Category Archives: Retail

HB 1926: Support Fraser on the Senate Floor

 

HB 1926 by Kacal (Sp: Fraser) – Relating to the governance of certain municipal power agencies.

 

Proposal

  • HB 1926 requires all municipally-owned utilities, if building transmission outside of their traditional service territory, to seek a certificate of convenience & necessity (CCN) through the PUC and follow the same routing process as any other electric utility.
  • The bill also continues the Texas Municipal Power Agency (TMPA), a collective of municipally-owned utilities that includes Bryan, Denton, Garland and Greenville.

 

Discussion

  • AECT supports HB 1926, as the bill ensures a level playing field for all utilities building transmission in Texas.

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Click here to download a PDF of this issue paper.

 

HB 1101: Support Ensuring Remaining System Benefit Fund Balance is Disbursed to Eligible Customers

 

HB 1101 by Sylvester Turner – Relating to extending the period over which the balance of the system benefit fund is to be eliminated

AECT Position: Support

 

Proposal

HB 1101 would allow the PUC to use the remaining balance of the System Benefit Fund (SBF) for its intended purpose by extending funding for a low-income discount for eligible customers in the competitive electric market through August 2017.

  • In September 2015 and May through August 2016, low-income customers would receive up to a 33 percent discount off their electric bills.
  • For the months of September 2016 and May through August 2017, the low-income discount rate will be set by the PUC at a level to fully use the remaining SBF balance.

 

AECT Supports the Use of the SBF Balance for a Low-Income Discount

AECT has long supported the use of the SBF for its primary purpose: to provide assistance to low-income electric customers

  • The SBF initially provided funding for a year-round rate discount of 10-20 percent, as well as for energy efficiency and customer education. The discount was suspended in 2005. Beginning 2007, the discount was reinstated for the months of May-September only at a rate set by the PUC.
  • The fees that funded the SBF were typically greater than the annual expenditures on the low-income discount. The 83rd Legislature decided to discontinue collection of the SBF fees, and sunset the low-income discount using the SBF’s accumulated balance to fund it through August 2016.
  • Below-average summer temperatures and lower-than-expected enrollments resulted in significantly lower SBF expenditures and concern that the low-income discount may not fully utilize the remaining SBF funds before sunsetting in August 2016.
  • The SBF balance is currently projected to be about $247 million when the program expires in September 2016. HB 1101 would intend to use the entirety of the fund, concluding the SBF program.

Click here to download a PDF of this issue paper

Legislation to Enact Recommendations Included in the PUC’s “2015 Scope of Competition in Electric Markets in Texas”

 

SB 734 by Fraser – Relating to the setting of annual interest rates for utility deposits by the PUC (PUC Recommendation H.3)
AECT Position: Support

  •  SB 734 allows the PUC to set the rate of interest for the next calendar year on electric company deposits “on or before each December 1,” rather than specifically on December 1 or the next regular workday following December 1. SB 734 simply provides the PUC additional flexibility for when it sets annual interest rates for utility deposits.

SB 774 by Fraser – Relating to a study on periodic rate adjustment by electric utilities (PUC Recommendation H.2)
AECT Position: Support as Amended

  • As amended, SB 774 will reauthorize the 2011 Periodic Rate Adjustment (PRA) bill. The 2011 PRA bill is set to expire in January 2017. Under SB 774, the bill will expire on September 1, 2019. This ensures that the PRA mechanism will be available for use through the next two legislative sessions.
  • The bill revises the scope of a PUC report included in the 2011 PRA bill to more broadly study formula rate plans and other modernized ratemaking mechanisms. The report must be sent to the legislature on January 31, 2017.

SB 775 by Fraser- Relating to the repeal of the goal for natural gas use (PUC Recommendation E.1)
AECT Position: Support

  • Sec. 39.9044 of the Utilities Code requires at least 50 percent of non-renewable electric generation in Texas be fueled by natural gas. SB 775 removes this section.
  • The vast majority of non-renewable electric generation installed since Sec. 39.9044 was adopted in 1999 has been natural gas-fired, rendering Sec. 39.9044 unnecessary.

