CHAPTER 31. GENERAL PROVISIONS
UTILITIES CODE
TITLE 2. PUBLIC UTILITY REGULATORY ACT
SUBTITLE B. ELECTRIC UTILITIES
CHAPTER 31. GENERAL PROVISIONS
Sec. 31.001. LEGISLATIVE FINDINGS; PURPOSE OF SUBTITLE. (a)
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.
(b) 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.
(c) 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.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 31.002. DEFINITIONS. In this subtitle:
(1) "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.
(2) "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.
(3) "Aggregation" includes the following:
(A) 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
(B) 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.
(4) "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.
(5) "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.
(6) "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:
(A) a municipal corporation;
(B) a qualifying facility;
(C) a power generation company;
(D) an exempt wholesale generator;
(E) a power marketer;
(F) a corporation described by Section 32.053 to the extent the
corporation sells electricity exclusively at wholesale and not to
the ultimate consumer;
(G) an electric cooperative;
(H) a retail electric provider;
(I) this state or an agency of this state; or
(J) a person not otherwise an electric utility who:
(i) 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;
(ii) 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; or
(iii) owns or operates in this state a recreational vehicle park
that provides metered electric service in accordance with
Subchapter C, Chapter 184.
(7) "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:
(A) 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
(B) has:
(i) applied to the Federal Energy Regulatory Commission for a
determination under 15 U.S.C. Section 79z-5a; or
(ii) registered as an exempt wholesale generator as required by
Section 35.032.
(8) "Freeze period" means the period beginning on January 1,
1999, and ending on December 31, 2001.
(9) "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.
(10) "Power generation company" means a person that:
(A) generates electricity that is intended to be sold at
wholesale;
(B) 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
(C) does not have a certificated service area, although its
affiliated electric utility or transmission and distribution
utility may have a certificated service area.
(11) "Power marketer" means a person who:
(A) becomes an owner of electric energy in this state for the
purpose of selling the electric energy at wholesale;
(B) does not own generation, transmission, or distribution
facilities in this state;
(C) does not have a certificated service area; and
(D) has:
(i) been granted authority by the Federal Energy Regulatory
Commission to sell electric energy at market-based rates; or
(ii) registered as a power marketer under Section 35.032.
(12) "Power region" means a contiguous geographical area which
is a distinct region of the North American Electric Reliability
Council.
(13) "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 the purchaser of the cogenerator's
thermal output is not for that reason considered to be a retail
electric provider or a power generation company.
(14) "Qualifying facility" means a qualifying cogenerator or
qualifying small power producer.
(15) "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.
(16) "Retail customer" means the separately metered end-use
customer who purchases and ultimately consumes electricity.
(17) "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.
(18) "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.
(19) "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.
(20) "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."
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.
Sec. 31.003. REPORT ON SCOPE OF COMPETITION. (a) Before
January 15 of each odd-numbered year, the commission shall report
to the legislature on the scope of competition in electric
markets and the effect of competition and industry restructuring
on customers in both competitive and noncompetitive markets.
(b) The report under this section must include:
(1) an assessment of the effect of competition on the rates and
availability of electric services for residential and small
commercial customers;
(2) a summary of commission action over the preceding two years
that reflects changes in the scope of competition in regulated
electric markets; and
(3) recommendations to the legislature for legislation that the
commission finds appropriate to promote the public interest in
the context of a partially competitive electric market.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Sec. 31.004. ENERGY-EFFICIENT SCHOOL FACILITIES. (a) The
commission may serve as a resource center to assist school
districts in developing energy-efficient facilities.
(b) As a resource center under this section, the commission may:
(1) present programs to school districts relating to managing
energy, training school-plant operators, and designing
energy-efficient buildings;
(2) provide school districts with technical assistance in
managing energy;
(3) collect and distribute information relating to energy
management in school facilities; and
(4) offer energy resource workshops to educators and make
available to educators a film library on energy-related matters
and energy education lesson packages.
(c) 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.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
939, Sec. 18, eff. September 1, 2007.
Sec. 31.005. CUSTOMER-OPTION PROGRAMS. (a) This section
applies to:
(1) a municipally owned electric utility;
(2) an electric cooperative;
(3) an electric utility;
(4) a power marketer;
(5) a retail electric provider; and
(6) a transmission and distribution utility.
(b) An entity to which this section applies shall consider
establishing customer-option programs that encourage the
reduction of air contaminant emissions, such as:
(1) an appliance retirement and recycling program;
(2) a solar water heating market transformation program;
(3) an air conditioning tune-up program;
(4) a program that allows the use of on-site energy storage as
an eligible efficiency measure in existing programs;
(5) a program that encourages the deployment of advanced
electricity meters;
(6) a program that encourages the installation of cool roofing
materials;
(7) a program that establishes lighting limits;
(8) a distributed energy generation technology program; and
(9) a program that encourages the use of high-efficiency
building distribution transformers and variable air volume fan
controls.
Added by Acts 2005, 79th Leg., Ch.
1095, Sec. 6, eff. September 1, 2005.