri uplift balance by:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scN/s39.651/1"> <num value="1">(1)</num> <content>enabling the independent organization certified under Section 39.151 for the ERCOT power region to finance the uplift balance on behalf of wholesale market participants through debt obligations; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scN/s39.651/2"> <num value="2">(2)</num> <content>authorizing the commission to contract with another state agency to finance the payment of the uplift balance with debt obligations or use any another financial mechanism consistent with this subchapter for that purpose.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scN/s39.651/b"> <num value="b">(b)</num> <content>Financing the uplift balance in the manner provided by this subchapter will allow wholesale market participants who were assessed extraordinary uplift charges due to consumption during the period of emergency to pay those charges over a longer period of time, alleviating liquidity issues and reducing the risk of additional defaults in the wholesale market.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scN/s39.651/c"> <num value="c">(c)</num> <content>The legislature finds that authorizing financing under this subchapter serves the public purpose of allowing the commission to stabilize the wholesale electricity market in the ERCOT power region.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scN/s39.651/d"> <num value="d">(d)</num> <content>The proceeds of debt obligations issued under this subchapter must be used solely for the purpose of financing reliability deployment price adder charges and ancillary service costs that exceeded the commission's system-wide offer cap and were uplifted to load-serving entities based on consumption during the period of emergency. A load-serving entity that receives proceeds from the debt obligations may use the proceeds solely for the purposes of fulfilling payment obligations directly related to such costs and refunding such costs to retail customers who have paid or otherwise would be obligated to pay such costs.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scN/s39.651/e"> <num value="e">(e)</num> <content>The commission shall ensure that the structuring and pricing of the debt obligations results in the lowest uplift charges consistent with market conditions and the terms of the order issued under this subchapter. The present value calculation must use a discount rate equal to the proposed interest rate on the debt obligations.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 908 (H.B. 4492), Sec. 5, eff. June 16, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scN/s39.652"> <num value="39.652">Sec. 39.652.</num> <heading>DEFINITIONS</heading> <chapeau>In this subchapter:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scN/s39.652/1"> <num value="1">(1)</num> <content>"Independent organization" means the independent organization certified under Section 39.151 for the ERCOT power region.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scN/s39.652/2"> <num value="2">(2)</num> <content>"Load-serving entity" means a municipally owned utility, an electric cooperative, or a retail electric provider.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scN/s39.652/3"> <num value="3">(3)</num> <content>"Period of emergency" means the period beginning 12:01 a.m., February 12, 2021, and ending 11:59 p.m., February 20, 2021.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scN/s39.652/4"> <num value="4">(4)</num> <content>"Uplift balance" means an amount of money of not more than $2.1 billion that was uplifted to load-serving entities on a load ratio share basis due to energy consumption during the period of emergency for reliability deployment price adder charges and ancillary services costs in excess of the commission's system-wide offer cap, excluding amounts securitized under Subchapter D, Chapter 41. The term does not include amounts that were part of the prevailing settlement point price during the period of emergency.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scN/s39.652/5"> <num value="5">(5)</num> <content>"Uplift charges" means charges assessed to load-serving entities to repay amounts financed under this subchapter to pay the uplift balance and reasonable costs incurred by a state agency or the independent organization to implement a debt obligation order under Section 39.653, 39.654, or 39.655, including the cost of retiring or refunding existing debt.</content> </paragraph> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 908 (H.B. 4492), Sec. 5, eff. June 16, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scN/s39.653"> <num value="39.653">Sec. 39.653.</num> <heading>DEBT OBLIGATION ORDER</heading> <subsection identifier="/us/tx/ut/t2/c39/scN/s39.653/a"> <num value="a">(a)</num> <content>The independent organization shall file an application with the commission to establish a debt financing mechanism for the payment of the uplift balance if the commission finds that such financing will support the financial integrity of the wholesale market and is necessary to protect the public interest, considering the impacts on both wholesale market participants and retail customers.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scN/s39.653/b"> <num value="b">(b)</num> <chapeau>An order issued under this section must:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scN/s39.653/1"> <num value="1">(1)</num> <content>state the uplift balance to be financed;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scN/s39.653/2"> <num value="2">(2)</num> <content>state the period over which the uplift charges must be assessed to repay the debt obligations, which may not exceed 30 years; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scN/s39.653/3"> <num value="3">(3)</num> <content>provide the process for remitting the proceeds of the financing to load-serving entities who were exposed to the costs included in the uplift balance, including a requirement for the load-serving entities to submit documentation of their exposure.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scN/s39.653/c"> <num value="c">(c)</num> <content>The independent organization shall assess uplift charges to all load-serving entities on a load ratio share basis, which may be translated to a kWh charge, including load serving entities who enter the market after an order has been issued under this subchapter, but excluding the load of entities that opt out under Subsection (d).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scN/s39.653/d"> <num value="d">(d)</num> <content>The commission shall develop a one-time process that allows municipally owned utilities, electric cooperatives, river authorities, a retail electric provider that has the same corporate parent as each of the provider's customers, a retail electric provider that is an affiliate of each of the provider's customers, and transmission-voltage customers served by a retail electric provider to opt out of the uplift charges by paying in full all invoices owed for usage during the period of emergency. Load-serving entities and transmission-voltage customers that opt out under this subsection shall not receive any proceeds from the uplift financing.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scN/s39.653/e"> <num value="e">(e)</num> <content>An order issued under this section must include a requirement that any load-serving entity that receives proceeds from the financing that exceed the entity's actual exposure to uplift charges from consumption during the period of emergency notify the independent organization and remit any excess receipts. Any payments received under this subsection must be credited against the uplift balance to reduce the remaining uplift charges.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scN/s39.653/f"> <num value="f">(f)</num> <content>Not later than the 90th day after the date the independent organization files an application for an order under Subsection (a), the commission shall issue an order described by Subsection (a) or an order denying the application. The order becomes effective in accordance with its terms and the order, together with the uplift charges authorized in the order, shall be irrevocable and not subject to reduction, impairment, or adjustment by further action of the commission after it takes effect. Notwithstanding this requirement, the commission may refinance any debt obligations created by an order under this subchapter if the commission determines that the refinancing is in the public interest and otherwise meets the requirements of this subchapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scN/s39.653/g"> <num value="g">(g)</num> <content>An order issued under this section is not subject to rehearing by the commission. An order may be reviewed by appeal by a party to the proceeding to a Travis County district court filed not later than the 15th day after the date the order is signed by the commission. The judgment of the district court may be reviewed only by direct appeal to the Supreme Court of Texas filed not later than the 15th day after the date of the entry of judgment. All appeals shall be heard and determined by the district court and the Supreme Court of Texas as expeditiously as possible with lawful precedence over other matters. Review on appeal shall be based solely on the record before the commission and briefs to the court and shall be limited to whether the order conforms to the constitution and laws of this state and the United States and is within the authority of the commission under this chapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scN/s39.653/h"> <num value="h">(h)</num> <content>A debt obligation issued under this section is a nonrecourse debt secured solely by the uplift charges explicitly assessed to repay the obligation. The independent organization's obligations authorized under this section do not create personal liability for the independent organization.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scN/s39.653/i"> <num value="i">(i)</num> <content>This section does not apply to any balance securitized under Subchapter D, Chapter 41.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 908 (H.B. 4492), Sec. 5, eff. June 16, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scN/s39.654"> <num value="39.654">Sec. 39.654.</num> <heading>COMMISSION-AUTHORIZED FINANCING</heading> <subsection identifier="/us/tx/ut/t2/c39/scN/s39.654/a"> <num value="a">(a)</num> <content>The commission may contract with another state agency with expertise in public financing to establish a debt financing mechanism to finance the payment of the uplift balance under an order that meets the requirements of Section 39.653.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scN/s39.654/b"> <num value="b">(b)</num> <content>The contracted state agency and any issuer must be a party to the commission's proceedings that address the issuance of an order along with the independent organization.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scN/s39.654/c"> <num value="c">(c)</num> <chapeau>In addition to the other applicable requirements of this subtitle, an order issued under this section must:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scN/s39.654/1"> <num value="1">(1)</num> <content>require the sale, assignment, or other transfer to the contracted state agency of uplift charges created by the order and, following that sale, assignment, or transfer, require that uplift charges paid under any order be created, assessed, and collected as the property of the contracted state agency, subject to subsequent sale, assignment, or transfer by the contracted state agency as authorized under this subchapter;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scN/s39.654/2"> <num value="2">(2)</num> <chapeau>authorize:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c39/scN/s39.654/A"> <num value="A">(A)</num> <content>the issuance of debt obligations by the contracted state agency secured by a pledge of uplift charge revenue, and the application of the proceeds of those debt obligations, net of issuance costs, to the independent organization; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scN/s39.654/B"> <num value="B">(B)</num> <content>the acquisition of uplift charge revenue from the independent organization by the contracted state agency, financed:</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scN/s39.654/i"> <num value="i">(i)</num> <chapeau>by a loan by an issuer to the contracted state agency of the proceeds of debt obligations, net of issuance costs; or</chapeau> <clause identifier="/us/tx/ut/t2/c39/scN/s39.654/ii"> <num value="ii">(ii)</num> <content>by the acquisition by an issuer from the contracted state agency of the uplift charge revenue and in each case the pledge of the revenue to the repayment of the loan or debt obligations, as applicable; and</content> </clause> <paragraph identifier="/us/tx/ut/t2/c39/scN/s39.654/3"> <num value="3">(3)</num> <content>authorize the independent organization to serve as collection agent to collect the uplift charges and transfer the collected uplift charges to the contracted state agency or the issuer, as appropriate.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scN/s39.654/d"> <num value="d">(d)</num> <content>After issuance of the order, the contracted state agency shall arrange for the issuance of debt obligations, as specified by the order, by the contracted state agency or another issuer selected by the contracted state agency and approved by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scN/s39.654/e"> <num value="e">(e)</num> <content>Debt obligations issued pursuant to an order issued under this section are secured only by the uplift charge revenue and any other funds pledged under the bond documents. No assets of the state or the independent organization are subject to claims by the holders of the debt obligations. Following assignment of the uplift charge revenue, the independent organization does not have any beneficial interest or claim of right in the revenue.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 908 (H.B. 4492), Sec. 5, eff. June 16, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scN/s39.655"> <num value="39.655">Sec. 39.655.</num> <heading>OTHER FINANCIAL MECHANISM</heading> <content>The commission may use a financial mechanism other than the mechanisms described by Sections 39.653 and 39.654 that meets the requirements of this subchapter to accomplish the purposes of this subchapter.</content> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 908 (H.B. 4492), Sec. 5, eff. June 16, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scN/s39.656"> <num value="39.656">Sec. 39.656.</num> <heading>UPLIFT CHARGES NONBYPASSABLE</heading> <chapeau>An order issued under Section 39.653, 39.654, or 39.655 must:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scN/s39.656/1"> <num value="1">(1)</num> <content>include terms ensuring that the imposition and collection of uplift charges authorized in the order shall be nonbypassable, except for entities excluded under Section 39.653(d); and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scN/s39.656/2"> <num value="2">(2)</num> <content>authorize the independent organization to establish appropriate fees and other methods for pursuing amounts owed from entities exiting the wholesale market.</content> </paragraph> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 908 (H.B. 4492), Sec. 5, eff. June 16, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scN/s39.657"> <num value="39.657">Sec. 39.657.</num> <heading>TRUE-UP</heading> <chapeau>An order shall include a mechanism requiring that uplift charges be reviewed and adjusted at least annually, not later than the 45th day after the anniversary date of the issuance of the debt obligations, to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scN/s39.657/1"> <num value="1">(1)</num> <content>correct over-collections or under-collections over the preceding 12 months; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scN/s39.657/2"> <num value="2">(2)</num> <content>ensure the expected recovery of amounts sufficient to timely provide all payments of debt service and other required amounts and charges in connection with the debt obligations.</content> </paragraph> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 908 (H.B. 4492), Sec. 5, eff. June 16, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scN/s39.658"> <num value="39.658">Sec. 39.658.</num> <heading>TAX EXEMPTION</heading> <content>Transactions involving the transfer and ownership of uplift property and the receipt of uplift charges are exempt from state and local income, sales, franchise, gross receipts, and other taxes or similar charges.</content> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 908 (H.B. 4492), Sec. 5, eff. June 16, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scN/s39.659"> <num value="39.659">Sec. 39.659.</num> <heading>SEVERABILITY</heading> <content>Effective on the date the first debt obligations are issued under this subchapter, if any provision in this title or portion of this title is held to be invalid or is invalidated, superseded, replaced, repealed, or expires for any reason, that occurrence does not affect the validity or continuation of this subchapter or any other provision of this title that is relevant to the issuance, administration, payment, retirement, or refunding of debt obligations or to any actions of the independent organization, its successors, an assignee, a collection agent, or a financing party, which shall remain in full force and effect.</content> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 908 (H.B. 4492), Sec. 5, eff. June 16, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scN/s39.660"> <num value="39.660">Sec. 39.660.</num> <heading>CUSTOMER CHARGES</heading> <content>All load-serving entities that receive offsets to specific uplift charges from the independent organization under this subchapter must adjust customer invoices to reflect the offsets for any charges that were or would otherwise be passed through to customers under the terms of service with the load-serving entity, including by providing a refund for any offset charges that were previously paid. An electric cooperative, including an electric cooperative that elects to receive offsets, shall not otherwise become subject to rate regulation by the commission and receipt of offsets does not affect the applicability of Chapter 41 to an electric cooperative.</content> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 908 (H.B. 4492), Sec. 5, eff. June 16, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scN/s39.661"> <num value="39.661">Sec. 39.661.</num> <heading>ENFORCEMENT</heading> <content>The commission may use any enforcement mechanism established by Chapter 15 or this chapter, including revocation of certification by the commission, against any entity that fails to remit excess receipts from the uplift balance financing under Section 39.653(e) or otherwise misappropriates or misuses amounts received from the uplift balance financing this subchapter.</content> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 908 (H.B. 4492), Sec. 5, eff. June 16, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scN/s39.662"> <num value="39.662">Sec. 39.662.</num> <heading>PROPERTY RIGHTS</heading> <subsection identifier="/us/tx/ut/t2/c39/scN/s39.662/a"> <num value="a">(a)</num> <content>The rights and interests of the independent organization or its successor under a debt obligation order issued under this subchapter, including the right to impose, collect, and receive uplift charges authorized in a debt obligation order under this subchapter, shall be only contract rights until they are first transferred to an assignee or pledged in connection with the issuance of a financing agreement entered into under Section 39.654(a) or the issuance of debt obligations, at which time they will become uplift property, as described by Subsection (b).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scN/s39.662/b"> <num value="b">(b)</num> <content>Uplift property shall constitute a present property right for purposes of contracts concerning the sale or pledge of property, even though the imposition and collection of uplift charges depends on further acts of the independent organization or others that have not yet occurred. A debt obligation order issued under this subchapter shall remain in effect and the property shall continue to exist for the same period as the pledge of the state described by Section 39.663.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scN/s39.662/c"> <num value="c">(c)</num> <content>All revenues and collections resulting from uplift charges shall constitute proceeds only of the uplift property arising from the debt obligation order.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 908 (H.B. 4492), Sec. 5, eff. June 16, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scN/s39.663"> <num value="39.663">Sec. 39.663.</num> <heading>PLEDGE OF STATE</heading> <content>Debt obligations issued pursuant to this subchapter, including any bonds, are not a debt or obligation of the state and are not a charge on its full faith and credit or taxing power. The state pledges, however, for the benefit and protection of financing parties and the independent organization that it will not take or permit any action that would impair the value of uplift property, or reduce, alter, or impair the uplift charges to be imposed, collected, and remitted to financing parties, until the principal, interest and premium, and any other charges incurred and contracts to be performed in connection with the related debt obligations have been paid and performed in full. Any party issuing a debt obligation under this subchapter is authorized to include this pledge in any documentation relating to the obligation.</content> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 908 (H.B. 4492), Sec. 5, eff. June 16, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scN/s39.664"> <num value="39.664">Sec. 39.664.</num> <heading>LEGAL ACTIONS INVOLVING PRICING OR UPLIFT ACTIONS</heading> <content>A load-serving entity that receives proceeds from the financing under this subchapter shall return an amount of the proceeds equal to any amount of money received by the entity due to litigation seeking judicial review of pricing or uplift actions taken by the commission or the independent organization in connection with the period of emergency.</content> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 908 (H.B. 4492), Sec. 5, eff. June 16, 2021.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c39/scZ"> <num value="Z">SUBCHAPTER Z.</num> <heading>MISCELLANEOUS PROVISIONS</heading> <section identifier="/us/tx/ut/t2/c39/scZ/s39.9016"> <num value="39.9016">Sec. 39.9016.</num> <heading>NUCLEAR SAFETY FEE</heading> <content>An electric utility that operates a nuclear asset located in a county on the coast of the Gulf of Mexico shall pay a nuclear safety fee for the year 2000 and the year 2001 to each taxing unit in which the nuclear asset is located, other than a school district, in an amount equal to the difference between the ad valorem taxes imposed by the taxing unit in 1999 and the amount of ad valorem taxes imposed by the unit in the year for which the fee is due, except that the amount of the fee may not exceed one-half the taxes imposed on the asset by the unit in 1999. The nuclear safety fee shall be considered a tax or fee under Section 39.258(5).</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scZ/s39.902"> <num value="39.902">Sec. 39.902.</num> <heading>CUSTOMER EDUCATION</heading> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.902/a"> <num value="a">(a)</num> <content>On or before January 1, 2001, the commission shall develop and implement an educational program to inform customers, including low-income and non-English-speaking customers, about changes in the provision of electric service resulting from the opening of the retail electric market and the customer choice pilot program under this chapter. The educational program shall be neutral and nonpromotional and shall provide customers with the information necessary to make informed decisions relating to the source and type of electric service available for purchase and other information the commission considers necessary. The educational program shall inform customers of their rights and of the protections available through the commission and the office. The educational program may not duplicate customer information efforts undertaken by retail electric providers or other private entities. The educational program may not be targeted to areas served by municipally owned utilities or electric cooperatives that have not adopted customer choice. In planning and implementing this program, the commission shall consult with the office, with the Texas Department of Housing and Community Affairs, and with customers of and providers of retail electric service. The commission may enter into contracts for professional services to carry out the customer education program.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.902/b"> <num value="b">(b)</num> <content>Repealed by Acts 2011, 82nd Leg., R.S., Ch. 1083, Sec. 25(162), eff. June 17, 2011.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.902/c"> <num value="c">(c)</num> <content>After the opening of the retail electric market, the commission shall conduct ongoing customer education designed to help customers make informed choices of electric services and retail electric providers. As part of ongoing education, the commission may provide customers information concerning specific retail electric providers, including instances of complaints against them and records relating to quality of customer service.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 1083 (S.B. 1179), Sec. 25(162), eff. June 17, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scZ/s39.9025"> <num value="39.9025">Sec. 39.9025.</num> <heading>HOME ELECTRIC ENERGY REPORTS</heading> <content>The commission may encourage retail electric providers to deliver individualized home electric energy reports to educate consumers about electric energy use and energy efficiency to assist consumers to use energy more efficiently.</content> <sourceCredit>Added by Acts 2007, 80th Leg., R.S., Ch. 939 (H.B. 3693), Sec. 21, eff. September 1, 2007.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scZ/s39.903"> <num value="39.903">Sec. 39.903.</num> <heading></heading> <chapeau>This section expired September 1, 2017, according to the date provided by Subsection (m).</chapeau> <continuation>Sec. 39.903. SYSTEM BENEFIT FUND. (a) The system benefit fund is an account in the general revenue fund. Money in the account may be appropriated only for the purposes provided by this section or other law. Interest earned on the system benefit fund shall be credited to the fund. Section 403.095, Government Code, does not apply to the system benefit fund.</continuation> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.903/b"> <num value="b">(b)</num> <content>The system benefit fund is financed by a nonbypassable fee set by the commission in an amount not to exceed 65 cents per megawatt hour. The system benefit fund fee is allocated to customers based on the amount of kilowatt hours used.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.903/c"> <num value="c">(c)</num> <content>The nonbypassable fee may not be imposed on the retail electric customers of a municipally owned utility or electric cooperative before the sixth month preceding the date on which the utility or cooperative implements customer choice. Money distributed from the system benefit fund to a municipally owned utility or an electric cooperative shall be proportional to the nonbypassable fee paid by the municipally owned utility or the electric cooperative, subject to the reimbursement provided by Subsection (i). On request by a municipally owned utility or electric cooperative, the commission shall reduce the nonbypassable fee imposed on retail electric customers served by the municipally owned utility or electric cooperative by an amount equal to the amount provided by the municipally owned utility or electric cooperative or its ratepayers for local low-income programs and local programs that educate customers about the retail electric market in a neutral and nonpromotional manner.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.903/d"> <num value="d">(d)</num> <content>The commission shall annually review and approve system benefit fund accounts, projected revenue requirements, and proposed nonbypassable fees.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.903/e"> <num value="e">(e)</num> <chapeau>Money in the system benefit fund may be appropriated to provide funding solely for the following regulatory purposes, in the following order of priority:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.903/1"> <num value="1">(1)</num> <chapeau>programs to:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c39/scZ/s39.903/A"> <num value="A">(A)</num> <content>assist low-income electric customers by providing the 10 percent reduced rate prescribed by Subsection (h); and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scZ/s39.903/B"> <num value="B">(B)</num> <content>provide one-time bill payment assistance to electric customers who are or who have in their households one or more seriously ill or disabled low-income persons and who have been threatened with disconnection for nonpayment;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.903/2"> <num value="2">(2)</num> <content>customer education programs, administrative expenses incurred by the commission in implementing and administering this chapter, and expenses incurred by the office under this chapter;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.903/3"> <num value="3">(3)</num> <content>programs to assist low-income electric customers by providing the targeted energy efficiency programs described by Subsection (f)(2);</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.903/4"> <num value="4">(4)</num> <content>programs to assist low-income electric customers by providing the 20 percent reduced rate prescribed by Subsection (h); and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.903/5"> <num value="5">(5)</num> <content>reimbursement to the commission and the Health and Human Services Commission for expenses incurred in the implementation and administration of an integrated eligibility process created under Section 17.007 for customer service discounts relating to retail electric service, including outreach expenses the commission determines are reasonable and necessary.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.903/f"> <num value="f">(f)</num> <chapeau>Notwithstanding Section 39.106(b), the commission shall adopt rules regarding programs to assist low-income electric customers on the introduction of customer choice. The programs may not be targeted to areas served by municipally owned utilities or electric cooperatives that have not adopted customer choice. The programs shall include:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.903/1"> <num value="1">(1)</num> <content>reduced electric rates as provided by Subsections (h)-(l); and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.903/2"> <num value="2">(2)</num> <content>targeted energy efficiency programs to be administered by the Texas Department of Housing and Community Affairs in coordination with existing weatherization programs.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.903/g"> <num value="g">(g)</num> <content>Until customer choice is introduced in a power region, an electric utility may not reduce, in any manner, programs already offered to assist low-income electric customers.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.903/h"> <num value="h">(h)</num> <content>The commission shall adopt rules for a retail electric provider to determine a reduced rate for eligible customers to be discounted off the standard retail service package as approved by the commission under Section 39.106, or the price to beat established by Section 39.202, whichever is lower. Municipally owned utilities and electric cooperatives shall establish a reduced rate for eligible customers to be discounted off the standard retail service package established under Section 40.053 or 41.053, as appropriate. The reduced rate for a retail electric provider shall result in a total charge that is at least 10 percent and, if sufficient money in the system benefit fund is available, up to 20 percent, lower than the amount the customer would otherwise be charged. To the extent the system benefit fund is insufficient to fund the initial 10 percent rate reduction, the commission may increase the fee to an amount not more than 65 cents per megawatt hour, as provided by Subsection (b). If the fee is set at 65 cents per megawatt hour or if the commission determines that appropriations are insufficient to fund the 10 percent rate reduction, the commission may reduce the rate reduction to less than 10 percent. For a municipally owned utility or electric cooperative, the reduced rate shall be equal to an amount that can be fully funded by that portion of the nonbypassable fee proceeds paid by the municipally owned utility or electric cooperative that is allocated to the utility or cooperative by the commission under Subsection (e) for programs for low-income customers of the utility or cooperative. The reduced rate for municipally owned utilities and electric cooperatives under this section is in addition to any rate reduction that may result from local programs for low-income customers of the municipally owned utilities or electric cooperatives.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.903/i"> <num value="i">(i)</num> <content>A retail electric provider, municipally owned utility, or electric cooperative seeking reimbursement from the system benefit fund may not charge an eligible low-income customer a rate higher than the appropriate rate determined under Subsection (h). A retail electric provider not subject to the price to beat, or a municipally owned utility or electric cooperative subject to the nonbypassable fee under Subsection (c), shall be reimbursed from the system benefit fund for the difference between the reduced rate and the rate established under Section 39.106 or, as appropriate, the rate established under Section 40.053 or 41.053. A retail electric provider who is subject to the price to beat shall be reimbursed from the system benefit fund for the difference between the reduced rate and the price to beat. The commission shall adopt rules providing for the reimbursement.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.903/j"> <num value="j">(j)</num> <content>The commission shall adopt rules providing for methods of enrolling customers eligible to receive reduced rates under Subsection (h). The rules must provide for automatic enrollment as one enrollment option. The Texas Department of Human Services, on request of the commission, shall assist in the adoption and implementation of these rules. The commission and the Texas Department of Human Services shall enter into a memorandum of understanding establishing the respective duties of the commission and the department in relation to the automatic enrollment.</content> <continuation>(j-1) The commission shall adopt rules governing the bill payment assistance program provided under Subsection (e)(1)(B). The rules must provide that a customer is eligible to receive the assistance only if the assistance is necessary to prevent the disconnection of service for nonpayment of bills and the electric customer is or has in the customer's household one or more seriously ill or disabled low-income persons whose health or safety may be injured by the disconnection. The commission may prescribe the documentation necessary to demonstrate eligibility for the assistance and may establish additional eligibility criteria. The Health and Human Services Commission, on request of the commission, shall assist in the adoption and implementation of these rules.</continuation> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.903/k"> <num value="k">(k)</num> <content>A retail electric provider is prohibited from charging the customer a fee for participation in the reduced rate program.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.903/l"> <num value="l">(l)</num> <chapeau>For the purposes of this section, a "low-income electric customer" is an electric customer:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.903/1"> <num value="1">(1)</num> <content>whose household income is not more than 125 percent of the federal poverty guidelines; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.903/2"> <num value="2">(2)</num> <content>who receives food stamps from the Texas Department of Human Services or medical assistance from a state agency administering a part of the medical assistance program.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.903/m"> <num value="m">(m)</num> <content>This section expires September 1, 2017.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999. Amended by Acts 2001, 77th Leg., ch. 1466, Sec. 19(a), eff. June 15, 2001; Acts 2001, 77th Leg., ch. 1394, Sec. 3, eff. Sept. 1, 2001; Acts 2001, 77th Leg., ch. 1451, Sec. 3, eff. Sept. 1, 2001; Acts 2003, 78th Leg., ch. 211, Sec. 2.02, eff. June 16, 2003; Acts 2003, 78th Leg., ch. 1296, Sec. 4(a), eff. June 20, 2003. Amended by: Acts 2005, 79th Leg., Ch. 412 (S.B. 1652), Sec. 17, eff. September 1, 2005. Acts 2005, 79th Leg., Ch. 728 (H.B. 2018), Sec. 21.001, eff. September 1, 2005. Acts 2005, 79th Leg., Ch. 797 (S.B. 408), Sec. 11, eff. September 1, 2005. Acts 2005, 79th Leg., Ch. 797 (S.B. 408), Sec. 12, eff. September 1, 2005. Acts 2005, 79th Leg., Ch. 899 (S.B. 1863), Sec. 14.01, eff. August 29, 2005. Acts 2013, 83rd Leg., R.S., Ch. 170 (H.B. 1600), Sec. 1.10, eff. September 1, 2013. Acts 2013, 83rd Leg., R.S., Ch. 835 (H.B. 7), Sec. 16, eff. June 14, 2013. Acts 2015, 84th Leg., R.S., Ch. 706 (H.B. 1101), Sec. 1, eff. June 17, 2015.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scZ/s39.9044"> <num value="39.9044">Sec. 39.9044.</num> <heading>GOAL FOR NATURAL GAS</heading> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.9044/a"> <num value="a">(a)</num> <content>It is the intent of the legislature that 50 percent of the megawatts of generating capacity installed in this state after January 1, 2000, use natural gas. To the extent permitted by law, the commission shall establish a program to encourage utilities to comply with this section by using natural gas produced in this state as the preferential fuel. This section does not apply to generating capacity for renewable energy technologies.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.9044/b"> <num value="b">(b)</num> <content>The commission shall establish a natural gas energy credits trading program. Any power generation company, municipally owned utility, or electric cooperative that does not satisfy the requirements of Subsection (a) by directly owning or purchasing capacity using natural gas technologies shall purchase sufficient natural gas energy credits to satisfy the requirements by holding natural gas energy credits in lieu of capacity from natural gas energy technologies.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.9044/c"> <num value="c">(c)</num> <chapeau>Not later than January 1, 2000, the commission shall adopt rules necessary to administer and enforce this section and to perform any necessary studies in cooperation with the Railroad Commission of Texas. At a minimum, the rules shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.9044/1"> <num value="1">(1)</num> <content>establish the minimum annual natural gas generation requirement for each power generation company, municipally owned utility, and electric cooperative operating in this state in a manner reasonably calculated by the commission to produce, on a statewide basis, compliance with the requirement prescribed by Subsection (a); and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.9044/2"> <num value="2">(2)</num> <chapeau>specify reasonable performance standards that all natural gas capacity additions must meet to count against the requirement prescribed by Subsection (a) and that:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c39/scZ/s39.9044/A"> <num value="A">(A)</num> <content>are designed and operated so as to maximize the energy output from the capacity additions in accordance with then-current industry standards and best industry standards; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scZ/s39.9044/B"> <num value="B">(B)</num> <content>encourage the development, construction, and operation of new natural gas energy projects at those sites in this state that have the greatest economic potential for capture and development of this state's environmentally beneficial natural gas resources.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.9044/d"> <num value="d">(d)</num> <chapeau>The commission, with the assistance of the Railroad Commission of Texas, shall adopt rules allowing and encouraging retail electric providers and municipally owned utilities and electric cooperatives that have adopted customer choice to market electricity generated using natural gas produced in this state as environmentally beneficial. The rules shall allow a provider, municipally owned utility, or cooperative to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.9044/1"> <num value="1">(1)</num> <content>emphasize that natural gas produced in this state is the cleanest-burning fossil fuel; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.9044/2"> <num value="2">(2)</num> <content>label the electricity generated using natural gas produced in this state as "green" electricity.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.9044/e"> <num value="e">(e)</num> <content>In this section, "natural gas technology" means any technology that exclusively relies on natural gas as a primary fuel source.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scZ/s39.9048"> <num value="39.9048">Sec. 39.9048.</num> <heading>NATURAL GAS FUEL</heading> <chapeau>It is the intent of the legislature that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.9048/1"> <num value="1">(1)</num> <content>the cost of generating electricity remain as low as possible; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.9048/2"> <num value="2">(2)</num> <content>the state establish and publicize a program to keep the costs of fuel, such as natural gas, used for generating electricity low.</content> </paragraph> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scZ/s39.905"> <num value="39.905">Sec. 39.905.</num> <heading>GOAL FOR ENERGY EFFICIENCY</heading> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.905/a"> <num value="a">(a)</num> <chapeau>It is the goal of the legislature that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/1"> <num value="1">(1)</num> <content>electric utilities will administer energy efficiency incentive programs in a market-neutral, nondiscriminatory manner but will not offer underlying competitive services;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/2"> <num value="2">(2)</num> <content>all customers, in all customer classes, will have a choice of and access to energy efficiency alternatives and other choices from the market that allow each customer to reduce energy consumption, summer and winter peak demand, or energy costs;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/3"> <num value="3">(3)</num> <chapeau>each electric utility annually will provide, through market-based standard offer programs or through targeted market-transformation programs, incentives sufficient for retail electric providers and competitive energy service providers to acquire additional cost-effective energy efficiency, subject to cost ceilings established by the commission, for the utility's residential and commercial customers equivalent to:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/A"> <num value="A">(A)</num> <content>not less than:</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.905/i"> <num value="i">(i)</num> <chapeau>30 percent of the electric utility's annual growth in demand of residential and commercial customers by December 31 of each year beginning with the 2013 calendar year; and</chapeau> <clause identifier="/us/tx/ut/t2/c39/scZ/s39.905/ii"> <num value="ii">(ii)</num> <content>the amount of energy efficiency to be acquired for the utility's residential and commercial customers for the most recent preceding year; and</content> </clause> <subparagraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/B"> <num value="B">(B)</num> <content>for an electric utility whose amount of energy efficiency to be acquired under this subsection is equivalent to at least four-tenths of one percent of the electric utility's summer weather-adjusted peak demand for residential and commercial customers in the previous calendar year, not less than:</content> </subparagraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.905/i"> <num value="i">(i)</num> <chapeau>four-tenths of one percent of the utility's summer weather-adjusted peak demand for residential and commercial customers by December 31 of each subsequent year; and</chapeau> <clause identifier="/us/tx/ut/t2/c39/scZ/s39.905/ii"> <num value="ii">(ii)</num> <content>the amount of energy efficiency to be acquired for the utility's residential and commercial customers for the most recent preceding year;</content> </clause> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/4"> <num value="4">(4)</num> <chapeau>each electric utility in the ERCOT region shall use its best efforts to encourage and facilitate the involvement of the region's retail electric providers in the delivery of efficiency programs and demand response programs under this section, including programs for demand-side renewable energy systems that:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/A"> <num value="A">(A)</num> <content>use distributed renewable generation, as defined by Section 39.916; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/B"> <num value="B">(B)</num> <content>reduce the need for energy consumption by using a renewable energy technology, a geothermal heat pump, a solar water heater, or another natural mechanism of the environment;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/5"> <num value="5">(5)</num> <content>retail electric providers in the ERCOT region, and electric utilities outside of the ERCOT region, shall provide customers with energy efficiency educational materials; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/6"> <num value="6">(6)</num> <content>notwithstanding Subsection (a)(3), electric utilities shall continue to make available, at 2007 funding and participation levels, any load management standard offer programs developed for industrial customers and implemented prior to May 1, 2007.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.905/b"> <num value="b">(b)</num> <chapeau>The commission shall provide oversight and adopt rules and procedures to ensure that the utilities can achieve the goal of this section, including:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/1"> <num value="1">(1)</num> <content>establishing an energy efficiency cost recovery factor for ensuring timely and reasonable cost recovery for utility expenditures made to satisfy the goal of this section;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/2"> <num value="2">(2)</num> <content>establishing an incentive under Section 36.204 to reward utilities administering programs under this section that exceed the minimum goals established by this section;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/3"> <num value="3">(3)</num> <chapeau>providing a utility that is unable to establish an energy efficiency cost recovery factor in a timely manner due to a rate freeze with a mechanism to enable the utility to:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/A"> <num value="A">(A)</num> <content>defer the costs of complying with this section; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/B"> <num value="B">(B)</num> <content>recover the deferred costs through an energy efficiency cost recovery factor on the expiration of the rate freeze period;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/4"> <num value="4">(4)</num> <content>ensuring that the costs associated with programs provided under this section and any shareholder bonus awarded are borne by the customer classes that receive the services under the programs;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/5"> <num value="5">(5)</num> <content>ensuring the program rules encourage the value of the incentives to be passed on to the end-use customer;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/6"> <num value="6">(6)</num> <content>ensuring that programs are evaluated, measured, and verified using a framework established by the commission that promotes effective program design and consistent and streamlined reporting; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/7"> <num value="7">(7)</num> <content>ensuring that an independent organization certified under Section 39.151 allows load participation in all energy markets for residential, commercial, and industrial customer classes, either directly or through aggregators of retail customers, to the extent that load participation by each of those customer classes complies with reasonable requirements adopted by the organization relating to the reliability and adequacy of the regional electric network and in a manner that will increase market efficiency, competition, and customer benefits.</content> <continuation>(b-1) The energy efficiency cost recovery factor under Subsection (b)(1) may not result in an over-recovery of costs but may be adjusted each year to change rates to enable utilities to match revenues against energy efficiency costs and any incentives to which they are granted. The factor shall be adjusted to reflect any over-collection or under-collection of energy efficiency cost recovery revenues in previous years.</continuation> <continuation>(b-2) Repealed by Acts 2011, 82nd Leg., R.S., Ch. 180, Sec. 3, eff. September 1, 2011.</continuation> <continuation>(b-3) Beginning not later than January 1, 2008, the commission, in consultation with the State Energy Conservation Office, annually for a period of five years shall compute and report to ERCOT the projected energy savings and demand impacts for each entity in the ERCOT region that administers standard offer programs, market transformation programs, combined heating and power technology, demand response programs, solar incentive programs, appliance efficiency standards, energy efficiency programs in public buildings, and any other relevant programs that are reasonably anticipated to reduce electricity energy or peak demand or that serve as substitutes for electric supply.</continuation> <continuation>(b-4) The commission and ERCOT shall develop a method to account for the projected efficiency impacts under Subsection (b-3) in ERCOT's annual forecasts of future capacity, demand, and reserves.</continuation> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.905/c"> <num value="c">(c)</num> <content>A standard offer program provided under Subsection (a)(3) must be neutral with respect to technologies, equipment, and fuels, including thermal, chemical, mechanical, and electrical energy storage technologies.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.905/d"> <num value="d">(d)</num> <chapeau>The commission shall establish a procedure for reviewing and evaluating market-transformation program options described by this subsection and other options. In evaluating program options, the commission may consider the ability of a program option to reduce costs to customers through reduced demand, energy savings, and relief of congestion. Utilities may choose to implement any program option approved by the commission after its evaluation in order to satisfy the goal in Subsection (a), including:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/1"> <num value="1">(1)</num> <content>energy-smart schools;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/2"> <num value="2">(2)</num> <content>appliance retirement and recycling;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/3"> <num value="3">(3)</num> <content>air conditioning system tune-ups;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/4"> <num value="4">(4)</num> <content>the installation of variable speed air conditioning systems, motors, and drives;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/5"> <num value="5">(5)</num> <content>the use of trees or other landscaping for energy efficiency;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/6"> <num value="6">(6)</num> <content>customer energy management and demand response programs;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/7"> <num value="7">(7)</num> <content>high performance residential and commercial buildings that will achieve the levels of energy efficiency sufficient to qualify those buildings for federal tax incentives;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/8"> <num value="8">(8)</num> <content>commissioning services for commercial and institutional buildings that result in operational and maintenance practices that reduce the buildings' energy consumption;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/9"> <num value="9">(9)</num> <content>programs for customers who rent or lease their residence or commercial space;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/10"> <num value="10">(10)</num> <content>programs providing energy monitoring equipment to customers that enable a customer to better understand the amount, price, and time of the customer's energy use;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/11"> <num value="11">(11)</num> <content>energy audit programs for owners and other residents of single-family or multifamily residences and for small commercial customers;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/12"> <num value="12">(12)</num> <content>net-zero energy new home programs;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/13"> <num value="13">(13)</num> <content>solar thermal or solar electric programs;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/14"> <num value="14">(14)</num> <content>programs for using windows and other glazing systems, glass doors, and skylights in residential and commercial buildings that reduce solar gain by at least 30 percent from the level established for the federal Energy Star windows program;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/15"> <num value="15">(15)</num> <content>data center efficiency programs; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/16"> <num value="16">(16)</num> <content>energy use programs with measurable and verifiable results that reduce energy consumption through behavioral changes that lead to efficient use patterns and practices.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.905/e"> <num value="e">(e)</num> <chapeau>An electric utility may use money approved by the commission for energy efficiency programs to perform necessary energy efficiency research and development to foster continuous improvement and innovation in the application of energy efficiency technology and energy efficiency program design and implementation. Money the utility uses under this subsection may not exceed 10 percent of the greater of:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/1"> <num value="1">(1)</num> <content>the amount the commission approved for energy efficiency programs in the utility's most recent full rate proceeding; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/2"> <num value="2">(2)</num> <content>the commission-approved expenditures by the utility for energy efficiency in the previous year.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.905/f"> <num value="f">(f)</num> <content>Each unbundled transmission and distribution utility shall include in its energy efficiency plan a targeted low-income energy efficiency program, and the savings achieved by the program shall count toward the transmission and distribution utility's energy efficiency goal. The commission shall determine the appropriate level of funding to be allocated to both targeted and standard offer low-income energy efficiency programs in each unbundled transmission and distribution utility service area. The level of funding for low-income energy efficiency programs shall be provided from money approved by the commission for the transmission and distribution utility's energy efficiency programs. The commission shall ensure that annual expenditures for the targeted low-income energy efficiency programs of each unbundled transmission and distribution utility are not less than 10 percent of the transmission and distribution utility's energy efficiency budget for the year. A targeted low-income energy efficiency program must comply with the same audit requirements that apply to federal weatherization subrecipients. In an energy efficiency cost recovery factor proceeding related to expenditures under this subsection, the commission shall make findings of fact regarding whether the utility meets requirements imposed under this subsection. The state agency that administers the federal weatherization assistance program shall participate in energy efficiency cost recovery factor proceedings related to expenditures under this subsection to ensure that targeted low-income weatherization programs are consistent with federal weatherization programs and adequately funded.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.905/g"> <num value="g">(g)</num> <chapeau>The commission may provide for a good cause exemption to a utility's liability for an administrative penalty or other sanction if the utility fails to meet a goal for energy efficiency under this section and the utility's failure to meet the goal is caused by one or more factors outside of the utility's control, including:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/1"> <num value="1">(1)</num> <content>insufficient demand by retail electric providers and competitive energy service providers for program incentive funds made available by the utility through its programs;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/2"> <num value="2">(2)</num> <content>changes in building energy codes; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/3"> <num value="3">(3)</num> <content>changes in government-imposed appliance or equipment efficiency standards.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.905/h"> <num value="h">(h)</num> <chapeau>For an electric utility operating in an area not open to competition, the utility may achieve the goal of this section by:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/1"> <num value="1">(1)</num> <content>providing rebate or incentive funds directly to customers to promote or facilitate the success of programs implemented under this section; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/2"> <num value="2">(2)</num> <content>developing, subject to commission approval, new programs other than standard offer programs and market transformation programs, to the extent that the new programs satisfy the same cost-effectiveness requirements as standard offer programs and market transformation programs.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.905/i"> <num value="i">(i)</num> <content>For an electric utility operating in an area open to competition, on demonstration to the commission, after a contested case hearing, that the requirements under Subsection (a) cannot be met in a rural area through retail electric providers or competitive energy service providers, the utility may achieve the goal of this section by providing rebate or incentive funds directly to customers in the rural area to promote or facilitate the success of programs implemented under this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.905/j"> <num value="j">(j)</num> <chapeau>An electric utility may use energy audit programs to achieve the goal of this section if:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/1"> <num value="1">(1)</num> <content>the programs do not constitute more than three percent of total program costs under this section; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.905/2"> <num value="2">(2)</num> <content>the addition of the programs does not cause a utility's portfolio of programs to no longer be cost-effective.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.905/k"> <num value="k">(k)</num> <content>To help a residential or nongovernmental nonprofit customer make informed decisions regarding energy efficiency, the commission may consider program designs that ensure, to the extent practicable, the customer is provided with information using standardized forms and terms that allow the customer to compare offers for varying degrees of energy efficiency attainable using a measure the customer is considering by cost, estimated energy savings, and payback periods.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999. Amended by: Acts 2005, 79th Leg., Ch. 328 (S.B. 712), Sec. 1, eff. September 1, 2005. Acts 2007, 80th Leg., R.S., Ch. 939 (H.B. 3693), Sec. 22, eff. September 1, 2007. Acts 2011, 82nd Leg., R.S., Ch. 180 (S.B. 1125), Sec. 1, eff. September 1, 2011. Acts 2011, 82nd Leg., R.S., Ch. 180 (S.B. 1125), Sec. 3, eff. September 1, 2011. Acts 2011, 82nd Leg., R.S., Ch. 1346 (S.B. 1434), Sec. 1, eff. June 17, 2011. Acts 2013, 83rd Leg., R.S., Ch. 1079 (H.B. 3361), Sec. 4.01, eff. September 1, 2013. Acts 2019, 86th Leg., R.S., Ch. 467 (H.B. 4170), Sec. 16.003, eff. September 1, 2019.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scZ/s39.9051"> <num value="39.9051">Sec. 39.9051.</num> <heading>ENERGY EFFICIENCY FOR MUNICIPALLY OWNED UTILITIES</heading> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.9051/a"> <num value="a">(a)</num> <content>In this section, "municipally owned utility" has the meaning assigned by Section 11.003.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.9051/b"> <num value="b">(b)</num> <content>This section applies only to a municipally owned utility that had retail sales of more than 500,000 megawatt hours in 2005.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.9051/c"> <num value="c">(c)</num> <chapeau>It is the goal of the legislature that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.9051/1"> <num value="1">(1)</num> <content>municipally owned utilities will administer energy savings incentive programs;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.9051/2"> <num value="2">(2)</num> <content>customers of a municipally owned utility will have a choice of and access to energy efficiency alternatives that allow customers to reduce energy consumption, peak demand, or energy costs; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.9051/3"> <num value="3">(3)</num> <content>each municipally owned utility will provide incentives sufficient for municipally owned utilities to acquire additional cost-effective energy efficiency.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.9051/d"> <num value="d">(d)</num> <content>The governing body of a municipally owned utility shall provide oversight and adopt rules and procedures, as necessary, to ensure that the utility can achieve the goal of this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.9051/e"> <num value="e">(e)</num> <content>If a municipally owned utility adopts customer choice by decision of the governing body under Chapter 40, the commission shall provide oversight and adopt rules and procedures, as necessary, to ensure that the municipally owned utility can achieve the goal in this section in a market-neutral, nondiscriminatory manner. The commission shall, to the extent possible, include existing energy efficiency programs already adopted by the municipally owned utility.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.9051/f"> <num value="f">(f)</num> <content>Beginning April 1, 2012, a municipally owned utility must report each year to the State Energy Conservation Office, on a standardized form developed by the office, information regarding the combined effects of the energy efficiency activities of the utility from the previous calendar year, including the utility's annual goals, programs enacted to achieve those goals, and any achieved energy demand or savings goals.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.9051/g"> <num value="g">(g)</num> <content>The State Energy Conservation Office shall provide the reports made under Subsection (f) to the Energy Systems Laboratory at the Texas Engineering Experiment Station of The Texas A&M University System. The laboratory shall calculate the energy savings and estimated pollution reductions that resulted from the reported activities.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.9051/h"> <num value="h">(h)</num> <content>The energy systems laboratory shall share the results of the analysis with the Public Utility Commission of Texas, ERCOT, the United States Environmental Protection Agency, and the Texas Commission on Environmental Quality.</content> </subsection> <sourceCredit>Added by Acts 2007, 80th Leg., R.S., Ch. 939 (H.B. 3693), Sec. 23, eff. September 1, 2007. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 1068 (S.B. 924), Sec. 1, eff. September 1, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scZ/s39.9052"> <num value="39.9052">Sec. 39.9052.</num> <heading>ENERGY EFFICIENCY FOR ELECTRIC COOPERATIVES</heading> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.9052/a"> <num value="a">(a)</num> <content>An electric cooperative shall consider adopting and implementing energy efficiency programs that reduce the cooperative's annual growth in demand in a manner consistent with standards established in the state for other utilities.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.9052/b"> <num value="b">(b)</num> <content>Beginning April 1, 2012, an electric cooperative that had retail sales of more than 500,000 megawatt hours in 2005 must report each year to the State Energy Conservation Office, on a standardized form developed by the office, information regarding the combined effects of the energy efficiency activities of the electric cooperative from the previous calendar year, including the electric cooperative's annual goals, programs enacted to achieve those goals, and any achieved energy demand or savings goals.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.9052/c"> <num value="c">(c)</num> <content>The State Energy Conservation Office shall provide the reports made under Subsection (b) to the Energy Systems Laboratory at the Texas Engineering Experiment Station of The Texas A&M University System. The laboratory shall calculate the energy savings and estimated pollution reductions that resulted from the reported activities.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.9052/d"> <num value="d">(d)</num> <content>The energy systems laboratory shall share the results of the analysis with the Public Utility Commission of Texas, ERCOT, the United States Environmental Protection Agency, and the Texas Commission on Environmental Quality.</content> </subsection> <sourceCredit>Added by Acts 2007, 80th Leg., R.S., Ch. 939 (H.B. 3693), Sec. 23, eff. September 1, 2007. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 1068 (S.B. 924), Sec. 2, eff. September 1, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scZ/s39.9054"> <num value="39.9054">Sec. 39.9054.</num> <heading>ENERGY EFFICIENCY PLANS AND REPORTS; PUBLIC INFORMATION</heading> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.9054/a"> <num value="a">(a)</num> <chapeau>An electric utility shall submit electronically an energy efficiency plan and report in a searchable form prescribed by the commission on or before April 1 of each year. The commission by rule shall adopt a form that will permit the public to easily compare information submitted by different electric utilities. The plan and report must:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.9054/1"> <num value="1">(1)</num> <content>provide information on the utility's performance in achieving energy efficiency goals for the previous five years;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.9054/2"> <num value="2">(2)</num> <content>describe how the utility intends to achieve future goals; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.9054/3"> <num value="3">(3)</num> <content>provide any other information the commission considers relevant.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.9054/b"> <num value="b">(b)</num> <chapeau>On the Internet website found at http://www.puc.state.tx.us, the commission shall publish information on energy efficiency programs, including:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.9054/1"> <num value="1">(1)</num> <content>an explanation of the goal for energy efficiency in this state;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.9054/2"> <num value="2">(2)</num> <content>a description of the types of energy efficiency programs available to certain classes of eligible customers;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.9054/3"> <num value="3">(3)</num> <content>a link to the plans and reports filed as prescribed by Subsection (a); and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.9054/4"> <num value="4">(4)</num> <content>a list of persons who install or provide energy efficiency measures or services by area.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.9054/c"> <num value="c">(c)</num> <content>This section does not require the commission to warrant that the list required to be displayed under Subsection (b) constitutes a complete or accurate list of all persons who install energy efficiency measures or services in the marketplace.</content> </subsection> <sourceCredit>Added by Acts 2011, 82nd Leg., R.S., Ch. 180 (S.B. 1125), Sec. 2, eff. September 1, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scZ/s39.9055"> <num value="39.9055">Sec. 39.9055.</num> <heading>EXAMINATION OF DEMAND RESPONSE POTENTIAL OF SEAWATER DESALINATION PROJECTS</heading> <content>The commission and the ERCOT independent system operator shall study the potential for seawater desalination projects to participate in existing demand response opportunities in the ERCOT market. To the extent feasible, the study shall determine whether the operational characteristics of seawater desalination projects enable projects of that kind to participate in ERCOT-operated ancillary services markets or other competitively supplied demand response opportunities. The study shall also determine the potential economic benefit to a seawater desalination project if the project is able to reduce its demand during peak pricing periods. The commission shall include the results of the study in the report required by Section 12.203.</content> <sourceCredit>Added by Acts 2015, 84th Leg., R.S., Ch. 829 (H.B. 4097), Sec. 2, eff. June 17, 2015. Amended by: Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 35, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scZ/s39.906"> <num value="39.906">Sec. 39.906.</num> <heading>DISPLACED WORKERS</heading> <content>In order to mitigate potential negative impacts on utility personnel directly affected by electric industry restructuring, the commission shall allow the recovery of reasonable employee-related transition costs incurred and projected for severance, retraining, early retirement, outplacement, and related expenses for the employees.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scZ/s39.908"> <num value="39.908">Sec. 39.908.</num> <heading>EFFECT OF SUNSET PROVISION</heading> <content>If the commission is abolished under Section 12.005 or other law, the authorities, duties, and functions of the commission under this chapter shall be performed and carried out by a successor agency to be designated by the legislature before abolishment of the commission or, if the legislature does not designate the successor, by the secretary of state.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999. Amended by: Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 36, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scZ/s39.909"> <num value="39.909">Sec. 39.909.</num> <heading>PLAN AND REPORT OF WORKFORCE DIVERSITY AND OTHER BUSINESS PRACTICES</heading> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.909/a"> <num value="a">(a)</num> <content>In this section, "small business" and "historically underutilized business" have the meanings assigned by former Section 481.191, Government Code, as that section existed on January 1, 2015.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.909/b"> <num value="b">(b)</num> <chapeau>Before January 1, 2000, each electric utility shall develop and submit to the commission a comprehensive five-year plan to enhance diversity of its workforce in all occupational categories and to increase contracting opportunities for small and historically underutilized businesses. The plan must consist of:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.909/1"> <num value="1">(1)</num> <content>the electric utility's historical and current performance with regard to workforce diversity and contracting with small and historically underutilized businesses;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.909/2"> <num value="2">(2)</num> <content>initiatives that the electric utility will pursue in these areas over the period of the plan;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.909/3"> <num value="3">(3)</num> <content>a listing of programs and activities the electric utility will undertake to achieve each of those initiatives; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.909/4"> <num value="4">(4)</num> <content>a listing of the business partnership initiatives the electric utility will undertake to facilitate small and historically underutilized business entry into the electric energy market as generators and retail energy providers taking into account opportunities for contracting and joint ventures.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.909/c"> <num value="c">(c)</num> <chapeau>Each electric utility shall submit an annual report to the commission and the legislature relating to its efforts to improve workforce diversity and contracting opportunities for small and historically underutilized businesses. The report must be submitted on October 1 of each year or may be included as part of any other annual report submitted by the electric utility to the commission. The report must include:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.909/1"> <num value="1">(1)</num> <content>the diversity of the electric utility's workforce as of the time of the report;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.909/2"> <num value="2">(2)</num> <content>the electric utility's level of contracting with small and historically underutilized businesses;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.909/3"> <num value="3">(3)</num> <content>the specific progress made under the plan under Subsection (b);</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.909/4"> <num value="4">(4)</num> <content>the specific initiatives, programs, and activities undertaken under the plan during the preceding year;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.909/5"> <num value="5">(5)</num> <content>an assessment of the success of each of those initiatives, programs, and activities;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.909/6"> <num value="6">(6)</num> <content>the extent to which the electric utility has carried out its initiatives to facilitate opportunities for contracts or joint ventures with small and historically underutilized businesses; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.909/7"> <num value="7">(7)</num> <content>the initiatives, programs, and activities the electric utility will pursue during the next year to increase the diversity of its workforce and contracting opportunities for small and historically underutilized businesses.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999. Amended by: Acts 2015, 84th Leg., R.S., Ch. 364 (H.B. 2667), Sec. 4, eff. September 1, 2015.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scZ/s39.910"> <num value="39.910">Sec. 39.910.</num> <heading>INCENTIVE PROGRAM AND GOAL FOR ENERGY EFFICIENCY FOR MILITARY BASES</heading> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.910/a"> <num value="a">(a)</num> <content>The commission by rule shall establish an electric energy efficiency incentive program under which each electric utility in an area where customer choice is not available will provide incentives sufficient for military bases, retail electric providers, or competitive energy service providers to install energy efficiency devices or other alternatives at military bases. The commission shall design the program to provide military bases with a variety of choices for cost-effective energy efficiency devices and other alternatives from the market to reduce energy consumption and energy costs.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.910/b"> <num value="b">(b)</num> <content>The commission shall establish a goal for the program to reduce, before January 1, 2005, the consumption of electricity by military bases in this state by five percent as compared to consumption levels in 2002.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.910/c"> <num value="c">(c)</num> <content>The commission shall approve a nonbypassable surcharge or other rate mechanism to recover costs associated with the program established under this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.910/d"> <num value="d">(d)</num> <content>An electric utility shall administer the electric energy efficiency incentive program in a market-neutral, nondiscriminatory manner. An electric utility may not offer underlying competitive services.</content> </subsection> <sourceCredit>Added by Acts 2003, 78th Leg., ch. 149, Sec. 23, eff. May 27, 2003.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scZ/s39.911"> <num value="39.911">Sec. 39.911.</num> <heading>ALTERNATIVE FUNDING FOR ENERGY EFFICIENCY AND RENEWABLE ENERGY SYSTEMS</heading> <content>The State Energy Conservation Office, in coordination with the governor, the Department of Agriculture, the Texas Commission on Environmental Quality, the Texas Education Agency, the commission, and other appropriate state agencies, shall solicit gifts, grants, and other financial resources available to fund energy efficiency improvements and renewable energy systems for public and private facilities in this state.</content> <sourceCredit>Added by Acts 2007, 80th Leg., R.S., Ch. 939 (H.B. 3693), Sec. 23, eff. September 1, 2007.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scZ/s39.9111"> <num value="39.9111">Sec. 39.9111.</num> <heading>RULES RELATED TO RENEWABLE POWER FACILITIES</heading> <content>The commission may adopt rules requiring renewable power facilities to have reactive power control capabilities or any other feasible technology designed to reduce the facilities' effects on system reliability.</content> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 37, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scZ/s39.9112"> <num value="39.9112">Sec. 39.9112.</num> <heading>REPORT ON TRANSMISSION AND GENERATION CAPACITY</heading> <content>The commission and the independent organization certified under Section 39.151 for the ERCOT power region shall study the need for increased transmission and generation capacity throughout this state and report to the legislature the results of the study and any recommendations for legislation. The report must be filed with the legislature not later than December 31 of each even-numbered year.</content> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 37, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scZ/s39.9113"> <num value="39.9113">Sec. 39.9113.</num> <heading>RENEWABLE ENERGY CREDITS</heading> <content>To facilitate voluntary contractual obligations and verify claims regarding environmental attributes of renewable energy production in this state, the independent organization certified under Section 39.151 for the ERCOT power region shall maintain an accreditation and banking system to award and track voluntary renewable energy credits generated by eligible facilities.</content> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 37, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scZ/s39.912"> <num value="39.912">Sec. 39.912.</num> <heading>REPORT ON COMBINED HEATING AND POWER TECHNOLOGY</heading> <chapeau>The commission shall study the installation and use of combined heating and power technology in this state, and shall submit a report regarding the commission's findings to the 81st Legislature. The report shall include:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.912/1"> <num value="1">(1)</num> <content>an explanation describing combined heating and power technology and its use; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.912/2"> <num value="2">(2)</num> <content>an explanation of how combined heating and power technology can be implemented in this state to meet energy efficiency goals.</content> </paragraph> <sourceCredit>Added by Acts 2007, 80th Leg., R.S., Ch. 939 (H.B. 3693), Sec. 23, eff. September 1, 2007.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scZ/s39.913"> <num value="39.913">Sec. 39.913.</num> <heading>COMBINING CERTAIN REPORTS</heading> <content>The commission may combine the reports required under Sections 39.905(b-2) and 39.912.</content> <sourceCredit>Added by Acts 2007, 80th Leg., R.S., Ch. 939 (H.B. 3693), Sec. 23, eff. September 1, 2007.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scZ/s39.914"> <num value="39.914">Sec. 39.914.</num> <heading>CREDIT FOR SURPLUS SOLAR GENERATION BY PUBLIC SCHOOLS</heading> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.914/a"> <num value="a">(a)</num> <chapeau>An electric utility or retail electric provider shall provide for net metering and contract with an independent school district so that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.914/1"> <num value="1">(1)</num> <content>surplus electricity produced by a school building's solar electric generation panels is made available for sale to the electric transmission grid and distribution system; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.914/2"> <num value="2">(2)</num> <content>the net value of that surplus electricity is credited to the district.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.914/b"> <num value="b">(b)</num> <content>For areas of this state in which customer choice has not been introduced, the commission by rule shall require that credits for electricity produced by a school building's solar electric generation panels reflect the value of the electricity that is made available for sale to the electric utility in accordance with federal regulations.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.914/c"> <num value="c">(c)</num> <content>For independent school districts in areas in which customer choice has been introduced, the district must sell the school buildings' surplus electricity produced to the retail electric provider that serves the school district's load at a value agreed to between the district and the provider that serves the district's load. The agreed value may be based on the clearing price of energy at the time of day that the electricity is made available to the grid. The independent organization identified in Section 39.151 shall develop procedures so that the amount of electricity purchased from a district under this section is accounted for in settling the total load served by the provider that serves the district's load. A district requesting net metering services for purposes of this section must have metering devices capable of providing measurements consistent with the independent organization's settlement requirements.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.914/d"> <num value="d">(d)</num> <content>A transmission and distribution utility shall make available to an independent school district for purposes of this section metering required for services provided under this section, including separate meters that measure the load and generator output or a single meter capable of measuring separately in-flow and out-flow at the point of common coupling meter point. The district must pay the differential cost of the metering unless the meters are provided at no additional cost. Except as provided by this section, Section 39.107 applies to metering under this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.914/e"> <num value="e">(e)</num> <content>A municipally owned utility or electric cooperative shall consider and complete the determinations regarding net metering service as provided by the federal Public Utility Regulatory Policies Act of 1978 (16 U.S.C. Section 2601 et seq., as amended by the federal Energy Policy Act of 2005 (Pub. L. No. 109-58)) after proceedings conducted in accordance with that law. A municipally owned utility or electric cooperative shall report the determinations made under this subsection to the State Energy Conservation Office and include in that report information regarding metering electricity generated by solar panels on public school building rooftops.</content> </subsection> <sourceCredit>Added by Acts 2007, 80th Leg., R.S., Ch. 939 (H.B. 3693), Sec. 24, eff. September 1, 2007.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scZ/s39.915"> <num value="39.915">Sec. 39.915.</num> <heading>CONSIDERATION AND APPROVAL OF CERTAIN TRANSACTIONS</heading> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.915/a"> <num value="a">(a)</num> <chapeau>To protect retail customers in this state, and to ensure the continuation of cost-effective energy efficiency measures and delivery systems, notwithstanding any other provision of this title, an electric utility or transmission and distribution utility must report to and obtain approval of the commission before closing any transaction in which:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.915/1"> <num value="1">(1)</num> <content>the electric utility or transmission and distribution utility will be merged or consolidated with another electric utility or transmission and distribution utility;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.915/2"> <num value="2">(2)</num> <content>at least 50 percent of the stock of the electric utility or transmission and distribution utility will be transferred or sold; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.915/3"> <num value="3">(3)</num> <content>a controlling interest or operational control of the electric utility or transmission and distribution utility will be transferred.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.915/b"> <num value="b">(b)</num> <content>The commission shall approve a transaction under Subsection (a) if the commission finds that the transaction is in the public interest. In making its determination, the commission shall consider whether the transaction will adversely affect the reliability of service, availability of service, or cost of service of the electric utility or transmission and distribution utility. The commission shall make the determination concerning a transaction under this subsection not later than the 180th day after the date the commission receives the relevant report. The commission may extend the deadline provided by this subsection for not more than 60 days if the commission determines the extension is needed to evaluate additional information, to consider actions taken by other jurisdictions concerning the transaction, to provide for administrative efficiency, or for other good cause. If the commission has not made a determination before the expiration of the deadline provided by or extended under this subsection, the transaction is considered approved.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.915/c"> <num value="c">(c)</num> <content>Subsections (a) and (b) do not apply to a transaction described by Subsection (a) for which a definitive agreement was executed before April 1, 2007, if an electric utility or transmission and distribution utility or a person seeking to acquire or merge with an electric utility or transmission and distribution utility made a filing for review of the transaction under Section 14.101 before May 1, 2007, and the resulting proceeding was not withdrawn.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.915/d"> <num value="d">(d)</num> <content>If an electric utility or transmission and distribution utility or a person seeking to acquire or merge with an electric utility or transmission and distribution utility files with the commission a stipulation, representation, or commitment in advance of or as part of a filing under this section or under Section 14.101, the commission may enforce the stipulation, representation, or commitment to the extent that the stipulation, representation, or commitment is consistent with the standards provided by this section and Section 14.101. The commission may reasonably interpret and enforce conditions adopted under this section.</content> </subsection> <sourceCredit>Added by Acts 2007, 80th Leg., R.S., Ch. 939 (H.B. 3693), Sec. 25, eff. September 1, 2007. Amended by: Acts 2017, 85th Leg., R.S., Ch. 200 (S.B. 735), Sec. 4, eff. May 27, 2017.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scZ/s39.916"> <num value="39.916">Sec. 39.916.</num> <heading>INTERCONNECTION OF DISTRIBUTED RENEWABLE GENERATION</heading> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.916/a"> <num value="a">(a)</num> <chapeau>In this section:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.916/1"> <num value="1">(1)</num> <content>"Distributed renewable generation" means electric generation with a capacity of not more than 2,000 kilowatts provided by a renewable energy technology that is installed on a retail electric customer's side of the meter.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.916/2"> <num value="2">(2)</num> <chapeau>"Distributed renewable generation owner" means:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c39/scZ/s39.916/A"> <num value="A">(A)</num> <content>an owner of distributed renewable generation;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scZ/s39.916/B"> <num value="B">(B)</num> <content>a retail electric customer on whose side of the meter distributed renewable generation is installed and operated, regardless of whether the customer takes ownership of the distributed renewable generation; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scZ/s39.916/C"> <num value="C">(C)</num> <content>a person who by contract is assigned ownership rights to energy produced from distributed renewable generation located at the premises of the customer on the customer's side of the meter.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.916/3"> <num value="3">(3)</num> <content>"Interconnection" means the right of a distributed renewable generation owner to physically connect distributed renewable generation to an electricity distribution system, and the technical requirements, rules, or processes for the connection.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.916/4"> <num value="4">(4)</num> <content>"Renewable energy technology" means any technology that relies exclusively on an energy source that is naturally regenerated over a short time and is derived from the sun directly or indirectly or from moving water or other natural movements or mechanisms of the environment. The term includes a technology that relies on energy derived from the sun directly, on wind, geothermal, hydroelectric, wave, or tidal energy, or on biomass or biomass-based waste products, including landfill gas. The term does not include a technology that relies on an energy resource derived from a fossil fuel, a waste product from a fossil fuel, or a waste product from an inorganic source.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.916/b"> <num value="b">(b)</num> <chapeau>A transmission and distribution utility or electric utility shall allow interconnection if:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.916/1"> <num value="1">(1)</num> <content>the distributed renewable generation to be interconnected has a five-year warranty against breakdown or undue degradation; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.916/2"> <num value="2">(2)</num> <content>the rated capacity of the distributed renewable generation does not exceed the transmission and distribution utility or electric utility service capacity.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.916/c"> <num value="c">(c)</num> <content>A customer may request interconnection by filing an application for interconnection with the transmission and distribution utility or electric utility. Procedures of a transmission and distribution utility or electric utility for the submission and processing of a customer's application for interconnection shall be consistent with rules adopted by the commission regarding interconnection.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.916/d"> <num value="d">(d)</num> <content>The commission by rule shall establish safety, technical, and performance standards for distributed renewable generation that may be interconnected. In adopting the rules, the commission shall consider standards published by the Underwriters Laboratories, the National Electric Code, the National Electric Safety Code, and the Institute of Electrical and Electronics Engineers.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.916/e"> <num value="e">(e)</num> <content>A transmission and distribution utility, electric utility, or retail electric provider may not require a distributed renewable generation owner whose distributed renewable generation meets the standards established by rule under Subsection (d) to purchase an amount, type, or classification of liability insurance the distributed renewable generation owner would not have in the absence of the distributed renewable generation.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.916/f"> <num value="f">(f)</num> <content>A transmission and distribution utility or electric utility shall make available to a distributed renewable generation owner for purposes of this section metering required for services provided under this section, including separate meters that measure the load and generator output or a single meter capable of measuring in-flow and out-flow at the point of common coupling meter point. The distributed renewable generation owner must pay the differential cost of the metering unless the meters are provided at no additional cost. Except as provided by this section, Section 39.107 applies to metering under this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.916/g"> <num value="g">(g)</num> <content>Repealed by Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 46(a)(5), eff. September 1, 2023.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.916/h"> <num value="h">(h)</num> <chapeau>An electric utility or retail electric provider may contract with a distributed renewable generation owner so that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.916/1"> <num value="1">(1)</num> <content>surplus electricity produced by distributed renewable generation is made available for sale to the transmission grid and distribution system; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.916/2"> <num value="2">(2)</num> <content>the net value of that surplus electricity is credited to the distributed renewable generation owner.</content> <continuation>[(i) reserved]</continuation> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.916/j"> <num value="j">(j)</num> <content>For distributed renewable generation owners in areas in which customer choice has been introduced, the distributed renewable generation owner must sell the owner's surplus electricity produced to the retail electric provider that serves the distributed renewable generation owner's load at a value agreed to between the distributed renewable generation owner and the provider that serves the owner's load which may include, but is not limited to, an agreed value based on the clearing price of energy at the time of day that the electricity is made available to the grid or it may be a credit applied to an account during a billing period that may be carried over to subsequent billing periods until the credit has been redeemed. The independent organization identified in Section 39.151 shall develop procedures so that the amount of electricity purchased from a distributed renewable generation owner under this section is accounted for in settling the total load served by the provider that serves that owner's load by January 1, 2009. A distributed renewable generation owner requesting net metering services for purposes of this section must have metering devices capable of providing measurements consistent with the independent organization's settlement requirements.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.916/k"> <num value="k">(k)</num> <content>Neither a retail electric customer that uses distributed renewable generation nor the owner of the distributed renewable generation that the retail electric customer uses is an electric utility, power generation company, or retail electric provider for the purposes of this title and neither is required to register with or be certified by the commission if at the time distributed renewable generation is installed, the estimated annual amount of electricity to be produced by the distributed renewable generation is less than or equal to the retail electric customer's estimated annual electricity consumption.</content> </subsection> <sourceCredit>Added by Acts 2007, 80th Leg., R.S., Ch. 939 (H.B. 3693), Sec. 26, eff. September 1, 2007. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 1070 (S.B. 981), Sec. 1, eff. September 1, 2011. Acts 2011, 82nd Leg., R.S., Ch. 1070 (S.B. 981), Sec. 2, eff. September 1, 2011. Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 38, eff. September 1, 2023. Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 46(a)(5), eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scZ/s39.9165"> <num value="39.9165">Sec. 39.9165.</num> <heading>DISTRIBUTED GENERATION FACILITY REPORTING</heading> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.9165/a"> <num value="a">(a)</num> <chapeau>In this section:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.9165/1"> <num value="1">(1)</num> <chapeau>"Distributed generation facility" is an electrical generating facility, including an energy storage facility, that:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c39/scZ/s39.9165/A"> <num value="A">(A)</num> <content>is connected at a voltage less than 60 kilovolts; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scZ/s39.9165/B"> <num value="B">(B)</num> <content>is capable of being connected in parallel operation to the utility system.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.9165/2"> <num value="2">(2)</num> <content>"Transmission service provider" means a transmission and distribution utility, municipally owned utility, or electric cooperative that owns or operates facilities used for the transmission of electricity.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.9165/b"> <num value="b">(b)</num> <content>An independent organization certified under Section 39.151 may establish protocols to require a person who owns or operates a distributed generation facility interconnected to a utility system operating in the power region served by the independent organization, or who seeks to interconnect such a facility, to provide to the interconnecting transmission and distribution utility, municipally owned utility, or electric cooperative information about the distributed generation facility that the independent organization determines is necessary for maintaining system reliability.</content> <continuation>(b-1) Protocols adopted under Subsection (b) may require that the information be provided as a condition to interconnecting the distributed generation facility.</continuation> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.9165/c"> <num value="c">(c)</num> <chapeau>An independent organization certified under Section 39.151 may establish protocols to require a transmission service provider operating in the power region served by the independent organization to report to the independent organization, in aggregate by delivery point, information the independent organization determines is necessary for maintaining system reliability regarding distributed generation facilities and distribution-connected loads that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.9165/1"> <num value="1">(1)</num> <content>are not registered with the independent organization; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.9165/2"> <num value="2">(2)</num> <content>are connected to the utility systems served by the transmission service provider.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.9165/d"> <num value="d">(d)</num> <content>An independent organization certified under Section 39.151 may establish protocols to require a transmission and distribution utility, municipally owned utility, or electric cooperative that is not required to report load information directly to the independent organization regarding the delivery points interconnected with its facilities to provide information to the utility's or cooperative's transmission service provider for purposes of the report described by Subsection (c).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.9165/e"> <num value="e">(e)</num> <chapeau>For a distributed generation facility interconnected before September 1, 2023, any protocols the independent organization certified under Section 39.151 establishes under Subsections (c) and (d) may require a transmission and distribution utility, municipally owned utility, or electric cooperative to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.9165/1"> <num value="1">(1)</num> <content>request information about the distributed generation facility from the owner or operator of the facility; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.9165/2"> <num value="2">(2)</num> <content>in the absence of any timely response to the request for information under Subdivision (1) or if the information reasonably appears to be incorrect, provide to its transmission service provider a good-faith estimate of the information based on field observation or other data using reasonable engineering judgment.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.9165/f"> <num value="f">(f)</num> <content>Notwithstanding Subsection (e), the transmission and distribution utility, municipally owned utility, or electric cooperative, in fulfilling any reporting obligation, may rely on any existing record regarding the information required for a distributed generation facility, if the transmission and distribution utility, municipally owned utility, or electric cooperative reasonably believes the information is accurate.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 426 (S.B. 3), Sec. 19, eff. June 8, 2021. Amended by: Acts 2023, 88th Leg., R.S., Ch. 331 (H.B. 3390), Sec. 1, eff. June 2, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scZ/s39.917"> <num value="39.917">Sec. 39.917.</num> <heading>TEXAS ELECTRIC GRID SECURITY COUNCIL</heading> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.917/a"> <num value="a">(a)</num> <content>The legislature finds that there is a public interest in mitigating the risk of cyber and physical attacks that may affect the reliability of electric systems operating in Texas. The Texas Electric Grid Security Council is established as an advisory body to facilitate the creation, aggregation, coordination, and dissemination of best security practices for the electric industry, including the generation, transmission, and delivery of electricity.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.917/b"> <num value="b">(b)</num> <chapeau>The Texas Electric Grid Security Council is composed of:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.917/1"> <num value="1">(1)</num> <content>the commissioner designated as presiding officer of the commission under Section 12.052 or a representative designated by the commissioner;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.917/2"> <num value="2">(2)</num> <content>the chief executive officer of the independent organization certified under Section 39.151 for the ERCOT power region or a representative designated by the chief executive officer; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.917/3"> <num value="3">(3)</num> <content>the governor or a representative designated by the governor.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.917/c"> <num value="c">(c)</num> <content>The member of the council designated by Subsection (b)(1) shall serve as presiding officer.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.917/d"> <num value="d">(d)</num> <content>The council shall convene at the call of the presiding officer.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.917/e"> <num value="e">(e)</num> <content>A member of the council is not entitled to compensation. Members are entitled to reimbursement for travel and other necessary expenses related to the activities of the council as provided by the General Appropriations Act.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.917/f"> <num value="f">(f)</num> <content>A member of the council may apply for a secret security clearance or an interim security clearance granted by the United States government. A member of the council may not access classified information or participate in a briefing or meeting involving classified information unless the member has a secret security clearance.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.917/g"> <num value="g">(g)</num> <chapeau>The independent organization certified under Section 39.151 shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.917/1"> <num value="1">(1)</num> <content>provide information and resources requested by the council; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.917/2"> <num value="2">(2)</num> <content>maintain nonclassified information obtained or created by the council, provide members of the council with access to the information, and retain the information for five years after the date that the council obtains or creates the information.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.917/h"> <num value="h">(h)</num> <chapeau>In carrying out its functions, the council may consult and coordinate with:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.917/1"> <num value="1">(1)</num> <content>the Texas Division of Emergency Management;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.917/2"> <num value="2">(2)</num> <content>the United States Department of Energy;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.917/3"> <num value="3">(3)</num> <content>the United States Department of Homeland Security;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.917/4"> <num value="4">(4)</num> <content>the North American Electric Reliability Corporation;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.917/5"> <num value="5">(5)</num> <content>the Texas Reliability Entity;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.917/6"> <num value="6">(6)</num> <content>federal and state agencies;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.917/7"> <num value="7">(7)</num> <content>members of the electric industry; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.917/8"> <num value="8">(8)</num> <content>grid security experts.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.917/i"> <num value="i">(i)</num> <chapeau>On a request by the governor, the lieutenant governor, the chair of the house of representatives committee having jurisdiction over energy utility regulation, or the chair of the senate committee having jurisdiction over energy utility regulation, the council shall issue to the requestor recommendations regarding:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.917/1"> <num value="1">(1)</num> <content>the development of educational programs or marketing materials to promote the development of a grid security workforce;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.917/2"> <num value="2">(2)</num> <content>the development of grid security best practices;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.917/3"> <num value="3">(3)</num> <content>preparation for events that threaten grid security; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.917/4"> <num value="4">(4)</num> <content>amendments to the state emergency management plan to ensure coordinated and adaptable response and recovery efforts after events that threaten grid security.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.917/j"> <num value="j">(j)</num> <content>The council may prepare a report outlining grid security response efforts that do not involve classified or highly sensitive, company-specific information. If the council prepares the report, the council shall deliver the report to the governor, lieutenant governor, and legislature on or before the December 1 immediately preceding a regular session of the legislature.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.917/k"> <num value="k">(k)</num> <content>The meetings of the council and information obtained or created by the council are not subject to the requirements of Chapter 551 or 552, Government Code.</content> </subsection> <sourceCredit>Added by Acts 2019, 86th Leg., R.S., Ch. 516 (S.B. 475), Sec. 1, eff. June 7, 2019.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scZ/s39.918"> <num value="39.918">Sec. 39.918.</num> <heading>UTILITY FACILITIES FOR POWER RESTORATION AFTER SIGNIFICANT POWER OUTAGE</heading> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.918/a"> <num value="a">(a)</num> <chapeau>In this section, "significant power outage" means an event that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.918/1"> <num value="1">(1)</num> <chapeau>results in a loss of electric power that:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c39/scZ/s39.918/A"> <num value="A">(A)</num> <content>affects a significant number of distribution customers of a transmission and distribution utility and has lasted or is expected to last for at least six hours;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scZ/s39.918/B"> <num value="B">(B)</num> <content>affects distribution customers of a transmission and distribution utility in an area for which the governor has issued a disaster or emergency declaration;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scZ/s39.918/C"> <num value="C">(C)</num> <content>affects distribution customers served by a radial transmission or distribution facility, creates a risk to public health or safety, and has lasted or is expected to last for at least 12 hours; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scZ/s39.918/D"> <num value="D">(D)</num> <content>creates a risk to public health or safety because it affects a critical infrastructure facility that serves the public such as a hospital, health care facility, law enforcement facility, fire station, or water or wastewater facility; or</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.918/2"> <num value="2">(2)</num> <content>causes the independent system operator to order a transmission and distribution utility to shed load.</content> <continuation>(a-1) The Texas Division of Emergency Management, the independent organization certified under Section 39.151 for the ERCOT power region, or the executive director of the commission may determine that a power outage other than an outage described by Subsection (a) is a significant power outage for the purposes of this section.</continuation> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.918/b"> <num value="b">(b)</num> <chapeau>Notwithstanding any other provision of this subtitle, a transmission and distribution utility may:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.918/1"> <num value="1">(1)</num> <chapeau>lease and operate facilities that provide temporary emergency electric energy to aid in restoring power to the utility's distribution customers during a significant power outage in which:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c39/scZ/s39.918/A"> <num value="A">(A)</num> <content>the independent system operator has ordered the utility to shed load; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scZ/s39.918/B"> <num value="B">(B)</num> <content>the utility's distribution facilities are not being fully served by the bulk power system under normal operations; and</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.918/2"> <num value="2">(2)</num> <content>procure, own, and operate, or enter into a cooperative agreement with other transmission and distribution utilities to procure, own, and operate jointly, transmission and distribution facilities that have a lead time of at least six months and would aid in restoring power to the utility's distribution customers following a significant power outage. In this section, long lead time facilities may not be electric energy storage equipment or facilities under Chapter 35.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.918/c"> <num value="c">(c)</num> <content>A transmission and distribution utility that leases and operates facilities under Subsection (b)(1) may not sell electric energy or ancillary services from those facilities.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.918/d"> <num value="d">(d)</num> <chapeau>A facility described by Subsection (b)(1):</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.918/1"> <num value="1">(1)</num> <content>must be operated in isolation from the bulk power system;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.918/2"> <num value="2">(2)</num> <chapeau>may not be included in independent system operator:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c39/scZ/s39.918/A"> <num value="A">(A)</num> <content>locational marginal pricing calculations;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scZ/s39.918/B"> <num value="B">(B)</num> <content>pricing; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scZ/s39.918/C"> <num value="C">(C)</num> <content>reliability models;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.918/3"> <num value="3">(3)</num> <chapeau>must be:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c39/scZ/s39.918/A"> <num value="A">(A)</num> <content>mobile;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scZ/s39.918/B"> <num value="B">(B)</num> <content>capable of being moved from its staged location in less than 12 hours; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scZ/s39.918/C"> <num value="C">(C)</num> <content>capable of generating electric energy within three hours after being connected to a demand source; and</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.918/4"> <num value="4">(4)</num> <content>must have a maximum generation capacity of not more than five megawatts.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.918/e"> <num value="e">(e)</num> <content>A transmission and distribution utility that leases and operates facilities under Subsection (b)(1) shall ensure, to the extent reasonably practicable, that retail customer usage during operation of those facilities is adjusted out of the usage reported for billing purposes by the retail customer's retail electric provider.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.918/f"> <num value="f">(f)</num> <content>A transmission and distribution utility shall use a competitive bidding process to lease facilities under Subsection (b)(1).</content> <continuation>(f-1) A transmission and distribution utility may not enter into a lease under Subsection (b)(1) unless:</continuation> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.918/1"> <num value="1">(1)</num> <chapeau>the commission first, in a rate proceeding or a separate contested case hearing, authorizes:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c39/scZ/s39.918/A"> <num value="A">(A)</num> <content>the total generating capacity the utility may lease; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c39/scZ/s39.918/B"> <num value="B">(B)</num> <content>the functions for which the utility may lease facilities and the generation capacity the utility may lease for each function; or</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.918/2"> <num value="2">(2)</num> <content>the lease includes a provision that allows alteration of the lease based on commission order or rule.</content> <continuation>(f-2) The commission may limit the period during which an authorization issued under Subsection (f-1) is valid.</continuation> <continuation>(f-3) Notwithstanding Subsections (f) and (f-1)(1), a transmission and distribution utility may enter into a lease under Subsection (b)(1) without competitive bidding or prior commission approval if:</continuation> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.918/1"> <num value="1">(1)</num> <content>the transmission and distribution utility lacks the leased generating capacity necessary to aid in restoring power to the utility's customers during a significant power outage;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.918/2"> <num value="2">(2)</num> <content>the amount of leased generating capacity does not significantly exceed the amount of megawatts necessary to restore electric service to the utility's customers during a significant power outage; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.918/3"> <num value="3">(3)</num> <content>the term of the lease does not significantly exceed the time period that is required to restore electric service to the utility's customers during a significant power outage.</content> <continuation>(f-4) A transmission and distribution utility that enters into a lease in the manner provided by Subsection (f-3) shall provide documentation to justify the amount of leased generating capacity during the first base rate proceeding after the date the lease begins.</continuation> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.918/g"> <num value="g">(g)</num> <content>A transmission and distribution utility that leases and operates facilities under Subsection (b)(1) or that procures, owns, and operates facilities under Subsection (b)(2) shall include in the utility's emergency operations plan filed with the commission, as described by Section 186.007, a detailed plan on the utility's use of those facilities.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.918/h"> <num value="h">(h)</num> <chapeau>The commission shall permit:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.918/1"> <num value="1">(1)</num> <content>a transmission and distribution utility that leases and operates facilities under Subsection (b)(1) to recover the reasonable and necessary costs of leasing and operating the facilities, including the present value of future payments required under the lease, using the rate of return on investment established in the commission's final order in the utility's most recent base rate proceeding; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.918/2"> <num value="2">(2)</num> <content>a transmission and distribution utility that procures, owns, and operates facilities under Subsection (b)(2) to recover the reasonable and necessary costs of procuring, owning, and operating the facilities, using the rate of return on investment established in the commission's final order in the utility's most recent base rate proceeding.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.918/i"> <num value="i">(i)</num> <content>The commission shall authorize a transmission and distribution utility to defer for recovery in a future ratemaking proceeding the incremental operations and maintenance expenses and the return, not otherwise recovered in a rate proceeding, associated with the leasing or procurement, ownership, and operation of the facilities.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.918/j"> <num value="j">(j)</num> <content>A transmission and distribution utility may request recovery of the reasonable and necessary costs of leasing or procuring, owning, and operating facilities under this section, including any deferred expenses, through a proceeding under Section 36.210 or in another ratemaking proceeding. A lease under Subsection (b)(1) must be treated as a capital lease or finance lease for ratemaking purposes.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.918/k"> <num value="k">(k)</num> <content>Repealed by Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 46(a)(6), eff. September 1, 2023.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 698 (H.B. 2483), Sec. 1, eff. September 1, 2021. Amended by: Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 39, eff. September 1, 2023. Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 40, eff. September 1, 2023. Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 46(a)(6), eff. September 1, 2023. Acts 2023, 88th Leg., R.S., Ch. 768 (H.B. 4595), Sec. 22.004, eff. September 1, 2023. Acts 2025, 89th Leg., R.S., Ch. 477 (S.B. 231), Sec. 1, eff. June 20, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c39/scZ/s39.919"> <num value="39.919">Sec. 39.919.</num> <heading>AVERAGE TOTAL RESIDENTIAL LOAD REDUCTION GOALS</heading> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.919/a"> <num value="a">(a)</num> <content>The commission by rule shall establish goals in the ERCOT power region to reduce the average total residential load.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.919/b"> <num value="b">(b)</num> <chapeau>The rules adopted under Subsection (a) must provide for the adoption of a program that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.919/1"> <num value="1">(1)</num> <content>provides demand response participation to residential customers where reasonably available;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.919/2"> <num value="2">(2)</num> <content>promotes the use of smart metering technology;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.919/3"> <num value="3">(3)</num> <content>is capable of responding to an emergency energy alert about low operating reserves issued by the independent organization certified under Section 39.151 for the ERCOT power region;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.919/4"> <num value="4">(4)</num> <content>provides opportunities for demand response providers to contract with retail electric providers to provide demand response services;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.919/5"> <num value="5">(5)</num> <content>ensures the program does not impact the critical needs of vulnerable populations;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.919/6"> <num value="6">(6)</num> <content>facilitates the widespread deployment of smart responsive appliances and devices in a manner that enables the customer's appliance or device to be enrolled as part of a demand response product or plan offered by a retail electric provider;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.919/7"> <num value="7">(7)</num> <content>establishes the method by which the components of the ratio described by Subsection (c) are calculated for purposes of determining whether the goals described by Subsection (a) have been achieved;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.919/8"> <num value="8">(8)</num> <content>provides for achievement of demand reductions within both summer and winter seasons; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c39/scZ/s39.919/9"> <num value="9">(9)</num> <content>allows a retail electric provider that offers a demand response program under this section to obtain funding for the demand response program through an energy efficiency incentive program established under Section 39.905 if the program complies with commission requirements related to the evaluation, measurement, and verification of demand response programs adopted under Section 39.905.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.919/c"> <num value="c">(c)</num> <content>The goals described by Subsection (a) must be calculated as a ratio by dividing the amount of load reduced at peak demand by the total amount of demand, at the same time, of all residential customers who have responsive appliances or devices at their premises that reduce the electric consumption of the customers.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c39/scZ/s39.919/d"> <num value="d">(d)</num> <content>A transmission and distribution utility required to provide an energy efficiency incentive program under Section 39.905 may use up to 10 percent of the budgeted spending for demand response programs on the programs described by Subsection (b)(9).</content> </subsection> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 945 (S.B. 1699), Sec. 5, eff. September 1, 2023.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t2/c40"> <num value="40">CHAPTER 40.</num> <heading>COMPETITION FOR MUNICIPALLY OWNED UTILITIES AND RIVER AUTHORITIES</heading> <subchapter identifier="/us/tx/ut/t2/c40/scA"> <num value="A">SUBCHAPTER A.</num> <heading>GENERAL PROVISIONS</heading> <section identifier="/us/tx/ut/t2/c40/scA/s40.001"> <num value="40.001">Sec. 40.001.</num> <heading>APPLICABLE LAW</heading> <subsection identifier="/us/tx/ut/t2/c40/scA/s40.001/a"> <num value="a">(a)</num> <content>Notwithstanding any other provision of law, except Sections 39.155, 39.157(e), and 39.203, this chapter governs the transition to and the establishment of a fully competitive electric power industry for municipally owned utilities. With respect to the regulation of municipally owned utilities, this chapter controls over any other provision of this title, except for sections in which the term "municipally owned utility" is specifically used.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c40/scA/s40.001/b"> <num value="b">(b)</num> <content>Except as specifically provided in this subsection, Chapter 39 does not apply to a river authority operating a steam generating plant on or before January 1, 1999, or a corporation authorized by Chapter 152, Water Code, or Section 32.053. A river authority operating a steam generating plant on or before January 1, 1999, is subject to Sections 39.051(a)-(c), 39.108, 39.1516, 39.155, 39.157(e), and 39.203.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c40/scA/s40.001/c"> <num value="c">(c)</num> <content>For purposes of Section 39.051, hydroelectric assets may not be deemed to be generating assets, and the transfer of generating assets to a corporation authorized by Chapter 152, Water Code, satisfies the requirements of Section 39.051.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c40/scA/s40.001/d"> <num value="d">(d)</num> <content>Accommodation shall be made in the code of conduct established under Section 39.157(e) for the provisions of Chapter 152, Water Code, and the commission may not prohibit a river authority and any related corporation from sharing officers, directors, employees, equipment, and facilities or from providing goods or services to each other at cost without the need for a competitive bid.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.401, eff. Sept. 1, 2001. Amended by: Acts 2019, 86th Leg., R.S., Ch. 467 (H.B. 4170), Sec. 16.004, eff. September 1, 2019. Acts 2019, 86th Leg., R.S., Ch. 610 (S.B. 936), Sec. 8, eff. September 1, 2019. Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 41, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c40/scA/s40.002"> <num value="40.002">Sec. 40.002.</num> <heading>DEFINITION</heading> <content>For purposes of this chapter, "body vested with the power to manage and operate a municipally owned utility" means a body created in accordance with Section 1502.070, Government Code, or Subchapter G, Chapter 552, Local Government Code, or by municipal charter.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.402, eff. Sept. 1, 2001. Amended by: Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278), Sec. 3.77(29), eff. April 1, 2009.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c40/scA/s40.003"> <num value="40.003">Sec. 40.003.</num> <heading>SECURITIZATION</heading> <subsection identifier="/us/tx/ut/t2/c40/scA/s40.003/a"> <num value="a">(a)</num> <chapeau>Municipally owned utilities and river authorities may adopt and use securitization provisions having the effect of the provisions provided by Subchapter G, Chapter 39, to recover through appropriate charges their stranded costs, at a recovery level deemed appropriate by the municipally owned utility or river authority up to 100 percent, under rules and procedures that shall be established:</chapeau> <paragraph identifier="/us/tx/ut/t2/c40/scA/s40.003/1"> <num value="1">(1)</num> <content>in the case of a municipally owned utility, by the municipal governing body or a body vested with the power to manage and operate the municipally owned utility, including procedures providing for rate orders of the governing body having the effect of financing orders, providing for a separate nonbypassable charge approved by the governing body, in the nature of a transition charge, to be collected from all retail electric customers of the municipally owned utility, identified as of a date determined by the governing body, to fund the recovery of the stranded costs of the municipally owned utility and of all reasonable related expenses, as determined by the governing body, and providing for the issuance of bonds, having a term and other characteristics as determined by the governing body, as necessary to recover the amount deemed appropriate by the governing body through securitization financing; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c40/scA/s40.003/2"> <num value="2">(2)</num> <content>in the case of a river authority, by the commission.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c40/scA/s40.003/b"> <num value="b">(b)</num> <content>In order to implement securitization financing under the rules and procedures established by and for a municipally owned utility under Subsection (a)(1), municipalities are expressly authorized and empowered to issue bonds, notes, or other obligations, including refunding bonds, payable from and secured by a lien on and pledge of the revenues collected under an order of the governing body of the municipality, and the bonds shall be issued, without an election or any requirement of giving notice of intent to issue the bonds, by ordinance adopted by the governing body of the municipality, in the form and manner and sold on a negotiated basis or on receipt of bids and on the terms and conditions as shall be determined by the governing body of the municipality.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c40/scA/s40.003/c"> <num value="c">(c)</num> <content>Bonds issued under the authority conferred by Subsections (a)(1) and (2) and Subsection (b) may be issued in the form and manner, with or without credit enhancement or liquidity enhancement and using the procedures as provided in Chapter 1201, Government Code, or other laws applicable to the issuance of bonds, including Subchapters A-C, Chapter 1207, Government Code, and Chapter 1371, Government Code, as if those laws were fully restated in this section and made a part of this section for all purposes, and a municipality or river authority shall have the right and authority to use those other laws, notwithstanding any applicable restrictions contained in those laws, to the extent convenient or necessary to carry out any power or authority, express or implied, granted under this section, in the issuance of bonds by a municipality or river authority in connection with securitization financing. This section is wholly sufficient authority for the issuance of bonds, notes, or other obligations, including refunding bonds, and the performance of the other authorized acts and procedures, without reference to any other laws or any restrictions or limitations contained in those laws. To the extent of any conflict or inconsistency between the provisions of this authorization and any provisions of any other law or home-rule charter, the authorization and power to issue bonds conferred on municipalities or river authorities under this section shall prevail and control.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c40/scA/s40.003/d"> <num value="d">(d)</num> <content>The rules and procedures for securitization established by the commission under Subsection (a)(2) shall include procedures for the recovery of qualified costs under the terms of a financing order adopted by the governing body of the river authority.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c40/scA/s40.003/e"> <num value="e">(e)</num> <content>The rules and procedures for securitization established by the commission under Subsection (a)(2) shall include rules and procedures for the issuance of transition bonds. Findings made by the governing body of a river authority in a financing order issued under the rules and procedures described in this subsection shall be conclusive, and any transition charge incorporated in the rate order to recover the principal, interest, and all reasonable expenses associated with any transition bonds shall constitute property rights, as described in Subchapter G, Chapter 39, and otherwise conform in all material respects to the transition charges provided by Subchapter G, Chapter 39.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c40/scA/s40.003/f"> <num value="f">(f)</num> <content>The rules and procedures established under this section shall be consistent with other law applicable to municipally owned utilities and river authorities and with the terms of any resolutions, orders, charter provisions, or ordinances authorizing outstanding bonds or other indebtedness of the municipalities or river authorities.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.403, eff. Sept. 1, 2001.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c40/scA/s40.004"> <num value="40.004">Sec. 40.004.</num> <heading>JURISDICTION OF COMMISSION</heading> <chapeau>Except as specifically otherwise provided in this chapter, the commission has jurisdiction over municipally owned utilities only for the following purposes:</chapeau> <paragraph identifier="/us/tx/ut/t2/c40/scA/s40.004/1"> <num value="1">(1)</num> <content>to regulate wholesale transmission rates and service, including terms of access, to the extent provided by Subchapter A, Chapter 35;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c40/scA/s40.004/2"> <num value="2">(2)</num> <content>to regulate certification of retail service areas to the extent provided by Chapter 37;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c40/scA/s40.004/3"> <num value="3">(3)</num> <content>to regulate rates on appeal under Subchapters D and E, Chapter 33, subject to Section 40.051(c);</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c40/scA/s40.004/4"> <num value="4">(4)</num> <content>to establish a code of conduct as provided by Section 39.157(e) applicable to anticompetitive activities and to affiliate activities limited to structurally unbundled affiliates of municipally owned utilities, subject to Section 40.054;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c40/scA/s40.004/5"> <num value="5">(5)</num> <content>to establish terms and conditions for open access to transmission and distribution facilities for municipally owned utilities providing customer choice, as provided by Section 39.203;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c40/scA/s40.004/6"> <num value="6">(6)</num> <content>to administer the natural gas energy credits program under Section 39.9044(b);</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c40/scA/s40.004/7"> <num value="7">(7)</num> <chapeau>to require reports of municipally owned utility operations only to the extent necessary to:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c40/scA/s40.004/A"> <num value="A">(A)</num> <content>enable the commission to determine the aggregate load and energy requirements of the state and the resources available to serve that load; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c40/scA/s40.004/B"> <num value="B">(B)</num> <content>enable the commission to determine information relating to market power as provided by Section 39.155; and</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c40/scA/s40.004/8"> <num value="8">(8)</num> <content>to evaluate and monitor the cybersecurity preparedness of a municipally owned utility described by Section 39.1516(a)(3) or (4).</content> </paragraph> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999. Amended by: Acts 2019, 86th Leg., R.S., Ch. 467 (H.B. 4170), Sec. 16.005, eff. September 1, 2019. Acts 2019, 86th Leg., R.S., Ch. 610 (S.B. 936), Sec. 9, eff. September 1, 2019. Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 42, eff. September 1, 2023.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c40/scB"> <num value="B">SUBCHAPTER B.</num> <heading>MUNICIPALLY OWNED UTILITY CHOICE</heading> <section identifier="/us/tx/ut/t2/c40/scB/s40.051"> <num value="40.051">Sec. 40.051.</num> <heading>GOVERNING BODY DECISION</heading> <subsection identifier="/us/tx/ut/t2/c40/scB/s40.051/a"> <num value="a">(a)</num> <content>The municipal governing body or a body vested with the power to manage and operate a municipally owned utility has the discretion to decide when or if the municipally owned utility will provide customer choice.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c40/scB/s40.051/b"> <num value="b">(b)</num> <content>Municipally owned utilities may choose to participate in customer choice at any time on or after January 1, 2002, by adoption of an appropriate resolution of the municipal governing body or a body vested with power to manage and operate the municipally owned utility. The decision to participate in customer choice by the adoption of a resolution is irrevocable.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c40/scB/s40.051/c"> <num value="c">(c)</num> <content>After a decision to offer customer choice has been made, Subchapters D and E, Chapter 33, do not apply to any action taken under this chapter.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c40/scB/s40.052"> <num value="40.052">Sec. 40.052.</num> <heading>UTILITY NOT OFFERING CUSTOMER CHOICE</heading> <subsection identifier="/us/tx/ut/t2/c40/scB/s40.052/a"> <num value="a">(a)</num> <content>A municipally owned utility that has not chosen to participate in customer choice may not offer electric energy at unregulated prices directly to retail customers outside its certificated retail service area.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c40/scB/s40.052/b"> <num value="b">(b)</num> <content>A municipally owned utility under Subsection (a) retains the right to offer and provide a full range of customer service and pricing programs to the customers within its certificated area and to purchase and sell electric energy at wholesale without geographic restriction.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c40/scB/s40.053"> <num value="40.053">Sec. 40.053.</num> <heading>RETAIL CUSTOMER'S RIGHT OF CHOICE</heading> <subsection identifier="/us/tx/ut/t2/c40/scB/s40.053/a"> <num value="a">(a)</num> <content>If a municipally owned utility chooses to participate in customer choice, after that choice all retail customers served by the municipally owned utility within the certificated retail service area of the municipally owned utility shall have the right of customer choice consistent with the provisions of this chapter, and the municipally owned utility shall provide open access for retail service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c40/scB/s40.053/b"> <num value="b">(b)</num> <content>Notwithstanding Section 39.107, the metering function may not be deemed a competitive service for customers of the municipally owned utility within that service area and may, at the option of the municipally owned utility, continue to be offered by the municipally owned utility as sole provider.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c40/scB/s40.053/c"> <num value="c">(c)</num> <content>On its initiation of customer choice, a municipally owned utility may designate itself or one or more other entities 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. The municipally owned utility shall 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. The municipally owned utility may delegate the authority to designate the provider or providers of last resort to the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c40/scB/s40.053/d"> <num value="d">(d)</num> <content>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, the applicable provider of last resort shall 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 the authority to set rates. If a provider of last resort is designated by the commission, the commission may set the rate each provider of last resort may charge.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c40/scB/s40.053/e"> <num value="e">(e)</num> <content>The governing body of a municipally owned utility may establish the procedures and criteria for designating a provider of last resort and may redesignate a provider of last resort according to a schedule it considers appropriate. If the municipally owned utility delegates authority to the commission under Subsection (c), the commission is not required to comply with procedures or criteria adopted by the municipally owned utility.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999. Amended by: Acts 2023, 88th Leg., R.S., Ch. 54 (S.B. 1170), Sec. 1, eff. May 19, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c40/scB/s40.054"> <num value="40.054">Sec. 40.054.</num> <heading>SERVICE OUTSIDE AREA</heading> <subsection identifier="/us/tx/ut/t2/c40/scB/s40.054/a"> <num value="a">(a)</num> <content>A municipally owned utility participating in customer choice shall have the right to offer electric energy and related services at unregulated prices directly to retail customers who have customer choice without regard to geographic location.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c40/scB/s40.054/b"> <num value="b">(b)</num> <content>In providing service under Subsection (a) to retail customers outside its certificated retail service area as that area exists on the date of adoption of customer choice, a municipally owned utility is subject to the commission's rules establishing a code of conduct regulating anticompetitive practices.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c40/scB/s40.054/c"> <num value="c">(c)</num> <content>For municipally owned utilities participating in customer choice, the commission shall have jurisdiction to establish terms and conditions, but not rates, for access by other retail electric providers to the municipally owned utility's distribution facilities.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c40/scB/s40.054/d"> <num value="d">(d)</num> <content>Accommodation shall be made in the commission's terms and conditions for access and in the code of conduct for specific legal requirements imposed by state or federal law applicable to municipally owned utilities.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c40/scB/s40.054/e"> <num value="e">(e)</num> <content>The commission does not have jurisdiction to require unbundling of services or functions of, or to regulate the recovery of stranded investment of, a municipally owned utility or, except as provided by this section, jurisdiction with respect to the rates, terms, and conditions of service for retail customers of a municipally owned utility within the utility's certificated service area.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c40/scB/s40.054/f"> <num value="f">(f)</num> <content>A municipally owned utility shall maintain separate books and records of its operations from those of the operations of any affiliate.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c40/scB/s40.055"> <num value="40.055">Sec. 40.055.</num> <heading>JURISDICTION OF MUNICIPAL GOVERNING BODY</heading> <subsection identifier="/us/tx/ut/t2/c40/scB/s40.055/a"> <num value="a">(a)</num> <chapeau>The municipal governing body or a body vested with the power to manage and operate a municipally owned utility has exclusive jurisdiction to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c40/scB/s40.055/1"> <num value="1">(1)</num> <content>set all terms of access, conditions, and rates applicable to services provided by the municipally owned utility, subject to Sections 40.054 and 40.056, including nondiscriminatory and comparable rates for distribution but excluding wholesale transmission rates, terms of access, and conditions for wholesale transmission service set by the commission under this subtitle, provided that the rates for distribution access established by the municipal governing body shall be comparable to the distribution access rates that apply to the municipally owned utility and the municipally owned utility's affiliates;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c40/scB/s40.055/2"> <num value="2">(2)</num> <content>determine whether to unbundle any energy-related activities and, if the municipally owned utility chooses to unbundle, whether to do so structurally or functionally;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c40/scB/s40.055/3"> <num value="3">(3)</num> <content>reasonably determine the amount of the municipally owned utility's stranded investment;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c40/scB/s40.055/4"> <num value="4">(4)</num> <content>establish nondiscriminatory transition charges reasonably designed to recover the stranded investment over an appropriate period of time, provided that recovery of retail stranded costs shall be from all existing or future retail customers, including the facilities, premises, and loads of those retail customers, within the utility's geographical certificated service area as it existed on May 1, 1999;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c40/scB/s40.055/5"> <num value="5">(5)</num> <content>determine the extent to which the municipally owned utility will provide various customer services at the distribution level, including other services that the municipally owned utility is legally authorized to provide, or will accept the services from other providers;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c40/scB/s40.055/6"> <num value="6">(6)</num> <content>manage and operate the municipality's electric utility systems, including exercise of control over resource acquisition and any related expansion programs;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c40/scB/s40.055/7"> <num value="7">(7)</num> <content>establish and enforce service quality and reliability standards and consumer safeguards designed to protect retail electric customers, including safeguards that will accomplish the objectives of Sections 39.101(a) and (b), consistent with this chapter;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c40/scB/s40.055/8"> <num value="8">(8)</num> <content>determine whether a base rate reduction is appropriate for the municipally owned utility;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c40/scB/s40.055/9"> <num value="9">(9)</num> <content>determine any other utility matters that the municipal governing body or body vested with power to manage and operate the municipally owned utility believes should be included;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c40/scB/s40.055/10"> <num value="10">(10)</num> <content>make any other decisions affecting the municipally owned utility's participation in customer choice that are not inconsistent with this chapter; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c40/scB/s40.055/11"> <num value="11">(11)</num> <content>determine the extent to which the municipally owned utility offers energy efficiency programs and how the programs are administered by the utility, except as provided by Section 39.9051(e).</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c40/scB/s40.055/b"> <num value="b">(b)</num> <content>In multiply certificated areas, a retail customer, including a retail customer of an electric cooperative or a municipally owned utility, may not avoid stranded cost recovery charges by switching to another electric utility, electric cooperative, or municipally owned utility.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999. Amended by: Acts 2007, 80th Leg., R.S., Ch. 939 (H.B. 3693), Sec. 27, eff. September 1, 2007.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c40/scB/s40.056"> <num value="40.056">Sec. 40.056.</num> <heading>ANTICOMPETITIVE ACTIONS</heading> <subsection identifier="/us/tx/ut/t2/c40/scB/s40.056/a"> <num value="a">(a)</num> <content>If, on complaint by a retail electric provider, the commission finds that a municipal rule, action, or order relating to customer choice is anticompetitive or does not provide other retail electric providers with nondiscriminatory terms and conditions of access to distribution facilities or customers within the municipally owned utility's certificated retail service area that are comparable to the municipally owned utility's and its affiliates' terms and conditions of access to distribution facilities or customers, the commission shall notify the municipally owned utility.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c40/scB/s40.056/b"> <num value="b">(b)</num> <content>The municipally owned utility shall have three months to cure the anticompetitive or noncompliant behavior described in Subsection (a), following opportunity for hearing on the complaint. If the rule, action, or order is not fully remedied within that time, the commission may prohibit the municipally owned utility or affiliate from providing retail service outside its certificated retail service area until the rule, action, or order is remedied.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c40/scB/s40.057"> <num value="40.057">Sec. 40.057.</num> <heading>BILLING</heading> <subsection identifier="/us/tx/ut/t2/c40/scB/s40.057/a"> <num value="a">(a)</num> <content>A municipally owned utility that opts for customer choice may continue to bill directly electric customers located in its certificated retail service area, as that area exists on the date of adoption of customer choice, for all transmission and distribution services. The municipally owned utility may also bill directly for generation services and customer services provided by the municipally owned utility to those customers.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c40/scB/s40.057/b"> <num value="b">(b)</num> <content>A municipally owned utility that opts for customer choice may not adopt anticompetitive billing practices that would discourage customers in its service area from choosing a retail electric provider.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c40/scB/s40.057/c"> <num value="c">(c)</num> <content>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 certificated service area. A retail electric provider may provide billing services for distribution, transmission, and generation services provided to those customers.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999. Amended by: Acts 2023, 88th Leg., R.S., Ch. 54 (S.B. 1170), Sec. 2, eff. May 19, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c40/scB/s40.058"> <num value="40.058">Sec. 40.058.</num> <heading>TARIFFS FOR OPEN ACCESS</heading> <content>A municipally owned utility that owns or operates transmission and distribution facilities shall file with the commission tariffs implementing the open access rules established by the commission under Section 39.203 and shall file with the commission the rates for open access on distribution facilities as set by the municipal regulatory authority, before the 90th day preceding the date the utility offers customer choice. The commission does not have authority to determine the rates for distribution access service for a municipally owned utility.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c40/scB/s40.059"> <num value="40.059">Sec. 40.059.</num> <heading>MUNICIPAL POWER AGENCY; RECOVERY OF STRANDED COSTS</heading> <subsection identifier="/us/tx/ut/t2/c40/scB/s40.059/a"> <num value="a">(a)</num> <content>In this section, "member city" means a municipality that participated in the creation of a municipal power agency formed under Chapter 163 by the adoption of a concurrent resolution by the municipality on or before August 1, 1975.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c40/scB/s40.059/b"> <num value="b">(b)</num> <content>After a member city adopts a resolution choosing to participate in customer choice under Section 40.051(b), a member city may include stranded costs described in Subsection (c) in its distribution costs and may recover those costs through a nonbypassable charge. The nonbypassable charge shall be as determined by the member city's governing body and may be spread over 16 years.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c40/scB/s40.059/c"> <num value="c">(c)</num> <content>The stranded costs that may be recovered under this section are those costs that were determined by the commission and stated in the commission's April 1998 Report to the Texas Senate Interim Committee on Electric Utility Restructuring entitled "Potentially Strandable Investment (ECOM) Report: 1998 Update" and specifically stated in the report at Appendix A (ECOM Estimates Including the Effects of Transition Plans) under the commission base case benchmark base market price for the year 2002.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c40/scB/s40.059/d"> <num value="d">(d)</num> <content>The stranded cost amounts described in this section may not be included in the generation costs used in setting rates by the member city's governing body.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c40/scB/s40.059/e"> <num value="e">(e)</num> <content>The provisions of this section are cumulative of all other provisions of this chapter, and nothing in this section shall be construed to limit or restrict the application of any provision of this chapter to the member cities.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c40/scB/s40.059/f"> <num value="f">(f)</num> <content>The municipal power agency shall extinguish the agency's indebtedness by sale of the electric facility to one or more purchasers, by way of a sale through the issuance of taxable or tax-exempt debt to the member cities, or by any other method. The agency shall set as an objective the extinguishment of the agency's debt by September 1, 2000. In the event this objective is not met, the agency shall provide detailed reasons to the electric utility restructuring legislative oversight committee by November 1, 2000, why the agency was not able to meet this objective.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c40/scB/s40.059/g"> <num value="g">(g)</num> <content>The municipal power agency or its successor in interest may, at its option, use the rate of return method for calculating its transmission cost of service. If the rate of return method is used, the return component for the transmission cost of service revenue requirement shall be sufficient to meet the transmission function's pro rata share of levelized debt service and debt service coverage ratio (1.50) and other annual debt obligations; provided, however, that the total levelized debt service may not exceed the total debt service under the current payment schedule. Any additional revenue generated by the methodology described in this subsection shall be applied to reduce the agency's outstanding indebtedness.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c40/scB/s40.060"> <num value="40.060">Sec. 40.060.</num> <heading>NO POWER TO AMEND CERTIFICATES</heading> <content>Nothing in this chapter empowers a municipal governing body or a body vested with the power to manage and operate a municipally owned utility to issue, amend, or rescind a certificate of public convenience and necessity granted by the commission. This subsection does not affect the ability of a municipal governing body or a body vested with the power to manage and operate the municipally owned utility to pass a resolution under Section 40.051(b).</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c40/scC"> <num value="C">SUBCHAPTER C.</num> <heading>RIGHTS NOT AFFECTED</heading> <section identifier="/us/tx/ut/t2/c40/scC/s40.101"> <num value="40.101">Sec. 40.101.</num> <heading>INTERFERENCE WITH CONTRACT</heading> <subsection identifier="/us/tx/ut/t2/c40/scC/s40.101/a"> <num value="a">(a)</num> <content>This subtitle may not interfere with or abrogate the rights or obligations of parties, including a retail or wholesale customer, to a contract with a municipally owned utility or river authority.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c40/scC/s40.101/b"> <num value="b">(b)</num> <content>This subtitle may not interfere with or abrogate the rights or obligations of a party under a contract or agreement concerning certificated utility service areas.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c40/scC/s40.102"> <num value="40.102">Sec. 40.102.</num> <heading>ACCESS TO WHOLESALE MARKET</heading> <content>Nothing in this subtitle shall limit the access of municipally owned utilities to the wholesale electric market.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c40/scC/s40.103"> <num value="40.103">Sec. 40.103.</num> <heading>PROTECTION OF BONDHOLDERS</heading> <content>Nothing in this subtitle or any rule adopted under this subtitle shall impair contracts, covenants, or obligations between this state, river authorities, municipalities, and the bondholders of revenue bonds issued by the river authorities or municipalities.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c40/scC/s40.104"> <num value="40.104">Sec. 40.104.</num> <heading>TAX-EXEMPT STATUS</heading> <content>Nothing in this subtitle may impair the tax-exempt status of municipalities, electric cooperatives, or river authorities, nor shall anything in this subtitle compel any municipality, electric cooperative, or river authority to use its facilities in a manner that violates any contractual provisions, bond covenants, or other restrictions applicable to facilities financed by tax-exempt debt. Notwithstanding any other provision of law, the decision to participate in customer choice by the adoption of a resolution in accordance with Section 40.051(b) is irrevocable.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t2/c41"> <num value="41">CHAPTER 41.</num> <heading>ELECTRIC COOPERATIVES AND COMPETITION</heading> <subchapter identifier="/us/tx/ut/t2/c41/scA"> <num value="A">SUBCHAPTER A.</num> <heading>GENERAL PROVISIONS</heading> <section identifier="/us/tx/ut/t2/c41/scA/s41.001"> <num value="41.001">Sec. 41.001.</num> <heading>APPLICABLE LAW</heading> <content>Notwithstanding any other provision of law, except Sections 39.155, 39.157(e), and 39.203, this chapter governs the transition to and the establishment of a fully competitive electric power industry for electric cooperatives. Regarding the regulation of electric cooperatives, this chapter shall control over any other provision of this title, except for sections in which the term "electric cooperative" is specifically used.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999. Amended by: Acts 2019, 86th Leg., R.S., Ch. 467 (H.B. 4170), Sec. 16.006, eff. September 1, 2019. Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 43, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c41/scA/s41.002"> <num value="41.002">Sec. 41.002.</num> <heading>DEFINITIONS</heading> <chapeau>In this chapter:</chapeau> <paragraph identifier="/us/tx/ut/t2/c41/scA/s41.002/1"> <num value="1">(1)</num> <content>"Board of directors" means the board of directors of an electric cooperative as described in Section 161.071.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c41/scA/s41.002/2"> <num value="2">(2)</num> <content>"Rate" includes any compensation, tariff, charge, fare, toll, rental, or classification that is directly or indirectly demanded, observed, charged, or collected by an electric cooperative for any service, product, or commodity and any rule, practice, or contract affecting the compensation, tariff, charge, fare, toll, rental, or classification.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c41/scA/s41.002/3"> <num value="3">(3)</num> <chapeau>"Stranded investment" means:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c41/scA/s41.002/A"> <num value="A">(A)</num> <content>the excess, if any, of the net book value of generation assets over the market value of the generation assets; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c41/scA/s41.002/B"> <num value="B">(B)</num> <content>any above market purchased power costs.</content> </subparagraph> </paragraph> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c41/scA/s41.003"> <num value="41.003">Sec. 41.003.</num> <heading>SECURITIZATION</heading> <subsection identifier="/us/tx/ut/t2/c41/scA/s41.003/a"> <num value="a">(a)</num> <content>Electric cooperatives may adopt and use securitization provisions having the effect of the provisions provided by Subchapter G, Chapter 39, to recover through rates stranded costs at a recovery level deemed appropriate by the board of directors up to 100 percent, under rules and procedures that shall be established by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scA/s41.003/b"> <num value="b">(b)</num> <content>The rules and procedures for securitization established under Subsection (a) shall include rules and procedures for the recovery of stranded costs under the terms of a rate order adopted by the board of directors of the electric cooperative, which rate order shall have the effect of a financing order.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scA/s41.003/c"> <num value="c">(c)</num> <content>The rules and procedures established by the commission under Subsection (b) shall include rules and procedures for the issuance of transition bonds issued in a securitized financing transaction. The issuance of any transition bonds issued in a securitized financing transaction by an electric cooperative is expressly authorized and shall be governed by the laws governing the issuance of bonds or other obligations by the electric cooperative. Findings made by the board of directors of an electric cooperative in a rate order issued under the rules and procedures described by this subsection shall be conclusive, and any transition charges incorporated in the rate order to recover the principal, interest, and all reasonable expenses associated with any securitized financing transaction shall constitute property rights, as described in Subchapter G, Chapter 39, and shall otherwise conform in all material respects to the transition charges provided by Subchapter G, Chapter 39.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c41/scA/s41.004"> <num value="41.004">Sec. 41.004.</num> <heading>JURISDICTION OF COMMISSION</heading> <chapeau>Except as specifically provided otherwise in this chapter, the commission has jurisdiction over electric cooperatives only as follows:</chapeau> <paragraph identifier="/us/tx/ut/t2/c41/scA/s41.004/1"> <num value="1">(1)</num> <content>to regulate wholesale transmission rates and service, including terms of access, to the extent provided in Subchapter A, Chapter 35;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c41/scA/s41.004/2"> <num value="2">(2)</num> <content>to regulate certification to the extent provided in Chapter 37;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c41/scA/s41.004/3"> <num value="3">(3)</num> <content>to establish a code of conduct as provided in Section 39.157(e) subject to Section 41.054;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c41/scA/s41.004/4"> <num value="4">(4)</num> <content>to establish terms and conditions, but not rates, for open access to distribution facilities for electric cooperatives providing customer choice, as provided in Section 39.203;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c41/scA/s41.004/5"> <num value="5">(5)</num> <chapeau>to require reports of electric cooperative operations only to the extent necessary to:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c41/scA/s41.004/A"> <num value="A">(A)</num> <content>ensure the public safety;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c41/scA/s41.004/B"> <num value="B">(B)</num> <content>enable the commission to satisfy its responsibilities relating to electric cooperatives under this chapter;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c41/scA/s41.004/C"> <num value="C">(C)</num> <content>enable the commission to determine the aggregate electric load and energy requirements in the state and the resources available to serve that load; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c41/scA/s41.004/D"> <num value="D">(D)</num> <content>enable the commission to determine information relating to market power as provided in Section 39.155; and</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c41/scA/s41.004/6"> <num value="6">(6)</num> <content>to evaluate and monitor the cybersecurity preparedness of an electric cooperative described by Section 39.1516(a)(3) or (4).</content> </paragraph> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999. Amended by: Acts 2019, 86th Leg., R.S., Ch. 610 (S.B. 936), Sec. 10, eff. September 1, 2019.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c41/scA/s41.005"> <num value="41.005">Sec. 41.005.</num> <heading>LIMITATION ON MUNICIPAL AUTHORITY</heading> <content>Notwithstanding any other provision of this title, a municipality may not directly or indirectly regulate the rates, operations, and services of an electric cooperative, except, with respect to operations, to the extent necessary to protect the public health, safety, or welfare. This section does not prohibit a municipality from making a lawful charge for the use of public rights-of-way within the municipality as provided by Section 182.025, Tax Code, and Section 33.008. An electric cooperative shall be an electric utility for purposes of Section 182.025, Tax Code, and Section 33.008.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c41/scB"> <num value="B">SUBCHAPTER B.</num> <heading>ELECTRIC COOPERATIVE UTILITY CHOICE</heading> <section identifier="/us/tx/ut/t2/c41/scB/s41.051"> <num value="41.051">Sec. 41.051.</num> <heading>BOARD DECISION</heading> <subsection identifier="/us/tx/ut/t2/c41/scB/s41.051/a"> <num value="a">(a)</num> <content>The board of directors has the discretion to decide when or if the electric cooperative will provide customer choice.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scB/s41.051/b"> <num value="b">(b)</num> <content>Electric cooperatives that choose to participate in customer choice may do so at any time on or after January 1, 2002, by adoption of an appropriate resolution of the board of directors. The decision to participate in customer choice by the adoption of a resolution may be revoked only if no customer has opted for choice within four years of the resolution's adoption. An electric cooperative may initiate a customer choice pilot project at any time.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c41/scB/s41.052"> <num value="41.052">Sec. 41.052.</num> <heading>ELECTRIC COOPERATIVES NOT OFFERING CUSTOMER CHOICE</heading> <subsection identifier="/us/tx/ut/t2/c41/scB/s41.052/a"> <num value="a">(a)</num> <content>An electric cooperative that chooses not to participate in customer choice may not offer electric energy at unregulated prices directly to retail customers outside its certificated retail service area.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scB/s41.052/b"> <num value="b">(b)</num> <content>An electric cooperative under Subsection (a) retains the right to offer and provide a full range of customer service and pricing programs to the customers within its certificated retail service area and to purchase and sell electric energy at wholesale without geographic restriction.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scB/s41.052/c"> <num value="c">(c)</num> <content>A generation and transmission electric cooperative may offer electric energy at unregulated prices directly to retail customers outside of its parent electric cooperatives' certificated service areas only if a majority of the parent electric cooperatives of the generation and transmission electric cooperative have chosen to offer customer choice.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scB/s41.052/d"> <num value="d">(d)</num> <content>A subsidiary of an electric cooperative may not provide electric energy at unregulated prices outside of its parent electric cooperative's certificated retail service area unless the electric cooperative offers customer choice inside its certificated retail service area.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c41/scB/s41.053"> <num value="41.053">Sec. 41.053.</num> <heading>RETAIL CUSTOMER RIGHT OF CHOICE</heading> <subsection identifier="/us/tx/ut/t2/c41/scB/s41.053/a"> <num value="a">(a)</num> <content>If an electric cooperative chooses to participate in customer choice, after that choice, all retail customers within the certificated service area of the electric cooperative shall have the right of customer choice, and the electric cooperative shall provide nondiscriminatory open access for retail service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scB/s41.053/b"> <num value="b">(b)</num> <content>Notwithstanding Section 39.107, the metering function may not be deemed a competitive service for customers of the electric cooperative within that service area and may, at the option of the electric cooperative, continue to be offered by the electric cooperative as sole provider.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scB/s41.053/c"> <num value="c">(c)</num> <content>On its initiation of customer choice, an electric cooperative shall designate itself or another entity as the provider of last resort for retail customers within the electric cooperative's certificated service area and shall fulfill the role of default provider of last resort in the event no other entity is available to act in that capacity.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scB/s41.053/d"> <num value="d">(d)</num> <content>If a retail electric provider fails to serve a customer described in Subsection (c), on request by the customer, the provider of last resort shall 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 board of directors.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scB/s41.053/e"> <num value="e">(e)</num> <content>The board of directors may establish the procedures and criteria for designating the provider of last resort and may redesignate the provider of last resort according to a schedule it considers appropriate.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c41/scB/s41.054"> <num value="41.054">Sec. 41.054.</num> <heading>SERVICE OUTSIDE CERTIFICATED AREA</heading> <subsection identifier="/us/tx/ut/t2/c41/scB/s41.054/a"> <num value="a">(a)</num> <chapeau>Notwithstanding any provisions of Chapter 161:</chapeau> <paragraph identifier="/us/tx/ut/t2/c41/scB/s41.054/1"> <num value="1">(1)</num> <content>an electric cooperative participating in customer choice shall have the right to offer electric energy and related services at unregulated prices directly to retail customers who have customer choice without regard to geographic location; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c41/scB/s41.054/2"> <num value="2">(2)</num> <content>any person, without restriction, except as may be provided in the electric cooperative's articles of incorporation and bylaws, may be a member of an electric cooperative.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scB/s41.054/b"> <num value="b">(b)</num> <content>In providing service under Subsection (a) to retail customers outside its certificated service area as that area exists on the date of adoption of customer choice, an electric cooperative becomes subject to commission jurisdiction as to the commission's rules establishing a code of conduct regulating anticompetitive practices under Section 39.157(e), except to the extent those rules conflict with this chapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scB/s41.054/c"> <num value="c">(c)</num> <content>For electric cooperatives participating in customer choice, the commission shall have jurisdiction to establish terms and conditions, but not rates, for access by other electric providers to the electric cooperative's distribution facilities.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scB/s41.054/d"> <num value="d">(d)</num> <content>Notwithstanding Subsections (b) and (c), the commission shall make accommodation in the code of conduct for specific legal requirements imposed by state or federal law applicable to electric cooperatives. The commission shall accommodate the organizational structures of electric cooperatives and may not prohibit an electric cooperative and any related entity from sharing officers, directors, or employees.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scB/s41.054/e"> <num value="e">(e)</num> <content>The commission does not have jurisdiction to require the unbundling of services or functions of, or to regulate the recovery of stranded investment of, an electric cooperative or, except as provided by this section, jurisdiction with respect to the rates, terms, and conditions of service for retail customers of an electric cooperative within the electric cooperative's certificated service area.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scB/s41.054/f"> <num value="f">(f)</num> <content>An electric cooperative shall maintain separate books and records of its operations and the operations of any subsidiary and shall ensure that the rates charged for provision of electric service do not include any costs of its subsidiary or any other costs not related to the provision of electric service.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c41/scB/s41.055"> <num value="41.055">Sec. 41.055.</num> <heading>JURISDICTION OF BOARD OF DIRECTORS</heading> <chapeau>A board of directors has exclusive jurisdiction to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c41/scB/s41.055/1"> <num value="1">(1)</num> <content>set all terms of access, conditions, and rates applicable to services provided by the electric cooperative, except as provided by Sections 41.054 and 41.056, including nondiscriminatory and comparable rates for distribution but excluding wholesale transmission rates, terms of access, and conditions for wholesale transmission service set by the commission under Subchapter A, Chapter 35, provided that the rates for distribution established by the electric cooperative shall be comparable to the distribution rates that apply to the electric cooperative and its subsidiaries;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c41/scB/s41.055/2"> <num value="2">(2)</num> <content>determine whether to unbundle any energy-related activities and, if the board of directors chooses to unbundle, whether to do so structurally or functionally;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c41/scB/s41.055/3"> <num value="3">(3)</num> <content>reasonably determine the amount of the electric cooperative's stranded investment;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c41/scB/s41.055/4"> <num value="4">(4)</num> <content>establish nondiscriminatory transition charges reasonably designed to recover the stranded investment over an appropriate period of time;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c41/scB/s41.055/5"> <num value="5">(5)</num> <content>determine the extent to which the electric cooperative will provide various customer services, including nonelectric services, or accept the services from other providers;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c41/scB/s41.055/6"> <num value="6">(6)</num> <content>manage and operate the electric cooperative's utility systems, including exercise of control over resource acquisition and any related expansion programs;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c41/scB/s41.055/7"> <num value="7">(7)</num> <content>establish and enforce service quality standards, reliability standards, and consumer safeguards designed to protect retail electric customers;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c41/scB/s41.055/8"> <num value="8">(8)</num> <content>determine whether a base rate reduction is appropriate for the electric cooperative;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c41/scB/s41.055/9"> <num value="9">(9)</num> <content>determine any other utility matters that the board of directors believes should be included;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c41/scB/s41.055/10"> <num value="10">(10)</num> <content>sell electric energy and capacity at wholesale, regardless of whether the electric cooperative participates in customer choice;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c41/scB/s41.055/11"> <num value="11">(11)</num> <content>determine the extent to which the electric cooperative offers energy efficiency programs and how the programs are administered by the electric cooperative; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c41/scB/s41.055/12"> <num value="12">(12)</num> <content>make any other decisions affecting the electric cooperative's method of conducting business that are not inconsistent with the provisions of this chapter.</content> </paragraph> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999. Amended by: Acts 2007, 80th Leg., R.S., Ch. 939 (H.B. 3693), Sec. 28, eff. September 1, 2007.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c41/scB/s41.056"> <num value="41.056">Sec. 41.056.</num> <heading>ANTICOMPETITIVE ACTIONS</heading> <subsection identifier="/us/tx/ut/t2/c41/scB/s41.056/a"> <num value="a">(a)</num> <content>If, after notice and hearing, the commission finds that an electric cooperative providing customer choice has engaged in anticompetitive behavior by not providing other retail electric providers with nondiscriminatory terms and conditions of access to distribution facilities or customers within the electric cooperative's certificated service area that are comparable to the electric cooperative's and its subsidiaries' terms and conditions of access to distribution facilities or customers, the commission shall notify the electric cooperative.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scB/s41.056/b"> <num value="b">(b)</num> <content>The electric cooperative shall have three months to cure the anticompetitive or noncompliant behavior described in Subsection (a). If the behavior is not fully remedied within that time, the commission may prohibit the electric cooperative or its subsidiary from providing retail service outside its certificated retail service area until the behavior is remedied.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c41/scB/s41.057"> <num value="41.057">Sec. 41.057.</num> <heading>BILLING</heading> <subsection identifier="/us/tx/ut/t2/c41/scB/s41.057/a"> <num value="a">(a)</num> <content>An electric cooperative that opts for customer choice may continue to bill directly electric customers located in its certificated service area for all transmission and distribution services. The electric cooperative may also bill directly for generation and customer services provided by the electric cooperative or its subsidiaries to those customers.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scB/s41.057/b"> <num value="b">(b)</num> <content>A customer served by an electric cooperative for transmission and distribution services and by a retail electric provider for retail service has the option of being billed directly by each service provider or receiving a single bill for distribution, transmission, and generation services from the electric cooperative.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c41/scB/s41.058"> <num value="41.058">Sec. 41.058.</num> <heading>TARIFFS FOR OPEN ACCESS</heading> <content>An electric cooperative that owns or operates transmission and distribution facilities shall file tariffs implementing the open access rules established by the commission under Section 39.203 with the appropriate regulatory authorities having jurisdiction over the transmission and distribution service of the electric cooperative before the 90th day preceding the date the electric cooperative offers customer choice.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c41/scB/s41.059"> <num value="41.059">Sec. 41.059.</num> <heading>NO POWER TO AMEND CERTIFICATES</heading> <content>Nothing in this chapter empowers a board of directors to issue, amend, or rescind a certificate of public convenience and necessity granted by the commission.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c41/scB/s41.060"> <num value="41.060">Sec. 41.060.</num> <heading>CUSTOMER SERVICE INFORMATION</heading> <subsection identifier="/us/tx/ut/t2/c41/scB/s41.060/a"> <num value="a">(a)</num> <content>The commission shall keep information submitted by customers and retail electric providers pertaining to the provision of electric service by electric cooperatives.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scB/s41.060/b"> <num value="b">(b)</num> <content>The commission shall notify the appropriate electric cooperative of information submitted by a customer or retail electric provider, and the electric cooperative shall respond to the customer or retail electric provider. The electric cooperative shall notify the commission of its response.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scB/s41.060/c"> <num value="c">(c)</num> <content>The commission shall prepare a report for the Sunset Advisory Commission that includes information submitted and responses by electric cooperatives in accordance with the Sunset Advisory Commission's schedule for reviewing the commission.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c41/scB/s41.061"> <num value="41.061">Sec. 41.061.</num> <heading>RETAIL RATE CHANGES BY ELECTRIC COOPERATIVES</heading> <subsection identifier="/us/tx/ut/t2/c41/scB/s41.061/a"> <num value="a">(a)</num> <chapeau>This section shall apply to retail rates of an electric cooperative that has not adopted customer choice and to the retail delivery rates of an electric cooperative that has adopted customer choice. This section may not apply to rates for:</chapeau> <paragraph identifier="/us/tx/ut/t2/c41/scB/s41.061/1"> <num value="1">(1)</num> <content>sales of electric energy by an electric cooperative that has adopted customer choice; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c41/scB/s41.061/2"> <num value="2">(2)</num> <content>wholesale sales of electric energy.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scB/s41.061/b"> <num value="b">(b)</num> <chapeau>An electric cooperative may change its rates by:</chapeau> <paragraph identifier="/us/tx/ut/t2/c41/scB/s41.061/1"> <num value="1">(1)</num> <content>adopting a resolution approving the proposed change;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c41/scB/s41.061/2"> <num value="2">(2)</num> <content>mailing notice of the proposed change to each affected customer whose rate would be increased by the proposed change at least 30 days before implementation of the proposed change, which notice may be included in a monthly billing; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c41/scB/s41.061/3"> <num value="3">(3)</num> <content>holding a meeting to discuss the proposed rate changes with affected customers, if any change is expected to increase total system annual revenues by more than $100,000 or one percent, whichever is greater.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scB/s41.061/c"> <num value="c">(c)</num> <content>An electric cooperative may implement the proposed rates on completion of the requirements under Subsection (b), and those rates shall remain in effect until changed by the electric cooperative as provided by this section or, for rates other than retail delivery rates, until this section is no longer applicable because the electric cooperative adopts customer choice.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scB/s41.061/d"> <num value="d">(d)</num> <content>The electric cooperative may reconsider a rate change at any time and adjust the rate by board resolution without additional notice or meeting of customers if the rate as adjusted is not expected to increase the revenues from a customer class. However, if notice is given to a customer class that would receive an increase as a result of the adjustment, then the rates for the customer class may be increased without additional meeting of the customers. A customer may petition to appeal within the time provided in Subsection (f).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scB/s41.061/e"> <num value="e">(e)</num> <content>Retail rates set by an electric cooperative that has not adopted customer choice and retail delivery rates set by an electric cooperative that has adopted customer choice shall be just and reasonable, not unreasonably preferential, prejudicial, or discriminatory; provided, however, if the customer agrees, an electric cooperative may charge a market-based rate to customers who have energy supply options if rates are not increased for other customers as a result.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scB/s41.061/f"> <num value="f">(f)</num> <content>A customer of the electric cooperative who is adversely affected by a rate setting resolution of the electric cooperative is entitled to judicial review. A person initiates judicial review by filing a petition in the district court of Travis County not later than the 90th day after the resolution is implemented.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scB/s41.061/g"> <num value="g">(g)</num> <content>The resolution of the electric cooperative setting rates, as it may have been amended as described in Subsection (d), shall be presumed valid, and the burden of showing that the resolution is invalid rests on the persons challenging the resolution. A court reviewing a change of a rate or rates by an electric cooperative may consider any relevant factor including the cost of providing service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scB/s41.061/h"> <num value="h">(h)</num> <chapeau>If the court finds that the electric cooperative's resolution setting rates violates the standards contained in Subsection (e), or that the electric cooperative's rate violates Subsection (e), the court shall enter an order:</chapeau> <paragraph identifier="/us/tx/ut/t2/c41/scB/s41.061/1"> <num value="1">(1)</num> <content>stating the specific basis for its determination that the rates set in the electric cooperative's resolution violate Subsection (e); and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c41/scB/s41.061/2"> <num value="2">(2)</num> <chapeau>directing the electric cooperative to:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c41/scB/s41.061/A"> <num value="A">(A)</num> <content>set, within 60 days, revised retail rates that do not violate the standards of Subsection (e); and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c41/scB/s41.061/B"> <num value="B">(B)</num> <content>refund or credit against future bills, at the electric cooperative's option, revenues collected under the rate found to violate the standards of Subsection (e) that exceed the revenues that would have been collected under the revised rates. The refund or credit shall be made over a period of not more than 12 months, as determined by the court.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scB/s41.061/i"> <num value="i">(i)</num> <content>The court may not enter an order delaying or prohibiting implementation of a rate change or set revised rates either for the period the challenged resolution was in effect or prospectively.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scB/s41.061/j"> <num value="j">(j)</num> <chapeau>A person having obtained an order of the court requiring an electric cooperative to set revised retail rates pursuant to Subsection (h)(2)(A) may, once the order is no longer subject to appeal, initiate an original proceeding in the district court of Travis County either to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c41/scB/s41.061/1"> <num value="1">(1)</num> <content>seek enforcement of the court's order by writ of mandamus if the electric cooperative has failed to adopt a resolution approving revised rates within the time prescribed; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c41/scB/s41.061/2"> <num value="2">(2)</num> <content>seek judicial review of the electric cooperative's most current resolution setting rates as provided in this section, if the electric cooperative has set revised rates pursuant to the order of the court within the time prescribed. In the event of such enforcement proceeding or judicial review the court may, in addition to the other remedies provided for in this section, award reasonable costs, including reasonable attorney's fees, to the party prevailing on the case as a whole. Additionally, if the court finds that either party has acted in bad faith solely for the purpose of perpetuating the rate dispute between the parties, the court may impose sanctions on the offending party in accordance with the provisions of Subsections (b), (c), and (e), Section 10.004, Civil Practice and Remedies Code.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scB/s41.061/k"> <num value="k">(k)</num> <content>An electric cooperative that has not adopted customer choice and that has not changed each of its nonresidential rates since January 1, 1999, shall, on or before May 1, 2002, adopt a resolution setting rates. The resolution shall be subject to judicial review as provided in this section whether or not any rate is changed. In the event the electric cooperative fails to adopt a resolution setting rates pursuant to this subsection, a customer may petition for judicial review of the electric cooperative's rates. A person initiates judicial review by filing a petition in the district court of Travis County not later than November 1, 2002.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c41/scB/s41.062"> <num value="41.062">Sec. 41.062.</num> <heading>ALLOCATION OF STRANDED INVESTMENT</heading> <content>Any competition transition charge shall be allocated among retail customer classes based on the relevant customer class characteristics as of the end of the electric cooperative's most recent fiscal year before implementation of customer choice, in accordance with the methodology used to allocate the costs of the underlying assets or expenses in the electric cooperative's most recent cost of service study certified by a professional engineer or certified public accountant or approved by the commission. In multiply certificated areas, a retail customer may not avoid stranded cost recovery charges by switching to another electric cooperative, an electric utility, or a municipally owned utility.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c41/scC"> <num value="C">SUBCHAPTER C.</num> <heading>RIGHTS NOT AFFECTED</heading> <section identifier="/us/tx/ut/t2/c41/scC/s41.101"> <num value="41.101">Sec. 41.101.</num> <heading>INTERFERENCE WITH CONTRACT</heading> <subsection identifier="/us/tx/ut/t2/c41/scC/s41.101/a"> <num value="a">(a)</num> <content>This subtitle may not interfere with or abrogate the rights or obligations of parties, including a retail or wholesale customer, to a contract with an electric cooperative or its subsidiary.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scC/s41.101/b"> <num value="b">(b)</num> <content>No provision of this subtitle may interfere with or be deemed to abrogate the rights or obligations of a party under a contract or an agreement concerning certificated service areas.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c41/scC/s41.102"> <num value="41.102">Sec. 41.102.</num> <heading>ACCESS TO WHOLESALE MARKET</heading> <content>Nothing in this subtitle shall limit the access of an electric cooperative or its subsidiary, either on its own behalf or on behalf of its customers, to the wholesale electric market.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c41/scC/s41.103"> <num value="41.103">Sec. 41.103.</num> <heading>PROTECTION OF BONDHOLDERS</heading> <content>Nothing in this subtitle or any rule adopted under this subtitle shall impair contracts, covenants, or obligations between an electric cooperative and its lenders and holders of bonds issued on behalf of or by the electric cooperative.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c41/scC/s41.104"> <num value="41.104">Sec. 41.104.</num> <heading>TAX-EXEMPT STATUS</heading> <content>Nothing in this subtitle may impair the tax-exempt status of electric cooperatives, nor shall anything in this subtitle compel any electric cooperative to use its facilities in a manner that violates any contractual provisions, bond covenants, or other restrictions applicable to facilities financed by tax-exempt or federally insured or guaranteed debt.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c41/scD"> <num value="D">SUBCHAPTER D.</num> <heading>MARKET PARTICIPATION AND SECURITIZATION</heading> <section identifier="/us/tx/ut/t2/c41/scD/s41.151"> <num value="41.151">Sec. 41.151.</num> <heading>PURPOSE</heading> <subsection identifier="/us/tx/ut/t2/c41/scD/s41.151/a"> <num value="a">(a)</num> <content>The purpose of this subchapter is to enable electric cooperatives to use securitization financing to recover extraordinary costs and expenses incurred due to the abnormal weather events that occurred in this state in the period beginning 12:00 a.m., February 12, 2021, and ending at 11:59 p.m., February 20, 2021. This type of debt will reduce the cost of financing the extraordinary costs and expenses relative to the costs that would be incurred using conventional electric cooperative financing methods. The proceeds of the securitized bonds shall be used solely for the purposes of financing or refinancing the extraordinary costs and expenses, including costs relating to consummation and administration of the securitized financing. The board of each electric cooperative involved in the financing shall ensure that securitization provides tangible and quantifiable benefits to its members, greater than would have been achieved absent the issuance of securitized bonds. Each board that chooses to securitize under this subchapter shall ensure that the structuring and pricing of the securitized bonds are consistent with market conditions and the terms of the financing order. This subchapter may be used by a group of electric cooperatives to issue securitized bonds in a combined securitization transaction.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scD/s41.151/b"> <num value="b">(b)</num> <chapeau>A cooperative that owes the independent organization certified under Section 39.151, Utilities Code, for the ERCOT power region amounts incurred as a result of operations during the period beginning 12:01 a.m., February 12, 2021, and ending at 11:59 p.m., February 20, 2021, shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c41/scD/s41.151/1"> <num value="1">(1)</num> <content>use all means necessary to securitize the amount owed the independent organization, calculated solely according to the protocols of the independent organization in effect during the period of emergency promulgated subject to the approval of the commission; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c41/scD/s41.151/2"> <num value="2">(2)</num> <content>fully repay the amount described by Subdivision (1) immediately upon receipt of the securitized amount along with any additional amounts necessary to fully satisfy the amount owed.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 950 (S.B. 1580), Sec. 1, eff. June 18, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c41/scD/s41.152"> <num value="41.152">Sec. 41.152.</num> <heading>DEFINITIONS</heading> <chapeau>In this subchapter:</chapeau> <paragraph identifier="/us/tx/ut/t2/c41/scD/s41.152/1"> <num value="1">(1)</num> <content>"Assignee" means any individual, corporation, or other legally recognized entity, including a special purpose entity, to which an interest in securitized property is transferred, other than as security.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c41/scD/s41.152/2"> <num value="2">(2)</num> <content>"Board" means the governing body of an electric cooperative.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c41/scD/s41.152/3"> <num value="3">(3)</num> <content>"Combined securitization transaction" means the issuance of securitized bonds under this subchapter in a transaction involving at least two electric cooperatives acting together.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c41/scD/s41.152/4"> <num value="4">(4)</num> <chapeau>"Extraordinary costs and expenses" means:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c41/scD/s41.152/A"> <num value="A">(A)</num> <content>costs and expenses incurred by an electric cooperative for electric power and energy purchased during the period of emergency in excess of what would have been paid for the same amount of electric power and energy at the average rate incurred by the electric cooperative for electric power and energy purchased during the month of January 2021;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c41/scD/s41.152/B"> <num value="B">(B)</num> <content>costs and expenses incurred by an electric cooperative to generate and transmit electric power and energy during the period of emergency, including fuel costs, operation and maintenance expenses, overtime costs, and all other costs and expenses that would not have been incurred but for the abnormal weather events; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c41/scD/s41.152/C"> <num value="C">(C)</num> <content>any charges imposed on the electric cooperative or on a power supplier to the electric cooperative that were passed on to the electric cooperative by the applicable regional transmission organization or independent system operator, resulting from defaults by other market participants of the regional transmission organization or independent system operator for costs relating to the period of emergency.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c41/scD/s41.152/5"> <num value="5">(5)</num> <content>"Financing order" means an order of a board approving the issuance of securitized bonds, which may be through participation in a combined securitization transaction, and the creation of securitized charges for the recovery of qualified costs.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c41/scD/s41.152/6"> <num value="6">(6)</num> <content>"Financing party" means a holder of securitized bonds, including trustees, collateral agents, and other persons acting for the benefit of the holder.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c41/scD/s41.152/7"> <num value="7">(7)</num> <chapeau>"Qualified costs" means up to 100 percent of an electric cooperative's:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c41/scD/s41.152/A"> <num value="A">(A)</num> <content>extraordinary costs and expenses;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c41/scD/s41.152/B"> <num value="B">(B)</num> <content>costs of issuing, supporting, repaying, servicing, and refinancing the securitized bonds, whether incurred or paid upon issuance of the securitized bonds or over the life of the securitized bonds or the refunded securitized bonds, whether incurred directly or allocated in a combined securitization transaction; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c41/scD/s41.152/C"> <num value="C">(C)</num> <content>any costs of retiring and refunding the electric cooperative's existing debt securities initially issued to finance the extraordinary costs and expenses including interest accrued on debt securities over their term, whether incurred directly or allocated in a combined securitization transaction.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c41/scD/s41.152/8"> <num value="8">(8)</num> <content>"Period of emergency" means the period beginning 12:00 a.m., February 12, 2021, and ending 11:59 p.m., February 20, 2021.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c41/scD/s41.152/9"> <num value="9">(9)</num> <content>"Securitized bonds" means bonds, debentures, notes, certificates of participation or of beneficial interest, or other evidences of indebtedness or ownership that are issued by an electric cooperative, its successors, or an assignee of the electric cooperative or group of electric cooperatives under a financing order or financing orders, that have a term not longer than 30 years, and that are secured by or payable, primarily, from securitized property and the proceeds thereof and, in a combined securitization transaction, securitized property contributed by other electric cooperatives. If certificates of participation, beneficial interest, or ownership are issued, references in this subchapter to principal, interest, or premium shall refer to comparable amounts under those certificates.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c41/scD/s41.152/10"> <num value="10">(10)</num> <content>"Securitized charges" means nonbypassable amounts to be charged for the use or availability of electric services, approved by the board under a financing order to recover qualified costs, that shall be collected by an electric cooperative, its successors, an assignee, or other collection agents as provided for in the financing order.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c41/scD/s41.152/11"> <num value="11">(11)</num> <chapeau>"Securitized property" means the property right created under this subchapter, including the right, title, and interest of the electric cooperative or its assignee:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c41/scD/s41.152/A"> <num value="A">(A)</num> <content>in and to the securitized charges established under a financing order, including all rights to obtain adjustments in accordance with Section 41.157 and the financing order;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c41/scD/s41.152/B"> <num value="B">(B)</num> <content>to be paid the amount that is determined in a financing order to be the amount that the electric cooperative or its transferee is lawfully entitled to receive under this subchapter and the proceeds thereof; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c41/scD/s41.152/C"> <num value="C">(C)</num> <content>in and to all revenue, collections, claims, payments, money, or process of or arising from the securitized charges that are the subject of a financing order.</content> </subparagraph> </paragraph> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 950 (S.B. 1580), Sec. 1, eff. June 18, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c41/scD/s41.153"> <num value="41.153">Sec. 41.153.</num> <heading>FINANCING ORDERS; TERMS</heading> <subsection identifier="/us/tx/ut/t2/c41/scD/s41.153/a"> <num value="a">(a)</num> <content>The board shall adopt a financing order to recover the electric cooperative's qualified costs consistent with the standards in Section 41.151.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scD/s41.153/b"> <num value="b">(b)</num> <content>The financing order shall detail the amount of qualified costs to be recovered and the period over which the nonbypassable securitized charges shall be recovered, which period may not exceed 30 years.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scD/s41.153/c"> <num value="c">(c)</num> <content>Securitized charges shall be collected and allocated among customers in the manner provided by the financing order.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scD/s41.153/d"> <num value="d">(d)</num> <content>A financing order becomes effective in accordance with its terms, and the financing order, together with the securitized charges authorized in the order, after it takes effect, is irrevocable and not subject to denial, recission, reduction, impairment, adjustment, or other alteration by further action of the board or by action of any regulatory or other governmental body of this state, except as permitted by Section 41.157. A financing order issued under this subchapter has the same force and effect of a financing order issued under Chapter 39.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scD/s41.153/e"> <num value="e">(e)</num> <content>A financing order may be reviewed by appeal by a member of the electric cooperative to a district court in the county where the electric cooperative is domiciled, filed not later than the 15th day after the date the financing order is adopted by the board. The judgment of the district court may be reviewed only by direct appeal to the Supreme Court of Texas filed not later than the 15th day after the date of the entry of judgment. All appeals shall be heard and determined by the district court and the Supreme Court of Texas as expeditiously as possible with lawful precedence over other matters. Review on appeal shall be based solely on the financing order adopted by the board, other information considered by the board in adopting the resolutions, and briefs to the court and shall be limited to whether the financing order conforms to the constitution and laws of this state and the United States and is within the authority of the board under this subchapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scD/s41.153/f"> <num value="f">(f)</num> <content>The board or, in a combined securitization transaction, the boards of all participating electric cooperatives, may adopt a financing order or financing orders providing for retiring and refunding securitized bonds on making a finding that the future securitized charges required to service the new securitized bonds, including transaction costs, will be less than the future securitized charges required to service the securitized bonds being refunded. After the indefeasible repayment in full of all outstanding securitized bonds and associated financing costs, the board shall adjust the related securitized charges accordingly.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 950 (S.B. 1580), Sec. 1, eff. June 18, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c41/scD/s41.154"> <num value="41.154">Sec. 41.154.</num> <heading>PROPERTY RIGHTS</heading> <subsection identifier="/us/tx/ut/t2/c41/scD/s41.154/a"> <num value="a">(a)</num> <content>The rights and interests of an electric cooperative or its subsidiary, affiliate, successor, financing party, or assignee under a financing order, including the right to impose, collect, receive, and enforce the payment of securitized charges authorized in the financing order, shall be only contract rights until the property is first transferred or pledged to an assignee or financing party, as applicable, in connection with the issuance of securitized bonds, at which time the property becomes securitized property.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scD/s41.154/b"> <num value="b">(b)</num> <content>Securitized property that is specified in the financing order constitutes a present vested property right for all purposes, including for purposes of Sections 16 and 17, Article I, Texas Constitution, Section 10, Article I, United States Constitution, and the Fifth Amendment to the United States Constitution, and the laws of this state and the United States, even if the imposition and collection of securitized charges depend on further acts of the electric cooperative or others that may not have yet occurred.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scD/s41.154/c"> <num value="c">(c)</num> <content>Securitized property shall exist regardless of whether securitized charges have been billed, have accrued, or have been collected and notwithstanding the fact that the value or amount of the property is dependent on the future provision of service to customers by the electric cooperative or its successors or assigns.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scD/s41.154/d"> <num value="d">(d)</num> <content>On the issuance of the securitized bonds and the financing order, and when the requirements of Section 41.159 are met, the securitized charges, including their nonbypassability, are irrevocable, final, nondiscretionary, and effective without further action by the electric cooperative or any other person or governmental authority. The financing order shall remain in effect and the property shall continue to exist for the same period as the pledge of the state described in Section 41.160.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scD/s41.154/e"> <num value="e">(e)</num> <content>All revenue, collections, claims, payments, money, or proceeds of or arising from or relating to securitized charges shall constitute proceeds of the securitized property arising from the financing order.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 950 (S.B. 1580), Sec. 1, eff. June 18, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c41/scD/s41.155"> <num value="41.155">Sec. 41.155.</num> <heading>NO SETOFF</heading> <content>The interest of an assignee or pledgee in securitized property and in the revenues and collections arising from that property are not subject to setoff, counterclaim, surcharge, recoupment, or defense by the electric cooperative or any other person or in connection with the bankruptcy of the electric cooperative or any other entity. A financing order shall remain in effect and unabated notwithstanding the bankruptcy of the electric cooperative, its successors, or assignees.</content> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 950 (S.B. 1580), Sec. 1, eff. June 18, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c41/scD/s41.156"> <num value="41.156">Sec. 41.156.</num> <heading>NO BYPASS</heading> <subsection identifier="/us/tx/ut/t2/c41/scD/s41.156/a"> <num value="a">(a)</num> <content>A financing order shall include terms ensuring that the imposition and collection of securitized charges authorized in the order shall be nonbypassable and apply to all customers connected to the electric cooperative's system assets and taking service, regardless of whether the system assets continue to be owned by the electric cooperative.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scD/s41.156/b"> <num value="b">(b)</num> <content>The electric cooperative, its servicer, any entity providing electric transmission or distribution services, and any retail electric provider providing services to a retail customer in the electric cooperative's certificated service area as it existed on the date of enactment of this subchapter are entitled to collect and must remit, consistent with this subchapter and any financing order adopted under this subchapter, the securitized charges from the retail customers and from retail customers that switch to new on-site generation. Such retail customers are required to pay the securitized charges.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 950 (S.B. 1580), Sec. 1, eff. June 18, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c41/scD/s41.157"> <num value="41.157">Sec. 41.157.</num> <heading>TRUE-UP</heading> <subsection identifier="/us/tx/ut/t2/c41/scD/s41.157/a"> <num value="a">(a)</num> <chapeau>A financing order shall be reviewed and adjusted promptly if after its adoption there are additional charges, reductions, or refunds of extraordinary costs and expenses, to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c41/scD/s41.157/1"> <num value="1">(1)</num> <content>ensure that there is not an over-collection or an under-collection of extraordinary costs and expenses; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c41/scD/s41.157/2"> <num value="2">(2)</num> <content>ensure that collections on the securitized property will be sufficient to timely make all periodic and final payments of principal, interest, fees, and other amounts and to timely fund all reserve accounts, if any, related to the securitized bonds.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scD/s41.157/b"> <num value="b">(b)</num> <chapeau>A financing order shall also include a mechanism requiring that securitized charges be reviewed by the board and adjusted at least annually, not later than the 45th day after the anniversary date of the issuance of the securitized bonds, to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c41/scD/s41.157/1"> <num value="1">(1)</num> <content>correct over-collections or under-collections of the preceding 12 months; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c41/scD/s41.157/2"> <num value="2">(2)</num> <content>ensure the expected recovery of amounts sufficient to timely provide all payments of debt service and other required amounts and charges in connection with the securitized bonds.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scD/s41.157/c"> <num value="c">(c)</num> <content>The electric cooperatives that are members of a generation and transmission cooperative may include in their financing orders the ability to allocate any true-up amounts over the retail customers of all electric cooperatives that are members of the same generation and transmission cooperative.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scD/s41.157/d"> <num value="d">(d)</num> <content>In a combined securitization transaction, each generation and transmission cooperative may calculate all adjustments and determinations relevant to each true-up by each electric cooperative member of the generation and transmission cooperative participating in the securitization transaction, with the adjustments being allocated across the electric cooperatives in the manner agreed to by all of the participating electric cooperatives under their financing orders.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scD/s41.157/e"> <num value="e">(e)</num> <content>A governmental authority may not disapprove of or alter any adjustments made or proposed to be made under this subchapter other than to correct computation or other manifest errors.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 950 (S.B. 1580), Sec. 1, eff. June 18, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c41/scD/s41.158"> <num value="41.158">Sec. 41.158.</num> <heading>TRUE SALE</heading> <content>An agreement by an electric cooperative or assignee to transfer securitized property that expressly states that the transfer is a sale or other absolute transfer signifies that the transaction is a true sale and is not a secured transaction and that title, legal and equitable, has passed to the entity to which the securitized property is transferred. The transaction shall be treated as an absolute sale regardless of whether the purchaser has any recourse against the seller, or any other term of the parties' agreement, including the seller's retention of an equity interest in the securitized property, the fact that the electric cooperative acts as the collector of securitized charges relating to the securitized property, or the treatment of the transfer as a financing for tax, financial reporting, or other purposes.</content> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 950 (S.B. 1580), Sec. 1, eff. June 18, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c41/scD/s41.159"> <num value="41.159">Sec. 41.159.</num> <heading>SECURITY INTERESTS; ASSIGNMENT; COMMINGLING; DEFAULT</heading> <subsection identifier="/us/tx/ut/t2/c41/scD/s41.159/a"> <num value="a">(a)</num> <content>Securitized property does not constitute an account or general intangible under Section 9.106, Business & Commerce Code. The transfer, sale, or assignment, or the creation, granting, perfection, and enforcement of liens and security interests in securitized property are governed by this section and not by the Business & Commerce Code. Securitized property shall constitute property for all purposes, including for contracts securing securitized bonds, regardless of whether the securitized property revenues and proceeds have accrued.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scD/s41.159/b"> <num value="b">(b)</num> <content>A valid and enforceable transfer, sale, or assignment, or lien and security interest, as applicable, in securitized property may be created only by a financing order and the execution and delivery of a transfer, sale, or assignment, or security agreement, as applicable, with a financing party in connection with the issuance of securitized bonds. The transfer, sale, assignment, or lien and security interest, as applicable, shall attach automatically from the time that value is received for the securitized bonds and, on perfection through the filing of notice with the secretary of state in accordance with the rules prescribed under Subsection (d), shall be a continuously perfected transfer, sale, and assignment, or lien and security interest, as applicable, in the securitized property and all proceeds of the property, whether accrued or not, shall have priority in the order of filing and take precedence over any subsequent judicial or other lien creditor. If notice is filed before the 10th day after the date value is received for the securitized bonds, the transfer, sale, or assignment, or security interest, as applicable, shall be perfected retroactive to the date value was received. Otherwise, the transfer, sale, or assignment, or security interest, as applicable, shall be perfected as of the date of filing.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scD/s41.159/c"> <num value="c">(c)</num> <content>Transfer, sale, or assignment of an interest in securitized property to an assignee shall be perfected against all third parties, including subsequent judicial or other lien creditors, when the financing order becomes effective, transfer documents have been delivered to the assignee, and a notice of that transfer has been filed in accordance with the rules prescribed under Subsection (d). However, if notice of the transfer has not been filed in accordance with this subsection before the 10th day after the delivery of transfer documentation, the transfer of the interest is not perfected against third parties until the notice is filed.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scD/s41.159/d"> <num value="d">(d)</num> <content>The secretary of state shall implement this section by establishing and maintaining a separate system of records for the filing of notices under this section and prescribing the rules for those filings based on Chapter 9, Business & Commerce Code, adapted to this subchapter and using the terms defined in this subchapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scD/s41.159/e"> <num value="e">(e)</num> <content>The priority of a lien and security interest perfected under this section is not impaired by any later modification of the financing order under Section 41.157 or by the commingling of funds arising from securitized charges with other funds, and any other security interest that may apply to those funds shall be terminated when they are transferred to a segregated account for the assignee or a financing party. If securitized property has been transferred to an assignee, any proceeds of that property shall be held in trust for the assignee.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scD/s41.159/f"> <num value="f">(f)</num> <content>Securitized bonds shall be secured by a statutory lien on the securitized property in favor of the owners or beneficial owners of securitized bonds. The lien shall automatically arise on issuance of the securitized bonds without the need for any action or authorization by the electric cooperative or the board. The lien shall be valid and binding from the time the securitized bonds are executed and delivered. The securitized property shall be immediately subject to the lien, and the lien shall immediately attach to the securitized property and be effective, binding, and enforceable against the electric cooperative, its creditors, their successors, assignees, and all others asserting rights therein, regardless of whether those persons have notice of the lien and without the need for any physical delivery, recordation, filing, or further act. The lien is created by this subchapter and not by any security agreement, but may be enforced by any financing party or their representatives as if they were secured parties under Chapter 9, Business & Commerce Code. On application by or on behalf of the financing parties, a district court in the county where the electric cooperative is domiciled may order that amounts arising from securitized charges be transferred to a separate account for the financing parties' benefit.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scD/s41.159/g"> <num value="g">(g)</num> <content>The statutory lien is a continuously perfected security interest and has priority over any other lien, created by operation of law or otherwise, that may subsequently attach to that securitized property or proceeds thereof unless the owners or beneficial owners of securitized bonds as specified in the trust agreement or indenture have agreed in writing otherwise. The statutory lien is a lien on the securitized charges and all securitized charge revenues or other proceeds that are deposited in any deposit account or other account of the servicer or other person in which securitized charge revenues or other proceeds have been commingled with other funds.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scD/s41.159/h"> <num value="h">(h)</num> <content>The statutory lien is not adversely affected or impaired by, among other things, the commingling of securitized charge revenues or other proceeds from securitized charges with other amounts regardless of the person holding those amounts.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scD/s41.159/i"> <num value="i">(i)</num> <content>The electric cooperative, any successor or assignee of the electric cooperative, or any other person with any operational control of any portion of the electric cooperative's system assets, whether as owner, lessee, franchisee, or otherwise, and any successor servicer of collections of the securitized charges shall be bound by the requirements of this subchapter and shall perform and satisfy all obligations imposed under this subchapter in the same manner and to the same extent as did its predecessor, including the obligation to bill, adjust, and enforce the payment of securitized charges.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c41/scD/s41.159/j"> <num value="j">(j)</num> <content>If a default or termination occurs under the securitized bonds, the financing parties or their representatives may foreclose on or otherwise enforce their lien and security interest in any securitized property as if they were secured parties under Chapter 9, Business & Commerce Code, and on application by the electric cooperative or by or on behalf of the financing parties, a district court in the county where the electric cooperative is domiciled may order that amounts arising from securitized charges be transferred to a separate account for the financing parties' benefit, to which their lien and security interest shall apply. On application by or on behalf of the financing parties, a district court in the county where the electric cooperative is domiciled shall order the sequestration and payment to them of revenues arising from the securitized charges.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 950 (S.B. 1580), Sec. 1, eff. June 18, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c41/scD/s41.160"> <num value="41.160">Sec. 41.160.</num> <heading>PLEDGE OF STATE</heading> <content>Securitized bonds are not a debt or obligation of the state and are not a charge on its full faith and credit or taxing power. The state pledges, however, for the benefit and protection of assignees, financing parties, and the electric cooperative, that it will not take or permit, or permit any agency or other governmental authority or political subdivision of the state to take or permit, any action that would impair the value of securitized property, or, except as permitted by Section 41.157, reduce, alter, or impair the securitized charges to be imposed, collected, and remitted to financing parties, until the principal, interest and premium, and any other charges incurred and contracts to be performed in connection with the related securitized bonds have been paid and performed in full. Any party issuing securitized bonds is authorized to include this pledge in any documentation relating to those bonds.</content> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 950 (S.B. 1580), Sec. 1, eff. June 18, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c41/scD/s41.161"> <num value="41.161">Sec. 41.161.</num> <heading>TAX EXEMPTION</heading> <content>Transactions involving the transfer and ownership of securitized property and the receipt of securitized charges are exempt from state and local income, sales, franchise, gross receipts, and other taxes or similar charges.</content> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 950 (S.B. 1580), Sec. 1, eff. June 18, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c41/scD/s41.162"> <num value="41.162">Sec. 41.162.</num> <heading>NOT PUBLIC UTILITY</heading> <content>An assignee or financing party may not be considered to be a public utility, electric cooperative, or person providing electric service solely by virtue of the transactions described in this subchapter.</content> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 950 (S.B. 1580), Sec. 1, eff. June 18, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c41/scD/s41.163"> <num value="41.163">Sec. 41.163.</num> <heading>SEVERABILITY</heading> <content>Effective on the date the first securitized bonds are issued under this subchapter, if any provision in this title or portion of this title is held to be invalid or is invalidated, superseded, replaced, repealed, or expires for any reason, that occurrence does not affect the validity or continuation of this subchapter or any other provision of this title that is relevant to the issuance, administration, payment, retirement, or refunding of securitized bonds or to any actions of the electric cooperative, its successors, an assignee, a collection agent, or a financing party, which shall remain in full force and effect.</content> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 950 (S.B. 1580), Sec. 1, eff. June 18, 2021.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t2/c42"> <num value="42">CHAPTER 42.</num> <heading>PUBLIC CHARGING OF ELECTRIC VEHICLES</heading> <section identifier="/us/tx/ut/t2/c42/s42.0101"> <num value="42.0101">Sec. 42.0101.</num> <heading>LEGISLATIVE FINDINGS</heading> <subsection identifier="/us/tx/ut/t2/c42/s42.0101/a"> <num value="a">(a)</num> <content>The legislature finds that it is in the best interests of this state to continue the long-standing policy of supporting private sector investment in infrastructure by establishing a framework designed to encourage competitive private sector investment in the deployment of public electric vehicle charging stations.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c42/s42.0101/b"> <num value="b">(b)</num> <content>The legislature finds that encouraging investment in the deployment of public electric vehicle charging stations is essential to foster the rapid installation and widespread use of public electric vehicle charging stations on property whose owners or tenants desire to install public electric vehicle charging stations.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c42/s42.0101/c"> <num value="c">(c)</num> <content>The legislature finds that electric utilities, transmission and distribution utilities, competitive entities, and the commission have important roles to fill in supporting the installation and use of infrastructure for electric vehicle charging.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c42/s42.0101/d"> <num value="d">(d)</num> <chapeau>The legislature finds that it is necessary to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c42/s42.0101/1"> <num value="1">(1)</num> <content>implement competitively neutral policies to encourage competitive private sector investment in public electric vehicle charging station deployment;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c42/s42.0101/2"> <num value="2">(2)</num> <content>develop and implement competitively neutral electricity tariffs that are optimized for public electric vehicle charging stations and based on cost causation principles while ensuring transparency in pricing and recognizing changing market needs; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c42/s42.0101/3"> <num value="3">(3)</num> <content>encourage competitive private investment, ownership, and operation of public electric vehicle charging stations, including equipment that allows for fast charging.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 53 (S.B. 1002), Sec. 1, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c42/s42.0102"> <num value="42.0102">Sec. 42.0102.</num> <heading>DEFINITIONS</heading> <chapeau>In this chapter:</chapeau> <paragraph identifier="/us/tx/ut/t2/c42/s42.0102/1"> <num value="1">(1)</num> <content>"Direct-current fast charging station" means a charging system capable of delivering at least 50 kilowatts of direct-current electrical power to an electric vehicle's rechargeable battery at a voltage of 200 volts or greater.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c42/s42.0102/2"> <num value="2">(2)</num> <content>"Electric vehicle" means a vehicle that is propelled by one or more electric motors using energy stored in the form of a rechargeable battery.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c42/s42.0102/3"> <num value="3">(3)</num> <content>"Electric vehicle charging provider" means the owner or operator of a public electric vehicle charging station. The term does not include an electric utility or transmission and distribution utility.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c42/s42.0102/4"> <num value="4">(4)</num> <content>"Electric vehicle charging service" means sales made from a public electric vehicle charging station to the public.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c42/s42.0102/5"> <num value="5">(5)</num> <content>"Level two charging station" means a charging system capable of delivering at least 3 and not more than 19.2 kilowatts of alternating-current electrical power to an electric vehicle's rechargeable battery at a voltage of at least 208 volts on a circuit of at least 40 amperes.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c42/s42.0102/6"> <num value="6">(6)</num> <chapeau>"Make-ready infrastructure" means the electrical infrastructure required to service a public electric vehicle charging station's electrical load on the electric utility's or transmission and distribution utility's side of the point of delivery. The term:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c42/s42.0102/A"> <num value="A">(A)</num> <content>includes all site-specific electrical infrastructure required to accommodate engineering, physical, operational, or other constraints for the public electric vehicle charging station, regardless of whether the infrastructure is on the utility's or customer's side of the point of delivery; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c42/s42.0102/B"> <num value="B">(B)</num> <content>does not include the public electric vehicle charging station or any utility infrastructure on the customer's side of the point of delivery, up to and including the meter.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c42/s42.0102/7"> <num value="7">(7)</num> <chapeau>"Public electric vehicle charging station" means any level two charging station or direct-current fast charging station that delivers electricity from a source outside an electric vehicle into an electric vehicle, is separate and distinct from make-ready infrastructure, and is accessible for commercial use by the public, or similar vehicle charging equipment capable of delivering electricity into an electric vehicle faster than a level two charging station. The term does not include vehicle charging equipment that is:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c42/s42.0102/A"> <num value="A">(A)</num> <content>used by an electric utility, a transmission and distribution utility, or an affiliate to charge:</content> </subparagraph> </paragraph> <subsection identifier="/us/tx/ut/t2/c42/s42.0102/i"> <num value="i">(i)</num> <chapeau>an electric vehicle owned by the utility or affiliate; or</chapeau> <clause identifier="/us/tx/ut/t2/c42/s42.0102/ii"> <num value="ii">(ii)</num> <content>as an incident of employment, an electric vehicle owned by an employee of the utility or affiliate; or</content> </clause> <subparagraph identifier="/us/tx/ut/t2/c42/s42.0102/B"> <num value="B">(B)</num> <content>located on the premises of a customer of an electric utility, a transmission and distribution utility, or an affiliate and:</content> </subparagraph> </subsection> <subsection identifier="/us/tx/ut/t2/c42/s42.0102/i"> <num value="i">(i)</num> <chapeau>used by the customer or the customer's tenants, affiliates, or guests; and</chapeau> <clause identifier="/us/tx/ut/t2/c42/s42.0102/ii"> <num value="ii">(ii)</num> <content>not used commercially for electric vehicle charging service.</content> </clause> </subsection> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 53 (S.B. 1002), Sec. 1, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c42/s42.0103"> <num value="42.0103">Sec. 42.0103.</num> <heading>PUBLIC CHARGING OF ELECTRIC VEHICLES OUTSIDE OF ERCOT</heading> <subsection identifier="/us/tx/ut/t2/c42/s42.0103/a"> <num value="a">(a)</num> <content>This section applies only to an electric utility that operates solely outside of ERCOT.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c42/s42.0103/b"> <num value="b">(b)</num> <chapeau>An electric utility:</chapeau> <paragraph identifier="/us/tx/ut/t2/c42/s42.0103/1"> <num value="1">(1)</num> <content>may not provide electric vehicle charging service directly to a customer except as provided by this section;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c42/s42.0103/2"> <num value="2">(2)</num> <chapeau>may be affiliated with an entity that provides electric vehicle charging service from a public electric vehicle charging station if the affiliate:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c42/s42.0103/A"> <num value="A">(A)</num> <content>is not subject to regulation by the commission; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c42/s42.0103/B"> <num value="B">(B)</num> <content>is subject to prohibitions on market power abuse, cross-subsidizations, co-branding, and preferential treatment between regulated and competitive activities described by Section 39.157(d); and</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c42/s42.0103/3"> <num value="3">(3)</num> <content>consistent with the requirements of Subchapter B, Chapter 38, and Section 39.157(d)(3), shall offer the same nondiscriminatory rates, terms, and conditions offered to an affiliate described by Subdivision (2) to other electric vehicle charging providers in the utility's service area for the operation of public electric vehicle charging stations.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c42/s42.0103/c"> <num value="c">(c)</num> <content>An affiliate of an electric utility that provides electric vehicle charging service and is not subject to regulation by the commission is subject to the same tariffs of the electric utility that apply to any other entity receiving from the utility electric service that is used to provide electric vehicle charging service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c42/s42.0103/d"> <num value="d">(d)</num> <content>This section does not prohibit an electric utility from subsidizing the costs of make-ready infrastructure through rates or charges for services provided by the electric utility's regulated services.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c42/s42.0103/e"> <num value="e">(e)</num> <chapeau>An electric utility may provide electric vehicle charging service directly to a customer only if:</chapeau> <paragraph identifier="/us/tx/ut/t2/c42/s42.0103/1"> <num value="1">(1)</num> <content>the public electric vehicle charging station used to provide electric vehicle charging service is constructed in compliance with the requirements of this section; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c42/s42.0103/2"> <num value="2">(2)</num> <content>the rates charged by the utility for electric vehicle charging service are set by the commission under Subsection (m).</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c42/s42.0103/f"> <num value="f">(f)</num> <chapeau>An electric utility seeking to provide electric vehicle charging service directly to a customer shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c42/s42.0103/1"> <num value="1">(1)</num> <content>file with the commission a proposal identifying the specific location at which the utility seeks to provide electric vehicle charging service and a general description of the public electric vehicle charging station the utility proposes to construct at the location; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c42/s42.0103/2"> <num value="2">(2)</num> <chapeau>provide notice of the filing made under Subdivision (1):</chapeau> <subparagraph identifier="/us/tx/ut/t2/c42/s42.0103/A"> <num value="A">(A)</num> <content>on the utility's Internet website; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c42/s42.0103/B"> <num value="B">(B)</num> <content>to each dealer to which Chapter 2310, Occupations Code, applies who offers for retail sale motor fuel at a site that is located not more than 15 miles from the proposed location of the public electric vehicle charging station.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c42/s42.0103/g"> <num value="g">(g)</num> <chapeau>A notice provided under Subsection (f)(2) must include:</chapeau> <paragraph identifier="/us/tx/ut/t2/c42/s42.0103/1"> <num value="1">(1)</num> <content>the date the electric utility filed a proposal to provide electric vehicle charging service under Subsection (f)(1); and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c42/s42.0103/2"> <num value="2">(2)</num> <content>the date by which a person may file a proposal to provide reasonably comparable electric vehicle charging service under Subsection (h).</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c42/s42.0103/h"> <num value="h">(h)</num> <chapeau>The commission shall determine whether the provision of electric vehicle charging service under a proposal submitted under Subsection (f)(1) is in the public interest because the service is adequate for the needs of the area. Not later than the 90th day after the date the commission determines that the provision of the proposed electric vehicle charging service is in the public interest, a person other than the electric utility may notify the commission that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c42/s42.0103/1"> <num value="1">(1)</num> <chapeau>the person:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c42/s42.0103/A"> <num value="A">(A)</num> <content>intends to provide electric vehicle charging service that is adequate for the needs of the area in reasonable proximity to the proposed location of the public electric vehicle charging station and request the necessary make-ready infrastructure from the electric utility; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c42/s42.0103/B"> <num value="B">(B)</num> <content>is firmly committed to placing into service equipment necessary to provide the electric vehicle charging service before the later of:</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c42/s42.0103/i"> <num value="i">(i)</num> <chapeau>18 months after the date the person submits the notice to the commission; or</chapeau> <clause identifier="/us/tx/ut/t2/c42/s42.0103/ii"> <num value="ii">(ii)</num> <content>the date of completion of the installation of the necessary make-ready infrastructure to provide the electric vehicle charging service; and</content> </clause> <paragraph identifier="/us/tx/ut/t2/c42/s42.0103/2"> <num value="2">(2)</num> <chapeau>the person is capable of:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c42/s42.0103/A"> <num value="A">(A)</num> <content>acquiring the right to use the property at which the electric vehicle charging service will be provided; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c42/s42.0103/B"> <num value="B">(B)</num> <content>financing the cost of the equipment described by Subdivision (1)(B).