Texas Bill Would Require Municipal Utilities To Transition To Retail Choice Based On Rate Comparison
January 4, 2021 Email This Story Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • email@example.com
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A Texas bill, SB 182, has been authored and introduced by Sen. Charles Schwertner which would require municipal electric utilities to transition to customer choice based upon the findings of a rate comparison required to be conducted by the Texas PUC
SB 182 would require that, not later than September 1 of each year,
the PUC shall make an electric rate comparison of
approximately one-fifth of municipally owned utilities located in
the ERCOT power region and not open to customer choice by comparing
the average electric rate paid in the previous five years by:
(1) customers of the municipally owned utility; and
(2) customers who are located in a region that is open
to customer choice and similarly situated to the region served by
the utility, as determined by the commission.
Under the bill, if the commission determines that
the five-year average electric rate paid by customers of a
municipally owned utility is 10 percent greater than the five-year
average electric rate paid by customers in a similarly situated
region open to customer choice, "the commission shall notify the
governing body of the municipally owned utility that the utility is
required to transition to customer choice."
Under SB 182, not later than one year after the date a governing body receives such notice from the PUC, the utility shall initiate customer choice
The bill provides that, as soon
as practicable, but not earlier than 90 days after the date that a municipally owned utility is required to initiate customer choice, the PUC may determine that the utility is not adequately offering customer choice. If the commission makes such a determination, the commission assumes oversight authority over the municipally owned utility beginning on the date of the
determination for matters relating to the implementation of
customer choice. The PUC's oversight authority in this regard continues until the date the commission determines that the municipally owned utility: (1) has completed the transition to customer choice; and (2) is prepared to continue to provide customer choice in a manner consistent with the competitive market.
SB 182 provides that the PUC shall make the initial electric rate comparison not earlier than January 1, 2026. The commission shall designate approximately one-fifth of municipally owned utilities to which that section applies as subject to the initial electric rate comparison and one-fifth as
subject to the second, third, fourth, and fifth rate comparisons, respectively.
Notably, the bill authorizes the PUC to adopt rules as
necessary to implement the bill, including rules requiring
reporting of electric rates by a retail electric provider or
municipally owned utility. Ostensibly, such authorization regarding the reporting of REP rates is needed to complete the required comparison, but may impose new compliance obligations on REPs.
Under the bill, the commission may not make an electric rate comparison
of a municipally owned utility if the utility was the subject of a
rate comparison under Subsection (a) in the previous four years.
Additionally, the commission is not required to make a rate comparison as described above if each municipally owned utility to which the bill applies has been the subject of a rate comparison in
the previous four years.