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A BILL TO BE ENTITLED
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AN ACT
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relating to the establishment of certain water and sewer utility |
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rates and the transfer of certain functions from the Texas |
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Commission on Environmental Quality to the Public Utility |
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Commission of Texas. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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ARTICLE 1. AUTHORITY TO ESTABLISH INTERIM RATES |
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SECTION 1.01. Subsection (h), Section 13.043, Water Code, |
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is amended to read as follows: |
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(h) The utility commission or the executive director of the |
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utility commission may[, on a motion by the executive director or by
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the appellant under Subsection (a), (b), or (f) of this section,] |
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establish interim rates to be in effect until a final decision is |
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made in an appeal filed under Subsection (a), (b), or (f). |
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SECTION 1.02. Subsections (b) and (l), Section 13.187, |
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Water Code, are amended to read as follows: |
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(b) A copy of the statement of intent shall be mailed, sent |
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by e-mail, or delivered to the appropriate offices of each affected |
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municipality, to the executive director of the utility commission, |
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and to any [other] affected persons as required by the regulatory |
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authority's rules. |
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(l) At any time during the pendency of the rate proceeding |
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the regulatory authority or, if the regulatory authority is the |
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utility commission, the executive director of the utility |
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commission may fix interim rates to remain in effect until a final |
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determination is made on the proposed rate. |
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ARTICLE 2. WATER AND SEWER UTILITIES |
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SECTION 2.01. Section 13.002, Water Code, is amended by |
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amending Subdivisions (2) and (18) and adding Subdivision (22-a) to |
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read as follows: |
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(2) "Affiliated interest" or "affiliate" means: |
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(A) any person or corporation owning or holding |
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directly or indirectly five percent or more of the voting |
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securities of a utility; |
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(B) any person or corporation in any chain of |
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successive ownership of five percent or more of the voting |
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securities of a utility; |
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(C) any corporation five percent or more of the |
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voting securities of which is owned or controlled directly or |
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indirectly by a utility; |
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(D) any corporation five percent or more of the |
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voting securities of which is owned or controlled directly or |
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indirectly by any person or corporation that owns or controls |
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directly or indirectly five percent or more of the voting |
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securities of any utility or by any person or corporation in any |
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chain of successive ownership of five percent of those utility |
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securities; |
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(E) any person who is an officer or director of a |
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utility or of any corporation in any chain of successive ownership |
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of five percent or more of voting securities of a public utility; |
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(F) any person or corporation that the utility |
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commission, after notice and hearing, determines actually |
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exercises any substantial influence or control over the policies |
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and actions of a utility or over which a utility exercises such |
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control or that is under common control with a utility, such control |
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being the possession directly or indirectly of the power to direct |
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or cause the direction of the management and policies of another, |
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whether that power is established through ownership or voting of |
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securities or by any other direct or indirect means; or |
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(G) any person or corporation that the utility |
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commission, after notice and hearing, determines is exercising |
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substantial influence over the policies and actions of the utility |
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in conjunction with one or more persons or corporations with which |
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they are related by ownership or blood relationship, or by action in |
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concert, that together they are affiliated within the meaning of |
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this section, even though no one of them alone is so affiliated. |
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(18) "Regulatory authority" means, in accordance with |
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the context in which it is found, either the commission, the utility |
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commission, or the governing body of a municipality. |
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(22-a) "Utility commission" means the Public Utility |
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Commission of Texas. |
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SECTION 2.02. Section 13.004, Water Code, is amended to |
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read as follows: |
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Sec. 13.004. JURISDICTION OF UTILITY COMMISSION OVER |
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CERTAIN WATER SUPPLY OR SEWER SERVICE CORPORATIONS. |
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(a) Notwithstanding any other law, the utility commission has the |
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same jurisdiction over a water supply or sewer service corporation |
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that the utility commission has under this chapter over a water and |
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sewer utility if the utility commission finds that the water supply |
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or sewer service corporation: |
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(1) is failing to conduct annual or special meetings |
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in compliance with Section 67.007; or |
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(2) is operating in a manner that does not comply with |
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the requirements for classifications as a nonprofit water supply or |
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sewer service corporation prescribed by Sections 13.002(11) and |
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(24). |
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(b) If the water supply or sewer service corporation |
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voluntarily converts to a special utility district operating under |
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Chapter 65, the utility commission's jurisdiction provided by this |
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section ends. |
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SECTION 2.03. Section 13.011, Water Code, is amended to |
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read as follows: |
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Sec. 13.011. EMPLOYEES. (a) The executive director of the |
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utility commission and the executive director of the commission, |
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subject to approval, as applicable, by the utility commission or |
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the commission, shall employ any engineering, accounting, and |
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administrative personnel necessary to carry out each agency's |
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powers and duties under this chapter. |
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(b) The executive director and the commission's staff are |
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responsible for the gathering of information relating to all |
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matters within the jurisdiction of the commission under this |
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subchapter. The executive director of the utility commission and |
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the utility commission's staff are responsible for the gathering of |
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information relating to all matters within the jurisdiction of the |
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utility commission under this subchapter. The duties of the |
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respective executive directors and staffs [director and the staff] |
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include: |
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(1) accumulation of evidence and other information |
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from water and sewer utilities, [and] from the agency and governing |
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body, [commission and the board] and from other sources for the |
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purposes specified by this chapter; |
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(2) preparation and presentation of evidence before |
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the agency [commission] or its appointed examiner in proceedings; |
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(3) conducting investigations of water and sewer |
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utilities under the jurisdiction of the agency [commission]; |
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(4) preparation of recommendations that the agency |
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[commission] undertake an investigation of any matter within its |
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jurisdiction; |
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(5) preparation of recommendations and a report for |
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inclusion in the annual report of the agency [commission]; |
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(6) protection and representation of the public |
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interest[, together with the public interest advocate,] before the |
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agency [commission]; and |
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(7) other activities that are reasonably necessary to |
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enable the executive director and the staff to perform their |
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duties. |
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SECTION 2.04. Section 13.014, Water Code, is amended to |
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read as follows: |
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Sec. 13.014. ATTORNEY GENERAL TO REPRESENT COMMISSION OR |
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UTILITY COMMISSION. The attorney general shall represent the |
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commission or the utility commission under this chapter in all |
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matters before the state courts and any court of the United States. |
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SECTION 2.05. Subchapter B, Chapter 13, Water Code, is |
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amended by adding Section 13.017 to read as follows: |
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Sec. 13.017. OFFICE OF PUBLIC UTILITY COUNSEL; POWERS AND |
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DUTIES. (a) In this section, "counsellor" and "office" have the |
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meanings assigned by Section 11.003, Utilities Code. |
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(b) The office represents the interests of residential and |
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small commercial consumers under this chapter. The office: |
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(1) shall assess the effect of utility rate changes |
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and other regulatory actions on residential consumers in this |
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state; |
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(2) shall advocate in the office's own name a position |
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determined by the counsellor to be most advantageous to a |
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substantial number of residential consumers; |
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(3) may appear or intervene, as a party or otherwise, |
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as a matter of right on behalf of: |
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(A) residential consumers, as a class, in any |
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proceeding before the utility commission, including an alternative |
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dispute resolution proceeding; and |
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(B) small commercial consumers, as a class, in |
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any proceeding in which the counsellor determines that small |
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commercial consumers are in need of representation, including an |
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alternative dispute resolution proceeding; |
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(4) may initiate or intervene as a matter of right or |
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otherwise appear in a judicial proceeding: |
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(A) that involves an action taken by an |
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administrative agency in a proceeding, including an alternative |
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dispute resolution proceeding, in which the counsellor is |
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authorized to appear; or |
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(B) in which the counsellor determines that |
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residential consumers or small commercial consumers are in need of |
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representation; |
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(5) is entitled to the same access as a party, other |
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than utility commission staff, to records gathered by the utility |
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commission under Section 13.133; |
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(6) is entitled to discovery of any nonprivileged |
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matter that is relevant to the subject matter of a proceeding or |
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petition before the utility commission; |
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(7) may represent an individual residential or small |
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commercial consumer with respect to the consumer's disputed |
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complaint concerning retail utility services that is unresolved |
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before the utility commission; and |
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(8) may recommend legislation to the legislature that |
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the office determines would positively affect the interests of |
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residential and small commercial consumers. |
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(c) This section does not limit the authority of the utility |
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commission to represent residential or small commercial consumers. |
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(d) The appearance of the counsellor in a proceeding does |
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not preclude the appearance of other parties on behalf of |
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residential or small commercial consumers. The counsellor may not |
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be grouped with any other party. |
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SECTION 2.06. Section 13.041, Water Code, is amended to |
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read as follows: |
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Sec. 13.041. GENERAL POWERS OF UTILITY COMMISSION AND |
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COMMISSION [POWER]; RULES; HEARINGS. (a) The utility commission |
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may regulate and supervise the business of each [every] water and |
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sewer utility within its jurisdiction, including ratemaking and |
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other economic regulation. The commission shall regulate water and |
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sewer utilities within its jurisdiction to ensure safe drinking |
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water and environmental protection. The utility commission and the |
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commission [and] may do all things, whether specifically designated |
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in this chapter or implied in this chapter, necessary and |
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convenient to the exercise of these powers [this power] and |
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jurisdiction. The utility commission may consult with the |
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commission as necessary in carrying out its duties related to the |
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regulation of water and sewer utilities. |
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(b) The commission and the utility commission shall adopt |
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and enforce rules reasonably required in the exercise of [its] |
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powers and jurisdiction of each agency, including rules governing |
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practice and procedure before the commission and the utility |
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commission. |
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(c) The commission and the utility commission may call and |
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hold hearings, administer oaths, receive evidence at hearings, |
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issue subpoenas to compel the attendance of witnesses and the |
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production of papers and documents, and make findings of fact and |
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decisions with respect to administering this chapter or the rules, |
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orders, or other actions of the commission or the utility |
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commission. |
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(d) The utility commission may issue emergency orders, with |
