BILL ANALYSIS

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

Concerns have been raised regarding the lack of due process for the granting of single certification by the Public Utility Commission of Texas (PUC) to a municipality for the provision of retail utility service to an incorporated or annexed area that is being served by a retail public utility. The current decertification process at the PUC is automatic and offers little in the way of process for the retail water utility whose area is being decertified. Current statutory language makes it difficult for the water utility to receive any compensation for their assets in their service delivery upon decertification. H.B. 2442 seeks to revise certain provisions relating to certificates of public convenience and necessity issued to certain retail public utilities, including by providing for notice, the opportunity to respond, and the opportunity for the retail public utility to appeal certain actions by the PUC.

H.B. 2442 amends current law relating to certificates of public convenience and necessity issued to certain retail public utilities.

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 13.2541, Water Code, by adding Subsection (b-1), as follows:

(b-1) Requires the petitioner, on the day a petitioner submits a petition to the Public Utility Commission of Texas (PUC) under Section 13.2541 (Streamlined Expedited Release Initiated by Landowner), to send, via certified mail, a copy of the petition to the certificate holder, who is authorized to submit information to the PUC to controvert information submitted by the petitioner.

SECTION 2. Amends Section 13.255, Water Code, by adding Subsections (b-1) and (c-3) and amending Subsection (c), as follows:

(b-1) Requires a municipality to send, on the day the municipality submits an application for single certification to the PUC under Section 13.255 (Single Certification in Incorporated or Annexed Areas), via certified mail or hand delivery, a copy of the application to the retail public utility.

(c)  Requires the PUC, by order, to grant single certification to the municipality. Requires the PUC to also determine in its order the monetary amount that is adequate and just to compensate the retail public utility for any of the retail public utility's property the PUC determines is being rendered useless or valueless by the single certification. Authorizes a transfer of property to be obtained under this section only by a court judgment rendered under, rather than pursuant to, Subsection (d) (relating to authorizing the municipality to request a judgment from the district court in Travis County should the final order of the PUC not be appealed within a certain timeframe) or (e) (relating to authorizing a party aggrieved by a final order of the PUC to file an appeal within a certain period of time and to the approval and procedures of the appeal hearing).� Provides that the grant of single certification by the PUC takes, rather than is required to go into, effect on the date the municipality or franchised utility, as the case may be, pays adequate and just compensation pursuant to court order, or pays an amount into the registry of the court or to the retail public utility under Subsection (f) (relating to the payment of certain fees following the final judgement of the transfer of property). Makes a conforming change.

Deletes existing text requiring the PUC to also determine whether single certification as requested by the municipality would result in property of a retail public utility being rendered useless or valueless to the retail public utility, and to determine in its order the monetary amount that is adequate and just to compensate the retail public utility for such property.

(c-3) Authorizes the retail public utility, before filing an appeal under Subsection (e) and not later than the seventh day after the date the PUC issues a final order under Subsection (c), to appeal the final order to the PUC in a separate hearing before the PUC.

SECTION 3. Makes application of this Act prospective.

SECTION 4. Effective date: September 1, 2023.