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The Legislative Budget Board met on August 24, 2018 to hear from the Public Utility Commission of Texas concerning the agency’s Legislative Appropriation Request for the 86th Session and key exceptional items.

This report is intended to give you an overview and highlight of the discussions on the various topics the committee took up. It is not a verbatim transcript of the hearing, but is based upon what was audible or understandable to the observer and the desire to get details out as quickly as possible with few errors or omissions.

 

Agency Presentation

JP Urban, Executive Director of the Public Utility Commission of Texas

Thomas Gleeson, COO Public Utility Commission of Texas

  • Texas is a national leader in the energy dealing market
  • More than 357 billion kilowatt hours were used in the ERCOT region in 2017, provided by more than 350 generation companies and 100 retail electric providers licensed by the Public Utility Commission (PUC)
  • We oversee the market to ensure customers receive the benefits of competition
  • We perform traditional regulatory functions for utilities across the state
  • We are continuing efforts put forth by the 2013 Legislature which transferred rate-making pieces and certificates of convenience and necessity (CCNs) over to us from TCEQ
  • Our team has identified areas of regulation in need of amendment to ensure consistency with the Texas Water Code
  • Prior to FY 2012 most of our funding came from general revenue (GR) with some coming from the now eliminated System Benefit Fund (SBF)
  • The funding from GR was split in half because the Legislature determined that most of our electric operations should be paid for by the System Benefit Fund
  • Now that SBF is gone, 100% of our funding is GR based
  • Our baseline appropriation request is total of $31.7 million
  • Our baseline GR request is $205,000
  • Overall, our baseline request is $26.35 million in GR and $5.13 million in GR Dedicated Water Resource Management Account and $950,000 in appropriated receipt funds
  • Exceptional Item 1:
    • An increase in $1.1 million in funding from the Water Resource Management account for 2020
    • There is a shortfall in resources with water utilities
    • We currently dedicate $2.5 million in funding to handle the water cases
    • 40% of our Oversight and Enforcement Divisions time is dedicated to water cases
  • Exceptional Item 2:
    • We are requesting an additional $550,000 each fiscal year
    • $101,000 of that funding would go to SOA to make up for a price spike in water cases
    • Additional funding would go to expanding our regional training programs for contracting companies who are working through our regulatory process
    • Additional funding would go to Executive Director compensation to recruit and retain talent
    • We hope to gain the ability to self-level

 

Questions from Joint Legislative/LBB Panel

  • Question – How is the gross receipts assessment made?
    • It is statutory.
  • Question – Does it raise more than would currently go to the agency?
    • The Comptroller estimated it would bring in $59 million and our current GR appropriation is roughly $14 million
  • Question – The concept of self levelling would be to let the administrators fund the operation of the agency?
    • That is correct
  • Question – In your presentation you said that SOA is being funded through GR, but your requesting WRMA funds to meet the increase. Is there a reason why the request wasn’t put in to cover the full cost of those cases being sent to SOA?
    • GRD money requires 38% additional funds and benefits
    • We run out of money 9 months into the year
  • Question – In your handout, you say that a $46 million tax cut to electricity customers would result from this funding. What does that mean?
    • The $59 million brought in is currently passed onto the customer. If we reduce that, the customer would see that in a tax decrease
  • Question – Could you discuss further the impacts of a self-leveling designation? What are the benefits to the agency?
    • It is more about being good stewards of the money
  • Question – What percent increase in funding would the rural water contract require?
    • We spend over $100,000 on that, so nearly 100%