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or without a hearing: |
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(1) to compel a water or sewer service provider that |
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has obtained or is required to obtain a certificate of public |
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convenience and necessity to provide continuous and adequate water |
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service, sewer service, or both, if the discontinuance of the |
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service is imminent or has occurred because of the service |
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provider's actions or failure to act; and |
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(2) to compel a retail public utility to provide an |
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emergency interconnection with a neighboring retail public utility |
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for the provision of temporary water or sewer service, or both, for |
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not more than 90 days if service discontinuance or serious |
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impairment in service is imminent or has occurred. |
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(e) The utility commission may establish reasonable |
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compensation for the temporary service required under Subsection |
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(d)(2) [of this section] and may allow the retail public utility |
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receiving the service to make a temporary adjustment to its rate |
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structure to ensure proper payment. |
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(f) If an order is issued under Subsection (d) without a |
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hearing, the order shall fix a time, as soon after the emergency |
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order is issued as is practicable, and place for a hearing to be |
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held before the utility commission. |
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(g) The regulatory assessment required by Section 5.701(n) |
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[5.235(n) of this code] is not a rate and is not reviewable by the |
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utility commission under Section 13.043 [of this code]. The |
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commission has the authority to enforce payment and collection of |
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the regulatory assessment. |
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SECTION 2.07. Section 13.042, Water Code, is amended to |
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read as follows: |
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Sec. 13.042. JURISDICTION OF MUNICIPALITY; ORIGINAL AND |
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APPELLATE JURISDICTION OF UTILITY COMMISSION. (a) Subject to the |
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limitations imposed in this chapter and for the purpose of |
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regulating rates and services so that those rates may be fair, just, |
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and reasonable and the services adequate and efficient, the |
|
governing body of each municipality has exclusive original |
|
jurisdiction over all water and sewer utility rates, operations, |
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and services provided by a water and sewer utility within its |
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corporate limits. |
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(b) The governing body of a municipality by ordinance may |
|
elect to have the utility commission exercise exclusive original |
|
jurisdiction over the utility rates, operation, and services of |
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utilities, within the incorporated limits of the municipality. |
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(c) The governing body of a municipality that surrenders its |
|
jurisdiction to the utility commission may reinstate its |
|
jurisdiction by ordinance at any time after the second anniversary |
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of the date on which the municipality surrendered its jurisdiction |
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to the utility commission, except that the municipality may not |
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reinstate its jurisdiction during the pendency of a rate proceeding |
|
before the utility commission. The municipality may not surrender |
|
its jurisdiction again until the second anniversary of the date on |
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which the municipality reinstates jurisdiction. |
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(d) The utility commission shall have exclusive appellate |
|
jurisdiction to review orders or ordinances of those municipalities |
|
as provided in this chapter. |
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(e) The utility commission shall have exclusive original |
|
jurisdiction over water and sewer utility rates, operations, and |
|
services not within the incorporated limits of a municipality |
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exercising exclusive original jurisdiction over those rates, |
|
operations, and services as provided in this chapter. |
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(f) This subchapter does not give the utility commission |
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power or jurisdiction to regulate or supervise the rates or service |
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of a utility owned and operated by a municipality, directly or |
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through a municipally owned corporation, within its corporate |
|
limits or to affect or limit the power, jurisdiction, or duties of a |
|
municipality that regulates land and supervises water and sewer |
|
utilities within its corporate limits, except as provided by this |
|
code. |
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SECTION 2.08. Subsections (a), (b), (c), (e), (f), (g), and |
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(j), Section 13.043, Water Code, are amended to read as follows: |
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(a) Any party to a rate proceeding before the governing body |
|
of a municipality may appeal the decision of the governing body to |
|
the utility commission. This subsection does not apply to a |
|
municipally owned utility. An appeal under this subsection must be |
|
initiated within 90 days after the date of notice of the final |
|
decision by the governing body by filing a petition for review with |
|
the utility commission and by serving copies on all parties to the |
|
original rate proceeding. The utility commission shall hear the |
|
appeal de novo and shall fix in its final order the rates the |
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governing body should have fixed in the action from which the appeal |
|
was taken and may include reasonable expenses incurred in the |
|
appeal proceedings. The utility commission may establish the |
|
effective date for the utility commission's rates at the original |
|
effective date as proposed by the utility provider and may order |
|
refunds or allow a surcharge to recover lost revenues. The utility |
|
commission may consider only the information that was available to |
|
the governing body at the time the governing body made its decision |
|
and evidence of reasonable expenses incurred in the appeal |
|
proceedings. |
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(b) Ratepayers of the following entities may appeal the |
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decision of the governing body of the entity affecting their water, |
|
drainage, or sewer rates to the utility commission: |
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(1) a nonprofit water supply or sewer service |
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corporation created and operating under Chapter 67; |
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(2) a utility under the jurisdiction of a municipality |
|
inside the corporate limits of the municipality; |
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(3) a municipally owned utility, if the ratepayers |
|
reside outside the corporate limits of the municipality; |
|
(4) a district or authority created under Article III, |
|
Section 52, or Article XVI, Section 59, of the Texas Constitution |
|
that provides water or sewer service to household users; and |
|
(5) a utility owned by an affected county, if the |
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ratepayer's rates are actually or may be adversely affected. For |
|
the purposes of this section ratepayers who reside outside the |
|
boundaries of the district or authority shall be considered a |
|
separate class from ratepayers who reside inside those boundaries. |
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(c) An appeal under Subsection (b) [of this section] must be |
|
initiated by filing a petition for review with the utility |
|
commission and the entity providing service within 90 days after |
|
the effective day of the rate change or, if appealing under |
|
Subdivision (b)(2) or (5) [of this section], within 90 days after |
|
the date on which the governing body of the municipality or affected |
|
county makes a final decision. The petition must be signed by the |
|
lesser of 10,000 or 10 percent of those ratepayers whose rates have |
|
been changed and who are eligible to appeal under Subsection (b) [of
|
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this section]. |
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(e) In an appeal under Subsection (b) [of this section], the |
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utility commission shall hear the appeal de novo and shall fix in |
|
its final order the rates the governing body should have fixed in |
|
the action from which the appeal was taken. The utility commission |
|
may establish the effective date for the utility commission's rates |
|
at the original effective date as proposed by the service provider, |
|
may order refunds or allow a surcharge to recover lost revenues, and |
|
may allow recovery of reasonable expenses incurred by the retail |
|
public utility in the appeal proceedings. The utility commission |
|
may consider only the information that was available to the |
|
governing body at the time the governing body made its decision and |
|
evidence of reasonable expenses incurred by the retail public |
|
utility in the appeal proceedings. The rates established by the |
|
utility commission in an appeal under Subsection (b) [of this
|
|
section] remain in effect until the first anniversary of the |
|
effective date proposed by the retail public utility for the rates |
|
being appealed or until changed by the service provider, whichever |
|
date is later, unless the utility commission determines that a |
|
financial hardship exists. |
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(f) A retail public utility that receives water or sewer |
|
service from another retail public utility or political subdivision |
|
of the state, including an affected county, may appeal to the |
|
utility commission a decision of the provider of water or sewer |
|
service affecting the amount paid for water or sewer service. An |
|
appeal under this subsection must be initiated within 90 days after |
|
the date of notice of the decision is received from the provider of |
|
water or sewer service by the filing of a petition by the retail |
|
public utility. |
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(g) An applicant for service from an affected county or a |
|
water supply or sewer service corporation may appeal to the utility |
|
commission a decision of the county or water supply or sewer service |
|
corporation affecting the amount to be paid to obtain service other |
|
than the regular membership or tap fees. In addition to the factors |
|
specified under Subsection (j), in an appeal brought under this |
|
subsection the utility commission shall determine whether the |
|
amount paid by the applicant is consistent with the tariff of the |
|
water supply or sewer service corporation and is reasonably related |
|
to the cost of installing on-site and off-site facilities to |
|
provide service to that applicant. If the utility commission finds |
|
the amount charged to be clearly unreasonable, it shall establish |
|
the fee to be paid for that applicant. An appeal under this |
|
subsection must be initiated within 90 days after the date written |
|
notice is provided to the applicant or member of the decision of an |
|
affected county or water supply or sewer service corporation |
|
relating to the applicant's initial request for that service. A |
|
determination made by the utility commission on an appeal under |
|
this subsection is binding on all similarly situated applicants for |
|
service, and the utility commission may not consider other appeals |
|
on the same issue until the applicable provisions of the tariff of |
|
the water supply or sewer service corporation are amended. |
|
(j) In an appeal under this section, the utility commission |
|
shall ensure that every rate made, demanded, or received by any |
|
retail public utility or by any two or more retail public utilities |
|
jointly shall be just and reasonable. Rates shall not be |
|
unreasonably preferential, prejudicial, or discriminatory but |
|
shall be sufficient, equitable, and consistent in application to |
|
each class of customers. The utility commission shall use a |
|
methodology that preserves the financial integrity of the retail |
|
public utility. For agreements between municipalities the utility |
|
commission shall consider the terms of any wholesale water or sewer |
|
service agreement in an appellate rate proceeding. |
|
SECTION 2.09. Subsection (b), Section 13.044, Water Code, |
|
is amended to read as follows: |
|
(b) Notwithstanding the provisions of any resolution, |
|
ordinance, or agreement, a district may appeal the rates imposed by |
|
the municipality by filing a petition with the utility commission. |
|
The utility commission shall hear the appeal de novo and the |
|
municipality shall have the burden of proof to establish that the |
|
rates are just and reasonable. The utility commission shall fix the |
|
rates to be charged by the municipality and the municipality may not |
|
increase such rates without the approval of the utility commission. |
|
SECTION 2.10. Section 13.046, Water Code, is amended to |
|
read as follows: |
|
Sec. 13.046. TEMPORARY RATES FOR SERVICES PROVIDED FOR |
|
NONFUNCTIONING SYSTEM; SANCTIONS FOR NONCOMPLIANCE. (a) The |
|
utility commission by rule shall establish a procedure that allows |
|
a retail public utility that takes over the provision of services |
|
for a nonfunctioning retail water or sewer utility service provider |
|
to charge a reasonable rate for the services provided to the |
|
customers of the nonfunctioning system and to bill the customers |
|
for the services at that rate immediately to recover service costs. |
|
(b) The rules must provide a streamlined process that the |
|
retail public utility that takes over the nonfunctioning system may |
|
use to apply to the utility commission for a ruling on the |
|
reasonableness of the rates the utility is charging under |
|
Subsection (a). The process must allow for adequate consideration |
|
of costs for interconnection or other costs incurred in making |
|
services available and of the costs that may necessarily be |
|
incurred to bring the nonfunctioning system into compliance with |
|
utility commission and commission rules. |
|
(c) The utility commission shall provide a reasonable |
|
period for the retail public utility that takes over the |
|
nonfunctioning system to bring the nonfunctioning system into |
|
compliance with utility commission and commission rules during |
|
which the utility commission or the commission may not impose a |
|
penalty for any deficiency in the system that is present at the time |
|
the utility takes over the nonfunctioning system. The utility |
|
commission must consult with the utility before determining the |
|
period and may grant an extension of the period for good cause. |
|
SECTION 2.11. Section 13.081, Water Code, is amended to |
|
read as follows: |
|
Sec. 13.081. FRANCHISES. This chapter may not be construed |
|
as in any way limiting the rights and powers of a municipality to |
|
grant or refuse franchises to use the streets and alleys within its |
|
limits and to make the statutory charges for their use, but no |
|
provision of any franchise agreement may limit or interfere with |
|
any power conferred on the utility commission by this chapter. If a |
|
municipality performs regulatory functions under this chapter, it |
|
may make such other charges as may be provided in the applicable |
|
franchise agreement, together with any other charges permitted by |
|
this chapter. |
|
SECTION 2.12. Section 13.082, Water Code, is amended to |
|
read as follows: |
|
Sec. 13.082. LOCAL UTILITY SERVICE; EXEMPT AND NONEXEMPT |
|
AREAS. (a) Notwithstanding any other provision of this section, |
|
municipalities shall continue to regulate each kind of local |
|
utility service inside their boundaries until the utility |
|
commission has assumed jurisdiction over the respective utility |
|
pursuant to this chapter. |
|
(b) If a municipality does not surrender its jurisdiction, |
|
local utility service within the boundaries of the municipality |
|
shall be exempt from regulation by the utility commission under |
|
this chapter to the extent that this chapter applies to local |
|
service, and the municipality shall have, regarding service within |
|
its boundaries, the right to exercise the same regulatory powers |
|
under the same standards and rules as the utility commission or |
|
other standards and rules not inconsistent with them. The utility |
|
commission's rules relating to service and response to requests for |
|
service for utilities operating within a municipality's corporate |
|
limits apply unless the municipality adopts its own rules. |
|
(c) Notwithstanding any election, the utility commission |
|
may consider water and sewer utilities' revenues and return on |
|
investment in exempt areas in fixing rates and charges in nonexempt |
|
areas and may also exercise the powers conferred necessary to give |
|
effect to orders under this chapter for the benefit of nonexempt |
|
areas. Likewise, in fixing rates and charges in the exempt area, |
|
the governing body may consider water and sewer utilities' revenues |
|
and return on investment in nonexempt areas. |
|
(d) Utilities serving exempt areas are subject to the |
|
reporting requirements of this chapter. Those reports and tariffs |
|
shall be filed with the governing body of the municipality as well |
|
as with the utility commission. |
|
(e) This section does not limit the duty and power of the |
|
utility commission to regulate service and rates of municipally |
|
regulated water and sewer utilities for service provided to other |
|
areas in Texas. |
|
SECTION 2.13. Section 13.085, Water Code, is amended to |
|
read as follows: |
|
Sec. 13.085. ASSISTANCE BY UTILITY COMMISSION. On request, |
|
the utility commission may advise and assist municipalities and |
|
affected counties in connection with questions and proceedings |
|
arising under this chapter. This assistance may include aid to |
|
municipalities or an affected county in connection with matters |
|
pending before the utility commission, the courts, the governing |
|
body of any municipality, or the commissioners court of an affected |
|
county, including making members of the staff available to them as |
|
witnesses and otherwise providing evidence. |
|
SECTION 2.14. Subsection (c), Section 13.087, Water Code, |
|
is amended to read as follows: |
|
(c) Notwithstanding any other provision of this chapter, |
|
the utility commission has jurisdiction to enforce this section. |
|
SECTION 2.15. Subsections (a), (b), (c), and (e), Section |
|
13.131, Water Code, are amended to read as follows: |
|
(a) Every water and sewer utility shall keep and render to |
|
the regulatory authority in the manner and form prescribed by the |
|
utility commission uniform accounts of all business transacted. |
|
The utility commission may also prescribe forms of books, accounts, |
|
records, and memoranda to be kept by those utilities, including the |
|
books, accounts, records, and memoranda of the rendition of and |
|
capacity for service as well as the receipts and expenditures of |
|
money, and any other forms, records, and memoranda that in the |
|
judgment of the utility commission may be necessary to carry out |
|
this chapter. |
|
(b) In the case of a utility subject to regulation by a |
|
federal regulatory agency, compliance with the system of accounts |
|
prescribed for the particular class of utilities by that agency may |
|
be considered a sufficient compliance with the system prescribed by |
|
the utility commission. However, the utility commission may |
|
prescribe forms of books, accounts, records, and memoranda covering |
|
information in addition to that required by the federal agency. The |
|
system of accounts and the forms of books, accounts, records, and |
|
memoranda prescribed by the utility commission for a utility or |
|
class of utilities may not conflict or be inconsistent with the |
|
systems and forms established by a federal agency for that utility |
|
or class of utilities. |
|
(c) The utility commission shall fix proper and adequate |
|
rates and methods of depreciation, amortization, or depletion of |
|
the several classes of property of each utility and shall require |
|
every utility to carry a proper and adequate depreciation account |
|
in accordance with those rates and methods and with any other rules |
|
the utility commission prescribes. Rules adopted under this |