</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c42/s42.0103/i"> <num value="i">(i)</num> <chapeau>The commission shall issue a determination regarding each notice received under Subsection (h) of whether:</chapeau> <paragraph identifier="/us/tx/ut/t2/c42/s42.0103/1"> <num value="1">(1)</num> <content>the proposed electric vehicle charging service is adequate for the needs of the area; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c42/s42.0103/2"> <num value="2">(2)</num> <content>the person has made the commitment and has the capabilities described by that subsection.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c42/s42.0103/j"> <num value="j">(j)</num> <chapeau>The commission by rule may establish a distance that constitutes reasonable proximity to a type of location for the purposes of Subsection (h). The commission may also issue an order establishing a distance other than one authorized by rule that constitutes reasonable proximity to a location for purposes of Subsection (h) for a specific electric utility. In establishing distances that constitute reasonable proximity to a location, the commission shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c42/s42.0103/1"> <num value="1">(1)</num> <content>consider population density and site access;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c42/s42.0103/2"> <num value="2">(2)</num> <content>establish the reasonable proximity between two locations on an interstate highway for the purposes of Subsection (h) as not more than 10 miles; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c42/s42.0103/3"> <num value="3">(3)</num> <content>consider the Texas Department of Transportation's designation by category of nearby roads other than interstate highways when establishing the reasonable proximity between two locations at which electric vehicle charging service will be provided on roads other than interstate highways.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c42/s42.0103/k"> <num value="k">(k)</num> <chapeau>An electric utility that files a proposal under Subsection (f) may proceed with construction of the public electric vehicle charging station and the provision of electric vehicle charging service unless the commission determines, based on the information submitted under Subsection (h), that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c42/s42.0103/1"> <num value="1">(1)</num> <content>the electric vehicle charging service proposed under Subsection (h) in response to the utility's proposal is adequate for the needs of the area and that the person who submitted the notice under Subsection (h) has made the commitment and has the capabilities described by that subsection; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c42/s42.0103/2"> <num value="2">(2)</num> <chapeau>the electric vehicle charging service proposed under Subsection (f) by the utility unreasonably duplicates:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c42/s42.0103/A"> <num value="A">(A)</num> <content>electric vehicle charging service provided by another person; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c42/s42.0103/B"> <num value="B">(B)</num> <content>a facility under construction that another person will use to provide electric vehicle charging service.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c42/s42.0103/l"> <num value="l">(l)</num> <content>An electric utility authorized to proceed with the construction of a public electric vehicle charging station under Subsection (k) shall notify the commission that the utility intends to proceed with the construction and may construct and operate the proposed public electric vehicle charging station after the 120th day after the date the utility files the notice of intent under this subsection.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c42/s42.0103/m"> <num value="m">(m)</num> <content>On application by an electric utility, the commission shall set in a manner authorized under Chapter 36 the rates the utility may charge for electric vehicle charging service. The rates must be reasonable and ensure that competition is not impaired. The commission may set rates differently for different locations and times of day and for different types of electric vehicle charging service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c42/s42.0103/n"> <num value="n">(n)</num> <content>The commission shall permit an electric utility authorized to construct and operate a public electric vehicle charging station under this section to recover, using the rate of return on investment established in the commission's final order in the utility's most recent base rate proceeding, reasonable and necessary costs incurred for the construction, financing, operation, and maintenance of that public electric vehicle charging station.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c42/s42.0103/o"> <num value="o">(o)</num> <chapeau>This section does not prohibit a person who is not an electric utility or an affiliate of an electric utility from entering into an agreement with an electric utility for the utility to own or operate a public electric vehicle charging station on the person's property if:</chapeau> <paragraph identifier="/us/tx/ut/t2/c42/s42.0103/1"> <num value="1">(1)</num> <chapeau>the utility does not:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c42/s42.0103/A"> <num value="A">(A)</num> <content>provide electric vehicle charging service using the public electric vehicle charging station; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c42/s42.0103/B"> <num value="B">(B)</num> <content>brand or market the public electric vehicle charging station as owned or operated by the utility, including by presenting the utility's name, logo, or any other distinguishing mark to indicate that the utility owns or operates the public electric vehicle charging station;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c42/s42.0103/2"> <num value="2">(2)</num> <chapeau>the person solely determines:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c42/s42.0103/A"> <num value="A">(A)</num> <content>physical access to and use of the public electric vehicle charging station necessary to carry out responsibilities associated with ownership and operation of the public electric vehicle charging station; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c42/s42.0103/B"> <num value="B">(B)</num> <content>prices for the electric vehicle charging service; and</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c42/s42.0103/3"> <num value="3">(3)</num> <content>the person pays for all electric utility-related costs under a tariff approved by the commission that provides for full recovery of the costs of the public electric vehicle charging station from the person, including incremental revenues paid by the person to the utility associated with the electric vehicle charging service.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c42/s42.0103/p"> <num value="p">(p)</num> <chapeau>The commission shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c42/s42.0103/1"> <num value="1">(1)</num> <content>require each electric utility for which the commission has approved a tariff under Subsection (o) to offer service under the terms of the tariff to other persons seeking agreements in the utility's service area on a nondiscriminatory basis; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c42/s42.0103/2"> <num value="2">(2)</num> <content>ensure that revenue collected by an electric utility under an agreement under Subsection (o) allows the utility to recover the costs of owning, constructing, financing, operating, and maintaining the public electric vehicle charging station from the person and not the utility's other customers.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c42/s42.0103/q"> <num value="q">(q)</num> <content>A public electric vehicle charging station operated under an agreement under Subsection (o) is not subject to the requirements of Subsections (f)-(l).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c42/s42.0103/r"> <num value="r">(r)</num> <chapeau>Notwithstanding any other provision of this section, a municipality that is a customer of an electric utility may enter into an agreement with the utility under which:</chapeau> <paragraph identifier="/us/tx/ut/t2/c42/s42.0103/1"> <num value="1">(1)</num> <content>the utility owns and operates a public electric vehicle charging station and provides electric vehicle charging service on the municipality's property; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c42/s42.0103/2"> <num value="2">(2)</num> <content>none of the costs of constructing, financing, operating, or maintaining the public electric vehicle charging station described by Subdivision (1) are recovered from the other customers of the utility.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 53 (S.B. 1002), Sec. 1, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c42/s42.0104"> <num value="42.0104">Sec. 42.0104.</num> <heading>PUBLIC CHARGING OF ELECTRIC VEHICLES INSIDE ERCOT</heading> <subsection identifier="/us/tx/ut/t2/c42/s42.0104/a"> <num value="a">(a)</num> <chapeau>A transmission and distribution utility:</chapeau> <paragraph identifier="/us/tx/ut/t2/c42/s42.0104/1"> <num value="1">(1)</num> <content>may not directly own, operate, or provide electric vehicle charging service from a public electric vehicle charging station;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c42/s42.0104/2"> <num value="2">(2)</num> <content>may not include costs of a public electric vehicle charging station for recovery through rates approved by the commission;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c42/s42.0104/3"> <num value="3">(3)</num> <chapeau>may be affiliated with a competitive affiliate that provides electric vehicle charging service from a public electric vehicle charging station through a separate entity or third party only if:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c42/s42.0104/A"> <num value="A">(A)</num> <content>the affiliate:</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c42/s42.0104/i"> <num value="i">(i)</num> <chapeau>is not subject to regulation by the commission; and</chapeau> <clause identifier="/us/tx/ut/t2/c42/s42.0104/ii"> <num value="ii">(ii)</num> <content>is subject to prohibitions on market power abuse, cross-subsidizations, co-branding, and preferential treatment between regulated and competitive activities described by Section 39.157(d); and</content> </clause> <subparagraph identifier="/us/tx/ut/t2/c42/s42.0104/B"> <num value="B">(B)</num> <content>the alternative fuels data center map maintained by the United States Department of Energy does not show that a public electric vehicle charging station owned or operated by an electric vehicle charging provider and used to provide electric vehicle charging service is located less than 50 miles from the location where the affiliate proposes to provide electric vehicle charging service; and</content> </subparagraph> <paragraph identifier="/us/tx/ut/t2/c42/s42.0104/4"> <num value="4">(4)</num> <content>consistent with the requirements of Subchapter B, Chapter 38, and Section 39.157(d)(3), shall offer the same nondiscriminatory rates, terms, and conditions offered to the affiliate described by Subdivision (3) to other electric vehicle charging providers in the transmission and distribution utility's service area for the operation of public electric vehicle charging stations.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c42/s42.0104/b"> <num value="b">(b)</num> <content>An affiliate described by Subsection (a)(3) shall maintain for at least two years documentation of the alternative fuels data center map that is available on the date on which the installation of the public electric vehicle charging station begins.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c42/s42.0104/c"> <num value="c">(c)</num> <content>An affiliate of a transmission and distribution utility that provides, owns, operates, or maintains public electric vehicle charging stations and is not subject to regulation by the commission may not be subsidized by any rate or charge for any regulated services provided by the transmission and distribution utility.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c42/s42.0104/d"> <num value="d">(d)</num> <content>This section does not prohibit a transmission and distribution utility from constructing, owning, or operating make-ready infrastructure on the transmission and distribution utility's side of the point of delivery that is funded through rates or charges for services under the transmission and distribution utility's tariffs.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c42/s42.0104/e"> <num value="e">(e)</num> <content>Notwithstanding Subsection (a), a transmission and distribution utility may own, operate, lease, install, or otherwise procure service from a public electric vehicle charging station on the utility's premises for the sole purpose of serving the utility's vehicles.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c42/s42.0104/f"> <num value="f">(f)</num> <content>The commission shall permit a transmission and distribution utility to recover, using the rate of return on investment established in the commission's final order in the utility's most recent base rate proceeding, reasonable and necessary costs incurred for the construction or installation of make-ready infrastructure on the utility's side of the point of delivery.</content> </subsection> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 53 (S.B. 1002), Sec. 1, eff. September 1, 2023.</sourceCredit> </section> </chapter> <chapter identifier="/us/tx/ut/t2/c43"> <num value="43">CHAPTER 43.</num> <heading>PROVISION OF MIDDLE MILE BROADBAND SERVICE BY ELECTRIC UTILITIES</heading> <subchapter identifier="/us/tx/ut/t2/c43/scA"> <num value="A">SUBCHAPTER A.</num> <heading>GENERAL PROVISIONS</heading> <section identifier="/us/tx/ut/t2/c43/scA/s43.001"> <num value="43.001">Sec. 43.001.</num> <heading>LEGISLATIVE FINDINGS</heading> <subsection identifier="/us/tx/ut/t2/c43/scA/s43.001/a"> <num value="a">(a)</num> <content>The legislature finds that access to quality, high-speed broadband Internet service is important to this state, is a necessary prerequisite for enabling economic development and improving education, health care, public safety, and government services in this state, and provides other benefits to its citizens.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c43/scA/s43.001/b"> <num value="b">(b)</num> <content>The legislature finds that broadband development in unserved and underserved areas of Texas can be facilitated by the participation of electric utilities in this state that own and operate facilities that may be useful for the full deployment of broadband service by Internet service providers throughout this state.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c43/scA/s43.001/c"> <num value="c">(c)</num> <content>The legislature finds that electric utilities have existing infrastructure in place throughout this state and that excess fiber capacity on that infrastructure could be used to provide middle mile broadband service in unserved and underserved areas.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c43/scA/s43.001/d"> <num value="d">(d)</num> <content>The legislature finds that it is in the public interest to encourage the deployment of broadband service in unserved and underserved areas by permitting electric utilities to own, construct, or operate fiber facilities for the support of electric service and to lease excess fiber capacity for the provision of middle mile broadband service. The purpose of this chapter is to provide the appropriate framework to facilitate the leasing of excess fiber capacity on electric utility facilities.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c43/scA/s43.001/e"> <num value="e">(e)</num> <content>The legislature finds that an electric utility may choose to implement middle mile broadband service to lease excess fiber capacity to Internet service providers under the procedures set forth in this chapter, but is not required to do so. The electric utility shall have the right to decide, in its sole discretion, whether to implement middle mile broadband service and may not be penalized for deciding to implement or not to implement that service.</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 2, eff. September 7, 2005. Amended by: Acts 2021, 87th Leg., R.S., Ch. 727 (H.B. 3853), Sec. 1, eff. June 15, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c43/scA/s43.002"> <num value="43.002">Sec. 43.002.</num> <heading>APPLICABILITY</heading> <subsection identifier="/us/tx/ut/t2/c43/scA/s43.002/a"> <num value="a">(a)</num> <content>This chapter applies to an electric utility whether or not the electric utility is offering customer choice under Chapter 39.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c43/scA/s43.002/b"> <num value="b">(b)</num> <content>If there is a conflict between the specific provisions of this chapter and any other provisions of this title, the provisions of this chapter control.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c43/scA/s43.002/c"> <num value="c">(c)</num> <content>Except as otherwise provided by this title, no provision of this title imposes an obligation on an electric utility to construct or operate facilities to provide middle mile broadband service, or to allow others to install facilities or use the electric utility's facilities for the provision of broadband service.</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 2, eff. September 7, 2005. Amended by: Acts 2021, 87th Leg., R.S., Ch. 727 (H.B. 3853), Sec. 1, eff. June 15, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c43/scA/s43.003"> <num value="43.003">Sec. 43.003.</num> <heading>DEFINITIONS</heading> <chapeau>In this chapter:</chapeau> <paragraph identifier="/us/tx/ut/t2/c43/scA/s43.003/1"> <num value="1">(1)</num> <content>"Broadband service" means retail Internet service provided by a commercial Internet service provider with the capability of providing a download speed of at least 25 megabits per second and an upload speed of at least 3 megabits per second.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c43/scA/s43.003/2"> <num value="2">(2)</num> <content>"Internet service provider" means a commercial entity that provides Internet services to end-use customers on a retail basis.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c43/scA/s43.003/3"> <num value="3">(3)</num> <content>"Electric delivery system" means the power lines and related transmission and distribution facilities constructed to deliver electric energy to the electric utility's customers.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c43/scA/s43.003/4"> <num value="4">(4)</num> <content>"Electric utility" includes an electric utility and a transmission and distribution utility as defined in Section 31.002(6) or (19).</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c43/scA/s43.003/5"> <num value="5">(5)</num> <content>"Middle mile broadband service" means the provision of excess fiber capacity on an electric utility's electric delivery system or other facilities to an Internet service provider to provide broadband service. The term does not include provision of Internet service to end-use customers on a retail basis.</content> </paragraph> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 2, eff. September 7, 2005. Amended by: Acts 2021, 87th Leg., R.S., Ch. 727 (H.B. 3853), Sec. 1, eff. June 15, 2021.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c43/scB"> <num value="B">SUBCHAPTER B.</num> <heading>DEVELOPMENT OF MIDDLE MILE BROADBAND SERVICE</heading> <section identifier="/us/tx/ut/t2/c43/scB/s43.051"> <num value="43.051">Sec. 43.051.</num> <heading>AUTHORIZATION FOR MIDDLE MILE BROADBAND SERVICE</heading> <subsection identifier="/us/tx/ut/t2/c43/scB/s43.051/a"> <num value="a">(a)</num> <content>An electric utility may own, construct, maintain, and operate fiber optic cables and other facilities for providing middle mile broadband service in unserved and underserved areas consistent with the requirements of this chapter. Nothing in this chapter prohibits an entity defined in Section 11.003(9) from providing broadband service to an Internet service provider or owning and operating a broadband system as otherwise permitted by law.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c43/scB/s43.051/b"> <num value="b">(b)</num> <content>The electric utility shall determine on a nondiscriminatory basis which Internet service providers may access excess fiber capacity on the electric utility's electric delivery system or other facilities and provide access points to allow connection between the electric utility's electric delivery system or other facilities and the systems of those Internet service providers. The electric utility shall provide access to excess fiber capacity only on reasonable and nondiscriminatory terms and conditions that assure the electric utility the unimpaired ability to comply with and enforce all applicable federal and state requirements regarding the safety, reliability, and security of the electric delivery system.</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 2, eff. September 7, 2005. Amended by: Acts 2021, 87th Leg., R.S., Ch. 727 (H.B. 3853), Sec. 1, eff. June 15, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c43/scB/s43.052"> <num value="43.052">Sec. 43.052.</num> <heading>CHARGES</heading> <content>An electric utility that owns and operates facilities to provide middle mile broadband service may lease excess fiber capacity on the electric utility's electric delivery system or other facilities to an Internet service provider on a wholesale basis and shall charge the Internet service provider for the use of the electric utility's system for all costs associated with that use. The rates, terms, and conditions of a lease of excess fiber capacity described by this section must be nondiscriminatory. An electric utility may not lease excess fiber capacity to provide middle mile broadband service to an affiliated Internet service provider.</content> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 2, eff. September 7, 2005. Amended by: Acts 2021, 87th Leg., R.S., Ch. 727 (H.B. 3853), Sec. 1, eff. June 15, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c43/scB/s43.053"> <num value="43.053">Sec. 43.053.</num> <heading>NO ADDITIONAL EASEMENTS OR CONSIDERATION REQUIRED</heading> <subsection identifier="/us/tx/ut/t2/c43/scB/s43.053/a"> <num value="a">(a)</num> <content>Because broadband systems provide benefits to electric delivery systems, the installation of facilities to provide middle mile broadband service on an electric delivery system or other facilities does not require the electric utility or an entity defined in Section 11.003(9) to obtain, modify, or expand easements or other rights-of-way for the middle mile broadband service or to give additional consideration as a result of the installation or the operation of middle mile broadband service on the electric delivery system or other facilities of the electric utility or entity, unless the property owner protests the use as provided by this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c43/scB/s43.053/b"> <num value="b">(b)</num> <content>Not later than the 60th day before the date an electric utility begins construction in an easement or other property right of fiber optic cables and other facilities for providing middle mile broadband service, the electric utility shall provide written notice to the owners of the affected property of the electric utility's intent to use the easement or other property right for middle mile broadband service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c43/scB/s43.053/c"> <num value="c">(c)</num> <chapeau>Notice under this section must:</chapeau> <paragraph identifier="/us/tx/ut/t2/c43/scB/s43.053/1"> <num value="1">(1)</num> <content>be sent by first class mail to the last known address of each person in whose name the affected property is listed on the most recent tax roll of each county authorized to levy property taxes against the property; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c43/scB/s43.053/2"> <num value="2">(2)</num> <content>state whether any new fiber optic cables used for middle mile broadband service will be located above or below ground in the easement or other property right.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c43/scB/s43.053/d"> <num value="d">(d)</num> <content>Not later than the 60th day after the date an electric utility mails notice under this section, a property owner entitled to the notice may submit to the electric utility a written protest of the intended use of the easement or other property right for middle mile broadband service. An electric utility that receives a timely written protest may not use the easement or other property right for middle mile broadband service unless the protestor later agrees in writing to that use or that use is authorized by law. If a property owner fails to submit a timely written protest, an electric utility may proceed under Subsection (a) without modifying or expanding the easement for that property owner.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c43/scB/s43.053/e"> <num value="e">(e)</num> <content>An electric utility that receives a timely written protest under Subsection (d) regarding proposed middle mile broadband service may cancel the project at any time.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c43/scB/s43.053/f"> <num value="f">(f)</num> <content>The requirements of this section do not apply to an existing easement that permits the provision of third-party middle mile broadband service on an electric delivery system.</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 2, eff. September 7, 2005. Amended by: Acts 2021, 87th Leg., R.S., Ch. 727 (H.B. 3853), Sec. 1, eff. June 15, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c43/scB/s43.054"> <num value="43.054">Sec. 43.054.</num> <heading>RELIABILITY OF ELECTRIC SYSTEMS MAINTAINED</heading> <chapeau>An electric utility that installs and operates facilities to provide middle mile broadband service shall employ all reasonable measures to ensure that the operation of the middle mile broadband service does not interfere with or diminish the reliability of the utility's electric delivery system. If a disruption in the provision of electric service occurs, the electric utility is governed by the terms and conditions of the retail electric delivery service tariff. The electric utility may take all necessary actions regarding its middle mile broadband service and the facilities required in the provision of that service to address circumstances that may pose health, safety, security, or reliability concerns. At all times, the provision of broadband service is secondary to the reliable provision of electric delivery services. Except as provided by contract or tariff, an electric utility is not liable to any person, including an Internet service provider, for any damages, including direct, indirect, physical, economic, exemplary, or consequential damages, including loss of business, loss of profits or revenue, or loss of production capacity caused by a fluctuation, disruption, or interruption of middle mile broadband service that is caused in whole or in part by:</chapeau> <paragraph identifier="/us/tx/ut/t2/c43/scB/s43.054/1"> <num value="1">(1)</num> <content>force majeure; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c43/scB/s43.054/2"> <num value="2">(2)</num> <content>the electric utility's provision of electric delivery services, including actions taken by the electric utility to ensure the reliability and security of the electric delivery system and actions taken in response to address all circumstances that may pose health, safety, security, or reliability concerns.</content> </paragraph> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 2, eff. September 7, 2005. Amended by: Acts 2021, 87th Leg., R.S., Ch. 727 (H.B. 3853), Sec. 1, eff. June 15, 2021.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c43/scC"> <num value="C">SUBCHAPTER C.</num> <heading>IMPLEMENTATION OF MIDDLE MILE BROADBAND SERVICE BY ELECTRIC UTILITY</heading> <section identifier="/us/tx/ut/t2/c43/scC/s43.101"> <num value="43.101">Sec. 43.101.</num> <heading>PARTICIPATION BY ELECTRIC UTILITY</heading> <subsection identifier="/us/tx/ut/t2/c43/scC/s43.101/a"> <num value="a">(a)</num> <content>An electric utility may install and operate facilities to provide middle mile broadband service on any part of its electric delivery system or other facilities for Internet service providers but may not construct new electric delivery facilities for the purpose of expanding the electric utility's middle mile broadband service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c43/scC/s43.101/b"> <num value="b">(b)</num> <content>The installation, operation, and use of middle mile broadband service and the lease of excess fiber capacity by Internet service providers from an electric utility may not be regulated by any state agency, a municipality, or local government other than as provided by this chapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c43/scC/s43.101/c"> <num value="c">(c)</num> <chapeau>An electric utility that owns and operates middle mile broadband service:</chapeau> <paragraph identifier="/us/tx/ut/t2/c43/scC/s43.101/1"> <num value="1">(1)</num> <content>may lease excess fiber capacity on the electric utility's electric delivery system or other facilities to an Internet service provider on a wholesale basis; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c43/scC/s43.101/2"> <num value="2">(2)</num> <content>may not provide Internet service to end-use customers on a retail basis.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c43/scC/s43.101/d"> <num value="d">(d)</num> <chapeau>The commission or a state or local government or a regulatory or quasi-governmental or a quasi-regulatory authority may not:</chapeau> <paragraph identifier="/us/tx/ut/t2/c43/scC/s43.101/1"> <num value="1">(1)</num> <content>require an electric utility to install or offer middle mile broadband service on the utility's electric delivery system or other facilities;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c43/scC/s43.101/2"> <num value="2">(2)</num> <content>require an electric utility to allow others to install middle mile broadband service on the utility's electric delivery system or other facilities; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c43/scC/s43.101/3"> <num value="3">(3)</num> <content>prohibit an electric utility from installing or offering middle mile broadband service on the utility's electric delivery system or other facilities.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c43/scC/s43.101/e"> <num value="e">(e)</num> <content>If a municipality or local government is already collecting a charge or fee from the electric utility for the use of the public rights-of-way for the delivery of electricity to retail electric customers, the municipality or local government may not require a franchise or an amendment to a franchise or require an additional charge, fee, or tax from the electric utility for use of the public rights-of-way for middle mile broadband service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c43/scC/s43.101/f"> <num value="f">(f)</num> <content>If the state or a municipality or local government is not already collecting a charge or fee from the electric utility for the use of the public rights-of-way, the state or a municipality or local government may impose a charge on the provision of middle mile broadband service, but the charge may not be greater than the lowest charge that the state or municipality imposes on other providers of broadband service for use of the public rights-of-way in its respective jurisdiction.</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 2, eff. September 7, 2005. Amended by: Acts 2021, 87th Leg., R.S., Ch. 727 (H.B. 3853), Sec. 1, eff. June 15, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c43/scC/s43.102"> <num value="43.102">Sec. 43.102.</num> <heading>COMMISSION REVIEW OF UTILITY MIDDLE MILE PLAN</heading> <subsection identifier="/us/tx/ut/t2/c43/scC/s43.102/a"> <num value="a">(a)</num> <chapeau>An electric utility that plans a project to deploy middle mile broadband service shall submit to the commission a written plan that includes:</chapeau> <paragraph identifier="/us/tx/ut/t2/c43/scC/s43.102/1"> <num value="1">(1)</num> <content>the route of the middle mile broadband service infrastructure proposed for the project;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c43/scC/s43.102/2"> <num value="2">(2)</num> <content>the location of the electric utility's infrastructure that will be used in connection with the project;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c43/scC/s43.102/3"> <num value="3">(3)</num> <content>an estimate of potential broadband customers that would be served by the Internet service provider;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c43/scC/s43.102/4"> <num value="4">(4)</num> <content>the capacity, number of fiber strands, and any other facilities of the middle mile broadband service that will be available to lease to Internet service providers;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c43/scC/s43.102/5"> <num value="5">(5)</num> <content>the estimated cost of the project, including engineering costs, construction costs, permitting costs, right-of-way costs, and a reasonable allowance for funds used during construction;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c43/scC/s43.102/6"> <num value="6">(6)</num> <content>the proposed schedule of construction for the project;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c43/scC/s43.102/7"> <num value="7">(7)</num> <content>testimony, exhibits, or other evidence that demonstrates the project will allow for the provision and maintenance of middle mile broadband service; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c43/scC/s43.102/8"> <num value="8">(8)</num> <content>any other information that the applicant considers relevant or that the commission requires.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c43/scC/s43.102/b"> <num value="b">(b)</num> <content>The commission, after notice and hearing if required by the commission, shall approve the plan if the commission finds that the plan includes all the items required by Subsection (a) and by commission rule.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c43/scC/s43.102/c"> <num value="c">(c)</num> <content>The commission must approve, modify, or reject a plan submitted to the commission under this section not later than the 181st day after the date the plan is submitted under Subsection (a).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c43/scC/s43.102/d"> <num value="d">(d)</num> <content>An approved plan may be updated or amended subject to commission approval in accordance with this section.</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 2, eff. September 7, 2005. Amended by: Acts 2021, 87th Leg., R.S., Ch. 727 (H.B. 3853), Sec. 1, eff. June 15, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c43/scC/s43.103"> <num value="43.103">Sec. 43.103.</num> <heading>COST RECOVERY FOR DEPLOYMENT OF MIDDLE MILE BROADBAND FACILITIES</heading> <subsection identifier="/us/tx/ut/t2/c43/scC/s43.103/a"> <num value="a">(a)</num> <content>Where an electric utility installs facilities used to provide middle mile broadband service under Section 43.051, the electric utility's investment in those facilities is eligible for inclusion in the electric utility's invested capital, and any fees or operating expenses that are reasonable and necessary are eligible for inclusion as operating expenses for purposes of any proceeding under Chapter 36. The commission may allow an electric utility to recover investment and associated costs in middle mile broadband service if the plan for the service has been submitted and approved under Section 43.102.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c43/scC/s43.103/b"> <num value="b">(b)</num> <content>In a proceeding under Chapter 36, revenue received by an electric utility from an Internet service provider for the use of middle mile broadband service must be applied as a revenue credit to customers in proportion to the customers' funding of the underlying infrastructure.</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 2, eff. September 7, 2005. Amended by: Acts 2021, 87th Leg., R.S., Ch. 727 (H.B. 3853), Sec. 1, eff. June 15, 2021.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c43/scD"> <num value="D">SUBCHAPTER D.</num> <heading>MISCELLANEOUS PROVISIONS</heading> <section identifier="/us/tx/ut/t2/c43/scD/s43.151"> <num value="43.151">Sec. 43.151.</num> <heading>COMPLIANCE WITH FEDERAL AND STATE LAW</heading> <content>An electric utility that owns and operates facilities for the provision of middle mile broadband service shall comply with all applicable federal and state laws.</content> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 2, eff. September 7, 2005. Amended by: Acts 2021, 87th Leg., R.S., Ch. 727 (H.B. 3853), Sec. 1, eff. June 15, 2021.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t2/c44"> <num value="44">CHAPTER 44.</num> <heading>GRID RESILIENCE</heading> <section identifier="/us/tx/ut/t2/c44/s44.001"> <num value="44.001">Sec. 44.001.</num> <heading>DEFINITIONS</heading> <chapeau>In this chapter:</chapeau> <paragraph identifier="/us/tx/ut/t2/c44/s44.001/1"> <num value="1">(1)</num> <chapeau>"All hazards" means:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c44/s44.001/A"> <num value="A">(A)</num> <content>terrestrial weather, including wind, hurricanes, tornadoes, flooding, ice storms, extended cold weather events, heat waves, and wildfires;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c44/s44.001/B"> <num value="B">(B)</num> <content>seismic events, including earthquakes and tsunamis;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c44/s44.001/C"> <num value="C">(C)</num> <content>physical threats, including terrorist attacks with direct fire, drones, explosives, and other methods of physical sabotage;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c44/s44.001/D"> <num value="D">(D)</num> <content>cyber attacks, including malware attacks and hacking of unprotected or compromised information technology networks;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c44/s44.001/E"> <num value="E">(E)</num> <content>manipulation of operational technology devices, including sensors, actuators, and drives;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c44/s44.001/F"> <num value="F">(F)</num> <content>electromagnetic threats through man-made radio frequency weapons, high-altitude nuclear electromagnetic pulses, and naturally occurring geomagnetic disturbances;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c44/s44.001/G"> <num value="G">(G)</num> <content>electric generation supply chain vulnerabilities, including insecure or inadequate fuel transportation or storage; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c44/s44.001/H"> <num value="H">(H)</num> <content>insider threats caused by compromised or hostile personnel working within government or the utility industry.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c44/s44.001/2"> <num value="2">(2)</num> <content>"Micro-grid" means a group of interconnected loads and distributed energy resources inside clearly defined electrical boundaries.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c44/s44.001/3"> <num value="3">(3)</num> <content>"Public utility" means an entity that generates, transmits, or distributes electric energy to the public, including an electric utility, an electric cooperative, a municipally owned utility, and a river authority.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c44/s44.001/4"> <num value="4">(4)</num> <content>"Security commission" means the Texas Grid Security Commission.</content> </paragraph> <sourceCredit>Added by Acts 2025, 89th Leg., R.S., Ch. 760 (S.B. 75), Sec. 3, eff. June 20, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c44/s44.002"> <num value="44.002">Sec. 44.002.</num> <heading>TEXAS GRID SECURITY COMMISSION</heading> <subsection identifier="/us/tx/ut/t2/c44/s44.002/a"> <num value="a">(a)</num> <chapeau>The Texas Grid Security Commission is composed of the following members:</chapeau> <paragraph identifier="/us/tx/ut/t2/c44/s44.002/1"> <num value="1">(1)</num> <content>a representative of the Texas Division of Emergency Management appointed by the chief of that division;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c44/s44.002/2"> <num value="2">(2)</num> <content>a representative of the commission appointed by that commission;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c44/s44.002/3"> <num value="3">(3)</num> <content>a representative of the Railroad Commission of Texas appointed by that commission;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c44/s44.002/4"> <num value="4">(4)</num> <content>a representative of the independent organization certified under Section 39.151 for the ERCOT power region appointed by the chief executive officer of that organization;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c44/s44.002/5"> <num value="5">(5)</num> <content>a representative of power generation companies appointed by the chief of the Texas Division of Emergency Management;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c44/s44.002/6"> <num value="6">(6)</num> <content>a representative of transmission and distribution utilities, electric cooperatives, municipally owned utilities, and river authorities appointed by the chief of the Texas Division of Emergency Management; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c44/s44.002/7"> <num value="7">(7)</num> <content>at the discretion of the security commission's presiding officer, any other representative of a state agency, board, commission, or organized volunteer group designated by the head of that entity.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c44/s44.002/b"> <num value="b">(b)</num> <content>The Texas Division of Emergency Management shall designate a member of the security commission to serve as presiding officer.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c44/s44.002/c"> <num value="c">(c)</num> <content>The security commission shall convene at the call of the presiding officer.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c44/s44.002/d"> <num value="d">(d)</num> <content>The security commission shall report to the chief of the Texas Division of Emergency Management.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c44/s44.002/e"> <num value="e">(e)</num> <content>A vacancy on the security commission is filled by appointment for the unexpired term in the same manner as the original appointment.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c44/s44.002/f"> <num value="f">(f)</num> <content>To the extent possible, individuals appointed to the security commission must be residents of this state.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c44/s44.002/g"> <num value="g">(g)</num> <content>The chief of the Texas Division of Emergency Management may invite officials or former officials of the United States Department of Defense or Department of Homeland Security with expertise on electromagnetic pulse defense to advise the security commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c44/s44.002/h"> <num value="h">(h)</num> <content>The presiding officer of the security commission or the chief of the Texas Division of Emergency Management may invite to advise the security commission any person whose expertise the security commission considers necessary to carry out the purposes of this chapter, including individuals recognized as experts in the fields of law enforcement, emergency services, communications, water and sewer services, health care, financial services, agriculture, transportation, electricity markets, cybersecurity of grid control systems, electromagnetic pulse mitigation, terrestrial and solar weather, and micro-grids.</content> </subsection> <sourceCredit>Added by Acts 2025, 89th Leg., R.S., Ch. 760 (S.B. 75), Sec. 3, eff. June 20, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c44/s44.003"> <num value="44.003">Sec. 44.003.</num> <heading>GRID RESILIENCE INFORMATION</heading> <subsection identifier="/us/tx/ut/t2/c44/s44.003/a"> <num value="a">(a)</num> <chapeau>Each of the following members of the security commission shall apply for a secret security clearance or an interim secret security clearance to be granted by the federal government:</chapeau> <paragraph identifier="/us/tx/ut/t2/c44/s44.003/1"> <num value="1">(1)</num> <content>the representative of the independent organization certified under Section 39.151 for the ERCOT power region;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c44/s44.003/2"> <num value="2">(2)</num> <content>the representative of the Texas Division of Emergency Management; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c44/s44.003/3"> <num value="3">(3)</num> <content>the representative of the commission.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c44/s44.003/b"> <num value="b">(b)</num> <content>A member of the security commission listed under Subsection (a) who is granted an applicable security clearance under that subsection is a member of the information security working group.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c44/s44.003/c"> <num value="c">(c)</num> <chapeau>The information security working group shall determine:</chapeau> <paragraph identifier="/us/tx/ut/t2/c44/s44.003/1"> <num value="1">(1)</num> <content>which information created or obtained by the security commission is confidential;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c44/s44.003/2"> <num value="2">(2)</num> <content>which members of the security commission may access which types of information received by the security commission; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c44/s44.003/3"> <num value="3">(3)</num> <content>which members, other than members of the working group, should apply for a secret security clearance or interim clearance granted by the federal government.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c44/s44.003/d"> <num value="d">(d)</num> <content>Information that the information security working group determines is confidential under Subsection (c) shall be stored and maintained by the independent organization certified under Section 39.151 for the ERCOT power region.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c44/s44.003/e"> <num value="e">(e)</num> <content>The security commission must maintain a reasonable balance between public transparency and security for information determined to be confidential under Subsection (c).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c44/s44.003/f"> <num value="f">(f)</num> <content>Confidential information created or obtained by the security commission is not subject to disclosure under Chapter 552, Government Code.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c44/s44.003/g"> <num value="g">(g)</num> <content>A meeting of the security commission that involves the discussion of confidential information is not subject to Chapter 551, Government Code.</content> </subsection> <sourceCredit>Added by Acts 2025, 89th Leg., R.S., Ch. 760 (S.B. 75), Sec. 3, eff. June 20, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c44/s44.004"> <num value="44.004">Sec. 44.004.</num> <heading>GRID RESILIENCE EVALUATION</heading> <subsection identifier="/us/tx/ut/t2/c44/s44.004/a"> <num value="a">(a)</num> <chapeau>The security commission shall evaluate, using available information on past power outages in ERCOT, all hazards to the critical infrastructure of the ERCOT electric grid, including threats that can cause future outages. The security commission shall evaluate the resilience of municipalities in this state in the following essential areas:</chapeau> <paragraph identifier="/us/tx/ut/t2/c44/s44.004/1"> <num value="1">(1)</num> <content>emergency services;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c44/s44.004/2"> <num value="2">(2)</num> <content>communications systems;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c44/s44.004/3"> <num value="3">(3)</num> <content>water and sewer services;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c44/s44.004/4"> <num value="4">(4)</num> <content>health care systems;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c44/s44.004/5"> <num value="5">(5)</num> <content>financial services;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c44/s44.004/6"> <num value="6">(6)</num> <content>energy systems, including whether energy, electric power, and fuel supplies are protected and available for recovery in the event of a catastrophic power outage; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c44/s44.004/7"> <num value="7">(7)</num> <content>transportation systems.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c44/s44.004/b"> <num value="b">(b)</num> <content>The security commission may create groups to identify and address each hazard as necessary. The security commission must assess each hazard both on the likelihood of occurrence of the hazard and the potential consequences of the hazard.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c44/s44.004/c"> <num value="c">(c)</num> <chapeau>The security commission shall identify methods by which this state can support an overall national deterrence policy as proposed by the United States Cyberspace Solarium Commission, including by:</chapeau> <paragraph identifier="/us/tx/ut/t2/c44/s44.004/1"> <num value="1">(1)</num> <content>identifying means to ensure that measures taken to increase resilience of critical infrastructure against all hazards support critical national security functions in this state; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c44/s44.004/2"> <num value="2">(2)</num> <content>engaging the Texas National Guard to be trained as first responders to cybersecurity threats to the ERCOT electric grid and other critical infrastructure.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c44/s44.004/d"> <num value="d">(d)</num> <content>The security commission shall evaluate nuclear generation sites in this state, the resilience of each nuclear reactor to all hazards, and the resilience to all hazards of off-site power for critical safety systems that support the reactor and spent fuel. The security commission may communicate with the United States Nuclear Regulatory Commission to accomplish the evaluation.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c44/s44.004/e"> <num value="e">(e)</num> <content>The security commission shall evaluate current Critical Infrastructure Protection standards established by the North American Electric Reliability Corporation and standards set by the National Institute of Standards and Technology to inform the security commission's recommended standards for protecting critical infrastructure in this state.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c44/s44.004/f"> <num value="f">(f)</num> <content>The security commission shall investigate the steps that local communities and other states have taken to address grid resilience. The security commission may request funding from the Texas Division of Emergency Management to conduct site visits to these locations as required.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c44/s44.004/g"> <num value="g">(g)</num> <content>The security commission shall identify universities based in this state that have expertise in cybersecurity and other matters that can contribute to the security commission's goal of mitigating all hazards to critical infrastructure in this state.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c44/s44.004/h"> <num value="h">(h)</num> <chapeau>In carrying out the security commission's duties under this section, the security commission may solicit information from:</chapeau> <paragraph identifier="/us/tx/ut/t2/c44/s44.004/1"> <num value="1">(1)</num> <content>defense contractors with experience protecting defense systems from electromagnetic pulses;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c44/s44.004/2"> <num value="2">(2)</num> <content>public utilities that have developed electromagnetic pulse protections for the utilities' grid assets;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c44/s44.004/3"> <num value="3">(3)</num> <content>the United States Department of Homeland Security; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c44/s44.004/4"> <num value="4">(4)</num> <content>the Commission to Assess the Threat to the United States from Electromagnetic Pulse (EMP) Attack.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2025, 89th Leg., R.S., Ch. 760 (S.B. 75), Sec. 3, eff. June 20, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c44/s44.005"> <num value="44.005">Sec. 44.005.</num> <heading>RESILIENCE STANDARDS</heading> <subsection identifier="/us/tx/ut/t2/c44/s44.005/a"> <num value="a">(a)</num> <content>Based on the findings of the evaluations and investigations conducted under Section 44.004, the security commission shall consider and recommend resilience standards for municipalities and critical infrastructure of the ERCOT electric grid.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c44/s44.005/b"> <num value="b">(b)</num> <content>Standards considered and recommended for energy systems of municipalities should include provisions to ensure that energy, electric power, and fuel supplies are protected and available for recovery in the event of a catastrophic power outage.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c44/s44.005/c"> <num value="c">(c)</num> <content>Not later than December 1, 2026, the security commission shall prepare and deliver a report to the legislature on the security commission's recommended resilience standards, the estimated costs associated with implementing the recommended standards, the potential effects if the recommended standards are not implemented, and the anticipated timeline for implementation of the recommended standards.</content> </subsection> <sourceCredit>Added by Acts 2025, 89th Leg., R.S., Ch. 760 (S.B. 75), Sec. 3, eff. June 20, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c44/s44.006"> <num value="44.006">Sec. 44.006.</num> <heading>MICRO-GRIDS</heading> <content>The security commission shall recommend resilience standards for micro-grids. The standards must be developed for both alternating current and direct current.</content> <sourceCredit>Added by Acts 2025, 89th Leg., R.S., Ch. 760 (S.B. 75), Sec. 3, eff. June 20, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c44/s44.007"> <num value="44.007">Sec. 44.007.</num> <heading>PLAN FOR ALL HAZARDS RESILIENCE</heading> <subsection identifier="/us/tx/ut/t2/c44/s44.007/a"> <num value="a">(a)</num> <content>Not later than December 1, 2026, the security commission shall prepare and deliver to the legislature a plan for protecting critical infrastructure from all hazards, including a catastrophic loss of power in the state.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c44/s44.007/b"> <num value="b">(b)</num> <chapeau>The plan must include:</chapeau> <paragraph identifier="/us/tx/ut/t2/c44/s44.007/1"> <num value="1">(1)</num> <content>any weatherization recommendations in addition to requirements established under Section 35.0021 necessary to prevent outages of critical infrastructure from extreme cold weather events, an analysis of whether these recommendations would induce cyber vulnerabilities, and an analysis of the associated costs for these recommendations;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c44/s44.007/2"> <num value="2">(2)</num> <content>recommendations for installing, replacing, or upgrading industrial control systems and associated networks, or the use of compensating controls or procedures, in critical facilities to address cyber vulnerabilities;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c44/s44.007/3"> <num value="3">(3)</num> <content>recommendations for installing, replacing, or upgrading extra high-voltage power transformers and supervisory control and data acquisition systems to withstand 100 kilovolts/meter E1 electromagnetic pulses and 85 volts/kilometer E3 electromagnetic pulses;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c44/s44.007/4"> <num value="4">(4)</num> <content>a timeline for making improvements to critical infrastructure to meet resilience standards recommended by the security commission under Section 44.005;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c44/s44.007/5"> <num value="5">(5)</num> <chapeau>long-term resilience recommendations for supporting industries, including:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c44/s44.007/A"> <num value="A">(A)</num> <content>communications;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c44/s44.007/B"> <num value="B">(B)</num> <content>food supply;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c44/s44.007/C"> <num value="C">(C)</num> <content>fuel supply;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c44/s44.007/D"> <num value="D">(D)</num> <content>health care;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c44/s44.007/E"> <num value="E">(E)</num> <content>nuclear reactors, materials, and waste;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c44/s44.007/F"> <num value="F">(F)</num> <content>transportation; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c44/s44.007/G"> <num value="G">(G)</num> <content>water and sewer services; and</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c44/s44.007/6"> <num value="6">(6)</num> <content>any additional recommendations considered necessary by the security commission.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c44/s44.007/c"> <num value="c">(c)</num> <content>The security commission may consult with the Private Sector Advisory Council in developing the plan.</content> </subsection> <sourceCredit>Added by Acts 2025, 89th Leg., R.S., Ch. 760 (S.B. 75), Sec. 3, eff. June 20, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c44/s44.008"> <num value="44.008">Sec. 44.008.</num> <heading>CRITICAL INFRASTRUCTURE RESILIENCE REPORT</heading> <subsection identifier="/us/tx/ut/t2/c44/s44.008/a"> <num value="a">(a)</num> <content>Not later than January 1 of each year, the security commission shall prepare and deliver a nonclassified report to the legislature, the governor, and the commission assessing natural and man-made threats to critical infrastructure and efforts to mitigate the threats.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c44/s44.008/b"> <num value="b">(b)</num> <content>The security commission shall make the report available to the public.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c44/s44.008/c"> <num value="c">(c)</num> <content>In preparing the report, the security commission may hold confidential or classified briefings with federal, state, and local officials as necessary.</content> </subsection> <sourceCredit>Added by Acts 2025, 89th Leg., R.S., Ch. 760 (S.B. 75), Sec. 3, eff. June 20, 2025.</sourceCredit> </section> </chapter> <chapter identifier="/us/tx/ut/t2/c51"> <num value="51">CHAPTER 51.</num> <heading>GENERAL PROVISIONS</heading> <section identifier="/us/tx/ut/t2/c51/s51.001"> <num value="51.001">Sec. 51.001.</num> <heading>POLICY</heading> <subsection identifier="/us/tx/ut/t2/c51/s51.001/a"> <num value="a">(a)</num> <content>Significant changes have occurred in telecommunications since the law from which this title is derived was originally adopted. Communications providers, including providers not subject to state regulation, such as wireless communications providers and Voice over Internet Protocol providers, have made investments in this state and broadened the range of communications choices available to consumers. To encourage and accelerate the development of a competitive and advanced telecommunications environment and infrastructure, rules, policies, and principles must be reformulated to reduce regulation of incumbent local exchange companies, ensure fair business practices, and protect the public interest.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c51/s51.001/b"> <num value="b">(b)</num> <chapeau>It is the policy of this state to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c51/s51.001/1"> <num value="1">(1)</num> <content>promote diversity of telecommunications providers and interconnectivity;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c51/s51.001/2"> <num value="2">(2)</num> <content>encourage a fully competitive telecommunications marketplace; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c51/s51.001/3"> <num value="3">(3)</num> <content>maintain a wide availability of high quality, interoperable, standards-based telecommunications services at affordable rates.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c51/s51.001/c"> <num value="c">(c)</num> <chapeau>The policy goals described by Subsection (b) are best achieved by legislation that modernizes telecommunications regulation by:</chapeau> <paragraph identifier="/us/tx/ut/t2/c51/s51.001/1"> <num value="1">(1)</num> <content>guaranteeing the affordability of basic telephone service in a competitively neutral manner; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c51/s51.001/2"> <num value="2">(2)</num> <content>fostering free market competition in the telecommunications industry.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c51/s51.001/d"> <num value="d">(d)</num> <chapeau>The technological advancements, advanced telecommunications infrastructure, and increased customer choices for telecommunications services generated by a truly competitive market play a critical role in Texas' economic future by raising living standards for Texans through:</chapeau> <paragraph identifier="/us/tx/ut/t2/c51/s51.001/1"> <num value="1">(1)</num> <content>enhanced economic development; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c51/s51.001/2"> <num value="2">(2)</num> <content>improved delivery of education, health, and other public and private services.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c51/s51.001/e"> <num value="e">(e)</num> <chapeau>The strength of competitive forces varies widely between markets, products, and services. It is the policy of this state to require the commission to take action necessary to enhance competition by adjusting regulation to match the degree of competition in the marketplace to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c51/s51.001/1"> <num value="1">(1)</num> <content>reduce the cost and burden of regulation; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c51/s51.001/2"> <num value="2">(2)</num> <content>protect markets that are not competitive.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c51/s51.001/f"> <num value="f">(f)</num> <chapeau>It is the policy of this state to ensure that high quality telecommunications services are available, accessible, and usable by an individual with a disability, unless making the services available, accessible, or usable would:</chapeau> <paragraph identifier="/us/tx/ut/t2/c51/s51.001/1"> <num value="1">(1)</num> <content>result in an undue burden, including unreasonable cost or technical infeasibility; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c51/s51.001/2"> <num value="2">(2)</num> <content>have an adverse competitive effect.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c51/s51.001/g"> <num value="g">(g)</num> <content>It is the policy of this state to ensure that customers in all regions of this state, including low-income customers and customers in rural and high cost areas, have access to telecommunications and information services, including interexchange services, cable services, wireless services, and advanced telecommunications and information services, that are reasonably comparable to those services provided in urban areas and that are available at prices that are reasonably comparable to prices charged for similar services in urban areas.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 1212, Sec. 4, eff. Sept. 1, 1999. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 98 (S.B. 980), Sec. 1, eff. September 1, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c51/s51.002"> <num value="51.002">Sec. 51.002.</num> <heading>DEFINITIONS</heading> <chapeau>In this subtitle:</chapeau> <paragraph identifier="/us/tx/ut/t2/c51/s51.002/1"> <num value="1">(1)</num> <chapeau>"Basic local telecommunications service" means:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/A"> <num value="A">(A)</num> <content>flat rate residential and business local exchange telephone service, including primary directory listings;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/B"> <num value="B">(B)</num> <content>tone dialing service;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/C"> <num value="C">(C)</num> <content>access to operator services;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/D"> <num value="D">(D)</num> <content>access to directory assistance services;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/E"> <num value="E">(E)</num> <content>access to 911 service provided by a local authority or dual party relay service;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/F"> <num value="F">(F)</num> <content>the ability to report service problems seven days a week;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/G"> <num value="G">(G)</num> <content>lifeline and tel-assistance services; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/H"> <num value="H">(H)</num> <content>any other service the commission determines after a hearing is a basic local telecommunications service.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c51/s51.002/2"> <num value="2">(2)</num> <chapeau>"Dominant carrier" means a provider of a communication service provided wholly or partly over a telephone system who the commission determines has sufficient market power in a telecommunications market to control prices for that service in that market in a manner adverse to the public interest. The term includes a provider who provided local exchange telephone service within a certificated exchange area on September 1, 1995, as to that service and as to any other service for which a competitive alternative is not available in a particular geographic market. In addition, with respect to:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/A"> <num value="A">(A)</num> <content>intraLATA long distance message telecommunications service originated by dialing the access code "1-plus," the term includes a provider of local exchange telephone service in a certificated exchange area for whom the use of that access code for the origination of "1-plus" intraLATA calls in the exchange area is exclusive; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/B"> <num value="B">(B)</num> <content>interexchange services, the term does not include an interexchange carrier that is not a certificated local exchange company.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c51/s51.002/3"> <num value="3">(3)</num> <content>"Incumbent local exchange company" means a local exchange company that has a certificate of convenience and necessity on September 1, 1995.</content> <continuation>(3-a) "Internet Protocol enabled service" means a service, capability, functionality, or application that uses Internet Protocol or a successor protocol to allow an end user to send or receive a data, video, or voice communication in Internet Protocol or a successor protocol.</continuation> </paragraph> <paragraph identifier="/us/tx/ut/t2/c51/s51.002/4"> <num value="4">(4)</num> <chapeau>"Local exchange company" means a telecommunications utility that has a certificate of convenience and necessity or a certificate of operating authority to provide in this state:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/A"> <num value="A">(A)</num> <content>local exchange telephone service;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/B"> <num value="B">(B)</num> <content>basic local telecommunications service; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/C"> <num value="C">(C)</num> <content>switched access service.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c51/s51.002/5"> <num value="5">(5)</num> <chapeau>"Local exchange telephone service" means telecommunications service provided within an exchange to establish connections between customer premises within the exchange, including connections between a customer premises and a long distance provider serving the exchange. The term includes tone dialing service, service connection charges, and directory assistance services offered in connection with basic local telecommunications service and interconnection with other service providers. The term does not include the following services, whether offered on an intraexchange or interexchange basis:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/A"> <num value="A">(A)</num> <content>central office based PBX-type services for systems of 75 stations or more;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/B"> <num value="B">(B)</num> <content>billing and collection services;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/C"> <num value="C">(C)</num> <content>high-speed private line services of 1.544 megabits or greater;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/D"> <num value="D">(D)</num> <content>customized services;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/E"> <num value="E">(E)</num> <content>private line or virtual private line services;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/F"> <num value="F">(F)</num> <content>resold or shared local exchange telephone services if permitted by tariff;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/G"> <num value="G">(G)</num> <content>dark fiber services;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/H"> <num value="H">(H)</num> <content>non-voice data transmission service offered as a separate service and not as a component of basic local telecommunications service;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/I"> <num value="I">(I)</num> <content>dedicated or virtually dedicated access services; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/J"> <num value="J">(J)</num> <content>any other service the commission determines is not a "local exchange telephone service."</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c51/s51.002/6"> <num value="6">(6)</num> <content>"Long run incremental cost" has the meaning assigned by 16 T.A.C. Section 23.91 or its successor.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c51/s51.002/7"> <num value="7">(7)</num> <chapeau>"Pricing flexibility" includes:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/A"> <num value="A">(A)</num> <content>customer specific contracts;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/B"> <num value="B">(B)</num> <content>packaging of services;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/C"> <num value="C">(C)</num> <content>volume, term, and discount pricing;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/D"> <num value="D">(D)</num> <content>zone density pricing, with a zone to be defined as an exchange; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/E"> <num value="E">(E)</num> <content>other promotional pricing.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c51/s51.002/8"> <num value="8">(8)</num> <chapeau>"Public utility" or "utility" means a person or river authority that owns or operates for compensation in this state equipment or facilities to convey, transmit, or receive communications over a telephone system as a dominant carrier. The term includes a lessee, trustee, or receiver of any of those entities, or a combination of those entities. The term does not include a municipal corporation. A person is not a public utility solely because the person:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/A"> <num value="A">(A)</num> <content>furnishes or furnishes and maintains a private system;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/B"> <num value="B">(B)</num> <content>manufactures, distributes, installs, or maintains customer premise communications equipment and accessories; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/C"> <num value="C">(C)</num> <content>furnishes a telecommunications 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.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c51/s51.002/9"> <num value="9">(9)</num> <content>"Separation" means the division of plant, revenues, expenses, taxes, and reserves applicable to exchange or local service if these items are used in common to provide public utility service to both local exchange telephone service and other service, such as interstate or intrastate toll service.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c51/s51.002/10"> <num value="10">(10)</num> <chapeau>"Telecommunications provider":</chapeau> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/A"> <num value="A">(A)</num> <content>means:</content> </subparagraph> </paragraph> <subsection identifier="/us/tx/ut/t2/c51/s51.002/i"> <num value="i">(i)</num> <chapeau>a certificated telecommunications utility;</chapeau> <clause identifier="/us/tx/ut/t2/c51/s51.002/ii"> <num value="ii">(ii)</num> <content>a shared tenant service provider;</content> </clause> <clause identifier="/us/tx/ut/t2/c51/s51.002/iii"> <num value="iii">(iii)</num> <content>a nondominant carrier of telecommunications services;</content> </clause> <clause identifier="/us/tx/ut/t2/c51/s51.002/iv"> <num value="iv">(iv)</num> <content>a provider of commercial mobile service as defined by Section 332(d), Communications Act of 1934 (47 U.S.C. Section 151 et seq.), Federal Communications Commission rules, and the Omnibus Budget Reconciliation Act of 1993 (Public Law 103-66), except that the term does not include these entities for the purposes of Chapter 17, 55, or 64;</content> </clause> </subsection> <subsection identifier="/us/tx/ut/t2/c51/s51.002/v"> <num value="v">(v)</num> <chapeau>a telecommunications entity that provides central office based PBX-type sharing or resale arrangements;</chapeau> <clause identifier="/us/tx/ut/t2/c51/s51.002/vi"> <num value="vi">(vi)</num> <content>an interexchange telecommunications carrier;</content> </clause> <clause identifier="/us/tx/ut/t2/c51/s51.002/vii"> <num value="vii">(vii)</num> <content>a specialized common carrier;</content> </clause> <clause identifier="/us/tx/ut/t2/c51/s51.002/viii"> <num value="viii">(viii)</num> <content>a reseller of communications;</content> </clause> <clause identifier="/us/tx/ut/t2/c51/s51.002/ix"> <num value="ix">(ix)</num> <content>a provider of operator services;</content> </clause> </subsection> <subsection identifier="/us/tx/ut/t2/c51/s51.002/x"> <num value="x">(x)</num> <chapeau>a provider of customer-owned pay telephone service; or</chapeau> <clause identifier="/us/tx/ut/t2/c51/s51.002/xi"> <num value="xi">(xi)</num> <content>a person or entity determined by the commission to provide telecommunications services to customers in this state; and</content> </clause> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/B"> <num value="B">(B)</num> <content>does not mean:</content> </subparagraph> </subsection> <subsection identifier="/us/tx/ut/t2/c51/s51.002/i"> <num value="i">(i)</num> <chapeau>a provider of enhanced or information services, or another user of telecommunications services, who does not also provide telecommunications services; or</chapeau> <clause identifier="/us/tx/ut/t2/c51/s51.002/ii"> <num value="ii">(ii)</num> <content>a state agency or state institution of higher education, or a service provided by a state agency or state institution of higher education.</content> </clause> <paragraph identifier="/us/tx/ut/t2/c51/s51.002/11"> <num value="11">(11)</num> <chapeau>"Telecommunications utility" means:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/A"> <num value="A">(A)</num> <content>a public utility;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/B"> <num value="B">(B)</num> <content>an interexchange telecommunications carrier, including a reseller of interexchange telecommunications services;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/C"> <num value="C">(C)</num> <content>a specialized communications common carrier;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/D"> <num value="D">(D)</num> <content>a reseller of communications;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/E"> <num value="E">(E)</num> <content>a communications carrier who conveys, transmits, or receives communications wholly or partly over a telephone system;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/F"> <num value="F">(F)</num> <content>a provider of operator services as defined by Section 55.081, unless the provider is a subscriber to customer-owned pay telephone service; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/G"> <num value="G">(G)</num> <content>a separated affiliate or an electronic publishing joint venture as defined in Chapter 63.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c51/s51.002/12"> <num value="12">(12)</num> <content>"Tier 1 local exchange company" has the meaning assigned by the Federal Communications Commission.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c51/s51.002/13"> <num value="13">(13)</num> <chapeau>"Voice over Internet Protocol service" means a service that:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/A"> <num value="A">(A)</num> <content>uses Internet Protocol or a successor protocol to enable a real-time, two-way voice communication that originates from or terminates to the user's location in Internet Protocol or a successor protocol;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/B"> <num value="B">(B)</num> <content>requires a broadband connection from the user's location; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c51/s51.002/C"> <num value="C">(C)</num> <content>permits a user generally to receive a call that originates on the public switched telephone network and to terminate a call to the public switched telephone network.</content> </subparagraph> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 1212, Sec. 5, eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 1579, Sec. 4, eff. Aug. 30, 1999; Acts 2001, 77th Leg., ch. 651, Sec. 5, eff. Sept. 1, 2001. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 98 (S.B. 980), Sec. 2, eff. September 1, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c51/s51.003"> <num value="51.003">Sec. 51.003.</num> <heading>APPLICABILITY</heading> <chapeau>Except as otherwise expressly provided by this title, this title does not apply to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c51/s51.003/1"> <num value="1">(1)</num> <chapeau>a company that as its only form of business:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c51/s51.003/A"> <num value="A">(A)</num> <content>is a telecommunications manager; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c51/s51.003/B"> <num value="B">(B)</num> <content>administers central office based or customer based PBX-type sharing/resale arrangements;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c51/s51.003/2"> <num value="2">(2)</num> <content>telegraph services;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c51/s51.003/3"> <num value="3">(3)</num> <content>television or radio stations;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c51/s51.003/4"> <num value="4">(4)</num> <content>community antenna television services; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c51/s51.003/5"> <num value="5">(5)</num> <content>a provider of commercial mobile service as defined by Section 332(d), Communications Act of 1934 (47 U.S.C. Section 151 et seq.), Federal Communications Commission rules, and the Omnibus Budget Reconciliation Act of 1993 (Public Law 103-66), other than conventional rural radio-telephone services provided by a wire-line telephone company under the Public Mobile Service rules of the Federal Communications Commission (47 C.F.R. Part 22).</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c51/s51.004"> <num value="51.004">Sec. 51.004.</num> <heading>PRICING FLEXIBILITY</heading> <subsection identifier="/us/tx/ut/t2/c51/s51.004/a"> <num value="a">(a)</num> <chapeau>A discount or other form of pricing flexibility may not be:</chapeau> <paragraph identifier="/us/tx/ut/t2/c51/s51.004/1"> <num value="1">(1)</num> <content>unreasonably preferential, prejudicial, or discriminatory; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c51/s51.004/2"> <num value="2">(2)</num> <content>predatory or anticompetitive.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c51/s51.004/b"> <num value="b">(b)</num> <content>This title does not prohibit a volume discount or other discount based on a reasonable business purpose. A price that is set at or above the long run incremental cost of a service is presumed not to be a predatory price.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c51/s51.004/c"> <num value="c">(c)</num> <content>This title allows an offer based on a reasonable business purpose, including an offer made at any time to a selected customer or a group of customers in response to a competitor's offer or a former customer's acceptance of a competitor's offer if the price of the offer meets the requirements of Section 52.0584, 58.063, or 59.031.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c51/s51.004/d"> <num value="d">(d)</num> <content>An offer made under Subsection (c) must be made in compliance with Chapter 304, Business & Commerce Code.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 1212, Sec. 6, eff. Sept. 1, 1999; Acts 2003, 78th Leg., ch. 32, Sec. 1, eff. Sept. 1, 2003. Amended by: Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278), Sec. 2.39, eff. April 1, 2009.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c51/s51.005"> <num value="51.005">Sec. 51.005.</num> <heading>ASSISTANCE TO MUNICIPALITY</heading> <content>On request of a municipality, the commission may advise and assist the municipality with respect to a question or proceeding arising under this title. Assistance provided by the commission may include aid to a municipality on a matter pending before the commission or a court, such as making a staff member available as a witness or otherwise providing evidence to the municipality.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c51/s51.006"> <num value="51.006">Sec. 51.006.</num> <heading>MUNICIPAL PARTICIPATION IN RATEMAKING PROCEEDINGS</heading> <subsection identifier="/us/tx/ut/t2/c51/s51.006/a"> <num value="a">(a)</num> <chapeau>The governing body of a municipality participating in a ratemaking proceeding may engage rate consultants, accountants, auditors, attorneys, and engineers to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c51/s51.006/1"> <num value="1">(1)</num> <content>conduct investigations, present evidence, and advise and represent the governing body; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c51/s51.006/2"> <num value="2">(2)</num> <content>assist the governing body with litigation before the commission or a court.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c51/s51.006/b"> <num value="b">(b)</num> <content>The public utility in the ratemaking proceeding shall reimburse the governing body of the municipality for the reasonable cost of the services of a person engaged under Subsection (a) to the extent the commission determines is reasonable.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c51/s51.007"> <num value="51.007">Sec. 51.007.</num> <heading>MUNICIPAL STANDING IN CERTAIN CASES</heading> <subsection identifier="/us/tx/ut/t2/c51/s51.007/a"> <num value="a">(a)</num> <content>A municipality has standing in each case before the commission that relates to a utility providing service in the municipality.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c51/s51.007/b"> <num value="b">(b)</num> <chapeau>A municipality's standing is subject to the right of the commission to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c51/s51.007/1"> <num value="1">(1)</num> <content>determine standing in a case involving a retail service area dispute that involves two or more utilities; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c51/s51.007/2"> <num value="2">(2)</num> <content>consolidate municipalities on an issue of common interest.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c51/s51.008"> <num value="51.008">Sec. 51.008.</num> <heading>JUDICIAL REVIEW</heading> <content>A municipality is entitled to judicial review of a commission order relating to a utility providing services in the municipality as provided by Section 15.001.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c51/s51.009"> <num value="51.009">Sec. 51.009.</num> <heading>MUNICIPAL FEES</heading> <subsection identifier="/us/tx/ut/t2/c51/s51.009/a"> <num value="a">(a)</num> <content>Nothing in this title, including Section 53.201, may be construed as in any way limiting the right of a public utility to pass through a municipal fee, including an increase in a municipal fee.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c51/s51.009/b"> <num value="b">(b)</num> <content>A public utility that traditionally passes through municipal fees shall promptly pass through any municipal fee reduction.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c51/s51.010"> <num value="51.010">Sec. 51.010.</num> <heading>COMMISSION INVESTIGATION OF SALE, MERGER, OR CERTAIN OTHER ACTIONS</heading> <subsection identifier="/us/tx/ut/t2/c51/s51.010/a"> <num value="a">(a)</num> <content>The commission, not later than the 180th day after the date a public utility reports to the commission under Section 14.101, shall complete an investigation under that section and enter a final order.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c51/s51.010/b"> <num value="b">(b)</num> <content>If a final order is not entered as required by Subsection (a), the commission is considered to have determined that the action taken by the public utility is consistent with the public interest.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c51/s51.010/c"> <num value="c">(c)</num> <chapeau>Section 14.101 does not apply to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c51/s51.010/1"> <num value="1">(1)</num> <content>a company that receives a certificate of operating authority or a service provider certificate of operating authority under Chapter 54; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c51/s51.010/2"> <num value="2">(2)</num> <content>a company electing under Chapter 58.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </chapter> <chapter identifier="/us/tx/ut/t2/c52"> <num value="52">CHAPTER 52.</num> <heading>COMMISSION JURISDICTION</heading> <subchapter identifier="/us/tx/ut/t2/c52/scA"> <num value="A">SUBCHAPTER A.</num> <heading>GENERAL POWERS AND DUTIES OF COMMISSION</heading> <section identifier="/us/tx/ut/t2/c52/scA/s52.001"> <num value="52.001">Sec. 52.001.</num> <heading>POLICY</heading> <subsection identifier="/us/tx/ut/t2/c52/scA/s52.001/a"> <num value="a">(a)</num> <content>It is the policy of this state to protect the public interest in having adequate and efficient telecommunications service available to each resident of this state at just, fair, and reasonable rates.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scA/s52.001/b"> <num value="b">(b)</num> <chapeau>The telecommunications industry, through technical advancements, federal legislative, judicial, and administrative actions, and the formulation of new telecommunications enterprises, has become and will continue to be in many and growing areas a competitive industry that does not lend itself to traditional public utility regulatory rules, policies, and principles. As a result, the public interest requires that rules, policies, and principles be formulated and applied to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scA/s52.001/1"> <num value="1">(1)</num> <content>protect the public interest; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scA/s52.001/2"> <num value="2">(2)</num> <content>provide equal opportunity to each telecommunications utility in a competitive marketplace.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scA/s52.002"> <num value="52.002">Sec. 52.002.</num> <heading>AUTHORITY TO REGULATE</heading> <subsection identifier="/us/tx/ut/t2/c52/scA/s52.002/a"> <num value="a">(a)</num> <content>To carry out the public policy stated by Section 52.001 and to regulate rates, operations, and services so that the rates are just, fair, and reasonable and the services are adequate and efficient, the commission has exclusive original jurisdiction over the business and property of a telecommunications utility in this state subject to the limitations imposed by this title.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scA/s52.002/b"> <num value="b">(b)</num> <content>The commission's regulatory authority as to a telecommunications utility other than a public utility is only as prescribed by this title.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scA/s52.002/c"> <num value="c">(c)</num> <content>The commission may not require a telecommunications utility that is not a public utility, including a deregulated or transitioning company, to comply with a requirement or standard that is more burdensome than a requirement or standard the commission imposes on a public utility.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scA/s52.002/d"> <num value="d">(d)</num> <chapeau>Notwithstanding any other law, a department, agency, or political subdivision of this state may not by rule, order, or other means directly or indirectly regulate rates charged for, service or contract terms for, conditions for, or requirements for entry into the market for Voice over Internet Protocol services or other Internet Protocol enabled services. This subsection does not:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scA/s52.002/1"> <num value="1">(1)</num> <content>affect requirements pertaining to use of a right-of-way or payment of right-of-way fees applicable to Voice over Internet Protocol services under Chapter 283, Local Government Code;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scA/s52.002/2"> <num value="2">(2)</num> <content>affect any person's obligation to provide video or cable service, as defined under applicable state or federal law, the applicability of Chapter 66, or a requirement to make a payment under Chapter 66;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scA/s52.002/3"> <num value="3">(3)</num> <content>require or prohibit assessment of enhanced 9-1-1, relay access service, or universal service fund fees on Voice over Internet Protocol service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scA/s52.002/4"> <num value="4">(4)</num> <content>affect any entity's obligations under Sections 251 and 252, Communications Act of 1934 (47 U.S.C. Sections 251 and 252), or a right granted to an entity by those sections;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scA/s52.002/5"> <num value="5">(5)</num> <content>affect any applicable wholesale tariff;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scA/s52.002/6"> <num value="6">(6)</num> <content>grant, modify, or affect the authority of the commission to implement, carry out, or enforce the rights or obligations provided by Sections 251 and 252, Communications Act of 1934 (47 U.S.C. Sections 251 and 252), or of an applicable wholesale tariff through arbitration proceedings or other available mechanisms and procedures;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scA/s52.002/7"> <num value="7">(7)</num> <content>require or prohibit payment of switched network access rates or other intercarrier compensation rates, as applicable;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scA/s52.002/8"> <num value="8">(8)</num> <content>limit any commission authority over the subjects listed in Subdivisions (1)-(7) or grant the commission any authority over those subjects; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scA/s52.002/9"> <num value="9">(9)</num> <content>affect the assessment, administration, collection, or enforcement of any tax or fee over which the comptroller has authority.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 98 (S.B. 980), Sec. 3, eff. September 1, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scA/s52.003"> <num value="52.003">Sec. 52.003.</num> <heading>COOPERATION WITH OTHER REGULATORY AUTHORITIES</heading> <content>In regulating the rates, operations, and services of a telecommunications utility providing service in a municipality located on the state line adjacent to a municipality in an adjoining state, the commission may cooperate with the utility regulatory commission of the adjoining state or of the federal government and may hold a joint hearing or make a joint investigation with that commission.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scA/s52.004"> <num value="52.004">Sec. 52.004.</num> <heading>COMMISSION MAY ESTABLISH SEPARATE MARKETS</heading> <subsection identifier="/us/tx/ut/t2/c52/scA/s52.004/a"> <num value="a">(a)</num> <chapeau>The commission may establish separate telecommunications markets in this state if the commission determines that the public interest will be served. The commission shall hold hearings and require evidence as necessary to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scA/s52.004/1"> <num value="1">(1)</num> <content>carry out the public purpose of this chapter; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scA/s52.004/2"> <num value="2">(2)</num> <content>determine the need and effect of establishing separate markets.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scA/s52.004/b"> <num value="b">(b)</num> <content>A provider determined to be a dominant carrier as to a particular telecommunications service in a market may not be presumed to be a dominant carrier of a different telecommunications service in that market.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scA/s52.005"> <num value="52.005">Sec. 52.005.</num> <heading>MINIMUM REQUIREMENTS FOR DOMINANT CARRIERS</heading> <content>The commission shall impose as minimum requirements for a dominant carrier the same requirements imposed by Subchapter C, except Section 52.107.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scA/s52.007"> <num value="52.007">Sec. 52.007.</num> <heading>TARIFF REQUIREMENTS RELATING TO PROVIDERS NOT SUBJECT TO RATE OF RETURN REGULATION</heading> <subsection identifier="/us/tx/ut/t2/c52/scA/s52.007/a"> <num value="a">(a)</num> <content>This section applies only to a telecommunications provider that is not subject to rate of return regulation under Chapter 53.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scA/s52.007/b"> <num value="b">(b)</num> <chapeau>A telecommunications provider:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scA/s52.007/1"> <num value="1">(1)</num> <content>may, but is not required to, maintain on file with the commission tariffs, price lists, or customer service agreements governing the terms of providing service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scA/s52.007/2"> <num value="2">(2)</num> <content>may make changes in its tariffs, price lists, and customer service agreements in relation to services that are not subject to regulation without commission approval; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scA/s52.007/3"> <num value="3">(3)</num> <content>may cross-reference its federal tariff in its state tariff if the provider's intrastate switched access rates are the same as the provider's interstate switched access rates.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scA/s52.007/c"> <num value="c">(c)</num> <chapeau>A telecommunications provider may withdraw a tariff, price list, or customer service agreement not required to be filed or maintained with the commission under this section if the telecommunications provider:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scA/s52.007/1"> <num value="1">(1)</num> <content>files written notice of the withdrawal with the commission; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scA/s52.007/2"> <num value="2">(2)</num> <content>notifies its customers of the withdrawal and posts the current tariffs, price lists, or generic customer service agreements on the telecommunications provider's Internet website.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scA/s52.007/d"> <num value="d">(d)</num> <content>The commission may not require a telecommunications provider to withdraw a tariff, price list, or customer service agreement.</content> <continuation>(d-1) The commission may not require a nondominant carrier to obtain advance approval for a filing with the commission or a posting on the nondominant carrier's Internet website that adds, modifies, withdraws, or grandfathers a retail service or the service's rates, terms, or conditions.</continuation> <continuation>(d-2) In this subsection, "deregulated company" and "transitioning company" have the meanings assigned by Section 65.002. The commission may not require a deregulated company or transitioning company to obtain advance approval for a filing with the commission or a posting on the company's Internet website that adds, modifies, withdraws, or grandfathers:</continuation> <paragraph identifier="/us/tx/ut/t2/c52/scA/s52.007/1"> <num value="1">(1)</num> <content>a nonbasic retail service or the service's rates, terms, or conditions; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scA/s52.007/2"> <num value="2">(2)</num> <content>for a market that has been deregulated, a basic network service or the service's rates, terms, or conditions.</content> <continuation>(d-3) Unless an interconnection agreement contract specifies otherwise, an incumbent local exchange carrier shall continue to provide to affected resellers of retail services the same notice of rate changes or withdrawal of detariffed services that it was required to provide prior to detariffing.</continuation> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scA/s52.007/e"> <num value="e">(e)</num> <content>This section does not affect the authority of the commission to regulate wholesale services, or administer or enforce Chapter 56 or any other applicable regulation permitted or required under this title.</content> </subsection> <sourceCredit>Added by Acts 2011, 82nd Leg., R.S., Ch. 98 (S.B. 980), Sec. 4, eff. September 1, 2011. Amended by: Acts 2013, 83rd Leg., R.S., Ch. 210 (S.B. 259), Sec. 1, eff. September 1, 2013.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c52/scB"> <num value="B">SUBCHAPTER B.</num> <heading>INCUMBENT LOCAL EXCHANGE COMPANIES</heading> <section identifier="/us/tx/ut/t2/c52/scB/s52.051"> <num value="52.051">Sec. 52.051.</num> <heading>POLICY</heading> <chapeau>In adopting rules and establishing procedures under this subchapter, the commission shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scB/s52.051/1"> <num value="1">(1)</num> <chapeau>attempt to balance the public interest in a technologically advanced telecommunications system providing a wide range of new and innovative services with traditional regulatory concerns for:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c52/scB/s52.051/A"> <num value="A">(A)</num> <content>preserving universal service;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c52/scB/s52.051/B"> <num value="B">(B)</num> <content>prohibiting anticompetitive practices; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c52/scB/s52.051/C"> <num value="C">(C)</num> <content>preventing the subsidization of competitive services with revenues from regulated monopoly services; and</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scB/s52.051/2"> <num value="2">(2)</num> <content>incorporate an appropriate mix of regulatory and market mechanisms reflecting the level and nature of competition in the marketplace.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scB/s52.052"> <num value="52.052">Sec. 52.052.</num> <heading>APPLICABILITY</heading> <content>This subchapter does not apply to basic local telecommunications service, including local measured service.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scB/s52.053"> <num value="52.053">Sec. 52.053.</num> <heading>CERTAIN RATES PROHIBITED</heading> <chapeau>A rate established under this subchapter may not be:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scB/s52.053/1"> <num value="1">(1)</num> <content>unreasonably preferential, prejudicial, or discriminatory;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scB/s52.053/2"> <num value="2">(2)</num> <content>subsidized either directly or indirectly by a regulated monopoly service; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scB/s52.053/3"> <num value="3">(3)</num> <content>predatory or anticompetitive.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scB/s52.054"> <num value="52.054">Sec. 52.054.</num> <heading>RULES AND PROCEDURES FOR INCUMBENT LOCAL EXCHANGE COMPANIES</heading> <subsection identifier="/us/tx/ut/t2/c52/scB/s52.054/a"> <num value="a">(a)</num> <chapeau>To carry out the public policy stated in Section 52.001, notwithstanding any other provision of this title, the commission may adopt rules and establish procedures applicable to incumbent local exchange companies to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scB/s52.054/1"> <num value="1">(1)</num> <content>determine the level of competition in a specific telecommunications market or submarket; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scB/s52.054/2"> <num value="2">(2)</num> <content>provide appropriate regulatory treatment to allow an incumbent local exchange company to respond to significant competitive challenges.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scB/s52.054/b"> <num value="b">(b)</num> <content>This section does not change the burden of proof on an incumbent local exchange company under Sections 53.003, 53.006, 53.051, 53.052, 53.053, 53.054, 53.055, 53.057, 53.058, 53.060, and 53.062.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scB/s52.055"> <num value="52.055">Sec. 52.055.</num> <heading>HEARING TO DETERMINE LEVEL OF COMPETITION</heading> <chapeau>In determining the level of competition in a specific market or submarket, the commission shall hold an evidentiary hearing to consider:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scB/s52.055/1"> <num value="1">(1)</num> <content>the number and size of telecommunications utilities or other persons providing the same, equivalent, or substitutable service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scB/s52.055/2"> <num value="2">(2)</num> <content>the extent to which the same, equivalent, or substitutable service is available;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scB/s52.055/3"> <num value="3">(3)</num> <content>the ability of a customer to obtain the same, equivalent, or substitutable service at comparable rates and terms;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scB/s52.055/4"> <num value="4">(4)</num> <content>the ability of a telecommunications utility or other person to make the same, equivalent, or substitutable service readily available at comparable rates and terms;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scB/s52.055/5"> <num value="5">(5)</num> <content>the existence of a significant barrier to the entry or exit of a provider of the service; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scB/s52.055/6"> <num value="6">(6)</num> <content>other relevant information the commission determines is appropriate.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scB/s52.056"> <num value="52.056">Sec. 52.056.</num> <heading>SPECIFICALLY AUTHORIZED REGULATORY TREATMENTS</heading> <chapeau>The regulatory treatments the commission may implement under Section 52.054 include:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scB/s52.056/1"> <num value="1">(1)</num> <content>approval of a range of rates for a specific service; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scB/s52.056/2"> <num value="2">(2)</num> <content>the detariffing of rates.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 21 (S.B. 983), Sec. 1, eff. September 1, 2011. Acts 2011, 82nd Leg., R.S., Ch. 98 (S.B. 980), Sec. 5, eff. September 1, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scB/s52.058"> <num value="52.058">Sec. 52.058.</num> <heading>GENERAL PROVISIONS RELATING TO NEW OR EXPERIMENTAL SERVICES OR PROMOTIONAL RATES</heading> <subsection identifier="/us/tx/ut/t2/c52/scB/s52.058/a"> <num value="a">(a)</num> <chapeau>To encourage the rapid introduction of new or experimental services or promotional rates, the commission shall adopt rules and establish procedures that allow:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scB/s52.058/1"> <num value="1">(1)</num> <content>the expedited introduction of new or experimental services or promotional rates;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scB/s52.058/2"> <num value="2">(2)</num> <content>the establishment and adjustment of rates; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scB/s52.058/3"> <num value="3">(3)</num> <content>the withdrawal of those services or promotional rates.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scB/s52.058/b"> <num value="b">(b)</num> <content>The rules and procedures described by Subsection (a) must include rules and procedures to allow the governing body of a municipality served by an incumbent local exchange company having more than 500,000 access lines in this state to make requests to the commission for new or experimental services or promotional rates.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scB/s52.058/c"> <num value="c">(c)</num> <chapeau>A rate established or adjusted at the request of a municipality may not:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scB/s52.058/1"> <num value="1">(1)</num> <content>result in higher rates for ratepayers outside the municipal boundaries; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scB/s52.058/2"> <num value="2">(2)</num> <content>include a rate for incumbent local exchange company interexchange service or interexchange carrier access service.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 1212, Sec. 7, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scB/s52.0583"> <num value="52.0583">Sec. 52.0583.</num> <heading>NEW SERVICES</heading> <subsection identifier="/us/tx/ut/t2/c52/scB/s52.0583/a"> <num value="a">(a)</num> <content>An incumbent local exchange company may introduce a new service 10 days after providing an informational notice to the commission, to the office, and to any person who holds a certificate of operating authority in the incumbent local exchange company's certificated area or areas or who has an effective interconnection agreement with the incumbent local exchange company.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scB/s52.0583/b"> <num value="b">(b)</num> <content>An incumbent local exchange company shall price each new service at or above the service's long run incremental cost. The commission shall allow a company serving fewer than one million access lines in this state to establish a service's long run incremental cost by adopting, at that company's option, the cost studies of a larger company for that service that have been accepted by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scB/s52.0583/c"> <num value="c">(c)</num> <content>An affected person, the office on behalf of residential or small commercial customers, or the commission may file a complaint at the commission challenging whether the pricing by an incumbent local exchange company of a new service is in compliance with Subsection (b).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scB/s52.0583/d"> <num value="d">(d)</num> <chapeau>If a complaint is filed under Subsection (c), the incumbent local exchange company has the burden of proving that the company set the price for the new service in accordance with the applicable provisions of this subchapter. If the complaint is finally resolved in favor of the complainant, the company:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scB/s52.0583/1"> <num value="1">(1)</num> <content>shall, not later than the 10th day after the date the complaint is finally resolved, amend the price of the service as necessary to comply with the final resolution; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scB/s52.0583/2"> <num value="2">(2)</num> <content>may, at the company's option, discontinue the service.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scB/s52.0583/e"> <num value="e">(e)</num> <content>A company electing incentive regulation under Chapter 58 or 59 may introduce new services only in accordance with the applicable provisions of Chapter 58 or 59.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 8, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scB/s52.0584"> <num value="52.0584">Sec. 52.0584.</num> <heading>PRICING AND PACKAGING FLEXIBILITY; CUSTOMER PROMOTIONAL OFFERINGS</heading> <subsection identifier="/us/tx/ut/t2/c52/scB/s52.0584/a"> <num value="a">(a)</num> <content>Notwithstanding any other provision of this title, an incumbent local exchange company may exercise pricing flexibility in accordance with this section, including the packaging of any regulated service such as basic local telecommunications service with any other regulated or unregulated service or any service of an affiliate. The company may exercise pricing flexibility 10 days after providing an informational notice to the commission, to the office, and to any person who holds a certificate of operating authority in the incumbent local exchange company's certificated area or areas or who has an effective interconnection agreement with the incumbent local exchange company. Pricing flexibility includes all pricing arrangements included in the definition of "pricing flexibility" prescribed by Section 51.002 and includes packaging of any regulated service with any unregulated service or any service of an affiliate.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scB/s52.0584/b"> <num value="b">(b)</num> <content>An incumbent local exchange company, at the company's option, shall price each regulated service offered separately or as part of a package under Subsection (a) at either the service's tariffed rate or at a rate not lower than the service's long run incremental cost. The commission shall allow a company serving fewer than one million access lines in this state to establish a service's long run incremental cost by adopting, at that company's option, the cost studies of a larger company for that service that have been accepted by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scB/s52.0584/c"> <num value="c">(c)</num> <content>An affected person, the office on behalf of residential or small commercial customers, or the commission may file a complaint alleging that an incumbent local exchange company has priced a regulated service in a manner that does not meet the pricing standards of this subchapter. The complaint must be filed before the 31st day after the date the company implements the rate.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scB/s52.0584/d"> <num value="d">(d)</num> <content>A company electing incentive regulation under Chapter 58 or 59 may use pricing and packaging flexibility and introduce customer promotional offerings only in accordance with the applicable provisions of Chapter 58 or 59.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 8, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scB/s52.0585"> <num value="52.0585">Sec. 52.0585.</num> <heading>CUSTOMER PROMOTIONAL OFFERINGS</heading> <subsection identifier="/us/tx/ut/t2/c52/scB/s52.0585/a"> <num value="a">(a)</num> <content>An incumbent local exchange company may offer a promotion for a regulated service for not more than 90 days in any 12-month period.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scB/s52.0585/b"> <num value="b">(b)</num> <chapeau>The company shall file with the commission a promotional offering that consists of:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scB/s52.0585/1"> <num value="1">(1)</num> <content>waiver of installation charges or service order charges, or both, for not more than 90 days in a 12-month period; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scB/s52.0585/2"> <num value="2">(2)</num> <content>a temporary discount of not more than 25 percent from the tariffed rate for not more than 60 days in a 12-month period.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scB/s52.0585/c"> <num value="c">(c)</num> <content>An incumbent local exchange company is not required to obtain commission approval to make a promotional offering described by Subsection (b).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scB/s52.0585/d"> <num value="d">(d)</num> <content>An incumbent local exchange company may offer a promotion of any regulated service as part of a package of services consisting of any regulated service with any other regulated or unregulated service or any service of an affiliate.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 8, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scB/s52.059"> <num value="52.059">Sec. 52.059.</num> <heading>RATES TO COVER APPROPRIATE COSTS</heading> <subsection identifier="/us/tx/ut/t2/c52/scB/s52.059/a"> <num value="a">(a)</num> <content>The commission by rule shall adopt standards necessary to ensure that a rate established under this subchapter covers appropriate costs as determined by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scB/s52.059/b"> <num value="b">(b)</num> <content>Until standards are set under Subsection (a), the commission shall use a costing methodology that is in the public interest to determine whether a rate established under this subchapter covers appropriate costs.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scB/s52.060"> <num value="52.060">Sec. 52.060.</num> <heading>ADMINISTRATIVE FEE OR ASSESSMENT</heading> <content>The commission may prescribe and collect a fee or assessment from local exchange companies necessary to recover the cost to the commission and to the office of activities carried out and services provided under this subchapter and Section 12.203.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 44, eff. September 1, 2023.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c52/scC"> <num value="C">SUBCHAPTER C.</num> <heading>TELECOMMUNICATIONS UTILITIES THAT ARE NOT DOMINANT CARRIERS</heading> <section identifier="/us/tx/ut/t2/c52/scC/s52.101"> <num value="52.101">Sec. 52.101.</num> <heading>APPLICABILITY</heading> <chapeau>This subchapter applies only to a telecommunications utility that is not:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scC/s52.101/1"> <num value="1">(1)</num> <content>a dominant carrier; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scC/s52.101/2"> <num value="2">(2)</num> <content>the holder of a certificate of operating authority or a service provider certificate of operating authority.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scC/s52.102"> <num value="52.102">Sec. 52.102.</num> <heading>LIMITED REGULATORY AUTHORITY</heading> <subsection identifier="/us/tx/ut/t2/c52/scC/s52.102/a"> <num value="a">(a)</num> <chapeau>Except as otherwise provided by this subchapter, Subchapters D and K, Chapter 55, and Section 55.011, the commission has only the following jurisdiction over a telecommunications utility subject to this subchapter:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scC/s52.102/1"> <num value="1">(1)</num> <content>to require registration under Section 52.103;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scC/s52.102/2"> <num value="2">(2)</num> <content>to conduct an investigation under Section 52.104;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scC/s52.102/3"> <num value="3">(3)</num> <content>to require the filing of reports as the commission periodically directs;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scC/s52.102/4"> <num value="4">(4)</num> <content>to require the maintenance of statewide average rates or prices of telecommunications service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scC/s52.102/5"> <num value="5">(5)</num> <content>to require a telecommunications utility that had more than six percent of the total intrastate access minutes of use as measured for the most recent 12-month period to pass switched access rate reductions under this title to customers as required by Section 52.112;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scC/s52.102/6"> <num value="6">(6)</num> <content>to require access to telecommunications service under Section 52.105; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scC/s52.102/7"> <num value="7">(7)</num> <content>to require the quality of telecommunications service provided to be adequate under Section 52.106.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scC/s52.102/b"> <num value="b">(b)</num> <content>The authority provided by Subsection (a)(5) expires on the date on which Section 52.112 expires.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 62, Sec. 18.04(a), eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 1212, Sec. 9, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scC/s52.103"> <num value="52.103">Sec. 52.103.</num> <heading>REGISTRATION REQUIRED</heading> <subsection identifier="/us/tx/ut/t2/c52/scC/s52.103/a"> <num value="a">(a)</num> <content>A telecommunications utility shall register with the commission not later than the 30th day after the date the utility commences service to the public.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scC/s52.103/b"> <num value="b">(b)</num> <chapeau>A telecommunications utility that registers under Subsection (a) shall file with the commission a description of:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scC/s52.103/1"> <num value="1">(1)</num> <content>the location and type of service provided;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scC/s52.103/2"> <num value="2">(2)</num> <content>the price to the public of that service; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scC/s52.103/3"> <num value="3">(3)</num> <content>other registration information the commission directs.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scC/s52.103/c"> <num value="c">(c)</num> <content>An interexchange telecommunications utility doing business in this state shall maintain on file with the commission tariffs or lists governing the terms of providing its services.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scC/s52.1035"> <num value="52.1035">Sec. 52.1035.</num> <heading>RENEWAL OF CERTAIN CERTIFICATES</heading> <subsection identifier="/us/tx/ut/t2/c52/scC/s52.1035/a"> <num value="a">(a)</num> <chapeau>The commission by rule shall require each holder of a certificate of operating authority and holder of a service provider certificate of operating authority to file with the commission on a one-time or regular basis:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scC/s52.1035/1"> <num value="1">(1)</num> <content>the certificate holder's name;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scC/s52.1035/2"> <num value="2">(2)</num> <content>the certificate holder's address; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scC/s52.1035/3"> <num value="3">(3)</num> <content>the most recent version of each annual report the commission requires the certificate holder to file under this subtitle.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scC/s52.1035/b"> <num value="b">(b)</num> <chapeau>The rules must:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scC/s52.1035/1"> <num value="1">(1)</num> <content>require the commission to automatically allow a certificate holder an extension of a filing deadline for the number of days prescribed by the rule, as applicable; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scC/s52.1035/2"> <num value="2">(2)</num> <content>state that the certificate of a holder will not be valid after the last day of the automatic extension period described by Subdivision (1) if the certificate holder does not file information required by the commission under this section by the end of the automatic extension period.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scC/s52.1035/c"> <num value="c">(c)</num> <content>A certificate holder whose certificate is no longer valid may obtain a new certificate only by complying with the requirements prescribed for obtaining an original certificate.</content> </subsection> <sourceCredit>Added by Acts 2013, 83rd Leg., R.S., Ch. 170 (H.B. 1600), Sec. 1.11, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scC/s52.104"> <num value="52.104">Sec. 52.104.</num> <heading>COMMISSION MAY INVESTIGATE</heading> <subsection identifier="/us/tx/ut/t2/c52/scC/s52.104/a"> <num value="a">(a)</num> <chapeau>The commission may investigate as necessary to determine the effect and scope of competition in the telecommunications industry. The investigation may include:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scC/s52.104/1"> <num value="1">(1)</num> <content>identifying dominant carriers in the local telecommunications and intraLATA interexchange telecommunications industry; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scC/s52.104/2"> <num value="2">(2)</num> <content>defining the telecommunications market or markets.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scC/s52.104/b"> <num value="b">(b)</num> <chapeau>In conducting an investigation under this section, the commission may:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scC/s52.104/1"> <num value="1">(1)</num> <content>hold a hearing;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scC/s52.104/2"> <num value="2">(2)</num> <content>issue a subpoena to compel the attendance of a witness or the production of a document; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scC/s52.104/3"> <num value="3">(3)</num> <content>make findings of fact and decisions to administer this title or a rule, order, or other action of the commission.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scC/s52.105"> <num value="52.105">Sec. 52.105.</num> <heading>ACCESS TO CERTAIN SERVICES REQUIRED</heading> <subsection identifier="/us/tx/ut/t2/c52/scC/s52.105/a"> <num value="a">(a)</num> <content>The commission may require that each local exchange area have access to local and interexchange telecommunications service, except as otherwise provided by this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scC/s52.105/b"> <num value="b">(b)</num> <chapeau>The commission shall allow a telecommunications utility to discontinue service to a local exchange area if:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scC/s52.105/1"> <num value="1">(1)</num> <content>comparable service is available in the area; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scC/s52.105/2"> <num value="2">(2)</num> <content>discontinuing the service is not contrary to the public interest.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scC/s52.105/c"> <num value="c">(c)</num> <chapeau>This section does not authorize the commission to require a telecommunications utility to initiate service to a local exchange area to which the telecommunications utility:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scC/s52.105/1"> <num value="1">(1)</num> <content>did not provide service during the preceding 12-month period; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scC/s52.105/2"> <num value="2">(2)</num> <content>has not provided service previously for a cumulative period of at least one year.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scC/s52.106"> <num value="52.106">Sec. 52.106.</num> <heading>QUALITY OF SERVICE REQUIRED</heading> <content>The commission may require the quality of telecommunications service provided in a local exchange in which the commission determines that service has deteriorated and become unreliable to be adequate to protect the public interest and the interests of customers of that exchange.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scC/s52.107"> <num value="52.107">Sec. 52.107.</num> <heading>PREDATORY PRICING</heading> <subsection identifier="/us/tx/ut/t2/c52/scC/s52.107/a"> <num value="a">(a)</num> <chapeau>The commission may enter an order necessary to protect the public interest if the commission finds by a preponderance of the evidence after notice and hearing that an interexchange telecommunications utility has:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scC/s52.107/1"> <num value="1">(1)</num> <content>engaged in predatory pricing; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scC/s52.107/2"> <num value="2">(2)</num> <content>attempted to engage in predatory pricing.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scC/s52.107/b"> <num value="b">(b)</num> <content>A hearing held by the commission under Subsection (a) must be based on a complaint from another interexchange telecommunications utility.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scC/s52.107/c"> <num value="c">(c)</num> <chapeau>An order entered under Subsection (a) may include the imposition on a specific service of the commission's full regulatory authority under:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scC/s52.107/1"> <num value="1">(1)</num> <content>this chapter;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scC/s52.107/2"> <num value="2">(2)</num> <content>Chapters 14, 15, 51, 53, and 54; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scC/s52.107/3"> <num value="3">(3)</num> <content>Subchapters A, D, and H, Chapter 55.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scC/s52.107/d"> <num value="d">(d)</num> <content>This section applies only to an interexchange telecommunications utility.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scC/s52.108"> <num value="52.108">Sec. 52.108.</num> <heading>OTHER PROHIBITED PRACTICES</heading> <chapeau>The commission may enter any order necessary to protect the public interest if the commission finds after notice and hearing that a telecommunications utility has:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scC/s52.108/1"> <num value="1">(1)</num> <content>failed to maintain statewide average rates;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scC/s52.108/2"> <num value="2">(2)</num> <content>abandoned interexchange message telecommunications service to a local exchange area in a manner contrary to the public interest;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scC/s52.108/3"> <num value="3">(3)</num> <content>engaged in a pattern of preferential or discriminatory activities prohibited by Section 53.003, 55.005, or 55.006; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scC/s52.108/4"> <num value="4">(4)</num> <content>failed to pass switched access rate reductions to customers under Chapter 56 or other law, as required by Section 52.112.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 1212, Sec. 10, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scC/s52.109"> <num value="52.109">Sec. 52.109.</num> <heading>AVAILABILITY OF SERVICE</heading> <subsection identifier="/us/tx/ut/t2/c52/scC/s52.109/a"> <num value="a">(a)</num> <content>The commission may require a telecommunications utility that provides a service to make that service available in an exchange served by the telecommunications utility within a reasonable time after receipt of a bona fide request for the service in that exchange.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scC/s52.109/b"> <num value="b">(b)</num> <chapeau>A telecommunications utility may not be required to extend a service to an area if:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scC/s52.109/1"> <num value="1">(1)</num> <content>the local exchange company is unable to provide the required access or other service; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scC/s52.109/2"> <num value="2">(2)</num> <content>extending the service would, after consideration of the public interest to be served, impose unreasonable costs on or require unreasonable investments by the telecommunications utility.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scC/s52.109/c"> <num value="c">(c)</num> <content>The commission may require from a telecommunications utility or a local exchange company information necessary to enforce this section.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scC/s52.110"> <num value="52.110">Sec. 52.110.</num> <heading>BURDEN OF PROOF</heading> <subsection identifier="/us/tx/ut/t2/c52/scC/s52.110/a"> <num value="a">(a)</num> <chapeau>In a proceeding before the commission in which it is alleged that a telecommunications utility engaged in conduct in violation of Section 52.107, 52.108, 52.109, or 52.112, the burden of proof is on:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scC/s52.110/1"> <num value="1">(1)</num> <content>a telecommunications utility complaining of conduct committed against it in violation of this subchapter; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scC/s52.110/2"> <num value="2">(2)</num> <chapeau>except as provided by Subsection (b), the responding telecommunications utility if the proceedings are:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c52/scC/s52.110/A"> <num value="A">(A)</num> <content>brought by a customer or customer representative who is not a telecommunications utility; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c52/scC/s52.110/B"> <num value="B">(B)</num> <content>initiated by the commission.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scC/s52.110/b"> <num value="b">(b)</num> <content>The commission may impose the burden of proof on the complaining party in a proceeding described by Subsection (a)(2) if the commission determines that placing the burden of proof on the complaining party is in the public interest.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 1212, Sec. 11, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scC/s52.111"> <num value="52.111">Sec. 52.111.</num> <heading>COMMISSION MAY EXEMPT</heading> <chapeau>The commission may exempt from a requirement of this subchapter a telecommunications utility that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scC/s52.111/1"> <num value="1">(1)</num> <content>does not have a significant effect on the public interest, as determined by the commission; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scC/s52.111/2"> <num value="2">(2)</num> <content>relies solely on the facilities of others to complete long distance calls, if the commission determines that the exemption is in the public interest.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scC/s52.112"> <num value="52.112">Sec. 52.112.</num> <heading>REDUCTION PASS-THROUGH REQUIRED</heading> <subsection identifier="/us/tx/ut/t2/c52/scC/s52.112/a"> <num value="a">(a)</num> <content>Each telecommunications utility that had more than six percent of the total intrastate access minutes of use as measured for the most recent 12-month period shall pass through to customers switched access rate reductions under this title. The residential customer class shall receive not less than a proportionate share of the reductions.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scC/s52.112/b"> <num value="b">(b)</num> <content>Within six months following each reduction in intrastate switched access rates under this title, each telecommunications utility subject to this section shall file with the commission a sworn affidavit confirming that the utility has reduced the per minute rates it charges under its basic rate schedule to reflect the per minute reduction in intrastate switched access rates.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scC/s52.112/c"> <num value="c">(c)</num> <content>This section expires on the second anniversary of the date incumbent local exchange companies doing business in the state are no longer prohibited by federal law from offering interLATA and interstate long distance service.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 12, eff. Sept. 1, 1999.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c52/scD"> <num value="D">SUBCHAPTER D.</num> <heading>CERTIFICATE HOLDERS</heading> <section identifier="/us/tx/ut/t2/c52/scD/s52.151"> <num value="52.151">Sec. 52.151.</num> <heading>APPLICABILITY</heading> <content>This subchapter applies only to a telecommunications utility that holds a certificate of operating authority or a service provider certificate of operating authority.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scD/s52.152"> <num value="52.152">Sec. 52.152.</num> <heading>LIMITED REGULATORY AUTHORITY</heading> <chapeau>Except as otherwise specifically provided by this title, the commission has only the following authority over a telecommunications utility subject to this subchapter:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scD/s52.152/1"> <num value="1">(1)</num> <content>to enforce this title under Subchapter B, Chapter 15;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scD/s52.152/2"> <num value="2">(2)</num> <content>to assert jurisdiction over a specific service under Subchapter E;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scD/s52.152/3"> <num value="3">(3)</num> <content>to require co-carriage reciprocity; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scD/s52.152/4"> <num value="4">(4)</num> <content>to regulate condemnation and building access.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scD/s52.153"> <num value="52.153">Sec. 52.153.</num> <heading>BOOKS AND RECORDS</heading> <content>The commission may prescribe forms of books, accounts, records, and memoranda to be kept by a telecommunications utility, but only as necessary to enforce the limited jurisdiction over those companies that this title provides to the commission.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scD/s52.154"> <num value="52.154">Sec. 52.154.</num> <heading>COMMISSION MAY NOT OVERBURDEN</heading> <chapeau>The commission may not, by a rule or regulatory practice adopted under this chapter, impose on a nondominant telecommunications utility a greater regulatory burden than is imposed on:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scD/s52.154/1"> <num value="1">(1)</num> <content>a holder of a certificate of convenience and necessity serving the same area; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scD/s52.154/2"> <num value="2">(2)</num> <chapeau>a deregulated company, as defined by Section 65.002, that:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c52/scD/s52.154/A"> <num value="A">(A)</num> <content>has 500,000 or more access lines in service at the time it becomes a deregulated company; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c52/scD/s52.154/B"> <num value="B">(B)</num> <content>serves an area also served by the nondominant telecommunications utility.</content> </subparagraph> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2013, 83rd Leg., R.S., Ch. 210 (S.B. 259), Sec. 2, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scD/s52.155"> <num value="52.155">Sec. 52.155.</num> <heading>PROHIBITION OF EXCESSIVE ACCESS CHARGES</heading> <subsection identifier="/us/tx/ut/t2/c52/scD/s52.155/a"> <num value="a">(a)</num> <chapeau>A telecommunications utility that holds a certificate of operating authority or a service provider certificate of operating authority may not charge a higher amount for originating or terminating intrastate switched access than the prevailing rates charged by the holder of the certificate of convenience and necessity or the holder of a certificate of operating authority issued under Chapter 65 in whose territory the call originated or terminated unless:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scD/s52.155/1"> <num value="1">(1)</num> <content>the commission specifically approves the higher rate; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scD/s52.155/2"> <num value="2">(2)</num> <content>subject to commission review, the telecommunications utility establishes statewide average composite originating and terminating intrastate switched access rates based on a reasonable approximation of traffic originating and terminating between all holders of certificates of convenience and necessity in this state.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scD/s52.155/b"> <num value="b">(b)</num> <content>Notwithstanding any other provision of this title, the commission has all jurisdiction necessary to enforce this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scD/s52.155/c"> <num value="c">(c)</num> <content>Notwithstanding Subsection (a), Chapter 65 governs the switched access rates of a company that holds a certificate of operating authority issued under Chapter 65.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 13, eff. Sept. 1, 1999. Amended by: Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 3, eff. September 7, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scD/s52.156"> <num value="52.156">Sec. 52.156.</num> <heading>RETAIL RATES, TERMS, AND CONDITIONS</heading> <chapeau>A telecommunications utility may not:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scD/s52.156/1"> <num value="1">(1)</num> <content>establish a retail rate, term, or condition that is anticompetitive or unreasonably preferential, prejudicial, or discriminatory; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scD/s52.156/2"> <num value="2">(2)</num> <content>engage in predatory pricing or attempt to engage in predatory pricing.</content> </paragraph> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 4, eff. September 7, 2005.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c52/scE"> <num value="E">SUBCHAPTER E.</num> <heading>DEREGULATION OF SERVICE</heading> <section identifier="/us/tx/ut/t2/c52/scE/s52.201"> <num value="52.201">Sec. 52.201.</num> <heading>DEREGULATION OF SERVICE</heading> <chapeau>Notwithstanding any other provision of this title, the commission may deregulate the price of a service in a geographic market if, after notice and hearing, the commission determines that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scE/s52.201/1"> <num value="1">(1)</num> <content>the incumbent local exchange company is not dominant for the service in that geographic market; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scE/s52.201/2"> <num value="2">(2)</num> <content>the holder of a certificate of operating authority who is a dominant carrier is no longer dominant for the service in that geographic market.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scE/s52.202"> <num value="52.202">Sec. 52.202.</num> <heading>DETERMINATION OF GEOGRAPHIC MARKET</heading> <content>In determining the geographic market under Section 52.201, the commission shall consider the economic and technical conditions of the market.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scE/s52.203"> <num value="52.203">Sec. 52.203.</num> <heading>MARKET POWER TEST</heading> <subsection identifier="/us/tx/ut/t2/c52/scE/s52.203/a"> <num value="a">(a)</num> <chapeau>To determine whether an incumbent local exchange company or holder of a certificate of operating authority who is a dominant carrier is no longer dominant for a service in a geographic market, the commission must find that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scE/s52.203/1"> <num value="1">(1)</num> <content>there is an effective competitive alternative; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scE/s52.203/2"> <num value="2">(2)</num> <content>the incumbent local exchange company or certificate holder does not have market power sufficient to control, in a manner that is adverse to the public interest, the price of the service in the geographic area.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scE/s52.203/b"> <num value="b">(b)</num> <chapeau>To determine whether the incumbent local exchange company or certificate holder is dominant for a service in the geographic area, the commission shall consider:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scE/s52.203/1"> <num value="1">(1)</num> <content>the number and size of telecommunications utilities or other persons who provide the same, equivalent, or substitutable service in the relevant market;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scE/s52.203/2"> <num value="2">(2)</num> <content>the extent to which the service is available in the relevant market;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scE/s52.203/3"> <num value="3">(3)</num> <content>the ability of customers in the relevant market to obtain the same, equivalent, or substitutable service at comparable rates and on comparable terms;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scE/s52.203/4"> <num value="4">(4)</num> <content>the ability of a telecommunications utility or other person to make the same, equivalent, or substitutable service readily available in the relevant market at comparable rates and on comparable terms;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scE/s52.203/5"> <num value="5">(5)</num> <content>the proportion of the relevant market that is being provided the service by a telecommunications utility other than the incumbent local exchange company or holder of a certificate of operating authority who is a dominant carrier; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scE/s52.203/6"> <num value="6">(6)</num> <content>other relevant information the commission considers necessary.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scE/s52.204"> <num value="52.204">Sec. 52.204.</num> <heading>RATE FOR DEREGULATED SERVICE</heading> <content>If the price of a service in a geographic market is deregulated under this subchapter, the incumbent local exchange company or holder of a certificate of operating authority may set the rate for the service at any level higher than the service's long run incremental cost.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scE/s52.205"> <num value="52.205">Sec. 52.205.</num> <heading>INVESTIGATION OF COMPETITION</heading> <subsection identifier="/us/tx/ut/t2/c52/scE/s52.205/a"> <num value="a">(a)</num> <content>On request of an incumbent local exchange company or holder of a certificate of operating authority who is a dominant carrier made in conjunction with an application under this subchapter, the commission shall investigate to determine the effect and scope of competition in the geographic and service markets at issue.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scE/s52.205/b"> <num value="b">(b)</num> <chapeau>The commission has the power necessary and convenient to conduct the investigation. In conducting an investigation, the commission may:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scE/s52.205/1"> <num value="1">(1)</num> <content>hold a hearing;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scE/s52.205/2"> <num value="2">(2)</num> <content>issue a subpoena to compel the attendance of a witness and the production of a document; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scE/s52.205/3"> <num value="3">(3)</num> <content>make findings of fact and decisions with respect to the markets.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scE/s52.205/c"> <num value="c">(c)</num> <content>A party to a proceeding may use, in an application for pricing flexibility, the results of an investigation conducted under this section.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scE/s52.206"> <num value="52.206">Sec. 52.206.</num> <heading>REREGULATION OF MARKET</heading> <chapeau>The commission, on its own motion or on a complaint that the commission considers to have merit, may assert regulation over a service in a geographic market if:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scE/s52.206/1"> <num value="1">(1)</num> <content>the incumbent local exchange company or holder of a certificate of operating authority who was previously a dominant carrier is found to again be dominant for the service in that geographic market; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scE/s52.206/2"> <num value="2">(2)</num> <content>the provider of services under a certificate of operating authority or service provider certificate of operating authority is found to be dominant for the service in that geographic market.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scE/s52.207"> <num value="52.207">Sec. 52.207.</num> <heading>REPORTS; CONFIDENTIAL INFORMATION</heading> <subsection identifier="/us/tx/ut/t2/c52/scE/s52.207/a"> <num value="a">(a)</num> <chapeau>In conjunction with the commission's authority to collect and compile information, the commission may collect a report from a holder of a:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scE/s52.207/1"> <num value="1">(1)</num> <content>certificate of operating authority; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scE/s52.207/2"> <num value="2">(2)</num> <content>service provider certificate of operating authority.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scE/s52.207/b"> <num value="b">(b)</num> <content>The commission shall maintain the confidentiality of information contained in a report collected under this section that is claimed to be confidential for competitive purposes. The confidential information is exempt from disclosure under Chapter 552, Government Code.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scE/s52.207/c"> <num value="c">(c)</num> <content>To protect the confidential information, the commission shall aggregate the information to the maximum extent possible considering the purpose of the proceeding.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c52/scF"> <num value="F">SUBCHAPTER F.</num> <heading>REQUIRED REPORTS AND FILINGS; RECORDS</heading> <section identifier="/us/tx/ut/t2/c52/scF/s52.251"> <num value="52.251">Sec. 52.251.</num> <heading>TARIFF FILINGS</heading> <subsection identifier="/us/tx/ut/t2/c52/scF/s52.251/a"> <num value="a">(a)</num> <chapeau>A public utility shall file with the commission a tariff showing each rate that is:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scF/s52.251/1"> <num value="1">(1)</num> <content>subject to the commission's jurisdiction; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scF/s52.251/2"> <num value="2">(2)</num> <content>in effect for a utility service, product, or commodity offered by the utility.</content> <continuation>(a-1) An affiliate or trade association may file the tariff required under Subsection (a) on behalf of the public utility.</continuation> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scF/s52.251/b"> <num value="b">(b)</num> <chapeau>The public utility, affiliate, or trade association shall file as a part of the tariff required under Subsection (a) each rule that relates to or affects:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scF/s52.251/1"> <num value="1">(1)</num> <content>a rate of the utility; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scF/s52.251/2"> <num value="2">(2)</num> <content>a utility service, product, or commodity furnished by the utility.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scF/s52.251/c"> <num value="c">(c)</num> <content>The tariff filing is considered approved if the commission does not approve or deny the tariff filing or request supplemental information from the public utility, affiliate, or trade association that filed the tariff before the 60th day after receiving the tariff filing.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scF/s52.251/d"> <num value="d">(d)</num> <content>If the commission requests supplemental information from the public utility, affiliate, or trade association under Subsection (c), the utility, affiliate, or association must provide the commission with the supplemental information not later than the 15th day after receiving the request from the commission. If the commission does not approve or deny the tariff filing before the 30th day after the commission receives the supplemental information, the tariff filing is considered approved.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2023, 88th Leg., R.S., Ch. 817 (H.B. 1597), Sec. 1, eff. September 1, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scF/s52.252"> <num value="52.252">Sec. 52.252.</num> <heading>DEPRECIATION ACCOUNT</heading> <chapeau>The commission shall require each public utility to carry a proper and adequate depreciation account in accordance with:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scF/s52.252/1"> <num value="1">(1)</num> <content>the rates and methods prescribed by the commission under Section 53.056; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scF/s52.252/2"> <num value="2">(2)</num> <content>any other rule the commission adopts.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scF/s52.253"> <num value="52.253">Sec. 52.253.</num> <heading>ACCOUNTS OF PROFITS AND LOSSES</heading> <content>A public utility shall keep separate accounts showing profits or losses from the sale or lease of merchandise, including an appliance, a fixture, or equipment.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scF/s52.255"> <num value="52.255">Sec. 52.255.</num> <heading>AVAILABILITY OF RECORDS</heading> <content>Notwithstanding Section 14.152, a book, account, record, or memorandum of a public utility may be removed from this state if the book, account, record, or memorandum is returned to this state for any commission inspection authorized by this title.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c52/scF/s52.256"> <num value="52.256">Sec. 52.256.</num> <heading>PLAN AND REPORT OF WORKFORCE DIVERSITY AND OTHER BUSINESS PRACTICES</heading> <subsection identifier="/us/tx/ut/t2/c52/scF/s52.256/a"> <num value="a">(a)</num> <content>In this section, "small business" and "historically underutilized business" have the meanings assigned by former Section 481.191, Government Code, as that section existed on January 1, 2015.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scF/s52.256/b"> <num value="b">(b)</num> <chapeau>Before January 1, 2000, each telecommunications utility shall develop and submit to the commission a comprehensive five-year plan to enhance diversity of its workforce in all occupational categories and for increasing opportunities for small and historically underutilized businesses. The plan must consist of:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scF/s52.256/1"> <num value="1">(1)</num> <content>the telecommunications utility's performance with regard to workforce diversity and contracting with small and historically underutilized businesses;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scF/s52.256/2"> <num value="2">(2)</num> <content>initiatives that the telecommunications utility will pursue in these areas over the period of the plan;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scF/s52.256/3"> <num value="3">(3)</num> <content>a listing of programs and activities the telecommunications utility will undertake to achieve each of these initiatives; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scF/s52.256/4"> <num value="4">(4)</num> <content>a listing of the business partnership initiatives the telecommunications utility will undertake to facilitate small and historically underutilized business entry into the telecommunications market, taking into account opportunities for contracting and joint ventures.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c52/scF/s52.256/c"> <num value="c">(c)</num> <chapeau>Each telecommunications utility shall submit an annual report to the commission and the legislature relating to its efforts to improve workforce diversity and contracting opportunities for small and historically underutilized businesses. The report must include:</chapeau> <paragraph identifier="/us/tx/ut/t2/c52/scF/s52.256/1"> <num value="1">(1)</num> <content>the diversity of the telecommunications utility's workforce as of the time of the report;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scF/s52.256/2"> <num value="2">(2)</num> <content>the telecommunications utility's level of contracting with small and historically underutilized businesses;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scF/s52.256/3"> <num value="3">(3)</num> <content>the specific progress made under the plan under Subsection (b);</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scF/s52.256/4"> <num value="4">(4)</num> <content>the specific initiatives, programs, and activities undertaken under the plan during the preceding year;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scF/s52.256/5"> <num value="5">(5)</num> <content>an assessment of the success of each of those initiatives, programs, and activities;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scF/s52.256/6"> <num value="6">(6)</num> <content>the extent to which the telecommunications utility has carried out its initiatives to facilitate opportunities for contracts or joint ventures with small and historically underutilized businesses; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c52/scF/s52.256/7"> <num value="7">(7)</num> <content>the initiatives, programs, and activities the telecommunications utility will pursue during the next year to increase the diversity of its workforce and contracting opportunities for small and historically underutilized businesses.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 14, eff. Sept. 1, 1999. Amended by: Acts 2015, 84th Leg., R.S., Ch. 364 (H.B. 2667), Sec. 5, eff. September 1, 2015.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t2/c53"> <num value="53">CHAPTER 53.</num> <heading>RATES</heading> <subchapter identifier="/us/tx/ut/t2/c53/scA"> <num value="A">SUBCHAPTER A.</num> <heading>GENERAL PROVISIONS</heading> <section identifier="/us/tx/ut/t2/c53/scA/s53.001"> <num value="53.001">Sec. 53.001.</num> <heading>AUTHORIZATION TO ESTABLISH AND REGULATE RATES</heading> <subsection identifier="/us/tx/ut/t2/c53/scA/s53.001/a"> <num value="a">(a)</num> <chapeau>Except as otherwise provided by this title, the commission may establish and regulate rates of a public utility and may adopt rules for determining:</chapeau> <paragraph identifier="/us/tx/ut/t2/c53/scA/s53.001/1"> <num value="1">(1)</num> <content>the classification of customers and services; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scA/s53.001/2"> <num value="2">(2)</num> <content>the applicability of rates.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scA/s53.001/b"> <num value="b">(b)</num> <content>A rule or order of the commission may not conflict with a ruling of a federal regulatory body.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scA/s53.002"> <num value="53.002">Sec. 53.002.</num> <heading>COMPLIANCE WITH TITLE</heading> <content>A utility may not charge or receive a rate for utility service except as provided by this title.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scA/s53.003"> <num value="53.003">Sec. 53.003.</num> <heading>JUST AND REASONABLE RATES</heading> <subsection identifier="/us/tx/ut/t2/c53/scA/s53.003/a"> <num value="a">(a)</num> <content>The commission shall ensure that each rate a public utility or two or more public utilities jointly make, demand, or receive is just and reasonable.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scA/s53.003/b"> <num value="b">(b)</num> <content>A rate may not be unreasonably preferential, prejudicial, or discriminatory but must be sufficient, equitable, and consistent in application to each class of consumer.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scA/s53.003/c"> <num value="c">(c)</num> <chapeau>A public utility may not:</chapeau> <paragraph identifier="/us/tx/ut/t2/c53/scA/s53.003/1"> <num value="1">(1)</num> <content>grant an unreasonable preference or advantage concerning rates to a person in a classification;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scA/s53.003/2"> <num value="2">(2)</num> <content>subject a person in a classification to an unreasonable prejudice or disadvantage concerning rates; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scA/s53.003/3"> <num value="3">(3)</num> <content>establish or maintain an unreasonable difference concerning rates between localities or between classes of service.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scA/s53.003/d"> <num value="d">(d)</num> <content>In establishing a public utility's rates, the commission may treat as a single class two or more municipalities that a public utility serves if the commission considers that treatment to be appropriate.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scA/s53.004"> <num value="53.004">Sec. 53.004.</num> <heading>EQUALITY OF RATES AND SERVICES</heading> <subsection identifier="/us/tx/ut/t2/c53/scA/s53.004/a"> <num value="a">(a)</num> <content>A public utility may not directly or indirectly charge, demand, or receive from a person a greater or lesser compensation for a service provided or to be provided by the utility than the compensation prescribed by the applicable tariff filed under Section 52.251.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scA/s53.004/b"> <num value="b">(b)</num> <content>A person may not knowingly receive or accept a service from a public utility for a compensation greater or less than the compensation prescribed by the tariff.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scA/s53.004/c"> <num value="c">(c)</num> <content>This title does not prevent a cooperative corporation from returning to its members net earnings resulting from its operations in proportion to the members' purchases from or through the corporation.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scA/s53.005"> <num value="53.005">Sec. 53.005.</num> <heading>RATES FOR AREA NOT IN MUNICIPALITY</heading> <content>Without the approval of the commission, a public utility's rates for an area not in a municipality may not exceed 115 percent of the average of all rates for similar services for all municipalities served by the same utility in the same county as that area.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scA/s53.006"> <num value="53.006">Sec. 53.006.</num> <heading>BURDEN OF PROOF</heading> <subsection identifier="/us/tx/ut/t2/c53/scA/s53.006/a"> <num value="a">(a)</num> <chapeau>In a proceeding involving a proposed rate change, the public utility has the burden of proving that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c53/scA/s53.006/1"> <num value="1">(1)</num> <content>the rate change is just and reasonable, if the utility proposes the change; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scA/s53.006/2"> <num value="2">(2)</num> <content>an existing rate is just and reasonable, if the proposal is to reduce the rate.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scA/s53.006/b"> <num value="b">(b)</num> <content>In a proceeding in which the rate of an incumbent local exchange company is in issue, the incumbent local exchange company has the burden of proving that the rate is just and reasonable.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scA/s53.007"> <num value="53.007">Sec. 53.007.</num> <heading>LIMIT ON RECONNECTION FEE</heading> <content>The commission shall establish a reasonable limit on the amount that a local exchange company may charge a customer for changing the location at which the customer receives service.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c53/scB"> <num value="B">SUBCHAPTER B.</num> <heading>COMPUTATION OF RATES</heading> <section identifier="/us/tx/ut/t2/c53/scB/s53.051"> <num value="53.051">Sec. 53.051.</num> <heading>ESTABLISHING OVERALL REVENUES</heading> <content>In establishing a public utility's rates, the commission shall establish the utility's overall revenues at an amount that will permit the utility a reasonable opportunity to earn a reasonable return on the utility's invested capital used and useful in providing service to the public in excess of the utility's reasonable and necessary operating expenses.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scB/s53.052"> <num value="53.052">Sec. 53.052.</num> <heading>ESTABLISHING REASONABLE RETURN</heading> <chapeau>In establishing a reasonable return on invested capital, the commission shall consider applicable factors, including:</chapeau> <paragraph identifier="/us/tx/ut/t2/c53/scB/s53.052/1"> <num value="1">(1)</num> <content>the quality of the utility's services;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scB/s53.052/2"> <num value="2">(2)</num> <content>the efficiency of the utility's operations; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scB/s53.052/3"> <num value="3">(3)</num> <content>the quality of the utility's management.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scB/s53.053"> <num value="53.053">Sec. 53.053.</num> <heading>COMPONENTS OF INVESTED CAPITAL</heading> <subsection identifier="/us/tx/ut/t2/c53/scB/s53.053/a"> <num value="a">(a)</num> <content>Public utility rates shall be based on the original cost, less depreciation, of property used by and useful to the utility in providing service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scB/s53.053/b"> <num value="b">(b)</num> <content>The original cost of property shall be determined at the time the property is dedicated to public use, whether by the utility that is the present owner or by a predecessor.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scB/s53.053/c"> <num value="c">(c)</num> <content>In this section, "original cost" means the actual money cost or the actual money value of consideration paid other than money.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scB/s53.054"> <num value="53.054">Sec. 53.054.</num> <heading>CONSTRUCTION WORK IN PROGRESS</heading> <subsection identifier="/us/tx/ut/t2/c53/scB/s53.054/a"> <num value="a">(a)</num> <content>Construction work in progress, at cost as recorded on the public utility's books, may be included in the utility's rate base. The inclusion of construction work in progress is an exceptional form of rate relief that the commission may grant only if the utility demonstrates that inclusion is necessary to the utility's financial integrity.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scB/s53.054/b"> <num value="b">(b)</num> <content>Construction work in progress may not be included in the rate base for a major project under construction to the extent that the project has been inefficiently or imprudently planned or managed.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scB/s53.055"> <num value="53.055">Sec. 53.055.</num> <heading>SEPARATIONS AND ALLOCATIONS</heading> <content>Costs of facilities, revenues, expenses, taxes, and reserves shall be separated or allocated as prescribed by the commission.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scB/s53.056"> <num value="53.056">Sec. 53.056.</num> <heading>DEPRECIATION, AMORTIZATION, AND DEPLETION</heading> <subsection identifier="/us/tx/ut/t2/c53/scB/s53.056/a"> <num value="a">(a)</num> <content>The commission shall establish proper and adequate rates and methods of depreciation, amortization, or depletion for each class of property of a public utility.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scB/s53.056/b"> <num value="b">(b)</num> <content>On application of a utility, the commission shall establish depreciation rates that promote the use of new technology and infrastructure. In establishing rates under this subsection, the commission shall consider depreciation practices of nonregulated telecommunications providers.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scB/s53.056/c"> <num value="c">(c)</num> <content>The rates and methods established under this section and the depreciation account required by Section 52.252 shall be used uniformly and consistently throughout rate-setting and appeal proceedings.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scB/s53.056/d"> <num value="d">(d)</num> <content>Notwithstanding this section, a company electing under Chapter 58 may determine its own depreciation rates and amortizations. The company shall notify the commission of any change in those rates or amortizations.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scB/s53.057"> <num value="53.057">Sec. 53.057.</num> <heading>NET INCOME; DETERMINATION OF REVENUES AND EXPENSES</heading> <subsection identifier="/us/tx/ut/t2/c53/scB/s53.057/a"> <num value="a">(a)</num> <content>A public utility's net income is the total revenues of the utility less all reasonable and necessary expenses as determined by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scB/s53.057/b"> <num value="b">(b)</num> <content>The commission shall determine revenues and expenses in a manner consistent with this subchapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scB/s53.057/c"> <num value="c">(c)</num> <content>The commission may adopt reasonable rules with respect to whether an expense is allowed for ratemaking purposes.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scB/s53.058"> <num value="53.058">Sec. 53.058.</num> <heading>CONSIDERATION OF PAYMENT TO AFFILIATE</heading> <subsection identifier="/us/tx/ut/t2/c53/scB/s53.058/a"> <num value="a">(a)</num> <chapeau>Except as provided by Subsection (b), the commission may not allow as capital cost or as expense a payment to an affiliate for:</chapeau> <paragraph identifier="/us/tx/ut/t2/c53/scB/s53.058/1"> <num value="1">(1)</num> <content>cost of a service, property, right, or other item; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scB/s53.058/2"> <num value="2">(2)</num> <content>interest expense.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scB/s53.058/b"> <num value="b">(b)</num> <content>The commission may allow a payment described by Subsection (a) only to the extent that the commission finds the payment is reasonable and necessary for each item or class of items as determined by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scB/s53.058/c"> <num value="c">(c)</num> <chapeau>A finding under Subsection (b) must include:</chapeau> <paragraph identifier="/us/tx/ut/t2/c53/scB/s53.058/1"> <num value="1">(1)</num> <content>a specific finding of the reasonableness and necessity of each item or class of items allowed; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scB/s53.058/2"> <num value="2">(2)</num> <chapeau>except as provided by Subsection (d), a finding that the price to the utility is not higher than the prices charged by the supplying affiliate to:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c53/scB/s53.058/A"> <num value="A">(A)</num> <content>its other affiliates or divisions for the same item or class of items; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c53/scB/s53.058/B"> <num value="B">(B)</num> <content>a nonaffiliated person within the same market area or having the same market conditions.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scB/s53.058/d"> <num value="d">(d)</num> <content>A finding under this section is not required as to the prices charged by the supplying affiliate to its other affiliates or divisions if the supplying affiliate computed its charges to the utility in a manner consistent with Federal Communications Commission rules.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scB/s53.058/e"> <num value="e">(e)</num> <chapeau>If the commission finds that the affiliate expense for the test period is unreasonable, the commission shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c53/scB/s53.058/1"> <num value="1">(1)</num> <content>determine the reasonable level of the expense; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scB/s53.058/2"> <num value="2">(2)</num> <content>include that expense in determining the utility's cost of service.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scB/s53.059"> <num value="53.059">Sec. 53.059.</num> <heading>TREATMENT OF CERTAIN TAX BENEFITS</heading> <subsection identifier="/us/tx/ut/t2/c53/scB/s53.059/a"> <num value="a">(a)</num> <chapeau>In determining the allocation of tax savings derived from liberalized depreciation and amortization, the investment tax credit, and the application of similar methods, the commission shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c53/scB/s53.059/1"> <num value="1">(1)</num> <content>balance equitably the interests of present and future customers; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scB/s53.059/2"> <num value="2">(2)</num> <content>apportion accordingly the benefits between consumers and the public utility.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scB/s53.059/b"> <num value="b">(b)</num> <content>If a public utility retains a portion of the investment tax credit, that portion shall be deducted from the original cost of the facilities or other addition to the rate base to which the credit applied to the extent allowed by the Internal Revenue Code.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scB/s53.060"> <num value="53.060">Sec. 53.060.</num> <heading>COMPUTATION OF INCOME TAX; CONSOLIDATED RETURN</heading> <subsection identifier="/us/tx/ut/t2/c53/scB/s53.060/a"> <num value="a">(a)</num> <chapeau>Unless it is shown to the satisfaction of the commission that it was reasonable to choose not to consolidate returns, a public utility's income taxes shall be computed as though a consolidated return had been filed and the utility had realized its fair share of the savings resulting from that return, if:</chapeau> <paragraph identifier="/us/tx/ut/t2/c53/scB/s53.060/1"> <num value="1">(1)</num> <content>the utility is a member of an affiliated group eligible to file a consolidated income tax return; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scB/s53.060/2"> <num value="2">(2)</num> <content>it is advantageous to the utility to do so.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scB/s53.060/b"> <num value="b">(b)</num> <content>The amount of income tax that a consolidated group of which a public utility is a member saves, because the consolidated return eliminates the intercompany profit on purchases by the utility from an affiliate, shall be applied to reduce the cost of the property or service purchased from the affiliate.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scB/s53.060/c"> <num value="c">(c)</num> <content>The investment tax credit allowed against federal income taxes, to the extent retained by the utility, shall be applied as a reduction in the rate-based contribution of the assets to which the credit applies, to the extent and at the rate allowed by the Internal Revenue Code.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scB/s53.061"> <num value="53.061">Sec. 53.061.</num> <heading>ALLOWANCE OF CERTAIN EXPENSES</heading> <subsection identifier="/us/tx/ut/t2/c53/scB/s53.061/a"> <num value="a">(a)</num> <chapeau>The commission may not allow as a cost or expense for ratemaking purposes:</chapeau> <paragraph identifier="/us/tx/ut/t2/c53/scB/s53.061/1"> <num value="1">(1)</num> <content>an expenditure for legislative advocacy; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scB/s53.061/2"> <num value="2">(2)</num> <content>an expenditure described by Section 52.254 that the commission determines to be not in the public interest.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scB/s53.061/b"> <num value="b">(b)</num> <content>The commission may allow as a cost or expense reasonable charitable or civic contributions not to exceed the amount approved by the commission.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scB/s53.062"> <num value="53.062">Sec. 53.062.</num> <heading>CONSIDERATION OF CERTAIN EXPENSES</heading> <chapeau>The commission may not consider for ratemaking purposes:</chapeau> <paragraph identifier="/us/tx/ut/t2/c53/scB/s53.062/1"> <num value="1">(1)</num> <content>an expenditure for legislative advocacy, made directly or indirectly, including legislative advocacy expenses included in trade association dues;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scB/s53.062/2"> <num value="2">(2)</num> <content>an expenditure for costs of processing a refund or credit under Section 53.110; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scB/s53.062/3"> <num value="3">(3)</num> <content>any other expenditure, including an executive salary, advertising expense, legal expense, or civil penalty or fine the commission finds to be unreasonable, unnecessary, or not in the public interest.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scB/s53.063"> <num value="53.063">Sec. 53.063.</num> <heading>CONSIDERATION OF PROFIT OR LOSS FROM SALE OR LEASE OF MERCHANDISE</heading> <content>In establishing a public utility's rates, the commission may not consider a profit or loss that results from the sale or lease of merchandise, including appliances, fixtures, or equipment, to the extent that merchandise is not integral to providing utility service.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scB/s53.064"> <num value="53.064">Sec. 53.064.</num> <heading>SELF-INSURANCE</heading> <subsection identifier="/us/tx/ut/t2/c53/scB/s53.064/a"> <num value="a">(a)</num> <content>A public utility may self-insure all or part of the utility's potential liability or catastrophic property loss, including windstorm, fire, and explosion losses, that could not have been reasonably anticipated and included under operating and maintenance expenses.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scB/s53.064/b"> <num value="b">(b)</num> <chapeau>The commission shall approve a self-insurance plan under this section if the commission finds that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c53/scB/s53.064/1"> <num value="1">(1)</num> <content>the coverage is in the public interest;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scB/s53.064/2"> <num value="2">(2)</num> <content>the plan, considering all costs, is a lower cost alternative to purchasing commercial insurance; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scB/s53.064/3"> <num value="3">(3)</num> <content>ratepayers will receive the benefits of the savings.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scB/s53.064/c"> <num value="c">(c)</num> <chapeau>In computing a utility's reasonable and necessary expenses under this subchapter, the commission, to the extent the commission finds is in the public interest, shall allow as a necessary expense money credited to a reserve account for self-insurance. The commission shall determine reasonableness under this subsection:</chapeau> <paragraph identifier="/us/tx/ut/t2/c53/scB/s53.064/1"> <num value="1">(1)</num> <content>from information provided at the time the self-insurance plan and reserve account are established; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scB/s53.064/2"> <num value="2">(2)</num> <content>on the filing of a rate case by a utility that has a reserve account.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scB/s53.064/d"> <num value="d">(d)</num> <chapeau>After a reserve account for self-insurance is established, the commission shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c53/scB/s53.064/1"> <num value="1">(1)</num> <content>determine whether the account has a surplus or shortage under Subsection (e); and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scB/s53.064/2"> <num value="2">(2)</num> <content>subtract any surplus from or add any shortage to the utility's rate base.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scB/s53.064/e"> <num value="e">(e)</num> <content>A surplus in the reserve account exists if the charges against the account are less than the money credited to the account. A shortage in the reserve account exists if the charges against the account are greater than the money credited to the account.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scB/s53.064/f"> <num value="f">(f)</num> <content>The commission shall adopt rules governing self-insurance under this section.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scB/s53.065"> <num value="53.065">Sec. 53.065.</num> <heading>INTEREXCHANGE SERVICES; RATES OF INCUMBENT LOCAL EXCHANGE COMPANY</heading> <subsection identifier="/us/tx/ut/t2/c53/scB/s53.065/a"> <num value="a">(a)</num> <content>An incumbent local exchange company's rates for interexchange telecommunications services must be statewide average rates except as ordered by the commission after application and hearing.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scB/s53.065/b"> <num value="b">(b)</num> <content>Repealed by Acts 2011, 82nd Leg., R.S., Ch. 98, Sec. 21(2), eff. September 1, 2011.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 21 (S.B. 983), Sec. 4, eff. September 1, 2011. Acts 2011, 82nd Leg., R.S., Ch. 98 (S.B. 980), Sec. 21(2), eff. September 1, 2011.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c53/scC"> <num value="C">SUBCHAPTER C.</num> <heading>GENERAL PROCEDURES FOR RATE CHANGE PROPOSED BY UTILITY</heading> <section identifier="/us/tx/ut/t2/c53/scC/s53.101"> <num value="53.101">Sec. 53.101.</num> <heading>DEFINITION</heading> <content>In this subchapter, "major change" means an increase in rates that would increase the aggregate revenues of the applicant more than the greater of $100,000 or 2-1/2 percent. The term does not include an increase in rates that the commission allows to go into effect or the utility makes under an order of the commission after hearings held with public notice.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scC/s53.102"> <num value="53.102">Sec. 53.102.</num> <heading>STATEMENT OF INTENT TO CHANGE RATES</heading> <subsection identifier="/us/tx/ut/t2/c53/scC/s53.102/a"> <num value="a">(a)</num> <content>A utility may not change its rates unless the utility files a statement of its intent with the commission at least 35 days before the effective date of the proposed change.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scC/s53.102/b"> <num value="b">(b)</num> <content>The utility shall also mail or deliver a copy of the statement of intent to the appropriate officer of each affected municipality.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scC/s53.102/c"> <num value="c">(c)</num> <chapeau>The statement of intent must include:</chapeau> <paragraph identifier="/us/tx/ut/t2/c53/scC/s53.102/1"> <num value="1">(1)</num> <content>proposed revisions of tariffs; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scC/s53.102/2"> <num value="2">(2)</num> <chapeau>a detailed statement of:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c53/scC/s53.102/A"> <num value="A">(A)</num> <content>each proposed change;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c53/scC/s53.102/B"> <num value="B">(B)</num> <content>the effect the proposed change is expected to have on the revenues of the utility;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c53/scC/s53.102/C"> <num value="C">(C)</num> <content>each class and number of utility consumers affected; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c53/scC/s53.102/D"> <num value="D">(D)</num> <content>any other information required by the commission's rules.</content> </subparagraph> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scC/s53.103"> <num value="53.103">Sec. 53.103.</num> <heading>NOTICE OF INTENT TO CHANGE RATES</heading> <subsection identifier="/us/tx/ut/t2/c53/scC/s53.103/a"> <num value="a">(a)</num> <chapeau>The utility shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c53/scC/s53.103/1"> <num value="1">(1)</num> <content>publish, in conspicuous form and place, notice to the public of the proposed change once each week for four successive weeks before the effective date of the proposed change in a newspaper having general circulation in each county containing territory affected by the proposed change; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scC/s53.103/2"> <num value="2">(2)</num> <content>mail notice of the proposed change to any other affected person as required by the commission's rules.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scC/s53.103/b"> <num value="b">(b)</num> <content>The commission may waive the publication of notice requirement prescribed by Subsection (a) in a proceeding that involves only a rate reduction for each affected ratepayer. The applicant shall give notice of the proposed rate change by mail to each affected utility customer.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scC/s53.103/c"> <num value="c">(c)</num> <content>The commission by rule shall define other proceedings for which the publication of notice requirement prescribed by Subsection (a) may be waived on a showing of good cause. A waiver may not be granted in a proceeding involving a rate increase to any class or category of ratepayer.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scC/s53.104"> <num value="53.104">Sec. 53.104.</num> <heading>EARLY EFFECTIVE DATE OF RATE CHANGE</heading> <subsection identifier="/us/tx/ut/t2/c53/scC/s53.104/a"> <num value="a">(a)</num> <chapeau>For good cause shown, the commission may allow a rate change, other than a major change, to take effect:</chapeau> <paragraph identifier="/us/tx/ut/t2/c53/scC/s53.104/1"> <num value="1">(1)</num> <content>before the end of the 35-day period prescribed by Section 53.102; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scC/s53.104/2"> <num value="2">(2)</num> <content>under conditions the commission prescribes, subject to suspension as provided by this subchapter.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scC/s53.104/b"> <num value="b">(b)</num> <content>The utility shall immediately revise its tariffs to include the change.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scC/s53.105"> <num value="53.105">Sec. 53.105.</num> <heading>DETERMINATION OF PROPRIETY OF CHANGE; HEARING</heading> <subsection identifier="/us/tx/ut/t2/c53/scC/s53.105/a"> <num value="a">(a)</num> <content>If a tariff changing rates is filed with the commission, the commission shall, on complaint by an affected person, or may, on its own motion, not later than the 30th day after the effective date of the change, enter on a hearing to determine the propriety of the change.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scC/s53.105/b"> <num value="b">(b)</num> <content>The commission shall hold a hearing in every case in which the change constitutes a major change. The commission may, however, use an informal proceeding if the commission does not receive a complaint before the 46th day after the date notice of the change is filed.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scC/s53.105/c"> <num value="c">(c)</num> <content>The commission shall give reasonable notice of the hearing, including notice to the governing body of each affected municipality and county. The utility is not required to provide a formal answer or file any other formal pleading in response to the notice, and the absence of an answer does not affect an order for a hearing.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scC/s53.106"> <num value="53.106">Sec. 53.106.</num> <heading>REGIONAL HEARING</heading> <content>The commission shall hold a regional hearing at an appropriate location in a case in which the commission determines it is in the public interest to hear testimony at a regional hearing for inclusion in the record.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scC/s53.107"> <num value="53.107">Sec. 53.107.</num> <heading>PREFERENCE TO HEARING</heading> <chapeau>The commission shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c53/scC/s53.107/1"> <num value="1">(1)</num> <content>give preference to a hearing under this subchapter and to deciding questions arising under this subchapter and Subchapter E over any other question pending before it; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scC/s53.107/2"> <num value="2">(2)</num> <content>decide the questions as quickly as possible.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scC/s53.108"> <num value="53.108">Sec. 53.108.</num> <heading>RATE SUSPENSION; DEADLINE</heading> <subsection identifier="/us/tx/ut/t2/c53/scC/s53.108/a"> <num value="a">(a)</num> <content>Pending the hearing and a decision, the commission, after delivering to the utility a written statement of the commission's reasons, may suspend the rate change for not longer than 150 days after the date the rate change would otherwise be effective.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scC/s53.108/b"> <num value="b">(b)</num> <content>The 150-day period prescribed by Subsection (a) shall be extended two days for each day the actual hearing on the merits of the case exceeds 15 days.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scC/s53.108/c"> <num value="c">(c)</num> <content>If the commission does not make a final determination concerning a rate change before expiration of the suspension period, the commission is considered to have approved the change. This approval is subject to the authority of the commission thereafter to continue a hearing in progress.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scC/s53.109"> <num value="53.109">Sec. 53.109.</num> <heading>TEMPORARY RATES</heading> <subsection identifier="/us/tx/ut/t2/c53/scC/s53.109/a"> <num value="a">(a)</num> <content>The commission may establish temporary rates to be in effect during the suspension period under Section 53.108.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scC/s53.109/b"> <num value="b">(b)</num> <content>If the commission does not establish temporary rates, the rates in effect when the suspended tariff was filed continue in effect during the suspension period.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scC/s53.110"> <num value="53.110">Sec. 53.110.</num> <heading>BONDED RATES</heading> <subsection identifier="/us/tx/ut/t2/c53/scC/s53.110/a"> <num value="a">(a)</num> <chapeau>A utility may put a changed rate into effect by filing a bond with the commission if:</chapeau> <paragraph identifier="/us/tx/ut/t2/c53/scC/s53.110/1"> <num value="1">(1)</num> <content>the 150-day suspension period has been extended under Section 53.108(b); and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scC/s53.110/2"> <num value="2">(2)</num> <content>the commission fails to make a final determination before the 151st day after the date the rate change would otherwise be effective.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scC/s53.110/b"> <num value="b">(b)</num> <content>The bonded rate may not exceed the proposed rate.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scC/s53.110/c"> <num value="c">(c)</num> <chapeau>The bond must be:</chapeau> <paragraph identifier="/us/tx/ut/t2/c53/scC/s53.110/1"> <num value="1">(1)</num> <content>payable to the commission in an amount, in a form, and with a surety approved by the commission; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scC/s53.110/2"> <num value="2">(2)</num> <content>conditioned on refund.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scC/s53.110/d"> <num value="d">(d)</num> <chapeau>The utility shall refund or credit against future bills:</chapeau> <paragraph identifier="/us/tx/ut/t2/c53/scC/s53.110/1"> <num value="1">(1)</num> <content>money collected under the bonded rates in excess of the rate finally ordered; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scC/s53.110/2"> <num value="2">(2)</num> <content>interest on that money, at the current interest rate as determined by the commission.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scC/s53.111"> <num value="53.111">Sec. 53.111.</num> <heading>ESTABLISHMENT OF FINAL RATES</heading> <subsection identifier="/us/tx/ut/t2/c53/scC/s53.111/a"> <num value="a">(a)</num> <chapeau>If, after hearing, the commission finds the rates are unreasonable or in violation of law, the commission shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c53/scC/s53.111/1"> <num value="1">(1)</num> <content>enter an order establishing the rates the utility shall charge or apply for the service in question; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scC/s53.111/2"> <num value="2">(2)</num> <content>serve a copy of the order on the utility.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scC/s53.111/b"> <num value="b">(b)</num> <content>The rates established in the order shall be observed thereafter until changed as provided by this title.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scC/s53.111/c"> <num value="c">(c)</num> <content>This section does not apply to a company electing under Chapter 58 or 59 except as otherwise provided by those chapters or by Chapter 60.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scC/s53.112"> <num value="53.112">Sec. 53.112.</num> <heading>EXPIRATION OF SUSPENSION; EFFECT ON CERTAIN RATES</heading> <subsection identifier="/us/tx/ut/t2/c53/scC/s53.112/a"> <num value="a">(a)</num> <content>Notwithstanding Section 53.111(a), if the commission does not make a final determination concerning an incumbent local exchange company's rate change before expiration of the 150-day suspension period, the rates finally approved by the commission take effect on and the incumbent local exchange company is entitled to collect those rates from the date the 150-day suspension period expired.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scC/s53.112/b"> <num value="b">(b)</num> <content>A surcharge or other charge necessary to effectuate this section may not be recovered over a period of less than 90 days from the date of the commission's final order.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scC/s53.113"> <num value="53.113">Sec. 53.113.</num> <heading>FCC-APPROVED TARIFFS FOR SWITCHED-ACCESS SERVICE</heading> <subsection identifier="/us/tx/ut/t2/c53/scC/s53.113/a"> <num value="a">(a)</num> <content>An incumbent local exchange company may file with the commission tariffs for switched-access service that have been approved by the Federal Communications Commission. The tariffs must include all rate elements in the company's interstate access tariff other than end-user charges.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scC/s53.113/b"> <num value="b">(b)</num> <content>Not later than the 60th day after the date a company files tariffs under Subsection (a), the commission shall order the rates and terms to be the incumbent local exchange company's intrastate switched-access rates and terms if, on review, the tariffs contain the same rates and terms, excluding end-user charges, as approved by the Federal Communications Commission.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c53/scD"> <num value="D">SUBCHAPTER D.</num> <heading>RATE CHANGES PROPOSED BY COMMISSION</heading> <section identifier="/us/tx/ut/t2/c53/scD/s53.151"> <num value="53.151">Sec. 53.151.</num> <heading>UNREASONABLE OR VIOLATIVE EXISTING RATES</heading> <subsection identifier="/us/tx/ut/t2/c53/scD/s53.151/a"> <num value="a">(a)</num> <chapeau>If the commission, on its own motion or on complaint by an affected person, after reasonable notice and hearing, finds that the existing rates of a public utility for a service are unreasonable or in violation of law, the commission shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c53/scD/s53.151/1"> <num value="1">(1)</num> <content>enter an order establishing the just and reasonable rates to be observed thereafter, including maximum or minimum rates; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scD/s53.151/2"> <num value="2">(2)</num> <content>serve a copy of the order on the utility.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scD/s53.151/b"> <num value="b">(b)</num> <content>The rates established under Subsection (a) constitute the legal rates of the public utility until changed as provided by this title.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scD/s53.151/c"> <num value="c">(c)</num> <content>This section does not apply to a company electing under Chapter 58 or Chapter 59 except as otherwise provided by those chapters.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scD/s53.152"> <num value="53.152">Sec. 53.152.</num> <heading>INVESTIGATING COSTS OF OBTAINING SERVICE FROM ANOTHER SOURCE</heading> <content>If a public utility does not produce or generate the service that it distributes, transmits, or furnishes to the public for compensation but obtains the service from another source, the commission may investigate the cost of that production or generation in an investigation of the reasonableness of the utility's rates.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c53/scE"> <num value="E">SUBCHAPTER E.</num> <heading>COST RECOVERY AND RATE ADJUSTMENTS</heading> <section identifier="/us/tx/ut/t2/c53/scE/s53.201"> <num value="53.201">Sec. 53.201.</num> <heading>AUTOMATIC ADJUSTMENT FOR CHANGE IN COSTS PROHIBITED</heading> <content>The commission may not establish a rate or tariff that authorizes a utility to automatically adjust and pass through to the utility's customers a change in the utility's costs.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c53/scF"> <num value="F">SUBCHAPTER F.</num> <heading>REGULATORY POLICY FOR SMALL INCUMBENT LOCAL EXCHANGE COMPANIES AND COOPERATIVES</heading> <section identifier="/us/tx/ut/t2/c53/scF/s53.251"> <num value="53.251">Sec. 53.251.</num> <heading>GENERAL POLICY</heading> <chapeau>Regulatory policy should recognize that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c53/scF/s53.251/1"> <num value="1">(1)</num> <content>there are differences between small and large incumbent local exchange companies;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scF/s53.251/2"> <num value="2">(2)</num> <content>there are a large number of customer-owned telephone cooperatives and small, locally owned investor companies; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scF/s53.251/3"> <num value="3">(3)</num> <chapeau>it is appropriate to provide incentives and flexibility to allow an incumbent local exchange company that serves a rural area to:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c53/scF/s53.251/A"> <num value="A">(A)</num> <content>provide existing services; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c53/scF/s53.251/B"> <num value="B">(B)</num> <content>introduce new technology and new services in a prompt, efficient, and economical manner.</content> </subparagraph> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scF/s53.252"> <num value="53.252">Sec. 53.252.</num> <heading>ADOPTION OF CERTAIN POLICIES</heading> <chapeau>Notwithstanding any other provision of this title, the commission shall consider and may adopt policies to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c53/scF/s53.252/1"> <num value="1">(1)</num> <content>provide for evaluation of the overall reasonableness of the rates of a rural or small incumbent local exchange company or cooperative not more frequently than once every three years;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scF/s53.252/2"> <num value="2">(2)</num> <content>permit consideration of future construction plans and operational changes in evaluating the reasonableness of the rates of a rural or small incumbent local exchange company or cooperative; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scF/s53.252/3"> <num value="3">(3)</num> <chapeau>allow a rural or small incumbent local exchange company or cooperative to:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c53/scF/s53.252/A"> <num value="A">(A)</num> <content>provide required information by report or by other means, as necessary, including a required rate filing package, in substantially less burdensome and complex form than is required of a larger incumbent local exchange company;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c53/scF/s53.252/B"> <num value="B">(B)</num> <content>change depreciation and amortization rates, if customer rates are not affected, after notice to the commission, subject to commission review in a proceeding under Subchapter C or Subchapter D;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c53/scF/s53.252/C"> <num value="C">(C)</num> <content>adopt for a new service the rates for the same or a substantially similar service offered by a larger incumbent local exchange company, without additional cost justification; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c53/scF/s53.252/D"> <num value="D">(D)</num> <content>submit to the commission, instead of a management audit otherwise required by law, policy, or rule, financial audits regularly performed by an independent auditor or required and performed as a result of the company's or cooperative's participation in a federal or state financing or revenue-sharing program.</content> </subparagraph> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c53/scG"> <num value="G">SUBCHAPTER G.</num> <heading>SPECIAL PROCEDURES FOR SMALL LOCAL EXCHANGE COMPANIES AND COOPERATIVES</heading> <section identifier="/us/tx/ut/t2/c53/scG/s53.301"> <num value="53.301">Sec. 53.301.</num> <heading>DEFINITION</heading> <subsection identifier="/us/tx/ut/t2/c53/scG/s53.301/a"> <num value="a">(a)</num> <chapeau>In this subchapter, "minor change" means a change, including the restructuring of rates of existing services, that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c53/scG/s53.301/1"> <num value="1">(1)</num> <content>decreases the rates or revenues of an incumbent local exchange company; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scG/s53.301/2"> <num value="2">(2)</num> <content>together with any other rate change or approved tariff changes in the 12 months preceding the effective date of the proposed change, increases the company's total regulated intrastate gross annual revenues by not more than five percent.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scG/s53.301/b"> <num value="b">(b)</num> <content>With regard to a change to a basic local access line rate, a "minor change" does not include a change that, together with any other change to the basic local access line rate that took effect during the 12 months preceding the effective date of the proposed change, results in an increase of more than 50 percent.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 118 (H.B. 2680), Sec. 1, eff. September 1, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scG/s53.302"> <num value="53.302">Sec. 53.302.</num> <heading>APPLICABILITY</heading> <content>This subchapter does not apply to an incumbent local exchange company that is a cooperative corporation partially deregulated under Subchapter H.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scG/s53.303"> <num value="53.303">Sec. 53.303.</num> <heading>PROVISIONS NOT EXCLUSIVE</heading> <chapeau>This subchapter does not prohibit:</chapeau> <paragraph identifier="/us/tx/ut/t2/c53/scG/s53.303/1"> <num value="1">(1)</num> <content>an incumbent local exchange company from filing for a new service or rate change under another section of this title; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scG/s53.303/2"> <num value="2">(2)</num> <content>the commission from conducting a review under Subchapter D.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scG/s53.304"> <num value="53.304">Sec. 53.304.</num> <heading>PROCEDURE TO OFFER CERTAIN SERVICES OR MAKE MINOR CHANGES</heading> <subsection identifier="/us/tx/ut/t2/c53/scG/s53.304/a"> <num value="a">(a)</num> <chapeau>An incumbent local exchange company may offer an extended local calling service, a packaged service, or a new or promotional service on an optional basis or make a minor change in its rates or tariffs if the company:</chapeau> <paragraph identifier="/us/tx/ut/t2/c53/scG/s53.304/1"> <num value="1">(1)</num> <content>is a cooperative corporation or has, together with all affiliated incumbent local exchange companies, fewer than 31,000 access lines in service in this state;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scG/s53.304/2"> <num value="2">(2)</num> <content>files with the commission and the office notice, as prescribed by Subsection (b), not later than the 10th day before the effective date of the proposed change;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scG/s53.304/3"> <num value="3">(3)</num> <content>provides notice as prescribed by Section 53.305; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scG/s53.304/4"> <num value="4">(4)</num> <content>files with the commission affidavits verifying that notice as prescribed by Section 53.305 was provided.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scG/s53.304/b"> <num value="b">(b)</num> <chapeau>The notice must include:</chapeau> <paragraph identifier="/us/tx/ut/t2/c53/scG/s53.304/1"> <num value="1">(1)</num> <content>a copy of a resolution adopted by the incumbent local exchange company's board of directors approving the proposed change;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scG/s53.304/2"> <num value="2">(2)</num> <content>a description of the services affected by the proposed change;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scG/s53.304/3"> <num value="3">(3)</num> <content>a copy of the proposed tariff for the affected service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scG/s53.304/4"> <num value="4">(4)</num> <content>a copy of the customer notice required by Subsection (a)(3);</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scG/s53.304/5"> <num value="5">(5)</num> <content>the number of access lines the company and each affiliate have in service in this state; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scG/s53.304/6"> <num value="6">(6)</num> <content>the amount by which the company's total regulated intrastate gross annual revenues will increase or decrease as a result of the proposed change.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 118 (H.B. 2680), Sec. 2, eff. September 1, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scG/s53.305"> <num value="53.305">Sec. 53.305.</num> <heading>NOTICE TO AFFECTED CUSTOMERS</heading> <subsection identifier="/us/tx/ut/t2/c53/scG/s53.305/a"> <num value="a">(a)</num> <content>A company shall provide notice of a proposed change to affected customers in the manner prescribed by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scG/s53.305/b"> <num value="b">(b)</num> <chapeau>Notice must:</chapeau> <paragraph identifier="/us/tx/ut/t2/c53/scG/s53.305/1"> <num value="1">(1)</num> <content>be provided not later than the 10th day before the effective date of the proposed change; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scG/s53.305/2"> <num value="2">(2)</num> <chapeau>include:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c53/scG/s53.305/A"> <num value="A">(A)</num> <content>a description of the services affected by the proposed change;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c53/scG/s53.305/B"> <num value="B">(B)</num> <content>the effective date of the proposed change;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c53/scG/s53.305/C"> <num value="C">(C)</num> <content>an explanation of the customer's right to petition the commission for a review under Section 53.306, including the number of persons required to petition before a commission review will occur;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c53/scG/s53.305/D"> <num value="D">(D)</num> <content>an explanation of the customer's right to information concerning how to obtain a copy of the proposed tariff from the company;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c53/scG/s53.305/E"> <num value="E">(E)</num> <content>the amount by which the company's total regulated intrastate gross annual revenues will increase or decrease as a result of the proposed change; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c53/scG/s53.305/F"> <num value="F">(F)</num> <content>a list of rates that are affected by the proposed rate change.</content> </subparagraph> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 118 (H.B. 2680), Sec. 3, eff. September 1, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scG/s53.306"> <num value="53.306">Sec. 53.306.</num> <heading>COMMISSION REVIEW OF PROPOSED CHANGE</heading> <subsection identifier="/us/tx/ut/t2/c53/scG/s53.306/a"> <num value="a">(a)</num> <chapeau>The commission shall review a proposed change filed under this subchapter if:</chapeau> <paragraph identifier="/us/tx/ut/t2/c53/scG/s53.306/1"> <num value="1">(1)</num> <content>the commission receives complaints relating to the proposed change signed by a number of affected local service customers equal at least to the lesser of 1,500 or five percent of those customers;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scG/s53.306/2"> <num value="2">(2)</num> <content>the commission receives a complaint relating to the proposed change from an affected intrastate access customer, or a group of affected intrastate access customers, that in the preceding 12 months accounted for more than 10 percent of the company's total intrastate gross access revenues;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scG/s53.306/3"> <num value="3">(3)</num> <content>the proposed change is not a minor change;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scG/s53.306/4"> <num value="4">(4)</num> <content>the company does not comply with the procedural requirements of this subchapter; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scG/s53.306/5"> <num value="5">(5)</num> <content>the proposed change is inconsistent with the commission's substantive policies as expressed in its rules.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scG/s53.306/b"> <num value="b">(b)</num> <content>The commission may suspend a tariff proposed under this subchapter during the review.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scG/s53.307"> <num value="53.307">Sec. 53.307.</num> <heading>COMPLIANCE WITH PRINCIPLES; REDUCED RATES</heading> <content>A rate established under this subchapter must be in accordance with the rate-setting principles of this chapter, except that a company may provide to its board members, officers, employees, or agents free or reduced rates for services.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scG/s53.308"> <num value="53.308">Sec. 53.308.</num> <heading>FEES AND ASSESSMENTS</heading> <chapeau>The commission may prescribe and collect a fee or assessment from incumbent local exchange companies necessary to recover the cost to the commission and to the office of activities carried out and services provided under:</chapeau> <paragraph identifier="/us/tx/ut/t2/c53/scG/s53.308/1"> <num value="1">(1)</num> <content>this subchapter;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scG/s53.308/2"> <num value="2">(2)</num> <content>Section 53.112;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scG/s53.308/3"> <num value="3">(3)</num> <content>Subchapter H; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scG/s53.308/4"> <num value="4">(4)</num> <content>Section 55.004.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c53/scH"> <num value="H">SUBCHAPTER H.</num> <heading>PARTIAL DEREGULATION AVAILABLE TO CERTAIN COOPERATIVE CORPORATIONS</heading> <section identifier="/us/tx/ut/t2/c53/scH/s53.351"> <num value="53.351">Sec. 53.351.</num> <heading>PROVISIONS NOT EXCLUSIVE</heading> <subsection identifier="/us/tx/ut/t2/c53/scH/s53.351/a"> <num value="a">(a)</num> <chapeau>This subchapter does not:</chapeau> <paragraph identifier="/us/tx/ut/t2/c53/scH/s53.351/1"> <num value="1">(1)</num> <content>prohibit a cooperative from filing for a new service or a rate change under another applicable provision of this title; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scH/s53.351/2"> <num value="2">(2)</num> <chapeau>affect the application of a provision of this title not directly related to:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c53/scH/s53.351/A"> <num value="A">(A)</num> <content>establishing rates; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c53/scH/s53.351/B"> <num value="B">(B)</num> <content>the authority of the commission to require a cooperative to file a report required under this title or the commission's rules.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scH/s53.351/b"> <num value="b">(b)</num> <content>Notwithstanding any other provision of this subchapter, the commission may conduct a review under Subchapter D.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scH/s53.352"> <num value="53.352">Sec. 53.352.</num> <heading>PARTIAL DEREGULATION BY BALLOT</heading> <subsection identifier="/us/tx/ut/t2/c53/scH/s53.352/a"> <num value="a">(a)</num> <content>An incumbent local exchange company that is a cooperative corporation may vote to partially deregulate the cooperative by sending a ballot to each cooperative member. The incumbent local exchange company may include the ballot in a bill or send the ballot separately. The ballot shall be printed to permit voting for or against the proposition: "Authorizing the partial deregulation of the (name of the cooperative)."</content> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scH/s53.352/b"> <num value="b">(b)</num> <content>The cooperative is partially deregulated if a majority of the ballots returned to the cooperative not later than the 45th day after the date the ballots are mailed favor deregulation.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scH/s53.353"> <num value="53.353">Sec. 53.353.</num> <heading>VOTING PROCEDURES</heading> <content>The commission by rule shall prescribe the voting procedures a cooperative must use under this subchapter.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scH/s53.354"> <num value="53.354">Sec. 53.354.</num> <heading>PROCEDURE TO OFFER CERTAIN SERVICES OR MAKE CERTAIN CHANGES</heading> <chapeau>After the initial balloting, a cooperative may offer extended local calling services, offer new services on an optional basis, or make changes in its rates or tariffs if the cooperative:</chapeau> <paragraph identifier="/us/tx/ut/t2/c53/scH/s53.354/1"> <num value="1">(1)</num> <content>files a statement of intent under Section 53.355;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scH/s53.354/2"> <num value="2">(2)</num> <content>provides notice of the proposed action to each customer and municipality as prescribed by Section 53.356; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scH/s53.354/3"> <num value="3">(3)</num> <content>files with the commission affidavits verifying that notice was provided as prescribed by Section 53.357.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scH/s53.355"> <num value="53.355">Sec. 53.355.</num> <heading>STATEMENT OF INTENT</heading> <subsection identifier="/us/tx/ut/t2/c53/scH/s53.355/a"> <num value="a">(a)</num> <content>A cooperative must file a statement of intent to use this subchapter with the commission and the office not later than the 61st day before the effective date of the proposed change.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scH/s53.355/b"> <num value="b">(b)</num> <chapeau>The statement must include:</chapeau> <paragraph identifier="/us/tx/ut/t2/c53/scH/s53.355/1"> <num value="1">(1)</num> <content>a copy of a resolution, signed by a majority of the members of the cooperative's board of directors, approving the proposed action and authorizing the filing of the statement of intent;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scH/s53.355/2"> <num value="2">(2)</num> <content>a description of the services affected by the proposed action;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scH/s53.355/3"> <num value="3">(3)</num> <content>a copy of the proposed tariff for the affected service; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scH/s53.355/4"> <num value="4">(4)</num> <content>a copy of the customer notice required by Section 53.356.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scH/s53.356"> <num value="53.356">Sec. 53.356.</num> <heading>NOTICE TO AFFECTED PERSONS</heading> <subsection identifier="/us/tx/ut/t2/c53/scH/s53.356/a"> <num value="a">(a)</num> <content>The cooperative shall provide to each affected customer or party, including a municipality, at least two notices of the proposed action by bill insert or by individual notice.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scH/s53.356/b"> <num value="b">(b)</num> <chapeau>The cooperative shall provide:</chapeau> <paragraph identifier="/us/tx/ut/t2/c53/scH/s53.356/1"> <num value="1">(1)</num> <content>the first notice not later than the 61st day before the effective date of the proposed action; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scH/s53.356/2"> <num value="2">(2)</num> <content>the last notice not later than the 31st day before the effective date of the proposed action.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scH/s53.356/c"> <num value="c">(c)</num> <chapeau>A notice prescribed by this section must include:</chapeau> <paragraph identifier="/us/tx/ut/t2/c53/scH/s53.356/1"> <num value="1">(1)</num> <content>a description of the services affected by the proposed action;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scH/s53.356/2"> <num value="2">(2)</num> <content>the effective date of the proposed action;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scH/s53.356/3"> <num value="3">(3)</num> <chapeau>an explanation of the customer's right to:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c53/scH/s53.356/A"> <num value="A">(A)</num> <content>obtain a copy of the proposed tariff from the cooperative; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c53/scH/s53.356/B"> <num value="B">(B)</num> <content>petition the commission for a review under Section 53.358;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scH/s53.356/4"> <num value="4">(4)</num> <content>a statement of the amount by which the cooperative's total gross annual revenues will increase or decrease and a statement explaining the effect on the cooperative revenues as a result of the proposed action; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scH/s53.356/5"> <num value="5">(5)</num> <content>a list of rates that are affected by the proposed rate action, showing the effect of the proposed action on each of those rates.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scH/s53.357"> <num value="53.357">Sec. 53.357.</num> <heading>FILING OF AFFIDAVITS VERIFYING NOTICE</heading> <content>Not later than the 15th day before the effective date of a proposed action, the cooperative shall file with the commission affidavits that verify that the cooperative provided each notice required by Section 53.356.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scH/s53.358"> <num value="53.358">Sec. 53.358.</num> <heading>COMMISSION REVIEW OF PROPOSED ACTION</heading> <subsection identifier="/us/tx/ut/t2/c53/scH/s53.358/a"> <num value="a">(a)</num> <chapeau>The commission shall review a proposed action filed under this subchapter if:</chapeau> <paragraph identifier="/us/tx/ut/t2/c53/scH/s53.358/1"> <num value="1">(1)</num> <chapeau>the commission receives, not later than the 45th day after the date the first notice is provided under Section 53.356, complaints relating to the proposed action:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c53/scH/s53.358/A"> <num value="A">(A)</num> <content>signed by at least five percent of the affected local service customers; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c53/scH/s53.358/B"> <num value="B">(B)</num> <content>from an affected intrastate access customer, or group of affected intrastate access customers, that in the preceding 12 months accounted for more than 10 percent of the cooperative's total intrastate access revenues;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scH/s53.358/2"> <num value="2">(2)</num> <content>the cooperative does not comply with the procedural requirements of this subchapter; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c53/scH/s53.358/3"> <num value="3">(3)</num> <content>the proposed action is inconsistent with the commission's substantive policies as expressed in its rules.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scH/s53.358/b"> <num value="b">(b)</num> <content>If the commission conducts a review of the proposed action under this section before the action's effective date, the commission may suspend the proposed action during the review.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c53/scH/s53.359"> <num value="53.359">Sec. 53.359.</num> <heading>REVERSAL OF DEREGULATION BY BALLOT</heading> <subsection identifier="/us/tx/ut/t2/c53/scH/s53.359/a"> <num value="a">(a)</num> <content>A cooperative that is partially deregulated under this subchapter may vote to reverse the deregulation by sending a ballot to each cooperative member.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scH/s53.359/b"> <num value="b">(b)</num> <content>The cooperative's board of directors may order reballoting on its own motion. If the board receives a written request for that action from at least 10 percent of its members, the board shall reballot not later than the 60th day after the date the board receives that request.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scH/s53.359/c"> <num value="c">(c)</num> <content>The cooperative may include the ballot in a bill or send the ballot separately. The ballot shall be printed to permit voting for or against the proposition: "Reversing the partial deregulation of the (name of the cooperative)."</content> </subsection> <subsection identifier="/us/tx/ut/t2/c53/scH/s53.359/d"> <num value="d">(d)</num> <content>The partial deregulation is reversed if a majority of the ballots returned to the cooperative not later than the 45th day after the date the ballots are mailed favor reversal.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t2/c54"> <num value="54">CHAPTER 54.</num> <heading>CERTIFICATES</heading> <subchapter identifier="/us/tx/ut/t2/c54/scA"> <num value="A">SUBCHAPTER A.</num> <heading>GENERAL PROVISIONS</heading> <section identifier="/us/tx/ut/t2/c54/scA/s54.001"> <num value="54.001">Sec. 54.001.</num> <heading>CERTIFICATE REQUIRED</heading> <chapeau>A person may not provide local exchange telephone service, basic local telecommunications service, or switched access service unless the person obtains a:</chapeau> <paragraph identifier="/us/tx/ut/t2/c54/scA/s54.001/1"> <num value="1">(1)</num> <content>certificate of convenience and necessity;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scA/s54.001/2"> <num value="2">(2)</num> <content>certificate of operating authority; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scA/s54.001/3"> <num value="3">(3)</num> <content>service provider certificate of operating authority.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scA/s54.002"> <num value="54.002">Sec. 54.002.</num> <heading>EXCEPTIONS TO CERTIFICATE REQUIREMENT FOR SERVICE EXTENSION</heading> <subsection identifier="/us/tx/ut/t2/c54/scA/s54.002/a"> <num value="a">(a)</num> <chapeau>A telecommunications utility is not required to obtain a certificate of convenience and necessity, a certificate of operating authority, or a service provider certificate of operating authority for an:</chapeau> <paragraph identifier="/us/tx/ut/t2/c54/scA/s54.002/1"> <num value="1">(1)</num> <chapeau>extension into territory that is:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c54/scA/s54.002/A"> <num value="A">(A)</num> <content>contiguous to the territory the telecommunications utility serves;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c54/scA/s54.002/B"> <num value="B">(B)</num> <content>not receiving similar service from another telecommunications utility; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c54/scA/s54.002/C"> <num value="C">(C)</num> <content>not in another telecommunications utility's certificated area;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scA/s54.002/2"> <num value="2">(2)</num> <content>extension in or to territory the telecommunications utility serves or is authorized to serve under a certificate of public convenience and necessity, a certificate of operating authority, or a service provider certificate of operating authority; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scA/s54.002/3"> <num value="3">(3)</num> <content>operation, extension, or service in progress on September 1, 1975.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scA/s54.002/b"> <num value="b">(b)</num> <chapeau>An extension allowed by Subsection (a) is limited to a device used:</chapeau> <paragraph identifier="/us/tx/ut/t2/c54/scA/s54.002/1"> <num value="1">(1)</num> <content>to interconnect existing facilities; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scA/s54.002/2"> <num value="2">(2)</num> <content>solely to transmit telecommunications utility services from an existing facility to a customer of retail utility service.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scA/s54.003"> <num value="54.003">Sec. 54.003.</num> <heading>EXCEPTIONS TO CERTIFICATE REQUIREMENT FOR CERTAIN SERVICES</heading> <chapeau>A telecommunications utility is not required to obtain a certificate of convenience and necessity, a certificate of operating authority, or a service provider certificate of operating authority for:</chapeau> <paragraph identifier="/us/tx/ut/t2/c54/scA/s54.003/1"> <num value="1">(1)</num> <content>an interexchange telecommunications service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scA/s54.003/2"> <num value="2">(2)</num> <content>a nonswitched private line service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scA/s54.003/3"> <num value="3">(3)</num> <content>a shared tenant service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scA/s54.003/4"> <num value="4">(4)</num> <content>a specialized communications common carrier service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scA/s54.003/5"> <num value="5">(5)</num> <content>a commercial mobile service; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scA/s54.003/6"> <num value="6">(6)</num> <content>an operator service as defined by Section 55.081.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scA/s54.004"> <num value="54.004">Sec. 54.004.</num> <heading>RELINQUISHMENT PLAN</heading> <content>A holder of a service provider certificate of operating authority who applies for a certificate of operating authority or a certificate of convenience and necessity for the same territory must include with the application a plan to relinquish the service provider certificate of operating authority.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scA/s54.005"> <num value="54.005">Sec. 54.005.</num> <heading>NOTICE OF AND HEARING ON APPLICATION</heading> <subsection identifier="/us/tx/ut/t2/c54/scA/s54.005/a"> <num value="a">(a)</num> <chapeau>When an application for a certificate of convenience and necessity, a certificate of operating authority, or a service provider certificate of operating authority is filed, the commission shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c54/scA/s54.005/1"> <num value="1">(1)</num> <content>give notice of the application to interested parties; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scA/s54.005/2"> <num value="2">(2)</num> <chapeau>if requested:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c54/scA/s54.005/A"> <num value="A">(A)</num> <content>set a time and place for a hearing; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c54/scA/s54.005/B"> <num value="B">(B)</num> <content>give notice of the hearing.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scA/s54.005/b"> <num value="b">(b)</num> <content>A person interested in the application may intervene at the hearing.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scA/s54.006"> <num value="54.006">Sec. 54.006.</num> <heading>REQUEST FOR PRELIMINARY ORDER</heading> <subsection identifier="/us/tx/ut/t2/c54/scA/s54.006/a"> <num value="a">(a)</num> <content>A telecommunications utility that wants to exercise a right or privilege under a franchise or permit that the utility anticipates obtaining but has not been granted may apply to the commission for a preliminary order under this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scA/s54.006/b"> <num value="b">(b)</num> <content>The commission may issue a preliminary order declaring that the commission, on application and under commission rules, will grant the requested certificate of convenience and necessity, certificate of operating authority, or service provider certificate of operating authority, on terms the commission designates, after the telecommunications utility obtains the franchise or permit.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scA/s54.006/c"> <num value="c">(c)</num> <content>The commission shall grant the certificate on presentation of evidence satisfactory to the commission that the telecommunications utility has obtained the franchise or permit.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scA/s54.007"> <num value="54.007">Sec. 54.007.</num> <heading>FLEXIBILITY PLAN</heading> <subsection identifier="/us/tx/ut/t2/c54/scA/s54.007/a"> <num value="a">(a)</num> <content>After the commission grants an application for a certificate of convenience and necessity, a certificate of operating authority, or a service provider certificate of operating authority or determines that a certificate is not needed for the applicant to provide the relevant services, the commission shall conduct appropriate proceedings to establish a transitional flexibility plan for the incumbent local exchange company in the same area or areas as the new certificate holder.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scA/s54.007/b"> <num value="b">(b)</num> <content>A basic local telecommunications service price of the incumbent local exchange company may not be increased before the fourth anniversary of the date the certificate is granted to the applicant except that the price may be increased as provided by this title.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 1212, Sec. 15, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scA/s54.008"> <num value="54.008">Sec. 54.008.</num> <heading>REVOCATION OR AMENDMENT OF CERTIFICATE</heading> <subsection identifier="/us/tx/ut/t2/c54/scA/s54.008/a"> <num value="a">(a)</num> <content>The commission may revoke or amend a certificate of convenience and necessity, a certificate of operating authority or a service provider certificate of operating authority after notice and hearing if the commission finds that the certificate holder has never provided or is no longer providing service in all or any part of the certificated area.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scA/s54.008/b"> <num value="b">(b)</num> <content>The commission may require one or more public utilities to provide service in an area affected by the revocation or amendment of a certificate held by a public utility.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c54/scB"> <num value="B">SUBCHAPTER B.</num> <heading>CERTIFICATE OF CONVENIENCE AND NECESSITY</heading> <section identifier="/us/tx/ut/t2/c54/scB/s54.051"> <num value="54.051">Sec. 54.051.</num> <heading>DEFINITION</heading> <content>In this subchapter, "certificate" means a certificate of convenience and necessity.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scB/s54.052"> <num value="54.052">Sec. 54.052.</num> <heading>CERTIFICATE REQUIRED FOR PUBLIC UTILITY</heading> <subsection identifier="/us/tx/ut/t2/c54/scB/s54.052/a"> <num value="a">(a)</num> <content>A public utility may not directly or indirectly provide service to the public under a franchise or permit unless the utility first obtains from the commission a certificate that states that the public convenience and necessity requires or will require the installation, operation, or extension of the service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scB/s54.052/b"> <num value="b">(b)</num> <content>Except as otherwise provided by this chapter, a public utility may not furnish or make available retail public utility service to an area in which retail utility service is being lawfully furnished by another public utility unless the utility first obtains a certificate that includes the area in which the consuming facility is located.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scB/s54.053"> <num value="54.053">Sec. 54.053.</num> <heading>APPLICATION FOR CERTIFICATE</heading> <subsection identifier="/us/tx/ut/t2/c54/scB/s54.053/a"> <num value="a">(a)</num> <content>A public utility that wants to obtain or amend a certificate must submit an application to the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scB/s54.053/b"> <num value="b">(b)</num> <content>The applicant shall file with the commission evidence the commission requires to show the applicant has received the consent, franchise, or permit required by the proper municipal or other public authority.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scB/s54.054"> <num value="54.054">Sec. 54.054.</num> <heading>GRANT OR DENIAL OF CERTIFICATE</heading> <subsection identifier="/us/tx/ut/t2/c54/scB/s54.054/a"> <num value="a">(a)</num> <content>The commission may approve an application and grant a certificate only if the commission finds that the certificate is necessary for the service, accommodation, convenience, or safety of the public.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scB/s54.054/b"> <num value="b">(b)</num> <chapeau>The commission may:</chapeau> <paragraph identifier="/us/tx/ut/t2/c54/scB/s54.054/1"> <num value="1">(1)</num> <content>grant the certificate as requested;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scB/s54.054/2"> <num value="2">(2)</num> <content>grant the certificate for the construction of a portion of the requested system, facility, or extension or the partial exercise of the requested right or privilege; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scB/s54.054/3"> <num value="3">(3)</num> <content>refuse to grant the certificate.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scB/s54.054/c"> <num value="c">(c)</num> <chapeau>The commission shall grant each certificate on a nondiscriminatory basis after considering:</chapeau> <paragraph identifier="/us/tx/ut/t2/c54/scB/s54.054/1"> <num value="1">(1)</num> <content>the adequacy of existing service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scB/s54.054/2"> <num value="2">(2)</num> <content>the need for additional service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scB/s54.054/3"> <num value="3">(3)</num> <content>the effect of granting the certificate on the recipient of the certificate and any public utility of the same kind serving the proximate area; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scB/s54.054/4"> <num value="4">(4)</num> <chapeau>other factors, such as:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c54/scB/s54.054/A"> <num value="A">(A)</num> <content>community values;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c54/scB/s54.054/B"> <num value="B">(B)</num> <content>recreational and park areas;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c54/scB/s54.054/C"> <num value="C">(C)</num> <content>historical and aesthetic values;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c54/scB/s54.054/D"> <num value="D">(D)</num> <content>environmental integrity; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c54/scB/s54.054/E"> <num value="E">(E)</num> <content>the probable improvement of service or lowering of cost to consumers in the area if the certificate is granted.</content> </subparagraph> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c54/scC"> <num value="C">SUBCHAPTER C.</num> <heading>CERTIFICATE OF OPERATING AUTHORITY</heading> <section identifier="/us/tx/ut/t2/c54/scC/s54.101"> <num value="54.101">Sec. 54.101.</num> <heading>DEFINITION</heading> <content>In this subchapter, "certificate" means a certificate of operating authority.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 1212, Sec. 16, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scC/s54.102"> <num value="54.102">Sec. 54.102.</num> <heading>APPLICATION FOR CERTIFICATE</heading> <subsection identifier="/us/tx/ut/t2/c54/scC/s54.102/a"> <num value="a">(a)</num> <content>A person may apply for a certificate of operating authority.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scC/s54.102/b"> <num value="b">(b)</num> <content>The applicant must file with the application a sworn statement that the applicant has applied for each municipal consent, franchise, or permit required for the type of services and facilities for which the applicant has applied.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scC/s54.102/c"> <num value="c">(c)</num> <content>An affiliate of a person holding a certificate of convenience and necessity may hold a certificate of operating authority if the holder of the certificate of convenience and necessity is in compliance with federal law and Federal Communications Commission rules governing affiliates and structural separation. An affiliate of a person holding a certificate of convenience and necessity may not directly or indirectly sell to a non-affiliate any regulated product or service purchased from the person holding a certificate of convenience and necessity at any rate or price less than the price paid to the person holding a certificate of convenience and necessity.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scC/s54.102/d"> <num value="d">(d)</num> <content>A person may hold a certificate for all or any portion of a service area for which one or more affiliates of the person holds a certificate of operating authority, a service provider certificate of operating authority, or a certificate of convenience and necessity.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scC/s54.102/e"> <num value="e">(e)</num> <content>An affiliate of a company that holds a certificate of convenience and necessity and that serves more than five million access lines in this state may hold a certificate of operating authority or service provider certificate of operating authority to provide service in an area of this state in which its affiliated company is the incumbent local exchange company. However, the affiliate holding the certificate of operating authority or service provider certificate of operating authority may not provide in that area any service listed in Sections 58.051(a)(1)-(4) or Sections 58.151(1)-(4), or any subset of those services, in a manner that results in a customer-specific contract so long as the affiliated company that is the incumbent local exchange company may not provide those services or subsets of services in a manner that results in a customer-specific contract under Section 58.003 in that area. This subsection does not preclude an affiliate of a company holding a certificate of convenience and necessity from holding a certificate of operating authority in any area of this state to provide advanced services as defined by rules or orders of the Federal Communications Commission, or preclude such an advanced services affiliate from using any form of pricing flexibility, with regard to services other than those subject to the restrictions provided by this subsection. This subsection does not preclude a long distance affiliate from using any form of pricing flexibility with regard to services other than those services subject to the restrictions provided by this subsection. In addition, the affiliate holding the certificate of operating authority or service provider certificate of operating authority may not offer, in an area for which the affiliated incumbent local exchange company holds a certificate of convenience and necessity, a service listed in Sections 58.151(1)-(4) as a component of a package of services, as a promotional offering, or with a volume or term discount until the affiliated incumbent local exchange company may offer those services in pricing flexibility offerings in accordance with Section 58.004, unless the customer of one of these pricing flexibility offerings is a federal, state, or local governmental entity.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scC/s54.102/f"> <num value="f">(f)</num> <content>The commission has the authority to enforce this section.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 1212, Sec. 16, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scC/s54.103"> <num value="54.103">Sec. 54.103.</num> <heading>GRANT OR DENIAL OF CERTIFICATE</heading> <subsection identifier="/us/tx/ut/t2/c54/scC/s54.103/a"> <num value="a">(a)</num> <content>The commission must grant or deny a certificate not later than the 60th day after the date the application for the certificate is filed. The commission may extend the deadline on good cause shown.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scC/s54.103/b"> <num value="b">(b)</num> <chapeau>The commission shall grant each certificate on a nondiscriminatory basis after considering factors such as:</chapeau> <paragraph identifier="/us/tx/ut/t2/c54/scC/s54.103/1"> <num value="1">(1)</num> <content>the technical and financial qualifications of the applicant; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scC/s54.103/2"> <num value="2">(2)</num> <content>the applicant's ability to meet the commission's quality of service requirements.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scC/s54.103/c"> <num value="c">(c)</num> <chapeau>In an exchange of an incumbent local exchange company that serves fewer than 31,000 access lines, in addition to the factors described by Subsection (b), the commission shall consider:</chapeau> <paragraph identifier="/us/tx/ut/t2/c54/scC/s54.103/1"> <num value="1">(1)</num> <content>the effect of granting the certificate on a public utility serving the area and on that utility's customers;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scC/s54.103/2"> <num value="2">(2)</num> <content>the ability of that public utility to provide adequate service at reasonable rates;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scC/s54.103/3"> <num value="3">(3)</num> <content>the effect of granting the certificate on the ability of that public utility to act as the provider of last resort; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scC/s54.103/4"> <num value="4">(4)</num> <content>the ability of the exchange, not the company, to support more than one provider of service.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scC/s54.103/d"> <num value="d">(d)</num> <content>Except as provided by Subsections (e) and (f), the commission may grant an application for a certificate only for an area or areas that are contiguous and reasonably compact and cover an area of at least 27 square miles.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scC/s54.103/e"> <num value="e">(e)</num> <content>In an exchange in a county that has a population of less than 500,000 and that is served by an incumbent local exchange company that has more than 31,000 access lines, an area covering less than 27 square miles may be approved if the area is contiguous and reasonably compact and has at least 20,000 access lines.