By: Paddie, et al. (Senate Sponsor - Schwertner)	H.B. No. 10
	(In the Senate - Received from the House March 31, 2021;
	April 8, 2021, read first time and referred to Committee on
	Jurisprudence; May 22, 2021, reported adversely, with favorable
	Committee Substitute by the following vote:  Yeas 5, Nays 0;
	May 22, 2021, sent to printer.)
Click here to see the committee vote
	COMMITTEE SUBSTITUTE FOR H.B. No. 10	By:  Hinojosa

	A BILL TO BE ENTITLED
	AN ACT
	relating to the governance of the Public Utility Commission of
	Texas, the Office of Public Utility Counsel, and an independent
	organization certified to manage a power region.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Section 12.051(a), Utilities Code, is amended to
	read as follows:
	(a)  The commission is composed of five [three]
	commissioners appointed by the governor with the advice and consent
	of the senate.
	SECTION 2.  Section 12.053, Utilities Code, is amended by
	amending Subsections (a) and (b) and adding Subsection (a-1) to
	read as follows:
	(a)  To be eligible for appointment, a commissioner must:
	(1)  be a qualified voter;
	(2)  be a citizen of the United States;
	(3)  be a resident of this state;
	(4)  be a competent and experienced administrator;
	[(4) be well informed and qualified in the field of
	public utilities and utility regulation;] and
	(5)  have at least five years of experience:
	(A)  in the administration of business or
	government; or
	(B)  as a practicing attorney, [or] certified
	public accountant, or professional engineer.
	(a-1)  At least two commissioners must be well informed and
	qualified in the field of public utilities and utility regulation.
	(b)  A person is not eligible for appointment as a
	commissioner if the person:
	(1)  at any time during the one year [two years]
	preceding appointment:
	(A)  personally served as an officer, director,
	owner, employee, partner, or legal representative of a public
	utility regulated by the commission or of an affiliate or direct
	competitor of a public utility regulated by the commission; [or]
	(B)  owned or controlled, directly or indirectly,
	more than a 10 percent interest in a public utility regulated by the
	commission or in an affiliate or direct competitor of a public
	utility regulated by the commission; or
	(C)  served as an executive officer listed under
	Section 1, Article IV, Texas Constitution, other than the secretary
	of state, or a member of the legislature; or
	(2)  is not qualified to serve under Section 12.151,
	12.152, or 12.153.
	SECTION 3.  Section 13.022(a), Utilities Code, is amended to
	read as follows:
	(a)  The counsellor must:
	(1)  be licensed to practice law in this state and a
	resident of this state;
	(2)  have demonstrated a strong commitment to and
	involvement in efforts to safeguard the rights of the public; and
	(3)  possess the knowledge and experience necessary to
	practice effectively in utility proceedings.
	SECTION 4.  Section 39.151, Utilities Code, is amended by
	amending Subsections (d), (g), and (g-1) and adding Subsections
	(g-2), (g-3), and (g-4) to read as follows:
	(d)  The commission shall adopt and enforce rules relating to
	the reliability of the regional electrical network and accounting
	for the production and delivery of electricity among generators and
	all other market participants, or may delegate to an independent
	organization responsibilities for adopting [establishing] or
	enforcing such rules. Rules [Any such rules] adopted by an
	independent organization and [any] enforcement actions taken by the
	organization under delegated authority from the commission are
	subject to commission oversight and review and may not take effect
	before receiving commission approval. An independent organization
	certified by the commission is directly responsible and accountable
	to the commission. The commission has complete authority to
	oversee and investigate the organization's finances, budget, and
	operations as necessary to ensure the organization's
	accountability and to ensure that the organization adequately
	performs the organization's functions and duties. The organization
	shall fully cooperate with the commission in the commission's
	oversight and investigatory functions. The commission may take
	appropriate action against an organization that does not adequately
	perform the organization's functions or duties or does not comply
	with this section, including decertifying the organization or
	assessing an administrative penalty against the organization. The
	commission by rule shall adopt procedures governing
	decertification of an independent organization, selecting and
	certifying a successor organization, and transferring assets to the
	successor organization to ensure continuity of operations in the
	region. The commission may not implement, by order or by rule, a
	requirement that is contrary to an applicable federal law or rule.
	(g)  To maintain certification as an independent
	organization under this section, an organization's governing body
	must be composed of persons specified by this section and selected
	in accordance with formal bylaws or protocols of the organization.