|
subsection must require the book cost less net salvage of |
|
depreciable utility plant retired to be charged in its entirety to |
|
the accumulated depreciation account in a manner consistent with |
|
accounting treatment of regulated electric and gas utilities in |
|
this state. Those rates, methods, and accounts shall be utilized |
|
uniformly and consistently throughout the rate-setting and appeal |
|
proceedings. |
|
(e) Every utility is required to keep and render its books, |
|
accounts, records, and memoranda accurately and faithfully in the |
|
manner and form prescribed by the utility commission and to comply |
|
with all directions of the regulatory authority relating to those |
|
books, accounts, records, and memoranda. The regulatory authority |
|
may require the examination and audit of all accounts. |
|
SECTION 2.16. Section 13.132, Water Code, is amended to |
|
read as follows: |
|
Sec. 13.132. POWERS OF UTILITY COMMISSION. (a) The |
|
utility commission may: |
|
(1) require that water and sewer utilities report to |
|
it any information relating to themselves and affiliated interests |
|
both inside and outside this state that it considers useful in the |
|
administration of this chapter; |
|
(2) establish forms for all reports; |
|
(3) determine the time for reports and the frequency |
|
with which any reports are to be made; |
|
(4) require that any reports be made under oath; |
|
(5) require that a copy of any contract or arrangement |
|
between any utility and any affiliated interest be filed with it and |
|
require that such a contract or arrangement that is not in writing |
|
be reduced to writing; |
|
(6) require that a copy of any report filed with any |
|
federal agency or any governmental agency or body of any other state |
|
be filed with it; and |
|
(7) require that a copy of annual reports showing all |
|
payments of compensation, other than salary or wages subject to the |
|
withholding of federal income tax, made to residents of Texas, or |
|
with respect to legal, administrative, or legislative matters in |
|
Texas, or for representation before the Texas Legislature or any |
|
governmental agency or body be filed with it. |
|
(b) On the request of the governing body of any |
|
municipality, the utility commission may provide sufficient staff |
|
members to advise and consult with the municipality on any pending |
|
matter. |
|
SECTION 2.17. Subsection (b), Section 13.133, Water Code, |
|
is amended to read as follows: |
|
(b) The regulatory authority may require, by order or |
|
subpoena served on any utility, the production within this state at |
|
the time and place it may designate of any books, accounts, papers, |
|
or records kept by that utility outside the state or verified copies |
|
of them if the regulatory authority [commission] so orders. A |
|
utility failing or refusing to comply with such an order or subpoena |
|
violates this chapter. |
|
SECTION 2.18. Subsections (b) and (c), Section 13.136, |
|
Water Code, are amended to read as follows: |
|
(b) Each utility annually shall file a service and financial |
|
report in a form and at times specified by utility commission rule. |
|
(c) Every water supply or sewer service corporation shall |
|
file with the utility commission tariffs showing all rates that are |
|
subject to the appellate jurisdiction of the utility commission and |
|
that are in force at the time for any utility service, product, or |
|
commodity offered. Every water supply or sewer service corporation |
|
shall file with and as a part of those tariffs all rules and |
|
regulations relating to or affecting the rates, utility service, |
|
product, or commodity furnished. The filing required under this |
|
subsection shall be for informational purposes only. |
|
SECTION 2.19. Section 13.137, Water Code, is amended to |
|
read as follows: |
|
Sec. 13.137. OFFICE AND OTHER BUSINESS LOCATIONS OF |
|
UTILITY; RECORDS; REMOVAL FROM STATE. (a) Every utility shall: |
|
(1) make available and notify its customers of a |
|
business location where its customers may make payments to prevent |
|
disconnection of or to restore service: |
|
(A) in each county in which the utility provides |
|
service; or |
|
(B) not more than 20 miles from the residence of |
|
any residential customer if there is no location to receive |
|
payments in the county; and |
|
(2) have an office in a county of this state or in the |
|
immediate area in which its property or some part of its property is |
|
located in which it shall keep all books, accounts, records, and |
|
memoranda required by the utility commission to be kept in this |
|
state. |
|
(b) The utility commission by rule may provide for waiving |
|
the requirements of Subsection (a)(1) for a utility for which |
|
meeting those requirements would cause a rate increase or otherwise |
|
harm or inconvenience customers. The rules must provide for an |
|
additional 14 days to be given for a customer to pay before a |
|
utility that is granted a waiver may disconnect service for late |
|
payment. |
|
(c) Books, accounts, records, or memoranda required by the |
|
regulatory authority to be kept in the state may not be removed from |
|
the state, except on conditions prescribed by the utility |
|
commission. |
|
SECTION 2.20. Subsection (b), Section 13.139, Water Code, |
|
is amended to read as follows: |
|
(b) The governing body of a municipality, as the regulatory |
|
authority for public utilities operating within its corporate |
|
limits, and the utility commission or the commission as the |
|
regulatory authority for public utilities operating outside the |
|
corporate limits of any municipality, after reasonable notice and |
|
hearing on its own motion, may: |
|
(1) ascertain and fix just and reasonable standards, |
|
classifications, regulations, service rules, minimum service |
|
standards or practices to be observed and followed with respect to |
|
the service to be furnished; |
|
(2) ascertain and fix adequate and reasonable |
|
standards for the measurement of the quantity, quality, pressure, |
|
or other condition pertaining to the supply of the service; |
|
(3) prescribe reasonable regulations for the |
|
examination and testing of the service and for the measurement of |
|
service; and |
|
(4) establish or approve reasonable rules, |
|
regulations, specifications, and standards to secure the accuracy |
|
of all meters, instruments, and equipment used for the measurement |
|
of any utility service. |
|
SECTION 2.21. Section 13.1395, Water Code, is amended by |
|
adding Subsection (m) to read as follows: |
|
(m) The commission shall coordinate with the utility |
|
commission in the administration of this section. |
|
SECTION 2.22. Subsection (b), Section 13.142, Water Code, |
|
is amended to read as follows: |
|
(b) The utility commission shall adopt rules concerning |
|
payment of utility bills that are consistent with Chapter 2251, |
|
Government Code. |
|
SECTION 2.23. Section 13.144, Water Code, is amended to |
|
read as follows: |
|
Sec. 13.144. NOTICE OF WHOLESALE WATER SUPPLY CONTRACT. A |
|
district or authority created under Section 52, Article III, or |
|
Section 59, Article XVI, Texas Constitution, a retail public |
|
utility, a wholesale water service, or other person providing a |
|
retail public utility with a wholesale water supply shall provide |
|
the utility commission and the commission with a certified copy of |
|
any wholesale water supply contract with a retail public utility |
|
within 30 days after the date of the execution of the contract. The |
|
submission must include the amount of water being supplied, term of |
|
the contract, consideration being given for the water, purpose of |
|
use, location of use, source of supply, point of delivery, |
|
limitations on the reuse of water, a disclosure of any affiliated |
|
interest between the parties to the contract, and any other |
|
condition or agreement relating to the contract. |
|
SECTION 2.24. Subsection (a), Section 13.147, Water Code, |
|
is amended to read as follows: |
|
(a) A retail public utility providing water service may |
|
contract with a retail public utility providing sewer service to |
|
bill and collect the sewer service provider's fees and payments as |
|
part of a consolidated process with the billing and collection of |
|
the water service provider's fees and payments. The water service |
|
provider may provide that service only for customers who are served |
|
by both providers in an area covered by both providers' |
|
certificates of public convenience and necessity. If the water |
|
service provider refuses to enter into a contract under this |
|
section or if the water service provider and sewer service provider |
|
cannot agree on the terms of a contract, the sewer service provider |
|
may petition the utility commission to issue an order requiring the |
|
water service provider to provide that service. |
|
SECTION 2.25. Subsection (b), Section 13.181, Water Code, |
|
is amended to read as follows: |
|
(b) Subject to this chapter, the utility commission has all |
|
authority and power of the state to ensure compliance with the |
|
obligations of utilities under this chapter. For this purpose the |
|
regulatory authority may fix and regulate rates of utilities, |
|
including rules and regulations for determining the classification |
|
of customers and services and for determining the applicability of |
|
rates. A rule or order of the regulatory authority may not conflict |
|
with the rulings of any federal regulatory body. The utility |
|
commission may adopt rules which authorize a utility which is |
|
permitted under Section 13.242(c) to provide service without a |
|
certificate of public convenience and necessity to request or |
|
implement a rate increase and operate according to rules, |
|
regulations, and standards of service other than those otherwise |
|
required under this chapter provided that rates are just and |
|
reasonable for customers and the utility and that service is safe, |
|
adequate, efficient, and reasonable. |
|
SECTION 2.26. Subsections (c) and (d), Section 13.182, |
|
Water Code, are amended to read as follows: |
|
(c) For ratemaking purposes, the utility commission may |
|
treat two or more municipalities served by a utility as a single |
|
class wherever the utility commission considers that treatment to |
|
be appropriate. |
|
(d) The utility commission by rule shall establish a |
|
preference that rates under a consolidated tariff be consolidated |
|
by region. The regions under consolidated tariffs must be |
|
determined on a case-by-case basis. |
|
SECTION 2.27. Subsection (d), Section 13.183, Water Code, |
|
is amended to read as follows: |
|
(d) A regulatory authority other than the utility |
|
commission may not approve an acquisition adjustment for a system |
|
purchased before the effective date of an ordinance authorizing |
|
acquisition adjustments. |
|
SECTION 2.28. Subsection (a), Section 13.184, Water Code, |
|
is amended to read as follows: |
|
(a) Unless the utility commission establishes alternate |
|
rate methodologies in accordance with Section 13.183(c), the |
|
utility commission may not prescribe any rate that will yield more |
|
than a fair return on the invested capital used and useful in |
|
rendering service to the public. The governing body of a |
|
municipality exercising its original jurisdiction over rates and |
|
services may use alternate ratemaking methodologies established by |
|
ordinance or by utility commission rule in accordance with Section |
|
13.183(c). Unless the municipal regulatory authority uses |
|
alternate ratemaking methodologies established by ordinance or by |
|
utility commission rule in accordance with Section 13.183(c), it |
|
may not prescribe any rate that will yield more than a fair return |
|
on the invested capital used and useful in rendering service to the |
|
public. |
|
SECTION 2.29. Subsections (d), (k), and (o), Section |
|
13.187, Water Code, are amended to read as follows: |
|
(d) Except as provided by Subsection (d-1), if the |
|
application or the statement of intent is not substantially |
|
complete or does not comply with the regulatory authority's rules, |
|
it may be rejected and the effective date of the rate change may be |
|
suspended until a properly completed application is accepted by the |
|
regulatory authority and a proper statement of intent is provided. |
|
The utility commission may also suspend the effective date of any |
|
rate change if the utility does not have a certificate of public |
|
convenience and necessity or a completed application for a |
|
certificate or to transfer a certificate pending before the utility |
|
commission or if the utility is delinquent in paying the assessment |
|
and any applicable penalties or interest required by Section |
|
5.701(n) [of this code]. |
|
(k) If the regulatory authority receives at least the number |
|
of complaints from ratepayers required for the regulatory authority |
|
to set a hearing under Subsection (e), the regulatory authority |
|
may, pending the hearing and a decision, suspend the date the rate |
|
change would otherwise be effective. Except as provided by |
|
Subsection (d-1), the proposed rate may not be suspended for longer |
|
than: |
|
(1) 90 days by a local regulatory authority; or |
|
(2) 150 days by the utility commission. |
|
(o) If a regulatory authority other than the utility |
|
commission establishes interim rates or an escrow account, the |
|
regulatory authority must make a final determination on the rates |
|
not later than the first anniversary of the effective date of the |
|
interim rates or escrowed rates or the rates are automatically |
|
approved as requested by the utility. |
|
SECTION 2.30. Subsection (a), Section 13.188, Water Code, |
|
is amended to read as follows: |
|
(a) Notwithstanding any other provision in this chapter, |
|
the utility commission by rule shall adopt a procedure allowing a |
|
utility to file with the utility commission an application to |
|
timely adjust the utility's rates to reflect an increase or |
|
decrease in documented energy costs in a pass through clause. The |
|
utility commission, by rule, shall require the pass through of |
|
documented decreases in energy costs within a reasonable time. The |
|
pass through, whether a decrease or increase, shall be implemented |
|
on no later than an annual basis, unless the utility commission |
|
determines a special circumstance applies. |
|
SECTION 2.31. Subsections (a) and (d), Section 13.241, |
|
Water Code, are amended to read as follows: |
|
(a) In determining whether to grant or amend a certificate |
|
of public convenience and necessity, the utility commission shall |
|
ensure that the applicant possesses the financial, managerial, and |
|
technical capability to provide continuous and adequate service. |
|
(d) Before the utility commission grants a new certificate |
|
of convenience and necessity for an area which would require |
|
construction of a physically separate water or sewer system, the |
|
applicant must demonstrate to the utility commission that |
|
regionalization or consolidation with another retail public |
|
utility is not economically feasible. |
|
SECTION 2.32. Subsections (a) and (c), Section 13.242, |
|
Water Code, are amended to read as follows: |
|
(a) Unless otherwise specified, a utility, a utility |
|
operated by an affected county, or a water supply or sewer service |
|
corporation may not in any way render retail water or sewer utility |
|
service directly or indirectly to the public without first having |
|
obtained from the utility commission a certificate that the present |
|
or future public convenience and necessity will require that |
|
installation, operation, or extension, and except as otherwise |
|
provided by this subchapter, a retail public utility may not |
|
furnish, make available, render, or extend retail water or sewer |
|
utility service to any area to which retail water or sewer utility |
|
service is being lawfully furnished by another retail public |
|
utility without first having obtained a certificate of public |
|
convenience and necessity that includes the area in which the |
|
consuming facility is located. |
|
(c) The utility commission may by rule allow a municipality |
|
or utility or water supply corporation to render retail water |
|
service without a certificate of public convenience and necessity |
|
if the municipality has given notice under Section 13.255 [of this
|
|
code] that it intends to provide retail water service to an area or |
|
if the utility or water supply corporation has less than 15 |
|
potential connections and is not within the certificated area of |
|
another retail public utility. |
|
SECTION 2.33. Section 13.244, Water Code, is amended to |
|
read as follows: |
|
Sec. 13.244. APPLICATION; MAPS AND OTHER INFORMATION; |
|
EVIDENCE AND CONSENT. (a) To obtain a certificate of public |
|
convenience and necessity or an amendment to a certificate, a |
|
public utility or water supply or sewer service corporation shall |
|
submit to the utility commission an application for a certificate |
|
or for an amendment as provided by this section. |
|
(b) Each public utility and water supply or sewer service |
|
corporation shall file with the utility commission a map or maps |
|
showing all its facilities and illustrating separately facilities |
|
for production, transmission, and distribution of its services, and |
|
each certificated retail public utility shall file with the utility |
|
commission a map or maps showing any facilities, customers, or area |
|
currently being served outside its certificated areas. |
|
(c) Each applicant for a certificate or for an amendment |
|
shall file with the utility commission evidence required by the |
|
commission to show that the applicant has received the required |
|
consent, franchise, or permit of the proper municipality or other |
|
public authority. |
|
(d) An application for a certificate of public convenience |
|
and necessity or for an amendment to a certificate must contain: |
|
(1) a description of the proposed service area by: |
|
(A) a metes and bounds survey certified by a |
|
licensed state land surveyor or a registered professional land |
|
surveyor; |
|
(B) the Texas State Plane Coordinate System; |
|
(C) verifiable landmarks, including a road, |
|
creek, or railroad line; or |
|
(D) if a recorded plat of the area exists, lot and |
|
block number; |
|
(2) a description of any requests for service in the |
|
proposed service area; |
|
(3) a capital improvements plan, including a budget |
|
and estimated timeline for construction of all facilities necessary |
|
to provide full service to the entire proposed service area; |
|
(4) a description of the sources of funding for all |
|
facilities; |
|
(5) to the extent known, a description of current and |
|
projected land uses, including densities; |
|
(6) a current financial statement of the applicant; |
|
(7) according to the tax roll of the central appraisal |
|
district for each county in which the proposed service area is |
|
located, a list of the owners of each tract of land that is: |
|
(A) at least 50 acres; and |
|
(B) wholly or partially located within the |
|
proposed service area; and |
|
(8) any other item required by the utility commission. |
|
SECTION 2.34. (a) If S.B. No. 573, Acts of the 82nd |
|
Legislature, Regular Session, 2011, does not become law, |
|
Subsections (b), (c), and (e), Section 13.245, Water Code, are |
|
amended to read as follows: |
|
(b) Except as provided by Subsection (c), the utility |
|
commission may not grant to a retail public utility a certificate of |
|
public convenience and necessity for a service area within the |
|
boundaries or extraterritorial jurisdiction of a municipality |
|
without the consent of the municipality. The municipality may not |
|
unreasonably withhold the consent. As a condition of the consent, a |
|
municipality may require that all water and sewer facilities be |
|
designed and constructed in accordance with the municipality's |
|
standards for facilities. |
|
(c) If a municipality has not consented under Subsection (b) |
|
before the 180th day after the date the municipality receives the |
|
retail public utility's application, the utility commission shall |
|
grant the certificate of public convenience and necessity without |
|
the consent of the municipality if the utility commission finds |
|
that the municipality: |
|
(1) does not have the ability to provide service; or |
|
(2) has failed to make a good faith effort to provide |
|
service on reasonable terms and conditions. |
|
(e) If the utility commission makes a decision under |
|
Subsection (d) regarding the grant of a certificate of public |
|
convenience and necessity without the consent of the municipality, |
|
the municipality or the retail public utility may appeal the |
|
decision to the appropriate state district court. The court shall |
|
hear the petition within 120 days after the date the petition is |
|
filed. On final disposition, the court may award reasonable fees to |
|
the prevailing party. |
|
(b) If S.B. No. 573, Acts of the 82nd Legislature, Regular |
|
Session, 2011, becomes law, Subsections (b), (c), (c-1), (c-2), |
|
(c-3), and (e), Section 13.245, Water Code, as effective September |
|
1, 2011, are amended to read as follows: |
|
(b) Except as provided by Subsections (c), (c-1), and (c-2), |
|
the utility commission may not grant to a retail public utility a |
|
certificate of public convenience and necessity for a service area |
|
within the boundaries or extraterritorial jurisdiction of a |
|
municipality without the consent of the municipality. The |
|
municipality may not unreasonably withhold the consent. As a |
|
condition of the consent, a municipality may require that all water |
|
and sewer facilities be designed and constructed in accordance with |
|
the municipality's standards for facilities. |
|
(c) If a municipality has not consented under Subsection (b) |
|
before the 180th day after the date the municipality receives the |
|
retail public utility's application, the utility commission shall |
|
grant the certificate of public convenience and necessity without |
|
the consent of the municipality if the utility commission finds |
|
that the municipality: |
|
(1) does not have the ability to provide service; or |
|
(2) has failed to make a good faith effort to provide |
|
service on reasonable terms and conditions. |
|
(c-1) If a municipality has not consented under Subsection |