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scC/s54.103/f"> <num value="f">(f)</num> <content>In an exchange of a company that serves fewer than 31,000 access lines in this state, the commission may grant an application only for an area that has boundaries similar to the boundaries of the serving central office that is served by the incumbent local exchange company that holds the certificate of convenience and necessity for the area.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scC/s54.103/g"> <num value="g">(g)</num> <content>Expired.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 1212, Sec. 16, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scC/s54.104"> <num value="54.104">Sec. 54.104.</num> <heading>TIME OF SERVICE REQUIREMENTS</heading> <subsection identifier="/us/tx/ut/t2/c54/scC/s54.104/a"> <num value="a">(a)</num> <content>The commission by rule may prescribe the period within which a certificate holder must be able to serve customers.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scC/s54.104/b"> <num value="b">(b)</num> <content>Notwithstanding Subsection (a), a certificate holder must serve a customer not later than the 30th day after the date the customer requests service.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, Sept. 1, 1997. Renumbered from Sec. 54.106 and amended by Acts 1999, 76th Leg., ch. 1212, Sec. 16, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scC/s54.105"> <num value="54.105">Sec. 54.105.</num> <heading>PENALTY FOR VIOLATION OF TITLE</heading> <chapeau>If a certificate holder fails to comply with a requirement of this title, the commission may:</chapeau> <paragraph identifier="/us/tx/ut/t2/c54/scC/s54.105/1"> <num value="1">(1)</num> <content>revoke the holder's certificate;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scC/s54.105/2"> <num value="2">(2)</num> <content>impose against the holder administrative penalties under Subchapter B, Chapter 15; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scC/s54.105/3"> <num value="3">(3)</num> <content>take another action under Subchapter B, Chapter 15.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Renumbered from Sec. 54.111 by Acts 1999, 76th Leg., ch. 1212, Sec. 16, eff. Sept. 1, 1999.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c54/scD"> <num value="D">SUBCHAPTER D.</num> <heading>SERVICE PROVIDER CERTIFICATE OF OPERATING AUTHORITY</heading> <section identifier="/us/tx/ut/t2/c54/scD/s54.151"> <num value="54.151">Sec. 54.151.</num> <heading>DEFINITION</heading> <content>In this subchapter, "certificate" means a service provider certificate of operating authority.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scD/s54.152"> <num value="54.152">Sec. 54.152.</num> <heading>LIMITATION ON GRANT OF CERTIFICATE</heading> <chapeau>The commission may not grant a certificate to a holder of a:</chapeau> <paragraph identifier="/us/tx/ut/t2/c54/scD/s54.152/1"> <num value="1">(1)</num> <content>certificate of convenience and necessity for the same territory; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scD/s54.152/2"> <num value="2">(2)</num> <content>certificate of operating authority for the same territory.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scD/s54.153"> <num value="54.153">Sec. 54.153.</num> <heading>ELIGIBILITY FOR CERTIFICATE</heading> <subsection identifier="/us/tx/ut/t2/c54/scD/s54.153/a"> <num value="a">(a)</num> <chapeau>A company is not eligible to obtain a certificate under this subchapter if the company, together with affiliates, had more than six percent of the total intrastate switched access minutes of use as measured for the most recent 12-month period:</chapeau> <paragraph identifier="/us/tx/ut/t2/c54/scD/s54.153/1"> <num value="1">(1)</num> <content>that precedes the date the application is filed; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scD/s54.153/2"> <num value="2">(2)</num> <content>for which the access information is available.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scD/s54.153/b"> <num value="b">(b)</num> <content>The commission shall obtain information necessary to determine eligibility from the incumbent local exchange telephone companies and the applicant.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scD/s54.153/c"> <num value="c">(c)</num> <content>The commission shall certify eligibility not later than the 10th day after the date the application is filed.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scD/s54.153/d"> <num value="d">(d)</num> <chapeau>In this section:</chapeau> <paragraph identifier="/us/tx/ut/t2/c54/scD/s54.153/1"> <num value="1">(1)</num> <content>"Affiliate" means an entity that, directly or indirectly, owns or controls, is owned or controlled by, or is under common ownership or control with a company that applies for a certificate under this subchapter.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scD/s54.153/2"> <num value="2">(2)</num> <content>"Control" means to exercise substantial influence over the policies and actions of another.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scD/s54.154"> <num value="54.154">Sec. 54.154.</num> <heading>APPLICATION FOR CERTIFICATE</heading> <subsection identifier="/us/tx/ut/t2/c54/scD/s54.154/a"> <num value="a">(a)</num> <content>The commission may grant a certificate to encourage an innovative, competitive, and entrepreneurial business to provide telecommunications services.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scD/s54.154/b"> <num value="b">(b)</num> <chapeau>An applicant for a certificate must:</chapeau> <paragraph identifier="/us/tx/ut/t2/c54/scD/s54.154/1"> <num value="1">(1)</num> <chapeau>file with the application:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c54/scD/s54.154/A"> <num value="A">(A)</num> <content>a sworn statement that the applicant has applied for each municipal consent, franchise, or permit required for the type of services and facilities for which the applicant has applied; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c54/scD/s54.154/B"> <num value="B">(B)</num> <content>a description of the services the applicant will provide;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scD/s54.154/2"> <num value="2">(2)</num> <content>show the areas in which the applicant will provide the services;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scD/s54.154/3"> <num value="3">(3)</num> <content>demonstrate that the applicant has the financial and technical ability to provide services; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scD/s54.154/4"> <num value="4">(4)</num> <content>demonstrate that the services will meet the requirements of this subchapter.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scD/s54.155"> <num value="54.155">Sec. 54.155.</num> <heading>GRANT OR DENIAL OF CERTIFICATE</heading> <subsection identifier="/us/tx/ut/t2/c54/scD/s54.155/a"> <num value="a">(a)</num> <content>The commission must grant or deny a certificate not later than the 60th day after the date the application for the certificate is filed. The commission may extend the deadline on good cause shown.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scD/s54.155/b"> <num value="b">(b)</num> <chapeau>The commission shall grant each certificate on a nondiscriminatory basis after considering factors such as:</chapeau> <paragraph identifier="/us/tx/ut/t2/c54/scD/s54.155/1"> <num value="1">(1)</num> <content>the technical and financial qualifications of the applicant; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scD/s54.155/2"> <num value="2">(2)</num> <content>the applicant's ability to meet the commission's quality of service requirements.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scD/s54.156"> <num value="54.156">Sec. 54.156.</num> <heading>RESALE OF SERVICES</heading> <subsection identifier="/us/tx/ut/t2/c54/scD/s54.156/a"> <num value="a">(a)</num> <content>A certificate holder may obtain services under the resale tariffs approved by the commission under Subchapter C, Chapter 60, except in a certificated area of a company that serves fewer than 31,000 access lines.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scD/s54.156/b"> <num value="b">(b)</num> <content>A certificate holder may obtain for resale the monthly recurring flat rate local exchange telephone service and associated nonrecurring charges, including any mandatory extended area service, of an incumbent local exchange company at a five percent discount to the tariffed rate.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scD/s54.156/c"> <num value="c">(c)</num> <chapeau>The incumbent local exchange company shall sell a feature service that may be provided to a customer in conjunction with local exchange service at a five percent discount to the tariffed rate, including any associated nonrecurring charge for those services, provided that the incumbent local exchange company shall make available to a certificate holder, at an additional five percent discount, any discounts made available to customers of the incumbent local exchange company who are similarly situated to the customers of the certificate holder. In this subsection "feature service" includes:</chapeau> <paragraph identifier="/us/tx/ut/t2/c54/scD/s54.156/1"> <num value="1">(1)</num> <content>toll restriction;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scD/s54.156/2"> <num value="2">(2)</num> <content>call control options;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scD/s54.156/3"> <num value="3">(3)</num> <content>tone dialing;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scD/s54.156/4"> <num value="4">(4)</num> <content>custom calling; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scD/s54.156/5"> <num value="5">(5)</num> <content>caller identification.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scD/s54.156/d"> <num value="d">(d)</num> <content>A certificate holder and an incumbent local exchange company may agree to a rate lower than the tariffed rate or discounted rate.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scD/s54.156/e"> <num value="e">(e)</num> <content>The five percent discounts provided by this section do not apply in an exchange of a company that has fewer than 31,000 access lines in this state.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scD/s54.156/f"> <num value="f">(f)</num> <content>If the tariffed rate for a resold service changes, the five percent discount prescribed by this section applies to the changed rate. The commission may not, for certificate holders, create a special class for purposes of resold services.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scD/s54.156/g"> <num value="g">(g)</num> <chapeau>A certificate holder:</chapeau> <paragraph identifier="/us/tx/ut/t2/c54/scD/s54.156/1"> <num value="1">(1)</num> <content>may not use a resold flat rate local exchange telephone service to avoid the rates and terms of an incumbent local exchange company's tariffs;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scD/s54.156/2"> <num value="2">(2)</num> <content>may not terminate both flat rate local exchange telephone service and services obtained under the resale tariff approved under Section 60.041 on the same end user customer's premises;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scD/s54.156/3"> <num value="3">(3)</num> <content>may not use resold flat rate local exchange telephone services to provide access services to another interexchange carrier, cellular carrier, competitive access provider, or retail telecommunications provider, but may permit customers to use resold local exchange telephone services to access such a carrier or provider;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scD/s54.156/4"> <num value="4">(4)</num> <content>may sell the flat rate local exchange telephone service only to the same class of customers to which the incumbent local exchange company sells that service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scD/s54.156/5"> <num value="5">(5)</num> <content>may obtain services offered by or negotiated with a holder of a certificate of convenience and necessity or a certificate of operating authority; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scD/s54.156/6"> <num value="6">(6)</num> <content>may obtain for resale single or multiple line flat rate intraLATA calling service when provided by the local exchange company at the tariffed rate for online digital communications.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scD/s54.157"> <num value="54.157">Sec. 54.157.</num> <heading>OPTIONAL EXTENDED AREA SERVICE OR EXPANDED LOCAL CALLING SERVICE</heading> <subsection identifier="/us/tx/ut/t2/c54/scD/s54.157/a"> <num value="a">(a)</num> <chapeau>A certificate holder may purchase for resale:</chapeau> <paragraph identifier="/us/tx/ut/t2/c54/scD/s54.157/1"> <num value="1">(1)</num> <content>optional extended area service; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scD/s54.157/2"> <num value="2">(2)</num> <content>expanded local calling service.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scD/s54.157/b"> <num value="b">(b)</num> <content>The purchase of optional extended area service and expanded local calling service may not be discounted.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scD/s54.158"> <num value="54.158">Sec. 54.158.</num> <heading>INTERFERENCE WITH RESOLD SERVICES PROHIBITED</heading> <chapeau>An incumbent local exchange company may not:</chapeau> <paragraph identifier="/us/tx/ut/t2/c54/scD/s54.158/1"> <num value="1">(1)</num> <content>delay providing or maintaining a service provided under this subchapter;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scD/s54.158/2"> <num value="2">(2)</num> <content>degrade the quality of access the company provides to another provider;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scD/s54.158/3"> <num value="3">(3)</num> <content>impair the speed, quality, or efficiency of a line used by another provider;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scD/s54.158/4"> <num value="4">(4)</num> <content>fail to fully disclose in a timely manner after a request all available information necessary for a certificate holder to provide resale services; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scD/s54.158/5"> <num value="5">(5)</num> <content>refuse to take a reasonable action to allow a certificate holder efficient access to the company's ordering, billing, or repair management system.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scD/s54.159"> <num value="54.159">Sec. 54.159.</num> <heading>RETENTION OF ACCESS SERVICE AND INTRALATA TOLL SERVICE</heading> <content>An incumbent local exchange company that sells flat rate local exchange telephone service to a certificate holder may retain all access service and "1-plus" intraLATA toll service that originates over the resold flat rate local exchange telephone service.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c54/scE"> <num value="E">SUBCHAPTER E.</num> <heading>MUNICIPALITIES</heading> <section identifier="/us/tx/ut/t2/c54/scE/s54.201"> <num value="54.201">Sec. 54.201.</num> <heading>CERTIFICATION PROHIBITED</heading> <chapeau>The commission may not grant to a municipality a:</chapeau> <paragraph identifier="/us/tx/ut/t2/c54/scE/s54.201/1"> <num value="1">(1)</num> <content>certificate of convenience and necessity;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scE/s54.201/2"> <num value="2">(2)</num> <content>certificate of operating authority; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scE/s54.201/3"> <num value="3">(3)</num> <content>service provider certificate of operating authority.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scE/s54.202"> <num value="54.202">Sec. 54.202.</num> <heading>PROHIBITED MUNICIPAL SERVICES</heading> <subsection identifier="/us/tx/ut/t2/c54/scE/s54.202/a"> <num value="a">(a)</num> <chapeau>A municipality or municipal electric system may not offer for sale to the public:</chapeau> <paragraph identifier="/us/tx/ut/t2/c54/scE/s54.202/1"> <num value="1">(1)</num> <content>a service for which a certificate of convenience and necessity, a certificate of operating authority, or a service provider certificate of operating authority is required; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scE/s54.202/2"> <num value="2">(2)</num> <chapeau>a nonswitched telecommunications service used to connect a customer's premises with:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c54/scE/s54.202/A"> <num value="A">(A)</num> <content>another customer's premises within the exchange; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c54/scE/s54.202/B"> <num value="B">(B)</num> <content>a long distance provider that serves the exchange.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scE/s54.202/b"> <num value="b">(b)</num> <content>Subsection (a) applies to a service offered either directly or indirectly through a telecommunications provider.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scE/s54.202/c"> <num value="c">(c)</num> <content>This section may not be construed to prevent a municipally owned utility from providing to its energy customers, either directly or indirectly, any energy related service involving the transfer or receipt of information or data concerning the use, measurement, monitoring, or management of energy utility services provided by the municipally owned utility, including services such as load management or automated meter reading.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 5, eff. September 7, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scE/s54.2025"> <num value="54.2025">Sec. 54.2025.</num> <heading>LEASE OF FIBER OPTIC CABLE FACILITIES</heading> <content>Nothing in this subchapter shall prevent a municipality, or a municipal electric system that is a member of a municipal power agency formed under Chapter 163 by adoption of a concurrent resolution by the participating municipalities on or before August 1, 1975, from leasing any of the excess capacity of its fiber optic cable facilities (dark fiber), so long as the rental of the fiber facilities is done on a nondiscriminatory, nonpreferential basis.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 17, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scE/s54.203"> <num value="54.203">Sec. 54.203.</num> <heading>SERVICE IN ANNEXED OR INCORPORATED AREA</heading> <subsection identifier="/us/tx/ut/t2/c54/scE/s54.203/a"> <num value="a">(a)</num> <content>If an area is or will be included within a municipality as the result of annexation, incorporation, or another reason, each telecommunications utility that holds or is entitled to hold a certificate under this title to provide service or operate a facility in the area before the inclusion has the right to continue to provide the service or operate the facility and extend service in the utility's certificated area within the annexed or incorporated area under the rights granted by the certificate and this title.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scE/s54.203/b"> <num value="b">(b)</num> <chapeau>Notwithstanding any other law, a certificated telecommunications utility has the right to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c54/scE/s54.203/1"> <num value="1">(1)</num> <content>continue and extend service within the utility's certificated area; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scE/s54.203/2"> <num value="2">(2)</num> <content>use roads, streets, highways, alleys, and public property to furnish retail utility service.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scE/s54.203/c"> <num value="c">(c)</num> <chapeau>The governing body of a municipality may require a certificated telecommunications utility to relocate the utility's facility at the utility's expense to permit the widening or straightening of a street by:</chapeau> <paragraph identifier="/us/tx/ut/t2/c54/scE/s54.203/1"> <num value="1">(1)</num> <content>giving the utility 30 days' notice; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scE/s54.203/2"> <num value="2">(2)</num> <content>specifying the new location for the facility along the right-of-way of the street.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scE/s54.203/d"> <num value="d">(d)</num> <content>This section does not limit the power of a city, town, or village to incorporate or of a municipality to extend its boundaries by annexation.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scE/s54.204"> <num value="54.204">Sec. 54.204.</num> <heading>DISCRIMINATION BY MUNICIPALITY PROHIBITED</heading> <subsection identifier="/us/tx/ut/t2/c54/scE/s54.204/a"> <num value="a">(a)</num> <chapeau>Notwithstanding Section 14.008, a municipality or a municipally owned utility may not discriminate against a certificated telecommunications provider regarding:</chapeau> <paragraph identifier="/us/tx/ut/t2/c54/scE/s54.204/1"> <num value="1">(1)</num> <content>the authorization or placement of a facility in a public right-of-way;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scE/s54.204/2"> <num value="2">(2)</num> <content>access to a building; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scE/s54.204/3"> <num value="3">(3)</num> <content>a municipal utility pole attachment rate or term.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scE/s54.204/b"> <num value="b">(b)</num> <chapeau>In granting consent, a franchise, or a permit for the use of a public street, alley, or right-of-way within its municipal boundaries, a municipality or municipally owned utility may not discriminate in favor of or against a certificated telecommunications provider regarding:</chapeau> <paragraph identifier="/us/tx/ut/t2/c54/scE/s54.204/1"> <num value="1">(1)</num> <content>municipal utility pole attachment or underground conduit rates or terms; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scE/s54.204/2"> <num value="2">(2)</num> <chapeau>the authorization, placement, replacement, or removal of a facility in a public right-of-way and the reasonable compensation for the authorization, placement, replacement, or removal regardless of whether the compensation is in the form of:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c54/scE/s54.204/A"> <num value="A">(A)</num> <content>money;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c54/scE/s54.204/B"> <num value="B">(B)</num> <content>services;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c54/scE/s54.204/C"> <num value="C">(C)</num> <content>use of facilities; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c54/scE/s54.204/D"> <num value="D">(D)</num> <content>another kind of consideration.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scE/s54.204/c"> <num value="c">(c)</num> <content>A municipality or a municipally owned utility may not charge any entity, regardless of the nature of the services provided by that entity, a pole attachment rate or underground conduit rate that exceeds the fee the municipality or municipally owned utility would be permitted to charge under rules adopted by the Federal Communications Commission under 47 U.S.C. Section 224(e) if the municipality's or municipally owned utility's rates were regulated under federal law and the rules of the Federal Communications Commission. In addition, not later than September 1, 2006, a municipality or municipally owned utility shall charge a single, uniform pole attachment or underground conduit rate to all entities that are not affiliated with the municipality or municipally owned utility regardless of the services carried over the networks attached to the poles or underground conduit.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scE/s54.204/d"> <num value="d">(d)</num> <content>Notwithstanding any other law, the commission has the jurisdiction necessary to enforce this section.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 6, eff. September 7, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scE/s54.205"> <num value="54.205">Sec. 54.205.</num> <heading>MUNICIPALITY'S RIGHT TO CONTROL ACCESS</heading> <content>This title does not restrict a municipality's historical right to control and receive reasonable compensation for access to the municipality's public streets, alleys, or rights-of-way or to other public property.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scE/s54.206"> <num value="54.206">Sec. 54.206.</num> <heading>RECOVERY OF MUNICIPAL FEE</heading> <subsection identifier="/us/tx/ut/t2/c54/scE/s54.206/a"> <num value="a">(a)</num> <content>A holder of a certificate of convenience and necessity, a certificate of operating authority, or a service provider certificate of operating authority has the right to collect a fee that a municipality imposes under Section 54.204 or 54.205 through a pro rata charge to the customers in the boundaries of the municipality.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scE/s54.206/b"> <num value="b">(b)</num> <content>The charge may be shown on the customer's bill as a separate line item.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c54/scF"> <num value="F">SUBCHAPTER F.</num> <heading>REGULATION OF SERVICES, AREAS, AND FACILITIES</heading> <section identifier="/us/tx/ut/t2/c54/scF/s54.251"> <num value="54.251">Sec. 54.251.</num> <heading>PROVISION OF SERVICE</heading> <subsection identifier="/us/tx/ut/t2/c54/scF/s54.251/a"> <num value="a">(a)</num> <chapeau>Except as provided by this section, Section 54.252, Section 54.253, and Section 54.254, a telecommunications utility that holds a certificate of convenience and necessity or a certificate of operating authority shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c54/scF/s54.251/1"> <num value="1">(1)</num> <content>offer all basic local telecommunications services to each customer in the utility's certificated area; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scF/s54.251/2"> <num value="2">(2)</num> <content>provide continuous and adequate service in that area.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scF/s54.251/b"> <num value="b">(b)</num> <content>Except as specifically determined otherwise by the commission under this subchapter or Subchapter G of this chapter, and except as provided by Subchapters C and D, Chapter 65, the holder of a certificate of convenience and necessity for an area has the obligations of a provider of last resort regardless of whether another provider has a certificate of operating authority or service provider certificate of operating authority for that area.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scF/s54.251/c"> <num value="c">(c)</num> <content>A certificate holder may meet the holder's provider of last resort obligations using any available technology. Notwithstanding any provision of Chapter 56, the commission may adjust disbursements from the universal service fund to companies using technologies other than traditional wireline or landline technologies to meet provider of last resort obligations. As determined by the commission, the certificate holder shall meet minimum quality of service standards, including standards for 911 service, comparable to those established for traditional wireline or landline technologies and shall offer services at a price comparable to the monthly service charge for comparable services in that exchange or the provider's nearest exchange.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 2003, 78th Leg., ch. 76, Sec. 1, eff. Sept. 1, 2003. Amended by: Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 7, eff. September 7, 2005. Acts 2011, 82nd Leg., R.S., Ch. 98 (S.B. 980), Sec. 6, eff. September 1, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scF/s54.252"> <num value="54.252">Sec. 54.252.</num> <heading>GROUNDS FOR REDUCTION OF SERVICE BY HOLDER OF CERTIFICATE OF CONVENIENCE AND NECESSITY</heading> <subsection identifier="/us/tx/ut/t2/c54/scF/s54.252/a"> <num value="a">(a)</num> <chapeau>Except to the extent otherwise ordered by the commission in accordance with this subchapter, the holder of a certificate of convenience and necessity may not discontinue, reduce, or impair service to any part of the holder's certificated service area except for:</chapeau> <paragraph identifier="/us/tx/ut/t2/c54/scF/s54.252/1"> <num value="1">(1)</num> <content>nonpayment of charges;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scF/s54.252/2"> <num value="2">(2)</num> <content>nonuse; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scF/s54.252/3"> <num value="3">(3)</num> <content>another similar reason that occurs in the usual course of business.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scF/s54.252/b"> <num value="b">(b)</num> <content>A discontinuance, reduction, or impairment of service must be in compliance with and is subject to any condition or restriction the commission prescribes.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 2003, 78th Leg., ch. 76, Sec. 2, eff. Sept. 1, 2003.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scF/s54.253"> <num value="54.253">Sec. 54.253.</num> <heading>DISCONTINUATION OF SERVICE BY CERTAIN CERTIFICATE HOLDERS</heading> <subsection identifier="/us/tx/ut/t2/c54/scF/s54.253/a"> <num value="a">(a)</num> <chapeau>A telecommunications utility that holds a certificate of operating authority or a service provider certificate of operating authority may:</chapeau> <paragraph identifier="/us/tx/ut/t2/c54/scF/s54.253/1"> <num value="1">(1)</num> <content>cease operations in the utility's certificated area; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scF/s54.253/2"> <num value="2">(2)</num> <content>discontinue an optional service that is not essential to providing basic local telecommunications service.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scF/s54.253/b"> <num value="b">(b)</num> <chapeau>Before the telecommunications utility ceases operations or discontinues an optional service, the utility, in the manner required by the commission, must give notice of the intended action to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c54/scF/s54.253/1"> <num value="1">(1)</num> <content>the commission;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scF/s54.253/2"> <num value="2">(2)</num> <content>each affected customer;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scF/s54.253/3"> <num value="3">(3)</num> <content>the Commission on State Emergency Communications;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scF/s54.253/4"> <num value="4">(4)</num> <content>the office; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scF/s54.253/5"> <num value="5">(5)</num> <content>each wholesale provider of telecommunications facilities or services from which the utility has purchased facilities or services.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scF/s54.253/c"> <num value="c">(c)</num> <content>The telecommunications utility is entitled to discontinue an optional service on or after the 61st day after the date the utility gives the notice.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scF/s54.253/d"> <num value="d">(d)</num> <chapeau>The telecommunications utility may not cease operations in its certificated area unless the commission authorizes the utility to cease operations and:</chapeau> <paragraph identifier="/us/tx/ut/t2/c54/scF/s54.253/1"> <num value="1">(1)</num> <content>another provider of basic local telecommunications services has adequate facilities and capacity to serve the customers in the certificated area; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scF/s54.253/2"> <num value="2">(2)</num> <content>the utility is an "exiting utility," as that term is defined by Section 54.301, no other telecommunications utility has facilities sufficient to provide basic local telecommunications service in the defined geographic area, and the utility acts in good faith to provide for a transition of the utility's existing basic local telecommunications service customers to another holder of a certificate for that area.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scF/s54.253/e"> <num value="e">(e)</num> <content>The commission may not authorize the telecommunications utility to cease operations under Subsection (d) before the 61st day after the date the utility gives the notice required by Subsection (b). Unless the commission receives a complaint from an affected person, the commission may enter an order under this subsection administratively.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 2003, 78th Leg., ch. 76, Sec. 3, eff. Sept. 1, 2003.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scF/s54.254"> <num value="54.254">Sec. 54.254.</num> <heading>REQUIRED REFUSAL OF SERVICE</heading> <content>A holder of a certificate of convenience and necessity, a certificate of operating authority, or a service provider certificate of operating authority shall refuse to serve a customer in the holder's certificated area if the holder is prohibited from providing the service under Section 212.012, 232.029, or 232.0291, Local Government Code.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2005, 79th Leg., Ch. 708 (S.B. 425), Sec. 14, eff. September 1, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scF/s54.255"> <num value="54.255">Sec. 54.255.</num> <heading>TRANSFER OF CERTAIN CERTIFICATES</heading> <subsection identifier="/us/tx/ut/t2/c54/scF/s54.255/a"> <num value="a">(a)</num> <content>A telecommunications utility may sell, assign, or lease a certificate of convenience and necessity or a certificate of operating authority or a right obtained under such a certificate if the commission determines that the purchaser, assignee, or lessee can provide adequate service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scF/s54.255/b"> <num value="b">(b)</num> <content>The sale, assignment, or lease of a certificate or a right is subject to conditions the commission prescribes.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scF/s54.256"> <num value="54.256">Sec. 54.256.</num> <heading>APPLICATION OF CONTRACTS</heading> <chapeau>A contract approved by the commission between telecommunications utilities that designates areas and customers to be served by the utilities:</chapeau> <paragraph identifier="/us/tx/ut/t2/c54/scF/s54.256/1"> <num value="1">(1)</num> <content>is valid and enforceable; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scF/s54.256/2"> <num value="2">(2)</num> <content>shall be incorporated into the appropriate areas of certification.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scF/s54.257"> <num value="54.257">Sec. 54.257.</num> <heading>INTERFERENCE WITH ANOTHER TELECOMMUNICATIONS UTILITY</heading> <chapeau>If a telecommunications utility constructing or extending the utility's lines, plant, or system interferes or attempts to interfere with the operation of a line, plant, or system of another utility, the commission by order may:</chapeau> <paragraph identifier="/us/tx/ut/t2/c54/scF/s54.257/1"> <num value="1">(1)</num> <content>prohibit the construction or extension; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scF/s54.257/2"> <num value="2">(2)</num> <content>prescribe terms for locating the affected lines, plants, or systems.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scF/s54.258"> <num value="54.258">Sec. 54.258.</num> <heading>MAPS</heading> <content>A public utility shall file with the commission one or more maps that show each utility facility and that separately illustrate each utility facility for transmission or distribution of the utility's services on a date the commission orders.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scF/s54.259"> <num value="54.259">Sec. 54.259.</num> <heading>DISCRIMINATION BY PROPERTY OWNER PROHIBITED</heading> <subsection identifier="/us/tx/ut/t2/c54/scF/s54.259/a"> <num value="a">(a)</num> <chapeau>If a telecommunications utility holds a consent, franchise, or permit as determined to be the appropriate grants of authority by the municipality and holds a certificate if required by this title, a public or private property owner may not:</chapeau> <paragraph identifier="/us/tx/ut/t2/c54/scF/s54.259/1"> <num value="1">(1)</num> <content>prevent the utility from installing on the owner's property a telecommunications service facility a tenant requests;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scF/s54.259/2"> <num value="2">(2)</num> <content>interfere with the utility's installation on the owner's property of a telecommunications service facility a tenant requests;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scF/s54.259/3"> <num value="3">(3)</num> <content>discriminate against such a utility regarding installation, terms, or compensation of a telecommunications service facility to a tenant on the owner's property;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scF/s54.259/4"> <num value="4">(4)</num> <content>demand or accept an unreasonable payment of any kind from a tenant or the utility for allowing the utility on or in the owner's property; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scF/s54.259/5"> <num value="5">(5)</num> <content>discriminate in favor of or against a tenant in any manner, including rental charge discrimination, because of the utility from which the tenant receives a telecommunications service.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scF/s54.259/b"> <num value="b">(b)</num> <chapeau>Subsection (a) does not apply to an institution of higher education. In this subsection, "institution of higher education" means:</chapeau> <paragraph identifier="/us/tx/ut/t2/c54/scF/s54.259/1"> <num value="1">(1)</num> <content>an institution of higher education as defined by Section 61.003, Education Code; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scF/s54.259/2"> <num value="2">(2)</num> <content>a private or independent institution of higher education as defined by Section 61.003, Education Code.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scF/s54.259/c"> <num value="c">(c)</num> <content>Notwithstanding any other law, the commission has the jurisdiction to enforce this section.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scF/s54.260"> <num value="54.260">Sec. 54.260.</num> <heading>PROPERTY OWNER'S CONDITIONS</heading> <subsection identifier="/us/tx/ut/t2/c54/scF/s54.260/a"> <num value="a">(a)</num> <chapeau>Notwithstanding Section 54.259, if a telecommunications utility holds a municipal consent, franchise, or permit as determined to be the appropriate grant of authority by the municipality and holds a certificate if required by this title, a public or private property owner may:</chapeau> <paragraph identifier="/us/tx/ut/t2/c54/scF/s54.260/1"> <num value="1">(1)</num> <chapeau>impose a condition on the utility that is reasonably necessary to protect:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c54/scF/s54.260/A"> <num value="A">(A)</num> <content>the safety, security, appearance, and condition of the property; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c54/scF/s54.260/B"> <num value="B">(B)</num> <content>the safety and convenience of other persons;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scF/s54.260/2"> <num value="2">(2)</num> <content>impose a reasonable limitation on the time at which the utility may have access to the property to install a telecommunications service facility;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scF/s54.260/3"> <num value="3">(3)</num> <content>impose a reasonable limitation on the number of such utilities that have access to the owner's property, if the owner can demonstrate a space constraint that requires the limitation;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scF/s54.260/4"> <num value="4">(4)</num> <content>require the utility to agree to indemnify the owner for damage caused installing, operating, or removing a facility;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scF/s54.260/5"> <num value="5">(5)</num> <content>require the tenant or the utility to bear the entire cost of installing, operating, or removing a facility; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scF/s54.260/6"> <num value="6">(6)</num> <content>require the utility to pay compensation that is reasonable and nondiscriminatory among such telecommunications utilities.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scF/s54.260/b"> <num value="b">(b)</num> <content>Notwithstanding any other law, the commission has the jurisdiction to enforce this section.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scF/s54.261"> <num value="54.261">Sec. 54.261.</num> <heading>SHARED TENANT SERVICES CONTRACT</heading> <content>Sections 54.259 and 54.260 do not require a public or private property owner to enter into a contract with a telecommunications utility to provide shared tenant services on a property.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c54/scG"> <num value="G">SUBCHAPTER G.</num> <heading>PROVIDER OF LAST RESORT</heading> <section identifier="/us/tx/ut/t2/c54/scG/s54.301"> <num value="54.301">Sec. 54.301.</num> <heading>DEFINITIONS</heading> <chapeau>In this subchapter:</chapeau> <paragraph identifier="/us/tx/ut/t2/c54/scG/s54.301/1"> <num value="1">(1)</num> <chapeau>"Exiting utility" means a telecommunications utility that:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c54/scG/s54.301/A"> <num value="A">(A)</num> <content>holds a certificate of operating authority or a service provider certificate of operating authority;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c54/scG/s54.301/B"> <num value="B">(B)</num> <content>is the predominant provider of basic local telecommunications service in a defined geographic area and provides those services using the utility's own facilities; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c54/scG/s54.301/C"> <num value="C">(C)</num> <content>ceases operations in all or part of the utility's certificated service area under Section 54.253 or 54.303.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scG/s54.301/2"> <num value="2">(2)</num> <content>"Provider of last resort" means a certificated telecommunications utility that must offer basic local telecommunications service throughout a defined geographic area.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scG/s54.301/3"> <num value="3">(3)</num> <content>"Successor utility" means a telecommunications utility that holds a certificate of convenience and necessity, certificate of operating authority, or service provider certificate of operating authority, and that is or is designated to become the provider of last resort for the defined geographic area previously served by an exiting utility.</content> </paragraph> <sourceCredit>Added by Acts 2003, 78th Leg., ch. 76, Sec. 4, eff. Sept. 1, 2003.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scG/s54.3015"> <num value="54.3015">Sec. 54.3015.</num> <heading>APPLICABILITY OF SUBCHAPTER</heading> <content>This subchapter applies to a transitioning company under Chapter 65 in relation to its regulated exchanges in the same manner and to the same extent this subchapter applies to a holder of a certificate of convenience and necessity.</content> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 8, eff. September 7, 2005. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 98 (S.B. 980), Sec. 7, eff. September 1, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scG/s54.302"> <num value="54.302">Sec. 54.302.</num> <heading>PROVIDER OF LAST RESORT; FACILITIES-BASED PROVIDERS</heading> <subsection identifier="/us/tx/ut/t2/c54/scG/s54.302/a"> <num value="a">(a)</num> <content>Notwithstanding any other provision of this title, if a telecommunications utility installs facilities to serve customers located in a defined geographic area to provide telecommunications services, including basic local telecommunications service, before the holder of the certificate of convenience and necessity installs facilities to serve customers located in that defined geographic area, the holder of the certificate of convenience and necessity may petition the commission for an order relieving the utility of the utility's designation as the provider of last resort in that defined geographic area.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scG/s54.302/b"> <num value="b">(b)</num> <chapeau>The commission shall relieve the holder of the certificate of convenience and necessity of the obligations of service as the provider of last resort for the defined geographic area, and the commission shall designate the facilities-based telecommunications utility as the provider of last resort if the commission determines that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c54/scG/s54.302/1"> <num value="1">(1)</num> <content>the holder of the certificate of convenience and necessity does not have facilities in place to provide basic local telecommunications service to all customers within that defined geographic area;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scG/s54.302/2"> <num value="2">(2)</num> <content>another certificated telecommunications utility has installed facilities adequate to provide that service throughout that area; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scG/s54.302/3"> <num value="3">(3)</num> <content>the public interest would be served by transferring the provider of last resort obligations for that area.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scG/s54.302/c"> <num value="c">(c)</num> <content>The commission shall complete proceedings necessary to make the determinations prescribed by this section not later than the 91st day after the date the petition is filed under Subsection (a).</content> </subsection> <sourceCredit>Added by Acts 2003, 78th Leg., ch. 76, Sec. 4, eff. Sept. 1, 2003.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scG/s54.303"> <num value="54.303">Sec. 54.303.</num> <heading>SUCCESSOR TELECOMMUNICATIONS UTILITY WHEN NO SUFFICIENT FACILITIES EXIST</heading> <subsection identifier="/us/tx/ut/t2/c54/scG/s54.303/a"> <num value="a">(a)</num> <chapeau>When the commission obtains notice as required under Section 54.253 or otherwise that a utility intends to become an exiting utility and no other telecommunications utility has facilities sufficient to provide basic local telecommunications service in that defined geographic area, the commission shall open a contested case proceeding to determine:</chapeau> <paragraph identifier="/us/tx/ut/t2/c54/scG/s54.303/1"> <num value="1">(1)</num> <content>the identity of the successor utility under this section; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scG/s54.303/2"> <num value="2">(2)</num> <content>the amount of universal service funding under Subchapter G, Chapter 56, to be made available to the successor utility.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scG/s54.303/b"> <num value="b">(b)</num> <chapeau>On designation as the successor utility under this section, the commission, if applicable, shall provide to the successor utility:</chapeau> <paragraph identifier="/us/tx/ut/t2/c54/scG/s54.303/1"> <num value="1">(1)</num> <content>a reasonable time, in accordance with industry practices and not subject to otherwise applicable commission service quality rules or standards, to modify, construct, or obtain facilities necessary to serve the customers of the exiting telecommunications utility; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scG/s54.303/2"> <num value="2">(2)</num> <content>an exemption on a transitional basis from any obligation to unbundle the utility's network elements or to provide service for resale within that defined geographic area for nine months or another reasonable period the commission may authorize as necessary to modify the utility's network to provide that unbundling or resale.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scG/s54.303/c"> <num value="c">(c)</num> <content>A customer within the defined geographic area to be served by the successor utility is considered to have applied for service from the successor utility on the effective date of that designation by the commission. Each right, privilege, and obligation of being a customer of the successor utility applies to that customer and the customer is subject to the successor utility's applicable terms of service as specified in an applicable tariff or contract.</content> </subsection> <sourceCredit>Added by Acts 2003, 78th Leg., ch. 76, Sec. 4, eff. Sept. 1, 2003.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scG/s54.304"> <num value="54.304">Sec. 54.304.</num> <heading>ABANDONMENT OR CESSATION BY FACILITIES-BASED PROVIDER; EMERGENCY RESTORATION</heading> <subsection identifier="/us/tx/ut/t2/c54/scG/s54.304/a"> <num value="a">(a)</num> <chapeau>The commission, on its own motion or on the petition of an interested party, may institute an expedited proceeding under this section if the commission finds that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c54/scG/s54.304/1"> <num value="1">(1)</num> <content>a holder of a certificate of operating authority or service provider certificate of operating authority is the predominant provider of basic local telecommunications service in a defined geographic area and the utility provides that service using the utility's own facilities;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scG/s54.304/2"> <num value="2">(2)</num> <content>no other telecommunications utility has facilities sufficient to provide basic local telecommunications service in that defined geographic area; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scG/s54.304/3"> <num value="3">(3)</num> <chapeau>the holder of the certificate of operating authority or service provider certificate of operating authority has:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c54/scG/s54.304/A"> <num value="A">(A)</num> <content>ceased providing basic local telecommunications service to the utility's customers in that defined geographic area; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c54/scG/s54.304/B"> <num value="B">(B)</num> <content>abandoned the operation of the utility's facilities in the defined geographic area that are used to provide basic local telecommunications service.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scG/s54.304/b"> <num value="b">(b)</num> <chapeau>In a proceeding under this section, the commission may declare that an emergency exists and issue any order necessary to protect the health, safety, and welfare of affected customers of the utility and to expedite the restoration and continuation of basic local telecommunications service to those customers. An order issued by the commission under this subsection may include an order to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c54/scG/s54.304/1"> <num value="1">(1)</num> <content>provide for a temporary arrangement for operation of the utility's facilities by an uncertificated entity that agrees to provide service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scG/s54.304/2"> <num value="2">(2)</num> <content>authorize one or more third parties to enter the premises of the abandoned facilities; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c54/scG/s54.304/3"> <num value="3">(3)</num> <content>grant temporary waivers from quality of service requirements.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scG/s54.304/c"> <num value="c">(c)</num> <content>The commission may designate a successor utility in accordance with Section 54.303 during a proceeding under this section.</content> </subsection> <sourceCredit>Added by Acts 2003, 78th Leg., ch. 76, Sec. 4, eff. Sept. 1, 2003.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c54/scG/s54.305"> <num value="54.305">Sec. 54.305.</num> <heading>COMMISSION PARTICIPATION IN BANKRUPTCY PROCEEDINGS</heading> <subsection identifier="/us/tx/ut/t2/c54/scG/s54.305/a"> <num value="a">(a)</num> <content>The commission, on written notice that a certificated telecommunications utility has filed a petition in bankruptcy or is the subject of an involuntary petition in bankruptcy, may inform the appropriate court and parties of the commission's interest in obtaining notice of proceedings.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scG/s54.305/b"> <num value="b">(b)</num> <content>Within the time prescribed by the applicable statutes, rules, and court orders, the commission may intervene and participate in any bankruptcy proceedings that affect customers or providers of telecommunications services in this state.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c54/scG/s54.305/c"> <num value="c">(c)</num> <content>The office may inform the appropriate court and parties of the office's interest in obtaining notice of the proceedings. Within the time prescribed by the applicable statutes, rules, and court orders, the office may intervene and participate in any bankruptcy proceeding on behalf of residential and small commercial customers.</content> </subsection> <sourceCredit>Added by Acts 2003, 78th Leg., ch. 76, Sec. 4, eff. Sept. 1, 2003.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t2/c55"> <num value="55">CHAPTER 55.</num> <heading>REGULATION OF TELECOMMUNICATIONS SERVICES</heading> <subchapter identifier="/us/tx/ut/t2/c55/scA"> <num value="A">SUBCHAPTER A.</num> <heading>GENERAL PROVISIONS</heading> <section identifier="/us/tx/ut/t2/c55/scA/s55.001"> <num value="55.001">Sec. 55.001.</num> <heading>GENERAL STANDARD</heading> <content>A public utility shall furnish service, instrumentalities, and facilities that are safe, adequate, efficient, and reasonable.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scA/s55.002"> <num value="55.002">Sec. 55.002.</num> <heading>COMMISSION AUTHORITY CONCERNING STANDARDS</heading> <chapeau>The commission, on its own motion or on complaint and after reasonable notice and hearing, may:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scA/s55.002/1"> <num value="1">(1)</num> <content>adopt just and reasonable standards, classifications, rules, or practices a public utility must follow in furnishing a service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scA/s55.002/2"> <num value="2">(2)</num> <content>adopt adequate and reasonable standards for measuring a condition, including quantity and quality, relating to the furnishing of a service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scA/s55.002/3"> <num value="3">(3)</num> <content>adopt reasonable rules for examining, testing, and measuring a service; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scA/s55.002/4"> <num value="4">(4)</num> <content>adopt or approve reasonable rules, specifications, and standards to ensure the accuracy of equipment, including meters and instruments, used to measure a service.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scA/s55.003"> <num value="55.003">Sec. 55.003.</num> <heading>RULE OR STANDARD</heading> <subsection identifier="/us/tx/ut/t2/c55/scA/s55.003/a"> <num value="a">(a)</num> <content>A public utility may not impose a rule except as provided by this title.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scA/s55.003/b"> <num value="b">(b)</num> <content>A public utility may file with the commission a standard, classification, rule, or practice the utility follows.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scA/s55.003/c"> <num value="c">(c)</num> <chapeau>The standard, classification, rule, or practice continues in force until:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scA/s55.003/1"> <num value="1">(1)</num> <content>amended by the utility; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scA/s55.003/2"> <num value="2">(2)</num> <content>changed by the commission as provided by this subtitle.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scA/s55.004"> <num value="55.004">Sec. 55.004.</num> <heading>LOCAL EXCHANGE COMPANY RULE OR PRACTICE CHANGE</heading> <subsection identifier="/us/tx/ut/t2/c55/scA/s55.004/a"> <num value="a">(a)</num> <content>To make a change in an incumbent local exchange company's tariffed rules or practices that does not affect the company's charges or rates, the company must file the proposed change with the commission at least 35 days before the effective date of the change. The commission may require the incumbent local exchange company to provide to ratepayers appropriate notice as determined by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scA/s55.004/b"> <num value="b">(b)</num> <content>The commission, on complaint by an affected person or on its own motion and after reasonable notice, may hold a hearing to determine the propriety of a change proposed under this section. Pending the hearing and decision, the commission may suspend the change for not longer than 120 days after the date the change would otherwise be effective. The commission shall approve, deny, or modify the change before the period of suspension expires.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scA/s55.004/c"> <num value="c">(c)</num> <chapeau>In a proceeding under this section, the incumbent local exchange company has the burden of proving the proposed change:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scA/s55.004/1"> <num value="1">(1)</num> <content>is in the public interest; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scA/s55.004/2"> <num value="2">(2)</num> <content>complies with this title.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scA/s55.005"> <num value="55.005">Sec. 55.005.</num> <heading>UNREASONABLE PREFERENCE OR PREJUDICE CONCERNING SERVICE PROHIBITED</heading> <chapeau>In providing a service to persons in a classification, a public utility may not:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scA/s55.005/1"> <num value="1">(1)</num> <content>grant an unreasonable preference or advantage to a person in the classification; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scA/s55.005/2"> <num value="2">(2)</num> <content>subject a person in the classification to an unreasonable prejudice or disadvantage.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scA/s55.006"> <num value="55.006">Sec. 55.006.</num> <heading>DISCRIMINATION AND RESTRICTION ON COMPETITION</heading> <chapeau>A public utility may not:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scA/s55.006/1"> <num value="1">(1)</num> <content>discriminate against a person who sells or leases equipment or performs services in competition with the public utility; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scA/s55.006/2"> <num value="2">(2)</num> <content>engage in a practice that tends to restrict or impair that competition.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scA/s55.007"> <num value="55.007">Sec. 55.007.</num> <heading>MINIMUM SERVICES</heading> <subsection identifier="/us/tx/ut/t2/c55/scA/s55.007/a"> <num value="a">(a)</num> <chapeau>The commission shall require a holder of a certificate of convenience and necessity or a certificate of operating authority to provide at the applicable tariff rate, if any, to each customer, regardless of race, national origin, income, or residence in an urban or rural area:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scA/s55.007/1"> <num value="1">(1)</num> <content>single-party service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scA/s55.007/2"> <num value="2">(2)</num> <content>tone-dialing service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scA/s55.007/3"> <num value="3">(3)</num> <content>basic custom calling features;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scA/s55.007/4"> <num value="4">(4)</num> <content>equal access for an interLATA interexchange carrier on a bona fide request; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scA/s55.007/5"> <num value="5">(5)</num> <content>digital switching capability in an exchange on customer request, provided by a digital switch in the exchange or by connection to a digital switch in another exchange.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scA/s55.007/b"> <num value="b">(b)</num> <content>Notwithstanding Subsection (a), an electing incumbent local exchange company serving more than 175,000 but fewer than 1,500,000 access lines on January 1, 1995, shall install a digital switch in each central office that serves an exchange of fewer than 20,000 access lines.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scA/s55.007/c"> <num value="c">(c)</num> <content>The commission may temporarily waive a requirement imposed by Subsection (a) or (b) on a showing of good cause.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scA/s55.007/d"> <num value="d">(d)</num> <chapeau>The commission may not consider the cost of implementing this section in determining whether an electing company is entitled to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scA/s55.007/1"> <num value="1">(1)</num> <content>a rate increase under Chapter 58 or 59; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scA/s55.007/2"> <num value="2">(2)</num> <content>increased universal service funds under Subchapter B, Chapter 56.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scA/s55.007/e"> <num value="e">(e)</num> <content>Expired.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scA/s55.008"> <num value="55.008">Sec. 55.008.</num> <heading>IMPROVEMENTS IN SERVICE; INTERCONNECTING SERVICE</heading> <chapeau>The commission, after notice and hearing, may:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scA/s55.008/1"> <num value="1">(1)</num> <chapeau>order a public utility to provide specified improvements in its service in a specified area if:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c55/scA/s55.008/A"> <num value="A">(A)</num> <content>service in the area is inadequate or substantially inferior to service in a comparable area; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c55/scA/s55.008/B"> <num value="B">(B)</num> <content>requiring the company to provide the improved service is reasonable; or</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scA/s55.008/2"> <num value="2">(2)</num> <content>order two or more utilities to establish specified facilities for interconnecting service.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scA/s55.009"> <num value="55.009">Sec. 55.009.</num> <heading>INTRALATA CALLS</heading> <subsection identifier="/us/tx/ut/t2/c55/scA/s55.009/a"> <num value="a">(a)</num> <content>If federal law prohibits a local exchange company in this state from providing interLATA telecommunications services, the local exchange companies in this state designated or de facto authorized to receive a "0-plus" or "1-plus" dialed intraLATA call are exclusively designated or authorized to receive such a call.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scA/s55.009/b"> <num value="b">(b)</num> <content>A telecommunications utility operating under a certificate of operating authority or a service provider certificate of operating authority is de facto authorized to receive a "0-plus" or "1-plus" dialed intraLATA call on the date the utility receives its certificate, to the extent the utility is not restricted by Section 54.159.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scA/s55.009/c"> <num value="c">(c)</num> <chapeau>If federal law allows all local exchange companies to provide interLATA telecommunications services, the commission shall ensure that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scA/s55.009/1"> <num value="1">(1)</num> <content>a customer may designate a provider of the customer's choice to carry the customer's "0-plus" and "1-plus" dialed intraLATA calls; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scA/s55.009/2"> <num value="2">(2)</num> <content>equal access in the public network is implemented to allow the provider to carry those calls.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scA/s55.010"> <num value="55.010">Sec. 55.010.</num> <heading>BILLING FOR SERVICE TO THE STATE</heading> <content>A telecommunications utility providing service to the state, including service to an agency in any branch of state government, may not impose a fee, a penalty, interest, or any other charge for delinquent payment of a bill for that service.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scA/s55.011"> <num value="55.011">Sec. 55.011.</num> <heading>NOTICE OF IDENTITY OF INTEREXCHANGE CARRIER</heading> <subsection identifier="/us/tx/ut/t2/c55/scA/s55.011/a"> <num value="a">(a)</num> <content>A local exchange company shall print on the first page of each bill sent to a customer of the local exchange company the name of the customer's primary interexchange carrier if the company provides billing services for that carrier.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scA/s55.011/b"> <num value="b">(b)</num> <content>The bill must contain instructions on how the customer can contact the commission if the customer believes that the named carrier is not the customer's primary interexchange carrier.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scA/s55.011/c"> <num value="c">(c)</num> <content>The commission may, for good cause, waive the billing requirement prescribed by this section in exchanges served by local exchange companies serving not more than 31,000 access lines.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.04(b), eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scA/s55.013"> <num value="55.013">Sec. 55.013.</num> <heading>LIMITATIONS ON DISCONTINUANCE OF BASIC LOCAL TELECOMMUNICATIONS SERVICE</heading> <subsection identifier="/us/tx/ut/t2/c55/scA/s55.013/a"> <num value="a">(a)</num> <content>A provider of basic local telecommunications service may not discontinue that service because of nonpayment by a residential customer of charges for long distance service. Payment shall first be allocated to basic local telecommunications service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scA/s55.013/b"> <num value="b">(b)</num> <content>For purposes of allocating payment in this section, if the provider of basic local telecommunications service bundles its basic local telecommunications service with long distance service or any other service and provides a discount for the basic local telecommunications service because of that bundling, the rate of basic local telecommunications service shall be the rate the provider charges for stand-alone basic local telecommunications service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scA/s55.013/c"> <num value="c">(c)</num> <chapeau>Notwithstanding Subsection (a), the commission shall adopt and implement rules, not later than January 1, 2000, to prevent customer abuse of the protections afforded by this section. The rules must include:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scA/s55.013/1"> <num value="1">(1)</num> <content>provisions requiring a provider of basic local telecommunications service to offer and implement toll blocking capability to limit a customer's ability to incur additional charges for long distance services after nonpayment for long distance services; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scA/s55.013/2"> <num value="2">(2)</num> <content>provisions regarding fraudulent activity in response to which a provider may discontinue a residential customer's basic local telecommunications service.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scA/s55.013/d"> <num value="d">(d)</num> <content>Notwithstanding any other provision of this title, the commission has all jurisdiction necessary to establish a maximum price that an incumbent local exchange company may charge a long distance service provider to initiate the toll blocking capability required to be offered under the rules adopted under Subsection (c). The maximum price established under this subsection shall be observed by all providers of basic local telecommunications service in the incumbent local exchange company's certificated service area. Notwithstanding Sections 52.102 and 52.152, the commission has all jurisdiction necessary to enforce this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scA/s55.013/e"> <num value="e">(e)</num> <content>A provider of basic local exchange telecommunications service shall comply with the requirements of this section not later than March 1, 2000.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 19, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scA/s55.014"> <num value="55.014">Sec. 55.014.</num> <heading>PROVISION OF ADVANCED TELECOMMUNICATIONS SERVICES</heading> <subsection identifier="/us/tx/ut/t2/c55/scA/s55.014/a"> <num value="a">(a)</num> <content>In this section, "advanced service" means any telecommunications service other than residential or business basic local exchange telephone service, caller identification service, and customer calling features.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scA/s55.014/b"> <num value="b">(b)</num> <content>This section applies to a company electing under Chapter 58 or a company that holds a certificate of operating authority or service provider certificate of operating authority.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scA/s55.014/c"> <num value="c">(c)</num> <chapeau>Notwithstanding any other provision of this title, beginning September 1, 2001, a company to which this section applies that provides advanced telecommunications services within the company's urban service areas, shall, on a bona fide retail request for those services, provide in rural areas of this state served by the company advanced telecommunications services that are reasonably comparable to the advanced services provided in urban areas. The company shall offer the advanced telecommunications services:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scA/s55.014/1"> <num value="1">(1)</num> <content>at prices, terms, and conditions that are reasonably comparable to the prices, terms, and conditions for similar advanced services provided by the company in urban areas; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scA/s55.014/2"> <num value="2">(2)</num> <content>within 15 months after the bona fide request for those advanced services.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scA/s55.014/d"> <num value="d">(d)</num> <chapeau>Notwithstanding any other provision of this title, a company to which this section applies shall, on a bona fide retail request for those services, offer caller identification service and custom calling features in rural areas served by the company. The company shall offer the services:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scA/s55.014/1"> <num value="1">(1)</num> <content>at prices, terms, and conditions reasonably comparable to the company's prices, terms, and conditions for similar services in urban areas; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scA/s55.014/2"> <num value="2">(2)</num> <content>within 15 months after the bona fide request for those services.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scA/s55.014/e"> <num value="e">(e)</num> <chapeau>This section may not be construed to require a company to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scA/s55.014/1"> <num value="1">(1)</num> <content>begin providing services in a rural area in which the company does not provide local exchange telephone service; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scA/s55.014/2"> <num value="2">(2)</num> <content>provide a service in a rural area of this state unless the company provides the service in urban areas of this state.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scA/s55.014/f"> <num value="f">(f)</num> <content>For purposes of this section, a company to which this section applies is considered to provide services in urban areas of this state if the company provides services in a municipality with a population of more than 190,000.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scA/s55.014/g"> <num value="g">(g)</num> <content>Notwithstanding any other provision of this title, the commission has all jurisdiction necessary to enforce this section.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 20, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scA/s55.015"> <num value="55.015">Sec. 55.015.</num> <heading>LIFELINE SERVICE</heading> <subsection identifier="/us/tx/ut/t2/c55/scA/s55.015/a"> <num value="a">(a)</num> <content>The commission shall adopt rules prohibiting a certificated provider of local exchange telephone service from discontinuing basic network services listed in Section 58.051 to a consumer who receives lifeline service because of nonpayment by the consumer of charges for other services billed by the provider, including interexchange telecommunications service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scA/s55.015/b"> <num value="b">(b)</num> <content>The commission shall adopt rules providing for automatic enrollment to receive lifeline service for eligible consumers. The Health and Human Services Commission, on request of the commission, shall assist in the adoption and implementation of those rules. The commission and the Health and Human Services Commission shall enter into a memorandum of understanding establishing the respective duties of those agencies in relation to the automatic enrollment.</content> <continuation>(b-1) The commission shall adopt rules requiring certificated providers of local exchange telephone service to implement procedures to ensure that all consumers are clearly informed both orally and in writing of the existence of the lifeline service program when they request or initiate service or change service locations or providers. On or before June 1, 2006, the commission shall enter into a memorandum of understanding with the Health and Human Services Commission, and, to the maximum extent feasible, housing authorities in the principal cities of each metropolitan statistical area, to improve enrollment rates in the lifeline service program.</continuation> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scA/s55.015/c"> <num value="c">(c)</num> <content>A certificated provider of local exchange telephone service may block a lifeline service participant's access to all interexchange telecommunications service except toll-free numbers when the participant owes an outstanding amount for that service. The provider shall remove the block without additional cost to the participant on payment of the outstanding amount.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scA/s55.015/d"> <num value="d">(d)</num> <content>A certificated provider of local exchange telephone service shall offer a consumer who applies for or receives lifeline service the option of blocking all toll calls or, if technically capable, placing a limit on the amount of toll calls. The provider may not charge the consumer an administrative charge or other additional amount for the blocking service.</content> <continuation>(d-1) A certificated provider of local exchange telephone service shall provide access to lifeline service to a customer whose income is not more than 150 percent of the applicable income level established by the federal poverty guidelines or in whose household resides a person who receives or has a child who receives:</continuation> <paragraph identifier="/us/tx/ut/t2/c55/scA/s55.015/1"> <num value="1">(1)</num> <content>Medicaid;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scA/s55.015/2"> <num value="2">(2)</num> <content>food stamps;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scA/s55.015/3"> <num value="3">(3)</num> <content>Supplemental Security Income;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scA/s55.015/4"> <num value="4">(4)</num> <content>federal public housing assistance;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scA/s55.015/5"> <num value="5">(5)</num> <content>Low Income Home Energy Assistance Program (LIHEAP) assistance; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scA/s55.015/6"> <num value="6">(6)</num> <content>health benefits coverage under the state child health plan under Chapter 62, Health and Safety Code.</content> <continuation>(d-2) A certificated provider of local exchange telephone service shall provide consumers who apply for or receive lifeline service access to available vertical services or custom calling features, including caller ID, call waiting, and call blocking, at the same price as other consumers. Lifeline discounts shall only apply to that portion of the bill that is for basic network service.</continuation> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scA/s55.015/e"> <num value="e">(e)</num> <content>In this section, "lifeline service" means a retail local service offering described by 47 C.F.R. Section 54.401(a), as amended.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 21, eff. Sept. 1, 1999. Amended by: Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 9, eff. September 7, 2005. Acts 2017, 85th Leg., R.S., Ch. 48 (S.B. 1976), Sec. 2, eff. September 1, 2017.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scA/s55.016"> <num value="55.016">Sec. 55.016.</num> <heading>TELECOMMUNICATIONS BILLING</heading> <subsection identifier="/us/tx/ut/t2/c55/scA/s55.016/a"> <num value="a">(a)</num> <content>The proliferation of charges for separate services, products, surcharges, fees, and taxes on a bill for telecommunications products or services has increased the complexity of those bills to such an extent that in some cases the bills have become difficult for customers to understand.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scA/s55.016/b"> <num value="b">(b)</num> <content>A bill from a local exchange company for telecommunications products or services should be consistent with providing customers sufficient information about the charges included in the bill to understand the basis and source of the charges.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scA/s55.016/c"> <num value="c">(c)</num> <content>To the extent permitted by law, a monthly bill from a local exchange company for local exchange telephone service shall clearly identify all charges including basic local service charges, fees, carrier's charges, assessments, surcharges, optional services, and taxes.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scA/s55.016/d"> <num value="d">(d)</num> <content>Local exchange carriers shall annually file a copy of that portion of their bill that has not been previously approved by the commission for compliance review with this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scA/s55.016/e"> <num value="e">(e)</num> <content>The commission shall have all necessary authority to enforce this section.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 18, eff. Mar. 1, 2000. Amended by Acts 2001, 77th Leg., ch. 963, Sec. 1, eff. June 14, 2001. Renumbered from Sec. 55.012 by Acts 2001, 77th Leg., ch. 1420, Sec. 21.001(110), eff. Sept. 1, 2001.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scA/s55.017"> <num value="55.017">Sec. 55.017.</num> <heading>IDENTIFICATION REQUIRED</heading> <subsection identifier="/us/tx/ut/t2/c55/scA/s55.017/a"> <num value="a">(a)</num> <content>A representative of a telecommunications provider or a video or cable service provider that has an easement in or a right-of-way over or through real property must show proof of identification to the owner of the real property when entering the property if requested by the owner.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scA/s55.017/b"> <num value="b">(b)</num> <content>This section does not apply to regularly scheduled service readings or examinations.</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 10, eff. September 7, 2005.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c55/scB"> <num value="B">SUBCHAPTER B.</num> <heading>EXTENDED AREA SERVICE</heading> <section identifier="/us/tx/ut/t2/c55/scB/s55.021"> <num value="55.021">Sec. 55.021.</num> <heading>EXTENDED AREA SERVICE</heading> <chapeau>After notice and a hearing, the commission may order one or more local exchange companies that are dominant carriers to provide:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scB/s55.021/1"> <num value="1">(1)</num> <content>mandatory extended area service in accordance with Section 55.022; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scB/s55.021/2"> <num value="2">(2)</num> <content>optional extended area service in accordance with Section 55.023.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scB/s55.022"> <num value="55.022">Sec. 55.022.</num> <heading>MANDATORY SERVICE</heading> <chapeau>The commission may order mandatory extended area service in a specified metropolitan area if:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scB/s55.022/1"> <num value="1">(1)</num> <content>there is a sufficient community of interest in the area; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scB/s55.022/2"> <num value="2">(2)</num> <content>the company can reasonably provide the service.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scB/s55.023"> <num value="55.023">Sec. 55.023.</num> <heading>OPTIONAL EXTENDED AREA SERVICE</heading> <subsection identifier="/us/tx/ut/t2/c55/scB/s55.023/a"> <num value="a">(a)</num> <chapeau>The commission may order optional extended area service in a specified calling area if:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scB/s55.023/1"> <num value="1">(1)</num> <content>each affected company and the representatives of at least one political subdivision in the proposed calling area agree to the service; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scB/s55.023/2"> <num value="2">(2)</num> <content>the proposed common calling area has a single, continuous boundary.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scB/s55.023/b"> <num value="b">(b)</num> <content>The commission may not adopt rules that diminish in any manner the ability of an affected company or a political subdivision to enter into joint agreements for optional extended area service under this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scB/s55.023/c"> <num value="c">(c)</num> <chapeau>In this section, "political subdivision" means:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scB/s55.023/1"> <num value="1">(1)</num> <content>a county;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scB/s55.023/2"> <num value="2">(2)</num> <content>a municipality; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scB/s55.023/3"> <num value="3">(3)</num> <content>an unincorporated town or village that has 275 or more access lines.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scB/s55.024"> <num value="55.024">Sec. 55.024.</num> <heading>CHARGE FOR EXTENDED AREA SERVICE</heading> <subsection identifier="/us/tx/ut/t2/c55/scB/s55.024/a"> <num value="a">(a)</num> <chapeau>An incumbent local exchange company that provides mandatory two-way extended area service to customers shall impose for that service a separately stated monthly charge of $3.50 a line for a residential customer and $7 a line for a business customer if, on September 1, 1995, the company:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scB/s55.024/1"> <num value="1">(1)</num> <content>served more than 1,000,000 access lines in this state; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scB/s55.024/2"> <num value="2">(2)</num> <content>imposed a separately stated monthly charge for mandatory two-way extended area service of more than $3.50 a line for a residential customer and more than $7 a line for a business customer.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scB/s55.024/b"> <num value="b">(b)</num> <content>The company shall recover all costs incurred and all loss of revenue that results from imposition of the rates prescribed by Subsection (a) in the manner prescribed by Section 55.048(c).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scB/s55.024/c"> <num value="c">(c)</num> <chapeau>The rate limitation prescribed by Subsection (a) does not apply to a separately stated monthly charge for:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scB/s55.024/1"> <num value="1">(1)</num> <content>extended area service in or into a metropolitan exchange; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scB/s55.024/2"> <num value="2">(2)</num> <content>extended metropolitan service.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scB/s55.025"> <num value="55.025">Sec. 55.025.</num> <heading>HUNTING SERVICE</heading> <subsection identifier="/us/tx/ut/t2/c55/scB/s55.025/a"> <num value="a">(a)</num> <content>A local exchange company shall make available, at a reasonable tariffed rate, hunting service from local exchange lines to extended metropolitan service lines.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scB/s55.025/b"> <num value="b">(b)</num> <content>The company may not require a customer to purchase additional extended metropolitan service to obtain the hunting service.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scB/s55.026"> <num value="55.026">Sec. 55.026.</num> <heading>NEW ORDERS PROHIBITED AFTER CERTAIN DATE</heading> <content>On or after September 1, 2011, the commission may not require a telecommunications provider to provide mandatory or optional extended area service to additional metropolitan areas or calling areas.</content> <sourceCredit>Added by Acts 2011, 82nd Leg., R.S., Ch. 98 (S.B. 980), Sec. 8, eff. September 1, 2011.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c55/scC"> <num value="C">SUBCHAPTER C.</num> <heading>EXPANDED TOLL-FREE LOCAL CALLING AREAS</heading> <section identifier="/us/tx/ut/t2/c55/scC/s55.041"> <num value="55.041">Sec. 55.041.</num> <heading>DEFINITIONS</heading> <content>In this subchapter, "metropolitan exchange," "local calling area of a metropolitan exchange," and "exchange" have the meanings and boundaries assigned by the commission on September 1, 1993.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scC/s55.042"> <num value="55.042">Sec. 55.042.</num> <heading>CONTIGUOUS EXCHANGE</heading> <content>The commission may expand a toll-free local calling area into an exchange that is not in a metropolitan exchange but is in a local calling area that is contiguous to a metropolitan exchange that the commission determines has a community of interest with the exchange for which a petition is filed under this subchapter.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scC/s55.043"> <num value="55.043">Sec. 55.043.</num> <heading>SPLITTING EXCHANGES PROHIBITED</heading> <content>Notwithstanding any other provision of this subchapter, the commission may not split a petitioning or requested exchange in establishing a toll-free local calling area.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scC/s55.044"> <num value="55.044">Sec. 55.044.</num> <heading>EXEMPTION</heading> <subsection identifier="/us/tx/ut/t2/c55/scC/s55.044/a"> <num value="a">(a)</num> <chapeau>The commission may not require an incumbent local exchange company serving the petitioning or requested exchange to expand the company's toll-free local calling area under this subchapter if:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scC/s55.044/1"> <num value="1">(1)</num> <content>the incumbent local exchange company has fewer than 10,000 access lines;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scC/s55.044/2"> <num value="2">(2)</num> <content>the petitioning or requested exchange is served by a telephone cooperative corporation;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scC/s55.044/3"> <num value="3">(3)</num> <content>extended area service or extended metropolitan service is available between the exchanges;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scC/s55.044/4"> <num value="4">(4)</num> <content>the petitioning or requested exchange is a metropolitan exchange; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scC/s55.044/5"> <num value="5">(5)</num> <content>the commission determines that the company has shown that to serve the area is not geographically or technologically feasible.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scC/s55.044/b"> <num value="b">(b)</num> <chapeau>To promote the wide dispersion of pay telephones, the commission may:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scC/s55.044/1"> <num value="1">(1)</num> <content>exempt pay telephones from this subchapter; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scC/s55.044/2"> <num value="2">(2)</num> <content>change the rates charged for calls from pay telephones.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scC/s55.045"> <num value="55.045">Sec. 55.045.</num> <heading>ELIGIBILITY TO PETITION</heading> <chapeau>The telephone subscribers of an incumbent local exchange company exchange that serves not more than 10,000 access lines may petition the commission for expansion of the company's toll-free local calling area if:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scC/s55.045/1"> <num value="1">(1)</num> <content>the petitioning exchange's central switching office is located within 22 miles, using vertical and horizontal geographic coordinates, of the central switching office of the exchange requested for expanded local calling service; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scC/s55.045/2"> <num value="2">(2)</num> <content>the petitioning exchange's central office is not more than 50 miles from the central office of the exchange requested for expanded local calling service and the exchanges share a community of interest.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scC/s55.046"> <num value="55.046">Sec. 55.046.</num> <heading>PETITION REQUIREMENTS</heading> <subsection identifier="/us/tx/ut/t2/c55/scC/s55.046/a"> <num value="a">(a)</num> <content>A petition under this subchapter must be signed by a number of the exchange's subscribers equal at least to the lesser of 100 of the exchange's subscribers or five percent of the exchange's subscribers.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scC/s55.046/b"> <num value="b">(b)</num> <content>An exchange that petitions under Section 55.045(2) must demonstrate in the petition that the exchange shares a community of interest with the requested exchange.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scC/s55.046/c"> <num value="c">(c)</num> <chapeau>For purposes of this section, the relationships between exchanges that create a community of interest include:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scC/s55.046/1"> <num value="1">(1)</num> <content>a relationship because of schools, hospitals, local governments, or business centers; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scC/s55.046/2"> <num value="2">(2)</num> <content>other relationships that would make the unavailability of expanded local calling service a hardship for the residents of the area.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scC/s55.047"> <num value="55.047">Sec. 55.047.</num> <heading>BALLOTING AND CONSIDERATION</heading> <subsection identifier="/us/tx/ut/t2/c55/scC/s55.047/a"> <num value="a">(a)</num> <content>If the commission receives a petition that complies with this subchapter, the commission shall order the incumbent local exchange company to provide ballots to the subscribers in the petitioning exchange.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scC/s55.047/b"> <num value="b">(b)</num> <content>The commission shall consider the request for expansion of the toll-free local calling area if at least 70 percent of the subscribers who vote do so in favor of the expansion.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scC/s55.047/c"> <num value="c">(c)</num> <content>The commission by rule shall provide for an expedited hearing on the issue of expansion.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scC/s55.048"> <num value="55.048">Sec. 55.048.</num> <heading>CHARGES</heading> <subsection identifier="/us/tx/ut/t2/c55/scC/s55.048/a"> <num value="a">(a)</num> <content>The incumbent local exchange company shall recover all costs incurred and all loss of revenue from an expansion of a toll-free local calling area under this subchapter through a request other than a revenue requirement showing by imposing a monthly fee under Subsection (b) or (c), or both.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scC/s55.048/b"> <num value="b">(b)</num> <content>The company may impose a monthly fee against each residential and business customer in the petitioning exchange. The fee may not exceed $3.50 a line for a residential customer and $7 a line for a business customer unless the customer's toll-free local calling area includes more than five exchanges. The company may impose an additional monthly fee of $1.50 for each exchange in excess of five. This subsection applies regardless of the number of petitions required to obtain access to the exchanges. A company may impose a fee under this subsection only until the company's next general rate case.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scC/s55.048/c"> <num value="c">(c)</num> <content>The company may impose a monthly fee against each of the company's local exchange service customers in this state. This fee is in addition to the company's local exchange rates.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scC/s55.048/d"> <num value="d">(d)</num> <content>The company may not recover regulatory case expenses under this subchapter by imposing a surcharge on the subscribers of the petitioning exchange.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scC/s55.049"> <num value="55.049">Sec. 55.049.</num> <heading>EXPANSION PROHIBITED AFTER CERTAIN DATE</heading> <content>On or after September 1, 2011, the commission may not order an expansion of a toll-free local calling area.</content> <sourceCredit>Added by Acts 2011, 82nd Leg., R.S., Ch. 98 (S.B. 980), Sec. 9, eff. September 1, 2011.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c55/scD"> <num value="D">SUBCHAPTER D.</num> <heading>OPERATOR SERVICE PROVIDERS</heading> <section identifier="/us/tx/ut/t2/c55/scD/s55.081"> <num value="55.081">Sec. 55.081.</num> <heading>DEFINITION</heading> <content>In this subchapter, "operator service" means a service using live operator or automated operator functions to handle telephone service such as toll calling using collect, third-number billing, and calling card services. The term does not include a call for which the called party has arranged to be billed (800 service).</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scD/s55.082"> <num value="55.082">Sec. 55.082.</num> <heading>APPLICABILITY</heading> <content>Except as provided by Section 55.088, this subchapter applies only to a telecommunications utility that is not a dominant carrier.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scD/s55.083"> <num value="55.083">Sec. 55.083.</num> <heading>RULES AND PROCEDURES</heading> <subsection identifier="/us/tx/ut/t2/c55/scD/s55.083/a"> <num value="a">(a)</num> <content>The commission may adopt rules and establish procedures to enforce and implement this subchapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scD/s55.083/b"> <num value="b">(b)</num> <content>A rule adopted under this subchapter must be nondiscriminatory and designed to promote competition that facilitates consumer choice.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scD/s55.084"> <num value="55.084">Sec. 55.084.</num> <heading>INFORMATION DISPLAYED ON PUBLIC USE TELEPHONE</heading> <subsection identifier="/us/tx/ut/t2/c55/scD/s55.084/a"> <num value="a">(a)</num> <chapeau>An operator service provider shall furnish each entity with which it contracts to provide operator service a sticker, card, or other form of information approved by the commission for each telephone that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scD/s55.084/1"> <num value="1">(1)</num> <content>has access to the service; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scD/s55.084/2"> <num value="2">(2)</num> <content>is intended for use by the public.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scD/s55.084/b"> <num value="b">(b)</num> <content>The commission may grant the owner of a telephone approval for an alternative form of information.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scD/s55.084/c"> <num value="c">(c)</num> <chapeau>The information must state:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scD/s55.084/1"> <num value="1">(1)</num> <content>the provider's name;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scD/s55.084/2"> <num value="2">(2)</num> <content>that the operator service provider will provide rate information on a caller's request;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scD/s55.084/3"> <num value="3">(3)</num> <content>that a caller, on the caller's request, will be informed of the method of access to the local exchange carrier operator; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scD/s55.084/4"> <num value="4">(4)</num> <content>that a complaint about the service may be made to the provider or to the commission at the designated telephone number.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scD/s55.084/d"> <num value="d">(d)</num> <content>The operator service provider shall by contract require an entity receiving information to display the information on or near each telephone for which the operator service provider is required to furnish the information.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scD/s55.085"> <num value="55.085">Sec. 55.085.</num> <heading>CONNECTION ANNOUNCEMENT</heading> <chapeau>Before connecting a call, the operator service provider shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scD/s55.085/1"> <num value="1">(1)</num> <content>announce the provider's name; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scD/s55.085/2"> <num value="2">(2)</num> <content>at the caller's request, quote the rate and any other fee or surcharge that applies to the call and is charged by the provider.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scD/s55.086"> <num value="55.086">Sec. 55.086.</num> <heading>INFORMATION REQUIRED ON ACCESS TO LOCAL EXCHANGE COMPANY OPERATOR</heading> <subsection identifier="/us/tx/ut/t2/c55/scD/s55.086/a"> <num value="a">(a)</num> <content>An operator service provider, on a caller's request, shall inform the caller of the method of access to the local exchange carrier operator serving the exchange from which the call is made.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scD/s55.086/b"> <num value="b">(b)</num> <content>A charge may not be made for information provided under this section.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scD/s55.087"> <num value="55.087">Sec. 55.087.</num> <heading>ACCESS TO LOCAL EXCHANGE COMPANY AND OTHER UTILITIES REQUIRED</heading> <subsection identifier="/us/tx/ut/t2/c55/scD/s55.087/a"> <num value="a">(a)</num> <chapeau>The commission by rule shall require an operator service provider to include in its contract with each entity through which it provides operator service a provision that requires each telephone subscribed to its service to allow access to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scD/s55.087/1"> <num value="1">(1)</num> <content>the local exchange carrier operator serving the exchange from which the call is made; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scD/s55.087/2"> <num value="2">(2)</num> <content>other telecommunications utilities.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scD/s55.087/b"> <num value="b">(b)</num> <content>To prevent fraudulent use of its service, an operator service provider or an entity through which it provides operator service may block the access described by Subsection (a) by obtaining a waiver for this purpose from the commission or the Federal Communications Commission. The commission by rule shall establish the procedure and criteria for obtaining a waiver from the commission.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scD/s55.088"> <num value="55.088">Sec. 55.088.</num> <heading>ACCESS TO LIVE OPERATOR REQUIRED</heading> <subsection identifier="/us/tx/ut/t2/c55/scD/s55.088/a"> <num value="a">(a)</num> <content>A dominant or nondominant telecommunications utility that provides operator service shall ensure that a caller has access to a live operator at the beginning of a live or mechanized operator-assisted call through a method designed to be easily and clearly understandable and accessible to the caller.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scD/s55.088/b"> <num value="b">(b)</num> <content>A telecommunications utility described by Subsection (a) shall submit to the commission for review the method by which the utility will provide access to a live operator.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scD/s55.088/c"> <num value="c">(c)</num> <content>This section applies regardless of the method by which the telecommunications utility provides operator service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scD/s55.088/d"> <num value="d">(d)</num> <content>This section does not apply to a telephone located in a prison or jail facility.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scD/s55.089"> <num value="55.089">Sec. 55.089.</num> <heading>COMMISSION MAY INVESTIGATE AND ACT ON VIOLATION</heading> <subsection identifier="/us/tx/ut/t2/c55/scD/s55.089/a"> <num value="a">(a)</num> <content>If the commission determines that an operator service provider has violated or is about to violate this subchapter, the commission, after notice and evidentiary hearing, may take action to stop, correct, or prevent the violation.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scD/s55.089/b"> <num value="b">(b)</num> <content>The commission may investigate a complaint that it receives concerning an operator service.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c55/scE"> <num value="E">SUBCHAPTER E.</num> <heading>CALLER IDENTIFICATION SERVICE</heading> <section identifier="/us/tx/ut/t2/c55/scE/s55.101"> <num value="55.101">Sec. 55.101.</num> <heading>DEFINITIONS</heading> <chapeau>In this subchapter:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scE/s55.101/1"> <num value="1">(1)</num> <content>"Caller identification information" means any information that may be used to identify the specific originating number or originating location of a wire or electronic communication transmitted by a telephone, including the telephone listing number or the name of the customer from whose telephone a telephone number is dialed.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scE/s55.101/2"> <num value="2">(2)</num> <content>"Caller identification service" means a service that provides caller identification information to a device that can display the information.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scE/s55.101/3"> <num value="3">(3)</num> <content>"Per-call blocking" means a telecommunications service that prevents caller identification information from being transmitted to a called party on an individual call when the calling party affirmatively acts to prevent the transmission.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scE/s55.101/4"> <num value="4">(4)</num> <content>"Per-line blocking" means a telecommunications service that prevents caller identification information from being transmitted to a called party on each call unless the calling party affirmatively acts to permit the transmission.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scE/s55.102"> <num value="55.102">Sec. 55.102.</num> <heading>APPLICABILITY</heading> <subsection identifier="/us/tx/ut/t2/c55/scE/s55.102/a"> <num value="a">(a)</num> <content>This subchapter applies only to the provision of caller identification service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scE/s55.102/b"> <num value="b">(b)</num> <chapeau>This subchapter does not apply to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scE/s55.102/1"> <num value="1">(1)</num> <content>an identification service that is used in a limited system, including a central office based PBX-type system;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scE/s55.102/2"> <num value="2">(2)</num> <content>information that is used on a public agency's emergency telephone line or on a line that receives the primary emergency telephone number (911);</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scE/s55.102/3"> <num value="3">(3)</num> <content>information exchanged between telecommunications utilities, enhanced service providers, or other entities that is necessary for the setting up, processing, transmission, or billing of telecommunications or related services;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scE/s55.102/4"> <num value="4">(4)</num> <content>information provided in compliance with applicable law or legal process; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scE/s55.102/5"> <num value="5">(5)</num> <content>an identification service provided in connection with a 700, 800, or 900 access code telecommunications service.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scE/s55.103"> <num value="55.103">Sec. 55.103.</num> <heading>PROVISION OF SERVICE</heading> <subsection identifier="/us/tx/ut/t2/c55/scE/s55.103/a"> <num value="a">(a)</num> <content>A telecommunications utility may offer caller identification services under this subchapter only if the utility obtains written authorization from the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scE/s55.103/b"> <num value="b">(b)</num> <content>A commercial mobile service provider may offer caller identification services in accordance with Sections 55.104, 55.105, 55.106, 55.1065, and 55.107.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 62, Sec. 18.05(a), eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scE/s55.104"> <num value="55.104">Sec. 55.104.</num> <heading>USE OF INFORMATION</heading> <subsection identifier="/us/tx/ut/t2/c55/scE/s55.104/a"> <num value="a">(a)</num> <content>A person may not use a caller identification service to compile and sell specific local call information without the affirmative approval of the originating telephone customer.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scE/s55.104/b"> <num value="b">(b)</num> <chapeau>This section does not prohibit a provider of caller identification service from:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scE/s55.104/1"> <num value="1">(1)</num> <content>verifying network performance or testing the caller identification service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scE/s55.104/2"> <num value="2">(2)</num> <content>compiling, using, and disclosing aggregate caller identification information; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scE/s55.104/3"> <num value="3">(3)</num> <content>complying with applicable law or legal process.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scE/s55.105"> <num value="55.105">Sec. 55.105.</num> <heading>PER-CALL BLOCKING</heading> <content>Except as provided by Section 55.1065, the commission shall require that a provider of caller identification service offer free per-call blocking to each telephone subscriber in the specific area in which the service is offered.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 62, Sec. 18.05(b), eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scE/s55.106"> <num value="55.106">Sec. 55.106.</num> <heading>PER-LINE BLOCKING</heading> <subsection identifier="/us/tx/ut/t2/c55/scE/s55.106/a"> <num value="a">(a)</num> <content>Except as provided by Section 55.1065, the commission shall require that a provider of caller identification service offer free per-line blocking to a particular customer if the commission receives from the customer written certification that the customer has a compelling need for per-line blocking.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scE/s55.106/b"> <num value="b">(b)</num> <content>A provider who is ordered to offer per-line blocking under this section shall notify the customer by mail of the date the blocking will begin.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scE/s55.106/c"> <num value="c">(c)</num> <content>If a customer removes and later reinstates the per-line block, the provider may assess a service order charge in an amount approved by the commission for the provider's administrative expenses relating to the reinstatement.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scE/s55.106/d"> <num value="d">(d)</num> <content>The commission may impose a fee or assessment on a provider in an amount sufficient to cover the additional expenses the commission incurs in implementing the customer certification provisions of this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scE/s55.106/e"> <num value="e">(e)</num> <content>Information received under this section by the commission or by a provider is confidential and may be used only to administer this section.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 62, Sec. 18.05(c), eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scE/s55.107"> <num value="55.107">Sec. 55.107.</num> <heading>LIMITATION ON COMMISSION AUTHORITY</heading> <content>The commission may prescribe in relation to blocking only a requirement authorized by Sections 55.105, 55.106, and 55.1065.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 62, Sec. 18.05(e), eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scE/s55.109"> <num value="55.109">Sec. 55.109.</num> <heading>IMPLEMENTATION OF PANEL RECOMMENDATIONS</heading> <content>The commission may implement the recommendations of the Caller ID Consumer Education Panel and interested parties to the extent consistent with the public interest.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scE/s55.110"> <num value="55.110">Sec. 55.110.</num> <heading>REPORT OF BLOCKING FAILURE</heading> <subsection identifier="/us/tx/ut/t2/c55/scE/s55.110/a"> <num value="a">(a)</num> <content>A provider of caller ID services who becomes aware of the failure of per-call or per-line blocking to block identification of a customer shall report that failure to the commission, the Caller ID Consumer Education Panel, and the customer whose identification was not blocked.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scE/s55.110/b"> <num value="b">(b)</num> <content>The provider shall make a reasonable effort to notify the customer within 24 hours after the provider becomes aware of the failure. The provider is not required to notify the customer if the customer reported the failure.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scE/s55.110/c"> <num value="c">(c)</num> <content>In this section, "caller ID service" means a service that permits the called party to determine the identity, telephone number, or address of the calling party. The term does not include 911 services.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c55/scF"> <num value="F">SUBCHAPTER F.</num> <heading>AUTOMATIC DIAL ANNOUNCING DEVICES</heading> <section identifier="/us/tx/ut/t2/c55/scF/s55.121"> <num value="55.121">Sec. 55.121.</num> <heading>DEFINITIONS</heading> <chapeau>In this subchapter:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scF/s55.121/1"> <num value="1">(1)</num> <chapeau>"Automated dial announcing device" means automated equipment used for telephone solicitation or collection that can:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c55/scF/s55.121/A"> <num value="A">(A)</num> <content>store telephone numbers to be called or produce numbers to be called through use of a random or sequential number generator; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c55/scF/s55.121/B"> <num value="B">(B)</num> <content>convey, alone or in conjunction with other equipment, a prerecorded or synthesized voice message to the number called without the use of a live operator.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scF/s55.121/2"> <num value="2">(2)</num> <content>"Telephone solicitation" means an unsolicited call.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2013, 83rd Leg., R.S., Ch. 600 (S.B. 1040), Sec. 1, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scF/s55.122"> <num value="55.122">Sec. 55.122.</num> <heading>EXEMPTIONS</heading> <chapeau>This subchapter does not apply to the use of an automated dial announcing device:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scF/s55.122/1"> <num value="1">(1)</num> <content>to make a call relating to an emergency or a public service under a program developed or approved by the emergency management coordinator of the county in which the call is received;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scF/s55.122/2"> <num value="2">(2)</num> <content>by a public or private primary or secondary school system to locate or account for a truant student;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scF/s55.122/3"> <num value="3">(3)</num> <content>by a municipality or a person calling on behalf of a municipality to deliver information to citizens of the municipality regarding a public health, safety, or welfare issue; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scF/s55.122/4"> <num value="4">(4)</num> <content>by an organization to a member of the organization.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2013, 83rd Leg., R.S., Ch. 600 (S.B. 1040), Sec. 2, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scF/s55.1225"> <num value="55.1225">Sec. 55.1225.</num> <heading>APPLICABILITY</heading> <content>This subchapter applies to an automated dial announcing device used to make a telephone call that originates or terminates in this state.</content> <sourceCredit>Added by Acts 2013, 83rd Leg., R.S., Ch. 600 (S.B. 1040), Sec. 3, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scF/s55.123"> <num value="55.123">Sec. 55.123.</num> <heading>NOTICE OF USE OF DEVICE TO TELECOMMUNICATIONS UTILITY</heading> <content>A person may not use an automated dial announcing device to make a telephone call in which the device plays a recorded message when the connection is completed unless the person gives to each telecommunications utility over whose system the device is to be used written notice specifying the type of device to be used.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scF/s55.124"> <num value="55.124">Sec. 55.124.</num> <heading>RANDOM OR SEQUENTIAL NUMBER CALLING</heading> <content>A person may not use an automated dial announcing device for random number dialing or to dial numbers determined by successively increasing or decreasing integers if the person uses the device to make a telephone call in which the device plays a recorded message when the connection is completed.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scF/s55.125"> <num value="55.125">Sec. 55.125.</num> <heading>HOURS WHEN USE PROHIBITED</heading> <subsection identifier="/us/tx/ut/t2/c55/scF/s55.125/a"> <num value="a">(a)</num> <chapeau>A person may not use an automated dial announcing device to make a telephone solicitation call terminating in this state in which the device plays a recorded message when the connection is completed if the call is made:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scF/s55.125/1"> <num value="1">(1)</num> <content>before noon or after 9 p.m. on a Sunday; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scF/s55.125/2"> <num value="2">(2)</num> <content>before 9 a.m. or after 9 p.m. on a weekday or a Saturday.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scF/s55.125/b"> <num value="b">(b)</num> <content>A person may not use an automated dial announcing device to make a telephone collection call terminating in this state in which the device plays a recorded message when the connection is completed if the call is made at an hour at which collection calls are prohibited under the federal Fair Debt Collection Practices Act (15 U.S.C. Section 1692 et seq.).</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scF/s55.126"> <num value="55.126">Sec. 55.126.</num> <heading>DEVICE DISCONNECTION</heading> <content>A person may not use an automated dial announcing device to make a telephone call in which the device plays a recorded message when the connection is completed unless the device disconnects from the called person's line not later than five seconds after the call is terminated by either party. If the device cannot disconnect during that period, a live operator must introduce the call and receive the called person's oral consent before beginning a prerecorded or synthesized voice message.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 667, Sec. 2, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scF/s55.127"> <num value="55.127">Sec. 55.127.</num> <heading>CONTENTS OF RECORDED MESSAGE</heading> <subsection identifier="/us/tx/ut/t2/c55/scF/s55.127/a"> <num value="a">(a)</num> <chapeau>A person may not use an automated dial announcing device to make a telephone call in which the device plays a recorded message when the connection is completed unless the recorded message states during the first 30 seconds of the call:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scF/s55.127/1"> <num value="1">(1)</num> <content>the nature of the call;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scF/s55.127/2"> <num value="2">(2)</num> <content>the identity of the person, company, or organization making the call; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scF/s55.127/3"> <num value="3">(3)</num> <content>the telephone number from which the call is made.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scF/s55.127/b"> <num value="b">(b)</num> <chapeau>In addition to the requirements prescribed by Subsection (a), a call during which a cross-promotion or reference to a pay-per-call information service is made must include a statement of:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scF/s55.127/1"> <num value="1">(1)</num> <content>the fact that a caller who makes a call to a pay-per-call information service's telephone number will be charged for that call;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scF/s55.127/2"> <num value="2">(2)</num> <content>the amount of the flat-rate or cost-per-minute charge the caller will incur or the amount of both if both charges will be incurred; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scF/s55.127/3"> <num value="3">(3)</num> <content>the estimated amount of time required to receive all the information offered by the service during a call.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scF/s55.127/c"> <num value="c">(c)</num> <chapeau>Subsection (a) does not apply to the use of a device if the device is used:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scF/s55.127/1"> <num value="1">(1)</num> <content>for debt collection purposes in compliance with applicable federal law and regulations; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scF/s55.127/2"> <num value="2">(2)</num> <content>by a live operator for automated dialing or hold announcement purposes.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scF/s55.127/d"> <num value="d">(d)</num> <content>In this section, "pay-per-call information service" means a service that routinely delivers, for a predetermined and sometimes time-sensitive fee, a prerecorded or live message or interactive program after the caller dials a specified 900 or 976 number.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scF/s55.128"> <num value="55.128">Sec. 55.128.</num> <heading>DURATION OF RECORDED MESSAGE</heading> <chapeau>A person may not use an automated dial announcing device to make for solicitation purposes a telephone call in which the device plays a recorded message when the connection is completed unless:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scF/s55.128/1"> <num value="1">(1)</num> <content>the recorded message is shorter than 30 seconds; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scF/s55.128/2"> <num value="2">(2)</num> <chapeau>the device has the technical capacity to:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c55/scF/s55.128/A"> <num value="A">(A)</num> <content>recognize a telephone answering device on the called person's line; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c55/scF/s55.128/B"> <num value="B">(B)</num> <content>terminate the call within 30 seconds.</content> </subparagraph> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 62, Sec. 18.05(f), eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scF/s55.129"> <num value="55.129">Sec. 55.129.</num> <heading>PERMIT REQUIRED</heading> <content>A person may not use an automated dial announcing device to make a telephone call in which the device plays a recorded message when the connection is completed unless the person has a permit under Section 55.130.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scF/s55.130"> <num value="55.130">Sec. 55.130.</num> <heading>PERMIT</heading> <subsection identifier="/us/tx/ut/t2/c55/scF/s55.130/a"> <num value="a">(a)</num> <content>A person may not use an automated dial announcing device without a permit issued by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scF/s55.130/b"> <num value="b">(b)</num> <chapeau>An applicant for an original permit must submit to the commission an application on a form that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scF/s55.130/1"> <num value="1">(1)</num> <content>is prescribed by the commission; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scF/s55.130/2"> <num value="2">(2)</num> <chapeau>contains:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c55/scF/s55.130/A"> <num value="A">(A)</num> <content>the telephone number of each automated dial announcing device that the person will use; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c55/scF/s55.130/B"> <num value="B">(B)</num> <content>the physical address from which each automated dial announcing device will operate.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scF/s55.130/c"> <num value="c">(c)</num> <content>An original permit is valid for one year and may be renewed annually by filing with the commission the information required by Subsection (b)(2).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scF/s55.130/d"> <num value="d">(d)</num> <content>An application for an original permit or a filing required for the renewal of the permit must be accompanied by the appropriate fee prescribed by Section 55.131.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scF/s55.130/e"> <num value="e">(e)</num> <content>In determining whether to deny an application for an original permit or renewal of the permit, the commission shall consider the compliance record of the owner or operator of the automated dial announcing device and may deny the application based on that record.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scF/s55.131"> <num value="55.131">Sec. 55.131.</num> <heading>PERMIT FEE</heading> <subsection identifier="/us/tx/ut/t2/c55/scF/s55.131/a"> <num value="a">(a)</num> <content>The commission shall prescribe a fee for an original permit or renewal of a permit.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scF/s55.131/b"> <num value="b">(b)</num> <content>The amount of the original permit fee must be reasonable and cover the enforcement cost to the commission but may not exceed $500.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scF/s55.131/c"> <num value="c">(c)</num> <content>The fee for renewal of a permit may not exceed $100.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scF/s55.132"> <num value="55.132">Sec. 55.132.</num> <heading>NOTIFICATION OF CHANGE</heading> <subsection identifier="/us/tx/ut/t2/c55/scF/s55.132/a"> <num value="a">(a)</num> <content>The owner or operator of an automated dial announcing device shall notify the commission if the telephone number of the device or the physical address from which the device operates changes.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scF/s55.132/b"> <num value="b">(b)</num> <content>The owner or operator shall give the notice by certified mail not later than the 48th hour before the hour the device begins operating with the new telephone number or at the new address.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scF/s55.132/c"> <num value="c">(c)</num> <content>If the owner or operator of a device fails to give notice as required by Subsection (b), the person's permit is invalid.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scF/s55.133"> <num value="55.133">Sec. 55.133.</num> <heading>NOTIFICATION OF LOCAL EXCHANGE COMPANY</heading> <content>The commission shall provide to a local exchange company on request a copy of a permit issued under this subchapter and of any change relating to the permit.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scF/s55.134"> <num value="55.134">Sec. 55.134.</num> <heading>COMPLAINTS AND ENFORCEMENT</heading> <subsection identifier="/us/tx/ut/t2/c55/scF/s55.134/a"> <num value="a">(a)</num> <chapeau>The commission shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scF/s55.134/1"> <num value="1">(1)</num> <content>investigate complaints relating to the use of an automated dial announcing device; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scF/s55.134/2"> <num value="2">(2)</num> <content>enforce this subchapter.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scF/s55.134/b"> <num value="b">(b)</num> <content>A local exchange company that receives a complaint relating to the use of an automated dial announcing device shall send the complaint to the commission. The commission by rule shall prescribe the procedures and requirements for sending a complaint to the commission.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scF/s55.135"> <num value="55.135">Sec. 55.135.</num> <heading>REVOCATION OF PERMIT</heading> <content>The commission may revoke a person's permit if the person fails to comply with this subchapter.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scF/s55.136"> <num value="55.136">Sec. 55.136.</num> <heading>DISCONNECTION OF SERVICE</heading> <subsection identifier="/us/tx/ut/t2/c55/scF/s55.136/a"> <num value="a">(a)</num> <content>If the commission or a court determines that a person has violated this subchapter, the commission or court shall require a telecommunications utility to disconnect service to the person.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scF/s55.136/b"> <num value="b">(b)</num> <content>The telecommunications utility may reconnect service to the person only on a determination by the commission that the person will comply with this subchapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scF/s55.136/c"> <num value="c">(c)</num> <content>Not later than the third day before the date of the disconnection, the telecommunications utility shall give notice to the person using the device of its intent to disconnect service. However, if the device is causing network congestion or blockage, the notice may be given on the day before the date of disconnection.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scF/s55.136/d"> <num value="d">(d)</num> <content>A telecommunications utility, without an order by the commission or a court, may disconnect or refuse to connect service to a person using or intending to use an automated dial announcing device if the utility determines that the device would cause or is causing network harm.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scF/s55.137"> <num value="55.137">Sec. 55.137.</num> <heading>ADMINISTRATIVE PENALTY</heading> <subsection identifier="/us/tx/ut/t2/c55/scF/s55.137/a"> <num value="a">(a)</num> <content>The commission may impose an administrative penalty against a person who owns or operates an automated dial announcing device in violation of this subchapter or a commission rule or order.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scF/s55.137/b"> <num value="b">(b)</num> <content>The penalty for a violation may be in an amount not to exceed $1,000 for each day or portion of a day during which the device operates in violation of this subchapter or a commission rule or order.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scF/s55.137/c"> <num value="c">(c)</num> <content>The administrative penalty is civil in nature and is in addition to any other penalty provided by law.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scF/s55.137/d"> <num value="d">(d)</num> <content>The commission by rule shall prescribe the procedures for assessing an administrative penalty under this section. The procedures must require proper notice and hearing in accordance with Chapter 2001, Government Code.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scF/s55.137/e"> <num value="e">(e)</num> <content>A person may appeal the final order of the commission under Chapter 2001, Government Code. The substantial evidence rule applies on appeal.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scF/s55.137/f"> <num value="f">(f)</num> <content>The proceeds of administrative penalties collected under this section shall be deposited to the credit of the commission. The commission shall use the proceeds to enforce this subchapter.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 62, Sec. 18.05(g), eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scF/s55.138"> <num value="55.138">Sec. 55.138.</num> <heading>CRIMINAL PENALTY</heading> <subsection identifier="/us/tx/ut/t2/c55/scF/s55.138/a"> <num value="a">(a)</num> <content>A person commits an offense if the person owns or operates an automated dial announcing device that the person knows is operating in violation of this subchapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scF/s55.138/b"> <num value="b">(b)</num> <content>An offense under this section is a Class A misdemeanor.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c55/scH"> <num value="H">SUBCHAPTER H.</num> <heading>PAY TELEPHONES</heading> <section identifier="/us/tx/ut/t2/c55/scH/s55.171"> <num value="55.171">Sec. 55.171.</num> <heading>DEFINITION</heading> <chapeau>In this subchapter, "provider" means an entity that provides pay telephone service, including:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scH/s55.171/1"> <num value="1">(1)</num> <content>an incumbent local exchange company; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scH/s55.171/2"> <num value="2">(2)</num> <content>a subscriber to a customer-owned pay telephone service.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scH/s55.172"> <num value="55.172">Sec. 55.172.</num> <heading>LIMITATION</heading> <chapeau>This subchapter prescribes the limits of:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scH/s55.172/1"> <num value="1">(1)</num> <content>the right of a provider to set the provider's rates and charges for pay telephone services; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scH/s55.172/2"> <num value="2">(2)</num> <content>the commission's authority over the pay telephone service rates of an incumbent local exchange company.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scH/s55.173"> <num value="55.173">Sec. 55.173.</num> <heading>REGISTRATION</heading> <subsection identifier="/us/tx/ut/t2/c55/scH/s55.173/a"> <num value="a">(a)</num> <content>A person may not provide pay telephone service in this state unless the person is registered with the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scH/s55.173/b"> <num value="b">(b)</num> <content>This section does not apply to a provider who holds a certificate of convenience and necessity.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scH/s55.1735"> <num value="55.1735">Sec. 55.1735.</num> <heading>CHARGE FOR PAY PHONE ACCESS LINE</heading> <content>The charge or surcharge a local exchange company imposes for an access line used to provide pay telephone service in an exchange may not exceed the amount of the charge or surcharge the company imposes for an access line used for regular business purposes in that exchange.</content> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 11, eff. September 7, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scH/s55.174"> <num value="55.174">Sec. 55.174.</num> <heading>PROHIBITION ON CHARGE FOR CERTAIN CALLS</heading> <chapeau>A provider may not charge a person making a call on a pay telephone for:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scH/s55.174/1"> <num value="1">(1)</num> <content>local directory assistance; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scH/s55.174/2"> <num value="2">(2)</num> <content>a call made under Chapter 771 or 772, Health and Safety Code.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scH/s55.175"> <num value="55.175">Sec. 55.175.</num> <heading>CHARGE FOR LOCAL CALLS</heading> <subsection identifier="/us/tx/ut/t2/c55/scH/s55.175/a"> <num value="a">(a)</num> <content>The commission shall establish the limit on the amount a provider may charge for a pay telephone coin sent-paid call in the local exchange company's toll-free calling area.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scH/s55.175/b"> <num value="b">(b)</num> <chapeau>The commission may establish a statewide ceiling on the amount a provider may charge for a local pay telephone call that is:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scH/s55.175/1"> <num value="1">(1)</num> <content>collect;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scH/s55.175/2"> <num value="2">(2)</num> <content>operator assisted; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scH/s55.175/3"> <num value="3">(3)</num> <content>paid by credit card or calling card.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scH/s55.175/c"> <num value="c">(c)</num> <content>The commission may not establish the ceiling under Subsection (b) at an amount that is less than the applicable local rates for such a call imposed by any of the four largest interexchange telecommunications carriers operating in this state.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scH/s55.176"> <num value="55.176">Sec. 55.176.</num> <heading>CHARGE FOR 800-TYPE CALLS</heading> <subsection identifier="/us/tx/ut/t2/c55/scH/s55.176/a"> <num value="a">(a)</num> <content>A provider may charge at a pay telephone a fee of not more than 25 cents for initiating an 800-type call.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scH/s55.176/b"> <num value="b">(b)</num> <chapeau>A provider may impose the fee only if:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scH/s55.176/1"> <num value="1">(1)</num> <content>the pay telephone is registered with the commission; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scH/s55.176/2"> <num value="2">(2)</num> <content>the provider certifies that the pay telephone complies with commission rules regarding the provision of pay telephone service.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scH/s55.176/c"> <num value="c">(c)</num> <content>Subsection (b) does not apply to a local exchange company pay telephone.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scH/s55.176/d"> <num value="d">(d)</num> <content>A provider may not impose the fee if imposition is inconsistent with federal law.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scH/s55.176/e"> <num value="e">(e)</num> <chapeau>A provider may not impose the fee for a:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scH/s55.176/1"> <num value="1">(1)</num> <content>local call;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scH/s55.176/2"> <num value="2">(2)</num> <content>911 call;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scH/s55.176/3"> <num value="3">(3)</num> <content>local directory assistance call; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scH/s55.176/4"> <num value="4">(4)</num> <content>call that is covered by the Telephone Operator Consumer Services Improvement Act of 1990 (47 U.S.C. Section 226).</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scH/s55.176/f"> <num value="f">(f)</num> <chapeau>A provider who imposes the fee must post on each pay telephone notice that the fee will be charged. The provider must post the notice:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scH/s55.176/1"> <num value="1">(1)</num> <content>in plain sight of the user; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scH/s55.176/2"> <num value="2">(2)</num> <content>in a manner consistent with existing commission requirements for posting information.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scH/s55.176/g"> <num value="g">(g)</num> <chapeau>The commission may not impose on a local exchange company the duty or obligation to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scH/s55.176/1"> <num value="1">(1)</num> <content>record the use of pay telephone service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scH/s55.176/2"> <num value="2">(2)</num> <content>bill or collect for the use of the pay telephone; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scH/s55.176/3"> <num value="3">(3)</num> <content>remit to the provider the fee authorized by this section.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scH/s55.177"> <num value="55.177">Sec. 55.177.</num> <heading>CHARGE FOR CREDIT CARD, CALLING CARD, OR OPERATOR-ASSISTED CALLS</heading> <subsection identifier="/us/tx/ut/t2/c55/scH/s55.177/a"> <num value="a">(a)</num> <content>A provider may not impose for a credit card, calling card, or live or automated operator-assisted call a rate or charge that is greater than the authorized rates and charges published on March 18, 1995, in the eight newspapers having the largest circulation in this state.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scH/s55.177/b"> <num value="b">(b)</num> <content>The published rates may not be changed.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scH/s55.177/c"> <num value="c">(c)</num> <content>This section does not apply to a local exchange company. Chapter 58 governs the pay telephone rates of an incumbent local exchange company that elects incentive regulation under that chapter.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scH/s55.178"> <num value="55.178">Sec. 55.178.</num> <heading>NOTICE OF INABILITY TO RECEIVE CALLS</heading> <subsection identifier="/us/tx/ut/t2/c55/scH/s55.178/a"> <num value="a">(a)</num> <content>A provider may not display the telephone number of a pay telephone that cannot receive telephone calls.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scH/s55.178/b"> <num value="b">(b)</num> <content>A provider shall place in a conspicuous location on each pay telephone that cannot receive telephone calls a notice stating in letters one-fourth inch high: "THIS TELEPHONE CANNOT RECEIVE TELEPHONE CALLS."</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scH/s55.178/c"> <num value="c">(c)</num> <content>A provider that violates this section or a rule or order adopted by the commission under this section is subject to a civil penalty as provided by Section 15.028 unless the provider takes corrective action to comply with this section or the rule or order not later than the 14th day after the date the provider receives written notice of the violation.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scH/s55.178/d"> <num value="d">(d)</num> <content>The commission has jurisdiction over a provider to the extent necessary to enforce this section regardless of whether a provider is a telecommunications utility regulated under this title.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scH/s55.178/e"> <num value="e">(e)</num> <content>The commission may establish procedures to enforce this section.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scH/s55.179"> <num value="55.179">Sec. 55.179.</num> <heading>INFORMATION REQUIREMENTS</heading> <subsection identifier="/us/tx/ut/t2/c55/scH/s55.179/a"> <num value="a">(a)</num> <content>The commission by rule may prescribe the information that must be posted on a pay telephone.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scH/s55.179/b"> <num value="b">(b)</num> <content>A commission rule may not require a provider or an affiliate of a provider to police compliance by another provider with the commission's rules.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scH/s55.180"> <num value="55.180">Sec. 55.180.</num> <heading>VIOLATIONS</heading> <content>The commission may order the disconnection of pay telephone service for not more than one year for repeat violations of commission rules.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c55/scI"> <num value="I">SUBCHAPTER I.</num> <heading>DIRECTORY LISTINGS AND ASSISTANCE</heading> <section identifier="/us/tx/ut/t2/c55/scI/s55.201"> <num value="55.201">Sec. 55.201.</num> <heading>TERMS OF DIRECTORY LISTINGS AND ASSISTANCE</heading> <subsection identifier="/us/tx/ut/t2/c55/scI/s55.201/a"> <num value="a">(a)</num> <content>Each company that provides local exchange telephone service in overlapping certificated areas shall negotiate the terms of printed directory listings and directory assistance in those areas.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scI/s55.201/b"> <num value="b">(b)</num> <chapeau>On complaint by the incumbent local exchange company or the holder of a certificate of convenience and necessity, a certificate of operating authority, or a service provider certificate of operating authority, the commission may:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scI/s55.201/1"> <num value="1">(1)</num> <content>resolve a dispute between the parties; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scI/s55.201/2"> <num value="2">(2)</num> <content>issue an order setting the terms of the directory listings or directory assistance, if necessary.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scI/s55.201/c"> <num value="c">(c)</num> <content>This section does not affect the authority of an incumbent local exchange company to voluntarily conduct negotiations with an applicant for a certificate of convenience and necessity, a certificate of operating authority, or a service provider certificate of operating authority.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scI/s55.202"> <num value="55.202">Sec. 55.202.</num> <heading>DIRECTORY PUBLISHED BY TELECOMMUNICATIONS UTILITY</heading> <content>A telecommunications utility or an affiliate of that utility that publishes a residential or business telephone directory that is distributed to the public shall publish in the directory the name of each state senator or representative who represents all or part of the geographical area for which the directory contains listings.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scI/s55.203"> <num value="55.203">Sec. 55.203.</num> <heading>DIRECTORY PUBLISHED BY PRIVATE PUBLISHER</heading> <subsection identifier="/us/tx/ut/t2/c55/scI/s55.203/a"> <num value="a">(a)</num> <chapeau>A private for-profit publisher of a residential telephone directory that is distributed to the public at minimal or no cost shall include in the directory:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scI/s55.203/1"> <num value="1">(1)</num> <chapeau>a listing of any toll-free and local telephone numbers of:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c55/scI/s55.203/A"> <num value="A">(A)</num> <content>state agencies;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c55/scI/s55.203/B"> <num value="B">(B)</num> <content>state public services; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c55/scI/s55.203/C"> <num value="C">(C)</num> <content>each state elected official who represents all or part of the geographical area for which the directory contains listings; and</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scI/s55.203/2"> <num value="2">(2)</num> <content>the Internet address of the state electronic Internet portal and a statement that Internet sites for state agencies may be accessed through the state electronic Internet portal.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scI/s55.203/b"> <num value="b">(b)</num> <chapeau>The listing required by this section must be:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scI/s55.203/1"> <num value="1">(1)</num> <content>clearly identified; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scI/s55.203/2"> <num value="2">(2)</num> <content>located or clearly referenced at the front of the directory before the main listing of residential and business telephone numbers.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scI/s55.203/c"> <num value="c">(c)</num> <chapeau>The commission by rule may specify:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scI/s55.203/1"> <num value="1">(1)</num> <content>the format of the listing; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scI/s55.203/2"> <num value="2">(2)</num> <content>criteria for inclusion of agencies, services, and officials.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scI/s55.203/d"> <num value="d">(d)</num> <chapeau>The commission's rules must require a publisher to list:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scI/s55.203/1"> <num value="1">(1)</num> <content>the telephone number for state government information; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scI/s55.203/2"> <num value="2">(2)</num> <chapeau>telephone numbers alphabetically by:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c55/scI/s55.203/A"> <num value="A">(A)</num> <content>the subject matter of agency programs; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c55/scI/s55.203/B"> <num value="B">(B)</num> <content>agency name.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scI/s55.203/e"> <num value="e">(e)</num> <chapeau>The commission, with the cooperation of other state agencies, shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scI/s55.203/1"> <num value="1">(1)</num> <content>compile relevant information to ensure accuracy of information in the listing; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scI/s55.203/2"> <num value="2">(2)</num> <content>provide the information to a telecommunications utility or telephone directory publisher within a reasonable time after a request by the utility or publisher.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scI/s55.203/f"> <num value="f">(f)</num> <content>The Department of Information Resources shall cooperate with the commission and with publishers to ensure that the subject matter listing of programs and telephone numbers in the telephone directories are consistent with the categorization developed by the Records Management Interagency Coordinating Council under Section 441.203(j), Government Code.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scI/s55.203/g"> <num value="g">(g)</num> <content>The rules adopted under Subsection (d) must provide that a telecommunications utility that publishes and distributes to the public a residential or business telephone directory shall list prominently in the directory the contact information for the specialized telecommunications assistance program established under Subchapter E, Chapter 56.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 62, Sec. 18.06(a), eff. Sept. 1, 1999; Acts 2001, 77th Leg., ch. 424, Sec. 5, eff. Sept. 1, 2001; Acts 2001, 77th Leg., ch. 1420, Sec. 20.002, eff. Sept. 1, 2001; Acts 2003, 78th Leg., ch. 165, Sec. 1, eff. Sept. 1, 2003. Amended by: Acts 2007, 80th Leg., R.S., Ch. 937 (H.B. 3560), Sec. 2.08, eff. September 1, 2007. Acts 2011, 82nd Leg., R.S., Ch. 973 (H.B. 1504), Sec. 32, eff. June 17, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scI/s55.204"> <num value="55.204">Sec. 55.204.</num> <heading>ELECTRONIC TELEPHONE DIRECTORY</heading> <subsection identifier="/us/tx/ut/t2/c55/scI/s55.204/a"> <num value="a">(a)</num> <content>Notwithstanding any other law, a telecommunications provider or telecommunications utility, to further the recycling goals, may publish on the provider's or the utility's Internet website a telephone directory or directory listing instead of providing for general distribution to the public of printed directories or listings.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scI/s55.204/b"> <num value="b">(b)</num> <content>A provider or utility that publishes a telephone directory or directory listing as described by Subsection (a) shall provide a print or digital copy of the directory or listing to a customer on request. If a provider or utility exercises this option, it shall notify its customers that the provider or utility shall provide the first print or digital copy requested by a customer in each calendar year at no charge to the customer.</content> </subsection> <sourceCredit>Added by Acts 2011, 82nd Leg., R.S., Ch. 1180 (H.B. 3395), Sec. 4, eff. June 17, 2011.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c55/scJ"> <num value="J">SUBCHAPTER J.</num> <heading>TELECOMMUNICATIONS SERVICE BY CERTAIN PROVIDERS</heading> <section identifier="/us/tx/ut/t2/c55/scJ/s55.251"> <num value="55.251">Sec. 55.251.</num> <heading>CHARGE FOR HOTEL OR MOTEL CALL</heading> <chapeau>A hotel or motel may not charge more than 50 cents for:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scJ/s55.251/1"> <num value="1">(1)</num> <content>a local telephone call;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scJ/s55.251/2"> <num value="2">(2)</num> <content>a credit card telephone call;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scJ/s55.251/3"> <num value="3">(3)</num> <content>a collect telephone call; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scJ/s55.251/4"> <num value="4">(4)</num> <content>any other local telephone call for which assistance from the hotel or motel operator is not required.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scJ/s55.252"> <num value="55.252">Sec. 55.252.</num> <heading>900 SERVICE USED BY PROBATIONERS OR PAROLEES</heading> <subsection identifier="/us/tx/ut/t2/c55/scJ/s55.252/a"> <num value="a">(a)</num> <chapeau>This section applies only to a telecommunications utility that transports or provides an intrastate 900 service that is:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scJ/s55.252/1"> <num value="1">(1)</num> <content>covered by a contract authorized by Chapter 76 or 508, Government Code; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scJ/s55.252/2"> <num value="2">(2)</num> <chapeau>used by a defendant under the supervision of a community supervision and corrections department or the parole division of the Texas Department of Criminal Justice to:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c55/scJ/s55.252/A"> <num value="A">(A)</num> <content>pay a fee or cost; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c55/scJ/s55.252/B"> <num value="B">(B)</num> <content>comply with telephone reporting requirements.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scJ/s55.252/b"> <num value="b">(b)</num> <content>A telecommunications utility may adjust or authorize the adjustment of an end-user's bill for 900 service described by Subsection (a) only with the consent of the contracting community supervision and corrections department or the contracting parole division of the Texas Department of Criminal Justice.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 62, Sec. 18.07(a), eff. Sept. 1, 1999. Amended by: Acts 2009, 81st Leg., R.S., Ch. 87 (S.B. 1969), Sec. 25.155, eff. September 1, 2009.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scJ/s55.253"> <num value="55.253">Sec. 55.253.</num> <heading>TELEPHONE PREPAID CALLING SERVICES</heading> <subsection identifier="/us/tx/ut/t2/c55/scJ/s55.253/a"> <num value="a">(a)</num> <chapeau>In this section:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scJ/s55.253/1"> <num value="1">(1)</num> <content>"Prepaid calling card company" means a company that provides a prepaid calling service to the public using its own network or resold services.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scJ/s55.253/2"> <num value="2">(2)</num> <content>"Prepaid calling service" means a prepaid telecommunications service that allows an end user to originate a call using an access number and authorization code.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scJ/s55.253/b"> <num value="b">(b)</num> <content>The commission by rule may prescribe standards regarding the information a prepaid calling card company shall disclose to customers in relation to the rates and terms of service for prepaid calling services offered in this state.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scJ/s55.253/c"> <num value="c">(c)</num> <content>The commission is granted all necessary jurisdiction to adopt rules under this section and to enforce those rules and this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scJ/s55.253/d"> <num value="d">(d)</num> <content>A violation of a rule adopted under this section is subject to enforcement under Subchapter B, Chapter 15.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 411, Sec. 1, eff. June 18, 1999.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c55/scK"> <num value="K">SUBCHAPTER K.</num> <heading>SELECTION OF TELECOMMUNICATIONS UTILITIES</heading> <section identifier="/us/tx/ut/t2/c55/scK/s55.301"> <num value="55.301">Sec. 55.301.</num> <heading>STATE POLICY</heading> <content>It is the policy of this state to ensure that all customers are protected from the unauthorized switching of a telecommunications utility selected by the customer to provide telecommunications service.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 22, eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 1579, Sec. 6, eff. Aug. 30, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scK/s55.302"> <num value="55.302">Sec. 55.302.</num> <heading>COMMISSION RULES</heading> <subsection identifier="/us/tx/ut/t2/c55/scK/s55.302/a"> <num value="a">(a)</num> <chapeau>The commission shall adopt nondiscriminatory and competitively neutral rules to implement this subchapter, including rules that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scK/s55.302/1"> <num value="1">(1)</num> <content>ensure that customers are protected from deceptive practices in the obtaining of authorizations and verifications required by this subchapter;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scK/s55.302/2"> <num value="2">(2)</num> <content>are applicable to all local exchange telephone services, interexchange telecommunications service, and other telecommunications service provided by telecommunications utilities in this state;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scK/s55.302/3"> <num value="3">(3)</num> <content>are consistent with the rules and regulations prescribed by the Federal Communications Commission for the selection of telecommunications utilities;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scK/s55.302/4"> <num value="4">(4)</num> <content>permit telecommunications utilities to select any method of verification of a change order authorized by Section 55.303;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scK/s55.302/5"> <num value="5">(5)</num> <content>require the reversal of certain changes in the selection of a customer's telecommunications utility in accordance with Section 55.304(a);</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scK/s55.302/6"> <num value="6">(6)</num> <content>prescribe, in accordance with Section 55.304(b), the duties of a telecommunications utility that initiates an unauthorized customer change; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scK/s55.302/7"> <num value="7">(7)</num> <content>provide for corrective action and the imposition of penalties in accordance with Sections 55.305 and 55.306.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scK/s55.302/b"> <num value="b">(b)</num> <content>The commission is granted all necessary jurisdiction to adopt rules required by this subchapter and to enforce those rules and this subchapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scK/s55.302/c"> <num value="c">(c)</num> <content>The commission may notify customers of their rights under the rules.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 22, eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 1579, Sec. 6, eff. Aug. 30, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scK/s55.303"> <num value="55.303">Sec. 55.303.</num> <heading>VERIFICATION OF CHANGE</heading> <chapeau>A telecommunications utility may verify a change order by:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scK/s55.303/1"> <num value="1">(1)</num> <content>obtaining written authorization from the customer;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scK/s55.303/2"> <num value="2">(2)</num> <content>obtaining a toll-free electronic authorization placed from the telephone number that is the subject of the change order; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scK/s55.303/3"> <num value="3">(3)</num> <content>an oral authorization obtained by an independent third party.</content> </paragraph> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 22, eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 1579, Sec. 6, eff. Aug. 30, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scK/s55.304"> <num value="55.304">Sec. 55.304.</num> <heading>UNAUTHORIZED CHANGE</heading> <subsection identifier="/us/tx/ut/t2/c55/scK/s55.304/a"> <num value="a">(a)</num> <content>If a change in the selection of a customer's telecommunications utility is not made or verified in accordance with this subchapter, the change, on request by the customer, shall be reversed within a period established by commission ruling.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scK/s55.304/b"> <num value="b">(b)</num> <chapeau>A telecommunications utility that initiates an unauthorized customer change shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c55/scK/s55.304/1"> <num value="1">(1)</num> <content>pay all usual and customary charges associated with returning the customer to its original telecommunications utility;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scK/s55.304/2"> <num value="2">(2)</num> <content>pay the telecommunications utility from which the customer was changed any amount paid by the customer that would have been paid to that telecommunications utility if the unauthorized change had not been made;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scK/s55.304/3"> <num value="3">(3)</num> <content>return to the customer any amount paid by the customer that exceeds the charges that would have been imposed for identical services by the telecommunications utility from which the customer was changed if the unauthorized change had not been made; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c55/scK/s55.304/4"> <num value="4">(4)</num> <content>provide to the original telecommunications utility from which the customer was changed all billing records to enable that telecommunications utility to comply with this subchapter.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scK/s55.304/c"> <num value="c">(c)</num> <content>The telecommunications utility from which the customer was changed shall provide to the customer all benefits associated with the service on receipt of payment for service provided during the unauthorized change.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scK/s55.304/d"> <num value="d">(d)</num> <content>A customer is not liable for charges incurred during the first 30 days after the date of an unauthorized carrier change.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 22, eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 1579, Sec. 6, eff. Aug. 30, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scK/s55.305"> <num value="55.305">Sec. 55.305.</num> <heading>CORRECTIVE ACTION AND PENALTIES</heading> <subsection identifier="/us/tx/ut/t2/c55/scK/s55.305/a"> <num value="a">(a)</num> <content>If the commission finds that a telecommunications utility has repeatedly violated the commission's telecommunications utility selection rules, the commission shall order the utility to take corrective action as necessary. In addition, the utility may be subject to administrative penalties under Sections 15.023-15.027.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c55/scK/s55.305/b"> <num value="b">(b)</num> <content>An administrative penalty collected under this section shall be used to enforce this subchapter.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 22, eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 1579, Sec. 6, eff. Aug. 30, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scK/s55.306"> <num value="55.306">Sec. 55.306.</num> <heading>REPEATED AND RECKLESS VIOLATION</heading> <content>If the commission finds that a telecommunications utility has repeatedly and recklessly violated the commission's telecommunications utility selection rules, the commission may, if consistent with the public interest, suspend, restrict, deny, or revoke the registration or certificate, including an amended certificate, of the telecommunications utility and, by taking that action, deny the telecommunications utility the right to provide service in this state.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 22, eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 1579, Sec. 6, eff. Aug. 30, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scK/s55.307"> <num value="55.307">Sec. 55.307.</num> <heading>DECEPTIVE OR FRAUDULENT PRACTICE</heading> <content>The commission may prohibit a utility from engaging in a deceptive or fraudulent practice, including a marketing practice, involving the selection of a customer's telecommunications utility. The commission may define deceptive and fraudulent practices to which this section applies.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 22, eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 1579, Sec. 6, eff. Aug. 30, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c55/scK/s55.308"> <num value="55.308">Sec. 55.308.</num> <heading>CONSISTENCY WITH FEDERAL LAW</heading> <content>Notwithstanding any other provision of this subchapter, rules adopted by the commission under this subchapter shall be consistent with applicable federal laws and rules.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 22, eff. Sept. 1, 1999.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t2/c56"> <num value="56">CHAPTER 56.</num> <heading>TELECOMMUNICATIONS ASSISTANCE AND UNIVERSAL SERVICE FUND</heading> <subchapter identifier="/us/tx/ut/t2/c56/scA"> <num value="A">SUBCHAPTER A.</num> <heading>GENERAL PROVISIONS</heading> <section identifier="/us/tx/ut/t2/c56/scA/s56.001"> <num value="56.001">Sec. 56.001.</num> <heading>DEFINITIONS</heading> <chapeau>In this chapter:</chapeau> <paragraph identifier="/us/tx/ut/t2/c56/scA/s56.001/1"> <num value="1">(1)</num> <content>"Department" means the Department of Assistive and Rehabilitative Services.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scA/s56.001/2"> <num value="2">(2)</num> <content>"Designated provider" means a telecommunications provider designated by the commission to provide services to an uncertificated area under Subchapter F.</content> <continuation>(2-a) "Executive commissioner" means the executive commissioner of the Health and Human Services Commission.</continuation> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 2001, 77th Leg., ch. 651, Sec. 1, eff. Sept. 1, 2001. Amended by: Acts 2013, 83rd Leg., R.S., Ch. 532 (S.B. 512), Sec. 1, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scA/s56.002"> <num value="56.002">Sec. 56.002.</num> <heading>CONFLICT OF PROVISIONS</heading> <content>If this chapter conflicts with another provision of this title, this chapter prevails.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c56/scB"> <num value="B">SUBCHAPTER B.</num> <heading>UNIVERSAL SERVICE FUND</heading> <section identifier="/us/tx/ut/t2/c56/scB/s56.021"> <num value="56.021">Sec. 56.021.</num> <heading>UNIVERSAL SERVICE FUND ESTABLISHED</heading> <chapeau>The commission shall adopt and enforce rules requiring local exchange companies to establish a universal service fund to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.021/1"> <num value="1">(1)</num> <chapeau>assist telecommunications providers in providing basic local telecommunications service at reasonable rates in high cost rural areas under two plans:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c56/scB/s56.021/A"> <num value="A">(A)</num> <content>the Texas High Cost Universal Service Plan (16 T.A.C. Section 26.403); and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c56/scB/s56.021/B"> <num value="B">(B)</num> <content>the Small and Rural Incumbent Local Exchange Company Universal Service Plan (16 T.A.C. Section 26.404);</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.021/2"> <num value="2">(2)</num> <content>reimburse the telecommunications carrier that provides the statewide telecommunications relay access service under Subchapter D;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.021/3"> <num value="3">(3)</num> <content>finance the specialized telecommunications assistance program established under Subchapter E;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.021/4"> <num value="4">(4)</num> <content>reimburse the department and the commission for costs incurred in implementing this chapter and Chapter 57;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.021/5"> <num value="5">(5)</num> <content>reimburse a telecommunications carrier providing lifeline service as provided by 47 C.F.R. Part 54, Subpart E, as amended;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.021/6"> <num value="6">(6)</num> <content>finance the implementation and administration of the identification process under Section 17.007 for telecommunications services;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.021/7"> <num value="7">(7)</num> <content>reimburse a designated provider under Subchapter F;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.021/8"> <num value="8">(8)</num> <content>reimburse a successor utility under Subchapter G; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.021/9"> <num value="9">(9)</num> <content>finance the program established under Subchapter H.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 62, Sec. 18.08(a), eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 835, Sec. 2, eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 1212, Sec. 23, eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 1553, Sec. 1, eff. Sept. 1, 1999; Acts 2001, 77th Leg., ch. 651, Sec. 2, eff. Sept. 1, 2001; Acts 2001, 77th Leg., ch. 1451, Sec. 2, eff. Sept. 1, 2001; Acts 2003, 78th Leg., ch. 76, Sec. 5, eff. Sept. 1, 2003; Acts 2003, 78th Leg., ch. 1276, Sec. 17.001, eff. Sept. 1, 2003. Amended by: Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 12, eff. September 7, 2005. Acts 2011, 82nd Leg., R.S., Ch. 314 (H.B. 2295), Sec. 1, eff. June 17, 2011. Acts 2013, 83rd Leg., R.S., Ch. 532 (S.B. 512), Sec. 2, eff. September 1, 2013. Acts 2017, 85th Leg., R.S., Ch. 48 (S.B. 1976), Sec. 3, eff. September 1, 2017.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scB/s56.022"> <num value="56.022">Sec. 56.022.</num> <heading>UNIFORM CHARGE</heading> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.022/a"> <num value="a">(a)</num> <content>The universal service fund is funded by a statewide uniform charge payable by each telecommunications provider that has access to the customer base.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.022/b"> <num value="b">(b)</num> <content>A telecommunications provider shall pay the charge in accordance with procedures approved by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.022/c"> <num value="c">(c)</num> <chapeau>The uniform charge is on services and at rates the commission determines. In establishing the charge and the services to which the charge will apply, the commission may not:</chapeau> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.022/1"> <num value="1">(1)</num> <content>grant an unreasonable preference or advantage to a telecommunications provider;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.022/2"> <num value="2">(2)</num> <content>assess the charge on pay telephone service; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.022/3"> <num value="3">(3)</num> <content>subject a telecommunications provider to unreasonable prejudice or disadvantage.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 2001, 77th Leg., ch. 404, Sec. 1, eff. Sept. 1, 2001.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scB/s56.023"> <num value="56.023">Sec. 56.023.</num> <heading>COMMISSION POWERS AND DUTIES</heading> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.023/a"> <num value="a">(a)</num> <chapeau>The commission shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.023/1"> <num value="1">(1)</num> <content>in a manner that assures reasonable rates for basic local telecommunications service, adopt eligibility criteria and review procedures, including a method for administrative review, the commission finds necessary to fund the universal service fund and make distributions from that fund;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.023/2"> <num value="2">(2)</num> <content>determine which telecommunications providers meet the eligibility criteria;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.023/3"> <num value="3">(3)</num> <content>determine the amount of and approve a procedure for reimbursement to telecommunications providers of revenue lost in providing tel-assistance service under Subchapter C;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.023/4"> <num value="4">(4)</num> <content>establish and collect fees from the universal service fund necessary to recover the costs the department and the commission incur in administering this chapter and Chapter 57;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.023/5"> <num value="5">(5)</num> <content>approve procedures for the collection and disbursal of the revenue of the universal service fund; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.023/6"> <num value="6">(6)</num> <content>audit voucher payments and other expenditures made under the specialized telecommunications assistance program established under Subchapter E.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.023/b"> <num value="b">(b)</num> <chapeau>The eligibility criteria must require that a telecommunications provider, in compliance with the commission's quality of service requirements:</chapeau> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.023/1"> <num value="1">(1)</num> <content>offer service to each consumer within an exchange in the company's certificated area for which the incumbent local exchange company receives support under a plan established under Section 56.021(1) and to any permanent residential or business premises to which the company is designated to provide services under Subchapter F; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.023/2"> <num value="2">(2)</num> <content>render continuous and adequate service within an exchange in the company's certificated area for which the incumbent local exchange company receives support under a plan established under Section 56.021(1) and to any permanent residential or business premises to which the company is designated to provide services under Subchapter F.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.023/c"> <num value="c">(c)</num> <content>A company designated under Subchapter F to provide services to permanent residential or business premises within an uncertificated area and that complies with Subsection (b) shall receive universal service fund distributions to assist the provider in providing those services. In addition, the commission shall designate the provider as an eligible telecommunications carrier under 47 U.S.C. Section 214(e)(2), as amended, for those permanent residential or business premises.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.023/d"> <num value="d">(d)</num> <content>The commission shall adopt rules for the administration of the universal service fund and this chapter and may act as necessary and convenient to administer the fund and this chapter. The rules must include procedures to ensure reasonable transparency and accountability in the administration of the universal service fund.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.023/e"> <num value="e">(e)</num> <content>A successor utility, as that term is defined by Section 54.301, that is or becomes an eligible telecommunications carrier under 47 U.S.C. Section 214(e)(2), as amended, is entitled to receive universal service fund distributions for costs in accordance with Subchapter G.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.023/f"> <num value="f">(f)</num> <chapeau>Except as provided by Subsection (g), for an incumbent local exchange company or cooperative that served greater than 31,000 access lines in this state on September 1, 2022, or a company or cooperative that is a successor to such a company or cooperative, the support that the company or cooperative is eligible to receive on December 31, 2023, under a plan established under Section 56.021(1)(A) is reduced:</chapeau> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.023/1"> <num value="1">(1)</num> <content>on January 1, 2024, to 75 percent of the level of support the company or cooperative is eligible to receive on December 31, 2023;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.023/2"> <num value="2">(2)</num> <content>on January 1, 2025, to 50 percent of the level of support the company or cooperative is eligible to receive on December 31, 2023;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.023/3"> <num value="3">(3)</num> <content>on January 1, 2026, to 25 percent of the level of support the company or cooperative is eligible to receive on December 31, 2023; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.023/4"> <num value="4">(4)</num> <content>on January 1, 2027, to zero percent of the level of support the company or cooperative is eligible to receive on December 31, 2023.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.023/g"> <num value="g">(g)</num> <chapeau>After the commission has adopted rules under Subsection (j), an incumbent local exchange company or cooperative that is subject to Subsection (f) may petition the commission to initiate a contested case proceeding as necessary to determine the eligibility of the company or cooperative to receive support under a plan established under Section 56.021(1)(A). A company or cooperative may not file more than one petition under this subsection. On receipt of a petition under this subsection, the commission shall initiate a contested case proceeding to determine the eligibility of the company or cooperative to receive continued support under a plan established under Section 56.021(1)(A) for service in the exchanges that are the subject of the petition. To be eligible to receive support for service in an exchange under this subsection, the company or cooperative must demonstrate that it has a financial need for continued support. The commission must issue a final order on the proceeding not later than the 330th day after the date the petition is filed with the commission. Until the commission issues a final order on the proceeding, the company or cooperative is entitled to receive the total amount of support the company or cooperative was eligible to receive on the date the company or cooperative filed the petition. A company or cooperative that files a petition under this subsection is not subject to Subsection (f) after the commission issues a final order on the proceeding. If the commission determines that a company or cooperative has demonstrated financial need for continued support under this subsection, it shall set the amount of support in the same proceeding. The amount of support set by the commission for an exchange under this subsection may not exceed:</chapeau> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.023/1"> <num value="1">(1)</num> <content>100 percent of the amount of support that the company or cooperative will be eligible to receive on December 31, 2023, if the petition is filed before January 1, 2024;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.023/2"> <num value="2">(2)</num> <content>75 percent of the amount of support that the company or cooperative will be eligible to receive on December 31, 2023, if the petition is filed on or after January 1, 2024, and before January 1, 2025;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.023/3"> <num value="3">(3)</num> <content>50 percent of the amount of support the company or cooperative is eligible to receive on December 31, 2023, if the petition is filed on or after January 1, 2025, and before January 1, 2026;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.023/4"> <num value="4">(4)</num> <content>25 percent of the amount of support that the company or cooperative is eligible to receive on December 31, 2023, if the petition is filed on or after January 1, 2026, and before January 1, 2027; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.023/5"> <num value="5">(5)</num> <content>zero percent of the amount of support that the company or cooperative is eligible to receive on December 31, 2023, if the petition is filed on or after January 1, 2027, and before January 1, 2028.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.023/h"> <num value="h">(h)</num> <chapeau>Except as provided by Subsection (i), for an incumbent local exchange company that is an electing company under Chapter 58 or 59 or a cooperative that served greater than 31,000 access lines in this state on September 1, 2022, or a company or cooperative that is a successor to such a company or cooperative, the support that the company or cooperative is eligible to receive on December 31, 2024, under a plan established under Section 56.021(1)(B) is reduced:</chapeau> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.023/1"> <num value="1">(1)</num> <content>on January 1, 2025, to 75 percent of the level of support the company or cooperative is eligible to receive on December 31, 2024;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.023/2"> <num value="2">(2)</num> <content>on January 1, 2026, to 50 percent of the level of support the company or cooperative is eligible to receive on December 31, 2024;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.023/3"> <num value="3">(3)</num> <content>on January 1, 2027, to 25 percent of the level of support the company or cooperative is eligible to receive on December 31, 2024; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.023/4"> <num value="4">(4)</num> <content>on January 1, 2028, to zero percent of the level of support the company or cooperative is eligible to receive on December 31, 2024.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.023/i"> <num value="i">(i)</num> <chapeau>After the commission has adopted rules under Subsection (j), an incumbent local exchange company or cooperative that is subject to Subsection (h) may petition the commission to initiate a contested case proceeding as necessary to determine the eligibility of the company or cooperative to receive support under a plan established under Section 56.021(1)(B). A company or cooperative may not file more than one petition under this subsection. On receipt of a petition under this subsection, the commission shall initiate a contested case proceeding to determine the eligibility of the company or cooperative to receive continued support under a plan established under Section 56.021(1)(B) for service in the exchanges that are the subject of the petition. To be eligible to receive support for service in an exchange under this subsection, the company or cooperative must demonstrate that it has a financial need for continued support. The commission must issue a final order on the proceeding no later than the 330th day after the date the petition is filed with the commission. Until the commission issues a final order on the proceeding, the company or cooperative shall continue to receive the total amount of support it was eligible to receive on the date the company or cooperative filed a petition under this subsection. A company or cooperative that files a petition under this subsection is not subject to Subsection (h) after the commission issues a final order on the proceeding. If the commission determines that a company or cooperative has demonstrated financial need for continued support under this subsection, it shall set the amount of support in the same proceeding. The amount of support set by the commission for an exchange under this subsection may not exceed:</chapeau> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.023/1"> <num value="1">(1)</num> <content>100 percent of the amount of support that the company or cooperative will be eligible to receive on December 31, 2024, if the petition is filed before January 1, 2025;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.023/2"> <num value="2">(2)</num> <content>75 percent of the amount of support that the company or cooperative will be eligible to receive on December 31, 2024, if the petition is filed on or after January 1, 2025, and before January 1, 2026;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.023/3"> <num value="3">(3)</num> <content>50 percent of the amount of support that the company or cooperative is eligible to receive on December 31, 2024, if the petition is filed on or after January 1, 2026, and before January 1, 2027;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.023/4"> <num value="4">(4)</num> <content>25 percent of the amount of support that the company or cooperative is eligible to receive on December 31, 2024, if the petition is filed on or after January 1, 2027, and before January 1, 2028; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.023/5"> <num value="5">(5)</num> <content>zero percent of the amount of support that the company or cooperative is eligible to receive on December 31, 2024, if the petition is filed on or after January 1, 2028, and before January 1, 2029.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.023/j"> <num value="j">(j)</num> <content>The commission by rule shall establish the standards and criteria for an incumbent local exchange company or cooperative to demonstrate under Subsection (g) or (i) that the company or cooperative has a financial need for continued support for residential and business lines under a plan established under Section 56.021(1).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.023/k"> <num value="k">(k)</num> <content>Subsections (g) and (i) do not authorize the commission to initiate a contested case hearing concerning a local exchange company that has elected to participate in a total support reduction plan under 16 T.A.C. Section 26.403 that requires the company to forego funding under a plan established under Section 56.021(1) after January 1, 2024. This section does not affect any obligation of a local exchange company subject to such a total support reduction plan.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.023/l"> <num value="l">(l)</num> <content>Subsections (f), (g), (h), and (i) do not apply to an incumbent local exchange company that elects, not later than March 1, 2014, to eliminate, not later than September 1, 2018, the support it receives under a plan established under Section 56.021(1).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.023/m"> <num value="m">(m)</num> <content>Nothing in this chapter relieves any party of an obligation entered into in the commission's Docket No. 40521.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.023/n"> <num value="n">(n)</num> <content>Nothing in this section is intended to affect the rate rebalancing proceeding in the commission's Docket No. 41097.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.023/o"> <num value="o">(o)</num> <content>Expired.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.023/p"> <num value="p">(p)</num> <content>If an incumbent local exchange company or cooperative is ineligible for support under a plan established under Section 56.021(1) for services in an exchange, a plan established under Section 56.021(1) may not provide support to any other telecommunications providers for services in that exchange, except that an eligible telecommunications provider that is receiving support under Section 56.021(1)(A) in that exchange shall continue to receive such support until the commission determines that the support should be eliminated under Subsection (r). Until the commission eliminates the support under Subsection (r), the support received by the eligible telecommunications provider shall be at the same monthly per line support level in effect for that exchange as of the date the incumbent local exchange provider or cooperative ceases receiving funding in that exchange.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.023/q"> <num value="q">(q)</num> <content>Notwithstanding the period for continued support specified by Subsection (p), if the eligible telecommunications provider receiving continued support under that subsection is a cooperative or an affiliate of a cooperative, the telecommunications provider is entitled to continued support through December 31, 2023, at the same monthly per line support amount as the provider is receiving as of the date the support ceases for that exchange for the incumbent local exchange company or cooperative. Support authorized under this subsection ceases December 31, 2023.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.023/r"> <num value="r">(r)</num> <content>If the number of access lines served by competitive eligible telecommunications providers receiving support in an exchange described by Subsection (p) declines by at least 50 percent from the number of lines that were served by those providers in that exchange on December 31, 2016, the commission shall review the per line support amount for that exchange at least once every three years to determine whether continuing the support is in the public interest. The commission by rule shall establish the criteria to determine whether the support should be eliminated. The first review under this subsection for an exchange must be completed not later than the end of the year following the year in which the number of access lines first declines by at least 50 percent.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.023/s"> <num value="s">(s)</num> <content>The support for eligible telecommunications providers under Subsections (p) and (r) expires December 31, 2023.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.023/t"> <num value="t">(t)</num> <content>Not later than September 1 of every fourth year beginning September 1, 2023, the commission shall review and may adjust the standards and criteria to demonstrate financial need for continued support under Subsection (f).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.023/u"> <num value="u">(u)</num> <content>Not later than September 1 of every fourth year beginning September 1, 2024, the commission shall review and may adjust the standards and criteria to demonstrate financial need for continued support under Subsection (h).</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 1212, Sec. 24, eff. Sept. 1, 1999; Acts 2001, 77th Leg., ch. 651, Sec. 3, eff. Sept. 1, 2001; Acts 2003, 78th Leg., ch. 76, Sec. 6, eff. Sept. 1, 2003. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 98 (S.B. 980), Sec. 10, eff. September 1, 2011. Acts 2013, 83rd Leg., R.S., Ch. 532 (S.B. 512), Sec. 3, eff. September 1, 2013. Acts 2013, 83rd Leg., R.S., Ch. 751 (S.B. 583), Sec. 1, eff. June 14, 2013. Acts 2015, 84th Leg., R.S., Ch. 22 (S.B. 804), Sec. 1, eff. September 1, 2015. Acts 2017, 85th Leg., R.S., Ch. 1161 (S.B. 1476), Sec. 1, eff. June 15, 2017. Acts 2017, 85th Leg., R.S., Ch. 1161 (S.B. 1476), Sec. 2, eff. June 15, 2017. Acts 2023, 88th Leg., R.S., Ch. 946 (S.B. 1710), Sec. 1, eff. June 18, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scB/s56.0231"> <num value="56.0231">Sec. 56.0231.</num> <heading>SUPPORT EXPIRED</heading> <content>Support to an incumbent local exchange company or cooperative provided under Section 56.023 must be reduced on December 31, 2024, to zero percent of the amount of support that the company or cooperative is eligible to receive on that date if before December 31, 2022, support to the company or cooperative had been reduced to 25 percent of the support the company or cooperative was eligible to receive.</content> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 946 (S.B. 1710), Sec. 2, eff. June 18, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scB/s56.0232"> <num value="56.0232">Sec. 56.0232.</num> <heading>SUPPORT RELINQUISHED</heading> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.0232/a"> <num value="a">(a)</num> <content>An eligible telecommunications provider may notify the commission that the provider relinquishes the support it is entitled to receive under this chapter. After notice by the provider, the commission shall require the entity administering the universal service fund to terminate support to the provider.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.0232/b"> <num value="b">(b)</num> <content>If the commission does not notify the administrator under Subsection (a) of the provider's request before the 90th day after the date the commission receives the request, the provider is entitled to stop receiving the support on that date.</content> </subsection> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 946 (S.B. 1710), Sec. 2, eff. June 18, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scB/s56.024"> <num value="56.024">Sec. 56.024.</num> <heading>REPORTS; CONFIDENTIALITY</heading> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.024/a"> <num value="a">(a)</num> <content>The commission may require a telecommunications provider to provide a report or information necessary to assess contributions and disbursements to the universal service fund.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.024/b"> <num value="b">(b)</num> <content>A report or information the commission requires a telecommunications provider to provide under Subsection (a) is confidential and not subject to disclosure under Chapter 552, Government Code.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.024/c"> <num value="c">(c)</num> <chapeau>A telecommunications provider shall file with the commission the provider's annual earnings report if the provider:</chapeau> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.024/1"> <num value="1">(1)</num> <content>is not a local exchange company subject to a total support reduction plan under 16 T.A.C. Section 26.403 or that has made an election under Section 56.023(l);</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.024/2"> <num value="2">(2)</num> <content>serves greater than 31,000 access lines; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.024/3"> <num value="3">(3)</num> <content>receives support under a plan established under Section 56.021(1).</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.024/d"> <num value="d">(d)</num> <content>A report filed under Subsection (c) is confidential and not subject to disclosure under Chapter 552, Government Code.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 1212, Sec. 24, eff. Sept. 1, 1999. Amended by: Acts 2013, 83rd Leg., R.S., Ch. 751 (S.B. 583), Sec. 2, eff. June 14, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scB/s56.025"> <num value="56.025">Sec. 56.025.</num> <heading>MAINTENANCE OF RATES AND EXPANSION OF FUND FOR CERTAIN COMPANIES</heading> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.025/a"> <num value="a">(a)</num> <chapeau>In addition to the authority provided by Section 56.021:</chapeau> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.025/1"> <num value="1">(1)</num> <content>for each local exchange company that serves fewer than 31,000 access lines and each cooperative, the commission may adopt a mechanism necessary to maintain reasonable rates for local exchange telephone service; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.025/2"> <num value="2">(2)</num> <content>for each local exchange company and each cooperative that serves 31,000 or fewer access lines and that on June 1, 2013, is not an electing company under Chapter 58 or 59, the commission shall adopt rules to expand the universal service fund in the circumstances prescribed by this section.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.025/b"> <num value="b">(b)</num> <content>The commission shall implement a mechanism through the universal service fund to replace the reasonably projected reduction in high cost assistance revenue caused by a commission order, rule, or policy. This subsection does not apply to an order entered in a proceeding related to an individual company's revenue requirements.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.025/c"> <num value="c">(c)</num> <chapeau>The commission shall implement a mechanism to replace the reasonably projected change in revenue caused by a Federal Communications Commission order, rule, or policy that changes:</chapeau> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.025/1"> <num value="1">(1)</num> <content>the federal universal service fund revenue of a local exchange company; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.025/2"> <num value="2">(2)</num> <content>costs or revenue assigned to the intrastate jurisdiction.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.025/d"> <num value="d">(d)</num> <content>The commission shall implement a mechanism to replace the reasonably projected reduction in contribution caused by a change of commission policy regarding intraLATA "1-plus" dialing access. In this subsection, "contribution" means the average intraLATA long distance message telecommunications service revenue per minute, including intraLATA toll pooling and associated impacts, less the average message telecommunications service cost per minute less the average contribution from switched access multiplied by the projected change in intraLATA "1-plus" minutes of use.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.025/e"> <num value="e">(e)</num> <content>The commission shall implement a mechanism to replace the reasonably projected increase in costs or decrease in revenue of the intrastate jurisdiction caused by another governmental agency's order, rule, or policy.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.025/f"> <num value="f">(f)</num> <chapeau>A mechanism implemented under Subsection (c), (d), or (e) must be through:</chapeau> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.025/1"> <num value="1">(1)</num> <content>an increase in rates, if the increase would not adversely affect universal service; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.025/2"> <num value="2">(2)</num> <content>the universal service fund.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.025/g"> <num value="g">(g)</num> <content>Notwithstanding any other provision of this section, after December 31, 2013, the commission may not distribute support granted under this section, including any support granted before that date, to a local exchange company or cooperative that serves greater than 31,000 access lines or that is an electing company under Chapter 58 or 59 on June 1, 2013.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 13, eff. September 7, 2005. Acts 2013, 83rd Leg., R.S., Ch. 751 (S.B. 583), Sec. 3, eff. June 14, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scB/s56.026"> <num value="56.026">Sec. 56.026.</num> <heading>PROMPT AND EFFICIENT DISBURSEMENTS</heading> <content>The commission shall make each disbursement from the universal service fund promptly and efficiently so that a telecommunications provider does not experience an unnecessary cash-flow change as a result of a change in governmental policy.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 1212, Sec. 25, eff. Sept. 1, 1999. Amended by: Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 14, eff. September 7, 2005. Acts 2013, 83rd Leg., R.S., Ch. 751 (S.B. 583), Sec. 4, eff. June 14, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scB/s56.028"> <num value="56.028">Sec. 56.028.</num> <heading>UNIVERSAL SERVICE FUND REIMBURSEMENT FOR CERTAIN INTRALATA SERVICE</heading> <content>On request of an incumbent local exchange company that is not an electing company under Chapters 58 and 59, the commission shall provide reimbursement through the universal service fund for reduced rates for intraLATA interexchange high capacity (1.544 Mbps) service for entities described in Section 58.253(a). The amount of reimbursement shall be the difference between the company's tariffed rate for that service as of January 1, 1998, and the lowest rate offered for that service by any local exchange company electing incentive regulation under Chapter 58.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 26, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scB/s56.030"> <num value="56.030">Sec. 56.030.</num> <heading>AFFIDAVITS OF COMPLIANCE</heading> <content>On or before September 1 of each year, a telecommunications provider that receives disbursements from the universal service fund shall file with the commission an affidavit certifying that the telecommunications provider is in compliance with the requirements for receiving money from the universal service fund and requirements regarding the use of money from each universal service fund program for which the telecommunications provider receives disbursements.</content> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 15, eff. September 7, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scB/s56.031"> <num value="56.031">Sec. 56.031.</num> <heading>ADJUSTMENTS: TEXAS HIGH COST UNIVERSAL SERVICE PLAN</heading> <content>The commission may revise the monthly per line support amounts to be made available from the Texas High Cost Universal Service Plan after notice and an opportunity for hearing. In determining appropriate monthly per line support amounts, the commission shall consider the adequacy of basic rates to support universal service.</content> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 15, eff. September 7, 2005. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 535 (H.B. 2603), Sec. 1, eff. September 1, 2011. Acts 2013, 83rd Leg., R.S., Ch. 751 (S.B. 583), Sec. 6, eff. June 14, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scB/s56.032"> <num value="56.032">Sec. 56.032.</num> <heading></heading> <chapeau>For expiration of Subsections (a), (c), (d), and (e)–(m), see Subsection (n).</chapeau> <continuation>Sec. 56.032. ADJUSTMENTS: SMALL AND RURAL INCUMBENT LOCAL EXCHANGE COMPANY UNIVERSAL SERVICE PLAN. (a) In this section:</continuation> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.032/1"> <num value="1">(1)</num> <content>"Rate of return" means the Federal Communications Commission's prescribed rate of return as of the date of any determination, review, or adjustment under this section, to be no greater than 9.75 percent prior to July 1, 2021. If the commission finds that the Federal Communications Commission no longer prescribes a rate of return necessary to implement this section, the commission shall initiate proceedings to determine or modify the rate of return to be used for purposes of this section as necessary.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.032/2"> <num value="2">(2)</num> <chapeau>"Small provider" means:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c56/scB/s56.032/A"> <num value="A">(A)</num> <content>an incumbent local exchange company or cooperative that, on September 1, 2013, together with all local exchange companies affiliated with the company or cooperative on that date, served 31,000 or fewer access lines in this state; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c56/scB/s56.032/B"> <num value="B">(B)</num> <content>a company or cooperative that is a successor to a company or cooperative described by Paragraph (A).</content> </subparagraph> </paragraph> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.032/b"> <num value="b">(b)</num> <content>Except as provided by Subsections (c) through (j), the commission may revise the monthly support amounts to be made available from the Small and Rural Incumbent Local Exchange Company Universal Service Plan by any mechanism, including support reductions resulting from rate rebalancing approved by the commission, after notice and an opportunity for hearing. In determining appropriate monthly support amounts, the commission shall consider the adequacy of basic rates to support universal service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.032/c"> <num value="c">(c)</num> <content>On the written request of a small provider that is not an electing company under Chapter 58 or 59, the commission shall determine and disburse support to the small provider in fixed monthly amounts based on an annualized support amount the commission determines to be sufficient, when combined with regulated revenues, to permit the small provider the opportunity to earn a reasonable return in accordance with Section 53.051. A small provider that makes a request under this subsection shall continue to receive the same level of support it was receiving on the date of the written request until the commission makes a determination or adjustment through the mechanism described by Subsection (d).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.032/d"> <num value="d">(d)</num> <chapeau>Not later than January 1, 2018, the commission shall initiate rulemaking proceedings to develop and implement a mechanism to determine the annualized support amount to be disbursed under Subsection (c). The mechanism must:</chapeau> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.032/1"> <num value="1">(1)</num> <chapeau>require the annual filing of a report by each small provider that submits a request under Subsection (c) for the purpose of:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c56/scB/s56.032/A"> <num value="A">(A)</num> <content>establishing a continued level of support for the provider or the eligibility of the provider for support adjustment filings for the purposes of Subsections (f), (g), (h), and (i); and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c56/scB/s56.032/B"> <num value="B">(B)</num> <content>determining whether support levels, when combined with regulated revenues, provide the provider an opportunity to earn a reasonable return as described by Subsection (f);</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.032/2"> <num value="2">(2)</num> <content>provide requirements for the annual filing, which may include annual earnings reports filed with the commission under 16 T.A.C. Section 26.73 and any underlying data that, during the rulemaking process, the commission determines to be reasonably necessary for the purposes of Subdivision (1);</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.032/3"> <num value="3">(3)</num> <content>provide requirements and procedures for adjustment proceedings that are consistent with Subsections (h) and (i); and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.032/4"> <num value="4">(4)</num> <content>provide a procedure for the commission to assess, as necessary, whether the reported return of a small provider is based on expenses that are not reasonable and necessary.</content> <continuation>(d-1) In addition to the report required by Subsection (d), a small provider that submits a request under Subsection (c) shall file with the commission annually a report that includes the following information regarding the provider's operations that are regulated by the commission:</continuation> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.032/1"> <num value="1">(1)</num> <content>total operating revenues;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.032/2"> <num value="2">(2)</num> <content>total operating expenses;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.032/3"> <num value="3">(3)</num> <content>total operating tax expense;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.032/4"> <num value="4">(4)</num> <content>rate of return;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.032/5"> <num value="5">(5)</num> <content>total invested capital; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.032/6"> <num value="6">(6)</num> <content>network access revenue.</content> <continuation>(d-2) A small provider shall file the report required by Subsection (d-1) using the commission's public filing system. Subsection (k) does not apply to information in a report filed under Subsection (d-1).</continuation> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.032/e"> <num value="e">(e)</num> <content>In a proceeding to adjust support levels using the mechanism described by Subsection (d), the commission may consider the small provider's data for a period not to exceed three fiscal years before the date the proceeding is initiated.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.032/f"> <num value="f">(f)</num> <content>For purposes of the mechanism described by Subsection (d), a return is deemed reasonable if the return is within two percentage points above or three percentage points below the rate of return as defined in this section. A small provider's reported return is subject to assessment under the procedures described in Subsection (d)(4).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.032/g"> <num value="g">(g)</num> <content>The commission may not approve a support adjustment under Subsection (h) or (i) if the commission determines that a small provider's return for the previous fiscal year was reasonable under Subsection (f).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.032/h"> <num value="h">(h)</num> <content>A small provider whose return is not reasonable under Subsection (f) because the return is more than three percentage points below the rate of return as defined in this section may file an application that is eligible for administrative review or informal disposition to adjust support or rates to a level that would bring the small provider's return into the range that would be deemed reasonable under Subsection (f), except that the adjustment may not set a small provider's support level at more than 140 percent of the annualized support amount the provider received in the 12-month period before the date of adjustment. A rate adjustment under this subsection may not adversely affect universal service. Except for good cause, a small provider that files an application for adjustment under this subsection may not file a subsequent application for adjustment before the third anniversary of the date on which the small provider's most recent application for adjustment is initiated.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.032/i"> <num value="i">(i)</num> <content>There is no presumption that the return is unreasonable for a small provider whose return is more than two percentage points above the rate of return as defined in this section. However, on its own motion, the commission may initiate a proceeding to review the small provider's support level and regulated revenues and after notice and an opportunity for a hearing, adjust the provider's level of support or rates, if appropriate. A rate adjustment under this subsection may not adversely affect universal service. Except for good cause, the commission may not initiate a subsequent adjustment proceeding for a small provider under this subsection before the third anniversary of the date on which the small provider's most recent adjustment proceeding is initiated.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.032/j"> <num value="j">(j)</num> <chapeau>A small provider that is eligible to have support determined and distributed under Subsection (c) shall continue to receive the same level of support it was receiving on August 31, 2017, until the earlier of:</chapeau> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.032/1"> <num value="1">(1)</num> <content>the date on which the commission makes a determination or adjustment through the mechanism described by Subsection (d); or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.032/2"> <num value="2">(2)</num> <content>the 61st day after the date the commission adopts the mechanism described by Subsection (d).</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.032/k"> <num value="k">(k)</num> <content>A report or information the commission requires a small provider to provide under Subsection (d) is confidential and is not subject to disclosure under Chapter 552, Government Code. In any proceeding related to Subsection (d), a third party's access to confidential information is subject to an appropriate protective order.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.032/l"> <num value="l">(l)</num> <chapeau>Except as provided by Subsection (m), this section does not:</chapeau> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.032/1"> <num value="1">(1)</num> <content>affect the commission's authority under Chapter 53 or this chapter; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scB/s56.032/2"> <num value="2">(2)</num> <content>limit the commission's authority to initiate a review of a small provider under another provision of this title.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.032/m"> <num value="m">(m)</num> <content>In a proceeding for a small provider initiated under Subchapter A, B, C, or D, Chapter 53, the commission may recalculate the annualized support amount to be disbursed to the small provider and to be used as the basis for adjustment in any subsequent proceeding under Subsections (c) through (j).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.032/n"> <num value="n">(n)</num> <content>Subsections (a), (c), (d), (e), (f), (g), (h), (i), (j), (k), (l), and (m) and any monthly amounts approved under those subsections expire September 1, 2033.</content> </subsection> <sourceCredit>Added by Acts 2011, 82nd Leg., R.S., Ch. 535 (H.B. 2603), Sec. 2, eff. September 1, 2011. Amended by: Acts 2013, 83rd Leg., R.S., Ch. 751 (S.B. 583), Sec. 5, eff. June 14, 2013. Acts 2017, 85th Leg., R.S., Ch. 1116 (S.B. 586), Sec. 1, eff. September 1, 2017. Acts 2023, 88th Leg., R.S., Ch. 57 (S.B. 1425), Sec. 1, eff. May 19, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scB/s56.033"> <num value="56.033">Sec. 56.033.</num> <heading>SUPPORT AVAILABLE TO DEREGULATED MARKETS</heading> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.033/a"> <num value="a">(a)</num> <content>An incumbent local exchange company may not receive support from the universal service fund for a deregulated market that has a population of at least 30,000.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.033/b"> <num value="b">(b)</num> <content>An incumbent local exchange company may receive support from the universal service fund for a deregulated market that has a population of less than 30,000 only if the company demonstrates to the commission that the company needs the support to provide basic local telecommunications service at reasonable rates in the affected market. A company may use evidence from outside the affected market to make the demonstration.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scB/s56.033/c"> <num value="c">(c)</num> <content>An incumbent local exchange company may make the demonstration described by Subsection (b) in relation to a market before submitting a petition to deregulate the market.</content> </subsection> <sourceCredit>Added by Acts 2011, 82nd Leg., R.S., Ch. 98 (S.B. 980), Sec. 11, eff. January 2, 2012. Redesignated from Utilities Code, Section 56.032 by Acts 2013, 83rd Leg., R.S., Ch. 161 (S.B. 1093), Sec. 22.001(54), eff. September 1, 2013.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c56/scD"> <num value="D">SUBCHAPTER D.</num> <heading>STATEWIDE TELECOMMUNICATIONS RELAY ACCESS SERVICE</heading> <section identifier="/us/tx/ut/t2/c56/scD/s56.101"> <num value="56.101">Sec. 56.101.</num> <heading>PURPOSE</heading> <content>The purpose of this subchapter is to provide for the uniform and coordinated provision by one telecommunications carrier of a statewide telecommunications relay access service for persons with an impairment of hearing or speech.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scD/s56.102"> <num value="56.102">Sec. 56.102.</num> <heading>TELECOMMUNICATIONS RELAY ACCESS SERVICE</heading> <subsection identifier="/us/tx/ut/t2/c56/scD/s56.102/a"> <num value="a">(a)</num> <content>The commission shall adopt and enforce rules establishing a statewide telecommunications relay access service for the use of a person with an impairment of hearing or speech.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scD/s56.102/b"> <num value="b">(b)</num> <chapeau>The commission rules shall provide that the service must:</chapeau> <paragraph identifier="/us/tx/ut/t2/c56/scD/s56.102/1"> <num value="1">(1)</num> <content>use specialized communications equipment, such as a telecommunications device for the deaf, and operator translations; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scD/s56.102/2"> <num value="2">(2)</num> <content>meet the criteria provided by Sections 56.103, 56.104, and 56.105.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scD/s56.103"> <num value="56.103">Sec. 56.103.</num> <heading>TELECOMMUNICATIONS RELAY ACCESS SERVICE REQUIREMENTS</heading> <subsection identifier="/us/tx/ut/t2/c56/scD/s56.103/a"> <num value="a">(a)</num> <content>The telecommunications relay access service shall provide a person with an impairment of hearing or speech with access to the telecommunications network in this state equivalent to the access provided other customers.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scD/s56.103/b"> <num value="b">(b)</num> <chapeau>The service consists of:</chapeau> <paragraph identifier="/us/tx/ut/t2/c56/scD/s56.103/1"> <num value="1">(1)</num> <content>switching and transmission of the call;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scD/s56.103/2"> <num value="2">(2)</num> <content>live or automated verbal and print translations of communications between a person with an impairment of hearing or speech who uses a telecommunications device for the deaf or a similar automated device and a person who does not have such equipment; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scD/s56.103/3"> <num value="3">(3)</num> <content>other service enhancements proposed by the carrier and approved by the commission.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scD/s56.104"> <num value="56.104">Sec. 56.104.</num> <heading>TELECOMMUNICATIONS RELAY ACCESS SERVICE CHARGES</heading> <subsection identifier="/us/tx/ut/t2/c56/scD/s56.104/a"> <num value="a">(a)</num> <chapeau>For a call made using the telecommunications relay access service, the person calling or called:</chapeau> <paragraph identifier="/us/tx/ut/t2/c56/scD/s56.104/1"> <num value="1">(1)</num> <content>may not be charged for a call that originates and terminates in the same local calling area; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scD/s56.104/2"> <num value="2">(2)</num> <content>shall pay one-half of the total charges established by contract with the commission for intrastate interexchange calls.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scD/s56.104/b"> <num value="b">(b)</num> <content>Charges related to providing the service that, under Subsection (a), are not charged to a person calling or called shall be funded from the universal service fund, as specified by the service provider's contract with the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scD/s56.104/c"> <num value="c">(c)</num> <content>A local exchange company may not impose an interexchange carrier access charge on a call using the service that originates and terminates in the same local calling area.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scD/s56.104/d"> <num value="d">(d)</num> <content>A local exchange company shall provide billing and collection services for the service at just and reasonable rates.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scD/s56.105"> <num value="56.105">Sec. 56.105.</num> <heading>TRIAL SERVICE COSTS AND DESIGN INFORMATION</heading> <content>If the commission orders a local exchange company to provide for a trial telecommunications relay access service for persons with an impairment of hearing or speech, all pertinent costs and design information from the trial must be made available to the public.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scD/s56.106"> <num value="56.106">Sec. 56.106.</num> <heading>TELECOMMUNICATIONS RELAY ACCESS SERVICE ASSESSMENTS</heading> <subsection identifier="/us/tx/ut/t2/c56/scD/s56.106/a"> <num value="a">(a)</num> <content>The commission shall set appropriate assessments for all telecommunications utilities to fund the telecommunications relay access service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scD/s56.106/b"> <num value="b">(b)</num> <chapeau>In setting an assessment, the commission shall consider:</chapeau> <paragraph identifier="/us/tx/ut/t2/c56/scD/s56.106/1"> <num value="1">(1)</num> <content>the aggregate calling pattern of service users; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scD/s56.106/2"> <num value="2">(2)</num> <content>any other factor the commission finds appropriate and in the public interest.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scD/s56.106/c"> <num value="c">(c)</num> <chapeau>The commission shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c56/scD/s56.106/1"> <num value="1">(1)</num> <content>review the assessments annually; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scD/s56.106/2"> <num value="2">(2)</num> <content>adjust the assessments as appropriate.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scD/s56.107"> <num value="56.107">Sec. 56.107.</num> <heading>UNIVERSAL SERVICE FUND SURCHARGE</heading> <subsection identifier="/us/tx/ut/t2/c56/scD/s56.107/a"> <num value="a">(a)</num> <content>A telecommunications utility may recover the utility's universal service fund assessment for the telecommunications relay access service through a surcharge added to the utility customers' bills.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scD/s56.107/b"> <num value="b">(b)</num> <content>The commission shall specify how each telecommunications utility is to determine the amount of the surcharge.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scD/s56.107/c"> <num value="c">(c)</num> <content>If a telecommunications utility imposes the surcharge, the bill shall list the surcharge as the "universal service fund surcharge."</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scD/s56.108"> <num value="56.108">Sec. 56.108.</num> <heading>SELECTION OF TELECOMMUNICATIONS RELAY ACCESS SERVICE CARRIER</heading> <subsection identifier="/us/tx/ut/t2/c56/scD/s56.108/a"> <num value="a">(a)</num> <content>The commission shall select one telecommunications carrier to provide the statewide telecommunications relay access service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scD/s56.108/b"> <num value="b">(b)</num> <chapeau>The commission shall make a written award of the contract to the telecommunications carrier whose proposal is the most advantageous to this state, considering:</chapeau> <paragraph identifier="/us/tx/ut/t2/c56/scD/s56.108/1"> <num value="1">(1)</num> <content>price;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scD/s56.108/2"> <num value="2">(2)</num> <content>the interests of the community of persons with an impairment of hearing or speech in having access to a high quality and technologically advanced telecommunications system; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scD/s56.108/3"> <num value="3">(3)</num> <content>any other factor listed in the commission's request for proposals.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scD/s56.108/c"> <num value="c">(c)</num> <content>The commission shall consider each proposal in a manner that does not disclose the contents of the proposal to a telecommunications carrier making a competing proposal.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scD/s56.108/d"> <num value="d">(d)</num> <chapeau>The commission's evaluation of a telecommunications carrier's proposal shall include the:</chapeau> <paragraph identifier="/us/tx/ut/t2/c56/scD/s56.108/1"> <num value="1">(1)</num> <content>charges for the service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scD/s56.108/2"> <num value="2">(2)</num> <content>service enhancements proposed by the carrier;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scD/s56.108/3"> <num value="3">(3)</num> <content>technological sophistication of the network proposed by the carrier; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scD/s56.108/4"> <num value="4">(4)</num> <content>date proposed for beginning the service.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scD/s56.1085"> <num value="56.1085">Sec. 56.1085.</num> <heading>SPECIAL FEATURES FOR RELAY ACCESS SERVICE</heading> <subsection identifier="/us/tx/ut/t2/c56/scD/s56.1085/a"> <num value="a">(a)</num> <chapeau>The commission may contract for a special feature for the state's telecommunications relay access service if the commission determines:</chapeau> <paragraph identifier="/us/tx/ut/t2/c56/scD/s56.1085/1"> <num value="1">(1)</num> <content>the feature will benefit the communication of persons with an impairment of hearing or speech;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scD/s56.1085/2"> <num value="2">(2)</num> <content>installation of the feature will be of benefit to the state; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scD/s56.1085/3"> <num value="3">(3)</num> <content>the feature will make the relay access service available to a greater number of users.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scD/s56.1085/b"> <num value="b">(b)</num> <chapeau>If the carrier selected to provide the telecommunications relay access service under Section 56.108 is unable to provide the special feature at the best value to the state, the commission may make a written award of a contract for a carrier to provide the special feature to the telecommunications carrier whose proposal is most advantageous to the state, considering:</chapeau> <paragraph identifier="/us/tx/ut/t2/c56/scD/s56.1085/1"> <num value="1">(1)</num> <content>the factors provided by Section 56.108(b); and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scD/s56.1085/2"> <num value="2">(2)</num> <content>the past performance, demonstrated capability, and experience of the carrier.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scD/s56.1085/c"> <num value="c">(c)</num> <content>The commission shall consider each proposal in a manner that does not disclose the contents of the proposal to a telecommunications carrier making a competing proposal.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scD/s56.1085/d"> <num value="d">(d)</num> <content>The commission's evaluation of a telecommunications carrier's proposal shall include the considerations provided by Section 56.108(d).</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1553, Sec. 2, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scD/s56.109"> <num value="56.109">Sec. 56.109.</num> <heading>COMPENSATION OF CARRIER</heading> <subsection identifier="/us/tx/ut/t2/c56/scD/s56.109/a"> <num value="a">(a)</num> <content>The telecommunications carrier selected to provide the telecommunications relay access service under Section 56.108 or the carrier selected to provide a special feature for the telecommunications relay access service under Section 56.1085 shall be compensated at rates and on terms provided by the carrier's contract with the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scD/s56.109/b"> <num value="b">(b)</num> <chapeau>The compensation may include:</chapeau> <paragraph identifier="/us/tx/ut/t2/c56/scD/s56.109/1"> <num value="1">(1)</num> <content>a return on the investment required to provide the service; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scD/s56.109/2"> <num value="2">(2)</num> <content>compensation for unbillable or uncollectible calls placed through the service.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scD/s56.109/c"> <num value="c">(c)</num> <content>Compensation for unbillable or uncollectible calls is subject to a reasonable limitation determined by the commission.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 1553, Sec. 3, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scD/s56.110"> <num value="56.110">Sec. 56.110.</num> <heading>ADVISORY COMMITTEE</heading> <subsection identifier="/us/tx/ut/t2/c56/scD/s56.110/a"> <num value="a">(a)</num> <chapeau>An advisory committee to assist the commission in administering this subchapter is composed of the following persons appointed by the commission:</chapeau> <paragraph identifier="/us/tx/ut/t2/c56/scD/s56.110/1"> <num value="1">(1)</num> <content>two persons with disabilities that impair the ability to effectively access the telephone network other than disabilities described by Subdivisions (2)-(7);</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scD/s56.110/2"> <num value="2">(2)</num> <content>one deaf person recommended by the Texas Deaf Caucus;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scD/s56.110/3"> <num value="3">(3)</num> <content>one deaf person recommended by the Texas Association of the Deaf;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scD/s56.110/4"> <num value="4">(4)</num> <content>one person with a hearing impairment recommended by Self-Help for the Hard of Hearing;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scD/s56.110/5"> <num value="5">(5)</num> <content>one person with a hearing impairment recommended by the American Association of Retired Persons;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scD/s56.110/6"> <num value="6">(6)</num> <content>one deaf and blind person recommended by the Texas Deaf/Blind Association;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scD/s56.110/7"> <num value="7">(7)</num> <content>one person with a speech impairment and one person with a speech and hearing impairment recommended by the Coalition of Texans with Disabilities;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scD/s56.110/8"> <num value="8">(8)</num> <content>two representatives of telecommunications utilities, one representing a nonlocal exchange utility and one representing a local exchange company, chosen from a list of candidates provided by the Texas Telephone Association;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scD/s56.110/9"> <num value="9">(9)</num> <content>two persons, at least one of whom is deaf, with experience in providing relay services recommended by the department; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scD/s56.110/10"> <num value="10">(10)</num> <content>two public members recommended by organizations representing consumers of telecommunications services.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scD/s56.110/b"> <num value="b">(b)</num> <content>Members of the advisory committee serve two-year terms. A member whose term has expired shall continue to serve until a qualified replacement is appointed.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 62, Sec. 18.08(b), eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 1553, Sec. 4, eff. Sept. 1, 1999. Amended by: Acts 2013, 83rd Leg., R.S., Ch. 532 (S.B. 512), Sec. 4, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scD/s56.111"> <num value="56.111">Sec. 56.111.</num> <heading>ADVISORY COMMITTEE DUTIES</heading> <chapeau>The advisory committee shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c56/scD/s56.111/1"> <num value="1">(1)</num> <content>monitor the establishment, administration, and promotion of the statewide telecommunications relay access service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scD/s56.111/2"> <num value="2">(2)</num> <content>advise the commission in pursuing a service that meets the needs of persons with an impairment of hearing or speech in communicating with other telecommunications services users; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scD/s56.111/3"> <num value="3">(3)</num> <chapeau>advise the department, at that department's request, regarding any issue related to the specialized telecommunications assistance program established under Subchapter E, including:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c56/scD/s56.111/A"> <num value="A">(A)</num> <content>devices or services suitable to meet the needs of persons with disabilities in communicating with other users of telecommunications services; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c56/scD/s56.111/B"> <num value="B">(B)</num> <content>oversight and administration of the program.</content> </subparagraph> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 62, Sec. 18.08(c), eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 1553, Sec. 5, eff. Sept. 1, 1999. Amended by: Acts 2013, 83rd Leg., R.S., Ch. 532 (S.B. 512), Sec. 5, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scD/s56.112"> <num value="56.112">Sec. 56.112.</num> <heading>ADVISORY COMMITTEE SUPPORT AND COSTS</heading> <subsection identifier="/us/tx/ut/t2/c56/scD/s56.112/a"> <num value="a">(a)</num> <chapeau>The commission shall provide to the advisory committee:</chapeau> <paragraph identifier="/us/tx/ut/t2/c56/scD/s56.112/1"> <num value="1">(1)</num> <content>clerical and staff support; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scD/s56.112/2"> <num value="2">(2)</num> <content>a secretary to record committee meetings.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scD/s56.112/b"> <num value="b">(b)</num> <content>The costs associated with the advisory committee shall be reimbursed from the universal service fund.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 62, Sec. 18.08(d), eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scD/s56.113"> <num value="56.113">Sec. 56.113.</num> <heading>ADVISORY COMMITTEE COMPENSATION AND EXPENSES</heading> <content>A member of the advisory committee serves without compensation but is entitled to reimbursement at rates established for state employees for travel and per diem incurred in the performance of the member's official duties.</content> <sourceCredit>Added by Acts 2001, 77th Leg., ch. 1158, Sec. 93, eff. Sept. 1, 2001.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c56/scE"> <num value="E">SUBCHAPTER E.</num> <heading>SPECIALIZED TELECOMMUNICATIONS ASSISTANCE PROGRAM</heading> <section identifier="/us/tx/ut/t2/c56/scE/s56.151"> <num value="56.151">Sec. 56.151.</num> <heading>SPECIALIZED TELECOMMUNICATIONS ASSISTANCE PROGRAM</heading> <subsection identifier="/us/tx/ut/t2/c56/scE/s56.151/a"> <num value="a">(a)</num> <content>The executive commissioner, after consulting with the department, by rule shall establish a specialized telecommunications assistance program to provide financial assistance to individuals with disabilities that impair the individuals' ability to effectively access the telephone network to assist the individuals with the purchase of basic specialized equipment or services to provide the individuals with telephone network access that is functionally equivalent to that enjoyed by individuals without disabilities. The executive commissioner may adopt rules that identify devices and services eligible for vouchers under the program.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scE/s56.151/b"> <num value="b">(b)</num> <content>The department may contract, as necessary, to implement and administer the specialized telecommunications assistance program.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.08(e), eff. Sept. 1, 1999. Amended by Acts 1999, 76th Leg., ch. 1553, Sec. 7, eff. Sept. 1, 1999; Acts 2001, 77th Leg., ch. 424, Sec. 1, eff. Sept. 1, 2001. Amended by: Acts 2013, 83rd Leg., R.S., Ch. 532 (S.B. 512), Sec. 6, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scE/s56.152"> <num value="56.152">Sec. 56.152.</num> <heading>ELIGIBILITY</heading> <content>The executive commissioner, after consulting with the department, by rule shall prescribe eligibility standards for individuals, including deaf individuals and individuals who have an impairment of hearing or speech, to receive an assistance voucher under the program. To be eligible, an individual must be a resident of this state with a disability that impairs the individual's ability to effectively access the telephone network.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.08(e), eff. Sept. 1, 1999. Amended by Acts 1999, 76th Leg., ch. 1553, Sec. 7, eff. Sept. 1, 1999; Acts 2001, 77th Leg., ch. 424, Sec. 2, eff. Sept. 1, 2001. Amended by: Acts 2013, 83rd Leg., R.S., Ch. 532 (S.B. 512), Sec. 7, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scE/s56.153"> <num value="56.153">Sec. 56.153.</num> <heading>VOUCHERS</heading> <subsection identifier="/us/tx/ut/t2/c56/scE/s56.153/a"> <num value="a">(a)</num> <content>The department shall determine a reasonable price for a basic specialized telecommunications device that permits, or basic specialized services that permit, telephone network access and distribute to each eligible applicant a voucher that guarantees payment of that amount to a distributor of new specialized telecommunications devices described by Section 56.151 or to a provider of services described by that section. The department may issue a voucher for a service only if the service is less expensive than a device eligible for a voucher under the program to meet the same need.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scE/s56.153/b"> <num value="b">(b)</num> <content>A voucher must have the value printed on its face. The individual exchanging a voucher for the purchase of a specialized telecommunications device or service is responsible for payment of the difference between the voucher's value and the price of the device or service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scE/s56.153/c"> <num value="c">(c)</num> <content>The executive commissioner, after consulting with the department, by rule shall provide that a distributor of devices or a provider of services will receive not more than the full price of the device or service if the recipient of a voucher exchanges the voucher for a device or service that the distributor or provider sells for less than the voucher's value.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scE/s56.153/d"> <num value="d">(d)</num> <content>An individual who has exchanged a voucher for a specialized telecommunications device is not eligible to receive another voucher before the fifth anniversary of the date the individual exchanged the previously issued voucher unless, before that date, the recipient develops a need for a different type of telecommunications device or service under the program because the recipient's disability changes or the recipient acquires another disability.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scE/s56.153/e"> <num value="e">(e)</num> <content>Except as provided by rules adopted under this subsection, an individual is not eligible for a voucher if the department has issued a voucher for a device or service to another individual with the same type of disability in the individual's household. The executive commissioner, after consulting with the department, by rule may provide for financially independent individuals who reside in a congregate setting to be eligible for a voucher regardless of whether another individual living in that setting has received a voucher.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scE/s56.153/f"> <num value="f">(f)</num> <content>The department shall determine eligibility of each person who files an application for a voucher and issue each eligible applicant an appropriate voucher.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scE/s56.153/g"> <num value="g">(g)</num> <content>The department shall maintain a record regarding each individual who receives a voucher under the program.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scE/s56.153/h"> <num value="h">(h)</num> <content>The department shall deposit money collected under the program to the credit of the universal service fund.</content> </subsection> <sourceCredit>Acts 1999, 76th Leg., ch. 62, Sec. 18.08(e), eff. Sept. 1, 1999. Amended by Acts 1999, 76th Leg., ch. 1553, Sec. 7, eff. Sept. 1, 1999; Acts 2001, 77th Leg., ch. 424, Sec. 3, eff. Sept. 1, 2001. Amended by: Acts 2013, 83rd Leg., R.S., Ch. 532 (S.B. 512), Sec. 8, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scE/s56.154"> <num value="56.154">Sec. 56.154.</num> <heading>DEPARTMENT DUTIES</heading> <subsection identifier="/us/tx/ut/t2/c56/scE/s56.154/a"> <num value="a">(a)</num> <content>Not later than the 45th day after the date the department receives a voucher a telecommunications device distributor presents for payment or a voucher a telecommunications service provider presents for payment, the department shall pay to the distributor or service provider the lesser of the value of a voucher properly exchanged for a specialized telecommunications device or service or the full price of the device or service for which a voucher recipient exchanges the voucher. The payments must be made from the universal service fund.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scE/s56.154/b"> <num value="b">(b)</num> <content>The department may investigate whether the presentation of a voucher for payment represents a valid transaction for a telecommunications device or service under the program.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scE/s56.154/c"> <num value="c">(c)</num> <chapeau>Notwithstanding Section 56.153(a), the department may:</chapeau> <paragraph identifier="/us/tx/ut/t2/c56/scE/s56.154/1"> <num value="1">(1)</num> <content>delay payment of a voucher to a distributor of devices or a service provider if there is a dispute regarding the amount or propriety of the payment or whether the device or service is appropriate or adequate to meet the needs of the person to whom the department issued the voucher until the dispute is resolved;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scE/s56.154/2"> <num value="2">(2)</num> <content>provide that payment of the voucher is conditioned on the return of the payment if the device is returned to the distributor or if the service is not used by the person to whom the voucher was issued; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scE/s56.154/3"> <num value="3">(3)</num> <content>provide an alternative dispute resolution process for resolving a dispute regarding a subject described by Subdivision (1) or (2).</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scE/s56.154/d"> <num value="d">(d)</num> <content>The executive commissioner, after consulting with the department, may adopt rules to implement this section.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.08(e), eff. Sept. 1, 1999. Amended by Acts 1999, 76th Leg., ch. 1553, Sec. 7, eff. Sept. 1, 1999. Amended by: Acts 2013, 83rd Leg., R.S., Ch. 532 (S.B. 512), Sec. 9, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scE/s56.155"> <num value="56.155">Sec. 56.155.</num> <heading>RECOVERY OF SPECIALIZED TELECOMMUNICATIONS DEVICE ASSISTANCE PROGRAM SURCHARGE</heading> <subsection identifier="/us/tx/ut/t2/c56/scE/s56.155/a"> <num value="a">(a)</num> <content>The commission shall allow a telecommunications utility to recover the universal service fund assessment related to the specialized telecommunications assistance program through a surcharge added to the utility's customers' bills.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scE/s56.155/b"> <num value="b">(b)</num> <content>The commission shall specify how each utility must determine the amount of the surcharge and by rule shall prohibit a utility from recovering an aggregation of more than 12 months of assessments in a single surcharge. The rules must require a utility to apply for approval of a surcharge before the 91st day after the date the period during which the aggregated surcharges were assessed closes.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scE/s56.155/c"> <num value="c">(c)</num> <content>If a utility chooses to impose the surcharge, the utility shall include the surcharge in the "universal service fund surcharge" listing as provided by Section 56.107.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.08(e), eff. Sept. 1, 1999. Amended by Acts 1999, 76th Leg., ch. 1553, Sec. 8, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scE/s56.156"> <num value="56.156">Sec. 56.156.</num> <heading>PROMOTION OF PROGRAM</heading> <content>The department may promote the program established under this subchapter by means of participation in events, advertisements, pamphlets, brochures, forms, pins, or other promotional items or efforts that provide contact information for persons interested in applying for a voucher under the program.