SB 776 by Fraser – Relating to the authority of the PUC to approve certain transmission facilities constructed by a municipally owned utility (PUC Recommendation B.3)
AECT Position: Amend

  • SB 776 requires a municipally-owned utility to obtain a certificate of convenience and necessity (CCN) before building transmission facilities outside its certificated service area.
  • SB 776 includes a standard for municipally-owned utilities that’s different from the standard for investor-owned utilities. AECT supports amending the legislation to ensure a level playing field for all utilities.

SB 777 by Fraser – Relating to the authority of the Public Utility Commission of Texas to restrict participation in the retail electric market for significant violations (PUC Recommendation A)
AECT Position: Support as Amended

  • AECT supports the concept of SB 777. The bill should be amended to clarify that the ban is on the individual who the PUC has sought action against. As filed, the text could be interpreted as creating an administrative burden on (and risk to) well-behaved REPs to ensure that a blacklisted individual is not in their employ. The filed language also implicitly allows employment of the blacklisted individual by other customer-impacting market participants.

SB 931 by Fraser – Relating to the goal for renewable energy and competitive renewable energy zones (PUC Recommendations B.1 and E.2)
AECT Position: Neutral

  • The Competitive Renewable Energy Zone (CREZ) project was completed in 2013. SB 931 would clarify that future proposed transmission projects, even those located in the CREZ, must meet the same adequacy and need criteria as non-CREZ transmission lines.
  • Texas’ renewable portfolio standard (RPS) set a mandate that at least 5,880 MW of renewable generation should be installed in Texas by 2025. The state currently has over 12,000 MW of renewable generation online, making the mandate unnecessary. SB 931 removes the goal from statute; it retains the renewable energy credit (REC) trading program.

SB 932 by Fraser – Relating to the authority of the PUC to retain assistance for federal proceedings affecting certain electric utilities and consumers (PUC Recommendation C)
AECT Position: Support

  • SB 932 would allow the PUC to hire assistance for federal proceedings in areas located outside the ERCOT grid. These utilities are regulated by FERC, in addition to the PUC.
  • It is appropriate for the PUC to have resources available to participate in these cases, which often require specialized knowledge of FERC.

 SB 933 by Fraser – Relating to Relating to the authority of the PUC to review transmission interconnections that enable imports or exports from the ERCOT power grid (PUC Recommendation B.2)
AECT Position: No Position 

  • SB 933 would require any interconnection between the ERCOT transmission grid and a neighboring grid to be approved by the PUC and found in the public interest.
  • This ensures the PUC can formally assess the impact of an interconnection between power markets.

Click here to download a PDF of this issue paper.

PUC Rules Protect Customers and Facilitate Choice

 

Recent calls for increased regulation of the competitive retail electric market allege that choosing an electric product is confusing, and therefore REPs should be limited by rule in the product structures offered. However, existing laws and regulations already address many of those concerns.

The competitive market continues to bring innovative electric products with the prices and services customers want. Additional regulations are simply not necessary and may result in increased prices for all customers.

Customers Have Significant Protections in the Competitive Market

  • By law, REPs are required to provide clear written disclosure of price and fee information so customers can make an informed choice when choosing an electric product.
  • All retail electric products must include a standardized Electricity Facts Label (EFL) that describes the product, rate structure and full price for service, including utility delivery charges at different usage amounts. Customers may request an EFL for a product that is in the market at any time.
  • The Public Utility Commission of Texas (PUC) enforces strict customer protection standards. These standards apply to all sales channels including door-to-door enrollments.
  • Failure to meet the standards established by the PUC result in significant consequences ranging from financial penalties to revocation of a REP’s Certificate.

Consumers Can Choose a Product to Best Suit Their Needs

  • There are dozens of REPs and hundreds of offers available to customers in the competitive market. As of January 2015, customers in competitive areas typically had at least 250 plans available, many without minimum usage fees.
  • Prices remain low; customers can find offers well below the regulated electric rates in 2001, just before the competitive market opened.
  • REPs need the flexibility to create products that meet different customer needs while determining the best business practices to keep prices low for all customers.
  • Structuring fees for certain customer actions like calling a call center, minimum usage and early contract termination allow REPs to assign expenses to customers that are the basis for those costs. This results in lower prices because REPs don’t have to socialize those costs to all customers.

Download a PDF of this issue paper.