|
(b) before the 180th day after the date a landowner or a retail |
|
public utility submits to the municipality a formal request for |
|
service according to the municipality's application requirements |
|
and standards for facilities on the same or substantially similar |
|
terms as provided by the retail public utility's application to the |
|
utility commission, including a capital improvements plan required |
|
by Section 13.244(d)(3) or a subdivision plat, the utility |
|
commission may grant the certificate of public convenience and |
|
necessity without the consent of the municipality if: |
|
(1) the utility commission makes the findings required |
|
by Subsection (c); |
|
(2) the municipality has not entered into a binding |
|
commitment to serve the area that is the subject of the retail |
|
public utility's application to the utility commission before the |
|
180th day after the date the formal request was made; and |
|
(3) the landowner or retail public utility that |
|
submitted the formal request has not unreasonably refused to: |
|
(A) comply with the municipality's service |
|
extension and development process; or |
|
(B) enter into a contract for water or sewer |
|
services with the municipality. |
|
(c-2) If a municipality refuses to provide service in the |
|
proposed service area, as evidenced by a formal vote of the |
|
municipality's governing body or an official notification from the |
|
municipality, the utility commission is not required to make the |
|
findings otherwise required by this section and may grant the |
|
certificate of public convenience and necessity to the retail |
|
public utility at any time after the date of the formal vote or |
|
receipt of the official notification. |
|
(c-3) The utility commission must include as a condition of |
|
a certificate of public convenience and necessity granted under |
|
Subsection (c-1) or (c-2) that all water and sewer facilities be |
|
designed and constructed in accordance with the municipality's |
|
standards for water and sewer facilities. |
|
(e) If the utility commission makes a decision under |
|
Subsection (d) regarding the grant of a certificate of public |
|
convenience and necessity without the consent of the municipality, |
|
the municipality or the retail public utility may appeal the |
|
decision to the appropriate state district court. The court shall |
|
hear the petition within 120 days after the date the petition is |
|
filed. On final disposition, the court may award reasonable fees to |
|
the prevailing party. |
|
SECTION 2.35. If S.B. No. 573, Acts of the 82nd Legislature, |
|
Regular Session, 2011, becomes law, Subsection (b), Section |
|
13.2451, Water Code, as effective September 1, 2011, is amended to |
|
read as follows: |
|
(b) The utility commission may not extend a municipality's |
|
certificate of public convenience and necessity beyond its |
|
extraterritorial jurisdiction if an owner of land that is located |
|
wholly or partly outside the extraterritorial jurisdiction elects |
|
to exclude some or all of the landowner's property within a proposed |
|
service area in accordance with Section 13.246(h). This subsection |
|
does not apply to a transfer of a certificate as approved by the |
|
utility commission. |
|
SECTION 2.36. Subsection (c), Section 13.2451, Water Code, |
|
is amended to read as follows: |
|
(c) The utility commission, after notice to the |
|
municipality and an opportunity for a hearing, may decertify an |
|
area outside a municipality's extraterritorial jurisdiction if the |
|
municipality does not provide service to the area on or before the |
|
fifth anniversary of the date the certificate of public convenience |
|
and necessity was granted for the area. This subsection does not |
|
apply to a certificate of public convenience and necessity for an |
|
area: |
|
(1) that was transferred to a municipality on approval |
|
of the utility commission; and |
|
(2) in relation to which the municipality has spent |
|
public funds. |
|
SECTION 2.37. Subsections (a), (a-1), (b), (c), (d), (f), |
|
and (i), Section 13.246, Water Code, are amended to read as follows: |
|
(a) If an application for a certificate of public |
|
convenience and necessity or for an amendment to a certificate is |
|
filed, the utility commission shall cause notice of the application |
|
to be given to affected parties and to each county and groundwater |
|
conservation district that is wholly or partly included in the area |
|
proposed to be certified. If requested, the utility commission |
|
shall fix a time and place for a hearing and give notice of the |
|
hearing. Any person affected by the application may intervene at |
|
the hearing. |
|
(a-1) Except as otherwise provided by this subsection, in |
|
addition to the notice required by Subsection (a), the utility |
|
commission shall require notice to be mailed to each owner of a |
|
tract of land that is at least 25 acres and is wholly or partially |
|
included in the area proposed to be certified. Notice required |
|
under this subsection must be mailed by first class mail to the |
|
owner of the tract according to the most current tax appraisal rolls |
|
of the applicable central appraisal district at the time the |
|
utility commission received the application for the certificate or |
|
amendment. Good faith efforts to comply with the requirements of |
|
this subsection shall be considered adequate notice to landowners. |
|
Notice under this subsection is not required for a matter filed with |
|
the utility commission or the commission under: |
|
(1) Section 13.248 or 13.255; or |
|
(2) Chapter 65. |
|
(b) The utility commission may grant applications and issue |
|
certificates and amendments to certificates only if the utility |
|
commission finds that a certificate or amendment is necessary for |
|
the service, accommodation, convenience, or safety of the public. |
|
The utility commission may issue a certificate or amendment as |
|
requested, or refuse to issue it, or issue it for the construction |
|
of only a portion of the contemplated system or facility or |
|
extension, or for the partial exercise only of the right or |
|
privilege and may impose special conditions necessary to ensure |
|
that continuous and adequate service is provided. |
|
(c) Certificates of public convenience and necessity and |
|
amendments to certificates shall be granted by the utility |
|
commission on a nondiscriminatory basis after consideration by the |
|
utility commission of: |
|
(1) the adequacy of service currently provided to the |
|
requested area; |
|
(2) the need for additional service in the requested |
|
area, including whether any landowners, prospective landowners, |
|
tenants, or residents have requested service; |
|
(3) the effect of the granting of a certificate or of |
|
an amendment on the recipient of the certificate or amendment, on |
|
the landowners in the area, and on any retail public utility of the |
|
same kind already serving the proximate area; |
|
(4) the ability of the applicant to provide adequate |
|
service, including meeting the standards of the commission, taking |
|
into consideration the current and projected density and land use |
|
of the area; |
|
(5) the feasibility of obtaining service from an |
|
adjacent retail public utility; |
|
(6) the financial ability of the applicant to pay for |
|
the facilities necessary to provide continuous and adequate service |
|
and the financial stability of the applicant, including, if |
|
applicable, the adequacy of the applicant's debt-equity ratio; |
|
(7) environmental integrity; |
|
(8) the probable improvement of service or lowering of |
|
cost to consumers in that area resulting from the granting of the |
|
certificate or amendment; and |
|
(9) the effect on the land to be included in the |
|
certificated area. |
|
(d) The utility commission may require an applicant for a |
|
certificate or for an amendment to provide a bond or other financial |
|
assurance in a form and amount specified by the utility commission |
|
to ensure that continuous and adequate utility service is provided. |
|
(f) If two or more retail public utilities or water supply |
|
or sewer service corporations apply for a certificate of public |
|
convenience and necessity to provide water or sewer utility service |
|
to an uncertificated area located in an economically distressed |
|
area and otherwise meet the requirements for obtaining a new |
|
certificate, the utility commission shall grant the certificate to |
|
the retail public utility or water supply or sewer service |
|
corporation that is more capable financially, managerially, and |
|
technically of providing continuous and adequate service. |
|
(i) A landowner is not entitled to make an election under |
|
Subsection (h) but is entitled to contest the inclusion of the |
|
landowner's property in the proposed service area at a hearing held |
|
by the utility commission regarding the application if the proposed |
|
service area is located within the boundaries or extraterritorial |
|
jurisdiction of a municipality with a population of more than |
|
500,000 and the municipality or a utility owned by the municipality |
|
is the applicant. |
|
SECTION 2.38. (a) If S.B. No. 573, Acts of the 82nd |
|
Legislature, Regular Session, 2011, does not become law, Subsection |
|
(h), Section 13.246, Water Code, is amended to read as follows: |
|
(h) Except as provided by Subsection (i), a landowner who |
|
owns a tract of land that is at least 25 acres and that is wholly or |
|
partially located within the proposed service area may elect to |
|
exclude some or all of the landowner's property from the proposed |
|
service area by providing written notice to the utility commission |
|
before the 30th day after the date the landowner receives notice of |
|
a new application for a certificate of public convenience and |
|
necessity or for an amendment to an existing certificate of public |
|
convenience and necessity. The landowner's election is effective |
|
without a further hearing or other process by the utility |
|
commission. If a landowner makes an election under this |
|
subsection, the application shall be modified so that the electing |
|
landowner's property is not included in the proposed service area. |
|
(b) If S.B. No. 573, Acts of the 82nd Legislature, Regular |
|
Session, 2011, becomes law, Subsection (h), Section 13.246, Water |
|
Code, as effective September 1, 2011, is amended to read as follows: |
|
(h) Except as provided by Subsection (i), a landowner who |
|
owns a tract of land that is at least 25 acres and that is wholly or |
|
partially located within the proposed service area may elect to |
|
exclude some or all of the landowner's property from the proposed |
|
service area by providing written notice to the utility commission |
|
before the 30th day after the date the landowner receives notice of |
|
a new application for a certificate of public convenience and |
|
necessity or for an amendment to an existing certificate of public |
|
convenience and necessity. The landowner's election is effective |
|
without a further hearing or other process by the utility |
|
commission. If a landowner makes an election under this |
|
subsection, the application shall be modified so that the electing |
|
landowner's property is not included in the proposed service area. |
|
An applicant for a certificate of public convenience and necessity |
|
that has land removed from its proposed certificated service area |
|
because of a landowner's election under this subsection may not be |
|
required to provide service to the removed land for any reason, |
|
including the violation of law or utility commission rules by the |
|
water or sewer system of another person. |
|
SECTION 2.39. Subsection (a), Section 13.247, Water Code, |
|
is amended to read as follows: |
|
(a) If an area is within the boundaries of a municipality, |
|
all retail public utilities certified or entitled to certification |
|
under this chapter to provide service or operate facilities in that |
|
area may continue and extend service in its area of public |
|
convenience and necessity within the area pursuant to the rights |
|
granted by its certificate and this chapter, unless the |
|
municipality exercises its power of eminent domain to acquire the |
|
property of the retail public utility under Subsection (d). Except |
|
as provided by Section 13.255, a municipally owned or operated |
|
utility may not provide retail water and sewer utility service |
|
within the area certificated to another retail public utility |
|
without first having obtained from the utility commission a |
|
certificate of public convenience and necessity that includes the |
|
areas to be served. |
|
SECTION 2.40. Section 13.248, Water Code, is amended to |
|
read as follows: |
|
Sec. 13.248. CONTRACTS VALID AND ENFORCEABLE. Contracts |
|
between retail public utilities designating areas to be served and |
|
customers to be served by those retail public utilities, when |
|
approved by the utility commission after public notice and hearing, |
|
are valid and enforceable and are incorporated into the appropriate |
|
areas of public convenience and necessity. |
|
SECTION 2.41. Subsections (b), (c), and (e), Section |
|
13.250, Water Code, are amended to read as follows: |
|
(b) Unless the utility commission issues a certificate that |
|
neither the present nor future convenience and necessity will be |
|
adversely affected, the holder of a certificate or a person who |
|
possesses facilities used to provide utility service shall not |
|
discontinue, reduce, or impair service to a certified service area |
|
or part of a certified service area except for: |
|
(1) nonpayment of charges for services provided by the |
|
certificate holder or a person who possesses facilities used to |
|
provide utility service; |
|
(2) nonpayment of charges for sewer service provided |
|
by another retail public utility under an agreement between the |
|
retail public utility and the certificate holder or a person who |
|
possesses facilities used to provide utility service or under a |
|
utility commission-ordered arrangement between the two service |
|
providers; |
|
(3) nonuse; or |
|
(4) other similar reasons in the usual course of |
|
business. |
|
(c) Any discontinuance, reduction, or impairment of |
|
service, whether with or without approval of the utility |
|
commission, shall be in conformity with and subject to conditions, |
|
restrictions, and limitations that the utility commission |
|
prescribes. |
|
(e) Not later than the 48th hour after the hour in which a |
|
utility files a bankruptcy petition, the utility shall report this |
|
fact to the utility commission and the commission in writing. |
|
SECTION 2.42. Subsection (d), Section 13.2502, Water Code, |
|
is amended to read as follows: |
|
(d) This section does not limit or extend the jurisdiction |
|
of the utility commission under Section 13.043(g). |
|
SECTION 2.43. Section 13.251, Water Code, is amended to |
|
read as follows: |
|
Sec. 13.251. SALE, ASSIGNMENT, OR LEASE OF CERTIFICATE. |
|
Except as provided by Section 13.255 [of this code], a utility or a |
|
water supply or sewer service corporation may not sell, assign, or |
|
lease a certificate of public convenience and necessity or any |
|
right obtained under a certificate unless the commission has |
|
determined that the purchaser, assignee, or lessee is capable of |
|
rendering adequate and continuous service to every consumer within |
|
the certified area, after considering the factors under Section |
|
13.246(c) [of this code]. The sale, assignment, or lease shall be |
|
on the conditions prescribed by the utility commission. |
|
SECTION 2.44. Section 13.252, Water Code, is amended to |
|
read as follows: |
|
Sec. 13.252. INTERFERENCE WITH OTHER RETAIL PUBLIC UTILITY. |
|
If a retail public utility in constructing or extending a line, |
|
plant, or system interferes or attempts to interfere with the |
|
operation of a line, plant, or system of any other retail public |
|
utility, or furnishes, makes available, renders, or extends retail |
|
water or sewer utility service to any portion of the service area of |
|
another retail public utility that has been granted or is not |
|
required to possess a certificate of public convenience and |
|
necessity, the utility commission may issue an order prohibiting |
|
the construction, extension, or provision of service or prescribing |
|
terms and conditions for locating the line, plant, or system |
|
affected or for the provision of the service. |
|
SECTION 2.45. Section 13.253, Water Code, is amended to |
|
read as follows: |
|
Sec. 13.253. IMPROVEMENTS IN SERVICE; INTERCONNECTING |
|
SERVICE. (a) After notice and hearing, the utility commission or |
|
the commission may: |
|
(1) order any retail public utility that is required |
|
by law to possess a certificate of public convenience and necessity |
|
or any retail public utility that possesses a certificate of public |
|
convenience and necessity and is located in an affected county as |
|
defined in Section 16.341 to: |
|
(A) provide specified improvements in its |
|
service in a defined area if service in that area is inadequate or |
|
is substantially inferior to service in a comparable area and it is |
|
reasonable to require the retail public utility to provide the |
|
improved service; or |
|
(B) develop, implement, and follow financial, |
|
managerial, and technical practices that are acceptable to the |
|
utility commission to ensure that continuous and adequate service |
|
is provided to any areas currently certificated to the retail |
|
public utility if the retail public utility has not provided |
|
continuous and adequate service to any of those areas and, for a |
|
utility, to provide financial assurance of the utility's ability to |
|
operate the system in accordance with applicable laws and rules, in |
|
the form of a bond or other financial assurance in a form and amount |
|
specified by the utility commission; |
|
(2) order two or more public utilities or water supply |
|
or sewer service corporations to establish specified facilities for |
|
interconnecting service; |
|
(3) order a public utility or water supply or sewer |
|
service corporation that has not demonstrated that it can provide |
|
continuous and adequate service from its drinking water source or |
|
sewer treatment facility to obtain service sufficient to meet its |
|
obligation to provide continuous and adequate service on at least a |
|
wholesale basis from another consenting utility service provider; |
|
or |
|
(4) issue an emergency order, with or without a |
|
hearing, under Section 13.041. |
|
(b) If the utility commission has reason to believe that |
|
improvements and repairs to a water or sewer service system are |
|
necessary to enable a retail public utility to provide continuous |
|
and adequate service in any portion of its service area and the |
|
retail public utility has provided financial assurance under |
|
Section 341.0355, Health and Safety Code, or under this chapter, |
|
the utility commission, after providing to the retail public |
|
utility notice and an opportunity to be heard by the commissioners |
|
at a [commission] meeting of the utility commission, may |
|
immediately order specified improvements and repairs to the water |
|
or sewer system, the costs of which may be paid by the bond or other |
|
financial assurance in an amount determined by the utility |
|
commission not to exceed the amount of the bond or financial |
|
assurance. The order requiring the improvements may be an |
|
emergency order if it is issued after the retail public utility has |
|
had an opportunity to be heard [by the commissioners] at a |
|
[commission] meeting of the utility commission. After notice and |
|
hearing, the utility commission may require a retail public utility |
|
to obligate additional money to replace the financial assurance |
|
used for the improvements. |
|
SECTION 2.46. (a) If S.B. No. 573, Acts of the 82nd |
|
Legislature, Regular Session, 2011, does not become law, Section |
|
13.254, Water Code, is amended to read as follows: |
|
Sec. 13.254. REVOCATION OR AMENDMENT OF CERTIFICATE. |
|
(a) The utility commission at any time after notice and hearing |
|
may, on its own motion or on receipt of a petition described by |
|
Subsection (a-1), revoke or amend any certificate of public |
|
convenience and necessity with the written consent of the |
|
certificate holder or if the utility commission [it] finds that: |
|
(1) the certificate holder has never provided, is no |
|
longer providing, is incapable of providing, or has failed to |
|
provide continuous and adequate service in the area, or part of the |
|
area, covered by the certificate; |
|
(2) in an affected county as defined in Section |
|
16.341, the cost of providing service by the certificate holder is |
|
so prohibitively expensive as to constitute denial of service, |
|
provided that, for commercial developments or for residential |
|
developments started after September 1, 1997, in an affected county |
|
as defined in Section 16.341, the fact that the cost of obtaining |
|
service from the currently certificated retail public utility makes |
|
the development economically unfeasible does not render such cost |
|
prohibitively expensive in the absence of other relevant factors; |
|
(3) the certificate holder has agreed in writing to |
|
allow another retail public utility to provide service within its |
|
service area, except for an interim period, without amending its |
|
certificate; or |
|
(4) the certificate holder has failed to file a cease |
|
and desist action pursuant to Section 13.252 within 180 days of the |
|
date that it became aware that another retail public utility was |
|
providing service within its service area, unless the certificate |
|
holder demonstrates good cause for its failure to file such action |
|
within the 180 days. |
|
(a-1) As an alternative to decertification under Subsection |
|
(a), the owner of a tract of land that is at least 50 acres and that |
|
is not in a platted subdivision actually receiving water or sewer |
|
service may petition the utility commission under this subsection |
|
for expedited release of the area from a certificate of public |
|
convenience and necessity so that the area may receive service from |
|
another retail public utility. The petitioner shall deliver, via |
|
certified mail, a copy of the petition to the certificate holder, |
|