</content> <sourceCredit>Added by Acts 2001, 77th Leg., ch. 424, Sec. 4, eff. Sept. 1, 2001. Amended by: Acts 2013, 83rd Leg., R.S., Ch. 532 (S.B. 512), Sec. 10, eff. September 1, 2013.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c56/scF"> <num value="F">SUBCHAPTER F.</num> <heading>SERVICE TO UNCERTIFICATED AREA</heading> <section identifier="/us/tx/ut/t2/c56/scF/s56.201"> <num value="56.201">Sec. 56.201.</num> <heading>DEFINITION</heading> <content>In this subchapter, "permanent residential or business premises" means a premises that has permanent facilities for water, wastewater, and electricity.</content> <sourceCredit>Added by Acts 2001, 77th Leg., ch. 651, Sec. 4, eff. Sept. 1, 2001.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scF/s56.202"> <num value="56.202">Sec. 56.202.</num> <heading>DESIGNATION OF PROVIDER</heading> <subsection identifier="/us/tx/ut/t2/c56/scF/s56.202/a"> <num value="a">(a)</num> <content>Notwithstanding Section 54.001, the commission may designate a telecommunications provider under this section to provide voice-grade services to permanent residential or business premises that are not included within the certificated area of a holder of a certificate of convenience and necessity.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scF/s56.202/b"> <num value="b">(b)</num> <content>The commission may designate a provider only if the provider is otherwise eligible to receive universal service funds under Section 56.023(b).</content> </subsection> <sourceCredit>Added by Acts 2001, 77th Leg., ch. 651, Sec. 4, eff. Sept. 1, 2001.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scF/s56.203"> <num value="56.203">Sec. 56.203.</num> <heading>PETITION FOR SERVICE</heading> <content>Persons residing in permanent residential premises or owners of permanent residential or business premises that are not included within the certificated area of a holder of a certificate of convenience and necessity may petition the commission to designate a telecommunications provider to provide to those premises voice-grade services supported by state and federal universal service support mechanisms.</content> <sourceCredit>Added by Acts 2001, 77th Leg., ch. 651, Sec. 4, eff. Sept. 1, 2001.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scF/s56.204"> <num value="56.204">Sec. 56.204.</num> <heading>CONTENTS OF PETITION</heading> <subsection identifier="/us/tx/ut/t2/c56/scF/s56.204/a"> <num value="a">(a)</num> <chapeau>A petition for designation of a service provider must:</chapeau> <paragraph identifier="/us/tx/ut/t2/c56/scF/s56.204/1"> <num value="1">(1)</num> <content>state with reasonable particularity the locations of the permanent residential or business premises for which the petitioners are requesting service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scF/s56.204/2"> <num value="2">(2)</num> <content>establish that those locations are within reasonable proximity to one another so that the petitioners possess a sufficient community of interest to warrant the designation of a provider and the expenditure of universal service funds necessary to establish service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scF/s56.204/3"> <num value="3">(3)</num> <chapeau>except as provided by Subsection (b), be signed by at least five persons who:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c56/scF/s56.204/A"> <num value="A">(A)</num> <content>are not members of the same household;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c56/scF/s56.204/B"> <num value="B">(B)</num> <content>reside in the permanent residential premises or are the owners of the permanent residential or business premises for which service is sought and that are not located within a certificated area;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c56/scF/s56.204/C"> <num value="C">(C)</num> <content>want service to those premises; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c56/scF/s56.204/D"> <num value="D">(D)</num> <content>commit to pay the aid to construction charges for service to those premises as determined by the commission;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scF/s56.204/4"> <num value="4">(4)</num> <content>nominate as potential providers of service not more than five telecommunications providers serving territory that is contiguous to the location of the permanent residential or business premises using wireless or wireline facilities, resale, or unbundled network elements; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scF/s56.204/5"> <num value="5">(5)</num> <content>include as an attachment or an appendix documentation indicating the required residence or ownership, including a state-issued license or identification, tax records, deeds, or voter registration materials.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scF/s56.204/b"> <num value="b">(b)</num> <content>The commission may accept a petition that is signed by fewer than five persons if a petitioner provides an affidavit stating that the petitioners have taken all reasonable steps to secure the signatures of the residents of permanent residential premises or the owners of permanent residential or business premises within reasonably close proximity to the petitioning premises who are not receiving telephone service when the petition is filed and who want telephone service initiated.</content> </subsection> <sourceCredit>Added by Acts 2001, 77th Leg., ch. 651, Sec. 4, eff. Sept. 1, 2001.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scF/s56.205"> <num value="56.205">Sec. 56.205.</num> <heading>HEARING</heading> <content>If the commission finds that the petition complies with Section 56.204, the commission shall hold an evidentiary hearing to determine if a telecommunications provider is willing to be designated to provide service to those premises or, if a provider is not willing to be designated, to determine the telecommunications provider that is best able to serve those premises under the criteria prescribed by this subchapter.</content> <sourceCredit>Added by Acts 2001, 77th Leg., ch. 651, Sec. 4, eff. Sept. 1, 2001.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scF/s56.206"> <num value="56.206">Sec. 56.206.</num> <heading>DENIAL OF PETITION</heading> <chapeau>The commission shall deny a petition if the commission determines that services cannot be extended to the petitioning premises at a reasonable cost. In making that determination, the commission shall consider all relevant factors, including:</chapeau> <paragraph identifier="/us/tx/ut/t2/c56/scF/s56.206/1"> <num value="1">(1)</num> <content>the original cost to be incurred by a designated provider to deploy service to the petitioning premises, and the effect of reimbursement of those costs on the state universal service fund;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scF/s56.206/2"> <num value="2">(2)</num> <content>the number of access lines requested by the petitioners for the petitioning premises;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scF/s56.206/3"> <num value="3">(3)</num> <content>the size of the geographic territory in which the petitioning premises are included;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scF/s56.206/4"> <num value="4">(4)</num> <content>the proximity of existing facilities and the existence of a preferred designated provider under Section 56.213; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scF/s56.206/5"> <num value="5">(5)</num> <content>any technical barriers to the provision of service.</content> </paragraph> <sourceCredit>Added by Acts 2001, 77th Leg., ch. 651, Sec. 4, eff. Sept. 1, 2001.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scF/s56.207"> <num value="56.207">Sec. 56.207.</num> <heading>ORDER</heading> <chapeau>In any order granting a petition, the commission shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c56/scF/s56.207/1"> <num value="1">(1)</num> <content>approve the facilities to be deployed based on the estimated costs of deployment submitted in accordance with Section 56.208(a);</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scF/s56.207/2"> <num value="2">(2)</num> <content>approve the amount of original cost of deployment to be recovered from the state universal service fund and the terms of original cost recovery under Section 56.209; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scF/s56.207/3"> <num value="3">(3)</num> <content>approve the recurring cost recovery under Section 56.209, including the monthly rate for services and the monthly per line fee to be recovered from the state universal service fund under that section.</content> </paragraph> <sourceCredit>Added by Acts 2001, 77th Leg., ch. 651, Sec. 4, eff. Sept. 1, 2001.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scF/s56.208"> <num value="56.208">Sec. 56.208.</num> <heading>DESIGNATION OF PROVIDER</heading> <subsection identifier="/us/tx/ut/t2/c56/scF/s56.208/a"> <num value="a">(a)</num> <content>In determining which nominated telecommunications provider the commission will designate to provide service to the petitioning premises, the commission shall consider the relative estimated cost to be incurred by contiguous providers to serve the petitioning premises and give preference to the provider having the least cost technology that meets the quality of service standards prescribed by the commission applicable to that provider.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scF/s56.208/b"> <num value="b">(b)</num> <content>The commission may not designate a telecommunications provider to serve the petitioning premises unless the premises are located in an area that is contiguous to an area in which the telecommunications provider has previously been designated eligible to receive universal service funding under Section 56.023(b). This subsection does not apply if the commission designates the provider after the provider voluntarily agrees to provide service to the petitioning premises.</content> </subsection> <sourceCredit>Added by Acts 2001, 77th Leg., ch. 651, Sec. 4, eff. Sept. 1, 2001.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scF/s56.209"> <num value="56.209">Sec. 56.209.</num> <heading>RECOVERY OF COSTS</heading> <subsection identifier="/us/tx/ut/t2/c56/scF/s56.209/a"> <num value="a">(a)</num> <content>If, after a hearing, the commission designates a telecommunications provider to serve the petitioning premises, the commission shall permit the designated provider to recover from the state universal service fund the provider's actual costs of providing service to the premises, including the provider's original cost of deployment and actual recurring costs.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scF/s56.209/b"> <num value="b">(b)</num> <chapeau>The reimbursable original cost of deploying facilities to the petitioning premises is the original cost of the telecommunications provider's facilities installed in, or upgraded to permit the provision of service to, the petitioning premises as determined by the financial accounting standards applicable to the provider, including an amount for the recovery of all costs that are typically included as capital costs for accounting purposes, that are not recovered through an aid to construction charge assessed to the petitioners. The final order permitting or requiring the designated provider to provide service to the petitioning premises shall ensure that all the original cost of the provider shall be amortized and recovered from the state universal service fund, together with interest at the prevailing commercial lending rate:</chapeau> <paragraph identifier="/us/tx/ut/t2/c56/scF/s56.209/1"> <num value="1">(1)</num> <content>not later than the third anniversary of the date of the order, for a deployment with an original cost of $1 million or less;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scF/s56.209/2"> <num value="2">(2)</num> <content>not later than the fifth anniversary of the date of the order, for a deployment with an original cost of more than $1 million, but not more than $2 million; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scF/s56.209/3"> <num value="3">(3)</num> <content>not later than the seventh anniversary of the date of the order, for a deployment with an original cost of more than $2 million.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scF/s56.209/c"> <num value="c">(c)</num> <chapeau>The designated provider shall recover the provider's actual recurring costs of service, including maintenance and the ongoing operational costs of providing service after deployment of the facilities to the petitioning premises and a reasonable operating margin, from:</chapeau> <paragraph identifier="/us/tx/ut/t2/c56/scF/s56.209/1"> <num value="1">(1)</num> <content>the monthly rate charged the customer; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scF/s56.209/2"> <num value="2">(2)</num> <content>a monthly per line state universal service fund payment in an amount equal to the unrecovered recurring costs incurred in providing service divided by the access lines served in the petitioning premises.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scF/s56.209/d"> <num value="d">(d)</num> <content>The monthly per line fee established under Subsection (c) is in addition to the universal service funds associated with the recovery of the original cost of deployment and interest authorized by Subsection (b) and in addition to the universal service funds the designated provider receives to provide service in other areas of this state.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scF/s56.209/e"> <num value="e">(e)</num> <content>The commission may not authorize or require any services to be provided to petitioning premises under this subchapter during a fiscal year if the total amount of required reimbursements of actual original cost of deployment to all approved petitioning premises under this section, together with interest, including obligations for reimbursements from preceding years, would equal an amount that exceeds 0.02 percent of the annual gross revenues reported to the state universal service fund during the preceding fiscal year.</content> </subsection> <sourceCredit>Added by Acts 2001, 77th Leg., ch. 651, Sec. 4, eff. Sept. 1, 2001.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scF/s56.210"> <num value="56.210">Sec. 56.210.</num> <heading>AID TO CONSTRUCTION CHARGE; CONTRACT FOR SERVICES</heading> <chapeau>The commission shall establish a reasonable aid to construction charge, not to exceed $3,000, to be assessed each petitioner. The commission may not require a designated provider to begin construction until:</chapeau> <paragraph identifier="/us/tx/ut/t2/c56/scF/s56.210/1"> <num value="1">(1)</num> <content>each petitioner has paid or executed an agreement acceptable to the provider to pay the aid to construction charge; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scF/s56.210/2"> <num value="2">(2)</num> <content>each petitioner has executed an assignable agreement for subscription to basic local service to the petitioning premises from the designated provider for a period at least equal to the period during which the provider will receive reimbursement for the original cost of deployment under Section 56.209(b).</content> </paragraph> <sourceCredit>Added by Acts 2001, 77th Leg., ch. 651, Sec. 4, eff. Sept. 1, 2001.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scF/s56.211"> <num value="56.211">Sec. 56.211.</num> <heading>PERMANENT PREMISES REQUIRED</heading> <content>A telecommunications provider may not under any circumstances be required to extend service to a location that is not a permanent residential or business premises or be required to provide service to the petitioning premises before the 180th day after the date the provider was designated to provide service to the petitioning premises.</content> <sourceCredit>Added by Acts 2001, 77th Leg., ch. 651, Sec. 4, eff. Sept. 1, 2001.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scF/s56.212"> <num value="56.212">Sec. 56.212.</num> <heading>SUBSEQUENT RELATED PETITIONS</heading> <subsection identifier="/us/tx/ut/t2/c56/scF/s56.212/a"> <num value="a">(a)</num> <content>If the commission approves a petition requesting service, residents of permanent residential premises or owners of permanent residential or business premises in reasonable proximity to the premises that were the subject of an approved petition who did not sign the prior petition requesting service are not entitled to receive service under this subchapter until the fifth anniversary of the date the prior petition was filed unless the residents or owners file a new petition under this subchapter and agree to pay aid to construction charges on the same terms as applicable to the prior petitioners.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scF/s56.212/b"> <num value="b">(b)</num> <content>The designated provider shall receive reimbursement for the original cost of deployment and actual recurring costs of providing service to those additional residents in the same manner as the provider received reimbursement of those costs in relation to the prior petitioners. The provider may not receive reimbursement for the original cost of deployment under a subsequent petition if the provider previously received complete reimbursement for those costs from the state universal service fund. If the state universal service fund has completely reimbursed the original cost of deployment as provided by this subchapter, each subsequent petitioner must pay into the state universal service fund an amount equal to the aid to construction charge paid by each prior petitioner.</content> </subsection> <sourceCredit>Added by Acts 2001, 77th Leg., ch. 651, Sec. 4, eff. Sept. 1, 2001.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scF/s56.213"> <num value="56.213">Sec. 56.213.</num> <heading>PREFERRED PROVIDER</heading> <subsection identifier="/us/tx/ut/t2/c56/scF/s56.213/a"> <num value="a">(a)</num> <content>A provider who is designated to serve petitioning premises located within an uncertificated area under this subchapter is the preferred provider for any permanent residential or business premises in reasonable proximity to those petitioning premises for later petitions filed under Section 56.212.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scF/s56.213/b"> <num value="b">(b)</num> <content>A preferred designated provider is entitled to an opportunity for a hearing under Section 56.205 on a petition filed under Section 56.203.</content> </subsection> <sourceCredit>Added by Acts 2001, 77th Leg., ch. 651, Sec. 4, eff. Sept. 1, 2001.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scF/s56.214"> <num value="56.214">Sec. 56.214.</num> <heading>CERTIFICATE NOT AMENDED</heading> <chapeau>The designation of a provider to serve permanent residential or business premises within an uncertificated area under this subchapter does not have the effect of:</chapeau> <paragraph identifier="/us/tx/ut/t2/c56/scF/s56.214/1"> <num value="1">(1)</num> <content>amending the boundaries of the provider's certificate to provide local exchange service; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scF/s56.214/2"> <num value="2">(2)</num> <content>imposing carrier of last resort responsibilities on the provider.</content> </paragraph> <sourceCredit>Added by Acts 2001, 77th Leg., ch. 651, Sec. 4, eff. Sept. 1, 2001.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c56/scG"> <num value="G">SUBCHAPTER G.</num> <heading>FUNDING FOR CERTAIN TELECOMMUNICATIONS UTILITIES</heading> <section identifier="/us/tx/ut/t2/c56/scG/s56.251"> <num value="56.251">Sec. 56.251.</num> <heading>DEFINITION</heading> <content>In this subchapter, "successor utility" has the meaning assigned by Section 54.301.</content> <sourceCredit>Added by Acts 2003, 78th Leg., ch. 76, Sec. 7, eff. Sept. 1, 2003.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scG/s56.252"> <num value="56.252">Sec. 56.252.</num> <heading>TELECOMMUNICATIONS UTILITIES ELIGIBLE TO RECEIVE FUNDING UNDER THIS SUBCHAPTER</heading> <chapeau>A telecommunications utility may receive funding under this subchapter only if:</chapeau> <paragraph identifier="/us/tx/ut/t2/c56/scG/s56.252/1"> <num value="1">(1)</num> <content>the telecommunications utility is eligible to receive universal service funding under Section 56.023(b); and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scG/s56.252/2"> <num value="2">(2)</num> <content>the telecommunications utility is designated as a successor utility under Section 54.303.</content> </paragraph> <sourceCredit>Added by Acts 2003, 78th Leg., ch. 76, Sec. 7, eff. Sept. 1, 2003.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scG/s56.253"> <num value="56.253">Sec. 56.253.</num> <heading>DETERMINATION OF SUCCESSOR UTILITY'S COSTS TO BE RECOVERED</heading> <subsection identifier="/us/tx/ut/t2/c56/scG/s56.253/a"> <num value="a">(a)</num> <content>At the time the commission designates the successor utility under Section 54.303, the commission shall determine the extent to which the utility should recover the costs the utility will incur in accepting and establishing service to the affected service area.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c56/scG/s56.253/b"> <num value="b">(b)</num> <content>In making the determination under Subsection (a), the commission shall consider relevant information, including the costs of acquiring and restoring or upgrading the utility's facilities in the geographic area as necessary to make those facilities compatible with the facilities in the utility's other certificated service areas and to comply with commission quality of service standards.</content> </subsection> <sourceCredit>Added by Acts 2003, 78th Leg., ch. 76, Sec. 7, eff. Sept. 1, 2003.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c56/scG/s56.254"> <num value="56.254">Sec. 56.254.</num> <heading>RECOVERY OF COSTS</heading> <chapeau>The commission order designating the successor utility under Section 54.303 shall authorize the utility to recover the costs determined under Section 56.253. The costs may be amortized and recovered from the state universal service fund, together with interest at the prevailing commercial lending rate:</chapeau> <paragraph identifier="/us/tx/ut/t2/c56/scG/s56.254/1"> <num value="1">(1)</num> <content>not later than the first anniversary of the date of the order if the costs are not more than $1 million;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scG/s56.254/2"> <num value="2">(2)</num> <content>not later than the second anniversary of the date of the order if the costs are more than $1 million but no more than $2 million; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c56/scG/s56.254/3"> <num value="3">(3)</num> <content>not later than the third anniversary of the date of the order if the costs are more than $2 million.</content> </paragraph> <sourceCredit>Added by Acts 2003, 78th Leg., ch. 76, Sec. 7, eff. Sept. 1, 2003.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c56/scH"> <num value="H">SUBCHAPTER H.</num> <heading>AUDIO NEWSPAPER PROGRAM</heading> <section identifier="/us/tx/ut/t2/c56/scH/s56.301"> <num value="56.301">Sec. 56.301.</num> <heading>AUDIO NEWSPAPER ASSISTANCE PROGRAM</heading> <content>The commission by rule shall establish a program to provide from the universal service fund financial assistance for a free telephone service for blind and visually impaired persons that offers the text of newspapers using synthetic speech. The commission may adopt rules to implement the program.</content> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 17, eff. September 7, 2005.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t2/c57"> <num value="57">CHAPTER 57.</num> <heading>DISTANCE LEARNING AND OTHER ADVANCED SERVICES</heading> <subchapter identifier="/us/tx/ut/t2/c57/scA"> <num value="A">SUBCHAPTER A.</num> <heading>GENERAL PROVISIONS</heading> <section identifier="/us/tx/ut/t2/c57/scA/s57.001"> <num value="57.001">Sec. 57.001.</num> <heading>CONFLICT OF PROVISIONS</heading> <content>If this chapter conflicts with another provision of this title, this chapter prevails.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c57/scB"> <num value="B">SUBCHAPTER B.</num> <heading>DISTANCE LEARNING AND INFORMATION SHARING</heading> <section identifier="/us/tx/ut/t2/c57/scB/s57.021"> <num value="57.021">Sec. 57.021.</num> <heading>DEFINITIONS</heading> <chapeau>In this subchapter:</chapeau> <paragraph identifier="/us/tx/ut/t2/c57/scB/s57.021/1"> <num value="1">(1)</num> <chapeau>"Distance learning" means an instruction, learning, or training resource, including video, data, voice, or electronic information, that is:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c57/scB/s57.021/A"> <num value="A">(A)</num> <content>used by an educational institution predominantly for instruction, learning, or training; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c57/scB/s57.021/B"> <num value="B">(B)</num> <content>transmitted from a site to one or more other sites by a telecommunications service.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c57/scB/s57.021/2"> <num value="2">(2)</num> <chapeau>"Educational institution" includes:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c57/scB/s57.021/A"> <num value="A">(A)</num> <content>an accredited primary or secondary school;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c57/scB/s57.021/B"> <num value="B">(B)</num> <content>an institution of higher education as defined by Section 61.003, Education Code;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c57/scB/s57.021/C"> <num value="C">(C)</num> <content>a private institution of higher education accredited by a recognized accrediting agency as defined by Section 61.003, Education Code;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c57/scB/s57.021/D"> <num value="D">(D)</num> <content>the Texas Education Agency and its successors and assigns;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c57/scB/s57.021/E"> <num value="E">(E)</num> <content>a regional education service center established and operated in accordance with Chapter 8, Education Code; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c57/scB/s57.021/F"> <num value="F">(F)</num> <content>the Texas Higher Education Coordinating Board and its successors and assigns.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c57/scB/s57.021/3"> <num value="3">(3)</num> <chapeau>"Library" means:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c57/scB/s57.021/A"> <num value="A">(A)</num> <content>a public library or regional library system as defined by Section 441.122, Government Code; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c57/scB/s57.021/B"> <num value="B">(B)</num> <content>a library operated by an institution of higher education or a school district.</content> </subparagraph> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c57/scB/s57.022"> <num value="57.022">Sec. 57.022.</num> <heading>REDUCED RATES FOR DISTANCE LEARNING OR INFORMATION SHARING SERVICES</heading> <subsection identifier="/us/tx/ut/t2/c57/scB/s57.022/a"> <num value="a">(a)</num> <chapeau>The commission by rule shall require a dominant carrier to file a tariff that includes a reduced rate for a telecommunications service the commission finds is directly related to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c57/scB/s57.022/1"> <num value="1">(1)</num> <content>a distance learning activity that is or could be conducted by an educational institution in this state; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c57/scB/s57.022/2"> <num value="2">(2)</num> <content>an information sharing program that is or could be conducted by a library in this state.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c57/scB/s57.022/b"> <num value="b">(b)</num> <chapeau>The commission rules shall specify:</chapeau> <paragraph identifier="/us/tx/ut/t2/c57/scB/s57.022/1"> <num value="1">(1)</num> <content>each telecommunications service to which Subsection (a) applies;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c57/scB/s57.022/2"> <num value="2">(2)</num> <content>the process for an educational institution or library to qualify for a reduced rate;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c57/scB/s57.022/3"> <num value="3">(3)</num> <content>the date by which a dominant carrier is required to file a tariff;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c57/scB/s57.022/4"> <num value="4">(4)</num> <content>guidelines and criteria that require the services and reduced rates to further the goals prescribed by Section 57.023; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c57/scB/s57.022/5"> <num value="5">(5)</num> <content>any other requirement or term that the commission determines to be in the public interest.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c57/scB/s57.022/c"> <num value="c">(c)</num> <content>The commission is not required to determine the long run incremental cost of providing a service before approving a reduced rate for the service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c57/scB/s57.022/d"> <num value="d">(d)</num> <content>Until cost determination rules are developed and the rates established under this section are changed as necessary to ensure proper cost recovery, the reduced rates established by the commission shall be equal to 75 percent of the otherwise applicable rate.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c57/scB/s57.022/e"> <num value="e">(e)</num> <chapeau>After the commission develops cost determination rules for telecommunications services generally, the commission shall ensure that a reduced rate approved under this section:</chapeau> <paragraph identifier="/us/tx/ut/t2/c57/scB/s57.022/1"> <num value="1">(1)</num> <content>recovers service-specific long run incremental costs; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c57/scB/s57.022/2"> <num value="2">(2)</num> <content>avoids subsidizing an educational institution or a library.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c57/scB/s57.023"> <num value="57.023">Sec. 57.023.</num> <heading>SERVICE AND RATE REQUIREMENTS</heading> <chapeau>The services and reduced rates must be designed to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c57/scB/s57.023/1"> <num value="1">(1)</num> <chapeau>encourage the development and offering of:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c57/scB/s57.023/A"> <num value="A">(A)</num> <content>distance learning activities by educational institutions; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c57/scB/s57.023/B"> <num value="B">(B)</num> <content>information sharing programs of libraries;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c57/scB/s57.023/2"> <num value="2">(2)</num> <chapeau>meet the:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c57/scB/s57.023/A"> <num value="A">(A)</num> <content>distance learning needs identified by the educational community; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c57/scB/s57.023/B"> <num value="B">(B)</num> <content>information sharing needs identified by libraries; and</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c57/scB/s57.023/3"> <num value="3">(3)</num> <content>recover the long run incremental costs of providing the services, to the extent those costs can be identified, to avoid subsidizing an educational institution or a library.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c57/scB/s57.024"> <num value="57.024">Sec. 57.024.</num> <heading>TARIFF FILINGS</heading> <chapeau>A tariff filed by a dominant carrier under Section 57.022:</chapeau> <paragraph identifier="/us/tx/ut/t2/c57/scB/s57.024/1"> <num value="1">(1)</num> <content>may concern the implementation of this subchapter only;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c57/scB/s57.024/2"> <num value="2">(2)</num> <content>is not a rate change under Subchapter C, Chapter 53; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c57/scB/s57.024/3"> <num value="3">(3)</num> <content>does not affect the carrier's other rates or services.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c57/scB/s57.025"> <num value="57.025">Sec. 57.025.</num> <heading>CHANGES IN RATE PROGRAM</heading> <subsection identifier="/us/tx/ut/t2/c57/scB/s57.025/a"> <num value="a">(a)</num> <chapeau>An educational institution, library, or dominant carrier may request the commission to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c57/scB/s57.025/1"> <num value="1">(1)</num> <chapeau>provide for a reduced rate for a service that:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c57/scB/s57.025/A"> <num value="A">(A)</num> <content>is directly related to a distance learning activity or an information sharing program; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c57/scB/s57.025/B"> <num value="B">(B)</num> <content>is not covered by commission rules;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c57/scB/s57.025/2"> <num value="2">(2)</num> <content>change a rate;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c57/scB/s57.025/3"> <num value="3">(3)</num> <content>amend a tariff; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c57/scB/s57.025/4"> <num value="4">(4)</num> <content>amend a commission rule.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c57/scB/s57.025/b"> <num value="b">(b)</num> <content>The commission shall take the action requested under Subsection (a) if the commission determines the action is appropriate.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c57/scD"> <num value="D">SUBCHAPTER D.</num> <heading>INTERACTIVE MULTIMEDIA COMMUNICATIONS</heading> <section identifier="/us/tx/ut/t2/c57/scD/s57.071"> <num value="57.071">Sec. 57.071.</num> <heading>DEFINITION</heading> <content>In this subchapter, "interactive multimedia communications" means real-time, two-way, interactive voice, video, and data communications conducted over networks that link geographically dispersed locations.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c57/scD/s57.072"> <num value="57.072">Sec. 57.072.</num> <heading>RATES FOR INTERACTIVE MULTIMEDIA COMMUNICATIONS</heading> <subsection identifier="/us/tx/ut/t2/c57/scD/s57.072/a"> <num value="a">(a)</num> <content>The commission shall permit a local exchange company that provides an interactive multimedia communications service to establish, using sound ratemaking principles, rates necessary to recover costs associated with providing the service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c57/scD/s57.072/b"> <num value="b">(b)</num> <content>A local exchange company may not establish a rate under Subsection (a) that is less than the local exchange company's long run incremental costs of providing the interactive multimedia communications service, unless the commission determines it to be in the public interest to do so.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t2/c58"> <num value="58">CHAPTER 58.</num> <heading>INCENTIVE REGULATION</heading> <subchapter identifier="/us/tx/ut/t2/c58/scA"> <num value="A">SUBCHAPTER A.</num> <heading>GENERAL PROVISIONS</heading> <section identifier="/us/tx/ut/t2/c58/scA/s58.001"> <num value="58.001">Sec. 58.001.</num> <heading>POLICY</heading> <chapeau>Considering the status of competition in the telecommunications industry, it is the policy of this state to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c58/scA/s58.001/1"> <num value="1">(1)</num> <content>provide a framework for an orderly transition from the traditional regulation of return on invested capital to a fully competitive telecommunications marketplace in which all telecommunications providers compete on fair terms;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scA/s58.001/2"> <num value="2">(2)</num> <content>preserve and enhance universal telecommunications service at affordable rates;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scA/s58.001/3"> <num value="3">(3)</num> <content>upgrade the telecommunications infrastructure of this state;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scA/s58.001/4"> <num value="4">(4)</num> <content>promote network interconnectivity; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scA/s58.001/5"> <num value="5">(5)</num> <content>promote diversity in the supply of telecommunications services and innovative products and services throughout the entire state, including urban and rural areas.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scA/s58.002"> <num value="58.002">Sec. 58.002.</num> <heading>DEFINITION</heading> <content>In this chapter, "electing company" means an incumbent local exchange company that elects to be subject to incentive regulation and to make the corresponding infrastructure commitment under this chapter.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scA/s58.003"> <num value="58.003">Sec. 58.003.</num> <heading>CUSTOMER-SPECIFIC CONTRACTS</heading> <subsection identifier="/us/tx/ut/t2/c58/scA/s58.003/a"> <num value="a">(a)</num> <content>Notwithstanding any other provision of this chapter, but subject to Subsection (b), an electing company may not offer in an exchange a service, or an appropriate subset of a service, listed in Sections 58.051(a)(1)-(4) or Sections 58.151(1)-(4) in a manner that results in a customer-specific contract, unless the other party to the contract is a federal, state, or local governmental entity, until the earlier of September 1, 2003, or the date on which the commission finds that at least 40 percent of the total access lines for that service or appropriate subset of that service in that exchange are served by competitive alternative providers that are not affiliated with the electing company.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scA/s58.003/b"> <num value="b">(b)</num> <chapeau>The requirements prescribed by Subsection (a) do not apply to an electing company serving fewer than five million access lines after the date on which it completes the infrastructure improvements described in this subsection. The electing company must also notify the commission of the company's binding commitment to make the following infrastructure improvements not later than September 1, 2000:</chapeau> <paragraph identifier="/us/tx/ut/t2/c58/scA/s58.003/1"> <num value="1">(1)</num> <content>install Common Channel Signaling 7 capability in each central office; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scA/s58.003/2"> <num value="2">(2)</num> <content>connect all of the company's serving central offices to their respective LATA tandem central offices with optical fiber or equivalent facilities.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scA/s58.003/c"> <num value="c">(c)</num> <content>The commission by rule shall prescribe appropriate subsets of services.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scA/s58.003/d"> <num value="d">(d)</num> <content>An electing company may file with the commission a request for a finding under this section. The filing must include information sufficient for the commission to perform a review and evaluation in relation to the particular exchange and the particular service or appropriate subset of a service for which the electing company wants to offer customer-specific contracts. The commission must grant or deny the request not later than the 60th day after the date the electing company files the request.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scA/s58.003/e"> <num value="e">(e)</num> <content>The commitments described by Subsection (b) do not apply to exchanges of the company sold or transferred before, or for which contracts for sale or transfer are pending on, September 1, 2001. In the case of exchanges for which contracts for sale or transfer are pending as of March 1, 2001, where the purchaser withdrew or defaulted before September 1, 2001, the company shall have one year from the date of withdrawal or default to comply with the commitments.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scA/s58.003/f"> <num value="f">(f)</num> <content>This section does not preclude an electing company from offering a customer-specific contract to the extent allowed by this title as of August 31, 1999.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 33, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scA/s58.004"> <num value="58.004">Sec. 58.004.</num> <heading>PACKAGING, TERM AND VOLUME DISCOUNTS, AND PROMOTIONAL OFFERINGS</heading> <subsection identifier="/us/tx/ut/t2/c58/scA/s58.004/a"> <num value="a">(a)</num> <content>Notwithstanding any other provision of this chapter, an electing company that has more than five million access lines in this state may not offer in an exchange a service listed in Sections 58.151(1)-(4) as a component of a package of services or as a promotional offering until the company makes the reduction in switched access service rates required by Section 58.301(2) unless the customer of one of the pricing flexibility offerings described in this subsection is a federal, state, or local governmental entity.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scA/s58.004/b"> <num value="b">(b)</num> <content>Notwithstanding any other provision of this chapter, an electing company that has more than five million access lines in this state may not offer a volume or term discount on any service listed in Sections 58.151(1)-(4) until September 1, 2000, unless the customer of one of the pricing flexibility offerings described in this subsection is a federal, state, or local governmental entity.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scA/s58.004/c"> <num value="c">(c)</num> <content>Notwithstanding any other provision of this chapter, an electing company that has more than five million access lines in this state may offer in an exchange a service listed in Sections 58.051(a)(1)-(4) as a component of a package of services, as a promotional offering, or with a volume or term discount on and after September 1, 1999.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 34, eff. Sept. 1, 1999.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c58/scB"> <num value="B">SUBCHAPTER B.</num> <heading>ELECTION OF INCENTIVE REGULATION</heading> <section identifier="/us/tx/ut/t2/c58/scB/s58.021"> <num value="58.021">Sec. 58.021.</num> <heading>ELECTION</heading> <subsection identifier="/us/tx/ut/t2/c58/scB/s58.021/a"> <num value="a">(a)</num> <content>An incumbent local exchange company may elect to be subject to incentive regulation and to make the corresponding infrastructure commitment under this chapter by notifying the commission in writing of its election.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scB/s58.021/b"> <num value="b">(b)</num> <chapeau>The notice must include a statement that the company agrees to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c58/scB/s58.021/1"> <num value="1">(1)</num> <content>limit until September 1, 2005, any increase in a rate the company charges for basic network services as prescribed by Subchapter C; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scB/s58.021/2"> <num value="2">(2)</num> <content>fulfill the infrastructure commitment prescribed by Subchapters F and G.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scB/s58.021/c"> <num value="c">(c)</num> <content>Except as provided in Subsection (d), an election under this chapter remains in effect until the legislature eliminates the incentive regulation authorized by this chapter and Chapter 59.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scB/s58.021/d"> <num value="d">(d)</num> <chapeau>The commission may allow an electing company serving fewer than five million access lines to withdraw the company's election under this chapter:</chapeau> <paragraph identifier="/us/tx/ut/t2/c58/scB/s58.021/1"> <num value="1">(1)</num> <content>on application by the company; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scB/s58.021/2"> <num value="2">(2)</num> <content>only for good cause.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scB/s58.021/e"> <num value="e">(e)</num> <content>In this section, "good cause" includes only matters beyond the control of the company.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 1212, Sec. 35, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scB/s58.022"> <num value="58.022">Sec. 58.022.</num> <heading>CHAPTER CONTROLS</heading> <content>This chapter governs the regulation of an electing company's telecommunications services regardless of whether the company is a dominant carrier.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scB/s58.023"> <num value="58.023">Sec. 58.023.</num> <heading>SERVICE CLASSIFICATION</heading> <chapeau>On election, the services provided by an electing company are classified into two categories:</chapeau> <paragraph identifier="/us/tx/ut/t2/c58/scB/s58.023/1"> <num value="1">(1)</num> <content>basic network services governed by Subchapter C; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scB/s58.023/2"> <num value="2">(2)</num> <content>nonbasic services governed by Subchapter E.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scB/s58.023/3"> <num value="3">(3)</num> <content>Renumbered (2) by Acts 1999, 76th Leg., ch. 1212, Sec. 36, eff. Sept. 1, 1999</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 1212, Sec. 36, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scB/s58.024"> <num value="58.024">Sec. 58.024.</num> <heading>SERVICE RECLASSIFICATION</heading> <subsection identifier="/us/tx/ut/t2/c58/scB/s58.024/a"> <num value="a">(a)</num> <content>The commission may reclassify a basic network service as a nonbasic service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scB/s58.024/b"> <num value="b">(b)</num> <chapeau>The commission shall establish criteria for determining whether a service should be reclassified. The criteria must include consideration of the:</chapeau> <paragraph identifier="/us/tx/ut/t2/c58/scB/s58.024/1"> <num value="1">(1)</num> <content>availability of the service from other providers;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scB/s58.024/2"> <num value="2">(2)</num> <content>effect of the reclassification on service subscribers; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scB/s58.024/3"> <num value="3">(3)</num> <content>nature of the service.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scB/s58.024/c"> <num value="c">(c)</num> <chapeau>The commission may not reclassify a service until:</chapeau> <paragraph identifier="/us/tx/ut/t2/c58/scB/s58.024/1"> <num value="1">(1)</num> <content>each competitive safeguard prescribed by Subchapters B-H, Chapter 60, is fully implemented; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scB/s58.024/2"> <num value="2">(2)</num> <content>for a company that serves more than five million access lines in this state, the date on which the Federal Communications Commission determines in accordance with 47 U.S.C. Section 271 that the company or any of its affiliates may enter the interLATA telecommunications market in this state.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scB/s58.024/d"> <num value="d">(d)</num> <chapeau>The commission may reclassify a service subject to the following conditions:</chapeau> <paragraph identifier="/us/tx/ut/t2/c58/scB/s58.024/1"> <num value="1">(1)</num> <content>the electing company must file a request for a service reclassification including information sufficient for the commission to perform a review and evaluation under Subsection (b);</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scB/s58.024/2"> <num value="2">(2)</num> <content>the commission must grant or deny the request not later than the 60th day after the date the electing company files the request for service reclassification; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scB/s58.024/3"> <num value="3">(3)</num> <content>there is a rebuttable presumption that the request for service reclassification by the electing company should be granted if the commission finds that there is a competitive alternative provider serving customers through means other than total service resale.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 62, Sec. 18.11, eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 1212, Sec. 37, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scB/s58.025"> <num value="58.025">Sec. 58.025.</num> <heading>COMPLAINT OR HEARING</heading> <subsection identifier="/us/tx/ut/t2/c58/scB/s58.025/a"> <num value="a">(a)</num> <chapeau>An electing company is not, under any circumstances, subject to a complaint, hearing, or determination regarding the reasonableness of the company's:</chapeau> <paragraph identifier="/us/tx/ut/t2/c58/scB/s58.025/1"> <num value="1">(1)</num> <content>rates;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scB/s58.025/2"> <num value="2">(2)</num> <content>overall revenues;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scB/s58.025/3"> <num value="3">(3)</num> <content>return on invested capital; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scB/s58.025/4"> <num value="4">(4)</num> <content>net income.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scB/s58.025/b"> <num value="b">(b)</num> <content>This section does not prohibit a complaint, hearing, or determination on an electing company's implementation and enforcement of a competitive safeguard required by Chapter 60.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scB/s58.026"> <num value="58.026">Sec. 58.026.</num> <heading>CONSUMER COMPLAINTS REGARDING TARIFFS</heading> <subsection identifier="/us/tx/ut/t2/c58/scB/s58.026/a"> <num value="a">(a)</num> <chapeau>This chapter does not restrict:</chapeau> <paragraph identifier="/us/tx/ut/t2/c58/scB/s58.026/1"> <num value="1">(1)</num> <content>a consumer's right to complain to the commission about the application of an ambiguous tariff; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scB/s58.026/2"> <num value="2">(2)</num> <chapeau>the commission's right to determine:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c58/scB/s58.026/A"> <num value="A">(A)</num> <content>the proper application of that tariff; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c58/scB/s58.026/B"> <num value="B">(B)</num> <content>the proper rate if that tariff does not apply.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scB/s58.026/b"> <num value="b">(b)</num> <chapeau>This section does not permit the commission to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c58/scB/s58.026/1"> <num value="1">(1)</num> <content>lower a tariff rate except as specifically provided by this title;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scB/s58.026/2"> <num value="2">(2)</num> <content>change the commission's interpretation of a tariff; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scB/s58.026/3"> <num value="3">(3)</num> <content>extend the application of a tariff to a new class of customers.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scB/s58.027"> <num value="58.027">Sec. 58.027.</num> <heading>CONSUMER COMPLAINTS REGARDING SERVICES; ENFORCEMENT OF STANDARDS</heading> <chapeau>This chapter does not restrict:</chapeau> <paragraph identifier="/us/tx/ut/t2/c58/scB/s58.027/1"> <num value="1">(1)</num> <content>a consumer's right to complain to the commission about quality of service; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scB/s58.027/2"> <num value="2">(2)</num> <content>the commission's right to enforce a quality of service standard.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c58/scC"> <num value="C">SUBCHAPTER C.</num> <heading>BASIC NETWORK SERVICES</heading> <section identifier="/us/tx/ut/t2/c58/scC/s58.051"> <num value="58.051">Sec. 58.051.</num> <heading>SERVICES INCLUDED</heading> <subsection identifier="/us/tx/ut/t2/c58/scC/s58.051/a"> <num value="a">(a)</num> <chapeau>Unless reclassified under Section 58.024, the following services are basic network services:</chapeau> <paragraph identifier="/us/tx/ut/t2/c58/scC/s58.051/1"> <num value="1">(1)</num> <content>flat rate residential local exchange telephone service, including primary directory listings and the receipt of a directory and any applicable mileage or zone charges;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scC/s58.051/2"> <num value="2">(2)</num> <content>residential tone dialing service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scC/s58.051/3"> <num value="3">(3)</num> <content>lifeline and tel-assistance service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scC/s58.051/4"> <num value="4">(4)</num> <content>service connection for basic residential services;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scC/s58.051/5"> <num value="5">(5)</num> <content>direct inward dialing service for basic residential services;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scC/s58.051/6"> <num value="6">(6)</num> <content>private pay telephone access service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scC/s58.051/7"> <num value="7">(7)</num> <content>call trap and trace service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scC/s58.051/8"> <num value="8">(8)</num> <content>access for all residential and business end users to 911 service provided by a local authority and access to dual party relay service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scC/s58.051/9"> <num value="9">(9)</num> <content>mandatory residential extended area service arrangements; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scC/s58.051/10"> <num value="10">(10)</num> <content>mandatory residential extended metropolitan service or other mandatory residential toll-free calling arrangements.</content> <continuation>(a-1) Notwithstanding Subsection (a) and Section 58.151, basic network services include residential caller identification services if the customer to whom the service is billed is at least 65 years of age.</continuation> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scC/s58.051/b"> <num value="b">(b)</num> <content>Electing companies shall offer each basic network service as a separately tariffed service in addition to any packages or other pricing flexibility offerings that include those basic network services.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scC/s58.051/c"> <num value="c">(c)</num> <content>At the election of the affected incumbent local exchange company, the price for basic network service shall also include the fees and charges for any mandatory extended area service arrangements, mandatory expanded toll-free calling plans, and any other service included in the definition of basic network service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scC/s58.051/d"> <num value="d">(d)</num> <chapeau>A nonpermanent expanded toll-free local calling service surcharge established by the commission to recover the costs of mandatory expanded toll-free local calling service:</chapeau> <paragraph identifier="/us/tx/ut/t2/c58/scC/s58.051/1"> <num value="1">(1)</num> <content>is considered a part of basic network service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scC/s58.051/2"> <num value="2">(2)</num> <content>may not be aggregated under Subsection (c); and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scC/s58.051/3"> <num value="3">(3)</num> <content>continues to be transitioned in accordance with commission orders and substantive rules.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 1212, Sec. 39, eff. Sept. 1, 1999. Amended by: Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 18, eff. September 7, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scC/s58.052"> <num value="58.052">Sec. 58.052.</num> <heading>REGULATION OF SERVICES</heading> <subsection identifier="/us/tx/ut/t2/c58/scC/s58.052/a"> <num value="a">(a)</num> <chapeau>Except as provided by Subchapter E, Chapter 52, basic network services of an electing company are regulated:</chapeau> <paragraph identifier="/us/tx/ut/t2/c58/scC/s58.052/1"> <num value="1">(1)</num> <content>in accordance with this chapter; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scC/s58.052/2"> <num value="2">(2)</num> <chapeau>to the extent not inconsistent with this chapter, in accordance with:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c58/scC/s58.052/A"> <num value="A">(A)</num> <content>Subtitle A;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c58/scC/s58.052/B"> <num value="B">(B)</num> <content>Chapters 51, 54, 60, 62, and 63;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c58/scC/s58.052/C"> <num value="C">(C)</num> <content>Chapter 52, except for Subchapter F;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c58/scC/s58.052/D"> <num value="D">(D)</num> <content>Subchapters C, D, and E, Chapter 53;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c58/scC/s58.052/E"> <num value="E">(E)</num> <content>Chapter 55, except for:</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scC/s58.052/i"> <num value="i">(i)</num> <chapeau>Subchapters F and G; and</chapeau> <clause identifier="/us/tx/ut/t2/c58/scC/s58.052/ii"> <num value="ii">(ii)</num> <content>Sections 55.001, 55.002, 55.003, and 55.004;</content> </clause> <subparagraph identifier="/us/tx/ut/t2/c58/scC/s58.052/F"> <num value="F">(F)</num> <content>Sections 53.001, 53.003, 53.004, 53.006, 53.065, 55.005, 55.006, 55.009, and 55.010; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c58/scC/s58.052/G"> <num value="G">(G)</num> <content>commission rules and procedures.</content> </subparagraph> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scC/s58.052/b"> <num value="b">(b)</num> <content>The commission must approve a change in the terms of the tariff offering of a basic network service.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scC/s58.053"> <num value="58.053">Sec. 58.053.</num> <heading>INVESTMENT LIMITATION ON SERVICE STANDARDS</heading> <subsection identifier="/us/tx/ut/t2/c58/scC/s58.053/a"> <num value="a">(a)</num> <content>The commission may not raise a service standard applicable to the provision of local exchange telephone service by an electing company if the increased investment required to comply with the raised standard in any year exceeds 10 percent of the company's average annual intrastate additions in capital investment for the most recent five-year period.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scC/s58.053/b"> <num value="b">(b)</num> <chapeau>In computing the average under Subsection (a), the company shall exclude:</chapeau> <paragraph identifier="/us/tx/ut/t2/c58/scC/s58.053/1"> <num value="1">(1)</num> <content>extraordinary investments made during the five-year period; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scC/s58.053/2"> <num value="2">(2)</num> <content>investments required by Section 58.203.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scC/s58.054"> <num value="58.054">Sec. 58.054.</num> <heading>RATES CAPPED</heading> <subsection identifier="/us/tx/ut/t2/c58/scC/s58.054/a"> <num value="a">(a)</num> <content>As a condition of election under this chapter, an electing company shall commit to not increasing a rate for a basic network service on or before the fourth anniversary of its election date.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scC/s58.054/b"> <num value="b">(b)</num> <chapeau>The rates an electing company may charge on or before that fourth anniversary are the rates charged by the company on June 1, 1995, or, for a company that elects under this chapter after September 1, 1999, the rates charged on the date of its election, without regard to a proceeding pending under:</chapeau> <paragraph identifier="/us/tx/ut/t2/c58/scC/s58.054/1"> <num value="1">(1)</num> <content>Section 15.001;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scC/s58.054/2"> <num value="2">(2)</num> <content>Subchapter D, Chapter 53; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scC/s58.054/3"> <num value="3">(3)</num> <content>Subchapter G, Chapter 2001, Government Code.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scC/s58.054/c"> <num value="c">(c)</num> <content>Notwithstanding Subsections (a) and (b), the cap on the rates for basic network services for a company electing under this chapter may not expire before September 1, 2005.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 1212, Sec. 40, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scC/s58.055"> <num value="58.055">Sec. 58.055.</num> <heading>RATE ADJUSTMENT BY COMPANY</heading> <subsection identifier="/us/tx/ut/t2/c58/scC/s58.055/a"> <num value="a">(a)</num> <chapeau>An electing company may increase a rate for a basic network service during the election period prescribed by Section 58.054 only:</chapeau> <paragraph identifier="/us/tx/ut/t2/c58/scC/s58.055/1"> <num value="1">(1)</num> <content>with commission approval that the proposed change is included in Section 58.056, 58.057, or 58.058; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scC/s58.055/2"> <num value="2">(2)</num> <content>as provided by Sections 58.056, 58.057, 58.058, and 58.059.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scC/s58.055/b"> <num value="b">(b)</num> <content>Notwithstanding Subchapter F, Chapter 60, an electing company may, on its own initiative, decrease a rate for a basic network service during the electing period.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scC/s58.055/c"> <num value="c">(c)</num> <content>The company may decrease the rate for a basic local telecommunications service to an amount above the service's appropriate cost. If the company has been required to perform or has elected to perform a long run incremental cost study, the appropriate cost for the service is the service's long run incremental cost.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 1212, Sec. 40, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scC/s58.056"> <num value="58.056">Sec. 58.056.</num> <heading>RATE ADJUSTMENT FOR CHANGES IN FCC SEPARATIONS</heading> <content>The commission, on motion of the electing company or on its own motion, shall proportionally adjust rates for services to reflect changes in Federal Communications Commission separations that affect intrastate net income by at least 10 percent.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scC/s58.057"> <num value="58.057">Sec. 58.057.</num> <heading>RATE ADJUSTMENT FOR CERTAIN COMPANIES</heading> <subsection identifier="/us/tx/ut/t2/c58/scC/s58.057/a"> <num value="a">(a)</num> <chapeau>An electing company, after the 42nd month after the date the company elects incentive regulation under this chapter, may file an application for a commission review of the company's need for changes in the rates of its services if the company:</chapeau> <paragraph identifier="/us/tx/ut/t2/c58/scC/s58.057/1"> <num value="1">(1)</num> <content>has fewer than five million access lines in this state; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scC/s58.057/2"> <num value="2">(2)</num> <chapeau>is complying with:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c58/scC/s58.057/A"> <num value="A">(A)</num> <content>the company's infrastructure commitment;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c58/scC/s58.057/B"> <num value="B">(B)</num> <content>each requirement relating to quality of service; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c58/scC/s58.057/C"> <num value="C">(C)</num> <content>each commission rule adopted under Chapter 60.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scC/s58.057/b"> <num value="b">(b)</num> <content>The company's application may request that the commission adjust rates, implement new pricing plans, restructure rates, or rebalance revenues between services to recognize changed market conditions and the effects of competitive entry.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scC/s58.057/c"> <num value="c">(c)</num> <content>The commission may use an index and a productivity offset in determining the requested changes.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scC/s58.057/d"> <num value="d">(d)</num> <chapeau>The commission may not:</chapeau> <paragraph identifier="/us/tx/ut/t2/c58/scC/s58.057/1"> <num value="1">(1)</num> <content>order an increase in the rate for residential local exchange telephone service that would cause the rate to increase by more than the United States Consumer Price Index in any 12-month period; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scC/s58.057/2"> <num value="2">(2)</num> <content>set the monthly rate for residential local exchange telephone service in an amount that exceeds the nationwide average rates for similar local exchange telephone services.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scC/s58.058"> <num value="58.058">Sec. 58.058.</num> <heading>RATE GROUP RECLASSIFICATION</heading> <content>Notwithstanding Subchapter B, the commission, on request of the electing company, shall allow a rate group reclassification that results from access line growth.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scC/s58.059"> <num value="58.059">Sec. 58.059.</num> <heading>COMMISSION RATE ADJUSTMENT PROCEDURE</heading> <subsection identifier="/us/tx/ut/t2/c58/scC/s58.059/a"> <num value="a">(a)</num> <content>In accordance with this section, an electing company may request and the commission may authorize a rate adjustment under Section 58.056, 58.057, or 58.058.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scC/s58.059/b"> <num value="b">(b)</num> <content>The electing company must provide to the commission notice of its intent to adjust rates. The notice must be accompanied by sufficient documentary evidence to demonstrate that the rate adjustment is authorized under Section 58.056, 58.057, or 58.058. The commission by rule or order shall prescribe the documentation required under this subsection.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scC/s58.059/c"> <num value="c">(c)</num> <chapeau>The electing company must also provide notice to its customers after providing notice to the commission. The notice to the customers must:</chapeau> <paragraph identifier="/us/tx/ut/t2/c58/scC/s58.059/1"> <num value="1">(1)</num> <content>within a reasonable period after notice to the commission, be published once in a newspaper of general circulation in the affected service area;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scC/s58.059/2"> <num value="2">(2)</num> <content>be included in or printed on each affected consumer's bill in the first billing that occurs after notice is filed with the commission;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scC/s58.059/3"> <num value="3">(3)</num> <content>have a title that includes the name of the company and the words "NOTICE OF POSSIBLE RATE CHANGE"; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scC/s58.059/4"> <num value="4">(4)</num> <chapeau>include:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c58/scC/s58.059/A"> <num value="A">(A)</num> <content>a statement that the consumer's rate may change;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c58/scC/s58.059/B"> <num value="B">(B)</num> <content>an estimate of the amount of the annual change for the typical residential, business, or access consumer if the commission approves the rate change;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c58/scC/s58.059/C"> <num value="C">(C)</num> <content>a statement that a consumer who wants to comment on the rate change or who wants additional information regarding the rate change may call or write the commission and that the information will be provided without cost to the consumer and at the expense of the electing company; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c58/scC/s58.059/D"> <num value="D">(D)</num> <content>the commission's telephone number and address.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scC/s58.059/d"> <num value="d">(d)</num> <content>The estimate of the amount of the annual change required by Subsection (c)(4)(B) must be printed in a type style and size that is distinct from and larger than the type style and size of the body of the notice.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scC/s58.059/e"> <num value="e">(e)</num> <content>The commission shall review the proposed rates to determine if the rate adjustment is authorized under Section 58.056, 58.057, or 58.058.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scC/s58.059/f"> <num value="f">(f)</num> <content>The rate adjustment takes effect on the 90th day after the date the electing company completes the notice required by this section unless the commission suspends the effective date under Subsection (g).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scC/s58.059/g"> <num value="g">(g)</num> <chapeau>At any time before a rate adjustment is scheduled to take effect, the commission, on its own motion or on complaint by an affected party, may suspend the effective date of the rate adjustment and conduct a hearing to review the proposed adjustment. After the hearing, the commission may issue an order approving the adjustment, or if it finds that the adjustment is not authorized under Section 58.056, 58.057, or 58.058, issue an order modifying or rejecting the adjustment. An order modifying or rejecting a rate adjustment must specify:</chapeau> <paragraph identifier="/us/tx/ut/t2/c58/scC/s58.059/1"> <num value="1">(1)</num> <content>each reason why the proposed adjustment was not authorized by Section 58.056, 58.057, or 58.058; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scC/s58.059/2"> <num value="2">(2)</num> <content>how the proposed adjustment may be changed so that it is authorized.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scC/s58.059/h"> <num value="h">(h)</num> <content>Except as provided by this section, a request for a rate restructure must comply with the notice and hearing requirements prescribed by Sections 53.101-53.106.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scC/s58.059/i"> <num value="i">(i)</num> <content>An electing company that has not more than five percent of the total access lines in this state may adopt as the cost for a service the cost for the same or substantially similar service offered by a larger incumbent local exchange company. The electing company may adopt the larger company's cost only if the cost was determined based on a long run incremental cost study. An electing company that adopts a cost under this subsection is not required to present its own long run incremental cost study to support the adopted cost.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scC/s58.060"> <num value="58.060">Sec. 58.060.</num> <heading>RATE ADJUSTMENT AFTER CAP EXPIRATION</heading> <chapeau>After the expiration of the period during which the rates for basic network services are capped as prescribed by Section 58.054, an electing company may increase a rate for a basic network service only:</chapeau> <paragraph identifier="/us/tx/ut/t2/c58/scC/s58.060/1"> <num value="1">(1)</num> <content>with commission approval subject to this title; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scC/s58.060/2"> <num value="2">(2)</num> <content>to the extent consistent with achieving universal affordable service.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 1212, Sec. 41, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scC/s58.061"> <num value="58.061">Sec. 58.061.</num> <heading>EFFECT ON CERTAIN CHARGES</heading> <chapeau>This subchapter does not affect a charge permitted under:</chapeau> <paragraph identifier="/us/tx/ut/t2/c58/scC/s58.061/1"> <num value="1">(1)</num> <content>Section 55.024;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scC/s58.061/2"> <num value="2">(2)</num> <content>Subchapter C, Chapter 55; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scC/s58.061/3"> <num value="3">(3)</num> <content>Subchapter B, Chapter 56.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scC/s58.063"> <num value="58.063">Sec. 58.063.</num> <heading>PRICING AND PACKAGING FLEXIBILITY</heading> <subsection identifier="/us/tx/ut/t2/c58/scC/s58.063/a"> <num value="a">(a)</num> <content>Notwithstanding Section 58.052(b) or Subchapter F, Chapter 60, an electing company may exercise pricing flexibility for basic network services, including the packaging of basic network services with any other regulated or unregulated service or any service of an affiliate. The company may exercise pricing flexibility in accordance with this section 10 days after providing an informational notice to the commission, to the office, and to any person who holds a certificate of operating authority in the electing company's certificated area or areas or who has an effective interconnection agreement with the electing company.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scC/s58.063/b"> <num value="b">(b)</num> <chapeau>An electing company shall set the price of a package of services containing basic network services and nonbasic services at any level at or above the lesser of:</chapeau> <paragraph identifier="/us/tx/ut/t2/c58/scC/s58.063/1"> <num value="1">(1)</num> <content>the sum of the long run incremental costs of any basic network services and nonbasic services contained in the package; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scC/s58.063/2"> <num value="2">(2)</num> <content>the sum of the tariffed prices of any basic network services contained in the package and the long run incremental costs of nonbasic services contained in the package.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scC/s58.063/c"> <num value="c">(c)</num> <content>Except as provided by Section 58.003, an electing company may flexibly price a package that includes a basic network service in any manner provided by Section 51.002(7).</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 42, eff. Sept. 1, 1999.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c58/scE"> <num value="E">SUBCHAPTER E.</num> <heading>NONBASIC SERVICES</heading> <section identifier="/us/tx/ut/t2/c58/scE/s58.151"> <num value="58.151">Sec. 58.151.</num> <heading>SERVICES INCLUDED</heading> <chapeau>The following services are classified as nonbasic services:</chapeau> <paragraph identifier="/us/tx/ut/t2/c58/scE/s58.151/1"> <num value="1">(1)</num> <content>flat rate business local exchange telephone service, including primary directory listings and the receipt of a directory, and any applicable mileage or zone charges, except that the prices for this service shall be capped until September 1, 2005, at the prices in effect on September 1, 1999;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scE/s58.151/2"> <num value="2">(2)</num> <content>business tone dialing service, except that the prices for this service shall be capped until September 1, 2005, at the prices in effect on September 1, 1999;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scE/s58.151/3"> <num value="3">(3)</num> <content>service connection for all business services, except that the prices for this service shall be capped until September 1, 2005, at the prices in effect on September 1, 1999;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scE/s58.151/4"> <num value="4">(4)</num> <content>direct inward dialing for basic business services, except that the prices for this service shall be capped until September 1, 2005, at the prices in effect on September 1, 1999;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scE/s58.151/5"> <num value="5">(5)</num> <content>"1-plus" intraLATA message toll services;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scE/s58.151/6"> <num value="6">(6)</num> <content>0+ and 0- operator services;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scE/s58.151/7"> <num value="7">(7)</num> <chapeau>call waiting, call forwarding, and custom calling, except that:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c58/scE/s58.151/A"> <num value="A">(A)</num> <content>residential call waiting service shall be classified as a basic network service until July 1, 2006; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c58/scE/s58.151/B"> <num value="B">(B)</num> <content>for an electing company subject to Section 58.301, prices for residential call forwarding and other custom calling services shall be capped at the prices in effect on September 1, 1999, until the electing company implements the reduction in switched access rates described by Section 58.301(2);</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scE/s58.151/8"> <num value="8">(8)</num> <content>call return, caller identification, and call control options, except that, for an electing company subject to Section 58.301, prices for residential call return, caller identification, and call control options shall be capped at the prices in effect on September 1, 1999, until the electing company implements the reduction in switched access rates described by Section 58.301(2);</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scE/s58.151/9"> <num value="9">(9)</num> <content>central office based PBX-type services;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scE/s58.151/10"> <num value="10">(10)</num> <content>billing and collection services, including installment billing and late payment charges for customers of the electing company;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scE/s58.151/11"> <num value="11">(11)</num> <content>integrated services digital network (ISDN) services, except that prices for Basic Rate Interface (BRI) ISDN services, which comprise up to two 64 Kbps B-channels and one 16 Kbps D-channel, shall be capped until September 1, 2005, at the prices in effect on September 1, 1999;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scE/s58.151/12"> <num value="12">(12)</num> <content>new services;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scE/s58.151/13"> <num value="13">(13)</num> <content>directory assistance services, except that an electing company shall provide to a residential customer the first three directory assistance inquiries in a monthly billing cycle at no charge until July 1, 2006;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scE/s58.151/14"> <num value="14">(14)</num> <content>services described in the WATS tariff as the tariff existed on January 1, 1995;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scE/s58.151/15"> <num value="15">(15)</num> <content>800 and foreign exchange services;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scE/s58.151/16"> <num value="16">(16)</num> <content>private line service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scE/s58.151/17"> <num value="17">(17)</num> <content>special access service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scE/s58.151/18"> <num value="18">(18)</num> <content>services from public pay telephones;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scE/s58.151/19"> <num value="19">(19)</num> <content>paging services and mobile services (IMTS);</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scE/s58.151/20"> <num value="20">(20)</num> <content>911 services provided to a local authority that are available from another provider;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scE/s58.151/21"> <num value="21">(21)</num> <content>speed dialing;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scE/s58.151/22"> <num value="22">(22)</num> <content>three-way calling; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scE/s58.151/23"> <num value="23">(23)</num> <content>all other services subject to the commission's jurisdiction that are not specifically classified as basic network services in Section 58.051, except that nothing in this section shall preclude a customer from subscribing to a local flat rate residential or business line for a computer modem or a facsimile machine.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 1212, Sec. 43, eff. Sept. 1, 1999. Amended by: Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 19, eff. September 7, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scE/s58.152"> <num value="58.152">Sec. 58.152.</num> <heading>PRICES</heading> <subsection identifier="/us/tx/ut/t2/c58/scE/s58.152/a"> <num value="a">(a)</num> <chapeau>An electing company may set the price for any nonbasic service at any level above the lesser of the:</chapeau> <paragraph identifier="/us/tx/ut/t2/c58/scE/s58.152/1"> <num value="1">(1)</num> <content>service's long run incremental cost in accordance with the imputation rules prescribed by or under Subchapter D, Chapter 60; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scE/s58.152/2"> <num value="2">(2)</num> <content>price for the service in effect on September 1, 1999.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scE/s58.152/b"> <num value="b">(b)</num> <content>Subject to Section 51.004, an electing company may use pricing flexibility for a nonbasic service. Pricing flexibility includes all pricing arrangements included in the definition of "pricing flexibility" prescribed by Section 51.002 and includes packages that include basic network services.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 1212, Sec. 43, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scE/s58.153"> <num value="58.153">Sec. 58.153.</num> <heading>NEW SERVICES</heading> <subsection identifier="/us/tx/ut/t2/c58/scE/s58.153/a"> <num value="a">(a)</num> <content>Subject to the pricing conditions prescribed by Section 58.152(a), an electing company may introduce a new service 10 days after providing an informational notice to the commission, to the office, and to any person who holds a certificate of operating authority in the electing company's certificated area or areas or who has an effective interconnection agreement with the electing company.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scE/s58.153/b"> <num value="b">(b)</num> <chapeau>An electing company serving more than five million access lines in this state shall provide notice to any person who holds a certificate of operating authority in the electing company's certificated area or areas or who has an effective interconnection agreement with the electing company of any changes in the generally available prices and terms under which the electing company offers basic or nonbasic telecommunications services regulated by the commission at retail rates to subscribers that are not telecommunications providers. Changes requiring notice under this subsection include the introduction of any new nonbasic services, any new features or functions of basic or nonbasic services, promotional offerings of basic or nonbasic services, or the discontinuation of then-current features or services. The electing company shall provide the notice:</chapeau> <paragraph identifier="/us/tx/ut/t2/c58/scE/s58.153/1"> <num value="1">(1)</num> <content>if the electing company is required to give notice to the commission, at the same time the company provides that notice; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scE/s58.153/2"> <num value="2">(2)</num> <content>if the electing company is not required to give notice to the commission, at least 45 days before the effective date of a price change or 90 days before the effective date of a change other than a price change, unless the commission determines that the notice should not be given.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scE/s58.153/c"> <num value="c">(c)</num> <content>An affected person, the office on behalf of residential or small commercial customers, or the commission may file a complaint at the commission challenging whether the pricing by an incumbent local exchange company of a new service is in compliance with Section 58.152(a). The commission shall allow the company to continue to provide the service while the complaint is pending.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scE/s58.153/d"> <num value="d">(d)</num> <chapeau>If a complaint is filed under Subsection (c), the electing company has the burden of proving that the company set the price for the new service in accordance with Section 58.152(a). If the complaint is finally resolved in favor of the complainant, the company:</chapeau> <paragraph identifier="/us/tx/ut/t2/c58/scE/s58.153/1"> <num value="1">(1)</num> <content>shall, not later than the 10th day after the date the complaint is finally resolved, amend the price of the service as necessary to comply with the final resolution; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scE/s58.153/2"> <num value="2">(2)</num> <content>may, at the company's option, discontinue the service.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scE/s58.153/e"> <num value="e">(e)</num> <content>The notice requirement prescribed by Subsection (b) expires September 1, 2003.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 43, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scE/s58.155"> <num value="58.155">Sec. 58.155.</num> <heading>INTERCONNECTION</heading> <content>Because interconnection to competitive providers and interconnection for commercial mobile service providers are subject to the requirements of Sections 251 and 252, Communications Act of 1934 (47 U.S.C. Sections 251 and 252), as amended, and Federal Communications Commission rules, including the commission's authority to arbitrate issues, interconnection is not addressed in this subchapter or Subchapter B.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 44, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scE/s58.156"> <num value="58.156">Sec. 58.156.</num> <heading>REGULATION OF SERVICES</heading> <content>Sections 55.001, 55.002, 55.003, and 55.004 do not apply to retail nonbasic services offered by an electing company or by a transitioning company, as defined by Section 65.002.</content> <sourceCredit>Added by Acts 2013, 83rd Leg., R.S., Ch. 210 (S.B. 259), Sec. 3, eff. September 1, 2013.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c58/scF"> <num value="F">SUBCHAPTER F.</num> <heading>GENERAL INFRASTRUCTURE COMMITMENT</heading> <section identifier="/us/tx/ut/t2/c58/scF/s58.201"> <num value="58.201">Sec. 58.201.</num> <heading>STATEMENT OF STATE GOAL</heading> <subsection identifier="/us/tx/ut/t2/c58/scF/s58.201/a"> <num value="a">(a)</num> <content>It is the goal of this state to facilitate and promote the deployment of an advanced telecommunications infrastructure to spur economic development throughout this state. This state should be among the leaders in achieving this objective.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scF/s58.201/b"> <num value="b">(b)</num> <content>The primary means of achieving this goal is through encouraging private investment in this state's telecommunications infrastructure by creating incentives for that investment and promoting the development of competition.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scF/s58.201/c"> <num value="c">(c)</num> <content>The best way to bring the benefits of an advanced telecommunications network infrastructure to communities in this state is through innovation and competition among all the state's communications providers. Competition will provide residents of this state with a choice of telecommunications providers and will drive technology deployment, innovation, service quality, and cost-based prices as competing firms try to satisfy customer needs.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scF/s58.202"> <num value="58.202">Sec. 58.202.</num> <heading>POLICY GOALS FOR IMPLEMENTATION</heading> <chapeau>In implementing this subchapter, the commission shall consider this state's policy goals to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c58/scF/s58.202/1"> <num value="1">(1)</num> <content>ensure the availability of the widest possible range of competitive choices in the provision of telecommunications services and facilities;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scF/s58.202/2"> <num value="2">(2)</num> <content>foster competition and rely on market forces where competition exists to determine the price, terms, and availability of service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scF/s58.202/3"> <num value="3">(3)</num> <content>ensure the universal availability of basic local telecommunications services at reasonable rates;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scF/s58.202/4"> <num value="4">(4)</num> <content>encourage the continued development and deployment of advanced and reliable capabilities and services in telecommunications networks;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scF/s58.202/5"> <num value="5">(5)</num> <content>ensure interconnection and interoperability, based on uniform technical standards, among telecommunications carriers;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scF/s58.202/6"> <num value="6">(6)</num> <content>eliminate unnecessary administrative procedures that impose regulatory barriers to competition and ensure that competitive entry is fostered on an economically rational basis;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scF/s58.202/7"> <num value="7">(7)</num> <content>ensure consumer protection and protection against anticompetitive conduct;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scF/s58.202/8"> <num value="8">(8)</num> <content>regulate a provider of services only to the extent the provider has market power to control the price of services to customers;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scF/s58.202/9"> <num value="9">(9)</num> <content>encourage cost-based pricing of telecommunications services so that consumers pay a fair price for services they use; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scF/s58.202/10"> <num value="10">(10)</num> <content>subject to Subchapter C, develop appropriate quality of service standards for local exchange companies so as to place this state among the leaders in deployment of an advanced telecommunications infrastructure.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scF/s58.203"> <num value="58.203">Sec. 58.203.</num> <heading>INFRASTRUCTURE GOALS OF ALL ELECTING COMPANIES</heading> <subsection identifier="/us/tx/ut/t2/c58/scF/s58.203/a"> <num value="a">(a)</num> <content>Recognizing that it will take time for competition to develop in the local exchange market, the commission shall, in the absence of competition, ensure that each electing company achieves the infrastructure goals described by this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scF/s58.203/b"> <num value="b">(b)</num> <content>Not later than December 31, 1996, an electing company shall make available to each customer in the company's territory access to end-to-end digital connectivity.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scF/s58.203/c"> <num value="c">(c)</num> <content>Each new central office switch installed for an electing company after September 1, 1995, must be digital or technically equal to or superior to digital. In addition, a switch installed after September 1, 1997, must, at a minimum, be capable of providing integrated services digital network (ISDN) services in a manner consistent with generally accepted national standards.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scF/s58.203/d"> <num value="d">(d)</num> <content>Not later than January 1, 2000, 50 percent of the local exchange access lines in each electing company's territory must be served by a digital central office switch.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scF/s58.203/e"> <num value="e">(e)</num> <content>Not later than January 1, 2000, an electing company's public switched network backbone interoffice facilities must employ broadband facilities capable of 45 or more megabits a second. The company may employ facilities at a lower bandwidth if technology permits the delivery of video signal at the lower bandwidth at a quality level comparable to a television broadcast signal. The requirements of this subsection do not apply to local loop facilities.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scF/s58.204"> <num value="58.204">Sec. 58.204.</num> <heading>ADDITIONAL INFRASTRUCTURE COMMITMENT OF CERTAIN COMPANIES</heading> <subsection identifier="/us/tx/ut/t2/c58/scF/s58.204/a"> <num value="a">(a)</num> <content>Not later than December 31, 1998, an electing company serving more than one million but fewer than five million access lines shall provide digital switching central offices in all exchanges.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scF/s58.204/b"> <num value="b">(b)</num> <chapeau>Not later than January 1, 2000, an electing company serving more than five million access lines shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c58/scF/s58.204/1"> <num value="1">(1)</num> <content>install Common Channel Signaling 7 capability in each central office; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scF/s58.204/2"> <num value="2">(2)</num> <content>connect all of the company's serving central offices to their respective LATA tandem central offices with optical fiber or equivalent facilities.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scF/s58.205"> <num value="58.205">Sec. 58.205.</num> <heading>EXTENSION OR WAIVER OF INFRASTRUCTURE REQUIREMENTS</heading> <subsection identifier="/us/tx/ut/t2/c58/scF/s58.205/a"> <num value="a">(a)</num> <content>For an electing company that serves more than one million but fewer than two million access lines, the commission may temporarily extend a deadline prescribed by Section 58.203 if the company demonstrates that the extension is in the public interest.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scF/s58.205/b"> <num value="b">(b)</num> <content>For an electing company that serves fewer than one million access lines, the commission may waive a requirement prescribed by Section 58.203 if the company demonstrates that the investment is not viable economically.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scF/s58.205/c"> <num value="c">(c)</num> <content>Before granting a waiver under Subsection (b), the commission must consider the public benefits that would result from compliance with the requirement.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scF/s58.206"> <num value="58.206">Sec. 58.206.</num> <heading>IMPLEMENTATION COSTS; INCREASE IN RATES AND UNIVERSAL SERVICE FUNDS</heading> <chapeau>The commission may not consider the cost of implementing Section 58.203 or 58.204 in determining whether an electing company is entitled to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c58/scF/s58.206/1"> <num value="1">(1)</num> <content>a rate increase under this chapter; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scF/s58.206/2"> <num value="2">(2)</num> <content>increased universal service funds under Subchapter B, Chapter 56.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c58/scG"> <num value="G">SUBCHAPTER G.</num> <heading>INFRASTRUCTURE COMMITMENT TO CERTAIN ENTITIES</heading> <section identifier="/us/tx/ut/t2/c58/scG/s58.251"> <num value="58.251">Sec. 58.251.</num> <heading>INTENT AND GOAL OF SUBCHAPTER</heading> <subsection identifier="/us/tx/ut/t2/c58/scG/s58.251/a"> <num value="a">(a)</num> <content>It is the intent of this subchapter to establish a telecommunications infrastructure that interconnects the public entities described in this subchapter. The interconnection of these entities requires ubiquitous, broadband, digital services for voice, video, and data in the local serving area. The ubiquitous nature of these connections must allow individual networks of these entities to interconnect and interoperate across the broadband digital service infrastructure. The delivery of these advanced telecommunications services requires collaborations and partnerships of public, private, and commercial telecommunications service network providers.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scG/s58.251/b"> <num value="b">(b)</num> <content>The goal of this subchapter is to interconnect and aggregate the connections to every entity described in this subchapter, in the local serving area. It is further intended that the infrastructure implemented under this subchapter connect each entity that requests a service offered under this subchapter.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scG/s58.252"> <num value="58.252">Sec. 58.252.</num> <heading>DEFINITIONS</heading> <chapeau>In this subchapter:</chapeau> <paragraph identifier="/us/tx/ut/t2/c58/scG/s58.252/1"> <num value="1">(1)</num> <content>"Educational institution" has the meaning assigned by Section 57.021.</content> <continuation>(1-a) "Health center" means a federally qualified health center service delivery site.</continuation> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scG/s58.252/2"> <num value="2">(2)</num> <chapeau>"Library" means:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c58/scG/s58.252/A"> <num value="A">(A)</num> <content>a public library or regional library system as those terms are defined by Section 441.122, Government Code;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c58/scG/s58.252/B"> <num value="B">(B)</num> <content>a library operated by an institution of higher education or a school district; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c58/scG/s58.252/C"> <num value="C">(C)</num> <content>a library operated by a nonprofit corporation as defined by Section 441.221(3), Government Code.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scG/s58.252/3"> <num value="3">(3)</num> <chapeau>"Private network services" means:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c58/scG/s58.252/A"> <num value="A">(A)</num> <content>broadband digital service that is capable of providing transmission speeds of 45 megabits a second or greater for customer applications; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c58/scG/s58.252/B"> <num value="B">(B)</num> <content>other customized or packaged network services.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scG/s58.252/4"> <num value="4">(4)</num> <chapeau>"Telemedicine center" means a facility that is equipped to transmit, by video, data, or voice service, medical information for the diagnosis or treatment of illness or disease and that is:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c58/scG/s58.252/A"> <num value="A">(A)</num> <content>owned or operated by a public or not-for-profit hospital, including an academic health center; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c58/scG/s58.252/B"> <num value="B">(B)</num> <content>owned by one or more state-licensed health care practitioners and operated on a nonprofit basis.</content> </subparagraph> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2007, 80th Leg., R.S., Ch. 831 (H.B. 735), Sec. 11, eff. September 1, 2008. Acts 2011, 82nd Leg., R.S., Ch. 903 (S.B. 773), Sec. 1, eff. September 1, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scG/s58.253"> <num value="58.253">Sec. 58.253.</num> <heading>PRIVATE NETWORK SERVICES FOR CERTAIN ENTITIES</heading> <subsection identifier="/us/tx/ut/t2/c58/scG/s58.253/a"> <num value="a">(a)</num> <chapeau>On customer request, an electing company shall provide private network services to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c58/scG/s58.253/1"> <num value="1">(1)</num> <content>an educational institution;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scG/s58.253/2"> <num value="2">(2)</num> <content>a library as defined in Section 57.021;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scG/s58.253/3"> <num value="3">(3)</num> <content>a nonprofit telemedicine center;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scG/s58.253/4"> <num value="4">(4)</num> <content>a public or not-for-profit hospital;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scG/s58.253/5"> <num value="5">(5)</num> <content>a legally constituted consortium or group of entities listed in this subsection; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scG/s58.253/6"> <num value="6">(6)</num> <content>a health center.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scG/s58.253/b"> <num value="b">(b)</num> <content>Except as provided by Section 58.266, the electing company shall provide the private network services for the private and sole use of the receiving entity.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 2001, 77th Leg., ch. 959, Sec. 9, eff. June 14, 2001; Acts 2001, 77th Leg., ch. 1220, Sec. 4, eff. Sept. 1, 2001; Acts 2001, 77th Leg., ch. 1255, Sec. 16, eff. June 15, 2001; Acts 2001, 77th Leg., ch. 1350, Sec. 7, eff. Sept. 1, 2001. Amended by: Acts 2007, 80th Leg., R.S., Ch. 831 (H.B. 735), Sec. 12, eff. September 1, 2008. Acts 2011, 82nd Leg., R.S., Ch. 903 (S.B. 773), Sec. 2, eff. September 1, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scG/s58.254"> <num value="58.254">Sec. 58.254.</num> <heading>PRIORITIES</heading> <chapeau>An electing company shall give priority to serving:</chapeau> <paragraph identifier="/us/tx/ut/t2/c58/scG/s58.254/1"> <num value="1">(1)</num> <content>rural areas;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scG/s58.254/2"> <num value="2">(2)</num> <content>areas designated as critically underserved either medically or educationally; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scG/s58.254/3"> <num value="3">(3)</num> <content>educational institutions with high percentages of economically disadvantaged students.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scG/s58.255"> <num value="58.255">Sec. 58.255.</num> <heading>CONTRACTS FOR PRIVATE NETWORK SERVICES</heading> <subsection identifier="/us/tx/ut/t2/c58/scG/s58.255/a"> <num value="a">(a)</num> <content>An electing company shall provide a private network service under a customer specific contract.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scG/s58.255/b"> <num value="b">(b)</num> <content>An electing company shall offer private network service contracts under this subchapter at 110 percent of the long run incremental cost of providing the private network service, including installation.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scG/s58.255/c"> <num value="c">(c)</num> <content>Commission approval of a contract is not required.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scG/s58.255/d"> <num value="d">(d)</num> <content>Subtitle D, Title 10, Government Code, does not apply to a contract entered into under this subchapter.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 21 (S.B. 983), Sec. 2, eff. September 1, 2011. Acts 2011, 82nd Leg., R.S., Ch. 98 (S.B. 980), Sec. 12, eff. September 1, 2011. Acts 2011, 82nd Leg., R.S., Ch. 903 (S.B. 773), Sec. 3, eff. September 1, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scG/s58.256"> <num value="58.256">Sec. 58.256.</num> <heading>PREFERRED RATE TREATMENT WARRANTED</heading> <content>An entity described by Section 58.253(a) warrants preferred rate treatment. However, a rate charged for a service must cover the service's long run incremental cost.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scG/s58.257"> <num value="58.257">Sec. 58.257.</num> <heading>ELECTION OF RATE TREATMENT</heading> <content>An educational institution or a library may elect the rate treatment provided by this subchapter or the discount provided by Subchapter B, Chapter 57.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scG/s58.258"> <num value="58.258">Sec. 58.258.</num> <heading>PRIVATE NETWORK SERVICES RATES AND TARIFFS</heading> <subsection identifier="/us/tx/ut/t2/c58/scG/s58.258/a"> <num value="a">(a)</num> <content>Notwithstanding the pricing flexibility authorized by this subtitle, an electing company's rates for private network services may not be increased before January 1, 2016. However, an electing company may increase a rate in accordance with the provisions of a customer specific contract.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scG/s58.258/b"> <num value="b">(b)</num> <content>An electing company may not charge an entity described by Section 58.253(a) a special construction or installation charge.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 20, eff. September 7, 2005. Acts 2011, 82nd Leg., R.S., Ch. 903 (S.B. 773), Sec. 4, eff. September 1, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scG/s58.259"> <num value="58.259">Sec. 58.259.</num> <heading>TARIFF RATE FOR CERTAIN INTRALATA SERVICE</heading> <subsection identifier="/us/tx/ut/t2/c58/scG/s58.259/a"> <num value="a">(a)</num> <content>An electing company shall file a flat monthly tariff rate for point-to-point intraLATA 1.544 megabits a second service for the entities described by Section 58.253(a).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scG/s58.259/b"> <num value="b">(b)</num> <chapeau>The tariff rate may not be:</chapeau> <paragraph identifier="/us/tx/ut/t2/c58/scG/s58.259/1"> <num value="1">(1)</num> <content>distance sensitive; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scG/s58.259/2"> <num value="2">(2)</num> <content>higher than 110 percent of the service's statewide average long run incremental cost, including installation.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 903 (S.B. 773), Sec. 5, eff. September 1, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scG/s58.260"> <num value="58.260">Sec. 58.260.</num> <heading>POINT-TO-POINT 45 MEGABITS A SECOND INTRALATA SERVICE</heading> <subsection identifier="/us/tx/ut/t2/c58/scG/s58.260/a"> <num value="a">(a)</num> <content>On request of an entity described by Section 58.253(a), an electing company shall provide to the entity point-to-point 45 megabits a second intraLATA services.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scG/s58.260/b"> <num value="b">(b)</num> <content>The service must be provided under a customer specific contract except that any interoffice portion of the service must be recovered on a statewide average basis that is not distance sensitive.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scG/s58.260/c"> <num value="c">(c)</num> <content>The rate for the service may not be higher than 110 percent of the service's long run incremental cost, including installation.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 903 (S.B. 773), Sec. 6, eff. September 1, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scG/s58.261"> <num value="58.261">Sec. 58.261.</num> <heading>BROADBAND DIGITAL SPECIAL ACCESS SERVICE</heading> <subsection identifier="/us/tx/ut/t2/c58/scG/s58.261/a"> <num value="a">(a)</num> <content>An electing company shall provide to an entity described by Section 58.253(a) broadband digital special access service to interexchange carriers.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scG/s58.261/b"> <num value="b">(b)</num> <content>The rate for the service may not be higher than 110 percent of the service's long run incremental cost, including installation.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 903 (S.B. 773), Sec. 7, eff. September 1, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scG/s58.262"> <num value="58.262">Sec. 58.262.</num> <heading>EXPANDED INTERCONNECTION</heading> <subsection identifier="/us/tx/ut/t2/c58/scG/s58.262/a"> <num value="a">(a)</num> <content>On request of an entity described by Section 58.253(a), an electing company shall provide to the entity expanded interconnection (virtual colocation).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scG/s58.262/b"> <num value="b">(b)</num> <chapeau>The company shall provide expanded interconnection:</chapeau> <paragraph identifier="/us/tx/ut/t2/c58/scG/s58.262/1"> <num value="1">(1)</num> <content>in accordance with commission rules adopted under Subchapter H, Chapter 60; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scG/s58.262/2"> <num value="2">(2)</num> <content>at 105 percent of long run incremental cost, including installation.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scG/s58.262/c"> <num value="c">(c)</num> <content>An entity described by Section 58.253(a) is not required to qualify for expanded interconnection if expanded interconnection is ordered by the commission.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scG/s58.263"> <num value="58.263">Sec. 58.263.</num> <heading>INTERNET ACCESS</heading> <subsection identifier="/us/tx/ut/t2/c58/scG/s58.263/a"> <num value="a">(a)</num> <content>This section applies only to an educational institution or library in an exchange of an electing company serving more than five million access lines in which toll-free access to the Internet is not available.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scG/s58.263/b"> <num value="b">(b)</num> <content>On request of the educational institution or library, the electing company shall make available a toll-free connection or toll-free dialing arrangement that the institution or library may use to obtain access to the Internet in an exchange in which toll-free access to the Internet is available.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scG/s58.263/c"> <num value="c">(c)</num> <content>The electing company shall provide the connection or dialing arrangement at no charge to the educational institution or library until Internet access becomes available in the exchange of the requesting educational institution or library.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scG/s58.263/d"> <num value="d">(d)</num> <content>The electing company is not required to arrange for Internet access or to pay Internet charges for the requesting educational institution or library.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scG/s58.264"> <num value="58.264">Sec. 58.264.</num> <heading>COMPLAINTS LIMITED</heading> <subsection identifier="/us/tx/ut/t2/c58/scG/s58.264/a"> <num value="a">(a)</num> <content>Notwithstanding any other provision of this title, an electing company is subject to a complaint under this subchapter only by an entity described by Section 58.253(a).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scG/s58.264/b"> <num value="b">(b)</num> <content>An entity may only complain that the company provided a private network service under this subchapter preferentially to a similarly situated customer.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scG/s58.265"> <num value="58.265">Sec. 58.265.</num> <heading>INTERCONNECTION OF NETWORK SERVICES</heading> <content>The private network services provided under this subchapter may be interconnected with other similar networks for distance learning, telemedicine, and information-sharing purposes.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scG/s58.266"> <num value="58.266">Sec. 58.266.</num> <heading>SHARING OR RESALE OF NETWORK SERVICES</heading> <subsection identifier="/us/tx/ut/t2/c58/scG/s58.266/a"> <num value="a">(a)</num> <content>A private network service may be used by and shared among the entities described by Section 58.253(a) but may not be otherwise shared or resold to other customers.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scG/s58.266/b"> <num value="b">(b)</num> <content>A service provided under this subchapter may not be required to be resold to another customer at a rate provided by this subchapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scG/s58.266/c"> <num value="c">(c)</num> <content>This section does not prohibit an otherwise permitted resale of another service that an electing company may offer through the use of the same facilities used to provide a private network service offered under this subchapter.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scG/s58.267"> <num value="58.267">Sec. 58.267.</num> <heading>IMPLEMENTATION COSTS; INCREASE IN RATES AND UNIVERSAL SERVICE FUNDS</heading> <chapeau>The commission may not consider the cost of implementing this subchapter in determining whether an electing company is entitled to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c58/scG/s58.267/1"> <num value="1">(1)</num> <content>a rate increase under this chapter; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scG/s58.267/2"> <num value="2">(2)</num> <content>increased universal service funds under Subchapter B, Chapter 56.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scG/s58.268"> <num value="58.268">Sec. 58.268.</num> <heading>CONTINUATION OF OBLIGATION</heading> <chapeau>Notwithstanding any other provision of this title, an electing company shall continue to comply with this subchapter until January 1, 2016, regardless of:</chapeau> <paragraph identifier="/us/tx/ut/t2/c58/scG/s58.268/1"> <num value="1">(1)</num> <content>the date the company elected under this chapter; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scG/s58.268/2"> <num value="2">(2)</num> <content>any action taken in relation to that company under Chapter 65.</content> </paragraph> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 21, eff. September 7, 2005. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 903 (S.B. 773), Sec. 8, eff. September 1, 2011.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c58/scH"> <num value="H">SUBCHAPTER H.</num> <heading>SWITCHED ACCESS SERVICES</heading> <section identifier="/us/tx/ut/t2/c58/scH/s58.301"> <num value="58.301">Sec. 58.301.</num> <heading>SWITCHED ACCESS RATE REDUCTION</heading> <chapeau>An electing company with greater than five million access lines in this state shall reduce its switched access rates on a combined originating and terminating basis as follows:</chapeau> <paragraph identifier="/us/tx/ut/t2/c58/scH/s58.301/1"> <num value="1">(1)</num> <content>the electing company shall reduce switched access rates on a combined originating and terminating basis in effect on September 1, 1999, by one cent a minute; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scH/s58.301/2"> <num value="2">(2)</num> <chapeau>the electing company shall reduce switched access rates on a combined originating and terminating basis by an additional two cents a minute on the earlier of:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c58/scH/s58.301/A"> <num value="A">(A)</num> <content>July 1, 2000; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c58/scH/s58.301/B"> <num value="B">(B)</num> <content>the date the electing company, or its affiliate formed in compliance with 47 U.S.C. Section 272, as amended, actually begins providing interLATA services in this state in accordance with the authorization required by 47 U.S.C. Section 271, as amended.</content> </subparagraph> </paragraph> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 45, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c58/scH/s58.302"> <num value="58.302">Sec. 58.302.</num> <heading>SWITCHED ACCESS RATE CAP</heading> <subsection identifier="/us/tx/ut/t2/c58/scH/s58.302/a"> <num value="a">(a)</num> <chapeau>An electing company may not increase the per minute rates for switched access services on a combined originating and terminating basis above the lesser of:</chapeau> <paragraph identifier="/us/tx/ut/t2/c58/scH/s58.302/1"> <num value="1">(1)</num> <content>the rates for switched access services charged by that electing company on September 1, 1999, as may be further reduced on implementation of the universal service fund under Chapter 56; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c58/scH/s58.302/2"> <num value="2">(2)</num> <content>the applicable rate described by Section 58.301 as may be further reduced on implementation of the universal service fund under Chapter 56.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c58/scH/s58.302/b"> <num value="b">(b)</num> <content>Notwithstanding Subchapter F, Chapter 60, but subject to Section 60.001, an electing company may, on its own initiative, decrease a rate charged for switched access service to any amount above the long run incremental cost of the service.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 45, eff. Sept. 1, 1999.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t2/c59"> <num value="59">CHAPTER 59.</num> <heading>INFRASTRUCTURE PLAN</heading> <subchapter identifier="/us/tx/ut/t2/c59/scA"> <num value="A">SUBCHAPTER A.</num> <heading>GENERAL PROVISIONS</heading> <section identifier="/us/tx/ut/t2/c59/scA/s59.001"> <num value="59.001">Sec. 59.001.</num> <heading>POLICY</heading> <content>It is the policy of this state that an incumbent local exchange company that does not elect to be regulated under Chapter 58 should have incentives to deploy infrastructure that will benefit the residents of this state while maintaining reasonable local rates and universal service.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c59/scA/s59.002"> <num value="59.002">Sec. 59.002.</num> <heading>DEFINITIONS</heading> <chapeau>In this chapter:</chapeau> <paragraph identifier="/us/tx/ut/t2/c59/scA/s59.002/1"> <num value="1">(1)</num> <content>"Electing company" means an incumbent local exchange company that elects for an infrastructure commitment and corresponding regulation under this chapter.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c59/scA/s59.002/2"> <num value="2">(2)</num> <content>"Election date" means the date on which the commission receives notice of election under Subchapter B.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c59/scB"> <num value="B">SUBCHAPTER B.</num> <heading>INFRASTRUCTURE INCENTIVES</heading> <section identifier="/us/tx/ut/t2/c59/scB/s59.021"> <num value="59.021">Sec. 59.021.</num> <heading>ELECTION</heading> <subsection identifier="/us/tx/ut/t2/c59/scB/s59.021/a"> <num value="a">(a)</num> <chapeau>An incumbent local exchange company may elect to make an infrastructure commitment and to be subject to corresponding regulation under this chapter if the company:</chapeau> <paragraph identifier="/us/tx/ut/t2/c59/scB/s59.021/1"> <num value="1">(1)</num> <content>serves less than five percent of the access lines in this state; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c59/scB/s59.021/2"> <num value="2">(2)</num> <content>has not elected incentive regulation under Chapter 58.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c59/scB/s59.021/b"> <num value="b">(b)</num> <content>A company makes the election by notifying the commission in writing of the company's election.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c59/scB/s59.021/c"> <num value="c">(c)</num> <chapeau>A company electing under this chapter may renew the election for successive two-year periods. An election that is renewed under this subsection remains in effect until the earlier of the date that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c59/scB/s59.021/1"> <num value="1">(1)</num> <content>the election expires because it was not renewed;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c59/scB/s59.021/2"> <num value="2">(2)</num> <content>the commission allows the company to withdraw its election under Section 59.022; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c59/scB/s59.021/3"> <num value="3">(3)</num> <content>the legislature eliminates the incentive regulation authorized by this chapter and Chapter 58.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 1212, Sec. 46, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c59/scB/s59.022"> <num value="59.022">Sec. 59.022.</num> <heading>WITHDRAWAL OF ELECTION</heading> <subsection identifier="/us/tx/ut/t2/c59/scB/s59.022/a"> <num value="a">(a)</num> <chapeau>The commission may allow an electing company to withdraw the company's election under this chapter:</chapeau> <paragraph identifier="/us/tx/ut/t2/c59/scB/s59.022/1"> <num value="1">(1)</num> <content>on application by the company; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c59/scB/s59.022/2"> <num value="2">(2)</num> <content>only for good cause.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c59/scB/s59.022/b"> <num value="b">(b)</num> <content>In this section, "good cause" includes only matters beyond the control of the company.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c59/scB/s59.023"> <num value="59.023">Sec. 59.023.</num> <heading>ELECTION UNDER CHAPTER</heading> <subsection identifier="/us/tx/ut/t2/c59/scB/s59.023/a"> <num value="a">(a)</num> <content>This chapter does not prohibit a company electing under this chapter from electing incentive regulation under Chapter 58.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c59/scB/s59.023/b"> <num value="b">(b)</num> <content>If a company makes an election under Chapter 58, the infrastructure commitment made under this chapter offsets the infrastructure commitment required in connection with the Chapter 58 election.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c59/scB/s59.024"> <num value="59.024">Sec. 59.024.</num> <heading>RATE CHANGES</heading> <subsection identifier="/us/tx/ut/t2/c59/scB/s59.024/a"> <num value="a">(a)</num> <content>Except for the charges permitted under Subchapter C, Chapter 55, Subchapter B, Chapter 56, and Section 55.024, an electing company may not, before the end of the company's election period under this chapter, increase a rate previously established for that company under this title unless the commission approves the proposed change as authorized under Subsection (c) or (d).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c59/scB/s59.024/b"> <num value="b">(b)</num> <chapeau>For purposes of Subsection (a), the company's previously established rates are the rates charged by the company on its election date without regard to a proceeding pending under:</chapeau> <paragraph identifier="/us/tx/ut/t2/c59/scB/s59.024/1"> <num value="1">(1)</num> <content>Section 15.001;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c59/scB/s59.024/2"> <num value="2">(2)</num> <content>Subchapter D, Chapter 53; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c59/scB/s59.024/3"> <num value="3">(3)</num> <content>Subchapter G, Chapter 2001, Government Code.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c59/scB/s59.024/c"> <num value="c">(c)</num> <content>The commission, on motion of the electing company or on its own motion, shall adjust prices for services to reflect changes in Federal Communications Commission separations that affect intrastate net income by at least 10 percent.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c59/scB/s59.024/d"> <num value="d">(d)</num> <content>Notwithstanding Subsection (a), the commission, on request of the electing company, shall allow a rate group reclassification that results from access line growth.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c59/scB/s59.024/e"> <num value="e">(e)</num> <content>Section 58.059 applies to a rate change under this section.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 1212, Sec. 47, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c59/scB/s59.025"> <num value="59.025">Sec. 59.025.</num> <heading>SWITCHED ACCESS RATES</heading> <content>Notwithstanding any other provision of this title, the commission may not, on the commission's own motion, reduce an electing company's rates for switched access services before the expiration of the election period prescribed by Section 59.024, but may approve a reduction proposed by the electing company.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 1212, Sec. 48, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c59/scB/s59.026"> <num value="59.026">Sec. 59.026.</num> <heading>COMPLAINT OR HEARING</heading> <subsection identifier="/us/tx/ut/t2/c59/scB/s59.026/a"> <num value="a">(a)</num> <chapeau>On or before the end of the company's election period, an electing company is not, under any circumstances, subject to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c59/scB/s59.026/1"> <num value="1">(1)</num> <chapeau>a complaint or hearing regarding the reasonableness of the company's:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c59/scB/s59.026/A"> <num value="A">(A)</num> <content>rates;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c59/scB/s59.026/B"> <num value="B">(B)</num> <content>overall revenues;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c59/scB/s59.026/C"> <num value="C">(C)</num> <content>return on invested capital; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c59/scB/s59.026/D"> <num value="D">(D)</num> <content>net income; or</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c59/scB/s59.026/2"> <num value="2">(2)</num> <content>a complaint that a rate is excessive.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c59/scB/s59.026/b"> <num value="b">(b)</num> <content>Subsection (a) applies only to a company that is in compliance with the company's infrastructure commitment under this chapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c59/scB/s59.026/c"> <num value="c">(c)</num> <content>This section does not prohibit a complaint, hearing, or determination on an electing company's implementation of a competitive safeguard required by Chapter 60.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 1212, Sec. 49, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c59/scB/s59.027"> <num value="59.027">Sec. 59.027.</num> <heading>CONSUMER COMPLAINTS REGARDING TARIFFS</heading> <subsection identifier="/us/tx/ut/t2/c59/scB/s59.027/a"> <num value="a">(a)</num> <chapeau>This chapter does not restrict:</chapeau> <paragraph identifier="/us/tx/ut/t2/c59/scB/s59.027/1"> <num value="1">(1)</num> <content>a consumer's right to complain to the commission about the application of an ambiguous tariff; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c59/scB/s59.027/2"> <num value="2">(2)</num> <chapeau>the commission's right to determine:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c59/scB/s59.027/A"> <num value="A">(A)</num> <content>the proper application of that tariff; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c59/scB/s59.027/B"> <num value="B">(B)</num> <content>the proper tariff rate if that tariff does not apply.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c59/scB/s59.027/b"> <num value="b">(b)</num> <chapeau>This section does not permit the commission to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c59/scB/s59.027/1"> <num value="1">(1)</num> <content>lower a tariff rate except as specifically provided by this title;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c59/scB/s59.027/2"> <num value="2">(2)</num> <content>change the commission's interpretation of a tariff; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c59/scB/s59.027/3"> <num value="3">(3)</num> <content>extend the application of a tariff to a new class of customers.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c59/scB/s59.028"> <num value="59.028">Sec. 59.028.</num> <heading>CONSUMER COMPLAINTS REGARDING SERVICES; ENFORCEMENT OF STANDARDS</heading> <chapeau>This chapter does not restrict:</chapeau> <paragraph identifier="/us/tx/ut/t2/c59/scB/s59.028/1"> <num value="1">(1)</num> <content>a consumer's right to complain to the commission about quality of service; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c59/scB/s59.028/2"> <num value="2">(2)</num> <content>the commission's right to enforce a quality of service standard.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c59/scB/s59.029"> <num value="59.029">Sec. 59.029.</num> <heading>INVESTMENT LIMITATION ON SERVICE STANDARDS</heading> <subsection identifier="/us/tx/ut/t2/c59/scB/s59.029/a"> <num value="a">(a)</num> <content>The commission may not raise a service standard applicable to the provision of local exchange telephone service by an electing company if the increased investment required to comply with the raised standard in any year exceeds 10 percent of the company's average annual intrastate additions in capital investment for the most recent five-year period.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c59/scB/s59.029/b"> <num value="b">(b)</num> <chapeau>In computing the average under Subsection (a), the electing company shall exclude:</chapeau> <paragraph identifier="/us/tx/ut/t2/c59/scB/s59.029/1"> <num value="1">(1)</num> <content>extraordinary investments made during the five-year period; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c59/scB/s59.029/2"> <num value="2">(2)</num> <content>investments required by Section 59.052.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c59/scB/s59.030"> <num value="59.030">Sec. 59.030.</num> <heading>NEW SERVICES</heading> <subsection identifier="/us/tx/ut/t2/c59/scB/s59.030/a"> <num value="a">(a)</num> <content>An electing company may introduce a new service 10 days after providing an informational notice to the commission, to the office, and to any person who holds a certificate of operating authority in the electing company's certificated area or areas or who has an effective interconnection agreement with the electing company.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c59/scB/s59.030/b"> <num value="b">(b)</num> <content>An electing company shall price each new service at or above the service's long run incremental cost. The commission shall allow a company serving fewer than one million access lines to establish a service's long run incremental cost by adopting, at that company's option, the cost studies of a larger company for that service that has been accepted by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c59/scB/s59.030/c"> <num value="c">(c)</num> <content>An affected person, the office on behalf of residential or small commercial customers, or the commission may file a complaint at the commission challenging whether the pricing by an electing company of a new service is in compliance with Subsection (b).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c59/scB/s59.030/d"> <num value="d">(d)</num> <chapeau>If a complaint is filed under Subsection (c), the electing company has the burden of proving that the company set the price for the new service in accordance with the applicable provisions of this subchapter. If the complaint is finally resolved in favor of the complainant, the electing company:</chapeau> <paragraph identifier="/us/tx/ut/t2/c59/scB/s59.030/1"> <num value="1">(1)</num> <content>shall, not later than the 10th day after the date the complaint is finally resolved, amend the price of the service as necessary to comply with the final resolution; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c59/scB/s59.030/2"> <num value="2">(2)</num> <content>may, at the company's option, discontinue the service.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 50, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c59/scB/s59.031"> <num value="59.031">Sec. 59.031.</num> <heading>PRICING AND PACKAGING FLEXIBILITY</heading> <subsection identifier="/us/tx/ut/t2/c59/scB/s59.031/a"> <num value="a">(a)</num> <content>Notwithstanding Section 59.027(b) or Subchapter F, Chapter 60, an electing company may exercise pricing flexibility in accordance with this section, including the packaging of any regulated service such as basic local telecommunications service with any other regulated or unregulated service or any service of an affiliate. The electing company may exercise pricing flexibility 10 days after providing an informational notice to the commission, to the office, and to any person who holds a certificate of operating authority in the electing company's certificated area or areas or who has an effective interconnection agreement with the electing company. Pricing flexibility includes all pricing arrangements included in the definition of "pricing flexibility" prescribed by Section 51.002(7) and includes packaging of regulated services with unregulated services or any service of an affiliate.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c59/scB/s59.031/b"> <num value="b">(b)</num> <content>An electing company, at the company's option, shall price each regulated service offered separately or as part of a package under Subsection (a) at either the service's tariffed rate or at a rate not lower than the service's long run incremental cost. The commission shall allow a company serving fewer than one million access lines to establish a service's long run incremental cost by adopting, at that company's option, the cost studies of a larger company for that service that have been accepted by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c59/scB/s59.031/c"> <num value="c">(c)</num> <content>An affected person, the office on behalf of residential or small commercial customers, or the commission may file a complaint alleging that an electing company has priced a regulated service in a manner that does not meet the pricing standards of this subchapter. The complaint must be filed before the 31st day after the company implements the rate.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 50, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c59/scB/s59.032"> <num value="59.032">Sec. 59.032.</num> <heading>CUSTOMER PROMOTIONAL OFFERINGS</heading> <subsection identifier="/us/tx/ut/t2/c59/scB/s59.032/a"> <num value="a">(a)</num> <content>An electing company may offer a promotion for a regulated service for not more than 90 days in any 12-month period.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c59/scB/s59.032/b"> <num value="b">(b)</num> <chapeau>The electing company shall file with the commission a promotional offering that consists of:</chapeau> <paragraph identifier="/us/tx/ut/t2/c59/scB/s59.032/1"> <num value="1">(1)</num> <content>waiver of installation charges or service order charges, or both, for not more than 90 days in a 12-month period; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c59/scB/s59.032/2"> <num value="2">(2)</num> <content>a temporary discount of not more than 25 percent from the tariffed rate for not more than 60 days in a 12-month period.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c59/scB/s59.032/c"> <num value="c">(c)</num> <content>An electing company is not required to obtain commission approval to make a promotional offering described by Subsection (b).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c59/scB/s59.032/d"> <num value="d">(d)</num> <content>An electing company may offer a promotion of any regulated service as part of a package of services consisting of any regulated service with any other regulated or unregulated service or any service of an affiliate.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 50, eff. Sept. 1, 1999.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c59/scC"> <num value="C">SUBCHAPTER C.</num> <heading>INFRASTRUCTURE COMMITMENT AND GOALS</heading> <section identifier="/us/tx/ut/t2/c59/scC/s59.051"> <num value="59.051">Sec. 59.051.</num> <heading>INFRASTRUCTURE COMMITMENT</heading> <subsection identifier="/us/tx/ut/t2/c59/scC/s59.051/a"> <num value="a">(a)</num> <content>An electing company shall commit to make in this state, during the six years after the election date, the telecommunications infrastructure investment prescribed by this chapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c59/scC/s59.051/b"> <num value="b">(b)</num> <content>The company shall make the commitment to the governor and the commission in writing.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c59/scC/s59.052"> <num value="59.052">Sec. 59.052.</num> <heading>INFRASTRUCTURE GOALS</heading> <subsection identifier="/us/tx/ut/t2/c59/scC/s59.052/a"> <num value="a">(a)</num> <content>The commission shall ensure that each electing company achieves the infrastructure goals described by this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c59/scC/s59.052/b"> <num value="b">(b)</num> <content>Each new central office switch installed for an electing company in this state after September 1, 1995, must be digital.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c59/scC/s59.052/c"> <num value="c">(c)</num> <content>An electing company shall make available to each customer in the company's territory access to end-to-end digital connectivity. In this subsection, "make available" has the meaning assigned by 16 T.A.C. Section 23.69.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c59/scC/s59.052/d"> <num value="d">(d)</num> <content>In each electing company's territory, 50 percent of the local exchange access lines must be served by a digital central office switch.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c59/scC/s59.052/e"> <num value="e">(e)</num> <content>An electing company's public switched network backbone interoffice facilities must employ broadband facilities that serve at least 50 percent of the local exchange access lines and are capable of 45 or more megabits a second. The company may employ facilities at a lower bandwidth if technology permits the delivery of video signal at the lower bandwidth at a quality level comparable to a television broadcast signal. The requirements of this subsection do not apply to local loop facilities.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c59/scC/s59.052/f"> <num value="f">(f)</num> <content>An electing company shall install Common Channel Signaling 7 capability in each access tandem office.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c59/scC/s59.052/g"> <num value="g">(g)</num> <content>The infrastructure goals specified by Subsections (c)-(f) must be achieved not later than January 1, 2000.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c59/scC/s59.053"> <num value="59.053">Sec. 59.053.</num> <heading>WAIVER OF INFRASTRUCTURE REQUIREMENTS</heading> <subsection identifier="/us/tx/ut/t2/c59/scC/s59.053/a"> <num value="a">(a)</num> <content>For an electing company that serves fewer than one million lines, the commission may waive a requirement prescribed by Section 59.052 if the company demonstrates that the investment is not viable economically.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c59/scC/s59.053/b"> <num value="b">(b)</num> <content>Before granting a waiver under Subsection (a), the commission must consider the public benefits that would result from compliance with the requirement.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c59/scC/s59.054"> <num value="59.054">Sec. 59.054.</num> <heading>PROGRESS REPORT</heading> <subsection identifier="/us/tx/ut/t2/c59/scC/s59.054/a"> <num value="a">(a)</num> <content>On each anniversary of the company's election date, an electing company shall file with the commission a report on the company's progress on its infrastructure commitment.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c59/scC/s59.054/b"> <num value="b">(b)</num> <chapeau>The report must include a statement of:</chapeau> <paragraph identifier="/us/tx/ut/t2/c59/scC/s59.054/1"> <num value="1">(1)</num> <content>the institutions requesting service under Subchapter D;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c59/scC/s59.054/2"> <num value="2">(2)</num> <content>the institutions served under Subchapter D;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c59/scC/s59.054/3"> <num value="3">(3)</num> <content>the investments and expenses for the previous period and the total investments and expenses for all periods; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c59/scC/s59.054/4"> <num value="4">(4)</num> <content>other information the commission considers necessary.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c59/scC/s59.055"> <num value="59.055">Sec. 59.055.</num> <heading>IMPLEMENTATION COSTS; INCREASE IN RATES AND UNIVERSAL SERVICE FUNDS</heading> <chapeau>The commission may not consider the cost of implementing Section 59.052 in determining whether an electing company is entitled to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c59/scC/s59.055/1"> <num value="1">(1)</num> <content>a rate increase under this chapter; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c59/scC/s59.055/2"> <num value="2">(2)</num> <content>increased universal service funds under Subchapter B, Chapter 56.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c59/scD"> <num value="D">SUBCHAPTER D.</num> <heading>INFRASTRUCTURE COMMITMENT TO CERTAIN ENTITIES</heading> <section identifier="/us/tx/ut/t2/c59/scD/s59.071"> <num value="59.071">Sec. 59.071.</num> <heading>DEFINITIONS</heading> <chapeau>In this subchapter:</chapeau> <paragraph identifier="/us/tx/ut/t2/c59/scD/s59.071/1"> <num value="1">(1)</num> <content>"Educational institution" has the meaning assigned by Section 57.021.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c59/scD/s59.071/2"> <num value="2">(2)</num> <chapeau>"Library" means:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c59/scD/s59.071/A"> <num value="A">(A)</num> <content>a public library or regional library system as those terms are defined by Section 441.122, Government Code;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c59/scD/s59.071/B"> <num value="B">(B)</num> <content>a library operated by an institution of higher education or a school district; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c59/scD/s59.071/C"> <num value="C">(C)</num> <content>a library operated by a nonprofit corporation as defined by Section 441.221(3), Government Code.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c59/scD/s59.071/3"> <num value="3">(3)</num> <content>"Private network services" means telecommunications services provided to an entity described by Section 59.072(a), including broadband services, customized services, and packaged network services.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c59/scD/s59.071/4"> <num value="4">(4)</num> <chapeau>"Telemedicine center" means a facility that is equipped to transmit, by video or data service, medical information for the diagnosis or treatment of illness or disease and that is:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c59/scD/s59.071/A"> <num value="A">(A)</num> <content>owned or operated by a public or not-for-profit hospital; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c59/scD/s59.071/B"> <num value="B">(B)</num> <content>owned by a state-licensed health care practitioner and operated on a nonprofit basis.</content> </subparagraph> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2007, 80th Leg., R.S., Ch. 831 (H.B. 735), Sec. 13, eff. September 1, 2008.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c59/scD/s59.072"> <num value="59.072">Sec. 59.072.</num> <heading>PRIVATE NETWORK SERVICES FOR CERTAIN ENTITIES</heading> <subsection identifier="/us/tx/ut/t2/c59/scD/s59.072/a"> <num value="a">(a)</num> <chapeau>On customer request, an electing company shall provide private network services to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c59/scD/s59.072/1"> <num value="1">(1)</num> <content>an educational institution;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c59/scD/s59.072/2"> <num value="2">(2)</num> <content>a library;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c59/scD/s59.072/3"> <num value="3">(3)</num> <content>a telemedicine center; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c59/scD/s59.072/4"> <num value="4">(4)</num> <content>a legally constituted consortium or group of entities listed in this subsection.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c59/scD/s59.072/b"> <num value="b">(b)</num> <content>Except as provided by Section 59.081, the electing company shall provide the private network services for the private and sole use of the receiving entity. However, the company may provide the services with a facility that is used to provide another service to another customer.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c59/scD/s59.072/c"> <num value="c">(c)</num> <content>The customers listed in Subsection (a) are a special class of customers for purposes of the private network for distance learning, telemedicine, and information-sharing purposes.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c59/scD/s59.073"> <num value="59.073">Sec. 59.073.</num> <heading>INVESTMENT PRIORITIES</heading> <chapeau>An electing company shall give investment priority to serving:</chapeau> <paragraph identifier="/us/tx/ut/t2/c59/scD/s59.073/1"> <num value="1">(1)</num> <content>rural areas;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c59/scD/s59.073/2"> <num value="2">(2)</num> <content>areas designated as critically underserved medically or educationally; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c59/scD/s59.073/3"> <num value="3">(3)</num> <content>educational institutions with high percentages of economically disadvantaged students.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c59/scD/s59.074"> <num value="59.074">Sec. 59.074.</num> <heading>CONTRACTS FOR PRIVATE NETWORK SERVICES</heading> <subsection identifier="/us/tx/ut/t2/c59/scD/s59.074/a"> <num value="a">(a)</num> <content>An electing company shall provide a private network service under a customer-specific contract.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c59/scD/s59.074/b"> <num value="b">(b)</num> <content>An electing company shall offer private network service contracts under this subchapter at 110 percent of the long run incremental cost of providing the private network service, including installation costs.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c59/scD/s59.074/c"> <num value="c">(c)</num> <content>Commission approval of a contract is not required.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 21 (S.B. 983), Sec. 3, eff. September 1, 2011. Acts 2011, 82nd Leg., R.S., Ch. 98 (S.B. 980), Sec. 13, eff. September 1, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c59/scD/s59.075"> <num value="59.075">Sec. 59.075.</num> <heading>PREFERRED RATE TREATMENT WARRANTED</heading> <content>The classes of customers described by Section 59.072(a) warrant preferred rate treatment. However, a rate charged for a service must cover the service's long run incremental cost.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c59/scD/s59.076"> <num value="59.076">Sec. 59.076.</num> <heading>ELECTION OF RATE TREATMENT</heading> <content>An educational institution or a library may elect the rate treatment provided by this subchapter or the discount provided by Subchapter B, Chapter 57.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c59/scD/s59.077"> <num value="59.077">Sec. 59.077.</num> <heading>PRIVATE NETWORK SERVICES RATES AND TARIFFS</heading> <subsection identifier="/us/tx/ut/t2/c59/scD/s59.077/a"> <num value="a">(a)</num> <content>Notwithstanding the pricing flexibility authorized by this subtitle, an electing company's rates for private network services may not be increased before January 1, 2016.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c59/scD/s59.077/b"> <num value="b">(b)</num> <content>An electing company may not assess an entity described by Section 59.072(a) a tariffed special construction or installation charge unless the company and the entity agree on the assessment.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 22, eff. September 7, 2005. Acts 2011, 82nd Leg., R.S., Ch. 903 (S.B. 773), Sec. 9, eff. September 1, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c59/scD/s59.078"> <num value="59.078">Sec. 59.078.</num> <heading>PRIVATE LINE OR SPECIAL ACCESS RATES</heading> <subsection identifier="/us/tx/ut/t2/c59/scD/s59.078/a"> <num value="a">(a)</num> <content>On request by an educational institution or a library, an electing company shall provide 1.544 megabits a second private line or special access service at 110 percent of the service's long run incremental cost, including installation costs.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c59/scD/s59.078/b"> <num value="b">(b)</num> <content>The rate provided by Subsection (a) is in lieu of the discount provided by Subchapter B, Chapter 57.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c59/scD/s59.079"> <num value="59.079">Sec. 59.079.</num> <heading>COMPLAINTS LIMITED</heading> <content>Notwithstanding any other provision of this title, an electing company is subject to a complaint under Subchapter C or this subchapter only by an entity described by Section 59.072(a).</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c59/scD/s59.080"> <num value="59.080">Sec. 59.080.</num> <heading>INTERCONNECTION OF NETWORK SERVICES</heading> <content>The private network services provided under this subchapter may be interconnected with other similar networks for distance learning, telemedicine, and information-sharing purposes.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c59/scD/s59.081"> <num value="59.081">Sec. 59.081.</num> <heading>SHARING OR RESALE OF NETWORK SERVICES</heading> <subsection identifier="/us/tx/ut/t2/c59/scD/s59.081/a"> <num value="a">(a)</num> <content>A private network service may be used and shared among the entities described by Section 59.072(a) but may not be otherwise shared or resold to other customers.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c59/scD/s59.081/b"> <num value="b">(b)</num> <content>A service provided under this subchapter may not be required to be resold to other customers at a rate provided by this subchapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c59/scD/s59.081/c"> <num value="c">(c)</num> <content>This section does not prohibit an otherwise permitted resale of another service that an electing company may offer through the use of the same facilities used to provide a private network service offered under this subchapter.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c59/scD/s59.082"> <num value="59.082">Sec. 59.082.</num> <heading>IMPLEMENTATION COSTS; INCREASE IN RATES AND UNIVERSAL SERVICE FUNDS</heading> <chapeau>The commission may not consider the cost of implementing this subchapter in determining whether an electing company is entitled to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c59/scD/s59.082/1"> <num value="1">(1)</num> <content>a rate increase under this chapter; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c59/scD/s59.082/2"> <num value="2">(2)</num> <content>increased universal service funds under Subchapter B, Chapter 56.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c59/scD/s59.083"> <num value="59.083">Sec. 59.083.</num> <heading>CONTINUATION OF OBLIGATION</heading> <chapeau>Notwithstanding any other provision of this title, an electing company shall continue to comply with this subchapter until January 1, 2016, regardless of:</chapeau> <paragraph identifier="/us/tx/ut/t2/c59/scD/s59.083/1"> <num value="1">(1)</num> <content>the date the company elected under this chapter; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c59/scD/s59.083/2"> <num value="2">(2)</num> <content>any action taken in relation to that company under Chapter 65.</content> </paragraph> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 23, eff. September 7, 2005. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 903 (S.B. 773), Sec. 10, eff. September 1, 2011.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t2/c60"> <num value="60">CHAPTER 60.</num> <heading>COMPETITIVE SAFEGUARDS</heading> <subchapter identifier="/us/tx/ut/t2/c60/scA"> <num value="A">SUBCHAPTER A.</num> <heading>GENERAL PROVISIONS</heading> <section identifier="/us/tx/ut/t2/c60/scA/s60.001"> <num value="60.001">Sec. 60.001.</num> <heading>FAIR COMPETITION</heading> <chapeau>To the extent necessary to ensure that competition in telecommunications is fair to each participant and to accelerate the improvement of telecommunications in this state, the commission shall ensure that the rates and rules of an incumbent local exchange company:</chapeau> <paragraph identifier="/us/tx/ut/t2/c60/scA/s60.001/1"> <num value="1">(1)</num> <content>are not unreasonably preferential, prejudicial, or discriminatory; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scA/s60.001/2"> <num value="2">(2)</num> <content>are applied equitably and consistently.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c60/scA/s60.002"> <num value="60.002">Sec. 60.002.</num> <heading>EXCLUSIVE JURISDICTION; ENFORCEMENT</heading> <subsection identifier="/us/tx/ut/t2/c60/scA/s60.002/a"> <num value="a">(a)</num> <content>The commission has exclusive jurisdiction to implement competitive safeguards.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c60/scA/s60.002/b"> <num value="b">(b)</num> <content>Section 58.025 does not prevent the commission from enforcing this chapter.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c60/scA/s60.003"> <num value="60.003">Sec. 60.003.</num> <heading>COMMISSION AUTHORITY</heading> <subsection identifier="/us/tx/ut/t2/c60/scA/s60.003/a"> <num value="a">(a)</num> <chapeau>The commission may:</chapeau> <paragraph identifier="/us/tx/ut/t2/c60/scA/s60.003/1"> <num value="1">(1)</num> <content>establish procedures with respect to a policy stated in this subchapter or Subchapters B-H; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scA/s60.003/2"> <num value="2">(2)</num> <content>resolve a dispute that arises under a policy described by Subdivision (1).</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c60/scA/s60.003/b"> <num value="b">(b)</num> <chapeau>The commission shall adopt procedures for a proceeding under Subchapters B and C. A procedure may:</chapeau> <paragraph identifier="/us/tx/ut/t2/c60/scA/s60.003/1"> <num value="1">(1)</num> <content>limit discovery; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scA/s60.003/2"> <num value="2">(2)</num> <content>for purposes of cross-examination align any party, other than the office, with another party that has a similar position.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c60/scA/s60.003/c"> <num value="c">(c)</num> <chapeau>In adopting a procedure under this section and in resolving a dispute, the commission shall consider the action's effect on:</chapeau> <paragraph identifier="/us/tx/ut/t2/c60/scA/s60.003/1"> <num value="1">(1)</num> <content>consumers;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scA/s60.003/2"> <num value="2">(2)</num> <content>competitors; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scA/s60.003/3"> <num value="3">(3)</num> <content>the incumbent local exchange company.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c60/scA/s60.003/d"> <num value="d">(d)</num> <content>The commission, by order or rule, may not implement a requirement that is contrary to a federal law or rule.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c60/scA/s60.004"> <num value="60.004">Sec. 60.004.</num> <heading>APPLICABILITY TO CERTAIN SMALLER INCUMBENT LOCAL EXCHANGE COMPANIES; RULES</heading> <subsection identifier="/us/tx/ut/t2/c60/scA/s60.004/a"> <num value="a">(a)</num> <content>Subchapters B, C, and H may be applied to an incumbent local exchange company that serves fewer than 31,000 access lines only on a bona fide request from a certificated telecommunications utility.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c60/scA/s60.004/b"> <num value="b">(b)</num> <content>In applying the rules adopted under Subchapters B, C, and H to a company described by Subsection (a), the commission may modify the rules in the public interest.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c60/scA/s60.004/c"> <num value="c">(c)</num> <content>This section takes effect September 1, 1998.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c60/scA/s60.005"> <num value="60.005">Sec. 60.005.</num> <heading>APPLICABILITY TO CERTAIN LARGER INCUMBENT LOCAL EXCHANGE COMPANIES; RULES</heading> <subsection identifier="/us/tx/ut/t2/c60/scA/s60.005/a"> <num value="a">(a)</num> <content>Subchapters B, D, and F may be applied to an incumbent local exchange company that, as of September 1, 1995, has 31,000 or more access lines in this state but fewer than one million access lines in this state only on a bona fide request from a holder of a certificate of operating authority or a service provider certificate of operating authority.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c60/scA/s60.005/b"> <num value="b">(b)</num> <content>In applying the rules adopted under Subchapters B, D, and F to a company described by Subsection (a), the commission may modify the rules in the public interest.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c60/scA/s60.006"> <num value="60.006">Sec. 60.006.</num> <heading>BULLETIN BOARD SYSTEMS UNAFFECTED</heading> <chapeau>This subtitle does not:</chapeau> <paragraph identifier="/us/tx/ut/t2/c60/scA/s60.006/1"> <num value="1">(1)</num> <content>require the commission to change the rate treatment established by the commission in Docket No. 8387 for a bulletin board system in a residence;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scA/s60.006/2"> <num value="2">(2)</num> <content>regulate or tax a bulletin board system or Internet service provider that provides only enhanced or information services and that does not provide a telecommunications service; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scA/s60.006/3"> <num value="3">(3)</num> <content>require a change in a rate charged to an entity described by Subdivision (2) under a tariff in effect on September 1, 1995.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c60/scB"> <num value="B">SUBCHAPTER B.</num> <heading>UNBUNDLING</heading> <section identifier="/us/tx/ut/t2/c60/scB/s60.021"> <num value="60.021">Sec. 60.021.</num> <heading>MINIMUM UNBUNDLING REQUIREMENT</heading> <content>At a minimum, an incumbent local exchange company shall unbundle its network to the extent the Federal Communications Commission orders.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c60/scB/s60.022"> <num value="60.022">Sec. 60.022.</num> <heading>COMMISSION UNBUNDLING ORDERS</heading> <subsection identifier="/us/tx/ut/t2/c60/scB/s60.022/a"> <num value="a">(a)</num> <content>The commission may adopt an order relating to the issue of unbundling of local exchange company services in addition to the unbundling required by Section 60.021.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c60/scB/s60.022/b"> <num value="b">(b)</num> <content>Before ordering further unbundling, the commission must consider the public interest and competitive merits of further unbundling.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c60/scB/s60.022/c"> <num value="c">(c)</num> <content>On the request of a party, the commission shall proceed by evidentiary hearing. If a request for a hearing is not made, the commission may proceed by rulemaking.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c60/scB/s60.023"> <num value="60.023">Sec. 60.023.</num> <heading>ASSIGNMENT OF UNBUNDLED COMPONENT TO CATEGORY OF SERVICE</heading> <content>The commission may assign an unbundled component to the appropriate category of services under Chapter 58 according to the purposes and intents of the categories.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c60/scC"> <num value="C">SUBCHAPTER C.</num> <heading>RESALE</heading> <section identifier="/us/tx/ut/t2/c60/scC/s60.041"> <num value="60.041">Sec. 60.041.</num> <heading>LOOP RESALE TARIFF</heading> <subsection identifier="/us/tx/ut/t2/c60/scC/s60.041/a"> <num value="a">(a)</num> <content>An incumbent local exchange company that on September 1, 1995, serves one million or more access lines or that on or before September 1, 1995, elects regulation under Chapter 58 shall file a usage sensitive loop resale tariff.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c60/scC/s60.041/b"> <num value="b">(b)</num> <chapeau>An incumbent local exchange company shall file a usage sensitive loop resale tariff not later than the 60th day after the date a certificate of operating authority or a service provider certificate of operating authority is granted under Chapter 54 if the company:</chapeau> <paragraph identifier="/us/tx/ut/t2/c60/scC/s60.041/1"> <num value="1">(1)</num> <content>serves fewer than one million access lines; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scC/s60.041/2"> <num value="2">(2)</num> <content>is not an electing company under Chapter 58.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c60/scC/s60.041/c"> <num value="c">(c)</num> <content>The commission shall conduct an appropriate proceeding to determine the rates and terms of the resale tariff not later than the 180th day after the date the tariff is filed.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c60/scC/s60.041/d"> <num value="d">(d)</num> <chapeau>The commission may not approve a usage sensitive rate unless the rate recovers:</chapeau> <paragraph identifier="/us/tx/ut/t2/c60/scC/s60.041/1"> <num value="1">(1)</num> <content>the total long run incremental cost of the loop on an unseparated basis; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scC/s60.041/2"> <num value="2">(2)</num> <content>an appropriate contribution to joint and common costs.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c60/scC/s60.041/e"> <num value="e">(e)</num> <chapeau>Except as provided by Section 60.044, a person may not purchase from the resale tariff unless the person is the holder of:</chapeau> <paragraph identifier="/us/tx/ut/t2/c60/scC/s60.041/1"> <num value="1">(1)</num> <content>a certificate of convenience and necessity;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scC/s60.041/2"> <num value="2">(2)</num> <content>a certificate of operating authority; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scC/s60.041/3"> <num value="3">(3)</num> <content>a service provider certificate of operating authority.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c60/scC/s60.041/f"> <num value="f">(f)</num> <content>In this section, "loop resale" means the purchase of the local distribution channel or loop facility from the incumbent local exchange company to resell to end user customers.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c60/scC/s60.042"> <num value="60.042">Sec. 60.042.</num> <heading>PROHIBITED RESALE OR SHARING</heading> <subsection identifier="/us/tx/ut/t2/c60/scC/s60.042/a"> <num value="a">(a)</num> <chapeau>A provider of telecommunications service may not impose a restriction on the resale or sharing of a service:</chapeau> <paragraph identifier="/us/tx/ut/t2/c60/scC/s60.042/1"> <num value="1">(1)</num> <content>for which the provider is not a dominant provider; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scC/s60.042/2"> <num value="2">(2)</num> <content>entitled to regulatory treatment as a nonbasic service under Subchapter E, Chapter 58, if the provider is a company electing regulation under Chapter 58.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c60/scC/s60.042/b"> <num value="b">(b)</num> <content>An incumbent local exchange company must comply with the resale provisions of 47 U.S.C. Section 251(c)(4), as amended, unless exempted under 47 U.S.C. Section 251(f), as amended.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c60/scC/s60.042/c"> <num value="c">(c)</num> <content>If a company electing under Chapter 58 offers basic or nonbasic services regulated by the commission to its retail customers as a promotional offering, the electing company shall make those services available for resale by a certificated telecommunications utility on terms that are no less favorable than the terms on which the services are made available to retail customers in accordance with this section. For a promotion with a duration of 90 days or less, the electing company's basic or nonbasic services shall be made available to the certificated telecommunications utility at the electing company's promotional rate, without an avoided-cost discount. For a promotion with a duration of more than 90 days, the electing company's basic or nonbasic services shall be made available to the certificated telecommunications utility at a rate reflecting the avoided-cost discount, if any, from the promotional rate.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 1212, Sec. 51, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c60/scC/s60.043"> <num value="60.043">Sec. 60.043.</num> <heading>RESALE OBLIGATION</heading> <chapeau>A holder of a certificate of operating authority or a service provider certificate of operating authority shall permit a local exchange company to resell the holder's loop facilities at the holder's regularly published rates if the local exchange company:</chapeau> <paragraph identifier="/us/tx/ut/t2/c60/scC/s60.043/1"> <num value="1">(1)</num> <content>does not have loop facilities; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scC/s60.043/2"> <num value="2">(2)</num> <content>has a request for service.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c60/scC/s60.044"> <num value="60.044">Sec. 60.044.</num> <heading>ELIMINATION OF RESALE PROHIBITIONS</heading> <subsection identifier="/us/tx/ut/t2/c60/scC/s60.044/a"> <num value="a">(a)</num> <chapeau>Except as provided by Subsections (c) and (d), the commission shall eliminate all resale prohibitions in the tariffs of an electing company on the:</chapeau> <paragraph identifier="/us/tx/ut/t2/c60/scC/s60.044/1"> <num value="1">(1)</num> <content>completion of the commission's costing and pricing rulemaking;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scC/s60.044/2"> <num value="2">(2)</num> <content>completion of rate rebalancing of the incumbent local exchange company rates under Subchapter F; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scC/s60.044/3"> <num value="3">(3)</num> <content>removal of all prohibitions on an incumbent local exchange company's provision of interLATA services.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c60/scC/s60.044/b"> <num value="b">(b)</num> <content>Except as provided by Subsections (c) and (d), the commission shall eliminate all resale prohibitions in the tariffs of an electing company that has one million access lines or more on removal of all prohibitions on the company's provision of interLATA service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c60/scC/s60.044/c"> <num value="c">(c)</num> <chapeau>After the resale prohibitions are eliminated under this section:</chapeau> <paragraph identifier="/us/tx/ut/t2/c60/scC/s60.044/1"> <num value="1">(1)</num> <content>the commission shall continue to prohibit the resale of local exchange or directory assistance flat rate services as a substitute for usage sensitive services; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scC/s60.044/2"> <num value="2">(2)</num> <content>residence service may not be resold to a business customer.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c60/scC/s60.044/d"> <num value="d">(d)</num> <chapeau>A service or function may be offered for resale only to the same class of customer to which the incumbent local exchange company sells the service if the commission finds that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c60/scC/s60.044/1"> <num value="1">(1)</num> <content>as a result of the costing and pricing proceeding the rate for the service or function will be less than the cost of providing the service or function; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scC/s60.044/2"> <num value="2">(2)</num> <content>the difference in rate and cost will not be recovered from the universal service fund.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c60/scC/s60.045"> <num value="60.045">Sec. 60.045.</num> <heading>RESALE OR SHARING ARRANGEMENTS UNAFFECTED</heading> <chapeau>This subchapter does not change a resale or sharing arrangement permitted in an incumbent local exchange company tariff that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c60/scC/s60.045/1"> <num value="1">(1)</num> <content>existed on September 1, 1995; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scC/s60.045/2"> <num value="2">(2)</num> <content>was filed on or before May 1, 1995, by an incumbent local exchange company that serves more than five million access lines in this state.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c60/scD"> <num value="D">SUBCHAPTER D.</num> <heading>IMPUTATION</heading> <section identifier="/us/tx/ut/t2/c60/scD/s60.061"> <num value="60.061">Sec. 60.061.</num> <heading>RULES</heading> <subsection identifier="/us/tx/ut/t2/c60/scD/s60.061/a"> <num value="a">(a)</num> <content>The commission shall adopt rules governing imputation of the price of a service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c60/scD/s60.061/b"> <num value="b">(b)</num> <content>Imputation is a regulatory policy the commission shall apply to prevent an incumbent local exchange company from selling a service or function to another telecommunications utility at a price that is higher than the rate the incumbent local exchange company implicitly includes in services it provides to the company's retail customers.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c60/scD/s60.061/c"> <num value="c">(c)</num> <chapeau>The commission may require imputation only of the price of a service that is:</chapeau> <paragraph identifier="/us/tx/ut/t2/c60/scD/s60.061/1"> <num value="1">(1)</num> <content>not generally available from a source other than the incumbent local exchange company; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scD/s60.061/2"> <num value="2">(2)</num> <content>necessary for the competitor to provide a competing service.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c60/scD/s60.061/d"> <num value="d">(d)</num> <content>The commission may require imputation only on a service-by-service basis and may not require imputation on a rate-element-by-element basis.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c60/scD/s60.061/e"> <num value="e">(e)</num> <chapeau>For a service for which the commission may require imputation under Subsection (c) and that is provided under a customer specific contract, the commission:</chapeau> <paragraph identifier="/us/tx/ut/t2/c60/scD/s60.061/1"> <num value="1">(1)</num> <content>may require imputation only on a service-by-service basis within the contract; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scD/s60.061/2"> <num value="2">(2)</num> <content>may not require imputation on a rate-element-by-element basis.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c60/scD/s60.062"> <num value="60.062">Sec. 60.062.</num> <heading>EXCEPTION FOR CAPPED PRICE</heading> <content>The commission may not require imputation of the price to a local exchange telephone service while the price is capped under Chapter 58 or 59.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c60/scD/s60.063"> <num value="60.063">Sec. 60.063.</num> <heading>IMPUTATION FOR SWITCHED ACCESS</heading> <content>The commission shall impute the price of switched access service to the price of each service for which switched access service is a component until switched access service is competitively available.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c60/scD/s60.064"> <num value="60.064">Sec. 60.064.</num> <heading>RECOVERY OF COST OF PROVIDING SERVICE</heading> <subsection identifier="/us/tx/ut/t2/c60/scD/s60.064/a"> <num value="a">(a)</num> <content>An incumbent local exchange company shall demonstrate that the price it charges for retail service recovers the cost of providing the service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c60/scD/s60.064/b"> <num value="b">(b)</num> <chapeau>For purposes of this section, the cost of providing the service is the sum of:</chapeau> <paragraph identifier="/us/tx/ut/t2/c60/scD/s60.064/1"> <num value="1">(1)</num> <content>each specifically tariffed premium rate for each noncompetitive service or service function, or each element of a noncompetitive service or service function, or the functional equivalent, that is used to provide the service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scD/s60.064/2"> <num value="2">(2)</num> <content>the total service long run incremental cost of the competitive services or service functions that are used;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scD/s60.064/3"> <num value="3">(3)</num> <content>each cost, not reflected in Subdivision (1) or (2), that is specifically associated with providing the service or group of services; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scD/s60.064/4"> <num value="4">(4)</num> <content>each cost or surcharge associated with an explicit subsidy applied to all providers of the service to promote universal service.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c60/scD/s60.065"> <num value="60.065">Sec. 60.065.</num> <heading>WAIVERS</heading> <chapeau>If the commission determines that a waiver is in the public interest, the commission may waive an imputation requirement for a public interest service such as:</chapeau> <paragraph identifier="/us/tx/ut/t2/c60/scD/s60.065/1"> <num value="1">(1)</num> <content>9-1-1 service; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scD/s60.065/2"> <num value="2">(2)</num> <content>dual party relay service.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c60/scE"> <num value="E">SUBCHAPTER E.</num> <heading>TELECOMMUNICATIONS NUMBER PORTABILITY</heading> <section identifier="/us/tx/ut/t2/c60/scE/s60.081"> <num value="60.081">Sec. 60.081.</num> <heading>DEFINITION</heading> <content>In this subchapter, "telecommunications number portability" means the ability of a telecommunications services user who is changing from one telecommunications service provider to another provider to retain a telephone number, to the extent technically feasible, without impairing the quality, reliability, or convenience of service.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c60/scE/s60.082"> <num value="60.082">Sec. 60.082.</num> <heading>PORTABILITY GUIDELINES</heading> <subsection identifier="/us/tx/ut/t2/c60/scE/s60.082/a"> <num value="a">(a)</num> <content>Because a uniform national number plan is valuable and necessary to this state, the commission by rule shall adopt guidelines governing telecommunications number portability and the assignment of telephone numbers in a competitively neutral manner.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c60/scE/s60.082/b"> <num value="b">(b)</num> <content>The rules may not be inconsistent with the rules and regulations of the Federal Communications Commission regarding telecommunications number portability.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c60/scE/s60.083"> <num value="60.083">Sec. 60.083.</num> <heading>INTERIM RETENTION OF CONSUMER NUMBERS</heading> <content>As an interim measure, the commission shall adopt reasonable mechanisms, including, at minimum, the use of call forwarding and direct inward dialing, to allow consumers to retain their telephone numbers.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c60/scE/s60.084"> <num value="60.084">Sec. 60.084.</num> <heading>RATES FOR INTERIM PORTABILITY MEASURES</heading> <subsection identifier="/us/tx/ut/t2/c60/scE/s60.084/a"> <num value="a">(a)</num> <chapeau>An incumbent local exchange company with one million or more access lines shall file tariffs, and the commission shall determine reasonable rates to be charged by the company for:</chapeau> <paragraph identifier="/us/tx/ut/t2/c60/scE/s60.084/1"> <num value="1">(1)</num> <content>call forwarding;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scE/s60.084/2"> <num value="2">(2)</num> <content>direct inward dialing; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scE/s60.084/3"> <num value="3">(3)</num> <content>any other mechanism the commission determines should be used as an interim telecommunications number portability measure by a new entrant.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c60/scE/s60.084/b"> <num value="b">(b)</num> <content>An incumbent local exchange company with fewer than one million access lines that serves an area in which a certificate of operating authority or a service provider certificate of operating authority has been granted shall, not later than the 60th day after the date of a bona fide request, file tariffs in accordance with Subsection (a).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c60/scE/s60.084/c"> <num value="c">(c)</num> <content>Not later than the 60th day after the date a company files tariffs under Subsection (b), the commission shall determine reasonable rates in accordance with Subsection (a).</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c60/scF"> <num value="F">SUBCHAPTER F.</num> <heading>PRICING</heading> <section identifier="/us/tx/ut/t2/c60/scF/s60.101"> <num value="60.101">Sec. 60.101.</num> <heading>PRICING RULE</heading> <subsection identifier="/us/tx/ut/t2/c60/scF/s60.101/a"> <num value="a">(a)</num> <content>The commission shall adopt a pricing rule.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c60/scF/s60.101/b"> <num value="b">(b)</num> <chapeau>In adopting the pricing rule, the commission shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c60/scF/s60.101/1"> <num value="1">(1)</num> <content>ensure that each price for a monopoly service remains affordable;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scF/s60.101/2"> <num value="2">(2)</num> <chapeau>ensure that each price for competitive service is not:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c60/scF/s60.101/A"> <num value="A">(A)</num> <content>unreasonably preferential, prejudicial, or discriminatory;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c60/scF/s60.101/B"> <num value="B">(B)</num> <content>directly or indirectly subsidized by a noncompetitive service; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c60/scF/s60.101/C"> <num value="C">(C)</num> <content>predatory or anticompetitive; and</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scF/s60.101/3"> <num value="3">(3)</num> <content>require that each service recover the appropriate costs, including joint and common costs, of each facility and function used to provide the service.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c60/scF/s60.102"> <num value="60.102">Sec. 60.102.</num> <heading>ADOPTION OF COST STUDIES BY CERTAIN COMPANIES</heading> <content>The commission shall allow an incumbent local exchange company that is not a Tier 1 local exchange company on September 1, 1995, to adopt, at that company's option, the cost studies approved by the commission for a Tier 1 local exchange company.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c60/scG"> <num value="G">SUBCHAPTER G.</num> <heading>INTERCONNECTION</heading> <section identifier="/us/tx/ut/t2/c60/scG/s60.121"> <num value="60.121">Sec. 60.121.</num> <heading>DEFINITION</heading> <content>In this subchapter, "interconnection" means, for calls that originate and terminate in this state, the termination of local intraexchange traffic of another local exchange company or holder of a service provider certificate of operating authority within the local calling area of the terminating local exchange company or certificate holder.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c60/scG/s60.122"> <num value="60.122">Sec. 60.122.</num> <heading>EXCLUSIVE JURISDICTION</heading> <content>The commission has exclusive jurisdiction to determine rates and terms for interconnection for a holder of a certificate of convenience and necessity, a certificate of operating authority, or a service provider certificate of operating authority.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c60/scG/s60.123"> <num value="60.123">Sec. 60.123.</num> <heading>INAPPLICABILITY OF SUBCHAPTER</heading> <content>This subchapter does not apply to a rate for the existing termination of cellular or interexchange traffic.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c60/scG/s60.124"> <num value="60.124">Sec. 60.124.</num> <heading>INTEROPERABLE NETWORKS REQUIRED</heading> <subsection identifier="/us/tx/ut/t2/c60/scG/s60.124/a"> <num value="a">(a)</num> <content>The commission shall require each telecommunications provider to maintain interoperable networks.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c60/scG/s60.124/b"> <num value="b">(b)</num> <chapeau>The commission may:</chapeau> <paragraph identifier="/us/tx/ut/t2/c60/scG/s60.124/1"> <num value="1">(1)</num> <content>adopt rules, including generic rules that are responsive to changes in federal law or a development in the local exchange market; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scG/s60.124/2"> <num value="2">(2)</num> <content>set policies governing interconnection arrangements.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c60/scG/s60.125"> <num value="60.125">Sec. 60.125.</num> <heading>DETERMINATION OF INTERCONNECTION RATES</heading> <subsection identifier="/us/tx/ut/t2/c60/scG/s60.125/a"> <num value="a">(a)</num> <content>Telecommunications providers shall negotiate network interconnectivity, charges, and terms.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c60/scG/s60.125/b"> <num value="b">(b)</num> <content>If interconnectivity, charges, and terms are successfully negotiated, the commission shall approve the interconnection rates.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c60/scG/s60.125/c"> <num value="c">(c)</num> <content>If telecommunications providers do not enter into a mutually agreed compensation rate under this section, each provider shall reciprocally terminate the other provider's traffic at no charge for the first nine months after the date the first call is terminated between the providers.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c60/scG/s60.125/d"> <num value="d">(d)</num> <content>During the nine-month period prescribed by Subsection (c), the commission shall complete a proceeding to establish reciprocal interconnection rates and terms. The commission shall establish reciprocal interconnection rates and terms based solely on the commission proceeding.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c60/scG/s60.125/e"> <num value="e">(e)</num> <content>In establishing the initial interconnection rate, the commission may not require cost studies from the new entrant.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c60/scG/s60.125/f"> <num value="f">(f)</num> <content>On or after the third anniversary of the date the first call is terminated between the providers, the commission, on receipt of a complaint, may require cost studies by a new entrant to establish interconnection rates.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c60/scG/s60.126"> <num value="60.126">Sec. 60.126.</num> <heading>INTERCONNECTIVITY NEGOTIATIONS; DISPUTE RESOLUTION</heading> <content>The commission may resolve a dispute filed by a party to a negotiation under Section 60.125(a).</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c60/scG/s60.127"> <num value="60.127">Sec. 60.127.</num> <heading>ADOPTION OF APPROVED INTERCONNECTION RATES</heading> <subsection identifier="/us/tx/ut/t2/c60/scG/s60.127/a"> <num value="a">(a)</num> <content>An incumbent local exchange company may adopt the interconnection rates the commission approves for a larger incumbent local exchange company without additional cost justification.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c60/scG/s60.127/b"> <num value="b">(b)</num> <content>If an incumbent local exchange company does not adopt the interconnection rates of a larger company or negotiates under Section 60.125(a), the company is governed by Sections 60.125(c)-(f).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c60/scG/s60.127/c"> <num value="c">(c)</num> <content>If the incumbent local exchange company adopts the interconnection rates of another incumbent local exchange company, the new entrant may adopt those rates as the new entrant's interconnection rates.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c60/scG/s60.127/d"> <num value="d">(d)</num> <content>If the incumbent local exchange company elects to file its own tariff, the new entrant must also file its own interconnection tariff.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c60/scG/s60.128"> <num value="60.128">Sec. 60.128.</num> <heading>USE OF RATES RESTRICTED</heading> <content>The commission may not use interconnection rates under this subchapter as a basis to alter interconnection rates for other services.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c60/scH"> <num value="H">SUBCHAPTER H.</num> <heading>EXPANDED INTERCONNECTION</heading> <section identifier="/us/tx/ut/t2/c60/scH/s60.141"> <num value="60.141">Sec. 60.141.</num> <heading>EXPANDED INTERCONNECTION RULES</heading> <chapeau>The commission shall adopt rules for expanded interconnection that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c60/scH/s60.141/1"> <num value="1">(1)</num> <content>are consistent with the rules and regulations of the Federal Communications Commission relating to expanded interconnection;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scH/s60.141/2"> <num value="2">(2)</num> <content>treat intrastate private line services as special access service; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scH/s60.141/3"> <num value="3">(3)</num> <content>provide that if an incumbent local exchange company is required to provide expanded interconnection to another local exchange company, the second local exchange company shall in a similar manner provide expanded interconnection to the first company.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c60/scI"> <num value="I">SUBCHAPTER I.</num> <heading>LOCAL EXCHANGE COMPANY REQUIREMENTS</heading> <section identifier="/us/tx/ut/t2/c60/scI/s60.161"> <num value="60.161">Sec. 60.161.</num> <heading>INCUMBENT LOCAL EXCHANGE COMPANY REQUIREMENTS</heading> <chapeau>An incumbent local exchange company may not unreasonably:</chapeau> <paragraph identifier="/us/tx/ut/t2/c60/scI/s60.161/1"> <num value="1">(1)</num> <content>discriminate against another provider by refusing access to the local exchange;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scI/s60.161/2"> <num value="2">(2)</num> <content>refuse or delay an interconnection to another provider;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scI/s60.161/3"> <num value="3">(3)</num> <content>degrade the quality of access the company provides to another provider;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scI/s60.161/4"> <num value="4">(4)</num> <content>impair the speed, quality, or efficiency of a line used by another provider;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scI/s60.161/5"> <num value="5">(5)</num> <content>fail to fully disclose in a timely manner on request all available information necessary to design equipment that will meet the specifications of the local exchange network; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scI/s60.161/6"> <num value="6">(6)</num> <content>refuse or delay access by a person to another provider.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c60/scI/s60.162"> <num value="60.162">Sec. 60.162.</num> <heading>EXPANDED INTERCONNECTION</heading> <content>This subchapter does not require an incumbent local exchange company to provide expanded interconnection as that term is defined by the Federal Communications Commission.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c60/scI/s60.163"> <num value="60.163">Sec. 60.163.</num> <heading>INFRASTRUCTURE SHARING</heading> <subsection identifier="/us/tx/ut/t2/c60/scI/s60.163/a"> <num value="a">(a)</num> <content>The commission shall adopt rules that require a local exchange company to share public switched network infrastructure and technology with a requesting local exchange company that lacks economies of scale or scope, to enable the requesting company to provide telecommunications services in each geographic area for which the requesting company is designated as the sole carrier of last resort.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c60/scI/s60.163/b"> <num value="b">(b)</num> <chapeau>The rules governing the sharing:</chapeau> <paragraph identifier="/us/tx/ut/t2/c60/scI/s60.163/1"> <num value="1">(1)</num> <content>may not require a local exchange company to make a decision that is uneconomic or adverse to the public;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scI/s60.163/2"> <num value="2">(2)</num> <content>shall permit, but may not require, joint ownership and operation of public switched network infrastructure and services by or among the local exchange companies that share infrastructure; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scI/s60.163/3"> <num value="3">(3)</num> <content>shall establish conditions that promote cooperation between local exchange companies.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c60/scI/s60.164"> <num value="60.164">Sec. 60.164.</num> <heading>PERMISSIBLE JOINT MARKETING</heading> <content>Except as prescribed in Chapters 61, 62, and 63, the commission may not adopt any rule or order that would prohibit a local exchange company from jointly marketing or selling its products and services with the products and services of any of its affiliates in any manner permitted by federal law or applicable rules or orders of the Federal Communications Commission.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 52, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c60/scI/s60.165"> <num value="60.165">Sec. 60.165.</num> <heading>AFFILIATE RULE</heading> <content>Except as prescribed in Chapters 61, 62, and 63, the commission may not adopt any rule or order that would prescribe for any local exchange company any affiliate rule, including any accounting rule, any cost allocation rule, or any structural separation rule, that is more burdensome than federal law or applicable rules or orders of the Federal Communications Commission. Notwithstanding any other provision in this title, the commission may not attribute or impute to a local exchange company a price discount offered by an affiliate of the local exchange company to the affiliate's customers. This section does not limit the authority of the commission to consider a complaint brought under Subchapter A, Chapter 52, Section 53.003, or this chapter.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 52, eff. Sept. 1, 1999.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c60/scJ"> <num value="J">SUBCHAPTER J.</num> <heading>WHOLESALE CODE OF CONDUCT</heading> <section identifier="/us/tx/ut/t2/c60/scJ/s60.201"> <num value="60.201">Sec. 60.201.</num> <heading>STATEMENT OF POLICY</heading> <content>It is the policy of this state that providers of telecommunications services operate in a manner that is consistent with minimum standards to provide customers with continued competitive choices.</content> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 24, eff. September 7, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c60/scJ/s60.202"> <num value="60.202">Sec. 60.202.</num> <heading>APPLICABILITY OF SUBCHAPTER</heading> <content>A provision of this subchapter applies only to the extent the provision has not been preempted by federal law or a rule, regulation, or order of the Federal Communications Commission.</content> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 24, eff. September 7, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c60/scJ/s60.203"> <num value="60.203">Sec. 60.203.</num> <heading>MINIMUM SERVICE REQUIREMENTS</heading> <chapeau>A telecommunications provider may not unreasonably:</chapeau> <paragraph identifier="/us/tx/ut/t2/c60/scJ/s60.203/1"> <num value="1">(1)</num> <content>discriminate against another provider by refusing access to an exchange;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scJ/s60.203/2"> <num value="2">(2)</num> <content>refuse or delay an interconnection to another provider;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scJ/s60.203/3"> <num value="3">(3)</num> <content>degrade the quality of access the telecommunications provider provides to another provider;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scJ/s60.203/4"> <num value="4">(4)</num> <content>impair the speed, quality, or efficiency of a line used by another provider;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scJ/s60.203/5"> <num value="5">(5)</num> <content>fail to fully disclose in a timely manner on request all available information necessary to design equipment that will meet the specifications of the network; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scJ/s60.203/6"> <num value="6">(6)</num> <content>refuse or delay access by a person to another provider.</content> </paragraph> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 24, eff. September 7, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c60/scJ/s60.204"> <num value="60.204">Sec. 60.204.</num> <heading>INTERCONNECTION</heading> <content>A telecommunications provider shall provide interconnection with other telecommunications providers' networks for the transmission and routing of telephone exchange service and exchange access.</content> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 24, eff. September 7, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c60/scJ/s60.205"> <num value="60.205">Sec. 60.205.</num> <heading>NUMBER PORTABILITY</heading> <content>A telecommunications provider shall provide number portability in accordance with federal requirements.</content> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 24, eff. September 7, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c60/scJ/s60.206"> <num value="60.206">Sec. 60.206.</num> <heading>DUTY TO NEGOTIATE</heading> <content>A telecommunications provider shall negotiate in good faith the terms and conditions of any agreement.</content> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 24, eff. September 7, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c60/scJ/s60.207"> <num value="60.207">Sec. 60.207.</num> <heading>DIALING PARITY</heading> <subsection identifier="/us/tx/ut/t2/c60/scJ/s60.207/a"> <num value="a">(a)</num> <content>A telecommunications provider shall provide dialing parity to competing telecommunications providers of telephone exchange service and telephone toll service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c60/scJ/s60.207/b"> <num value="b">(b)</num> <content>A telecommunications provider shall provide nondiscriminatory access to telephone numbers, operator services, directory assistance, and directory listings and may not delay that access unreasonably.</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 24, eff. September 7, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c60/scJ/s60.208"> <num value="60.208">Sec. 60.208.</num> <heading>ACCESS TO RIGHTS-OF-WAY</heading> <content>A telecommunications provider shall provide access to poles, ducts, conduits, and rights-of-way to competing providers of telecommunications service on rates, terms, and conditions that are just, reasonable, and nondiscriminatory.</content> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 24, eff. September 7, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c60/scJ/s60.209"> <num value="60.209">Sec. 60.209.</num> <heading>RECIPROCAL COMPENSATION</heading> <content>A telecommunications provider shall establish reciprocal compensation arrangements for the transport and termination of telecommunications.</content> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 24, eff. September 7, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c60/scJ/s60.210"> <num value="60.210">Sec. 60.210.</num> <heading>ACCESS TO SERVICES</heading> <chapeau>A telecommunications provider shall provide access to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c60/scJ/s60.210/1"> <num value="1">(1)</num> <content>911 and E-911 service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scJ/s60.210/2"> <num value="2">(2)</num> <content>directory assistance service to allow other telecommunications providers' customers to obtain telephone numbers; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c60/scJ/s60.210/3"> <num value="3">(3)</num> <content>operator call completion service.</content> </paragraph> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 24, eff. September 7, 2005.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t2/c62"> <num value="62">CHAPTER 62.</num> <heading>BROADCASTER SAFEGUARDS</heading> <subchapter identifier="/us/tx/ut/t2/c62/scA"> <num value="A">SUBCHAPTER A.</num> <heading>GENERAL PROVISIONS</heading> <section identifier="/us/tx/ut/t2/c62/scA/s62.001"> <num value="62.001">Sec. 62.001.</num> <heading>APPLICABILITY OF CHAPTER</heading> <content>This chapter does not apply to a cable company.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c62/scA/s62.002"> <num value="62.002">Sec. 62.002.</num> <heading>DEFINITIONS</heading> <chapeau>In this chapter:</chapeau> <paragraph identifier="/us/tx/ut/t2/c62/scA/s62.002/1"> <num value="1">(1)</num> <chapeau>"Audio programming":</chapeau> <subparagraph identifier="/us/tx/ut/t2/c62/scA/s62.002/A"> <num value="A">(A)</num> <content>means programming:</content> </subparagraph> </paragraph> <subsection identifier="/us/tx/ut/t2/c62/scA/s62.002/i"> <num value="i">(i)</num> <chapeau>provided by an amplitude modulation or frequency modulation broadcast radio station; or</chapeau> <clause identifier="/us/tx/ut/t2/c62/scA/s62.002/ii"> <num value="ii">(ii)</num> <content>generally considered comparable to programming described by Subparagraph (i); and</content> </clause> <subparagraph identifier="/us/tx/ut/t2/c62/scA/s62.002/B"> <num value="B">(B)</num> <content>does not include an audio-related service offered by an incumbent local exchange company on September 1, 1995.</content> </subparagraph> <paragraph identifier="/us/tx/ut/t2/c62/scA/s62.002/2"> <num value="2">(2)</num> <content>"Video programming" means programming provided by or generally considered comparable to programming provided by a television broadcast station as defined by Section 602, Communications Act of 1934 (47 U.S.C. Section 522).</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c62/scA/s62.003"> <num value="62.003">Sec. 62.003.</num> <heading>REQUIREMENTS RELATING TO AUDIO AND VIDEO PROGRAMMING</heading> <subsection identifier="/us/tx/ut/t2/c62/scA/s62.003/a"> <num value="a">(a)</num> <content>This section applies only to a provider of advanced services or local exchange telephone service that has more than 500,000 access lines in service in this state and that delivers audio programming with localized content or video programming to its subscribers in those service areas where such provider is not regulated as a cable system under federal law.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c62/scA/s62.003/b"> <num value="b">(b)</num> <content>Notwithstanding any other provision of this title, a provider of advanced services or local exchange telephone service shall provide subscribers access to the signals of the local broadcast television and radio stations licensed by the Federal Communications Commission to serve those subscribers over the air; provided with respect to low power television stations, this section shall only apply to those low power television stations that are "qualified low power stations" as defined in 47 U.S.C. Section 534(h)(2).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c62/scA/s62.003/c"> <num value="c">(c)</num> <content>To facilitate access by subscribers of a provider of advanced services or local exchange telephone service to the signals of local broadcast stations, a station either shall be granted mandatory carriage or may request retransmission consent with the provider.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c62/scA/s62.003/d"> <num value="d">(d)</num> <content>This title does not require a provider of advanced services or local exchange telephone service to provide a television or radio station valuable consideration in exchange for carriage.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c62/scA/s62.003/e"> <num value="e">(e)</num> <content>A provider of advanced services or local exchange telephone service shall transmit without degradation the signals a local broadcast station delivers to the provider. The transmission quality offered a broadcast station may not be lower than the quality made available to another broadcast station or video or audio programming source.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c62/scA/s62.003/f"> <num value="f">(f)</num> <chapeau>A provider of advanced services or local exchange telephone service that delivers audio or video programming to its subscribers may not:</chapeau> <paragraph identifier="/us/tx/ut/t2/c62/scA/s62.003/1"> <num value="1">(1)</num> <content>discriminate among broadcast stations or between broadcast stations on the one hand and programming providers on the other with respect to transmission of their signals, taking into account any consideration afforded a provider of advanced services or local exchange telephone service by any such programming provider or broadcast station; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c62/scA/s62.003/2"> <num value="2">(2)</num> <content>delete, change, or alter a copyright identification transmitted as part of a broadcast station's signal.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c62/scA/s62.003/g"> <num value="g">(g)</num> <content>A provider of advanced services or local exchange telephone service that delivers audio or video programming shall be subject to any applicable network nonduplication or syndicated exclusivity rules promulgated by the Federal Communications Commission to the extent applicable to cable systems as defined by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c62/scA/s62.003/h"> <num value="h">(h)</num> <content>A provider of advanced services or local exchange telephone service that delivers audio or video programming to its subscribers shall include all programming providers in a subscriber programming guide, if any, that lists program schedules.</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 25, eff. September 7, 2005.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t2/c64"> <num value="64">CHAPTER 64.</num> <heading>CUSTOMER PROTECTION</heading> <subchapter identifier="/us/tx/ut/t2/c64/scA"> <num value="A">SUBCHAPTER A.</num> <heading>GENERAL PROVISIONS</heading> <section identifier="/us/tx/ut/t2/c64/scA/s64.001"> <num value="64.001">Sec. 64.001.</num> <heading>CUSTOMER PROTECTION POLICY</heading> <subsection identifier="/us/tx/ut/t2/c64/scA/s64.001/a"> <num value="a">(a)</num> <content>The legislature finds that new developments in telecommunications services, as well as changes in market structure, marketing techniques, and technology, make it essential that customers have safeguards against fraudulent, unfair, misleading, deceptive, or anticompetitive business practices and against businesses that do not have the technical and financial resources to provide adequate service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c64/scA/s64.001/b"> <num value="b">(b)</num> <content>The purpose of this chapter is to establish customer protection standards and confer on the commission authority to adopt and enforce rules to protect customers from fraudulent, unfair, misleading, deceptive, or anticompetitive practices.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c64/scA/s64.001/c"> <num value="c">(c)</num> <content>Nothing in this section shall be construed to abridge customer rights set forth in commission rules in effect at the time of the enactment of this chapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c64/scA/s64.001/d"> <num value="d">(d)</num> <content>This chapter does not limit the constitutional, statutory, and common law authority of the office of the attorney general.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 55, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c64/scA/s64.002"> <num value="64.002">Sec. 64.002.</num> <heading>DEFINITIONS</heading> <chapeau>In this chapter:</chapeau> <paragraph identifier="/us/tx/ut/t2/c64/scA/s64.002/1"> <num value="1">(1)</num> <content>"Billing agent" means any entity that submits charges to the billing utility on behalf of itself or any provider of a product or service.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scA/s64.002/2"> <num value="2">(2)</num> <content>"Billing utility" means any telecommunications provider, as defined by Section 51.002, that issues a bill directly to a customer for any telecommunications product or service.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scA/s64.002/3"> <num value="3">(3)</num> <content>"Certificated telecommunications utility" means a telecommunications utility that has been granted either a certificate of convenience and necessity, a certificate of operating authority, or a service provider certificate of operating authority.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scA/s64.002/4"> <num value="4">(4)</num> <content>"Customer" means any person in whose name telephone service is billed, including individuals, governmental units at all levels of government, corporate entities, and any other entity with legal capacity to be billed for telephone service.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scA/s64.002/5"> <num value="5">(5)</num> <content>"Service provider" means any entity that offers a product or service to a customer and that directly or indirectly charges to or collects from a customer's bill an amount for the product or service on a customer's bill received from a billing utility.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scA/s64.002/6"> <num value="6">(6)</num> <content>"Telecommunications utility" has the meaning assigned by Section 51.002.</content> </paragraph> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 55, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c64/scA/s64.004"> <num value="64.004">Sec. 64.004.</num> <heading>CUSTOMER PROTECTION STANDARDS</heading> <subsection identifier="/us/tx/ut/t2/c64/scA/s64.004/a"> <num value="a">(a)</num> <chapeau>All buyers of telecommunications services are entitled to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c64/scA/s64.004/1"> <num value="1">(1)</num> <content>protection from fraudulent, unfair, misleading, deceptive, or anticompetitive practices, including protection from being billed for services that were not authorized or provided;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scA/s64.004/2"> <num value="2">(2)</num> <content>choice of a telecommunications service provider and to have that choice honored;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scA/s64.004/3"> <num value="3">(3)</num> <content>information in English and Spanish and any other language as the commission deems necessary concerning rates, key terms, and conditions;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scA/s64.004/4"> <num value="4">(4)</num> <content>protection from discrimination on the basis of race, color, sex, nationality, religion, marital status, income level, or source of income and from unreasonable discrimination on the basis of geographic location;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scA/s64.004/5"> <num value="5">(5)</num> <content>impartial and prompt resolution of disputes with a certificated telecommunications utility and disputes with a telecommunications service provider related to unauthorized charges and switching of service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scA/s64.004/6"> <num value="6">(6)</num> <content>privacy of customer consumption and credit information;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scA/s64.004/7"> <num value="7">(7)</num> <content>accuracy of billing;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scA/s64.004/8"> <num value="8">(8)</num> <content>bills presented in a clear, readable format and easy-to-understand language;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scA/s64.004/9"> <num value="9">(9)</num> <content>information in English and Spanish and any other language as the commission deems necessary concerning low-income assistance programs and deferred payment plans;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scA/s64.004/10"> <num value="10">(10)</num> <content>all consumer protections and disclosures established by the Fair Credit Reporting Act (15 U.S.C. Section 1681 et seq.) and the Truth in Lending Act (15 U.S.C. Section 1601 et seq.); and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scA/s64.004/11"> <num value="11">(11)</num> <content>programs that offer eligible low-income customers an affordable rate package and bill payment assistance programs designed to reduce uncollectible accounts.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c64/scA/s64.004/b"> <num value="b">(b)</num> <content>The commission may adopt and enforce rules as necessary or appropriate to carry out this section, including rules for minimum service standards for a certificated telecommunications utility relating to customer deposits and the extension of credit, switching fees, termination of service, an affordable rate package, and bill payment assistance programs for low-income customers. The commission may waive language requirements for good cause.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c64/scA/s64.004/c"> <num value="c">(c)</num> <content>The commission shall request the comments of the office of the attorney general in developing the rules that may be necessary or appropriate to carry out this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c64/scA/s64.004/d"> <num value="d">(d)</num> <content>The commission shall coordinate its enforcement efforts regarding the prosecution of fraudulent, misleading, deceptive, and anticompetitive business practices with the office of the attorney general in order to ensure consistent treatment of specific alleged violations.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c64/scA/s64.004/e"> <num value="e">(e)</num> <content>Nothing in this section shall be construed to abridge customer rights set forth in commission rules in effect at the time of the enactment of this chapter.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 55, eff. Sept. 1, 1999.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c64/scB"> <num value="B">SUBCHAPTER B.</num> <heading>CERTIFICATION, REGISTRATION, AND REPORTING REQUIREMENTS</heading> <section identifier="/us/tx/ut/t2/c64/scB/s64.051"> <num value="64.051">Sec. 64.051.</num> <heading>ADOPTION OF RULES</heading> <subsection identifier="/us/tx/ut/t2/c64/scB/s64.051/a"> <num value="a">(a)</num> <content>The commission shall adopt rules relating to certification, registration, and reporting requirements for a certificated telecommunications utility, all telecommunications utilities that are not dominant carriers, and pay telephone providers.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c64/scB/s64.051/b"> <num value="b">(b)</num> <content>The rules adopted under Subsection (a) shall be consistent with and no less effective than federal law and may not require the disclosure of highly sensitive competitive or trade secret information.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 55, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c64/scB/s64.052"> <num value="64.052">Sec. 64.052.</num> <heading>SCOPE OF RULES</heading> <chapeau>The commission may adopt and enforce rules to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c64/scB/s64.052/1"> <num value="1">(1)</num> <content>require certification or registration with the commission as a condition of doing business in this state;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scB/s64.052/2"> <num value="2">(2)</num> <content>amend certificates or registrations to reflect changed ownership and control;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scB/s64.052/3"> <num value="3">(3)</num> <content>establish rules for customer service and protection;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scB/s64.052/4"> <num value="4">(4)</num> <content>suspend or revoke certificates or registrations for repeated violations of this chapter or commission rules, except that the commission may not revoke a certificate of convenience and necessity of a telecommunications utility except as provided by Section 54.008; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scB/s64.052/5"> <num value="5">(5)</num> <content>order disconnection of a pay telephone service provider's pay telephones or revocation of certification or registration for repeated violations of this chapter or commission rules.</content> </paragraph> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 55, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c64/scB/s64.053"> <num value="64.053">Sec. 64.053.</num> <heading>REPORTS</heading> <content>The commission may require a telecommunications service provider to submit reports to the commission concerning any matter over which it has authority under this chapter.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 55, eff. Sept. 1, 1999.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c64/scC"> <num value="C">SUBCHAPTER C.</num> <heading>CUSTOMER'S RIGHT TO CHOICE</heading> <section identifier="/us/tx/ut/t2/c64/scC/s64.101"> <num value="64.101">Sec. 64.101.</num> <heading>POLICY</heading> <content>It is the policy of this state that all customers be protected from the unauthorized switching of a telecommunications service provider selected by the customer to provide service.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 55, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c64/scC/s64.102"> <num value="64.102">Sec. 64.102.</num> <heading>RULES RELATING TO CHOICE</heading> <chapeau>The commission shall adopt and enforce rules that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c64/scC/s64.102/1"> <num value="1">(1)</num> <content>ensure that customers are protected from deceptive practices employed in obtaining authorizations of service and in the verification of change orders, including negative option marketing, sweepstakes, and contests that cause customers to unknowingly change their telecommunications service provider;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scC/s64.102/2"> <num value="2">(2)</num> <content>provide for clear, easily understandable identification, in each bill sent to a customer, of all telecommunications service providers submitting charges on the bill;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scC/s64.102/3"> <num value="3">(3)</num> <content>ensure that every service provider submitting charges on the bill is clearly and easily identified on the bill along with its services, products, and charges;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scC/s64.102/4"> <num value="4">(4)</num> <content>provide that unauthorized changes in service be remedied at no cost to the customer within a period established by the commission;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scC/s64.102/5"> <num value="5">(5)</num> <content>require refunds or credits to the customer in the event of an unauthorized change; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scC/s64.102/6"> <num value="6">(6)</num> <content>provide for penalties for violations of commission rules adopted under this section, including fines and revocation of certificates or registrations, by this action denying the certificated telecommunications utility the right to provide service in this state, except that the commission may not revoke a certificate of convenience and necessity of a telecommunications utility except as provided by Section 54.008.</content> </paragraph> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 55, eff. Sept. 1, 1999.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c64/scD"> <num value="D">SUBCHAPTER D.</num> <heading>PROTECTION AGAINST UNAUTHORIZED CHARGES</heading> <section identifier="/us/tx/ut/t2/c64/scD/s64.151"> <num value="64.151">Sec. 64.151.</num> <heading>REQUIREMENTS FOR SUBMITTING CHARGES</heading> <subsection identifier="/us/tx/ut/t2/c64/scD/s64.151/a"> <num value="a">(a)</num> <chapeau>A service provider or billing agent may submit charges for a new product or service to be billed on a customer's telephone bill on or after the effective date of this section only if:</chapeau> <paragraph identifier="/us/tx/ut/t2/c64/scD/s64.151/1"> <num value="1">(1)</num> <content>the service provider offering the product or service has thoroughly informed the customer of the product or service being offered, including all associated charges, and has explicitly informed the customer that the associated charges for the product or service will appear on the customer's telephone bill;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scD/s64.151/2"> <num value="2">(2)</num> <content>the customer has clearly and explicitly consented to obtain the product or service offered and to have the associated charges appear on the customer's telephone bill and the consent has been verified as provided by Subsection (b); and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scD/s64.151/3"> <num value="3">(3)</num> <chapeau>the service provider offering the product or service and any billing agent for the service provider:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c64/scD/s64.151/A"> <num value="A">(A)</num> <content>has provided the customer with a toll-free telephone number the customer may call and an address to which the customer may write to resolve any billing dispute and to answer questions; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c64/scD/s64.151/B"> <num value="B">(B)</num> <content>has contracted with the billing utility to bill for products and services on the billing utility's bill as provided by Subsection (c).</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c64/scD/s64.151/b"> <num value="b">(b)</num> <chapeau>The customer consent required by Subsection (a)(2) must be verified by the service provider offering the product or service by authorization from the customer. A record of the customer consent, including verification, must be maintained by the service provider offering the product or service for a period of at least 24 months immediately after the consent and verification have been obtained. The method of obtaining customer consent and verification must include one or more of the following:</chapeau> <paragraph identifier="/us/tx/ut/t2/c64/scD/s64.151/1"> <num value="1">(1)</num> <content>written authorization from the customer;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scD/s64.151/2"> <num value="2">(2)</num> <content>toll-free electronic authorization placed from the telephone number that is the subject of the product or service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scD/s64.151/3"> <num value="3">(3)</num> <content>oral authorization obtained by an independent third party; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scD/s64.151/4"> <num value="4">(4)</num> <content>any other method of authorization approved by the commission or the Federal Communications Commission.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c64/scD/s64.151/c"> <num value="c">(c)</num> <content>The contract required by Subsection (a)(3)(B) must include the service provider's name, business address, and business telephone number and shall be maintained by the billing utility for as long as the billing for the products and services continues and for the 24 months immediately following the permanent discontinuation of the billing.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c64/scD/s64.151/d"> <num value="d">(d)</num> <content>A service provider offering a product or service to be charged on a customer's telephone bill and any billing agent for the service provider may not use any fraudulent, unfair, misleading, deceptive, or anticompetitive marketing practice to obtain customers, including the use of negative option marketing, sweepstakes, and contests.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c64/scD/s64.151/e"> <num value="e">(e)</num> <content>Unless verification is required by federal law or rules implementing federal law, Subsection (b) does not apply to customer-initiated transactions with a certificated telecommunications provider for which the service provider has the appropriate documentation.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c64/scD/s64.151/f"> <num value="f">(f)</num> <content>If a service provider is notified by a billing utility that a customer has reported to the billing utility that a charge made by the service provider is unauthorized, the service provider shall cease to charge the customer for the unauthorized product or service.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c64/scD/s64.151/g"> <num value="g">(g)</num> <content>This section does not apply to message telecommunications services charges that are initiated by dialing 1+, 0+, 0-, 1010XXX, or collect calls and charges for video services if the service provider has the necessary call detail record to establish the billing for the call or service.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 55, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c64/scD/s64.152"> <num value="64.152">Sec. 64.152.</num> <heading>RESPONSIBILITIES OF BILLING UTILITY</heading> <subsection identifier="/us/tx/ut/t2/c64/scD/s64.152/a"> <num value="a">(a)</num> <chapeau>If a customer's telephone bill is charged for any product or service without proper customer consent or verification, the billing utility, on its knowledge or notification of any unauthorized charge, shall promptly, not later than 45 days after the date of knowledge or notification of the charge:</chapeau> <paragraph identifier="/us/tx/ut/t2/c64/scD/s64.152/1"> <num value="1">(1)</num> <content>notify the service provider to cease charging the customer for the unauthorized product or service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scD/s64.152/2"> <num value="2">(2)</num> <content>remove any unauthorized charge from the customer's bill;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scD/s64.152/3"> <num value="3">(3)</num> <content>refund or credit to the customer all money that has been paid by the customer for any unauthorized charge, and if the unauthorized charge is not adjusted within three billing cycles, shall pay interest on the amount of the unauthorized charge;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scD/s64.152/4"> <num value="4">(4)</num> <content>on the customer's request, provide the customer with all billing records under its control related to any unauthorized charge within 15 business days after the date of the removal of the unauthorized charge from the customer's bill; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scD/s64.152/5"> <num value="5">(5)</num> <content>maintain for at least 24 months a record of every customer who has experienced any unauthorized charge for a product or service on the customer's telephone bill and who has notified the billing utility of the unauthorized charge.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c64/scD/s64.152/b"> <num value="b">(b)</num> <chapeau>A record required by Subsection (a)(5) shall contain for each unauthorized charge:</chapeau> <paragraph identifier="/us/tx/ut/t2/c64/scD/s64.152/1"> <num value="1">(1)</num> <content>the name of the service provider that offered the product or service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scD/s64.152/2"> <num value="2">(2)</num> <content>any affected telephone numbers or addresses;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scD/s64.152/3"> <num value="3">(3)</num> <content>the date the customer requested that the billing utility remove the unauthorized charge;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scD/s64.152/4"> <num value="4">(4)</num> <content>the date the unauthorized charge was removed from the customer's telephone bill; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scD/s64.152/5"> <num value="5">(5)</num> <content>the date any money that the customer paid for the unauthorized charges was refunded or credited to the customer.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c64/scD/s64.152/c"> <num value="c">(c)</num> <chapeau>A billing utility may not:</chapeau> <paragraph identifier="/us/tx/ut/t2/c64/scD/s64.152/1"> <num value="1">(1)</num> <content>disconnect or terminate telecommunications service to any customer for nonpayment of an unauthorized charge; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scD/s64.152/2"> <num value="2">(2)</num> <content>file an unfavorable credit report against a customer who has not paid charges the customer has alleged were unauthorized unless the dispute regarding the unauthorized charge is ultimately resolved against the customer, except that the customer shall remain obligated to pay any charges that are not in dispute, and this subsection does not apply to those undisputed charges.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 55, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c64/scD/s64.153"> <num value="64.153">Sec. 64.153.</num> <heading>RECORDS OF DISPUTED CHARGES</heading> <subsection identifier="/us/tx/ut/t2/c64/scD/s64.153/a"> <num value="a">(a)</num> <content>Every service provider shall maintain a record of every disputed charge for a product or service placed on a customer's bill.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c64/scD/s64.153/b"> <num value="b">(b)</num> <chapeau>The record required under Subsection (a) shall contain for every disputed charge:</chapeau> <paragraph identifier="/us/tx/ut/t2/c64/scD/s64.153/1"> <num value="1">(1)</num> <content>any affected telephone numbers or addresses;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scD/s64.153/2"> <num value="2">(2)</num> <content>the date the customer requested that the billing utility remove the unauthorized charge;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scD/s64.153/3"> <num value="3">(3)</num> <content>the date the unauthorized charge was removed from the customer's telephone bill; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scD/s64.153/4"> <num value="4">(4)</num> <content>the date action was taken to refund or credit to the customer any money that the customer paid for the unauthorized charges.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c64/scD/s64.153/c"> <num value="c">(c)</num> <content>The record required by Subsection (a) shall be maintained for at least 24 months following the completion of all steps required by Section 64.152(a).</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 55, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c64/scD/s64.154"> <num value="64.154">Sec. 64.154.</num> <heading>NOTICE</heading> <subsection identifier="/us/tx/ut/t2/c64/scD/s64.154/a"> <num value="a">(a)</num> <content>A billing utility shall provide notice of a customer's rights under this section in the manner prescribed by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c64/scD/s64.154/b"> <num value="b">(b)</num> <content>Notice of a customer's rights must be provided by mail to each residential and retail business customer within 60 days of the effective date of this section or by inclusion in the publication of the telephone directory next following the effective date of this section. In addition, each billing utility shall send the notice to new customers at the time service is initiated or to any customer at that customer's request.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 55, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c64/scD/s64.155"> <num value="64.155">Sec. 64.155.</num> <heading>PROVIDING COPY OF RECORDS</heading> <content>A billing utility shall provide a copy of records maintained under Sections 64.151(c), 64.152, and 64.154 to the commission staff on request. A service provider shall provide a copy of records maintained under Sections 64.151(b) and 64.153 to the commission on request.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 55, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c64/scD/s64.156"> <num value="64.156">Sec. 64.156.</num> <heading>VIOLATIONS</heading> <subsection identifier="/us/tx/ut/t2/c64/scD/s64.156/a"> <num value="a">(a)</num> <content>If the commission finds that a billing utility violated this subchapter, the commission may implement penalties and other enforcement actions under Chapter 15.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c64/scD/s64.156/b"> <num value="b">(b)</num> <content>If the commission finds that any other service provider or billing agent subject to this subchapter has violated this subchapter or has knowingly provided false information to the commission on matters subject to this subchapter, the commission may enforce the provisions of Chapter 15 against the service provider or billing agent as if it were regulated by the commission.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c64/scD/s64.156/c"> <num value="c">(c)</num> <content>Neither the authority granted under this section nor any other provision of this subchapter shall be construed to grant the commission jurisdiction to regulate service providers or billing agents who are not otherwise subject to commission regulation, other than as specifically provided by this chapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c64/scD/s64.156/d"> <num value="d">(d)</num> <content>If the commission finds that a billing utility or service provider repeatedly violates this subchapter, the commission may, if the action is consistent with the public interest, suspend, restrict, or revoke the registration or certificate of the telecommunications service provider, by this action denying the telecommunications service provider the right to provide service in this state, except that the commission may not revoke a certificate of convenience and necessity of a telecommunications utility except as provided by Section 54.008.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c64/scD/s64.156/e"> <num value="e">(e)</num> <content>If the commission finds that a service provider or billing agent has repeatedly violated any provision of this subchapter, the commission may order the billing utility to terminate billing and collection services for that service provider or billing agent.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c64/scD/s64.156/f"> <num value="f">(f)</num> <content>Nothing in this subchapter shall be construed to preclude a billing utility from taking action on its own to terminate or restrict its billing and collection services.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 55, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c64/scD/s64.157"> <num value="64.157">Sec. 64.157.</num> <heading>DISPUTES</heading> <subsection identifier="/us/tx/ut/t2/c64/scD/s64.157/a"> <num value="a">(a)</num> <content>The commission may resolve disputes between a retail customer and a billing utility, service provider, or telecommunications utility.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c64/scD/s64.157/b"> <num value="b">(b)</num> <chapeau>In exercising its authority under Subsection (a), the commission may:</chapeau> <paragraph identifier="/us/tx/ut/t2/c64/scD/s64.157/1"> <num value="1">(1)</num> <content>order a billing utility or service provider to produce information or records;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scD/s64.157/2"> <num value="2">(2)</num> <content>require that all contracts, bills, and other communications from a billing utility or service provider display a working toll-free telephone number that customers may call with complaints and inquiries;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scD/s64.157/3"> <num value="3">(3)</num> <content>require a billing utility or service provider to refund or credit overcharges or unauthorized charges with interest if the billing utility or service provider has failed to comply with commission rules or a contract with the customer;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scD/s64.157/4"> <num value="4">(4)</num> <content>order appropriate relief to ensure that a customer's choice of a telecommunications service provider is honored;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scD/s64.157/5"> <num value="5">(5)</num> <content>require the continuation of service to a residential or small commercial customer while a dispute is pending regarding charges the customer has alleged were unauthorized; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scD/s64.157/6"> <num value="6">(6)</num> <content>investigate an alleged violation.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c64/scD/s64.157/c"> <num value="c">(c)</num> <content>The commission shall adopt procedures for the resolution of disputes in a timely manner, which in no event shall exceed 60 days.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 55, eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c64/scD/s64.158"> <num value="64.158">Sec. 64.158.</num> <heading>CONSISTENCY WITH FEDERAL LAW</heading> <content>Rules adopted by the commission under this subchapter shall be consistent with and not more burdensome than applicable federal laws and rules.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 1212, Sec. 55, eff. Sept. 1, 1999.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c64/scE"> <num value="E">SUBCHAPTER E.</num> <heading>PUBLICATION OF MOBILE SERVICE CUSTOMER TELEPHONE NUMBERS</heading> <section identifier="/us/tx/ut/t2/c64/scE/s64.201"> <num value="64.201">Sec. 64.201.</num> <heading>DEFINITION</heading> <content>In this subchapter, "commercial mobile service provider" means a provider of commercial mobile service as defined by Section 332(d), Communications Act of 1934 (47 U.S.C. Section 151 et seq.), Federal Communications Commission rules, and the Omnibus Budget Reconciliation Act of 1993 (Pub. L. No. 103-66).</content> <sourceCredit>Added by Acts 2005, 79th Leg., Ch. 226 (H.B. 2553), Sec. 1, eff. September 1, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c64/scE/s64.202"> <num value="64.202">Sec. 64.202.</num> <heading>CONSENT REQUIRED</heading> <subsection identifier="/us/tx/ut/t2/c64/scE/s64.202/a"> <num value="a">(a)</num> <chapeau>A commercial mobile service provider doing business in this state may not publish in a directory or provide for publication in a directory the name and telephone number of a mobile service customer in this state without the express consent of the customer. The consent of a customer must be given:</chapeau> <paragraph identifier="/us/tx/ut/t2/c64/scE/s64.202/1"> <num value="1">(1)</num> <content>in writing on a separate document that includes the customer's signature and the date;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scE/s64.202/2"> <num value="2">(2)</num> <content>verbally; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scE/s64.202/3"> <num value="3">(3)</num> <content>on a website maintained by the commercial mobile service provider.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c64/scE/s64.202/b"> <num value="b">(b)</num> <chapeau>Before a customer consents under Subsection (a), a commercial mobile service provider must disclose to the customer in writing or verbally, as appropriate, that:</chapeau> <paragraph identifier="/us/tx/ut/t2/c64/scE/s64.202/1"> <num value="1">(1)</num> <content>by consenting the customer agrees to have the customer's telephone number sold or licensed as part of a list of customers and the customer's telephone number may be included in a publicly available directory; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c64/scE/s64.202/2"> <num value="2">(2)</num> <content>if the customer's calling plan bills the customer for unsolicited calls or text messages from a telemarketer, by consenting to have the customer's telephone number sold or licensed as part of a list of customers or be included in a publicly available directory, the customer may incur additional charges for receiving unsolicited calls or text messages.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c64/scE/s64.202/c"> <num value="c">(c)</num> <content>A customer who consents under Subsection (a) may revoke that consent at any time. A commercial mobile service provider shall comply with the customer's request not later than the 60th day after the date the request is made.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c64/scE/s64.202/d"> <num value="d">(d)</num> <content>A commercial mobile service provider may not bill a mobile services customer for not consenting under Subsection (a).</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., Ch. 226 (H.B. 2553), Sec. 1, eff. September 1, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c64/scE/s64.203"> <num value="64.203">Sec. 64.203.</num> <heading>VIOLATIONS</heading> <subsection identifier="/us/tx/ut/t2/c64/scE/s64.203/a"> <num value="a">(a)</num> <content>The attorney general may investigate violations of this subchapter and file civil enforcement actions seeking injunctive relief, attorney's fees, and civil penalties in an amount not to exceed $1,000 for each violation. If the court finds the defendant wilfully or knowingly violated this subchapter, the court may increase the amount of the civil penalties to an amount not to exceed $3,000 for each violation.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c64/scE/s64.203/b"> <num value="b">(b)</num> <content>Chapter 15 does not apply to a violation of this subchapter.</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., Ch. 226 (H.B. 2553), Sec. 1, eff. September 1, 2005.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t2/c65"> <num value="65">CHAPTER 65.</num> <heading>DEREGULATION OF CERTAIN INCUMBENT LOCAL EXCHANGE COMPANY MARKETS</heading> <subchapter identifier="/us/tx/ut/t2/c65/scA"> <num value="A">SUBCHAPTER A.</num> <heading>GENERAL PROVISIONS</heading> <section identifier="/us/tx/ut/t2/c65/scA/s65.001"> <num value="65.001">Sec. 65.001.</num> <heading>STATEMENT OF POLICY</heading> <content>It is the policy of this state to provide for full rate and service competition in the telecommunications market of this state so that customers may benefit from innovations in service quality and market-based pricing.</content> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 26, eff. September 7, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c65/scA/s65.002"> <num value="65.002">Sec. 65.002.</num> <heading>DEFINITIONS</heading> <chapeau>In this chapter:</chapeau> <paragraph identifier="/us/tx/ut/t2/c65/scA/s65.002/1"> <num value="1">(1)</num> <content>"Deregulated company" means an incumbent local exchange company for which all of the company's markets have been deregulated.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c65/scA/s65.002/2"> <num value="2">(2)</num> <content>"Market" means an exchange in which an incumbent local exchange company provides residential local exchange telephone service.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c65/scA/s65.002/3"> <num value="3">(3)</num> <content>"Regulated company" means an incumbent local exchange company for which none of the company's markets have been deregulated.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c65/scA/s65.002/4"> <num value="4">(4)</num> <chapeau>"Stand-alone residential local exchange voice service" means:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c65/scA/s65.002/A"> <num value="A">(A)</num> <content>residential tone dialing service;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c65/scA/s65.002/B"> <num value="B">(B)</num> <content>services and functionalities supported under the lifeline program;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c65/scA/s65.002/C"> <num value="C">(C)</num> <content>access for all residential end users to 911 service provided by a local authority and access to dual party relay service;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c65/scA/s65.002/D"> <num value="D">(D)</num> <content>at the election of the incumbent local exchange company, mandatory residential extended area service arrangements, mandatory residential extended metropolitan service or other mandatory residential toll-free calling arrangements, mandatory expanded local calling service arrangements, or another service that a company is required under a tariff to provide to a customer who subscribes or may subscribe to basic network services;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c65/scA/s65.002/E"> <num value="E">(E)</num> <content>flat rate residential local exchange telephone service delivered by landline, but only if the service is ordered and received independent of:</content> </subparagraph> </paragraph> <subsection identifier="/us/tx/ut/t2/c65/scA/s65.002/i"> <num value="i">(i)</num> <chapeau>a service classified as a nonbasic service under Section 58.151 or residential call waiting service;</chapeau> <clause identifier="/us/tx/ut/t2/c65/scA/s65.002/ii"> <num value="ii">(ii)</num> <content>a package of services that includes a service classified as a nonbasic service under Section 58.151; or</content> </clause> <clause identifier="/us/tx/ut/t2/c65/scA/s65.002/iii"> <num value="iii">(iii)</num> <content>another flat rate residential local exchange service delivered by landline; and</content> </clause> <subparagraph identifier="/us/tx/ut/t2/c65/scA/s65.002/F"> <num value="F">(F)</num> <content>residential caller identification services if the customer to whom the service is billed is at least 65 years of age.