Today the Senate unanimously passed out the committee substitute to SB 661 (Nichols) as amended. SB 661 relates to the continuation of the Electric Reliability Council of Texas, the Office of Public Utility Counsel, and the Public Utility Commission of Texas and to the transfer of functions from the Texas Commission on Environmental Quality (TCEQ).
The bill strengthens the PUC’s oversight of high risks for the Electric Reliability Council of Texas (ERCOT). “This bill increases the PUC’s administrative penalty authority up to $100,000 per day for reliability related violations and authorizes PUC to issue emergency cease and desist orders for electric utilities,” said Sen. Robert Nichols.
The bill also gives the PUC authority to conduct annual reviews and approval of ERCOT’s entire budget, prior review and approval of all use of debt financing and annual reviews of performance measures. It requires ERCOT reporting to ensure budget projections are met and makes ERCOT subject to future sunset reviews that run concurrently with sunset of PUC and the Office of Public Utility Counsel. To ensure greater objectivity and financial expertise, the bill also reduces the board presence of those with a stake in the electric market and increases representation by independent members.
Sen. Glenn Hegar offered an amendment that was accepted by the author which says only ERCOT’s board can hire or fire its chief executive officer and is not subject to review or approval by the commission. The bill gives the PUC authority to administer penalties up to $100,000 per violation per day for electric industry violations of ERCOT’s reliability protocols or of PUC’s wholesale reliability rules. However, it prohibits such penalties for violation of reliability standards if a federal agency has already ordered a penalty for the same violation. It also provides for a refund if the PUC levies a penalty and the federal government subsequently orders a penalty for the same violation. The PUC would get new authority to issue emergency cease-and-desist orders to stop harmful activities of electric industry providers under the bill.
In committee, changes were added to speed up due-process provisions to give the subject of the order 30 days to request a hearing, which then must be held within 10 days. Nichols held off several consumer-oriented amendments from Democrats. One aimed at removing a PUC “switch-hold” rule, which says an electric company can hold a customer until the customer pays off a deferred payment plan in full. The switch-hold rule is meant to “prevent customers from gaming the system,” Nichols said.
The bill moves water rate cases to the PUC from the Texas Commission on Environmental Quality. It also extends the life of the PUC and the Office of Public Utility Counsel for 12 years.
