2005 Texas Utilities Code CHAPTER 31. GENERAL PROVISIONS

UTILITIES CODE

SUBTITLE B. ELECTRIC UTILITIES

CHAPTER 31. GENERAL PROVISIONS


	§ 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, § 1, eff. Sept. 1, 1997.                    


	§ 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, § 1, eff. Sept. 1, 1997.  Amended 
by Acts 1999, 76th Leg., ch. 405, § 11, eff. Sept. 1, 1999.


	§ 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, § 1, eff. Sept. 1, 1997.                    


	§ 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.

Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.                    


	§ 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. 1352, § 25, eff. Sept. 1, 
2005.