</content> </subparagraph> <paragraph identifier="/us/tx/ut/t2/c65/scA/s65.002/5"> <num value="5">(5)</num> <content>"Transitioning company" means an incumbent local exchange company for which at least one, but not all, of the company's markets has been deregulated.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 26, eff. September 7, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c65/scA/s65.003"> <num value="65.003">Sec. 65.003.</num> <heading>COMMISSION AUTHORITY</heading> <subsection identifier="/us/tx/ut/t2/c65/scA/s65.003/a"> <num value="a">(a)</num> <content>Notwithstanding any other provisions of this title, the commission has authority to implement and enforce this chapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c65/scA/s65.003/b"> <num value="b">(b)</num> <content>The commission may adopt rules and conduct proceedings necessary to administer and enforce this chapter, including rules to determine whether a market should remain regulated, should be deregulated, or should be reregulated.</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 26, eff. September 7, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c65/scA/s65.004"> <num value="65.004">Sec. 65.004.</num> <heading>INFORMATION</heading> <subsection identifier="/us/tx/ut/t2/c65/scA/s65.004/a"> <num value="a">(a)</num> <content>The commission may collect and compile information from all telecommunications providers as necessary to implement and enforce this chapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c65/scA/s65.004/b"> <num value="b">(b)</num> <content>The commission shall maintain the confidentiality of information collected under this chapter that is claimed to be confidential for competitive purposes. Information that is claimed to be confidential is exempt from disclosure under Chapter 552, Government Code.</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 26, eff. September 7, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c65/scA/s65.005"> <num value="65.005">Sec. 65.005.</num> <heading>CUSTOMER PROTECTION</heading> <content>This chapter does not affect a customer's right to complain to the commission regarding a telecommunications provider.</content> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 26, eff. September 7, 2005.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c65/scB"> <num value="B">SUBCHAPTER B.</num> <heading>DETERMINATION OF WHETHER MARKET SHOULD BE REGULATED</heading> <section identifier="/us/tx/ut/t2/c65/scB/s65.051"> <num value="65.051">Sec. 65.051.</num> <heading>MARKETS DEREGULATED</heading> <content>A market that is deregulated as of September 1, 2011, shall remain deregulated. Notwithstanding any other provision of this title, the commission may not reregulate a market or company that has been deregulated.</content> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 26, eff. September 7, 2005. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 98 (S.B. 980), Sec. 14, eff. September 1, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c65/scB/s65.052"> <num value="65.052">Sec. 65.052.</num> <heading>DETERMINATION OF WHETHER A MARKET SHOULD REMAIN REGULATED</heading> <subsection identifier="/us/tx/ut/t2/c65/scB/s65.052/a"> <num value="a">(a)</num> <chapeau>An incumbent local exchange company may petition the commission to deregulate a market of the company that the commission previously determined should remain regulated. Notwithstanding any other provision of this title, only the incumbent local exchange company may initiate a proceeding to deregulate one of the company's markets. Not later than the 90th day after the date the commission receives the petition, the commission shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c65/scB/s65.052/1"> <num value="1">(1)</num> <content>determine whether the regulated market should remain regulated; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c65/scB/s65.052/2"> <num value="2">(2)</num> <content>issue a final order classifying the market in accordance with this section.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c65/scB/s65.052/b"> <num value="b">(b)</num> <chapeau>In making a determination under Subsection (a), the commission may not determine that a market should remain regulated if:</chapeau> <paragraph identifier="/us/tx/ut/t2/c65/scB/s65.052/1"> <num value="1">(1)</num> <content>the population in the area included in the market is at least 100,000; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c65/scB/s65.052/2"> <num value="2">(2)</num> <chapeau>the population in the area included in the market is less than 100,000 and, in addition to the incumbent local exchange company, there are at least two competitors operating in all or part of the market that:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c65/scB/s65.052/A"> <num value="A">(A)</num> <content>are unaffiliated with the incumbent local exchange company; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c65/scB/s65.052/B"> <num value="B">(B)</num> <content>provide voice communications service without regard to the delivery technology, including through:</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c65/scB/s65.052/i"> <num value="i">(i)</num> <chapeau>Internet Protocol or a successor protocol;</chapeau> <clause identifier="/us/tx/ut/t2/c65/scB/s65.052/ii"> <num value="ii">(ii)</num> <content>satellite; or</content> </clause> <clause identifier="/us/tx/ut/t2/c65/scB/s65.052/iii"> <num value="iii">(iii)</num> <content>a technology used by a wireless provider or a commercial mobile service provider, as that term is defined by Section 64.201.</content> </clause> </subsection> <subsection identifier="/us/tx/ut/t2/c65/scB/s65.052/c"> <num value="c">(c)</num> <content>If the commission deregulates a market under this section and the deregulation results in a regulated or transitioning company no longer meeting the definition of a regulated or transitioning company, the commission shall issue an order reclassifying the company as a transitioning company or deregulated company, as those terms are defined by Section 65.002.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c65/scB/s65.052/d"> <num value="d">(d)</num> <content>Repealed by Acts 2011, 82nd Leg., R.S., Ch. 98, Sec. 21(3), eff. September 1, 2011.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c65/scB/s65.052/e"> <num value="e">(e)</num> <content>Repealed by Acts 2011, 82nd Leg., R.S., Ch. 98, Sec. 21(3), eff. September 1, 2011.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c65/scB/s65.052/f"> <num value="f">(f)</num> <content>Repealed by Acts 2011, 82nd Leg., R.S., Ch. 98, Sec. 21(3), eff. September 1, 2011.</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 26, eff. September 7, 2005. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 98 (S.B. 980), Sec. 15, eff. September 1, 2011. Acts 2011, 82nd Leg., R.S., Ch. 98 (S.B. 980), Sec. 21(3), eff. September 1, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c65/scB/s65.053"> <num value="65.053">Sec. 65.053.</num> <heading>INCUMBENT LOCAL EXCHANGE COMPANY MARKETS</heading> <subsection identifier="/us/tx/ut/t2/c65/scB/s65.053/a"> <num value="a">(a)</num> <content>Notwithstanding Section 65.052, an incumbent local exchange company may elect to have all of the company's markets remain regulated on and after January 1, 2006.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c65/scB/s65.053/b"> <num value="b">(b)</num> <content>To make an election under Subsection (a), an incumbent local exchange company must file an affidavit with the commission making that election not later than December 1, 2005.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c65/scB/s65.053/c"> <num value="c">(c)</num> <content>If an incumbent local exchange company makes an election under this section, the commission shall issue an order classifying the company as a regulated company that is subject to the provisions of this title that applied to the company on September 1, 2005. This subsection does not affect the authority of a regulated company to elect under Chapter 58 or 59 after January 1, 2005, and to be regulated under the chapter under which the company elected.</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 26, eff. September 7, 2005.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c65/scC"> <num value="C">SUBCHAPTER C.</num> <heading>DEREGULATED COMPANY</heading> <section identifier="/us/tx/ut/t2/c65/scC/s65.101"> <num value="65.101">Sec. 65.101.</num> <heading>ISSUANCE OF CERTIFICATE OF OPERATING AUTHORITY</heading> <subsection identifier="/us/tx/ut/t2/c65/scC/s65.101/a"> <num value="a">(a)</num> <content>A deregulated company may petition the commission to relinquish the company's certificate of convenience and necessity and receive a certificate of operating authority.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c65/scC/s65.101/b"> <num value="b">(b)</num> <content>The commission shall issue the deregulated company a certificate of operating authority and rescind the deregulated company's certificate of convenience and necessity if the commission finds that all of the company's markets have been deregulated under Subchapter B.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c65/scC/s65.101/c"> <num value="c">(c)</num> <content>A deregulated company that holds a certificate of operating authority is a nondominant carrier.</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 26, eff. September 7, 2005. Amended by: Acts 2013, 83rd Leg., R.S., Ch. 210 (S.B. 259), Sec. 4, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c65/scC/s65.102"> <num value="65.102">Sec. 65.102.</num> <heading>REQUIREMENTS</heading> <subsection identifier="/us/tx/ut/t2/c65/scC/s65.102/a"> <num value="a">(a)</num> <chapeau>A deregulated company that holds a certificate of operating authority issued under this subchapter is not required to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c65/scC/s65.102/1"> <num value="1">(1)</num> <content>fulfill the obligations of a provider of last resort;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c65/scC/s65.102/2"> <num value="2">(2)</num> <content>comply with retail quality of service standards or reporting requirements;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c65/scC/s65.102/3"> <num value="3">(3)</num> <content>file an earnings report with the commission unless the company is receiving support from the Texas High Cost Universal Service Plan; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c65/scC/s65.102/4"> <num value="4">(4)</num> <content>comply with a pricing requirement other than a requirement prescribed by this subchapter.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c65/scC/s65.102/b"> <num value="b">(b)</num> <chapeau>Notwithstanding any other provision of this title, the commission has only the authority provided by this section over a deregulated company that holds a certificate of operating authority issued under this subchapter. Subject to Subsection (c), the following provisions apply to a deregulated company and may be enforced by the commission using the remedies provided by Subchapter B, Chapter 15, and Subsection (d):</chapeau> <paragraph identifier="/us/tx/ut/t2/c65/scC/s65.102/1"> <num value="1">(1)</num> <content>Subchapter A, Chapter 15;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c65/scC/s65.102/2"> <num value="2">(2)</num> <content>Subchapters A, C, and D, Chapter 17, as applicable to carriers holding a certificate of operating authority;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c65/scC/s65.102/3"> <num value="3">(3)</num> <content>Sections 52.007, 52.060, and 52.156;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c65/scC/s65.102/4"> <num value="4">(4)</num> <content>Sections 54.001, 54.002, 54.003, 54.004, 54.005, 54.006, 54.008(a), 54.101, 54.102, 54.103, 54.105, 54.151, 54.156, 54.158, 54.159, 54.255, 54.256, 54.257, 54.259, 54.260, and 54.261;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c65/scC/s65.102/5"> <num value="5">(5)</num> <content>Sections 55.010, 55.123, 55.133, 55.134, 55.136, and 55.137;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c65/scC/s65.102/6"> <num value="6">(6)</num> <content>Chapter 56, except Subchapters F and G;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c65/scC/s65.102/7"> <num value="7">(7)</num> <content>Chapter 60;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c65/scC/s65.102/8"> <num value="8">(8)</num> <content>Chapter 62;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c65/scC/s65.102/9"> <num value="9">(9)</num> <content>Subchapter E, Chapter 64;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c65/scC/s65.102/10"> <num value="10">(10)</num> <content>Sections 65.001, 65.002, 65.003, and 65.004, this subchapter, and Subchapter E of this chapter; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c65/scC/s65.102/11"> <num value="11">(11)</num> <content>Chapter 66.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c65/scC/s65.102/c"> <num value="c">(c)</num> <chapeau>Nothing in this subchapter affects the continuing applicability of the following provisions of this title:</chapeau> <paragraph identifier="/us/tx/ut/t2/c65/scC/s65.102/1"> <num value="1">(1)</num> <content>Sections 51.003 and 51.010(c);</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c65/scC/s65.102/2"> <num value="2">(2)</num> <content>Section 52.002(d);</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c65/scC/s65.102/3"> <num value="3">(3)</num> <content>Sections 54.204, 54.205, and 54.206; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c65/scC/s65.102/4"> <num value="4">(4)</num> <content>Section 65.051.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c65/scC/s65.102/d"> <num value="d">(d)</num> <content>The commission may hear complaints of retail and wholesale customers against deregulated companies that are in the scope of the commission's authority provided by this section.</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 26, eff. September 7, 2005. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 98 (S.B. 980), Sec. 16, eff. September 1, 2011. Acts 2013, 83rd Leg., R.S., Ch. 210 (S.B. 259), Sec. 5, eff. September 1, 2013. Acts 2017, 85th Leg., R.S., Ch. 29 (S.B. 1003), Sec. 1, eff. September 1, 2017.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c65/scD"> <num value="D">SUBCHAPTER D.</num> <heading>TRANSITIONING COMPANY</heading> <section identifier="/us/tx/ut/t2/c65/scD/s65.151"> <num value="65.151">Sec. 65.151.</num> <heading>PROVISIONS APPLICABLE TO TRANSITIONING COMPANY</heading> <subsection identifier="/us/tx/ut/t2/c65/scD/s65.151/a"> <num value="a">(a)</num> <content>Except as provided by Subsection (b), a transitioning company is governed by this subchapter and the provisions of this title that applied to the company immediately before the date the company was classified as a transitioning company. If there is a conflict between this subchapter and the other applicable provisions of this title, this subchapter controls.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c65/scD/s65.151/b"> <num value="b">(b)</num> <content>A transitioning company is not required to fulfill the obligations of a provider of last resort in a deregulated market.</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 26, eff. September 7, 2005. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 98 (S.B. 980), Sec. 17, eff. September 1, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c65/scD/s65.152"> <num value="65.152">Sec. 65.152.</num> <heading>GENERAL REQUIREMENTS</heading> <subsection identifier="/us/tx/ut/t2/c65/scD/s65.152/a"> <num value="a">(a)</num> <chapeau>A transitioning company may:</chapeau> <paragraph identifier="/us/tx/ut/t2/c65/scD/s65.152/1"> <num value="1">(1)</num> <content>exercise pricing flexibility in a market subject only to the price and rate standards prescribed by Sections 65.153 and 65.154; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c65/scD/s65.152/2"> <num value="2">(2)</num> <content>introduce a new service in a market subject only to the price and rate standards prescribed by Sections 65.153 and 65.154.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c65/scD/s65.152/b"> <num value="b">(b)</num> <chapeau>A transitioning company may not be required to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c65/scD/s65.152/1"> <num value="1">(1)</num> <content>comply with retail quality of service standards or reporting requirements in a market that is deregulated; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c65/scD/s65.152/2"> <num value="2">(2)</num> <content>file an earnings report with the commission unless the company is receiving support from the Texas High Cost Universal Service Plan.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 26, eff. September 7, 2005. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 98 (S.B. 980), Sec. 18, eff. September 1, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c65/scD/s65.153"> <num value="65.153">Sec. 65.153.</num> <heading>RATE REQUIREMENTS</heading> <subsection identifier="/us/tx/ut/t2/c65/scD/s65.153/a"> <num value="a">(a)</num> <content>In a market that remains regulated, a transitioning company shall price the company's retail services in accordance with the provisions that applied to that company immediately before the date the company was classified as a transitioning company.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c65/scD/s65.153/b"> <num value="b">(b)</num> <chapeau>In a market that is deregulated, a transitioning company shall price the company's retail services as follows:</chapeau> <paragraph identifier="/us/tx/ut/t2/c65/scD/s65.153/1"> <num value="1">(1)</num> <content>for all services, other than basic local telecommunications service, at any price higher than the service's long run incremental cost; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c65/scD/s65.153/2"> <num value="2">(2)</num> <content>for basic local telecommunications service, at any price higher than the lesser of the service's long run incremental cost or the tariffed price on the date that market was deregulated, provided that the company may not increase the company's rates for stand-alone residential local exchange voice service before the date that the commission has the opportunity to revise the monthly per line support under the Texas High Cost Universal Service Plan pursuant to Section 56.031, regardless of whether the company is an electing company under Chapter 58.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c65/scD/s65.153/c"> <num value="c">(c)</num> <content>Except as provided by Subsection (c-1), in each deregulated market, a transitioning company shall make available to all residential customers uniformly throughout that market the same price, terms, and conditions for all basic and non-basic services, consistent with any pricing flexibility available to such company.</content> <continuation>(c-1) A transitioning company may offer to an individual residential customer a promotional offer that is not available uniformly throughout the market if the company makes the offer through a medium other than direct mail or mass electronic media and the offer is intended to retain or obtain a customer.</continuation> </subsection> <subsection identifier="/us/tx/ut/t2/c65/scD/s65.153/d"> <num value="d">(d)</num> <chapeau>In any market, regardless of whether regulated or deregulated, the transitioning company may not:</chapeau> <paragraph identifier="/us/tx/ut/t2/c65/scD/s65.153/1"> <num value="1">(1)</num> <content>establish a retail rate, term, or condition that is anticompetitive or unreasonably preferential, prejudicial, or discriminatory;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c65/scD/s65.153/2"> <num value="2">(2)</num> <content>establish a retail rate for a basic or non-basic service in a deregulated market that is subsidized either directly or indirectly by a basic or non-basic service provided in an exchange that is not deregulated; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c65/scD/s65.153/3"> <num value="3">(3)</num> <content>engage in predatory pricing or attempt to engage in predatory pricing.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c65/scD/s65.153/e"> <num value="e">(e)</num> <content>A rate that meets the pricing requirements in Subsection (b) shall be deemed compliant with Subsection (d)(2).</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 26, eff. September 7, 2005. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 98 (S.B. 980), Sec. 19, eff. September 1, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c65/scD/s65.154"> <num value="65.154">Sec. 65.154.</num> <heading>RATE AND PRICE REQUIREMENTS NOT APPLICABLE</heading> <subsection identifier="/us/tx/ut/t2/c65/scD/s65.154/a"> <num value="a">(a)</num> <chapeau>A transitioning company is not required to comply with the following requirements prescribed by this title on submission of a written notice to the commission:</chapeau> <paragraph identifier="/us/tx/ut/t2/c65/scD/s65.154/1"> <num value="1">(1)</num> <content>a direct or indirect requirement to price a residential service at, above, or according to the long-run incremental cost of the service or to otherwise use long-run incremental cost in establishing prices for residential services; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c65/scD/s65.154/2"> <num value="2">(2)</num> <content>a requirement to file with the commission a long-run incremental cost study for residential or business services.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c65/scD/s65.154/b"> <num value="b">(b)</num> <chapeau>Notwithstanding Subsection (a), a transitioning company may not:</chapeau> <paragraph identifier="/us/tx/ut/t2/c65/scD/s65.154/1"> <num value="1">(1)</num> <content>establish a retail rate, price, term, or condition that is anticompetitive or unreasonably preferential, prejudicial, or discriminatory;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c65/scD/s65.154/2"> <num value="2">(2)</num> <content>establish a retail rate for a basic or non-basic service in a deregulated market that is subsidized either directly or indirectly by a basic or non-basic service provided in an exchange that is not deregulated; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c65/scD/s65.154/3"> <num value="3">(3)</num> <content>engage in predatory pricing or attempt to engage in predatory pricing.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c65/scD/s65.154/c"> <num value="c">(c)</num> <content>A rate or price for a basic local telecommunications service is not anticompetitive, predatory, or unreasonably preferential, prejudicial, or discriminatory if the rate or price is equal to or greater than the rate or price in the transitioning company's tariff for that service in effect on the date the transitioning company submits notice to the commission under Subsection (a).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c65/scD/s65.154/d"> <num value="d">(d)</num> <chapeau>This section, including Subsection (a)(1), does not affect:</chapeau> <paragraph identifier="/us/tx/ut/t2/c65/scD/s65.154/1"> <num value="1">(1)</num> <content>other law or legal standards governing predatory pricing or anticompetitive conduct; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c65/scD/s65.154/2"> <num value="2">(2)</num> <content>an infrastructure commitment under Chapter 58 or 59.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2011, 82nd Leg., R.S., Ch. 98 (S.B. 980), Sec. 20, eff. January 2, 2012.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c65/scD/s65.155"> <num value="65.155">Sec. 65.155.</num> <heading>COMPLAINT BY AFFECTED PERSON</heading> <subsection identifier="/us/tx/ut/t2/c65/scD/s65.155/a"> <num value="a">(a)</num> <content>An affected person may file a complaint at the commission challenging whether a transitioning company is complying with Section 65.154(b).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c65/scD/s65.155/b"> <num value="b">(b)</num> <content>Notwithstanding Section 65.154(a)(2), the commission may require a transitioning company to submit a long-run incremental cost study for a business service that is the subject of a complaint submitted under Subsection (a).</content> </subsection> <sourceCredit>Added by Acts 2011, 82nd Leg., R.S., Ch. 98 (S.B. 980), Sec. 20, eff. January 2, 2012.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t2/c65/scE"> <num value="E">SUBCHAPTER E.</num> <heading>REDUCTION OF SWITCHED ACCESS RATES</heading> <section identifier="/us/tx/ut/t2/c65/scE/s65.201"> <num value="65.201">Sec. 65.201.</num> <heading>REDUCTION OF SWITCHED ACCESS RATES BY DEREGULATED COMPANY</heading> <subsection identifier="/us/tx/ut/t2/c65/scE/s65.201/a"> <num value="a">(a)</num> <content>On the date the last market of an incumbent local exchange company is deregulated, the company shall reduce both the company's originating and terminating per minute of use switched access rates in each market to parity with the company's respective federal originating and terminating per minute of use switched access rates.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c65/scE/s65.201/b"> <num value="b">(b)</num> <content>After reducing the rates under Subsection (a), a deregulated company shall maintain parity with the company's federal originating and terminating per minute of use switched access rates. If the company's federal originating and terminating per minute of use switched access rates are changed, the company shall change the company's per minute of use switched access rates in each market as necessary to re-achieve parity with the company's federal originating and terminating per minute of use switched access rates.</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 26, eff. September 7, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c65/scE/s65.202"> <num value="65.202">Sec. 65.202.</num> <heading>REDUCTION OF SWITCHED ACCESS RATES BY TRANSITIONING COMPANY WITH MORE THAN THREE MILLION ACCESS LINES</heading> <subsection identifier="/us/tx/ut/t2/c65/scE/s65.202/a"> <num value="a">(a)</num> <chapeau>Notwithstanding any other provision of this title, a transitioning company that has more than three million access lines in service in this state on January 1, 2006, shall:</chapeau> <paragraph identifier="/us/tx/ut/t2/c65/scE/s65.202/1"> <num value="1">(1)</num> <content>on July 1, 2006, reduce both the company's originating and terminating per minute of use switched access rates in each market by an amount equal to 33 percent of the difference in the rates in effect on June 30, 2006, and the company's respective federal originating and terminating per minute of use switched access rates;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c65/scE/s65.202/2"> <num value="2">(2)</num> <content>on July 1, 2007, reduce both the company's originating and terminating per minute of use switched access rates in each market by an amount equal to 33 percent of the difference in the rates in effect on June 30, 2006, and the company's respective federal originating and terminating per minute of use switched access rates; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c65/scE/s65.202/3"> <num value="3">(3)</num> <content>on July 1, 2008, reduce both the company's originating and terminating per minute of use switched access rates in each market to parity with the company's respective federal originating and terminating per minute of use switched access rates.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c65/scE/s65.202/b"> <num value="b">(b)</num> <content>After reducing the rates under Subsection (a), a transitioning company shall maintain parity with the company's federal originating and terminating per minute of use switched access rates. If the company's federal originating and terminating per minute of use switched access rates are changed, the company shall change the company's per minute of use switched access rates in each market as necessary to re-achieve parity with the company's federal originating and terminating per minute of use switched access rates.</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 26, eff. September 7, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c65/scE/s65.203"> <num value="65.203">Sec. 65.203.</num> <heading>REDUCTION OF SWITCHED ACCESS RATES BY CERTAIN TRANSITIONING COMPANIES WITH NOT MORE THAN THREE MILLION ACCESS LINES</heading> <subsection identifier="/us/tx/ut/t2/c65/scE/s65.203/a"> <num value="a">(a)</num> <content>Notwithstanding any other provision of this title, a company that is classified as a transitioning company effective January 1, 2006, and that has not more than three million access lines in service in this state on that date shall reduce both the company's originating and terminating per minute of use switched access rates in each market in accordance with this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c65/scE/s65.203/b"> <num value="b">(b)</num> <chapeau>On July 1, 2006, the transitioning company shall reduce both the company's originating and terminating per minute of use switched access rates in each market by an amount equal to the lesser of:</chapeau> <paragraph identifier="/us/tx/ut/t2/c65/scE/s65.203/1"> <num value="1">(1)</num> <content>25 percent of the difference in the company's rates in effect on June 30, 2006, and the company's respective federal originating and terminating per minute of use switched access rates in effect on that date; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c65/scE/s65.203/2"> <num value="2">(2)</num> <content>an amount derived by multiplying that difference by a percentage derived by dividing the number of the company's markets that are not regulated on July 1, 2006, by the total number of the company's markets on December 30, 2005.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c65/scE/s65.203/c"> <num value="c">(c)</num> <chapeau>On July 1, 2007, the transitioning company shall reduce both the company's originating and terminating per minute of use switched access rates in each market by an amount equal to the lesser of:</chapeau> <paragraph identifier="/us/tx/ut/t2/c65/scE/s65.203/1"> <num value="1">(1)</num> <content>25 percent of the difference in the company's rates in effect on June 30, 2006, and the company's respective federal originating and terminating per minute of use switched access rates in effect on that date; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c65/scE/s65.203/2"> <num value="2">(2)</num> <content>an amount derived by multiplying that difference by a percentage derived by dividing the number of the company's markets that were deregulated in the prior 12 months by the total number of the company's markets on December 30, 2005.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c65/scE/s65.203/d"> <num value="d">(d)</num> <chapeau>On July 1, 2008, the transitioning company shall reduce both the company's originating and terminating per minute of use switched access rates in each market by an amount equal to the lesser of:</chapeau> <paragraph identifier="/us/tx/ut/t2/c65/scE/s65.203/1"> <num value="1">(1)</num> <content>25 percent of the difference in the company's rates in effect on June 30, 2006, and the company's respective federal originating and terminating per minute of use switched access rates in effect on that date; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c65/scE/s65.203/2"> <num value="2">(2)</num> <content>an amount derived by multiplying that difference by a percentage derived by dividing the number of the company's markets that were deregulated in the prior 12 months by the total number of the company's markets on December 30, 2005.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c65/scE/s65.203/e"> <num value="e">(e)</num> <content>On July 1, 2009, and each succeeding year thereafter on July 1, the transitioning company shall reduce both the company's originating and terminating per minute of use switched access rates in each market by an amount derived by multiplying the difference in the company's rates in effect on June 30, 2006, and the company's respective federal originating and terminating per minute of use switched access rates in effect on that date by a percentage derived by dividing the number of the company's markets that were deregulated in the prior 12 months by the total number of the company's markets on December 30, 2005, except that a transitioning company shall be required to reduce both the company's originating and terminating per minute of use switched access charges to parity with the company's respective federal originating and terminating per minute of use switched access charges if more than 75 percent of the transitioning company's markets are not regulated on July 1 of 2009 or any succeeding year.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c65/scE/s65.203/f"> <num value="f">(f)</num> <content>After reducing the rates under Subsection (e), a transitioning company shall maintain parity with the company's federal originating and terminating per minute of use switched access rates. If the company's federal originating and terminating per minute of use switched access rates are changed, the company shall change the company's per minute of use switched access rates in each market as necessary to re-achieve parity with the company's federal originating and terminating per minute of use switched access rates.</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 26, eff. September 7, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c65/scE/s65.204"> <num value="65.204">Sec. 65.204.</num> <heading>REDUCTION OF SWITCHED ACCESS RATES BY NEWLY DESIGNATED TRANSITIONING COMPANY</heading> <subsection identifier="/us/tx/ut/t2/c65/scE/s65.204/a"> <num value="a">(a)</num> <content>Notwithstanding any other provision of this title, a company that is classified as a transitioning company after January 1, 2006, shall reduce both the company's originating and terminating per minute of use switched access rates in each market in accordance with this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c65/scE/s65.204/b"> <num value="b">(b)</num> <chapeau>On the date the company is classified as a transitioning company, the company shall reduce both the company's originating and terminating per minute of use switched access rates in each market by an amount equal to the lesser of:</chapeau> <paragraph identifier="/us/tx/ut/t2/c65/scE/s65.204/1"> <num value="1">(1)</num> <content>25 percent of the difference in the company's rates in effect on the day before the date the company was classified, and the company's respective federal originating and terminating per minute of use switched access rates in effect on that date; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c65/scE/s65.204/2"> <num value="2">(2)</num> <content>an amount derived by multiplying that difference by a percentage derived by dividing the number of the company's markets that are not regulated on the date the company is classified as a transitioning company by the total number of the company's markets on December 30, 2005.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c65/scE/s65.204/c"> <num value="c">(c)</num> <chapeau>On the first anniversary of the date the company is classified as a transitioning company, the company shall reduce both the company's originating and terminating per minute of use switched access rates in each market by an amount equal to the lesser of:</chapeau> <paragraph identifier="/us/tx/ut/t2/c65/scE/s65.204/1"> <num value="1">(1)</num> <content>25 percent of the difference in the company's rates in effect on the day before the date the company was classified, and the company's respective federal originating and terminating per minute of use switched access rates in effect on that date; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c65/scE/s65.204/2"> <num value="2">(2)</num> <content>an amount derived by multiplying that difference by a percentage derived by dividing the number of the company's markets that were deregulated in the prior 12 months by the total number of the company's markets on December 30, 2005.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c65/scE/s65.204/d"> <num value="d">(d)</num> <chapeau>On the second anniversary of the date the company is classified as a transitioning company, the company shall reduce both the company's originating and terminating per minute of use switched access rates in each market by an amount equal to the lesser of:</chapeau> <paragraph identifier="/us/tx/ut/t2/c65/scE/s65.204/1"> <num value="1">(1)</num> <content>25 percent of the difference in the company's rates in effect on the day before the date the company was classified, and the company's respective federal originating and terminating per minute of use switched access rates in effect on that date; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c65/scE/s65.204/2"> <num value="2">(2)</num> <content>an amount derived by multiplying that difference by a percentage derived by dividing the number of the company's markets that were deregulated in the prior 12 months by the total number of the company's markets on December 30, 2005.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c65/scE/s65.204/e"> <num value="e">(e)</num> <content>On the third anniversary of the date the company is classified as a transitioning company and each anniversary thereafter, the company shall reduce both the company's originating and terminating per minute of use switched access rates in each market by an amount derived by multiplying the difference in the company's rates in effect on the day before the date the company was classified as a transitioning company, and the company's respective federal originating and terminating per minute of use switched access rates in effect on that date by a percentage derived by dividing the number of the company's markets that were deregulated in the prior 12 months by the total number of the company's markets on December 30, 2005, except that a transitioning company shall be required to reduce both the company's originating and terminating per minute of use switched access charges to parity with the company's respective federal originating and terminating per minute of use switched access charges if more than 75 percent of the transitioning company's markets are not regulated on July 1 of 2009 or any succeeding year.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c65/scE/s65.204/f"> <num value="f">(f)</num> <content>After reducing the rates under Subsection (e), a transitioning company shall maintain parity with the company's federal originating and terminating per minute of use switched access rates. If the company's federal originating and terminating per minute of use switched access rates are changed, the company shall change the company's per minute of use switched access rates in each market as necessary to re-achieve parity with the company's federal originating and terminating per minute of use switched access rates.</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 26, eff. September 7, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c65/scE/s65.205"> <num value="65.205">Sec. 65.205.</num> <heading>MAINTENANCE OF REDUCTION OR PARITY</heading> <subsection identifier="/us/tx/ut/t2/c65/scE/s65.205/a"> <num value="a">(a)</num> <content>After a deregulated or transitioning company reduces the company's rates under this subchapter, the company may not increase those rates above the applicable rates prescribed by this subchapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c65/scE/s65.205/b"> <num value="b">(b)</num> <content>If a transitioning company's federal per minute of use switched access rates are reduced, the company shall reduce the company's per minute of use switched access rates to not more than the applicable rates prescribed by this subchapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c65/scE/s65.205/c"> <num value="c">(c)</num> <content>Notwithstanding Subsections (a) and (b), a deregulated or transitioning company may decrease the company's per minute of use switched access rates to amounts that are less than the applicable rates prescribed by this subchapter.</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 26, eff. September 7, 2005.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t2/c66"> <num value="66">CHAPTER 66.</num> <heading>STATE-ISSUED CABLE AND VIDEO FRANCHISE</heading> <section identifier="/us/tx/ut/t2/c66/s66.001"> <num value="66.001">Sec. 66.001.</num> <heading>FRANCHISING AUTHORITY</heading> <content>The commission shall be designated as the franchising authority for a state-issued franchise for the provision of cable service or video service.</content> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 27, eff. September 7, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c66/s66.002"> <num value="66.002">Sec. 66.002.</num> <heading>DEFINITIONS</heading> <chapeau>In this chapter:</chapeau> <paragraph identifier="/us/tx/ut/t2/c66/s66.002/1"> <num value="1">(1)</num> <content>"Actual incremental cost" means only current out-of-pocket expenses for labor, equipment repair, equipment replacement, and tax expenses directly associated with the labor or the equipment of a service provider that is necessarily and directly used to provide what were, under a superseded franchise, in-kind services, exclusive of any profit or overhead such as depreciation, amortization, or administrative expense.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c66/s66.002/2"> <num value="2">(2)</num> <content>"Cable service" is defined as set forth in 47 U.S.C. Section 522(6).</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c66/s66.002/3"> <num value="3">(3)</num> <content>"Cable service provider" means a person who provides cable service.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c66/s66.002/4"> <num value="4">(4)</num> <content>"Communications network" means a component or facility that is, wholly or partly, physically located within a public right-of-way and that is used to provide video programming, cable, voice, or data services.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c66/s66.002/5"> <num value="5">(5)</num> <content>"Franchise" means an initial authorization, or renewal of an authorization, issued by a franchising authority, regardless of whether the authorization is designated as a franchise, permit, license, resolution, contract, certificate, agreement, or otherwise, that authorizes the construction and operation of a cable or video services network in the public rights-of-way.</content> <continuation>(6)(A) "Gross revenues" means all consideration of any kind or nature including without limitation cash, credits, property, and in-kind contributions (services or goods) derived by the holder of a state-issued certificate of franchise authority from the operation of the cable service provider's or the video service provider's network to provide cable service or video service within the municipality. Gross revenue shall include all consideration paid to the holder of a state-issued certificate of franchise authority and its affiliates (to the extent either is acting as a provider of a cable service or video service as authorized by this chapter), which shall include but not be limited to the following: (i) all fees charged to subscribers for any and all cable service or video service provided by the holder of a state-issued certificate of franchise authority; (ii) any fee imposed on the holder of a state-issued certificate of franchise authority by this chapter that is passed through and paid by subscribers (including without limitation the franchise fee set forth in this chapter); and (iii) compensation received by the holder of a state-issued certificate of franchise authority or its affiliates that is derived from the operation of the holder of a state-issued certificate of franchise authority's network to provide cable service or video service with respect to commissions that are paid to the holder of a state-issued certificate of franchise authority as compensation for promotion or exhibition of any products or services on the holder of a state-issued certificate of franchise authority's network, such as a "home shopping" or a similar channel, subject to Paragraph (B)(v). Gross revenue includes a pro rata portion of all revenue derived by the holder of a state-issued certificate of franchise authority or its affiliates pursuant to compensation arrangements for advertising derived from the operation of the holder of a state-issued certificate of franchise authority's network to provide cable service or the video service within a municipality, subject to Paragraph (B)(iii). The allocation shall be based on the number of subscribers in the municipality divided by the total number of subscribers in relation to the relevant regional or national compensation arrangement. Advertising commissions paid to third parties shall not be netted against advertising revenue included in gross revenue. Revenue of an affiliate derived from the affiliate's provision of cable service or the video service shall be gross revenue to the extent the treatment of such revenue as revenue of the affiliate and not of the holder of a state-issued certificate of franchise authority has the effect (whether intentional or unintentional) of evading the payment of fees which would otherwise be paid to the municipality. In no event shall revenue of an affiliate be gross revenue to the holder of a state-issued certificate of franchise authority if such revenue is otherwise subject to fees to be paid to the municipality.</continuation> <subparagraph identifier="/us/tx/ut/t2/c66/s66.002/B"> <num value="B">(B)</num> <content>For purposes of this section, "gross revenues" does not include:</content> </subparagraph> </paragraph> <subsection identifier="/us/tx/ut/t2/c66/s66.002/i"> <num value="i">(i)</num> <chapeau>any revenue not actually received, even if billed, such as bad debt;</chapeau> <clause identifier="/us/tx/ut/t2/c66/s66.002/ii"> <num value="ii">(ii)</num> <content>non-cable services or non-video services revenues received by any affiliate or any other person in exchange for supplying goods or services used by the holder of a state-issued certificate of franchise authority to provide cable service or video service;</content> </clause> <clause identifier="/us/tx/ut/t2/c66/s66.002/iii"> <num value="iii">(iii)</num> <content>refunds, rebates, or discounts made to subscribers, leased access providers, advertisers, or a municipality;</content> </clause> <clause identifier="/us/tx/ut/t2/c66/s66.002/iv"> <num value="iv">(iv)</num> <content>any revenues from services classified as non-cable service or non-video service under federal law including without limitation revenue received from telecommunications services; revenue received from information services (but not excluding cable services or video services); and any other revenues attributed by the holder of a state-issued certificate of franchise authority to non-cable service or non-video service in accordance with Federal Communications Commission or commission rules, regulations, standards, or orders;</content> </clause> </subsection> <subsection identifier="/us/tx/ut/t2/c66/s66.002/v"> <num value="v">(v)</num> <chapeau>any revenue paid by subscribers to home shopping programmers directly from the sale of merchandise through any home shopping channel offered as part of the cable services or video services, but not excluding any commissions that are paid to the holder of a state-issued certificate of franchise authority as compensation for promotion or exhibition of any products or services on the holder of a state-issued certificate of franchise authority's network, such as a "home shopping" or a similar channel;</chapeau> <clause identifier="/us/tx/ut/t2/c66/s66.002/vi"> <num value="vi">(vi)</num> <content>the sale of cable services or video services for resale in which the purchaser is required to collect this chapter's fees from the purchaser's customer. Nothing under this chapter is intended to limit state's rights pursuant to 47 U.S.C. Section 542(h);</content> </clause> <clause identifier="/us/tx/ut/t2/c66/s66.002/vii"> <num value="vii">(vii)</num> <content>the provision of cable services or video services to customers at no charge, as required or allowed by this chapter, including without limitation the provision of cable services or video services to public institutions, as required or permitted in this chapter, including without limitation public schools or governmental entities, as required or permitted in this chapter;</content> </clause> <clause identifier="/us/tx/ut/t2/c66/s66.002/viii"> <num value="viii">(viii)</num> <content>any tax of general applicability imposed upon the holder of a state-issued certificate of franchise authority or upon subscribers by a city, state, federal, or any other governmental entity and required to be collected by the holder of a state-issued certificate of franchise authority and remitted to the taxing entity (including, but not limited to, sales and use tax, gross receipts tax, excise tax, utility users tax, public service tax, communication taxes, and fees not imposed by this chapter);</content> </clause> <clause identifier="/us/tx/ut/t2/c66/s66.002/ix"> <num value="ix">(ix)</num> <content>any forgone revenue from the holder of a state-issued certificate of franchise authority's provision of free or reduced cost cable services or video services to any person including without limitation employees of the holder of a state-issued certificate of franchise authority, to the municipality and other public institutions or other institutions as allowed in this chapter; provided, however, that any forgone revenue which the holder of a state-issued certificate of franchise authority chooses not to receive in exchange for trades, barters, services, or other items of value shall be included in gross revenue;</content> </clause> </subsection> <subsection identifier="/us/tx/ut/t2/c66/s66.002/x"> <num value="x">(x)</num> <chapeau>sales of capital assets or sales of surplus equipment that is not used by the purchaser to receive cable services or video services from the holder of a state-issued certificate of franchise authority;</chapeau> <clause identifier="/us/tx/ut/t2/c66/s66.002/xi"> <num value="xi">(xi)</num> <content>directory or Internet advertising revenue including, but not limited to, yellow pages, white pages, banner advertisement, and electronic publishing; and</content> </clause> <clause identifier="/us/tx/ut/t2/c66/s66.002/xii"> <num value="xii">(xii)</num> <content>reimbursement by programmers of marketing costs incurred by the holder of a state-issued franchise for the introduction of new programming that exceed the actual costs.</content> </clause> <subparagraph identifier="/us/tx/ut/t2/c66/s66.002/C"> <num value="C">(C)</num> <content>For purposes of this definition, a provider's network consists solely of the optical spectrum wavelengths, bandwidth, or other current or future technological capacity used for the transmission of video programming over wireline directly to subscribers within the geographic area within the municipality as designated by the provider in its franchise.</content> </subparagraph> <paragraph identifier="/us/tx/ut/t2/c66/s66.002/7"> <num value="7">(7)</num> <content>"Incumbent cable service provider" means the cable service provider serving the largest number of cable subscribers in a particular municipal franchise area on September 1, 2005.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c66/s66.002/8"> <num value="8">(8)</num> <content>"Public right-of-way" means the area on, below, or above a public roadway, highway, street, public sidewalk, alley, waterway, or utility easement in which a municipality has an interest.</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c66/s66.002/9"> <num value="9">(9)</num> <content>"Video programming" means programming provided by, or generally considered comparable to programming provided by, a television broadcast station, as set forth in 47 U.S.C. Section 522(20).</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c66/s66.002/10"> <num value="10">(10)</num> <chapeau>"Video service" means video programming services provided through wireline facilities located at least in part in the public right-of-way without regard to delivery technology, including Internet protocol technology. The term does not include:</chapeau> <subparagraph identifier="/us/tx/ut/t2/c66/s66.002/A"> <num value="A">(A)</num> <content>any video service provided by a commercial mobile service provider as defined in 47 U.S.C. Section 332(d);</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c66/s66.002/B"> <num value="B">(B)</num> <content>direct-to-home satellite services, as defined in 47 U.S.C. Section 303(v), that are transmitted from a satellite directly to a customer's premises without using or accessing a portion of the public right-of-way; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t2/c66/s66.002/C"> <num value="C">(C)</num> <content>any video programming accessed via a service that enables users to access content, information, e-mail, or other services offered over the Internet, including streaming content.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t2/c66/s66.002/11"> <num value="11">(11)</num> <content>"Video service provider" means a video programming distributor that distributes video programming services through wireline facilities located at least in part in the public right-of-way without regard to delivery technology. This term does not include a cable service provider.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 27, eff. September 7, 2005. Amended by: Acts 2025, 89th Leg., R.S., Ch. 786 (S.B. 924), Sec. 1, eff. September 1, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c66/s66.003"> <num value="66.003">Sec. 66.003.</num> <heading>STATE AUTHORIZATION TO PROVIDE CABLE SERVICE OR VIDEO SERVICE</heading> <subsection identifier="/us/tx/ut/t2/c66/s66.003/a"> <num value="a">(a)</num> <content>An entity or person seeking to provide cable service or video service in this state shall file an application for a state-issued certificate of franchise authority with the commission as required by this section. An entity providing cable service or video service under a franchise agreement with a municipality is not subject to this subsection with respect to such municipality until the franchise agreement is terminated under Section 66.004 or until the franchise agreement expires.</content> <continuation>(a-1) The commission shall notify an applicant for a state-issued certificate of franchise authority whether the applicant's affidavit described by Subsection (b) is complete before the 15th business day after the applicant submits the affidavit.</continuation> </subsection> <subsection identifier="/us/tx/ut/t2/c66/s66.003/b"> <num value="b">(b)</num> <chapeau>The commission shall issue a certificate of franchise authority to offer cable service or video service before the 17th business day after receipt of a completed affidavit submitted by the applicant and signed by an officer or general partner of the applicant affirming:</chapeau> <paragraph identifier="/us/tx/ut/t2/c66/s66.003/1"> <num value="1">(1)</num> <content>that the applicant has filed or will timely file with the Federal Communications Commission all forms required by that agency in advance of offering cable service or video service in this state;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c66/s66.003/2"> <num value="2">(2)</num> <content>that the applicant agrees to comply with all applicable federal and state statutes and regulations;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c66/s66.003/3"> <num value="3">(3)</num> <content>that the applicant agrees to comply with all applicable municipal regulations regarding the use and occupation of public rights-of-way in the delivery of the cable service or video service, including the police powers of the municipalities in which the service is delivered;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c66/s66.003/4"> <num value="4">(4)</num> <content>a description of the service area footprint to be served within the municipality, if applicable, otherwise the municipality to be served by the applicant, which may include certain designations of unincorporated areas, which description shall be updated by the applicant prior to the expansion of cable service or video service to a previously undesignated service area and, upon such expansion, notice to the commission of the service area to be served by the applicant; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c66/s66.003/5"> <num value="5">(5)</num> <content>the location of the applicant's principal place of business and the names of the applicant's principal executive officers.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c66/s66.003/c"> <num value="c">(c)</num> <chapeau>The certificate of franchise authority issued by the commission shall contain:</chapeau> <paragraph identifier="/us/tx/ut/t2/c66/s66.003/1"> <num value="1">(1)</num> <content>a grant of authority to provide cable service or video service as requested in the application;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c66/s66.003/2"> <num value="2">(2)</num> <content>a grant of authority to use and occupy the public rights-of-way in the delivery of that service, subject to the laws of this state, including the police powers of the municipalities in which the service is delivered; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c66/s66.003/3"> <num value="3">(3)</num> <content>a statement that the grant of authority is subject to lawful operation of the cable service or video service by the applicant or its successor in interest.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c66/s66.003/d"> <num value="d">(d)</num> <content>The certificate of franchise authority issued by the commission is fully transferable to any successor in interest to the applicant to which it is initially granted. A notice of transfer shall be filed with the commission and the relevant municipality within 14 business days of the completion of such transfer.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c66/s66.003/e"> <num value="e">(e)</num> <content>The certificate of franchise authority issued by the commission may be terminated by the cable service provider or video service provider by submitting notice to the commission.</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 27, eff. September 7, 2005. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 1077 (S.B. 1087), Sec. 1, eff. September 1, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c66/s66.004"> <num value="66.004">Sec. 66.004.</num> <heading>ELIGIBILITY FOR COMMISSION-ISSUED FRANCHISE</heading> <subsection identifier="/us/tx/ut/t2/c66/s66.004/a"> <num value="a">(a)</num> <content>A cable service provider or a video service provider that currently has or had previously received a franchise to provide cable service or video service with respect to such municipalities is not eligible to seek a state-issued certificate of franchise authority under this chapter as to those municipalities until the expiration date of the existing franchise agreement, except as provided by Subsections (b), (b-1), (b-2), (b-3), and (c).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c66/s66.004/b"> <num value="b">(b)</num> <content>Beginning September 1, 2005, a cable service provider or video service provider that is not the incumbent cable service provider and serves fewer than 40 percent of the total cable customers in a particular municipal franchise area may elect to terminate that municipal franchise and seek a state-issued certificate of franchise authority by providing written notice to the commission and the affected municipality before January 1, 2006. The municipal franchise is terminated on the date the commission issues the state-issued certificate of franchise authority.</content> <continuation>(b-1) Beginning September 1, 2011, a cable service provider or video service provider in a municipality with a population of less than 215,000 that was not allowed to or did not terminate a municipal franchise under Subsection (b) may elect to terminate not less than all unexpired franchises in municipalities with a population of less than 215,000 and seek a state-issued certificate of franchise authority for each area served under a terminated municipal franchise by providing written notice to the commission and each affected municipality before January 1, 2012. A municipal franchise is terminated on the date the commission issues a state-issued certificate of franchise authority to the provider for the area served under that terminated franchise.</continuation> <continuation>(b-2) A cable service provider or video service provider in a municipality with a population of at least 215,000 may terminate a municipal franchise in that municipality in the manner described by Subsection (b-1) if:</continuation> <paragraph identifier="/us/tx/ut/t2/c66/s66.004/1"> <num value="1">(1)</num> <content>the cable service provider or video service provider is not the incumbent cable service provider in that municipality; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c66/s66.004/2"> <num value="2">(2)</num> <content>the incumbent cable service provider received a state-issued certificate of franchise authority from the commission before September 1, 2011.</content> <continuation>(b-3) A municipality with a population of at least 215,000 may enter into an agreement with any cable service provider in the municipality to terminate a municipal cable franchise before the expiration of the franchise. To the extent that the mutually agreed on terms and conditions for early termination of the unexpired municipal cable franchise conflict with a provision of this chapter, the agreed on terms and conditions control.</continuation> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c66/s66.004/c"> <num value="c">(c)</num> <content>A cable service provider that elects under Subsection (b), (b-1), or (b-2) to terminate an existing municipal franchise is responsible for remitting to the affected municipality before the 91st day after the date the municipal franchise is terminated any accrued but unpaid franchise fees due under the terminated franchise. If the cable service provider has credit remaining from prepaid franchise fees, the provider may deduct the amount of the remaining credit from any future fees or taxes it must pay to the municipality, either directly or through the comptroller.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c66/s66.004/d"> <num value="d">(d)</num> <content>For purposes of this section, a cable service provider or video service provider will be deemed to have or have had a franchise to provide cable service or video service in a specific municipality if any affiliates or successor entity of the cable or video provider has or had a franchise agreement granted by that specific municipality.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c66/s66.004/e"> <num value="e">(e)</num> <content>The terms "affiliates or successor entity" in this section shall include but not be limited to any entity receiving, obtaining, or operating under a municipal cable or video franchise through merger, sale, assignment, restructuring, or any other type of transaction.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c66/s66.004/f"> <num value="f">(f)</num> <content>Except as provided in this chapter, nothing in this chapter is intended to abrogate, nullify, or adversely affect in any way the contractual rights, duties, and obligations existing and incurred by a cable service provider or a video service provider before the date a franchise expires or the date a provider terminates a franchise under Subsection (b-1) or (b-2), as applicable, and owed or owing to any private person, firm, partnership, corporation, or other entity including without limitation those obligations measured by and related to the gross revenue hereafter received by the holder of a state-issued certificate of franchise authority for services provided in the geographic area to which such prior franchise or permit applies. All liens, security interests, royalties, and other contracts, rights, and interests in effect on September 1, 2005, or the date a franchise is terminated under Subsection (b-1) or (b-2) shall continue in full force and effect, without the necessity for renewal, extension, or continuance, and shall be paid and performed by the holder of a state-issued certificate of franchise authority, and shall apply as though the revenue generated by the holder of a state-issued certificate of franchise authority continued to be generated pursuant to the permit or franchise issued by the prior local franchising authority or municipality within the geographic area to which the prior permit or franchise applies. It shall be a condition to the issuance and continuance of a state-issued certificate of franchise authority that the private contractual rights and obligations herein described continue to be honored, paid, or performed to the same extent as though the cable service provider continued to operate under its prior franchise or permit, for the duration of such state-issued certificate of franchise authority and any renewals or extensions thereof, and that the applicant so agrees. Any person, firm, partnership, corporation, or other entity holding or claiming rights herein reserved may enforce same by an action brought in a court of competent jurisdiction.</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 27, eff. September 7, 2005. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 1077 (S.B. 1087), Sec. 2, eff. September 1, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c66/s66.005"> <num value="66.005">Sec. 66.005.</num> <heading>FRANCHISE FEE</heading> <subsection identifier="/us/tx/ut/t2/c66/s66.005/a"> <num value="a">(a)</num> <content>The holder of a state-issued certificate of franchise authority shall pay each municipality in which it provides cable service or video service a franchise fee of five percent based upon the definition of gross revenues as set forth in this chapter. That same franchise fee structure shall apply to any unincorporated areas that are annexed by a municipality after the effective date of the state-issued certificate of franchise authority.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c66/s66.005/b"> <num value="b">(b)</num> <content>The franchise fee payable under this section is to be paid quarterly, within 45 days after the end of the quarter for the preceding calendar quarter. Each payment shall be accompanied by a summary explaining the basis for the calculation of the fee. A municipality may review the business records of the cable service provider or video service provider to the extent necessary to ensure compensation in accordance with Subsection (a), provided that the municipality may only review records that relate to the 48-month period preceding the date of the last franchise fee payment. Each party shall bear the party's own costs of the examination. A municipality may, in the event of a dispute concerning compensation under this section, bring an action in a court of competent jurisdiction.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c66/s66.005/c"> <num value="c">(c)</num> <content>The holder of a state-issued certificate of franchise authority may recover from the provider's customers any fee imposed by this chapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c66/s66.005/d"> <num value="d">(d)</num> <content>In this subsection, "affiliated group" has the meaning assigned by Section 171.0001, Tax Code. A holder of a state-issued certificate of franchise authority is not subject to the fee imposed under Subsection (a) for a given calendar year if the holder determines that the sum of fees due from the holder and any member of the holder's affiliated group to all municipalities in this state under Subsection (a) is less than the sum of the compensation due from the holder and any member of the holder's affiliated group to all municipalities in this state under Section 283.051, Local Government Code. The determination under this subsection for a given year must be based on amounts actually paid, or amounts that would have been paid notwithstanding this subsection, during the 12-month period ending June 30 of the immediately preceding calendar year by the holder and any member of the holder's affiliated group. In the case of a conflict between this subsection and Section 283.055, Local Government Code, this subsection prevails.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c66/s66.005/e"> <num value="e">(e)</num> <content>Notwithstanding the aggregate amount of compensation or fees paid in this state calculated under Subsection (d), Subsection (d) does not exempt a holder of a state-issued certificate of franchise authority from paying the fee imposed under Subsection (a) to a municipality if the holder is not required to pay compensation under Section 283.051, Local Government Code, to that municipality. This subsection applies only to a municipality described in this subsection and does not limit the application of Subsection (d) to any other municipality. Nothing in this subsection affects the application of Section 66.006 or 66.009 to any holder of a state-issued certificate of franchise authority.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c66/s66.005/f"> <num value="f">(f)</num> <content>A holder of a state-issued certificate of franchise authority shall file, not later than October 1 of each year, an annual written notification with each municipality in which the holder provides cable or video services of the holder's requirement to pay the fee under Subsection (a) or exemption from the requirement to pay the fee under Subsection (d) for the following calendar year.</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 27, eff. September 7, 2005. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 1077 (S.B. 1087), Sec. 3, eff. September 1, 2011. Acts 2019, 86th Leg., R.S., Ch. 980 (S.B. 1152), Sec. 2, eff. September 1, 2019.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c66/s66.006"> <num value="66.006">Sec. 66.006.</num> <heading>IN-KIND CONTRIBUTIONS TO MUNICIPALITY</heading> <subsection identifier="/us/tx/ut/t2/c66/s66.006/a"> <num value="a">(a)</num> <content>Until the expiration or termination of the incumbent cable service provider's agreement, the holder of a state-issued certificate of franchise authority shall pay a municipality in which it is offering cable service or video service the same cash payments on a per subscriber basis as required by the incumbent cable service provider's franchise agreement. All cable service providers and all video service providers shall report quarterly to the municipality the total number of subscribers served within the municipality. The amount paid by the holder of a state-issued certificate of franchise authority shall be calculated quarterly by the municipality by multiplying the amount of cash payment under the incumbent cable service provider's franchise agreement by a number derived by dividing the number of subscribers served by a video service provider or cable service provider by the total number of video or cable service subscribers in the municipality. Such pro rata payments are to be paid quarterly to the municipality within 45 days after the end of the quarter for the preceding calendar quarter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c66/s66.006/b"> <num value="b">(b)</num> <content>On the expiration or termination of the incumbent cable service provider's agreement, the holder of a state-issued certificate of franchise authority shall pay a municipality in which it is offering cable service or video service one percent of the provider's gross revenues, as defined by this chapter, or at the municipality's election, the per subscriber fee that was paid to the municipality under the expired or terminated incumbent cable service provider's agreement, in lieu of in-kind compensation and grants. Payments under this subsection shall be paid in the same manner as outlined in Section 66.005(b).</content> </subsection> <subsection identifier="/us/tx/ut/t2/c66/s66.006/c"> <num value="c">(c)</num> <content>All fees paid to municipalities under this section are paid in accordance with 47 U.S.C. Sections 531 and 541(a)(4)(B) and may be used by the municipality as allowed by federal law; further, these payments are not chargeable as a credit against the franchise fee payments authorized under this chapter.</content> <continuation>(c-1) The holder of a state-issued certificate of franchise authority shall include with a fee paid to a municipality under this section a statement identifying the fee.</continuation> <continuation>(c-2) A municipality that receives fees under this section:</continuation> <paragraph identifier="/us/tx/ut/t2/c66/s66.006/1"> <num value="1">(1)</num> <content>shall maintain revenue from the fees in a separate account established for that purpose;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c66/s66.006/2"> <num value="2">(2)</num> <content>may not commingle revenue from the fees with any other money;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c66/s66.006/3"> <num value="3">(3)</num> <content>shall maintain a record of each deposit to and disbursement from the separate account, including a record of the payee and purpose of each disbursement; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c66/s66.006/4"> <num value="4">(4)</num> <content>may not spend revenue from the fees except directly from the separate account.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c66/s66.006/d"> <num value="d">(d)</num> <chapeau>The following services shall continue to be provided by the cable provider that was furnishing services pursuant to its municipal cable franchise until the expiration or termination of the franchise and thereafter as provided in Subdivisions (1) and (2) below:</chapeau> <paragraph identifier="/us/tx/ut/t2/c66/s66.006/1"> <num value="1">(1)</num> <content>institutional network capacity, however defined or referred to in the municipal cable franchise but generally referring to a private line data network capacity for use by the municipality for noncommercial purposes, shall continue to be provided at the same capacity as was provided to the municipality prior to the date of expiration or termination, provided that the municipality will compensate the provider for the actual incremental cost of the capacity; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c66/s66.006/2"> <num value="2">(2)</num> <content>cable services to community public buildings, such as municipal buildings and public schools, shall continue to be provided to the same extent provided immediately prior to the date of the termination. On the expiration or termination of the franchise agreement, a provider that provides the services may deduct from the franchise fee to be paid to the municipality an amount equal to the actual incremental cost of the services if the municipality requires the services after that date. Such cable service generally refers to the existing cable drop connections to such facilities and the tier of cable service provided pursuant to the franchise at the time of the expiration or termination.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 27, eff. September 7, 2005. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 1077 (S.B. 1087), Sec. 4, eff. September 1, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c66/s66.007"> <num value="66.007">Sec. 66.007.</num> <heading>BUILD-OUT</heading> <content>The holder of a state-issued certificate of franchise authority shall not be required to comply with mandatory build-out provisions.</content> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 27, eff. September 7, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c66/s66.008"> <num value="66.008">Sec. 66.008.</num> <heading>CUSTOMER SERVICE STANDARDS</heading> <content>The holder of a state-issued certificate of franchise authority shall comply with customer service requirements consistent with 47 C.F.R. Section 76.309(c) until there are two or more providers offering service, excluding direct-to-home satellite service, in the relevant municipality.</content> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 27, eff. September 7, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c66/s66.009"> <num value="66.009">Sec. 66.009.</num> <heading>PUBLIC, EDUCATIONAL, AND GOVERNMENTAL ACCESS CHANNELS</heading> <subsection identifier="/us/tx/ut/t2/c66/s66.009/a"> <num value="a">(a)</num> <content>Not later than 120 days after a request by a municipality, the holder of a state-issued certificate of franchise authority shall provide the municipality with capacity in its communications network to allow public, educational, and governmental (PEG) access channels for noncommercial programming.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c66/s66.009/b"> <num value="b">(b)</num> <content>The holder of a state-issued certificate of franchise authority shall provide no fewer than the number of PEG access channels a municipality has activated under the incumbent cable service provider's franchise agreement as of September 1, 2005.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c66/s66.009/c"> <num value="c">(c)</num> <chapeau>If a municipality did not have the maximum number of PEG access channels as of September 1, 2005, as provided by Subdivisions (1) and (2) based on the municipality's population on that date, the cable service provider or video service provider shall furnish at the request of the municipality:</chapeau> <paragraph identifier="/us/tx/ut/t2/c66/s66.009/1"> <num value="1">(1)</num> <content>up to three PEG channels for a municipality with a population of at least 50,000; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c66/s66.009/2"> <num value="2">(2)</num> <content>up to two PEG channels for a municipality with a population of less than 50,000.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c66/s66.009/d"> <num value="d">(d)</num> <content>Any PEG channel provided pursuant to this section that is not utilized by the municipality for at least eight hours a day shall no longer be made available to the municipality, but may be programmed at the cable service provider's or video service provider's discretion. At such time as the municipality can certify to the cable service provider or video service provider a schedule for at least eight hours of daily programming, the cable service provider or video service provider shall restore the previously lost channel but shall be under no obligation to carry that channel on a basic or analog tier.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c66/s66.009/e"> <num value="e">(e)</num> <content>In the event a municipality has not utilized the minimum number of access channels as permitted by Subsection (c), access to the additional channel capacity allowed in Subsection (c) shall be provided upon 90 days' written notice if the municipality meets the following standard: if a municipality has one active PEG channel and wishes to activate an additional PEG channel, the initial channel shall be considered to be substantially utilized when 12 hours are programmed on that channel each calendar day. In addition, at least 40 percent of the 12 hours of programming for each business day on average over each calendar quarter must be nonrepeat programming. Nonrepeat programming shall include the first three video-castings of a program. If a municipality is entitled to three PEG channels under Subsection (c) and has in service two active PEG channels, each of the two active channels shall be considered to be substantially utilized when 12 hours are programmed on each channel each calendar day and at least 50 percent of the 12 hours of programming for each business day on average over each calendar quarter is nonrepeat programming for three consecutive calendar quarters.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c66/s66.009/f"> <num value="f">(f)</num> <content>The operation of any PEG access channel provided pursuant to this section shall be the responsibility of the municipality receiving the benefit of such channel, and the holder of a state-issued certificate of franchise authority bears only the responsibility for the transmission of such channel. The holder of a state-issued certificate of franchise authority shall be responsible for providing the connectivity to each PEG access channel distribution point up to the first 200 feet.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c66/s66.009/g"> <num value="g">(g)</num> <content>The municipality must ensure that all transmissions, content, or programming to be transmitted over a channel or facility by a holder of a state-issued certificate of franchise authority are provided or submitted to the cable service provider or video service provider in a manner or form that is capable of being accepted and transmitted by a provider, without requirement for additional alteration or change in the content by the provider, over the particular network of the cable service provider or video service provider, which is compatible with the technology or protocol utilized by the cable service provider or video service provider to deliver services.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c66/s66.009/h"> <num value="h">(h)</num> <content>Where technically feasible, the holder of a state-issued certificate of franchise authority that is not an incumbent cable service provider and an incumbent cable service provider, including an incumbent cable service provider that holds a state-issued certificate of franchise authority issued under Section 66.004(b-1), shall use reasonable efforts to interconnect their cable or video systems for the purpose of providing PEG programming. Interconnection may be accomplished by direct cable, microwave link, satellite, or other reasonable method of connection. The holder of a state-issued certificate of franchise authority and the incumbent cable service provider shall negotiate in good faith, and the incumbent cable service provider may not withhold interconnection of PEG channels.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c66/s66.009/i"> <num value="i">(i)</num> <content>A court of competent jurisdiction shall have exclusive jurisdiction to enforce any requirement under this section.</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 27, eff. September 7, 2005. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 1077 (S.B. 1087), Sec. 5, eff. September 1, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c66/s66.010"> <num value="66.010">Sec. 66.010.</num> <heading>NONDISCRIMINATION BY MUNICIPALITY</heading> <subsection identifier="/us/tx/ut/t2/c66/s66.010/a"> <num value="a">(a)</num> <content>A municipality shall allow the holder of a state-issued certificate of franchise authority to install, construct, and maintain a communications network within a public right-of-way and shall provide the holder of a state-issued certificate of franchise authority with open, comparable, nondiscriminatory, and competitively neutral access to the public right-of-way. All use of a public right-of-way by the holder of a state-issued certificate of franchise authority is nonexclusive and subject to Section 66.011.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c66/s66.010/b"> <num value="b">(b)</num> <chapeau>A municipality may not discriminate against the holder of a state-issued certificate of franchise authority regarding:</chapeau> <paragraph identifier="/us/tx/ut/t2/c66/s66.010/1"> <num value="1">(1)</num> <content>the authorization or placement of a communications network in a public right-of-way;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c66/s66.010/2"> <num value="2">(2)</num> <content>access to a building; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c66/s66.010/3"> <num value="3">(3)</num> <content>a municipal utility pole attachment term.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 27, eff. September 7, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c66/s66.011"> <num value="66.011">Sec. 66.011.</num> <heading>MUNICIPAL POLICE POWER; OTHER AUTHORITY</heading> <subsection identifier="/us/tx/ut/t2/c66/s66.011/a"> <num value="a">(a)</num> <chapeau>A municipality may enforce police power-based regulations in the management of a public right-of-way that apply to the holder of a state-issued certificate of franchise authority within the municipality. A municipality may enforce police power-based regulations in the management of the activities of the holder of a state-issued certificate of franchise authority to the extent that they are reasonably necessary to protect the health, safety, and welfare of the public. Police power-based regulation of the holder of a state-issued certificate of franchise authority's use of the public right-of-way must be competitively neutral and may not be unreasonable or discriminatory. A municipality may not impose on activities of the holder of a state-issued certificate of franchise authority a requirement:</chapeau> <paragraph identifier="/us/tx/ut/t2/c66/s66.011/1"> <num value="1">(1)</num> <content>that particular business offices be located in the municipality;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c66/s66.011/2"> <num value="2">(2)</num> <content>regarding the filing of reports and documents with the municipality that are not required by state or federal law and that are not related to the use of the public right-of-way except that a municipality may request maps and records maintained in the ordinary course of business for purposes of locating the portions of a communications network that occupy public rights-of-way. Any maps or records of the location of a communications network received by a municipality shall be confidential and exempt from disclosure under Chapter 552, Government Code, and may be used by a municipality only for the purpose of planning and managing construction activity in the public right-of-way. A municipality may not request information concerning the capacity or technical configuration of the holder of a state-issued certificate of franchise authority's facilities;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c66/s66.011/3"> <num value="3">(3)</num> <content>for the inspection of the holder of a state-issued certificate of franchise authority's business records except to extent permitted under Section 66.005(b);</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c66/s66.011/4"> <num value="4">(4)</num> <content>for the approval of transfers of ownership or control of the holder of a state-issued certificate of franchise authority's business, except that a municipality may require that the holder of a state-issued certificate of franchise authority maintain a current point of contact and provide notice of a transfer within a reasonable time; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c66/s66.011/5"> <num value="5">(5)</num> <content>that the holder of a state-issued certificate of franchise authority that is self-insured under the provisions of state law obtain insurance or bonding for any activities within the municipality, except that a self-insured provider shall provide substantially the same defense and claims processing as an insured provider. A bond may not be required from a provider for any work consisting of aerial construction except that a reasonable bond may be required of a provider that cannot demonstrate a record of at least four years' performance of work in any municipal public right-of-way free of currently unsatisfied claims by a municipality for damage to the right-of-way.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t2/c66/s66.011/b"> <num value="b">(b)</num> <content>Notwithstanding any other law, a municipality may require the issuance of a construction permit, without cost, to the holder of a state-issued certificate of franchise authority that is locating facilities in or on a public right-of-way in the municipality. The terms of the permit shall be consistent with construction permits issued to other persons excavating in a public right-of-way.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c66/s66.011/c"> <num value="c">(c)</num> <content>In the exercise of its lawful regulatory authority, a municipality shall promptly process all valid and administratively complete applications of the holder of a state-issued certificate of franchise authority for a permit, license, or consent to excavate, set poles, locate lines, construct facilities, make repairs, affect traffic flow, or obtain zoning or subdivision regulation approvals or other similar approvals. A municipality shall make every reasonable effort not to delay or unduly burden the provider in the timely conduct of the provider's business.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c66/s66.011/d"> <num value="d">(d)</num> <content>If there is an emergency necessitating response work or repair, the holder of a state-issued certificate of franchise authority may begin the repair or emergency response work or take any action required under the circumstances without prior approval from the affected municipality, if the holder of a state-issued certificate of franchise authority notifies the municipality as promptly as possible after beginning the work and later obtains any approval required by a municipal ordinance applicable to emergency response work.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c66/s66.011/e"> <num value="e">(e)</num> <content>The commission shall have no jurisdiction to review such police power-based regulations and ordinances adopted by a municipality to manage the public rights-of-way.</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 27, eff. September 7, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c66/s66.012"> <num value="66.012">Sec. 66.012.</num> <heading>INDEMNITY IN CONNECTION WITH RIGHT-OF-WAY; NOTICE OF LIABILITY</heading> <subsection identifier="/us/tx/ut/t2/c66/s66.012/a"> <num value="a">(a)</num> <content>The holder of a state-issued certificate of franchise authority shall indemnify and hold a municipality and its officers and employees harmless against any and all claims, lawsuits, judgments, costs, liens, losses, expenses, fees (including reasonable attorney's fees and costs of defense), proceedings, actions, demands, causes of action, liability, and suits of any kind and nature, including personal or bodily injury (including death), property damage, or other harm for which recovery of damages is sought, that is found by a court of competent jurisdiction to be caused solely by the negligent act, error, or omission of the holder of a state-issued certificate of franchise authority or any agent, officer, director, representative, employee, affiliate, or subcontractor of the holder of a state-issued certificate of franchise authority or their respective officers, agents, employees, directors, or representatives, while installing, repairing, or maintaining facilities in a public right-of-way. The indemnity provided by this subsection does not apply to any liability resulting from the negligence of the municipality or its officers, employees, contractors, or subcontractors. If the holder of a state-issued certificate of franchise authority and the municipality are found jointly liable by a court of competent jurisdiction, liability shall be apportioned comparatively in accordance with the laws of this state without, however, waiving any governmental immunity available to the municipality under state law and without waiving any defenses of the parties under state law. This subsection is solely for the benefit of the municipality and the holder of a state-issued certificate of franchise authority and does not create or grant any rights, contractual or otherwise, for or to any other person or entity.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c66/s66.012/b"> <num value="b">(b)</num> <content>The holder of a state-issued certificate of franchise authority and a municipality shall promptly advise the other in writing of any known claim or demand against the holder of a state-issued certificate of franchise authority or the municipality related to or arising out of the holder of a state-issued certificate of franchise authority's activities in a public right-of-way.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c66/s66.012/c"> <num value="c">(c)</num> <content>The commission shall have no jurisdiction to review such police power-based regulations and ordinances adopted by a municipality to manage the public rights-of-way.</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 27, eff. September 7, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c66/s66.013"> <num value="66.013">Sec. 66.013.</num> <heading>MUNICIPAL AUTHORITY</heading> <chapeau>In addition to a municipality's authority to exercise its nondiscriminatory police power with respect to public rights-of-way under current law, a municipality's authority to regulate the holder of state-issued certificate of franchise authority is limited to:</chapeau> <paragraph identifier="/us/tx/ut/t2/c66/s66.013/1"> <num value="1">(1)</num> <content>a requirement that the holder of a state-issued certificate of franchise authority who is providing cable service or video service within the municipality register with the municipality and maintain a point of contact;</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c66/s66.013/2"> <num value="2">(2)</num> <content>the establishment of reasonable guidelines regarding the use of public, educational, and governmental access channels; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t2/c66/s66.013/3"> <num value="3">(3)</num> <content>submitting reports within 30 days on the customer service standards referenced in Section 66.008 if the provider is subject to those standards and has continued and unresolved customer service complaints indicating a clear failure on the part of the holder of a state-issued certificate of franchise authority to comply with the standards.</content> </paragraph> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 27, eff. September 7, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c66/s66.014"> <num value="66.014">Sec. 66.014.</num> <heading>DISCRIMINATION PROHIBITED</heading> <subsection identifier="/us/tx/ut/t2/c66/s66.014/a"> <num value="a">(a)</num> <content>The purpose of this section is to prevent discrimination among potential residential subscribers.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c66/s66.014/b"> <num value="b">(b)</num> <content>A cable service provider or video service provider that has been granted a state-issued certificate of franchise authority may not deny access to service to any group of potential residential subscribers because of the income of the residents in the local area in which such group resides.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c66/s66.014/c"> <num value="c">(c)</num> <content>An affected person may seek enforcement of the requirements described by Subsection (b) by initiating a proceeding with the commission. A municipality within which the potential residential cable service or video service subscribers referenced in Subsection (b) may be considered an affected person for purposes of this section.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c66/s66.014/d"> <num value="d">(d)</num> <content>The holder of a state-issued certificate of franchise authority shall have a reasonable period of time to become capable of providing cable service or video service to all households within the designated franchise area as defined in Section 66.003(b)(4) and may satisfy the requirements of this section through the use of an alternative technology that provides comparable content, service, and functionality.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c66/s66.014/e"> <num value="e">(e)</num> <content>Notwithstanding any provision of this chapter, the commission has the authority to make the determination regarding the comparability of the technology and the service provided. Notwithstanding any provision of this chapter, the commission has the authority to monitor the deployment of cable services, video services, or alternate technology.</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 27, eff. September 7, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c66/s66.015"> <num value="66.015">Sec. 66.015.</num> <heading>COMPLIANCE</heading> <subsection identifier="/us/tx/ut/t2/c66/s66.015/a"> <num value="a">(a)</num> <content>Should the holder of a state-issued certificate of franchise authority be found by a court of competent jurisdiction to be in noncompliance with the requirements of this chapter, the court shall order the holder a state-issued certificate of franchise authority, within a specified reasonable period of time, to cure such noncompliance. Failure to comply shall subject the holder of the state-issued franchise of franchise authority to penalties as the court shall reasonably impose, up to and including revocation of the state-issued certificate of franchise authority granted under this chapter.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c66/s66.015/b"> <num value="b">(b)</num> <content>A municipality within which the provider offers cable service or video service shall be an appropriate party in any such litigation.</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 27, eff. September 7, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c66/s66.016"> <num value="66.016">Sec. 66.016.</num> <heading>APPLICABILITY OF OTHER LAWS</heading> <subsection identifier="/us/tx/ut/t2/c66/s66.016/a"> <num value="a">(a)</num> <content>Nothing in this chapter shall be interpreted to prevent a voice provider, cable service provider or video service provider, or municipality from seeking clarification of its rights and obligations under federal law or to exercise any right or authority under federal or state law.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c66/s66.016/b"> <num value="b">(b)</num> <content>Nothing in this chapter shall limit the ability of a municipality under existing law to receive compensation for use of the public rights-of-way from entities determined not to be subject to all or part of this chapter, including but not limited to provider of Internet protocol cable or video services, unless such payments are expressly prohibited by federal law.</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 27, eff. September 7, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t2/c66/s66.017"> <num value="66.017">Sec. 66.017.</num> <heading>PRESERVATION OF CERTAIN DUTIES</heading> <subsection identifier="/us/tx/ut/t2/c66/s66.017/a"> <num value="a">(a)</num> <content>The enactment of Sections 66.002(10)(B) and (C) does not affect the obligation of a person who holds a state-issued certificate of franchise authority on September 1, 2025, to provide the compensation required under this chapter for use of a public right-of-way.</content> </subsection> <subsection identifier="/us/tx/ut/t2/c66/s66.017/b"> <num value="b">(b)</num> <content>The enactment of Sections 66.002(10)(B) and (C) does not affect the application of this chapter to compensation with respect to services described by those sections provided before September 1, 2025, by a person who was involved in litigation regarding this chapter on January 1, 2025.</content> </subsection> <sourceCredit>Added by Acts 2025, 89th Leg., R.S., Ch. 786 (S.B. 924), Sec. 2, eff. September 1, 2025.</sourceCredit> </section> </chapter> <num value="3">TITLE 3.</num> <heading>GAS REGULATION</heading> <chapter identifier="/us/tx/ut/t3/c101"> <num value="101">CHAPTER 101.</num> <heading>GENERAL PROVISIONS AND OFFICE OF PUBLIC UTILITY COUNSEL</heading> <subchapter identifier="/us/tx/ut/t3/c101/scA"> <num value="A">SUBCHAPTER A.</num> <heading>GENERAL PROVISIONS</heading> <section identifier="/us/tx/ut/t3/c101/scA/s101.001"> <num value="101.001">Sec. 101.001.</num> <heading>SHORT TITLE</heading> <content>This subtitle may be cited as the Gas Utility Regulatory Act.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c101/scA/s101.002"> <num value="101.002">Sec. 101.002.</num> <heading>PURPOSE AND FINDINGS</heading> <subsection identifier="/us/tx/ut/t3/c101/scA/s101.002/a"> <num value="a">(a)</num> <content>This subtitle is enacted to protect the public interest inherent in the rates and services of gas utilities. The purpose of this subtitle is to establish a comprehensive and adequate regulatory system for gas utilities to assure rates, operations, and services that are just and reasonable to the consumers and to the utilities.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c101/scA/s101.002/b"> <num value="b">(b)</num> <content>Gas utilities 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.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c101/scA/s101.003"> <num value="101.003">Sec. 101.003.</num> <heading>DEFINITIONS</heading> <chapeau>In this subtitle:</chapeau> <paragraph identifier="/us/tx/ut/t3/c101/scA/s101.003/1"> <num value="1">(1)</num> <chapeau>"Affected person" means:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c101/scA/s101.003/A"> <num value="A">(A)</num> <content>a gas utility affected by an action of a regulatory authority;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c101/scA/s101.003/B"> <num value="B">(B)</num> <content>a person whose utility service or rates are affected by a proceeding before a regulatory authority; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c101/scA/s101.003/C"> <num value="C">(C)</num> <content>a person who:</content> </subparagraph> </paragraph> <subsection identifier="/us/tx/ut/t3/c101/scA/s101.003/i"> <num value="i">(i)</num> <chapeau>is a competitor of a gas utility with respect to a service performed by the utility; or</chapeau> <clause identifier="/us/tx/ut/t3/c101/scA/s101.003/ii"> <num value="ii">(ii)</num> <content>wants to enter into competition with a gas utility.</content> </clause> <paragraph identifier="/us/tx/ut/t3/c101/scA/s101.003/2"> <num value="2">(2)</num> <chapeau>"Affiliate" means:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c101/scA/s101.003/A"> <num value="A">(A)</num> <content>a person who directly or indirectly owns or holds at least five percent of the voting securities of a gas utility;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c101/scA/s101.003/B"> <num value="B">(B)</num> <content>a person in a chain of successive ownership of at least five percent of the voting securities of a gas utility;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c101/scA/s101.003/C"> <num value="C">(C)</num> <content>a corporation that has at least five percent of its voting securities owned or controlled, directly or indirectly, by a gas utility;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c101/scA/s101.003/D"> <num value="D">(D)</num> <content>a corporation that has at least five percent of its voting securities owned or controlled, directly or indirectly, by:</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c101/scA/s101.003/i"> <num value="i">(i)</num> <chapeau>a person who directly or indirectly owns or controls at least five percent of the voting securities of a gas utility; or</chapeau> <clause identifier="/us/tx/ut/t3/c101/scA/s101.003/ii"> <num value="ii">(ii)</num> <content>a person in a chain of successive ownership of at least five percent of the voting securities of a gas utility;</content> </clause> <subparagraph identifier="/us/tx/ut/t3/c101/scA/s101.003/E"> <num value="E">(E)</num> <content>a person who is an officer or director of a gas utility or of a corporation in a chain of successive ownership of at least five percent of the voting securities of a gas utility; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c101/scA/s101.003/F"> <num value="F">(F)</num> <content>a person determined to be an affiliate under Section 101.004.</content> </subparagraph> <paragraph identifier="/us/tx/ut/t3/c101/scA/s101.003/3"> <num value="3">(3)</num> <content>"Allocation" means the division among municipalities or among municipalities and unincorporated areas of the plant, revenues, expenses, taxes, and reserves of a gas utility used to provide gas utility service in a municipality or for a municipality and unincorporated areas.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c101/scA/s101.003/4"> <num value="4">(4)</num> <content>"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, except as expressly provided by this subtitle.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c101/scA/s101.003/5"> <num value="5">(5)</num> <content>"Counsellor" means the chief executive of the Office of Public Utility Counsel.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c101/scA/s101.003/6"> <num value="6">(6)</num> <content>"Facilities" means all of the plant and equipment of a gas 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 gas utility.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c101/scA/s101.003/7"> <num value="7">(7)</num> <chapeau>"Gas utility" includes a person or river authority that owns or operates for compensation in this state equipment or facilities to transmit or distribute combustible hydrocarbon natural gas or synthetic natural gas for sale or resale in a manner not subject to the jurisdiction of the Federal Energy Regulatory Commission under the Natural Gas Act (15 U.S.C. Section 717 et seq.). The term includes a lessee, trustee, or receiver of a gas utility. The term does not include:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c101/scA/s101.003/A"> <num value="A">(A)</num> <content>a municipal corporation;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c101/scA/s101.003/B"> <num value="B">(B)</num> <content>a person or river authority to the extent the person or river authority:</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c101/scA/s101.003/i"> <num value="i">(i)</num> <chapeau>produces, gathers, transports, or sells natural gas or synthetic natural gas under Section 121.004 or 121.005;</chapeau> <clause identifier="/us/tx/ut/t3/c101/scA/s101.003/ii"> <num value="ii">(ii)</num> <content>distributes or sells liquefied petroleum gas; or</content> </clause> <clause identifier="/us/tx/ut/t3/c101/scA/s101.003/iii"> <num value="iii">(iii)</num> <content>transports, delivers, or sells natural gas for fuel for irrigation wells or any other direct agricultural use;</content> </clause> <subparagraph identifier="/us/tx/ut/t3/c101/scA/s101.003/C"> <num value="C">(C)</num> <content>a person to the extent the person:</content> </subparagraph> </subsection> <subsection identifier="/us/tx/ut/t3/c101/scA/s101.003/i"> <num value="i">(i)</num> <chapeau>sells natural gas for use as vehicle fuel;</chapeau> <clause identifier="/us/tx/ut/t3/c101/scA/s101.003/ii"> <num value="ii">(ii)</num> <content>sells natural gas to a person who later sells the natural gas for use as vehicle fuel; or</content> </clause> <clause identifier="/us/tx/ut/t3/c101/scA/s101.003/iii"> <num value="iii">(iii)</num> <content>owns or operates equipment or facilities to sell or transport natural gas for ultimate use as vehicle fuel;</content> </clause> <subparagraph identifier="/us/tx/ut/t3/c101/scA/s101.003/D"> <num value="D">(D)</num> <content>a person not otherwise a gas utility who furnishes gas or gas service only to itself, its employees, or its tenants as an incident of employment or tenancy, if the gas or gas service is not resold to or used by others;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c101/scA/s101.003/E"> <num value="E">(E)</num> <content>a person excluded from being considered a gas utility under Section 121.007; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c101/scA/s101.003/F"> <num value="F">(F)</num> <content>an electric cooperative, as that term is defined by Section 11.003, or its subsidiary, that is excluded from regulation as a gas utility by Section 121.008.</content> </subparagraph> <paragraph identifier="/us/tx/ut/t3/c101/scA/s101.003/8"> <num value="8">(8)</num> <content>"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.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c101/scA/s101.003/9"> <num value="9">(9)</num> <content>"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 the setting of a rate.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c101/scA/s101.003/10"> <num value="10">(10)</num> <content>"Person" includes an individual, a partnership of two or more persons having a joint or common interest, a mutual or cooperative association, a limited liability company, and a corporation.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c101/scA/s101.003/11"> <num value="11">(11)</num> <content>"Proceeding" means a hearing, investigation, inquiry, or other procedure for finding facts or making a decision under this subtitle. The term includes a denial of relief or dismissal of a complaint.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c101/scA/s101.003/12"> <num value="12">(12)</num> <chapeau>"Rate" means:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c101/scA/s101.003/A"> <num value="A">(A)</num> <content>any compensation, tariff, charge, fare, toll, rental, or classification that is directly or indirectly demanded, observed, charged, or collected by a gas utility for a service, product, or commodity described in the definition of gas utility in this section; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c101/scA/s101.003/B"> <num value="B">(B)</num> <content>a rule, regulation, practice, or contract affecting the compensation, tariff, charge, fare, toll, rental, or classification.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t3/c101/scA/s101.003/13"> <num value="13">(13)</num> <content>"Regulatory authority" means either the railroad commission or the governing body of a municipality, in accordance with the context.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c101/scA/s101.003/14"> <num value="14">(14)</num> <content>"Service" has its broadest and most inclusive meaning. The term includes any act performed, anything supplied, and any facilities used or supplied by a gas utility in the performance of the utility's duties under this subtitle to its patrons, employees, other gas utilities, and the public. The term also includes the interchange of facilities between two or more gas utilities.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c101/scA/s101.003/15"> <num value="15">(15)</num> <content>"State agency" has the meaning assigned by Section 572.002, Government Code, to the extent the state agency must obtain the approval described by Section 31.401(a), Natural Resources Code.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c101/scA/s101.003/16"> <num value="16">(16)</num> <content>"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 gas utility are available.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 11, Sec. 1, eff. May 3, 1999. Amended by: Acts 2007, 80th Leg., R.S., Ch. 709 (H.B. 2174), Sec. 1, eff. June 15, 2007. Acts 2011, 82nd Leg., R.S., Ch. 4 (S.B. 312), Sec. 1, eff. April 21, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c101/scA/s101.004"> <num value="101.004">Sec. 101.004.</num> <heading>PERSON DETERMINED TO BE AFFILIATE</heading> <subsection identifier="/us/tx/ut/t3/c101/scA/s101.004/a"> <num value="a">(a)</num> <chapeau>The railroad commission may determine that a person is an affiliate for purposes of this subtitle if the railroad commission after notice and hearing finds that the person:</chapeau> <paragraph identifier="/us/tx/ut/t3/c101/scA/s101.004/1"> <num value="1">(1)</num> <content>actually exercises substantial influence or control over the policies and actions of a gas utility;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c101/scA/s101.004/2"> <num value="2">(2)</num> <content>is a person over which a gas utility exercises the control described by Subdivision (1);</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c101/scA/s101.004/3"> <num value="3">(3)</num> <content>is under common control with a gas utility; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c101/scA/s101.004/4"> <num value="4">(4)</num> <content>actually exercises substantial influence over the policies and actions of a gas utility in conjunction with one or more persons with whom the person is related by ownership or blood relationship, or by action in concert, that together they are affiliated with the gas utility within the meaning of this section even though neither person may qualify as an affiliate individually.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c101/scA/s101.004/b"> <num value="b">(b)</num> <content>For purposes of Subsection (a)(3), "common control with a gas 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.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c101/scA/s101.005"> <num value="101.005">Sec. 101.005.</num> <heading>ADMINISTRATIVE PROCEDURE</heading> <content>Chapter 2001, Government Code, applies to a proceeding under this subtitle except to the extent inconsistent with this subtitle.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c101/scA/s101.006"> <num value="101.006">Sec. 101.006.</num> <heading>CUMULATIVE EFFECT; APPLICATION TO GAS UTILITIES</heading> <subsection identifier="/us/tx/ut/t3/c101/scA/s101.006/a"> <num value="a">(a)</num> <content>This subtitle is cumulative of laws existing on September 1, 1983, relating to the jurisdiction, power, or authority of the railroad commission over a gas utility, and, except as specifically in conflict with this subtitle, that jurisdiction, power, and authority are not limited by this subtitle.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c101/scA/s101.006/b"> <num value="b">(b)</num> <content>This subtitle applies to all gas utilities, including a gas utility that is under the jurisdiction, power, or authority of the railroad commission in accordance with a law other than this subtitle.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c101/scA/s101.007"> <num value="101.007">Sec. 101.007.</num> <heading>LIBERAL CONSTRUCTION</heading> <content>This subtitle shall be construed liberally to promote the effectiveness and efficiency of regulation of gas utilities to the extent that this construction preserves the validity of this subtitle and its provisions.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c101/scA/s101.008"> <num value="101.008">Sec. 101.008.</num> <heading>CONSTRUCTION WITH FEDERAL AUTHORITY</heading> <content>This subtitle shall be construed to apply so as not to conflict with any authority of the United States.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c101/scA/s101.009"> <num value="101.009">Sec. 101.009.</num> <heading>STATE AUTHORITY TO SELL OR CONVEY NATURAL GAS</heading> <subsection identifier="/us/tx/ut/t3/c101/scA/s101.009/a"> <num value="a">(a)</num> <chapeau>In this section:</chapeau> <paragraph identifier="/us/tx/ut/t3/c101/scA/s101.009/1"> <num value="1">(1)</num> <content>"Commissioner" means the commissioner of the General Land Office.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c101/scA/s101.009/2"> <num value="2">(2)</num> <content>"Public retail customer" means a retail customer that is an agency of this state, a state institution of higher education, a public school district, a political subdivision of this state, a military installation of the United States, or a United States Department of Veterans Affairs facility.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c101/scA/s101.009/b"> <num value="b">(b)</num> <content>The commissioner, acting on behalf of the state, may sell or otherwise convey natural gas generated from royalties taken in kind as provided by Sections 52.133(f), 53.026, and 53.077, Natural Resources Code, directly to a public retail customer.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c101/scA/s101.009/c"> <num value="c">(c)</num> <content>To ensure that the state receives the maximum benefit from the sale of natural gas generated from royalties taken in kind, the commissioner shall use all feasible means to sell that natural gas first to public retail customers that are military installations of the United States, agencies of this state, institutions of higher education, or public school districts. The remainder of the natural gas, if any, may be sold to public retail customers that are political subdivisions of this state or to a United States Department of Veterans Affairs facility.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 405, Sec. 22, eff. Sept. 1, 1999. Amended by Acts 2003, 78th Leg., ch. 149, Sec. 20, eff. May 27, 2003. Transferred, redesignated and amended from Utilities Code, Section 35.102 by Acts 2019, 86th Leg., R.S., Ch. 53 (H.B. 2263), Sec. 5, eff. May 17, 2019.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t3/c101/scB"> <num value="B">SUBCHAPTER B.</num> <heading>OFFICE OF PUBLIC UTILITY COUNSEL</heading> <section identifier="/us/tx/ut/t3/c101/scB/s101.051"> <num value="101.051">Sec. 101.051.</num> <heading>OFFICE OF PUBLIC UTILITY COUNSEL</heading> <content>The independent office of public utility counsel represents the interests of residential consumers.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c101/scB/s101.052"> <num value="101.052">Sec. 101.052.</num> <heading>OFFICE POWERS AND DUTIES</heading> <subsection identifier="/us/tx/ut/t3/c101/scB/s101.052/a"> <num value="a">(a)</num> <chapeau>The office:</chapeau> <paragraph identifier="/us/tx/ut/t3/c101/scB/s101.052/1"> <num value="1">(1)</num> <content>may appear or intervene as a party or otherwise represent residential consumers, as a class, in appeals to the railroad commission only at the written request of an affected municipality's governing body;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c101/scB/s101.052/2"> <num value="2">(2)</num> <content>may initiate or intervene as a matter of right or otherwise appear in a judicial proceeding that involves an action taken by the railroad commission in a proceeding in which the office was a party;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c101/scB/s101.052/3"> <num value="3">(3)</num> <content>is entitled to the same access as a party, other than railroad commission staff, to records gathered by the railroad commission under Section 102.203;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c101/scB/s101.052/4"> <num value="4">(4)</num> <content>is entitled to discovery of any nonprivileged matter that is relevant to the subject matter of a proceeding or petition before the railroad commission;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c101/scB/s101.052/5"> <num value="5">(5)</num> <content>may represent an individual residential consumer with respect to the consumer's disputed complaint concerning utility services that is unresolved before the railroad commission; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c101/scB/s101.052/6"> <num value="6">(6)</num> <content>may recommend legislation to the legislature that the office determines would positively affect the interests of residential consumers.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c101/scB/s101.052/b"> <num value="b">(b)</num> <content>The office may represent only as a class the residential consumers of a municipality that makes a request under Subsection (a)(1).</content> </subsection> <subsection identifier="/us/tx/ut/t3/c101/scB/s101.052/c"> <num value="c">(c)</num> <content>This section does not limit the authority of the railroad commission to represent residential consumers.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c101/scB/s101.052/d"> <num value="d">(d)</num> <content>The appearance of the counsellor in a proceeding does not preclude the appearance of other parties on behalf of residential consumers. The counsellor may not be grouped with any other party.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c101/scB/s101.053"> <num value="101.053">Sec. 101.053.</num> <heading>PROHIBITED ACTS</heading> <subsection identifier="/us/tx/ut/t3/c101/scB/s101.053/a"> <num value="a">(a)</num> <chapeau>The counsellor may not:</chapeau> <paragraph identifier="/us/tx/ut/t3/c101/scB/s101.053/1"> <num value="1">(1)</num> <content>have a direct or indirect interest in a gas utility company regulated under this subtitle; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c101/scB/s101.053/2"> <num value="2">(2)</num> <content>provide legal services directly or indirectly to or be employed in any capacity by a gas utility company regulated under this subtitle, its parent, or its subsidiary companies, corporations, or cooperatives.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c101/scB/s101.053/b"> <num value="b">(b)</num> <content>The prohibition under Subsection (a) applies during the period of the counsellor's service and until the first anniversary of the date the counsellor ceases to serve as counsellor.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c101/scB/s101.053/c"> <num value="c">(c)</num> <content>This section does not prohibit a person from otherwise engaging in the private practice of law after the person ceases to serve as counsellor.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c101/scB/s101.054"> <num value="101.054">Sec. 101.054.</num> <heading>PERSONNEL</heading> <subsection identifier="/us/tx/ut/t3/c101/scB/s101.054/a"> <num value="a">(a)</num> <content>The counsellor may employ lawyers, economists, engineers, consultants, statisticians, accountants, clerical staff, and other employees as the counsellor determines necessary to carry out this subchapter.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c101/scB/s101.054/b"> <num value="b">(b)</num> <content>An employee receives compensation as prescribed by the legislature from the assessment imposed by Subchapter A, Chapter 16.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t3/c102"> <num value="102">CHAPTER 102.</num> <heading>JURISDICTION AND POWERS OF RAILROAD COMMISSION AND OTHER REGULATORY AUTHORITIES</heading> <subchapter identifier="/us/tx/ut/t3/c102/scA"> <num value="A">SUBCHAPTER A.</num> <heading>GENERAL POWERS OF RAILROAD COMMISSION</heading> <section identifier="/us/tx/ut/t3/c102/scA/s102.001"> <num value="102.001">Sec. 102.001.</num> <heading>RAILROAD COMMISSION JURISDICTION</heading> <subsection identifier="/us/tx/ut/t3/c102/scA/s102.001/a"> <num value="a">(a)</num> <chapeau>The railroad commission has exclusive original jurisdiction over the rates and services of a gas utility:</chapeau> <paragraph identifier="/us/tx/ut/t3/c102/scA/s102.001/1"> <num value="1">(1)</num> <chapeau>that distributes natural gas or synthetic natural gas in:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c102/scA/s102.001/A"> <num value="A">(A)</num> <content>areas outside a municipality; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c102/scA/s102.001/B"> <num value="B">(B)</num> <content>areas inside a municipality that surrenders its jurisdiction to the railroad commission under Section 103.003; and</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t3/c102/scA/s102.001/2"> <num value="2">(2)</num> <content>that transmits, transports, delivers, or sells natural gas or synthetic natural gas to a gas utility that distributes the gas to the public.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c102/scA/s102.001/b"> <num value="b">(b)</num> <content>The railroad commission has exclusive appellate jurisdiction to review an order or ordinance of a municipality exercising exclusive original jurisdiction as provided by this subtitle.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 2001, 77th Leg., ch. 1233, Sec. 63, eff. Sept. 1, 2001.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c102/scA/s102.002"> <num value="102.002">Sec. 102.002.</num> <heading>LIMITATION ON RAILROAD COMMISSION JURISDICTION</heading> <chapeau>Except as otherwise provided by this subtitle, this subtitle does not authorize the railroad commission to:</chapeau> <paragraph identifier="/us/tx/ut/t3/c102/scA/s102.002/1"> <num value="1">(1)</num> <content>regulate or supervise a rate or service of a municipally owned utility; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c102/scA/s102.002/2"> <num value="2">(2)</num> <content>affect the jurisdiction, power, or duty of a municipality that has elected to regulate and supervise a gas utility in the municipality.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c102/scA/s102.003"> <num value="102.003">Sec. 102.003.</num> <heading>RAILROAD COMMISSION POWERS RELATING TO REPORTS</heading> <chapeau>The railroad commission may:</chapeau> <paragraph identifier="/us/tx/ut/t3/c102/scA/s102.003/1"> <num value="1">(1)</num> <content>require a gas utility to report to the railroad commission information relating to the gas utility and an affiliate inside or outside this state as useful in administering this subtitle;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c102/scA/s102.003/2"> <num value="2">(2)</num> <content>establish the form for a report;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c102/scA/s102.003/3"> <num value="3">(3)</num> <content>determine the time for a report and the frequency with which the report is to be made;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c102/scA/s102.003/4"> <num value="4">(4)</num> <content>require that a report be made under oath;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c102/scA/s102.003/5"> <num value="5">(5)</num> <chapeau>require the filing with the railroad commission of a copy of:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c102/scA/s102.003/A"> <num value="A">(A)</num> <content>a contract or arrangement between a gas utility and an affiliate;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c102/scA/s102.003/B"> <num value="B">(B)</num> <content>a report filed with a federal agency or a governmental agency or body of another state; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c102/scA/s102.003/C"> <num value="C">(C)</num> <content>an annual report that shows each payment of compensation, other than salary or wages subject to federal income tax withholding:</content> </subparagraph> </paragraph> <subsection identifier="/us/tx/ut/t3/c102/scA/s102.003/i"> <num value="i">(i)</num> <chapeau>to residents of this state;</chapeau> <clause identifier="/us/tx/ut/t3/c102/scA/s102.003/ii"> <num value="ii">(ii)</num> <content>with respect to legal, administrative, or legislative matters in this state; or</content> </clause> <clause identifier="/us/tx/ut/t3/c102/scA/s102.003/iii"> <num value="iii">(iii)</num> <content>for representation before the legislature of this state or any governmental agency or body; and</content> </clause> <paragraph identifier="/us/tx/ut/t3/c102/scA/s102.003/6"> <num value="6">(6)</num> <content>require that a contract or arrangement described by Subdivision (5)(A) that is not in writing be reduced to writing and filed with the railroad commission.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c102/scA/s102.004"> <num value="102.004">Sec. 102.004.</num> <heading>REPORT OF SUBSTANTIAL INTEREST</heading> <content>The railroad commission may require disclosure of the identity and respective interests of each owner of at least one percent of the voting securities of a gas utility or its affiliate.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c102/scA/s102.005"> <num value="102.005">Sec. 102.005.</num> <heading>ASSISTANCE TO MUNICIPALITY</heading> <content>On request of a municipality, the railroad commission may advise and assist the municipality with respect to a question or proceeding arising under this subtitle. Assistance provided by the railroad commission may include aid to a municipality on a matter pending before the railroad commission, a court, or the municipality's governing body, such as making a staff member available as a witness or otherwise providing evidence.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c102/scA/s102.006"> <num value="102.006">Sec. 102.006.</num> <heading>ADMINISTRATIVE HEARINGS IN CONTESTED CASES</heading> <subsection identifier="/us/tx/ut/t3/c102/scA/s102.006/a"> <num value="a">(a)</num> <content>The railroad commission by rule shall provide for administrative hearings in contested cases to be conducted by one or more members of the railroad commission, by railroad commission hearings examiners, or by the State Office of Administrative Hearings. The rules must provide for a railroad commission hearings examiner or the State Office of Administrative Hearings to conduct each hearing in a contested case that is not conducted by one or more members of the railroad commission. A hearing must be conducted in accordance with the rules and procedures adopted by the railroad commission.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c102/scA/s102.006/b"> <num value="b">(b)</num> <content>The railroad commission may delegate to a railroad commission hearings examiner or to the State Office of Administrative Hearings the authority to make a final decision and to issue findings of fact, conclusions of law, and other necessary orders in a proceeding in which there is not a contested issue of fact or law.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c102/scA/s102.006/c"> <num value="c">(c)</num> <content>The railroad commission by rule shall define the procedures by which it delegates final decision-making authority under Subsection (b) to a railroad commission hearings examiner or to the State Office of Administrative Hearings.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c102/scA/s102.006/d"> <num value="d">(d)</num> <content>For purposes of judicial review, the final decision of a railroad commission hearings examiner or an administrative law judge of the State Office of Administrative Hearings in a matter delegated under Subsection (b) has the same effect as a final decision of the railroad commission unless a member of the commission requests formal review of the decision.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c102/scA/s102.006/e"> <num value="e">(e)</num> <content>The State Office of Administrative Hearings shall charge the railroad commission a fixed annual rate for hearings conducted by the office under this section only if the legislature appropriates money for that purpose. If the legislature does not appropriate money for the payment of a fixed annual rate under this section, the State Office of Administrative Hearings shall charge the railroad commission an hourly rate set by the office under Section 2003.024(a), Government Code, for hearings conducted by the office under this section.</content> </subsection> <sourceCredit>Added by Acts 2001, 77th Leg., ch. 1233, Sec. 64, eff. Sept. 1, 2001. Amended by Acts 2003, 78th Leg., ch. 200, Sec. 3, eff. Sept. 1, 2003. Amended by: Acts 2015, 84th Leg., R.S., Ch. 228 (H.B. 2154), Sec. 25, eff. September 1, 2015.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t3/c102/scB"> <num value="B">SUBCHAPTER B.</num> <heading>RESTRICTIONS ON CERTAIN TRANSACTIONS</heading> <section identifier="/us/tx/ut/t3/c102/scB/s102.051"> <num value="102.051">Sec. 102.051.</num> <heading>REPORT OF CERTAIN TRANSACTIONS; RAILROAD COMMISSION CONSIDERATION</heading> <subsection identifier="/us/tx/ut/t3/c102/scB/s102.051/a"> <num value="a">(a)</num> <chapeau>Not later than the 60th day after the date the transaction takes effect, a gas utility shall report to the railroad commission:</chapeau> <paragraph identifier="/us/tx/ut/t3/c102/scB/s102.051/1"> <num value="1">(1)</num> <content>a sale, acquisition, or lease of a plant as an operating unit or system in this state for a total consideration of more than $1 million; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c102/scB/s102.051/2"> <num value="2">(2)</num> <content>a merger or consolidation with another gas utility operating in this state.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c102/scB/s102.051/b"> <num value="b">(b)</num> <content>On the filing of a report with the railroad commission, the railroad commission shall investigate the transaction described by Subsection (a), with or without a public hearing, to determine whether the action is consistent with the public interest. In reaching its determination, the railroad commission shall consider the reasonable value of the property, facilities, or securities to be acquired, disposed of, merged, or consolidated.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c102/scB/s102.051/c"> <num value="c">(c)</num> <content>If the railroad commission finds that a transaction is not in the public interest, the railroad commission shall take the effect of the transaction into consideration in ratemaking proceedings and disallow the effect of the transaction if the transaction will unreasonably affect rates or service.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c102/scB/s102.051/d"> <num value="d">(d)</num> <chapeau>This section does not apply to:</chapeau> <paragraph identifier="/us/tx/ut/t3/c102/scB/s102.051/1"> <num value="1">(1)</num> <content>the purchase of a unit of property for replacement; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c102/scB/s102.051/2"> <num value="2">(2)</num> <content>an addition to the facilities of a gas utility by construction.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 32, Sec. 1, eff. Sept. 1, 1999. Amended by: Acts 2005, 79th Leg., Ch. 1000 (H.B. 474), Sec. 1, eff. September 1, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c102/scB/s102.052"> <num value="102.052">Sec. 102.052.</num> <heading>REPORT OF PURCHASE OF VOTING STOCK IN GAS UTILITY</heading> <content>A gas utility may not purchase voting stock in another gas utility doing business in this state unless the utility reports the purchase to the railroad commission.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c102/scB/s102.053"> <num value="102.053">Sec. 102.053.</num> <heading>REPORT OF LOAN TO STOCKHOLDERS</heading> <content>A gas utility may not loan money, stocks, bonds, notes, or other evidence of indebtedness to a person who directly or indirectly owns or holds any stock of the gas utility unless the gas utility reports the transaction to the railroad commission within a reasonable time.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t3/c102/scC"> <num value="C">SUBCHAPTER C.</num> <heading>RECORDS</heading> <section identifier="/us/tx/ut/t3/c102/scC/s102.101"> <num value="102.101">Sec. 102.101.</num> <heading>RECORDS OF GAS UTILITY</heading> <subsection identifier="/us/tx/ut/t3/c102/scC/s102.101/a"> <num value="a">(a)</num> <content>Each gas utility shall keep and provide to the regulatory authority, in the manner and form prescribed by the railroad commission, uniform accounts of all business transacted by the gas utility.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c102/scC/s102.101/b"> <num value="b">(b)</num> <chapeau>The railroad commission may prescribe the form of books, accounts, records, and memoranda to be kept by a gas utility, including:</chapeau> <paragraph identifier="/us/tx/ut/t3/c102/scC/s102.101/1"> <num value="1">(1)</num> <chapeau>the books, accounts, records, and memoranda of:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c102/scC/s102.101/A"> <num value="A">(A)</num> <content>the provision of and capacity for service; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c102/scC/s102.101/B"> <num value="B">(B)</num> <content>the receipt and expenditure of money; and</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t3/c102/scC/s102.101/2"> <num value="2">(2)</num> <content>any other form, record, and memorandum that the railroad commission considers necessary to carry out this subtitle.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c102/scC/s102.101/c"> <num value="c">(c)</num> <content>For a gas utility subject to regulation by a federal regulatory agency, compliance with the system of accounts prescribed for the particular class of utilities by the federal agency may be considered sufficient compliance with the system prescribed by the railroad commission. The railroad commission may prescribe the form of books, accounts, records, and memoranda covering information in addition to that required by the federal agency. The system of accounts and the form of books, accounts, records, and memoranda prescribed by the railroad commission for a gas utility or class of utilities may not be inconsistent with the systems and forms established by a federal agency for that gas utility or class of utilities.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c102/scC/s102.101/d"> <num value="d">(d)</num> <chapeau>Each gas utility shall:</chapeau> <paragraph identifier="/us/tx/ut/t3/c102/scC/s102.101/1"> <num value="1">(1)</num> <content>keep and provide its books, accounts, records, and memoranda accurately and faithfully in the manner and form prescribed by the railroad commission; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c102/scC/s102.101/2"> <num value="2">(2)</num> <content>comply with the directions of the regulatory authority relating to the books, accounts, records, and memoranda.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c102/scC/s102.101/e"> <num value="e">(e)</num> <content>In this section, "gas utility" includes a municipally owned utility.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c102/scC/s102.102"> <num value="102.102">Sec. 102.102.</num> <heading>MAINTENANCE OF OFFICE AND RECORDS IN THIS STATE</heading> <subsection identifier="/us/tx/ut/t3/c102/scC/s102.102/a"> <num value="a">(a)</num> <content>Each gas utility shall maintain an office in this state in a county in which some part of the utility's property is located. The gas utility shall keep in this office all books, accounts, records, and memoranda required by the railroad commission to be kept in this state.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c102/scC/s102.102/b"> <num value="b">(b)</num> <content>A book, account, record, or memorandum required by the regulatory authority to be kept in this state may not be removed from this state except as prescribed by the railroad commission.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c102/scC/s102.103"> <num value="102.103">Sec. 102.103.</num> <heading>COMMUNICATIONS WITH REGULATORY AUTHORITY</heading> <subsection identifier="/us/tx/ut/t3/c102/scC/s102.103/a"> <num value="a">(a)</num> <chapeau>The regulatory authority shall adopt rules governing communications with the regulatory authority or a member or employee of the regulatory authority by:</chapeau> <paragraph identifier="/us/tx/ut/t3/c102/scC/s102.103/1"> <num value="1">(1)</num> <content>a gas utility;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c102/scC/s102.103/2"> <num value="2">(2)</num> <content>an affiliate; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c102/scC/s102.103/3"> <num value="3">(3)</num> <content>a representative of a gas utility or affiliate.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c102/scC/s102.103/b"> <num value="b">(b)</num> <chapeau>A record of a communication must contain:</chapeau> <paragraph identifier="/us/tx/ut/t3/c102/scC/s102.103/1"> <num value="1">(1)</num> <content>the name of the person contacting the regulatory authority or member or employee of the regulatory authority;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c102/scC/s102.103/2"> <num value="2">(2)</num> <content>the name of the business entity represented;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c102/scC/s102.103/3"> <num value="3">(3)</num> <content>a brief description of the subject matter of the communication; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c102/scC/s102.103/4"> <num value="4">(4)</num> <content>the action, if any, requested by the gas utility, affiliate, or representative.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c102/scC/s102.103/c"> <num value="c">(c)</num> <content>Records compiled under Subsection (b) shall be available to the public monthly.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c102/scC/s102.104"> <num value="102.104">Sec. 102.104.</num> <heading>JURISDICTION OVER AFFILIATE</heading> <content>The railroad commission has jurisdiction over an affiliate that has a transaction with a gas utility under the railroad commission's jurisdiction to the extent of access to an account or a record of the affiliate relating to the transaction, including an account or a record of joint or general expenses, any portion of which may be applicable to the transaction.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t3/c102/scD"> <num value="D">SUBCHAPTER D.</num> <heading>REQUIRED REPORTS AND FILINGS</heading> <section identifier="/us/tx/ut/t3/c102/scD/s102.151"> <num value="102.151">Sec. 102.151.</num> <heading>SCHEDULE FILINGS</heading> <subsection identifier="/us/tx/ut/t3/c102/scD/s102.151/a"> <num value="a">(a)</num> <chapeau>A gas utility shall file with each regulatory authority schedules showing all rates that are:</chapeau> <paragraph identifier="/us/tx/ut/t3/c102/scD/s102.151/1"> <num value="1">(1)</num> <content>subject to the regulatory authority's original or appellate jurisdiction; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c102/scD/s102.151/2"> <num value="2">(2)</num> <content>in effect for a gas utility service, product, or commodity offered by the gas utility.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c102/scD/s102.151/b"> <num value="b">(b)</num> <chapeau>The gas utility shall file as a part of the schedules required under Subsection (a) each rule or regulation that relates to or affects:</chapeau> <paragraph identifier="/us/tx/ut/t3/c102/scD/s102.151/1"> <num value="1">(1)</num> <content>a rate of the gas utility; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c102/scD/s102.151/2"> <num value="2">(2)</num> <content>a gas utility service, product, or commodity furnished by the gas utility.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c102/scD/s102.152"> <num value="102.152">Sec. 102.152.</num> <heading>DEPRECIATION ACCOUNT</heading> <chapeau>The railroad commission shall require each gas utility or municipally owned utility to carry a proper and adequate depreciation account in accordance with:</chapeau> <paragraph identifier="/us/tx/ut/t3/c102/scD/s102.152/1"> <num value="1">(1)</num> <content>the rates and methods prescribed by the railroad commission under Section 104.054; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c102/scD/s102.152/2"> <num value="2">(2)</num> <content>any other rule the railroad commission adopts.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c102/scD/s102.153"> <num value="102.153">Sec. 102.153.</num> <heading>ACCOUNTS OF PROFITS AND LOSSES</heading> <content>A gas utility or municipally owned utility shall keep separate accounts showing profits or losses from the sale or lease of merchandise, including an appliance, a fixture, or equipment.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c102/scD/s102.154"> <num value="102.154">Sec. 102.154.</num> <heading>REPORT OF CERTAIN EXPENSES</heading> <chapeau>A regulatory authority may require a gas utility to annually report the utility's expenditures for:</chapeau> <paragraph identifier="/us/tx/ut/t3/c102/scD/s102.154/1"> <num value="1">(1)</num> <content>business gifts and entertainment; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c102/scD/s102.154/2"> <num value="2">(2)</num> <content>advertising or public relations, including expenditures for institutional and consumption-inducing purposes.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t3/c102/scE"> <num value="E">SUBCHAPTER E.</num> <heading>AUDITS AND INSPECTIONS</heading> <section identifier="/us/tx/ut/t3/c102/scE/s102.201"> <num value="102.201">Sec. 102.201.</num> <heading>INQUIRY INTO MANAGEMENT AND AFFAIRS</heading> <content>A regulatory authority may inquire into the management and affairs of each gas utility and shall keep itself informed as to the manner and method in which each gas utility is managed and its affairs are conducted.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c102/scE/s102.202"> <num value="102.202">Sec. 102.202.</num> <heading>AUDIT OF ACCOUNTS</heading> <content>A regulatory authority may require the examination and audit of the accounts of a gas or municipally owned utility.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c102/scE/s102.203"> <num value="102.203">Sec. 102.203.</num> <heading>INSPECTION</heading> <chapeau>At a reasonable time for a reasonable purpose, a regulatory authority and, to the extent authorized by the regulatory authority, its counsel, agent, or employee may:</chapeau> <paragraph identifier="/us/tx/ut/t3/c102/scE/s102.203/1"> <num value="1">(1)</num> <content>inspect and obtain copies of the papers, books, accounts, documents, and other business records of a gas utility within its jurisdiction; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c102/scE/s102.203/2"> <num value="2">(2)</num> <content>inspect the plant, equipment, and other property of a gas utility within its jurisdiction.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c102/scE/s102.204"> <num value="102.204">Sec. 102.204.</num> <heading>EXAMINATIONS UNDER OATH</heading> <chapeau>In connection with an investigation taken under Section 102.203, the regulatory authority may:</chapeau> <paragraph identifier="/us/tx/ut/t3/c102/scE/s102.204/1"> <num value="1">(1)</num> <content>examine under oath an officer, agent, or employee of a gas utility; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c102/scE/s102.204/2"> <num value="2">(2)</num> <content>authorize the person conducting the action to make the examination under oath.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c102/scE/s102.205"> <num value="102.205">Sec. 102.205.</num> <heading>ENTERING PREMISES OF GAS UTILITY</heading> <subsection identifier="/us/tx/ut/t3/c102/scE/s102.205/a"> <num value="a">(a)</num> <content>A member, agent, or employee of a regulatory authority may enter the premises occupied by a gas utility to conduct an inspection, examination, or test or to exercise any other authority provided by this subtitle.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c102/scE/s102.205/b"> <num value="b">(b)</num> <content>A member, agent, or employee of the regulatory authority may act under this section only during reasonable hours and after reasonable notice to the gas utility.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c102/scE/s102.205/c"> <num value="c">(c)</num> <content>A gas utility is entitled to be represented when an inspection, examination, or test is conducted on its premises. The gas utility is entitled to a reasonable time to secure a representative before the inspection, examination, or test begins.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c102/scE/s102.206"> <num value="102.206">Sec. 102.206.</num> <heading>PRODUCTION OF OUT-OF-STATE RECORDS</heading> <subsection identifier="/us/tx/ut/t3/c102/scE/s102.206/a"> <num value="a">(a)</num> <content>A regulatory authority may require, by order or subpoena served on a gas utility, the production, at the time and place in this state that the regulatory authority designates, of any books, accounts, papers, or records kept by that gas utility outside this state or, if ordered by the railroad commission, verified copies of the books, accounts, papers, or records.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c102/scE/s102.206/b"> <num value="b">(b)</num> <content>A gas utility that fails or refuses to comply with an order or subpoena under this section violates this subtitle.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t3/c102/scF"> <num value="F">SUBCHAPTER F.</num> <heading>GENERAL PROVISIONS RELATING TO PROCEEDINGS BEFORE REGULATORY AUTHORITY</heading> <section identifier="/us/tx/ut/t3/c102/scF/s102.251"> <num value="102.251">Sec. 102.251.</num> <heading>RECORD OF PROCEEDING</heading> <content>The regulatory authority shall keep a record of each proceeding before the authority.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c102/scF/s102.252"> <num value="102.252">Sec. 102.252.</num> <heading>RIGHT TO BE HEARD</heading> <content>Each party to a proceeding before a regulatory authority is entitled to be heard by attorney or in person.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t3/c103"> <num value="103">CHAPTER 103.</num> <heading>JURISDICTION AND POWERS OF MUNICIPALITY</heading> <subchapter identifier="/us/tx/ut/t3/c103/scA"> <num value="A">SUBCHAPTER A.</num> <heading>GENERAL PROVISIONS</heading> <section identifier="/us/tx/ut/t3/c103/scA/s103.001"> <num value="103.001">Sec. 103.001.</num> <heading>MUNICIPAL JURISDICTION</heading> <content>To provide fair, just, and reasonable rates and adequate and efficient services, the governing body of a municipality has exclusive original jurisdiction over the rates, operations, and services of a gas utility within the municipality, subject to the limitations imposed by this subtitle, unless the municipality surrenders its jurisdiction to the railroad commission under Section 103.003.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 2001, 77th Leg., ch. 1233, Sec. 65, eff. Sept. 1, 2001.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c103/scA/s103.002"> <num value="103.002">Sec. 103.002.</num> <heading>FRANCHISES</heading> <subsection identifier="/us/tx/ut/t3/c103/scA/s103.002/a"> <num value="a">(a)</num> <content>This subtitle does not restrict the rights and powers of a municipality to grant or refuse a franchise to use the streets and alleys in the municipality or to make a statutory charge for that use.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c103/scA/s103.002/b"> <num value="b">(b)</num> <chapeau>A municipality that performs a regulatory function under this subtitle may make each charge that is authorized by:</chapeau> <paragraph identifier="/us/tx/ut/t3/c103/scA/s103.002/1"> <num value="1">(1)</num> <content>this subtitle; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c103/scA/s103.002/2"> <num value="2">(2)</num> <content>the applicable franchise agreement.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c103/scA/s103.002/c"> <num value="c">(c)</num> <content>A franchise agreement may not limit or interfere with a power conferred on the railroad commission by this subtitle.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c103/scA/s103.003"> <num value="103.003">Sec. 103.003.</num> <heading>SURRENDER OF MUNICIPAL JURISDICTION TO RAILROAD COMMISSION; REINSTATEMENT OF JURISDICTION</heading> <subsection identifier="/us/tx/ut/t3/c103/scA/s103.003/a"> <num value="a">(a)</num> <content>A municipality may elect to have the railroad commission exercise exclusive original jurisdiction over gas utility rates, operations, and services in the municipality by ordinance or by submitting the question of the surrender of its jurisdiction to the voters at a municipal election.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c103/scA/s103.003/b"> <num value="b">(b)</num> <content>The governing body of a municipality shall submit at a municipal election the question of surrendering its jurisdiction to the railroad commission if the governing body receives a petition signed by a number of qualified voters of the municipality equal to at least the lesser of 20,000 or 10 percent of the number of voters voting in the last preceding general election in the municipality.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c103/scA/s103.003/c"> <num value="c">(c)</num> <content>A municipality may not elect to surrender its jurisdiction while a case involving the municipality is pending.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c103/scA/s103.003/d"> <num value="d">(d)</num> <content>A municipality that surrenders its jurisdiction to the railroad commission may reinstate its jurisdiction. The provisions of this section governing the surrender of jurisdiction apply to the reinstatement of jurisdiction.</content> </subsection> <sourceCredit>Added by Acts 2001, 77th Leg., ch. 1233, Sec. 66, eff. Sept. 1, 2001.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t3/c103/scB"> <num value="B">SUBCHAPTER B.</num> <heading>RATE DETERMINATION</heading> <section identifier="/us/tx/ut/t3/c103/scB/s103.021"> <num value="103.021">Sec. 103.021.</num> <heading>MUNICIPAL PROCEEDINGS</heading> <subsection identifier="/us/tx/ut/t3/c103/scB/s103.021/a"> <num value="a">(a)</num> <content>A municipality regulating a gas utility under this subtitle shall require the utility to submit information as necessary to make a reasonable determination of rate base, expenses, investment, and rate of return in the municipality.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c103/scB/s103.021/b"> <num value="b">(b)</num> <content>A municipality shall make a determination under Subsection (a) using the procedures and requirements prescribed by this subtitle.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c103/scB/s103.021/c"> <num value="c">(c)</num> <content>A municipality shall retain personnel necessary to make the determination of reasonable rates.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c103/scB/s103.022"> <num value="103.022">Sec. 103.022.</num> <heading>RATE ASSISTANCE AND COST REIMBURSEMENT</heading> <subsection identifier="/us/tx/ut/t3/c103/scB/s103.022/a"> <num value="a">(a)</num> <chapeau>The governing body of a municipality participating in or conducting a ratemaking proceeding may engage rate consultants, accountants, auditors, attorneys, and engineers to:</chapeau> <paragraph identifier="/us/tx/ut/t3/c103/scB/s103.022/1"> <num value="1">(1)</num> <content>conduct investigations, present evidence, and advise and represent the governing body; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c103/scB/s103.022/2"> <num value="2">(2)</num> <content>assist the governing body with litigation or a gas utility ratemaking proceeding before a regulatory authority or court.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c103/scB/s103.022/b"> <num value="b">(b)</num> <content>The gas utility in the ratemaking proceeding shall reimburse the governing body of the municipality for the reasonable cost of the services of a person engaged under Subsection (a) to the extent the applicable regulatory authority determines reasonable.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c103/scB/s103.023"> <num value="103.023">Sec. 103.023.</num> <heading>MUNICIPAL STANDING</heading> <subsection identifier="/us/tx/ut/t3/c103/scB/s103.023/a"> <num value="a">(a)</num> <content>A municipality has standing in each case before the railroad commission that relates to a gas utility's rates and services in the municipality.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c103/scB/s103.023/b"> <num value="b">(b)</num> <content>A municipality's standing is subject to the right of the railroad commission to consolidate that municipality with another party on an issue of common interest.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c103/scB/s103.024"> <num value="103.024">Sec. 103.024.</num> <heading>JUDICIAL REVIEW</heading> <content>A municipality is entitled to judicial review of a railroad commission order relating to a gas utility's rates and services in a municipality as provided by Section 105.001.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t3/c103/scC"> <num value="C">SUBCHAPTER C.</num> <heading>APPEAL OF MUNICIPAL ORDER</heading> <section identifier="/us/tx/ut/t3/c103/scC/s103.051"> <num value="103.051">Sec. 103.051.</num> <heading>APPEAL BY PARTY</heading> <content>A party to a rate proceeding before a municipality's governing body may appeal the governing body's decision to the railroad commission.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c103/scC/s103.052"> <num value="103.052">Sec. 103.052.</num> <heading>APPEAL BY RESIDENTS</heading> <content>The residents of a municipality may appeal to the railroad commission the decision of the municipality's governing body in a rate proceeding by filing with the railroad commission a petition for review signed by a number of qualified voters of the municipality equal to at least the lesser of 20,000 or 10 percent of the qualified voters of the municipality.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c103/scC/s103.053"> <num value="103.053">Sec. 103.053.</num> <heading>APPEAL BY RATEPAYERS OUTSIDE MUNICIPALITY</heading> <subsection identifier="/us/tx/ut/t3/c103/scC/s103.053/a"> <num value="a">(a)</num> <content>The ratepayers of a municipally owned utility who are outside the municipality may appeal to the railroad commission an action of the municipality's governing body affecting the municipally owned utility's rates by filing with the railroad commission a petition for review signed by a number of ratepayers served by the utility outside the municipality equal to at least the lesser of 10,000 or five percent of those ratepayers.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c103/scC/s103.053/b"> <num value="b">(b)</num> <content>A petition for review is properly signed if signed by a person or the spouse of a person in whose name residential utility service is carried.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c103/scC/s103.053/c"> <num value="c">(c)</num> <content>For purposes of this section, each person who receives a separate bill is a ratepayer. A person who receives more than one bill may not be counted as more than one ratepayer.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c103/scC/s103.054"> <num value="103.054">Sec. 103.054.</num> <heading>FILING OF APPEAL</heading> <subsection identifier="/us/tx/ut/t3/c103/scC/s103.054/a"> <num value="a">(a)</num> <content>An appeal under this subchapter is initiated by filing a petition for review with the railroad commission and serving a copy of the petition on each party to the original rate proceeding.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c103/scC/s103.054/b"> <num value="b">(b)</num> <content>The appeal must be initiated not later than the 30th day after the date of the final decision by the governing body of the municipality.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c103/scC/s103.055"> <num value="103.055">Sec. 103.055.</num> <heading>HEARING AND ORDER</heading> <subsection identifier="/us/tx/ut/t3/c103/scC/s103.055/a"> <num value="a">(a)</num> <content>An appeal under this subchapter is de novo and based on the test year presented to the municipality adjusted for known changes and conditions that are measurable with reasonable accuracy.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c103/scC/s103.055/b"> <num value="b">(b)</num> <content>The railroad commission shall enter a final order establishing the rates the railroad commission determines the municipality should have set in the ordinance to which the appeal applies.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c103/scC/s103.055/c"> <num value="c">(c)</num> <content>If the railroad commission fails to enter a final order within 185 days after the date the appeal is perfected, the rates proposed by the gas utility are considered to be approved by the railroad commission and take effect on the expiration of the 185-day period.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c103/scC/s103.056"> <num value="103.056">Sec. 103.056.</num> <heading>APPLICABILITY OF RATES</heading> <content>Temporary or permanent rates set by the railroad commission are prospective and observed from the date of the applicable railroad commission order, except an interim rate order necessary to provide a gas utility the opportunity to avoid confiscation during the period beginning on the date a petition for review is filed with the railroad commission and ending on the date of a final order establishing rates.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t3/c104"> <num value="104">CHAPTER 104.</num> <heading>RATES AND SERVICES</heading> <subchapter identifier="/us/tx/ut/t3/c104/scA"> <num value="A">SUBCHAPTER A.</num> <heading>GENERAL PROVISIONS</heading> <section identifier="/us/tx/ut/t3/c104/scA/s104.001"> <num value="104.001">Sec. 104.001.</num> <heading>AUTHORIZATION TO ESTABLISH AND REGULATE RATES</heading> <subsection identifier="/us/tx/ut/t3/c104/scA/s104.001/a"> <num value="a">(a)</num> <content>The railroad commission is vested with all the authority and power of this state to ensure compliance with the obligations of gas utilities in this subtitle.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scA/s104.001/b"> <num value="b">(b)</num> <chapeau>The regulatory authority may establish and regulate rates of a gas utility and may adopt rules for determining:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scA/s104.001/1"> <num value="1">(1)</num> <content>the classification of customers and services; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scA/s104.001/2"> <num value="2">(2)</num> <content>the applicability of rates.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scA/s104.001/c"> <num value="c">(c)</num> <content>A rule or order of the regulatory authority may not conflict with a ruling of a federal regulatory body.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scA/s104.002"> <num value="104.002">Sec. 104.002.</num> <heading>COMPLIANCE WITH SUBTITLE</heading> <chapeau>A gas utility may not:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scA/s104.002/1"> <num value="1">(1)</num> <content>charge, collect, or receive a rate for utility service except as provided by this subtitle; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scA/s104.002/2"> <num value="2">(2)</num> <content>impose a rule or regulation except as provided by this subtitle.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scA/s104.003"> <num value="104.003">Sec. 104.003.</num> <heading>JUST AND REASONABLE RATES</heading> <subsection identifier="/us/tx/ut/t3/c104/scA/s104.003/a"> <num value="a">(a)</num> <content>The regulatory authority shall ensure that each rate a gas utility or two or more gas utilities jointly make, demand, or receive is just and reasonable. A rate may not be unreasonably preferential, prejudicial, or discriminatory but must be sufficient, equitable, and consistent in application to each class of consumer. In establishing a gas utility's rates, the railroad commission may treat as a single class two or more municipalities that a gas utility serves if the commission considers that treatment to be appropriate.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scA/s104.003/b"> <num value="b">(b)</num> <chapeau>A rate for a pipeline-to-pipeline transaction or to a transportation, industrial, or similar large volume contract customer is considered to be just and reasonable and otherwise to comply with this section and shall be approved by the regulatory authority if:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scA/s104.003/1"> <num value="1">(1)</num> <content>neither the gas utility nor the customer had an unfair advantage during the negotiations;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scA/s104.003/2"> <num value="2">(2)</num> <content>the rate is substantially the same as the rate between the gas utility and at least two of those customers under the same or similar conditions of service; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scA/s104.003/3"> <num value="3">(3)</num> <content>competition does or did exist with another gas utility, another supplier of natural gas, or a supplier of an alternative form of energy.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scA/s104.003/c"> <num value="c">(c)</num> <chapeau>Subsection (b) does not apply:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scA/s104.003/1"> <num value="1">(1)</num> <content>if a complaint is filed with the railroad commission by a transmission pipeline purchaser of gas sold or transported under the pipeline-to-pipeline or transportation rate; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scA/s104.003/2"> <num value="2">(2)</num> <content>to a direct sale for resale to a gas distribution utility at a city gate.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scA/s104.003/d"> <num value="d">(d)</num> <content>The reasonableness of gas purchase costs included in a city gate rate proposed to be charged for a sale for resale to a gas distribution utility at a city gate may be reviewed at a city gate rate proceeding even though the costs have been previously approved as a rate for other parties under Subsection (b).</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scA/s104.003/e"> <num value="e">(e)</num> <content>Subsection (b)(1) does not apply to a rate charged or offered to be charged to an affiliated pipeline utility.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scA/s104.004"> <num value="104.004">Sec. 104.004.</num> <heading>UNREASONABLE PREFERENCE OR PREJUDICE PROHIBITED</heading> <chapeau>A gas utility may not:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scA/s104.004/1"> <num value="1">(1)</num> <content>grant an unreasonable preference or advantage concerning rates or services to a person in a classification;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scA/s104.004/2"> <num value="2">(2)</num> <content>subject a person in a classification to an unreasonable prejudice or disadvantage concerning rates or services; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scA/s104.004/3"> <num value="3">(3)</num> <content>establish or maintain an unreasonable difference concerning rates of services between localities or between classes of service.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scA/s104.005"> <num value="104.005">Sec. 104.005.</num> <heading>EQUALITY OF RATES AND SERVICES</heading> <subsection identifier="/us/tx/ut/t3/c104/scA/s104.005/a"> <num value="a">(a)</num> <content>A gas utility may not directly or indirectly charge, demand, collect, or receive from a person a greater or lesser compensation for a service provided or to be provided by the utility than the compensation prescribed by the applicable schedule of rates filed under Section 102.151.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scA/s104.005/b"> <num value="b">(b)</num> <content>A person may not knowingly receive or accept a service from a gas utility for a compensation greater or less than the compensation prescribed by the schedules. A rate charged and collected by a gas utility on September 1, 1983, may be continued until schedules are filed.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scA/s104.005/c"> <num value="c">(c)</num> <content>After notice and hearing, the railroad commission may, in the public interest, order a gas utility to refund with interest compensation received in violation of this section.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scA/s104.005/d"> <num value="d">(d)</num> <content>This subtitle does not prevent a cooperative corporation from returning to its members net earnings resulting from its operations in proportion to the members' purchases from or through the corporation.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scA/s104.006"> <num value="104.006">Sec. 104.006.</num> <heading>RATES FOR AREA NOT IN MUNICIPALITY</heading> <content>Without the approval of the railroad commission, a gas utility's rates for an area not in a municipality may not exceed 115 percent of the average of all rates for similar services for all municipalities served by the same utility in the same county as that area.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scA/s104.007"> <num value="104.007">Sec. 104.007.</num> <heading>DISCRIMINATION AND RESTRICTION ON COMPETITION</heading> <chapeau>A gas utility may not:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scA/s104.007/1"> <num value="1">(1)</num> <content>discriminate against a person who sells or leases equipment or performs services in competition with the gas utility; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scA/s104.007/2"> <num value="2">(2)</num> <content>engage in a practice that tends to restrict or impair that competition.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scA/s104.008"> <num value="104.008">Sec. 104.008.</num> <heading>BURDEN OF PROOF</heading> <chapeau>In a proceeding involving a proposed rate change, the gas utility has the burden of proving that:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scA/s104.008/1"> <num value="1">(1)</num> <content>the rate change is just and reasonable, if the utility proposes the change; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scA/s104.008/2"> <num value="2">(2)</num> <content>an existing rate is just and reasonable, if the proposal is to reduce the rate.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t3/c104/scB"> <num value="B">SUBCHAPTER B.</num> <heading>COMPUTATION OF RATES</heading> <section identifier="/us/tx/ut/t3/c104/scB/s104.051"> <num value="104.051">Sec. 104.051.</num> <heading>ESTABLISHING OVERALL REVENUES</heading> <content>In establishing a gas utility's rates, the regulatory authority shall establish the utility's overall revenues at an amount that will permit the utility a reasonable opportunity to earn a reasonable return on the utility's invested capital used and useful in providing service to the public in excess of its reasonable and necessary operating expenses.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scB/s104.052"> <num value="104.052">Sec. 104.052.</num> <heading>ESTABLISHING FAIR RATE OF RETURN</heading> <content>The regulatory authority may not establish a rate that yields more than a fair return on the adjusted value of the invested capital used and useful in providing service to the public.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scB/s104.053"> <num value="104.053">Sec. 104.053.</num> <heading>COMPONENTS OF ADJUSTED VALUE OF INVESTED CAPITAL</heading> <subsection identifier="/us/tx/ut/t3/c104/scB/s104.053/a"> <num value="a">(a)</num> <chapeau>Gas utility rates shall be based on the adjusted value of invested capital used and useful to the utility in providing service and that adjusted value shall be computed on the basis of a reasonable balance between:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scB/s104.053/1"> <num value="1">(1)</num> <content>original cost, less depreciation; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scB/s104.053/2"> <num value="2">(2)</num> <content>current cost, less an adjustment for present age and condition.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scB/s104.053/b"> <num value="b">(b)</num> <chapeau>The regulatory authority may determine a reasonable balance that reflects:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scB/s104.053/1"> <num value="1">(1)</num> <content>not less than 60 percent nor more than 75 percent of the original cost of the property at the time the property was dedicated to public use, whether by the gas utility that is the present owner or by a predecessor, less depreciation; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scB/s104.053/2"> <num value="2">(2)</num> <content>not less than 25 percent nor more than 40 percent of the current cost less an adjustment for present age and condition.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scB/s104.053/c"> <num value="c">(c)</num> <content>In determining a reasonable balance, the regulatory authority may consider inflation, deflation, quality of service being provided, growth rate of the service area, and need for the gas utility to attract new capital.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scB/s104.053/d"> <num value="d">(d)</num> <content>Construction work in progress, at cost as recorded on the gas utility's books, may be included as part of the adjusted value of invested capital used by and useful to the utility in providing service, as necessary to the financial integrity of the utility.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scB/s104.053/e"> <num value="e">(e)</num> <content>Costs of facilities, revenues, expenses, taxes, and reserves shall be separated or allocated as prescribed by the regulatory authority.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scB/s104.053/f"> <num value="f">(f)</num> <content>In this section, "original cost" means the actual money cost or the actual money value of consideration paid other than money.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scB/s104.054"> <num value="104.054">Sec. 104.054.</num> <heading>DEPRECIATION, AMORTIZATION, AND DEPLETION</heading> <subsection identifier="/us/tx/ut/t3/c104/scB/s104.054/a"> <num value="a">(a)</num> <content>The railroad commission shall establish proper and adequate rates and methods of depreciation, amortization, or depletion for each class of property of a gas utility or municipally owned utility.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scB/s104.054/b"> <num value="b">(b)</num> <content>The rates and methods established under this section and the depreciation account required under Section 102.152 shall be used uniformly and consistently throughout rate-setting and appeal proceedings.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scB/s104.055"> <num value="104.055">Sec. 104.055.</num> <heading>NET INCOME; ALLOWABLE EXPENSES</heading> <subsection identifier="/us/tx/ut/t3/c104/scB/s104.055/a"> <num value="a">(a)</num> <content>Net income shall be used to establish just and reasonable rates. For that purpose, "net income" means the total revenues of the gas utility from gas utility service less all reasonable and necessary expenses related to that gas utility service. The regulatory authority shall determine those revenues and expenses in a manner consistent with this subchapter.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scB/s104.055/b"> <num value="b">(b)</num> <chapeau>In establishing a gas utility's rates, the regulatory authority may not allow a gas utility's payment to an affiliate for the cost of a service, property, right, or other item or for an interest expense to be included as capital cost or as expense related to gas utility service except to the extent that the regulatory authority finds the payment is reasonable and necessary for each item or class of items as determined by the regulatory authority. That finding must include:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scB/s104.055/1"> <num value="1">(1)</num> <content>a specific finding of the reasonableness and necessity of each item or class of items allowed; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scB/s104.055/2"> <num value="2">(2)</num> <content>a finding that the price to the gas utility is not higher than the prices charged by the supplying affiliate to its other affiliates or divisions or to a nonaffiliated person for the same item or class of items.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scB/s104.055/c"> <num value="c">(c)</num> <content>If an expense is allowed to be included in utility rates, or an investment is included in the utility rate base, the related income tax deduction or benefit shall be included in the computation of income tax expense to reduce the rates. If an expense is disallowed or not included in utility rates, or an investment is not included in the utility rate base, the related income tax deduction or benefit may not be included in the computation of income tax expense to reduce the rates. The income tax expense shall be computed using the statutory income tax rates.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scB/s104.055/d"> <num value="d">(d)</num> <content>The regulatory authority may adopt reasonable rules complying with this section with respect to including and excluding certain expenses in computing the rates to be established.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scB/s104.055/e"> <num value="e">(e)</num> <content>This section is not intended to increase gas utility rates to the customer not caused by utility service. Utility rates may include only expenses caused by utility service.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scB/s104.056"> <num value="104.056">Sec. 104.056.</num> <heading>TREATMENT OF CERTAIN TAX BENEFITS</heading> <subsection identifier="/us/tx/ut/t3/c104/scB/s104.056/a"> <num value="a">(a)</num> <chapeau>In determining the allocation of tax savings derived from liberalized depreciation and amortization, the investment tax credit, and the application of similar methods, the regulatory authority shall:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scB/s104.056/1"> <num value="1">(1)</num> <content>balance equitably the interests of present and future customers; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scB/s104.056/2"> <num value="2">(2)</num> <content>apportion accordingly the benefits between consumers and the gas utility or municipally owned utility.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scB/s104.056/b"> <num value="b">(b)</num> <content>If a gas utility or municipally owned utility retains a portion of the investment tax credit, that portion shall be deducted from the original cost of the facilities or other addition to the rate base to which the credit applied to the extent allowed by the Internal Revenue Code.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scB/s104.057"> <num value="104.057">Sec. 104.057.</num> <heading>CONSIDERATION OF CERTAIN EXPENSES</heading> <subsection identifier="/us/tx/ut/t3/c104/scB/s104.057/a"> <num value="a">(a)</num> <chapeau>In establishing a gas utility's rates, the regulatory authority may not allow as a cost or expense an expenditure:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scB/s104.057/1"> <num value="1">(1)</num> <content>described by Section 102.154 that the regulatory authority determines to be not in the public interest; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scB/s104.057/2"> <num value="2">(2)</num> <content>for legislative advocacy.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scB/s104.057/b"> <num value="b">(b)</num> <content>The regulatory authority may allow as a cost or expense reasonable charitable or civic contributions not to exceed the amount approved by the regulatory authority.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scB/s104.058"> <num value="104.058">Sec. 104.058.</num> <heading>CONSIDERATION OF PROFIT OR LOSS FROM SALE OR LEASE OF MERCHANDISE</heading> <content>In establishing a gas utility's or municipally owned utility's rates, the regulatory authority may not consider a profit or loss that results from the sale or lease of merchandise, including appliances, fixtures, or equipment, to the extent that merchandise is not integral to providing utility service.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scB/s104.059"> <num value="104.059">Sec. 104.059.</num> <heading>PENSION AND OTHER POSTEMPLOYMENT BENEFITS</heading> <subsection identifier="/us/tx/ut/t3/c104/scB/s104.059/a"> <num value="a">(a)</num> <content>In establishing a gas utility's rates, the regulatory authority shall allow recovery of the gas utility's costs of pensions and other postemployment benefits, as determined by actuarial or other similar studies in accordance with generally accepted accounting principles, in amounts the regulatory authority finds reasonable and necessary.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scB/s104.059/b"> <num value="b">(b)</num> <chapeau>If a gas utility establishes one or more reserve accounts for the purpose of tracking changes in the costs of pensions and other postemployment benefits, the gas utility shall periodically record in a reserve account any difference between:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scB/s104.059/1"> <num value="1">(1)</num> <content>the annual amount of pension and other postemployment benefits approved and included in the gas utility's then current rates or, if that annual amount cannot be determined from the regulatory authority's order, the amount recorded for pension and other postemployment benefits under generally accepted accounting principles during the first year that rates from the gas utility's last general rate proceeding were in effect; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scB/s104.059/2"> <num value="2">(2)</num> <content>the annual amount of costs of pensions and other postemployment benefits as determined by actuarial or other similar studies that would otherwise be recorded by the gas utility were this provision not applicable.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scB/s104.059/c"> <num value="c">(c)</num> <chapeau>The gas utility must:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scB/s104.059/1"> <num value="1">(1)</num> <content>establish separate reserve accounts for pensions and for other postemployment benefits; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scB/s104.059/2"> <num value="2">(2)</num> <content>apply the same methodology to allocate pension and other postemployment benefits between capital and expense as in the gas utility's last rate case.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scB/s104.059/d"> <num value="d">(d)</num> <content>A surplus in a reserve account exists if the amount of pension and other postemployment benefits under Subsection (b)(1) is greater than the amount determined under Subsection (b)(2). A shortage in a reserve account exists if the amount of pension and other postemployment benefits under Subsection (b)(1) is less than the amount determined under Subsection (b)(2).</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scB/s104.059/e"> <num value="e">(e)</num> <chapeau>If the gas utility establishes reserve accounts for the costs of pensions and other postemployment benefits, the regulatory authority at a subsequent general rate proceeding shall:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scB/s104.059/1"> <num value="1">(1)</num> <content>review the amounts recorded to each reserve account to determine whether the amounts are reasonable and necessary;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scB/s104.059/2"> <num value="2">(2)</num> <content>determine in accordance with Subsection (d) whether each reserve account has a surplus or shortage; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scB/s104.059/3"> <num value="3">(3)</num> <content>subtract any surplus from or add any shortage to the gas utility's rate base, with the surplus or shortage amortized over a reasonable time.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2011, 82nd Leg., R.S., Ch. 172 (S.B. 403), Sec. 1, eff. May 28, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scB/s104.060"> <num value="104.060">Sec. 104.060.</num> <heading>CONSIDERATION OF COMPENSATION AND BENEFIT EXPENSES</heading> <subsection identifier="/us/tx/ut/t3/c104/scB/s104.060/a"> <num value="a">(a)</num> <chapeau>In this section, "employee compensation and benefits" includes base salaries, wages, incentive compensation, and benefits. The term does not include:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scB/s104.060/1"> <num value="1">(1)</num> <content>pension or other postemployment benefits; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scB/s104.060/2"> <num value="2">(2)</num> <content>incentive compensation related to attaining financial metrics for an executive officer whose compensation is required to be disclosed under 17 C.F.R. Section 229.402(a).</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scB/s104.060/b"> <num value="b">(b)</num> <content>When establishing a gas utility's rates, the regulatory authority shall presume that employee compensation and benefits expenses are reasonable and necessary if the expenses are consistent with market compensation studies issued not earlier than three years before the initiation of the proceeding to establish the rates.</content> </subsection> <sourceCredit>Added by Acts 2019, 86th Leg., R.S., Ch. 1362 (H.B. 1767), Sec. 1, eff. June 15, 2019.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t3/c104/scC"> <num value="C">SUBCHAPTER C.</num> <heading>RATE CHANGES PROPOSED BY UTILITY</heading> <section identifier="/us/tx/ut/t3/c104/scC/s104.101"> <num value="104.101">Sec. 104.101.</num> <heading>DEFINITION</heading> <content>In this subchapter, "major change" means an increase in rates that would increase the aggregate revenues of the applicant more than the greater of $100,000 or 2-1/2 percent. The term does not include an increase in rates that the regulatory authority allows to go into effect or the gas utility makes under an order of the regulatory authority after hearings held with public notice.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scC/s104.102"> <num value="104.102">Sec. 104.102.</num> <heading>STATEMENT OF INTENT TO INCREASE RATES</heading> <subsection identifier="/us/tx/ut/t3/c104/scC/s104.102/a"> <num value="a">(a)</num> <content>A gas utility may not increase its rates unless the utility files a statement of its intent with the regulatory authority that has original jurisdiction over those rates at least 35 days before the effective date of the proposed increase.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scC/s104.102/b"> <num value="b">(b)</num> <content>The gas utility shall also mail or deliver a copy of the statement of intent to the appropriate officer of each affected municipality.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scC/s104.102/c"> <num value="c">(c)</num> <chapeau>The statement of intent must include:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scC/s104.102/1"> <num value="1">(1)</num> <content>proposed revisions of tariffs and schedules; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scC/s104.102/2"> <num value="2">(2)</num> <chapeau>a detailed statement of:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c104/scC/s104.102/A"> <num value="A">(A)</num> <content>each proposed increase;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c104/scC/s104.102/B"> <num value="B">(B)</num> <content>the effect the proposed increase is expected to have on the revenues of the utility;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c104/scC/s104.102/C"> <num value="C">(C)</num> <content>each class and number of utility consumers affected; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c104/scC/s104.102/D"> <num value="D">(D)</num> <content>any other information required by the regulatory authority's rules and regulations.</content> </subparagraph> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scC/s104.103"> <num value="104.103">Sec. 104.103.</num> <heading>NOTICE OF INTENT TO INCREASE RATES</heading> <subsection identifier="/us/tx/ut/t3/c104/scC/s104.103/a"> <num value="a">(a)</num> <chapeau>The gas utility shall:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scC/s104.103/1"> <num value="1">(1)</num> <content>publish, in conspicuous form, notice to the public of the proposed increase once each week for four successive weeks in a newspaper having general circulation in each county containing territory affected by the proposed increase; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scC/s104.103/2"> <num value="2">(2)</num> <content>provide notice of the proposed increase to any other affected person as required by the regulatory authority's rules.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scC/s104.103/b"> <num value="b">(b)</num> <chapeau>Instead of publishing newspaper notice, a gas utility may provide notice by:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scC/s104.103/1"> <num value="1">(1)</num> <content>mailing the notice by United States mail, postage prepaid, to the billing address of each directly affected customer;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scC/s104.103/2"> <num value="2">(2)</num> <content>including the notice, in conspicuous form, in the bill of each directly affected customer; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scC/s104.103/3"> <num value="3">(3)</num> <content>sending the notice by e-mail to each directly affected customer if that address is available to the utility.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scC/s104.103/c"> <num value="c">(c)</num> <content>A gas utility may provide a customer with notice of the utility's intent to increase rates by e-mail as described by Subsection (b)(3) only if the customer has consented in writing to the use of the customer's e-mail address for that purpose.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2013, 83rd Leg., R.S., Ch. 103 (S.B. 885), Sec. 1, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scC/s104.104"> <num value="104.104">Sec. 104.104.</num> <heading>EARLY EFFECTIVE DATE OF RATE INCREASE</heading> <subsection identifier="/us/tx/ut/t3/c104/scC/s104.104/a"> <num value="a">(a)</num> <chapeau>For good cause shown, the regulatory authority may allow a rate increase, other than a major change, to take effect:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scC/s104.104/1"> <num value="1">(1)</num> <content>before the end of the 35-day period prescribed by Section 104.102; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scC/s104.104/2"> <num value="2">(2)</num> <content>under conditions the regulatory authority prescribes, subject to suspension as provided by this subchapter.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scC/s104.104/b"> <num value="b">(b)</num> <content>The gas utility shall immediately revise its schedules to include the increase.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scC/s104.105"> <num value="104.105">Sec. 104.105.</num> <heading>DETERMINATION OF PROPRIETY OF RATE CHANGE; HEARING</heading> <subsection identifier="/us/tx/ut/t3/c104/scC/s104.105/a"> <num value="a">(a)</num> <content>If a schedule modifying or increasing rates is filed with a regulatory authority, the regulatory authority shall, on complaint by an affected person, or may, on its own motion, not later than the 30th day after the effective date of the increase, enter on a hearing to determine the propriety of the increase.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scC/s104.105/b"> <num value="b">(b)</num> <content>The regulatory authority shall hold a hearing in every case in which the increase constitutes a major change. The regulatory authority may, however, use an informal proceeding if the regulatory authority does not receive a complaint before the expiration of 45 days after the date notice of the increase is filed.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scC/s104.105/c"> <num value="c">(c)</num> <content>The regulatory authority shall give reasonable notice of the hearing, including notice to the governing body of each affected municipality and county. The gas utility is not required to provide a formal answer or file any other formal pleading in response to the notice, and the absence of an answer does not affect an order for a hearing.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scC/s104.106"> <num value="104.106">Sec. 104.106.</num> <heading>PREFERENCE TO HEARING</heading> <chapeau>The regulatory authority shall:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scC/s104.106/1"> <num value="1">(1)</num> <content>give preference to the hearing under this subchapter and to deciding questions arising under this subchapter over any other question pending before it; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scC/s104.106/2"> <num value="2">(2)</num> <content>decide the questions as quickly as possible.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scC/s104.107"> <num value="104.107">Sec. 104.107.</num> <heading>RATE SUSPENSION; DEADLINE</heading> <subsection identifier="/us/tx/ut/t3/c104/scC/s104.107/a"> <num value="a">(a)</num> <chapeau>Pending the hearing and a decision:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scC/s104.107/1"> <num value="1">(1)</num> <content>the local regulatory authority, after delivering to the gas utility a written statement of the regulatory authority's reasons, may suspend the operation of the schedule for not longer than 90 days after the date the schedule would otherwise be effective; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scC/s104.107/2"> <num value="2">(2)</num> <content>the railroad commission may suspend the operation of the schedule for not longer than 150 days after the date the schedule would otherwise be effective.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scC/s104.107/b"> <num value="b">(b)</num> <content>The 150-day period prescribed by Subsection (a)(2) shall be extended for two days for each day the actual hearing on the merits of the case exceeds 15 days.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scC/s104.107/c"> <num value="c">(c)</num> <content>If the regulatory authority does not make a final determination concerning a schedule of rates before expiration of the applicable suspension period, the regulatory authority is considered to have approved the schedule. This approval is subject to the authority of the regulatory authority thereafter to continue a hearing in progress.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 2001, 77th Leg., ch. 1233, Sec. 67, eff. Sept. 1, 2001.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scC/s104.108"> <num value="104.108">Sec. 104.108.</num> <heading>TEMPORARY RATES</heading> <subsection identifier="/us/tx/ut/t3/c104/scC/s104.108/a"> <num value="a">(a)</num> <content>The regulatory authority may establish temporary rates to be in effect during the applicable suspension period under Section 104.107.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scC/s104.108/b"> <num value="b">(b)</num> <content>If the regulatory authority does not establish temporary rates, the rates in effect when the suspended schedule was filed continue in effect during the suspension period.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scC/s104.109"> <num value="104.109">Sec. 104.109.</num> <heading>BONDED RATES</heading> <subsection identifier="/us/tx/ut/t3/c104/scC/s104.109/a"> <num value="a">(a)</num> <content>A gas utility may put a changed rate into effect by filing a bond with the regulatory authority if the regulatory authority fails to make a final determination within 90 days from the date the proposed increase would otherwise be effective.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scC/s104.109/b"> <num value="b">(b)</num> <content>The bonded rate may not exceed the proposed rate.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scC/s104.109/c"> <num value="c">(c)</num> <chapeau>The bond must be:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scC/s104.109/1"> <num value="1">(1)</num> <content>payable to the regulatory authority in an amount, in a form, and with a surety approved by the regulatory authority; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scC/s104.109/2"> <num value="2">(2)</num> <content>conditioned on refund.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scC/s104.109/d"> <num value="d">(d)</num> <chapeau>The gas utility shall refund or credit against future bills:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scC/s104.109/1"> <num value="1">(1)</num> <content>money collected under the bonded rates in excess of the rate finally ordered; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scC/s104.109/2"> <num value="2">(2)</num> <content>interest on that money, at the current interest rate as determined by the regulatory authority.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scC/s104.110"> <num value="104.110">Sec. 104.110.</num> <heading>ESTABLISHMENT OF FINAL RATES</heading> <subsection identifier="/us/tx/ut/t3/c104/scC/s104.110/a"> <num value="a">(a)</num> <chapeau>If, after hearing, the regulatory authority finds the rates are unreasonable or in violation of law, the regulatory authority shall:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scC/s104.110/1"> <num value="1">(1)</num> <content>enter an order establishing the rates the gas utility shall charge or apply for the service in question; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scC/s104.110/2"> <num value="2">(2)</num> <content>serve a copy of the order on the gas utility.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scC/s104.110/b"> <num value="b">(b)</num> <content>The rates established in the order shall be observed thereafter until changed as provided by this subtitle.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scC/s104.111"> <num value="104.111">Sec. 104.111.</num> <heading>APPROVAL OF DECREASE IN RATES</heading> <content>Notwithstanding any other provision in this subtitle, the regulatory authority may, without reference to the cost of service standard prescribed by Section 104.051, administratively approve a decrease in rates proposed by the applicant and agreed on by each party directly affected unless the regulatory authority determines that the proposed decrease is not in the public interest.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scC/s104.112"> <num value="104.112">Sec. 104.112.</num> <heading>SURCHARGE TO RECOVER RELOCATION COSTS</heading> <subsection identifier="/us/tx/ut/t3/c104/scC/s104.112/a"> <num value="a">(a)</num> <content>This section applies to a gas utility's costs of relocating a facility to accommodate construction or improvement of a highway, road, street, public way, or other public work by or on behalf of the United States, this state, a political subdivision of this state, or another entity having the power of eminent domain that are not reimbursed by a source other than as provided by this section.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scC/s104.112/b"> <num value="b">(b)</num> <content>A gas utility may recover its relocation costs to which this section applies through a surcharge on gas volumes sold and transported to customers in the service area where the relocation occurred by applying to each appropriate regulatory authority for a new rate schedule or tariff. The gas utility is not required to file a statement of intent to increase rates to institute the surcharge, and the other provisions of this subchapter, other than appeal rights, do not apply to institution of the surcharge.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scC/s104.112/c"> <num value="c">(c)</num> <chapeau>An application under Subsection (b) must include sufficient documentation to demonstrate:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scC/s104.112/1"> <num value="1">(1)</num> <content>the requirement for each relocation;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scC/s104.112/2"> <num value="2">(2)</num> <content>the entity requiring the relocation;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scC/s104.112/3"> <num value="3">(3)</num> <content>costs incurred for relocation of comparable facilities;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scC/s104.112/4"> <num value="4">(4)</num> <content>surcharge computations; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scC/s104.112/5"> <num value="5">(5)</num> <content>that reasonable efforts have been made to receive reimbursement from the entity requiring the relocation, if applicable.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scC/s104.112/d"> <num value="d">(d)</num> <chapeau>Not later than the 35th day after the date an application under Subsection (b) is received, the regulatory authority shall administratively grant or deny the application. Denial of the application must be based on a finding that:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scC/s104.112/1"> <num value="1">(1)</num> <content>the relocation was not necessary or required;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scC/s104.112/2"> <num value="2">(2)</num> <content>the costs of the relocation were excessive or not supported;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scC/s104.112/3"> <num value="3">(3)</num> <content>the utility did not pursue reimbursement from the entity requiring the relocation, if applicable;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scC/s104.112/4"> <num value="4">(4)</num> <content>the surcharge is unduly discriminatory among customers or classes of customers located in the service area; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scC/s104.112/5"> <num value="5">(5)</num> <content>the period over which the relocation costs are designed to be recovered is less than one or more than three years.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scC/s104.112/e"> <num value="e">(e)</num> <content>If the regulating authority does not make a decision before the deadline prescribed by Subsection (d), the application is approved.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 219, Sec. 1, eff. Sept. 1, 1999. Amended by Acts 2001, 77th Leg., ch. 662, Sec. 1, eff. Sept. 1, 2001.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t3/c104/scD"> <num value="D">SUBCHAPTER D.</num> <heading>RATE CHANGES PROPOSED BY COMMISSION</heading> <section identifier="/us/tx/ut/t3/c104/scD/s104.151"> <num value="104.151">Sec. 104.151.</num> <heading>UNREASONABLE OR VIOLATIVE EXISTING RATES</heading> <subsection identifier="/us/tx/ut/t3/c104/scD/s104.151/a"> <num value="a">(a)</num> <chapeau>If the regulatory authority, on its own motion or on complaint by an affected person, after reasonable notice and hearing, finds that the existing rates of a gas utility for a service are unreasonable or in violation of law, the regulatory authority shall:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scD/s104.151/1"> <num value="1">(1)</num> <content>enter an order establishing the just and reasonable rates to be observed thereafter, including maximum or minimum rates; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scD/s104.151/2"> <num value="2">(2)</num> <content>serve a copy of the order on the gas utility.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scD/s104.151/b"> <num value="b">(b)</num> <content>The rates set under Subsection (a) constitute the legal rates of the gas utility until changed as provided by this subtitle.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scD/s104.152"> <num value="104.152">Sec. 104.152.</num> <heading>INVESTIGATING COSTS OF OBTAINING SERVICE FROM ANOTHER SOURCE</heading> <content>If a gas utility does not produce the service that it distributes, transmits, or furnishes to the public for compensation but obtains the service from another source, the regulatory authority may investigate the cost of that production in an investigation of the reasonableness of the gas utility's rates.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t3/c104/scE"> <num value="E">SUBCHAPTER E.</num> <heading>RATES FOR GOVERNMENTAL ENTITIES</heading> <section identifier="/us/tx/ut/t3/c104/scE/s104.201"> <num value="104.201">Sec. 104.201.</num> <heading>TRANSPORTATION RATES BETWEEN GAS UTILITY OR MUNICIPALLY OWNED UTILITY AND STATE AGENCY</heading> <subsection identifier="/us/tx/ut/t3/c104/scE/s104.201/a"> <num value="a">(a)</num> <content>Notwithstanding Section 104.003(b), absent a contract for transportation service between a state agency and a gas utility or municipally owned utility, the railroad commission, not later than the 210th day after the date either party files a request to set a transportation rate, shall establish the transportation rate for the state agency. The commission has exclusive original jurisdiction to establish a transportation rate for a state agency under this section.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scE/s104.201/b"> <num value="b">(b)</num> <content>The railroad commission shall base its determination of the transportation rate under Subsection (a) on the cost of providing the transportation service for both the distribution system and the transmission system, as applicable, of the gas utility or municipally owned utility.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scE/s104.201/c"> <num value="c">(c)</num> <content>The railroad commission may order temporary rates under Subsection (a) as provided for under the commission's appellate jurisdiction.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scE/s104.202"> <num value="104.202">Sec. 104.202.</num> <heading>EXCLUDED EXPENSES</heading> <subsection identifier="/us/tx/ut/t3/c104/scE/s104.202/a"> <num value="a">(a)</num> <content>The rates that a gas utility or municipally owned utility charges a state agency may not include an amount representing a gross receipts assessment, regulatory assessment, or similar expense of the utility.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scE/s104.202/b"> <num value="b">(b)</num> <content>An expense under Subsection (a) that is reasonable and is not recovered from a state agency under this section may be recovered from other customers of the gas utility or municipally owned utility.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scE/s104.202/c"> <num value="c">(c)</num> <content>A gross receipts assessment, regulatory assessment, or similar expense of the utility does not include a payment to a municipality under a contract, franchise, or other agreement.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 1326, Sec. 1, eff. June 18, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scE/s104.203"> <num value="104.203">Sec. 104.203.</num> <heading>PAYMENT IN LIEU OF TAX</heading> <subsection identifier="/us/tx/ut/t3/c104/scE/s104.203/a"> <num value="a">(a)</num> <content>A payment made in lieu of a tax by a municipally owned utility to the municipality by which the utility is owned may not be considered an expense of operation in establishing the utility's rate for providing utility service to a school district or hospital district.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scE/s104.203/b"> <num value="b">(b)</num> <content>A rate a municipally owned utility receives from a school district or hospital district may not be used to make or to cover the cost of making payments in lieu of taxes to the municipality that owns the utility.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t3/c104/scF"> <num value="F">SUBCHAPTER F.</num> <heading>SERVICES</heading> <section identifier="/us/tx/ut/t3/c104/scF/s104.251"> <num value="104.251">Sec. 104.251.</num> <heading>GENERAL STANDARD</heading> <content>A gas utility shall furnish service, instrumentalities, and facilities that are safe, adequate, efficient, and reasonable.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scF/s104.252"> <num value="104.252">Sec. 104.252.</num> <heading>AUTHORITY OF REGULATORY AUTHORITY CONCERNING STANDARDS</heading> <chapeau>A regulatory authority, on its own motion or on complaint and after reasonable notice and hearing, may:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scF/s104.252/1"> <num value="1">(1)</num> <content>adopt just and reasonable standards, classifications, regulations, or practices a gas utility must follow in furnishing a service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scF/s104.252/2"> <num value="2">(2)</num> <content>adopt adequate and reasonable standards for measuring a condition, including quantity, quality, and pressure relating to the furnishing of a service;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scF/s104.252/3"> <num value="3">(3)</num> <content>adopt reasonable regulations for examining, testing, and measuring a service; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scF/s104.252/4"> <num value="4">(4)</num> <content>adopt or approve reasonable rules, regulations, specifications, and standards to ensure the accuracy of equipment, including meters and instruments, used to measure a service.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scF/s104.253"> <num value="104.253">Sec. 104.253.</num> <heading>RULE OR STANDARD</heading> <subsection identifier="/us/tx/ut/t3/c104/scF/s104.253/a"> <num value="a">(a)</num> <content>A gas utility may file with the regulatory authority a standard, classification, regulation, or practice the utility follows.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scF/s104.253/b"> <num value="b">(b)</num> <chapeau>The standard, classification, regulation, or practice continues in force until:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scF/s104.253/1"> <num value="1">(1)</num> <content>amended by the utility; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scF/s104.253/2"> <num value="2">(2)</num> <content>changed by the regulatory authority as provided by this subtitle.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scF/s104.254"> <num value="104.254">Sec. 104.254.</num> <heading>SERVICE</heading> <content>A gas utility or municipally owned utility may not refuse to provide service to a state agency if pipeline capacity is available on an existing facility of the utility.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scF/s104.2545"> <num value="104.2545">Sec. 104.2545.</num> <heading>REQUIRED SERVICE TO PUBLIC RETAIL CUSTOMER</heading> <subsection identifier="/us/tx/ut/t3/c104/scF/s104.2545/a"> <num value="a">(a)</num> <content>In this section, "service site" means facilities or buildings operated by a public retail customer or a group of adjacent facilities or buildings operated by a public retail customer within one contiguous geographical area.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scF/s104.2545/b"> <num value="b">(b)</num> <chapeau>Unless the utility is prohibited by other law from providing the service and if sufficient pipeline capacity is available on an existing facility of the utility to provide the service, a gas utility or municipally owned utility may not refuse to provide service to a public retail customer at a service site, at rates established as provided by Subsection (c), the following services:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scF/s104.2545/1"> <num value="1">(1)</num> <content>the sale of gas;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scF/s104.2545/2"> <num value="2">(2)</num> <chapeau>the transportation of an annual average of 25 million British thermal units or more each day of gas that is:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c104/scF/s104.2545/A"> <num value="A">(A)</num> <content>taken as a royalty in kind; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c104/scF/s104.2545/B"> <num value="B">(B)</num> <content>owned by the state or managed by a marketing program operated by the state or by a state agency; or</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scF/s104.2545/3"> <num value="3">(3)</num> <content>a combination of the services described by Subdivisions (1) and (2).</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scF/s104.2545/c"> <num value="c">(c)</num> <content>A utility shall provide a service described by Subsection (b) at rates provided by a written contract negotiated between the utility and the state or a state agency. If the utility and the state or state agency are not able to agree to a contract rate, a fair and reasonable rate may be determined for the public retail customer, as a rate for a separate class of service, by the railroad commission or, for municipally owned gas utilities, by the relevant regulatory body under this chapter.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scF/s104.2545/d"> <num value="d">(d)</num> <content>In this section, "public retail customer" has the meaning assigned by Section 101.009.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 300, Sec. 1, eff. Sept. 1, 1999. Amended by Acts 2003, 78th Leg., ch. 563, Sec. 1, eff. June 20, 2003. Amended by: Acts 2019, 86th Leg., R.S., Ch. 53 (H.B. 2263), Sec. 6, eff. May 17, 2019.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scF/s104.255"> <num value="104.255">Sec. 104.255.</num> <heading>BILLING</heading> <subsection identifier="/us/tx/ut/t3/c104/scF/s104.255/a"> <num value="a">(a)</num> <content>A gas utility or municipally owned utility may not bill or otherwise require the state or a state agency or institution to pay for service before the service is provided.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scF/s104.255/b"> <num value="b">(b)</num> <content>The railroad commission shall adopt rules concerning payment of bills by the state or a state agency to a gas utility or municipally owned utility. The rules must be consistent with Chapter 2251, Government Code.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scF/s104.255/c"> <num value="c">(c)</num> <content>This subtitle does not prohibit a gas utility or municipally owned utility from entering into an agreement with the state or a state agency to establish a level or average monthly service billing plan. An agreement under this subsection must require reconciliation of the leveled or equalized bills quarterly.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scF/s104.2551"> <num value="104.2551">Sec. 104.2551.</num> <heading>ELECTRONIC BILLING</heading> <content>A gas utility or municipally owned utility may transmit the utility's bill for services through the Internet or by other electronic means instead of through the United States mail on the request of a customer of the gas utility or municipally owned utility.</content> <sourceCredit>Added by Acts 2001, 77th Leg., ch. 1233, Sec. 68, eff. Sept. 1, 2001.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scF/s104.256"> <num value="104.256">Sec. 104.256.</num> <heading>EXAMINATION AND TEST OF INSTRUMENT OR EQUIPMENT; INSPECTION</heading> <subsection identifier="/us/tx/ut/t3/c104/scF/s104.256/a"> <num value="a">(a)</num> <chapeau>A regulatory authority may:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scF/s104.256/1"> <num value="1">(1)</num> <content>examine and test equipment, including meters and instruments, used to measure service of a gas utility; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scF/s104.256/2"> <num value="2">(2)</num> <content>set up and use on the premises occupied by a gas utility an apparatus or appliance necessary for the examination or test.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scF/s104.256/b"> <num value="b">(b)</num> <content>The gas utility is entitled to be represented at an examination, test, or inspection made under this section.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scF/s104.256/c"> <num value="c">(c)</num> <content>The gas utility and its officers and employees shall facilitate the examination, test, or inspection by giving reasonable aid to the regulatory authority and to any person designated by the regulatory authority for the performance of those duties.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scF/s104.257"> <num value="104.257">Sec. 104.257.</num> <heading>INSPECTION FOR CONSUMER</heading> <subsection identifier="/us/tx/ut/t3/c104/scF/s104.257/a"> <num value="a">(a)</num> <chapeau>A consumer may have a meter or other measuring device tested by a gas utility:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scF/s104.257/1"> <num value="1">(1)</num> <content>once without charge, after a reasonable period of presumed accuracy that the regulatory authority establishes by rule; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scF/s104.257/2"> <num value="2">(2)</num> <content>at a shorter interval on payment of a reasonable fee established by the regulatory authority.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scF/s104.257/b"> <num value="b">(b)</num> <content>The regulatory authority shall establish reasonable fees to be paid for other examining or testing of a measuring device on the request of a consumer.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scF/s104.257/c"> <num value="c">(c)</num> <content>If the consumer requests the test under Subsection (a)(2) and the measuring device is found unreasonably defective or incorrect to the substantial disadvantage of the consumer, the fee the consumer paid at the time of the request shall be refunded.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scF/s104.258"> <num value="104.258">Sec. 104.258.</num> <heading>DISCONNECTION OF GAS SERVICE</heading> <subsection identifier="/us/tx/ut/t3/c104/scF/s104.258/a"> <num value="a">(a)</num> <chapeau>In this section:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scF/s104.258/1"> <num value="1">(1)</num> <content>"Extreme weather emergency" means a period during which the previous day's highest temperature did not exceed 32 degrees Fahrenheit and the temperature is predicted to remain at or below that level for the next 24 hours according to the nearest National Weather Service reports.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scF/s104.258/2"> <num value="2">(2)</num> <chapeau>"Provider" means:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c104/scF/s104.258/A"> <num value="A">(A)</num> <content>a gas utility, as defined by Sections 101.003 and 121.001; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c104/scF/s104.258/B"> <num value="B">(B)</num> <content>an owner, operator, or manager of a mobile home park or apartment who purchases natural gas through a master meter for delivery to a dwelling unit in a mobile home park or apartment house under Chapter 124.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scF/s104.258/b"> <num value="b">(b)</num> <content>A provider may not disconnect natural gas service to a residential customer on a weekend day unless personnel of the provider are available on that day to take payments and reconnect service.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scF/s104.258/c"> <num value="c">(c)</num> <content>A provider may not disconnect natural gas service to a residential customer during an extreme weather emergency. The provider shall defer collection of the full payment of bills that are due during an extreme weather emergency until after the emergency is over and shall work with customers to establish a pay schedule for deferred bills.</content> </subsection> <sourceCredit>Added by Acts 2001, 77th Leg., ch. 1149, Sec. 1, eff. Sept. 1, 2001.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t3/c104/scG"> <num value="G">SUBCHAPTER G.</num> <heading>INTERIM COST RECOVERY AND RATE ADJUSTMENT</heading> <section identifier="/us/tx/ut/t3/c104/scG/s104.301"> <num value="104.301">Sec. 104.301.</num> <heading>INTERIM ADJUSTMENT FOR CHANGES IN INVESTMENT</heading> <subsection identifier="/us/tx/ut/t3/c104/scG/s104.301/a"> <num value="a">(a)</num> <content>A gas utility that has filed a rate case under Subchapter C within the preceding two years may file with the regulatory authority a tariff or rate schedule that provides for an interim adjustment in the utility's monthly customer charge or initial block rate to recover the cost of changes in the investment in service for gas utility services. The adjustment shall be allocated among the gas utility's classes of customers in the same manner as the cost of service was allocated among classes of customers in the utility's latest effective rates for the area in which the tariff or rate schedule is implemented. The gas utility shall file the tariff or rate schedule, or the annual adjustment under Subsection (c), with the regulatory authority at least 60 days before the proposed implementation date of the tariff, rate schedule, or annual adjustment. The gas utility shall provide notice of the tariff, rate schedule, or annual adjustment to affected customers by bill insert or direct mail not later than the 45th day after the date the utility files the tariff, rate schedule, or annual adjustment with the regulatory authority. During the 60-day period, the regulatory authority may act to suspend the implementation of the tariff, rate schedule, or annual adjustment for up to 45 days. After the issuance of a final order or decision by a regulatory authority in a rate case that is filed after the implementation of a tariff or rate schedule under this section, any change in investment that has been included in an interim adjustment in accordance with the tariff or rate schedule under this section shall no longer be subject to subsequent review for reasonableness or prudence. Until the issuance of a final order or decision by a regulatory authority in a rate case that is filed after the implementation of a tariff or rate schedule under this section, all amounts collected under the tariff or rate schedule before the filing of the rate case are subject to refund.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scG/s104.301/b"> <num value="b">(b)</num> <content>The amount the gas utility shall adjust the utility's rates upward or downward under the tariff or rate schedule each calendar year is based on the difference between the value of the invested capital for the preceding calendar year and the value of the invested capital for the calendar year preceding that calendar year. The value of the invested capital is equal to the original cost of the investment at the time the investment was first dedicated to public use minus the accumulated depreciation related to that investment.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scG/s104.301/c"> <num value="c">(c)</num> <content>The interim adjustment shall be recalculated on an annual basis in accordance with the requirements of Subsection (b). The gas utility may file a request with the regulatory authority to suspend the operation of the tariff or rate schedule for any year. The request must be in writing and state the reasons why the suspension is justified. The regulatory authority may grant the suspension on a showing by the utility of reasonable justification.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scG/s104.301/d"> <num value="d">(d)</num> <content>A gas utility may only adjust the utility's rates under the tariff or rate schedule for the return on investment, depreciation expense, ad valorem taxes, revenue related taxes, and incremental federal income taxes related to the difference in the value of the invested capital as determined under Subsection (b). The return on investment, depreciation, and incremental federal income tax factors used in the computation must be the same as the factors reflected in the final order issued by or settlement agreement approved by the regulatory authority establishing the gas utility's latest effective rates for the area in which the tariff or rate schedule is implemented.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scG/s104.301/e"> <num value="e">(e)</num> <content>A gas utility that implements a tariff or rate schedule under this section shall file with the regulatory authority an annual report describing the investment projects completed and placed in service during the preceding calendar year and the investments retired or abandoned during the preceding calendar year. The annual report shall also state the cost, need, and customers benefited by the change in investment.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scG/s104.301/f"> <num value="f">(f)</num> <content>In addition to the report required under Subsection (e), the gas utility shall file with the regulatory authority an annual earnings monitoring report demonstrating the utility's earnings during the preceding calendar year.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scG/s104.301/g"> <num value="g">(g)</num> <content>If the gas utility is earning a return on invested capital, as demonstrated by the report filed under Subsection (f), of more than 75 basis points above the return established in the latest effective rates approved by a regulatory authority for the area in which the tariff or rate schedule is implemented under this section, the gas utility shall file a statement with that report stating the reasons why the rates are not unreasonable or in violation of law.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scG/s104.301/h"> <num value="h">(h)</num> <content>If a gas utility that implements a tariff or rate schedule under this section does not file a rate case under Subchapter C before the fifth anniversary of the date on which the tariff or rate schedule takes effect, the gas utility shall file a rate case under that subchapter not later than the 180th day after that anniversary in relation to any rates subject to the tariff or rate schedule.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scG/s104.301/i"> <num value="i">(i)</num> <content>This section does not limit the power of a regulatory authority under Section 104.151.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scG/s104.301/j"> <num value="j">(j)</num> <content>A gas utility implementing a tariff or rate schedule under this section shall reimburse the railroad commission the utility's proportionate share of the railroad commission's costs related to the administration of the interim rate adjustment mechanism provided by this section.</content> </subsection> <sourceCredit>Added by Acts 2003, 78th Leg., ch. 938, Sec. 1, eff. Sept. 1, 2003. Amended by: Acts 2005, 79th Leg., Ch. 948 (H.B. 872), Sec. 1, eff. September 1, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scG/s104.302"> <num value="104.302">Sec. 104.302.</num> <heading>RECOVERY OF CERTAIN COSTS FOR GROSS PLANT</heading> <subsection identifier="/us/tx/ut/t3/c104/scG/s104.302/a"> <num value="a">(a)</num> <chapeau>In this section:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scG/s104.302/1"> <num value="1">(1)</num> <content>"Gross plant" means a gas utility's plant, facilities, or equipment that has been placed in service.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scG/s104.302/2"> <num value="2">(2)</num> <content>"Post in-service carrying costs" means the product of an unrecovered gross plant multiplied by a gas utility's pre-tax weighted average cost of capital established in the railroad commission's final order in the gas utility's most recent general rate proceeding until recovery.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scG/s104.302/3"> <num value="3">(3)</num> <content>"Unrecovered gross plant" means a gross plant whose cost is not yet being recovered in a gas utility's rates and not already being deferred to a regulatory asset.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scG/s104.302/b"> <num value="b">(b)</num> <chapeau>A gas utility may defer for future recovery as a regulatory asset:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scG/s104.302/1"> <num value="1">(1)</num> <content>post in-service carrying costs;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scG/s104.302/2"> <num value="2">(2)</num> <content>depreciation associated with the unrecovered gross plant; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scG/s104.302/3"> <num value="3">(3)</num> <content>ad valorem taxes associated with the unrecovered gross plant.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scG/s104.302/c"> <num value="c">(c)</num> <content>A regulatory asset established under Subsection (b) must be included in the railroad commission's authorized cost recovery mechanism under Section 104.301.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scG/s104.302/d"> <num value="d">(d)</num> <content>On recovery in rates of a regulatory asset established by a gas utility under Subsection (b), the gas utility shall make appropriate accounting adjustments to reflect the recovery in rates.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scG/s104.302/e"> <num value="e">(e)</num> <content>The railroad commission shall review the costs included in a regulatory asset established by a gas utility under Subsection (b) in a general rate proceeding. The costs are subject to a refund with interest to the extent the railroad commission by order disallows recovery in rates.</content> </subsection> <sourceCredit>Added by Acts 2025, 89th Leg., R.S., Ch. 657 (H.B. 4384), Sec. 1, eff. June 20, 2025.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t3/c104/scH"> <num value="H">SUBCHAPTER H.</num> <heading>PROTECTION AGAINST UTILITY SERVICE DISCONNECTION</heading> <section identifier="/us/tx/ut/t3/c104/scH/s104.351"> <num value="104.351">Sec. 104.351.</num> <heading>DEFINITIONS</heading> <chapeau>In this subchapter:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scH/s104.351/1"> <num value="1">(1)</num> <content>"Customer" means any person in whose name gas utility service is billed, including individuals, governmental units at all levels of government, corporate entities, and any other entity with legal capacity to be billed for gas service.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scH/s104.351/2"> <num value="2">(2)</num> <content>"Gas utility" has the meaning assigned by Section 181.021 but does not include a municipally owned utility or gas utility owned by an electric cooperative.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scH/s104.351/3"> <num value="3">(3)</num> <content>"Nonsubmetered master metered multifamily property" means an apartment, a leased or owner-occupied condominium, or one or more buildings containing at least 10 dwellings that receive gas utility service that is master metered but not submetered.</content> </paragraph> <sourceCredit>Added by Acts 2013, 83rd Leg., R.S., Ch. 322 (H.B. 1772), Sec. 3, eff. January 1, 2014.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scH/s104.352"> <num value="104.352">Sec. 104.352.</num> <heading>NOTICE OF DISCONNECTION TO MUNICIPALITIES FOR NONSUBMETERED MASTER METERED MULTIFAMILY PROPERTIES</heading> <subsection identifier="/us/tx/ut/t3/c104/scH/s104.352/a"> <num value="a">(a)</num> <chapeau>A gas utility shall send a written notice of service disconnection to a municipality before the gas utility disconnects service to a nonsubmetered master metered multifamily property for nonpayment if:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scH/s104.352/1"> <num value="1">(1)</num> <content>the property is located in the municipality; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scH/s104.352/2"> <num value="2">(2)</num> <content>the municipality establishes an authorized representative to receive the notice as described by Section 104.353(c).</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scH/s104.352/b"> <num value="b">(b)</num> <content>The gas utility shall send the notice required by this section not later than the 10th day before the date gas utility service is scheduled for disconnection.</content> </subsection> <sourceCredit>Added by Acts 2013, 83rd Leg., R.S., Ch. 322 (H.B. 1772), Sec. 3, eff. January 1, 2014.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scH/s104.353"> <num value="104.353">Sec. 104.353.</num> <heading>ADDITIONAL SAFEGUARDS</heading> <subsection identifier="/us/tx/ut/t3/c104/scH/s104.353/a"> <num value="a">(a)</num> <content>The customer safeguards provided by this subchapter are in addition to safeguards provided by other law or agency rules.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scH/s104.353/b"> <num value="b">(b)</num> <content>This subchapter does not prohibit a municipality or the regulatory authority from adopting customer safeguards that exceed the safeguards provided by this chapter.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scH/s104.353/c"> <num value="c">(c)</num> <content>The regulatory authority by rule shall develop a mechanism by which a municipality may provide the regulatory authority with the contact information of the municipality's authorized representative to whom the notice required by Section 104.352 must be sent. The regulatory authority shall make the contact information available to the public.</content> </subsection> <sourceCredit>Added by Acts 2013, 83rd Leg., R.S., Ch. 322 (H.B. 1772), Sec. 3, eff. January 1, 2014.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t3/c104/scI"> <num value="I">SUBCHAPTER I.</num> <heading>CUSTOMER RATE RELIEF BONDS</heading> <section identifier="/us/tx/ut/t3/c104/scI/s104.361"> <num value="104.361">Sec. 104.361.</num> <heading>PURPOSE; RAILROAD COMMISSION DUTY</heading> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.361/a"> <num value="a">(a)</num> <chapeau>The purpose of this subchapter is to reduce the cost that customers would otherwise experience because of extraordinary costs that gas utilities incurred to secure gas supply and provide service during Winter Storm Uri, and to restore gas utility systems after that event, by providing securitization financing for gas utilities to recover those costs. The securitization financing mechanism authorized by this subchapter will:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.361/1"> <num value="1">(1)</num> <content>provide rate relief to customers by extending the period during which the costs described by this subsection are recovered from customers; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.361/2"> <num value="2">(2)</num> <content>support the financial strength and stability of gas utility companies.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.361/b"> <num value="b">(b)</num> <content>The railroad commission shall ensure that securitization provides tangible and quantifiable benefits to customers, greater than would have been achieved absent the issuance of customer rate relief bonds.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 805 (H.B. 1520), Sec. 5, eff. June 16, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scI/s104.362"> <num value="104.362">Sec. 104.362.</num> <heading>DEFINITIONS</heading> <chapeau>In this subchapter:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.362/1"> <num value="1">(1)</num> <content>"Ancillary agreement" means a financial arrangement entered into in connection with the issuance or payment of customer rate relief bonds that enhances the marketability, security, or creditworthiness of customer rate relief bonds, including a bond, insurance policy, letter of credit, reserve account, surety bond, interest rate or currency swap arrangement, interest rate lock agreement, forward payment conversion agreement, credit agreement, other hedging arrangement, or liquidity or credit support arrangement.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.362/2"> <num value="2">(2)</num> <content>"Authority" means the Texas Public Finance Authority.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.362/3"> <num value="3">(3)</num> <content>"Bond administrative expenses" means all costs and expenses incurred by the railroad commission, the authority, or any issuing financing entity to evaluate, issue, and administer customer rate relief bonds issued under this subchapter, including fees and expenses of the authority, any bond administrator, and the issuing financing entity, fees for paying agents, trustees, and attorneys, and fees for paying for other consulting and professional services necessary to ensure compliance with this subchapter, applicable state or federal law, and the terms of the financing order.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.362/4"> <num value="4">(4)</num> <content>"Bond obligations" means the principal of a customer rate relief bond and any premium and interest on a customer rate relief bond issued under this subchapter, together with any amount owed under a related ancillary agreement or credit agreement.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.362/5"> <num value="5">(5)</num> <content>"Credit agreement" has the meaning assigned by Section 1371.001, Government Code.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.362/6"> <num value="6">(6)</num> <chapeau>"Customer rate relief bonds" means bonds, notes, certificates, or other evidence of indebtedness or ownership the proceeds of which are used directly or indirectly to recover, finance, or refinance regulatory assets approved by the railroad commission, including extraordinary costs and related financing costs, and that are:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c104/scI/s104.362/A"> <num value="A">(A)</num> <content>issued by an issuing financing entity under a financing order; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c104/scI/s104.362/B"> <num value="B">(B)</num> <content>payable from and secured by customer rate relief property and amounts on deposit in any trust accounts established for the benefit of the customer rate relief bondholders as approved by the applicable financing order.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.362/7"> <num value="7">(7)</num> <chapeau>"Customer rate relief charges" means the amounts authorized by the railroad commission as nonbypassable charges to repay, finance, or refinance regulatory assets, including extraordinary costs, financing costs, bond administrative expenses, and other costs authorized by the financing order:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c104/scI/s104.362/A"> <num value="A">(A)</num> <content>imposed on and included in customer bills of a gas utility that has received a regulatory asset determination under Section 104.365;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c104/scI/s104.362/B"> <num value="B">(B)</num> <content>collected in full by a gas utility that has received a regulatory asset determination under Section 104.365, or its successors or assignees, or a collection agent, as servicer, separate and apart from the gas utility's base rates; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c104/scI/s104.362/C"> <num value="C">(C)</num> <content>paid by all existing or future customers receiving service from a gas utility that has received a regulatory asset determination under Section 104.365 or its successors or assignees, even if a customer elects to purchase gas from an alternative gas supplier.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.362/8"> <num value="8">(8)</num> <chapeau>"Customer rate relief property" means:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c104/scI/s104.362/A"> <num value="A">(A)</num> <content>all rights and interests of an issuing financing entity or any successor under a financing order, including the right to impose, bill, collect, and receive customer rate relief charges authorized in the financing order and to obtain periodic adjustments to those customer rate relief charges as provided in the financing order and in accordance with Section 104.370; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c104/scI/s104.362/B"> <num value="B">(B)</num> <content>all revenues, collections, claims, rights to payments, payments, money, or proceeds arising from the rights and interests specified by Paragraph (A), regardless of whether the revenues, collections, claims, rights to payments, payments, money, or proceeds are imposed, billed, received, collected, or maintained together with or commingled with other revenues, collections, rights to payments, payments, money, or proceeds.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.362/9"> <num value="9">(9)</num> <chapeau>"Financing costs" means any of the following:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c104/scI/s104.362/A"> <num value="A">(A)</num> <content>interest and acquisition, defeasance, or redemption premiums that are payable on customer rate relief bonds;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c104/scI/s104.362/B"> <num value="B">(B)</num> <content>a payment required under an ancillary agreement or credit agreement or an amount required to fund or replenish reserve or other accounts established under the terms of an indenture, ancillary agreement, or other financing document pertaining to customer rate relief bonds;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c104/scI/s104.362/C"> <num value="C">(C)</num> <content>issuance costs or ongoing costs related to supporting, repaying, servicing, or refunding customer rate relief bonds, including servicing fees, accounting or auditing fees, trustee fees, legal fees or expenses, consulting fees, administrative fees, printing fees, financial advisor fees or expenses, Securities and Exchange Commission registration fees, issuer fees, bond administrative expenses, placement and underwriting fees, capitalized interest, overcollateralization funding requirements including amounts to fund or replenish any reserve established for a series of customer rate relief bonds, rating agency fees, stock exchange listing and compliance fees, filing fees, and any other bond administrative expenses; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c104/scI/s104.362/D"> <num value="D">(D)</num> <content>the costs to the railroad commission of acquiring professional or consulting services for the purpose of evaluating extraordinary costs under this subchapter.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.362/10"> <num value="10">(10)</num> <content>"Financing order" means an order adopted under Section 104.366 approving the issuance of customer rate relief bonds and the creation of customer rate relief property and associated customer rate relief charges for the recovery of regulatory assets, including extraordinary costs, related financing costs, and other costs authorized by the financing order.