who may submit information to the utility commission to controvert |
|
information submitted by the petitioner. The petitioner must |
|
demonstrate that: |
|
(1) a written request for service, other than a |
|
request for standard residential or commercial service, has been |
|
submitted to the certificate holder, identifying: |
|
(A) the area for which service is sought; |
|
(B) the timeframe within which service is needed |
|
for current and projected service demands in the area; |
|
(C) the level and manner of service needed for |
|
current and projected service demands in the area; and |
|
(D) any additional information requested by the |
|
certificate holder that is reasonably related to determination of |
|
the capacity or cost for providing the service; |
|
(2) the certificate holder has been allowed at least |
|
90 calendar days to review and respond to the written request and |
|
the information it contains; |
|
(3) the certificate holder: |
|
(A) has refused to provide the service; |
|
(B) is not capable of providing the service on a |
|
continuous and adequate basis within the timeframe, at the level, |
|
or in the manner reasonably needed or requested by current and |
|
projected service demands in the area; or |
|
(C) conditions the provision of service on the |
|
payment of costs not properly allocable directly to the |
|
petitioner's service request, as determined by the utility |
|
commission; and |
|
(4) the alternate retail public utility from which the |
|
petitioner will be requesting service is capable of providing |
|
continuous and adequate service within the timeframe, at the level, |
|
and in the manner reasonably needed or requested by current and |
|
projected service demands in the area. |
|
(a-2) A landowner is not entitled to make the election |
|
described in Subsection (a-1) but is entitled to contest the |
|
involuntary certification of its property in a hearing held by the |
|
utility commission if the landowner's property is located: |
|
(1) within the boundaries of any municipality or the |
|
extraterritorial jurisdiction of a municipality with a population |
|
of more than 500,000 and the municipality or retail public utility |
|
owned by the municipality is the holder of the certificate; or |
|
(2) in a platted subdivision actually receiving water |
|
or sewer service. |
|
(a-3) Within 90 calendar days from the date the utility |
|
commission determines the petition filed pursuant to Subsection |
|
(a-1) to be administratively complete, the utility commission shall |
|
grant the petition unless the utility commission makes an express |
|
finding that the petitioner failed to satisfy the elements required |
|
in Subsection (a-1) and supports its finding with separate findings |
|
and conclusions for each element based solely on the information |
|
provided by the petitioner and the certificate holder. The utility |
|
commission may grant or deny a petition subject to terms and |
|
conditions specifically related to the service request of the |
|
petitioner and all relevant information submitted by the petitioner |
|
and the certificate holder. In addition, the utility commission |
|
may require an award of compensation as otherwise provided by this |
|
section. |
|
(a-4) Chapter 2001, Government Code, does not apply to any |
|
petition filed under Subsection (a-1). The decision of the utility |
|
commission on the petition is final after any reconsideration |
|
authorized by the utility commission's rules and may not be |
|
appealed. |
|
(b) Upon written request from the certificate holder, the |
|
utility commission [executive director] may cancel the certificate |
|
of a utility or water supply corporation authorized by rule to |
|
operate without a certificate of public convenience and necessity |
|
under Section 13.242(c). |
|
(c) If the certificate of any retail public utility is |
|
revoked or amended, the utility commission may require one or more |
|
retail public utilities with their consent to provide service in |
|
the area in question. The order of the utility commission shall not |
|
be effective to transfer property. |
|
(d) A retail public utility may not in any way render retail |
|
water or sewer service directly or indirectly to the public in an |
|
area that has been decertified under this section without providing |
|
compensation for any property that the utility commission |
|
determines is rendered useless or valueless to the decertified |
|
retail public utility as a result of the decertification. |
|
(e) The determination of the monetary amount of |
|
compensation, if any, shall be determined at the time another |
|
retail public utility seeks to provide service in the previously |
|
decertified area and before service is actually provided. The |
|
utility commission shall ensure that the monetary amount of |
|
compensation is determined not later than the 90th calendar day |
|
after the date on which a retail public utility notifies the utility |
|
commission of its intent to provide service to the decertified |
|
area. |
|
(f) The monetary amount shall be determined by a qualified |
|
individual or firm serving as independent appraiser agreed upon by |
|
the decertified retail public utility and the retail public utility |
|
seeking to serve the area. The determination of compensation by the |
|
independent appraiser shall be binding on the utility commission. |
|
The costs of the independent appraiser shall be borne by the retail |
|
public utility seeking to serve the area. |
|
(g) For the purpose of implementing this section, the value |
|
of real property owned and utilized by the retail public utility for |
|
its facilities shall be determined according to the standards set |
|
forth in Chapter 21, Property Code, governing actions in eminent |
|
domain and the value of personal property shall be determined |
|
according to the factors in this subsection. The factors ensuring |
|
that the compensation to a retail public utility is just and |
|
adequate shall include: the amount of the retail public utility's |
|
debt allocable for service to the area in question; the value of the |
|
service facilities of the retail public utility located within the |
|
area in question; the amount of any expenditures for planning, |
|
design, or construction of service facilities that are allocable to |
|
service to the area in question; the amount of the retail public |
|
utility's contractual obligations allocable to the area in |
|
question; any demonstrated impairment of service or increase of |
|
cost to consumers of the retail public utility remaining after the |
|
decertification; the impact on future revenues lost from existing |
|
customers; necessary and reasonable legal expenses and |
|
professional fees; and other relevant factors. The utility |
|
commission shall adopt rules governing the evaluation of these |
|
factors. |
|
(g-1) If the retail public utilities cannot agree on an |
|
independent appraiser within 10 calendar days after the date on |
|
which the retail public utility notifies the utility commission of |
|
its intent to provide service to the decertified area, each retail |
|
public utility shall engage its own appraiser at its own expense, |
|
and each appraisal shall be submitted to the utility commission |
|
within 60 calendar days. After receiving the appraisals, the |
|
utility commission shall appoint a third appraiser who shall make a |
|
determination of the compensation within 30 days. The |
|
determination may not be less than the lower appraisal or more than |
|
the higher appraisal. Each retail public utility shall pay half the |
|
cost of the third appraisal. |
|
(b) If S.B. No. 573, Acts of the 82nd Legislature, Regular |
|
Session, 2011, becomes law, Subsections (a), (a-1), (a-2), (a-3), |
|
(a-6), (a-8), (b), (c), (d), (e), (f), (g), (g-1), and (h), Section |
|
13.254, Water Code, as effective September 1, 2011, are amended to |
|
read as follows: |
|
(a) The utility commission at any time after notice and |
|
hearing may revoke or amend any certificate of public convenience |
|
and necessity with the written consent of the certificate holder or |
|
if it finds that: |
|
(1) the certificate holder has never provided, is no |
|
longer providing, is incapable of providing, or has failed to |
|
provide continuous and adequate service in the area, or part of the |
|
area, covered by the certificate; |
|
(2) in an affected county as defined in Section |
|
16.341, the cost of providing service by the certificate holder is |
|
so prohibitively expensive as to constitute denial of service, |
|
provided that, for commercial developments or for residential |
|
developments started after September 1, 1997, in an affected county |
|
as defined in Section 16.341, the fact that the cost of obtaining |
|
service from the currently certificated retail public utility makes |
|
the development economically unfeasible does not render such cost |
|
prohibitively expensive in the absence of other relevant factors; |
|
(3) the certificate holder has agreed in writing to |
|
allow another retail public utility to provide service within its |
|
service area, except for an interim period, without amending its |
|
certificate; or |
|
(4) the certificate holder has failed to file a cease |
|
and desist action pursuant to Section 13.252 within 180 days of the |
|
date that it became aware that another retail public utility was |
|
providing service within its service area, unless the certificate |
|
holder demonstrates good cause for its failure to file such action |
|
within the 180 days. |
|
(a-1) As an alternative to decertification under Subsection |
|
(a), the owner of a tract of land that is at least 50 acres and that |
|
is not in a platted subdivision actually receiving water or sewer |
|
service may petition the utility commission under this subsection |
|
for expedited release of the area from a certificate of public |
|
convenience and necessity so that the area may receive service from |
|
another retail public utility. The fact that a certificate holder |
|
is a borrower under a federal loan program is not a bar to a request |
|
under this subsection for the release of the petitioner's land and |
|
the receipt of services from an alternative provider. On the day |
|
the petitioner submits the petition to the utility commission, the |
|
petitioner shall send, via certified mail, a copy of the petition to |
|
the certificate holder, who may submit information to the utility |
|
commission to controvert information submitted by the petitioner. |
|
The petitioner must demonstrate that: |
|
(1) a written request for service, other than a |
|
request for standard residential or commercial service, has been |
|
submitted to the certificate holder, identifying: |
|
(A) the area for which service is sought; |
|
(B) the timeframe within which service is needed |
|
for current and projected service demands in the area; |
|
(C) the level and manner of service needed for |
|
current and projected service demands in the area; |
|
(D) the approximate cost for the alternative |
|
provider to provide the service at the same level and manner that is |
|
requested from the certificate holder; |
|
(E) the flow and pressure requirements and |
|
specific infrastructure needs, including line size and system |
|
capacity for the required level of fire protection requested; and |
|
(F) any additional information requested by the |
|
certificate holder that is reasonably related to determination of |
|
the capacity or cost for providing the service; |
|
(2) the certificate holder has been allowed at least |
|
90 calendar days to review and respond to the written request and |
|
the information it contains; |
|
(3) the certificate holder: |
|
(A) has refused to provide the service; |
|
(B) is not capable of providing the service on a |
|
continuous and adequate basis within the timeframe, at the level, |
|
at the approximate cost that the alternative provider is capable of |
|
providing for a comparable level of service, or in the manner |
|
reasonably needed or requested by current and projected service |
|
demands in the area; or |
|
(C) conditions the provision of service on the |
|
payment of costs not properly allocable directly to the |
|
petitioner's service request, as determined by the utility |
|
commission; and |
|
(4) the alternate retail public utility from which the |
|
petitioner will be requesting service possesses the financial, |
|
managerial, and technical capability to provide continuous and |
|
adequate service within the timeframe, at the level, at the cost, |
|
and in the manner reasonably needed or requested by current and |
|
projected service demands in the area. |
|
(a-2) A landowner is not entitled to make the election |
|
described in Subsection (a-1) or (a-5) but is entitled to contest |
|
under Subsection (a) the involuntary certification of its property |
|
in a hearing held by the utility commission if the landowner's |
|
property is located: |
|
(1) within the boundaries of any municipality or the |
|
extraterritorial jurisdiction of a municipality with a population |
|
of more than 500,000 and the municipality or retail public utility |
|
owned by the municipality is the holder of the certificate; or |
|
(2) in a platted subdivision actually receiving water |
|
or sewer service. |
|
(a-3) Within 60 calendar days from the date the utility |
|
commission determines the petition filed pursuant to Subsection |
|
(a-1) to be administratively complete, the utility commission shall |
|
grant the petition unless the utility commission makes an express |
|
finding that the petitioner failed to satisfy the elements required |
|
in Subsection (a-1) and supports its finding with separate findings |
|
and conclusions for each element based solely on the information |
|
provided by the petitioner and the certificate holder. The utility |
|
commission may grant or deny a petition subject to terms and |
|
conditions specifically related to the service request of the |
|
petitioner and all relevant information submitted by the petitioner |
|
and the certificate holder. In addition, the utility commission |
|
may require an award of compensation as otherwise provided by this |
|
section. |
|
(a-6) The utility commission shall grant a petition |
|
received under Subsection (a-5) not later than the 60th day after |
|
the date the landowner files the petition. The utility commission |
|
may not deny a petition received under Subsection (a-5) based on the |
|
fact that a certificate holder is a borrower under a federal loan |
|
program. The utility commission may require an award of |
|
compensation by the petitioner to a decertified retail public |
|
utility that is the subject of a petition filed under Subsection |
|
(a-5) as otherwise provided by this section. |
|
(a-8) If a certificate holder has never made service |
|
available through planning, design, construction of facilities, or |
|
contractual obligations to serve the area a petitioner seeks to |
|
have released under Subsection (a-1), the utility commission is not |
|
required to find that the proposed alternative provider is capable |
|
of providing better service than the certificate holder, but only |
|
that the proposed alternative provider is capable of providing the |
|
requested service. |
|
(b) Upon written request from the certificate holder, the |
|
utility commission [executive director] may cancel the certificate |
|
of a utility or water supply corporation authorized by rule to |
|
operate without a certificate of public convenience and necessity |
|
under Section 13.242(c). |
|
(c) If the certificate of any retail public utility is |
|
revoked or amended, the utility commission may require one or more |
|
retail public utilities with their consent to provide service in |
|
the area in question. The order of the utility commission shall not |
|
be effective to transfer property. |
|
(d) A retail public utility may not in any way render retail |
|
water or sewer service directly or indirectly to the public in an |
|
area that has been decertified under this section without providing |
|
compensation for any property that the utility commission |
|
determines is rendered useless or valueless to the decertified |
|
retail public utility as a result of the decertification. |
|
(e) The determination of the monetary amount of |
|
compensation, if any, shall be determined at the time another |
|
retail public utility seeks to provide service in the previously |
|
decertified area and before service is actually provided. The |
|
utility commission shall ensure that the monetary amount of |
|
compensation is determined not later than the 90th calendar day |
|
after the date on which a retail public utility notifies the utility |
|
commission of its intent to provide service to the decertified |
|
area. |
|
(f) The monetary amount shall be determined by a qualified |
|
individual or firm serving as independent appraiser agreed upon by |
|
the decertified retail public utility and the retail public utility |
|
seeking to serve the area. The determination of compensation by the |
|
independent appraiser shall be binding on the utility commission. |
|
The costs of the independent appraiser shall be borne by the retail |
|
public utility seeking to serve the area. |
|
(g) For the purpose of implementing this section, the value |
|
of real property owned and utilized by the retail public utility for |
|
its facilities shall be determined according to the standards set |
|
forth in Chapter 21, Property Code, governing actions in eminent |
|
domain and the value of personal property shall be determined |
|
according to the factors in this subsection. The factors ensuring |
|
that the compensation to a retail public utility is just and |
|
adequate shall include: the amount of the retail public utility's |
|
debt allocable for service to the area in question; the value of the |
|
service facilities of the retail public utility located within the |
|
area in question; the amount of any expenditures for planning, |
|
design, or construction of service facilities that are allocable to |
|
service to the area in question; the amount of the retail public |
|
utility's contractual obligations allocable to the area in |
|
question; any demonstrated impairment of service or increase of |
|
cost to consumers of the retail public utility remaining after the |
|
decertification; the impact on future revenues lost from existing |
|
customers; necessary and reasonable legal expenses and |
|
professional fees; and other relevant factors. The utility |
|
commission shall adopt rules governing the evaluation of these |
|
factors. |
|
(g-1) If the retail public utilities cannot agree on an |
|
independent appraiser within 10 calendar days after the date on |
|
which the retail public utility notifies the utility commission of |
|
its intent to provide service to the decertified area, each retail |
|
public utility shall engage its own appraiser at its own expense, |
|
and each appraisal shall be submitted to the utility commission |
|
within 60 calendar days. After receiving the appraisals, the |
|
utility commission shall appoint a third appraiser who shall make a |
|
determination of the compensation within 30 days. The |
|
determination may not be less than the lower appraisal or more than |
|
the higher appraisal. Each retail public utility shall pay half the |
|
cost of the third appraisal. |
|
(h) A certificate holder that has land removed from its |
|
certificated service area in accordance with this section may not |
|
be required, after the land is removed, to provide service to the |
|
removed land for any reason, including the violation of law or |
|
utility commission rules by a water or sewer system of another |
|
person. |
|
SECTION 2.47. Subsections (a), (b), (c), (d), (e), (g-1), |
|
(k), (l), and (m), Section 13.255, Water Code, are amended to read |
|
as follows: |
|
(a) In the event that an area is incorporated or annexed by a |
|
municipality, either before or after the effective date of this |
|
section, the municipality and a retail public utility that provides |
|
water or sewer service to all or part of the area pursuant to a |
|
certificate of convenience and necessity may agree in writing that |
|
all or part of the area may be served by a municipally owned |
|
utility, by a franchised utility, or by the retail public utility. |
|
In this section, the phrase "franchised utility" shall mean a |
|
retail public utility that has been granted a franchise by a |
|
municipality to provide water or sewer service inside municipal |
|
boundaries. The agreement may provide for single or dual |
|
certification of all or part of the area, for the purchase of |
|
facilities or property, and for such other or additional terms that |
|
the parties may agree on. If a franchised utility is to serve the |
|
area, the franchised utility shall also be a party to the agreement. |
|
The executed agreement shall be filed with the utility commission, |
|
and the utility commission, on receipt of the agreement, shall |
|
incorporate the terms of the agreement into the respective |
|
certificates of convenience and necessity of the parties to the |
|
agreement. |
|
(b) If an agreement is not executed within 180 days after |
|
the municipality, in writing, notifies the retail public utility of |
|
its intent to provide service to the incorporated or annexed area, |
|
and if the municipality desires and intends to provide retail |
|
utility service to the area, the municipality, prior to providing |
|
service to the area, shall file an application with the utility |
|
commission to grant single certification to the municipally owned |
|
water or sewer utility or to a franchised utility. If an |
|
application for single certification is filed, the utility |
|
commission shall fix a time and place for a hearing and give notice |
|
of the hearing to the municipality and franchised utility, if any, |
|
and notice of the application and hearing to the retail public |
|
utility. |
|
(c) The utility commission shall grant single certification |
|
to the municipality. The utility commission shall 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 shall |
|
determine in its order the monetary amount that is adequate and just |
|
to compensate the retail public utility for such property. If the |
|
municipality in its application has requested the transfer of |
|
specified property of the retail public utility to the municipality |
|
or to a franchised utility, the utility commission shall also |