	The bylaws or protocols must be approved by the commission and must
	reflect the input of the commission. The bylaws must specify the
	process by which appropriate stakeholders elect members and, for
	unaffiliated members, prescribe professional qualifications for
	selection as a member. The bylaws must require that every member of
	the governing body be a resident of this state and prohibit a
	legislator from serving as a member. The bylaws may require the use
	of a professional search firm to identify candidates for
	[membership of unaffiliated] members described by Subdivisions
	(4), (5), and (6). The process must allow for commission input in
	identifying candidates. The governing body must be composed of:
	(1)  the chairman of the commission as an ex officio
	nonvoting member;
	(2)  the counsellor as an ex officio voting member
	representing residential and small commercial consumer interests;
	(3)  the chief executive officer of the independent
	organization as an ex officio voting member, who must be appointed
	by the governor with the advice and consent of the senate;
	(4)  six market participants elected by their
	respective market segments to serve two-year [one-year] terms,
	with:
	(A)  one representing independent generators,
	elected by a majority vote of the members of this market segment who
	each own and control five percent or more of the installed
	generation capacity located in the power region;
	(B)  one representing investor-owned utilities;
	(C)  one representing power marketers;
	(D)  one representing retail electric providers
	who may not be affiliated with an independent generator;
	(E)  one representing municipally owned
	utilities; and
	(F)  one representing electric cooperatives;
	(5)  one member representing industrial consumer
	interests and elected by the industrial consumer market segment to
	serve a two-year [one-year] term;
	(6)  one member representing large commercial consumer
	interests selected in accordance with the bylaws to serve a
	two-year [one-year] term; and
	(7)  five members unaffiliated with any market segment
	who must be appointed by the governor with the advice and consent of
	the senate [and selected by the other members of the governing body]
	to serve two-year [three-year] terms.
	(g-1)  The bylaws of an independent organization must
	require that the [The] presiding officer and vice presiding officer
	of the governing body must be:
	(1)  [one of the] members described by Subsection
	(g)(7); and
	(2)  selected by the governor with the advice and
	consent of the senate.
	(g-2)  A person does not qualify for appointment as a member
	of the governing body of an independent organization under
	Subsection (g)(3) or (7) if the person is required to register as a
	lobbyist under Chapter 305, Government Code. In making an
	appointment under Subsection (g)(3) or (7), the governor:
	(1)  shall give preference to a person who has
	executive-level business experience representing a range of
	industries; and
	(2)  may consider a person recommended by the
	legislature.
	(g-3)  Members of the governing body of an independent
	organization certified under this section must serve staggered
	terms.  A member described by Subsection (g)(4) or (5) must serve a
	term that expires in an even-numbered year.  A member described by
	Subsection (g)(6) or (7) must serve a term that expires in an
	odd-numbered year.  As soon as practicable after the date a member
	of the governing body's term expires, the appropriate authority
	must appoint or arrange for the election of a replacement in the
	same manner as the original appointment or election. If a vacancy
	occurs on the governing body, the appropriate authority must
	appoint or arrange for the election of a successor in the same
	manner as the original appointment or election to serve for the
	remainder of the unexpired term.
	(g-4)  To maintain certification as an independent
	organization under this section, the organization's governing body
	must establish and implement a formal process for adopting new
	protocols or revisions to existing protocols. The process must
	require that new or revised protocols may not take effect until the
	commission approves a market impact statement describing the new or
	revised protocols.
	SECTION 5.  In making appointments of commissioners to the
	Public Utility Commission of Texas under Section 12.051, Utilities
	Code, as amended by this Act, the governor shall assign staggered
	terms to the commissioners appointed to fill vacancies and to the
	commissioners appointed to new positions to ensure that the
	requirements of Section 30a, Article XVI, Texas Constitution, are
	met.
	SECTION 6.  An independent organization certified under
	Section 39.151, Utilities Code, by the Public Utility Commission of
	Texas before September 1, 2021, shall modify the organization to
	comply with Section 39.151, Utilities Code, as amended by this Act,
	not later than September 1, 2021. After September 1, 2021, the
	Public Utility Commission of Texas may decertify an independent
	organization that does not comply with Section 39.151, Utilities
	Code, as amended by this Act.
	SECTION 7.  This Act takes effect immediately if it receives
	a vote of two-thirds of all the members elected to each house, as
	provided by Section 39, Article III, Texas Constitution.  If this
	Act does not receive the vote necessary for immediate effect, this
	Act takes effect September 1, 2021.
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