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.362/11"> <num value="11">(11)</num> <content>"Financing party" means a holder of customer rate relief bonds, including a trustee, a pledgee, a collateral agent, any party under an ancillary agreement, or other person acting for the holder's benefit.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.362/12"> <num value="12">(12)</num> <chapeau>"Gas utility" means:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c104/scI/s104.362/A"> <num value="A">(A)</num> <content>an operator of natural gas distribution pipelines that delivers and sells natural gas to the public and that is subject to the railroad commission's jurisdiction under Section 102.001; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c104/scI/s104.362/B"> <num value="B">(B)</num> <content>an operator that transmits, transports, delivers, or sells natural gas or synthetic natural gas to operators of natural gas distribution pipelines and whose rates for those services are established by the railroad commission in a rate proceeding filed under this chapter.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.362/13"> <num value="13">(13)</num> <content>"Issuing financing entity" means a special purpose nonmember, nonstock, nonprofit public corporation established by the authority under Section 1232.1072, Government Code.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.362/14"> <num value="14">(14)</num> <chapeau>"Nonbypassable" means a charge that:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c104/scI/s104.362/A"> <num value="A">(A)</num> <content>must be paid by all existing or future customers receiving service from a gas utility that has received a regulatory asset determination under Section 104.365 or the gas utility's successors or assignees, even if a customer elects to purchase gas from an alternative gas supplier; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c104/scI/s104.362/B"> <num value="B">(B)</num> <content>may not be offset by any credit.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.362/15"> <num value="15">(15)</num> <content>"Normalized market pricing" means the average monthly pricing at the Henry Hub for the three months immediately preceding the month during which extraordinary costs were incurred, plus contractual adders to the index price and other non-indexed gas procurement costs.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.362/16"> <num value="16">(16)</num> <chapeau>"Regulatory asset" includes extraordinary costs:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c104/scI/s104.362/A"> <num value="A">(A)</num> <content>recorded by a gas utility in the utility's books and records in accordance with the uniform system of accounts prescribed for natural gas companies subject to the provisions of the Natural Gas Act (15 U.S.C. Section 717 et seq.) by the Federal Energy Regulatory Commission and generally accepted accounting principles; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c104/scI/s104.362/B"> <num value="B">(B)</num> <content>classified as a receivable or financial asset under international financial reporting standards under the railroad commission's authorization in the Notice of Authorization for Regulatory Asset Accounting for Local Distribution Companies Affected by the February 2021 Winter Weather Event issued February 13, 2021.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.362/17"> <num value="17">(17)</num> <content>"Servicer" means, with respect to each issuance of customer rate relief bonds, the entity identified by the railroad commission in the financing order as servicer responsible for collecting customer rate relief charges from participating gas utilities, remitting all collected funds to the applicable issuing financing entity or the bond trustee, calculating true-up adjustments, and performing any other duties as specified in the financing order.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.362/18"> <num value="18">(18)</num> <content>"Winter Storm Uri" means the North American winter storm that occurred in February 2021.</content> </paragraph> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 805 (H.B. 1520), Sec. 5, eff. June 16, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scI/s104.363"> <num value="104.363">Sec. 104.363.</num> <heading>EXTRAORDINARY COSTS</heading> <content>For the purposes of this subchapter, extraordinary costs are the reasonable and necessary costs related to Winter Storm Uri, including carrying costs, placed in a regulatory asset and approved by the railroad commission in a regulatory asset determination under Section 104.365.</content> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 805 (H.B. 1520), Sec. 5, eff. June 16, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scI/s104.364"> <num value="104.364">Sec. 104.364.</num> <heading>JURISDICTION AND POWERS OF RAILROAD COMMISSION AND OTHER REGULATORY AUTHORITIES</heading> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.364/a"> <num value="a">(a)</num> <content>The railroad commission may authorize the issuance of customer rate relief bonds if the requirements of Section 104.366 are met.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.364/b"> <num value="b">(b)</num> <content>The railroad commission may assess to a gas utility costs associated with administering this subchapter. Assessments must be recovered from rate-regulated customers as part of gas cost.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.364/c"> <num value="c">(c)</num> <content>The railroad commission has exclusive, original jurisdiction to issue financing orders that authorize the creation of customer rate relief property. Customer rate relief property must be created and vested in an issuing financing entity and does not constitute property of the railroad commission or any gas utility.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.364/d"> <num value="d">(d)</num> <content>Except as provided by Subsection (c), this subchapter does not limit or impair a regulatory authority's plenary jurisdiction over the rates, charges, and services rendered by gas utilities in this state under Chapter 102.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 805 (H.B. 1520), Sec. 5, eff. June 16, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scI/s104.365"> <num value="104.365">Sec. 104.365.</num> <heading>REGULATORY ASSET DETERMINATION</heading> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.365/a"> <num value="a">(a)</num> <content>The railroad commission, on application of a gas utility to recover a regulatory asset, shall determine the regulatory asset amount to be recovered by the gas utility. A gas utility may request recovery of a regulatory asset under this subchapter only if the regulatory asset is related to Winter Storm Uri.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.365/b"> <num value="b">(b)</num> <content>A gas utility desiring to participate in the customer rate relief bond process under a financing order by requesting recovery of a regulatory asset must file an application with the railroad commission on or before the 60th day after the effective date of the Act enacting this subchapter.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.365/c"> <num value="c">(c)</num> <content>If the railroad commission does not make a final determination regarding the regulatory asset amount to be recovered by a gas utility before the 151st day after the gas utility files the application, the railroad commission is considered to have approved the regulatory asset amount requested by the gas utility.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.365/d"> <num value="d">(d)</num> <content>The regulatory asset determination is not subject to reduction, impairment, or adjustment by further action of the railroad commission, except as authorized by Section 104.370.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.365/e"> <num value="e">(e)</num> <content>The regulatory asset determination is not subject to rehearing by the railroad commission and may be appealed only to a Travis County district court by a party to the proceeding. The appeal must be filed not later than the 15th day after the date the order is signed by the railroad commission.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.365/f"> <num value="f">(f)</num> <content>The judgment of the district court may be reviewed only by direct appeal to the Supreme Court of Texas. The appeal must be filed not later than the 15th day after the date of entry of judgment.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.365/g"> <num value="g">(g)</num> <chapeau>All appeals shall be heard and determined by the district court and the Supreme Court of Texas as expeditiously as possible with lawful precedence over other matters. Review on appeal shall be based solely on the record before the railroad commission and briefs to the court and limited to whether the financing order:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.365/1"> <num value="1">(1)</num> <content>complies with the constitution and laws of this state and the United States; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.365/2"> <num value="2">(2)</num> <content>is within the authority of the railroad commission to issue under this subchapter.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.365/h"> <num value="h">(h)</num> <content>The railroad commission shall establish a schedule, filing requirements, and a procedure for determining the prudence of the costs included in a gas utility's regulatory asset.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.365/i"> <num value="i">(i)</num> <content>To the extent a gas utility subject to this subchapter receives insurance proceeds, governmental grants, or other sources of funding that compensate or otherwise reimburse or indemnify the gas utility for extraordinary costs following the issuance of customer rate relief bonds, the gas utility may record the amount in a regulatory liability account and that amount shall be reviewed in a future proceeding. If an audit conducted under a valid gas purchase agreement identifies a change of greater than five percent to the total amount of the gas supply costs incurred during the event for which regulatory asset recovery was approved, the gas utility may record the amount in a regulatory asset or regulatory liability account and that amount shall be reviewed for recovery in a future proceeding.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 805 (H.B. 1520), Sec. 5, eff. June 16, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scI/s104.366"> <num value="104.366">Sec. 104.366.</num> <heading>FINANCING ORDERS AND ISSUANCE OF CUSTOMER RATE RELIEF BONDS</heading> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.366/a"> <num value="a">(a)</num> <content>If the railroad commission determines that customer rate relief bond financing for extraordinary costs is the most cost-effective method of funding regulatory asset reimbursements to be made to gas utilities, the railroad commission, after the final resolution of all applications filed under Section 104.365, may request the authority to direct an issuing financing entity to issue customer rate relief bonds. Before making the request, the railroad commission must issue a financing order that complies with this section.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.366/b"> <num value="b">(b)</num> <chapeau>To make the determination described by Subsection (a), the railroad commission must find that the proposed structuring, expected pricing, and proposed financing costs of the customer rate relief bonds are reasonably expected to provide benefits to customers by:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.366/1"> <num value="1">(1)</num> <content>considering customer affordability; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.366/2"> <num value="2">(2)</num> <chapeau>comparing:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c104/scI/s104.366/A"> <num value="A">(A)</num> <content>the estimated monthly costs to customers resulting from the issuance of customer rate relief bonds; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c104/scI/s104.366/B"> <num value="B">(B)</num> <content>the estimated monthly costs to customers that would result from the application of conventional recovery methods.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.366/c"> <num value="c">(c)</num> <chapeau>The financing order must:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.366/1"> <num value="1">(1)</num> <content>include a finding that the use of the securitization financing mechanism is in the public interest and consistent with the purposes of this subchapter;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.366/2"> <num value="2">(2)</num> <content>detail the total amount of the regulatory asset determinations to be included in the customer rate relief bond issuance;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.366/3"> <num value="3">(3)</num> <chapeau>authorize the recovery of any tax obligation of the gas utilities arising or resulting from:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c104/scI/s104.366/A"> <num value="A">(A)</num> <content>receipt of customer rate relief bond proceeds; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c104/scI/s104.366/B"> <num value="B">(B)</num> <content>collection or remittance of customer rate relief charges through the gas utilities' gas cost recovery mechanism or other means that the railroad commission determines reasonable;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.366/4"> <num value="4">(4)</num> <content>authorize the issuance of customer rate relief bonds through an issuing financing entity;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.366/5"> <num value="5">(5)</num> <chapeau>include a statement of:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c104/scI/s104.366/A"> <num value="A">(A)</num> <content>the aggregated regulatory asset determination to be included in the principal amount of the customer rate relief bonds, not to exceed $10 billion for any separate bond issue;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c104/scI/s104.366/B"> <num value="B">(B)</num> <content>the maximum scheduled final maturity of the customer rate relief bonds, not to exceed 30 years, except that the legal final maturity may be longer based on rating agency and market considerations; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c104/scI/s104.366/C"> <num value="C">(C)</num> <content>the maximum interest rate that the customer rate relief bonds may bear, not to exceed the maximum net effective interest rate allowed by law;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.366/6"> <num value="6">(6)</num> <content>provide for the imposition, collection, and mandatory periodic formulaic adjustment of customer rate relief charges in accordance with Section 104.370 by all gas utilities and successors of gas utilities for which a regulatory asset determination has been made under Section 104.365 to ensure that the customer rate relief bonds and all related financing costs will be paid in full and on a timely basis by customer rate relief charges;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.366/7"> <num value="7">(7)</num> <content>authorize the creation of customer rate relief property in favor of the issuing financing entity and pledge of customer rate relief property to the payment of the customer rate relief bonds;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.366/8"> <num value="8">(8)</num> <content>direct the issuing financing entity to disperse the proceeds of customer rate relief bonds, net of bond issuance costs, reserves, and any capitalized interest, to gas utilities for which a regulatory asset determination has been made under Section 104.365 and include the amounts to be distributed to each participating gas utility;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.366/9"> <num value="9">(9)</num> <content>provide that customer rate relief charges be collected and allocated among customers of each gas utility for which a regulatory determination has been made under Section 104.365 through uniform monthly volumetric charges to be paid by customers as a component of the gas utility's gas cost or in another manner that the railroad commission determines reasonable; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.366/10"> <num value="10">(10)</num> <content>reflect the commitment made by a gas utility receiving proceeds that the proceeds are in lieu of recovery of those costs through the regular ratemaking process or other mechanism to the extent the costs are reimbursed to the gas utility by customer rate relief bond financing proceeds.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.366/d"> <num value="d">(d)</num> <content>The financing order may provide for a centralized servicer to coordinate with participating gas utilities who bill and collect customer rate relief charges and to provide certain collection and forecast data required for calculating true-up adjustments. The financing order may not provide for the railroad commission, the authority, the issuing financing entity, or a participating utility to act as servicer.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.366/e"> <num value="e">(e)</num> <chapeau>The principal amount determined by the railroad commission must be increased to include an amount sufficient to:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.366/1"> <num value="1">(1)</num> <content>pay the financing costs associated with the issuance, including all bond administrative expenses to be paid from the proceeds of the bonds;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.366/2"> <num value="2">(2)</num> <content>reimburse the authority and the railroad commission for any costs incurred for the issuance of the customer rate relief bonds and related bond administrative expenses;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.366/3"> <num value="3">(3)</num> <content>provide for any applicable bond reserve fund; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.366/4"> <num value="4">(4)</num> <content>capitalize interest for the period determined necessary by the railroad commission.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.366/f"> <num value="f">(f)</num> <chapeau>The authority, consistent with this subchapter and the terms of the financing order, shall:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.366/1"> <num value="1">(1)</num> <content>direct an issuing financing entity to issue customer rate relief bonds at the railroad commission's request, in accordance with the requirements of Chapter 1232, Government Code, and other provisions of Title 9, Government Code, that apply to bond issuance by a state agency;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.366/2"> <num value="2">(2)</num> <content>determine the methods of sale, types of bonds, bond forms, interest rates, principal amortization, amount of reserves or capitalized interest, and other terms of the customer rate relief bonds that in the authority's judgment best achieve the economic goals of the financing order and effect the financing at the lowest practicable cost; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.366/3"> <num value="3">(3)</num> <content>reimburse the railroad commission, the authority, or any issuing financing entity for bond administrative expenses and other costs authorized under this subchapter.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.366/g"> <num value="g">(g)</num> <content>To the extent authorized in the applicable financing order, an issuing financing entity may enter into credit agreements or ancillary agreements in connection with the issuance of customer rate relief bonds.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.366/h"> <num value="h">(h)</num> <content>The financing order becomes effective in accordance with its terms. The financing order, together with the customer rate relief property and the customer rate relief charges authorized by the financing order, is irrevocable and not subject to reduction, impairment, or adjustment by further action of the railroad commission, except as provided under Subsection (j) and authorized by Section 104.370.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.366/i"> <num value="i">(i)</num> <content>The railroad commission shall issue a financing order under this section not later than the 90th day following the date of the conclusion of all proceedings filed under Section 104.365.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.366/j"> <num value="j">(j)</num> <content>A financing order is not subject to rehearing by the railroad commission. A financing order may be appealed only to a Travis County district court by a party to the proceeding. The appeal must be filed not later than the 15th day after the date the financing order is signed by the railroad commission.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.366/k"> <num value="k">(k)</num> <content>The judgment of the district court may be reviewed only by direct appeal to the Supreme Court of Texas. The appeal must be filed not later than the 15th day after the date of entry of judgment.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.366/l"> <num value="l">(l)</num> <chapeau>All appeals shall be heard and determined by the district court and the Supreme Court of Texas as expeditiously as possible with lawful precedence over other matters. Review on appeal shall be based solely on the record before the railroad commission and briefs to the court and is limited to whether the financing order:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.366/1"> <num value="1">(1)</num> <content>complies with the constitution and laws of this state and the United States; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.366/2"> <num value="2">(2)</num> <content>is within the authority of the railroad commission to issue under this subchapter.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.366/m"> <num value="m">(m)</num> <content>The railroad commission shall transmit a financing order to the authority after all appeals under this section have been exhausted.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.366/n"> <num value="n">(n)</num> <content>The authority shall direct an issuing financing entity to issue customer rate relief bonds as soon as practicable and not later than the 180th day after receipt of a financing order issued under this section, except that the authority may cause the issuance after the 180th day if necessary based on bond market conditions, the receipt of necessary approvals, and the timely receipt of necessary financial disclosure information from each participating gas utility.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.366/o"> <num value="o">(o)</num> <content>The issuing financing entity shall deliver customer rate relief bond proceeds net of upfront financing costs in accordance with the applicable financing order.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.366/p"> <num value="p">(p)</num> <content>For the benefit of the authority, the issuing financing entity, holders of customer rate relief bonds, and all other financing parties, the railroad commission shall guarantee in a financing order that the railroad commission will take all actions in the railroad commission's powers to enforce the provisions of the financing order to ensure that customer rate relief charge revenues are sufficient to pay on a timely basis scheduled principal and interest on the customer rate relief bonds and all related financing costs and bond administrative expenses.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.366/q"> <num value="q">(q)</num> <content>The railroad commission shall make periodic reports to the public regarding each financing.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 805 (H.B. 1520), Sec. 5, eff. June 16, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scI/s104.367"> <num value="104.367">Sec. 104.367.</num> <heading>PROPERTY RIGHTS</heading> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.367/a"> <num value="a">(a)</num> <content>Customer rate relief bonds are the limited obligation solely of the issuing financing entity and are not a debt of a gas utility or a debt or a pledge of the faith and credit of this state or any political subdivision of this state.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.367/b"> <num value="b">(b)</num> <content>Customer rate relief bonds are nonrecourse to the credit or any assets of this state or the authority. A trust fund created in connection with the issuance of customer rate relief bonds is not subject to Subtitle B, Title 9, Property Code.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.367/c"> <num value="c">(c)</num> <content>The rights and interests of an issuing financing entity or the successor under a financing order, including the right to receive customer rate relief charges authorized in the financing order, are only contract rights until pledged in connection with the issuance of the customer rate relief bonds, at which time the rights and interests become customer rate relief property.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.367/d"> <num value="d">(d)</num> <content>Customer rate relief property created under a financing order is vested ab initio in the issuing financing entity. Customer rate relief property constitutes a present property right for purposes of contracts concerning the sale or pledge of property, notwithstanding that the imposition and collection of customer rate relief charges depends on further acts of the gas utility or others that have not yet occurred. The financing order remains in effect, and the customer rate relief property continues to exist, for the same period as the pledge of the state described by Section 104.374.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.367/e"> <num value="e">(e)</num> <content>All revenue and collections resulting from customer rate relief charges constitute proceeds only of a property right arising from the financing order.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.367/f"> <num value="f">(f)</num> <content>An amount owed by an issuing financing entity under an ancillary agreement or a credit agreement is payable from and secured by a pledge and interest in the customer rate relief property to the extent provided in the documents evidencing the ancillary agreement or credit agreement.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 805 (H.B. 1520), Sec. 5, eff. June 16, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scI/s104.368"> <num value="104.368">Sec. 104.368.</num> <heading>PROPERTY INTEREST NOT SUBJECT TO SETOFF, COUNTERCLAIM, SURCHARGE, OR DEFENSE</heading> <content>The interest of an issuing financing entity or pledgee in customer rate relief property, including the revenue and collections arising from customer rate relief charges, is not subject to setoff, counterclaim, surcharge, or defense by the gas utility or any other person or in connection with the bankruptcy of the gas utility, the authority, or any other entity. A financing order remains in effect and unabated notwithstanding the bankruptcy of the gas utility, the authority, an issuing financing entity, or any successor or assignee of the gas utility, authority, or issuing financing entity.</content> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 805 (H.B. 1520), Sec. 5, eff. June 16, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scI/s104.369"> <num value="104.369">Sec. 104.369.</num> <heading>CUSTOMER RATE RELIEF CHARGES NONBYPASSABLE</heading> <content>A financing order must include terms ensuring that the imposition and collection of the customer rate relief charges authorized in the order are nonbypassable.</content> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 805 (H.B. 1520), Sec. 5, eff. June 16, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scI/s104.370"> <num value="104.370">Sec. 104.370.</num> <heading>TRUE-UP MECHANISM</heading> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.370/a"> <num value="a">(a)</num> <chapeau>A financing order must include a formulaic true-up charge adjustment mechanism that requires that the customer rate relief charges be reviewed and adjusted at least annually by the servicer or replacement servicer, including a subservicer or replacement subservicer, at time periods and frequencies provided in the financing order, to:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.370/1"> <num value="1">(1)</num> <content>correct any overcollections or undercollections of the preceding 12 months; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.370/2"> <num value="2">(2)</num> <content>ensure the expected recovery of amounts sufficient to provide for the timely payment of customer rate relief bond principal and interest payments and other financing costs.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.370/b"> <num value="b">(b)</num> <content>True-up charge adjustments must become effective not later than the 30th day after the date the railroad commission receives a true-up charge adjustment letter from the servicer or replacement servicer notifying the railroad commission of the pending adjustment.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.370/c"> <num value="c">(c)</num> <content>Any administrative review of true-up charge adjustments must be limited to notifying the servicer of mathematical or clerical errors in the calculation. The servicer may correct the error and refile a true-up charge adjustment letter, with the adjustment becoming effective as soon as practicable but not later than the 30th day after the date the railroad commission receives the refiled letter.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 805 (H.B. 1520), Sec. 5, eff. June 16, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scI/s104.371"> <num value="104.371">Sec. 104.371.</num> <heading>SECURITY INTERESTS; ASSIGNMENT; COMMINGLING; DEFAULT</heading> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.371/a"> <num value="a">(a)</num> <content>Customer rate relief property does not constitute an account or general intangible under Section 9.106, Business & Commerce Code. The creation, granting, perfection, and enforcement of liens and security interests in customer rate relief property that secures customer rate relief bonds are governed by Chapter 1208, Government Code.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.371/b"> <num value="b">(b)</num> <content>The priority of a lien and security interest perfected under this section is not impaired by any later adjustment of customer rate relief charges under a mechanism adopted under Section 104.370 or by the commingling of funds arising from customer rate relief charges with other funds. Any other security interest that may apply to those funds is terminated when the funds are transferred to a segregated account for the issuing financing entity or a financing party. If customer rate relief property has been transferred to a trustee or another pledgee of the issuing financing entity, any proceeds of that property must be held in trust for the financing party.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.371/c"> <num value="c">(c)</num> <content>If a default or termination occurs under the customer rate relief bonds, a district court of Travis County, on application by or on behalf of the financing parties, shall order the sequestration and payment to the financing parties of revenue arising from the customer rate relief charges.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 805 (H.B. 1520), Sec. 5, eff. June 16, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scI/s104.372"> <num value="104.372">Sec. 104.372.</num> <heading>BOND PROCEEDS IN TRUST</heading> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.372/a"> <num value="a">(a)</num> <content>The issuing financing entity may deposit proceeds of customer rate relief bonds issued by the issuing financing entity under this subchapter with a trustee selected by the issuing financing entity or the proceeds may be held by the comptroller in a dedicated trust fund outside the state treasury in the custody of the comptroller.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.372/b"> <num value="b">(b)</num> <chapeau>Bond proceeds, net of the financing costs and reserves described by Subdivisions (2) and (3), including investment income, must be held in trust for the exclusive benefit of the railroad commission's policy of reimbursing gas utility costs and applied in accordance with the financing order. The issuing financing entity shall deliver the net proceeds, as provided in the applicable financing order, to:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.372/1"> <num value="1">(1)</num> <content>reimburse each gas utility the regulatory asset amount determined to be reasonable for that gas utility in the financing order;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.372/2"> <num value="2">(2)</num> <content>pay the financing costs of issuing the bonds; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scI/s104.372/3"> <num value="3">(3)</num> <content>provide bond reserves or fund any capitalized interest, as applicable.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.372/c"> <num value="c">(c)</num> <content>On full payment of the customer rate relief bonds and any related financing costs, any customer rate relief charges or other amounts held as security for the bonds shall be used to provide credits to gas utility customers as provided in the financing order.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 805 (H.B. 1520), Sec. 5, eff. June 16, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scI/s104.373"> <num value="104.373">Sec. 104.373.</num> <heading>REPAYMENT OF CUSTOMER RATE RELIEF BONDS</heading> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.373/a"> <num value="a">(a)</num> <content>As long as any customer rate relief bonds or related financing costs remain outstanding, uniform monthly volumetric customer rate relief charges must be paid by all current and future customers that receive service from a gas utility for which a regulatory asset determination has been made under Section 104.365. A gas utility and its successors, assignees, or replacements shall continue to bill and collect customer rate relief charges from the gas utility's current and future customers until all customer rate relief bonds and financing costs are paid in full.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.373/b"> <num value="b">(b)</num> <content>The authority shall report to the railroad commission the amount of the outstanding customer rate relief bonds issued by the issuing financing entity under this subchapter and the estimated amount of annual bond administrative expenses.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.373/c"> <num value="c">(c)</num> <content>All revenue collected from the customer rate relief charges shall be remitted promptly by the applicable servicers to the issuing financing entity or the bond trustee for the customer rate relief bonds to pay bond obligations and ongoing financing costs, including bond administrative expenses, to ensure timely payment of bond obligations and financing costs.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.373/d"> <num value="d">(d)</num> <content>Customer rate relief property, including customer rate relief charges, may be applied only as provided by this subchapter.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.373/e"> <num value="e">(e)</num> <content>Bond obligations are payable only from sources provided for payment by this subchapter.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 805 (H.B. 1520), Sec. 5, eff. June 16, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scI/s104.374"> <num value="104.374">Sec. 104.374.</num> <heading>PLEDGE OF STATE</heading> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.374/a"> <num value="a">(a)</num> <content>Customer rate relief bonds issued under this subchapter and any related ancillary agreements or credit agreements are not a debt or pledge of the faith and credit of this state or a state agency or political subdivision of this state. A customer rate relief bond, ancillary agreement, or credit agreement is payable solely from customer rate relief charges as provided by this subchapter.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.374/b"> <num value="b">(b)</num> <content>Notwithstanding Subsection (a), this state, including the railroad commission and the authority, pledges for the benefit and protection of the financing parties and the gas utility that this state will not take or permit any action that would impair the value of customer rate relief property, or, except as permitted by Section 104.370, reduce, alter, or impair the customer rate relief charges to be imposed, collected, and remitted to financing parties until the principal, interest and premium, and contracts to be performed in connection with the related customer rate relief bonds and financing costs have been paid and performed in full. Each issuing financing entity shall include this pledge in any documentation relating to customer rate relief bonds.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.374/c"> <num value="c">(c)</num> <content>Before the date that is two years and one day after the date that an issuing financing entity no longer has any payment obligation with respect to customer rate relief bonds, the issuing financing entity may not wind up or dissolve the financing entity's operations, may not file a voluntary petition under federal bankruptcy law, and neither the board of the issuing financing entity nor any public official nor any organization, entity, or other person may authorize the issuing financing entity to be or to become a debtor under federal bankruptcy law during that period. The state covenants that it will not limit or alter the denial of authority under this subsection, and the provisions of this subsection are hereby made a part of the contractual obligation that is subject to the state pledge made in this section.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 805 (H.B. 1520), Sec. 5, eff. June 16, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scI/s104.375"> <num value="104.375">Sec. 104.375.</num> <heading>TAX EXEMPTION</heading> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.375/a"> <num value="a">(a)</num> <content>The sale or purchase of or revenue derived from services performed in the issuance or transfer of customer rate relief bonds issued under this subchapter is exempt from taxation by this state or a political subdivision of this state.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scI/s104.375/b"> <num value="b">(b)</num> <content>A gas utility's receipt of customer rate relief charges is exempt from state and local sales and use taxes and utility gross receipts taxes and assessments, and is excluded from revenue for purposes of franchise tax under Section 171.1011, Tax Code.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 805 (H.B. 1520), Sec. 5, eff. June 16, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scI/s104.376"> <num value="104.376">Sec. 104.376.</num> <heading>RECOVERABLE TAX EXPENSE</heading> <content>A tax obligation of the gas utility arising from receipt of customer rate relief bond proceeds or from the collection or remittance of customer rate relief charges is an allowable expense under Section 104.055.</content> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 805 (H.B. 1520), Sec. 5, eff. June 16, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scI/s104.377"> <num value="104.377">Sec. 104.377.</num> <heading>ISSUING FINANCING ENTITY OR FINANCING PARTY NOT PUBLIC UTILITY</heading> <content>An issuing financing entity or financing party may not be considered to be a public utility or person providing natural gas service solely by virtue of the transactions described by this subchapter.</content> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 805 (H.B. 1520), Sec. 5, eff. June 16, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scI/s104.378"> <num value="104.378">Sec. 104.378.</num> <heading>NO PERSONAL LIABILITY</heading> <content>A commissioner of the railroad commission, a railroad commission employee, a member of the board of directors of the authority, an employee of the authority, or a director, officer, or employee of any issuing financing entity is not personally liable for a result of an exercise of a duty or responsibility established under this subchapter.</content> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 805 (H.B. 1520), Sec. 5, eff. June 16, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scI/s104.380"> <num value="104.380">Sec. 104.380.</num> <heading>SEVERABILITY</heading> <content>After the date customer rate relief bonds are issued under this subchapter, if any provision in this title or portion of this title or related provisions in Title 9, Government Code, are held to be invalid or are invalidated, superseded, replaced, repealed, or expire for any reason, that occurrence does not affect the validity or continuation of this subchapter or any other provision of this title or related provisions in Title 9, Government Code, that are relevant to the issuance, administration, payment, retirement, or refunding of customer rate relief bonds or to any actions of a gas utility, its successors, an assignee, a collection agent, or a financing party, which shall remain in full force and effect.</content> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 805 (H.B. 1520), Sec. 5, eff. June 16, 2021.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t3/c104/scJ"> <num value="J">SUBCHAPTER J.</num> <heading>NATURAL GAS ENERGY CONSERVATION PROGRAMS</heading> <section identifier="/us/tx/ut/t3/c104/scJ/s104.401"> <num value="104.401">Sec. 104.401.</num> <heading>DEFINITIONS</heading> <chapeau>In this subchapter:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scJ/s104.401/1"> <num value="1">(1)</num> <content>"Energy conservation program" means a program that promotes energy conservation or energy efficiency.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scJ/s104.401/2"> <num value="2">(2)</num> <content>"Local distribution company" means a gas utility that operates a retail gas distribution system.</content> </paragraph> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 710 (H.B. 2263), Sec. 1, eff. June 12, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scJ/s104.402"> <num value="104.402">Sec. 104.402.</num> <heading>ENERGY CONSERVATION PROGRAM AUTHORITY</heading> <subsection identifier="/us/tx/ut/t3/c104/scJ/s104.402/a"> <num value="a">(a)</num> <content>A local distribution company may offer to customers and prospective customers and provide to customers an energy conservation program in the manner provided by this subchapter.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scJ/s104.402/b"> <num value="b">(b)</num> <content>The railroad commission has exclusive original jurisdiction over energy conservation programs implemented by local distribution companies.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scJ/s104.402/c"> <num value="c">(c)</num> <content>A political subdivision served by a local distribution company that implements an energy conservation program approved by the railroad commission under this subchapter may not limit, restrict, or otherwise prevent an eligible customer from participating in the energy conservation program based on the type or source of energy delivered to the customer.</content> </subsection> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 710 (H.B. 2263), Sec. 1, eff. June 12, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c104/scJ/s104.403"> <num value="104.403">Sec. 104.403.</num> <heading>ENERGY CONSERVATION PROGRAM COST RECOVERY</heading> <subsection identifier="/us/tx/ut/t3/c104/scJ/s104.403/a"> <num value="a">(a)</num> <content>A local distribution company may recover costs of energy conservation programs implemented under this subchapter if approved by the railroad commission in the manner provided by this subchapter. A local distribution company seeking to recover the costs must apply to the railroad commission before beginning recovery of the costs and at least once every three years after the date the company first applies for the cost recovery.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scJ/s104.403/b"> <num value="b">(b)</num> <content>If the railroad commission approves the local distribution company's application or approves the application with modifications, the company may recover costs prudently incurred to implement the energy conservation programs, including costs incurred to design, market, implement, administer, and deliver an energy conservation program.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scJ/s104.403/c"> <num value="c">(c)</num> <content>If the local distribution company provides an earnings monitoring report for the preceding calendar year demonstrating that the company did not earn above the rate of return established in the latest effective rates approved by the railroad commission for the company, the railroad commission may allow the company to recover an amount equal to the reduction in the company's marginal revenues due to lower sales or demand resulting from the energy conservation program.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scJ/s104.403/d"> <num value="d">(d)</num> <chapeau>The railroad commission by rule shall require a local distribution company that implements an energy conservation program under this subchapter to submit to the railroad commission an annual report on:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scJ/s104.403/1"> <num value="1">(1)</num> <content>the performance of the company's energy conservation programs for the preceding year; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scJ/s104.403/2"> <num value="2">(2)</num> <content>the company's planned energy conservation programs for the upcoming year.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scJ/s104.403/e"> <num value="e">(e)</num> <chapeau>An application for cost recovery under Subsection (a) must include:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scJ/s104.403/1"> <num value="1">(1)</num> <content>a summary of and objectives for the local distribution company's energy conservation programs;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scJ/s104.403/2"> <num value="2">(2)</num> <content>a description of each program;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scJ/s104.403/3"> <num value="3">(3)</num> <content>a proposed budget for each program;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scJ/s104.403/4"> <num value="4">(4)</num> <content>the projected consumption reduction or cost savings for each program; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scJ/s104.403/5"> <num value="5">(5)</num> <content>any public input compiled by the local distribution company on the proposed programs as required by the railroad commission.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scJ/s104.403/f"> <num value="f">(f)</num> <chapeau>The railroad commission by rule may:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scJ/s104.403/1"> <num value="1">(1)</num> <content>determine a cost recovery mechanism for timely recovery of costs described by Subsection (a); and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scJ/s104.403/2"> <num value="2">(2)</num> <content>ensure that costs described by Subsection (a) are allocated to the customer classes eligible for participation in the energy conservation program.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scJ/s104.403/g"> <num value="g">(g)</num> <chapeau>Energy conservation programs proposed under this section may be combined in a portfolio to provide incentives and services to encourage energy conservation. The portfolio:</chapeau> <paragraph identifier="/us/tx/ut/t3/c104/scJ/s104.403/1"> <num value="1">(1)</num> <content>must be designed to overcome barriers to the adoption of energy-efficient equipment, technologies, and processes and be designed to change customer behavior as necessary; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c104/scJ/s104.403/2"> <num value="2">(2)</num> <chapeau>may include measures such as:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c104/scJ/s104.403/A"> <num value="A">(A)</num> <content>direct financial incentives;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c104/scJ/s104.403/B"> <num value="B">(B)</num> <content>technical assistance and information, including building energy performance analyses performed by the local distribution company or a third party approved by the company;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c104/scJ/s104.403/C"> <num value="C">(C)</num> <content>discounts or rebates for products; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c104/scJ/s104.403/D"> <num value="D">(D)</num> <content>weatherization for low-income customers.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scJ/s104.403/h"> <num value="h">(h)</num> <content>A proceeding filed under this section is not a ratemaking proceeding for the purposes of Section 103.022.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c104/scJ/s104.403/i"> <num value="i">(i)</num> <content>A local distribution company implementing an energy conservation program under this subchapter shall reimburse the railroad commission for the utility's proportionate share of the railroad commission's costs related to administration of reviewing and approving or denying cost recovery applications under this subchapter.</content> </subsection> <sourceCredit>Added by Acts 2023, 88th Leg., R.S., Ch. 710 (H.B. 2263), Sec. 1, eff. June 12, 2023.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t3/c105"> <num value="105">CHAPTER 105.</num> <heading>JUDICIAL REVIEW; ENFORCEMENT AND PENALTIES</heading> <subchapter identifier="/us/tx/ut/t3/c105/scA"> <num value="A">SUBCHAPTER A.</num> <heading>JUDICIAL REVIEW</heading> <section identifier="/us/tx/ut/t3/c105/scA/s105.001"> <num value="105.001">Sec. 105.001.</num> <heading>RIGHT TO JUDICIAL REVIEW</heading> <subsection identifier="/us/tx/ut/t3/c105/scA/s105.001/a"> <num value="a">(a)</num> <content>Any party to a proceeding before the railroad commission is entitled to judicial review under the substantial evidence rule.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c105/scA/s105.001/b"> <num value="b">(b)</num> <content>The issue of confiscation is determined by a preponderance of the evidence.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c105/scA/s105.002"> <num value="105.002">Sec. 105.002.</num> <heading>JUDICIAL STAY OR SUSPENSION</heading> <content>While an appeal of an order, ruling, or decision of a regulatory authority is pending, the district court, court of appeals, or supreme court, as appropriate, may stay or suspend all or part of the operation of the order, ruling, or decision. In granting or refusing a stay or suspension, the court shall act in accordance with the practice of a court exercising equity jurisdiction.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t3/c105/scB"> <num value="B">SUBCHAPTER B.</num> <heading>ENFORCEMENT AND PENALTIES</heading> <section identifier="/us/tx/ut/t3/c105/scB/s105.021"> <num value="105.021">Sec. 105.021.</num> <heading>ACTION TO ENJOIN OR REQUIRE COMPLIANCE</heading> <subsection identifier="/us/tx/ut/t3/c105/scB/s105.021/a"> <num value="a">(a)</num> <chapeau>The attorney general, on the request of the railroad commission, shall apply in the name of the commission for an order under Subsection (b) if the commission determines that a gas utility or other person is:</chapeau> <paragraph identifier="/us/tx/ut/t3/c105/scB/s105.021/1"> <num value="1">(1)</num> <content>engaging in or about to engage in an act that violates this subtitle or an order or rule of the commission entered or adopted under this subtitle; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c105/scB/s105.021/2"> <num value="2">(2)</num> <content>failing to comply with the requirements of this subtitle or a rule or order of the commission.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c105/scB/s105.021/b"> <num value="b">(b)</num> <chapeau>A court, in an action under this section, may:</chapeau> <paragraph identifier="/us/tx/ut/t3/c105/scB/s105.021/1"> <num value="1">(1)</num> <content>prohibit the commencement or continuation of an act that violates this subtitle or an order or rule of the commission entered or adopted under this subtitle; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c105/scB/s105.021/2"> <num value="2">(2)</num> <content>require compliance with a provision of this subtitle or an order or rule of the commission.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c105/scB/s105.021/c"> <num value="c">(c)</num> <content>The remedy under this section is in addition to any other remedy provided under this subtitle.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c105/scB/s105.022"> <num value="105.022">Sec. 105.022.</num> <heading>CONTEMPT</heading> <chapeau>The railroad commission may file an action for contempt against a person who:</chapeau> <paragraph identifier="/us/tx/ut/t3/c105/scB/s105.022/1"> <num value="1">(1)</num> <content>fails to comply with a lawful order of the commission;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c105/scB/s105.022/2"> <num value="2">(2)</num> <content>fails to comply with a subpoena or subpoena duces tecum; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c105/scB/s105.022/3"> <num value="3">(3)</num> <content>refuses to testify about a matter on which the person may be lawfully interrogated.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c105/scB/s105.023"> <num value="105.023">Sec. 105.023.</num> <heading>CIVIL PENALTY AGAINST GAS UTILITY OR AFFILIATE</heading> <subsection identifier="/us/tx/ut/t3/c105/scB/s105.023/a"> <num value="a">(a)</num> <content>A gas utility or affiliate is subject to a civil penalty if the gas utility or affiliate knowingly violates this subtitle, fails to perform a duty imposed on it, or fails, neglects, or refuses to obey an order, rule, direction, or requirement of the railroad commission or a decree or judgment of a court.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c105/scB/s105.023/b"> <num value="b">(b)</num> <content>A civil penalty under this section shall be in an amount of not less than $1,000 and not more than $5,000 for each violation.</content> <continuation>(b-1) Notwithstanding Subsection (b), a civil penalty under this section shall be in an amount of not less than $1,000 and not more than $1,000,000 for each violation of Section 104.258(c).</continuation> </subsection> <subsection identifier="/us/tx/ut/t3/c105/scB/s105.023/c"> <num value="c">(c)</num> <content>A gas utility or affiliate commits a separate violation each day it continues to violate Subsection (a).</content> </subsection> <subsection identifier="/us/tx/ut/t3/c105/scB/s105.023/d"> <num value="d">(d)</num> <content>The attorney general shall file in the name of the railroad commission a suit on the attorney general's own initiative or at the request of the commission to recover the civil penalty under this section.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c105/scB/s105.023/e"> <num value="e">(e)</num> <chapeau>The railroad commission by rule shall establish a classification system to be used by a court under this subchapter for violations of Section 104.258(c) that includes a range of penalties that may be recovered for each class of violation based on:</chapeau> <paragraph identifier="/us/tx/ut/t3/c105/scB/s105.023/1"> <num value="1">(1)</num> <chapeau>the seriousness of the violation, including:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c105/scB/s105.023/A"> <num value="A">(A)</num> <content>the nature, circumstances, extent, and gravity of a prohibited act; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c105/scB/s105.023/B"> <num value="B">(B)</num> <content>the hazard or potential hazard created to the health, safety, or economic welfare of the public;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t3/c105/scB/s105.023/2"> <num value="2">(2)</num> <content>the history of previous violations;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c105/scB/s105.023/3"> <num value="3">(3)</num> <content>the amount necessary to deter future violations;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c105/scB/s105.023/4"> <num value="4">(4)</num> <content>efforts to correct the violation; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c105/scB/s105.023/5"> <num value="5">(5)</num> <content>any other matter that justice may require.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c105/scB/s105.023/f"> <num value="f">(f)</num> <content>The classification system established under Subsection (e) shall provide that a penalty in an amount that exceeds $5,000 may be recovered only if the violation is included in the highest class of violations in the classification system.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2021, 87th Leg., R.S., Ch. 426 (S.B. 3), Sec. 20, eff. June 8, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c105/scB/s105.024"> <num value="105.024">Sec. 105.024.</num> <heading>OFFENSE</heading> <subsection identifier="/us/tx/ut/t3/c105/scB/s105.024/a"> <num value="a">(a)</num> <content>A person commits an offense if the person knowingly violates this subtitle.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c105/scB/s105.024/b"> <num value="b">(b)</num> <content>An offense under this section is a felony of the third degree.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c105/scB/s105.025"> <num value="105.025">Sec. 105.025.</num> <heading>PLACE FOR SUIT</heading> <chapeau>A suit for an injunction or a penalty under this subtitle may be brought in:</chapeau> <paragraph identifier="/us/tx/ut/t3/c105/scB/s105.025/1"> <num value="1">(1)</num> <content>Travis County;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c105/scB/s105.025/2"> <num value="2">(2)</num> <content>a county in which the violation is alleged to have occurred; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c105/scB/s105.025/3"> <num value="3">(3)</num> <content>a county in which a defendant resides.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c105/scB/s105.026"> <num value="105.026">Sec. 105.026.</num> <heading>PENALTIES CUMULATIVE</heading> <subsection identifier="/us/tx/ut/t3/c105/scB/s105.026/a"> <num value="a">(a)</num> <content>A penalty that accrues under this subtitle is cumulative of any other penalty.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c105/scB/s105.026/b"> <num value="b">(b)</num> <content>A suit for the recovery of a penalty does not bar or affect the recovery of any other penalty or bar a criminal prosecution against any person, including a gas utility or officer, director, agent, or employee of a gas utility.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c105/scB/s105.027"> <num value="105.027">Sec. 105.027.</num> <heading>DISPOSITION OF FINES AND PENALTIES</heading> <content>A fine or penalty collected under this subtitle, other than a fine or penalty collected in a criminal proceeding, shall be paid to the railroad commission.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t3/c105/scC"> <num value="C">SUBCHAPTER C.</num> <heading>COMPLAINTS</heading> <section identifier="/us/tx/ut/t3/c105/scC/s105.051"> <num value="105.051">Sec. 105.051.</num> <heading>COMPLAINT BY AFFECTED PERSON</heading> <content>An affected person may complain to the regulatory authority in writing setting forth an act or omission by a gas utility in violation or claimed violation of a law that the regulatory authority has jurisdiction to administer or of an order, ordinance, or rule of the regulatory authority.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t3/c121"> <num value="121">CHAPTER 121.</num> <heading>GAS PIPELINES</heading> <subchapter identifier="/us/tx/ut/t3/c121/scA"> <num value="A">SUBCHAPTER A.</num> <heading>GAS UTILITY DEFINED</heading> <section identifier="/us/tx/ut/t3/c121/scA/s121.001"> <num value="121.001">Sec. 121.001.</num> <heading>DEFINITION OF GAS UTILITY</heading> <subsection identifier="/us/tx/ut/t3/c121/scA/s121.001/a"> <num value="a">(a)</num> <chapeau>In this chapter, "gas utility" means a person who owns, manages, operates, leases, or controls in this state property or equipment or a pipeline, plant, facility, franchise, license, or permit for a business that:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scA/s121.001/1"> <num value="1">(1)</num> <chapeau>transports, conveys, distributes, or delivers natural gas:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c121/scA/s121.001/A"> <num value="A">(A)</num> <content>for public use or service for compensation;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c121/scA/s121.001/B"> <num value="B">(B)</num> <content>for sale to municipalities or persons engaged in distributing or selling natural gas to the public, in a situation described by Subdivision (3);</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c121/scA/s121.001/C"> <num value="C">(C)</num> <content>for sale or delivery to a person operating under a franchise or contract with a political subdivision of this state; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c121/scA/s121.001/D"> <num value="D">(D)</num> <content>for sale or delivery to the public for domestic or other use;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scA/s121.001/2"> <num value="2">(2)</num> <chapeau>owns, operates, or manages a pipeline:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c121/scA/s121.001/A"> <num value="A">(A)</num> <content>that is for transporting or carrying natural gas, whether for public hire or not; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c121/scA/s121.001/B"> <num value="B">(B)</num> <content>for which the right-of-way has been or is hereafter acquired by exercising the right of eminent domain; or</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scA/s121.001/3"> <num value="3">(3)</num> <content>produces or purchases natural gas and transports or causes the transportation of natural gas by a pipeline to or near the limits of a municipality in which the gas is received and distributed or sold to the public by another gas utility or by the municipality in a situation in which the business is the only or practically the only agency of supply of natural gas to the gas utility or municipality.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scA/s121.001/b"> <num value="b">(b)</num> <content>In this subchapter, "person" means an individual, company, limited liability company, or private corporation and includes a lessee, trustee, or receiver of an individual, company, limited liability company, or private corporation.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 11, Sec. 2, eff. May 3, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scA/s121.002"> <num value="121.002">Sec. 121.002.</num> <heading>AFFILIATE OF GAS UTILITY EXCLUDED</heading> <content>A person is not a gas utility solely because the person is an affiliate of a gas utility.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scA/s121.003"> <num value="121.003">Sec. 121.003.</num> <heading>AGRICULTURAL SERVICE EXCLUDED</heading> <subsection identifier="/us/tx/ut/t3/c121/scA/s121.003/a"> <num value="a">(a)</num> <content>The act or acts of transporting, delivering, selling, or otherwise making available natural gas for fuel, either directly or indirectly, to an owner of an irrigation well, or the sale, transportation, or delivery of natural gas for any other direct use in an agricultural activity, does not make a person a gas utility or make the person subject to the jurisdiction, control, and regulation of the railroad commission as a gas utility.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scA/s121.003/b"> <num value="b">(b)</num> <content>In order for a person furnishing natural gas to qualify for the exemption under Subsection (a), the person to whom the gas was furnished under Subsection (a) shall use the gas exclusively to pump water for farm and other agricultural purposes.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scA/s121.004"> <num value="121.004">Sec. 121.004.</num> <heading>TRANSPORTATION OF GAS SOLELY FOR INTERSTATE COMMERCE EXCLUDED</heading> <content>Except as provided by Section 121.001(a)(2), a person is not a gas utility if the person certifies to the railroad commission that the person transports natural or synthetic gas, for sale, for hire, or otherwise, solely in, or in the vicinity of, the field or fields where the gas is produced, to another person for transportation or sale in interstate commerce.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scA/s121.005"> <num value="121.005">Sec. 121.005.</num> <heading>TRANSPORTATION OF GAS IN VICINITY OF PLACE OF PRODUCTION EXCLUDED</heading> <subsection identifier="/us/tx/ut/t3/c121/scA/s121.005/a"> <num value="a">(a)</num> <chapeau>Except as provided by Section 121.001(a)(2), a person is not a gas utility if the person certifies to the railroad commission that the person transports natural or synthetic gas, for sale, for hire, or otherwise, solely:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scA/s121.005/1"> <num value="1">(1)</num> <content>in, or in the vicinity of, the field or fields where the gas is produced to a gas processing plant or treating facility;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scA/s121.005/2"> <num value="2">(2)</num> <chapeau>from the outlet of a gas processing plant or treating facility described by Subdivision (1) to a person:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c121/scA/s121.005/A"> <num value="A">(A)</num> <content>at, or in the vicinity of, the plant or treating facility; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c121/scA/s121.005/B"> <num value="B">(B)</num> <content>described by Subdivision (3) or Section 121.004; or</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scA/s121.005/3"> <num value="3">(3)</num> <content>to another person in, or in the vicinity of, the field or fields where the gas is produced for transportation or sale in intrastate commerce.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scA/s121.005/b"> <num value="b">(b)</num> <chapeau>A person is not a gas utility because the person delivers or sells gas:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scA/s121.005/1"> <num value="1">(1)</num> <content>for lease use, compressor fuel, processing plant fuel, or a similar use;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scA/s121.005/2"> <num value="2">(2)</num> <content>under a lease or right-of-way agreement;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scA/s121.005/3"> <num value="3">(3)</num> <content>in, or in the vicinity of, the field where the gas is produced; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scA/s121.005/4"> <num value="4">(4)</num> <content>at a processing plant outlet.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scA/s121.005/c"> <num value="c">(c)</num> <chapeau>Subsection (b) does not exclude as a gas utility a pipeline that:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scA/s121.005/1"> <num value="1">(1)</num> <chapeau>transmits or distributes to end users of gas, other than:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c121/scA/s121.005/A"> <num value="A">(A)</num> <content>those described by Subsection (b); or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c121/scA/s121.005/B"> <num value="B">(B)</num> <content>a person who qualifies for the exemption provided by Section 121.003; or</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scA/s121.005/2"> <num value="2">(2)</num> <content>makes city-gate deliveries for local distribution.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scA/s121.005/d"> <num value="d">(d)</num> <content>The railroad commission may review a certification made by a person under Subsection (a). The railroad commission shall invite a person whose certification is being reviewed to an informal meeting to resolve the person's status under this subsection. If the person's status remains unresolved after the informal meeting and there is sufficient reason to move forward, the railroad commission shall provide notice and an opportunity for a hearing. After notice and an opportunity for a hearing, the railroad commission may determine whether the person is eligible for an exemption under this subsection.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2009, 81st Leg., R.S., Ch. 406 (H.B. 1883), Sec. 1, eff. September 1, 2009.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scA/s121.006"> <num value="121.006">Sec. 121.006.</num> <heading>VEHICLE FUEL EXCLUDED</heading> <chapeau>A person is not a gas utility to the extent that the person:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scA/s121.006/1"> <num value="1">(1)</num> <content>sells natural gas for use as vehicle fuel;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scA/s121.006/2"> <num value="2">(2)</num> <content>sells natural gas to a person who later sells the natural gas for use as vehicle fuel; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scA/s121.006/3"> <num value="3">(3)</num> <content>owns or operates equipment or facilities to sell or transport the natural gas for ultimate use as vehicle fuel.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scA/s121.007"> <num value="121.007">Sec. 121.007.</num> <heading>TRANSPORTATION OF GAS TO AND FROM LIQUEFIED NATURAL GAS MARINE TERMINAL EXCLUDED</heading> <subsection identifier="/us/tx/ut/t3/c121/scA/s121.007/a"> <num value="a">(a)</num> <chapeau>A person who owns or operates a natural gas pipeline, a liquefied natural gas pipeline, or an underground storage facility is not a gas utility if the person certifies to the railroad commission that the person uses the pipeline or underground storage facility solely to deliver natural gas or liquefied natural gas or the constituents of natural gas or liquefied natural gas:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scA/s121.007/1"> <num value="1">(1)</num> <content>to a liquefied natural gas marine terminal;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scA/s121.007/2"> <num value="2">(2)</num> <content>from a liquefied natural gas marine terminal to the owner of the gas or another person on behalf of the owner of the gas;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scA/s121.007/3"> <num value="3">(3)</num> <content>that is acquired, liquefied, or sold by the person as necessary for the operation or maintenance of its facility that is excluded as a gas utility under this section; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scA/s121.007/4"> <num value="4">(4)</num> <content>that has been stored for export.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scA/s121.007/b"> <num value="b">(b)</num> <content>This section does not confer the power of eminent domain to a pipeline or underground storage facility excluded as a gas utility under this section.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scA/s121.007/c"> <num value="c">(c)</num> <content>This section does not create an exception to the applicability of a pipeline safety requirement provided under this chapter or a penalty for a violation of such a requirement.</content> </subsection> <sourceCredit>Added by Acts 2007, 80th Leg., R.S., Ch. 709 (H.B. 2174), Sec. 2, eff. June 15, 2007. Amended by: Acts 2009, 81st Leg., R.S., Ch. 406 (H.B. 1883), Sec. 2, eff. September 1, 2009. Acts 2009, 81st Leg., R.S., Ch. 556 (S.B. 1826), Sec. 1, eff. September 1, 2009. Acts 2013, 83rd Leg., R.S., Ch. 104 (S.B. 900), Sec. 5, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scA/s121.008"> <num value="121.008">Sec. 121.008.</num> <heading>CERTAIN STORAGE FACILITIES OWNED BY ELECTRIC COOPERATIVES EXCLUDED</heading> <content>An electric cooperative, as that term is defined by Section 11.003, or its subsidiary, that sells electricity at wholesale is not a gas utility or subject to regulation as a gas utility solely because it provides gas storage services for hire if the gas storage facility is predominantly operated to support the integration of renewable resources. Such a gas storage facility may not have a working gas capacity of greater than five billion cubic feet.</content> <sourceCredit>Added by Acts 2011, 82nd Leg., R.S., Ch. 4 (S.B. 312), Sec. 2, eff. April 21, 2011.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t3/c121/scB"> <num value="B">SUBCHAPTER B.</num> <heading>PUBLIC POLICY</heading> <section identifier="/us/tx/ut/t3/c121/scB/s121.051"> <num value="121.051">Sec. 121.051.</num> <heading>GAS UTILITY: PUBLIC INTEREST AND JURISDICTION OF RAILROAD COMMISSION</heading> <subsection identifier="/us/tx/ut/t3/c121/scB/s121.051/a"> <num value="a">(a)</num> <content>A gas utility, including a business described by Section 121.001(a)(3), is affected with a public interest.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scB/s121.051/b"> <num value="b">(b)</num> <content>A business described by Section 121.001(a)(3) is a virtual monopoly.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scB/s121.051/c"> <num value="c">(c)</num> <content>A business described by Section 121.001(a)(3) and the property of the business used in this state is subject to the jurisdiction, control, and regulation of the railroad commission as provided by this chapter.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scB/s121.052"> <num value="121.052">Sec. 121.052.</num> <heading>PIPELINES: MONOPOLIES SUBJECT TO RAILROAD COMMISSION</heading> <subsection identifier="/us/tx/ut/t3/c121/scB/s121.052/a"> <num value="a">(a)</num> <content>The operation of a pipeline for buying, selling, transporting, producing, or otherwise dealing in natural gas is a business which in its nature and according to the established method of conducting the business is a monopoly.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scB/s121.052/b"> <num value="b">(b)</num> <content>A business described by this section may not be conducted unless the gas pipeline used in connection with the business is subject to the jurisdiction conferred by this chapter on the railroad commission.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scB/s121.052/c"> <num value="c">(c)</num> <content>The attorney general shall enforce this section by injunction or other remedy.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t3/c121/scC"> <num value="C">SUBCHAPTER C.</num> <heading>DUTIES OF GAS UTILITIES AND PIPELINES</heading> <section identifier="/us/tx/ut/t3/c121/scC/s121.101"> <num value="121.101">Sec. 121.101.</num> <heading>MAINTENANCE OF OFFICE AND RECORDS IN THIS STATE</heading> <subsection identifier="/us/tx/ut/t3/c121/scC/s121.101/a"> <num value="a">(a)</num> <content>A gas utility shall maintain an office in this state in a county in which some part of the gas utility's property is located. The gas utility shall keep in this office all books, accounts, papers, records, vouchers, and receipts that the railroad commission requires.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scC/s121.101/b"> <num value="b">(b)</num> <content>A book, account, paper, record, receipt, voucher, or other item of information required by the railroad commission to be kept in this state may not be removed from this state except as prescribed by the railroad commission.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scC/s121.102"> <num value="121.102">Sec. 121.102.</num> <heading>OPERATOR'S REPORT</heading> <chapeau>The railroad commission may require a person or corporation that owns, controls, or operates a pipeline subject to this chapter to make to the commission a sworn report of any matter relating to the business of the person or corporation that the commission determines to be pertinent, including:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scC/s121.102/1"> <num value="1">(1)</num> <content>the total quantity of gas distributed by the pipelines;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scC/s121.102/2"> <num value="2">(2)</num> <content>the total quantity of gas held in storage;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scC/s121.102/3"> <num value="3">(3)</num> <content>the source of supply of gas;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scC/s121.102/4"> <num value="4">(4)</num> <content>the number of wells from which the person or corporation draws its supply;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scC/s121.102/5"> <num value="5">(5)</num> <content>the amount of pipeline pressure maintained; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scC/s121.102/6"> <num value="6">(6)</num> <content>the amount and character and description of the equipment used.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scC/s121.103"> <num value="121.103">Sec. 121.103.</num> <heading>DUTY TO SERVE CERTAIN USERS EXTINGUISHED</heading> <subsection identifier="/us/tx/ut/t3/c121/scC/s121.103/a"> <num value="a">(a)</num> <chapeau>A gas utility that provides gas to a customer does not have an obligation to serve the customer or to maintain the gas supply or physical capacity to serve the customer if the customer:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scC/s121.103/1"> <num value="1">(1)</num> <content>is a transportation, industrial, commercial, or other similar large-volume contract customer;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scC/s121.103/2"> <num value="2">(2)</num> <content>is an end-use customer of the gas utility;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scC/s121.103/3"> <num value="3">(3)</num> <content>reduces or ceases the purchase of natural gas or natural gas service from the gas utility; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scC/s121.103/4"> <num value="4">(4)</num> <content>purchases natural gas or natural gas service from another supplier or purchases an alternate form of energy.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scC/s121.103/b"> <num value="b">(b)</num> <chapeau>Subsection (a) does not apply to the extent that:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scC/s121.103/1"> <num value="1">(1)</num> <content>the customer continues to purchase natural gas or natural gas service of any class from the gas utility; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scC/s121.103/2"> <num value="2">(2)</num> <content>the gas utility has a written contract to provide natural gas or natural gas service of any class to the customer.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scC/s121.103/c"> <num value="c">(c)</num> <content>This section does not prevent the railroad commission from requiring a gas utility to comply with an order of the railroad commission in apportioning gas under a curtailment plan and order.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scC/s121.103/d"> <num value="d">(d)</num> <content>Notwithstanding Subsection (a), a gas utility that has provided gas to a commercial customer is obligated to serve that customer if the gas utility has a sufficient gas supply and physical capacity to do so without reducing service to its other customers.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 2001, 77th Leg., ch. 1233, Sec. 69, eff. Sept. 1, 2001.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scC/s121.104"> <num value="121.104">Sec. 121.104.</num> <heading>DISCRIMINATION IN SERVICE AND CHARGES PROHIBITED</heading> <subsection identifier="/us/tx/ut/t3/c121/scC/s121.104/a"> <num value="a">(a)</num> <chapeau>A pipeline gas utility may not:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scC/s121.104/1"> <num value="1">(1)</num> <chapeau>discriminate in favor of or against any person or place in:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c121/scC/s121.104/A"> <num value="A">(A)</num> <content>apportioning the supply of natural gas; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c121/scC/s121.104/B"> <num value="B">(B)</num> <content>charging for natural gas; or</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scC/s121.104/2"> <num value="2">(2)</num> <content>directly or indirectly charge, demand, collect, or receive from anyone a greater or lesser compensation for a service provided than the compensation charged, demanded, or received from another for a similar and contemporaneous service.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scC/s121.104/b"> <num value="b">(b)</num> <chapeau>This section does not limit the right of the railroad commission to prescribe:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scC/s121.104/1"> <num value="1">(1)</num> <content>different rates and rules for the use of natural gas for manufacturing and similar purposes; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scC/s121.104/2"> <num value="2">(2)</num> <content>rates and rules for service from or to other or different places.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t3/c121/scD"> <num value="D">SUBCHAPTER D.</num> <heading>REGULATION BY RAILROAD COMMISSION</heading> <section identifier="/us/tx/ut/t3/c121/scD/s121.151"> <num value="121.151">Sec. 121.151.</num> <heading>RAILROAD COMMISSION REGULATION OF GAS PIPELINES</heading> <chapeau>The railroad commission shall:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scD/s121.151/1"> <num value="1">(1)</num> <content>establish and enforce the adequate and reasonable price of gas and fair and reasonable rates of charges and rules for transporting, producing, distributing, buying, selling, and delivering gas by pipelines subject to this chapter in this state;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scD/s121.151/2"> <num value="2">(2)</num> <content>establish fair and equitable rules for the full control and supervision of the pipelines subject to this chapter and all their holdings pertaining to the gas business in all their relations to the public, as the railroad commission determines to be proper;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scD/s121.151/3"> <num value="3">(3)</num> <content>establish a fair and equitable division of the proceeds of the sale of gas between the companies transporting or producing the gas and the companies distributing or selling it;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scD/s121.151/4"> <num value="4">(4)</num> <content>prescribe and enforce rules for the government and control of pipelines subject to this chapter in respect to their pipelines and producing, receiving, transporting, and distributing facilities;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scD/s121.151/5"> <num value="5">(5)</num> <content>regulate and apportion the supply of gas between municipalities and between municipalities and corporations; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scD/s121.151/6"> <num value="6">(6)</num> <chapeau>prescribe fair and reasonable rules requiring pipelines subject to this chapter to augment their supply of gas, when:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c121/scD/s121.151/A"> <num value="A">(A)</num> <content>the supply of gas controlled by any gas pipeline is inadequate; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c121/scD/s121.151/B"> <num value="B">(B)</num> <content>the railroad commission determines that augmentation is practicable.</content> </subparagraph> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scD/s121.152"> <num value="121.152">Sec. 121.152.</num> <heading>INITIATION OF REGULATORY PROCEEDING</heading> <chapeau>The railroad commission shall exercise power under Section 121.151:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scD/s121.152/1"> <num value="1">(1)</num> <chapeau>on:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c121/scD/s121.152/A"> <num value="A">(A)</num> <content>its own motion;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c121/scD/s121.152/B"> <num value="B">(B)</num> <content>the petition of a person or county commissioner's precinct showing a substantial interest in the subject;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c121/scD/s121.152/C"> <num value="C">(C)</num> <content>the petition of the attorney general; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c121/scD/s121.152/D"> <num value="D">(D)</num> <content>the petition of a district or county attorney of a county in which any portion of a business subject to this chapter is conducted; and</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scD/s121.152/2"> <num value="2">(2)</num> <content>after notice has been given.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scD/s121.153"> <num value="121.153">Sec. 121.153.</num> <heading>RAILROAD COMMISSION REVIEW OF GAS PIPELINE ORDERS AND AGREEMENTS</heading> <content>The railroad commission, after notice to a person or corporation owning, controlling, or operating a pipeline subject to this chapter and after a hearing, may review, revise, and regulate an order or agreement that is made by the person or corporation and establishes a price, rate, rule, regulation, or condition of service.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scD/s121.154"> <num value="121.154">Sec. 121.154.</num> <heading>REFUND OF EXCESS CHARGES</heading> <subsection identifier="/us/tx/ut/t3/c121/scD/s121.154/a"> <num value="a">(a)</num> <content>On a complaint against a person or corporation owning or operating a pipeline business subject to this chapter filed by any person authorized by Section 121.152 to file a petition and complaint and sustained in whole or in part by the railroad commission, each customer of the pipeline is entitled to reparation for or reimbursement of a rate or charge made or adopted by the pipeline for a purpose relating to the operation of that business, including a rate or charge for gas, service, or meter rental, or in the event of an inadequate supply of gas or inadequate service in any respect.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scD/s121.154/b"> <num value="b">(b)</num> <content>The amount recoverable under Subsection (a) is the amount paid after the filing of the complaint in excess of the proper rate or charge of the pipeline as finally determined by the railroad commission.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scD/s121.155"> <num value="121.155">Sec. 121.155.</num> <heading>RATE REDUCTION OR DETERMINATION BY MUNICIPALITY AND APPEAL</heading> <content>A gas utility the rates of which have been reduced by a municipality may appeal the municipal order, decision, regulation, or ordinance to the railroad commission. The appeal is initiated by filing with the railroad commission in the manner and on the conditions that the railroad commission may direct a petition for review and a bond. The appeal is de novo. The railroad commission shall set a hearing and may make any order or decision in relation to the matter appealed that the commission considers just and reasonable. To change a rate, rental, or charge, a gas utility that is a local distributing company or concern and the rates of which have been established by a municipality must submit an application to the municipality in which the utility is located. The municipality shall make a determination on an application not later than the 60th day after the date the application is filed. If the municipality rejects the application or fails or refuses to act on the application on or before the deadline prescribed by this section, the gas utility may appeal to the railroad commission as provided by this section. The railroad commission shall make a determination on the appeal not later than the 60th day after the date the appeal is filed unless the gas utility agrees in writing to a longer period. The rates established by the municipality remain in effect until changed by the railroad commission.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scD/s121.157"> <num value="121.157">Sec. 121.157.</num> <heading>RAILROAD COMMISSION EMPLOYEES</heading> <subsection identifier="/us/tx/ut/t3/c121/scD/s121.157/a"> <num value="a">(a)</num> <chapeau>The railroad commission may employ or appoint persons as necessary to:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scD/s121.157/1"> <num value="1">(1)</num> <content>inspect and audit records or receipts, disbursements, vouchers, prices, payrolls, time cards, and books;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scD/s121.157/2"> <num value="2">(2)</num> <content>inspect the property and records of a gas utility subject to this chapter; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scD/s121.157/3"> <num value="3">(3)</num> <content>perform other services as directed by, or under the authority of, the railroad commission.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scD/s121.157/b"> <num value="b">(b)</num> <content>The railroad commission shall set the amount of compensation for persons employed by the railroad commission.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scD/s121.157/c"> <num value="c">(c)</num> <content>The chief supervisor of the oil and gas division of the railroad commission shall assist the railroad commission in the performance of the railroad commission's duties under this chapter, as directed by, and under the rules of, the railroad commission.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scD/s121.158"> <num value="121.158">Sec. 121.158.</num> <heading>PAYMENT FROM THE GENERAL REVENUE FUND</heading> <content>All expenses, including witness fees and mileage, employee wages and fees, and the salary and expenses of the chief supervisor of the oil and gas division of the railroad commission incurred by or under authority of the railroad commission or a railroad commissioner in administering and enforcing, or exercising a power under, this chapter shall be paid from the general revenue fund.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t3/c121/scE"> <num value="E">SUBCHAPTER E.</num> <heading>PIPELINE SAFETY</heading> <section identifier="/us/tx/ut/t3/c121/scE/s121.201"> <num value="121.201">Sec. 121.201.</num> <heading>SAFETY RULES; RAILROAD COMMISSION POWER UNDER DELEGATED FEDERAL AUTHORITY</heading> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.201/a"> <num value="a">(a)</num> <chapeau>The railroad commission may:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.201/1"> <num value="1">(1)</num> <content>by rule prescribe or adopt safety standards for the transportation of gas and for gas pipeline facilities, including safety standards related to the prevention of damage to an interstate or intrastate gas pipeline facility resulting from the movement of earth by a person in the vicinity of the facility, other than movement by tillage that does not exceed a depth of 16 inches;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.201/2"> <num value="2">(2)</num> <content>by rule require an operator that does not file operator organization information under Section 91.142, Natural Resources Code, to provide the information to the commission in the form of an application;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.201/3"> <num value="3">(3)</num> <content>by rule require record maintenance and reports;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.201/4"> <num value="4">(4)</num> <content>inspect records and facilities to determine compliance with safety standards prescribed or adopted under Subdivision (1);</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.201/5"> <num value="5">(5)</num> <content>make certifications and reports from time to time;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.201/6"> <num value="6">(6)</num> <content>seek designation by the United States secretary of transportation as an agent to conduct safety inspections of interstate gas pipeline facilities located in this state;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.201/7"> <num value="7">(7)</num> <content>by rule take any other requisite action in accordance with 49 U.S.C. Section 60101 et seq. and its subsequent amendments or a succeeding law; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.201/8"> <num value="8">(8)</num> <chapeau>by rule establish safety standards and practices for gathering facilities and transportation activities in Class 1 locations, as defined by 49 C.F.R. Section 192.5:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c121/scE/s121.201/A"> <num value="A">(A)</num> <content>based only on the risks the facilities and activities present to the public safety, to the extent consistent with federal law; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c121/scE/s121.201/B"> <num value="B">(B)</num> <content>as necessary to maintain the maximum degree of federal delegation permissible under 49 U.S.C. Section 60101 et seq., or a succeeding law, if the federal government adopts safety standards and practices for gathering facilities and transportation activities in Class 1 locations, as defined by 49 C.F.R. Section 192.5.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.201/b"> <num value="b">(b)</num> <chapeau>The power granted by Subsection (a):</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.201/1"> <num value="1">(1)</num> <content>does not apply to the transportation of gas or to gas facilities subject to the exclusive control of the United States but applies to the transportation of gas and gas pipeline facilities in this state to the maximum degree permissible under 49 U.S.C. Section 60101 et seq. and its subsequent amendments or a succeeding law; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.201/2"> <num value="2">(2)</num> <content>is granted to provide exclusive state control over safety standards and practices applicable to the transportation of gas and gas pipeline facilities within the borders of this state to the maximum degree permissible under that law.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.201/c"> <num value="c">(c)</num> <content>A term that is used in this section and defined by 49 U.S.C. Section 60101 et seq. and its subsequent amendments or a succeeding law has the meaning assigned by that law.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.201/d"> <num value="d">(d)</num> <content>In this subsection, "telecommunications service" and "information service" have the meanings assigned by 47 U.S.C. Section 153. Notwithstanding Subsection (a), this title does not grant the railroad commission jurisdiction or right-of-way management authority over a provider of telecommunications service or information service. A provider of telecommunications service or information service shall comply with all applicable safety standards, including those provided by Subchapter H, Chapter 756, Health and Safety Code.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.201/e"> <num value="e">(e)</num> <chapeau>The power granted by Subsection (a) does not apply to:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.201/1"> <num value="1">(1)</num> <content>surface mining operations; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.201/2"> <num value="2">(2)</num> <chapeau>other entities or occupations if the railroad commission determines in its rulemaking process that exempting those entities or occupations from rules adopted under that subsection:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c121/scE/s121.201/A"> <num value="A">(A)</num> <content>is in the public interest; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c121/scE/s121.201/B"> <num value="B">(B)</num> <content>is not likely to cause harm to the safety and welfare of the public.</content> </subparagraph> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 62, Sec. 18.12(a), eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 1272, Sec. 1, eff. June 18, 1999. Amended by: Acts 2005, 79th Leg., Ch. 267 (H.B. 2161), Sec. 13, eff. September 1, 2005. Acts 2011, 82nd Leg., R.S., Ch. 91 (S.B. 1303), Sec. 25.002, eff. September 1, 2011. Acts 2013, 83rd Leg., R.S., Ch. 1045 (H.B. 2982), Sec. 3, eff. September 1, 2013. Acts 2013, 83rd Leg., R.S., Ch. 1045 (H.B. 2982), Sec. 4, eff. September 1, 2013. Acts 2013, 83rd Leg., R.S., Ch. 1177 (S.B. 901), Sec. 11, eff. September 1, 2013. Acts 2017, 85th Leg., R.S., Ch. 57 (H.B. 1818), Sec. 9, eff. September 1, 2017.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scE/s121.2015"> <num value="121.2015">Sec. 121.2015.</num> <heading>REQUIRED SAFETY RULES</heading> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.2015/a"> <num value="a">(a)</num> <chapeau>The railroad commission shall adopt rules regarding:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.2015/1"> <num value="1">(1)</num> <content>public education and awareness relating to gas pipeline facilities;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.2015/2"> <num value="2">(2)</num> <content>community liaison for responding to an emergency relating to a gas pipeline facility; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.2015/3"> <num value="3">(3)</num> <chapeau>measures a gas pipeline facility operator must implement to prepare the gas pipeline facility to maintain service quality and reliability during extreme weather conditions if the gas pipeline facility:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c121/scE/s121.2015/A"> <num value="A">(A)</num> <content>directly serves a natural gas electric generation facility operating solely to provide power to the electric grid for the ERCOT power region or for the ERCOT power region and an adjacent power region; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c121/scE/s121.2015/B"> <num value="B">(B)</num> <content>is included on the electricity supply chain map created under Section 38.203.</content> <continuation>(a-1) In adopting rules under Subsection (a)(3), the railroad commission shall take into consideration weather predictions produced by the office of the state climatologist.</continuation> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.2015/b"> <num value="b">(b)</num> <chapeau>The railroad commission shall require operators or their designated representatives to communicate and conduct liaison activities with fire, police, and other appropriate public emergency response officials. The liaison activities must be conducted by meetings in person except as provided by this section. An operator or the operator's representative may conduct required community liaison activities as provided by Subsection (c) only if the operator or the operator's representative has made an effort to conduct a community liaison meeting in person with the officials by one of the following methods:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.2015/1"> <num value="1">(1)</num> <content>mailing a written request for a meeting in person to the appropriate officials by certified mail, return receipt requested;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.2015/2"> <num value="2">(2)</num> <content>sending a request for a meeting in person to the appropriate officials by facsimile transmission; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.2015/3"> <num value="3">(3)</num> <content>making one or more telephone calls or e-mail message transmissions to the appropriate officials to request a meeting in person.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.2015/c"> <num value="c">(c)</num> <chapeau>If the operator or operator's representative cannot arrange a meeting in person after complying with Subsection (b), the operator or the operator's representative shall conduct community liaison activities by one of the following methods:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.2015/1"> <num value="1">(1)</num> <content>holding a telephone conference with the appropriate officials; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.2015/2"> <num value="2">(2)</num> <content>delivering the community liaison information required to be conveyed by certified mail, return receipt requested.</content> <continuation>(c-1) The railroad commission shall:</continuation> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.2015/1"> <num value="1">(1)</num> <content>inspect gas pipeline facilities described by Subsection (a)(3) for compliance with rules adopted under Subsection (a)(3);</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.2015/2"> <num value="2">(2)</num> <content>provide the owner of a facility described by Subsection (a)(3) with a reasonable period of time in which to remedy any violation the railroad commission discovers in an inspection; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.2015/3"> <num value="3">(3)</num> <content>report to the attorney general any violation that is not remedied in a reasonable period of time.</content> <continuation>(c-2) The railroad commission shall prioritize inspections conducted under Subsection (c-1)(1) based on risk level, as determined by the railroad commission.</continuation> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.2015/d"> <num value="d">(d)</num> <chapeau>The railroad commission by rule shall require a gas pipeline facility operator described by Subsection (a)(3) that experiences repeated or major weather-related forced interruptions of service to:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.2015/1"> <num value="1">(1)</num> <content>contract with a person who is not an employee of the operator to assess the operator's weatherization plans, procedures, and operations; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.2015/2"> <num value="2">(2)</num> <content>submit the assessment to the commission.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.2015/e"> <num value="e">(e)</num> <content>The railroad commission may require an operator of a gas pipeline facility described by Subsection (a)(3) to implement appropriate recommendations included in an assessment submitted to the commission under Subsection (d).</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.2015/f"> <num value="f">(f)</num> <content>The railroad commission shall assess an administrative penalty against a person who violates a rule adopted under Subsection (a)(3) if the violation is not remedied in a reasonable period of time in the manner provided by this subchapter.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.12(b), eff. Sept. 1, 1999. Amended by Acts 2001, 77th Leg., ch. 1233, Sec. 70, eff. Sept. 1, 2001. Amended by: Acts 2009, 81st Leg., R.S., Ch. 1197 (H.B. 4300), Sec. 1, eff. September 1, 2009. Acts 2021, 87th Leg., R.S., Ch. 426 (S.B. 3), Sec. 21, eff. June 8, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scE/s121.202"> <num value="121.202">Sec. 121.202.</num> <heading>MUNICIPAL AND COUNTY AUTHORITY</heading> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.202/a"> <num value="a">(a)</num> <content>A municipality or a county may not adopt or enforce an ordinance that establishes a safety standard or practice applicable to a facility that is regulated under this subchapter, another state law, or a federal law.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.202/b"> <num value="b">(b)</num> <chapeau>Except as provided by Subsection (a) and by Section 121.2025, this subchapter does not reduce, limit, or impair:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.202/1"> <num value="1">(1)</num> <chapeau>a power vested by law in:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c121/scE/s121.202/A"> <num value="A">(A)</num> <content>a county in relation to a county road; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c121/scE/s121.202/B"> <num value="B">(B)</num> <content>a municipality; or</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.202/2"> <num value="2">(2)</num> <chapeau>the ability of a municipality to:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c121/scE/s121.202/A"> <num value="A">(A)</num> <content>adopt an ordinance that establishes conditions for mapping, inventorying, locating, or relocating pipelines over, under, along, or across a public street or alley or private residential area in the boundaries of the municipality; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c121/scE/s121.202/B"> <num value="B">(B)</num> <content>establish conditions for mapping or taking an inventory in an area in a municipality's extraterritorial jurisdiction.</content> </subparagraph> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2005, 79th Leg., Ch. 530 (H.B. 951), Sec. 5, eff. June 17, 2005. Acts 2005, 79th Leg., Ch. 720 (S.B. 480), Sec. 3, eff. September 1, 2005.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scE/s121.2025"> <num value="121.2025">Sec. 121.2025.</num> <heading>AUTHORITY OF MUNICIPALITY TO ASSESS CHARGES</heading> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.2025/a"> <num value="a">(a)</num> <content>Except as otherwise provided by this section or Section 182.025, Tax Code, a municipality may not assess a charge for the placement, construction, maintenance, repair, replacement, operation, use, relocation, or removal of a gas pipeline facility on, along, under, or across a public road, highway, street, alley, stream, canal, or other public way.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.2025/b"> <num value="b">(b)</num> <chapeau>A municipality may:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.2025/1"> <num value="1">(1)</num> <content>assess a reasonable annual charge for the placement, construction, maintenance, repair, replacement, operation, use, relocation, or removal by an owner or operator of a gas pipeline facility on, along, or across the public roads, highways, streets, alleys, streams, canals, or other public ways located within the municipality and maintained by the municipality; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.2025/2"> <num value="2">(2)</num> <content>recover the reasonable cost of repairing damage to a public road, highway, street, alley, stream, canal, or other public way located within the municipality and maintained by the municipality that is caused by the placement, construction, maintenance, repair, replacement, operation, use, relocation, or removal of a gas pipeline facility if the owner or operator of the facility does not repair the damage in accordance with generally applicable paving standards or other applicable standards in the municipality.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.2025/c"> <num value="c">(c)</num> <content>A charge authorized by Subsection (b)(1) may not exceed the cost to the municipality of administering, supervising, inspecting, and otherwise regulating the location of the gas pipeline facility, including maintaining records and maps of the location of the pipeline facility.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.2025/d"> <num value="d">(d)</num> <content>The owner or operator of a gas pipeline facility may appeal the assessment of a charge under Subsection (b)(1) to the railroad commission. The railroad commission shall hear the appeal de novo. Unless the municipality that assessed the charge establishes that the charge is authorized by this section, the railroad commission shall declare the charge invalid or reduce the charge to an amount authorized by this section. The railroad commission has exclusive jurisdiction to determine whether a charge under Subsection (b)(1) is authorized by this section. The owner or operator of the gas pipeline facility and the municipality shall share equally the costs incurred by the railroad commission in connection with the appeal.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.2025/e"> <num value="e">(e)</num> <content>A municipality must file suit to collect a charge authorized by Subsection (b)(1) not later than the fourth anniversary of the date the charge becomes due. The running of the limitations period under this subsection is tolled on the filing of an appeal of the charge under Subsection (d) and begins running again on the date the appeal is determined.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.2025/f"> <num value="f">(f)</num> <chapeau>This section may not be construed to prevent a municipality from:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.2025/1"> <num value="1">(1)</num> <content>recovering the reasonable cost of repairing damage to a municipal facility, other than a public way, caused by acts of the owner or operator of a gas pipeline facility; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.2025/2"> <num value="2">(2)</num> <content>requiring the owner or operator of a gas pipeline facility to relocate the pipeline facility, at the owner's or operator's expense, to permit the construction, maintenance, modification, or alteration of a municipal facility.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.2025/g"> <num value="g">(g)</num> <content>Notwithstanding Subsection (f)(2), the municipality shall pay the cost of relocating a gas pipeline facility if the pipeline facility is authorized by a property right that has priority over the municipality's right to use the public way for the municipal facility.</content> </subsection> <sourceCredit>Added by Acts 2005, 79th Leg., Ch. 530 (H.B. 951), Sec. 6, eff. June 17, 2005. Added by Acts 2005, 79th Leg., Ch. 720 (S.B. 480), Sec. 4, eff. September 1, 2005. Amended by: Acts 2009, 81st Leg., R.S., Ch. 1311 (H.B. 2572), Sec. 1, eff. June 19, 2009.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scE/s121.203"> <num value="121.203">Sec. 121.203.</num> <heading>ENFORCEMENT: INJUNCTION</heading> <content>The attorney general, on behalf of the railroad commission, is entitled to injunctive relief to restrain a violation of a safety standard adopted under this subchapter, including an injunction that restrains the transportation of gas or the operation of a pipeline facility.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scE/s121.204"> <num value="121.204">Sec. 121.204.</num> <heading>CIVIL PENALTY</heading> <content>Each day of each violation of a safety standard adopted under this subchapter is subject to a civil penalty of not more than $200,000, except that the maximum penalty that may be assessed for any related series of violations may not exceed $2 million. The penalty is payable to the state.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2013, 83rd Leg., R.S., Ch. 104 (S.B. 900), Sec. 6, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scE/s121.205"> <num value="121.205">Sec. 121.205.</num> <heading>SETTLEMENT BY ATTORNEY GENERAL</heading> <chapeau>A civil penalty under Section 121.204 may be compromised by the attorney general who in determining a compromise shall consider:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.205/1"> <num value="1">(1)</num> <content>the appropriateness of the penalty in relation to the size of the business of the person charged;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.205/2"> <num value="2">(2)</num> <content>the gravity of the violation; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.205/3"> <num value="3">(3)</num> <content>the good faith of the person charged in attempting to achieve compliance after notification of the violation.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scE/s121.206"> <num value="121.206">Sec. 121.206.</num> <heading>ADMINISTRATIVE PENALTY FOR VIOLATION OF PIPELINE SAFETY STANDARD OR RULE</heading> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.206/a"> <num value="a">(a)</num> <content>The railroad commission may assess an administrative penalty against a person who violates Section 121.201 or a safety standard or other rule prescribed or adopted under this subchapter.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.206/b"> <num value="b">(b)</num> <content>The penalty for each violation may not exceed $200,000. Each day a violation continues may be considered a separate violation for the purpose of penalty assessment, provided that the maximum penalty that may be assessed for any related series of violations may not exceed $2 million.</content> <continuation>(b-1) Notwithstanding Subsection (b), the penalty for each violation may not exceed $1,000,000 for a violation of a rule adopted under Section 121.2015(a)(3). Each day a violation continues may be considered a separate violation for the purpose of penalty assessment.</continuation> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.206/c"> <num value="c">(c)</num> <content>In determining the amount of the penalty, the railroad commission shall consider the guidelines adopted under Subsection (d).</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.206/d"> <num value="d">(d)</num> <chapeau>The railroad commission by rule shall adopt guidelines to be used in determining the amount of a penalty under this subchapter. The guidelines shall include a penalty calculation worksheet that specifies the typical penalty for certain violations, circumstances justifying enhancement of a penalty and the amount of the enhancement, and circumstances justifying a reduction in a penalty and the amount of the reduction. The guidelines shall take into account:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.206/1"> <num value="1">(1)</num> <content>the person's history of previous violations of Section 121.201 or a safety standard or other rule prescribed or adopted under this subchapter, including the number of previous violations;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.206/2"> <num value="2">(2)</num> <content>the seriousness of the violation and of any pollution resulting from the violation;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.206/3"> <num value="3">(3)</num> <content>any hazard to the health or safety of the public;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.206/4"> <num value="4">(4)</num> <content>the degree of culpability;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.206/5"> <num value="5">(5)</num> <content>the demonstrated good faith of the person charged; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.206/6"> <num value="6">(6)</num> <content>any other factor the commission considers relevant.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.206/e"> <num value="e">(e)</num> <content>The guidelines must provide that a penalty in an amount that exceeds $5,000 for a violation of a rule adopted under Section 121.2015(a)(3) may be assessed only if circumstances justify the enhancement of the penalty.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 62, Sec. 18.13(b), eff. Sept. 1, 1999; Acts 2001, 77th Leg., ch. 1233, Sec. 71, eff. Sept. 1, 2001. Amended by: Acts 2005, 79th Leg., Ch. 267 (H.B. 2161), Sec. 14, eff. September 1, 2005. Acts 2013, 83rd Leg., R.S., Ch. 104 (S.B. 900), Sec. 7, eff. September 1, 2013. Acts 2019, 86th Leg., R.S., Ch. 363 (H.B. 866), Sec. 1, eff. June 2, 2019. Acts 2019, 86th Leg., R.S., Ch. 1048 (H.B. 864), Sec. 1, eff. September 1, 2019. Acts 2021, 87th Leg., R.S., Ch. 426 (S.B. 3), Sec. 22, eff. June 8, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scE/s121.207"> <num value="121.207">Sec. 121.207.</num> <heading>PIPELINE SAFETY ADMINISTRATIVE PENALTY: ASSESSMENT PROCEDURE</heading> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.207/a"> <num value="a">(a)</num> <content>An administrative penalty may be assessed only after a person charged under Section 121.206 has been given an opportunity for a public hearing.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.207/b"> <num value="b">(b)</num> <content>If a public hearing is held, the railroad commission shall make findings of fact and shall issue a written decision as to the occurrence of the violation and the penalty amount warranted by the violation, incorporating, if appropriate, an order requiring that the penalty be paid.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.207/c"> <num value="c">(c)</num> <content>If appropriate, the railroad commission shall consolidate the hearings with other proceedings under Section 121.206.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.207/d"> <num value="d">(d)</num> <chapeau>If a person charged under Section 121.206 fails to take advantage of the opportunity for a public hearing, an administrative penalty may be assessed by the railroad commission after it has determined:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.207/1"> <num value="1">(1)</num> <content>that a violation occurred; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.207/2"> <num value="2">(2)</num> <content>the penalty amount warranted by the violation.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.207/e"> <num value="e">(e)</num> <content>After assessing an administrative penalty, the railroad commission shall issue an order requiring the penalty to be paid.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.207/f"> <num value="f">(f)</num> <content>Not later than the 30th day after the date an order is issued finding that a violation described under Section 121.206 occurred, the railroad commission shall inform the person found in violation of the amount of the penalty.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scE/s121.208"> <num value="121.208">Sec. 121.208.</num> <heading>PIPELINE SAFETY ADMINISTRATIVE PENALTY: PAYMENT OF PENALTY</heading> <chapeau>Not later than the 30th day after the date the railroad commission's decision or order imposing an administrative penalty becomes final as provided by Section 2001.144, Government Code, the person charged with the violation shall:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.208/1"> <num value="1">(1)</num> <content>pay the penalty in full; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.208/2"> <num value="2">(2)</num> <chapeau>if the person seeks judicial review of either the amount of the penalty or the fact of the violation, or both:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c121/scE/s121.208/A"> <num value="A">(A)</num> <content>pay the penalty to the railroad commission for placement in an escrow account; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c121/scE/s121.208/B"> <num value="B">(B)</num> <content>give to the railroad commission a supersedeas bond in a form approved by the railroad commission for the amount of the penalty that is effective until all judicial review of the order or decision is final.</content> </subparagraph> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scE/s121.209"> <num value="121.209">Sec. 121.209.</num> <heading>PIPELINE SAFETY ADMINISTRATIVE PENALTY: REFUND OF PAYMENT OR RELEASE OF BOND</heading> <chapeau>If through judicial review of a decision or order regarding an administrative penalty it is determined that a violation did not occur or that the amount of the penalty should be reduced or not assessed, the railroad commission shall, not later than the 30th day after the date of that determination:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.209/1"> <num value="1">(1)</num> <content>remit the appropriate amount to the person, with accrued interest if the utility paid the penalty to the railroad commission; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.209/2"> <num value="2">(2)</num> <content>execute a release of the bond if the utility posted a supersedeas bond.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scE/s121.210"> <num value="121.210">Sec. 121.210.</num> <heading>RECOVERY BY ATTORNEY GENERAL</heading> <content>An administrative penalty owed under Sections 121.206-121.208 may be recovered in a civil action brought by the attorney general at the request of the railroad commission.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scE/s121.211"> <num value="121.211">Sec. 121.211.</num> <heading>PIPELINE SAFETY AND REGULATORY FEES</heading> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.211/a"> <num value="a">(a)</num> <content>The railroad commission by rule may adopt a fee to be assessed annually against operators of gas distribution pipelines and their pipeline facilities and gas master metered pipelines and their pipeline facilities subject to this title.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.211/b"> <num value="b">(b)</num> <content>The railroad commission by rule shall establish the method by which the fee will be calculated and assessed. In adopting a fee structure, the railroad commission may consider any factors necessary to provide for the equitable allocation among operators of the costs of administering the railroad commission's pipeline safety and regulatory program under this title.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.211/c"> <num value="c">(c)</num> <content>The total amount of fees estimated to be collected under rules adopted by the railroad commission under this section may not exceed the amount estimated by the railroad commission to be necessary to recover the costs of administering the railroad commission's pipeline safety and regulatory program under this title, excluding costs that are fully funded by federal sources.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.211/d"> <num value="d">(d)</num> <content>The commission may assess each operator of a gas distribution system subject to this title an annual fee not to exceed one dollar for each service line reported by the system on the Distribution Annual Report, Form RSPA F7100.1-1, due on March 15 of each year. The fee is due March 15 of each year.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.211/e"> <num value="e">(e)</num> <content>The railroad commission may assess each operator of a gas master metered system subject to this title an annual fee not to exceed $100 for each master metered system. The fee is due June 30 of each year.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.211/f"> <num value="f">(f)</num> <content>The railroad commission may assess a late payment penalty of 10 percent of the total assessment due under Subsection (d) or (e) that is not paid within 30 days after the annual due date established by the applicable subsection.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.211/g"> <num value="g">(g)</num> <content>Each operator of a gas distribution system and each gas master meter operator shall recover as a surcharge to its existing rates the amounts paid to the commission under this section. Amounts collected under this subsection by an investor-owned gas distribution system or a cooperatively owned gas distribution system shall not be included in the revenue or gross receipts of the company for the purpose of calculating municipal franchise fees or any tax imposed under Subchapter B, Chapter 182, Tax Code, or under Chapter 122. Those amounts are not subject to a sales and use tax imposed by Chapter 151, Tax Code, or Subtitle C, Title 3, Tax Code.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.211/h"> <num value="h">(h)</num> <content>A fee collected under this section shall be deposited to the credit of the oil and gas regulation and cleanup fund as provided by Section 81.067, Natural Resources Code.</content> </subsection> <sourceCredit>Added by Acts 2003, 78th Leg., ch. 200, Sec. 12(a), eff. Sept. 1, 2003; Acts 2003, 78th Leg., ch. 520, Sec. 1, eff. Sept. 1, 2003. Amended by: Acts 2005, 79th Leg., Ch. 728 (H.B. 2018), Sec. 21.003, eff. September 1, 2005. Acts 2005, 79th Leg., Ch. 948 (H.B. 872), Sec. 2, eff. September 1, 2005. Acts 2009, 81st Leg., R.S., Ch. 62 (S.B. 1658), Sec. 1, eff. September 1, 2009. Acts 2011, 82nd Leg., 1st C.S., Ch. 4 (S.B. 1), Sec. 19.25, eff. September 28, 2011. Acts 2011, 82nd Leg., 1st C.S., Ch. 4 (S.B. 1), Sec. 19.26, eff. September 28, 2011. Acts 2015, 84th Leg., R.S., Ch. 448 (H.B. 7), Sec. 43, eff. September 1, 2015. Acts 2025, 89th Leg., R.S., Ch. 1167 (H.B. 4042), Sec. 1, eff. September 1, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scE/s121.213"> <num value="121.213">Sec. 121.213.</num> <heading>INSTALLATION, REMOVAL, AND REPLACEMENT OF CERTAIN PIPELINES</heading> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.213/a"> <num value="a">(a)</num> <content>In this section, "distribution gas pipeline facility" means a pipeline facility that distributes gas directly to end-use customers.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.213/b"> <num value="b">(b)</num> <content>A distribution gas pipeline facility operator may not install as part of the operator's underground system a cast iron, wrought iron, or bare steel pipeline.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.213/c"> <num value="c">(c)</num> <chapeau>The railroad commission by rule shall require the operator of a distribution gas pipeline facility system to:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.213/1"> <num value="1">(1)</num> <content>develop and implement a risk-based program for the removal or replacement of underground distribution gas pipeline facilities; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.213/2"> <num value="2">(2)</num> <content>annually remove or replace at least eight percent of underground distribution gas pipeline facilities posing the greatest risk in the system and identified for replacement under the program.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2019, 86th Leg., R.S., Ch. 363 (H.B. 866), Sec. 2, eff. June 2, 2019. Amended by: Acts 2025, 89th Leg., R.S., Ch. 1167 (H.B. 4042), Sec. 2, eff. September 1, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scE/s121.214"> <num value="121.214">Sec. 121.214.</num> <heading>PIPELINE INCIDENT REPORTING AND RECORDS</heading> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.214/a"> <num value="a">(a)</num> <chapeau>In this section:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.214/1"> <num value="1">(1)</num> <content>"Distribution gas pipeline facility" means a pipeline facility that distributes gas directly to end use customers.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.214/2"> <num value="2">(2)</num> <chapeau>"Pipeline incident" means an event involving a release of gas from a pipeline that:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c121/scE/s121.214/A"> <num value="A">(A)</num> <content>under federal regulations, gives rise to a duty of a distribution gas pipeline facility operator to report the event to a federal agency; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c121/scE/s121.214/B"> <num value="B">(B)</num> <content>results in one or more of the following consequences:</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.214/i"> <num value="i">(i)</num> <chapeau>a death or a personal injury necessitating in-patient hospitalization;</chapeau> <clause identifier="/us/tx/ut/t3/c121/scE/s121.214/ii"> <num value="ii">(ii)</num> <content>estimated property damage greater than or equal to the greater of:</content> </clause> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.214/a"> <num value="a">(a)</num> <content>$50,000, including loss to the operator, loss to others, or both, but excluding cost of gas lost; or</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.214/b"> <num value="b">(b)</num> <chapeau>an amount under federal regulations that gives rise to the duty of a distribution gas pipeline facility operator to report the event to a federal agency; or</chapeau> <clause identifier="/us/tx/ut/t3/c121/scE/s121.214/iii"> <num value="iii">(iii)</num> <content>unintentional estimated gas loss of three million cubic feet or more.</content> </clause> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.214/3"> <num value="3">(3)</num> <content>"State record" has the meaning assigned by Section 441.180, Government Code.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.214/b"> <num value="b">(b)</num> <chapeau>The railroad commission by rule shall require a distribution gas pipeline facility operator, after a pipeline incident involving the operator's pipelines, to:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.214/1"> <num value="1">(1)</num> <content>notify the commission of the incident before the expiration of one hour following the operator's discovery of the incident;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.214/2"> <num value="2">(2)</num> <chapeau>provide the following information to the commission before the expiration of one hour following the operator's discovery of the incident:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c121/scE/s121.214/A"> <num value="A">(A)</num> <content>the pipeline operator's name and telephone number;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c121/scE/s121.214/B"> <num value="B">(B)</num> <content>the location of the incident;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c121/scE/s121.214/C"> <num value="C">(C)</num> <content>the time of the incident; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c121/scE/s121.214/D"> <num value="D">(D)</num> <content>the telephone number of the operator's on-site person; and</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scE/s121.214/3"> <num value="3">(3)</num> <chapeau>provide the following information to the commission when the information is known by the operator:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c121/scE/s121.214/A"> <num value="A">(A)</num> <content>the fatalities and personal injuries caused by the incident;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c121/scE/s121.214/B"> <num value="B">(B)</num> <content>the cost of gas lost;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c121/scE/s121.214/C"> <num value="C">(C)</num> <content>estimated property damage to the operator and others;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c121/scE/s121.214/D"> <num value="D">(D)</num> <content>any other significant facts relevant to the incident, including facts related to ignition, explosion, rerouting of traffic, evacuation of a building, and media interest; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c121/scE/s121.214/E"> <num value="E">(E)</num> <content>other information required under federal regulations to be provided to the Pipeline and Hazardous Materials Safety Administration or a successor agency after a pipeline incident or similar incident.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scE/s121.214/c"> <num value="c">(c)</num> <content>The railroad commission shall retain state records of the railroad commission regarding a pipeline incident perpetually.</content> </subsection> <sourceCredit>Added by Acts 2019, 86th Leg., R.S., Ch. 1048 (H.B. 864), Sec. 2, eff. September 1, 2019. Amended by: Acts 2025, 89th Leg., R.S., Ch. 1167 (H.B. 4042), Sec. 3, eff. September 1, 2025.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t3/c121/scF"> <num value="F">SUBCHAPTER F.</num> <heading>GAS SAFETY</heading> <section identifier="/us/tx/ut/t3/c121/scF/s121.251"> <num value="121.251">Sec. 121.251.</num> <heading>RAILROAD COMMISSION TO INVESTIGATE USE OF GAS MALODORANTS</heading> <chapeau>The railroad commission shall investigate the use of malodorants by a person, firm, or corporation in the business of:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scF/s121.251/1"> <num value="1">(1)</num> <content>handling, storing, selling, or distributing natural or liquefied petroleum gases, including butane and other odorless gases, for private or commercial uses; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scF/s121.251/2"> <num value="2">(2)</num> <content>supplying these products to a public building or the general public.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scF/s121.252"> <num value="121.252">Sec. 121.252.</num> <heading>REGULATION OF USE OF MALODORANTS</heading> <subsection identifier="/us/tx/ut/t3/c121/scF/s121.252/a"> <num value="a">(a)</num> <chapeau>The railroad commission, by rule as necessary to carry out the purposes of this section, may:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scF/s121.252/1"> <num value="1">(1)</num> <content>require a person, firm, or corporation subject to Section 121.251 to odorize the gas by using a malodorant agent that indicates the presence of gas by a distinctive odor;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scF/s121.252/2"> <num value="2">(2)</num> <content>regulate the method of the use of malodorants; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scF/s121.252/3"> <num value="3">(3)</num> <content>direct and approve the use of containers and other equipment used in connection with malodorants.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scF/s121.252/b"> <num value="b">(b)</num> <chapeau>A required malodorant agent must be:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scF/s121.252/1"> <num value="1">(1)</num> <content>nontoxic and noncorrosive; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scF/s121.252/2"> <num value="2">(2)</num> <content>not harmful to leather diaphragms in gas equipment.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scF/s121.253"> <num value="121.253">Sec. 121.253.</num> <heading>INTERSTATE TRANSPORTATION OF GAS EXCLUDED</heading> <content>This subchapter does not apply to gas transported out of this state.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t3/c121/scG"> <num value="G">SUBCHAPTER G.</num> <heading>ENFORCEMENT REMEDIES</heading> <section identifier="/us/tx/ut/t3/c121/scG/s121.301"> <num value="121.301">Sec. 121.301.</num> <heading>RECEIVERSHIP</heading> <subsection identifier="/us/tx/ut/t3/c121/scG/s121.301/a"> <num value="a">(a)</num> <content>On application of the railroad commission, a court having jurisdiction to appoint a receiver may appoint a receiver to control and manage, under the direction of the court, the property of a pipeline subject to this chapter if the person or corporation owning, operating, or controlling the pipeline violates this chapter or a rule of the railroad commission.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scG/s121.301/b"> <num value="b">(b)</num> <content>The railroad commission may apply for a receivership only if the railroad commission determines that the public interest requires a receivership.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scG/s121.301/c"> <num value="c">(c)</num> <content>The grounds for the appointment of a receiver under this section are in addition to any other ground provided by law.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scG/s121.302"> <num value="121.302">Sec. 121.302.</num> <heading>CIVIL PENALTY</heading> <subsection identifier="/us/tx/ut/t3/c121/scG/s121.302/a"> <num value="a">(a)</num> <chapeau>A gas utility is subject to a civil penalty if the gas utility:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scG/s121.302/1"> <num value="1">(1)</num> <content>violates this chapter;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scG/s121.302/2"> <num value="2">(2)</num> <content>fails to perform a duty imposed by this chapter; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scG/s121.302/3"> <num value="3">(3)</num> <content>fails to comply with an order of the railroad commission if the order is not stayed or suspended by a court order.</content> <continuation>(a-1) A penalty under this section is payable to the state and shall be:</continuation> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scG/s121.302/1"> <num value="1">(1)</num> <content>not less than $100 and not more than $1,000 for each violation or failure that is not related to pipeline safety; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scG/s121.302/2"> <num value="2">(2)</num> <content>not more than $200,000 for each violation or failure that is related to pipeline safety, provided that the maximum penalty that may be assessed for any related series of violations related to pipeline safety may not exceed $2 million.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scG/s121.302/b"> <num value="b">(b)</num> <content>Each violation and each day that the failure continues is subject to a separate penalty.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2013, 83rd Leg., R.S., Ch. 104 (S.B. 900), Sec. 8, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scG/s121.303"> <num value="121.303">Sec. 121.303.</num> <heading>PENALTY RECOVERABLE BY VICTIM OF DISCRIMINATION</heading> <subsection identifier="/us/tx/ut/t3/c121/scG/s121.303/a"> <num value="a">(a)</num> <content>A penalty of not less than $100 and not more than $1,000 for each violation is recoverable by any person against whom discrimination prohibited by Section 121.104 is committed.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scG/s121.303/b"> <num value="b">(b)</num> <content>A suit to collect a penalty under this section must be brought in the name of and for the benefit of the person aggrieved.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scG/s121.303/c"> <num value="c">(c)</num> <content>A person who recovers a penalty under this section is also entitled to reasonable attorney's fees.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scG/s121.303/d"> <num value="d">(d)</num> <content>The penalty under this section is in addition to a penalty under Section 121.302.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scG/s121.304"> <num value="121.304">Sec. 121.304.</num> <heading>POLLUTION OR PUBLIC SAFETY ADMINISTRATIVE PENALTY</heading> <subsection identifier="/us/tx/ut/t3/c121/scG/s121.304/a"> <num value="a">(a)</num> <chapeau>The railroad commission may assess an administrative penalty against a gas utility that violates this chapter, fails to perform a duty imposed by this chapter, or fails to comply with an order of the railroad commission issued under this chapter and applicable to the gas utility if the violation:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scG/s121.304/1"> <num value="1">(1)</num> <content>results in pollution of the air or water of this state; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scG/s121.304/2"> <num value="2">(2)</num> <content>poses a threat to the public safety.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scG/s121.304/b"> <num value="b">(b)</num> <content>The penalty for each violation or failure that is not related to pipeline safety may not exceed $10,000 a day. The penalty for each violation or failure that is related to pipeline safety may not exceed $200,000 a day. Each day a violation continues may be considered a separate violation for purposes of penalty assessment, provided that the maximum penalty that may be assessed for any related series of violations related to pipeline safety may not exceed $2 million.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scG/s121.304/c"> <num value="c">(c)</num> <chapeau>In determining the amount of the penalty, the railroad commission shall consider:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scG/s121.304/1"> <num value="1">(1)</num> <content>the gas utility's history of previous violations of this chapter;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scG/s121.304/2"> <num value="2">(2)</num> <content>the seriousness of the violation; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scG/s121.304/3"> <num value="3">(3)</num> <content>any hazard to the health or safety of the public.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2013, 83rd Leg., R.S., Ch. 104 (S.B. 900), Sec. 9, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scG/s121.305"> <num value="121.305">Sec. 121.305.</num> <heading>POLLUTION OR PUBLIC SAFETY ADMINISTRATIVE PENALTY: ASSESSMENT PROCEDURE</heading> <subsection identifier="/us/tx/ut/t3/c121/scG/s121.305/a"> <num value="a">(a)</num> <content>An administrative penalty may be assessed under Section 121.304 only after a gas utility charged under Section 121.304 has been given an opportunity for a public hearing.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scG/s121.305/b"> <num value="b">(b)</num> <content>If a public hearing is held, the railroad commission shall make findings of fact and shall issue a written decision as to the occurrence of the violation and the penalty amount warranted by the violation, incorporating, if appropriate, an order requiring that the penalty be paid.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scG/s121.305/c"> <num value="c">(c)</num> <content>If appropriate, the railroad commission shall consolidate the hearings with other proceedings under Section 121.304.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scG/s121.305/d"> <num value="d">(d)</num> <chapeau>If a gas utility charged under Section 121.304 fails to take advantage of the opportunity for a public hearing, an administrative penalty may be assessed by the railroad commission after it has determined:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scG/s121.305/1"> <num value="1">(1)</num> <content>that a violation occurred; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scG/s121.305/2"> <num value="2">(2)</num> <content>the penalty amount warranted by the violation.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scG/s121.305/e"> <num value="e">(e)</num> <content>After assessing an administrative penalty, the railroad commission shall issue an order requiring the penalty to be paid.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scG/s121.305/f"> <num value="f">(f)</num> <content>Not later than the 30th day after the date an order is issued finding that a violation described under Section 121.304 occurred, the railroad commission shall inform the gas utility found in violation of the amount of the penalty.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scG/s121.306"> <num value="121.306">Sec. 121.306.</num> <heading>POLLUTION OR PUBLIC SAFETY ADMINISTRATIVE PENALTY: PAYMENT OF PENALTY</heading> <subsection identifier="/us/tx/ut/t3/c121/scG/s121.306/a"> <num value="a">(a)</num> <chapeau>Not later than the 30th day after the date the railroad commission's decision or order imposing an administrative penalty becomes final as provided by Section 2001.144, Government Code, the gas utility charged with the violation shall:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scG/s121.306/1"> <num value="1">(1)</num> <content>pay the penalty in full; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scG/s121.306/2"> <num value="2">(2)</num> <chapeau>if the gas utility seeks judicial review of either the amount of the penalty or the fact of the violation, or both:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c121/scG/s121.306/A"> <num value="A">(A)</num> <content>pay the penalty to the railroad commission for placement in an escrow account; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c121/scG/s121.306/B"> <num value="B">(B)</num> <content>except as provided by Subsection (b), give to the railroad commission a supersedeas bond, in the amount of the penalty and in the form approved by the railroad commission, to stay the collection of the penalty until all judicial review of the order or decision is final.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scG/s121.306/b"> <num value="b">(b)</num> <content>If the gas utility is appealing a second or subsequent decision or order assessing an administrative penalty against the gas utility, regardless of the finality of judicial review of any previous decision or order, the railroad commission may, but is not required to, accept a supersedeas bond.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scG/s121.307"> <num value="121.307">Sec. 121.307.</num> <heading>POLLUTION OR PUBLIC SAFETY ADMINISTRATIVE PENALTY: APPEALS</heading> <subsection identifier="/us/tx/ut/t3/c121/scG/s121.307/a"> <num value="a">(a)</num> <content>The district courts of Travis County have exclusive jurisdiction of the appeal of an order or decision of the railroad commission assessing an administrative penalty under Section 121.304.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scG/s121.307/b"> <num value="b">(b)</num> <content>Subchapter G, Chapter 2001, Government Code, and the substantial evidence rule apply to an appeal under this section.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scG/s121.308"> <num value="121.308">Sec. 121.308.</num> <heading>POLLUTION OR PUBLIC SAFETY ADMINISTRATIVE PENALTY: REFUND OF PAYMENT OR RELEASE OF BOND</heading> <chapeau>If through judicial review of a decision or order regarding an administrative penalty it is determined that a violation did not occur or that the amount of the penalty should be reduced or not assessed, the railroad commission shall, not later than the 30th day after the date of that determination:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scG/s121.308/1"> <num value="1">(1)</num> <content>remit the appropriate amount to the gas utility with accrued interest if the utility paid the penalty to the railroad commission; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scG/s121.308/2"> <num value="2">(2)</num> <content>execute a release of the bond if the utility posted a supersedeas bond.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scG/s121.309"> <num value="121.309">Sec. 121.309.</num> <heading>POLLUTION OR PUBLIC SAFETY ADMINISTRATIVE PENALTY: RECOVERY</heading> <content>An administrative penalty owed under Sections 121.304-121.308 may be recovered in a civil action brought by the attorney general at the request of the railroad commission.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scG/s121.310"> <num value="121.310">Sec. 121.310.</num> <heading>CRIMINAL PENALTY</heading> <subsection identifier="/us/tx/ut/t3/c121/scG/s121.310/a"> <num value="a">(a)</num> <chapeau>A person commits an offense if:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scG/s121.310/1"> <num value="1">(1)</num> <content>the person is an owner, officer, director, agent, or employee of a person or corporation owning, operating, or controlling a pipeline of a gas utility; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scG/s121.310/2"> <num value="2">(2)</num> <content>the person wilfully violates this chapter or Chapter 122.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scG/s121.310/b"> <num value="b">(b)</num> <content>An offense under this section that is not related to pipeline safety is punishable by a fine of not less than $50 and not more than $1,000. An offense under this section that is related to pipeline safety is punishable by a fine of not more than $2 million. In addition to the fine, the offense may be punishable by confinement in jail for not less than 10 days nor more than six months.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scG/s121.310/c"> <num value="c">(c)</num> <content>In the prosecution of a defendant for multiple offenses under this section, all of the offenses related to pipeline safety are considered to be part of the same criminal episode, and as required by Section 3.03, Penal Code, the sentences of confinement shall run concurrently. Additionally, the cumulative total of fines imposed under this section for offenses related to pipeline safety may not exceed the maximum amount imposed on conviction of a single offense under this section.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2013, 83rd Leg., R.S., Ch. 104 (S.B. 900), Sec. 10, eff. September 1, 2013.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t3/c121/scH"> <num value="H">SUBCHAPTER H.</num> <heading>APPEALS</heading> <section identifier="/us/tx/ut/t3/c121/scH/s121.401"> <num value="121.401">Sec. 121.401.</num> <heading>APPEAL TO COURT</heading> <subsection identifier="/us/tx/ut/t3/c121/scH/s121.401/a"> <num value="a">(a)</num> <content>A gas utility or other party at interest may appeal to a court a decision of any rate, classification, rule, charge, order, or act adopted by the railroad commission by filing a petition against the railroad commission as defendant and specifying each particular reason for objection.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scH/s121.401/b"> <num value="b">(b)</num> <content>An action under this section is tried and determined as are other civil causes in the court except as provided by Section 121.402.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scH/s121.402"> <num value="121.402">Sec. 121.402.</num> <heading>APPEAL: BURDEN AND STANDARD OF PROOF</heading> <content>In a trial under this subchapter, the burden of proof is on the plaintiff, who must show by clear and satisfactory evidence that the rate, rule, order, classification, act, or charge that is the subject of the complaint is unreasonable and unjust to the plaintiff.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scH/s121.403"> <num value="121.403">Sec. 121.403.</num> <heading>APPEAL FROM TRIAL COURT</heading> <chapeau>An appeal from an action under Section 121.402:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scH/s121.403/1"> <num value="1">(1)</num> <content>is at once returnable to the appellate court; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scH/s121.403/2"> <num value="2">(2)</num> <content>has precedence in the appellate court over each other pending cause of a different character.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t3/c121/scI"> <num value="I">SUBCHAPTER I.</num> <heading>SOUR GAS PIPELINE FACILITIES</heading> <section identifier="/us/tx/ut/t3/c121/scI/s121.451"> <num value="121.451">Sec. 121.451.</num> <heading>DEFINITIONS</heading> <chapeau>In this subchapter:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scI/s121.451/1"> <num value="1">(1)</num> <content>"Affected party" means the owner or occupant of real property located in the radius of exposure, as computed in accordance with a methodology approved by the railroad commission, of the proposed route of a sour gas pipeline facility.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scI/s121.451/2"> <num value="2">(2)</num> <chapeau>"Construction" includes any activity conducted during the initial construction of a pipeline, including the removal of earth, vegetation, or obstructions along the proposed pipeline right-of-way. The term does not include:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c121/scI/s121.451/A"> <num value="A">(A)</num> <content>surveying or acquiring the right-of-way; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c121/scI/s121.451/B"> <num value="B">(B)</num> <content>clearing the right-of-way with the consent of the owner.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scI/s121.451/3"> <num value="3">(3)</num> <content>"Low-pressure gathering system" means a pipeline that operates at a working pressure of less than 50 pounds per square inch.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scI/s121.451/4"> <num value="4">(4)</num> <content>"Sour gas pipeline facility" means a pipeline facility that contains a concentration of 100 parts per million or more of hydrogen sulfide.</content> </paragraph> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.13(a), eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scI/s121.452"> <num value="121.452">Sec. 121.452.</num> <heading>APPLICABILITY</heading> <chapeau>This subchapter does not apply to:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scI/s121.452/1"> <num value="1">(1)</num> <chapeau>an extension of an existing sour gas pipeline facility that is in compliance with the railroad commission's rules for oil, gas, or geothermal resource operation in a hydrogen sulfide area if:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c121/scI/s121.452/A"> <num value="A">(A)</num> <content>the extension is not longer than five miles;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c121/scI/s121.452/B"> <num value="B">(B)</num> <content>the nominal pipe size is not larger than six inches in diameter; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c121/scI/s121.452/C"> <num value="C">(C)</num> <content>the railroad commission is given notice of the construction of the extension not later than 24 hours before the start of construction;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scI/s121.452/2"> <num value="2">(2)</num> <content>a new or an extension of a low-pressure gathering system; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scI/s121.452/3"> <num value="3">(3)</num> <content>an interstate gas pipeline facility, as defined by 49 U.S.C. Section 60101 and its subsequent amendments or a succeeding law, that is used for the transportation of sour gas.</content> </paragraph> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.13(a), eff. Sept. 1, 1999. Amended by: Acts 2013, 83rd Leg., R.S., Ch. 1177 (S.B. 901), Sec. 12, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scI/s121.453"> <num value="121.453">Sec. 121.453.</num> <heading>PERMIT APPLICATION</heading> <subsection identifier="/us/tx/ut/t3/c121/scI/s121.453/a"> <num value="a">(a)</num> <content>A person may not begin construction of a sour gas pipeline facility before the person obtains from the railroad commission a permit to construct the facility.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scI/s121.453/b"> <num value="b">(b)</num> <chapeau>An applicant for a permit to construct a sour gas pipeline facility must:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scI/s121.453/1"> <num value="1">(1)</num> <content>publish notice of the application in a form determined by the railroad commission in a newspaper of general circulation in each county that contains part of the proposed route of the sour gas pipeline facility; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scI/s121.453/2"> <num value="2">(2)</num> <content>provide a copy of the application to the county clerk of each county that contains part of the proposed route.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.13(a), eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scI/s121.454"> <num value="121.454">Sec. 121.454.</num> <heading>RAILROAD COMMISSION APPROVAL OR DENIAL</heading> <subsection identifier="/us/tx/ut/t3/c121/scI/s121.454/a"> <num value="a">(a)</num> <content>The railroad commission by order may approve an application for a permit to construct a sour gas pipeline facility if the railroad commission finds that the materials to be used in and method of construction and operation of the facility comply with the rules and safety standards adopted by the railroad commission.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scI/s121.454/b"> <num value="b">(b)</num> <chapeau>The railroad commission may issue an order under this section without holding a hearing unless an affected party files a written protest with the railroad commission not later than the 30th day after the date notice is published under Section 121.453. If an affected party files a written protest, the railroad commission shall:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scI/s121.454/1"> <num value="1">(1)</num> <content>hold a hearing not later than the 60th day after the date the protest is filed; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scI/s121.454/2"> <num value="2">(2)</num> <chapeau>issue an order:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c121/scI/s121.454/A"> <num value="A">(A)</num> <content>approving the permit application; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c121/scI/s121.454/B"> <num value="B">(B)</num> <content>denying the application and stating the reasons for the denial.</content> </subparagraph> </paragraph> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.13(a), eff. Sept. 1, 1999.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t3/c121/scJ"> <num value="J">SUBCHAPTER J.</num> <heading>TESTING OF NATURAL GAS PIPING SYSTEMS IN SCHOOL FACILITIES</heading> <section identifier="/us/tx/ut/t3/c121/scJ/s121.5005"> <num value="121.5005">Sec. 121.5005.</num> <heading>APPLICABILITY</heading> <content>This subchapter applies to a facility of a public elementary or secondary school, including a charter school, or a private elementary or secondary school, but does not apply to a home school.</content> <sourceCredit>Added by Acts 2001, 77th Leg., ch. 1233, Sec. 73, eff. Sept. 1, 2001.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scJ/s121.501"> <num value="121.501">Sec. 121.501.</num> <heading>DEFINITION</heading> <content>In this subchapter, "supplier" means an individual or company that sells and delivers natural gas to a school facility. If more than one individual or company sells and delivers natural gas to a school facility, each individual or company is a supplier for purposes of this subchapter.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.14(a), eff. Sept. 1, 1999. Amended by Acts 2001, 77th Leg., ch. 1233, Sec. 74, eff. Sept. 1, 2001.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scJ/s121.502"> <num value="121.502">Sec. 121.502.</num> <heading>DUTY TO PRESSURE TEST</heading> <subsection identifier="/us/tx/ut/t3/c121/scJ/s121.502/a"> <num value="a">(a)</num> <content>A person responsible for a school facility shall perform biennial pressure tests on the natural gas piping system in the school facility. The tests must be performed before the beginning of the school year.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scJ/s121.502/b"> <num value="b">(b)</num> <content>A person responsible for more than one school facility may perform the tests on a two-year cycle under which the person pressure tests the natural gas piping system in approximately one-half of the facilities each year.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scJ/s121.502/c"> <num value="c">(c)</num> <content>If the person responsible for one or more school facilities operates the facilities on a year-round calendar, the pressure test in each of those facilities must be conducted and reported not later than July 1 of the year in which the pressure test is performed.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scJ/s121.502/d"> <num value="d">(d)</num> <content>A natural gas piping pressure test performed under a municipal code satisfies the pressure testing requirements prescribed by this section.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.14(a), eff. Sept. 1, 1999. Amended by Acts 2001, 77th Leg., ch. 1233, Sec. 74, eff. Sept. 1, 2001.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scJ/s121.503"> <num value="121.503">Sec. 121.503.</num> <heading>REQUIREMENTS OF TEST</heading> <subsection identifier="/us/tx/ut/t3/c121/scJ/s121.503/a"> <num value="a">(a)</num> <content>The person responsible for a school facility shall perform the pressure test to determine whether the natural gas piping downstream of the school facility's meter holds at least normal operating pressure over a specified period determined by the railroad commission.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scJ/s121.503/b"> <num value="b">(b)</num> <content>During the pressure test, each system supply inlet and outlet in the school facility must be closed.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scJ/s121.503/c"> <num value="c">(c)</num> <content>At the request of a person responsible for a school facility, the railroad commission shall assist the person in developing a procedure for conducting the test.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.14(a), eff. Sept. 1, 1999. Amended by Acts 2001, 77th Leg., ch. 1233, Sec. 74, eff. Sept. 1, 2001.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scJ/s121.504"> <num value="121.504">Sec. 121.504.</num> <heading>NOTICE OF TEST</heading> <subsection identifier="/us/tx/ut/t3/c121/scJ/s121.504/a"> <num value="a">(a)</num> <content>A person responsible for a school facility shall provide written notice to the school's supplier specifying the date and result of each pressure test or other inspection.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scJ/s121.504/b"> <num value="b">(b)</num> <content>The supplier shall maintain a copy of the notice until at least the first anniversary of the date on which the supplier received the notice.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.14(a), eff. Sept. 1, 1999. Amended by Acts 2001, 77th Leg., ch. 1233, Sec. 74, eff. Sept. 1, 2001.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scJ/s121.505"> <num value="121.505">Sec. 121.505.</num> <heading>TERMINATION OF SERVICE</heading> <subsection identifier="/us/tx/ut/t3/c121/scJ/s121.505/a"> <num value="a">(a)</num> <chapeau>A supplier shall terminate service to a school facility if:</chapeau> <paragraph identifier="/us/tx/ut/t3/c121/scJ/s121.505/1"> <num value="1">(1)</num> <content>the supplier receives official notification from the firm or individual conducting the test of a hazardous natural gas leakage in the facility piping system; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c121/scJ/s121.505/2"> <num value="2">(2)</num> <content>a test or other inspection at the facility is not performed as required by this subchapter.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c121/scJ/s121.505/b"> <num value="b">(b)</num> <content>A supplier is not liable for any damages that result from a failure to terminate service as required by Subsection (a)(2) for a facility other than a school district facility.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.14(a), eff. Sept. 1, 1999. Amended by Acts 2001, 77th Leg., ch. 1233, Sec. 74, eff. Sept. 1, 2001.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scJ/s121.506"> <num value="121.506">Sec. 121.506.</num> <heading>REPORT OF LEAKAGE</heading> <content>An identified natural gas leakage in a school district facility must be reported to the board of trustees of the district in which the facility is located. An identified natural gas leakage in another school facility must be reported to the person responsible for the school facility.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.14(a), eff. Sept. 1, 1999. Amended by Acts 2001, 77th Leg., ch. 1233, Sec. 74, eff. Sept. 1, 2001.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c121/scJ/s121.507"> <num value="121.507">Sec. 121.507.</num> <heading>ENFORCEMENT</heading> <content>The railroad commission shall enforce this subchapter.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.14(a), eff. Sept. 1, 1999.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t3/c122"> <num value="122">CHAPTER 122.</num> <heading>GAS UTILITY PIPELINE TAX</heading> <subchapter identifier="/us/tx/ut/t3/c122/scA"> <num value="A">SUBCHAPTER A.</num> <heading>DEFINITIONS</heading> <section identifier="/us/tx/ut/t3/c122/scA/s122.001"> <num value="122.001">Sec. 122.001.</num> <heading>DEFINITIONS</heading> <chapeau>In this chapter:</chapeau> <paragraph identifier="/us/tx/ut/t3/c122/scA/s122.001/1"> <num value="1">(1)</num> <content>"Gas utility" has the meaning assigned by Section 121.001(a)(2) and includes a person without regard to whether the person acquired a part of the right-of-way for the pipeline by eminent domain.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c122/scA/s122.001/2"> <num value="2">(2)</num> <content>"Gross income" includes all gross receipts the gas utility received from activities described by Section 121.001(a)(2) that are performed in this state, other than an activity excluded by Chapter 121 from the activities that make a person a gas utility for purposes of that chapter, and excludes the amount of the deduction allowed by Section 122.052.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t3/c122/scB"> <num value="B">SUBCHAPTER B.</num> <heading>TAX IMPOSED</heading> <section identifier="/us/tx/ut/t3/c122/scB/s122.051"> <num value="122.051">Sec. 122.051.</num> <heading>TAX IMPOSED; RATE</heading> <subsection identifier="/us/tx/ut/t3/c122/scB/s122.051/a"> <num value="a">(a)</num> <content>A tax is imposed on each gas utility.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c122/scB/s122.051/b"> <num value="b">(b)</num> <content>The gas utility tax is imposed at the rate of one-half of one percent of the gross income of the gas utility.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c122/scB/s122.052"> <num value="122.052">Sec. 122.052.</num> <heading>DEDUCTION OF CERTAIN COSTS</heading> <content>A gas utility is entitled to deduct from the utility's gross receipts the amount of the cost paid to another person by the utility for purchasing, treating, or storing natural gas or for gathering or transporting natural gas to the utility's facilities.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t3/c122/scC"> <num value="C">SUBCHAPTER C.</num> <heading>PAYMENTS, REPORTS, AND RECORDS</heading> <section identifier="/us/tx/ut/t3/c122/scC/s122.101"> <num value="122.101">Sec. 122.101.</num> <heading>TAX PAYMENT</heading> <subsection identifier="/us/tx/ut/t3/c122/scC/s122.101/a"> <num value="a">(a)</num> <content>A gas utility on whom a tax is imposed by this chapter during a calendar quarter shall pay the tax to the railroad commission.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c122/scC/s122.101/b"> <num value="b">(b)</num> <content>A gas utility shall make the tax payment payable to the comptroller.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c122/scC/s122.102"> <num value="122.102">Sec. 122.102.</num> <heading>REPORT</heading> <subsection identifier="/us/tx/ut/t3/c122/scC/s122.102/a"> <num value="a">(a)</num> <chapeau>A gas utility on whom a tax is imposed by this chapter during a calendar quarter shall include with the tax payment a report to the railroad commission that includes a statement of:</chapeau> <paragraph identifier="/us/tx/ut/t3/c122/scC/s122.102/1"> <num value="1">(1)</num> <content>all activity subject to the tax during the period covered by the report; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c122/scC/s122.102/2"> <num value="2">(2)</num> <content>the gross income from that activity.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c122/scC/s122.102/b"> <num value="b">(b)</num> <content>The president, secretary, or general manager of a gas utility that is a corporation or an owner of a gas utility that is not a corporation must verify the truth and accuracy of the report.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c122/scC/s122.103"> <num value="122.103">Sec. 122.103.</num> <heading>PAYMENT AND REPORT DEADLINE</heading> <content>A tax payment and report under this chapter for a calendar quarter are due on or before the 20th day of the second month of the succeeding quarter.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c122/scC/s122.104"> <num value="122.104">Sec. 122.104.</num> <heading>RECORDS</heading> <chapeau>A person on whom a tax is imposed by this chapter shall maintain until the fourth anniversary of the date the tax report and payment for a calendar quarter are due records sufficient to:</chapeau> <paragraph identifier="/us/tx/ut/t3/c122/scC/s122.104/1"> <num value="1">(1)</num> <content>document the person's tax report; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c122/scC/s122.104/2"> <num value="2">(2)</num> <content>establish the amount of the tax imposed.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t3/c122/scD"> <num value="D">SUBCHAPTER D.</num> <heading>ADMINISTRATION</heading> <section identifier="/us/tx/ut/t3/c122/scD/s122.151"> <num value="122.151">Sec. 122.151.</num> <heading>ADMINISTRATION BY RAILROAD COMMISSION</heading> <chapeau>The railroad commission:</chapeau> <paragraph identifier="/us/tx/ut/t3/c122/scD/s122.151/1"> <num value="1">(1)</num> <content>shall administer and collect the taxes imposed by this chapter; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c122/scD/s122.151/2"> <num value="2">(2)</num> <content>may adopt rules necessary to administer this chapter and to collect and enforce the taxes.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c122/scD/s122.152"> <num value="122.152">Sec. 122.152.</num> <heading>EXAMINATION OF RECORDS AND PERSON DOING BUSINESS IN THIS STATE</heading> <chapeau>To enforce this chapter, the railroad commission may examine:</chapeau> <paragraph identifier="/us/tx/ut/t3/c122/scD/s122.152/1"> <num value="1">(1)</num> <content>a book, record, or paper of a person permitted to do business in this state, including an agent of the person, at an office of the person or agent in the United States; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c122/scD/s122.152/2"> <num value="2">(2)</num> <content>an officer or employee of a person described by Subdivision (1) under oath.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t3/c122/scE"> <num value="E">SUBCHAPTER E.</num> <heading>PENALTIES AND INTEREST</heading> <section identifier="/us/tx/ut/t3/c122/scE/s122.201"> <num value="122.201">Sec. 122.201.</num> <heading>PENALTY FOR FAILURE TO REPORT TAX</heading> <chapeau>A person who is required to report a tax imposed by this chapter and fails to report as required by Sections 122.102 and 122.103 shall pay:</chapeau> <paragraph identifier="/us/tx/ut/t3/c122/scE/s122.201/1"> <num value="1">(1)</num> <content>a penalty of five percent of the amount of the tax due with the report; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c122/scE/s122.201/2"> <num value="2">(2)</num> <content>if the report is not made before the 31st day after the date the report is initially required to be made, an additional penalty of five percent of the amount of the tax due with the report.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c122/scE/s122.202"> <num value="122.202">Sec. 122.202.</num> <heading>PENALTY FOR FAILURE TO PAY TAX</heading> <chapeau>A person who is required to pay a tax imposed by this chapter and fails to pay the tax as required by Sections 122.101 and 122.103 shall pay:</chapeau> <paragraph identifier="/us/tx/ut/t3/c122/scE/s122.202/1"> <num value="1">(1)</num> <content>a penalty of five percent of the amount of the tax due and unpaid; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c122/scE/s122.202/2"> <num value="2">(2)</num> <content>if the tax is not paid before the 31st day after the date the tax payment is initially required to be made, an additional penalty of five percent of the amount of the tax due and unpaid.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c122/scE/s122.203"> <num value="122.203">Sec. 122.203.</num> <heading>PENALTY FOR FAILURE TO REPORT AND PAY TAX</heading> <content>If a person fails to make the report and to pay the tax for a reporting period, only the penalty and additional penalty under Section 122.201, as applicable, for failure to make the report is imposed.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c122/scE/s122.204"> <num value="122.204">Sec. 122.204.</num> <heading>MINIMUM PENALTY</heading> <content>If the amount of a penalty or additional penalty computed as provided by this subchapter is less than $5, the amount of the penalty or additional penalty is $5.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c122/scE/s122.205"> <num value="122.205">Sec. 122.205.</num> <heading>INTEREST</heading> <content>A tax imposed by this chapter that becomes delinquent draws interest at the rate of 12 percent a year beginning on the 60th day after the date the tax becomes delinquent and continues to draw interest until the date the tax is paid.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t3/c123"> <num value="123">CHAPTER 123.</num> <heading>USE OF NATURAL GAS FOR AGRICULTURAL PURPOSES</heading> <subchapter identifier="/us/tx/ut/t3/c123/scA"> <num value="A">SUBCHAPTER A.</num> <heading>NATURAL GAS SUPPLY FOR AGRICULTURAL PURPOSES</heading> <section identifier="/us/tx/ut/t3/c123/scA/s123.001"> <num value="123.001">Sec. 123.001.</num> <heading>NATURAL GAS SUPPLY FOR AGRICULTURAL PURPOSES</heading> <chapeau>A person, firm, corporation, partnership, association, or cooperative who sells natural gas for irrigation may not reduce the supply of natural gas for an agricultural purpose, including irrigation pumping or crop drying, if that person or entity:</chapeau> <paragraph identifier="/us/tx/ut/t3/c123/scA/s123.001/1"> <num value="1">(1)</num> <content>sells and distributes natural gas in a municipality; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c123/scA/s123.001/2"> <num value="2">(2)</num> <content>delivers gas to the boundary of a municipality for resale in the municipality.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c123/scA/s123.002"> <num value="123.002">Sec. 123.002.</num> <heading>EXCEPTION</heading> <chapeau>This subchapter does not apply to the extent that the supply of natural gas is required to maintain natural gas service for:</chapeau> <paragraph identifier="/us/tx/ut/t3/c123/scA/s123.002/1"> <num value="1">(1)</num> <content>use by residential users or hospitals; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c123/scA/s123.002/2"> <num value="2">(2)</num> <content>an analogous use that is vital to public health and safety.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t3/c123/scB"> <num value="B">SUBCHAPTER B.</num> <heading>AGRICULTURE GAS USERS ACT</heading> <section identifier="/us/tx/ut/t3/c123/scB/s123.021"> <num value="123.021">Sec. 123.021.</num> <heading>SHORT TITLE</heading> <content>This subchapter may be cited as the Agriculture Gas Users Act.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c123/scB/s123.022"> <num value="123.022">Sec. 123.022.</num> <heading>DEFINITIONS</heading> <chapeau>In this subchapter:</chapeau> <paragraph identifier="/us/tx/ut/t3/c123/scB/s123.022/1"> <num value="1">(1)</num> <content>"Agriculture energy user" means a person who purchases or uses natural gas for fuel for an irrigation well.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c123/scB/s123.022/2"> <num value="2">(2)</num> <content>"Corporation" means a domestic or foreign corporation or association, and each lessee, assignee, trustee, receiver, or other successor in interest of the corporation or association, that has any of the powers or privileges of a corporation not possessed by an individual or partnership.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c123/scB/s123.022/3"> <num value="3">(3)</num> <content>"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.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c123/scB/s123.022/4"> <num value="4">(4)</num> <content>"Supplier" means a person who furnishes natural gas to an agriculture energy user.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c123/scB/s123.023"> <num value="123.023">Sec. 123.023.</num> <heading>CONTRACT FOR NATURAL GAS</heading> <subsection identifier="/us/tx/ut/t3/c123/scB/s123.023/a"> <num value="a">(a)</num> <content>A supplier and an agriculture energy user may by contract establish a price and other terms of service for the furnishing of natural gas.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c123/scB/s123.023/b"> <num value="b">(b)</num> <content>A contract under this section must be negotiated in good faith and the result of arm's-length bargaining between the parties.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c123/scB/s123.023/c"> <num value="c">(c)</num> <content>Each party shall provide information and maintain records as reasonably necessary for the contract.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c123/scB/s123.023/d"> <num value="d">(d)</num> <content>A price charged to an agriculture energy user under the contract may not exceed the price charged to a majority of the supplier's commercial users or other similar large-volume users.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c123/scB/s123.024"> <num value="123.024">Sec. 123.024.</num> <heading>EXCEPTION</heading> <chapeau>This subchapter does not apply to a transaction between an agriculture energy user and a supplier who does not deliver gas to a municipality unless:</chapeau> <paragraph identifier="/us/tx/ut/t3/c123/scB/s123.024/1"> <num value="1">(1)</num> <content>the parties agree the subchapter applies to the transaction; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c123/scB/s123.024/2"> <num value="2">(2)</num> <content>the contract states the subchapter applies to the transaction.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t3/c124"> <num value="124">CHAPTER 124.</num> <heading>SUBMETERING TO MOBILE HOME PARKS AND APARTMENT HOUSES</heading> <section identifier="/us/tx/ut/t3/c124/s124.001"> <num value="124.001">Sec. 124.001.</num> <heading>DEFINITIONS</heading> <chapeau>In this chapter:</chapeau> <paragraph identifier="/us/tx/ut/t3/c124/s124.001/1"> <num value="1">(1)</num> <content>"Apartment house" means one or more buildings containing more than five dwelling units each of which is rented primarily for nontransient use with rent paid at intervals of one week or longer. The term includes a rented or owner-occupied residential condominium.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c124/s124.001/2"> <num value="2">(2)</num> <chapeau>"Dwelling unit" means:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c124/s124.001/A"> <num value="A">(A)</num> <content>one or more rooms that are suitable for occupancy as a residence and that contain kitchen and bathroom facilities; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c124/s124.001/B"> <num value="B">(B)</num> <content>a mobile home in a mobile home park.</content> </subparagraph> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c124/s124.002"> <num value="124.002">Sec. 124.002.</num> <heading>SUBMETERING</heading> <subsection identifier="/us/tx/ut/t3/c124/s124.002/a"> <num value="a">(a)</num> <content>The railroad commission shall adopt rules under which an owner, operator, or manager of a mobile home park or apartment house may purchase natural gas through a master meter for delivery to a dwelling unit in the mobile home park or apartment house using individual submeters to allocate fairly the cost of the gas consumption of each dwelling unit.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c124/s124.002/b"> <num value="b">(b)</num> <chapeau>In addition to other appropriate safeguards for a resident of a mobile home park or apartment house, the rules must provide that the owner, operator, or manager of the mobile home park or apartment house:</chapeau> <paragraph identifier="/us/tx/ut/t3/c124/s124.002/1"> <num value="1">(1)</num> <content>may not deliver natural gas for sale or resale for profit; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c124/s124.002/2"> <num value="2">(2)</num> <content>shall maintain adequate records relating to that submetering and make those records available for inspection by the resident during reasonable business hours.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </chapter> <chapter identifier="/us/tx/ut/t3/c141"> <num value="141">CHAPTER 141.</num> <heading>STANDARDS FOR DISTRIBUTION SYSTEM RETAILERS</heading> <section identifier="/us/tx/ut/t3/c141/s141.001"> <num value="141.001">Sec. 141.001.</num> <heading>DEFINITIONS</heading> <chapeau>In this chapter:</chapeau> <paragraph identifier="/us/tx/ut/t3/c141/s141.001/1"> <num value="1">(1)</num> <content>"Allowable markup" means the two-calendar-year rolling average of the differences between the monthly E.I.A. retail prices per gallon reported during the two calendar years immediately preceding the calendar year in which a billing month occurs and the corresponding spot prices per gallon reported for the same month an E.I.A. retail price was reported during those two calendar years. As an example of the calculated allowable markup, for 2013, the allowable markup is $1.48 per gallon.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c141/s141.001/2"> <num value="2">(2)</num> <content>"Allowable spot price" means the average of the spot prices for the two months preceding the billing month. As an example of the calculated allowable spot price, for the billing month of January 2013, the allowable spot price was $0.844 per gallon. The commission shall identify the allowable spot price each month and publish that price on the commission's website.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c141/s141.001/3"> <num value="3">(3)</num> <content>"Commission" means the Railroad Commission of Texas or its successor agency.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c141/s141.001/4"> <num value="4">(4)</num> <content>"Customer" means a retail customer of propane gas purchased from and delivered by a distribution system retailer through a propane gas system.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c141/s141.001/5"> <num value="5">(5)</num> <chapeau>"Distribution system retailer":</chapeau> <subparagraph identifier="/us/tx/ut/t3/c141/s141.001/A"> <num value="A">(A)</num> <content>means a retail propane dealer that:</content> </subparagraph> </paragraph> <subsection identifier="/us/tx/ut/t3/c141/s141.001/i"> <num value="i">(i)</num> <chapeau>owns or operates for compensation in this state a propane gas system; and</chapeau> <clause identifier="/us/tx/ut/t3/c141/s141.001/ii"> <num value="ii">(ii)</num> <content>has a Category E or K license issued by the applicable license and permit section of the commission; and</content> </clause> <subparagraph identifier="/us/tx/ut/t3/c141/s141.001/B"> <num value="B">(B)</num> <content>does not include a person that furnishes propane gas only to the person, to the person's employees, or to the person's tenants as an incident of employment or tenancy, if the service is not resold to customers.</content> </subparagraph> <paragraph identifier="/us/tx/ut/t3/c141/s141.001/6"> <num value="6">(6)</num> <content>"E.I.A. retail price" means the monthly U.S. Propane Residential Price as reported by the United States Energy Information Administration or its successor agency in dollars per gallon. As an example of the calculated E.I.A. retail price, for January 2013, the E.I.A. retail price was $2.449 per gallon.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c141/s141.001/7"> <num value="7">(7)</num> <content>"Propane gas" means a normally gaseous hydrocarbon defined as propane by the United States Energy Information Administration or its successor agency.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c141/s141.001/8"> <num value="8">(8)</num> <content>"Propane gas system" means one or more propane storage containers, equipment, and facilities connected to a contiguous piping system through which propane gas is supplied by a distribution system retailer to at least 10 customers.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c141/s141.001/9"> <num value="9">(9)</num> <content>"Rate" means the price per cubic foot of gas passing through the meter levied, charged, or collected by a distribution system retailer from a customer for propane gas provided through a propane gas system to the customer exclusive of any fees, taxes, or other charges. A conversion factor of 36.4 cubic feet of propane gas per gallon shall be used for purposes of determining a rate.</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c141/s141.001/10"> <num value="10">(10)</num> <content>"Spot price" means the Mont Belvieu, TX monthly Propane Spot Price FOB per gallon as reported by the United States Energy Information Administration or its successor agency in dollars per gallon. In January 2013, the spot price was $0.838 per gallon.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2013, 83rd Leg., R.S., Ch. 1296 (H.B. 2532), Sec. 1, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c141/s141.002"> <num value="141.002">Sec. 141.002.</num> <heading>APPLICABILITY</heading> <content>This chapter applies only to the retail sale of propane gas made by a distribution system retailer through a propane gas system. This chapter does not apply to any other retail or wholesale sale of propane gas.</content> <sourceCredit>Added by Acts 2013, 83rd Leg., R.S., Ch. 1296 (H.B. 2532), Sec. 1, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c141/s141.003"> <num value="141.003">Sec. 141.003.</num> <heading>RATE AND FEE CEILINGS</heading> <subsection identifier="/us/tx/ut/t3/c141/s141.003/a"> <num value="a">(a)</num> <content>In each billing month, a distribution system retailer shall charge a customer a just and reasonable rate for propane gas provided through a propane gas system to the customer. For the purposes of this section, a just and reasonable rate charged monthly for propane gas is a rate for propane gas provided through a propane gas system to the customer if it is less than or equal to the allowable spot price plus the allowable markup. For a customer's bill that contains days in more than one month, the month with the most days covered by the bill shall be considered the billing month. The price per gallon shall be converted to the cubic foot rate by dividing the price per gallon by 36.4.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c141/s141.003/b"> <num value="b">(b)</num> <content>In addition to the rate authorized by Subsection (a), a distribution system retailer may charge customers special fees for services, including a connection fee, a disconnection fee, a monthly account fee to maintain an active account, a late payment fee, a disconnect or termination fee, a reconnection fee, an accelerated reconnection fee, a dishonored or canceled payment fee, a service initiation fee, and a tampering fee or an unauthorized gas consumption or diversion fee, if the fees are reasonable and customary. For purposes of this section, the fees described above that were charged or adopted by a distribution system retailer as of January 1, 2013, as adjusted pursuant to Subsection (c), are deemed reasonable and customary for that distribution system retailer and its successors regarding any systems owned or operated currently or in the future.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c141/s141.003/c"> <num value="c">(c)</num> <content>The distribution system retailer may adjust the fees described by Subsection (b) up or down based on the 12-month changes in the Consumer Price Index for All Urban Consumers, U.S. City Average, All Items, CPI-U, Not Seasonally Adjusted, published by the Bureau of Labor Statistics of the United States Department of Labor or a similar index if that index is unavailable. For calculation purposes, the beginning base month is December 2012.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c141/s141.003/d"> <num value="d">(d)</num> <chapeau>Nothing in this section limits a distribution system retailer's ability to pass through to a customer as a separate charge on a pro rata actual-cost basis:</chapeau> <paragraph identifier="/us/tx/ut/t3/c141/s141.003/1"> <num value="1">(1)</num> <content>a tax, other than a tax assessed on the basis of income, gross income, property, or margins;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c141/s141.003/2"> <num value="2">(2)</num> <chapeau>an assessment, surcharge, levy, fee, or other charge imposed by a governmental entity, any one of which begins or is increased on or after January 1, 2013, either:</chapeau> <subparagraph identifier="/us/tx/ut/t3/c141/s141.003/A"> <num value="A">(A)</num> <content>directly on a propane gas system or any portion; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t3/c141/s141.003/B"> <num value="B">(B)</num> <content>on a distribution system retailer by virtue of its ownership or operation of a propane gas system; or</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t3/c141/s141.003/3"> <num value="3">(3)</num> <content>a sales tax or franchise fee.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c141/s141.003/e"> <num value="e">(e)</num> <chapeau>A fee passed through to a customer under Subsection (d) shall be:</chapeau> <paragraph identifier="/us/tx/ut/t3/c141/s141.003/1"> <num value="1">(1)</num> <content>passed through without any additional markup; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c141/s141.003/2"> <num value="2">(2)</num> <content>identified as a separate item on a customer's bill.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c141/s141.003/f"> <num value="f">(f)</num> <content>Notwithstanding any other provision in this section, this subtitle does not apply to a new gas line construction charge, a gas line repair charge, or an appliance repair charge.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c141/s141.003/g"> <num value="g">(g)</num> <content>In the event either or both the E.I.A. retail price or the Mont Belvieu, TX monthly Propane Spot Price FOB per gallon cease to be available, the commission shall designate a reasonably similar available substitute index or indices as necessary for purposes of calculation of the rate deemed just and reasonable for purposes of this section. Until the commission publishes an order designating the substitute index or indices, distribution system retailers shall charge a rate not to exceed the most recent available allowable markup plus the most recent available Mont Belvieu, TX monthly Propane Spot Price FOB per gallon. If the Mont Belvieu, TX monthly Propane Spot Price FOB per gallon is not available from the United States Energy Information Administration, the distribution system retailer, for the purpose of defining the spot price, may identify and use the Mont Belvieu, TX monthly Propane Spot Price FOB per gallon as reported by an alternative publicly available published source.</content> </subsection> <sourceCredit>Added by Acts 2013, 83rd Leg., R.S., Ch. 1296 (H.B. 2532), Sec. 1, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c141/s141.0031"> <num value="141.0031">Sec. 141.0031.</num> <heading>DAYS IN BILLING MONTH</heading> <subsection identifier="/us/tx/ut/t3/c141/s141.0031/a"> <num value="a">(a)</num> <chapeau>A customer's bill may not include charges for a period of more than:</chapeau> <paragraph identifier="/us/tx/ut/t3/c141/s141.0031/1"> <num value="1">(1)</num> <content>32 days for a billing month in which the majority of days in the billing month occur in December, January, or February; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c141/s141.0031/2"> <num value="2">(2)</num> <content>31 days for a billing month in which the majority of days in the billing month occur in any other month.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c141/s141.0031/b"> <num value="b">(b)</num> <chapeau>If an extreme condition occurs or continues on or after the 29th day of a billing month described by Subsection (a)(1), the billing month may be extended by the number of days the extreme condition occurs. Extreme conditions include:</chapeau> <paragraph identifier="/us/tx/ut/t3/c141/s141.0031/1"> <num value="1">(1)</num> <content>iced, flooded, closed, or otherwise impassable roads in the county in which the customer resides;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c141/s141.0031/2"> <num value="2">(2)</num> <content>a natural disaster, including an earthquake, a hurricane, a tornado, or winds of more than 60 miles per hour; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c141/s141.0031/3"> <num value="3">(3)</num> <content>civil disruption, including war, riot, or labor disruption or stoppage.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2015, 84th Leg., R.S., Ch. 783 (H.B. 2558), Sec. 1, eff. September 1, 2015.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c141/s141.004"> <num value="141.004">Sec. 141.004.</num> <heading>DISCONNECTION OF PROPANE GAS SERVICE</heading> <subsection identifier="/us/tx/ut/t3/c141/s141.004/a"> <num value="a">(a)</num> <content>A distribution system retailer may not disconnect propane gas service to a residential customer on a weekend day or holiday officially observed by the State of Texas unless personnel of the distribution system retailer are available on that day to receive payments and reconnect service.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c141/s141.004/b"> <num value="b">(b)</num> <content>A distribution system retailer may not disconnect propane gas service to a residential customer during an extreme weather emergency, as defined by Section 104.258. The distribution system retailer shall defer collection of the full payment of bills that are due during an extreme weather emergency, as defined by Section 104.258, until after the emergency is over.</content> </subsection> <sourceCredit>Added by Acts 2013, 83rd Leg., R.S., Ch. 1296 (H.B. 2532), Sec. 1, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c141/s141.005"> <num value="141.005">Sec. 141.005.</num> <heading>CONTINUITY OF SERVICE</heading> <subsection identifier="/us/tx/ut/t3/c141/s141.005/a"> <num value="a">(a)</num> <content>A distribution system retailer shall make all reasonable efforts to prevent interruptions of service. When an interruption occurs, the distribution system retailer shall reestablish service within the shortest possible time consistent with prudent operating principles so that the smallest number of customers are affected.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c141/s141.005/b"> <num value="b">(b)</num> <content>Excluding service interruptions under Section 141.006, a distribution system retailer shall keep complete records of all emergency and scheduled service interruptions lasting more than six hours and affecting more than two customers. The records must describe the cause, date, length, and location of each interruption, the approximate number of customers affected by the interruption, and, in the case of an emergency interruption, the remedy and steps taken to prevent a recurrence, if applicable. The distribution system retailer shall submit copies of the service interruption records to the commission quarterly.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c141/s141.005/c"> <num value="c">(c)</num> <content>The distribution system retailer shall notify the commission in writing not later than 48 hours after an interruption in service that affects the entire propane gas system, lasts more than four hours, represents an existing or probable hazard to persons or property, and requires immediate repair or continuous action until the conditions are no longer hazardous. The notice shall include the distribution system report of a service interruption. A written report of a service interruption in another form, including a part of a safety report, is sufficient to comply with this subsection.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c141/s141.005/d"> <num value="d">(d)</num> <content>The commission shall establish and maintain a toll-free telephone number to enable a customer to notify the commission of a service interruption that does not involve a refusal to serve under Section 141.006. The commission shall immediately investigate the notification. A distribution system retailer shall notify the customer of the commission phone number on each billing statement.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c141/s141.005/e"> <num value="e">(e)</num> <chapeau>To restore and maintain service, the commission may assume temporary operational control of a propane gas system that experiences a service interruption that affects the entire propane gas system and that:</chapeau> <paragraph identifier="/us/tx/ut/t3/c141/s141.005/1"> <num value="1">(1)</num> <content>continues to affect the entire propane gas system after the distribution system retailer has had direct access to and control of the system for more than 48 hours after the service interruption began;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c141/s141.005/2"> <num value="2">(2)</num> <content>occurs more than three times in one month; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c141/s141.005/3"> <num value="3">(3)</num> <content>is the result of the distribution system retailer's failure or refusal to replenish the primary propane tank for a reason other than a general local market disruption, a restriction on wholesale propane supplies, mechanical failure, criminal activity, or an act of God.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c141/s141.005/f"> <num value="f">(f)</num> <content>The commission may draw down all or part of the financial surety posted under Section 141.009, as required, to restore and maintain service under Subsection (e).</content> </subsection> <subsection identifier="/us/tx/ut/t3/c141/s141.005/g"> <num value="g">(g)</num> <chapeau>At the request of the commission, the attorney general shall bring suit for the appointment of a receiver to collect the assets and carry on the business of a distribution system retailer that:</chapeau> <paragraph identifier="/us/tx/ut/t3/c141/s141.005/1"> <num value="1">(1)</num> <content>has abandoned operation of its facilities;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c141/s141.005/2"> <num value="2">(2)</num> <content>informs the commission that the owner is abandoning the system; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c141/s141.005/3"> <num value="3">(3)</num> <content>experiences a service interruption as described under Subsection (e).</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c141/s141.005/h"> <num value="h">(h)</num> <chapeau>The court shall appoint a receiver if an appointment is necessary to guarantee:</chapeau> <paragraph identifier="/us/tx/ut/t3/c141/s141.005/1"> <num value="1">(1)</num> <content>the collection of assessments, fees, penalties, or interest; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c141/s141.005/2"> <num value="2">(2)</num> <content>continuous and adequate service to the customers of the utility.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c141/s141.005/i"> <num value="i">(i)</num> <content>The receiver shall execute a bond to assure the proper performance of the receiver's duties in an amount to be set by the court.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c141/s141.005/j"> <num value="j">(j)</num> <content>After appointment and execution of bond, the receiver shall take possession of the assets of the utility specified by the court. Until discharged by the court, the receiver shall perform the duties that the court directs to preserve the assets and carry on the business of the utility and shall strictly observe the final order involved.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c141/s141.005/k"> <num value="k">(k)</num> <content>On a showing of good cause by the distribution system retailer, the court may dissolve the receivership and order the assets and control of the business returned to the distribution system retailer.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c141/s141.005/l"> <num value="l">(l)</num> <content>Notwithstanding Section 64.021, Civil Practice and Remedies Code, a receiver appointed under this section may seek commission approval to acquire the distribution system retailer's facilities.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c141/s141.005/m"> <num value="m">(m)</num> <chapeau>Subject to the approval of the court and after giving notice to all interested parties, the receiver may sell or otherwise dispose of all or part of the real or personal property of a propane gas system against which a proceeding has been brought under this subchapter to pay the costs incurred in the operation of the receivership. The costs include:</chapeau> <paragraph identifier="/us/tx/ut/t3/c141/s141.005/1"> <num value="1">(1)</num> <content>payment of fees to the receiver for the receiver's services;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c141/s141.005/2"> <num value="2">(2)</num> <content>payment of fees to attorneys, accountants, engineers, or any other persons or entities that provide goods or services necessary to the operation of the receivership; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c141/s141.005/3"> <num value="3">(3)</num> <content>payment of costs incurred ensuring that any property owned or controlled by a distribution system retailer is not used in violation of a final order of the court.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2013, 83rd Leg., R.S., Ch. 1296 (H.B. 2532), Sec. 1, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c141/s141.006"> <num value="141.006">Sec. 141.006.</num> <heading>GROUNDS FOR REFUSAL TO SERVE</heading> <subsection identifier="/us/tx/ut/t3/c141/s141.006/a"> <num value="a">(a)</num> <chapeau>A distribution system retailer may refuse service to an applicant for new service or to an existing customer for continued service or reconnection if:</chapeau> <paragraph identifier="/us/tx/ut/t3/c141/s141.006/1"> <num value="1">(1)</num> <content>an applicant or customer fails to pay fees, advances, contributions, or deposits required for service under the distribution system retailer's policies;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c141/s141.006/2"> <num value="2">(2)</num> <content>an applicant or customer fails to furnish a service or meter location specified for service by the distribution system retailer;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c141/s141.006/3"> <num value="3">(3)</num> <content>the existence or repeated creation of an unsafe condition, such as impaired meter access or a leak in the applicant's piping system, may potentially create bodily harm or endanger life or property in the distribution system retailer's opinion;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c141/s141.006/4"> <num value="4">(4)</num> <content>an applicant, customer, or service location owner is delinquent in payment for services provided by a distribution system retailer service location owner; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c141/s141.006/5"> <num value="5">(5)</num> <content>a current resident or occupant of the premises to receive service is delinquent in payment for services provided by a distribution system retailer.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c141/s141.006/b"> <num value="b">(b)</num> <content>The right to refuse service ends when the cause for the refusal to serve is corrected.</content> </subsection> <sourceCredit>Added by Acts 2013, 83rd Leg., R.S., Ch. 1296 (H.B. 2532), Sec. 1, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c141/s141.007"> <num value="141.007">Sec. 141.007.</num> <heading>REASONABLE TIME TO BEGIN SERVICE</heading> <content>A distribution system retailer may delay providing service following an application or execution of an agreement for service for a reasonable amount of time considering required approvals, inspections, or permits, the extent of the facilities to be built, and the distribution system retailer's workload at the time.</content> <sourceCredit>Added by Acts 2013, 83rd Leg., R.S., Ch. 1296 (H.B. 2532), Sec. 1, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c141/s141.008"> <num value="141.008">Sec. 141.008.</num> <heading>CUSTOMER COMPLAINTS</heading> <subsection identifier="/us/tx/ut/t3/c141/s141.008/a"> <num value="a">(a)</num> <content>A distribution system retailer that receives a written complaint shall promptly and suitably investigate the complaint and advise the complainant of the results of the investigation. A distribution system retailer shall keep for at least three years after the final disposition of each complaint a record that includes each complainant's name and address, the date and nature of the complaint, and the adjustment or disposition of the complaint. A distribution system retailer is not required to keep a record of a complaint that does not require the distribution system retailer to take specific further action. A distribution system retailer shall notify each complainant of the right to file a complaint with the commission if the complainant is not satisfied by the distribution system retailer's resolution of the matter.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c141/s141.008/b"> <num value="b">(b)</num> <content>On receipt of a written complaint from the commission on behalf of a customer, a distribution system retailer promptly and suitably shall investigate and notify the commission and complainant of the results of the investigation. An initial response must be made not later than the third business day after the date the distribution system retailer receives the complaint electronically delivered to a minimum of two electronic addresses designated by the distribution system retailer. A distribution system retailer shall send a final and complete response to the commission and complainant not later than the 15th day after the date the complaint was received, unless the commission grants additional time before the expiration of the 15-day period.</content> </subsection> <subsection identifier="/us/tx/ut/t3/c141/s141.008/c"> <num value="c">(c)</num> <chapeau>The commission may impose sanctions on a distribution system retailer if, after an investigation, the commission determines that the distribution system retailer has violated Section 141.003. Sanctions may include:</chapeau> <paragraph identifier="/us/tx/ut/t3/c141/s141.008/1"> <num value="1">(1)</num> <content>adopting an order requiring a distribution system retailer to refund the amounts of any overcharges to the distribution system retailer's customers;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c141/s141.008/2"> <num value="2">(2)</num> <content>drawing down all or a portion of the financial surety for the purpose of refunding the amounts of any overcharges to the distribution system retailer's customers not refunded before the 61st day after the date the commission orders a refund; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c141/s141.008/3"> <num value="3">(3)</num> <content>adopting an order setting rates and fees for the distribution system retailer in accordance with Section 141.003.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2013, 83rd Leg., R.S., Ch. 1296 (H.B. 2532), Sec. 1, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c141/s141.009"> <num value="141.009">Sec. 141.009.</num> <heading>PERFORMANCE GUARANTEE</heading> <content>A distribution system retailer shall post, in favor of the commission, financial surety in the form of a letter of credit, bond, or other acceptable form of financial surety with the commission in an amount equal to the lesser of $3 multiplied by the number of gallons of aggregate storage capacity in all of the propane gas systems operated by the distribution system retailer or $50,000. The issuer of the financial surety used to meet this requirement shall honor the financial surety if the issuer receives from the commission notice that the financial surety is due and payable. The commission may draw down all or a portion of the financial surety. The distribution system retailer shall provide the commission with verification of the adequacy of the financial surety, and the commission may order the distribution system retailer to adjust the amount of the financial surety annually.</content> <sourceCredit>Added by Acts 2013, 83rd Leg., R.S., Ch. 1296 (H.B. 2532), Sec. 1, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t3/c141/s141.010"> <num value="141.010">Sec. 141.010.</num> <heading>DISCLOSURE TO HOMEOWNERS</heading> <subsection identifier="/us/tx/ut/t3/c141/s141.010/a"> <num value="a">(a)</num> <chapeau>A distribution system retailer shall record in the real property records of each county in which the distribution system retailer owns or operates a propane gas system a notice of disclosure of the existence of the propane gas system and the service the retailer provides. The notice shall include:</chapeau> <paragraph identifier="/us/tx/ut/t3/c141/s141.010/1"> <num value="1">(1)</num> <content>a service map reflecting the location of the subdivisions or areas the distribution system retailer serves in the county;</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c141/s141.010/2"> <num value="2">(2)</num> <content>a copy of this chapter or a summary of the customer's rights under this chapter; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t3/c141/s141.010/3"> <num value="3">(3)</num> <content>for development agreements entered into after September 1, 2013, a statement disclosing the existence of any financial interest held by a homeowners' association, municipal utility district, or developer in the propane gas system.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t3/c141/s141.010/b"> <num value="b">(b)</num> <content>If a person proposes to sell or convey real property located in a propane gas system service area owned by a distribution system retailer, the person must give to the purchaser written notice as prescribed by this subsection. The notice must include a copy of the notice recorded in the real property records as required by Subsection (a), must be executed by the seller, and must read as follows: "The real property, described below, that you are about to purchase may be located in a propane gas system service area, which is authorized by law to provide propane gas service to the properties in the area pursuant to Chapter 141, Utilities Code. If your property is located in a propane gas system service area, there may be special costs or charges that you will be required to pay before you can receive propane gas service. There may be a period required to construct lines or other facilities necessary to provide propane gas service to your property. You are advised to determine if the property is in a propane gas system service area and contact the distribution system retailer to determine the cost that you will be required to pay and the period, if any, that is required to provide propane gas service to your property.</content> <continuation>"The undersigned purchaser hereby acknowledges receipt of the foregoing notice at or before the execution of a binding contract for the purchase of the real property described in the notice or at closing of purchase of the real property.</continuation> <continuation>________________________________</continuation> <continuation>Date</continuation> <continuation>________________________________</continuation> <continuation>Signature of Purchaser"</continuation> </subsection> <subsection identifier="/us/tx/ut/t3/c141/s141.010/c"> <num value="c">(c)</num> <content>Each county shall accept and record in its real property records a distribution system retailer's service map presented to the county clerk under this section if the map meets filing requirements, does not exceed 11 inches by 17 inches in size, and is accompanied by the appropriate fee. The recording required by this section must be completed not later than the later of January 1, 2014, or the 90th day after the date a distribution system retailer completes construction of a new propane gas system in the county.</content> </subsection> <sourceCredit>Added by Acts 2013, 83rd Leg., R.S., Ch. 1296 (H.B. 2532), Sec. 1, eff. September 1, 2013.</sourceCredit> </section> </chapter> <num value="4">TITLE 4.</num> <heading>DELIVERY OF UTILITY SERVICES</heading> <chapter identifier="/us/tx/ut/t4/c161"> <num value="161">CHAPTER 161.</num> <heading>ELECTRIC COOPERATIVE CORPORATIONS</heading> <subchapter identifier="/us/tx/ut/t4/c161/scA"> <num value="A">SUBCHAPTER A.</num> <heading>GENERAL PROVISIONS</heading> <section identifier="/us/tx/ut/t4/c161/scA/s161.001"> <num value="161.001">Sec. 161.001.</num> <heading>SHORT TITLE</heading> <content>This chapter may be cited as the Electric Cooperative Corporation Act.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c161/scA/s161.002"> <num value="161.002">Sec. 161.002.</num> <heading>DEFINITIONS</heading> <chapeau>In this chapter:</chapeau> <paragraph identifier="/us/tx/ut/t4/c161/scA/s161.002/1"> <num value="1">(1)</num> <content>"Acquire" means and includes construct, acquire by purchase, lease, devise, or gift, or other mode of acquisition.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scA/s161.002/2"> <num value="2">(2)</num> <content>"Board" means the board of directors of an electric cooperative.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scA/s161.002/3"> <num value="3">(3)</num> <content>"Central station service" means electric service provided by a municipally owned electric system or by an electric corporation described by Subchapter A, Chapter 181.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scA/s161.002/4"> <num value="4">(4)</num> <content>"Electric cooperative" means a corporation that is organized under this chapter or that becomes subject to this chapter as provided by this chapter.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scA/s161.002/5"> <num value="5">(5)</num> <chapeau>"Member" means:</chapeau> <subparagraph identifier="/us/tx/ut/t4/c161/scA/s161.002/A"> <num value="A">(A)</num> <content>an incorporator of an electric cooperative; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c161/scA/s161.002/B"> <num value="B">(B)</num> <content>a person admitted to membership in the electric cooperative as provided by Section 161.065.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scA/s161.002/6"> <num value="6">(6)</num> <content>"Obligation" includes a bond, note, debenture, interim certificate or receipt, or other evidence of indebtedness issued by an electric cooperative.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scA/s161.002/7"> <num value="7">(7)</num> <chapeau>"Rural area" means an area, including both farm and nonfarm population of the area, that is not located in:</chapeau> <subparagraph identifier="/us/tx/ut/t4/c161/scA/s161.002/A"> <num value="A">(A)</num> <content>a municipality having a population greater than 1,500; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c161/scA/s161.002/B"> <num value="B">(B)</num> <content>an unincorporated city, town, village, or borough having a population greater than 1,500.</content> </subparagraph> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c161/scA/s161.003"> <num value="161.003">Sec. 161.003.</num> <heading>CONSTRUCTION OF CHAPTER</heading> <content>This chapter shall be liberally construed. The enumeration of a purpose, power, method, or thing does not exclude similar purposes, powers, methods, or things.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c161/scA/s161.004"> <num value="161.004">Sec. 161.004.</num> <heading>CERTAIN CORPORATE NAMES PROHIBITED</heading> <content>A corporation organized under the laws of this state or authorized to do business in this state may not use the words "electric cooperative" in the corporation's name unless the corporation is organized under this chapter.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c161/scA/s161.005"> <num value="161.005">Sec. 161.005.</num> <heading>CHAPTER COMPLETE AND CONTROLLING</heading> <content>This chapter is complete in itself and is controlling.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t4/c161/scB"> <num value="B">SUBCHAPTER B.</num> <heading>CREATION AND OPERATION OF ELECTRIC COOPERATIVES</heading> <section identifier="/us/tx/ut/t4/c161/scB/s161.051"> <num value="161.051">Sec. 161.051.</num> <heading>INCORPORATORS</heading> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.051/a"> <num value="a">(a)</num> <content>Three or more individuals may act as incorporators of an electric cooperative by executing articles of incorporation as provided by this chapter.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.051/b"> <num value="b">(b)</num> <chapeau>An incorporator must:</chapeau> <paragraph identifier="/us/tx/ut/t4/c161/scB/s161.051/1"> <num value="1">(1)</num> <content>be at least 21 years of age; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scB/s161.051/2"> <num value="2">(2)</num> <content>reside in this state.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c161/scB/s161.052"> <num value="161.052">Sec. 161.052.</num> <heading>DURATION OF CORPORATION</heading> <content>An electric cooperative may be created as a perpetual corporation.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c161/scB/s161.053"> <num value="161.053">Sec. 161.053.</num> <heading>NAME OF ELECTRIC COOPERATIVE</heading> <chapeau>The name of an electric cooperative must:</chapeau> <paragraph identifier="/us/tx/ut/t4/c161/scB/s161.053/1"> <num value="1">(1)</num> <content>include the words "Electric Cooperative";</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scB/s161.053/2"> <num value="2">(2)</num> <content>include the term "Corporation," "Incorporated," "Inc.," "Association," or "Company"; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scB/s161.053/3"> <num value="3">(3)</num> <content>be distinct from the name of any other corporation organized under the laws of this state.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c161/scB/s161.054"> <num value="161.054">Sec. 161.054.</num> <heading>ARTICLES OF INCORPORATION</heading> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.054/a"> <num value="a">(a)</num> <chapeau>The articles of incorporation of an electric cooperative must state:</chapeau> <paragraph identifier="/us/tx/ut/t4/c161/scB/s161.054/1"> <num value="1">(1)</num> <content>the name of the cooperative;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scB/s161.054/2"> <num value="2">(2)</num> <content>the purpose for which the cooperative is formed;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scB/s161.054/3"> <num value="3">(3)</num> <content>the name and address of each incorporator;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scB/s161.054/4"> <num value="4">(4)</num> <content>the number of directors;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scB/s161.054/5"> <num value="5">(5)</num> <content>the address of the cooperative's principal office and the name and address of its agent on whom process may be served;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scB/s161.054/6"> <num value="6">(6)</num> <content>the duration of the cooperative;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scB/s161.054/7"> <num value="7">(7)</num> <content>the terms under which a person is admitted to membership and retains membership in the cooperative, unless the articles expressly state that the determination of membership matters is reserved to the directors by the bylaws; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scB/s161.054/8"> <num value="8">(8)</num> <content>any provisions that the incorporators include for the regulation of the business and the conduct of the affairs of the cooperative.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.054/b"> <num value="b">(b)</num> <content>The articles of incorporation do not need to state any of the corporate powers enumerated in this chapter.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c161/scB/s161.055"> <num value="161.055">Sec. 161.055.</num> <heading>FILING AND RECORDING OF ARTICLES OF INCORPORATION</heading> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.055/a"> <num value="a">(a)</num> <chapeau>The secretary of state shall receive articles of incorporation of an electric cooperative if the incorporators of the cooperative:</chapeau> <paragraph identifier="/us/tx/ut/t4/c161/scB/s161.055/1"> <num value="1">(1)</num> <content>apply for filing the articles;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scB/s161.055/2"> <num value="2">(2)</num> <content>furnish satisfactory evidence of compliance with this chapter to the secretary of state; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scB/s161.055/3"> <num value="3">(3)</num> <content>pay a fee of $10.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.055/b"> <num value="b">(b)</num> <chapeau>The secretary of state shall:</chapeau> <paragraph identifier="/us/tx/ut/t4/c161/scB/s161.055/1"> <num value="1">(1)</num> <content>file the articles of incorporation in the secretary's office;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scB/s161.055/2"> <num value="2">(2)</num> <content>record the articles at length in a book to be kept for that purpose;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scB/s161.055/3"> <num value="3">(3)</num> <content>retain the original articles of incorporation on file in the secretary's office; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scB/s161.055/4"> <num value="4">(4)</num> <content>issue a certificate showing the recording of the articles of incorporation and the electric cooperative's authority to do business under the articles.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.055/c"> <num value="c">(c)</num> <content>A copy of the articles of incorporation or of the record of the articles, certified under the state seal, is evidence of the creation of the electric cooperative.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.055/d"> <num value="d">(d)</num> <content>The existence of the electric cooperative dates from the filing of the articles in the office of the secretary of state. The certificate of the secretary of state is evidence of that filing.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c161/scB/s161.056"> <num value="161.056">Sec. 161.056.</num> <heading>REVIVAL OF ARTICLES OF INCORPORATION</heading> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.056/a"> <num value="a">(a)</num> <chapeau>If the articles of incorporation of an electric cooperative expire by limitation, the cooperative, with the consent of a majority of its members, may revive the articles by filing:</chapeau> <paragraph identifier="/us/tx/ut/t4/c161/scB/s161.056/1"> <num value="1">(1)</num> <content>new articles of incorporation under this chapter; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scB/s161.056/2"> <num value="2">(2)</num> <content>a certified copy of the expired original articles.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.056/b"> <num value="b">(b)</num> <content>An electric cooperative that revives its articles of incorporation has all the privileges, immunities, and rights of property exercised and held by the cooperative at the time the original articles expired.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.056/c"> <num value="c">(c)</num> <content>New articles of incorporation filed under this section must recite the privileges, immunities, and rights of property exercised and held by the cooperative at the time the original articles expired.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c161/scB/s161.057"> <num value="161.057">Sec. 161.057.</num> <heading>ORGANIZATIONAL MEETING</heading> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.057/a"> <num value="a">(a)</num> <content>After the certificate of incorporation is issued, the incorporators of an electric cooperative shall meet to adopt bylaws, elect officers, and transact other business that properly comes before the meeting.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.057/b"> <num value="b">(b)</num> <content>A majority of the incorporators shall call the organizational meeting.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.057/c"> <num value="c">(c)</num> <content>The incorporators calling the organizational meeting shall give at least three days' notice of the meeting by mail to each incorporator. The notice must state the time and place of the meeting. The notice may be waived in writing.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c161/scB/s161.058"> <num value="161.058">Sec. 161.058.</num> <heading>PERFECTING DEFECTIVELY ORGANIZED CORPORATION</heading> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.058/a"> <num value="a">(a)</num> <chapeau>An electric cooperative that files defective articles of incorporation or fails to take an action necessary to perfect its corporate organization may:</chapeau> <paragraph identifier="/us/tx/ut/t4/c161/scB/s161.058/1"> <num value="1">(1)</num> <content>file corrected articles of incorporation or amend the original articles; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scB/s161.058/2"> <num value="2">(2)</num> <content>take any action necessary to correct the defect.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.058/b"> <num value="b">(b)</num> <content>An action taken under this section is valid and binding on any person concerned.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c161/scB/s161.059"> <num value="161.059">Sec. 161.059.</num> <heading>NONPROFIT OPERATION</heading> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.059/a"> <num value="a">(a)</num> <content>An electric cooperative shall operate without profit to its members.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.059/b"> <num value="b">(b)</num> <chapeau>The rates, fees, rents, and other charges for electric energy and other facilities, supplies, equipment, or services furnished by the cooperative must be sufficient at all times to:</chapeau> <paragraph identifier="/us/tx/ut/t4/c161/scB/s161.059/1"> <num value="1">(1)</num> <content>pay all operating and maintenance expenses necessary or desirable for the prudent conduct of its business;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scB/s161.059/2"> <num value="2">(2)</num> <content>pay the principal of and interest on the obligations issued or assumed by the cooperative in performing the purpose for which the cooperative was organized; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scB/s161.059/3"> <num value="3">(3)</num> <content>create reserves.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.059/c"> <num value="c">(c)</num> <chapeau>The cooperative shall devote its revenues:</chapeau> <paragraph identifier="/us/tx/ut/t4/c161/scB/s161.059/1"> <num value="1">(1)</num> <content>first to the payment of operating and maintenance expenses and the principal and interest on outstanding obligations; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scB/s161.059/2"> <num value="2">(2)</num> <content>then to the reserves prescribed by the board for improvement, new construction, depreciation, and contingencies.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.059/d"> <num value="d">(d)</num> <chapeau>The cooperative shall periodically return revenues not required for the purposes prescribed by Subsection (c) to the members in proportion to the amount of business done with each member during the applicable period. The cooperative may return revenues:</chapeau> <paragraph identifier="/us/tx/ut/t4/c161/scB/s161.059/1"> <num value="1">(1)</num> <content>in cash, by abatement of current charges for electric energy, or in another manner determined by the board; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scB/s161.059/2"> <num value="2">(2)</num> <content>through a general rate reduction to members.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c161/scB/s161.060"> <num value="161.060">Sec. 161.060.</num> <heading>MEMBERS NOT LIABLE FOR DEBTS OF ELECTRIC COOPERATIVE</heading> <chapeau>A member is not liable for a debt of an electric cooperative except for:</chapeau> <paragraph identifier="/us/tx/ut/t4/c161/scB/s161.060/1"> <num value="1">(1)</num> <content>a debt contracted between the member and the cooperative; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scB/s161.060/2"> <num value="2">(2)</num> <content>an amount not to exceed the unpaid amount of the member's membership fee.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c161/scB/s161.061"> <num value="161.061">Sec. 161.061.</num> <heading>LICENSE FEE</heading> <content>Not later than May 1 of each year, each electric cooperative shall pay to the secretary of state a license fee of $10.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c161/scB/s161.062"> <num value="161.062">Sec. 161.062.</num> <heading>EXEMPTION FROM EXCISE TAXES</heading> <content>An electric cooperative is exempt from all excise taxes but is exempt from the franchise tax imposed by Chapter 171, Tax Code, only if the cooperative is exempted by that chapter.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c161/scB/s161.063"> <num value="161.063">Sec. 161.063.</num> <heading>EXEMPTION FROM APPLICATION OF SECURITIES ACT</heading> <chapeau>The Securities Act (Title 12, Government Code) does not apply to:</chapeau> <paragraph identifier="/us/tx/ut/t4/c161/scB/s161.063/1"> <num value="1">(1)</num> <content>an obligation issued to secure a debt of an electric cooperative to the United States; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scB/s161.063/2"> <num value="2">(2)</num> <content>the issuance of a membership certificate by an electric cooperative.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 2.42, eff. January 1, 2022.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c161/scB/s161.064"> <num value="161.064">Sec. 161.064.</num> <heading>BYLAWS</heading> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.064/a"> <num value="a">(a)</num> <content>The board may adopt, amend, or repeal the bylaws of the cooperative.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.064/b"> <num value="b">(b)</num> <content>The bylaws may contain any provision for the regulation and management of the affairs of the electric cooperative that is consistent with the articles of incorporation.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c161/scB/s161.065"> <num value="161.065">Sec. 161.065.</num> <heading>MEMBERSHIP</heading> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.065/a"> <num value="a">(a)</num> <chapeau>A person is eligible to become a member of an electric cooperative if the person has a dwelling, structure, apparatus, or point of delivery at which the person does not receive central station service from another source and that is located in an area in which the cooperative is authorized to provide electric energy, and the person:</chapeau> <paragraph identifier="/us/tx/ut/t4/c161/scB/s161.065/1"> <num value="1">(1)</num> <content>uses or agrees to use electric energy or the facilities, supplies, equipment, or services furnished by the cooperative at the dwelling, structure, apparatus, or point of delivery; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scB/s161.065/2"> <num value="2">(2)</num> <content>is an incorporator of the cooperative.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.065/b"> <num value="b">(b)</num> <content>An electric cooperative may become a member of another electric cooperative and may fully use the facilities and services of that cooperative.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.065/c"> <num value="c">(c)</num> <content>Membership in an electric cooperative is not transferable.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c161/scB/s161.066"> <num value="161.066">Sec. 161.066.</num> <heading>CERTIFICATE OF MEMBERSHIP</heading> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.066/a"> <num value="a">(a)</num> <content>An electric cooperative shall issue a certificate of membership to a member who pays the member's membership fee in full.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.066/b"> <num value="b">(b)</num> <content>A certificate of membership is not transferable.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.066/c"> <num value="c">(c)</num> <content>A certificate of membership shall be surrendered to the cooperative on the resignation, expulsion, or death of the member.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c161/scB/s161.067"> <num value="161.067">Sec. 161.067.</num> <heading>MEETINGS OF MEMBERS</heading> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.067/a"> <num value="a">(a)</num> <content>An electric cooperative may hold a meeting of its members at a place provided in the bylaws. If the bylaws do not provide for a place for a meeting, the cooperative shall hold the meeting in the principal office of the cooperative in this state.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.067/b"> <num value="b">(b)</num> <content>An electric cooperative shall hold an annual meeting of its members at the time provided in the bylaws. Failure to hold the annual meeting at the designated time does not result in forfeiture or dissolution of the cooperative.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.067/c"> <num value="c">(c)</num> <chapeau>A special meeting of the members may be called by:</chapeau> <paragraph identifier="/us/tx/ut/t4/c161/scB/s161.067/1"> <num value="1">(1)</num> <content>the president;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scB/s161.067/2"> <num value="2">(2)</num> <content>the board;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scB/s161.067/3"> <num value="3">(3)</num> <content>a majority of the directors;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scB/s161.067/4"> <num value="4">(4)</num> <content>the members by a petition signed by at least 10 percent of the members; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scB/s161.067/5"> <num value="5">(5)</num> <content>an officer or other person as provided by the articles of incorporation or bylaws.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c161/scB/s161.068"> <num value="161.068">Sec. 161.068.</num> <heading>NOTICE OF MEMBERS' MEETING</heading> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.068/a"> <num value="a">(a)</num> <content>Written notice of each meeting of the members shall be delivered to each member of record, either personally or by mail, not earlier than the 30th day or later than the 10th day before the date of the meeting. The notice must be delivered by or at the direction of the president, the secretary, or the officers or other persons calling the meeting.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.068/b"> <num value="b">(b)</num> <content>The notice must state the time and place of the meeting and, in the case of a special meeting, each purpose for which the meeting is called.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.068/c"> <num value="c">(c)</num> <content>A member may waive notice of meetings in writing.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.068/d"> <num value="d">(d)</num> <content>A notice that is mailed is considered to be delivered when the notice is deposited in the United States mail in a sealed envelope with postage prepaid addressed to the member at the member's address as it appears on the records of the electric cooperative.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c161/scB/s161.069"> <num value="161.069">Sec. 161.069.</num> <heading>QUORUM OF MEMBERS</heading> <content>Unless otherwise provided by the articles of incorporation, a quorum for the transaction of business at a meeting of the members of an electric cooperative is a majority of the members present in person or represented by proxy. If voting by mail is provided for in the bylaws, members voting by mail are counted as present for purposes of determining whether a quorum is present.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c161/scB/s161.070"> <num value="161.070">Sec. 161.070.</num> <heading>VOTING BY MEMBERS</heading> <content>Each member present at a meeting of the members is entitled to one vote on each matter submitted to a vote at the meeting. The bylaws may provide for voting by proxy or by mail.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c161/scB/s161.071"> <num value="161.071">Sec. 161.071.</num> <heading>BOARD OF DIRECTORS</heading> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.071/a"> <num value="a">(a)</num> <content>The business and affairs of an electric cooperative shall be managed by a board of directors. The board consists of at least three directors. Each director must be a member of the cooperative. The bylaws may prescribe additional qualifications for directors.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.071/b"> <num value="b">(b)</num> <content>The board may exercise any power of an electric cooperative not conferred on the members by this chapter or by the cooperative's articles of incorporation or bylaws.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c161/scB/s161.072"> <num value="161.072">Sec. 161.072.</num> <heading>ELECTION OF DIRECTORS; VACANCIES</heading> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.072/a"> <num value="a">(a)</num> <content>The incorporators of an electric cooperative named in the articles of incorporation shall serve as directors until the first annual meeting of the members, and until their successors are elected and qualify. Subsequently, the directors shall be elected by the members at each annual meeting or as otherwise provided by the bylaws.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.072/b"> <num value="b">(b)</num> <content>A vacancy on the board shall be filled as provided by the bylaws. A person selected to fill a vacancy serves until the next regular election of directors.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c161/scB/s161.073"> <num value="161.073">Sec. 161.073.</num> <heading>COMPENSATION OF DIRECTORS</heading> <content>A director of an electric cooperative is entitled to the compensation and reimbursement for expenses actually and necessarily incurred by the director as provided by the bylaws.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c161/scB/s161.074"> <num value="161.074">Sec. 161.074.</num> <heading>QUORUM OF DIRECTORS</heading> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.074/a"> <num value="a">(a)</num> <content>A majority of the directors is a quorum unless the articles of incorporation or the bylaws provide that a greater number of the directors is a quorum.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.074/b"> <num value="b">(b)</num> <content>A majority of the directors present at a meeting at which a quorum is present may exercise the board's authority unless the articles of incorporation or the bylaws require a greater number of directors to exercise the board's authority.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c161/scB/s161.075"> <num value="161.075">Sec. 161.075.</num> <heading>BOARD MEETINGS</heading> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.075/a"> <num value="a">(a)</num> <content>The board shall hold a regular or special board meeting at the place and on the notice prescribed by the bylaws.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.075/b"> <num value="b">(b)</num> <content>The attendance of a director at a board meeting constitutes a waiver of notice of the meeting unless the director attends the meeting for the express purpose of objecting to the transaction of business at the meeting because the meeting is not lawfully called or convened.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.075/c"> <num value="c">(c)</num> <content>A notice or waiver of notice of a board meeting is not required to specify the business to be transacted at the meeting or the purpose of the meeting.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c161/scB/s161.076"> <num value="161.076">Sec. 161.076.</num> <heading>OFFICERS, AGENTS, AND EMPLOYEES</heading> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.076/a"> <num value="a">(a)</num> <content>The board shall elect from the board's membership a president, a vice president, a secretary, and a treasurer. The terms of office, powers, duties, and compensation of the officers elected under this subsection shall be provided for by the bylaws.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.076/b"> <num value="b">(b)</num> <content>The same person may hold the offices of secretary and of treasurer.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.076/c"> <num value="c">(c)</num> <content>The board may appoint other officers, agents, and employees as the board considers necessary and shall prescribe the powers, duties, and compensation of those persons.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.076/d"> <num value="d">(d)</num> <content>The board may remove an officer, agent, or employee elected or appointed by the board if the board determines that the removal will serve the best interests of the cooperative.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c161/scB/s161.077"> <num value="161.077">Sec. 161.077.</num> <heading>EXECUTIVE COMMITTEE</heading> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.077/a"> <num value="a">(a)</num> <content>The bylaws of an electric cooperative may authorize the board to elect an executive committee from the board's membership.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.077/b"> <num value="b">(b)</num> <content>The board may delegate to the executive committee the management of the current and ordinary business of the cooperative and other duties as prescribed by the bylaws.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scB/s161.077/c"> <num value="c">(c)</num> <content>The designation of an executive committee and the delegation of authority to the committee does not relieve the board or any director of a responsibility imposed on the board or the director by this chapter.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c161/scB/s161.078"> <num value="161.078">Sec. 161.078.</num> <heading>INDEMNIFICATION</heading> <content>An electric cooperative may indemnify and provide indemnity insurance in the same manner and to the same extent as a nonprofit corporation under Article 2.22A, Texas Non-Profit Corporation Act (Article 1396-2.22A, Vernon's Texas Civil Statutes).</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c161/scB/s161.079"> <num value="161.079">Sec. 161.079.