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Texas Senate Concurs On House Changes To Electricity Broker Regulation Bill -- Now Bill Heads To Governor
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The Texas Senate today has concurred with amendments made by the House when the House recently passed SB 1497, which would subject electricity brokers to a registration requirement and regulation by the Public Utility Commission of Texas
As only reported by EnergyChoiceMatters.com's retail energy experts on May 16, the bill as passed by the House differed from the version passed by the Senate. As we noted at that time, and contrary to other published reports concerning the bill, the bill after House passage was not heading to the governor, but instead the Senate would need to either concur with the House version, or go through a conference committee process
The Senate has now concurred with the House version of the bill, and now the bill can be enrolled and sent to the governor
As previously reported, during House passage, a statement of intent was recorded in the House Journal concerning implementation of the bill and registration requirement
Asked about the bill, the bill's sponsor, Rep. Tan Parker, said implementation of broker registration, "needs to be limited in its purpose."
Discussing the authority granted to the PUC for the purpose of broker registration, Parker stated, "We want them to be very strict in terms of just making certain that they’re only
talking about contact information, the most basic information about the entity. We
want them to be able to use their authority very sparingly. I want this to be
extraordinarily limited."
Parker further explained the intent during an exchange with Rep. Jim Murphy, in which, among other things, Parker stated that there is no fee associated with the broker registration:
MURPHY: "And so the information you're asking them to provide is really
contact information and then the type of business entity under which they
operate."
PARKER: "That is absolutely correct -- just very simple information so that we can
protect all the wonderful brokers that are out there that are keeping our electric, if
you will, system and economy healthy, if you will, here in Texas."
...
MURPHY: "But importantly, this does not authorize any fee or new fees at the
PUC, and it's not your intention to create that kind of structure."
PARKER: "Representative Murphy, 100 percent. There is no fee at all associated
with this. That needs to always be the way it is going forward. I intend to
personally shepherd this process and make certain the PUC keeps it very simple
to just filling out a basic form with the most basic of information. Again, we want
brokers that are doing a wonderful job for Texas to continue to do so and to not
have any of their secret sauce, so to speak, with regard to how they operate their
business to become public."
As previously reported, the House committee substitute differed from the version of SB 1497 originally passed by the Senate in two respects. The Senate has now concurred with the changes described below
First, in defining broker, the House committee substitute deleted language defining brokerage services as, "selling or attempting to sell a product or service offered by a retail electric provider to a retail electric customer." REPs had raised concern that this language would require REP agents who act solely on behalf of a REP, and for whom the REP is legally responsible, to register as brokers
Second, in addition to subjecting brokers to any customer protection requirements adopted by the PUCT and to Chapter 39, Utilities Code, the House committee substitute also provides that brokers shall comply with customer protection provisions, disclosure requirements, and marketing guidelines established by Chapter 17 of PURA (generally relating to customer protection)
The enrolled SB 1497 provides that, "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."
The enrolled SB 1497 defines "brokerage services" to mean, "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."
The enrolled SB 1497 provides that a broker may not sell or take title to electric energy.
Under the enrolled SB 1497, a retail electric provider may not knowingly provide bids or offers to a person who: (1) provides brokerage services in this state for compensation or other consideration; and (2) has not registered as a broker with the commission.
The enrolled SB 1497 provides that a broker, "shall comply with customer protection provisions, disclosure requirements, and marketing guidelines established by the commission and by this chapter [Chapter 35] and Chapter 17."
The enrolled SB 1497 provides that the PUCT shall adopt rules as necessary to implement the bill.
The enrolled SB 1497 provides that the PUCT 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.
Under the enrolled SB 1497, a retail electric provider may not register as a broker.
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May 21, 2019
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Copyright 2010-19 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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