|
determine in its order the adequate and just compensation to be paid |
|
for such property pursuant to the provisions of this section, |
|
including an award for damages to property remaining in the |
|
ownership of the retail public utility after single certification. |
|
The order of the utility commission shall not be effective to |
|
transfer property. A transfer of property may only be obtained |
|
under this section by a court judgment rendered pursuant to |
|
Subsection (d) or (e) [of this section]. The grant of single |
|
certification by the utility commission shall 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). If the court judgment |
|
provides that the retail public utility is not entitled to any |
|
compensation, the grant of single certification shall go into |
|
effect when the court judgment becomes final. The municipality or |
|
franchised utility must provide to each customer of the retail |
|
public utility being acquired an individual written notice within |
|
60 days after the effective date for the transfer specified in the |
|
court judgment. The notice must clearly advise the customer of the |
|
identity of the new service provider, the reason for the transfer, |
|
the rates to be charged by the new service provider, and the |
|
effective date of those rates. |
|
(d) In the event the final order of the utility commission |
|
is not appealed within 30 days, the municipality may request the |
|
district court of Travis County to enter a judgment consistent with |
|
the order of the utility commission. In such event, the court shall |
|
render a judgment that: |
|
(1) transfers to the municipally owned utility or |
|
franchised utility title to property to be transferred to the |
|
municipally owned utility or franchised utility as delineated by |
|
the utility commission's final order and property determined by the |
|
utility commission to be rendered useless or valueless by the |
|
granting of single certification; and |
|
(2) orders payment to the retail public utility of |
|
adequate and just compensation for the property as determined by |
|
the utility commission in its final order. |
|
(e) Any party that is aggrieved by a final order of the |
|
utility commission under this section may file an appeal with the |
|
district court of Travis County within 30 days after the order |
|
becomes final. The hearing in such an appeal before the district |
|
court shall be by trial de novo on all issues. After the hearing, if |
|
the court determines that the municipally owned utility or |
|
franchised utility is entitled to single certification under the |
|
provisions of this section, the court shall enter a judgment that: |
|
(1) transfers to the municipally owned utility or |
|
franchised utility title to property requested by the municipality |
|
to be transferred to the municipally owned utility or franchised |
|
utility and located within the singly certificated area and |
|
property determined by the court or jury to be rendered useless or |
|
valueless by the granting of single certification; and |
|
(2) orders payment in accordance with Subsection (g) |
|
[of this section] to the retail public utility of adequate and just |
|
compensation for the property transferred and for the property |
|
damaged as determined by the court or jury. |
|
(g-1) The utility commission shall adopt rules governing |
|
the evaluation of the factors to be considered in determining the |
|
monetary compensation under Subsection (g). The utility commission |
|
by rule shall adopt procedures to ensure that the total |
|
compensation to be paid to a retail public utility under Subsection |
|
(g) is determined not later than the 90th calendar day after the |
|
date on which the utility commission determines that the |
|
municipality's application is administratively complete. |
|
(k) The following conditions apply when a municipality or |
|
franchised utility makes an application to acquire the service area |
|
or facilities of a retail public utility described in Subsection |
|
(j)(2): |
|
(1) the utility commission or court must determine |
|
that the service provided by the retail public utility is |
|
substandard or its rates are unreasonable in view of the reasonable |
|
expenses of the utility; |
|
(2) if the municipality abandons its application, the |
|
court or the utility commission is authorized to award to the retail |
|
public utility its reasonable expenses related to the proceeding |
|
hereunder, including attorney fees; and |
|
(3) unless otherwise agreed by the retail public |
|
utility, the municipality must take the entire utility property of |
|
the retail public utility in a proceeding hereunder. |
|
(l) For an area incorporated by a municipality, the |
|
compensation provided under Subsection (g) shall be determined by a |
|
qualified individual or firm to serve as independent appraiser, who |
|
shall be selected by the affected retail public utility, and the |
|
costs of the appraiser shall be paid by the municipality. For an |
|
area annexed by a municipality, the compensation provided under |
|
Subsection (g) shall be determined by a qualified individual or |
|
firm to which the municipality and the retail public utility agree |
|
to serve as independent appraiser. If the retail public utility and |
|
the municipality are unable to agree on a single individual or firm |
|
to serve as the independent appraiser before the 11th day after the |
|
date the retail public utility or municipality notifies the other |
|
party of the impasse, the retail public utility and municipality |
|
each shall appoint a qualified individual or firm to serve as |
|
independent appraiser. On or before the 10th business day after the |
|
date of their appointment, the independent appraisers shall meet to |
|
reach an agreed determination of the amount of compensation. If the |
|
appraisers are unable to agree on a determination before the 16th |
|
business day after the date of their first meeting under this |
|
subsection, the retail public utility or municipality may petition |
|
the utility commission or a person the utility commission |
|
designates for the purpose to appoint a third qualified independent |
|
appraiser to reconcile the appraisals of the two originally |
|
appointed appraisers. The determination of the third appraiser may |
|
not be less than the lesser or more than the greater of the two |
|
original appraisals. The costs of the independent appraisers for |
|
an annexed area shall be shared equally by the retail public utility |
|
and the municipality. The determination of compensation under this |
|
subsection is binding on the utility commission. |
|
(m) The utility commission shall deny an application for |
|
single certification by a municipality that fails to demonstrate |
|
compliance with the commission's minimum requirements for public |
|
drinking water systems. |
|
SECTION 2.48. Section 13.2551, Water Code, is amended to |
|
read as follows: |
|
Sec. 13.2551. COMPLETION OF DECERTIFICATION. (a) As a |
|
condition to decertification or single certification under Section |
|
13.254 or 13.255, and on request by an affected retail public |
|
utility, the utility commission may order: |
|
(1) the retail public utility seeking to provide |
|
service to a decertified area to serve the entire service area of |
|
the retail public utility that is being decertified; and |
|
(2) the transfer of the entire certificate of public |
|
convenience and necessity of a partially decertified retail public |
|
utility to the retail public utility seeking to provide service to |
|
the decertified area. |
|
(b) The utility commission shall order service to the entire |
|
area under Subsection (a) if the utility commission finds that the |
|
decertified retail public utility will be unable to provide |
|
continuous and adequate service at an affordable cost to the |
|
remaining customers. |
|
(c) The utility commission shall require the retail public |
|
utility seeking to provide service to the decertified area to |
|
provide continuous and adequate service to the remaining customers |
|
at a cost comparable to the cost of that service to its other |
|
customers and shall establish the terms under which the service |
|
must be provided. The terms may include: |
|
(1) transferring debt and other contract obligations; |
|
(2) transferring real and personal property; |
|
(3) establishing interim service rates for affected |
|
customers during specified times; and |
|
(4) other provisions necessary for the just and |
|
reasonable allocation of assets and liabilities. |
|
(d) The retail public utility seeking decertification shall |
|
not charge the affected customers any transfer fee or other fee to |
|
obtain service other than the retail public utility's usual and |
|
customary rates for monthly service or the interim rates set by the |
|
utility commission, if applicable. |
|
(e) The utility commission shall not order compensation to |
|
the decertificated retail utility if service to the entire service |
|
area is ordered under this section. |
|
SECTION 2.49. Subsections (e), (i), (r), and (s), Section |
|
13.257, Water Code, are amended to read as follows: |
|
(e) The notice must be given to the prospective purchaser |
|
before the execution of a binding contract of purchase and sale. |
|
The notice may be given separately or as an addendum to or paragraph |
|
of the contract. If the seller fails to provide the notice required |
|
by this section, the purchaser may terminate the contract. If the |
|
seller provides the notice at or before the closing of the purchase |
|
and sale contract and the purchaser elects to close even though the |
|
notice was not timely provided before the execution of the |
|
contract, it is conclusively presumed that the purchaser has waived |
|
all rights to terminate the contract and recover damages or pursue |
|
other remedies or rights under this section. Notwithstanding any |
|
provision of this section to the contrary, a seller, title |
|
insurance company, real estate broker, or examining attorney, or an |
|
agent, representative, or person acting on behalf of the seller, |
|
company, broker, or attorney, is not liable for damages under |
|
Subsection (m) or (n) or liable for any other damages to any person |
|
for: |
|
(1) failing to provide the notice required by this |
|
section to a purchaser before the execution of a binding contract of |
|
purchase and sale or at or before the closing of the purchase and |
|
sale contract if: |
|
(A) the utility service provider did not file the |
|
map of the certificated service area in the real property records of |
|
the county in which the service area is located and with the utility |
|
commission depicting the boundaries of the service area of the |
|
utility service provider as shown in the real property records of |
|
the county in which the service area is located; and |
|
(B) the utility commission did not maintain an |
|
accurate map of the certificated service area of the utility |
|
service provider as required by this chapter; or |
|
(2) unintentionally providing a notice required by |
|
this section that is incorrect under the circumstances before the |
|
execution of a binding contract of purchase and sale or at or before |
|
the closing of the purchase and sale contract. |
|
(i) If the notice is given at closing as provided by |
|
Subsection (g), a purchaser, or the purchaser's heirs, successors, |
|
or assigns, may not maintain an action for damages or maintain an |
|
action against a seller, title insurance company, real estate |
|
broker, or lienholder, or any agent, representative, or person |
|
acting on behalf of the seller, company, broker, or lienholder, by |
|
reason of the seller's use of the information filed with the utility |
|
commission by the utility service provider or the seller's use of |
|
the map of the certificated service area of the utility service |
|
provider filed in the real property records to determine whether |
|
the property to be purchased is within the certificated service |
|
area of the utility service provider. An action may not be |
|
maintained against a title insurance company for the failure to |
|
disclose that the described real property is included within the |
|
certificated service area of a utility service provider if the |
|
utility service provider did not file in the real property records |
|
or with the utility commission the map of the certificated service |
|
area. |
|
(r) A utility service provider shall: |
|
(1) record in the real property records of each county |
|
in which the service area or a portion of the service area is |
|
located a certified copy of the map of the certificate of public |
|
convenience and necessity and of any amendment to the certificate |
|
as contained in the utility commission's records, and a boundary |
|
description of the service area by: |
|
(A) a metes and bounds survey certified by a |
|
licensed state land surveyor or a registered professional land |
|
surveyor; |
|
(B) the Texas State Plane Coordinate System; |
|
(C) verifiable landmarks, including a road, |
|
creek, or railroad line; or |
|
(D) if a recorded plat of the area exists, lot and |
|
block number; and |
|
(2) submit to the executive director of the utility |
|
commission evidence of the recording. |
|
(s) Each county shall accept and file in its real property |
|
records a utility service provider's map presented to the county |
|
clerk under this section if the map meets filing requirements, does |
|
not exceed 11 inches by 17 inches in size, and is accompanied by the |
|
appropriate fee. The recording required by this section must be |
|
completed not later than the 31st day after the date a utility |
|
service provider receives a final order from the utility commission |
|
granting an application for a new certificate or for an amendment to |
|
a certificate that results in a change in the utility service |
|
provider's service area. |
|
SECTION 2.50. Subsections (a) through (g), Section 13.301, |
|
Water Code, are amended to read as follows: |
|
(a) A utility or a water supply or sewer service |
|
corporation, on or before the 120th day before the effective date of |
|
a sale, acquisition, lease, or rental of a water or sewer system |
|
that is required by law to possess a certificate of public |
|
convenience and necessity or the effective date of a merger or |
|
consolidation with such a utility or water supply or sewer service |
|
corporation, shall: |
|
(1) file a written application with the utility |
|
commission; and |
|
(2) unless public notice is waived by the executive |
|
director of the utility commission for good cause shown, give |
|
public notice of the action. |
|
(b) The utility commission may require that the person |
|
purchasing or acquiring the water or sewer system demonstrate |
|
adequate financial, managerial, and technical capability for |
|
providing continuous and adequate service to the requested area and |
|
any areas currently certificated to the person. |
|
(c) If the person purchasing or acquiring the water or sewer |
|
system cannot demonstrate adequate financial capability, the |
|
utility commission may require that the person provide a bond or |
|
other financial assurance in a form and amount specified by the |
|
utility commission to ensure continuous and adequate utility |
|
service is provided. |
|
(d) The utility commission shall, with or without a public |
|
hearing, investigate the sale, acquisition, lease, or rental to |
|
determine whether the transaction will serve the public interest. |
|
(e) Before the expiration of the 120-day notification |
|
period, the executive director of the utility commission shall |
|
notify all known parties to the transaction and the Office of Public |
|
Utility Counsel whether [of] the executive director of the utility |
|
commission will [director's decision whether to] request that the |
|
utility commission hold a public hearing to determine if the |
|
transaction will serve the public interest. The executive director |
|
of the utility commission may request a hearing if: |
|
(1) the application filed with the utility commission |
|
or the public notice was improper; |
|
(2) the person purchasing or acquiring the water or |
|
sewer system has not demonstrated adequate financial, managerial, |
|
and technical capability for providing continuous and adequate |
|
service to the service area being acquired and to any areas |
|
currently certificated to the person; |
|
(3) the person or an affiliated interest of the person |
|
purchasing or acquiring the water or sewer system has a history of: |
|
(A) noncompliance with the requirements of the |
|
utility commission, the commission, or the [Texas] Department of |
|
State Health Services; or |
|
(B) continuing mismanagement or misuse of |
|
revenues as a utility service provider; |
|
(4) the person purchasing or acquiring the water or |
|
sewer system cannot demonstrate the financial ability to provide |
|
the necessary capital investment to ensure the provision of |
|
continuous and adequate service to the customers of the water or |
|
sewer system; or |
|
(5) there are concerns that the transaction may not |
|
serve the public interest, after the application of the |
|
considerations provided by Section 13.246(c) for determining |
|
whether to grant a certificate of convenience and necessity. |
|
(f) Unless the executive director of the utility commission |
|
requests that a public hearing be held, the sale, acquisition, |
|
lease, or rental may be completed as proposed: |
|
(1) at the end of the 120-day period; or |
|
(2) at any time after the executive director of the |
|
utility commission notifies the utility or water supply or sewer |
|
service corporation that a hearing will not be requested. |
|
(g) If a hearing is requested or if the utility or water |
|
supply or sewer service corporation fails to make the application |
|
as required or to provide public notice, the sale, acquisition, |
|
lease, or rental may not be completed unless the utility commission |
|
determines that the proposed transaction serves the public |
|
interest. |
|
SECTION 2.51. Section 13.302, Water Code, is amended to |
|
read as follows: |
|
Sec. 13.302. PURCHASE OF VOTING STOCK IN ANOTHER PUBLIC |
|
UTILITY: REPORT. (a) A utility may not purchase voting stock in |
|
another utility doing business in this state and a person may not |
|
acquire a controlling interest in a utility doing business in this |
|
state unless the person or utility files a written application with |
|
the utility commission not later than the 61st day before the date |
|
on which the transaction is to occur. |
|
(b) The utility commission may require that a person |
|
acquiring a controlling interest in a utility demonstrate adequate |
|
financial, managerial, and technical capability for providing |
|
continuous and adequate service to the requested area and any areas |
|
currently certificated to the person. |
|
(c) If the person acquiring a controlling interest cannot |
|
demonstrate adequate financial capability, the utility commission |
|
may require that the person provide a bond or other financial |
|
assurance in a form and amount specified by the utility commission |
|
to ensure continuous and adequate utility service is provided. |
|
(d) The executive director of the utility commission may |
|
request that the utility commission hold a public hearing on the |
|
transaction if the executive director of the utility commission |
|
believes that a criterion prescribed by Section 13.301(e) applies. |
|
(e) Unless the executive director of the utility commission |
|
requests that a public hearing be held, the purchase or acquisition |
|
may be completed as proposed: |
|
(1) at the end of the 60-day period; or |
|
(2) at any time after the executive director of the |
|
utility commission notifies the person or utility that a hearing |
|
will not be requested. |
|
(f) If a hearing is requested or if the person or utility |
|
fails to make the application to the utility commission as |
|
required, the purchase or acquisition may not be completed unless |
|
the utility commission determines that the proposed transaction |
|
serves the public interest. A purchase or acquisition that is not |
|
completed in accordance with the provisions of this section is |
|
void. |
|
SECTION 2.52. Section 13.303, Water Code, is amended to |
|
read as follows: |
|
Sec. 13.303. LOANS TO STOCKHOLDERS: REPORT. A utility may |
|
not loan money, stocks, bonds, notes, or other evidences of |
|
indebtedness to any corporation or person owning or holding |
|
directly or indirectly any stock of the utility unless the utility |
|
reports the transaction to the utility commission within 60 days |
|
after the date of the transaction. |
|
SECTION 2.53. Section 13.304, Water Code, is amended to |
|
read as follows: |
|
Sec. 13.304. FORECLOSURE REPORT. (a) A utility that |
|
receives notice that all or a portion of the utility's facilities or |
|
property used to provide utility service are being posted for |
|
foreclosure shall notify the utility commission and the commission |
|
in writing of that fact not later than the 10th day after the date on |
|
which the utility receives the notice. |
|
(b) A financial institution that forecloses on a utility or |
|
on any part of the utility's facilities or property that are used to |
|
provide utility service is not required to provide the 120-day |
|
notice prescribed by Section 13.301, but shall provide written |
|
notice to the utility commission and the commission before the 30th |
|
day preceding the date on which the foreclosure is completed. |
|
(c) The financial institution may operate the utility for an |
|
interim period prescribed by utility commission rule before |
|
transferring or otherwise obtaining a certificate of convenience |
|
and necessity. A financial institution that operates a utility |
|
during an interim period under this subsection is subject to each |
|
utility commission rule to which the utility was subject and in the |
|
same manner. |
|
SECTION 2.54. Section 13.341, Water Code, is amended to |
|
read as follows: |
|
Sec. 13.341. JURISDICTION OVER AFFILIATED INTERESTS. The |
|
utility commission has jurisdiction over affiliated interests |
|
having transactions with utilities under the jurisdiction of the |
|
utility commission to the extent of access to all accounts and |
|
records of those affiliated interests relating to such |
|