</num> <heading>APPLICABILITY OF CHAPTER TO CORPORATIONS ORGANIZED UNDER OTHER LAW</heading> <content>A cooperative or nonprofit corporation or association organized under any other law of this state for the purpose of engaging in rural electrification may, by a majority vote of the members present in person or represented by proxy at a meeting called for that purpose, amend its articles of incorporation to comply with this chapter.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t4/c161/scC"> <num value="C">SUBCHAPTER C.</num> <heading>POWERS OF ELECTRIC COOPERATIVE</heading> <section identifier="/us/tx/ut/t4/c161/scC/s161.121"> <num value="161.121">Sec. 161.121.</num> <heading>GENERAL POWERS</heading> <chapeau>An electric cooperative may:</chapeau> <paragraph identifier="/us/tx/ut/t4/c161/scC/s161.121/1"> <num value="1">(1)</num> <content>sue and be sued in its corporate name;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scC/s161.121/2"> <num value="2">(2)</num> <content>adopt and alter a corporate seal and use the seal or a facsimile of the seal as required by law;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scC/s161.121/3"> <num value="3">(3)</num> <content>acquire, own, hold, maintain, exchange, or use property or an interest in property, including plants, buildings, works, machinery, supplies, equipment, apparatus, and transmission and distribution lines or systems that are necessary, convenient, or useful;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scC/s161.121/4"> <num value="4">(4)</num> <content>dispose of, mortgage, or lease as lessor any of its property or assets;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scC/s161.121/5"> <num value="5">(5)</num> <content>borrow money and otherwise contract indebtedness, issue obligations for its indebtedness, and secure the payment of indebtedness by mortgage, pledge, or deed of trust on any or all of its property or revenue;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scC/s161.121/6"> <num value="6">(6)</num> <content>accept gifts or grants of money, services, or property;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scC/s161.121/7"> <num value="7">(7)</num> <content>make any contracts necessary or convenient for the exercise of the powers granted by this chapter;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scC/s161.121/8"> <num value="8">(8)</num> <content>conduct its business and have offices inside or outside this state;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scC/s161.121/9"> <num value="9">(9)</num> <content>adopt and amend bylaws not inconsistent with the articles of incorporation for the administration and regulation of the affairs of the cooperative; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scC/s161.121/10"> <num value="10">(10)</num> <content>perform any other acts for the cooperative or its members or for another electric cooperative or its members, and exercise any other power, that may be necessary, convenient, or appropriate to accomplish the purpose for which the cooperative is organized, including other or additional purposes that benefit members and nonmembers, either directly or through affiliates, described in Section A, Article 2.01, Texas Non-Profit Corporation Act (Article 1396-2.01, Vernon's Texas Civil Statutes).</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 62, Sec. 18.15(a), eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c161/scC/s161.122"> <num value="161.122">Sec. 161.122.</num> <heading>PROVISION OF RURAL ELECTRIFICATION</heading> <chapeau>An electric cooperative may engage in rural electrification by:</chapeau> <paragraph identifier="/us/tx/ut/t4/c161/scC/s161.122/1"> <num value="1">(1)</num> <chapeau>furnishing electric energy to any person for delivery to a dwelling, structure, apparatus, or point of delivery that is:</chapeau> <subparagraph identifier="/us/tx/ut/t4/c161/scC/s161.122/A"> <num value="A">(A)</num> <content>located in a rural area; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c161/scC/s161.122/B"> <num value="B">(B)</num> <content>not receiving central station service, even if the person is receiving central station service at other points of delivery;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scC/s161.122/2"> <num value="2">(2)</num> <content>furnishing electric energy to a person desiring that service in a municipality or unincorporated city or town, rural or nonrural, served by the cooperative and in which central station service was not available at the time the cooperative began furnishing electric energy to the residents of the municipality or unincorporated city or town;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scC/s161.122/3"> <num value="3">(3)</num> <content>assisting in the wiring of the premises of persons in rural areas or the acquisition, supply, or installation of electrical or plumbing equipment in those premises; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scC/s161.122/4"> <num value="4">(4)</num> <content>furnishing electric energy, wiring facilities, or electrical or plumbing equipment or service to another electric cooperative or to the members of another electric cooperative.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c161/scC/s161.123"> <num value="161.123">Sec. 161.123.</num> <heading>POWERS RELATING TO PROVISION OF ELECTRIC ENERGY</heading> <chapeau>An electric cooperative may:</chapeau> <paragraph identifier="/us/tx/ut/t4/c161/scC/s161.123/1"> <num value="1">(1)</num> <content>generate, acquire, and accumulate electric energy and transmit, distribute, sell, furnish, and dispose of that electric energy to its members only;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scC/s161.123/2"> <num value="2">(2)</num> <chapeau>assist its members only to wire their premises and install in those premises electrical and plumbing fixtures, machinery, supplies, apparatus, and equipment of any kind, and in connection with those activities:</chapeau> <subparagraph identifier="/us/tx/ut/t4/c161/scC/s161.123/A"> <num value="A">(A)</num> <content>acquire, lease, sell, distribute, install, and repair electrical and plumbing fixtures, machinery, supplies, apparatus, and equipment of any kind; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c161/scC/s161.123/B"> <num value="B">(B)</num> <content>receive, acquire, endorse, pledge, and dispose of notes, bonds, and other evidences of indebtedness;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scC/s161.123/3"> <num value="3">(3)</num> <content>furnish to other electric cooperatives or their members electric energy, wiring facilities, electrical and plumbing equipment, and services that are convenient or useful; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scC/s161.123/4"> <num value="4">(4)</num> <content>establish, regulate, and collect rates, fees, rents, or other charges for electric energy or other facilities, supplies, equipment, or services furnished by the electric cooperative.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c161/scC/s161.124"> <num value="161.124">Sec. 161.124.</num> <heading>PROVISION OF ELECTRIC ENERGY TO CERTAIN NONMEMBER ENTITIES</heading> <chapeau>An electric cooperative may generate, acquire, and accumulate electric energy and transmit, distribute, sell, furnish, and dispose of that electric energy to any of the following that is engaged in the generation, transmission, or distribution of electricity:</chapeau> <paragraph identifier="/us/tx/ut/t4/c161/scC/s161.124/1"> <num value="1">(1)</num> <content>a corporation, association, or firm;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scC/s161.124/2"> <num value="2">(2)</num> <content>the United States;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scC/s161.124/3"> <num value="3">(3)</num> <content>this state or a political subdivision of this state; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scC/s161.124/4"> <num value="4">(4)</num> <content>a municipal power agency or political subdivision of this state that is a co-owner with the electric cooperative of an electric generation facility.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c161/scC/s161.125"> <num value="161.125">Sec. 161.125.</num> <heading>EMINENT DOMAIN</heading> <content>An electric cooperative may exercise the power of eminent domain in the manner provided by state law for acquiring private property for public use. The power does not apply to state property or property of a political subdivision in this state.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t4/c161/scD"> <num value="D">SUBCHAPTER D.</num> <heading>AMENDMENT OF ARTICLES OF INCORPORATION</heading> <section identifier="/us/tx/ut/t4/c161/scD/s161.151"> <num value="161.151">Sec. 161.151.</num> <heading>AMENDMENT OF ARTICLES OF INCORPORATION</heading> <subsection identifier="/us/tx/ut/t4/c161/scD/s161.151/a"> <num value="a">(a)</num> <content>An electric cooperative may amend its articles of incorporation by a majority vote of the members of the cooperative present in person or represented by proxy at a regular meeting or at a special meeting of its members called for that purpose as provided by the bylaws.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scD/s161.151/b"> <num value="b">(b)</num> <content>Notice of the meeting to members must state the general nature of each proposed amendment to be presented and voted on at the meeting. Valid action may not be taken at the meeting unless at least five percent of the members of the electric cooperative either attend the meeting in person or are represented at the meeting by proxy.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scD/s161.151/c"> <num value="c">(c)</num> <content>The power to amend the articles of incorporation includes the power to accomplish any desired change in the articles of incorporation and to include any purpose, power, or provision that is permitted to be included in original articles of incorporation executed at the time the amendment is made.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c161/scD/s161.152"> <num value="161.152">Sec. 161.152.</num> <heading>ARTICLES OF AMENDMENT</heading> <subsection identifier="/us/tx/ut/t4/c161/scD/s161.152/a"> <num value="a">(a)</num> <chapeau>Articles of amendment of an electric cooperative must be:</chapeau> <paragraph identifier="/us/tx/ut/t4/c161/scD/s161.152/1"> <num value="1">(1)</num> <content>signed by the president or vice president and attested by the secretary, certifying to the amendment and its lawful adoption; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scD/s161.152/2"> <num value="2">(2)</num> <content>executed, acknowledged, filed, and recorded in the same manner as the original articles of incorporation.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scD/s161.152/b"> <num value="b">(b)</num> <content>An amendment takes effect when the secretary of state accepts the articles of amendment for filing and recording and issues a certificate of amendment. The certificate of amendment is evidence of the filing of the amendment.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scD/s161.152/c"> <num value="c">(c)</num> <content>The secretary of state shall charge and collect a fee of $2.50 for filing articles of amendment and issuing a certificate of amendment.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t4/c161/scE"> <num value="E">SUBCHAPTER E.</num> <heading>CONSOLIDATION OF ELECTRIC COOPERATIVES</heading> <section identifier="/us/tx/ut/t4/c161/scE/s161.201"> <num value="161.201">Sec. 161.201.</num> <heading>CONSOLIDATION</heading> <subsection identifier="/us/tx/ut/t4/c161/scE/s161.201/a"> <num value="a">(a)</num> <chapeau>Two or more electric cooperatives may enter into an agreement to consolidate the cooperatives. The agreement must state:</chapeau> <paragraph identifier="/us/tx/ut/t4/c161/scE/s161.201/1"> <num value="1">(1)</num> <content>the terms of the consolidation;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scE/s161.201/2"> <num value="2">(2)</num> <content>the name of the proposed consolidated cooperative;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scE/s161.201/3"> <num value="3">(3)</num> <content>the number of directors of the proposed consolidated cooperative;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scE/s161.201/4"> <num value="4">(4)</num> <content>the time of the annual meeting and election; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scE/s161.201/5"> <num value="5">(5)</num> <content>the names of at least three persons to be directors until the first annual meeting.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scE/s161.201/b"> <num value="b">(b)</num> <content>A consolidation agreement may be approved only on the votes of a majority of the members of each electric cooperative present in person or represented by proxy at a regular meeting or at a special meeting of its members called for that purpose.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c161/scE/s161.202"> <num value="161.202">Sec. 161.202.</num> <heading>ARTICLES OF CONSOLIDATION</heading> <subsection identifier="/us/tx/ut/t4/c161/scE/s161.202/a"> <num value="a">(a)</num> <chapeau>The articles of consolidation must:</chapeau> <paragraph identifier="/us/tx/ut/t4/c161/scE/s161.202/1"> <num value="1">(1)</num> <content>conform substantially to original articles of incorporation of an electric cooperative; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scE/s161.202/2"> <num value="2">(2)</num> <content>be executed, acknowledged, filed, and recorded in the same manner as original articles of incorporation.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scE/s161.202/b"> <num value="b">(b)</num> <content>The directors named in the consolidation agreement shall as incorporators sign and acknowledge the articles of consolidation.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scE/s161.202/c"> <num value="c">(c)</num> <content>The secretary of state shall charge and collect a fee of $10 for filing articles of consolidation and issuing a certificate of consolidation.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scE/s161.202/d"> <num value="d">(d)</num> <content>When the secretary of state accepts the articles of consolidation for filing and recording and issues a certificate of consolidation, the proposed consolidated electric cooperative described in the articles under its designated name exists as a body corporate, with all the powers of an electric cooperative originally organized under this chapter.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t4/c161/scF"> <num value="F">SUBCHAPTER F.</num> <heading>DISSOLUTION</heading> <section identifier="/us/tx/ut/t4/c161/scF/s161.251"> <num value="161.251">Sec. 161.251.</num> <heading>DISSOLUTION</heading> <subsection identifier="/us/tx/ut/t4/c161/scF/s161.251/a"> <num value="a">(a)</num> <content>An electric cooperative may be dissolved by a majority vote of its members present in person or represented by proxy at a regular meeting or at a special meeting of its members called for that purpose.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scF/s161.251/b"> <num value="b">(b)</num> <chapeau>A certificate of dissolution must be:</chapeau> <paragraph identifier="/us/tx/ut/t4/c161/scF/s161.251/1"> <num value="1">(1)</num> <content>signed by the president or vice president and attested by the secretary, certifying to the dissolution and stating that the officers have been authorized by a vote of the members under Subsection (a) to execute and file the certificate; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scF/s161.251/2"> <num value="2">(2)</num> <content>executed, acknowledged, filed, and recorded in the same manner as original articles of incorporation of an electric cooperative.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scF/s161.251/c"> <num value="c">(c)</num> <content>The cooperative is dissolved when the secretary of state accepts the certificate of dissolution for filing and recording and issues a certificate of dissolution.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scF/s161.251/d"> <num value="d">(d)</num> <content>The secretary of state shall charge and collect a fee of $2.50 for filing articles of dissolution.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c161/scF/s161.252"> <num value="161.252">Sec. 161.252.</num> <heading>EXISTENCE FOLLOWING DISSOLUTION</heading> <subsection identifier="/us/tx/ut/t4/c161/scF/s161.252/a"> <num value="a">(a)</num> <chapeau>A dissolved electric cooperative continues to exist to:</chapeau> <paragraph identifier="/us/tx/ut/t4/c161/scF/s161.252/1"> <num value="1">(1)</num> <content>satisfy existing liabilities or obligations;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scF/s161.252/2"> <num value="2">(2)</num> <content>collect or liquidate its assets; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c161/scF/s161.252/3"> <num value="3">(3)</num> <content>take any other action required to adjust and wind up its business and affairs.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scF/s161.252/b"> <num value="b">(b)</num> <content>A dissolved electric cooperative may sue and be sued in its corporate name.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c161/scF/s161.253"> <num value="161.253">Sec. 161.253.</num> <heading>DISTRIBUTION OF NET ASSETS ON DISSOLUTION</heading> <content>Assets of a dissolved electric cooperative that remain after all liabilities or obligations of the cooperative have been satisfied shall be distributed pro rata to the members of the cooperative who were members when the certificate of dissolution was filed.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c161/scF/s161.254"> <num value="161.254">Sec. 161.254.</num> <heading>DISSOLUTION OF DEFECTIVELY INCORPORATED ELECTRIC COOPERATIVE</heading> <subsection identifier="/us/tx/ut/t4/c161/scF/s161.254/a"> <num value="a">(a)</num> <content>An electric cooperative that purports to have been incorporated or reincorporated under this chapter but that has not complied with a requirement for legal corporate existence may file a certificate of dissolution in the same manner as a validly incorporated electric cooperative.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scF/s161.254/b"> <num value="b">(b)</num> <content>The certificate of dissolution may be authorized by a majority of the incorporators or directors at a meeting called by an incorporator and held at the principal office of the cooperative named in the articles of incorporation.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c161/scF/s161.254/c"> <num value="c">(c)</num> <content>The incorporator calling the meeting must give at least 10 days' notice of the meeting by mail to the last known post office address of each incorporator or director.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t4/c162"> <num value="162">CHAPTER 162.</num> <heading>TELEPHONE COOPERATIVE CORPORATIONS</heading> <subchapter identifier="/us/tx/ut/t4/c162/scA"> <num value="A">SUBCHAPTER A.</num> <heading>GENERAL PROVISIONS</heading> <section identifier="/us/tx/ut/t4/c162/scA/s162.001"> <num value="162.001">Sec. 162.001.</num> <heading>SHORT TITLE</heading> <content>This chapter may be cited as the Telephone Cooperative Act.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scA/s162.002"> <num value="162.002">Sec. 162.002.</num> <heading>PURPOSE</heading> <content>A cooperative, nonprofit corporation may be organized under this chapter to furnish communication service to the widest practicable number of users of that service.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scA/s162.003"> <num value="162.003">Sec. 162.003.</num> <heading>DEFINITIONS</heading> <chapeau>In this chapter:</chapeau> <paragraph identifier="/us/tx/ut/t4/c162/scA/s162.003/1"> <num value="1">(1)</num> <content>"Board" means the board of directors of a telephone cooperative.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scA/s162.003/2"> <num value="2">(2)</num> <chapeau>"Communication service" means:</chapeau> <subparagraph identifier="/us/tx/ut/t4/c162/scA/s162.003/A"> <num value="A">(A)</num> <content>the transmission or reception of information, signals, or messages by any means, including by wire, radio, cellular radio, microwave, or fiber optics; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c162/scA/s162.003/B"> <num value="B">(B)</num> <content>the provision of lines, facilities, and systems used in the transmission or reception described by Paragraph (A).</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scA/s162.003/3"> <num value="3">(3)</num> <chapeau>"Member" means:</chapeau> <subparagraph identifier="/us/tx/ut/t4/c162/scA/s162.003/A"> <num value="A">(A)</num> <content>an incorporator of a telephone cooperative; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c162/scA/s162.003/B"> <num value="B">(B)</num> <content>a person admitted to membership in a telephone cooperative as provided by Section 162.065.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scA/s162.003/4"> <num value="4">(4)</num> <content>"Patron" means a member who is eligible to receive patronage dividends or to earn capital credits as a result of purchasing certain services from a telephone cooperative as provided by Section 162.066.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scA/s162.003/5"> <num value="5">(5)</num> <content>"Telephone cooperative" means a corporation that is organized under this chapter or that becomes subject to this chapter as provided by this chapter.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scA/s162.004"> <num value="162.004">Sec. 162.004.</num> <heading>CERTAIN CORPORATE NAMES PROHIBITED</heading> <content>A corporation organized under the laws of this state or authorized to do business in this state may not use the words "telephone cooperative" in the corporation's name unless the corporation is organized under this chapter.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scA/s162.005"> <num value="162.005">Sec. 162.005.</num> <heading>EFFECT OF RECORDING CERTAIN MORTGAGES EXECUTED BY TELEPHONE COOPERATIVES</heading> <subsection identifier="/us/tx/ut/t4/c162/scA/s162.005/a"> <num value="a">(a)</num> <content>An instrument executed by a telephone cooperative or a foreign corporation doing business in this state under this chapter that affects real and personal property and that is recorded in the real property records of any county in which the property is located or is to be located has the same effect as if the instrument were also recorded as provided by law in the proper office in that county as a mortgage of personal property.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scA/s162.005/b"> <num value="b">(b)</num> <content>All after-acquired property of a telephone cooperative or foreign corporation doing business in this state under this chapter described by or referred to as being pledged in an instrument to which Subsection (a) applies becomes subject to the lien described by the instrument immediately when the cooperative or corporation acquires the property, without regard to whether the property existed at the time the instrument was executed. The execution of the instrument constitutes notice and otherwise has the same effect with respect to after-acquired property to which this subsection applies as it has under the laws relating to recordation with respect to property that is owned by the cooperative or foreign corporation at the time the instrument is executed and that is described in the instrument as being pledged by the instrument.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scA/s162.005/c"> <num value="c">(c)</num> <chapeau>After a lien on personal property under an instrument to which Subsection (a) applies is recorded, the lien continues in existence and of record for the period specified in the instrument without:</chapeau> <paragraph identifier="/us/tx/ut/t4/c162/scA/s162.005/1"> <num value="1">(1)</num> <content>the refiling of the instrument; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scA/s162.005/2"> <num value="2">(2)</num> <content>the filing of any renewal certificate, affidavit, or other supplemental information required by a law relating to the renewal, maintenance, or extension of a lien on personal property.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scA/s162.006"> <num value="162.006">Sec. 162.006.</num> <heading>CONSTRUCTION STANDARDS</heading> <content>A telephone cooperative that constructs communication lines or facilities must at a minimum comply with the standards of the National Electrical Safety Code in effect at the time of construction.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t4/c162/scB"> <num value="B">SUBCHAPTER B.</num> <heading>CREATION AND OPERATION OF TELEPHONE COOPERATIVES</heading> <section identifier="/us/tx/ut/t4/c162/scB/s162.051"> <num value="162.051">Sec. 162.051.</num> <heading>INCORPORATORS</heading> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.051/a"> <num value="a">(a)</num> <content>Three or more individuals may act as incorporators of a telephone cooperative by executing articles of incorporation as provided by this chapter.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.051/b"> <num value="b">(b)</num> <chapeau>An incorporator must:</chapeau> <paragraph identifier="/us/tx/ut/t4/c162/scB/s162.051/1"> <num value="1">(1)</num> <content>be at least 21 years of age; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scB/s162.051/2"> <num value="2">(2)</num> <content>reside in this state.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scB/s162.052"> <num value="162.052">Sec. 162.052.</num> <heading>DURATION OF CORPORATION</heading> <content>A telephone cooperative may be created as a perpetual corporation.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scB/s162.053"> <num value="162.053">Sec. 162.053.</num> <heading>NAME OF TELEPHONE COOPERATIVE</heading> <chapeau>The name of a telephone cooperative must:</chapeau> <paragraph identifier="/us/tx/ut/t4/c162/scB/s162.053/1"> <num value="1">(1)</num> <content>include the words "telephone" and "cooperative" and the abbreviation "Inc."; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scB/s162.053/2"> <num value="2">(2)</num> <content>be distinct from the name of any other corporation organized under the laws of or authorized to do business in this state.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scB/s162.054"> <num value="162.054">Sec. 162.054.</num> <heading>ARTICLES OF INCORPORATION</heading> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.054/a"> <num value="a">(a)</num> <chapeau>The articles of incorporation of a telephone cooperative must:</chapeau> <paragraph identifier="/us/tx/ut/t4/c162/scB/s162.054/1"> <num value="1">(1)</num> <content>state that the articles are executed under this chapter;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scB/s162.054/2"> <num value="2">(2)</num> <content>be signed by each incorporator and acknowledged by at least two incorporators; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scB/s162.054/3"> <num value="3">(3)</num> <chapeau>state:</chapeau> <subparagraph identifier="/us/tx/ut/t4/c162/scB/s162.054/A"> <num value="A">(A)</num> <content>the name of the cooperative;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c162/scB/s162.054/B"> <num value="B">(B)</num> <content>the purpose for which the cooperative is formed;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c162/scB/s162.054/C"> <num value="C">(C)</num> <content>the name and address of each incorporator;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c162/scB/s162.054/D"> <num value="D">(D)</num> <content>the number of directors;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c162/scB/s162.054/E"> <num value="E">(E)</num> <content>the address of the cooperative's principal office and the name and address of its agent on whom process may be served;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c162/scB/s162.054/F"> <num value="F">(F)</num> <content>the duration of the cooperative;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c162/scB/s162.054/G"> <num value="G">(G)</num> <content>the terms under which a person is admitted to membership and retains membership in the cooperative, unless the articles expressly state that the determination of membership matters is reserved to the directors by the bylaws; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c162/scB/s162.054/H"> <num value="H">(H)</num> <content>any provisions that the incorporators include for the regulation of the business and the conduct of the affairs of the cooperative.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.054/b"> <num value="b">(b)</num> <content>The articles of incorporation do not need to state any of the corporate powers enumerated in this chapter.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scB/s162.055"> <num value="162.055">Sec. 162.055.</num> <heading>FILING AND RECORDING OF ARTICLES OF INCORPORATION</heading> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.055/a"> <num value="a">(a)</num> <chapeau>The secretary of state shall receive articles of incorporation of a telephone cooperative if the incorporators of the cooperative:</chapeau> <paragraph identifier="/us/tx/ut/t4/c162/scB/s162.055/1"> <num value="1">(1)</num> <content>apply for filing the articles;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scB/s162.055/2"> <num value="2">(2)</num> <content>furnish satisfactory evidence of compliance with this chapter to the secretary of state; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scB/s162.055/3"> <num value="3">(3)</num> <content>pay a fee of $25.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.055/b"> <num value="b">(b)</num> <chapeau>The secretary of state shall:</chapeau> <paragraph identifier="/us/tx/ut/t4/c162/scB/s162.055/1"> <num value="1">(1)</num> <content>file the articles of incorporation in the secretary's office;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scB/s162.055/2"> <num value="2">(2)</num> <content>record the articles at length in a book to be kept for that purpose;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scB/s162.055/3"> <num value="3">(3)</num> <content>retain the original articles of incorporation on file in the secretary's office; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scB/s162.055/4"> <num value="4">(4)</num> <content>issue a certificate showing the recording of the articles of incorporation and the telephone cooperative's authority to do business under the articles.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.055/c"> <num value="c">(c)</num> <content>A copy of the articles of incorporation or of the record of the articles, certified under the state seal, is evidence of the creation of the telephone cooperative.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.055/d"> <num value="d">(d)</num> <content>The existence of the telephone cooperative dates from the filing of the articles in the office of the secretary of state. The certificate of the secretary of state is evidence of that filing.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scB/s162.056"> <num value="162.056">Sec. 162.056.</num> <heading>REVIVAL OF ARTICLES OF INCORPORATION</heading> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.056/a"> <num value="a">(a)</num> <chapeau>If the articles of incorporation of a telephone cooperative expire by limitation, the cooperative, with the consent of a majority of its members, may revive the articles by filing:</chapeau> <paragraph identifier="/us/tx/ut/t4/c162/scB/s162.056/1"> <num value="1">(1)</num> <content>new articles of incorporation under this chapter; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scB/s162.056/2"> <num value="2">(2)</num> <content>a certified copy of the expired original articles.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.056/b"> <num value="b">(b)</num> <content>A telephone cooperative that revives its articles of incorporation has all the privileges, immunities, and rights of property exercised and held by the cooperative at the time the original articles expired.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.056/c"> <num value="c">(c)</num> <content>New articles of incorporation filed under this section must recite the privileges, immunities, and rights of property exercised and held by the cooperative at the time the original articles expired.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scB/s162.057"> <num value="162.057">Sec. 162.057.</num> <heading>ORGANIZATIONAL MEETING</heading> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.057/a"> <num value="a">(a)</num> <content>After the certificate of incorporation is issued, the incorporators of a telephone cooperative shall meet to adopt bylaws, elect officers, and transact other business that properly comes before the meeting.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.057/b"> <num value="b">(b)</num> <content>A majority of the incorporators shall call the organizational meeting.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.057/c"> <num value="c">(c)</num> <content>The incorporators calling the organizational meeting shall give at least three days' notice of the meeting by mail to each incorporator. The notice must state the time and place of the meeting. The notice may be waived in writing.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scB/s162.058"> <num value="162.058">Sec. 162.058.</num> <heading>PERFECTING DEFECTIVELY ORGANIZED CORPORATIONS</heading> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.058/a"> <num value="a">(a)</num> <chapeau>A telephone cooperative that files defective articles of incorporation or fails to take an action necessary to perfect its corporate organization may:</chapeau> <paragraph identifier="/us/tx/ut/t4/c162/scB/s162.058/1"> <num value="1">(1)</num> <content>file corrected articles of incorporation or amend the original articles; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scB/s162.058/2"> <num value="2">(2)</num> <content>take any action necessary to correct the defect.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.058/b"> <num value="b">(b)</num> <content>An action taken under this section is valid and binding on any person concerned.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scB/s162.059"> <num value="162.059">Sec. 162.059.</num> <heading>NONPROFIT OPERATION</heading> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.059/a"> <num value="a">(a)</num> <content>A telephone cooperative shall be operated on a nonprofit basis for the mutual benefit of its members and patrons.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.059/b"> <num value="b">(b)</num> <content>A cooperative's bylaws and its contracts with members and patrons must contain appropriate provisions relating to the disposition of revenues and receipts to establish and maintain the cooperative's nonprofit and cooperative character.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scB/s162.060"> <num value="162.060">Sec. 162.060.</num> <heading>MEMBERS NOT LIABLE FOR DEBTS OF TELEPHONE COOPERATIVE</heading> <content>A member is not liable for a debt of a telephone cooperative, and the member's property is not subject to execution for that debt.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scB/s162.061"> <num value="162.061">Sec. 162.061.</num> <heading>LICENSE FEE</heading> <content>Not later than July 1 of each year, each telephone cooperative doing business in this state shall pay to the secretary of state a fee of $10.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scB/s162.062"> <num value="162.062">Sec. 162.062.</num> <heading>EXEMPTION FROM EXCISE TAXES</heading> <content>A telephone cooperative doing business in this state is exempt from all excise taxes but is exempt from the franchise tax imposed by Chapter 171, Tax Code, only if the cooperative is exempted by that chapter.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scB/s162.063"> <num value="162.063">Sec. 162.063.</num> <heading>EXEMPTION FROM APPLICATION OF SECURITIES ACT</heading> <chapeau>The Securities Act (Title 12, Government Code) does not apply to:</chapeau> <paragraph identifier="/us/tx/ut/t4/c162/scB/s162.063/1"> <num value="1">(1)</num> <content>a note, bond, or other evidence of indebtedness issued by a telephone cooperative doing business in this state to the United States;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scB/s162.063/2"> <num value="2">(2)</num> <content>an instrument executed to secure a debt of a telephone cooperative to the United States; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scB/s162.063/3"> <num value="3">(3)</num> <content>the issuance of a membership certificate by a telephone cooperative or a foreign corporation doing business in this state under this chapter.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 2.43, eff. January 1, 2022.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scB/s162.064"> <num value="162.064">Sec. 162.064.</num> <heading>BYLAWS</heading> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.064/a"> <num value="a">(a)</num> <chapeau>The board shall adopt the initial bylaws of a telephone cooperative to be adopted following:</chapeau> <paragraph identifier="/us/tx/ut/t4/c162/scB/s162.064/1"> <num value="1">(1)</num> <content>an incorporation;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scB/s162.064/2"> <num value="2">(2)</num> <content>a consolidation; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scB/s162.064/3"> <num value="3">(3)</num> <content>an amendment by an existing cooperative, corporation, or association of its articles of incorporation as provided by Section 162.082.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.064/b"> <num value="b">(b)</num> <content>After the initial bylaws are adopted, the members may adopt, amend, or repeal the bylaws by the affirmative vote of a majority of those members voting on the question at a meeting of the members.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.064/c"> <num value="c">(c)</num> <content>The bylaws may contain any provision for the regulation and management of the affairs of the telephone cooperative that is consistent with the articles of incorporation.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scB/s162.065"> <num value="162.065">Sec. 162.065.</num> <heading>MEMBERSHIP</heading> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.065/a"> <num value="a">(a)</num> <content>Each incorporator of a telephone cooperative is a member of the cooperative. A person other than an incorporator may become a member of a telephone cooperative only if the person agrees to use communication service furnished by the cooperative when that service is made available through the cooperative's facilities. The bylaws may prescribe additional qualifications and limitations with respect to membership.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.065/b"> <num value="b">(b)</num> <content>Membership in a telephone cooperative is evidenced by a certificate of membership. A membership certificate must contain the provisions, consistent with this chapter and the articles of incorporation, that are prescribed by the cooperative's bylaws. A certificate may be transferred only as provided by the bylaws.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.065/c"> <num value="c">(c)</num> <content>A telephone cooperative may become a member of another telephone cooperative and may fully use the facilities and services of that cooperative.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scB/s162.066"> <num value="162.066">Sec. 162.066.</num> <heading>PATRONS</heading> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.066/a"> <num value="a">(a)</num> <content>A member is a patron of a telephone cooperative if the member purchases local telecommunications service or toll telecommunications service or pays end user access charges in the ordinary course of business of the cooperative.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.066/b"> <num value="b">(b)</num> <content>The use of interexchange access, payment of interexchange access fees or settlements, or purchase of equipment does not qualify a member or other person as a patron.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scB/s162.067"> <num value="162.067">Sec. 162.067.</num> <heading>MEETINGS OF MEMBERS</heading> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.067/a"> <num value="a">(a)</num> <content>A telephone cooperative shall hold an annual meeting of members at the time and place provided by the bylaws. Failure to hold the annual meeting at the designated time does not result in forfeiture or dissolution of the cooperative.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.067/b"> <num value="b">(b)</num> <chapeau>A special meeting of the members may be called by:</chapeau> <paragraph identifier="/us/tx/ut/t4/c162/scB/s162.067/1"> <num value="1">(1)</num> <content>the president;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scB/s162.067/2"> <num value="2">(2)</num> <content>the board;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scB/s162.067/3"> <num value="3">(3)</num> <content>any three directors; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scB/s162.067/4"> <num value="4">(4)</num> <chapeau>the lesser of:</chapeau> <subparagraph identifier="/us/tx/ut/t4/c162/scB/s162.067/A"> <num value="A">(A)</num> <content>200 members; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c162/scB/s162.067/B"> <num value="B">(B)</num> <content>10 percent of all the members.</content> </subparagraph> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scB/s162.068"> <num value="162.068">Sec. 162.068.</num> <heading>NOTICE OF MEMBERS' MEETING</heading> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.068/a"> <num value="a">(a)</num> <content>Except as otherwise provided by this chapter, written notice of each meeting of the members shall be given to each member, either personally or by mail, not earlier than the 25th day or later than the 10th day before the date of the meeting.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.068/b"> <num value="b">(b)</num> <content>The notice must state the time and place of the meeting and, in the case of a special meeting, each purpose for which the meeting is called.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.068/c"> <num value="c">(c)</num> <content>A notice that is mailed is considered to have been given when the notice is deposited in the United States mail with postage prepaid addressed to the member at the member's address as it appears on the records of the telephone cooperative.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scB/s162.069"> <num value="162.069">Sec. 162.069.</num> <heading>WAIVER OF NOTICE</heading> <content>A person entitled to notice of a meeting may waive notice in writing either before or after the meeting. If a person entitled to notice of a meeting attends the meeting, the person's attendance constitutes a waiver of notice of the meeting, unless the person participates in the meeting solely to object to the transaction of business because the meeting is not legally called or convened.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scB/s162.070"> <num value="162.070">Sec. 162.070.</num> <heading>MEMBERS' MEETING: QUORUM AND VOTING</heading> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.070/a"> <num value="a">(a)</num> <chapeau>Unless the bylaws prescribe a greater percentage or number of members for a quorum, a quorum at a meeting of the members of a telephone cooperative is the personal presence of:</chapeau> <paragraph identifier="/us/tx/ut/t4/c162/scB/s162.070/1"> <num value="1">(1)</num> <content>10 percent of all members, if the cooperative has 500 or fewer members; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scB/s162.070/2"> <num value="2">(2)</num> <content>the greater of 50 members or two percent of all members, if the cooperative has more than 500 members.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.070/b"> <num value="b">(b)</num> <content>If fewer than a quorum are present at a meeting, a majority of the members present in person may adjourn the meeting from time to time without further notice.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.070/c"> <num value="c">(c)</num> <content>Each member present at a meeting of the members is entitled to one vote on each matter submitted to a vote at the meeting. Voting must be in person unless the bylaws provide for voting by mail.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scB/s162.071"> <num value="162.071">Sec. 162.071.</num> <heading>BOARD OF DIRECTORS</heading> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.071/a"> <num value="a">(a)</num> <content>A board of at least five directors shall manage the business of a telephone cooperative. Each director must be a member of the cooperative. The bylaws must prescribe the number of directors and their qualifications other than those prescribed by this chapter.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.071/b"> <num value="b">(b)</num> <content>The board may exercise any power of a telephone cooperative not conferred on the members by this chapter or by the cooperative's articles of incorporation or bylaws.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scB/s162.072"> <num value="162.072">Sec. 162.072.</num> <heading>ELECTION OF DIRECTORS; TERMS</heading> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.072/a"> <num value="a">(a)</num> <content>The incorporators of a telephone cooperative named in the articles of incorporation shall serve as directors and hold office until the first annual meeting of the members and until their successors are elected and qualify.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.072/b"> <num value="b">(b)</num> <content>At each annual meeting or, in the case of failure to hold the annual meeting as specified in the bylaws, at a special meeting called for that purpose, the members shall elect directors to hold office until the next annual members' meeting, except as otherwise provided by this chapter. Except as provided by Subsection (e), each director holds office for the term for which the person is elected and until the person's successor is elected and qualifies.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.072/c"> <num value="c">(c)</num> <chapeau>Instead of electing all the directors annually, the bylaws may provide that the directors, other than those named in the articles of incorporation to serve until the first annual meeting of the members, are elected by the members for a term of two years or three years. The terms must be set so that:</chapeau> <paragraph identifier="/us/tx/ut/t4/c162/scB/s162.072/1"> <num value="1">(1)</num> <content>one-half of the directors, as nearly as possible, are elected annually, if a two-year term is provided; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scB/s162.072/2"> <num value="2">(2)</num> <content>one-third of the directors, as nearly as possible, are elected annually, if a three-year term is provided.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.072/d"> <num value="d">(d)</num> <content>After the implementation of two-year or three-year terms for directors, as directors' terms expire, the members shall elect their successors to serve until the second or third succeeding annual meeting after their election, as appropriate.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.072/e"> <num value="e">(e)</num> <content>The bylaws must prescribe the manner of electing a successor to a director who resigns, dies, or otherwise becomes incapable of acting. The bylaws may provide for the removal of a director from office and for the election of the director's successor.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scB/s162.073"> <num value="162.073">Sec. 162.073.</num> <heading>COMPENSATION OF DIRECTORS</heading> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.073/a"> <num value="a">(a)</num> <content>A director may not receive a salary for services as a director. Except in an emergency, a director may not receive a salary for services in a capacity other than director without the approval of the members.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.073/b"> <num value="b">(b)</num> <chapeau>The bylaws may:</chapeau> <paragraph identifier="/us/tx/ut/t4/c162/scB/s162.073/1"> <num value="1">(1)</num> <content>prescribe a fixed fee for attendance at each board meeting, committee meeting, industry-related conference approved by the board, or training program; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scB/s162.073/2"> <num value="2">(2)</num> <content>provide for reimbursement of actual expenses of attendance or a reasonable per diem.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scB/s162.074"> <num value="162.074">Sec. 162.074.</num> <heading>INSURANCE FOR DIRECTORS</heading> <content>A telephone cooperative may provide liability, accident, life, and health insurance coverage for a director who chooses to have that coverage.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scB/s162.075"> <num value="162.075">Sec. 162.075.</num> <heading>BOARD MEETINGS; QUORUM</heading> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.075/a"> <num value="a">(a)</num> <content>The bylaws shall prescribe the manner of holding board meetings.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.075/b"> <num value="b">(b)</num> <content>A majority of the directors is a quorum.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scB/s162.076"> <num value="162.076">Sec. 162.076.</num> <heading>DISTRICTS</heading> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.076/a"> <num value="a">(a)</num> <content>The bylaws may provide for the territory served or to be served by a telephone cooperative to be divided into two or more districts for any purpose, including the nomination and election of directors and the election and functioning of district delegates.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.076/b"> <num value="b">(b)</num> <chapeau>The bylaws must prescribe:</chapeau> <paragraph identifier="/us/tx/ut/t4/c162/scB/s162.076/1"> <num value="1">(1)</num> <content>the boundaries of each district or the manner of establishing a district's boundaries;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scB/s162.076/2"> <num value="2">(2)</num> <content>the manner of changing a district's boundaries; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scB/s162.076/3"> <num value="3">(3)</num> <content>the manner in which each district functions.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.076/c"> <num value="c">(c)</num> <content>District delegates may nominate and elect directors. A district delegate must be a member.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.076/d"> <num value="d">(d)</num> <content>A member may not vote by proxy or by mail at a district meeting.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.076/e"> <num value="e">(e)</num> <content>A district delegate may not vote by proxy or by mail at any meeting.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scB/s162.077"> <num value="162.077">Sec. 162.077.</num> <heading>OFFICERS, AGENTS, AND EMPLOYEES</heading> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.077/a"> <num value="a">(a)</num> <content>The board of a telephone cooperative shall annually elect from the board's membership a president, a vice president, a secretary, and a treasurer.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.077/b"> <num value="b">(b)</num> <content>An officer who ceases to be a director ceases to hold office.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.077/c"> <num value="c">(c)</num> <content>The same person may hold the offices of secretary and of treasurer.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.077/d"> <num value="d">(d)</num> <content>The board may also elect or appoint other officers, agents, or employees as the board considers appropriate and shall prescribe the powers and duties of those persons.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.077/e"> <num value="e">(e)</num> <content>An officer may be removed from office and a successor elected in the manner prescribed by the bylaws.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scB/s162.078"> <num value="162.078">Sec. 162.078.</num> <heading>EXECUTIVE COMMITTEE</heading> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.078/a"> <num value="a">(a)</num> <content>The bylaws of a telephone cooperative may authorize the board to elect an executive committee from the board's membership.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.078/b"> <num value="b">(b)</num> <content>The board may delegate to the executive committee the management of the current and ordinary business of the cooperative and other duties as prescribed by the bylaws.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.078/c"> <num value="c">(c)</num> <content>The designation of an executive committee and the delegation of authority to the committee does not relieve the board or any director of a responsibility imposed on the board or the director by this chapter.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scB/s162.079"> <num value="162.079">Sec. 162.079.</num> <heading>INDEMNIFICATION</heading> <content>Article 2.22A, Texas Non-Profit Corporation Act (Article 1396-2.22A, Vernon's Texas Civil Statutes), applies to a telephone cooperative in the same manner as if the cooperative were formed under the Texas Non-Profit Corporation Act.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scB/s162.080"> <num value="162.080">Sec. 162.080.</num> <heading>CHANGE OF LOCATION OF PRINCIPAL OFFICE</heading> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.080/a"> <num value="a">(a)</num> <content>A telephone cooperative may, with the authorization of the board or the members, change the location of its principal office by filing a certificate reciting the change of principal office with the secretary of state.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.080/b"> <num value="b">(b)</num> <content>The cooperative's president or vice president must execute and acknowledge the certificate under the cooperative's seal as attested by the secretary.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scB/s162.080/c"> <num value="c">(c)</num> <content>The secretary of state shall charge and collect a fee of $5 for filing a certificate of change of principal office.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scB/s162.081"> <num value="162.081">Sec. 162.081.</num> <heading>DIRECTOR, OFFICER, OR MEMBER ACTING AS NOTARY</heading> <content>A person who is an officer, director, or member of a telephone cooperative and who is authorized to take acknowledgments under state law is not disqualified because of the person's association with the cooperative from taking an acknowledgment of an instrument executed in favor of the cooperative or to which the cooperative is a party.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scB/s162.082"> <num value="162.082">Sec. 162.082.</num> <heading>APPLICABILITY TO CORPORATIONS ORGANIZED UNDER OTHER LAW</heading> <content>A cooperative or nonprofit corporation or association organized under any other law of this state for the purpose of furnishing communication service may, by a majority vote of the members present in person at a meeting called for that purpose, amend its articles of incorporation to comply with this chapter.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t4/c162/scC"> <num value="C">SUBCHAPTER C.</num> <heading>POWERS OF TELEPHONE COOPERATIVE</heading> <section identifier="/us/tx/ut/t4/c162/scC/s162.121"> <num value="162.121">Sec. 162.121.</num> <heading>GENERAL POWERS</heading> <chapeau>A telephone cooperative may:</chapeau> <paragraph identifier="/us/tx/ut/t4/c162/scC/s162.121/1"> <num value="1">(1)</num> <content>sue and be sued in its corporate name;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scC/s162.121/2"> <num value="2">(2)</num> <content>adopt and alter a corporate seal and use the seal or a facsimile of the seal as required by law;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scC/s162.121/3"> <num value="3">(3)</num> <content>construct, acquire, lease, improve, install, equip, maintain, and operate, and, subject to Sections 162.125 and 162.126, dispose of, lease, or encumber, communication lines, facilities or systems, lands, structures, plants and equipment, exchanges, and other property, considered appropriate to accomplish the purpose for which the cooperative is organized;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scC/s162.121/4"> <num value="4">(4)</num> <content>issue membership certificates as provided by this chapter;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scC/s162.121/5"> <num value="5">(5)</num> <content>borrow money and otherwise contract indebtedness, issue or guarantee notes, bonds, and other evidences of indebtedness, and secure the payment of indebtedness by pledge or other encumbrance on any or all of its property or revenue;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scC/s162.121/6"> <num value="6">(6)</num> <content>conduct its business and exercise its powers inside or outside this state;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scC/s162.121/7"> <num value="7">(7)</num> <content>adopt, amend, and repeal bylaws;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scC/s162.121/8"> <num value="8">(8)</num> <content>make any contracts appropriate for the full exercise of the powers granted by this chapter; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scC/s162.121/9"> <num value="9">(9)</num> <content>perform any other acts and exercise any other power that may be appropriate to accomplish the purpose for which the cooperative is organized.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scC/s162.122"> <num value="162.122">Sec. 162.122.</num> <heading>POWERS RELATING TO PROVISION OF COMMUNICATION SERVICE</heading> <subsection identifier="/us/tx/ut/t4/c162/scC/s162.122/a"> <num value="a">(a)</num> <chapeau>A telephone cooperative may:</chapeau> <paragraph identifier="/us/tx/ut/t4/c162/scC/s162.122/1"> <num value="1">(1)</num> <content>furnish and improve communication service to its members, to governmental agencies and political subdivisions, to any number of subscribers of other communication systems through interconnection of facilities, and to any number of users through pay stations;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scC/s162.122/2"> <num value="2">(2)</num> <content>connect and interconnect its communication lines, facilities, or systems with other communication lines, facilities, or systems;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scC/s162.122/3"> <num value="3">(3)</num> <content>make its facilities available to persons furnishing communication service inside or outside this state; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scC/s162.122/4"> <num value="4">(4)</num> <content>construct, maintain, and operate a communication line along, on, under, or across publicly owned land or a public thoroughfare, subject to the same restrictions and obligations that apply to an electric transmission cooperative under Subchapter C, Chapter 181.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scC/s162.122/b"> <num value="b">(b)</num> <content>A telephone cooperative that acquires communication facilities may continue to furnish service to a person who is already receiving service from those facilities without requiring the person to become a member, but the person may become a member on the terms prescribed by the bylaws.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scC/s162.123"> <num value="162.123">Sec. 162.123.</num> <heading>CONNECTION AND INTERCONNECTION OF FACILITIES</heading> <content>A telephone cooperative doing business in this state may require a person furnishing communication service to the public in this state to interconnect that person's lines, facilities, or systems with, or otherwise make available those lines, facilities, or systems to, the cooperative's communication lines, facilities, or systems to provide a continuous line of communication for the cooperative's subscribers.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scC/s162.124"> <num value="162.124">Sec. 162.124.</num> <heading>EMINENT DOMAIN</heading> <content>A telephone cooperative may exercise the power of eminent domain in the manner provided by state law for the exercise of that power by other corporations constructing or operating communication lines, facilities, or systems.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scC/s162.125"> <num value="162.125">Sec. 162.125.</num> <heading>ENCUMBRANCE AND DISPOSITION OF PROPERTY WITHOUT MEMBERS' AUTHORIZATION</heading> <subsection identifier="/us/tx/ut/t4/c162/scC/s162.125/a"> <num value="a">(a)</num> <content>The board of a telephone cooperative may, without authorization of the members, authorize the execution and delivery of a mortgage or deed of trust of or the encumbering of any property of the cooperative, including property to be acquired and the revenues from property of the cooperative, to secure any indebtedness of the cooperative to the United States or any lending institution licensed by the United States or a state.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scC/s162.125/b"> <num value="b">(b)</num> <content>A mortgage or deed of trust described by Subsection (a) is exempt from a tax for recording the instrument.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scC/s162.126"> <num value="162.126">Sec. 162.126.</num> <heading>ENCUMBRANCE, LEASE, AND DISPOSITION OF PROPERTY WITH MEMBERS' AUTHORIZATION</heading> <subsection identifier="/us/tx/ut/t4/c162/scC/s162.126/a"> <num value="a">(a)</num> <content>Except as provided by Section 162.125, a telephone cooperative may not dispose of, lease, or encumber all or a major portion of its property unless the disposition, lease, or encumbrance is authorized by the affirmative vote of at least two-thirds of all the members of the cooperative.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scC/s162.126/b"> <num value="b">(b)</num> <chapeau>The board may, on the authorization of two-thirds of all the members of the cooperative at a members' meeting, dispose of or lease all or a major portion of its property to:</chapeau> <paragraph identifier="/us/tx/ut/t4/c162/scC/s162.126/1"> <num value="1">(1)</num> <content>another telephone cooperative;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scC/s162.126/2"> <num value="2">(2)</num> <content>a foreign corporation doing business in this state under this chapter; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scC/s162.126/3"> <num value="3">(3)</num> <content>the holder of a note, bond, or other evidence of indebtedness issued to the United States or to a lending institution licensed by the United States or a state.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scC/s162.126/c"> <num value="c">(c)</num> <content>The notice of a meeting at which a disposition or lease under Subsection (b) is to be considered must state the proposed action.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t4/c162/scD"> <num value="D">SUBCHAPTER D.</num> <heading>AMENDMENT OF ARTICLES OF INCORPORATION</heading> <section identifier="/us/tx/ut/t4/c162/scD/s162.151"> <num value="162.151">Sec. 162.151.</num> <heading>AMENDMENT OF ARTICLES OF INCORPORATION</heading> <content>A telephone cooperative may amend its articles of incorporation in accordance with this subchapter.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scD/s162.152"> <num value="162.152">Sec. 162.152.</num> <heading>PRESENTATION AND APPROVAL OF PROPOSED AMENDMENT</heading> <subsection identifier="/us/tx/ut/t4/c162/scD/s162.152/a"> <num value="a">(a)</num> <content>A proposed amendment to the articles of incorporation must be presented to a meeting of the members. The notice of the meeting must state the proposed amendment or must have the proposed amendment attached to it.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scD/s162.152/b"> <num value="b">(b)</num> <content>A proposed amendment, with any changes, may be approved only on the affirmative vote of at least two-thirds of the members voting on the question at the meeting.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scD/s162.153"> <num value="162.153">Sec. 162.153.</num> <heading>ARTICLES OF AMENDMENT</heading> <subsection identifier="/us/tx/ut/t4/c162/scD/s162.153/a"> <num value="a">(a)</num> <content>The president or vice president, on behalf of the telephone cooperative, shall execute and acknowledge the approved articles of amendment. The cooperative's seal must be affixed to the articles of amendment and attested by its secretary.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scD/s162.153/b"> <num value="b">(b)</num> <chapeau>The articles of amendment must state:</chapeau> <paragraph identifier="/us/tx/ut/t4/c162/scD/s162.153/1"> <num value="1">(1)</num> <content>that the articles of amendment are executed under this chapter;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scD/s162.153/2"> <num value="2">(2)</num> <content>the name of the telephone cooperative;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scD/s162.153/3"> <num value="3">(3)</num> <content>the address of the cooperative's principal office; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scD/s162.153/4"> <num value="4">(4)</num> <content>the amendment to the articles of incorporation.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scD/s162.153/c"> <num value="c">(c)</num> <content>The president or vice president executing the articles of amendment shall make and attach to the articles an affidavit stating that the cooperative complied with this subchapter with respect to the amendment set forth in the articles.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scD/s162.154"> <num value="162.154">Sec. 162.154.</num> <heading>FILING OF ARTICLES OF AMENDMENT</heading> <subsection identifier="/us/tx/ut/t4/c162/scD/s162.154/a"> <num value="a">(a)</num> <content>Articles of amendment shall be filed with the secretary of state in the same manner as the original articles of incorporation.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scD/s162.154/b"> <num value="b">(b)</num> <content>The secretary of state shall charge and collect a fee of $25 for filing articles of amendment.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t4/c162/scE"> <num value="E">SUBCHAPTER E.</num> <heading>CONSOLIDATION OR MERGER OF TELEPHONE COOPERATIVES</heading> <section identifier="/us/tx/ut/t4/c162/scE/s162.201"> <num value="162.201">Sec. 162.201.</num> <heading>CONSOLIDATION</heading> <subsection identifier="/us/tx/ut/t4/c162/scE/s162.201/a"> <num value="a">(a)</num> <chapeau>Two or more telephone cooperatives may enter into an agreement to consolidate the cooperatives. The agreement must state:</chapeau> <paragraph identifier="/us/tx/ut/t4/c162/scE/s162.201/1"> <num value="1">(1)</num> <content>the terms of the consolidation;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scE/s162.201/2"> <num value="2">(2)</num> <content>the name of the proposed consolidated cooperative;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scE/s162.201/3"> <num value="3">(3)</num> <content>the number of directors of the proposed consolidated cooperative;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scE/s162.201/4"> <num value="4">(4)</num> <content>the time of the annual meeting and election; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scE/s162.201/5"> <num value="5">(5)</num> <content>the names of at least five persons to be directors until the first annual meeting.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scE/s162.201/b"> <num value="b">(b)</num> <content>A consolidation agreement may be approved only on the votes of a majority of the members of each telephone cooperative at a regular meeting or at a special meeting of its members called for that purpose.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scE/s162.201/c"> <num value="c">(c)</num> <content>Telephone cooperatives may not consolidate for the purpose of duplicating the facilities of another communication company where the other communication company is giving or is willing to give reasonably adequate communication service.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scE/s162.202"> <num value="162.202">Sec. 162.202.</num> <heading>ARTICLES OF CONSOLIDATION</heading> <subsection identifier="/us/tx/ut/t4/c162/scE/s162.202/a"> <num value="a">(a)</num> <chapeau>The articles of consolidation must:</chapeau> <paragraph identifier="/us/tx/ut/t4/c162/scE/s162.202/1"> <num value="1">(1)</num> <content>conform substantially to original articles of incorporation of a telephone cooperative; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scE/s162.202/2"> <num value="2">(2)</num> <content>be executed, acknowledged, filed, and recorded in the same manner as original articles of incorporation.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scE/s162.202/b"> <num value="b">(b)</num> <content>The directors named in the consolidation agreement shall as incorporators sign and acknowledge the articles of consolidation.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scE/s162.202/c"> <num value="c">(c)</num> <content>The secretary of state shall charge and collect a fee of $50 for filing articles of consolidation.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scE/s162.202/d"> <num value="d">(d)</num> <content>When the secretary of state accepts the articles of consolidation for filing and recording and issues a certificate of consolidation, the proposed consolidated telephone cooperative described in the articles under its designated name exists as a body corporate, with all the powers of a telephone cooperative originally organized under this chapter.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scE/s162.203"> <num value="162.203">Sec. 162.203.</num> <heading>MERGER</heading> <subsection identifier="/us/tx/ut/t4/c162/scE/s162.203/a"> <num value="a">(a)</num> <content>One or more telephone cooperatives may merge into another cooperative as provided by this section and Section 162.204.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scE/s162.203/b"> <num value="b">(b)</num> <content>The proposition for the merger and proposed articles of merger must be submitted at a meeting of the members of each merging cooperative and the surviving cooperative. A copy of the proposed articles of merger must be attached to the notice of each meeting.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scE/s162.203/c"> <num value="c">(c)</num> <content>A proposed merger and proposed articles of merger, with any amendments, may be approved only on the affirmative vote of at least two-thirds of the members of each cooperative voting on the proposed merger and articles.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scE/s162.204"> <num value="162.204">Sec. 162.204.</num> <heading>ARTICLES OF MERGER</heading> <subsection identifier="/us/tx/ut/t4/c162/scE/s162.204/a"> <num value="a">(a)</num> <content>The president or vice president of each telephone cooperative, on behalf of the telephone cooperative, shall execute and acknowledge the approved articles of merger. The cooperative's seal must be affixed to the articles of merger and attested by its secretary.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scE/s162.204/b"> <num value="b">(b)</num> <chapeau>The articles of merger must state:</chapeau> <paragraph identifier="/us/tx/ut/t4/c162/scE/s162.204/1"> <num value="1">(1)</num> <content>that they are executed under this chapter;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scE/s162.204/2"> <num value="2">(2)</num> <content>the name of each merging cooperative and the address of its principal office;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scE/s162.204/3"> <num value="3">(3)</num> <content>the name of the surviving cooperative and the address of its principal office;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scE/s162.204/4"> <num value="4">(4)</num> <content>that each merging cooperative and the surviving cooperative agree to the merger;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scE/s162.204/5"> <num value="5">(5)</num> <content>the name and address of each director of the surviving cooperative;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scE/s162.204/6"> <num value="6">(6)</num> <content>the terms of the merger and the manner in which the merger will be carried out, including the manner in which members of the merging cooperatives become or may become members of the surviving cooperative;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scE/s162.204/7"> <num value="7">(7)</num> <content>the duration of the surviving cooperative; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scE/s162.204/8"> <num value="8">(8)</num> <content>the purpose for which the surviving cooperative is formed.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scE/s162.204/c"> <num value="c">(c)</num> <content>The articles of merger may contain any provision consistent with this chapter considered appropriate for the conduct of the business of the surviving cooperative. The president or vice president of each cooperative executing the articles of merger shall make and attach to the articles an affidavit stating that the cooperative complied with this subchapter with respect to the articles.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scE/s162.204/d"> <num value="d">(d)</num> <chapeau>The original and a copy of the articles of merger shall be delivered to the secretary of state. If the secretary of state finds that the articles conform to law, the secretary of state, on payment of a fee of $50, shall:</chapeau> <paragraph identifier="/us/tx/ut/t4/c162/scE/s162.204/1"> <num value="1">(1)</num> <content>file and record the articles of merger;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scE/s162.204/2"> <num value="2">(2)</num> <content>issue a certificate of merger; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scE/s162.204/3"> <num value="3">(3)</num> <content>attach to the certificate of merger the copy of the articles of merger and deliver the certificate and attached copy to the surviving cooperative or its representative.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scE/s162.205"> <num value="162.205">Sec. 162.205.</num> <heading>EFFECT OF CONSOLIDATION OR MERGER</heading> <subsection identifier="/us/tx/ut/t4/c162/scE/s162.205/a"> <num value="a">(a)</num> <content>In a consolidation the existence of each telephone cooperative ceases and the articles of consolidation are considered to be the articles of incorporation of the new cooperative. In a merger the separate existence of each merging telephone cooperative ceases and the articles of incorporation of the surviving cooperative are considered to be amended to the extent, if any, that amendment is provided for in the articles of merger.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scE/s162.205/b"> <num value="b">(b)</num> <content>All the rights, privileges, immunities, property, and applications for membership of each of the consolidating or merging cooperatives are transferred to and vested in the new or surviving cooperative, except that this chapter does not relieve a cooperative of the obligation to comply with the applicable provisions of Title 2.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scE/s162.205/c"> <num value="c">(c)</num> <content>The new or surviving cooperative is liable for all the liabilities and obligations of the consolidating or merging cooperatives. A claim existing or action or proceeding pending by or against a consolidating or merging cooperative may be prosecuted as if the consolidation or merger had not taken place, and the new or surviving cooperative may be substituted in the place of the consolidating or merging cooperative. The consolidation or merger does not impair the rights of creditors of or liens on the property of a consolidating or merging cooperative.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t4/c162/scF"> <num value="F">SUBCHAPTER F.</num> <heading>CONVERSION OF CORPORATION INTO TELEPHONE COOPERATIVE</heading> <section identifier="/us/tx/ut/t4/c162/scF/s162.251"> <num value="162.251">Sec. 162.251.</num> <heading>CONVERSION OF CORPORATION INTO TELEPHONE COOPERATIVE</heading> <subsection identifier="/us/tx/ut/t4/c162/scF/s162.251/a"> <num value="a">(a)</num> <content>A corporation organized under the laws of this state that furnishes or is authorized to furnish communication service may be converted into a telephone cooperative in accordance with this subchapter. On conversion, the corporation is subject to this chapter as if it had been originally organized under this chapter.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scF/s162.251/b"> <num value="b">(b)</num> <content>The proposition for the conversion and proposed articles of conversion must be submitted at a meeting of the members or stockholders of the corporation or, in the case of a corporation that does not have members or stockholders, at a meeting of the incorporators of the corporation. A copy of the proposed articles of conversion must be attached to the notice of the meeting.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scF/s162.251/c"> <num value="c">(c)</num> <chapeau>A proposed conversion and proposed articles of conversion, with any amendments, may be approved only on the affirmative vote of:</chapeau> <paragraph identifier="/us/tx/ut/t4/c162/scF/s162.251/1"> <num value="1">(1)</num> <content>at least two-thirds of the members of the corporation voting on the proposed conversion and articles;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scF/s162.251/2"> <num value="2">(2)</num> <content>the holders of at least two-thirds of the shares of the capital stock of the corporation represented at the meeting and voting on the proposition and articles, if the corporation is a stock corporation; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scF/s162.251/3"> <num value="3">(3)</num> <content>at least two-thirds of the corporation's incorporators, if the corporation does not have members or outstanding shares of capital stock.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scF/s162.252"> <num value="162.252">Sec. 162.252.</num> <heading>ARTICLES OF CONVERSION</heading> <subsection identifier="/us/tx/ut/t4/c162/scF/s162.252/a"> <num value="a">(a)</num> <content>The president or vice president, on behalf of the corporation, shall execute and acknowledge the approved articles of conversion. The corporation's seal must be affixed to the articles and attested by its secretary.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scF/s162.252/b"> <num value="b">(b)</num> <chapeau>The articles of conversion must state:</chapeau> <paragraph identifier="/us/tx/ut/t4/c162/scF/s162.252/1"> <num value="1">(1)</num> <content>that they are executed under this chapter;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scF/s162.252/2"> <num value="2">(2)</num> <content>the name of the corporation and the address of its principal office before its conversion into a telephone cooperative;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scF/s162.252/3"> <num value="3">(3)</num> <content>the law under which the corporation was organized;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scF/s162.252/4"> <num value="4">(4)</num> <content>that the corporation elects to become a cooperative, nonprofit corporation subject to this chapter;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scF/s162.252/5"> <num value="5">(5)</num> <content>the corporation's name as a cooperative;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scF/s162.252/6"> <num value="6">(6)</num> <content>the address of the principal office of the cooperative;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scF/s162.252/7"> <num value="7">(7)</num> <content>the name and address of each director of the cooperative;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scF/s162.252/8"> <num value="8">(8)</num> <content>the manner in which a member, stockholder, or incorporator of the corporation becomes or may become a member of the cooperative;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scF/s162.252/9"> <num value="9">(9)</num> <content>the duration of the cooperative; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scF/s162.252/10"> <num value="10">(10)</num> <content>the purpose for which the cooperative is formed.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scF/s162.252/c"> <num value="c">(c)</num> <content>The articles of conversion may contain any provision consistent with this chapter considered appropriate for the conduct of the business of the cooperative. The president or vice president executing the articles of conversion shall make and attach to the articles an affidavit stating that the corporation complied with this section with respect to the articles. The articles of conversion are considered to be the articles of incorporation of the cooperative.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scF/s162.252/d"> <num value="d">(d)</num> <chapeau>The original and a copy of the articles of conversion shall be delivered to the secretary of state. If the secretary of state finds that the articles conform to law, the secretary of state, on payment of a fee of $50, shall:</chapeau> <paragraph identifier="/us/tx/ut/t4/c162/scF/s162.252/1"> <num value="1">(1)</num> <content>file and record the articles of conversion;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scF/s162.252/2"> <num value="2">(2)</num> <content>issue a certificate of conversion; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scF/s162.252/3"> <num value="3">(3)</num> <content>attach to the certificate of conversion the copy of the articles of conversion and deliver the certificate and attached copy to the cooperative or its representative.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scF/s162.253"> <num value="162.253">Sec. 162.253.</num> <heading>CONSOLIDATION AND CONVERSION OF CORPORATIONS INTO TELEPHONE COOPERATIVE</heading> <subsection identifier="/us/tx/ut/t4/c162/scF/s162.253/a"> <num value="a">(a)</num> <content>Two or more corporations organized under the laws of this state that furnish or are authorized to furnish communication service may, if otherwise permitted to consolidate under state law, consolidate and convert into a telephone cooperative in accordance with this subchapter. On consolidation and conversion, the new cooperative is subject to this chapter as if it had been originally organized under this chapter.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scF/s162.253/b"> <num value="b">(b)</num> <chapeau>The proposition for the consolidation and conversion and the proposed articles of consolidation and conversion, with any amendments, must be approved by each corporation in accordance with:</chapeau> <paragraph identifier="/us/tx/ut/t4/c162/scF/s162.253/1"> <num value="1">(1)</num> <content>the law under which it was organized; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scF/s162.253/2"> <num value="2">(2)</num> <content>Sections 162.251 and 162.252.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scF/s162.254"> <num value="162.254">Sec. 162.254.</num> <heading>ARTICLES OF CONSOLIDATION AND CONVERSION</heading> <subsection identifier="/us/tx/ut/t4/c162/scF/s162.254/a"> <num value="a">(a)</num> <chapeau>The approved articles of consolidation and conversion:</chapeau> <paragraph identifier="/us/tx/ut/t4/c162/scF/s162.254/1"> <num value="1">(1)</num> <content>shall be executed, acknowledged, and sealed as prescribed by Section 162.252 and by the law under which the consolidating and converting corporations were organized;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scF/s162.254/2"> <num value="2">(2)</num> <chapeau>must:</chapeau> <subparagraph identifier="/us/tx/ut/t4/c162/scF/s162.254/A"> <num value="A">(A)</num> <content>state that they are executed under this chapter and the law under which the corporations were organized and that each consolidating corporation elects that the new corporation be a cooperative; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c162/scF/s162.254/B"> <num value="B">(B)</num> <content>contain all other information required by the law under which the corporations were organized; and</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scF/s162.254/3"> <num value="3">(3)</num> <content>may contain any provision consistent with this chapter considered appropriate for the conduct of the business of the cooperative.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scF/s162.254/b"> <num value="b">(b)</num> <content>The president or vice president executing the articles of consolidation and conversion shall make and attach to the articles an affidavit stating that the corporations complied with this section and Section 162.253 and with the applicable provisions of the law under which the consolidating corporations were organized with respect to the articles. The articles of consolidation and conversion are considered to be the articles of incorporation of the cooperative and shall be filed in accordance with the provisions both of this chapter and of the law under which the consolidating corporations were organized.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scF/s162.254/c"> <num value="c">(c)</num> <chapeau>The original and a copy of the articles of consolidation and conversion shall be delivered to the secretary of state. If the secretary of state finds that the articles conform to law, the secretary of state, on payment of a fee of $50, shall:</chapeau> <paragraph identifier="/us/tx/ut/t4/c162/scF/s162.254/1"> <num value="1">(1)</num> <content>file and record the articles of consolidation and conversion;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scF/s162.254/2"> <num value="2">(2)</num> <content>issue a certificate of consolidation and conversion; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scF/s162.254/3"> <num value="3">(3)</num> <content>attach to the certificate the copy of the articles and deliver the certificate and attached copy to the cooperative or its representative.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t4/c162/scG"> <num value="G">SUBCHAPTER G.</num> <heading>DISSOLUTION</heading> <section identifier="/us/tx/ut/t4/c162/scG/s162.301"> <num value="162.301">Sec. 162.301.</num> <heading>DISSOLUTION</heading> <subsection identifier="/us/tx/ut/t4/c162/scG/s162.301/a"> <num value="a">(a)</num> <content>A telephone cooperative may be dissolved by a two-thirds vote of all the members of the cooperative. The vote must be taken at a regular meeting or at a special meeting of its members called for that purpose. Votes must be cast in person.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scG/s162.301/b"> <num value="b">(b)</num> <chapeau>A certificate of dissolution must be:</chapeau> <paragraph identifier="/us/tx/ut/t4/c162/scG/s162.301/1"> <num value="1">(1)</num> <content>signed by the president or vice president and attested by the secretary, certifying to the dissolution and stating that the officers have been authorized by a vote of the members under Subsection (a) to execute and file the certificate; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scG/s162.301/2"> <num value="2">(2)</num> <content>executed, acknowledged, filed, and recorded in the same manner as original articles of incorporation of a telephone cooperative.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scG/s162.301/c"> <num value="c">(c)</num> <content>The cooperative is dissolved when the secretary of state accepts the certificate of dissolution for filing and recording and issues a certificate of dissolution.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scG/s162.301/d"> <num value="d">(d)</num> <chapeau>The secretary of state shall charge and collect:</chapeau> <paragraph identifier="/us/tx/ut/t4/c162/scG/s162.301/1"> <num value="1">(1)</num> <content>a fee of $5 for filing a certificate of election to dissolve; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scG/s162.301/2"> <num value="2">(2)</num> <content>a fee of $5 for filing articles of dissolution.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scG/s162.302"> <num value="162.302">Sec. 162.302.</num> <heading>EXISTENCE FOLLOWING DISSOLUTION</heading> <subsection identifier="/us/tx/ut/t4/c162/scG/s162.302/a"> <num value="a">(a)</num> <chapeau>A dissolved telephone cooperative continues to exist to:</chapeau> <paragraph identifier="/us/tx/ut/t4/c162/scG/s162.302/1"> <num value="1">(1)</num> <content>satisfy existing liabilities or obligations;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scG/s162.302/2"> <num value="2">(2)</num> <content>collect or liquidate its assets; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scG/s162.302/3"> <num value="3">(3)</num> <content>take any other action required to adjust and wind up its business and affairs.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scG/s162.302/b"> <num value="b">(b)</num> <content>A dissolved telephone cooperative may sue and be sued in its corporate name.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scG/s162.303"> <num value="162.303">Sec. 162.303.</num> <heading>DISTRIBUTION OF NET ASSETS ON DISSOLUTION</heading> <chapeau>Assets of a dissolved telephone cooperative that remain after all liabilities or obligations of the cooperative have been satisfied shall be distributed as follows:</chapeau> <paragraph identifier="/us/tx/ut/t4/c162/scG/s162.303/1"> <num value="1">(1)</num> <content>first, to patrons for the pro rata return of amounts standing to their credit because of their patronage; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c162/scG/s162.303/2"> <num value="2">(2)</num> <content>second, to members for the pro rata repayment of membership fees.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c162/scG/s162.304"> <num value="162.304">Sec. 162.304.</num> <heading>DISSOLUTION OF DEFECTIVELY INCORPORATED TELEPHONE COOPERATIVE</heading> <subsection identifier="/us/tx/ut/t4/c162/scG/s162.304/a"> <num value="a">(a)</num> <content>A telephone cooperative that purports to have been incorporated or reincorporated under this chapter but that has not complied with a requirement for legal corporate existence may file a certificate of dissolution in the same manner as a validly incorporated telephone cooperative.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scG/s162.304/b"> <num value="b">(b)</num> <content>The certificate of dissolution may be authorized by a majority of the incorporators or directors at a meeting called by an incorporator and held at the principal office of the cooperative named in the articles of incorporation.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c162/scG/s162.304/c"> <num value="c">(c)</num> <content>The incorporator calling the meeting must give at least ten days' notice of the meeting by mail to the last known post office address of each incorporator or director.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t4/c163"> <num value="163">CHAPTER 163.</num> <heading>JOINT POWERS AGENCIES</heading> <subchapter identifier="/us/tx/ut/t4/c163/scA"> <num value="A">SUBCHAPTER A.</num> <heading>GENERAL PROVISIONS</heading> <section identifier="/us/tx/ut/t4/c163/scA/s163.001"> <num value="163.001">Sec. 163.001.</num> <heading>DEFINITIONS</heading> <chapeau>In this chapter:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scA/s163.001/1"> <num value="1">(1)</num> <chapeau>"Electric facility" means a facility necessary or incidental to generating or transmitting electric power and energy, including:</chapeau> <subparagraph identifier="/us/tx/ut/t4/c163/scA/s163.001/A"> <num value="A">(A)</num> <content>a generating unit or plant or a plant site;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c163/scA/s163.001/B"> <num value="B">(B)</num> <content>transmission lines;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c163/scA/s163.001/C"> <num value="C">(C)</num> <content>a right-of-way or other right relating to a facility; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c163/scA/s163.001/D"> <num value="D">(D)</num> <content>property and equipment.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scA/s163.001/2"> <num value="2">(2)</num> <content>"Entity" means a person who engages in the authorized generation, transmission, or distribution of electric energy for sale to the public.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scA/s163.001/3"> <num value="3">(3)</num> <content>"Private entity" means an entity that is not a public entity.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scA/s163.001/4"> <num value="4">(4)</num> <content>"Public entity" means an entity that is an agency or political subdivision of this state.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t4/c163/scB"> <num value="B">SUBCHAPTER B.</num> <heading>COOPERATION BY PUBLIC AND PRIVATE ENTITIES</heading> <section identifier="/us/tx/ut/t4/c163/scB/s163.011"> <num value="163.011">Sec. 163.011.</num> <heading>EFFECT OF SUBCHAPTER</heading> <chapeau>This subchapter does not affect:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scB/s163.011/1"> <num value="1">(1)</num> <content>the statutory purposes prescribed by state law relating to creating, establishing, or operating an entity that co-owns a facility;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scB/s163.011/2"> <num value="2">(2)</num> <content>an entity's rights or powers in effect on August 27, 1973, relating to the generation, transmission, distribution, or sale of electric power and energy; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scB/s163.011/3"> <num value="3">(3)</num> <content>a contract in effect on August 27, 1973.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scB/s163.012"> <num value="163.012">Sec. 163.012.</num> <heading>AUTHORITY TO MAKE AGREEMENTS</heading> <chapeau>Public and private entities may by agreement jointly plan, finance, acquire, construct, own, operate, and maintain electric facilities to:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scB/s163.012/1"> <num value="1">(1)</num> <content>achieve economies of scale in providing electric energy to the public;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scB/s163.012/2"> <num value="2">(2)</num> <content>promote the economic development of this state and its natural resources; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scB/s163.012/3"> <num value="3">(3)</num> <content>meet the state's future power needs.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scB/s163.013"> <num value="163.013">Sec. 163.013.</num> <heading>GENERAL RIGHTS, POWERS, AND DUTIES OF ENTITIES</heading> <subsection identifier="/us/tx/ut/t4/c163/scB/s163.013/a"> <num value="a">(a)</num> <chapeau>A participating entity may:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scB/s163.013/1"> <num value="1">(1)</num> <content>use its means and assets to plan, acquire, construct, own, operate, and maintain its interest in an electric facility;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scB/s163.013/2"> <num value="2">(2)</num> <content>issue bonds and other securities to raise money for a purpose described by Subdivision (1) in the same manner and to the same extent and subject to the same conditions as would be applicable if the entity had sole ownership of the electric facility;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scB/s163.013/3"> <num value="3">(3)</num> <content>acquire, for the use and benefit of each participating entity, land, easements, and property for an electric facility by purchase or by exercising the power of eminent domain; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scB/s163.013/4"> <num value="4">(4)</num> <content>transfer or otherwise convey the acquired land, property, or property interest or otherwise cause the land, property, or interest to become vested in other participating entities to the extent to which and in the manner in which the participating entities agree.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scB/s163.013/b"> <num value="b">(b)</num> <content>Each participating entity is a cotenant or co-owner of the electric facility and in relation to the entity's undivided interest in the facility has each right, privilege, exemption, power, duty, and liability the entity would have had if the entity had sole ownership.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scB/s163.014"> <num value="163.014">Sec. 163.014.</num> <heading>USE OF EMINENT DOMAIN</heading> <subsection identifier="/us/tx/ut/t4/c163/scB/s163.014/a"> <num value="a">(a)</num> <content>A participating entity has the power of eminent domain to be exercised as provided by this section.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scB/s163.014/b"> <num value="b">(b)</num> <content>The use of eminent domain authority by a participating entity is governed by the law relating to an eminent domain proceeding involving a municipality in this state.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scB/s163.014/c"> <num value="c">(c)</num> <content>A participating entity may acquire a fee title to the condemned real property.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scB/s163.014/d"> <num value="d">(d)</num> <chapeau>A participating entity may not use eminent domain authority to acquire:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scB/s163.014/1"> <num value="1">(1)</num> <content>an interest in an electric facility that belongs to another entity; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scB/s163.014/2"> <num value="2">(2)</num> <content>an interest in real property to drill, mine, or produce from that property oil, gas, geothermal resources, geothermal/geopressured resources, or lignite, coal, sulphur, uranium, plutonium, or other minerals that belong to another person regardless of whether the material is in place or is in the process of being drilled, mined, or produced.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scB/s163.014/e"> <num value="e">(e)</num> <content>Subsection (d) does not affect the authority of a participating entity to acquire full title to real property for a plant site and any related surface installation or equipment, including a cooling reservoir.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scB/s163.015"> <num value="163.015">Sec. 163.015.</num> <heading>TAXATION</heading> <subsection identifier="/us/tx/ut/t4/c163/scB/s163.015/a"> <num value="a">(a)</num> <content>A participating private entity shall render for ad valorem taxation its undivided fractional interest in a jointly owned electric facility. An ad valorem or similar tax shall be imposed separately against the undivided interest of the participating private entity.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scB/s163.015/b"> <num value="b">(b)</num> <content>A tax or assessment, including an excise tax or sales and use tax, attributable to a property or service bought, sold, leased, or used to construct, maintain, repair, or operate a jointly owned electric facility shall be imposed separately against each participating entity in proportion to the entity's respective undivided interest in the facility.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scB/s163.015/c"> <num value="c">(c)</num> <content>A participating entity is not liable for a tax or assessment attributable to another participating entity under Subsection (a) or (b).</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scB/s163.015/d"> <num value="d">(d)</num> <content>A participating entity is entitled to each constitutional or statutory ad valorem or other tax exemption attributable to the jointly owned electric facility or to a property or service bought, sold, leased, or used to construct, maintain, repair, or operate the facility to the extent the entity would have been exempt from the tax if the entity's undivided interest were an entire interest in the facility or in the property or service. The entity is entitled to any applicable exemption certificate or statement provided by law to claim or prove the exemption.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scB/s163.016"> <num value="163.016">Sec. 163.016.</num> <heading>INSURANCE</heading> <chapeau>A participating entity may:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scB/s163.016/1"> <num value="1">(1)</num> <content>contract for insurance, including specialized insurance for property and risks relating to the ownership, operation, and maintenance of electric facilities;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scB/s163.016/2"> <num value="2">(2)</num> <content>contract for insurance for the use and benefit of each of the other participating entities as though the insurance was for the sole benefit of the contracting entity; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scB/s163.016/3"> <num value="3">(3)</num> <content>cause the rights of the other participating entities to be protected under the contract in accordance with each entity's undivided interest or entitlement under any applicable agreement between the entities.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t4/c163/scC"> <num value="C">SUBCHAPTER C.</num> <heading>MUNICIPAL POWER AGENCIES</heading> <section identifier="/us/tx/ut/t4/c163/scC/s163.051"> <num value="163.051">Sec. 163.051.</num> <heading>DEFINITIONS</heading> <chapeau>In this subchapter:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.051/1"> <num value="1">(1)</num> <content>"Agency" means a municipal power agency created under this subchapter.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.051/2"> <num value="2">(2)</num> <content>"Bond" includes a note, but does not include a nonnegotiable purchase money note issued under Section 163.067.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.051/3"> <num value="3">(3)</num> <content>"Concurrent ordinance" means an ordinance or order adopted under this subchapter by two or more public entities that relates to the creation or re-creation of a municipal power agency.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.051/4"> <num value="4">(4)</num> <content>"Obligations" means revenue bonds or notes.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scC/s163.052"> <num value="163.052">Sec. 163.052.</num> <heading>CONSTRUCTION</heading> <content>This subchapter shall be liberally construed to carry out its purpose.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scC/s163.053"> <num value="163.053">Sec. 163.053.</num> <heading>CONFLICTS WITH OTHER LAW</heading> <chapeau>This subchapter prevails to the extent of a conflict between this subchapter and any other law, including:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.053/1"> <num value="1">(1)</num> <content>a law regulating the affairs of a municipal corporation; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.053/2"> <num value="2">(2)</num> <content>a home-rule charter provision.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scC/s163.054"> <num value="163.054">Sec. 163.054.</num> <heading>CREATION OF AGENCY</heading> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.054/a"> <num value="a">(a)</num> <content>Public entities may create an agency by concurrent ordinances subject to voter approval.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.054/b"> <num value="b">(b)</num> <content>A public entity may join in the creation of an agency under this subchapter only if on May 8, 1975, and at the time the concurrent ordinance is adopted, the entity was engaged in the authorized generation of electric energy for sale to the public. This subsection does not prohibit a public entity from disposing of its electric generating capabilities after creation of the agency.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.054/c"> <num value="c">(c)</num> <chapeau>An agency is a:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.054/1"> <num value="1">(1)</num> <content>separate municipal corporation;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.054/2"> <num value="2">(2)</num> <content>political subdivision of this state; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.054/3"> <num value="3">(3)</num> <content>political entity and corporate body.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.054/d"> <num value="d">(d)</num> <content>An agency may not impose a tax but has all the other powers relating to municipally owned utilities and provided by law to a municipality that owns a public utility.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scC/s163.055"> <num value="163.055">Sec. 163.055.</num> <heading>RE-CREATION OF AGENCY</heading> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.055/a"> <num value="a">(a)</num> <content>The public entities that create an agency may by concurrent ordinances re-create the agency by adding or deleting, or both, a public entity.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.055/b"> <num value="b">(b)</num> <content>The public entities may not re-create an agency if the re-creation will impair an agency obligation.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.055/c"> <num value="c">(c)</num> <content>Re-creation by adding a public entity is subject to voter approval in accordance with Section 163.058.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scC/s163.056"> <num value="163.056">Sec. 163.056.</num> <heading>NOTICE</heading> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.056/a"> <num value="a">(a)</num> <content>The governing body of each public entity shall publish notice of its intention to create an agency once a week for two consecutive weeks.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.056/b"> <num value="b">(b)</num> <content>The first publication must appear before the 14th day before the date set for passage of the concurrent ordinance.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.056/c"> <num value="c">(c)</num> <chapeau>The notice must state:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.056/1"> <num value="1">(1)</num> <content>the date, time, and location at which the governing body proposes to enact the concurrent ordinance; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.056/2"> <num value="2">(2)</num> <content>that an agency will be created on the date on which the concurrent ordinances take effect.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scC/s163.057"> <num value="163.057">Sec. 163.057.</num> <heading>CONTENTS OF CONCURRENT ORDINANCE</heading> <chapeau>A concurrent ordinance creating an agency under Section 163.054 or re-creating an agency under Section 163.055 must, as adopted by each public entity:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.057/1"> <num value="1">(1)</num> <content>contain identical provisions;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.057/2"> <num value="2">(2)</num> <content>define the boundaries of the agency to include the territory within the boundaries of each participating public entity;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.057/3"> <num value="3">(3)</num> <content>designate the name of the agency; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.057/4"> <num value="4">(4)</num> <content>designate the number, place, initial term, and manner of appointment of directors in accordance with Section 163.059.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scC/s163.058"> <num value="163.058">Sec. 163.058.</num> <heading>ELECTION</heading> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.058/a"> <num value="a">(a)</num> <content>An agency may not be created unless the creation is approved by a majority of the qualified voters of each public entity creating the agency at an election called and held for that purpose.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.058/b"> <num value="b">(b)</num> <content>An agency may not be re-created by addition of a public entity unless the re-creation is approved by a majority of the qualified voters of the additional public entity at an election called and held for that purpose.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.058/c"> <num value="c">(c)</num> <chapeau>Notice of an election under this section shall be given in accordance with Section 1251.003, Government Code. The election shall be called and held in accordance with:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.058/1"> <num value="1">(1)</num> <content>the Election Code;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.058/2"> <num value="2">(2)</num> <content>Chapter 1251, Government Code; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.058/3"> <num value="3">(3)</num> <content>this subchapter.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.404, eff. Sept. 1, 2001.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scC/s163.059"> <num value="163.059">Sec. 163.059.</num> <heading>BOARD OF DIRECTORS</heading> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.059/a"> <num value="a">(a)</num> <content>The agency shall be governed by a board of directors. The board is responsible for the management, operation, and control of the property belonging to the agency.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.059/b"> <num value="b">(b)</num> <content>The board must include at least four directors. Each director must be appointed by place by the governing bodies of the participating public entities. Each participating public entity is entitled to appoint at least one director.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.059/c"> <num value="c">(c)</num> <content>Directors must serve staggered terms. Successor directors are appointed in the same manner as the original appointees.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.059/d"> <num value="d">(d)</num> <content>To qualify to serve as a director, a person must be a qualified voter and reside in the boundaries of the appointing public entity when the person takes the constitutional oath of office.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.059/e"> <num value="e">(e)</num> <content>An employee, officer, or member of the governing body of a public entity may serve as a director but may not have a personal interest in a contract executed by the agency other than as an employee, officer, or member of the governing body of the public entity.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.059/f"> <num value="f">(f)</num> <content>Directors serve without compensation.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scC/s163.060"> <num value="163.060">Sec. 163.060.</num> <heading>POWERS</heading> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.060/a"> <num value="a">(a)</num> <chapeau>An agency may not engage in any utility business other than the generation, transmission, and sale or exchange of electric energy to:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.060/1"> <num value="1">(1)</num> <content>a participating public entity; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.060/2"> <num value="2">(2)</num> <content>a private entity that owns jointly with the agency an electric generating facility in this state.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.060/b"> <num value="b">(b)</num> <chapeau>The agency may:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.060/1"> <num value="1">(1)</num> <content>perform any act necessary to the full exercise of the agency's powers;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.060/2"> <num value="2">(2)</num> <chapeau>enter into a contract, lease, or agreement with or accept a grant or loan from a:</chapeau> <subparagraph identifier="/us/tx/ut/t4/c163/scC/s163.060/A"> <num value="A">(A)</num> <content>department or agency of the United States;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c163/scC/s163.060/B"> <num value="B">(B)</num> <content>department, agency, or political subdivision of this state; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c163/scC/s163.060/C"> <num value="C">(C)</num> <content>public or private person;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.060/3"> <num value="3">(3)</num> <content>sell, lease, convey, or otherwise dispose of any right, interest, or property the agency considers to be unnecessary for the efficient maintenance or operation of its electric facilities;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.060/4"> <num value="4">(4)</num> <content>use the uniform system of accounts prescribed for utilities and licenses by the Federal Energy Regulatory Commission; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.060/5"> <num value="5">(5)</num> <content>adopt rules to govern the operation of the agency and its employees, facilities, and service.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scC/s163.061"> <num value="163.061">Sec. 163.061.</num> <heading>CONSTRUCTION CONTRACTS</heading> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.061/a"> <num value="a">(a)</num> <content>Except as provided by Subsection (c), an agency may award a contract for construction of an improvement that involves the expenditure of more than $20,000 only on the basis of competitive bids.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.061/b"> <num value="b">(b)</num> <content>The agency shall publish notice of intent to receive bids once a week for two consecutive weeks in a newspaper of general circulation in this state. The first publication must appear before the 14th day before the date bids are to be received.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.061/c"> <num value="c">(c)</num> <content>An entity that has joint ownership of the improvement to be constructed or that is an agent of a joint owner shall award a contract using the entity's contracting procedures.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scC/s163.062"> <num value="163.062">Sec. 163.062.</num> <heading>SALE OR EXCHANGE OF ELECTRIC ENERGY</heading> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.062/a"> <num value="a">(a)</num> <content>An agency may participate through appropriate contracts in power pooling and power exchange agreements with other entities through direct or indirect system interconnections.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.062/b"> <num value="b">(b)</num> <chapeau>An entity that participates with an agency under this section may:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.062/1"> <num value="1">(1)</num> <content>purchase electric energy from the agency;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.062/2"> <num value="2">(2)</num> <content>sell or dispose of electric energy to the agency; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.062/3"> <num value="3">(3)</num> <content>exchange electric energy with the agency.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.062/c"> <num value="c">(c)</num> <content>An entity payment for electric energy purchased from the agency is an operating expense of the entity's electric system.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.062/d"> <num value="d">(d)</num> <content>An agency contract to sell or exchange electric energy may require the purchaser to pay for the electric energy regardless of whether the electric energy is produced or delivered.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scC/s163.063"> <num value="163.063">Sec. 163.063.</num> <heading>RATES AND CHARGES</heading> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.063/a"> <num value="a">(a)</num> <chapeau>An agency may establish and maintain rates and charges for electric power and energy the agency delivers, transmits, or exchanges. The rates and charges must:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.063/1"> <num value="1">(1)</num> <content>be reasonable and in accordance with prudent utility practices;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.063/2"> <num value="2">(2)</num> <content>be based on periodic cost of service studies and subject to modification, unless such a basis for rates and charges is waived by the purchaser by contract; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.063/3"> <num value="3">(3)</num> <content>be developed to recover the agency's cost of producing and transmitting the electric power and energy, as applicable, which cost must include the amortization of capital investment.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.063/b"> <num value="b">(b)</num> <content>Notwithstanding Subsection (a), this state reserves its power to regulate an agency's rates and charges for electric energy supplied by the agency's facilities.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.063/c"> <num value="c">(c)</num> <chapeau>Until obligations issued under this subchapter have been paid and discharged, with all interest on the obligations, interest on unpaid interest installments on the obligations, and other connected and incurred costs or expenses, this state pledges to and agrees with the purchasers and successive holders of the obligations that it will not:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.063/1"> <num value="1">(1)</num> <chapeau>limit or alter the power of an agency to establish and collect rates and charges under this section sufficient to pay:</chapeau> <subparagraph identifier="/us/tx/ut/t4/c163/scC/s163.063/A"> <num value="A">(A)</num> <content>necessary operational and maintenance expenses;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c163/scC/s163.063/B"> <num value="B">(B)</num> <content>interest and principal on obligations issued by the agency;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c163/scC/s163.063/C"> <num value="C">(C)</num> <content>sinking funds and reserve fund payments; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c163/scC/s163.063/D"> <num value="D">(D)</num> <content>other charges necessary to fulfill the terms of any agreement; or</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.063/2"> <num value="2">(2)</num> <content>take any action that will impair the rights or remedies of the holders of the obligations.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scC/s163.064"> <num value="163.064">Sec. 163.064.</num> <heading>REVENUE BONDS</heading> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.064/a"> <num value="a">(a)</num> <content>The agency may issue revenue bonds to accomplish the purposes of the agency.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.064/b"> <num value="b">(b)</num> <content>The agency may pledge to the payment of the obligations the revenues of all or part of its electric facilities, including facilities acquired after the obligations are issued. However, operating and maintenance expenses, including salaries and labor, materials, and repairs of electric facilities necessary to render efficient service constitute a first lien on and charge against the pledged revenue.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.064/c"> <num value="c">(c)</num> <content>The agency may set aside from the proceeds from the sale of the obligations amounts for payment into the interest and sinking fund and reserve fund, and for interest and operating expenses during construction and development, as specified in the proceedings authorizing the obligations.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.064/d"> <num value="d">(d)</num> <content>Obligation proceeds may be invested, pending their use, in securities, interest-bearing certificates, or time deposits as specified in the authorizing proceedings.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.064/e"> <num value="e">(e)</num> <chapeau>Agency obligations are authorized investments for:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.064/1"> <num value="1">(1)</num> <content>a bank;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.064/2"> <num value="2">(2)</num> <content>a savings bank;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.064/3"> <num value="3">(3)</num> <content>a trust company;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.064/4"> <num value="4">(4)</num> <content>a savings and loan association; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.064/5"> <num value="5">(5)</num> <content>an insurance company.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.064/f"> <num value="f">(f)</num> <content>The obligations, when accompanied by all appurtenant, unmatured coupons and to the extent of the lesser of their face value or market value, are eligible to secure the deposit of public funds of this state, a political subdivision of this state, and any other political corporation of this state.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scC/s163.065"> <num value="163.065">Sec. 163.065.</num> <heading>REFUNDING BONDS</heading> <content>The agency may issue refunding bonds.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scC/s163.066"> <num value="163.066">Sec. 163.066.</num> <heading>ISSUANCE, FORM, AND PROVISIONS OF BONDS</heading> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.066/a"> <num value="a">(a)</num> <content>Agency bonds that are payable from agency revenues or anticipated bond proceeds and the records relating to their issuance must be submitted to the attorney general for examination before delivery.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.066/b"> <num value="b">(b)</num> <chapeau>The bonds:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.066/1"> <num value="1">(1)</num> <content>must mature serially or otherwise not more than 50 years after the date of issuance;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.066/2"> <num value="2">(2)</num> <content>may be made redeemable before maturity at the time and at the price or prices set by the agency; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.066/3"> <num value="3">(3)</num> <content>may be sold at public or private sale under the terms and for the price the agency determines to be in the best interest of the agency.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.066/c"> <num value="c">(c)</num> <content>The bonds must be signed by the presiding officer or assistant presiding officer of the agency, be attested by the secretary, and bear the seal of the agency. The signatures may be printed on the bonds if authorized by the agency, and the seal may be impressed or printed on the bonds. The agency may adopt or use for any purpose the signature of an individual who has been an officer of the agency, regardless of whether the individual has ceased to be an officer at the time the bonds are delivered to the purchaser.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scC/s163.067"> <num value="163.067">Sec. 163.067.</num> <heading>NONNEGOTIABLE PURCHASE MONEY NOTES</heading> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.067/a"> <num value="a">(a)</num> <content>The agency may issue nonnegotiable purchase money notes to acquire land or fuel resources.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.067/b"> <num value="b">(b)</num> <chapeau>Nonnegotiable purchase money notes are:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.067/1"> <num value="1">(1)</num> <content>payable in installments;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.067/2"> <num value="2">(2)</num> <content>secured by the property acquired with the notes or other collateral the agency substitutes; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.067/3"> <num value="3">(3)</num> <content>not a security or agency obligation.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.067/c"> <num value="c">(c)</num> <content>Nonnegotiable purchase money notes may be further secured by a promise to issue bonds or bond anticipation notes to pay the purchase money notes.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scC/s163.068"> <num value="163.068">Sec. 163.068.</num> <heading>BOND ANTICIPATION NOTES</heading> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.068/a"> <num value="a">(a)</num> <chapeau>The agency may issue bond anticipation notes:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.068/1"> <num value="1">(1)</num> <content>for any purpose for which the agency may issue bonds; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.068/2"> <num value="2">(2)</num> <content>to refund previously issued bond anticipation notes or nonnegotiable purchase money notes.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.068/b"> <num value="b">(b)</num> <content>Bond anticipation notes are subject to the limitations and conditions prescribed by this subchapter for bonds.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.068/c"> <num value="c">(c)</num> <content>The agency may contract with purchasers of bond anticipation notes that the proceeds of one or more series of bonds will be used to pay or refund the notes.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scC/s164152.155725"> <num value="164152.155725">Sec. 164152.155725.</num> <heading></heading> <content>SUBCHAPTER C-1. ALTERNATE GOVERNANCE FOR CERTAIN MUNICIPAL POWER AGENCIES</content> </section> <section identifier="/us/tx/ut/t4/c163/scC/s163.071"> <num value="163.071">Sec. 163.071.</num> <heading>DEFINITIONS</heading> <chapeau>In this subchapter:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.071/1"> <num value="1">(1)</num> <content>"Agency" means a municipal power agency for which concurrent ordinances are adopted under Section 163.073.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.071/2"> <num value="2">(2)</num> <content>"Bond" includes a note, but does not include a nonnegotiable purchase money note issued under Section 163.067 or 163.087.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.071/3"> <num value="3">(3)</num> <content>"Concurrent ordinance" means an ordinance or order adopted under this subchapter by all of the participating public entities of an agency.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.071/4"> <num value="4">(4)</num> <content>"Obligations" means revenue bonds or notes.</content> </paragraph> <sourceCredit>Added by Acts 2015, 84th Leg., R.S., Ch. 1162 (S.B. 776), Sec. 3, eff. September 1, 2015.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scC/s163.072"> <num value="163.072">Sec. 163.072.</num> <heading>CONSTRUCTION</heading> <content>This subchapter shall be liberally construed to carry out its purpose.</content> <sourceCredit>Added by Acts 2015, 84th Leg., R.S., Ch. 1162 (S.B. 776), Sec. 3, eff. September 1, 2015.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scC/s163.073"> <num value="163.073">Sec. 163.073.</num> <heading>APPLICABILITY; ALTERNATE GOVERNANCE</heading> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.073/a"> <num value="a">(a)</num> <content>This subchapter applies to a municipal power agency created by two or more public entities under Subchapter C or a predecessor statute, including an agency re-created under Section 163.055 or a predecessor statute.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.073/b"> <num value="b">(b)</num> <content>The participating public entities of a municipal power agency may by concurrent ordinance elect to apply this subchapter to the agency as an alternative to Subchapter C.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.073/c"> <num value="c">(c)</num> <chapeau>Concurrent ordinances described by this section must, as adopted by each public entity:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.073/1"> <num value="1">(1)</num> <content>contain identical provisions; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.073/2"> <num value="2">(2)</num> <content>state that the public entity has elected that the agency shall, on and after the date designated in the ordinance, be governed by the provisions of this subchapter.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2015, 84th Leg., R.S., Ch. 1162 (S.B. 776), Sec. 3, eff. September 1, 2015.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scC/s163.074"> <num value="163.074">Sec. 163.074.</num> <heading>CONFLICTS WITH OTHER LAW</heading> <chapeau>This subchapter prevails to the extent of a conflict between this subchapter and any other law, including:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.074/1"> <num value="1">(1)</num> <content>a law regulating the affairs of a municipal corporation; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.074/2"> <num value="2">(2)</num> <content>a home-rule charter provision.</content> </paragraph> <sourceCredit>Added by Acts 2015, 84th Leg., R.S., Ch. 1162 (S.B. 776), Sec. 3, eff. September 1, 2015.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scC/s163.075"> <num value="163.075">Sec. 163.075.</num> <heading>NATURE OF AGENCY</heading> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.075/a"> <num value="a">(a)</num> <chapeau>An agency is a:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.075/1"> <num value="1">(1)</num> <content>separate municipal corporation;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.075/2"> <num value="2">(2)</num> <content>political subdivision of this state; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.075/3"> <num value="3">(3)</num> <content>political entity and corporate body.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.075/b"> <num value="b">(b)</num> <content>An agency may not impose a tax but has all the other powers relating to municipally owned utilities and provided by law to a municipality that owns a public utility.</content> </subsection> <sourceCredit>Added by Acts 2015, 84th Leg., R.S., Ch. 1162 (S.B. 776), Sec. 3, eff. September 1, 2015.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scC/s163.076"> <num value="163.076">Sec. 163.076.</num> <heading>ADDITION OR REMOVAL OF PUBLIC ENTITIES</heading> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.076/a"> <num value="a">(a)</num> <chapeau>The public entities that created or re-created an agency may by concurrent ordinances:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.076/1"> <num value="1">(1)</num> <content>add a new public entity as a participating public entity in the agency; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.076/2"> <num value="2">(2)</num> <content>remove a public entity from participation in the agency.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.076/b"> <num value="b">(b)</num> <chapeau>Concurrent ordinances described by this section must, as adopted by each public entity:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.076/1"> <num value="1">(1)</num> <content>contain identical provisions;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.076/2"> <num value="2">(2)</num> <content>define the boundaries of the agency to include the territory within the boundaries of each participating public entity;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.076/3"> <num value="3">(3)</num> <content>designate the name of the agency; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.076/4"> <num value="4">(4)</num> <content>designate the number, place, terms, and manner of appointment of directors, as provided by Section 163.078.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.076/c"> <num value="c">(c)</num> <content>The public entities may not add or remove a public entity if the addition or removal will impair an agency obligation.</content> </subsection> <sourceCredit>Added by Acts 2015, 84th Leg., R.S., Ch. 1162 (S.B. 776), Sec. 3, eff. September 1, 2015.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scC/s163.077"> <num value="163.077">Sec. 163.077.</num> <heading>ELECTION FOR ADDITION OF PUBLIC ENTITY</heading> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.077/a"> <num value="a">(a)</num> <content>Public entities may not adopt concurrent ordinances under Section 163.076 adding a participating public entity unless the addition has been approved by a majority of the qualified voters of the additional public entity at an election called and held for that purpose.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.077/b"> <num value="b">(b)</num> <chapeau>Notice of an election under this section shall be given in accordance with Section 1251.003, Government Code. The election shall be called and held in accordance with:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.077/1"> <num value="1">(1)</num> <content>the Election Code;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.077/2"> <num value="2">(2)</num> <content>Chapter 1251, Government Code; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.077/3"> <num value="3">(3)</num> <content>this subchapter.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2015, 84th Leg., R.S., Ch. 1162 (S.B. 776), Sec. 3, eff. September 1, 2015.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scC/s163.078"> <num value="163.078">Sec. 163.078.</num> <heading>BOARD OF DIRECTORS</heading> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.078/a"> <num value="a">(a)</num> <content>The agency shall be governed by a board of directors.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.078/b"> <num value="b">(b)</num> <content>The board is responsible for the management, operation, and control of the property belonging to the agency.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.078/c"> <num value="c">(c)</num> <chapeau>The board may by resolution delegate management or operational authority to an officer, employee, or committee of the agency, except that the delegation may not include legislative functions, including the sale or purchase of agency properties, the exercise of the power of eminent domain, the adoption or amendment of budgets and rates, or the issuance of debt. The board may repeal a resolution delegating management or operational authority:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.078/1"> <num value="1">(1)</num> <content>if the board is composed of six or more directors, by the affirmative vote of six directors, including the affirmative vote of at least one director appointed by each participating public entity; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.078/2"> <num value="2">(2)</num> <content>if the board is composed of fewer than six directors, by the affirmative vote of at least one director appointed by each participating public entity.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.078/d"> <num value="d">(d)</num> <content>The board must include at least four directors. Each director must be appointed by place by the governing bodies of the participating public entities. Each participating public entity is entitled to appoint at least one director.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.078/e"> <num value="e">(e)</num> <content>Directors must serve staggered terms. Successor directors are appointed in the same manner as the original appointees.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.078/f"> <num value="f">(f)</num> <chapeau>To qualify to serve as a director, when the person takes the constitutional oath of office, the person must be:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.078/1"> <num value="1">(1)</num> <content>a qualified voter and reside in the boundaries of the appointing public entity;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.078/2"> <num value="2">(2)</num> <content>an employee, officer, or member of the governing body of the appointing public entity; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.078/3"> <num value="3">(3)</num> <content>a retail electric customer of the appointing public entity.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.078/g"> <num value="g">(g)</num> <content>Except as provided by Subsections (h) and (i), an employee, officer, or member of the governing body of a participating public entity serving as a director may not have a personal interest in a contract executed by the agency other than as an employee, officer, or member of the governing body of the public entity.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.078/h"> <num value="h">(h)</num> <content>An employee, officer, or member of the governing body of a participating public entity serving as a director is considered to be a local public official for the purposes of Chapter 171, Local Government Code.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.078/i"> <num value="i">(i)</num> <content>An agency and a participating public entity are considered to be political subdivisions for the purposes of Section 131.903, Local Government Code.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.078/j"> <num value="j">(j)</num> <content>Directors serve without compensation. A director who is an employee, officer, or member of the governing body of a participating public entity may continue to receive from the public entity the compensation associated with the office or employment.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.078/k"> <num value="k">(k)</num> <content>A director serves at the discretion of the appointing public entity. The governing body of a public entity that appoints a director may remove the director from office at any time with or without cause. The governing body shall promptly appoint a new director to serve the remainder of the unexpired term of the removed director.</content> </subsection> <sourceCredit>Added by Acts 2015, 84th Leg., R.S., Ch. 1162 (S.B. 776), Sec. 3, eff. September 1, 2015.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scC/s163.079"> <num value="163.079">Sec. 163.079.</num> <heading>SEPARATE BOARDS OF DIRECTORS</heading> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.079/a"> <num value="a">(a)</num> <content>The public entities that created or re-created an agency may amend the creating concurrent ordinances to provide for the agency to be governed by one board of directors for the agency's generation system and another board of directors for the agency's transmission system.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.079/b"> <num value="b">(b)</num> <content>The concurrent ordinances as amended must contain identical provisions.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.079/c"> <num value="c">(c)</num> <chapeau>Section 163.078 applies to the separate boards and to the directors of the separate boards, except that:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.079/1"> <num value="1">(1)</num> <content>there is no minimum number of directors for a board established under this section;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.079/2"> <num value="2">(2)</num> <content>each participating public entity is not entitled to appoint a director to each board of an agency; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.079/3"> <num value="3">(3)</num> <content>the repeal of a resolution under Section 163.078(c) does not require approval by at least one director appointed by each participating public entity.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.079/d"> <num value="d">(d)</num> <content>Separate boards established under this section are not required to have the same number of directors.</content> </subsection> <sourceCredit>Added by Acts 2015, 84th Leg., R.S., Ch. 1162 (S.B. 776), Sec. 3, eff. September 1, 2015.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scC/s163.080"> <num value="163.080">Sec. 163.080.</num> <heading>POWERS</heading> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.080/a"> <num value="a">(a)</num> <chapeau>An agency may not engage in any utility business other than:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.080/1"> <num value="1">(1)</num> <chapeau>the generation and sale or exchange of electric energy to:</chapeau> <subparagraph identifier="/us/tx/ut/t4/c163/scC/s163.080/A"> <num value="A">(A)</num> <content>a participating public entity; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c163/scC/s163.080/B"> <num value="B">(B)</num> <content>a private entity that owns jointly with the agency an electric generating facility in this state; or</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.080/2"> <num value="2">(2)</num> <content>the provision of wholesale transmission service under Chapter 35.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.080/b"> <num value="b">(b)</num> <chapeau>The agency may:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.080/1"> <num value="1">(1)</num> <content>perform any act necessary to the full exercise of the agency's powers;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.080/2"> <num value="2">(2)</num> <chapeau>enter into a contract, lease, or agreement with or accept a grant or loan from a:</chapeau> <subparagraph identifier="/us/tx/ut/t4/c163/scC/s163.080/A"> <num value="A">(A)</num> <content>department or agency of the United States;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c163/scC/s163.080/B"> <num value="B">(B)</num> <content>department, agency, or political subdivision of this state; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c163/scC/s163.080/C"> <num value="C">(C)</num> <content>public or private person;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.080/3"> <num value="3">(3)</num> <content>use the uniform system of accounts prescribed for utilities and licenses by the Federal Energy Regulatory Commission; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.080/4"> <num value="4">(4)</num> <content>adopt rules to govern the operation of the agency and its employees, facilities, and service.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.080/c"> <num value="c">(c)</num> <content>The agency may sell, lease, convey, or otherwise dispose of any right, interest, or property of the agency, including its electric facilities. A sale, lease, conveyance, or other disposition having a value of more than $10 million shall require prior approval of each participating public entity, unless the public entities have agreed otherwise by written contract or the property was purchased by the agency for mining purposes.</content> </subsection> <sourceCredit>Added by Acts 2015, 84th Leg., R.S., Ch. 1162 (S.B. 776), Sec. 3, eff. September 1, 2015.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scC/s163.081"> <num value="163.081">Sec. 163.081.</num> <heading>CONSTRUCTION CONTRACTS</heading> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.081/a"> <num value="a">(a)</num> <content>Except as provided by Subsection (c), an agency may award a contract for construction of an improvement that involves the expenditure of more than $20,000 only on the basis of competitive bids.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.081/b"> <num value="b">(b)</num> <content>The agency shall publish notice of intent to receive bids once a week for two consecutive weeks in a newspaper of general circulation in this state. The first publication must appear before the 14th day before the date bids are to be received.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.081/c"> <num value="c">(c)</num> <content>An entity that has joint ownership of the improvement to be constructed or that is an agent of a joint owner shall award a contract using the entity's contracting procedures.</content> </subsection> <sourceCredit>Added by Acts 2015, 84th Leg., R.S., Ch. 1162 (S.B. 776), Sec. 3, eff. September 1, 2015.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scC/s163.082"> <num value="163.082">Sec. 163.082.</num> <heading>SALE OR EXCHANGE OF ELECTRIC ENERGY</heading> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.082/a"> <num value="a">(a)</num> <content>An agency may participate through appropriate contracts in power pooling and power exchange agreements with other entities through direct or indirect system interconnections.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.082/b"> <num value="b">(b)</num> <chapeau>An entity that participates with an agency under this section may:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.082/1"> <num value="1">(1)</num> <content>purchase electric energy from the agency;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.082/2"> <num value="2">(2)</num> <content>sell or dispose of electric energy to the agency; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.082/3"> <num value="3">(3)</num> <content>exchange electric energy with the agency.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.082/c"> <num value="c">(c)</num> <content>An entity payment for electric energy purchased from the agency is an operating expense of the entity's electric system.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.082/d"> <num value="d">(d)</num> <content>An agency contract to sell or exchange electric energy may require the purchaser to pay for the electric energy regardless of whether the electric energy is produced or delivered.</content> </subsection> <sourceCredit>Added by Acts 2015, 84th Leg., R.S., Ch. 1162 (S.B. 776), Sec. 3, eff. September 1, 2015.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scC/s163.083"> <num value="163.083">Sec. 163.083.</num> <heading>RATES AND CHARGES</heading> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.083/a"> <num value="a">(a)</num> <chapeau>An agency may establish and maintain rates and charges for electric power and energy the agency delivers, transmits, or exchanges. The rates and charges must:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.083/1"> <num value="1">(1)</num> <content>be reasonable and in accordance with prudent utility practices;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.083/2"> <num value="2">(2)</num> <content>be based on periodic cost of service studies and subject to modification, unless such a basis for rates and charges is waived by the purchaser by contract; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.083/3"> <num value="3">(3)</num> <content>be developed to recover the agency's cost of producing and transmitting the electric power and energy, as applicable, which cost must include the amortization of capital investment.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.083/b"> <num value="b">(b)</num> <content>Notwithstanding Subsection (a), this state reserves its power to regulate an agency's rates and charges for electric energy supplied by the agency's facilities.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.083/c"> <num value="c">(c)</num> <chapeau>Until obligations issued under this chapter have been paid and discharged, with all interest on the obligations, interest on unpaid interest installments on the obligations, and other connected and incurred costs or expenses, this state pledges to and agrees with the purchasers and successive holders of the obligations that it will not:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.083/1"> <num value="1">(1)</num> <chapeau>limit or alter the power of an agency to establish and collect rates and charges under this section sufficient to pay:</chapeau> <subparagraph identifier="/us/tx/ut/t4/c163/scC/s163.083/A"> <num value="A">(A)</num> <content>necessary operational and maintenance expenses;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c163/scC/s163.083/B"> <num value="B">(B)</num> <content>interest and principal on obligations issued by the agency;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c163/scC/s163.083/C"> <num value="C">(C)</num> <content>sinking funds and reserve fund payments; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c163/scC/s163.083/D"> <num value="D">(D)</num> <content>other charges necessary to fulfill the terms of any agreement; or</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.083/2"> <num value="2">(2)</num> <content>take any action that will impair the rights or remedies of the holders of the obligations.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2015, 84th Leg., R.S., Ch. 1162 (S.B. 776), Sec. 3, eff. September 1, 2015.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scC/s163.084"> <num value="163.084">Sec. 163.084.</num> <heading>REVENUE BONDS</heading> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.084/a"> <num value="a">(a)</num> <content>The agency may issue revenue bonds to accomplish the purposes of the agency.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.084/b"> <num value="b">(b)</num> <content>The agency may pledge to the payment of the obligations the revenues of all or part of its electric facilities, including facilities acquired after the obligations are issued. However, operating and maintenance expenses, including salaries and labor, materials, and repairs of electric facilities necessary to render efficient service, constitute a first lien on and charge against the pledged revenue.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.084/c"> <num value="c">(c)</num> <content>The agency may set aside from the proceeds from the sale of the obligations amounts for payment into the interest and sinking fund and reserve fund, and for interest and operating expenses during construction and development, as specified in the proceedings authorizing the obligations.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.084/d"> <num value="d">(d)</num> <content>Obligation proceeds may be invested, pending their use, in securities, interest-bearing certificates, or time deposits as specified in the authorizing proceedings.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.084/e"> <num value="e">(e)</num> <chapeau>Agency obligations are authorized investments for:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.084/1"> <num value="1">(1)</num> <content>a bank;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.084/2"> <num value="2">(2)</num> <content>a savings bank;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.084/3"> <num value="3">(3)</num> <content>a trust company;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.084/4"> <num value="4">(4)</num> <content>a savings and loan association; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.084/5"> <num value="5">(5)</num> <content>an insurance company.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.084/f"> <num value="f">(f)</num> <content>The obligations, when accompanied by all appurtenant, unmatured coupons and to the extent of the lesser of their face value or market value, are eligible to secure the deposit of public funds of this state, a political subdivision of this state, and any other political corporation of this state.</content> </subsection> <sourceCredit>Added by Acts 2015, 84th Leg., R.S., Ch. 1162 (S.B. 776), Sec. 3, eff. September 1, 2015.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scC/s163.085"> <num value="163.085">Sec. 163.085.</num> <heading>REFUNDING BONDS</heading> <content>The agency may issue refunding bonds.</content> <sourceCredit>Added by Acts 2015, 84th Leg., R.S., Ch. 1162 (S.B. 776), Sec. 3, eff. September 1, 2015.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scC/s163.086"> <num value="163.086">Sec. 163.086.</num> <heading>ISSUANCE, FORM, AND PROVISIONS OF BONDS</heading> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.086/a"> <num value="a">(a)</num> <content>Agency bonds that are payable from agency revenues or anticipated bond proceeds and the records relating to their issuance must be submitted to the attorney general for examination before delivery.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.086/b"> <num value="b">(b)</num> <chapeau>The bonds:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.086/1"> <num value="1">(1)</num> <content>must mature serially or otherwise not more than 50 years after the date of issuance;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.086/2"> <num value="2">(2)</num> <content>may be made redeemable before maturity at the time and at the price or prices set by the agency; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.086/3"> <num value="3">(3)</num> <content>may be sold at public or private sale under the terms and for the price the agency determines to be in the best interest of the agency.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.086/c"> <num value="c">(c)</num> <content>The bonds must be signed by the presiding officer or assistant presiding officer of the agency, be attested by the secretary, and bear the seal of the agency. The signatures may be printed on the bonds if authorized by the agency, and the seal may be impressed or printed on the bonds. The agency may adopt or use for any purpose the signature of an individual who has been an officer of the agency, regardless of whether the individual has ceased to be an officer at the time the bonds are delivered to the purchaser.</content> </subsection> <sourceCredit>Added by Acts 2015, 84th Leg., R.S., Ch. 1162 (S.B. 776), Sec. 3, eff. September 1, 2015.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scC/s163.087"> <num value="163.087">Sec. 163.087.</num> <heading>NONNEGOTIABLE PURCHASE MONEY NOTES</heading> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.087/a"> <num value="a">(a)</num> <content>The agency may issue nonnegotiable purchase money notes to acquire land or fuel resources.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.087/b"> <num value="b">(b)</num> <chapeau>Nonnegotiable purchase money notes are:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.087/1"> <num value="1">(1)</num> <content>payable in installments;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.087/2"> <num value="2">(2)</num> <content>secured by the property acquired with the notes or other collateral the agency substitutes; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.087/3"> <num value="3">(3)</num> <content>not a security or agency obligation.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.087/c"> <num value="c">(c)</num> <content>Nonnegotiable purchase money notes may be further secured by a promise to issue bonds or bond anticipation notes to pay the purchase money notes.</content> </subsection> <sourceCredit>Added by Acts 2015, 84th Leg., R.S., Ch. 1162 (S.B. 776), Sec. 3, eff. September 1, 2015.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scC/s163.088"> <num value="163.088">Sec. 163.088.</num> <heading>BOND ANTICIPATION NOTES</heading> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.088/a"> <num value="a">(a)</num> <chapeau>The agency may issue bond anticipation notes:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.088/1"> <num value="1">(1)</num> <content>for any purpose for which the agency may issue bonds; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.088/2"> <num value="2">(2)</num> <content>to refund previously issued bond anticipation notes or nonnegotiable purchase money notes.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.088/b"> <num value="b">(b)</num> <content>Bond anticipation notes are subject to the limitations and conditions prescribed by this subchapter for bonds.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.088/c"> <num value="c">(c)</num> <content>The agency may contract with purchasers of bond anticipation notes that the proceeds of one or more series of bonds will be used to pay or refund the notes.</content> </subsection> <sourceCredit>Added by Acts 2015, 84th Leg., R.S., Ch. 1162 (S.B. 776), Sec. 3, eff. September 1, 2015.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scC/s163.089"> <num value="163.089">Sec. 163.089.</num> <heading>PUBLIC SECURITIES</heading> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.089/a"> <num value="a">(a)</num> <content>It is a public purpose for a public entity that has participated in the creation of an agency to pay costs of planning, acquisition, construction, ownership, operation, and maintenance of electric facilities.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.089/b"> <num value="b">(b)</num> <content>A public entity may issue public securities, as defined by Section 1201.002(2), Government Code, including bonds, notes, or other forms of indebtedness, in the principal amount approved by the governing body of the public entity, for the purpose of financing electric facilities or improvements to electric facilities to be owned or operated by the agency or otherwise in furtherance of a purpose described by this section.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.089/c"> <num value="c">(c)</num> <content>A public entity and an agency may agree in a contract, or by other official action of the public entity and agency, to terms and conditions governing the use by the agency of the proceeds of the public securities issued by a public entity for a purpose described by this section.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.089/d"> <num value="d">(d)</num> <chapeau>A contract or other official action described by Subsection (c) may include provisions with respect to, and conclusively establish sufficient consideration for, the use of the proceeds. The consideration may include the right to:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.089/1"> <num value="1">(1)</num> <content>use the financed facilities or portions of the facilities;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.089/2"> <num value="2">(2)</num> <content>receive output from the financed facilities; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.089/3"> <num value="3">(3)</num> <content>receive an ownership interest in the financed facilities upon the dissolution of the agency or an undivided interest in the financed facilities at the time a public entity funds facility improvements.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.089/e"> <num value="e">(e)</num> <content>A contract or other official action described by Subsection (c) may contain other terms and extend for any period on which all of the parties agree.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.089/f"> <num value="f">(f)</num> <chapeau>A public security issued for the purposes described by this section may include:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.089/1"> <num value="1">(1)</num> <content>debt obligations issued in accordance with Chapter 1207, 1331, 1371, 1431, or 1502, Government Code, or Chapter 271, Local Government Code; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.089/2"> <num value="2">(2)</num> <content>other types or forms of debt that the public entity is authorized to issue.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.089/g"> <num value="g">(g)</num> <content>Each participating public entity may exercise any power of an issuer under Chapter 1371, Government Code.</content> </subsection> <sourceCredit>Added by Acts 2015, 84th Leg., R.S., Ch. 1162 (S.B. 776), Sec. 3, eff. September 1, 2015.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scC/s163.090"> <num value="163.090">Sec. 163.090.</num> <heading>DISSOLUTION</heading> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.090/a"> <num value="a">(a)</num> <content>The participating public entities of an agency may by concurrent ordinance dissolve the agency.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.090/b"> <num value="b">(b)</num> <chapeau>Concurrent ordinances dissolving an agency must:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.090/1"> <num value="1">(1)</num> <content>contain identical provisions;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.090/2"> <num value="2">(2)</num> <content>state that the agency will be dissolved upon the winding up of agency affairs;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.090/3"> <num value="3">(3)</num> <content>direct the board or boards of the agency to wind up the business and affairs of the agency and to inform the participating public entities by resolution when the winding up of the business and affairs of the agency is complete; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.090/4"> <num value="4">(4)</num> <content>state the date on which the dissolution takes effect, provided that the date provides sufficient time for the board or boards of the agency to wind up agency affairs.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.090/c"> <num value="c">(c)</num> <content>The participating public entities may not dissolve an agency if the dissolution will impair the rights or remedies of holders of obligations issued by the agency.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.090/d"> <num value="d">(d)</num> <chapeau>The dissolved agency continues to exist to:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.090/1"> <num value="1">(1)</num> <content>satisfy existing liabilities or obligations;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.090/2"> <num value="2">(2)</num> <content>collect, distribute, or liquidate its assets; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scC/s163.090/3"> <num value="3">(3)</num> <content>take any other action required to adjust and wind up its business and affairs.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.090/e"> <num value="e">(e)</num> <content>The assets of the dissolved agency that remain after all liabilities or obligations of the agency have been satisfied shall be distributed to the public entities that created the agency. The public entities shall establish the method of distribution by agreement.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scC/s163.090/f"> <num value="f">(f)</num> <content>An agreement between a public entity and an agency entered into before September 1, 2015, regarding the distribution of the agency's assets after dissolution is enforceable according to the terms of the agreement, regardless of a provision to the contrary in this subchapter.</content> </subsection> <sourceCredit>Added by Acts 2015, 84th Leg., R.S., Ch. 1162 (S.B. 776), Sec. 3, eff. September 1, 2015.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t4/c163/scD"> <num value="D">SUBCHAPTER D.</num> <heading>AGENCY RECEIVING POWER THROUGH INTERSTATE SYSTEM</heading> <section identifier="/us/tx/ut/t4/c163/scD/s163.101"> <num value="163.101">Sec. 163.101.</num> <heading>CREATION</heading> <subsection identifier="/us/tx/ut/t4/c163/scD/s163.101/a"> <num value="a">(a)</num> <chapeau>Notwithstanding Section 163.054, two or more public entities may create a municipal power agency governed by Subchapter C if the entities:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scD/s163.101/1"> <num value="1">(1)</num> <content>are municipalities;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scD/s163.101/2"> <num value="2">(2)</num> <content>are engaged in the distribution and sale of electric energy to the public; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scD/s163.101/3"> <num value="3">(3)</num> <content>receive a major portion of their power through or from an interstate electric system.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scD/s163.101/b"> <num value="b">(b)</num> <content>The entities must comply with the provisions of Subchapter C relating to the creation of a municipal power agency, including the concurrent ordinance and election provisions.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scD/s163.102"> <num value="163.102">Sec. 163.102.</num> <heading>POWERS</heading> <subsection identifier="/us/tx/ut/t4/c163/scD/s163.102/a"> <num value="a">(a)</num> <chapeau>An agency created under this subchapter may:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scD/s163.102/1"> <num value="1">(1)</num> <content>generate and transmit electric power and energy inside and outside this state;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scD/s163.102/2"> <num value="2">(2)</num> <content>sell, purchase, or exchange electric power and energy with entities inside or outside this state; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scD/s163.102/3"> <num value="3">(3)</num> <content>construct or acquire new steam electric generating facilities, but only if the facilities are owned jointly by the agency and one or more private entities.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c163/scD/s163.102/b"> <num value="b">(b)</num> <content>This section does not authorize an agency created under this subchapter to engage in the distribution and retail sale of electric power and energy.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t4/c163/scE"> <num value="E">SUBCHAPTER E.</num> <heading>ELECTRIC COOPERATIVE CORPORATIONS</heading> <section identifier="/us/tx/ut/t4/c163/scE/s163.121"> <num value="163.121">Sec. 163.121.</num> <heading>CREATION</heading> <content>An electric cooperative corporation may join one or more public entities to create a joint powers agency as if the corporation were also a public entity.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scE/s163.122"> <num value="163.122">Sec. 163.122.</num> <heading>APPLICATION OF OPEN MEETINGS LAW</heading> <content>A joint powers agency created under this subchapter is a governmental body subject to Chapter 551, Government Code.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scE/s163.123"> <num value="163.123">Sec. 163.123.</num> <heading>AUTHORITY OF PUBLIC UTILITY COMMISSION</heading> <chapeau>A joint powers agency created under this subchapter is:</chapeau> <paragraph identifier="/us/tx/ut/t4/c163/scE/s163.123/1"> <num value="1">(1)</num> <content>subject to all applicable provisions of Title 2; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c163/scE/s163.123/2"> <num value="2">(2)</num> <content>under the jurisdiction of the Public Utility Commission of Texas as provided by Title 2.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c163/scE/s163.124"> <num value="163.124">Sec. 163.124.</num> <heading>POWER TO ISSUE CERTAIN BONDS OR SECURITIES</heading> <content>This subchapter does not authorize an electric cooperative corporation to issue bonds or other securities that are tax exempt under federal law.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t4/c164"> <num value="164">CHAPTER 164.</num> <heading>JOINT OWNERSHIP OF ELECTRIC FACILITIES BY PUBLIC ENTITIES</heading> <section identifier="/us/tx/ut/t4/c164/s164.001"> <num value="164.001">Sec. 164.001.</num> <heading>JOINT OWNERSHIP OF ELECTRIC UTILITY FACILITIES AUTHORIZED</heading> <subsection identifier="/us/tx/ut/t4/c164/s164.001/a"> <num value="a">(a)</num> <content>Political subdivisions may join together to finance, construct, complete, acquire, or operate electric utility facilities so that the facilities or an undivided interest in the facilities is jointly owned by the political subdivisions as cotenants or co-owners.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c164/s164.001/b"> <num value="b">(b)</num> <content>The ownership shares in the facilities are those approved by the governing bodies of the political subdivisions, as set forth in an agreement authorized by the governing bodies.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c164/s164.002"> <num value="164.002">Sec. 164.002.</num> <heading>PUBLIC PURPOSE</heading> <content>The exercise by a political subdivision of the authority granted by this chapter, including the exercise of the power to issue bonds, notes, or other obligations to accomplish the purposes of this chapter, and the performance of an agreement entered into under this chapter are considered to be additional public purposes of the political subdivision, without regard to any express or implied limitation on the authority or purposes of the political subdivision under any other general or special law or charter provision.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c164/s164.003"> <num value="164.003">Sec. 164.003.</num> <heading>APPROVAL OF AGREEMENT BY ATTORNEY GENERAL</heading> <subsection identifier="/us/tx/ut/t4/c164/s164.003/a"> <num value="a">(a)</num> <content>An agreement between political subdivisions establishing an interest in electric utility facilities that is executed under this chapter shall be submitted to the attorney general in connection with any proceeding to finance the contractual obligation by the issuance of bonds.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c164/s164.003/b"> <num value="b">(b)</num> <content>An agreement submitted under Subsection (a) is incontestable on approval as to legality by the attorney general.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c164/s164.004"> <num value="164.004">Sec. 164.004.</num> <heading>INCREASE IN OWNERSHIP SHARES</heading> <subsection identifier="/us/tx/ut/t4/c164/s164.004/a"> <num value="a">(a)</num> <content>An agreement under this chapter may provide for a political subdivision to increase its present or future ownership share of the electric utility facilities by installment purchase payments and for another political subdivision that is a party to the agreement to transfer, in consideration of those payments, any portion of its present or future ownership share of the facilities to the purchasing political subdivision.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c164/s164.004/b"> <num value="b">(b)</num> <content>A payment made by a political subdivision to acquire an ownership interest is not treated as a maintenance and operating expense but is treated as a capital cost as if the political subdivision had issued bonds to construct or acquire the ownership interest, unless otherwise specified in the agreement.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c164/s164.005"> <num value="164.005">Sec. 164.005.</num> <heading>CONTRACTUAL OBLIGATIONS AS LIEN ON SYSTEM REVENUE</heading> <subsection identifier="/us/tx/ut/t4/c164/s164.005/a"> <num value="a">(a)</num> <content>If the electric utility facilities financed, acquired, constructed, or completed are a part of a utility system of a political subdivision, the obligation to make the contract payments to acquire an ownership interest is a lien on the revenue of the system on a parity with the outstanding bonds of the system to the extent permitted in the ordinance or resolution authorizing or the deed of trust or indenture securing the payment of the outstanding bonds.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c164/s164.005/b"> <num value="b">(b)</num> <chapeau>If the ordinance or resolution authorizing or the deed of trust or trust indenture securing the revenue bonds of a utility system provides for the subsequent issuance of additional bonds or the creation of a contractual obligation described by Section 164.004 and provides that the payments to be made for the security or payment of the subsequent bonds or contractual obligation are to be on a parity with the previously issued bonds or bonds then to be issued, the political subdivision may, subject to any conditions contained in that ordinance, resolution, deed of trust, or trust indenture, authorize, issue, and sell additional bonds or incur the contractual obligation in a different series payable from the entire revenue of the utility system on a parity with the previously issued bonds or bonds then to be issued and secured by a lien on the revenue of the system on a parity with the lien securing the previously issued bonds or bonds then to be issued. This subsection applies without regard to whether the previously issued bonds:</chapeau> <paragraph identifier="/us/tx/ut/t4/c164/s164.005/1"> <num value="1">(1)</num> <content>were issued before August 29, 1977; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c164/s164.005/2"> <num value="2">(2)</num> <content>are an original issue or a refunding issue.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c164/s164.005/c"> <num value="c">(c)</num> <content>A political subdivision may pledge the revenue of a utility system to pay contract payments to acquire an ownership interest in an electric utility facility under this chapter.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c164/s164.005/d"> <num value="d">(d)</num> <content>In this section, "utility system" includes a combined utility system.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c164/s164.006"> <num value="164.006">Sec. 164.006.</num> <heading>CONSTRUCTION WITH OTHER LAWS</heading> <content>To provide full authority for the execution of an agreement under this chapter, this chapter applies to a municipality as if this chapter were originally contained in Chapter 1501 or 1502, Government Code, or Chapter 552, Local Government Code. This chapter prevails over any charter provision or general or special law.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.405, eff. Sept. 1, 2001. Amended by: Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278), Sec. 3.77(30), eff. April 1, 2009.</sourceCredit> </section> </chapter> <chapter identifier="/us/tx/ut/t4/c181"> <num value="181">CHAPTER 181.</num> <heading>MISCELLANEOUS POWERS AND DUTIES OF UTILITIES</heading> <subchapter identifier="/us/tx/ut/t4/c181/scA"> <num value="A">SUBCHAPTER A.</num> <heading>POWERS AND DUTIES OF GAS AND ELECTRIC CORPORATIONS</heading> <section identifier="/us/tx/ut/t4/c181/scA/s181.001"> <num value="181.001">Sec. 181.001.</num> <heading>DEFINITIONS</heading> <chapeau>In this chapter:</chapeau> <paragraph identifier="/us/tx/ut/t4/c181/scA/s181.001/1"> <num value="1">(1)</num> <chapeau>"Corporation" includes:</chapeau> <subparagraph identifier="/us/tx/ut/t4/c181/scA/s181.001/A"> <num value="A">(A)</num> <content>a partnership, limited partnership, or master limited partnership;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c181/scA/s181.001/B"> <num value="B">(B)</num> <content>a combination of business entities composed exclusively of corporations or in which a corporation is a general partner;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c181/scA/s181.001/C"> <num value="C">(C)</num> <content>a limited liability company; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c181/scA/s181.001/D"> <num value="D">(D)</num> <content>a gas utility or electric utility regardless of form of organization, but not including a municipally owned utility.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scA/s181.001/2"> <num value="2">(2)</num> <content>"Electric corporation" means an electric current and power corporation.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 11, Sec. 3, eff. May 3, 1999; Acts 2003, 78th Leg., ch. 559, Sec. 1, eff. June 20, 2003.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c181/scA/s181.002"> <num value="181.002">Sec. 181.002.</num> <heading>CORPORATE POWERS</heading> <content>A gas or electric corporation has the powers and rights of a corporation organized for profit in this state whenever those powers and duties may be applicable.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c181/scA/s181.003"> <num value="181.003">Sec. 181.003.</num> <heading>AUTHORITY TO BORROW MONEY, ISSUE STOCK, OR MORTGAGE PROPERTY</heading> <chapeau>A gas or electric corporation has the right to:</chapeau> <paragraph identifier="/us/tx/ut/t4/c181/scA/s181.003/1"> <num value="1">(1)</num> <content>borrow money;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scA/s181.003/2"> <num value="2">(2)</num> <content>issue stock, including preferred stock; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scA/s181.003/3"> <num value="3">(3)</num> <content>mortgage a franchise or other property of the corporation to secure a debt contracted for any purpose of the corporation.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c181/scA/s181.004"> <num value="181.004">Sec. 181.004.</num> <heading>CONDEMNATION OF PROPERTY</heading> <content>A gas or electric corporation has the right and power to enter on, condemn, and appropriate the land, right-of-way, easement, or other property of any person or corporation.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c181/scA/s181.005"> <num value="181.005">Sec. 181.005.</num> <heading>AUTHORITY TO LAY AND MAINTAIN LINES</heading> <subsection identifier="/us/tx/ut/t4/c181/scA/s181.005/a"> <num value="a">(a)</num> <chapeau>A gas corporation has the right to lay and maintain lines over, along, under, and across a public road, an interurban railroad, a street railroad, a canal or stream, or a municipal street or alley and over, under, and across a railroad or a railroad right-of-way only if:</chapeau> <paragraph identifier="/us/tx/ut/t4/c181/scA/s181.005/1"> <num value="1">(1)</num> <chapeau>the pipeline complies with:</chapeau> <subparagraph identifier="/us/tx/ut/t4/c181/scA/s181.005/A"> <num value="A">(A)</num> <content>all safety regulations adopted by the Railroad Commission of Texas and all federal regulations relating to pipeline facilities and pipelines; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c181/scA/s181.005/B"> <num value="B">(B)</num> <content>all rules adopted by the Texas Department of Transportation or the Railroad Commission of Texas and all federal regulations regarding the accommodation of utility facilities on a right-of-way, including regulations relating to the horizontal or vertical placement of the pipeline; and</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scA/s181.005/2"> <num value="2">(2)</num> <content>the owner or operator of the pipeline ensures that the public right-of-way and any associated facility are promptly restored to their former condition of usefulness after the installation or maintenance of the pipeline.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scA/s181.005/b"> <num value="b">(b)</num> <content>The right granted by Subsection (a) relating to the use of a municipal street or alley is subject to the payment of charges in accordance with Section 121.2025 of this code and Sections 182.025 and 182.026, Tax Code.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scA/s181.005/c"> <num value="c">(c)</num> <chapeau>In determining the route of a pipeline within a municipality, a gas corporation shall consider using existing easements and public rights-of-way, including streets, roads, highways, and utility rights-of-way. In deciding whether to use a public easement or right-of-way, the gas corporation shall consider whether:</chapeau> <paragraph identifier="/us/tx/ut/t4/c181/scA/s181.005/1"> <num value="1">(1)</num> <content>the use is economically practicable;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scA/s181.005/2"> <num value="2">(2)</num> <content>adequate space exists; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scA/s181.005/3"> <num value="3">(3)</num> <content>the use will violate, or cause the violation of any pipeline safety regulations.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scA/s181.005/d"> <num value="d">(d)</num> <chapeau>The Texas Department of Transportation may require the owner or operator of a pipeline to relocate the pipeline:</chapeau> <paragraph identifier="/us/tx/ut/t4/c181/scA/s181.005/1"> <num value="1">(1)</num> <content>at the expense of the owner or operator of the pipeline, if the pipeline is located on a right-of-way of the state highway system;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scA/s181.005/2"> <num value="2">(2)</num> <content>at the expense of this state, if the pipeline is located on property in which the owner or operator of the pipeline has a private interest; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scA/s181.005/3"> <num value="3">(3)</num> <content>in accordance with Section 203.092, Transportation Code, at the expense of this state, if the pipeline is owned or operated by a gas utility as defined by Section 181.021 of this code or a common carrier as defined by Chapter 111, Natural Resources Code.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scA/s181.005/e"> <num value="e">(e)</num> <content>Rules adopted by the Texas Department of Transportation regarding horizontal and vertical placement of pipelines must be reasonable and, for rights-of-way of the state highway system, must provide an appeals process through the Texas Department of Transportation.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2009, 81st Leg., R.S., Ch. 1311 (H.B. 2572), Sec. 2, eff. June 19, 2009. Acts 2011, 82nd Leg., R.S., Ch. 313 (H.B. 2289), Sec. 1, eff. June 17, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c181/scA/s181.006"> <num value="181.006">Sec. 181.006.</num> <heading>CONSENT REQUIRED IN MUNICIPALITY</heading> <content>A gas corporation may exercise authority under Section 181.005 in relation to a municipal street or alley with the consent of and subject to the direction of the governing body of the municipality.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c181/scA/s181.007"> <num value="181.007">Sec. 181.007.</num> <heading>AUTHORITY TO HOLD LAND OR OTHER PROPERTY</heading> <content>A gas or electric corporation has the power to own, hold, or use land, a right-of-way, an easement, a franchise, or a building or other structure as necessary for the purpose of the corporation.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c181/scA/s181.008"> <num value="181.008">Sec. 181.008.</num> <heading>AUTHORITY RELATING TO TRANSPORT OR SALE</heading> <subsection identifier="/us/tx/ut/t4/c181/scA/s181.008/a"> <num value="a">(a)</num> <content>A gas or electric corporation has the power to generate, make, manufacture, transport, and sell gas, electric current, and power to an individual, the public, or a municipality for any purpose.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scA/s181.008/b"> <num value="b">(b)</num> <chapeau>A gas or electric corporation may:</chapeau> <paragraph identifier="/us/tx/ut/t4/c181/scA/s181.008/1"> <num value="1">(1)</num> <content>impose reasonable charges for an action taken under Subsection (a); and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scA/s181.008/2"> <num value="2">(2)</num> <content>construct, maintain, and operate power plants and substations and any machinery, apparatus, pipe, pole, wire, device, or arrangements as necessary to operate its lines in this state.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c181/scA/s181.009"> <num value="181.009">Sec. 181.009.</num> <heading>DISCRIMINATION PROHIBITED</heading> <chapeau>A gas or electric corporation may not discriminate against a person, corporation, firm, association, or location in:</chapeau> <paragraph identifier="/us/tx/ut/t4/c181/scA/s181.009/1"> <num value="1">(1)</num> <content>charging for gas, electric current, or power; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scA/s181.009/2"> <num value="2">(2)</num> <content>providing service under similar circumstances.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t4/c181/scB"> <num value="B">SUBCHAPTER B.</num> <heading>PROVISIONS APPLYING TO GAS UTILITIES</heading> <section identifier="/us/tx/ut/t4/c181/scB/s181.021"> <num value="181.021">Sec. 181.021.</num> <heading>DEFINITIONS</heading> <chapeau>In this subchapter:</chapeau> <paragraph identifier="/us/tx/ut/t4/c181/scB/s181.021/1"> <num value="1">(1)</num> <content>"Gas facility" means a pipe, main, conductor, or other facility or fixture used to carry gas.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scB/s181.021/2"> <num value="2">(2)</num> <content>"Gas utility" means a person, firm, corporation, or municipality engaged in the business of transporting or distributing gas for public consumption.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c181/scB/s181.022"> <num value="181.022">Sec. 181.022.</num> <heading>AUTHORITY TO LAY AND MAINTAIN GAS FACILITY</heading> <content>A gas utility has the right to lay and maintain a gas facility through, under, along, across, or over a public highway, a public road, a public street or alley, or public water.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c181/scB/s181.023"> <num value="181.023">Sec. 181.023.</num> <heading>CONSENT REQUIRED IN MUNICIPALITY</heading> <content>A gas utility may exercise authority under Section 181.022 in a municipality with the consent of and subject to the direction of the governing body of the municipality.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c181/scB/s181.024"> <num value="181.024">Sec. 181.024.</num> <heading>NOTICE TO STATE OR COUNTY</heading> <subsection identifier="/us/tx/ut/t4/c181/scB/s181.024/a"> <num value="a">(a)</num> <chapeau>A gas utility proposing under this subchapter to locate a gas facility in the right-of-way of a state highway or a county road not in a municipality shall give notice of the proposal to:</chapeau> <paragraph identifier="/us/tx/ut/t4/c181/scB/s181.024/1"> <num value="1">(1)</num> <content>the Texas Transportation Commission if the proposal relates to a state highway; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scB/s181.024/2"> <num value="2">(2)</num> <content>the commissioners court of the county if the proposal relates to a county road.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scB/s181.024/b"> <num value="b">(b)</num> <content>On receipt of the notice, the Texas Transportation Commission or the commissioners court may designate the location in the right-of-way where the gas utility may place the gas facility.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c181/scB/s181.025"> <num value="181.025">Sec. 181.025.</num> <heading>RELOCATION OF GAS FACILITY TO ALLOW CHANGE TO TRAFFIC LANE</heading> <subsection identifier="/us/tx/ut/t4/c181/scB/s181.025/a"> <num value="a">(a)</num> <content>The authority of the Texas Transportation Commission under this section is limited to a gas facility on a state highway not in a municipality. The authority of the commissioners court under this section is limited to a gas facility on a county road not in a municipality.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scB/s181.025/b"> <num value="b">(b)</num> <content>The Texas Transportation Commission or the commissioners court of a county may require a gas utility to relocate the utility's gas facility, at the utility's own expense, to allow the widening or other changing of a traffic lane.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scB/s181.025/c"> <num value="c">(c)</num> <content>To impose a requirement under this section, the Texas Transportation Commission or the commissioners court, as appropriate, must give to the gas utility 30 days' written notice of the requirement. The notice must identify the gas facility to be relocated and indicate the location on the new right-of-way where the gas utility may place the facility.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scB/s181.025/d"> <num value="d">(d)</num> <content>The gas utility shall replace the grade and surface of the highway or road at the utility's own expense.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c181/scB/s181.026"> <num value="181.026">Sec. 181.026.</num> <heading>EFFECT OF MUNICIPAL INCORPORATION ON GAS FACILITY PREVIOUSLY LAID</heading> <content>A gas utility having a gas facility located in an area that becomes incorporated after the facility is in place may continue to exercise in that area the authority granted by this subchapter until the 10th anniversary of the date of the incorporation without the consent of but subject to the direction of the governing body of the municipality.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t4/c181/scC"> <num value="C">SUBCHAPTER C.</num> <heading>PROVISIONS APPLYING TO ELECTRIC UTILITIES</heading> <section identifier="/us/tx/ut/t4/c181/scC/s181.041"> <num value="181.041">Sec. 181.041.</num> <heading>DEFINITIONS</heading> <chapeau>In this subchapter:</chapeau> <paragraph identifier="/us/tx/ut/t4/c181/scC/s181.041/1"> <num value="1">(1)</num> <chapeau>"Electric utility" means:</chapeau> <subparagraph identifier="/us/tx/ut/t4/c181/scC/s181.041/A"> <num value="A">(A)</num> <content>an electric cooperative organized under Chapter 161;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c181/scC/s181.041/B"> <num value="B">(B)</num> <content>a corporation or river authority, if the river authority is created by a statute of this state:</content> </subparagraph> </paragraph> <subsection identifier="/us/tx/ut/t4/c181/scC/s181.041/i"> <num value="i">(i)</num> <chapeau>that generates, transmits, or distributes electric energy in this state; and</chapeau> <clause identifier="/us/tx/ut/t4/c181/scC/s181.041/ii"> <num value="ii">(ii)</num> <content>whose operations are subject to the judicial and legislative processes of this state; or</content> </clause> <subparagraph identifier="/us/tx/ut/t4/c181/scC/s181.041/C"> <num value="C">(C)</num> <content>a municipal electric utility.</content> </subparagraph> <paragraph identifier="/us/tx/ut/t4/c181/scC/s181.041/2"> <num value="2">(2)</num> <content>"Municipal electric utility" means a municipality in this state that owns and operates an electric generating plant or that operates electric transmission lines or an electric distribution system.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scC/s181.041/3"> <num value="3">(3)</num> <content>"Distribution line" means a power line operated below 60,000 volts when measured phase to phase.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scC/s181.041/4"> <num value="4">(4)</num> <content>"Transmission line" means a power line operated at 60,000 volts or more when measured phase to phase.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2013, 83rd Leg., R.S., Ch. 77 (S.B. 349), Sec. 1, eff. May 18, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c181/scC/s181.042"> <num value="181.042">Sec. 181.042.</num> <heading>AUTHORITY TO CONSTRUCT, MAINTAIN, AND OPERATE LINES</heading> <content>An electric utility has the right to construct, maintain, and operate lines over, under, across, on, or along a state highway, a county road, a municipal street or alley, or other public property in a municipality.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c181/scC/s181.043"> <num value="181.043">Sec. 181.043.</num> <heading>CONSENT REQUIRED IN MUNICIPALITY</heading> <subsection identifier="/us/tx/ut/t4/c181/scC/s181.043/a"> <num value="a">(a)</num> <content>An electric utility may exercise authority under Section 181.042 in a municipality with the consent of and subject to the direction of the governing body of the municipality.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scC/s181.043/b"> <num value="b">(b)</num> <content>Subsection (a) does not apply to a municipal electric utility exercising authority under Section 181.042 in its municipal territory.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c181/scC/s181.044"> <num value="181.044">Sec. 181.044.</num> <heading>NOTICE TO STATE OR COUNTY</heading> <subsection identifier="/us/tx/ut/t4/c181/scC/s181.044/a"> <num value="a">(a)</num> <chapeau>An electric utility proposing under this subchapter to construct a line along the right-of-way of a state highway or a county road not in a municipality shall give notice of the proposal to:</chapeau> <paragraph identifier="/us/tx/ut/t4/c181/scC/s181.044/1"> <num value="1">(1)</num> <content>the Texas Transportation Commission if the proposal relates to a state highway; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scC/s181.044/2"> <num value="2">(2)</num> <content>the commissioners court of the county if the proposal relates to a county road.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scC/s181.044/b"> <num value="b">(b)</num> <content>On receipt of the notice, the Texas Transportation Commission or the commissioners court may designate the location along the right-of-way where the electric utility may construct the line.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c181/scC/s181.045"> <num value="181.045">Sec. 181.045.</num> <heading>STANDARDS FOR CONSTRUCTION, OPERATION, AND MAINTENANCE OF LINES</heading> <subsection identifier="/us/tx/ut/t4/c181/scC/s181.045/a"> <num value="a">(a)</num> <content>A municipal electric utility shall construct, operate, and maintain its transmission lines and distribution lines along highways and at other places in accordance with the national electrical safety code. With regard to clearances, an electric utility that is not a municipal electric utility shall construct, operate, and maintain its transmission lines and distribution lines along highways and at other places in accordance with the national electrical safety code.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scC/s181.045/b"> <num value="b">(b)</num> <chapeau>Regardless of Subsection (a), an electric utility shall:</chapeau> <paragraph identifier="/us/tx/ut/t4/c181/scC/s181.045/1"> <num value="1">(1)</num> <content>use single pole construction for a line along a highway or county road;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scC/s181.045/2"> <num value="2">(2)</num> <content>construct a transmission line that crosses a highway or road so that the line is at least 22 feet above the surface of the traffic lane; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scC/s181.045/3"> <num value="3">(3)</num> <content>construct a line that is above a railroad track or railroad siding so that the line is at least 22 feet above the surface of the track or siding.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scC/s181.045/c"> <num value="c">(c)</num> <content>Subsection (a) does not apply to a line in a municipality to the extent an ordinance or regulation applying in the municipality provides differently than the national electrical safety code.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scC/s181.045/d"> <num value="d">(d)</num> <content>In this section, "national electrical safety code" means the National Electrical Safety Code, as published in March 1948 by the National Bureau of Standards, Handbook 30, as revised by Handbook 81, published by the National Bureau of Standards in November 1961.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2013, 83rd Leg., R.S., Ch. 77 (S.B. 349), Sec. 2, eff. May 18, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c181/scC/s181.046"> <num value="181.046">Sec. 181.046.</num> <heading>RELOCATION OF LINE TO ALLOW ROAD OR DITCH IMPROVEMENT</heading> <subsection identifier="/us/tx/ut/t4/c181/scC/s181.046/a"> <num value="a">(a)</num> <content>The authority of the Texas Transportation Commission under this section is limited to a line on a state highway not in a municipality. The authority of the commissioners court under this section is limited to a line on a county road not in a municipality.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scC/s181.046/b"> <num value="b">(b)</num> <chapeau>The Texas Transportation Commission or the commissioners court of a county may require an electric utility to relocate a line of the utility, at the utility's own expense, to allow the:</chapeau> <paragraph identifier="/us/tx/ut/t4/c181/scC/s181.046/1"> <num value="1">(1)</num> <content>widening of a right-of-way;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scC/s181.046/2"> <num value="2">(2)</num> <content>changing of a traffic lane;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scC/s181.046/3"> <num value="3">(3)</num> <content>improving of a road bed; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scC/s181.046/4"> <num value="4">(4)</num> <content>improving of a drainage ditch located on a right-of-way.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scC/s181.046/c"> <num value="c">(c)</num> <content>To impose a requirement under this section, the Texas Transportation Commission or the commissioners court, as appropriate, must give to the electric utility 30 days' written notice of the requirement. The notice must identify the line to be relocated and indicate the location on the new right-of-way where the electric utility may place the line.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c181/scC/s181.047"> <num value="181.047">Sec. 181.047.</num> <heading>EFFECT OF MUNICIPAL INCORPORATION ON LINE PREVIOUSLY CONSTRUCTED</heading> <subsection identifier="/us/tx/ut/t4/c181/scC/s181.047/a"> <num value="a">(a)</num> <content>An electric utility that owns a line on a state highway or county road in a city or town that, at the time of the construction of the line, is unincorporated but that later incorporates as a municipality may continue to exercise in the municipality the authority granted by Section 181.042 until the 10th anniversary of the date of the incorporation.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scC/s181.047/b"> <num value="b">(b)</num> <content>After that period, to continue to exercise the authority in the municipality the electric utility must have the consent of the governing body of the municipality.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scC/s181.047/c"> <num value="c">(c)</num> <content>The governing body of the municipality may require the electric utility to relocate a pole or line, at the utility's own expense, to allow the widening or straightening of a street. To impose a requirement under this subsection, the governing body of the municipality must give to the electric utility 30 days' notice. The notice must indicate the new location for the pole or line along the right-of-way of the street.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scC/s181.047/d"> <num value="d">(d)</num> <content>This section does not prohibit a municipality from imposing a tax or special charge for the use of a street as authorized by Subchapter B, Chapter 182, Tax Code.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c181/scC/s181.048"> <num value="181.048">Sec. 181.048.</num> <heading>ELECTRIC COOPERATIVE BROADBAND FACILITIES</heading> <subsection identifier="/us/tx/ut/t4/c181/scC/s181.048/a"> <num value="a">(a)</num> <chapeau>In this section:</chapeau> <paragraph identifier="/us/tx/ut/t4/c181/scC/s181.048/1"> <num value="1">(1)</num> <chapeau>"Broadband service" means Internet service with the capability of providing:</chapeau> <subparagraph identifier="/us/tx/ut/t4/c181/scC/s181.048/A"> <num value="A">(A)</num> <content>a download speed of 25 megabits per second or faster; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c181/scC/s181.048/B"> <num value="B">(B)</num> <content>an upload speed of three megabits per second or faster.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scC/s181.048/2"> <num value="2">(2)</num> <content>"Electric cooperative" means an electric cooperative organized under Chapter 161 or a predecessor statute to Chapter 161.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scC/s181.048/b"> <num value="b">(b)</num> <content>An electric cooperative or electric cooperative affiliate may construct, operate, and maintain fiber optic cables and other facilities for providing broadband service over, under, across, on, or along real property, personal property, rights-of-way, easements, and licenses and other property rights owned, held, or used by the cooperative. An easement or other property right owned, held, or used by the electric cooperative to provide electricity or other services may also be used to provide broadband service.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scC/s181.048/c"> <num value="c">(c)</num> <content>The monetary rates applicable to an electric cooperative or electric cooperative affiliate for attaching broadband facilities on the electric cooperative's poles must be just and reasonable and may not be less than the monetary rates the electric cooperative charges to other broadband service providers for attaching broadband facilities to the electric cooperative's poles. The terms and conditions applicable to an electric cooperative or electric cooperative affiliate for attaching broadband facilities on the electric cooperative's poles must be just and reasonable and be comparable to the terms and conditions the electric cooperative applies to other broadband service providers for attaching broadband facilities to the electric cooperative's poles. This subsection does not limit or restrict an electric cooperative or electric cooperative affiliate from installing fiber optic cables in the supply space of the electric cooperative's poles.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scC/s181.048/d"> <num value="d">(d)</num> <content>An electric cooperative or electric cooperative affiliate that provides broadband service shall maintain separate books and records of broadband service operations and the broadband service operations of any subsidiary and shall ensure that the rates charged for provision of electric service do not include any broadband service costs or any other costs not related to the provision of electric service.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scC/s181.048/e"> <num value="e">(e)</num> <content>Subject to Subsection (f), not later than the 60th day before the date the electric cooperative or electric cooperative affiliate begins construction in an easement or other property right that existed before that date of fiber optic cables and other facilities for providing broadband service, the electric cooperative or electric cooperative affiliate must provide written notice to the owners of property in which the easement or property right is located of the intent to use the easement or other property right for broadband service. The electric cooperative or electric cooperative affiliate shall send the notice by first class mail to the last known address of each person in whose name the property is listed on the most recent tax roll of each county authorized to levy property taxes against the property. The notice must state whether any new fiber optic cables used for broadband service will be located above or below ground in the easement or other property right. Not later than the 60th day after the date notice is mailed by the electric cooperative or electric cooperative affiliate, a property owner entitled to notice under this subsection may submit to the electric cooperative or electric cooperative affiliate a written protest of the intended use of the easement or other property right for broadband service. If an electric cooperative or electric cooperative affiliate receives a timely written protest under this subsection, the electric cooperative or electric cooperative affiliate may not use the easement or other property right for broadband service unless the protestor later agrees in writing to that use or that use is authorized by law.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scC/s181.048/f"> <num value="f">(f)</num> <content>Subsection (e) does not apply to an electric cooperative's or electric cooperative affiliate's use of an easement or other property right that includes an authorization for the use of the easement or property right for the provision of broadband service or similar communications service.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scC/s181.048/g"> <num value="g">(g)</num> <chapeau>This section may not be construed to:</chapeau> <paragraph identifier="/us/tx/ut/t4/c181/scC/s181.048/1"> <num value="1">(1)</num> <content>conflict with or limit the provisions of Chapter 43; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scC/s181.048/2"> <num value="2">(2)</num> <content>limit or prohibit an electric cooperative's use of the electric cooperative's fiber optic cables or other facilities to operate and maintain the electric cooperative's electric transmission or distribution system or to provide electric service.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2019, 86th Leg., R.S., Ch. 499 (S.B. 14), Sec. 1, eff. June 7, 2019.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t4/c181/scD"> <num value="D">SUBCHAPTER D.</num> <heading>PROVISIONS APPLYING TO TELEGRAPH COMPANIES</heading> <section identifier="/us/tx/ut/t4/c181/scD/s181.061"> <num value="181.061">Sec. 181.061.</num> <heading>DEFINITION</heading> <content>In this subchapter, "telegraph company" includes a person, firm, corporation, or association engaged in the business of accepting and transmitting messages to and from different locations in this state through use of a telegraph.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c181/scD/s181.062"> <num value="181.062">Sec. 181.062.</num> <heading>TELEGRAPH CONNECTIONS</heading> <chapeau>A telegraph company engaged in business at the same location or in the same municipality as another telegraph company shall provide:</chapeau> <paragraph identifier="/us/tx/ut/t4/c181/scD/s181.062/1"> <num value="1">(1)</num> <content>means through which a message may be transferred to the lines of the other telegraph company at common locations and transmitted to the message's final destination; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scD/s181.062/2"> <num value="2">(2)</num> <content>facilities to assure the transfer of a message in compliance with this section.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c181/scD/s181.063"> <num value="181.063">Sec. 181.063.</num> <heading>EXCEPTIONS</heading> <subsection identifier="/us/tx/ut/t4/c181/scD/s181.063/a"> <num value="a">(a)</num> <chapeau>A telegraph company is not required to transfer a message to another line if:</chapeau> <paragraph identifier="/us/tx/ut/t4/c181/scD/s181.063/1"> <num value="1">(1)</num> <content>the message originated on the company's line; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scD/s181.063/2"> <num value="2">(2)</num> <content>the company can deliver the message directly to its intended recipient on the company's lines.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scD/s181.063/b"> <num value="b">(b)</num> <content>A telegraph company is not required to receive a message from another's line and transmit the message to its final destination if the message originated at a location on the company's lines.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c181/scD/s181.064"> <num value="181.064">Sec. 181.064.</num> <heading>HEARING AND DETERMINATION</heading> <subsection identifier="/us/tx/ut/t4/c181/scD/s181.064/a"> <num value="a">(a)</num> <chapeau>The governing body of a municipality or, for an unincorporated area, the commissioners court of the county, shall on its own motion or on application of at least 100 residents:</chapeau> <paragraph identifier="/us/tx/ut/t4/c181/scD/s181.064/1"> <num value="1">(1)</num> <content>hear evidence as the governing body or commissioners court considers necessary; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scD/s181.064/2"> <num value="2">(2)</num> <chapeau>determine whether a connection between different lines or other arrangements for transfer of messages is:</chapeau> <subparagraph identifier="/us/tx/ut/t4/c181/scD/s181.064/A"> <num value="A">(A)</num> <content>necessary for public convenience; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c181/scD/s181.064/B"> <num value="B">(B)</num> <content>just to the telegraph companies.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scD/s181.064/b"> <num value="b">(b)</num> <chapeau>After conducting a hearing and making the determinations required by Subsection (a), the governing body or commissioners court shall issue an order that:</chapeau> <paragraph identifier="/us/tx/ut/t4/c181/scD/s181.064/1"> <num value="1">(1)</num> <content>includes the findings of the governing body or commissioners court;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scD/s181.064/2"> <num value="2">(2)</num> <content>specifies the conditions under which the arrangements for transfer of messages will be made; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scD/s181.064/3"> <num value="3">(3)</num> <content>specifies the proportion of expense to be paid by the owner or operator of each line.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c181/scD/s181.065"> <num value="181.065">Sec. 181.065.</num> <heading>PENALTY</heading> <subsection identifier="/us/tx/ut/t4/c181/scD/s181.065/a"> <num value="a">(a)</num> <content>A telegraph company shall comply with an order of a municipality's governing body or a commissioners court requiring the company to arrange for transfer of messages.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scD/s181.065/b"> <num value="b">(b)</num> <content>A telegraph company that fails to comply with an order is subject to a penalty of $10 for each day of noncompliance, payable to the state. The county or district attorney may bring suit to recover the penalty.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scD/s181.065/c"> <num value="c">(c)</num> <chapeau>A penalty may not be imposed against a telegraph company for noncompliance with an order if:</chapeau> <paragraph identifier="/us/tx/ut/t4/c181/scD/s181.065/1"> <num value="1">(1)</num> <content>the company is prevented from making a connection through the fault or omission of another company; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scD/s181.065/2"> <num value="2">(2)</num> <content>the fault or omission causes the company's failure to connect.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c181/scD/s181.066"> <num value="181.066">Sec. 181.066.</num> <heading>APPEAL</heading> <subsection identifier="/us/tx/ut/t4/c181/scD/s181.066/a"> <num value="a">(a)</num> <content>A telegraph company ordered to transfer messages under this subchapter has the right to appeal to the court having jurisdiction over the matter.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scD/s181.066/b"> <num value="b">(b)</num> <content>If the court finds that the telegraph company had reasonable grounds for bringing the appeal, the court shall suspend any penalty imposed under this subchapter until the appeal is finally determined.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t4/c181/scE"> <num value="E">SUBCHAPTER E.</num> <heading>PROVISIONS APPLYING TO TELEPHONE AND TELEGRAPH CORPORATIONS</heading> <section identifier="/us/tx/ut/t4/c181/scE/s181.081"> <num value="181.081">Sec. 181.081.</num> <heading>DEFINITIONS</heading> <chapeau>In this subchapter:</chapeau> <paragraph identifier="/us/tx/ut/t4/c181/scE/s181.081/1"> <num value="1">(1)</num> <content>"Facility" means a pole, pier, abutment, wire, or other fixture related to a telephone or magnetic telegraph line.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scE/s181.081/2"> <num value="2">(2)</num> <content>"Telegraph corporation" means a corporation created to construct and maintain magnetic telegraph lines.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scE/s181.081/3"> <num value="3">(3)</num> <content>"Telephone corporation" means a corporation created to construct and maintain telephone lines.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c181/scE/s181.082"> <num value="181.082">Sec. 181.082.</num> <heading>AUTHORITY TO INSTALL FACILITY IN RELATION TO PUBLIC PROPERTY</heading> <content>A telephone or telegraph corporation may install a facility of the corporation along, on, or across a public road, a public street, or public water in a manner that does not inconvenience the public in the use of the road, street, or water.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c181/scE/s181.083"> <num value="181.083">Sec. 181.083.</num> <heading>AUTHORITY TO CONSTRUCT LINE ON PRIVATE PROPERTY</heading> <chapeau>A telephone or telegraph corporation may enter land in which a private person or a corporation owns a fee or lesser estate to:</chapeau> <paragraph identifier="/us/tx/ut/t4/c181/scE/s181.083/1"> <num value="1">(1)</num> <content>make a preliminary survey or examination to prepare for the construction of a telephone or telegraph line;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scE/s181.083/2"> <num value="2">(2)</num> <content>change the location of a part of a telephone or telegraph line as necessary; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scE/s181.083/3"> <num value="3">(3)</num> <content>construct or repair a telephone or telegraph line.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c181/scE/s181.084"> <num value="181.084">Sec. 181.084.</num> <heading>APPROPRIATION OR CONDEMNATION OF LAND</heading> <chapeau>A telephone or telegraph corporation has the right to:</chapeau> <paragraph identifier="/us/tx/ut/t4/c181/scE/s181.084/1"> <num value="1">(1)</num> <content>appropriate as much land owned by a private person or a corporation as is necessary to construct a facility; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scE/s181.084/2"> <num value="2">(2)</num> <content>condemn land to acquire a right-of-way or other interest in the land for the use of the telephone or telegraph corporation.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c181/scE/s181.085"> <num value="181.085">Sec. 181.085.</num> <heading>PROHIBITION ON LAND CONTRACT EXCLUDING ANOTHER TELEGRAPH UTILITY</heading> <content>A telegraph corporation may not contract with an owner of land for the right to construct and maintain a telegraph line over the land to the exclusion of the line of another telegraph corporation.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c181/scE/s181.086"> <num value="181.086">Sec. 181.086.</num> <heading>LINES IN OR OUTSIDE STATE</heading> <content>A telegraph corporation may construct, own, use, or maintain a telegraph line in or outside this state.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c181/scE/s181.087"> <num value="181.087">Sec. 181.087.</num> <heading>USE OF ANOTHER'S TELEGRAPH LINE</heading> <subsection identifier="/us/tx/ut/t4/c181/scE/s181.087/a"> <num value="a">(a)</num> <chapeau>A telegraph corporation may:</chapeau> <paragraph identifier="/us/tx/ut/t4/c181/scE/s181.087/1"> <num value="1">(1)</num> <content>lease the telegraph line of another telegraph corporation;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scE/s181.087/2"> <num value="2">(2)</num> <content>as the result of a lease or purchase, attach to its telegraph line the telegraph line of another telegraph corporation; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scE/s181.087/3"> <num value="3">(3)</num> <content>join with any other corporation or association to construct, lease, own, use, or maintain a telegraph line.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scE/s181.087/b"> <num value="b">(b)</num> <content>An action under Subsection (a)(3) must be taken in accordance with an agreement made by the directors or managers of the telegraph corporations.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c181/scE/s181.088"> <num value="181.088">Sec. 181.088.</num> <heading>CONSOLIDATION OF UTILITIES</heading> <subsection identifier="/us/tx/ut/t4/c181/scE/s181.088/a"> <num value="a">(a)</num> <chapeau>A telephone or telegraph corporation organized under the law of this state may consolidate or otherwise unite with one or more other companies organized under the law of a state or the United States if the union or consolidation:</chapeau> <paragraph identifier="/us/tx/ut/t4/c181/scE/s181.088/1"> <num value="1">(1)</num> <content>is approved, at a regular meeting of the corporation's stockholders, by a vote of persons holding a majority of the shares of stock of the corporation; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scE/s181.088/2"> <num value="2">(2)</num> <content>is done with the consent of each other company.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scE/s181.088/b"> <num value="b">(b)</num> <content>The company resulting from the consolidation or other union may hold, use, and enjoy the rights and privileges given by the law of this state to, and has the same liabilities of, a company separately organized under the law of this state relating to corporations.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c181/scE/s181.089"> <num value="181.089">Sec. 181.089.</num> <heading>MUNICIPAL REGULATION</heading> <subsection identifier="/us/tx/ut/t4/c181/scE/s181.089/a"> <num value="a">(a)</num> <chapeau>The appropriate authorities of a municipality through which a line of a telephone or telegraph corporation is to pass may adopt, by ordinance or another method, regulations governing the corporation that specify the:</chapeau> <paragraph identifier="/us/tx/ut/t4/c181/scE/s181.089/1"> <num value="1">(1)</num> <content>location of the facilities of the corporation;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scE/s181.089/2"> <num value="2">(2)</num> <content>kind of posts that must be used by the corporation; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scE/s181.089/3"> <num value="3">(3)</num> <content>height at which the wires of the corporation must be placed.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scE/s181.089/b"> <num value="b">(b)</num> <chapeau>After the construction of the telephone or telegraph line, the appropriate authorities of the municipality, after giving the corporation or its agents an opportunity to be heard, may direct any change in:</chapeau> <paragraph identifier="/us/tx/ut/t4/c181/scE/s181.089/1"> <num value="1">(1)</num> <content>the construction or location of the facilities; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scE/s181.089/2"> <num value="2">(2)</num> <content>the height at which the corporation must locate the wires.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t4/c181/scF"> <num value="F">SUBCHAPTER F.</num> <heading>PROVISIONS APPLYING TO COMMUNITY ANTENNA AND CABLE TELEVISION UTILITIES</heading> <section identifier="/us/tx/ut/t4/c181/scF/s181.101"> <num value="181.101">Sec. 181.101.</num> <heading>DEFINITIONS</heading> <chapeau>In this subchapter:</chapeau> <paragraph identifier="/us/tx/ut/t4/c181/scF/s181.101/1"> <num value="1">(1)</num> <content>"Equipment" means a line, wire, cable, pipe, conduit, conductor, pole, or other facility for the transmission of community antenna or cable television service.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scF/s181.101/2"> <num value="2">(2)</num> <content>"Person" means an individual, firm, or corporation.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c181/scF/s181.102"> <num value="181.102">Sec. 181.102.</num> <heading>AUTHORITY TO INSTALL AND MAINTAIN EQUIPMENT</heading> <subsection identifier="/us/tx/ut/t4/c181/scF/s181.102/a"> <num value="a">(a)</num> <content>In an unincorporated area, a person in the business of providing community antenna or cable television service to the public may install and maintain equipment through, under, along, across, or over a utility easement, a public road, an alley, or a body of public water in accordance with this subchapter.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scF/s181.102/b"> <num value="b">(b)</num> <content>The installation and maintenance of the equipment must be done in a way that does not unduly inconvenience the public using the affected property.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c181/scF/s181.103"> <num value="181.103">Sec. 181.103.</num> <heading>NOTICE TO STATE OR COUNTY</heading> <subsection identifier="/us/tx/ut/t4/c181/scF/s181.103/a"> <num value="a">(a)</num> <chapeau>A person proposing to install equipment under Section 181.102 in the right-of-way of a state highway or a county road shall give notice of the proposal to:</chapeau> <paragraph identifier="/us/tx/ut/t4/c181/scF/s181.103/1"> <num value="1">(1)</num> <content>the Texas Department of Transportation if the proposal relates to a state highway; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scF/s181.103/2"> <num value="2">(2)</num> <content>the commissioners court of the county if the proposal relates to a county road.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scF/s181.103/b"> <num value="b">(b)</num> <content>On receipt of the notice, the Texas Department of Transportation or commissioners court may designate the location in the right-of-way where the person may install the equipment, if the equipment is not to be installed on an existing facility.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c181/scF/s181.104"> <num value="181.104">Sec. 181.104.</num> <heading>RELOCATION OF EQUIPMENT TO ALLOW CHANGE TO TRAFFIC LANE</heading> <subsection identifier="/us/tx/ut/t4/c181/scF/s181.104/a"> <num value="a">(a)</num> <content>The authority of the Texas Department of Transportation under this section is limited to equipment installed in connection with a state highway. The authority of the commissioners court under this section is limited to equipment installed in connection with a county road.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scF/s181.104/b"> <num value="b">(b)</num> <content>The Texas Department of Transportation or the commissioners court of a county may require a person who has installed equipment in the right-of-way of a state highway or county road to relocate the person's equipment to allow the widening or other changing of a traffic lane.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scF/s181.104/c"> <num value="c">(c)</num> <content>To impose a requirement under this section, the Texas Department of Transportation or the commissioners court, as appropriate, must give to the person written notice of the requirement not later than the 45th day before the date the relocation is to be made. The notice must identify the equipment to be relocated and indicate the location in the right-of-way where the person may reinstall the equipment.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scF/s181.104/d"> <num value="d">(d)</num> <content>The person shall pay the cost of repairing a state highway or county road damaged by the relocation.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t4/c181/scZ"> <num value="Z">SUBCHAPTER Z.</num> <heading>MISCELLANEOUS PROVISIONS</heading> <section identifier="/us/tx/ut/t4/c181/scZ/s181.901"> <num value="181.901">Sec. 181.901.</num> <heading>AUTHORITY OF GENERAL-LAW MUNICIPALITY TO PROTECT UTILITY</heading> <subsection identifier="/us/tx/ut/t4/c181/scZ/s181.901/a"> <num value="a">(a)</num> <chapeau>The governing body of a general-law municipality may adopt an ordinance that applies to a utility using the streets and public grounds of the municipality and that protects the utility:</chapeau> <paragraph identifier="/us/tx/ut/t4/c181/scZ/s181.901/1"> <num value="1">(1)</num> <content>in the free enjoyment of the utility's rights and privileges; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scZ/s181.901/2"> <num value="2">(2)</num> <content>from interference with the utility's property and franchises.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scZ/s181.901/b"> <num value="b">(b)</num> <content>In this section, "utility" means a person, company, or corporation engaged in furnishing water, gas, telephone, light, power, or sewage service to the public.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c181/scZ/s181.902"> <num value="181.902">Sec. 181.902.</num> <heading>AUTHORITY OF GENERAL-LAW MUNICIPALITY TO PREVENT USE OR WASTE OF UTILITY COMMODITY OR SERVICE</heading> <subsection identifier="/us/tx/ut/t4/c181/scZ/s181.902/a"> <num value="a">(a)</num> <content>The governing body of a general-law municipality may adopt an ordinance that prevents the free or unauthorized use or the waste of a commodity or service furnished by a utility that uses the streets and public grounds of the municipality.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scZ/s181.902/b"> <num value="b">(b)</num> <content>In this section, "utility" has the meaning assigned to the term by Section 181.901.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c181/scZ/s181.903"> <num value="181.903">Sec. 181.903.</num> <heading>RESTRICTION ON REGULATION OF UTILITY SERVICES AND INFRASTRUCTURE</heading> <subsection identifier="/us/tx/ut/t4/c181/scZ/s181.903/a"> <num value="a">(a)</num> <chapeau>In this section:</chapeau> <paragraph identifier="/us/tx/ut/t4/c181/scZ/s181.903/1"> <num value="1">(1)</num> <content>"Regulatory authority" has the meanings assigned by Sections 11.003 and 101.003.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scZ/s181.903/2"> <num value="2">(2)</num> <content>"Utility" has the meaning assigned by Section 181.901, except that the term does not include a person, company, or corporation engaged in furnishing telephone service to the public.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scZ/s181.903/b"> <num value="b">(b)</num> <content>No regulatory authority, planning authority, or political subdivision of this state may adopt or enforce an ordinance, resolution, regulation, code, order, policy, or other measure that has the purpose, intent, or effect of directly or indirectly banning, limiting, restricting, discriminating against, or prohibiting the connection or reconnection of a utility service or the construction, maintenance, or installation of residential, commercial, or other public or private infrastructure for a utility service based on the type or source of energy to be delivered to the end-use customer.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scZ/s181.903/c"> <num value="c">(c)</num> <chapeau>An entity, including a regulatory authority, planning authority, political subdivision, or utility, may not impose any additional charge or pricing difference on a development or building permit applicant for utility infrastructure that:</chapeau> <paragraph identifier="/us/tx/ut/t4/c181/scZ/s181.903/1"> <num value="1">(1)</num> <content>encourages those constructing homes, buildings, or other structural improvements to connect to a utility service based on the type or source of energy to be delivered to the end-use customer; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c181/scZ/s181.903/2"> <num value="2">(2)</num> <content>discourages the installation of facilities for the delivery of or use of a utility service based on the type or source of energy to be delivered to the end-use customer.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c181/scZ/s181.903/d"> <num value="d">(d)</num> <content>This section does not limit the ability of a regulatory authority or political subdivision to choose utility services for properties owned by the regulatory authority or political subdivision.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 44 (H.B. 17), Sec. 1, eff. May 18, 2021.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t4/c182"> <num value="182">CHAPTER 182.</num> <heading>RIGHTS OF UTILITY CUSTOMERS</heading> <subchapter identifier="/us/tx/ut/t4/c182/scA"> <num value="A">SUBCHAPTER A.</num> <heading>PAYMENT DATE OF UTILITY BILL FOR ELDERLY INDIVIDUAL</heading> <section identifier="/us/tx/ut/t4/c182/scA/s182.001"> <num value="182.001">Sec. 182.001.</num> <heading>DEFINITIONS</heading> <chapeau>In this subchapter:</chapeau> <paragraph identifier="/us/tx/ut/t4/c182/scA/s182.001/1"> <num value="1">(1)</num> <content>"Elderly individual" means an individual who is 60 years of age or older.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c182/scA/s182.001/2"> <num value="2">(2)</num> <content>"Utility" means an electric, gas, water, or telephone utility operated by a public or private entity.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c182/scA/s182.002"> <num value="182.002">Sec. 182.002.</num> <heading>DELAY OF BILL PAYMENT DATE FOR ELDERLY INDIVIDUAL</heading> <subsection identifier="/us/tx/ut/t4/c182/scA/s182.002/a"> <num value="a">(a)</num> <content>On request by an elderly individual, a utility shall delay without penalty the payment date of a bill for providing utility service to that individual until the 25th day after the date the bill is issued.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c182/scA/s182.002/b"> <num value="b">(b)</num> <chapeau>This subchapter applies only to an elderly individual who:</chapeau> <paragraph identifier="/us/tx/ut/t4/c182/scA/s182.002/1"> <num value="1">(1)</num> <content>is a residential customer; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c182/scA/s182.002/2"> <num value="2">(2)</num> <content>occupies the entire premises for which a delay is requested.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c182/scA/s182.003"> <num value="182.003">Sec. 182.003.</num> <heading>REQUEST FOR DELAY</heading> <chapeau>An elderly individual may request that the utility implement the delay under Section 182.002 for:</chapeau> <paragraph identifier="/us/tx/ut/t4/c182/scA/s182.003/1"> <num value="1">(1)</num> <content>the most recent utility bill; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c182/scA/s182.003/2"> <num value="2">(2)</num> <content>the most recent utility bill and each subsequent utility bill.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c182/scA/s182.004"> <num value="182.004">Sec. 182.004.</num> <heading>PROOF OF AGE</heading> <content>A utility may require an individual requesting a delay under this subchapter to present reasonable proof that the individual is 60 years of age or older.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c182/scA/s182.005"> <num value="182.005">Sec. 182.005.</num> <heading>CERTAIN UTILITIES NOT AFFECTED</heading> <chapeau>This subchapter does not apply to a utility that:</chapeau> <paragraph identifier="/us/tx/ut/t4/c182/scA/s182.005/1"> <num value="1">(1)</num> <content>does not assess a late payment charge on a residential customer;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c182/scA/s182.005/2"> <num value="2">(2)</num> <content>does not suspend service before the 26th day after the date of the bill for which collection action is taken; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c182/scA/s182.005/3"> <num value="3">(3)</num> <content>is regulated under Title 2.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t4/c182/scB"> <num value="B">SUBCHAPTER B.</num> <heading>DISCLOSURE OF CUSTOMER INFORMATION</heading> <section identifier="/us/tx/ut/t4/c182/scB/s182.051"> <num value="182.051">Sec. 182.051.</num> <heading>DEFINITIONS</heading> <chapeau>In this subchapter:</chapeau> <paragraph identifier="/us/tx/ut/t4/c182/scB/s182.051/1"> <num value="1">(1)</num> <content>"Consumer reporting agency" means a person who, for a monetary fee or payment of dues, or on a cooperative nonprofit basis, regularly engages in the practice of assembling or evaluating consumer credit information or other information relating to consumers in order to furnish a consumer report to a third party.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c182/scB/s182.051/2"> <num value="2">(2)</num> <content>"Governmental body" has the meaning assigned by Section 552.003, Government Code.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c182/scB/s182.051/3"> <num value="3">(3)</num> <content>"Government-operated utility" means a governmental body or an entity governed by a governmental body that, for compensation, provides water, wastewater, sewer, gas, garbage, electricity, or drainage service.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c182/scB/s182.051/4"> <num value="4">(4)</num> <content>"Personal information" means an individual's address, telephone number, or social security number.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c182/scB/s182.052"> <num value="182.052">Sec. 182.052.</num> <heading>DISCLOSURE OF PERSONAL INFORMATION</heading> <subsection identifier="/us/tx/ut/t4/c182/scB/s182.052/a"> <num value="a">(a)</num> <content>Except as provided by Section 182.054, a government-operated utility may not disclose personal information in a customer's account record, or any information relating to the volume or units of utility usage or the amounts billed to or collected from the individual for utility usage, unless the customer requests that the government-operated utility disclose the information.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c182/scB/s182.052/b"> <num value="b">(b)</num> <content>A customer may request disclosure of information described by Subsection (a) by delivering to the government-operated utility an appropriately marked form provided under Subsection (c)(2) or any other written request for disclosure.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c182/scB/s182.052/c"> <num value="c">(c)</num> <chapeau>A government-operated utility shall include with a bill sent to each customer or shall post on the utility's Internet website:</chapeau> <paragraph identifier="/us/tx/ut/t4/c182/scB/s182.052/1"> <num value="1">(1)</num> <content>a notice of the customer's right to request disclosure under this section; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c182/scB/s182.052/2"> <num value="2">(2)</num> <content>a form by which the customer may request disclosure by marking an appropriate box on the form and returning it to the government-operated utility, either by mail or electronically.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c182/scB/s182.052/d"> <num value="d">(d)</num> <content>A customer may rescind a request for disclosure under this section by providing the government-operated utility a written request to withhold the customer's personal information beginning on the date the utility receives the request.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c182/scB/s182.052/e"> <num value="e">(e)</num> <content>A governmental body as defined by Section 552.003, Government Code, may withhold information prohibited from being disclosed under this section without the necessity of requesting a decision from the attorney general under Subchapter G, Chapter 552, Government Code.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 2001, 77th Leg., ch. 966, Sec. 2.59, eff. Sept. 1, 2001. Amended by: Acts 2015, 84th Leg., R.S., Ch. 692 (H.B. 685), Sec. 2, eff. September 1, 2015. Acts 2021, 87th Leg., R.S., Ch. 1025 (H.B. 872), Sec. 3, eff. June 18, 2021. Acts 2021, 87th Leg., R.S., Ch. 1025 (H.B. 872), Sec. 4, eff. June 18, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c182/scB/s182.054"> <num value="182.054">Sec. 182.054.</num> <heading>EXCEPTIONS</heading> <chapeau>This subchapter does not prohibit a government-operated utility from disclosing personal information in a customer's account record to:</chapeau> <paragraph identifier="/us/tx/ut/t4/c182/scB/s182.054/1"> <num value="1">(1)</num> <content>an official or employee of the state, a political subdivision of the state, or the United States acting in an official capacity;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c182/scB/s182.054/2"> <num value="2">(2)</num> <content>an employee of a utility acting in connection with the employee's duties;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c182/scB/s182.054/3"> <num value="3">(3)</num> <content>a consumer reporting agency;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c182/scB/s182.054/4"> <num value="4">(4)</num> <content>a contractor or subcontractor approved by and providing services to the utility, the state, a political subdivision of the state, or the United States;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c182/scB/s182.054/5"> <num value="5">(5)</num> <content>a person for whom the customer has contractually waived confidentiality for personal information;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c182/scB/s182.054/6"> <num value="6">(6)</num> <content>another entity that provides water, wastewater, sewer, gas, garbage, electricity, or drainage service for compensation;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c182/scB/s182.054/7"> <num value="7">(7)</num> <content>another entity as necessary to facilitate the transition of customers among retail electric providers under Section 40.053 or to comply with rules, guidelines, and procedures established by an independent organization certified under Section 39.151; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c182/scB/s182.054/8"> <num value="8">(8)</num> <content>a retail electric provider, as defined by Section 31.002(17).</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2023, 88th Leg., R.S., Ch. 46 (H.B. 2664), Sec. 1, eff. May 19, 2023.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c182/scB/s182.055"> <num value="182.055">Sec. 182.055.</num> <heading>NO CIVIL LIABILITY FROM VIOLATION</heading> <content>A government-operated utility or an officer or employee of a government-operated utility is immune from civil liability for a violation of this subchapter.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t4/c182/scC"> <num value="C">SUBCHAPTER C.</num> <heading>TESTING OF METERS</heading> <section identifier="/us/tx/ut/t4/c182/scC/s182.101"> <num value="182.101">Sec. 182.101.</num> <heading>DEFINITIONS</heading> <chapeau>In this subchapter:</chapeau> <paragraph identifier="/us/tx/ut/t4/c182/scC/s182.101/1"> <num value="1">(1)</num> <content>"Consumer" means a person who obtains electricity or gas from a utility.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c182/scC/s182.101/2"> <num value="2">(2)</num> <content>"Gas" includes natural gas and artificial gas.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c182/scC/s182.101/3"> <num value="3">(3)</num> <content>"Meter" means an instrument or machine used to measure and record the use of electricity or gas.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c182/scC/s182.101/4"> <num value="4">(4)</num> <content>"Test" includes, in reference to the testing of a meter and as necessary to the reading and examination of a meter, the authority to break the seal.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c182/scC/s182.101/5"> <num value="5">(5)</num> <content>"Utility" means a person, other than a governmental entity, who provides for compensation electricity or gas for consumption in a municipality.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c182/scC/s182.102"> <num value="182.102">Sec. 182.102.</num> <heading>TESTING OF METER</heading> <subsection identifier="/us/tx/ut/t4/c182/scC/s182.102/a"> <num value="a">(a)</num> <content>On complaint by a consumer to the governing body of a municipality, an agent or employee of the municipality shall examine, read, and test a meter that is installed by the utility furnishing the electricity or gas.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c182/scC/s182.102/b"> <num value="b">(b)</num> <chapeau>On demand by a consumer to the governing body of a municipality, the governing body shall provide the consumer with a detailed report stating the results of the examination, reading, and test, including:</chapeau> <paragraph identifier="/us/tx/ut/t4/c182/scC/s182.102/1"> <num value="1">(1)</num> <content>whether the meter is in good condition;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c182/scC/s182.102/2"> <num value="2">(2)</num> <content>whether the meter functions properly; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c182/scC/s182.102/3"> <num value="3">(3)</num> <content>the amount of electricity or gas used during a period designated by the consumer in the demand, not to exceed one year.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c182/scC/s182.103"> <num value="182.103">Sec. 182.103.</num> <heading>UTILITY REPRESENTATIVE; NOTICE</heading> <content>A utility representative may be present during a meter test. The municipality shall provide notice to a utility regarding the testing of a meter not later than the third day before the date the meter test is conducted.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c182/scC/s182.104"> <num value="182.104">Sec. 182.104.</num> <heading>OFFENSE</heading> <subsection identifier="/us/tx/ut/t4/c182/scC/s182.104/a"> <num value="a">(a)</num> <content>A utility or other person commits an offense if the utility or other person fails or refuses to allow an agent or employee of a municipality to examine a meter.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c182/scC/s182.104/b"> <num value="b">(b)</num> <content>An offense under this section is a misdemeanor punishable by a fine not to exceed $200.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c182/scC/s182.104/c"> <num value="c">(c)</num> <content>Each day a utility or other person refuses to allow an agent or employee of a municipality to examine a meter is a separate offense.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t4/c182/scD"> <num value="D">SUBCHAPTER D.</num> <heading>BILL PAYMENT ASSISTANCE PROGRAM FOR BURNED VETERANS</heading> <section identifier="/us/tx/ut/t4/c182/scD/s182.201"> <num value="182.201">Sec. 182.201.</num> <heading>DEFINITIONS</heading> <content>In this subchapter, "electric cooperative" and "municipally owned utility" have the meanings assigned by Section 11.003.</content> <sourceCredit>Added by Acts 2013, 83rd Leg., R.S., Ch. 597 (S.B. 981), Sec. 3, eff. June 14, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c182/scD/s182.202"> <num value="182.202">Sec. 182.202.</num> <heading>BURNED VETERANS ASSISTANCE PROGRAM</heading> <subsection identifier="/us/tx/ut/t4/c182/scD/s182.202/a"> <num value="a">(a)</num> <content>The board of directors of an electric cooperative or the governing body of a municipally owned utility may establish a bill payment assistance program for a customer who is a military veteran who a medical doctor certifies has a significantly decreased ability to regulate the individual's body temperature because of severe burns received in combat.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c182/scD/s182.202/b"> <num value="b">(b)</num> <content>The costs of a bill payment assistance program established under Subsection (a) are considered a necessary operations expense.