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 Acts1999, 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.