transactions, including but in no way limited to accounts and |
|
records of joint or general expenses, any portion of which may be |
|
applicable to those transactions. |
|
SECTION 2.55. Section 13.342, Water Code, is amended to |
|
read as follows: |
|
Sec. 13.342. DISCLOSURE OF SUBSTANTIAL INTEREST IN VOTING |
|
SECURITIES. The utility commission may require the disclosure of |
|
the identity and respective interests of every owner of any |
|
substantial interest in the voting securities of any utility or its |
|
affiliated interest. One percent or more is a substantial interest |
|
within the meaning of this section. |
|
SECTION 2.56. Subsection (a), Section 13.343, Water Code, |
|
is amended to read as follows: |
|
(a) The owner of a utility that supplies retail water |
|
service may not contract to purchase from an affiliated supplier |
|
wholesale water service for any of that owner's systems unless: |
|
(1) the wholesale service is provided for not more |
|
than 90 days to remedy an emergency condition, as defined by utility |
|
commission or commission rule; or |
|
(2) the executive director of the utility commission |
|
determines that the utility cannot obtain wholesale water service |
|
from another source at a lower cost than from the affiliate. |
|
SECTION 2.57. Section 13.381, Water Code, is amended to |
|
read as follows: |
|
Sec. 13.381. RIGHT TO JUDICIAL REVIEW; EVIDENCE. Any party |
|
to a proceeding before the utility commission or the commission is |
|
entitled to judicial review under the substantial evidence rule. |
|
SECTION 2.58. Subsection (a), Section 13.382, Water Code, |
|
is amended to read as follows: |
|
(a) Any party represented by counsel who alleges that |
|
existing rates are excessive or that rates prescribed by the |
|
utility commission are excessive and who is a prevailing party in |
|
proceedings for review of a utility commission order or decision |
|
may in the same action recover against the regulation fund |
|
reasonable fees for attorneys and expert witnesses and other costs |
|
incurred by him before the utility commission and the court. The |
|
amount of the attorney's fees shall be fixed by the court. |
|
SECTION 2.59. Section 13.411, Water Code, is amended to |
|
read as follows: |
|
Sec. 13.411. ACTION TO ENJOIN OR REQUIRE COMPLIANCE. |
|
(a) If the utility commission or the commission has reason to |
|
believe that any retail public utility or any other person or |
|
corporation is engaged in or is about to engage in any act in |
|
violation of this chapter or of any order or rule of the utility |
|
commission or the commission entered or adopted under this chapter |
|
or that any retail public utility or any other person or corporation |
|
is failing to comply with this chapter or with any rule or order, |
|
the attorney general on request of the utility commission or the |
|
commission, in addition to any other remedies provided in this |
|
chapter, shall bring an action in a court of competent jurisdiction |
|
in the name of and on behalf of the utility commission or the |
|
commission against the retail public utility or other person or |
|
corporation to enjoin the commencement or continuation of any act |
|
or to require compliance with this chapter or the rule or order. |
|
(b) If the executive director of the utility commission or |
|
the executive director of the commission has reason to believe that |
|
the failure of the owner or operator of a water utility to properly |
|
operate, maintain, or provide adequate facilities presents an |
|
imminent threat to human health or safety, the executive director |
|
of the utility commission or the executive director of the |
|
commission shall immediately: |
|
(1) notify the utility's representative; and |
|
(2) initiate enforcement action consistent with: |
|
(A) this subchapter; and |
|
(B) procedural rules adopted by the utility |
|
commission or the commission. |
|
SECTION 2.60. Section 13.4115, Water Code, is amended to |
|
read as follows: |
|
Sec. 13.4115. ACTION TO REQUIRE ADJUSTMENT TO CONSUMER |
|
CHARGE; PENALTY. In regard to a customer complaint arising out of a |
|
charge made by a public utility, if the utility commission [the
|
|
executive director] finds that the utility has failed to make the |
|
proper adjustment to the customer's bill after the conclusion of |
|
the complaint process established by the utility commission, the |
|
utility commission may issue an order requiring the utility to make |
|
the adjustment. Failure to comply with the order within 30 days of |
|
receiving the order is a violation for which the utility commission |
|
may impose an administrative penalty under Section 13.4151. |
|
SECTION 2.61. Subsections (a), (f), and (g), Section |
|
13.412, Water Code, are amended to read as follows: |
|
(a) At the request of the utility commission or the |
|
commission, the attorney general shall bring suit for the |
|
appointment of a receiver to collect the assets and carry on the |
|
business of a water or sewer utility that: |
|
(1) has abandoned operation of its facilities; |
|
(2) informs the utility commission or the commission |
|
that the owner is abandoning the system; |
|
(3) violates a final order of the utility commission |
|
or the commission; or |
|
(4) allows any property owned or controlled by it to be |
|
used in violation of a final order of the utility commission or the |
|
commission. |
|
(f) For purposes of this section and Section 13.4132, |
|
abandonment may include but is not limited to: |
|
(1) failure to pay a bill or obligation owed to a |
|
retail public utility or to an electric or gas utility with the |
|
result that the utility service provider has issued a notice of |
|
discontinuance of necessary services; |
|
(2) failure to provide appropriate water or wastewater |
|
treatment so that a potential health hazard results; |
|
(3) failure to adequately maintain facilities, |
|
resulting in potential health hazards, extended outages, or |
|
repeated service interruptions; |
|
(4) failure to provide customers adequate notice of a |
|
health hazard or potential health hazard; |
|
(5) failure to secure an alternative available water |
|
supply during an outage; |
|
(6) displaying a pattern of hostility toward or |
|
repeatedly failing to respond to the utility commission or the |
|
commission or the utility's customers; and |
|
(7) failure to provide the utility commission or the |
|
commission with adequate information on how to contact the utility |
|
for normal business and emergency purposes. |
|
(g) Notwithstanding Section 64.021, Civil Practice and |
|
Remedies Code, a receiver appointed under this section may seek |
|
[commission] approval from the utility commission and the |
|
commission to acquire the water or sewer utility's facilities and |
|
transfer the utility's certificate of convenience and necessity. |
|
The receiver must apply in accordance with Subchapter H. |
|
SECTION 2.62. Section 13.413, Water Code, is amended to |
|
read as follows: |
|
Sec. 13.413. PAYMENT OF COSTS OF RECEIVERSHIP. The |
|
receiver may, subject to the approval of the court and after giving |
|
notice to all interested parties, sell or otherwise dispose of all |
|
or part of the real or personal property of a water or sewer utility |
|
against which a proceeding has been brought under this subchapter |
|
to pay the costs incurred in the operation of the receivership. The |
|
costs include: |
|
(1) payment of fees to the receiver for his services; |
|
(2) payment of fees to attorneys, accountants, |
|
engineers, or any other person or entity that provides goods or |
|
services necessary to the operation of the receivership; and |
|
(3) payment of costs incurred in ensuring that any |
|
property owned or controlled by a water or sewer utility is not used |
|
in violation of a final order of the utility commission or the |
|
commission. |
|
SECTION 2.63. Section 13.4131, Water Code, is amended to |
|
read as follows: |
|
Sec. 13.4131. SUPERVISION OF CERTAIN UTILITIES. (a) The |
|
utility commission, after providing to the utility notice and an |
|
opportunity for a hearing, may place a utility under supervision |
|
for gross or continuing mismanagement, gross or continuing |
|
noncompliance with this chapter or a rule adopted under this |
|
chapter [commission rules], or noncompliance with an order issued |
|
under this chapter [commission orders]. |
|
(b) While supervising a utility, the utility commission may |
|
require the utility to abide by conditions and requirements |
|
prescribed by the utility commission, including: |
|
(1) management requirements; |
|
(2) additional reporting requirements; |
|
(3) restrictions on hiring, salary or benefit |
|
increases, capital investment, borrowing, stock issuance or |
|
dividend declarations, and liquidation of assets; and |
|
(4) a requirement that the utility place the utility's |
|
funds into an account in a financial institution approved by the |
|
utility commission and use of those funds shall be restricted to |
|
reasonable and necessary utility expenses. |
|
(c) While supervising a utility, the utility commission may |
|
require that the utility obtain [commission] approval from the |
|
utility commission before taking any action that may be restricted |
|
under Subsection (b) [of this section]. Any action or transaction |
|
which occurs without [commission] approval may be voided by the |
|
utility commission. |
|
SECTION 2.64. Subsections (a) and (c), Section 13.4133, |
|
Water Code, are amended to read as follows: |
|
(a) Notwithstanding the requirements of Section 13.187 [of
|
|
this code], the utility commission may authorize an emergency rate |
|
increase for a utility for which a person has been appointed under |
|
Section 13.4132 [of this code] or for which a receiver has been |
|
appointed under Section 13.412 [of this code] if the increase is |
|
necessary to ensure the provision of continuous and adequate |
|
services to the utility's customers. |
|
(c) The utility commission shall schedule a hearing to |
|
establish a final rate within 15 months after the date on which an |
|
emergency rate increase takes effect. The utility commission shall |
|
require the utility to provide notice of the hearing to each |
|
customer and to the Office of Public Utility Counsel. The |
|
additional revenues collected under an emergency rate increase are |
|
subject to refund if the utility commission finds that the rate |
|
increase was larger than necessary to ensure continuous and |
|
adequate service. |
|
SECTION 2.65. Subsections (a) and (c), Section 13.414, |
|
Water Code, are amended to read as follows: |
|
(a) Any retail public utility or affiliated interest that |
|
violates this chapter, fails to perform a duty imposed on it, or |
|
fails, neglects, or refuses to obey an order, rule, direction, or |
|
requirement of the utility commission or the commission or decree |
|
or judgment of a court is subject to a civil penalty of not less than |
|
$100 nor more than $5,000 for each violation. |
|
(c) The attorney general shall institute suit on his own |
|
initiative or at the request of, in the name of, and on behalf of the |
|
utility commission or the commission in a court of competent |
|
jurisdiction to recover the penalty under this section. |
|
SECTION 2.66. (a) If H.B. No. 2694, Acts of the 82nd |
|
Legislature, Regular Session, 2011, does not become law, Subsection |
|
(a), Section 13.4151, Water Code, is amended to read as follows: |
|
(a) If a person, affiliated interest, or entity subject to |
|
the jurisdiction of the utility commission or the commission |
|
violates this chapter or a rule or order adopted under this chapter, |
|
the utility commission or the commission, as applicable, may assess |
|
a penalty against that person, affiliated interest, or entity as |
|
provided by this section. The penalty may be in an amount not to |
|
exceed $500 a day. Each day a violation continues may be considered |
|
a separate violation. |
|
(b) If H.B. No. 2694, Acts of the 82nd Legislature, Regular |
|
Session, 2011, becomes law, Subsection (a), Section 13.4151, Water |
|
Code, as effective September 1, 2011, is amended to read as follows: |
|
(a) If a person, affiliated interest, or entity subject to |
|
the jurisdiction of the utility commission or the commission |
|
violates this chapter or a rule or order adopted under this chapter, |
|
the utility commission or the commission, as applicable, may assess |
|
a penalty against that person, affiliated interest, or entity as |
|
provided by this section. The penalty may be in an amount not to |
|
exceed $5,000 a day. Each day a violation continues may be |
|
considered a separate violation. |
|
SECTION 2.67. Subsections (b) through (k) and (m), Section |
|
13.4151, Water Code, are amended to read as follows: |
|
(b) In determining the amount of the penalty, the utility |
|
commission or the commission shall consider: |
|
(1) the nature, circumstances, extent, duration, and |
|
gravity of the prohibited acts or omissions; |
|
(2) with respect to the alleged violator: |
|
(A) the history and extent of previous |
|
violations; |
|
(B) the degree of culpability, including whether |
|
the violation was attributable to mechanical or electrical failures |
|
and whether the violation could have been reasonably anticipated |
|
and avoided; |
|
(C) the demonstrated good faith, including |
|
actions taken by the person, affiliated interest, or entity to |
|
correct the cause of the violation; |
|
(D) any economic benefit gained through the |
|
violation; and |
|
(E) the amount necessary to deter future |
|
violations; and |
|
(3) any other matters that justice requires. |
|
(c) If, after examination of a possible violation and the |
|
facts surrounding that possible violation, the executive director |
|
of the utility commission or the executive director of the |
|
commission concludes that a violation has occurred, the executive |
|
director of the utility commission or the executive director of the |
|
commission may issue a preliminary report stating the facts on |
|
which that conclusion is based, recommending that a penalty under |
|
this section be imposed on the person, affiliated interest, or |
|
retail public utility charged, and recommending the amount of that |
|
proposed penalty. The executive director of the utility commission |
|
or the executive director of the commission shall base the |
|
recommended amount of the proposed penalty on the factors provided |
|
by Subsection (b) [of this section], and shall analyze each factor |
|
for the benefit of the agency [commission]. |
|
(d) Not later than the 10th day after the date on which the |
|
report is issued, the executive director of the utility commission |
|
or the executive director of the commission shall give written |
|
notice of the report to the person, affiliated interest, or retail |
|
public utility charged with the violation. The notice shall |
|
include a brief summary of the charges, a statement of the amount of |
|
the penalty recommended, and a statement of the right of the person, |
|
affiliated interest, or retail public utility charged to a hearing |
|
on the occurrence of the violation, the amount of the penalty, or |
|
both. |
|
(e) Not later than the 20th day after the date on which |
|
notice is received, the person, affiliated interest, or retail |
|
public utility charged may give the agency [commission] written |
|
consent to the [executive director's] report described by |
|
Subsection (d), including the recommended penalty, or may make a |
|
written request for a hearing. |
|
(f) If the person, affiliated interest, or retail public |
|
utility charged with the violation consents to the penalty |
|
recommended in the report described by Subsection (d) [by the
|
|
executive director] or fails to timely respond to the notice, the |
|
utility commission or the commission by order shall assess that |
|
penalty or order a hearing to be held on the findings and |
|
recommendations in the [executive director's] report. If the |
|
utility commission or the commission assesses the penalty |
|
recommended by the report, the utility commission or the commission |
|
shall give written notice to the person, affiliated interest, or |
|
retail public utility charged of its decision. |
|
(g) If the person, affiliated interest, or retail public |
|
utility charged requests or the utility commission or the |
|
commission orders a hearing, the agency [commission] shall call a |
|
hearing and give notice of the hearing. As a result of the hearing, |
|
the agency [commission] by order may find that a violation has |
|
occurred and may assess a civil penalty, may find that a violation |
|
has occurred but that no penalty should be assessed, or may find |
|
that no violation has occurred. All proceedings under this |
|
subsection are subject to Chapter 2001, Government Code. In making |
|
any penalty decision, the agency [commission] shall analyze each of |
|
the factors provided by Subsection (b) [of this section]. |
|
(h) The utility commission or the commission shall give |
|
notice of its decision to the person, affiliated interest, or |
|
retail public utility charged, and if the agency [commission] finds |
|
|
|
agency [commission] shall give written notice to the person, |
|
affiliated interest, or retail public utility charged of its |
|
findings, of the amount of the penalty, and of the person's, |
|
affiliated interest's, or retail public utility's right to judicial |
|
review of the agency's [commission's] order. If the agency |
|
[commission] is required to give notice of a penalty under this |
|
subsection or Subsection (f) [of this section], the agency |
|
[commission] shall file notice of the agency's [its] decision in |
|
the Texas Register not later than the 10th day after the date on |
|
which the decision is adopted. |
|
(i) Within the 30-day period immediately following the day |
|
on which the agency's [commission's] order is final, as provided by |
|
Subchapter F, Chapter 2001, Government Code, the person, affiliated |
|
interest, or retail public utility charged with the penalty shall: |
|
(1) pay the penalty in full; or |
|
(2) if the person, affiliated interest, or retail |
|
public utility seeks judicial review of the fact of the violation, |
|
the amount of the penalty, or both: |
|
(A) forward the amount of the penalty to the |
|
agency [commission] for placement in an escrow account; or |
|
(B) post with the agency [commission] a |
|
supersedeas bond in a form approved by the agency [commission] for |
|
the amount of the penalty to be effective until all judicial review |
|
of the order or decision is final. |
|
(j) Failure to forward the money to or to post the bond with |
|
the agency [commission] within the time provided by Subsection (i) |
|
[of this section] constitutes a waiver of all legal rights to |
|
judicial review. If the person, affiliated interest, or retail |
|
public utility charged fails to forward the money or post the bond |
|
as provided by Subsection (i) [of this section], the agency |
|
[commission] or the executive director of the agency may forward |
|
the matter to the attorney general for enforcement. |
|
(k) Judicial review of the order or decision of the agency |
|
[commission] assessing the penalty shall be under the substantial |
|
evidence rule and may be instituted by filing a petition with a |
|
district court in Travis County, as provided by Subchapter G, |
|
Chapter 2001, Government Code. |
|
(m) Notwithstanding any other provision of law, the agency |
|
[commission] may compromise, modify, extend the time for payment |
|
of, or remit, with or without condition, any penalty imposed under |
|
this section. |
|
SECTION 2.68. Section 13.417, Water Code, is amended to |
|
read as follows: |
|
Sec. 13.417. CONTEMPT PROCEEDINGS. If any person or retail |
|
public utility fails to comply with any lawful order of the utility |
|
commission or the commission or with any subpoena or subpoena duces |
|
tecum or if any witness refuses to testify about any matter on which |
|
he may be lawfully interrogated, the utility commission or the |
|
commission may apply to any court of competent jurisdiction to |
|
compel obedience by proceedings for contempt. |
|
SECTION 2.69. Section 13.418, Water Code, is amended to |
|
read as follows: |
|
Sec. 13.418. DISPOSITION OF FINES AND PENALTIES; WATER |
|
UTILITY IMPROVEMENT ACCOUNT. (a) Fines and penalties collected |
|
under this chapter from a retail public utility that is not a public |
|
utility in other than criminal proceedings shall be [paid to the
|
|
commission and] deposited in the general revenue fund. |
|
(b) Fines and penalties collected from a public utility |
|
under this chapter in other than criminal proceedings shall be |
|
[paid to the commission and] deposited in the water utility |
|
improvement account as provided by Section 341.0485, Health and |
|
Safety Code. |
|
SECTION 2.70. Subdivision (7), Section 13.501, Water Code, |
|
is amended to read as follows: |
|
(7) "Multiple use facility" means commercial or |
|
industrial parks, office complexes, marinas, and others |
|
specifically identified in utility commission rules with five or |
|
more units. |
|
SECTION 2.71. Subsection (e), Section 13.502, Water Code, |
|
is amended to read as follows: |
|
(e) An owner of an apartment house, manufactured home rental |
|
community, or multiple use facility or a manager of a condominium |
|
may not change from submetered billing to allocated billing unless: |
|
(1) the executive director of the utility commission |
|
approves of the change in writing after a demonstration of good |
|
cause, including meter reading or billing problems that could not |
|
feasibly be corrected or equipment failures; and |
|
(2) the property owner meets rental agreement |
|
requirements established by the utility commission. |
|
SECTION 2.72. Subsections (a), (b), and (e), Section |
|
13.503, Water Code, are amended to read as follows: |
|
(a) The utility commission shall encourage submetering of |
|
individual rental or dwelling units by master meter operators or |
|
building owners to enhance the conservation of water resources. |
|
(b) Notwithstanding any other law, the utility commission |
|
shall adopt rules and standards under which an owner, operator, or |
|
manager of an apartment house, manufactured home rental community, |
|
or multiple use facility that is not individually metered for water |
|
for each rental or dwelling unit may install submetering equipment |
|
