Texas House Committee Reports Favorably Substitute Bill With Revised Language That Would Regulate Brokers, Require Registration With PUCT

The Texas House State Affairs Committee has reported favorably a substitute for SB 1497, which would subject electricity brokers to a registration requirement and regulation by the Public Utility Commission of Texas

The House committee substitute differs from the version of SB 1497 passed by the Senate in two respects.

First, in defining broker, the House committee substitute deletes 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 would also provide 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 House committee substitute for 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 House committee substitute for 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 House committee substitute for SB 1497 provides that a broker may not sell or take title to electric energy.

Under the House committee substitute for 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 House committee substitute for 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 House committee substitute for SB 1497 provides that the PUCT shall adopt rules as necessary to implement the bill.

The House committee substitute for 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 House committee substitute for SB 1497, a retail electric provider may not register as a broker.