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c182/scD/s182.202/c"> <num value="c">(c)</num> <content>The board of directors of an electric cooperative or the governing body of a municipally owned utility may determine the method to fund a bill payment assistance program established under Subsection (a).</content> </subsection> <sourceCredit>Added by Acts 2013, 83rd Leg., R.S., Ch. 597 (S.B. 981), Sec. 3, eff. June 14, 2013.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t4/c183"> <num value="183">CHAPTER 183.</num> <heading>UTILITY DEPOSITS</heading> <section identifier="/us/tx/ut/t4/c183/s183.001"> <num value="183.001">Sec. 183.001.</num> <heading>DEFINITIONS</heading> <chapeau>In this chapter:</chapeau> <paragraph identifier="/us/tx/ut/t4/c183/s183.001/1"> <num value="1">(1)</num> <content>"Commission" means the Public Utility Commission of Texas.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c183/s183.001/2"> <num value="2">(2)</num> <content>"Utility" means a person, firm, company, corporation, receiver, or trustee who furnishes water, electric, gas, or telephone service.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c183/s183.002"> <num value="183.002">Sec. 183.002.</num> <heading>INTEREST ON DEPOSIT</heading> <content>A utility that requires the user of a service to pay a money deposit as a condition to furnishing the service shall pay interest on the deposit from the time the deposit is made.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c183/s183.003"> <num value="183.003">Sec. 183.003.</num> <heading>RATE OF INTEREST</heading> <content>The commission on or before each December 1 shall set the annual interest rate for the next calendar year on deposits governed by this chapter at the average rate paid over the previous 12-month period on United States treasury bills with a 26-week maturity.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2005, 79th Leg., Ch. 1320 (H.B. 3460), Sec. 1, eff. September 1, 2005. Acts 2015, 84th Leg., R.S., Ch. 372 (S.B. 734), Sec. 1, eff. September 1, 2015.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c183/s183.004"> <num value="183.004">Sec. 183.004.</num> <heading>INTEREST PAYMENT TO DEPOSITOR</heading> <content>A utility shall pay interest on the deposit to the depositor or the depositor's heirs or assigns annually on demand or sooner if the service is discontinued.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c183/s183.005"> <num value="183.005">Sec. 183.005.</num> <heading>RETURN OF DEPOSIT</heading> <subsection identifier="/us/tx/ut/t4/c183/s183.005/a"> <num value="a">(a)</num> <content>When the service is discontinued, the utility shall return the deposit and any unpaid interest on the deposit to the depositor or the depositor's heirs or legal representatives.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c183/s183.005/b"> <num value="b">(b)</num> <content>The utility company may deduct from the amount returned under Subsection (a) any payments due for the services.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c183/s183.006"> <num value="183.006">Sec. 183.006.</num> <heading>CRIMINAL PENALTY</heading> <subsection identifier="/us/tx/ut/t4/c183/s183.006/a"> <num value="a">(a)</num> <content>A person commits an offense if the person violates this chapter.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c183/s183.006/b"> <num value="b">(b)</num> <chapeau>An offense under this section is punishable by:</chapeau> <paragraph identifier="/us/tx/ut/t4/c183/s183.006/1"> <num value="1">(1)</num> <content>a fine of not less than $25 and not more than $200;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c183/s183.006/2"> <num value="2">(2)</num> <content>confinement in jail for not less than six months and not more than one year; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c183/s183.006/3"> <num value="3">(3)</num> <content>both the fine and confinement.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </chapter> <chapter identifier="/us/tx/ut/t4/c184"> <num value="184">CHAPTER 184.</num> <heading>ELECTRIC AND WATER METERING</heading> <subchapter identifier="/us/tx/ut/t4/c184/scA"> <num value="A">SUBCHAPTER A.</num> <heading>GENERAL PROVISIONS</heading> <section identifier="/us/tx/ut/t4/c184/scA/s184.001"> <num value="184.001">Sec. 184.001.</num> <heading>DEFINITION</heading> <content>In this chapter, "commission" means the Public Utility Commission of Texas.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t4/c184/scB"> <num value="B">SUBCHAPTER B.</num> <heading>METERING IN APARTMENTS, CONDOMINIUMS, AND MOBILE HOME PARKS</heading> <section identifier="/us/tx/ut/t4/c184/scB/s184.011"> <num value="184.011">Sec. 184.011.</num> <heading>DEFINITIONS</heading> <chapeau>In this subchapter:</chapeau> <paragraph identifier="/us/tx/ut/t4/c184/scB/s184.011/1"> <num value="1">(1)</num> <content>"Apartment house" means one or more buildings containing more than five dwelling units each of which is rented primarily for nontransient use with rent paid at intervals of one week or longer. The term includes a rented or owner-occupied residential condominium.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c184/scB/s184.011/2"> <num value="2">(2)</num> <chapeau>"Dwelling unit":</chapeau> <subparagraph identifier="/us/tx/ut/t4/c184/scB/s184.011/A"> <num value="A">(A)</num> <content>means:</content> </subparagraph> </paragraph> <subsection identifier="/us/tx/ut/t4/c184/scB/s184.011/i"> <num value="i">(i)</num> <chapeau>one or more rooms that are suitable for occupancy as a residence and that contain kitchen and bathroom facilities; or</chapeau> <clause identifier="/us/tx/ut/t4/c184/scB/s184.011/ii"> <num value="ii">(ii)</num> <content>a mobile home in a mobile home park; and</content> </clause> <subparagraph identifier="/us/tx/ut/t4/c184/scB/s184.011/B"> <num value="B">(B)</num> <content>does not include a recreational vehicle, as defined by Section 522.004(b), Transportation Code.</content> </subparagraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2013, 83rd Leg., R.S., Ch. 613 (S.B. 1268), Sec. 4, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c184/scB/s184.012"> <num value="184.012">Sec. 184.012.</num> <heading>NEW CONSTRUCTION OR CONVERSION</heading> <subsection identifier="/us/tx/ut/t4/c184/scB/s184.012/a"> <num value="a">(a)</num> <content>A political subdivision may not authorize the construction or occupancy of a new apartment house, including the conversion of property to a condominium, unless the construction plan provides for the measurement of the quantity of electricity consumed by the occupants of each dwelling unit of the apartment house, either by individual metering by the utility company or by submetering by the owner.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c184/scB/s184.012/b"> <num value="b">(b)</num> <content>This section does not prohibit a political subdivision from issuing a permit to a nonprofit organization for construction of a new apartment house for occupancy by low-income elderly tenants if the nonprofit organization establishes, by submitting engineering and cost data and a sworn statement, that all cost savings will be passed on to the low-income elderly tenants.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c184/scB/s184.0125"> <num value="184.0125">Sec. 184.0125.</num> <heading>HOUSING FOR OLDER PERSONS</heading> <subsection identifier="/us/tx/ut/t4/c184/scB/s184.0125/a"> <num value="a">(a)</num> <content>Section 184.012 does not prohibit a political subdivision from issuing a permit for the construction of housing for older persons with 100 or more dwelling units.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c184/scB/s184.0125/b"> <num value="b">(b)</num> <content>Before issuing a permit, certificate, or other authorization for the construction of housing for older persons, a political subdivision shall require that the construction plan provide for the requirements prescribed by this section.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c184/scB/s184.0125/c"> <num value="c">(c)</num> <chapeau>To qualify for the exemption provided by this section, the housing, at a minimum, must have:</chapeau> <paragraph identifier="/us/tx/ut/t4/c184/scB/s184.0125/1"> <num value="1">(1)</num> <content>significant facilities and services specifically designed to meet the physical or social needs of older persons or, if the provision of those facilities and services is not practicable, the housing must be necessary to provide important housing opportunities for older persons;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c184/scB/s184.0125/2"> <num value="2">(2)</num> <content>at least 80 percent of the dwelling units set aside for occupancy by at least one person 55 years of age or older in each dwelling unit; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c184/scB/s184.0125/3"> <num value="3">(3)</num> <content>policies and procedures that demonstrate an intent by the owner or manager to provide housing for persons 55 years of age or older.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c184/scB/s184.0125/d"> <num value="d">(d)</num> <content>The owner or manager must adhere to the policies and procedures required by Subsection (c)(3).</content> </subsection> <subsection identifier="/us/tx/ut/t4/c184/scB/s184.0125/e"> <num value="e">(e)</num> <chapeau>In this section, "housing for older persons" means housing:</chapeau> <paragraph identifier="/us/tx/ut/t4/c184/scB/s184.0125/1"> <num value="1">(1)</num> <content>intended for and solely occupied by persons 62 years of age or older; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c184/scB/s184.0125/2"> <num value="2">(2)</num> <content>intended and operated for occupancy by at least one person 55 years of age or older in each dwelling unit.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.16(a), eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c184/scB/s184.013"> <num value="184.013">Sec. 184.013.</num> <heading>SUBMETERING</heading> <subsection identifier="/us/tx/ut/t4/c184/scB/s184.013/a"> <num value="a">(a)</num> <content>The owner of an apartment house or mobile home park may submeter each dwelling unit in the apartment house or mobile home park to measure the quantity of electricity consumed by the occupants of the dwelling unit.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c184/scB/s184.013/b"> <num value="b">(b)</num> <chapeau>Electric submetering equipment is subject to:</chapeau> <paragraph identifier="/us/tx/ut/t4/c184/scB/s184.013/1"> <num value="1">(1)</num> <content>the same rules adopted by the commission for accuracy, testing, and recordkeeping of meters installed by electric utilities; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c184/scB/s184.013/2"> <num value="2">(2)</num> <content>the meter testing requirements of Subchapter C, Chapter 38.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c184/scB/s184.013/c"> <num value="c">(c)</num> <chapeau>If not more than 90 days before the date an owner, operator, or manager of an apartment house installs individual meters or submeters in the apartment house the owner, operator, or manager increases rental rates and the increase in rental rates is attributable to the increased cost of utilities, the owner, operator, or manager, on installation of the meters or submeters, shall:</chapeau> <paragraph identifier="/us/tx/ut/t4/c184/scB/s184.013/1"> <num value="1">(1)</num> <content>immediately reduce the rental rate by the amount of the increase attributable to the increased cost of utilities; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c184/scB/s184.013/2"> <num value="2">(2)</num> <chapeau>refund the amount of the increased rent:</chapeau> <subparagraph identifier="/us/tx/ut/t4/c184/scB/s184.013/A"> <num value="A">(A)</num> <content>collected in the 90-day period preceding the installation of the meters or submeters; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c184/scB/s184.013/B"> <num value="B">(B)</num> <content>attributable to the cost of increased utilities.</content> </subparagraph> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c184/scB/s184.014"> <num value="184.014">Sec. 184.014.</num> <heading>RULES</heading> <subsection identifier="/us/tx/ut/t4/c184/scB/s184.014/a"> <num value="a">(a)</num> <content>The commission shall adopt rules under which an owner, operator, or manager of an apartment house or mobile home park for which electricity is not individually metered may install submetering equipment to allocate fairly the cost of the electrical consumption of each dwelling unit in the apartment house or mobile home park.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c184/scB/s184.014/b"> <num value="b">(b)</num> <chapeau>In addition to other appropriate safeguards for a tenant of an apartment house or mobile home park, a rule adopted under Subsection (a) must provide that:</chapeau> <paragraph identifier="/us/tx/ut/t4/c184/scB/s184.014/1"> <num value="1">(1)</num> <content>the apartment house owner or a mobile home park owner may not charge a tenant more than the cost per kilowatt hour charged by the utility to the owner; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c184/scB/s184.014/2"> <num value="2">(2)</num> <content>the apartment house owner shall maintain adequate records relating to submetering and make those records available for inspection by the tenant during reasonable business hours.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c184/scB/s184.014/c"> <num value="c">(c)</num> <content>A rule adopted under this section has the same effect as a rule adopted under Title 2, and a utility company and the owner, operator, or manager of an apartment house subject to this subchapter is subject to enforcement under Sections 15.021, 15.022, 15.028, 15.029, 15.030, 15.031, 15.032, and 15.033.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t4/c184/scC"> <num value="C">SUBCHAPTER C.</num> <heading>METERING IN RECREATIONAL VEHICLE PARKS</heading> <section identifier="/us/tx/ut/t4/c184/scC/s184.031"> <num value="184.031">Sec. 184.031.</num> <heading>DEFINITIONS</heading> <chapeau>In this subchapter:</chapeau> <paragraph identifier="/us/tx/ut/t4/c184/scC/s184.031/1"> <num value="1">(1)</num> <content>"Recreational vehicle" has the meaning assigned by Section 522.004(b), Transportation Code.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c184/scC/s184.031/2"> <num value="2">(2)</num> <content>"Supplying utility" means the electric utility from which a recreational vehicle park owner purchases electricity consumed at the recreational vehicle park.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c184/scC/s184.032"> <num value="184.032">Sec. 184.032.</num> <heading>METERED SALE UNDER COMMISSION RULES</heading> <content>The metered sale of electricity by a recreational vehicle park owner in compliance with submetering rules adopted by the commission under Title 2 does not constitute the provision of electric service for compensation.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c184/scC/s184.033"> <num value="184.033">Sec. 184.033.</num> <heading>METERED SALE UNDER THIS CHAPTER</heading> <chapeau>Notwithstanding any provision of Title 2, the metered sale of electricity by a recreational vehicle park owner does not constitute the provision of electric service for compensation if:</chapeau> <paragraph identifier="/us/tx/ut/t4/c184/scC/s184.033/1"> <num value="1">(1)</num> <content>the electricity is consumed in a recreational vehicle that is located in a recreational vehicle park;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c184/scC/s184.033/2"> <num value="2">(2)</num> <content>the owner can show that the owner does not annually recover from recreational vehicle occupants through metered charges more than the supplying utility charges the owner for electricity that is submetered, taking into account fuel refunds;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c184/scC/s184.033/3"> <num value="3">(3)</num> <chapeau>the owner establishes a fiscal year for the purposes of this subchapter and maintains for at least three years records of:</chapeau> <subparagraph identifier="/us/tx/ut/t4/c184/scC/s184.033/A"> <num value="A">(A)</num> <content>bills received from the supplying utility;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c184/scC/s184.033/B"> <num value="B">(B)</num> <content>charges made to recreational vehicle occupants; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c184/scC/s184.033/C"> <num value="C">(C)</num> <content>consumption records for each fiscal year;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t4/c184/scC/s184.033/4"> <num value="4">(4)</num> <content>the owner charges for electricity using a fixed rate per kilowatt hour for each fiscal year computed at the beginning of the fiscal year in the manner provided by Section 184.034; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c184/scC/s184.033/5"> <num value="5">(5)</num> <content>the owner complies with the refund requirements of Section 184.035.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c184/scC/s184.034"> <num value="184.034">Sec. 184.034.</num> <heading>COMPUTATION OF CHARGES</heading> <subsection identifier="/us/tx/ut/t4/c184/scC/s184.034/a"> <num value="a">(a)</num> <content>For the purposes of computing the charge for electricity under Section 184.033(4), the recreational vehicle park owner shall divide the amount charged the owner by the supplying utility for the preceding fiscal year by the total number of kilowatt hours consumed by occupants visiting the park in the preceding fiscal year and round the quotient to the nearest cent.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c184/scC/s184.034/b"> <num value="b">(b)</num> <content>If since or during the preceding fiscal year the supplying utility increases its rates, the owner may recompute the preceding fiscal year's charges by the utility using the current rates charged by the utility.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c184/scC/s184.034/c"> <num value="c">(c)</num> <content>If since or during the preceding fiscal year the supplying utility decreases its rates, the owner shall recompute the preceding fiscal year's charges by the utility using the current rates charged by the utility.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c184/scC/s184.034/d"> <num value="d">(d)</num> <chapeau>An owner may not:</chapeau> <paragraph identifier="/us/tx/ut/t4/c184/scC/s184.034/1"> <num value="1">(1)</num> <content>include a charge by the supplying utility for electricity used in a common area or office of the recreational vehicle park in computing the amounts under Subsection (b) or (c); or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c184/scC/s184.034/2"> <num value="2">(2)</num> <content>recover that charge through a metered charge to a recreational vehicle occupant.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c184/scC/s184.035"> <num value="184.035">Sec. 184.035.</num> <heading>REFUND OF SURCHARGES</heading> <content>A recreational vehicle park owner who determines at the end of a fiscal year that the owner has collected more than the amount charged by the supplying utility shall refund the excess amount to occupants visiting the park in the succeeding fiscal year.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c184/scC/s184.036"> <num value="184.036">Sec. 184.036.</num> <heading>UTILITY CUTOFF AT RECREATIONAL VEHICLE PARK</heading> <content>Notwithstanding any other law, a person who operates a recreational vehicle park, as defined by Section 13.087, Water Code, may withhold electric, water, or wastewater utility services from a person occupying a recreational vehicle at the park if the occupant is delinquent in paying for utility services provided by the operator until the occupant pays the delinquent amount.</content> <sourceCredit>Added by Acts 2013, 83rd Leg., R.S., Ch. 613 (S.B. 1268), Sec. 5, eff. September 1, 2013.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t4/c184/scD"> <num value="D">SUBCHAPTER D.</num> <heading>CENTRAL SYSTEM UTILITIES</heading> <section identifier="/us/tx/ut/t4/c184/scD/s184.051"> <num value="184.051">Sec. 184.051.</num> <heading>DEFINITIONS</heading> <chapeau>In this subchapter:</chapeau> <paragraph identifier="/us/tx/ut/t4/c184/scD/s184.051/1"> <num value="1">(1)</num> <content>"Apartment house" means one or more buildings containing two or more dwelling units rented primarily for nontransient use with rent paid at intervals of one week or longer.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c184/scD/s184.051/2"> <num value="2">(2)</num> <content>"Apartment house owner" means the legal titleholder of an apartment house or an individual, firm, or corporation purporting to be the landlord of tenants in the apartment house.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c184/scD/s184.051/3"> <num value="3">(3)</num> <content>"Central system utilities" means electricity and water consumed by and wastewater services related to a central air conditioning system, central heating system, central hot water system, or central chilled water system in an apartment house. The term does not include utilities directly consumed in a dwelling unit.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c184/scD/s184.051/4"> <num value="4">(4)</num> <content>"Customer" means an individual, firm, or corporation in whose name a master meter is connected by a utility.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c184/scD/s184.051/5"> <num value="5">(5)</num> <content>"Dwelling unit" means one or more rooms that are suitable for occupancy as a residence and that contain kitchen and bathroom facilities.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c184/scD/s184.051/6"> <num value="6">(6)</num> <content>"Nonsubmetered master metered utility service" means an electric utility service that is master metered for an apartment house but is not submetered.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c184/scD/s184.051/7"> <num value="7">(7)</num> <content>"Tenant" means a person who is entitled to occupy a dwelling unit in an apartment house to the exclusion of others and who is obligated to pay for the occupancy under a written or oral rental agreement.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c184/scD/s184.051/8"> <num value="8">(8)</num> <content>"Utility" means a public, private, or member-owned utility that provides electricity, water, or wastewater service to an apartment house served by a master meter.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c184/scD/s184.052"> <num value="184.052">Sec. 184.052.</num> <heading>RULES</heading> <subsection identifier="/us/tx/ut/t4/c184/scD/s184.052/a"> <num value="a">(a)</num> <content>The commission shall adopt rules governing billing systems or methods used by an apartment house owner to prorate or allocate among tenants central system utility costs or nonsubmetered master metered utility service costs.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c184/scD/s184.052/b"> <num value="b">(b)</num> <chapeau>In addition to other appropriate safeguards for a tenant of an apartment house, a rule adopted under this section must require that:</chapeau> <paragraph identifier="/us/tx/ut/t4/c184/scD/s184.052/1"> <num value="1">(1)</num> <chapeau>a rental agreement contain:</chapeau> <subparagraph identifier="/us/tx/ut/t4/c184/scD/s184.052/A"> <num value="A">(A)</num> <content>a clear written description of the method of computing the allocation of central system utilities or nonsubmetered master metered utilities for the apartment house; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c184/scD/s184.052/B"> <num value="B">(B)</num> <content>a statement of the average apartment unit monthly bill for all apartment units for any allocation of central system utilities' costs or nonsubmetered master metered utility service costs for the previous calendar year; and</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t4/c184/scD/s184.052/2"> <num value="2">(2)</num> <chapeau>the apartment house owner:</chapeau> <subparagraph identifier="/us/tx/ut/t4/c184/scD/s184.052/A"> <num value="A">(A)</num> <content>not impose a charge on a tenant in excess of the actual charge imposed on the owner for utility consumption by the apartment house; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c184/scD/s184.052/B"> <num value="B">(B)</num> <content>maintain adequate records, including utility bills and records concerning the central system utility or nonsubmetered master metered utility service consumption of the apartment house, the charges assessed by the utility, and the allocation of central system utilities' costs or nonsubmetered master metered utility service costs to the tenants and make the records available for inspection by the tenants during normal business hours.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c184/scD/s184.052/c"> <num value="c">(c)</num> <content>A rule adopted under this section has the same effect as a rule adopted under Title 2, and an owner, operator, or manager of an apartment house subject to this subchapter is subject to enforcement under Sections 15.021, 15.022, 15.028, 15.029, 15.030, 15.031, 15.032, and 15.033.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t4/c184/scE"> <num value="E">SUBCHAPTER E.</num> <heading>LIABILITY FOR RULE VIOLATION</heading> <section identifier="/us/tx/ut/t4/c184/scE/s184.071"> <num value="184.071">Sec. 184.071.</num> <heading>LIABILITY</heading> <subsection identifier="/us/tx/ut/t4/c184/scE/s184.071/a"> <num value="a">(a)</num> <chapeau>A landlord who violates a commission rule relating to submetering of electric utilities consumed exclusively in a tenant's dwelling unit or a rule relating to the allocation of central system utility costs or nonsubmetered master metered electric utility costs is liable to the tenant for:</chapeau> <paragraph identifier="/us/tx/ut/t4/c184/scE/s184.071/1"> <num value="1">(1)</num> <content>three times the amount of any overcharge;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c184/scE/s184.071/2"> <num value="2">(2)</num> <content>a civil penalty equal to one month's rent;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c184/scE/s184.071/3"> <num value="3">(3)</num> <content>reasonable attorney's fees; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c184/scE/s184.071/4"> <num value="4">(4)</num> <content>court costs.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c184/scE/s184.071/b"> <num value="b">(b)</num> <content>A landlord is not liable for the civil penalty provided by Subsection (a)(2) if the landlord proves that the landlord's violation of the rule was an unintentional mistake made in good faith.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t4/c185"> <num value="185">CHAPTER 185.</num> <heading>RATING OF SOLAR ENERGY DEVICES</heading> <section identifier="/us/tx/ut/t4/c185/s185.001"> <num value="185.001">Sec. 185.001.</num> <heading>DEFINITIONS</heading> <chapeau>In this chapter:</chapeau> <paragraph identifier="/us/tx/ut/t4/c185/s185.001/1"> <num value="1">(1)</num> <content>"Commission" means the Public Utility Commission of Texas.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c185/s185.001/2"> <num value="2">(2)</num> <content>"Solar energy device" means a solar energy collector or solar energy system that provides for the collection of solar energy or the subsequent use of that energy as thermal, mechanical, or electrical energy.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c185/s185.002"> <num value="185.002">Sec. 185.002.</num> <heading>COMPLIANCE</heading> <content>A person who rates, labels, or certifies the performance of a solar energy device in this state shall comply with the standards adopted by the commission under this chapter.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c185/s185.003"> <num value="185.003">Sec. 185.003.</num> <heading>ADOPTION OF STANDARDS</heading> <subsection identifier="/us/tx/ut/t4/c185/s185.003/a"> <num value="a">(a)</num> <content>The commission shall study and adopt standards for rating solar energy devices. The standards shall be used in performance labeling and certification of solar energy devices in this state.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c185/s185.003/b"> <num value="b">(b)</num> <content>The commission shall examine rating standards and certification programs used by other states and by industry in adopting standards under this section.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c185/s185.003/c"> <num value="c">(c)</num> <content>The commission shall adopt the standards that the commission finds are the most widely used unless the commission finds that those standards are not suitable for use in this state. If the commission finds that a widely used standard is not suitable, the commission may amend the standard or adopt a standard that the commission finds suitable.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c185/s185.004"> <num value="185.004">Sec. 185.004.</num> <heading>USE OF NATIONAL STANDARDS</heading> <content>If national standards for rating and certifying solar energy devices are developed by a federal agency in conjunction with the states and industry, the commission shall adopt those national standards as the standards for use in this state.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c185/s185.005"> <num value="185.005">Sec. 185.005.</num> <heading>REVIEW OF STANDARDS</heading> <chapeau>The commission shall periodically review the standards adopted under this chapter and shall amend those standards as necessary to ensure that the standards are:</chapeau> <paragraph identifier="/us/tx/ut/t4/c185/s185.005/1"> <num value="1">(1)</num> <content>appropriate in view of current technology; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c185/s185.005/2"> <num value="2">(2)</num> <content>the same as or similar to the standards widely used by other states and by industry.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </chapter> <chapter identifier="/us/tx/ut/t4/c186"> <num value="186">CHAPTER 186.</num> <heading>PROVISIONS TO ENSURE THE RELIABILITY AND INTEGRITY OF UTILITY SERVICE</heading> <subchapter identifier="/us/tx/ut/t4/c186/scA"> <num value="A">SUBCHAPTER A.</num> <heading>CONTINUITY OF UTILITY SERVICE</heading> <section identifier="/us/tx/ut/t4/c186/scA/s186.001"> <num value="186.001">Sec. 186.001.</num> <heading>DEFINITION</heading> <chapeau>In this subchapter, "public utility" means and includes a private corporation that does business in this state and has the right of eminent domain, a municipality, or a state agency, authority, or subdivision engaged in the business of:</chapeau> <paragraph identifier="/us/tx/ut/t4/c186/scA/s186.001/1"> <num value="1">(1)</num> <content>generating, transmitting, or distributing electric energy to the public;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c186/scA/s186.001/2"> <num value="2">(2)</num> <content>producing, transmitting, or distributing natural or artificial gas to the public; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c186/scA/s186.001/3"> <num value="3">(3)</num> <content>furnishing water to the public.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c186/scA/s186.002"> <num value="186.002">Sec. 186.002.</num> <heading>POLICY</heading> <subsection identifier="/us/tx/ut/t4/c186/scA/s186.002/a"> <num value="a">(a)</num> <content>Continuous service by a public utility is essential to the life, health, and safety of the public. A person's wilful interruption of that service is a public calamity that cannot be endured.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c186/scA/s186.002/b"> <num value="b">(b)</num> <content>A public utility is dedicated to public service. The primary duty of a public utility, including its management and employees, is to maintain continuous and adequate service at all times to protect the safety and health of the public against the danger inherent in the interruption of service.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c186/scA/s186.002/c"> <num value="c">(c)</num> <chapeau>Each court and administrative agency of this state shall:</chapeau> <paragraph identifier="/us/tx/ut/t4/c186/scA/s186.002/1"> <num value="1">(1)</num> <content>recognize the policy stated in this section; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c186/scA/s186.002/2"> <num value="2">(2)</num> <content>interpret and apply this subchapter in accordance with that policy.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c186/scA/s186.003"> <num value="186.003">Sec. 186.003.</num> <heading>ENFORCEMENT BY EXECUTIVE DEPARTMENT</heading> <content>In accordance with Section 186.002, the governor, and the department of the executive branch of government under the governor's direction, shall exercise all power available under the constitution and laws of this state to protect the public from dangers incident to an interruption in water, electric, or gas utility service in this state that occurs because of a violation of this subchapter.</content> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c186/scA/s186.004"> <num value="186.004">Sec. 186.004.</num> <heading>UNLAWFUL PICKETING, THREATS, OR INTIMIDATION</heading> <subsection identifier="/us/tx/ut/t4/c186/scA/s186.004/a"> <num value="a">(a)</num> <chapeau>A person may not:</chapeau> <paragraph identifier="/us/tx/ut/t4/c186/scA/s186.004/1"> <num value="1">(1)</num> <content>picket the plant, premises, or other property of a public utility with intent to disrupt the service of that utility or to prevent the maintenance of that service; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c186/scA/s186.004/2"> <num value="2">(2)</num> <content>engage in picketing that has the effect of disrupting the service of a public utility or preventing the maintenance of that service.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c186/scA/s186.004/b"> <num value="b">(b)</num> <chapeau>A person may not:</chapeau> <paragraph identifier="/us/tx/ut/t4/c186/scA/s186.004/1"> <num value="1">(1)</num> <content>intimidate, threaten, or harass an employee of a public utility with intent to disrupt the service of the utility or prevent the maintenance of that service; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c186/scA/s186.004/2"> <num value="2">(2)</num> <content>intimidate, threaten, or harass an employee of a public utility if that conduct has the effect of disrupting the service of the utility or preventing the maintenance of that service.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c186/scA/s186.005"> <num value="186.005">Sec. 186.005.</num> <heading>RESTRAINING ORDER</heading> <subsection identifier="/us/tx/ut/t4/c186/scA/s186.005/a"> <num value="a">(a)</num> <chapeau>A district court shall immediately inquire into the matter if a public utility presents a verified petition to the court:</chapeau> <paragraph identifier="/us/tx/ut/t4/c186/scA/s186.005/1"> <num value="1">(1)</num> <content>alleging that in the judicial district of the court a person is violating or threatening to violate Section 186.004 and that the violation or threatened violation will interfere with the maintenance of adequate water, electric, or gas service; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c186/scA/s186.005/2"> <num value="2">(2)</num> <content>describing the acts committed in violation of Section 186.004, or the threatened acts that, if committed, will violate Section 186.004.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c186/scA/s186.005/b"> <num value="b">(b)</num> <content>If it appears that there is a violation or threatened violation of Section 186.004, the court shall immediately issue an order restraining the person, the person's agent, and any other person acting with them from committing an act prohibited by that section.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c186/scA/s186.005/c"> <num value="c">(c)</num> <content>A restraining order issued under this section is effective when the petitioner files with the clerk of the court a good and sufficient bond in an amount set by the court to cover court costs that may reasonably accrue in connection with the case. A judgment rendered in the case may not be superseded pending appeal.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c186/scA/s186.005/d"> <num value="d">(d)</num> <content>Venue for a suit under this section is in any judicial district in which the violation or threat to violate occurs.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c186/scA/s186.006"> <num value="186.006">Sec. 186.006.</num> <heading>EMPLOYEE RIGHTS</heading> <chapeau>This subchapter does not limit the right of an employee of a public utility to:</chapeau> <paragraph identifier="/us/tx/ut/t4/c186/scA/s186.006/1"> <num value="1">(1)</num> <content>quit work and leave the employer's premises at any time the employee chooses; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c186/scA/s186.006/2"> <num value="2">(2)</num> <content>refuse to report for work when the employee does not want to report.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c186/scA/s186.007"> <num value="186.007">Sec. 186.007.</num> <heading>PUBLIC UTILITY COMMISSION WEATHER EMERGENCY PREPAREDNESS REPORTS</heading> <subsection identifier="/us/tx/ut/t4/c186/scA/s186.007/a"> <num value="a">(a)</num> <content>In this section, "commission" means the Public Utility Commission of Texas.</content> <continuation>(a-1) The commission shall analyze emergency operations plans developed by electric utilities as defined by Section 31.002, power generation companies as defined by Section 31.002, municipally owned utilities, and electric cooperatives that operate generation facilities in this state and retail electric providers as defined by Section 31.002 and prepare a weather emergency preparedness report on power weatherization preparedness. In preparing the report, the commission shall:</continuation> <paragraph identifier="/us/tx/ut/t4/c186/scA/s186.007/1"> <num value="1">(1)</num> <content>review emergency operations plans on file with the commission;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c186/scA/s186.007/2"> <num value="2">(2)</num> <content>analyze and determine the ability of the electric grid to withstand extreme weather events in the upcoming year;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c186/scA/s186.007/3"> <num value="3">(3)</num> <content>consider the anticipated weather patterns for the upcoming year as forecasted by the National Weather Service or any similar state or national agency; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c186/scA/s186.007/4"> <num value="4">(4)</num> <content>make recommendations on improving emergency operations plans and procedures in order to ensure the continuity of electric service.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c186/scA/s186.007/b"> <num value="b">(b)</num> <content>The commission shall require an entity subject to this section to file an updated emergency operations plan if it finds that an emergency operations plan on file does not contain adequate information to determine whether the entity can provide adequate electric services.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c186/scA/s186.007/c"> <num value="c">(c)</num> <content>The commission may adopt rules relating to the implementation of the report described by Subsection (a-1).</content> </subsection> <subsection identifier="/us/tx/ut/t4/c186/scA/s186.007/d"> <num value="d">(d)</num> <content>The commission shall submit the report described by Subsection (a-1) to the lieutenant governor, the speaker of the house of representatives, and the members of the legislature not later than September 30 of each even-numbered year.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c186/scA/s186.007/e"> <num value="e">(e)</num> <chapeau>The commission may submit additional weather emergency preparedness reports if the commission finds that significant changes to weatherization techniques have occurred or are necessary to protect consumers or vital services, or if there have been changes to statutes or rules relating to weatherization requirements. A report under this subsection must be submitted not later than:</chapeau> <paragraph identifier="/us/tx/ut/t4/c186/scA/s186.007/1"> <num value="1">(1)</num> <content>March 1 for a summer weather emergency preparedness report; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c186/scA/s186.007/2"> <num value="2">(2)</num> <content>September 1 for a winter weather emergency preparedness report.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c186/scA/s186.007/f"> <num value="f">(f)</num> <content>The emergency operations plans submitted for a report described by Subsection (a-1) and any additional plans submitted under Subsection (e) are public information except for the portions of the plan considered confidential under Chapter 552, Government Code, or other state or federal law. If portions of a plan are designated as confidential, the plan shall be provided to the commission in a redacted form for public inspection with the confidential portions removed. An entity within the ERCOT power region shall provide the entity's plan to ERCOT in its entirety.</content> </subsection> <sourceCredit>Added by Acts 2011, 82nd Leg., R.S., Ch. 1335 (S.B. 1133), Sec. 1, eff. June 17, 2011. Amended by: Acts 2021, 87th Leg., R.S., Ch. 426 (S.B. 3), Sec. 23, eff. June 8, 2021. Acts 2021, 87th Leg., R.S., Ch. 426 (S.B. 3), Sec. 24, eff. June 8, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c186/scA/s186.008"> <num value="186.008">Sec. 186.008.</num> <heading>RAILROAD COMMISSION WEATHER EMERGENCY PREPAREDNESS REPORTS</heading> <subsection identifier="/us/tx/ut/t4/c186/scA/s186.008/a"> <num value="a">(a)</num> <content>In this section, "commission" means the Railroad Commission of Texas.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c186/scA/s186.008/b"> <num value="b">(b)</num> <chapeau>The commission shall analyze emergency operations plans developed by operators of facilities that produce, treat, process, pressurize, store, or transport natural gas and are included on the electricity supply chain map created under Section 38.203 and prepare a weather emergency preparedness report on weatherization preparedness of those facilities. In preparing the report, the commission shall:</chapeau> <paragraph identifier="/us/tx/ut/t4/c186/scA/s186.008/1"> <num value="1">(1)</num> <content>review any emergency operations plans on file with the commission;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c186/scA/s186.008/2"> <num value="2">(2)</num> <content>analyze and determine the ability of the electricity supply chain, as mapped under Section 38.203, to withstand extreme weather events in the upcoming year;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c186/scA/s186.008/3"> <num value="3">(3)</num> <content>consider the anticipated weather patterns for the upcoming year as forecasted by the National Weather Service or any similar state or national agency; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c186/scA/s186.008/4"> <num value="4">(4)</num> <content>make recommendations on improving emergency operations plans and procedures in order to ensure the continuity of natural gas service for the electricity supply chain, as mapped under Section 38.203.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c186/scA/s186.008/c"> <num value="c">(c)</num> <content>The commission shall require an entity subject to this section to file an updated emergency operations plan if it finds that an emergency operations plan on file does not contain adequate information to determine whether the entity can provide adequate natural gas services.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c186/scA/s186.008/d"> <num value="d">(d)</num> <content>The commission may adopt rules relating to the implementation of the report described by Subsection (b).</content> </subsection> <subsection identifier="/us/tx/ut/t4/c186/scA/s186.008/e"> <num value="e">(e)</num> <content>The commission shall submit the report described by Subsection (b) to the lieutenant governor, the speaker of the house of representatives, and the members of the legislature not later than September 30 of each even-numbered year.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c186/scA/s186.008/f"> <num value="f">(f)</num> <chapeau>The commission may submit additional weather emergency preparedness reports if the commission finds that significant changes to weatherization techniques have occurred or are necessary to protect consumers or vital services, or if there have been changes to statutes or rules relating to weatherization requirements. A report under this subsection must be submitted not later than:</chapeau> <paragraph identifier="/us/tx/ut/t4/c186/scA/s186.008/1"> <num value="1">(1)</num> <content>March 1 for a summer weather emergency preparedness report; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c186/scA/s186.008/2"> <num value="2">(2)</num> <content>September 1 for a winter weather emergency preparedness report.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c186/scA/s186.008/g"> <num value="g">(g)</num> <content>The emergency operations plans submitted for a report described by Subsection (b) and any additional plans submitted under Subsection (f) are public information except for the portions of the plan considered confidential under Chapter 552, Government Code, or other state or federal law. If portions of a plan are designated as confidential, the plan shall be provided to the commission in a redacted form for public inspection with the confidential portions removed.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 426 (S.B. 3), Sec. 25, eff. June 8, 2021.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t4/c186/scB"> <num value="B">SUBCHAPTER B.</num> <heading>MANIPULATION OF SERVICE FOR CERTAIN LAW ENFORCEMENT PURPOSES</heading> <section identifier="/us/tx/ut/t4/c186/scB/s186.021"> <num value="186.021">Sec. 186.021.</num> <heading>EMERGENCY INVOLVING HOSTAGE OR ARMED SUSPECT</heading> <subsection identifier="/us/tx/ut/t4/c186/scB/s186.021/a"> <num value="a">(a)</num> <content>In an emergency in which the supervising law enforcement official having jurisdiction in the geographical area has probable cause to believe that an armed and barricaded suspect or a person holding a hostage is committing a crime, the supervising law enforcement official may order a designated telephone company security official to cut or otherwise control telephone lines to prevent telephone communication by the armed suspect or the hostage holder with a person other than a peace officer or person authorized by a peace officer.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c186/scB/s186.021/b"> <num value="b">(b)</num> <content>The serving telephone company in the geographical area of a law enforcement unit shall designate a telephone company security official and an alternate to provide all required assistance to law enforcement officials to carry out this section.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c186/scB/s186.021/c"> <num value="c">(c)</num> <content>Good faith reliance on an order given by a supervising law enforcement official under this section is a complete defense to a civil or criminal action brought against a telephone company or the company's director, officer, agent, or employee as a result of compliance with the order.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t4/c186/scC"> <num value="C">SUBCHAPTER C.</num> <heading>FRAUDULENT OBTAINING OF SERVICE</heading> <section identifier="/us/tx/ut/t4/c186/scC/s186.031"> <num value="186.031">Sec. 186.031.</num> <heading>DEFINITIONS</heading> <chapeau>In this subchapter:</chapeau> <paragraph identifier="/us/tx/ut/t4/c186/scC/s186.031/1"> <num value="1">(1)</num> <content>"Publish" means to communicate information to another by any means.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c186/scC/s186.031/2"> <num value="2">(2)</num> <content>"Telecommunications service" means the transmission of a message or other information by a public utility, including a telephone or telegraph company.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c186/scC/s186.032"> <num value="186.032">Sec. 186.032.</num> <heading>FRAUDULENTLY OBTAINING TELECOMMUNICATIONS SERVICES</heading> <subsection identifier="/us/tx/ut/t4/c186/scC/s186.032/a"> <num value="a">(a)</num> <chapeau>A person commits an offense if:</chapeau> <paragraph identifier="/us/tx/ut/t4/c186/scC/s186.032/1"> <num value="1">(1)</num> <chapeau>knowing that another will use the published information to avoid payment of a charge for telecommunications service, the person publishes:</chapeau> <subparagraph identifier="/us/tx/ut/t4/c186/scC/s186.032/A"> <num value="A">(A)</num> <content>an existing, cancelled, revoked, or nonexistent telephone number;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c186/scC/s186.032/B"> <num value="B">(B)</num> <content>a credit number or other credit device; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c186/scC/s186.032/C"> <num value="C">(C)</num> <content>a method of numbering or coding that is used in issuing telephone numbers or credit devices, including credit numbers; or</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t4/c186/scC/s186.032/2"> <num value="2">(2)</num> <content>the person makes or possesses equipment specifically designed to be used fraudulently to avoid charges for telecommunications service.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c186/scC/s186.032/b"> <num value="b">(b)</num> <content>An offense under this section is a misdemeanor punishable by a fine of not more than $500, by confinement in jail for not more than 60 days, or by both, unless the person has been previously convicted of an offense under this section. A second or subsequent offense is a felony punishable by a fine of not more than $5,000, by imprisonment in the Texas Department of Criminal Justice for not less than two years and not more than five years, or by both.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c186/scC/s186.032/c"> <num value="c">(c)</num> <content>This section does not apply to an employee of a public utility who provides telecommunications service while acting in the course of employment.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2009, 81st Leg., R.S., Ch. 87 (S.B. 1969), Sec. 25.156, eff. September 1, 2009.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c186/scC/s186.033"> <num value="186.033">Sec. 186.033.</num> <heading>DISPOSITION OF CERTAIN EQUIPMENT</heading> <subsection identifier="/us/tx/ut/t4/c186/scC/s186.033/a"> <num value="a">(a)</num> <content>A peace officer may seize equipment described by Section 186.032(a)(2) under a warrant or incident to a lawful arrest.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c186/scC/s186.033/b"> <num value="b">(b)</num> <content>If the person who possessed equipment seized under Subsection (a) is convicted under Section 186.032, the court entering the judgment of conviction shall order the sheriff to destroy the equipment.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t4/c186/scD"> <num value="D">SUBCHAPTER D.</num> <heading>AVAILABILITY OF EMERGENCY TELEPHONE SERVICE</heading> <section identifier="/us/tx/ut/t4/c186/scD/s186.041"> <num value="186.041">Sec. 186.041.</num> <heading>DEFINITIONS</heading> <chapeau>In this subchapter:</chapeau> <paragraph identifier="/us/tx/ut/t4/c186/scD/s186.041/1"> <num value="1">(1)</num> <content>"Emergency" means a situation in which property or human life is in jeopardy and the prompt summoning of aid is essential.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c186/scD/s186.041/2"> <num value="2">(2)</num> <content>"Party line" means a subscriber's telephone circuit, consisting of two or more main telephone stations connected with the circuit, each station with a distinctive ring or telephone number.</content> </paragraph> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c186/scD/s186.042"> <num value="186.042">Sec. 186.042.</num> <heading>OBSTRUCTION OF EMERGENCY TELEPHONE CALL; PENALTY</heading> <subsection identifier="/us/tx/ut/t4/c186/scD/s186.042/a"> <num value="a">(a)</num> <chapeau>A person commits an offense if:</chapeau> <paragraph identifier="/us/tx/ut/t4/c186/scD/s186.042/1"> <num value="1">(1)</num> <content>the person wilfully refuses to relinquish a party line immediately on being informed that the line is needed for an emergency call described by Subdivision (2); and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c186/scD/s186.042/2"> <num value="2">(2)</num> <chapeau>the party line is needed for an emergency call:</chapeau> <subparagraph identifier="/us/tx/ut/t4/c186/scD/s186.042/A"> <num value="A">(A)</num> <content>to a fire or police department; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c186/scD/s186.042/B"> <num value="B">(B)</num> <content>for medical aid or an ambulance service.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c186/scD/s186.042/b"> <num value="b">(b)</num> <chapeau>An offense under this section is a misdemeanor punishable by:</chapeau> <paragraph identifier="/us/tx/ut/t4/c186/scD/s186.042/1"> <num value="1">(1)</num> <content>a fine of not less than $25 and not more than $500;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c186/scD/s186.042/2"> <num value="2">(2)</num> <content>confinement in the county jail for not more than one month; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c186/scD/s186.042/3"> <num value="3">(3)</num> <content>both fine and confinement.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c186/scD/s186.043"> <num value="186.043">Sec. 186.043.</num> <heading>FALSIFICATION OF EMERGENCY TELEPHONE CALL; PENALTY</heading> <subsection identifier="/us/tx/ut/t4/c186/scD/s186.043/a"> <num value="a">(a)</num> <chapeau>A person commits an offense if the person secures the use of a party line by falsely stating that the line is needed for an emergency call:</chapeau> <paragraph identifier="/us/tx/ut/t4/c186/scD/s186.043/1"> <num value="1">(1)</num> <content>to a fire or police department; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c186/scD/s186.043/2"> <num value="2">(2)</num> <content>for medical aid or an ambulance service.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c186/scD/s186.043/b"> <num value="b">(b)</num> <chapeau>An offense under this section is a misdemeanor punishable by:</chapeau> <paragraph identifier="/us/tx/ut/t4/c186/scD/s186.043/1"> <num value="1">(1)</num> <content>a fine of not less than $25 and not more than $500;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c186/scD/s186.043/2"> <num value="2">(2)</num> <content>confinement in the county jail for not more than one month; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c186/scD/s186.043/3"> <num value="3">(3)</num> <content>both fine and confinement.</content> </paragraph> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c186/scD/s186.044"> <num value="186.044">Sec. 186.044.</num> <heading>NOTICE OF CERTAIN OFFENSES REQUIRED</heading> <subsection identifier="/us/tx/ut/t4/c186/scD/s186.044/a"> <num value="a">(a)</num> <chapeau>A telephone directory distributed to the public in this state that lists the telephone numbers of an exchange located in this state must contain a notice explaining the offenses under Sections 186.042 and 186.043. The notice must be:</chapeau> <paragraph identifier="/us/tx/ut/t4/c186/scD/s186.044/1"> <num value="1">(1)</num> <content>printed in type not smaller than the smallest type on the same page; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c186/scD/s186.044/2"> <num value="2">(2)</num> <content>preceded by the word "warning" printed in type at least as large as the largest type on the same page.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c186/scD/s186.044/b"> <num value="b">(b)</num> <content>At least once each year, a person providing telephone service shall enclose in the telephone bill mailed to each person who uses a party line telephone a notice of Sections 186.042 and 186.043.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c186/scD/s186.044/c"> <num value="c">(c)</num> <content>This section does not apply to a directory, commonly known as a classified directory, that is distributed solely for business advertising purposes.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c186/scD/s186.045"> <num value="186.045">Sec. 186.045.</num> <heading>FAILURE TO PROVIDE NOTICE; PENALTY</heading> <subsection identifier="/us/tx/ut/t4/c186/scD/s186.045/a"> <num value="a">(a)</num> <chapeau>A person providing telephone service commits an offense if the person:</chapeau> <paragraph identifier="/us/tx/ut/t4/c186/scD/s186.045/1"> <num value="1">(1)</num> <content>distributes copies of a telephone directory subject to Section 186.044(a) from which the notice required by that section is wilfully omitted; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c186/scD/s186.045/2"> <num value="2">(2)</num> <content>wilfully fails to enclose in telephone bills the notice required by Section 186.044(b).</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c186/scD/s186.045/b"> <num value="b">(b)</num> <content>An offense under this section is a misdemeanor punishable by a fine of not less than $25 and not more than $500.</content> </subsection> <sourceCredit>Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t4/c186/scE"> <num value="E">SUBCHAPTER E.</num> <heading>CONSTRUCTION AND MAINTENANCE OF FACILITIES ALONG, OVER, UNDER, OR ACROSS RAILROAD RIGHT-OF-WAY</heading> <section identifier="/us/tx/ut/t4/c186/scE/s186.051"> <num value="186.051">Sec. 186.051.</num> <heading>DEFINITIONS</heading> <chapeau>In this subchapter:</chapeau> <paragraph identifier="/us/tx/ut/t4/c186/scE/s186.051/1"> <num value="1">(1)</num> <content>"Cable operator" means an entity that owns or operates a cable system, as that term is defined by 47 U.S.C. Section 522, as amended.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c186/scE/s186.051/2"> <num value="2">(2)</num> <content>"Common carrier" means a common carrier as described by Section 111.002, Natural Resources Code, or a person who submits to regulation by the state as a common carrier under Article 2.01, Texas Business Corporation Act.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c186/scE/s186.051/3"> <num value="3">(3)</num> <content>"Energy transporter" means a person who gathers or transports oil, gas, or oil and gas products by pipeline.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c186/scE/s186.051/4"> <num value="4">(4)</num> <content>"Railroad" means an entity that owns, operates, or controls a railroad or property or assets owned or previously owned by a railroad in this state, including agents, assignees, or parties that by contract own, control, or manage railroad rights-of-way, easements, or other real property rights belonging to a railroad. The term includes interurban and street railroads owned by a private entity but excludes a terminal railroad and a railroad or interurban and street railroad owned by a governmental entity, including a navigation district or port authority, or a wharf.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c186/scE/s186.051/5"> <num value="5">(5)</num> <content>"Railroad right-of-way" means the real property rights owned or controlled by a railroad, including fee and easement interests used or previously used as a railroad operating corridor.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c186/scE/s186.051/6"> <num value="6">(6)</num> <chapeau>"Utility" means:</chapeau> <subparagraph identifier="/us/tx/ut/t4/c186/scE/s186.051/A"> <num value="A">(A)</num> <content>a gas, water, electric, or telecommunications entity that is defined as a utility under the laws of this state;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c186/scE/s186.051/B"> <num value="B">(B)</num> <content>an electric cooperative; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c186/scE/s186.051/C"> <num value="C">(C)</num> <content>a municipally owned utility.</content> </subparagraph> </paragraph> <sourceCredit>Added by Acts 2003, 78th Leg., ch. 1087, Sec. 2, eff. Sept. 1, 2003.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c186/scE/s186.052"> <num value="186.052">Sec. 186.052.</num> <heading>EXEMPTIONS</heading> <subsection identifier="/us/tx/ut/t4/c186/scE/s186.052/a"> <num value="a">(a)</num> <content>The inclusion of an energy transporter or cable operator in this subchapter does not subject the transporter or operator to regulation as a utility or common carrier.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c186/scE/s186.052/b"> <num value="b">(b)</num> <content>The inclusion of a common carrier in this subchapter does not subject the carrier to regulation as a utility.</content> </subsection> <sourceCredit>Added by Acts 2003, 78th Leg., ch. 1087, Sec. 2, eff. Sept. 1, 2003.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c186/scE/s186.053"> <num value="186.053">Sec. 186.053.</num> <heading>APPLICABILITY</heading> <subsection identifier="/us/tx/ut/t4/c186/scE/s186.053/a"> <num value="a">(a)</num> <content>Except as provided by Section 186.058, this subchapter applies only to facilities along, over, under, or across a railroad or railroad right-of-way in place under a license, agreement, or nonperpetual easement.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c186/scE/s186.053/b"> <num value="b">(b)</num> <content>In relation to cable operators, this subchapter applies only to those lines over which the cable operator is offering or transporting high-speed Internet or broadband information services.</content> </subsection> <sourceCredit>Added by Acts 2003, 78th Leg., ch. 1087, Sec. 2, eff. Sept. 1, 2003.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c186/scE/s186.054"> <num value="186.054">Sec. 186.054.</num> <heading>CONSTRUCTION AND MAINTENANCE OF UTILITY, COMMON CARRIER, CABLE OPERATOR, AND ENERGY TRANSPORTER FACILITIES</heading> <subsection identifier="/us/tx/ut/t4/c186/scE/s186.054/a"> <num value="a">(a)</num> <content>A utility, common carrier, cable operator, or energy transporter may acquire an easement by eminent domain along, over, under, or across a railroad or railroad right-of-way as provided by this subchapter to maintain, operate, or upgrade its facilities consistent with preexisting licenses or agreements.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c186/scE/s186.054/b"> <num value="b">(b)</num> <chapeau>A utility, common carrier, cable operator, or energy transporter:</chapeau> <paragraph identifier="/us/tx/ut/t4/c186/scE/s186.054/1"> <num value="1">(1)</num> <content>shall provide notice to the railroad within a reasonable period of any proposed activity relating to the construction, maintenance, or operation of the facilities; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c186/scE/s186.054/2"> <num value="2">(2)</num> <content>may not unreasonably interfere with railroad operations.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c186/scE/s186.054/c"> <num value="c">(c)</num> <chapeau>Absent terms to the contrary in an easement acquired by condemnation under this subchapter, existing license, or agreement, a railroad may require a utility, common carrier, cable operator, or energy transporter to relocate any portion of a facility that is located in the railroad right-of-way that is not in the public right-of-way if:</chapeau> <paragraph identifier="/us/tx/ut/t4/c186/scE/s186.054/1"> <num value="1">(1)</num> <content>a reasonable alternate route is available;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c186/scE/s186.054/2"> <num value="2">(2)</num> <content>a reasonable amount of time is provided;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c186/scE/s186.054/3"> <num value="3">(3)</num> <content>substantial interference with the railroad operations is established; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c186/scE/s186.054/4"> <num value="4">(4)</num> <content>the railroad reimburses the utility, common carrier, cable operator, or energy transporter for the reasonable cost of relocation.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2003, 78th Leg., ch. 1087, Sec. 2, eff. Sept. 1, 2003.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c186/scE/s186.055"> <num value="186.055">Sec. 186.055.</num> <heading>DOCUMENTATION OF RIGHTS ACQUIRED</heading> <content>If a railroad requires a utility, common carrier, cable operator, or energy transporter to obtain from the railroad a right to use a railroad right-of-way, the railroad shall produce, if requested in writing, the readily available documentation from the railroad's records indicating the extent of the railroad's right, title, or interest in the property sought to be used by the utility, common carrier, cable operator, or energy transporter. The utility, common carrier, cable operator, or energy transporter shall reimburse the railroad for the reasonable cost of producing the documentation as required by this section. The reimbursable cost, including internal costs, may not exceed $500, unless the parties agree otherwise. A railroad that produces documentation as provided by this section is not limited or prevented from asserting a right, title, or interest in real property based on documentation that has not been produced under this section.</content> <sourceCredit>Added by Acts 2003, 78th Leg., ch. 1087, Sec. 2, eff. Sept. 1, 2003.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c186/scE/s186.056"> <num value="186.056">Sec. 186.056.</num> <heading>VALUATION OF RIGHTS ACQUIRED</heading> <subsection identifier="/us/tx/ut/t4/c186/scE/s186.056/a"> <num value="a">(a)</num> <content>In the absence of an agreement to convey a permanent easement for the continued right to use a preexisting facility located in a railroad right-of-way, a utility, common carrier, cable operator, or energy transporter may obtain the right to continuously use the right-of-way through the exercise of eminent domain under Chapter 21, Property Code.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c186/scE/s186.056/b"> <num value="b">(b)</num> <chapeau>The award of damages due the railroad under an eminent domain proceeding as provided by Subsection (a) is:</chapeau> <paragraph identifier="/us/tx/ut/t4/c186/scE/s186.056/1"> <num value="1">(1)</num> <content>the market value of the real property interest to be used; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c186/scE/s186.056/2"> <num value="2">(2)</num> <content>if a portion of the railroad's right-of-way is taken, damages, if any, to the railroad's remaining property.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c186/scE/s186.056/c"> <num value="c">(c)</num> <chapeau>The railroad may also recover:</chapeau> <paragraph identifier="/us/tx/ut/t4/c186/scE/s186.056/1"> <num value="1">(1)</num> <content>reasonable costs and expenses for interference with railroad operations, including internal costs for providing flagging services; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c186/scE/s186.056/2"> <num value="2">(2)</num> <content>reasonable costs and expenses to repair any damage to its facilities caused by the maintenance, operation, or upgrade of the preexisting utility, common carrier, cable operator, or energy transporter facilities.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c186/scE/s186.056/d"> <num value="d">(d)</num> <content>The payment by the utility, common carrier, cable operator, or energy transporter determined under this section is the only compensation due to the railroad for the perpetual use of the interest obtained.</content> </subsection> <sourceCredit>Added by Acts 2003, 78th Leg., ch. 1087, Sec. 2, eff. Sept. 1, 2003.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c186/scE/s186.057"> <num value="186.057">Sec. 186.057.</num> <heading>RIGHT TO MAINTAIN FACILITIES</heading> <subsection identifier="/us/tx/ut/t4/c186/scE/s186.057/a"> <num value="a">(a)</num> <chapeau>A utility, common carrier, cable operator, or energy transporter may not be required to remove an existing facility for 180 days after the date the utility, common carrier, cable operator, or energy transporter receives a written notice from the railroad that an existing facility must be removed from the railroad's right-of-way if:</chapeau> <paragraph identifier="/us/tx/ut/t4/c186/scE/s186.057/1"> <num value="1">(1)</num> <content>the facility was located along, under, over, or across the railroad right-of-way with the written consent of the railroad; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c186/scE/s186.057/2"> <num value="2">(2)</num> <content>the utility, common carrier, cable operator, or energy transporter is not in default under an agreement with the railroad.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c186/scE/s186.057/b"> <num value="b">(b)</num> <content>If a utility, common carrier, cable operator, or energy transporter requests documentation under Section 186.055, the 180-day period provided by Subsection (a) is tolled until the utility, common carrier, cable operator, or energy transporter receives a written response to its request from the railroad.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c186/scE/s186.057/c"> <num value="c">(c)</num> <content>If a utility, common carrier, cable operator, or energy transporter does not condemn or enter into an agreement regarding the disputed area involving the railroad's right-of-way within the 180-day period provided by Subsection (a) or any extended period provided by Subsection (b), the license or agreement between the utility, common carrier, cable operator, or energy transporter and the railroad is terminated.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c186/scE/s186.057/d"> <num value="d">(d)</num> <content>The possessory right provided by this section is in addition to any possessory right provided by Chapter 21, Property Code.</content> </subsection> <sourceCredit>Added by Acts 2003, 78th Leg., ch. 1087, Sec. 2, eff. Sept. 1, 2003.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c186/scE/s186.058"> <num value="186.058">Sec. 186.058.</num> <heading>LICENSE AND RENEWAL</heading> <subsection identifier="/us/tx/ut/t4/c186/scE/s186.058/a"> <num value="a">(a)</num> <chapeau>A utility, common carrier, cable operator, or energy transporter may obtain an original license or renew a license for the right to use a railroad right-of-way for a one-time fee paid based on:</chapeau> <paragraph identifier="/us/tx/ut/t4/c186/scE/s186.058/1"> <num value="1">(1)</num> <content>the agreement of the railroad and the utility, common carrier, cable operator, or energy transporter; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c186/scE/s186.058/2"> <num value="2">(2)</num> <content>a mutually acceptable third-party determination of market value.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c186/scE/s186.058/b"> <num value="b">(b)</num> <content>A fee paid under this section is the only fee payment required. The license remains in effect without the requirement of additional fee payments for renewal of the license.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c186/scE/s186.058/c"> <num value="c">(c)</num> <content>The terms of the license or license renewal may provide that the railroad is not later subject to this subchapter, except the railroad continues to be subject to eminent domain authority granted by other law.</content> </subsection> <sourceCredit>Added by Acts 2003, 78th Leg., ch. 1087, Sec. 2, eff. Sept. 1, 2003.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c186/scE/s186.059"> <num value="186.059">Sec. 186.059.</num> <heading>RESTRICTIONS ON PAYMENT OF COSTS AWARDED AGAINST RAILROAD IN CONDEMNATION</heading> <content>If the special commissioners or a court awards costs against a railroad under Section 21.047, Property Code, because the award of damages to the railroad is equal to or less than the amount the utility, common carrier, cable operator, or energy transporter exercising the right of eminent domain under this subchapter offered to pay, the costs awarded against the railroad must be paid by the railroad without reimbursement by or contribution from any agent or representative, including an agent or representative that handled or assisted in the condemnation proceedings.</content> <sourceCredit>Added by Acts 2003, 78th Leg., ch. 1087, Sec. 2, eff. Sept. 1, 2003.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c186/scE/s186.060"> <num value="186.060">Sec. 186.060.</num> <heading>CUMULATIVE RIGHTS AND RESPONSIBILITIES</heading> <content>The rights, privileges, and responsibilities provided by this subchapter are in addition to and not in diminution of or substitution for those rights granted by any other state or federal law.</content> <sourceCredit>Added by Acts 2003, 78th Leg., ch. 1087, Sec. 2, eff. Sept. 1, 2003.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c186/scE/s186.061"> <num value="186.061">Sec. 186.061.</num> <heading>EFFECT ON OTHER LAW</heading> <content>This subchapter does not affect the elements a condemnor must establish by law to acquire real property.</content> <sourceCredit>Added by Acts 2003, 78th Leg., ch. 1087, Sec. 2, eff. Sept. 1, 2003.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t4/c187"> <num value="187">CHAPTER 187.</num> <heading>BATTERY ENERGY STORAGE FACILITY SAFETY</heading> <section identifier="/us/tx/ut/t4/c187/s187.001"> <num value="187.001">Sec. 187.001.</num> <heading>DEFINITIONS</heading> <chapeau>In this chapter:</chapeau> <paragraph identifier="/us/tx/ut/t4/c187/s187.001/1"> <num value="1">(1)</num> <chapeau>"Battery energy storage facility" includes:</chapeau> <subparagraph identifier="/us/tx/ut/t4/c187/s187.001/A"> <num value="A">(A)</num> <content>a battery energy storage resource; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c187/s187.001/B"> <num value="B">(B)</num> <content>any facility or equipment necessary to support the operation of the battery energy storage resource, other than a facility or equipment owned by an electric utility, as defined by Section 31.002.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t4/c187/s187.001/2"> <num value="2">(2)</num> <content>"Battery energy storage resource" means an electrochemical device, whether connected at the transmission or distribution level, that charges from the grid or a co-located generation resource and discharges that energy at a later time.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c187/s187.001/3"> <num value="3">(3)</num> <content>"Battery operator" means an electric cooperative, an electric utility, a power generation company, a self-generator, or another person that owns or operates a battery energy storage facility.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c187/s187.001/4"> <num value="4">(4)</num> <content>"Commissioner" means the commissioner of insurance.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c187/s187.001/5"> <num value="5">(5)</num> <content>"Electric cooperative" and "municipally owned utility" have the meanings assigned by Section 11.003.</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c187/s187.001/6"> <num value="6">(6)</num> <content>"Electric utility" and "power generation company" have the meanings assigned by Section 31.002.</content> </paragraph> <sourceCredit>Added by Acts 2025, 89th Leg., R.S., Ch. 641 (H.B. 3824), Sec. 1, eff. September 1, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c187/s187.002"> <num value="187.002">Sec. 187.002.</num> <heading>APPLICABILITY</heading> <content>This chapter applies only to a battery energy storage facility with a capacity of one megawatt hour or greater and a commercial operations date, determined according to criteria adopted by the commissioner, that occurs on or after January 1, 2027.</content> <sourceCredit>Added by Acts 2025, 89th Leg., R.S., Ch. 641 (H.B. 3824), Sec. 1, eff. September 1, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c187/s187.003"> <num value="187.003">Sec. 187.003.</num> <heading>FIRE SAFETY STANDARDS FOR BATTERY ENERGY STORAGE FACILITIES</heading> <subsection identifier="/us/tx/ut/t4/c187/s187.003/a"> <num value="a">(a)</num> <chapeau>The commissioner by rule shall adopt fire safety standards and testing requirements for the design, installation, operation, and safety of battery energy storage facilities based solely on:</chapeau> <paragraph identifier="/us/tx/ut/t4/c187/s187.003/1"> <num value="1">(1)</num> <content>nationally recognized standards for battery energy storage equipment or facilities established by UL Solutions, such as UL 9540A testing standards; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c187/s187.003/2"> <num value="2">(2)</num> <content>minimum standards related to stationary energy storage facilities established by the National Fire Protection Association, such as the 2023 edition of NFPA 855 or a later edition.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c187/s187.003/b"> <num value="b">(b)</num> <content>The commissioner may periodically update the standards and requirements adopted under Subsection (a) as necessary to reflect changes in the nationally recognized standards and the National Fire Protection Association standards on which the commissioner's standards are based.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c187/s187.003/c"> <num value="c">(c)</num> <content>Each battery operator or municipally owned utility that owns or operates a battery energy storage facility shall ensure that the facility meets the standards for design, installation, operation, and safety adopted by the commissioner under Subsection (a) in effect at the time the operator or utility first submits an application for a building permit or other similar authorization from the relevant political subdivision to install the facility.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c187/s187.003/d"> <num value="d">(d)</num> <content>Unless expressly authorized by another statute, a municipality or county may not adopt, enforce, or maintain an ordinance, order, or rule regulating conduct in a field of regulation that is inconsistent with the standards for design, installation, operation, and safety adopted by the commissioner under Subsection (a).</content> </subsection> <subsection identifier="/us/tx/ut/t4/c187/s187.003/e"> <num value="e">(e)</num> <chapeau>Before the commercial operations date of a battery energy storage facility, on request by a municipality in which the facility is located, or a county in which the facility is located if the facility is in an unincorporated area, a battery operator that owns or operates the facility shall, at the battery operator's expense, select and contract with an independent, third-party engineer licensed in this state or other consultant with appropriate expertise to:</chapeau> <paragraph identifier="/us/tx/ut/t4/c187/s187.003/1"> <num value="1">(1)</num> <content>evaluate the design, safety, and installation of the facility to ensure compliance with the requirements of this section;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c187/s187.003/2"> <num value="2">(2)</num> <chapeau>produce a written report that:</chapeau> <subparagraph identifier="/us/tx/ut/t4/c187/s187.003/A"> <num value="A">(A)</num> <content>includes the evaluation;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c187/s187.003/B"> <num value="B">(B)</num> <content>identifies any noted deficiencies in compliance with the standards adopted under this section; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c187/s187.003/C"> <num value="C">(C)</num> <content>recommends appropriate actions to correct deficiencies; and</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t4/c187/s187.003/3"> <num value="3">(3)</num> <content>provide the written report described by Subdivision (2) to the requesting municipality or county.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c187/s187.003/f"> <num value="f">(f)</num> <chapeau>The battery operator must make available to the engineer or consultant and the requesting municipality or county the following documents if held or created by the battery operator:</chapeau> <paragraph identifier="/us/tx/ut/t4/c187/s187.003/1"> <num value="1">(1)</num> <chapeau>at the time the operator first submits an application for a building permit or other similar authorization from the relevant political subdivision to install the battery energy storage facility:</chapeau> <subparagraph identifier="/us/tx/ut/t4/c187/s187.003/A"> <num value="A">(A)</num> <content>documents relating to the site layout;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c187/s187.003/B"> <num value="B">(B)</num> <content>any manufacturer specifications for the facility;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c187/s187.003/C"> <num value="C">(C)</num> <content>a UL 9540A report and any UL listings and associated documentation for the facility;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c187/s187.003/D"> <num value="D">(D)</num> <content>National Fire Protection Association standards, including any associated documentation, for the facility;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c187/s187.003/E"> <num value="E">(E)</num> <content>electrical drawings for the facility;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c187/s187.003/F"> <num value="F">(F)</num> <content>monitoring procedures for the facility; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c187/s187.003/G"> <num value="G">(G)</num> <content>fire protection system documentation for the facility; and</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t4/c187/s187.003/2"> <num value="2">(2)</num> <chapeau>at the commencement of installation:</chapeau> <subparagraph identifier="/us/tx/ut/t4/c187/s187.003/A"> <num value="A">(A)</num> <content>the emergency operations plan described by Section 187.004; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c187/s187.003/B"> <num value="B">(B)</num> <content>a hazard mitigation analysis for the battery energy storage facility.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c187/s187.003/g"> <num value="g">(g)</num> <chapeau>At least once every five years, each battery operator shall select and contract with, at the battery operator's expense, an independent, third-party engineer licensed in this state or other consultant with appropriate expertise to produce a fire safety inspection report for the battery operator's battery energy storage facility and provide the report to the municipality in which the facility is located or to the county in which the facility is located if the facility is in an unincorporated area. The report must:</chapeau> <paragraph identifier="/us/tx/ut/t4/c187/s187.003/1"> <num value="1">(1)</num> <chapeau>include an evaluation of:</chapeau> <subparagraph identifier="/us/tx/ut/t4/c187/s187.003/A"> <num value="A">(A)</num> <content>the structural integrity and weatherproofing of any enclosure containing a battery energy storage resource at the site of the facility against design specifications;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c187/s187.003/B"> <num value="B">(B)</num> <content>the maintenance schedule and any associated documentation for the facility;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c187/s187.003/C"> <num value="C">(C)</num> <content>the emergency operations plan described by Section 187.004;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c187/s187.003/D"> <num value="D">(D)</num> <content>any hazard mitigation analysis for the facility;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c187/s187.003/E"> <num value="E">(E)</num> <content>any monitoring procedures and gas or fire safety alarm activation history for the facility;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c187/s187.003/F"> <num value="F">(F)</num> <content>fire protection system inspection and testing records for the facility; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c187/s187.003/G"> <num value="G">(G)</num> <content>the ventilation equipment of the facility or other safety equipment with the same or a similar function; and</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t4/c187/s187.003/2"> <num value="2">(2)</num> <content>identify any noted deficiencies and recommend appropriate actions to correct deficiencies.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2025, 89th Leg., R.S., Ch. 641 (H.B. 3824), Sec. 1, eff. September 1, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c187/s187.004"> <num value="187.004">Sec. 187.004.</num> <heading>EMERGENCY OPERATIONS PLANS FOR BATTERY ENERGY STORAGE FACILITIES</heading> <subsection identifier="/us/tx/ut/t4/c187/s187.004/a"> <num value="a">(a)</num> <content>In this section, "first responder" has the meaning assigned by Section 78B.001, Civil Practice and Remedies Code.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c187/s187.004/b"> <num value="b">(b)</num> <content>The commissioner by rule may prescribe procedures or requirements as necessary for the purposes of this section.</content> </subsection> <subsection identifier="/us/tx/ut/t4/c187/s187.004/c"> <num value="c">(c)</num> <chapeau>A battery operator or a municipally owned utility shall produce a site-specific emergency operations plan for each battery energy storage facility site owned or operated by the battery operator or utility. The site-specific emergency operations plan must include:</chapeau> <paragraph identifier="/us/tx/ut/t4/c187/s187.004/1"> <num value="1">(1)</num> <content>an identification of potential risks and hazards specific to the site, including an assessment of any potential environmental effects resulting from an equipment failure;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c187/s187.004/2"> <num value="2">(2)</num> <content>a hazard mitigation analysis;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c187/s187.004/3"> <num value="3">(3)</num> <content>procedures for the safe shutdown, de-energizing, or isolation of equipment and facilities under emergency conditions, including emergency procedures to be followed in case of fire;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c187/s187.004/4"> <num value="4">(4)</num> <content>procedures for handling equipment damaged in a fire or other emergency event;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c187/s187.004/5"> <num value="5">(5)</num> <content>procedures and schedules for conducting drills using the procedures listed under this subsection and documentation related to the performance of the drills;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c187/s187.004/6"> <num value="6">(6)</num> <content>procedures for communication between the operator or utility and first responders, including procedures that facilitate communication between first responders and emergency contacts designated by the operator or utility; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c187/s187.004/7"> <num value="7">(7)</num> <chapeau>emergency operations protocols to ensure safety during critical events, including protocols that provide for the safety of:</chapeau> <subparagraph identifier="/us/tx/ut/t4/c187/s187.004/A"> <num value="A">(A)</num> <content>nearby residents;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c187/s187.004/B"> <num value="B">(B)</num> <content>neighboring properties; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t4/c187/s187.004/C"> <num value="C">(C)</num> <content>first responders.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c187/s187.004/d"> <num value="d">(d)</num> <chapeau>The battery operator or municipally owned utility shall:</chapeau> <paragraph identifier="/us/tx/ut/t4/c187/s187.004/1"> <num value="1">(1)</num> <content>before the commercial operations date of the battery energy storage facility, provide the site-specific emergency operations plan developed under Subsection (c) to the local first responder that is responsible for providing fire protection services in the area in which the facility is located; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c187/s187.004/2"> <num value="2">(2)</num> <content>maintain safety data sheets or comparable documents and the site-specific emergency operations plan developed under Subsection (c) at an on-site location accessible to personnel responsible for the operations and maintenance of the battery energy storage facility and first responders.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c187/s187.004/e"> <num value="e">(e)</num> <chapeau>The battery operator or municipally owned utility shall offer to local first responders, at no cost to the responders, education and annual training regarding responding to an equipment failure incident at the battery energy storage facility site, including:</chapeau> <paragraph identifier="/us/tx/ut/t4/c187/s187.004/1"> <num value="1">(1)</num> <content>training on specific characteristics of battery energy storage technology;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c187/s187.004/2"> <num value="2">(2)</num> <content>training on protecting first responders during incident response;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c187/s187.004/3"> <num value="3">(3)</num> <content>training on hazards commonly associated with incident response;</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c187/s187.004/4"> <num value="4">(4)</num> <content>training on incident response protocols, including an overview of the site-specific emergency operations plan developed under Subsection (c); and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c187/s187.004/5"> <num value="5">(5)</num> <content>an on-site review of the perimeter, major equipment, and ingress and egress to the site.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2025, 89th Leg., R.S., Ch. 641 (H.B. 3824), Sec. 1, eff. September 1, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t4/c187/s187.005"> <num value="187.005">Sec. 187.005.</num> <heading>ENFORCEMENT</heading> <subsection identifier="/us/tx/ut/t4/c187/s187.005/a"> <num value="a">(a)</num> <chapeau>The commissioner by rule shall:</chapeau> <paragraph identifier="/us/tx/ut/t4/c187/s187.005/1"> <num value="1">(1)</num> <content>delegate to the state fire marshal the authority to take disciplinary and enforcement actions, including the imposition of administrative penalties, to enforce this chapter in the manner provided by Section 417.010, Government Code; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t4/c187/s187.005/2"> <num value="2">(2)</num> <content>adopt a schedule of administrative penalties for violations subject to a penalty under this chapter to ensure that the amount of an administrative penalty imposed is appropriate to the violation, in the manner provided by Section 417.010, Government Code.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t4/c187/s187.005/b"> <num value="b">(b)</num> <content>Section 417.010, Government Code, applies to the enforcement of this chapter by the state fire marshal.</content> </subsection> <sourceCredit>Added by Acts 2025, 89th Leg., R.S., Ch. 641 (H.B. 3824), Sec. 1, eff. September 1, 2025.</sourceCredit> </section> </chapter> <num value="5">TITLE 5.</num> <heading>PROVISIONS AFFECTING THE OPERATION OF UTILITY FACILITIES</heading> <chapter identifier="/us/tx/ut/t5/c251"> <num value="251">CHAPTER 251.</num> <heading>UNDERGROUND FACILITY DAMAGE PREVENTION AND SAFETY</heading> <subchapter identifier="/us/tx/ut/t5/c251/scA"> <num value="A">SUBCHAPTER A.</num> <heading>GENERAL PROVISIONS</heading> <section identifier="/us/tx/ut/t5/c251/scA/s251.001"> <num value="251.001">Sec. 251.001.</num> <heading>SHORT TITLE</heading> <content>This chapter may be cited as the Underground Facility Damage Prevention and Safety Act.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.17(a), eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c251/scA/s251.002"> <num value="251.002">Sec. 251.002.</num> <heading>DEFINITIONS</heading> <chapeau>In this chapter:</chapeau> <paragraph identifier="/us/tx/ut/t5/c251/scA/s251.002/1"> <num value="1">(1)</num> <chapeau>"Class A underground facility" means an underground facility that is used to produce, store, convey, transmit, or distribute:</chapeau> <subparagraph identifier="/us/tx/ut/t5/c251/scA/s251.002/A"> <num value="A">(A)</num> <content>electrical energy;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t5/c251/scA/s251.002/B"> <num value="B">(B)</num> <content>natural or synthetic gas;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t5/c251/scA/s251.002/C"> <num value="C">(C)</num> <content>petroleum or petroleum products;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t5/c251/scA/s251.002/D"> <num value="D">(D)</num> <content>steam;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t5/c251/scA/s251.002/E"> <num value="E">(E)</num> <content>any form of telecommunications service, including voice, data, video, or optical transmission, or cable television service; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t5/c251/scA/s251.002/F"> <num value="F">(F)</num> <content>any other liquid, material, or product not defined as a Class B underground facility.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scA/s251.002/2"> <num value="2">(2)</num> <chapeau>"Class B underground facility" means an underground facility that is used to produce, store, convey, transmit, or distribute:</chapeau> <subparagraph identifier="/us/tx/ut/t5/c251/scA/s251.002/A"> <num value="A">(A)</num> <content>water;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t5/c251/scA/s251.002/B"> <num value="B">(B)</num> <content>slurry; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t5/c251/scA/s251.002/C"> <num value="C">(C)</num> <content>sewage.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scA/s251.002/3"> <num value="3">(3)</num> <content>"Corporation" means the Texas Underground Facility Notification Corporation.</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scA/s251.002/4"> <num value="4">(4)</num> <chapeau>"Damage" means:</chapeau> <subparagraph identifier="/us/tx/ut/t5/c251/scA/s251.002/A"> <num value="A">(A)</num> <content>the defacing, scraping, displacement, penetration, destruction, or partial or complete severance of an underground facility or of any protective coating, housing, or other protective device of an underground facility;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t5/c251/scA/s251.002/B"> <num value="B">(B)</num> <content>the weakening of structural or lateral support of an underground facility; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t5/c251/scA/s251.002/C"> <num value="C">(C)</num> <content>the failure to properly replace the backfill covering an underground facility.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scA/s251.002/5"> <num value="5">(5)</num> <content>"Excavate" means to use explosives or a motor, engine, hydraulic or pneumatically powered tool, or other mechanized equipment of any kind and includes auguring, backfilling, boring, compressing, digging, ditching, drilling, dragging, dredging, grading, mechanical probing, plowing-in, pulling-in, ripping, scraping, trenching, and tunneling to remove or otherwise disturb soil to a depth of 16 or more inches.</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scA/s251.002/6"> <num value="6">(6)</num> <content>"Excavator" means a person that excavates or intends to excavate in this state.</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scA/s251.002/7"> <num value="7">(7)</num> <content>"Exploration and production underground facility" means an underground facility used by a person producing gas or oil, or both, for the production of that gas or oil, including facilities used for field separation, treatment, gathering, or storage of gas or oil.</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scA/s251.002/8"> <num value="8">(8)</num> <content>"High speed data transmission" means a method of data transmission that does not include facsimile or voice transmission.</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scA/s251.002/9"> <num value="9">(9)</num> <content>"Legal holiday" means a holiday specified as a legal holiday by Subchapter B, Chapter 662, Government Code.</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scA/s251.002/10"> <num value="10">(10)</num> <content>"Mechanized equipment" means equipment operated by mechanical power, including a trencher, bulldozer, power shovel, auger, backhoe, scraper, drill, cable or pipe plow, and other equipment used to plow in or pull in cable or pipe.</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scA/s251.002/11"> <num value="11">(11)</num> <content>"Operator" means a person that operates an underground facility.</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scA/s251.002/12"> <num value="12">(12)</num> <content>"Secured facility" means a parcel of land used for commercial or industrial purposes that is surrounded entirely by a fence or other means of preventing access, including a fence with one or more gates that are locked at all times or monitored by an individual who can prevent unauthorized access.</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scA/s251.002/13"> <num value="13">(13)</num> <content>"Underground facility" means a line, cable, pipeline system, conduit, or structure that is located partially or totally underground and that is used to produce, store, convey, transmit, or distribute telecommunications, electricity, gas, water, sewage, steam, or liquids such as petroleum, petroleum products, or hazardous liquids.</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scA/s251.002/14"> <num value="14">(14)</num> <content>"Saturday notification" means a notice of intent to excavate provided by an excavator to a notification center on a Saturday before 11:59 a.m.</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scA/s251.002/15"> <num value="15">(15)</num> <content>"Violation" means a violation of Section 251.151, 251.152, or 251.159.</content> </paragraph> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.17(a), eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c251/scA/s251.003"> <num value="251.003">Sec. 251.003.</num> <heading>EXEMPTIONS</heading> <chapeau>The following are not subject to this chapter as underground facilities:</chapeau> <paragraph identifier="/us/tx/ut/t5/c251/scA/s251.003/1"> <num value="1">(1)</num> <content>an aboveground or underground storage tank, sump, or impoundment or piping connected to an aboveground or underground storage tank, sump, or impoundment located in the same tract of land as the storage tank, sump, or impoundment;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scA/s251.003/2"> <num value="2">(2)</num> <content>an underground facility operated by the owner of a secured facility and located entirely within the secured facility;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scA/s251.003/3"> <num value="3">(3)</num> <content>an underground facility that serves only the owner of the underground facility or the owner's tenant and that is located solely on the owner's property;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scA/s251.003/4"> <num value="4">(4)</num> <content>piping within a well bore;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scA/s251.003/5"> <num value="5">(5)</num> <content>the portion of an exploration and production underground facility that is located within the boundaries of the oil or gas field from which the oil and gas is produced and that is not located in the boundaries of an established easement or right-of-way granted for the benefit of a governmental entity or a private entity if the easement or right-of-way is granted for a public purpose; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scA/s251.003/6"> <num value="6">(6)</num> <content>an underground facility that serves a cemetery and is located solely on the cemetery's property.</content> </paragraph> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.17(a), eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c251/scA/s251.004"> <num value="251.004">Sec. 251.004.</num> <heading>APPLICATION TO CERTAIN CONTRACTORS AND STATE EMPLOYEES</heading> <subsection identifier="/us/tx/ut/t5/c251/scA/s251.004/a"> <num value="a">(a)</num> <content>This chapter does not apply to a contractor working in the public right-of-way under a contract with the Texas Department of Transportation.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scA/s251.004/b"> <num value="b">(b)</num> <content>Excavation by an employee of the Texas Department of Transportation on a segment of the state highway system is not subject to this chapter if the excavation is more than 10 feet from the right-of-way line.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.17(a), eff. Sept. 1, 1999. Amended by Acts 2003, 78th Leg., ch. 1276, Sec. 17.004(a), eff. Sept. 1, 2003.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c251/scA/s251.005"> <num value="251.005">Sec. 251.005.</num> <heading>CONVERSION OF FACILITY OR OPERATOR</heading> <subsection identifier="/us/tx/ut/t5/c251/scA/s251.005/a"> <num value="a">(a)</num> <content>An operator of an underground facility that is exempted under this subchapter may voluntarily convert that facility to a Class A underground facility by sending written communication from a competent authority of the operator to the corporation advising of the status change.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scA/s251.005/b"> <num value="b">(b)</num> <content>An operator of a Class B underground facility may voluntarily convert to a Class A underground facility operator by sending written communication from a competent authority of the operator to the corporation advising of the status change.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.17(a), eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c251/scA/s251.006"> <num value="251.006">Sec. 251.006.</num> <heading>COMPLIANCE BY PERMIT HOLDERS</heading> <subsection identifier="/us/tx/ut/t5/c251/scA/s251.006/a"> <num value="a">(a)</num> <content>The fact that a person has a legal permit, permission from the owner of the property or the owner's licensee, or an easement to conduct excavation operations does not affect the person's duty to comply with this chapter.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scA/s251.006/b"> <num value="b">(b)</num> <content>Compliance with this chapter does not affect a person's responsibility to obtain a permit required by law.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.17(a), eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c251/scA/s251.007"> <num value="251.007">Sec. 251.007.</num> <heading>FACILITY ON COUNTY OR MUNICIPAL ROAD</heading> <content>This chapter does not affect a contractual or statutory right of a county or municipality to require an operator to relocate, replace, or repair its underground facility.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.17(a), eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c251/scA/s251.008"> <num value="251.008">Sec. 251.008.</num> <heading>EFFECT ON CIVIL REMEDIES</heading> <content>Except as otherwise specifically provided by this chapter, this chapter, including Section 251.201, does not affect any civil remedy for personal injury or for property damage, including any damage to an underground facility.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.17(a), eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c251/scA/s251.009"> <num value="251.009">Sec. 251.009.</num> <heading>PROVISION OF GENERAL INFORMATION</heading> <content>At least once each calendar year, at intervals not exceeding 15 months, each Class A underground facility operator who conveys, transmits, or distributes by means of its underground facilities service directly to more than one million residential customers within this state shall provide all of its residential customers in this state general information about excavation activities covered by this chapter and the statewide toll-free telephone number established by the corporation.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.17(a), eff. Sept. 1, 1999.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t5/c251/scB"> <num value="B">SUBCHAPTER B.</num> <heading>TEXAS UNDERGROUND FACILITY NOTIFICATION CORPORATION</heading> <section identifier="/us/tx/ut/t5/c251/scB/s251.051"> <num value="251.051">Sec. 251.051.</num> <heading>PURPOSE</heading> <content>The Texas Underground Facility Notification Corporation provides statewide notification services under this chapter.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.17(a), eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c251/scB/s251.052"> <num value="251.052">Sec. 251.052.</num> <heading>NONPROFIT CORPORATION</heading> <chapeau>The corporation is a public nonprofit corporation and has all the powers and duties incident to a nonprofit corporation under the Texas Non-Profit Corporation Act (Article 1396-1.01 et seq., Vernon's Texas Civil Statutes), except that the corporation:</chapeau> <paragraph identifier="/us/tx/ut/t5/c251/scB/s251.052/1"> <num value="1">(1)</num> <content>may not make donations for the public welfare or for charitable, scientific, or educational purposes or in aid of war activities;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scB/s251.052/2"> <num value="2">(2)</num> <content>may not merge or consolidate with another corporation;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scB/s251.052/3"> <num value="3">(3)</num> <content>is not subject to voluntary or involuntary dissolution; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scB/s251.052/4"> <num value="4">(4)</num> <content>may not be placed in receivership.</content> </paragraph> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.17(a), eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c251/scB/s251.053"> <num value="251.053">Sec. 251.053.</num> <heading>APPLICATION OF OPEN MEETINGS AND OPEN RECORDS LAWS</heading> <content>The corporation is subject to Chapters 551 and 552, Government Code, except that the corporation may not disseminate, make available, or otherwise distribute service area map data or information provided by an operator unless that action is necessary to perform the corporation's specific obligations under this chapter.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.17(a), eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c251/scB/s251.054"> <num value="251.054">Sec. 251.054.</num> <heading>EXPENSES AND LIABILITIES OF CORPORATION</heading> <subsection identifier="/us/tx/ut/t5/c251/scB/s251.054/a"> <num value="a">(a)</num> <content>All expenses of the corporation shall be paid from income of the corporation.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scB/s251.054/b"> <num value="b">(b)</num> <content>A liability created by the corporation is not a debt of this state, and the corporation may not secure a liability with funds or assets of this state.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.17(a), eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c251/scB/s251.055"> <num value="251.055">Sec. 251.055.</num> <heading>BOARD OF DIRECTORS</heading> <subsection identifier="/us/tx/ut/t5/c251/scB/s251.055/a"> <num value="a">(a)</num> <chapeau>The board of directors of the corporation is composed of the following 12 members appointed by the governor:</chapeau> <paragraph identifier="/us/tx/ut/t5/c251/scB/s251.055/1"> <num value="1">(1)</num> <content>six representatives of the general public;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scB/s251.055/2"> <num value="2">(2)</num> <content>one representative of the gas industry;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scB/s251.055/3"> <num value="3">(3)</num> <content>one representative of the telecommunications industry;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scB/s251.055/4"> <num value="4">(4)</num> <content>one representative of the electric industry;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scB/s251.055/5"> <num value="5">(5)</num> <content>one representative of cable television companies;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scB/s251.055/6"> <num value="6">(6)</num> <content>one representative of municipalities; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scB/s251.055/7"> <num value="7">(7)</num> <content>one representative of persons who engage in excavation operations who are not also facility operators.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scB/s251.055/b"> <num value="b">(b)</num> <content>Board membership is voluntary and a director is not entitled to receive compensation for serving on the board.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.17(a), eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c251/scB/s251.056"> <num value="251.056">Sec. 251.056.</num> <heading>TERMS</heading> <subsection identifier="/us/tx/ut/t5/c251/scB/s251.056/a"> <num value="a">(a)</num> <content>Directors serve staggered three-year terms, with the terms of four directors expiring each August 31.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scB/s251.056/b"> <num value="b">(b)</num> <content>A director serves until the director's successor is appointed by the governor and assumes office.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.17(a), eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c251/scB/s251.057"> <num value="251.057">Sec. 251.057.</num> <heading>DECLARATION OF BOARD VACANCY</heading> <subsection identifier="/us/tx/ut/t5/c251/scB/s251.057/a"> <num value="a">(a)</num> <content>The board may declare a director's office vacant if the director ceases to be associated with the industry or an operator the director represents.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scB/s251.057/b"> <num value="b">(b)</num> <content>Not later than the 60th day after the date a vacancy on the board is declared, the governor shall appoint a person to fill the vacancy for the remainder of the unexpired term.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.17(a), eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c251/scB/s251.058"> <num value="251.058">Sec. 251.058.</num> <heading>OFFICERS</heading> <subsection identifier="/us/tx/ut/t5/c251/scB/s251.058/a"> <num value="a">(a)</num> <content>The board shall elect from among its directors a chair and vice chair.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scB/s251.058/b"> <num value="b">(b)</num> <content>The chair and vice chair serve for a term of one year and may be reelected.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.17(a), eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c251/scB/s251.059"> <num value="251.059">Sec. 251.059.</num> <heading>ENTITLEMENT TO VOTE</heading> <content>The corporation's bylaws must provide that each director is entitled to one vote.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.17(a), eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c251/scB/s251.060"> <num value="251.060">Sec. 251.060.</num> <heading>DUTIES OF CORPORATION</heading> <chapeau>The corporation shall develop and implement processes to:</chapeau> <paragraph identifier="/us/tx/ut/t5/c251/scB/s251.060/1"> <num value="1">(1)</num> <chapeau>maintain a registration of:</chapeau> <subparagraph identifier="/us/tx/ut/t5/c251/scB/s251.060/A"> <num value="A">(A)</num> <content>notification centers as provided by Section 251.101(a)(3);</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t5/c251/scB/s251.060/B"> <num value="B">(B)</num> <content>operators who elect to convert facilities to Class A facilities under Section 251.005(a); or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t5/c251/scB/s251.060/C"> <num value="C">(C)</num> <content>operators who elect to become Class A underground facility operators under Section 251.005(b);</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scB/s251.060/2"> <num value="2">(2)</num> <content>establish minimum technical standards used by notification centers;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scB/s251.060/3"> <num value="3">(3)</num> <content>establish a statewide toll-free telephone number to be used by excavators that incorporates the use of a call router system that routes calls to the notification centers on a pro rata basis;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scB/s251.060/4"> <num value="4">(4)</num> <content>oversee the bid process and select the vendor for the statewide toll-free telephone number;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scB/s251.060/5"> <num value="5">(5)</num> <content>oversee the bid process and select the vendor for the call router system;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scB/s251.060/6"> <num value="6">(6)</num> <chapeau>determine before May 1 of each year the cost-sharing between the notification centers of:</chapeau> <subparagraph identifier="/us/tx/ut/t5/c251/scB/s251.060/A"> <num value="A">(A)</num> <content>the toll-free telephone number; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t5/c251/scB/s251.060/B"> <num value="B">(B)</num> <content>the call router system prescribed by Section 251.102(4);</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scB/s251.060/7"> <num value="7">(7)</num> <content>develop public service announcements to educate the public about statewide one-call notification and its availability;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scB/s251.060/8"> <num value="8">(8)</num> <content>establish a format for information transfer among notification centers other than high speed data transmission, if appropriate;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scB/s251.060/9"> <num value="9">(9)</num> <content>on a complaint concerning charges, investigate and determine appropriate charges;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scB/s251.060/10"> <num value="10">(10)</num> <content>recommend a civil penalty against a notification center that does not meet the requirements of this chapter of not less than $1,000 or more than $5,000 for each violation;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scB/s251.060/11"> <num value="11">(11)</num> <content>refer the recommended penalty to the attorney general, who shall institute a suit in a court of competent jurisdiction to recover the penalty;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scB/s251.060/12"> <num value="12">(12)</num> <content>assist in dispute resolution among notification centers or between a notification center and an operator;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scB/s251.060/13"> <num value="13">(13)</num> <content>assist any operator who encounters difficulty in joining a notification center; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scB/s251.060/14"> <num value="14">(14)</num> <content>review and study design standards for the placement of underground facilities throughout this state.</content> </paragraph> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.17(a), eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c251/scB/s251.061"> <num value="251.061">Sec. 251.061.</num> <heading>CONTRACT FOR STATEWIDE TOLL-FREE NUMBER AND CALL ROUTER SYSTEM</heading> <subsection identifier="/us/tx/ut/t5/c251/scB/s251.061/a"> <num value="a">(a)</num> <content>The corporation shall solicit proposals for the contract to establish and operate the statewide toll-free telephone number and the call router system by using a request for proposals process that includes specifications that have been approved by the board of directors in accordance with this chapter.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scB/s251.061/b"> <num value="b">(b)</num> <content>The corporation is not required to award the contract to the lowest offeror if the terms of another proposal would result in a lower annual cost and are more advantageous to the corporation and its members. The corporation may reject all proposals if the corporation finds that none of the proposals is acceptable.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scB/s251.061/c"> <num value="c">(c)</num> <content>After the proposals are opened, each document relating to the consideration of a proposal or the award of a contract and the text of the contract are considered books and records of the corporation for the purposes of Article 2.23, Texas Non-Profit Corporation Act (Article 1396-2.23, Vernon's Texas Civil Statutes).</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.17(a), eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c251/scB/s251.062"> <num value="251.062">Sec. 251.062.</num> <heading>FEES AND RATES</heading> <subsection identifier="/us/tx/ut/t5/c251/scB/s251.062/a"> <num value="a">(a)</num> <content>Except as provided by this section, the corporation may not, for any reason, impose an assessment, fee, or other charge, including a charge for inputting data, against an operator.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scB/s251.062/b"> <num value="b">(b)</num> <content>Before January 15 of each year, a Class A facility operator shall pay to the corporation a fee of $50 for services to be performed by the corporation during that calendar year. A fee for a part of a year may not be prorated.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.17(a), eff. Sept. 1, 1999.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t5/c251/scC"> <num value="C">SUBCHAPTER C.</num> <heading>NOTIFICATION CENTERS</heading> <section identifier="/us/tx/ut/t5/c251/scC/s251.101"> <num value="251.101">Sec. 251.101.</num> <heading>NOTIFICATION CENTER</heading> <subsection identifier="/us/tx/ut/t5/c251/scC/s251.101/a"> <num value="a">(a)</num> <chapeau>A notification center is a legal entity that:</chapeau> <paragraph identifier="/us/tx/ut/t5/c251/scC/s251.101/1"> <num value="1">(1)</num> <content>operates a notification system capable of serving excavators and operators statewide;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scC/s251.101/2"> <num value="2">(2)</num> <chapeau>is created to:</chapeau> <subparagraph identifier="/us/tx/ut/t5/c251/scC/s251.101/A"> <num value="A">(A)</num> <content>receive notification of an intent to excavate and of damage to an underground facility and disseminate that information to member operators that may be affected by the excavation or damage and to other notification centers operating in this state; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t5/c251/scC/s251.101/B"> <num value="B">(B)</num> <content>receive notification of an extraordinary circumstance and disseminate that information to member operators and to other notification centers operating in this state; and</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scC/s251.101/3"> <num value="3">(3)</num> <chapeau>registers the following information with the corporation:</chapeau> <subparagraph identifier="/us/tx/ut/t5/c251/scC/s251.101/A"> <num value="A">(A)</num> <content>its name, address, and telephone number;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t5/c251/scC/s251.101/B"> <num value="B">(B)</num> <content>the name of a contact person;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t5/c251/scC/s251.101/C"> <num value="C">(C)</num> <content>a statement of compliance with Section 251.104; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t5/c251/scC/s251.101/D"> <num value="D">(D)</num> <content>a listing of the counties in which it operates.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scC/s251.101/b"> <num value="b">(b)</num> <content>A notification center operating on September 1, 1997, may continue to operate if the notification center complies with this chapter.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.17(a), eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c251/scC/s251.102"> <num value="251.102">Sec. 251.102.</num> <heading>GENERAL DUTIES OF NOTIFICATION CENTER</heading> <chapeau>A notification center shall:</chapeau> <paragraph identifier="/us/tx/ut/t5/c251/scC/s251.102/1"> <num value="1">(1)</num> <content>operate 24 hours a day every day of the year;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scC/s251.102/2"> <num value="2">(2)</num> <content>have the capability to receive emergency information 24 hours a day from excavators and disseminate the information as soon as it is received to the appropriate operators and to all registered and affected notification centers operating in this state;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scC/s251.102/3"> <num value="3">(3)</num> <content>have the capacity to receive extraordinary circumstance information 24 hours a day from operators and disseminate the information as soon as it is received to all registered and affected notification centers;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scC/s251.102/4"> <num value="4">(4)</num> <content>submit to the corporation, not later than May 15 of each year, a pro rata share of the expense, as established by the corporation, of the statewide toll-free telephone number and the call router;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scC/s251.102/5"> <num value="5">(5)</num> <content>provide, on request of an excavator, a contact name and telephone number of a representative of the operator for special circumstances; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scC/s251.102/6"> <num value="6">(6)</num> <content>have personnel capable of assisting Spanish-speaking customers.</content> </paragraph> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.17(a), eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c251/scC/s251.103"> <num value="251.103">Sec. 251.103.</num> <heading>RECORDS</heading> <subsection identifier="/us/tx/ut/t5/c251/scC/s251.103/a"> <num value="a">(a)</num> <chapeau>A notification center shall maintain for not less than four years a record to document:</chapeau> <paragraph identifier="/us/tx/ut/t5/c251/scC/s251.103/1"> <num value="1">(1)</num> <chapeau>the receipt of a notice of:</chapeau> <subparagraph identifier="/us/tx/ut/t5/c251/scC/s251.103/A"> <num value="A">(A)</num> <content>intent to excavate;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t5/c251/scC/s251.103/B"> <num value="B">(B)</num> <content>damage to an underground facility;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t5/c251/scC/s251.103/C"> <num value="C">(C)</num> <content>an emergency excavation; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t5/c251/scC/s251.103/D"> <num value="D">(D)</num> <content>an extraordinary circumstance;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scC/s251.103/2"> <num value="2">(2)</num> <content>the information the excavator is required to provide to the notification center under this chapter;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scC/s251.103/3"> <num value="3">(3)</num> <content>contact with operators and other notification centers; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scC/s251.103/4"> <num value="4">(4)</num> <content>the information the notification center provided to the excavator.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scC/s251.103/b"> <num value="b">(b)</num> <content>A notification center may not destroy records that relate to any matter that is involved in litigation if the notification center is placed on notice that the litigation has not been finally resolved.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.17(a), eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c251/scC/s251.104"> <num value="251.104">Sec. 251.104.</num> <heading>INSURANCE</heading> <content>A notification center shall, at all times, maintain a minimum of $5 million professional liability and errors and omissions insurance to cover duties prescribed by this chapter.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.17(a), eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c251/scC/s251.105"> <num value="251.105">Sec. 251.105.</num> <heading>FEES AND CHARGES</heading> <subsection identifier="/us/tx/ut/t5/c251/scC/s251.105/a"> <num value="a">(a)</num> <content>A notification center that notifies another notification center under Section 251.102(2) or (3) or Section 251.153(b) shall recover an amount not exceeding the actual cost of providing the notice from the notification center receiving the notice.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scC/s251.105/b"> <num value="b">(b)</num> <content>The notification center shall charge a Class A underground facility operator not more than $1.25 for a call made to the system that affects the operator. The board may increase or decrease the maximum charge only on an affirmative vote of at least two-thirds of the total number of votes entitled to be cast. A notification center may petition the corporation for an increase in the maximum charge and is entitled to the increase on proof that costs exceed the maximum charge.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scC/s251.105/c"> <num value="c">(c)</num> <content>The notification center may not charge an operator any additional fee such as an initiation fee, a membership fee, or a set-up fee.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.17(a), eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c251/scC/s251.106"> <num value="251.106">Sec. 251.106.</num> <heading>PAYMENTS TO CORPORATION</heading> <content>Each time a notification center receives a call from an excavator under Section 251.151, the notification center shall pay the corporation five cents. The corporation shall waive this charge for the remainder of any year in which the corporation receives $250,000 under this section.</content> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.17(a), eff. Sept. 1, 1999. Amended by Acts 2001, 77th Leg., ch. 652, Sec. 1, eff. Sept. 1, 2001.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c251/scC/s251.107"> <num value="251.107">Sec. 251.107.</num> <heading>DUTY TO PARTICIPATE IN NOTIFICATION CENTER</heading> <subsection identifier="/us/tx/ut/t5/c251/scC/s251.107/a"> <num value="a">(a)</num> <content>Each operator of a Class A underground facility, including a political subdivision of this state, shall participate in a notification center as a condition of doing business in this state.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scC/s251.107/b"> <num value="b">(b)</num> <chapeau>Each operator of a Class A underground facility shall provide to the notification center:</chapeau> <paragraph identifier="/us/tx/ut/t5/c251/scC/s251.107/1"> <num value="1">(1)</num> <content>maps or grid locations or other identifiers determined by the operator indicating the location of the operator's underground facilities;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scC/s251.107/2"> <num value="2">(2)</num> <content>the name and telephone number of a contact person or persons; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scC/s251.107/3"> <num value="3">(3)</num> <content>at least quarterly but, if possible, as those changes occur, information relating to each change in the operator's maps or grid locations or other identifiers or in the person or persons designated as the operator's contact person or persons.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scC/s251.107/c"> <num value="c">(c)</num> <content>The notification center may not require an operator to conduct a survey of the operator's underground facilities or alter the operator's existing signage.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scC/s251.107/d"> <num value="d">(d)</num> <content>A notification center may not disseminate, make available, or otherwise distribute maps or information provided by an operator unless that action is necessary to perform the notification center's specific obligations under this chapter.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.17(a), eff. Sept. 1, 1999.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t5/c251/scD"> <num value="D">SUBCHAPTER D.</num> <heading>REQUIREMENTS RELATING TO EXCAVATION</heading> <section identifier="/us/tx/ut/t5/c251/scD/s251.151"> <num value="251.151">Sec. 251.151.</num> <heading>DUTY OF AN EXCAVATOR</heading> <subsection identifier="/us/tx/ut/t5/c251/scD/s251.151/a"> <num value="a">(a)</num> <content>Except as provided by Sections 251.155 and 251.156, a person who intends to excavate shall notify a notification center not earlier than the 14th day before the date the excavation is to begin or later than the 48th hour before the time the excavation is to begin, excluding Saturdays, Sundays, and legal holidays.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scD/s251.151/b"> <num value="b">(b)</num> <content>Notwithstanding Subsection (a), if an excavator makes a Saturday notification, the excavator may begin the excavation the following Tuesday at 11:59 a.m. unless the intervening Monday is a holiday. If the intervening Monday is a holiday, the excavator may begin the excavation the following Wednesday at 11:59 a.m.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scD/s251.151/c"> <num value="c">(c)</num> <content>To have a representative present during the excavation, the operator shall contact the excavator and advise the excavator of the operator's intent to be present during excavation and confirm the start time of the excavation. If the excavator wants to change the start time, the excavator shall notify the operator to set a mutually agreed-to time to begin the excavation.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.17(a), eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c251/scD/s251.152"> <num value="251.152">Sec. 251.152.</num> <heading>INFORMATION INCLUDED IN NOTICE</heading> <chapeau>The excavator shall include in the notice required under Section 251.151:</chapeau> <paragraph identifier="/us/tx/ut/t5/c251/scD/s251.152/1"> <num value="1">(1)</num> <content>the name of the person serving the notice;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scD/s251.152/2"> <num value="2">(2)</num> <chapeau>the location of the proposed area of excavation, including:</chapeau> <subparagraph identifier="/us/tx/ut/t5/c251/scD/s251.152/A"> <num value="A">(A)</num> <content>the street address, if available, and the location of the excavation at the street address; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t5/c251/scD/s251.152/B"> <num value="B">(B)</num> <content>if there is no street address, an accurate description of the excavation area using any available designations such as the closest street, road, or intersection;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scD/s251.152/3"> <num value="3">(3)</num> <content>the name, address, and telephone number of the excavator or the excavator's company;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scD/s251.152/4"> <num value="4">(4)</num> <content>the excavator's field telephone number, if one is available;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scD/s251.152/5"> <num value="5">(5)</num> <content>a telephone facsimile number, e-mail address, or another electronic number or address approved by the board to which an operator may send the notification required by Section 251.157(d);</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scD/s251.152/6"> <num value="6">(6)</num> <content>the starting date and time and the anticipated completion date of excavation; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scD/s251.152/7"> <num value="7">(7)</num> <content>a statement as to whether explosives will be used.</content> </paragraph> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.17(a), eff. Sept. 1, 1999. Amended by Acts 2001, 77th Leg., ch. 858, Sec. 1, eff. Nov. 1, 2001.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c251/scD/s251.153"> <num value="251.153">Sec. 251.153.</num> <heading>DUTY OF NOTIFICATION CENTER</heading> <subsection identifier="/us/tx/ut/t5/c251/scD/s251.153/a"> <num value="a">(a)</num> <content>At the time an excavator provides a notification center with the excavator's intent to excavate, the notification center shall advise the excavator that water, slurry, and sewage underground facilities in the area of the proposed excavation may not receive information concerning the excavator's proposed excavation.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scD/s251.153/b"> <num value="b">(b)</num> <content>Not later than two hours after the time the notification center receives a notice of intent to excavate from an excavator, the notification center shall provide to every other affected notification center operating in this state the information required by Section 251.152 and received from the excavator. The notification center shall provide the information by the use of high speed data transmission.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scD/s251.153/c"> <num value="c">(c)</num> <content>Not later than two hours after the time the notification center receives a notice of intent to excavate from an excavator or from a different notification center, the notification center shall notify each member operator that may have an underground facility in the vicinity of the proposed excavation operation.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.17(a), eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c251/scD/s251.154"> <num value="251.154">Sec. 251.154.</num> <heading>NOTIFICATION BY AN EXCAVATOR</heading> <subsection identifier="/us/tx/ut/t5/c251/scD/s251.154/a"> <num value="a">(a)</num> <content>A person required to provide notice under this chapter is considered to have provided the notice when the person delivers the required information and a notification center receives that information within the time limits prescribed by this chapter.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scD/s251.154/b"> <num value="b">(b)</num> <content>A person may deliver information required under this chapter by any appropriate method, including the use of any electronic means of data transfer.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.17(a), eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c251/scD/s251.155"> <num value="251.155">Sec. 251.155.</num> <heading>EXCEPTION IN CASE OF EMERGENCY; OFFENSE</heading> <subsection identifier="/us/tx/ut/t5/c251/scD/s251.155/a"> <num value="a">(a)</num> <content>Section 251.151 does not apply to an emergency excavation that is necessary to respond to a situation that endangers life, health, or property or a situation in which the public need for uninterrupted service and immediate reestablishment of service if service is interrupted compels immediate action.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scD/s251.155/b"> <num value="b">(b)</num> <content>The excavator may begin emergency excavation under Subsection (a) immediately and shall take reasonable care to protect underground facilities.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scD/s251.155/c"> <num value="c">(c)</num> <content>When an emergency exists, the excavator shall notify a notification center as promptly as practicably possible.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scD/s251.155/d"> <num value="d">(d)</num> <chapeau>An excavator may not misrepresent a fact or circumstance used in the determination of an emergency excavation under Subsection (a). A person that violates this subsection is subject to a penalty under:</chapeau> <paragraph identifier="/us/tx/ut/t5/c251/scD/s251.155/1"> <num value="1">(1)</num> <content>Section 251.201;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scD/s251.155/2"> <num value="2">(2)</num> <content>Section 251.203; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scD/s251.155/3"> <num value="3">(3)</num> <content>both Section 251.201 and Section 251.203.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.17(a), eff. Sept. 1, 1999. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 184 (S.B. 1217), Sec. 1, eff. September 1, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c251/scD/s251.156"> <num value="251.156">Sec. 251.156.</num> <heading>OTHER EXCEPTIONS TO DUTY OF EXCAVATORS</heading> <subsection identifier="/us/tx/ut/t5/c251/scD/s251.156/a"> <num value="a">(a)</num> <chapeau>Section 251.151 does not apply to:</chapeau> <paragraph identifier="/us/tx/ut/t5/c251/scD/s251.156/1"> <num value="1">(1)</num> <content>interment operations of a cemetery;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scD/s251.156/2"> <num value="2">(2)</num> <chapeau>operations at a secured facility if:</chapeau> <subparagraph identifier="/us/tx/ut/t5/c251/scD/s251.156/A"> <num value="A">(A)</num> <content>the excavator operates each underground facility at the secured facility, other than those within a third-party underground facility easement or right-of-way; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t5/c251/scD/s251.156/B"> <num value="B">(B)</num> <content>the excavation activity is not within a third-party underground facility or right-of-way;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scD/s251.156/3"> <num value="3">(3)</num> <content>routine railroad maintenance within 15 feet of either side of the midline of the track if the maintenance will not disturb the ground at a depth of more than 18 inches;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scD/s251.156/4"> <num value="4">(4)</num> <content>activities performed on private property in connection with agricultural operations;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scD/s251.156/5"> <num value="5">(5)</num> <content>operations associated with the exploration or production of oil or gas if the operations are not conducted within an underground facility easement or right-of-way;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scD/s251.156/6"> <num value="6">(6)</num> <chapeau>excavations by or for a person that:</chapeau> <subparagraph identifier="/us/tx/ut/t5/c251/scD/s251.156/A"> <num value="A">(A)</num> <content>owns, leases, or owns a mineral leasehold interest in the real property on which the excavation occurs; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t5/c251/scD/s251.156/B"> <num value="B">(B)</num> <content>operates all underground facilities located at the excavation site; or</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scD/s251.156/7"> <num value="7">(7)</num> <content>routine maintenance by a county employee on a county road right-of-way to a depth of not more than 24 inches.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scD/s251.156/b"> <num value="b">(b)</num> <content>If a person excepted under Subsection (a)(4) elects to comply with this chapter and the operator fails to comply with this chapter, the person is not liable to the underground facility owner for damages to the underground facility.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scD/s251.156/c"> <num value="c">(c)</num> <chapeau>In this section:</chapeau> <paragraph identifier="/us/tx/ut/t5/c251/scD/s251.156/1"> <num value="1">(1)</num> <content>"Agricultural operations" means activities performed on land and described by Section 23.51(2), Tax Code.</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scD/s251.156/2"> <num value="2">(2)</num> <content>"Routine maintenance" means operations, not to exceed 24 inches in depth, within a road or drainage ditch involving grading and removal or replacement of pavement and structures.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.17(a), eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c251/scD/s251.157"> <num value="251.157">Sec. 251.157.</num> <heading>DUTY OF OPERATOR TO PERSON EXCAVATING</heading> <subsection identifier="/us/tx/ut/t5/c251/scD/s251.157/a"> <num value="a">(a)</num> <chapeau>Each Class A underground facility operator contacted by the notification system shall mark the approximate location of its underground facilities at or near the site of the proposed excavation if the operator believes that marking the location is necessary. The operator shall mark the location not later than:</chapeau> <paragraph identifier="/us/tx/ut/t5/c251/scD/s251.157/1"> <num value="1">(1)</num> <content>the 48th hour after the time the excavator gives to the notification system notice of intent to excavate, excluding Saturdays, Sundays, and legal holidays;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scD/s251.157/2"> <num value="2">(2)</num> <content>11:59 a.m. on the Tuesday following a Saturday notification unless the intervening Monday is a holiday;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scD/s251.157/3"> <num value="3">(3)</num> <content>11:59 a.m. on the Wednesday following a Saturday notification if the intervening Monday is a holiday; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scD/s251.157/4"> <num value="4">(4)</num> <content>a time agreed to by the operator and the excavator.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scD/s251.157/b"> <num value="b">(b)</num> <content>An operator shall refer to the American Public Works Association color coding standards when marking.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scD/s251.157/c"> <num value="c">(c)</num> <content>An excavator who has fully complied with this chapter may not be liable for damage to an underground facility that was not marked in accordance with this chapter.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scD/s251.157/d"> <num value="d">(d)</num> <content>Not later than the 48th hour after the time the excavator gives to the notification center notice of intent to excavate, an operator contacted by the notification center shall notify the excavator of the operator's plans to not mark the proximate location of an underground facility at or near the site of the proposed excavation. The operator must provide the notification by e-mail or facsimile or by another verifiable electronic method approved by the board.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.17(a), eff. Sept. 1, 1999. Amended by Acts 2001, 77th Leg., ch. 858, Sec. 2, eff. Nov. 1, 2001.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c251/scD/s251.158"> <num value="251.158">Sec. 251.158.</num> <heading>DUTY OF OPERATOR IN EVENT OF AN EXTRAORDINARY CIRCUMSTANCE</heading> <subsection identifier="/us/tx/ut/t5/c251/scD/s251.158/a"> <num value="a">(a)</num> <content>The deadline prescribed by Section 251.157(a) does not apply if the operator experiences an extraordinary circumstance due to an act of God, including a tornado, a hurricane, an ice storm, or a severe flood, or a war, riot, work stoppage, or strike that limits personnel or resources needed to fulfill the operator's obligations under this chapter.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scD/s251.158/b"> <num value="b">(b)</num> <chapeau>The operator shall notify a notification center of the extraordinary circumstance and shall include in the notification:</chapeau> <paragraph identifier="/us/tx/ut/t5/c251/scD/s251.158/1"> <num value="1">(1)</num> <content>the nature and location of the extraordinary circumstance;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scD/s251.158/2"> <num value="2">(2)</num> <content>the expected duration of the situation and the approximate time at which the operator will be able to resume location request activities; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scD/s251.158/3"> <num value="3">(3)</num> <content>the name and telephone number of the individual that the notification system can contact if there is an emergency that requires the operator's immediate attention.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scD/s251.158/c"> <num value="c">(c)</num> <chapeau>In addition to the notification required by Subsection (b), the operator shall also notify each excavator that has a pending location request in the location where an extraordinary circumstance is being experienced and shall include in the notification:</chapeau> <paragraph identifier="/us/tx/ut/t5/c251/scD/s251.158/1"> <num value="1">(1)</num> <content>the fact that the operator is experiencing an extraordinary circumstance; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scD/s251.158/2"> <num value="2">(2)</num> <content>the approximate time at which the operator will mark the requested location.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scD/s251.158/d"> <num value="d">(d)</num> <content>A notification center shall inform each excavator notifying the system under Section 251.151 that the operator's location request activities are suspended until the extraordinary circumstance has discontinued or has been corrected within the affected location.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scD/s251.158/e"> <num value="e">(e)</num> <content>An excavator is relieved from all provisions of this chapter until the operator notifies the notification center that the operator has resumed location request activities within the affected location.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.17(a), eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c251/scD/s251.159"> <num value="251.159">Sec. 251.159.</num> <heading>EXCAVATION DAMAGE</heading> <subsection identifier="/us/tx/ut/t5/c251/scD/s251.159/a"> <num value="a">(a)</num> <content>If an excavation operation results in damage to an underground facility, the excavator shall immediately contact the underground facility operator to report the damage.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scD/s251.159/b"> <num value="b">(b)</num> <content>If the excavator is not certain of the operator's identity, the excavator shall contact a notification center to report the damage, and the notification center shall immediately notify all other affected notification centers. Immediately on receiving notification, each notification center shall contact each member operator that has underground facilities in or near the area in which the damage occurred.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scD/s251.159/c"> <num value="c">(c)</num> <content>Only the operator or a person authorized by the operator may perform repairs, and the repairs must be made in an expeditious manner.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scD/s251.159/d"> <num value="d">(d)</num> <content>An excavator shall delay backfilling in the immediate area of the damage until the damage is reported to the operator and a repair schedule is mutually agreed to by the excavator and the operator.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scD/s251.159/e"> <num value="e">(e)</num> <content>If damage endangers life, health, or property because of the presence of flammable material, the excavator shall keep sources of ignition away.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.17(a), eff. Sept. 1, 1999.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t5/c251/scE"> <num value="E">SUBCHAPTER E.</num> <heading>PENALTIES</heading> <section identifier="/us/tx/ut/t5/c251/scE/s251.201"> <num value="251.201">Sec. 251.201.</num> <heading>CIVIL PENALTY OR WARNING LETTER</heading> <subsection identifier="/us/tx/ut/t5/c251/scE/s251.201/a"> <num value="a">(a)</num> <content>An excavator that violates Section 251.151, 251.152, or 251.159 is liable for a civil penalty of not less than $500 or more than $1,000. If a county attorney or district attorney decides not to bring an action to recover the civil penalty, the board of directors of the corporation may, in accordance with Section 251.2011, give the excavator a warning letter and require the excavator to attend a safety training course approved by the board. The county attorney or district attorney shall notify the board of its decision.</content> <continuation>(a-1) An excavator that violates Section 251.155(d) is liable for a civil penalty of not less than $1,000 or more than $2,000. If a county attorney or district attorney decides not to bring an action to recover the civil penalty, the board of directors of the corporation may, in accordance with Section 251.2011, give the excavator a warning letter and require the excavator to attend a safety training course approved by the board. The county attorney or district attorney shall notify the board of its decision.</continuation> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scE/s251.201/b"> <num value="b">(b)</num> <content>Except as provided by Subsection (b-1), if it is found at the trial on a civil penalty that the excavator has violated this chapter and has been assessed a penalty under this section or has received a warning letter from the board one other time before the first anniversary of the date of the most recent violation, the excavator is liable for a civil penalty of not less than $1,000 or more than $2,000.</content> <continuation>(b-1) If it is found at the trial on a civil penalty that the excavator has violated Section 251.155(d) and has been assessed a penalty under this section or has received a warning letter from the board one other time before the first anniversary of the date of the most recent violation, the excavator is liable for a civil penalty of not less than $2,000 or more than $5,000.</continuation> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scE/s251.201/c"> <num value="c">(c)</num> <content>Except as provided by Subsection (c-1), if it is found at the trial on a civil penalty that the excavator has violated this chapter and has been assessed a penalty under this section at least two other times before the first anniversary of the date of the most recent violation, or has been assessed a penalty at least one other time before the first anniversary of the date of the most recent violation and has received a warning letter from the board during that period, the excavator is liable for a civil penalty of not less than $2,000 or more than $5,000.</content> <continuation>(c-1) If it is found at the trial on a civil penalty that the excavator has violated Section 251.155(d) and has been assessed a penalty under this section at least two other times before the first anniversary of the date of the most recent violation, or has been assessed a penalty at least one other time before the first anniversary of the date of the most recent violation and has received a warning letter from the board during that period, the excavator is liable for a civil penalty of not less than $5,000 or more than $10,000.</continuation> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scE/s251.201/d"> <num value="d">(d)</num> <content>In assessing the civil penalty the court shall consider the actual damage to the facility, the effect of the excavator's actions on the public health and safety, whether the violation was a wilful act, and any good faith of the excavator in attempting to achieve compliance.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scE/s251.201/e"> <num value="e">(e)</num> <chapeau>Venue for a proceeding to collect a civil penalty under this section is in the county in which:</chapeau> <paragraph identifier="/us/tx/ut/t5/c251/scE/s251.201/1"> <num value="1">(1)</num> <content>all or part of the alleged violation occurred;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scE/s251.201/2"> <num value="2">(2)</num> <content>the defendant has its principal place of business in this state; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scE/s251.201/3"> <num value="3">(3)</num> <content>the defendant resides, if in this state.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scE/s251.201/f"> <num value="f">(f)</num> <content>The appropriate county attorney or criminal district attorney shall bring the action to recover the civil penalty.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scE/s251.201/g"> <num value="g">(g)</num> <content>This section does not apply to a residential property owner excavating on the property owner's own residential lot.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.17(a), eff. Sept. 1, 1999. Amended by Acts 2001, 77th Leg., ch. 652, Sec. 2, eff. Sept. 1, 2001. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 184 (S.B. 1217), Sec. 2, eff. September 1, 2011.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c251/scE/s251.2011"> <num value="251.2011">Sec. 251.2011.</num> <heading>WARNING LETTER AND SAFETY TRAINING COURSE</heading> <subsection identifier="/us/tx/ut/t5/c251/scE/s251.2011/a"> <num value="a">(a)</num> <content>The board of directors of the corporation shall establish a procedure to ensure that the board verifies that an excavator has violated Section 251.151, 251.152, or 251.159 before giving the excavator a warning letter and requiring the excavator to attend a safety training course under Section 251.201.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scE/s251.2011/b"> <num value="b">(b)</num> <content>The board shall solicit and consider advice and recommendations from excavators in establishing or approving a safety training course that an excavator may be required to attend under Section 251.201.</content> </subsection> <sourceCredit>Added by Acts 2001, 77th Leg., ch. 652, Sec. 3, eff. Sept. 1, 2001.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c251/scE/s251.202"> <num value="251.202">Sec. 251.202.</num> <heading>ALLOCATION OF CIVIL PENALTY</heading> <subsection identifier="/us/tx/ut/t5/c251/scE/s251.202/a"> <num value="a">(a)</num> <content>Fifty percent of the civil penalty collected under Section 251.201 shall be transferred to the county treasurer of the county prosecuting the action and 50 percent of the civil penalty collected under Section 251.201 shall be transferred to the corporation.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scE/s251.202/b"> <num value="b">(b)</num> <content>The county treasurer shall deposit all money received under this section in the county road and bridge fund.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scE/s251.202/c"> <num value="c">(c)</num> <content>The corporation shall use the money received under this section to develop public service announcements to educate the public about the statewide one-call notification system and its availability as prescribed by Section 251.060(7).</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.17(a), eff. Sept. 1, 1999.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c251/scE/s251.203"> <num value="251.203">Sec. 251.203.</num> <heading>CRIMINAL PENALTY</heading> <subsection identifier="/us/tx/ut/t5/c251/scE/s251.203/a"> <num value="a">(a)</num> <chapeau>A person commits an offense if:</chapeau> <paragraph identifier="/us/tx/ut/t5/c251/scE/s251.203/1"> <num value="1">(1)</num> <content>the person without authorization from the owner or operator of the facility intentionally removes, damages, or conceals a marker or sign giving information about the location of a Class A underground facility; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c251/scE/s251.203/2"> <num value="2">(2)</num> <content>the marker or sign gives notice of the penalty for intentional removal, damage, or concealment of the marker or sign.</content> <continuation>(a-1) A person commits an offense if the person intentionally or recklessly violates Section 251.155(d).</continuation> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t5/c251/scE/s251.203/b"> <num value="b">(b)</num> <content>An offense under this section is a Class B misdemeanor.</content> </subsection> <sourceCredit>Added by Acts 1999, 76th Leg., ch. 62, Sec. 18.17(a), eff. Sept. 1, 1999. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 184 (S.B. 1217), Sec. 3, eff. September 1, 2011. Acts 2011, 82nd Leg., R.S., Ch. 184 (S.B. 1217), Sec. 4, eff. September 1, 2011.</sourceCredit> </section> </subchapter> </chapter> <chapter identifier="/us/tx/ut/t5/c252"> <num value="252">CHAPTER 252.</num> <heading>CABLE ATTACHMENTS TO ELECTRIC COOPERATIVE'S DISTRIBUTION POLES</heading> <section identifier="/us/tx/ut/t5/c252/s252.001"> <num value="252.001">Sec. 252.001.</num> <heading>DEFINITIONS</heading> <chapeau>In this chapter:</chapeau> <paragraph identifier="/us/tx/ut/t5/c252/s252.001/1"> <num value="1">(1)</num> <chapeau>"Abandoned pole attachment" means a pole attachment:</chapeau> <subparagraph identifier="/us/tx/ut/t5/c252/s252.001/A"> <num value="A">(A)</num> <content>for which a cable operator has not paid, for a period of 90 consecutive days or more, an invoice for rental charges presented by an electric cooperative, unless there is a bona fide dispute over the invoice; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t5/c252/s252.001/B"> <num value="B">(B)</num> <content>that is not removed after authority for the pole attachment has terminated or expired, subject to any extension period for negotiation and mediation described by Section 252.005(c).</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t5/c252/s252.001/2"> <num value="2">(2)</num> <content>"Cable operator" means an entity that owns or operates a cable system, as that term is defined by 47 U.S.C. Section 522, regardless of the nature of the services offered or provided by the entity in addition to cable services.</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c252/s252.001/3"> <num value="3">(3)</num> <content>"Pole" means a pole carrying distribution lines with a voltage rating no higher than 34.5 kilovolts.</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c252/s252.001/4"> <num value="4">(4)</num> <content>"Pole attachment" means an affixture of cables, strands, wires, and associated equipment attached to a pole directly or indirectly.</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c252/s252.001/5"> <num value="5">(5)</num> <content>"Security instrument" means a performance bond or an equivalent financial instrument that guarantees payments of amounts payable to an electric cooperative by a cable operator.</content> </paragraph> <sourceCredit>Added by Acts 2013, 83rd Leg., R.S., Ch. 1077 (H.B. 3355), Sec. 1, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c252/s252.002"> <num value="252.002">Sec. 252.002.</num> <heading>APPLICABILITY</heading> <subsection identifier="/us/tx/ut/t5/c252/s252.002/a"> <num value="a">(a)</num> <content>This chapter applies to a pole attachment affixed by a cable operator to a pole owned and controlled by an electric cooperative. This chapter does not apply to a pole attachment regulated by the Federal Communications Commission under 47 U.S.C. Section 224.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c252/s252.002/b"> <num value="b">(b)</num> <content>This chapter does not abrogate or affect a right or obligation of a party to a pole attachment contract entered into by a cable operator and an electric cooperative before September 1, 2013.</content> </subsection> <sourceCredit>Added by Acts 2013, 83rd Leg., R.S., Ch. 1077 (H.B. 3355), Sec. 1, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c252/s252.003"> <num value="252.003">Sec. 252.003.</num> <heading>LIMITATION</heading> <subsection identifier="/us/tx/ut/t5/c252/s252.003/a"> <num value="a">(a)</num> <content>This chapter does not constitute state certification under 47 U.S.C. Section 224(c). If a court determines that this chapter constitutes certification under that section, this chapter is not enforceable and has no effect.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c252/s252.003/b"> <num value="b">(b)</num> <content>This chapter may not be construed to subject an electric cooperative to regulation by the Federal Communications Commission under 47 U.S.C. Section 224. This chapter does not authorize a department, agency, or political subdivision of the state to exercise enforcement or regulatory authority over attachments to electric cooperative poles.</content> </subsection> <sourceCredit>Added by Acts 2013, 83rd Leg., R.S., Ch. 1077 (H.B. 3355), Sec. 1, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c252/s252.004"> <num value="252.004">Sec. 252.004.</num> <heading>CONSTRUCTION</heading> <content>Unless defined by Section 252.001, the technical terms and phrases in this chapter shall be construed using their usual and customary meanings in the electric and cable industries.</content> <sourceCredit>Added by Acts 2013, 83rd Leg., R.S., Ch. 1077 (H.B. 3355), Sec. 1, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c252/s252.005"> <num value="252.005">Sec. 252.005.</num> <heading>POLE ATTACHMENT CONTRACTS; ACCESS REQUIREMENTS</heading> <subsection identifier="/us/tx/ut/t5/c252/s252.005/a"> <num value="a">(a)</num> <content>A cable operator and an electric cooperative shall establish the rates, terms, and conditions for pole attachments, including the cooperative's application and permitting processes by a written pole attachment contract executed by both parties. The rates, terms, and conditions for attachments by a cable operator on an electric cooperative's poles must be just and reasonable.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c252/s252.005/b"> <num value="b">(b)</num> <content>A cable operator and an electric cooperative shall negotiate a pole attachment contract in good faith.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c252/s252.005/c"> <num value="c">(c)</num> <chapeau>A request to negotiate a new pole attachment contract by a cable operator or an electric cooperative must be in writing. If a cable operator and an electric cooperative are unable to agree to a new pole attachment contract before the expiration date of an existing pole attachment contract, the rates, terms, and conditions of the existing pole attachment contract and the terms and conditions of the electric cooperative's application and permitting processes remain in force:</chapeau> <paragraph identifier="/us/tx/ut/t5/c252/s252.005/1"> <num value="1">(1)</num> <content>during the 180-day negotiation period described by Subsection (d) and during the period of any agreed extension; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c252/s252.005/2"> <num value="2">(2)</num> <content>during the 90-day mediation period described by Subsection (d) and during the period of any agreed extension.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t5/c252/s252.005/d"> <num value="d">(d)</num> <content>If a cable operator and an electric cooperative are unable to agree to a new pole attachment contract before the 181st day after the expiration date of the existing pole attachment contract and are unable to agree to an extension of the negotiation period for a certain number of days, the cable operator and electric cooperative shall attempt to resolve any disagreement over the rates, terms, or conditions by submitting the contract negotiations to mediation. The mediation process may not extend later than the 90th day after the end of the 180-day negotiation period and any agreed extension of that period unless the cable operator and an electric cooperative agree to an extension of the mediation period for a certain number of days. The mediation process must be conducted in a county in which the electric cooperative has distribution poles. The cable operator and an electric cooperative must share the expenses for the mediator equally.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c252/s252.005/e"> <num value="e">(e)</num> <content>If the mediation process does not resolve the disagreement over the rates, terms, or conditions, the cable operator or the electric cooperative may request that a court resolve the disagreement over the rates, terms, and conditions.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c252/s252.005/f"> <num value="f">(f)</num> <content>Access to a pole may be denied where there is insufficient capacity and for reasons of safety, reliability, and generally applicable engineering purposes.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c252/s252.005/g"> <num value="g">(g)</num> <chapeau>In determining whether rates, terms, and conditions are just and reasonable, at least the following factors must be considered:</chapeau> <paragraph identifier="/us/tx/ut/t5/c252/s252.005/1"> <num value="1">(1)</num> <content>the interests of and benefits to the consumers and potential consumers of the electric cooperative's services;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c252/s252.005/2"> <num value="2">(2)</num> <content>the interests of and benefits to the subscribers and potential subscribers of the services offered through the pole attachments;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c252/s252.005/3"> <num value="3">(3)</num> <content>compliance with applicable safety standards; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c252/s252.005/4"> <num value="4">(4)</num> <content>the maintenance and reliability of both electric distribution and cable services.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2013, 83rd Leg., R.S., Ch. 1077 (H.B. 3355), Sec. 1, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c252/s252.006"> <num value="252.006">Sec. 252.006.</num> <heading>TRANSFER OF ATTACHMENTS</heading> <subsection identifier="/us/tx/ut/t5/c252/s252.006/a"> <num value="a">(a)</num> <content>An electric cooperative shall provide a cable operator with notice when the electric cooperative is installing a new pole to replace an existing pole to which a pole attachment is affixed due to the rerouting, maintenance, or upgrading of the electric distribution system. In the notice, the electric cooperative shall specify a date for the cable operator to remove its attachment from the existing pole and transfer the attachment to the new pole.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c252/s252.006/b"> <num value="b">(b)</num> <content>If a cable operator does not transfer a pole attachment to the new pole on or before the 30th day after the date specified by the electric cooperative under Subsection (a), the electric cooperative may transfer the pole attachment to the new pole at the cable operator's expense, including the cost for the electric cooperative to return to the site.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c252/s252.006/c"> <num value="c">(c)</num> <content>A cable operator shall indemnify, defend, and hold harmless the electric cooperative and the cooperative's members, directors, officers, agents, and employees from and against all liability for the removal and transfer of a pole attachment subject to this section, except for personal injury or property damage arising from gross negligence or wilful misconduct of the electric cooperative during the removal and transfer process.</content> </subsection> <sourceCredit>Added by Acts 2013, 83rd Leg., R.S., Ch. 1077 (H.B. 3355), Sec. 1, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c252/s252.007"> <num value="252.007">Sec. 252.007.</num> <heading>ABANDONED POLE ATTACHMENTS; REMOVAL</heading> <subsection identifier="/us/tx/ut/t5/c252/s252.007/a"> <num value="a">(a)</num> <content>A cable operator shall remove the operator's abandoned pole attachment from an electric cooperative's pole not later than the 60th day after the date the cable operator receives from the electric cooperative a written request for removal of the pole attachment. A cable operator may request an electric cooperative to extend for a reasonable period the 60-day period prescribed by this section at any time before the 60-day period expires. The request for an extension must be in writing. The electric cooperative may grant a cable operator a reasonable extension of time to remove an abandoned attachment.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c252/s252.007/b"> <num value="b">(b)</num> <content>If a cable operator does not remove a pole attachment for which a request for removal was made under Subsection (a) before the expiration of the period described by that subsection or before the expiration of an extended period granted by the electric cooperative, the electric cooperative may remove, use, sell, or dispose of the pole attachment at the cable operator's expense.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c252/s252.007/c"> <num value="c">(c)</num> <content>An electric cooperative may require that a cable operator post a security instrument in an amount reasonably sufficient to cover the potential cost to the electric cooperative of removal and disposal of abandoned pole attachments.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c252/s252.007/d"> <num value="d">(d)</num> <content>A cable operator shall indemnify, defend, and hold harmless the electric cooperative and the cooperative's members, directors, officers, agents, and employees from and against all liability for the removal, use, sale, or disposal of abandoned pole attachments, except for personal injury or property damage arising from the gross negligence or wilful misconduct of the electric cooperative during the removal and disposal process.</content> </subsection> <sourceCredit>Added by Acts 2013, 83rd Leg., R.S., Ch. 1077 (H.B. 3355), Sec. 1, eff. September 1, 2013.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c252/s252.008"> <num value="252.008">Sec. 252.008.</num> <heading>EASEMENTS; INDEMNITY</heading> <subsection identifier="/us/tx/ut/t5/c252/s252.008/a"> <num value="a">(a)</num> <content>A cable operator is responsible for obtaining all rights-of-way and easements necessary for the installation, operation, and maintenance of the operator's pole attachments.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c252/s252.008/b"> <num value="b">(b)</num> <content>An electric cooperative is not required to obtain or expand a right-of-way or easement to accommodate a pole attachment requested by a cable operator.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c252/s252.008/c"> <num value="c">(c)</num> <content>An electric cooperative is not liable if a cable operator is prevented from placing or maintaining a pole attachment because the cable operator did not obtain a necessary right-of-way or easement.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c252/s252.008/d"> <num value="d">(d)</num> <content>A cable operator shall indemnify, defend, and hold harmless the electric cooperative and the cooperative's members, directors, officers, agents, and employees from and against any liability resulting from the cable operator's failure to obtain a necessary right-of-way or an easement for a pole attachment.</content> </subsection> <sourceCredit>Added by Acts 2013, 83rd Leg., R.S., Ch. 1077 (H.B. 3355), Sec. 1, eff. September 1, 2013.</sourceCredit> </section> </chapter> <chapter identifier="/us/tx/ut/t5/c253"> <num value="253">CHAPTER 253.</num> <heading>BROADBAND ATTACHMENTS TO ELECTRIC COOPERATIVE'S DISTRIBUTION POLES</heading> <subchapter identifier="/us/tx/ut/t5/c253/scA"> <num value="A">SUBCHAPTER A.</num> <heading>GENERAL PROVISIONS</heading> <section identifier="/us/tx/ut/t5/c253/scA/s253.0001"> <num value="253.0001">Sec. 253.0001.</num> <heading>DEFINITIONS</heading> <chapeau>In this chapter:</chapeau> <paragraph identifier="/us/tx/ut/t5/c253/scA/s253.0001/1"> <num value="1">(1)</num> <chapeau>"Broadband provider" means an entity that provides broadband service either directly or through an affiliate that uses the entity's communications facilities, regardless of whether the entity:</chapeau> <subparagraph identifier="/us/tx/ut/t5/c253/scA/s253.0001/A"> <num value="A">(A)</num> <content>provides additional services in addition to broadband service; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t5/c253/scA/s253.0001/B"> <num value="B">(B)</num> <content>uses its facilities in whole or in part to provide broadband service.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t5/c253/scA/s253.0001/2"> <num value="2">(2)</num> <chapeau>"Broadband service" means Internet service with the capability of providing:</chapeau> <subparagraph identifier="/us/tx/ut/t5/c253/scA/s253.0001/A"> <num value="A">(A)</num> <content>a download speed of 25 megabits per second or faster; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t5/c253/scA/s253.0001/B"> <num value="B">(B)</num> <content>an upload speed of 3 megabits per second or faster.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t5/c253/scA/s253.0001/3"> <num value="3">(3)</num> <content>"Pole" has the meaning assigned by Section 252.001.</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c253/scA/s253.0001/4"> <num value="4">(4)</num> <content>"Pole attachment" means an affixture of cables, strands, wires, and associated equipment used in the provision of a broadband provider's services attached to a pole directly or indirectly or placed in a right-of-way owned or controlled by an electric cooperative.</content> </paragraph> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 659 (H.B. 1505), Sec. 3, eff. September 1, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c253/scA/s253.0002"> <num value="253.0002">Sec. 253.0002.</num> <heading>APPLICABILITY</heading> <content>This chapter applies to a pole attachment that is used wholly or partly to provide broadband service and affixed by a broadband provider to a pole owned and controlled by an electric cooperative. This chapter does not apply to a pole attachment regulated by the Federal Communications Commission under 47 U.S.C. Section 224.</content> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 659 (H.B. 1505), Sec. 3, eff. September 1, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c253/scA/s253.0003"> <num value="253.0003">Sec. 253.0003.</num> <heading>CONSTRUCTION OF CHAPTER</heading> <subsection identifier="/us/tx/ut/t5/c253/scA/s253.0003/a"> <num value="a">(a)</num> <content>This chapter does not abrogate or affect a right or obligation of a party to a pole attachment contract entered into by a broadband provider and an electric cooperative before September 1, 2021.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c253/scA/s253.0003/b"> <num value="b">(b)</num> <content>This chapter does not limit a right of a party to a pole attachment contract to request modification, amendment, or renewal of such contract to conform it to the provisions of this chapter.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 659 (H.B. 1505), Sec. 3, eff. September 1, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c253/scA/s253.0004"> <num value="253.0004">Sec. 253.0004.</num> <heading>NO STATE CERTIFICATION; NO REGULATORY AUTHORITY</heading> <subsection identifier="/us/tx/ut/t5/c253/scA/s253.0004/a"> <num value="a">(a)</num> <content>This chapter does not constitute state certification under 47 U.S.C. Section 224. If a court determines that this chapter constitutes certification under that section, this chapter is not enforceable and has no effect.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c253/scA/s253.0004/b"> <num value="b">(b)</num> <content>This chapter may not be construed to subject an electric cooperative to regulation by the Federal Communications Commission under 47 U.S.C. Section 224.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c253/scA/s253.0004/c"> <num value="c">(c)</num> <content>This chapter does not authorize a department, agency, or political subdivision of this state to exercise enforcement or regulatory authority over attachments to electric cooperative poles.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 659 (H.B. 1505), Sec. 3, eff. September 1, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c253/scA/s253.0005"> <num value="253.0005">Sec. 253.0005.</num> <heading>CONSTRUCTION OF TERMS AND PHRASES</heading> <content>Technical terms and phrases in this chapter, other than those defined by Section 253.0001, shall be construed using the term's or phrase's usual and customary meanings in the electric and broadband industries.</content> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 659 (H.B. 1505), Sec. 3, eff. September 1, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c253/scA/s253.0006"> <num value="253.0006">Sec. 253.0006.</num> <heading>COST-BASED NONRECURRING CHARGES</heading> <content>Nonrecurring charges authorized by this chapter must be cost-based.</content> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 659 (H.B. 1505), Sec. 3, eff. September 1, 2021.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t5/c253/scB"> <num value="B">SUBCHAPTER B.</num> <heading>ACCESS TO POLES</heading> <section identifier="/us/tx/ut/t5/c253/scB/s253.0101"> <num value="253.0101">Sec. 253.0101.</num> <heading>APPLICATION FOR POLE ACCESS</heading> <content>A broadband provider may not access a pole owned by an electric cooperative for the purpose of placing a pole attachment unless the provider applies for that access.</content> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 659 (H.B. 1505), Sec. 3, eff. September 1, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c253/scB/s253.0102"> <num value="253.0102">Sec. 253.0102.</num> <heading>USE OF POLE ATTACHMENTS FOR MULTIPLE SERVICES</heading> <content>A broadband provider that attaches a pole attachment under this chapter may use the attachment for any service delivered over the provider's facilities, including cable service.</content> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 659 (H.B. 1505), Sec. 3, eff. September 1, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c253/scB/s253.0103"> <num value="253.0103">Sec. 253.0103.</num> <heading>NONDISCRIMINATORY ACCESS; MODIFICATION OR REPLACEMENT TO ACCOMMODATE ATTACHMENT</heading> <subsection identifier="/us/tx/ut/t5/c253/scB/s253.0103/a"> <num value="a">(a)</num> <content>Except as provided by this chapter, an electric cooperative shall provide a broadband provider with nondiscriminatory access to a pole that the cooperative owns or controls.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c253/scB/s253.0103/b"> <num value="b">(b)</num> <chapeau>Except as provided by Subsection (c), an electric cooperative may deny a broadband provider access to a pole:</chapeau> <paragraph identifier="/us/tx/ut/t5/c253/scB/s253.0103/1"> <num value="1">(1)</num> <content>if there is insufficient capacity; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c253/scB/s253.0103/2"> <num value="2">(2)</num> <content>for reasons of safety, reliability, and generally applicable engineering purposes.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t5/c253/scB/s253.0103/c"> <num value="c">(c)</num> <content>An electric cooperative may not deny a broadband provider access to a pole if the basis for denial may be remedied by rearranging facilities on the pole through reasonable make-ready activities.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c253/scB/s253.0103/d"> <num value="d">(d)</num> <chapeau>Except as provided by Subsection (e), if a pole must be replaced to accommodate a new pole attachment applied for by a broadband provider:</chapeau> <paragraph identifier="/us/tx/ut/t5/c253/scB/s253.0103/1"> <num value="1">(1)</num> <content>the electric cooperative and broadband provider shall determine, through good faith negotiations, a reasonable date by which the pole replacement will occur; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c253/scB/s253.0103/2"> <num value="2">(2)</num> <chapeau>the broadband provider shall pay the actual costs of replacing the pole, including the cost to:</chapeau> <subparagraph identifier="/us/tx/ut/t5/c253/scB/s253.0103/A"> <num value="A">(A)</num> <content>remove and dispose of the existing pole;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t5/c253/scB/s253.0103/B"> <num value="B">(B)</num> <content>purchase and install a replacement pole; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t5/c253/scB/s253.0103/C"> <num value="C">(C)</num> <content>transfer any existing facilities to the new pole.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t5/c253/scB/s253.0103/e"> <num value="e">(e)</num> <chapeau>An electric cooperative is responsible for the costs of removing and replacing under Subsection (d) a pole:</chapeau> <paragraph identifier="/us/tx/ut/t5/c253/scB/s253.0103/1"> <num value="1">(1)</num> <content>with recorded conditions or defects that would reasonably be expected to endanger human life or property and which should be promptly corrected; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c253/scB/s253.0103/2"> <num value="2">(2)</num> <content>that must be replaced for safety or reliability as a result of normal wear and tear or other natural causes and not on account of a pole attachment or the action of a broadband provider or third party.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 659 (H.B. 1505), Sec. 3, eff. September 1, 2021.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t5/c253/scC"> <num value="C">SUBCHAPTER C.</num> <heading>POLE ATTACHMENT CONTRACTS</heading> <section identifier="/us/tx/ut/t5/c253/scC/s253.0201"> <num value="253.0201">Sec. 253.0201.</num> <heading>CONTRACTS FOR POLE ATTACHMENTS</heading> <subsection identifier="/us/tx/ut/t5/c253/scC/s253.0201/a"> <num value="a">(a)</num> <content>An electric cooperative that owns a pole may require a broadband provider that attaches a pole attachment to the pole under this chapter to enter into a contract for access to the pole.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c253/scC/s253.0201/b"> <num value="b">(b)</num> <content>The terms and conditions of a contract under Subsection (a) must be consistent with this chapter.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 659 (H.B. 1505), Sec. 3, eff. September 1, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c253/scC/s253.0202"> <num value="253.0202">Sec. 253.0202.</num> <heading>RATES, TERMS, AND CONDITIONS FOR POLE ATTACHMENT</heading> <subsection identifier="/us/tx/ut/t5/c253/scC/s253.0202/a"> <num value="a">(a)</num> <content>A broadband provider and an electric cooperative shall establish the rates, terms, and conditions for pole attachments by a written pole attachment contract executed by both parties.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c253/scC/s253.0202/b"> <num value="b">(b)</num> <chapeau>The rates, terms, and conditions of a contract under this chapter must:</chapeau> <paragraph identifier="/us/tx/ut/t5/c253/scC/s253.0202/1"> <num value="1">(1)</num> <content>be just, reasonable, and nondiscriminatory; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c253/scC/s253.0202/2"> <num value="2">(2)</num> <content>comply with this chapter.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t5/c253/scC/s253.0202/c"> <num value="c">(c)</num> <chapeau>In determining whether rates, terms, and conditions are just and reasonable, the following factors must be considered:</chapeau> <paragraph identifier="/us/tx/ut/t5/c253/scC/s253.0202/1"> <num value="1">(1)</num> <content>the interests of and benefits to the consumers and potential consumers of the electric cooperative's services;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c253/scC/s253.0202/2"> <num value="2">(2)</num> <content>the interests of and benefits to the subscribers and potential subscribers to broadband services offered through the pole attachments;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c253/scC/s253.0202/3"> <num value="3">(3)</num> <content>the interests of and benefits to third parties from the availability of electric services and broadband services offered through the pole attachments;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c253/scC/s253.0202/4"> <num value="4">(4)</num> <content>compliance with applicable safety standards; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c253/scC/s253.0202/5"> <num value="5">(5)</num> <content>the maintenance and reliability of both electric distribution and broadband services.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t5/c253/scC/s253.0202/d"> <num value="d">(d)</num> <content>A broadband provider and an electric cooperative shall negotiate a pole attachment contract and any amendment, modification, or renewal thereof in good faith.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c253/scC/s253.0202/e"> <num value="e">(e)</num> <content>A request to negotiate a new pole attachment contract or to amend, modify, or renew a contract pertaining to pole attachments by a broadband provider or an electric cooperative must be made in writing.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 659 (H.B. 1505), Sec. 3, eff. September 1, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c253/scC/s253.0203"> <num value="253.0203">Sec. 253.0203.</num> <heading>CONTRACT NEGOTIATIONS AND MEDIATION</heading> <subsection identifier="/us/tx/ut/t5/c253/scC/s253.0203/a"> <num value="a">(a)</num> <chapeau>If a broadband provider and an electric cooperative are unable to agree to a new pole attachment contract before the expiration date of an existing contract, the rates, terms, and conditions of the existing contract and the terms and conditions of the electric cooperative's application and permitting processes remain in force:</chapeau> <paragraph identifier="/us/tx/ut/t5/c253/scC/s253.0203/1"> <num value="1">(1)</num> <content>during the 90-day negotiation period described by Subsection (b) and during the period of any agreed extension;</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c253/scC/s253.0203/2"> <num value="2">(2)</num> <content>during the 60-day mediation period described by Subsection (b) and during the period of any agreed extension; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t5/c253/scC/s253.0203/3"> <num value="3">(3)</num> <content>pending final disposition of any litigation commenced under Subsection (c).</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t5/c253/scC/s253.0203/b"> <num value="b">(b)</num> <content>If a broadband provider and an electric cooperative are unable to agree to a new pole attachment contract before the 91st day after the expiration date of an existing contract, and are unable to agree to an extension of the negotiation period for a certain number of days, the broadband provider and electric cooperative shall attempt to resolve any disagreement over the rates, terms, or conditions by submitting the contract negotiations to a mediation process. The mediation process may not extend later than the 60th day after the end of the initial 90-day negotiation period and any agreed extension of that period unless the broadband provider and electric cooperative agree to an extension of the mediation period for a certain number of days. The mediation process must be conducted in a county in which the electric cooperative has distribution poles. The broadband provider and electric cooperative must share equally the expenses for the mediator.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c253/scC/s253.0203/c"> <num value="c">(c)</num> <content>If the mediation process under Subsection (b) does not resolve the disagreement over the rates, terms, or conditions of a new pole attachment agreement, the broadband provider or electric cooperative may file suit in a district court to resolve the disagreement or dispute.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 659 (H.B. 1505), Sec. 3, eff. September 1, 2021.</sourceCredit> </section> </subchapter> <subchapter identifier="/us/tx/ut/t5/c253/scD"> <num value="D">SUBCHAPTER D.</num> <heading>ADDITIONAL POLE ATTACHMENT REQUIREMENTS</heading> <section identifier="/us/tx/ut/t5/c253/scD/s253.0401"> <num value="253.0401">Sec. 253.0401.</num> <heading>TRANSFER OF ATTACHMENTS</heading> <subsection identifier="/us/tx/ut/t5/c253/scD/s253.0401/a"> <num value="a">(a)</num> <content>Before an electric cooperative installs a new pole to replace an existing pole due to the rerouting, maintenance, or upgrading of the electric distribution system, the cooperative shall provide notice of the replacement to each broadband provider with a pole attachment on the existing pole.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c253/scD/s253.0401/b"> <num value="b">(b)</num> <content>The notice required under Subsection (a) must specify a date by which the broadband provider must remove the pole attachment from the existing pole and transfer the attachment to the new pole.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c253/scD/s253.0401/c"> <num value="c">(c)</num> <content>If a broadband provider does not transfer a pole attachment to the new pole before the 31st day after the date specified in the notice, the electric cooperative may transfer the pole attachment to the new pole at the broadband provider's expense, including the cost for the electric cooperative to return to the site.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c253/scD/s253.0401/d"> <num value="d">(d)</num> <content>A broadband provider shall indemnify, defend, and hold harmless an electric cooperative and the cooperative's members, directors, officers, agents, and employees from and against all liability for the removal and transfer of a pole attachment subject to this section, except for personal injury or property damage arising from the gross negligence or wilful misconduct of the electric cooperative during the removal and transfer process.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 659 (H.B. 1505), Sec. 3, eff. September 1, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c253/scD/s253.0402"> <num value="253.0402">Sec. 253.0402.</num> <heading>ABANDONED POLE ATTACHMENTS; REMOVAL</heading> <subsection identifier="/us/tx/ut/t5/c253/scD/s253.0402/a"> <num value="a">(a)</num> <content>A broadband provider that receives a written request from an electric cooperative to remove an abandoned pole attachment owned by the provider from a pole owned by the cooperative shall remove the attachment not later than the 60th day after the date the provider receives the request.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c253/scD/s253.0402/b"> <num value="b">(b)</num> <content>Before the deadline under Subsection (a), a broadband provider may request, and an electric cooperative may grant, a reasonable extension of that deadline. A request for an extension under this subsection must be in writing.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c253/scD/s253.0402/c"> <num value="c">(c)</num> <content>If a broadband provider does not remove a pole attachment by the deadline under Subsection (a) or an extended deadline under Subsection (b), the electric cooperative may remove, use, sell, or dispose of the pole attachment at the broadband provider's expense.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c253/scD/s253.0402/d"> <num value="d">(d)</num> <content>An electric cooperative may require that a broadband provider post a security instrument in an amount reasonably sufficient to cover the potential cost to the electric cooperative of removal and disposal of abandoned pole attachments.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c253/scD/s253.0402/e"> <num value="e">(e)</num> <content>A broadband provider shall indemnify, defend, and hold harmless an electric cooperative and the cooperative's members, directors, officers, agents, and employees from and against all liability for the removal, use, sale, or disposal of abandoned pole attachments, except for personal injury or property damage arising from the gross negligence or wilful misconduct of the electric cooperative during the removal and disposal process.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 659 (H.B. 1505), Sec. 3, eff. September 1, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t5/c253/scD/s253.0403"> <num value="253.0403">Sec. 253.0403.</num> <heading>EASEMENTS; INDEMNITY</heading> <subsection identifier="/us/tx/ut/t5/c253/scD/s253.0403/a"> <num value="a">(a)</num> <content>A broadband provider is responsible for obtaining all rights-of-way and easements necessary for the installation, operation, and maintenance of the provider's pole attachments.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c253/scD/s253.0403/b"> <num value="b">(b)</num> <content>An electric cooperative is not required to obtain or expand a right-of-way or easement to accommodate a pole attachment requested by a broadband provider.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c253/scD/s253.0403/c"> <num value="c">(c)</num> <content>An electric cooperative is not liable if a broadband provider is prevented from placing or maintaining a pole attachment because the broadband provider did not obtain a necessary right-of-way or easement.</content> </subsection> <subsection identifier="/us/tx/ut/t5/c253/scD/s253.0403/d"> <num value="d">(d)</num> <content>A broadband provider shall indemnify, defend, and hold harmless the electric cooperative and the cooperative's members, directors, officers, agents, and employees from and against any liability resulting from the broadband provider's failure to obtain a necessary right-of-way or easement for a pole attachment.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 659 (H.B. 1505), Sec. 3, eff. September 1, 2021.</sourceCredit> </section> </subchapter> </chapter> <num value="6">TITLE 6.</num> <heading>PRIVATE POWER AGREEMENTS</heading> <chapter identifier="/us/tx/ut/t6/c301"> <num value="301">CHAPTER 301.</num> <heading>WIND POWER FACILITY AGREEMENTS</heading> <section identifier="/us/tx/ut/t6/c301/s301.0001"> <num value="301.0001">Sec. 301.0001.</num> <heading>DEFINITIONS</heading> <chapeau>In this chapter:</chapeau> <paragraph identifier="/us/tx/ut/t6/c301/s301.0001/1"> <num value="1">(1)</num> <chapeau>"Grantee" means a person who:</chapeau> <subparagraph identifier="/us/tx/ut/t6/c301/s301.0001/A"> <num value="A">(A)</num> <content>leases property from a landowner; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t6/c301/s301.0001/B"> <num value="B">(B)</num> <content>operates a wind power facility on the property.</content> <continuation>(1-a) "Recycle" means the processing of an item to recover a usable product.</continuation> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t6/c301/s301.0001/2"> <num value="2">(2)</num> <chapeau>"Wind power facility" includes:</chapeau> <subparagraph identifier="/us/tx/ut/t6/c301/s301.0001/A"> <num value="A">(A)</num> <content>a wind turbine generator and any related components of the wind turbine, including a nacelle, a rotor hub, blades, and a gearbox assembly; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t6/c301/s301.0001/B"> <num value="B">(B)</num> <content>a facility or equipment used to support the operation of a wind turbine generator, including an underground or aboveground electrical transmission or communications line, an electric transformer, a battery energy storage facility or other energy storage facility, telecommunications equipment, a road, a meteorological tower with wind measurement equipment, or a maintenance yard.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t6/c301/s301.0001/3"> <num value="3">(3)</num> <content>"Wind power facility agreement" means a lease agreement between a grantee and a landowner that authorizes the grantee to operate a wind power facility on the leased property.</content> </paragraph> <sourceCredit>Added by Acts 2019, 86th Leg., R.S., Ch. 1293 (H.B. 2845), Sec. 1, eff. September 1, 2019. Amended by: Acts 2025, 89th Leg., R.S., Ch. 434 (H.B. 3228), Sec. 1, eff. September 1, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t6/c301/s301.0002"> <num value="301.0002">Sec. 301.0002.</num> <heading>WAIVER VOID; REMEDIES</heading> <subsection identifier="/us/tx/ut/t6/c301/s301.0002/a"> <num value="a">(a)</num> <content>A provision of a wind power facility agreement that purports to waive a right or exempt a grantee from a liability or duty established by this chapter is void.</content> </subsection> <subsection identifier="/us/tx/ut/t6/c301/s301.0002/b"> <num value="b">(b)</num> <content>A person who is harmed by a violation of this chapter is entitled to appropriate injunctive relief to prevent further violation of this chapter.</content> </subsection> <subsection identifier="/us/tx/ut/t6/c301/s301.0002/c"> <num value="c">(c)</num> <content>The provisions of this section are not exclusive. The remedies provided in this section are in addition to any other procedures or remedies provided by other law.</content> </subsection> <sourceCredit>Added by Acts 2019, 86th Leg., R.S., Ch. 1293 (H.B. 2845), Sec. 1, eff. September 1, 2019.</sourceCredit> </section> <section identifier="/us/tx/ut/t6/c301/s301.0003"> <num value="301.0003">Sec. 301.0003.</num> <heading>REQUIRED AGREEMENT PROVISIONS ON FACILITY REMOVAL</heading> <subsection identifier="/us/tx/ut/t6/c301/s301.0003/a"> <num value="a">(a)</num> <chapeau>A wind power facility agreement must provide that the grantee is responsible for removing the grantee's wind power facilities from the landowner's property and that the grantee shall, in accordance with any other applicable laws or regulations, safely:</chapeau> <paragraph identifier="/us/tx/ut/t6/c301/s301.0003/1"> <num value="1">(1)</num> <chapeau>clear, clean, and remove from the property:</chapeau> <subparagraph identifier="/us/tx/ut/t6/c301/s301.0003/A"> <num value="A">(A)</num> <content>each wind turbine generator, including towers and pad-mount transformers;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t6/c301/s301.0003/B"> <num value="B">(B)</num> <content>all liquids, greases, or similar substances contained in a wind turbine generator;</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t6/c301/s301.0003/C"> <num value="C">(C)</num> <content>each substation; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t6/c301/s301.0003/D"> <num value="D">(D)</num> <content>all liquids, greases, or similar substances contained in a substation;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t6/c301/s301.0003/2"> <num value="2">(2)</num> <chapeau>for each tower foundation and pad-mount transformer foundation installed in the ground:</chapeau> <subparagraph identifier="/us/tx/ut/t6/c301/s301.0003/A"> <num value="A">(A)</num> <content>clear, clean, and remove the foundation from the ground to a depth of at least three feet below the surface grade of the land in which the foundation is installed; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t6/c301/s301.0003/B"> <num value="B">(B)</num> <content>ensure that each hole or cavity created in the ground by the removal is filled with topsoil of the same type or a similar type as the predominant topsoil found on the property;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t6/c301/s301.0003/3"> <num value="3">(3)</num> <chapeau>for each buried cable, including power, fiber-optic, and communications cables, installed in the ground:</chapeau> <subparagraph identifier="/us/tx/ut/t6/c301/s301.0003/A"> <num value="A">(A)</num> <content>clear, clean, and remove the cable from the ground to a depth of at least three feet below the surface grade of the land in which the cable is installed; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t6/c301/s301.0003/B"> <num value="B">(B)</num> <content>ensure that each hole or cavity created in the ground by the removal is filled with topsoil of the same type or a similar type as the predominant topsoil found on the property; and</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t6/c301/s301.0003/4"> <num value="4">(4)</num> <content>clear, clean, and remove from the property each overhead power or communications line installed by the grantee on the property.</content> <continuation>(a-1) A wind power facility agreement must provide that the grantee is responsible for:</continuation> </paragraph> <paragraph identifier="/us/tx/ut/t6/c301/s301.0003/1"> <num value="1">(1)</num> <content>collecting and reusing or recycling, or shipping for reuse or recycling, all components of the wind power facility practicably capable of being reused or recycled, including the wind turbine blades, in accordance with any other applicable laws or regulations; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t6/c301/s301.0003/2"> <num value="2">(2)</num> <chapeau>disposing of all components of the wind power facility not practicably capable of being reused or recycled:</chapeau> <subparagraph identifier="/us/tx/ut/t6/c301/s301.0003/A"> <num value="A">(A)</num> <content>at a facility authorized under state and federal law to dispose of hazardous substances for a component considered hazardous under those laws; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t6/c301/s301.0003/B"> <num value="B">(B)</num> <content>for nonhazardous components, at a municipal solid waste landfill or other appropriate waste disposal facility authorized under state and federal law to dispose of that type of component.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t6/c301/s301.0003/b"> <num value="b">(b)</num> <chapeau>The agreement must provide that, at the request of the landowner, the grantee shall:</chapeau> <paragraph identifier="/us/tx/ut/t6/c301/s301.0003/1"> <num value="1">(1)</num> <content>clear, clean, and remove each road constructed by the grantee on the property; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t6/c301/s301.0003/2"> <num value="2">(2)</num> <content>ensure that each hole or cavity created in the ground by the removal is filled with topsoil of the same type or a similar type as the predominant topsoil found on the property.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t6/c301/s301.0003/c"> <num value="c">(c)</num> <chapeau>The agreement must provide that, at the request of the landowner, if reasonable, the grantee shall:</chapeau> <paragraph identifier="/us/tx/ut/t6/c301/s301.0003/1"> <num value="1">(1)</num> <content>remove from the property all rocks over 12 inches in diameter excavated during the decommissioning or removal process;</content> </paragraph> <paragraph identifier="/us/tx/ut/t6/c301/s301.0003/2"> <num value="2">(2)</num> <content>return the property to a tillable state using scarification, V-rip, or disc methods, as appropriate; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t6/c301/s301.0003/3"> <num value="3">(3)</num> <chapeau>ensure that:</chapeau> <subparagraph identifier="/us/tx/ut/t6/c301/s301.0003/A"> <num value="A">(A)</num> <content>each hole or cavity created in the ground by the removal is filled with topsoil of the same type or a similar type as the predominant topsoil found on the property; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t6/c301/s301.0003/B"> <num value="B">(B)</num> <content>the surface is returned as near as reasonably possible to the same condition as before the grantee dug holes or cavities, including by reseeding pastureland with native grasses prescribed by an appropriate governmental agency, if any.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t6/c301/s301.0003/d"> <num value="d">(d)</num> <chapeau>The landowner shall make a request under Subsection (b) or (c) not later than the 180th day after the later of:</chapeau> <paragraph identifier="/us/tx/ut/t6/c301/s301.0003/1"> <num value="1">(1)</num> <content>the date on which the wind power facility is no longer capable of generating electricity in commercial quantities; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t6/c301/s301.0003/2"> <num value="2">(2)</num> <content>the date the landowner receives written notice of intent to decommission the wind power facility from the grantee.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2019, 86th Leg., R.S., Ch. 1293 (H.B. 2845), Sec. 1, eff. September 1, 2019. Amended by: Acts 2025, 89th Leg., R.S., Ch. 434 (H.B. 3228), Sec. 2, eff. September 1, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t6/c301/s301.0004"> <num value="301.0004">Sec. 301.0004.</num> <heading>REQUIRED AGREEMENT PROVISIONS ON FINANCIAL ASSURANCE</heading> <subsection identifier="/us/tx/ut/t6/c301/s301.0004/a"> <num value="a">(a)</num> <content>A wind power facility agreement must provide that the grantee shall obtain and deliver to the landowner evidence of financial assurance that conforms to the requirements of this section to secure the performance of the grantee's obligations under Section 301.0003. Acceptable forms of financial assurance include a parent company guaranty with a minimum investment grade credit rating for the parent company issued by a major domestic credit rating agency, a letter of credit, a bond, or another form of financial assurance acceptable to the landowner.</content> </subsection> <subsection identifier="/us/tx/ut/t6/c301/s301.0004/b"> <num value="b">(b)</num> <content>The amount of the financial assurance must be at least equal to the estimated amount by which the cost of removing the wind power facilities from the landowner's property, recycling or disposing of all the components of the wind power facilities, and restoring the property to as near as reasonably possible the condition of the property as of the date the agreement begins exceeds the salvage value of the wind power facilities, less any portion of the value of the wind power facilities pledged to secure outstanding debt.</content> </subsection> <subsection identifier="/us/tx/ut/t6/c301/s301.0004/c"> <num value="c">(c)</num> <chapeau>The agreement must provide that:</chapeau> <paragraph identifier="/us/tx/ut/t6/c301/s301.0004/1"> <num value="1">(1)</num> <content>the estimated cost of removing the wind power facilities from the landowner's property, recycling or disposing of all the components of the wind power facilities, and restoring the property to as near as reasonably possible the condition of the property as of the date the agreement begins and the estimated salvage value of the wind power facilities must be determined by an independent, third-party professional engineer licensed in this state;</content> </paragraph> <paragraph identifier="/us/tx/ut/t6/c301/s301.0004/2"> <num value="2">(2)</num> <content>the grantee must deliver to the landowner an updated estimate, prepared by an independent, third-party professional engineer licensed in this state, of the cost of removal and recycling or disposal of the wind power facilities and the salvage value at least once every five years for the remainder of the term of the agreement; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t6/c301/s301.0004/3"> <num value="3">(3)</num> <content>the grantee is responsible for ensuring that the amount of the financial assurance remains sufficient to cover the amount required by Subsection (b), consistent with the estimates required by this subsection.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t6/c301/s301.0004/d"> <num value="d">(d)</num> <content>The grantee is responsible for the costs of obtaining financial assurance described by this section and costs of determining the estimated removal, recycling, and disposal costs and salvage value.</content> </subsection> <subsection identifier="/us/tx/ut/t6/c301/s301.0004/e"> <num value="e">(e)</num> <chapeau>The agreement must provide that the grantee shall deliver the financial assurance not later than the earlier of:</chapeau> <paragraph identifier="/us/tx/ut/t6/c301/s301.0004/1"> <num value="1">(1)</num> <content>the date the wind power facility agreement is terminated; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t6/c301/s301.0004/2"> <num value="2">(2)</num> <content>the 10th anniversary of the commercial operations date of the wind power facilities located on the landowner's leased property.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t6/c301/s301.0004/f"> <num value="f">(f)</num> <content>For purposes of this section, "commercial operations date" means the date on which the wind power facilities are approved for participation in market operations by a regional transmission organization and does not include the generation of electrical energy or other operations conducted before that date for purposes of maintenance and testing.</content> </subsection> <subsection identifier="/us/tx/ut/t6/c301/s301.0004/g"> <num value="g">(g)</num> <content>The grantee may not cancel financial assurance before the date the grantee has completed the grantee's obligation to remove the grantee's wind power facilities located on the landowner's property in the manner provided by this chapter, unless the grantee provides the landowner with replacement financial assurance at the time of or before the cancellation. In the event of a transfer of ownership of the grantee's wind power facilities, the financial security provided by the grantee shall remain in place until the date evidence of financial security meeting the requirements of this chapter is provided to the landowner.</content> </subsection> <sourceCredit>Added by Acts 2019, 86th Leg., R.S., Ch. 1293 (H.B. 2845), Sec. 1, eff. September 1, 2019. Amended by: Acts 2025, 89th Leg., R.S., Ch. 434 (H.B. 3228), Sec. 3, eff. September 1, 2025.</sourceCredit> </section> </chapter> <chapter identifier="/us/tx/ut/t6/c302"> <num value="302">CHAPTER 302.</num> <heading>SOLAR POWER FACILITY AGREEMENTS</heading> <section identifier="/us/tx/ut/t6/c302/s302.0001"> <num value="302.0001">Sec. 302.0001.</num> <heading>DEFINITIONS</heading> <chapeau>In this chapter:</chapeau> <paragraph identifier="/us/tx/ut/t6/c302/s302.0001/1"> <num value="1">(1)</num> <chapeau>"Grantee" means a person, other than an electric utility, as defined by Section 31.002, who:</chapeau> <subparagraph identifier="/us/tx/ut/t6/c302/s302.0001/A"> <num value="A">(A)</num> <content>leases property from a landowner; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t6/c302/s302.0001/B"> <num value="B">(B)</num> <content>operates a solar power facility on the property.</content> <continuation>(1-a) "Recycle" means the processing of an item to recover a usable product.</continuation> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t6/c302/s302.0001/2"> <num value="2">(2)</num> <content>"Solar energy device" has the meaning assigned by Section 185.001.</content> </paragraph> <paragraph identifier="/us/tx/ut/t6/c302/s302.0001/3"> <num value="3">(3)</num> <chapeau>"Solar power facility" includes:</chapeau> <subparagraph identifier="/us/tx/ut/t6/c302/s302.0001/A"> <num value="A">(A)</num> <content>a solar energy device; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t6/c302/s302.0001/B"> <num value="B">(B)</num> <content>a facility or equipment, other than a facility or equipment owned by an electric utility, as defined by Section 31.002, used to support the operation of a solar energy device, including an underground or aboveground electrical transmission or communications line, an electric transformer, a battery energy storage facility or other energy storage facility, telecommunications equipment, a road, a meteorological tower, or a maintenance yard.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t6/c302/s302.0001/4"> <num value="4">(4)</num> <content>"Solar power facility agreement" means a lease agreement between a grantee and a landowner that authorizes the grantee to operate a solar power facility on the leased property.</content> </paragraph> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 582 (S.B. 760), Sec. 2, eff. September 1, 2021. Amended by: Acts 2025, 89th Leg., R.S., Ch. 434 (H.B. 3228), Sec. 4, eff. September 1, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t6/c302/s302.0002"> <num value="302.0002">Sec. 302.0002.</num> <heading>APPLICABILITY</heading> <content>This chapter applies only to a solar power facility that is a generation asset as defined by Section 39.251.</content> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 582 (S.B. 760), Sec. 2, eff. September 1, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t6/c302/s302.0003"> <num value="302.0003">Sec. 302.0003.</num> <heading>WAIVER VOID; REMEDIES</heading> <subsection identifier="/us/tx/ut/t6/c302/s302.0003/a"> <num value="a">(a)</num> <content>A provision of a solar power facility agreement that purports to waive a right or exempt a grantee from a liability or duty established by this chapter is void.</content> </subsection> <subsection identifier="/us/tx/ut/t6/c302/s302.0003/b"> <num value="b">(b)</num> <content>A person who is harmed by a violation of this chapter is entitled to appropriate injunctive relief to prevent further violation of this chapter.</content> </subsection> <subsection identifier="/us/tx/ut/t6/c302/s302.0003/c"> <num value="c">(c)</num> <content>The provisions of this section are not exclusive. The remedies provided in this section are in addition to any other procedures or remedies provided by other law.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 582 (S.B. 760), Sec. 2, eff. September 1, 2021.</sourceCredit> </section> <section identifier="/us/tx/ut/t6/c302/s302.0004"> <num value="302.0004">Sec. 302.0004.</num> <heading>REQUIRED AGREEMENT PROVISIONS ON FACILITY REMOVAL</heading> <subsection identifier="/us/tx/ut/t6/c302/s302.0004/a"> <num value="a">(a)</num> <chapeau>A solar power facility agreement must provide that the grantee is responsible for removing the grantee's solar power facilities from the landowner's property and that the grantee shall, in accordance with any other applicable laws or regulations, safely:</chapeau> <paragraph identifier="/us/tx/ut/t6/c302/s302.0004/1"> <num value="1">(1)</num> <content>clear, clean, and remove from the property each solar energy device, transformer, and substation;</content> </paragraph> <paragraph identifier="/us/tx/ut/t6/c302/s302.0004/2"> <num value="2">(2)</num> <chapeau>for each foundation of a solar energy device, transformer, or substation installed in the ground:</chapeau> <subparagraph identifier="/us/tx/ut/t6/c302/s302.0004/A"> <num value="A">(A)</num> <content>clear, clean, and remove the foundation from the ground to a depth of at least three feet below the surface grade of the land in which the foundation is installed; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t6/c302/s302.0004/B"> <num value="B">(B)</num> <content>ensure that each hole or cavity created in the ground by the removal is filled with soil of the same type or a similar type as the predominant soil found on the property;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t6/c302/s302.0004/3"> <num value="3">(3)</num> <chapeau>for each buried cable, including power, fiber-optic, and communications cables, installed in the ground:</chapeau> <subparagraph identifier="/us/tx/ut/t6/c302/s302.0004/A"> <num value="A">(A)</num> <content>clear, clean, and remove the cable from the ground to a depth of at least three feet below the surface grade of the land in which the cable is installed; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t6/c302/s302.0004/B"> <num value="B">(B)</num> <content>ensure that each hole or cavity created in the ground by the removal is filled with soil of the same type or a similar type as the predominant soil found on the property; and</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t6/c302/s302.0004/4"> <num value="4">(4)</num> <content>clear, clean, and remove from the property each overhead power or communications line installed by the grantee on the property.</content> <continuation>(a-1) A solar power facility agreement must provide that the grantee is responsible for:</continuation> </paragraph> <paragraph identifier="/us/tx/ut/t6/c302/s302.0004/1"> <num value="1">(1)</num> <content>collecting and reusing or recycling, or shipping for reuse or recycling, all components of the solar power facility practicably capable of being reused or recycled, including the photovoltaic modules, in accordance with any other applicable laws or regulations; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t6/c302/s302.0004/2"> <num value="2">(2)</num> <chapeau>disposing of all components of the solar power facility not practicably capable of being reused or recycled:</chapeau> <subparagraph identifier="/us/tx/ut/t6/c302/s302.0004/A"> <num value="A">(A)</num> <content>at a facility authorized under state and federal law to dispose of hazardous substances for a component considered hazardous under those laws; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t6/c302/s302.0004/B"> <num value="B">(B)</num> <content>for nonhazardous components, at a municipal solid waste landfill or other appropriate waste disposal facility authorized under state and federal law to dispose of that type of component.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t6/c302/s302.0004/b"> <num value="b">(b)</num> <chapeau>The agreement must provide that, at the request of the landowner, the grantee shall:</chapeau> <paragraph identifier="/us/tx/ut/t6/c302/s302.0004/1"> <num value="1">(1)</num> <content>clear, clean, and remove each road constructed by the grantee on the property; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t6/c302/s302.0004/2"> <num value="2">(2)</num> <content>ensure that each hole or cavity created in the ground by the removal is filled with soil of the same type or a similar type as the predominant soil found on the property.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t6/c302/s302.0004/c"> <num value="c">(c)</num> <chapeau>The agreement must provide that, at the request of the landowner, if reasonable, the grantee shall:</chapeau> <paragraph identifier="/us/tx/ut/t6/c302/s302.0004/1"> <num value="1">(1)</num> <content>remove from the property all rocks over 12 inches in diameter excavated during the decommissioning or removal process;</content> </paragraph> <paragraph identifier="/us/tx/ut/t6/c302/s302.0004/2"> <num value="2">(2)</num> <content>return the property to a tillable state using scarification, V-rip, or disc methods, as appropriate; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t6/c302/s302.0004/3"> <num value="3">(3)</num> <chapeau>ensure that:</chapeau> <subparagraph identifier="/us/tx/ut/t6/c302/s302.0004/A"> <num value="A">(A)</num> <content>each hole or cavity created in the ground by the removal is filled with soil of the same type or a similar type as the predominant soil found on the property; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t6/c302/s302.0004/B"> <num value="B">(B)</num> <content>the surface is returned as near as reasonably possible to the same condition as before the grantee dug holes or cavities, including by reseeding pastureland with native grasses prescribed by an appropriate governmental agency, if any.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t6/c302/s302.0004/d"> <num value="d">(d)</num> <chapeau>The landowner shall make a request under Subsection (b) or (c) not later than the 180th day after the later of:</chapeau> <paragraph identifier="/us/tx/ut/t6/c302/s302.0004/1"> <num value="1">(1)</num> <content>the date on which the solar power facility is no longer capable of generating electricity in commercial quantities; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t6/c302/s302.0004/2"> <num value="2">(2)</num> <content>the date the landowner receives written notice of intent to decommission the solar power facility from the grantee.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 582 (S.B. 760), Sec. 2, eff. September 1, 2021. Amended by: Acts 2025, 89th Leg., R.S., Ch. 434 (H.B. 3228), Sec. 5, eff. September 1, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t6/c302/s302.0005"> <num value="302.0005">Sec. 302.0005.</num> <heading>REQUIRED AGREEMENT PROVISIONS ON FINANCIAL ASSURANCE</heading> <subsection identifier="/us/tx/ut/t6/c302/s302.0005/a"> <num value="a">(a)</num> <content>A solar power facility agreement must provide that the grantee shall obtain and deliver to the landowner evidence of financial assurance that conforms to the requirements of this section to secure the performance of the grantee's obligations under Section 302.0004. Acceptable forms of financial assurance include a parent company guaranty with a minimum investment grade credit rating for the parent company issued by a major domestic credit rating agency, a letter of credit, a bond, or another form of financial assurance reasonably acceptable to the landowner.</content> </subsection> <subsection identifier="/us/tx/ut/t6/c302/s302.0005/b"> <num value="b">(b)</num> <content>The amount of the financial assurance must be at least equal to the estimated amount by which the cost of removing the solar power facilities from the landowner's property, recycling or disposing of all the components of the solar power facilities, and restoring the property to as near as reasonably possible the condition of the property as of the date the agreement begins exceeds the salvage value of the solar power facilities, less any portion of the value of the solar power facilities pledged to secure outstanding debt.</content> </subsection> <subsection identifier="/us/tx/ut/t6/c302/s302.0005/c"> <num value="c">(c)</num> <chapeau>The agreement must provide that:</chapeau> <paragraph identifier="/us/tx/ut/t6/c302/s302.0005/1"> <num value="1">(1)</num> <content>the estimated cost of removing the solar power facilities from the landowner's property, recycling or disposing of all the components of the solar power facilities, and restoring the property to as near as reasonably possible the condition of the property as of the date the agreement begins and the estimated salvage value of the solar power facilities must be determined by an independent, third-party professional engineer licensed in this state;</content> </paragraph> <paragraph identifier="/us/tx/ut/t6/c302/s302.0005/2"> <num value="2">(2)</num> <chapeau>the grantee must deliver to the landowner an updated estimate, prepared by an independent, third-party professional engineer licensed in this state, of the cost of removal and recycling or disposal of the solar power facilities and the salvage value:</chapeau> <subparagraph identifier="/us/tx/ut/t6/c302/s302.0005/A"> <num value="A">(A)</num> <content>on or before the 10th anniversary of the commercial operations date of the solar power facilities; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t6/c302/s302.0005/B"> <num value="B">(B)</num> <content>at least once every five years after the commercial operations date of the solar power facilities for the remainder of the term of the agreement; and</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t6/c302/s302.0005/3"> <num value="3">(3)</num> <content>the grantee is responsible for ensuring that the amount of the financial assurance remains sufficient to cover the amount required by Subsection (b), consistent with the estimates required by this subsection.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t6/c302/s302.0005/d"> <num value="d">(d)</num> <content>The grantee is responsible for the costs of obtaining financial assurance described by this section and costs of determining the estimated removal, recycling, and disposal costs and salvage value.</content> </subsection> <subsection identifier="/us/tx/ut/t6/c302/s302.0005/e"> <num value="e">(e)</num> <chapeau>The agreement must provide that the grantee shall deliver the financial assurance not later than the earlier of:</chapeau> <paragraph identifier="/us/tx/ut/t6/c302/s302.0005/1"> <num value="1">(1)</num> <content>the date the solar power facility agreement is terminated; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t6/c302/s302.0005/2"> <num value="2">(2)</num> <content>the 20th anniversary of the commercial operations date of the solar power facilities located on the landowner's leased property.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t6/c302/s302.0005/f"> <num value="f">(f)</num> <content>For purposes of this section, "commercial operations date" means the date on which the solar power facilities are approved for participation in market operations by a regional transmission organization and does not include the generation of electrical energy or other operations conducted before that date for purposes of maintenance and testing.</content> </subsection> <subsection identifier="/us/tx/ut/t6/c302/s302.0005/g"> <num value="g">(g)</num> <content>The grantee may not cancel financial assurance before the date the grantee has completed the grantee's obligation to remove the grantee's solar power facilities located on the landowner's property in the manner provided by this chapter, unless the grantee provides the landowner with replacement financial assurance at the time of or before the cancellation. In the event of a transfer of ownership of the grantee's solar power facilities, the financial security provided by the grantee shall remain in place until the date evidence of financial security meeting the requirements of this chapter is provided to the landowner.</content> </subsection> <sourceCredit>Added by Acts 2021, 87th Leg., R.S., Ch. 582 (S.B. 760), Sec. 2, eff. September 1, 2021. Amended by: Acts 2025, 89th Leg., R.S., Ch. 434 (H.B. 3228), Sec. 6, eff. September 1, 2025.</sourceCredit> </section> </chapter> <chapter identifier="/us/tx/ut/t6/c303"> <num value="303">CHAPTER 303.</num> <heading>BATTERY ENERGY STORAGE FACILITY AGREEMENTS</heading> <section identifier="/us/tx/ut/t6/c303/s303.0001"> <num value="303.0001">Sec. 303.0001.</num> <heading>DEFINITIONS</heading> <chapeau>In this chapter:</chapeau> <paragraph identifier="/us/tx/ut/t6/c303/s303.0001/1"> <num value="1">(1)</num> <chapeau>"Battery energy storage facility" includes:</chapeau> <subparagraph identifier="/us/tx/ut/t6/c303/s303.0001/A"> <num value="A">(A)</num> <content>a battery energy storage resource; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t6/c303/s303.0001/B"> <num value="B">(B)</num> <content>any facility or equipment necessary to support the operation of a battery energy storage resource, other than a facility or equipment owned by an electric utility, as defined by Section 31.002.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t6/c303/s303.0001/2"> <num value="2">(2)</num> <content>"Battery energy storage facility agreement" means a lease agreement between a grantee and a landowner that authorizes the grantee to operate a battery energy storage facility on the leased property.</content> </paragraph> <paragraph identifier="/us/tx/ut/t6/c303/s303.0001/3"> <num value="3">(3)</num> <content>"Battery energy storage resource" means an electrochemical device, whether connected at the transmission or distribution level, with a capacity of one megawatt hour or greater that charges from the grid or a colocated generation resource and discharges that energy at a later time.</content> </paragraph> <paragraph identifier="/us/tx/ut/t6/c303/s303.0001/4"> <num value="4">(4)</num> <content>"Battery operation date" means the date on which a battery energy storage resource is first used for its intended purpose.</content> </paragraph> <paragraph identifier="/us/tx/ut/t6/c303/s303.0001/5"> <num value="5">(5)</num> <chapeau>"Grantee" means a person, other than an electric utility as defined by Section 31.002, who:</chapeau> <subparagraph identifier="/us/tx/ut/t6/c303/s303.0001/A"> <num value="A">(A)</num> <content>leases property from a landowner; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t6/c303/s303.0001/B"> <num value="B">(B)</num> <content>operates a battery energy storage facility on the property.</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t6/c303/s303.0001/6"> <num value="6">(6)</num> <content>"Recycle" means the processing, including disassembling, dismantling, and shredding of battery energy storage cells, modules or other equipment, or their components, to recover a usable product.</content> </paragraph> <sourceCredit>Added by Acts 2025, 89th Leg., R.S., Ch. 281 (H.B. 3809), Sec. 1, eff. September 1, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t6/c303/s303.0002"> <num value="303.0002">Sec. 303.0002.</num> <heading>APPLICABILITY</heading> <content>Except as provided by Section 303.0004(c), this chapter applies only to an agreement that authorizes a grantee to operate a battery energy storage facility that is not subject to Chapter 301 or 302.</content> <sourceCredit>Added by Acts 2025, 89th Leg., R.S., Ch. 281 (H.B. 3809), Sec. 1, eff. September 1, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t6/c303/s303.0003"> <num value="303.0003">Sec. 303.0003.</num> <heading>WAIVER VOID; REMEDIES</heading> <subsection identifier="/us/tx/ut/t6/c303/s303.0003/a"> <num value="a">(a)</num> <content>A provision of a battery energy storage facility agreement that purports to waive a right or exempt a grantee from a liability or duty established by this chapter is void.</content> </subsection> <subsection identifier="/us/tx/ut/t6/c303/s303.0003/b"> <num value="b">(b)</num> <content>A person who is harmed by a violation of this chapter is entitled to appropriate injunctive relief to prevent further violation of this chapter.</content> </subsection> <subsection identifier="/us/tx/ut/t6/c303/s303.0003/c"> <num value="c">(c)</num> <content>The provisions of this section are not exclusive. The remedies provided in this section are in addition to any other procedures or remedies provided by other law.</content> </subsection> <sourceCredit>Added by Acts 2025, 89th Leg., R.S., Ch. 281 (H.B. 3809), Sec. 1, eff. September 1, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t6/c303/s303.0004"> <num value="303.0004">Sec. 303.0004.</num> <heading>REQUIRED AGREEMENT PROVISIONS ON FACILITY REMOVAL</heading> <subsection identifier="/us/tx/ut/t6/c303/s303.0004/a"> <num value="a">(a)</num> <chapeau>A battery energy storage facility agreement must provide that the grantee is responsible for removing the battery energy storage facility from the landowner's property and that the grantee shall, in accordance with any other applicable laws or regulations, safely:</chapeau> <paragraph identifier="/us/tx/ut/t6/c303/s303.0004/1"> <num value="1">(1)</num> <content>clear, clean, and remove from the property each battery energy storage resource, transformer, and substation installed and owned by the grantee;</content> </paragraph> <paragraph identifier="/us/tx/ut/t6/c303/s303.0004/2"> <num value="2">(2)</num> <chapeau>for each foundation installed in the ground for a battery energy storage resource, transformer, or substation installed and owned by the grantee:</chapeau> <subparagraph identifier="/us/tx/ut/t6/c303/s303.0004/A"> <num value="A">(A)</num> <content>clear, clean, and remove the foundation from the ground to a depth of at least three feet below the surface grade of the land in which the foundation is installed; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t6/c303/s303.0004/B"> <num value="B">(B)</num> <content>ensure that each hole or cavity created in the ground by the removal is filled with soil of the same type or a similar type as the predominant soil found on the property;</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t6/c303/s303.0004/3"> <num value="3">(3)</num> <chapeau>for each buried cable, including power, fiber-optic, and communications cables, installed and owned by the grantee:</chapeau> <subparagraph identifier="/us/tx/ut/t6/c303/s303.0004/A"> <num value="A">(A)</num> <content>clear, clean, and remove the cable from the ground to a depth of at least three feet below the surface grade of the land in which the cable is installed; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t6/c303/s303.0004/B"> <num value="B">(B)</num> <content>ensure that each hole or cavity created in the ground by the removal is filled with soil of the same type or a similar type as the predominant soil found on the property; and</content> </subparagraph> </paragraph> <paragraph identifier="/us/tx/ut/t6/c303/s303.0004/4"> <num value="4">(4)</num> <content>clear, clean, and remove from the property each overhead power or communications line installed and owned by the grantee on the property.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t6/c303/s303.0004/b"> <num value="b">(b)</num> <chapeau>The agreement must provide that the grantee is responsible for:</chapeau> <paragraph identifier="/us/tx/ut/t6/c303/s303.0004/1"> <num value="1">(1)</num> <content>collecting and reusing or recycling, or shipping for reuse or recycling, all components of the battery energy storage facility practicably capable of being reused or recycled, in accordance with any other applicable laws or regulations; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t6/c303/s303.0004/2"> <num value="2">(2)</num> <chapeau>properly disposing of components of the battery energy storage facility not practicably capable of being reused or recycled:</chapeau> <subparagraph identifier="/us/tx/ut/t6/c303/s303.0004/A"> <num value="A">(A)</num> <content>at a facility authorized under state and federal law to dispose of hazardous substances for a component considered hazardous under those laws; or</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t6/c303/s303.0004/B"> <num value="B">(B)</num> <content>for nonhazardous components, at a municipal solid waste landfill or other appropriate waste disposal facility authorized under state and federal law to dispose of that type of component.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t6/c303/s303.0004/c"> <num value="c">(c)</num> <content>A wind power facility agreement entered into under Chapter 301 or solar power facility agreement entered into under Chapter 302 that authorizes the operation of a battery energy storage facility must include the provisions described by Subsection (b) and the financial assurance required by those chapters must be sufficient to secure the performance of the grantee's obligations under that subsection, in the manner provided by Section 303.0005.</content> </subsection> <subsection identifier="/us/tx/ut/t6/c303/s303.0004/d"> <num value="d">(d)</num> <chapeau>The agreement must provide that, at the request of the landowner, the grantee shall:</chapeau> <paragraph identifier="/us/tx/ut/t6/c303/s303.0004/1"> <num value="1">(1)</num> <content>clear, clean, and remove each road constructed by the grantee on the property; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t6/c303/s303.0004/2"> <num value="2">(2)</num> <content>ensure that each hole or cavity created in the ground by the removal is filled with soil of the same type or a similar type as the predominant soil found on the property.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t6/c303/s303.0004/e"> <num value="e">(e)</num> <chapeau>The agreement must provide that, at the request of the landowner, if reasonable, the grantee shall:</chapeau> <paragraph identifier="/us/tx/ut/t6/c303/s303.0004/1"> <num value="1">(1)</num> <content>remove from the property all rocks over 12 inches in diameter excavated during the decommissioning or removal process;</content> </paragraph> <paragraph identifier="/us/tx/ut/t6/c303/s303.0004/2"> <num value="2">(2)</num> <content>return the property to a tillable state using scarification, V-rip, or disc methods, as appropriate; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t6/c303/s303.0004/3"> <num value="3">(3)</num> <chapeau>ensure that:</chapeau> <subparagraph identifier="/us/tx/ut/t6/c303/s303.0004/A"> <num value="A">(A)</num> <content>each hole or cavity created in the ground by the removal is filled with soil of the same type or a similar type as the predominant soil found on the property; and</content> </subparagraph> <subparagraph identifier="/us/tx/ut/t6/c303/s303.0004/B"> <num value="B">(B)</num> <content>the surface is returned as near as reasonably possible to the same condition as before the grantee dug holes or cavities, including by reseeding pastureland with native grasses prescribed by an appropriate governmental agency, if any.</content> </subparagraph> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t6/c303/s303.0004/f"> <num value="f">(f)</num> <chapeau>The landowner shall make a request under Subsection (d) or (e) not later than the 180th day after the later of:</chapeau> <paragraph identifier="/us/tx/ut/t6/c303/s303.0004/1"> <num value="1">(1)</num> <content>the date on which the landowner receives from the grantee via certified mail a copy of a notification of intent to suspend operations filed with a grid operator indicating an intent to permanently cease operations; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t6/c303/s303.0004/2"> <num value="2">(2)</num> <content>the date the landowner receives written notice of intent to decommission the battery energy storage facility from the grantee.</content> </paragraph> </subsection> <sourceCredit>Added by Acts 2025, 89th Leg., R.S., Ch. 281 (H.B. 3809), Sec. 1, eff. September 1, 2025.</sourceCredit> </section> <section identifier="/us/tx/ut/t6/c303/s303.0005"> <num value="303.0005">Sec. 303.0005.</num> <heading>REQUIRED AGREEMENT PROVISIONS ON FINANCIAL ASSURANCE</heading> <subsection identifier="/us/tx/ut/t6/c303/s303.0005/a"> <num value="a">(a)</num> <content>A battery energy storage facility agreement must provide that the grantee shall obtain and deliver to the landowner evidence of financial assurance that conforms to the requirements of this section to secure the performance of the grantee's obligations under Section 303.0004. Acceptable forms of financial assurance include a parent company guaranty with a minimum investment grade credit rating for the parent company issued by a major domestic credit rating agency, a letter of credit, a bond, or another form of financial assurance reasonably acceptable to the landowner.</content> </subsection> <subsection identifier="/us/tx/ut/t6/c303/s303.0005/b"> <num value="b">(b)</num> <content>The amount of financial assurance must be at least equal to the estimated amount by which the cost of removing the battery energy storage facilities from the landowner's property, recycling or disposing of all the components of the battery energy storage facilities, and restoring the property to as near as reasonably possible the condition of the property as of the date the agreement begins, as described by Section 303.0004, exceeds the salvage value of the battery energy storage facilities, less any portion of the value of the battery energy storage facilities pledged to secure outstanding debt.</content> </subsection> <subsection identifier="/us/tx/ut/t6/c303/s303.0005/c"> <num value="c">(c)</num> <chapeau>The agreement must provide that:</chapeau> <paragraph identifier="/us/tx/ut/t6/c303/s303.0005/1"> <num value="1">(1)</num> <content>the estimated cost of removing the battery energy storage facilities from the landowner's property, recycling or disposing of all the components of the battery energy storage facilities, and restoring the property to as near as reasonably possible the condition of the property as of the date the agreement begins, as described by Section 303.0004, and the estimated salvage value of the battery energy storage facilities must be determined by an independent, third-party professional engineer licensed in this state;</content> </paragraph> <paragraph identifier="/us/tx/ut/t6/c303/s303.0005/2"> <num value="2">(2)</num> <content>the grantee must deliver to the landowner the estimated cost of removal and recycling or disposal of the battery energy storage facilities and the salvage value on or before the 10th anniversary of the battery operation date of the grantee's battery energy storage resources located on the landowner's property; and</content> </paragraph> <paragraph identifier="/us/tx/ut/t6/c303/s303.0005/3"> <num value="3">(3)</num> <content>the grantee must deliver an updated estimate of the cost and salvage value described by Subdivision (2) at least once every five years after the initial estimate for the remainder of the term of the agreement.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t6/c303/s303.0005/d"> <num value="d">(d)</num> <content>The grantee is responsible for the costs of obtaining financial assurance described by this section and determining the estimated removal, recycling, and disposal costs and salvage value.</content> </subsection> <subsection identifier="/us/tx/ut/t6/c303/s303.0005/e"> <num value="e">(e)</num> <chapeau>The agreement must provide that the grantee shall deliver financial assurance not later than the earlier of:</chapeau> <paragraph identifier="/us/tx/ut/t6/c303/s303.0005/1"> <num value="1">(1)</num> <content>the date the battery energy storage facility agreement is terminated; or</content> </paragraph> <paragraph identifier="/us/tx/ut/t6/c303/s303.0005/2"> <num value="2">(2)</num> <content>the 15th anniversary of the battery operation date of the grantee's battery energy storage resources located on the landowner's property.</content> </paragraph> </subsection> <subsection identifier="/us/tx/ut/t6/c303/s303.0005/f"> <num value="f">(f)</num> <content>The grantee is responsible for ensuring that the amount of financial assurance remains sufficient to cover the amount required by Subsection (b), consistent with the estimates required by this section.</content> </subsection> <subsection identifier="/us/tx/ut/t6/c303/s303.0005/g"> <num value="g">(g)</num> <content>The grantee may not cancel financial assurance before the date the grantee has completed the grantee's obligation to remove the grantee's battery energy storage facilities located on the landowner's property in the manner provided by this chapter, unless the grantee provides the landowner with replacement financial assurance at the time of or before the cancellation. In the event of a transfer of ownership of the grantee's battery energy storage facilities, financial assurance provided by the grantee shall remain in place until the date evidence of financial assurance meeting the requirements of this chapter is provided to the landowner.</content> </subsection> <sourceCredit>Added by Acts 2025, 89th Leg., R.S., Ch. 281 (H.B. 3809), Sec. 1, eff. September 1, 2025.</sourceCredit> </section> </chapter>