for each individual rental or dwelling unit for the purpose of |
|
fairly allocating the cost of each individual rental or dwelling |
|
unit's water consumption, including wastewater charges based on |
|
water consumption. In addition to other appropriate safeguards for |
|
the tenant, the rules shall require that, except as provided by this |
|
section, an apartment house owner, manufactured home rental |
|
community owner, multiple use facility owner, or condominium |
|
manager may not impose on the tenant any extra charges, over and |
|
above the cost per gallon and any other applicable taxes and |
|
surcharges that are charged by the retail public utility to the |
|
owner or manager, and that the rental unit or apartment house owner |
|
or manager shall maintain adequate records regarding submetering |
|
and make the records available for inspection by the tenant during |
|
reasonable business hours. The rules shall allow an owner or |
|
manager to charge a tenant a fee for late payment of a submetered |
|
water bill if the amount of the fee does not exceed five percent of |
|
the bill paid late. All submetering equipment is subject to the |
|
rules and standards established by the utility commission for |
|
accuracy, testing, and record keeping of meters installed by |
|
utilities and to the meter-testing requirements of Section 13.140 |
|
[of this code]. |
|
(e) The utility commission may authorize a building owner to |
|
use submetering equipment that relies on integrated radio based |
|
meter reading systems and remote registration in a building |
|
plumbing system using submeters that comply with nationally |
|
recognized plumbing standards and are as accurate as utility water |
|
meters in single application conditions. |
|
SECTION 2.73. Section 13.5031, Water Code, is amended to |
|
read as follows: |
|
Sec. 13.5031. NONSUBMETERING RULES. Notwithstanding any |
|
other law, the utility commission shall adopt rules and standards |
|
governing billing systems or methods used by manufactured home |
|
rental community owners, apartment house owners, condominium |
|
managers, or owners of other multiple use facilities for prorating |
|
or allocating among tenants nonsubmetered master metered utility |
|
service costs. In addition to other appropriate safeguards for the |
|
tenant, those rules shall require that: |
|
(1) the rental agreement contain a clear written |
|
description of the method of calculation of the allocation of |
|
nonsubmetered master metered utilities for the manufactured home |
|
rental community, apartment house, or multiple use facility; |
|
(2) the rental agreement contain a statement of the |
|
average manufactured home, apartment, or multiple use facility unit |
|
monthly bill for all units for any allocation of those utilities for |
|
the previous calendar year; |
|
(3) except as provided by this section, an owner or |
|
condominium manager may not impose additional charges on a tenant |
|
in excess of the actual charges imposed on the owner or condominium |
|
manager for utility consumption by the manufactured home rental |
|
community, apartment house, or multiple use facility; |
|
(4) the owner or condominium manager shall maintain |
|
adequate records regarding the utility consumption of the |
|
manufactured home rental community, apartment house, or multiple |
|
use facility, the charges assessed by the retail public utility, |
|
and the allocation of the utility costs to the tenants; |
|
(5) the owner or condominium manager shall maintain |
|
all necessary records concerning utility allocations, including |
|
the retail public utility's bills, and shall make the records |
|
available for inspection by the tenants during normal business |
|
hours; and |
|
(6) the owner or condominium manager may charge a |
|
tenant a fee for late payment of an allocated water bill if the |
|
amount of the fee does not exceed five percent of the bill paid |
|
late. |
|
SECTION 2.74. Section 13.505, Water Code, is amended to |
|
read as follows: |
|
Sec. 13.505. ENFORCEMENT. In addition to the enforcement |
|
provisions contained in Subchapter K [of this chapter], if an |
|
apartment house owner, condominium manager, manufactured home |
|
rental community owner, or other multiple use facility owner |
|
violates a rule of the utility commission regarding submetering of |
|
utility service consumed exclusively within the tenant's dwelling |
|
unit or multiple use facility unit or nonsubmetered master metered |
|
utility costs, the tenant may recover three times the amount of any |
|
overcharge, a civil penalty equal to one month's rent, reasonable |
|
attorney's fees, and court costs from the owner or condominium |
|
manager. However, an owner of an apartment house, manufactured |
|
home rental community, or other multiple use facility or |
|
condominium manager is not liable for a civil penalty if the owner |
|
or condominium manager proves the violation was a good faith, |
|
unintentional mistake. |
|
SECTION 2.75. Section 13.512, Water Code, is amended to |
|
read as follows: |
|
Sec. 13.512. AUTHORITY TO ENTER INTO PRIVATIZATION |
|
CONTRACTS. Any eligible city is authorized to enter into |
|
privatization contracts if such action is recommended by the board |
|
of utility trustees and authorized by the governing body of the |
|
eligible city pursuant to an ordinance. Any privatization contract |
|
entered into prior to the effective date of this Act is validated, |
|
ratified, and approved. Each eligible city shall file a copy of its |
|
privatization contract with the utility commission, for |
|
information purposes only, within 60 days of execution or the |
|
effective date of this Act, whichever is later. |
|
SECTION 2.76. Section 13.513, Water Code, is amended to |
|
read as follows: |
|
Sec. 13.513. ELECTION BY ELIGIBLE CITY TO EXEMPT SERVICE |
|
PROVIDER FROM UTILITY COMMISSION JURISDICTION. A service provider |
|
shall not constitute a "water and sewer utility," a "public |
|
utility," a "utility," or a "retail public utility" within the |
|
meaning of Chapter 13 as a result of entering into or performing a |
|
privatization contract, if the governing body of the eligible city |
|
shall so elect by ordinance and provide notice thereof in writing to |
|
the utility commission; provided, however, this provision shall not |
|
affect the application of Chapter 13 to an eligible city itself. |
|
Notwithstanding anything contained in this section, any service |
|
provider who seeks to extend or render sewer service to any person |
|
or municipality other than, or in addition to, an eligible city may |
|
be a "public utility" for the purposes of Chapter 13 with respect to |
|
such other person or municipality. |
|
SECTION 2.77. Subsection (a), Section 5.013, Water Code, is |
|
amended to read as follows: |
|
(a) The commission has general jurisdiction over: |
|
(1) water and water rights including the issuance of |
|
water rights permits, water rights adjudication, cancellation of |
|
water rights, and enforcement of water rights; |
|
(2) continuing supervision over districts created |
|
under Article III, Sections 52(b)(1) and (2), and Article XVI, |
|
Section 59, of the Texas Constitution; |
|
(3) the state's water quality program including |
|
issuance of permits, enforcement of water quality rules, standards, |
|
orders, and permits, and water quality planning; |
|
(4) the determination of the feasibility of certain |
|
federal projects; |
|
(5) the adoption and enforcement of rules and |
|
performance of other acts relating to the safe construction, |
|
maintenance, and removal of dams; |
|
(6) conduct of the state's hazardous spill prevention |
|
and control program; |
|
(7) the administration of the state's program relating |
|
to inactive hazardous substance, pollutant, and contaminant |
|
disposal facilities; |
|
(8) the administration of a portion of the state's |
|
injection well program; |
|
(9) the administration of the state's programs |
|
involving underground water and water wells and drilled and mined |
|
shafts; |
|
(10) the state's responsibilities relating to regional |
|
waste disposal; |
|
(11) the responsibilities assigned to the commission |
|
by Chapters 361, 363, 382, and 401, Health and Safety Code; and |
|
(12) [administration of the state's water rate program
|
|
under Chapter 13 of this code; and
|
|
[(13)] any other areas assigned to the commission by |
|
this code and other laws of this state. |
|
SECTION 2.78. (a) On June 1, 2012, the following are |
|
transferred from the Texas Commission on Environmental Quality to |
|
the Public Utility Commission of Texas: |
|
(1) the powers, duties, functions, programs, and |
|
activities of the Texas Commission on Environmental Quality |
|
relating to the economic regulation of water and sewer utilities, |
|
including the issuance and transfer of certificates of convenience |
|
and necessity, the determination of rates, and the administration |
|
of hearings and proceedings involving those matters, under Chapter |
|
13, Water Code, as provided by this article; |
|
(2) any obligations and contracts of the Texas |
|
Commission on Environmental Quality that are directly related to |
|
implementing a power, duty, function, program, or activity |
|
transferred under this article; and |
|
(3) all property and records in the custody of the |
|
Texas Commission on Environmental Quality that are related to a |
|
power, duty, function, program, or activity transferred under this |
|
article and all funds appropriated by the legislature for that |
|
power, duty, function, program, or activity. |
|
(b) The Texas Commission on Environmental Quality and the |
|
Public Utility Commission of Texas shall enter into a memorandum of |
|
understanding that: |
|
(1) identifies in detail the applicable powers and |
|
duties that are transferred by this article; |
|
(2) establishes a plan for the identification and |
|
transfer of the records, personnel, property, and unspent |
|
appropriations of the Texas Commission on Environmental Quality |
|
that are used for purposes of the commission's powers and duties |
|
directly related to the regulation of water and sewer utilities |
|
under Chapter 13, Water Code, as amended by this article; and |
|
(3) establishes a plan for the transfer of all pending |
|
applications, hearings, rulemaking proceedings, and orders |
|
relating to the economic regulation of water and sewer utilities |
|
under Chapter 13, Water Code, as amended by this article, from the |
|
Texas Commission on Environmental Quality to the Public Utility |
|
Commission of Texas. |
|
(c) The memorandum of understanding described by this |
|
section is not required to be adopted by rule under Section 5.104, |
|
Water Code. |
|
(d) The executive directors of the Texas Commission on |
|
Environmental Quality and the Public Utility Commission of Texas |
|
may agree in the memorandum of understanding under this section to |
|
transfer to the Public Utility Commission of Texas any personnel of |
|
the Texas Commission on Environmental Quality whose functions |
|
predominantly involve powers, duties, obligations, functions, and |
|
activities related to the regulation of water and sewer utilities |
|
under Chapter 13, Water Code, as amended by this article. |
|
(e) The Texas Commission on Environmental Quality and the |
|
Public Utility Commission of Texas shall appoint a transition team |
|
to accomplish the purposes of this section. The transition team |
|
shall establish guidelines on how the two agencies will cooperate |
|
regarding: |
|
(1) meeting federal drinking water standards; |
|
(2) maintaining adequate supplies of water; |
|
(3) meeting established design criteria for |
|
wastewater treatment plants; |
|
(4) demonstrating the economic feasibility of |
|
regionalization; and |
|
(5) serving the needs of economically distressed |
|
areas. |
|
(f) A rule, form, policy, procedure, or decision of the |
|
Texas Commission on Environmental Quality related to a power, duty, |
|
function, program, or activity transferred under this article |
|
continues in effect as a rule, form, policy, procedure, or decision |
|
of the Public Utility Commission of Texas and remains in effect |
|
until amended or replaced by that agency. |
|
(g) The memorandum required by this section must be |
|
completed by April 1, 2012. |
|
(h) The Public Utility Commission of Texas and the Texas |
|
Commission on Environmental Quality shall adopt rules to implement |
|
the changes in law made by this article to Chapter 13, Water Code, |
|
not later than November 1, 2012. |
|
SECTION 2.79. (a) The Public Utility Commission of Texas |
|
shall conduct a comparative analysis of the ratemaking authority of |
|
the commission before the effective date of this Act and the |
|
ratemaking authority of the commission after the transition |
|
described in Section 2.78 of this article, to identify potential |
|
for procedural standardization. The Public Utility Commission of |
|
Texas shall issue a report of the analysis, with recommendations |
|
regarding rate standardization, for consideration by the 83rd |
|
Legislature. |
|
(b) The Public Utility Commission of Texas shall prepare a |
|
report describing staffing changes related to the transition |
|
described in Section 2.78 of this article, including reductions in |
|
staff that the commission may realize as a result of consolidated |
|
functions. The Public Utility Commission of Texas shall submit the |
|
report to the Legislative Budget Board and the governor with the |
|
legislative appropriations request for the 2014-2015 biennium. |
|
SECTION 2.80. (a) On June 1, 2012, the following are |
|
transferred from the office of public interest counsel of the Texas |
|
Commission on Environmental Quality to the Office of Public Utility |
|
Counsel: |
|
(1) the powers, duties, functions, programs, and |
|
activities of the office of public interest counsel of the Texas |
|
Commission on Environmental Quality relating to the representation |
|
of the public interest in matters related to the regulation of water |
|
and sewer utilities under Chapter 13, Water Code, as amended by this |
|
article; |
|
(2) any obligations and contracts of the office of |
|
public interest counsel of the Texas Commission on Environmental |
|
Quality that are directly related to implementing a power, duty, |
|
function, program, or activity transferred under this article; and |
|
(3) all property and records in the custody of the |
|
office of public interest counsel of the Texas Commission on |
|
Environmental Quality that are related to a power, duty, function, |
|
program, or activity transferred under this article and all funds |
|
appropriated by the legislature for that power, duty, function, |
|
program, or activity. |
|
(b) The office of public interest counsel of the Texas |
|
Commission on Environmental Quality and the Office of Public |
|
Utility Counsel shall enter into a memorandum of understanding |
|
that: |
|
(1) identifies in detail the applicable powers and |
|
duties that are transferred by this article; and |
|
(2) establishes a plan for the identification and |
|
transfer of the records, personnel, property, and unspent |
|
appropriations of the Texas Commission on Environmental Quality |
|
that are used for purposes of the office of public interest |
|
counsel's powers and duties directly related to the representation |
|
of the public interest in matters relating to the regulation of |
|
water and sewer utilities under Chapter 13, Water Code, as amended |
|
by this article. |
|
(c) The memorandum of understanding described by this |
|
section is not required to be adopted by rule under Section 5.104, |
|
Water Code. |
|
(d) The office of public interest counsel of the Texas |
|
Commission on Environmental Quality and the Office of Public |
|
Utility Counsel may agree in the memorandum of understanding under |
|
this section to transfer to the Office of Public Utility Counsel any |
|
personnel of the office of public interest counsel whose functions |
|
predominantly involve powers, duties, obligations, functions, and |
|
activities related to the representation of the public interest in |
|
matters relating to the regulation of water and sewer utilities |
|
under Chapter 13, Water Code, as amended by this article. |
|
(e) The office of public interest counsel of the Texas |
|
Commission on Environmental Quality and the Office of Public |
|
Utility Counsel shall appoint a transition team to accomplish the |
|
purposes of this section. |
|
(f) A rule, form, policy, procedure, or decision of the |
|
office of public interest counsel of the Texas Commission on |
|
Environmental Quality related to a power, duty, function, program, |
|
or activity transferred under this article continues in effect as a |
|
rule, form, policy, procedure, or decision of the Office of Public |
|
Utility Counsel and remains in effect until amended or replaced by |
|
that agency. |
|
(g) The memorandum required by this section must be |
|
completed by April 1, 2012. |
|
(h) The Office of Public Utility Counsel and the office of |
|
public interest counsel of the Texas Commission on Environmental |
|
Quality shall adopt rules to implement the changes in law made by |
|
this article to Chapter 13, Water Code, not later than November 1, |
|
2012. |
|
ARTICLE 3. OTHER WATER AND SEWER DUTIES OF PUBLIC UTILITY |
|
COMMISSION OF TEXAS |
|
SECTION 3.01. Section 11.002, Water Code, is amended by |
|
adding Subdivision (21) to read as follows: |
|
(21) "Utility commission" means the Public Utility |
|
Commission of Texas. |
|
SECTION 3.02. Section 11.041, Water Code, is amended to |
|
read as follows: |
|
Sec. 11.041. DENIAL OF WATER: COMPLAINT. (a) Any person |
|
entitled to receive or use water from any canal, ditch, flume, |
|
lateral, dam, reservoir, or lake or from any conserved or stored |
|
supply may present to the utility commission a written petition |
|
showing: |
|
(1) that the person [he] is entitled to receive or use |
|
the water; |
|
(2) that the person [he] is willing and able to pay a |
|
just and reasonable price for the water; |
|
(3) that the party owning or controlling the water |
|
supply has water not contracted to others and available for the |
|
petitioner's use; and |
|
(4) that the party owning or controlling the water |
|
supply fails or refuses to supply the available water to the |
|
petitioner, or that the price or rental demanded for the available |
|
water is not reasonable and just or is discriminatory. |
|
(b) If the petition is accompanied by a deposit of $25, the |
|
executive director of the utility commission shall have a |
|
preliminary investigation of the complaint made and determine |
|
whether or not there are probable grounds for the complaint. |
|
(c) If, after preliminary investigation, the executive |
|
director of the utility commission determines that probable grounds |
|
exist for the complaint, the utility commission shall enter an |
|
order setting a time and place for a hearing on the petition. |
|
(d) The utility commission may require the complainant to |
|
make an additional deposit or execute a bond satisfactory to the |
|
utility commission in an amount fixed by the utility commission |
|
conditioned on the payment of all costs of the proceeding. |
|
(e) At least 20 days before the date set for the hearing, the |
|
utility commission shall transmit by registered mail a certified |
|
copy of the petition and a certified copy of the hearing order to |
|
the person against whom the complaint is made. |
|
(f) The utility commission shall hold a hearing on the |
|
complaint at the time and place stated in the order. It may hear |
|
evidence orally or by affidavit in support of or against the |
|
complaint, and it may hear arguments. The commission may |
|
participate in the hearing for the purpose of presenting evidence |
|
on the availability of the water requested by the petitioner. On |
|
completion of the hearing, the utility commission shall render a |
|
written decision. |
|
(g) If, after the preliminary investigation, the executive |
|
director of the utility commission determines that no probable |
|
grounds exist for the complaint, the executive director of the |
|
utility commission shall dismiss the complaint. The utility |
|
commission may either return the deposit or pay it into the State |
|
Treasury. |
|
SECTION 3.03. Section 12.013, Water Code, is amended to |
|
read as follows: |
|
Sec. 12.013. RATE-FIXING POWER. (a) The utility |
|
commission shall fix reasonable rates for the furnishing of raw or |
|
treated water for any purpose mentioned in Chapter 11 or 12 of this |
|
code. |
|
(b) In this section, [The term] "political subdivision" |
|
[when used in this section] means incorporated cities, towns or |
|
villages, counties, river authorities, water districts, and other |
|
special purpose districts. |
|
(c) The utility commission in reviewing and fixing |
|
reasonable rates for furnishing water under this section may use |
|
any reasonable basis for fixing rates as may be determined by the |
|
utility commission to be appropriate under the circumstances of the |
|
case being reviewed; provided, however, the utility commission may |
|
not fix a rate which a political subdivision may charge for |
|
furnishing water which is less than the amount required to meet the |
|
debt service and bond coverage requirements of that political |
|
subdivision's outstanding debt. |
|
(d) The utility commission's jurisdiction under this |
|
section relating to incorporated cities, towns, or villages shall |
|
be limited to water furnished by such city, town, or village to |
|
another political subdivision on a wholesale basis. |
|
(e) The utility commission may establish interim rates and |
|
compel continuing service during the pendency of any rate |
|
proceeding. |
|
(f) The utility commission may order a refund or assess |
|
additional charges from the date a petition for rate review is |
|
received by the utility commission of the difference between the |
|
rate actually charged and the rate fixed by the utility commission, |
|
plus interest at the statutory rate. |
|
[(g)
No action or proceeding commenced prior to January 1,
|
|
1977, before the Texas Water Rights Commission shall be affected by
|
|
the enactment of this section.
|
|
[(h)
Nothing herein contained shall affect the jurisdiction
|
|
of the Public Utility Commission.] |
|
ARTICLE 4. EFFECTIVE DATE |
|
SECTION 4.01. This Act takes effect on the 91st day after |
|
the last day of the legislative session. |