Bill Text: TX SB555 | 2011-2012 | 82nd Legislature | Engrossed
Bill Title: Relating to the regulation of propane gas distribution retailers.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Engrossed - Dead) 2011-05-19 - Referred to Energy Resources [SB555 Detail]
Download: Texas-2011-SB555-Engrossed.html
By: Watson | S.B. No. 555 |
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relating to the regulation of propane gas distribution retailers. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Title 3, Utilities Code, is amended by adding | ||
Subtitle C to read as follows: | ||
SUBTITLE C. PROPANE GAS DISTRIBUTION SYSTEMS | ||
CHAPTER 141. STANDARDS FOR DISTRIBUTION SYSTEM RETAILERS | ||
Sec. 141.001. DEFINITIONS. In this chapter: | ||
(1) "Distribution system retailer": | ||
(A) means a retail propane dealer that owns or | ||
operates for compensation in this state equipment and facilities | ||
connected to a contiguous piping system through which propane gas | ||
is supplied to at least 10 residential end users and: | ||
(i) has a Class E license issued by the Gas Services | ||
Division of the License and Permit Section of the railroad | ||
commission or is an active company representative or operations | ||
supervisor on file with the section; and | ||
(ii) is a regular supplier or a potential | ||
regular supplier of propane to a consumer; and | ||
(B) does not include a person that furnishes | ||
propane gas only to the person, to the person's employees, or to the | ||
person's tenants as an incident of employment or tenancy, if the | ||
service is not resold to commercial customers or other end users. | ||
(2) "Railroad commission" means the Railroad | ||
Commission of Texas or the successor agency to that commission. | ||
Sec. 141.002. APPLICABILITY. This chapter applies only to | ||
a distribution system retailer. This chapter does not apply to a | ||
traditional retail liquefied petroleum gas company that provides | ||
service in the service area. | ||
Sec. 141.003. RATE AND FEE CEILINGS. (a) A distribution | ||
system retailer may not charge a customer during any given billing | ||
period a rate for gas that exceeds the actual average delivered | ||
price charged, excluding price specials and tank rental fees, for | ||
propane gas delivered to company-owned, individual propane tanks by | ||
traditional retail liquefied petroleum gas companies that provide | ||
service in the service area where the distribution system retailer | ||
is located. The actual average price must be determined using | ||
independent objective market surveys of liquefied petroleum gas | ||
prices quoted by traditional liquefied petroleum gas companies and | ||
charged in the ordinary course of business during the respective | ||
billing period. Each distribution system retailer each quarter | ||
shall supply the market surveys and report the gas rates the | ||
distribution system retailer charges to the railroad commission. | ||
(b) For the following services or occurrences, a | ||
distribution system retailer may charge a fee not to exceed: | ||
(1) $12 a month as a recurring monthly fee to maintain | ||
an active gas service account with the distribution system retailer | ||
to be charged to a customer whose actual gas usage exceeds 99 | ||
gallons; | ||
(2) $17.50 a month as a recurring monthly fee to | ||
maintain an active service account with the distribution system | ||
retailer as long as the service address's gas usage history during | ||
the preceding 12-month period does not exceed 99 gallons; | ||
(3) $15 for a late payment received by the | ||
distribution system retailer, provided the bill was mailed or | ||
electronically transmitted 15 days prior to the date payment is | ||
due; | ||
(4) $25 to disconnect or terminate service from an | ||
active or delinquent account; | ||
(5) $65 for standard next available service for an | ||
active or delinquent account; | ||
(6) $125 for accelerated reconnect service; | ||
(7) $30 for a dishonored check that was received for a | ||
payment; and | ||
(8) $75 to initiate service to a new customer. | ||
(c) The railroad commission by rule annually shall adjust | ||
the fee limits described by Subsection (b) upward or downward based | ||
on changes in the Consumer Price Index for All Urban Consumers in | ||
the State of Texas published by the Bureau of Labor Statistics of | ||
the United States Department of Labor each calendar year. The | ||
distribution system retailer's adjustment, if required, must be | ||
made not later than the later of September or the 45th day after the | ||
date the railroad commission gives notice of the change to the | ||
distribution system retailer. | ||
(d) Nothing in this section limits a distribution system | ||
retailer's ability to pass through to a customer a new governmental | ||
fee, fee increase, or charge imposed on the retailer after | ||
September 1, 2011. Any fee, fee increase, or charge passed through | ||
to a customer shall be listed as a separate item on a customer's | ||
bill. | ||
Sec. 141.004. DISCONNECTION OF PROPANE GAS SERVICE. (a) A | ||
distribution system retailer may not disconnect propane gas service | ||
to a residential customer on a weekend day unless personnel of the | ||
distribution system retailer are available on that day to take | ||
payments and reconnect service. | ||
(b) A distribution system retailer may not disconnect | ||
propane gas service to a residential customer during an extreme | ||
weather emergency, as defined by Section 104.258. The distribution | ||
system retailer shall defer collection of the full payment of bills | ||
that are due during an extreme weather emergency, as defined by | ||
Section 104.258, until after the emergency is over. | ||
Sec. 141.005. CONTINUITY OF SERVICE. (a) A distribution | ||
system retailer shall make all reasonable efforts to prevent | ||
interruptions of service. When an interruption occurs, the | ||
distribution system retailer shall reestablish service within the | ||
shortest possible time consistent with prudent operating | ||
principles so that the smallest number of customers are affected. | ||
(b) Excluding service interruptions for nonpayment, a | ||
distribution system retailer shall keep complete records of all | ||
emergency and scheduled service interruptions lasting greater than | ||
four hours in duration and affecting more than two customers. The | ||
records must describe the cause of each interruption, the date, | ||
length, location, approximate number of customers affected by the | ||
interruption, and, in the case of an emergency interruption, the | ||
remedy and steps taken to prevent a recurrence, if applicable. The | ||
distribution system retailer shall submit copies of the records to | ||
the railroad commission quarterly. | ||
(c) The distribution system retailer shall notify the | ||
railroad commission in writing not later than 48 hours after an | ||
interruption in service that affects the entire system and lasts | ||
more than four hours caused by a Grade I leak that represents an | ||
existing or probable hazard to persons or property and requires | ||
immediate repair or continuous action until the conditions are no | ||
longer hazardous. The notice shall include the distribution system | ||
retailer's assessment of the cause of the interruption. A written | ||
report of a service interruption in another form, including a part | ||
of a safety report, is sufficient to comply with this subsection. | ||
(d) The railroad commission shall establish a toll-free | ||
number to enable a customer of a distribution system retailer to | ||
notify the railroad commission of a service interruption that does | ||
not involve a refusal to serve under Section 141.006. The railroad | ||
commission shall immediately investigate the cause of the service | ||
interruption. | ||
(e) To restore and maintain service, the railroad | ||
commission may assume temporary receivership of a system that | ||
experiences a service interruption that affects the entire system: | ||
(1) exceeding 48 hours in duration; | ||
(2) more than three times in one month; or | ||
(3) that is the result of the distribution system | ||
retailer's failure to replenish the primary propane tank that is | ||
not caused by a general local market disruption or a restriction on | ||
wholesale propane supplies. | ||
(f) The railroad commission may draw down all or part of the | ||
financial surety posted under Section 141.009, as required, to | ||
restore and maintain service under Subsection (e). | ||
(g) If the railroad commission assumes temporary | ||
receivership of a system under Subsection (e), it shall notify the | ||
distribution system retailer and provide the distribution system | ||
retailer 72 hours to prepare and submit a plan to avoid continuing | ||
receivership. | ||
(h) If a distribution system retailer's inability to | ||
fulfill its financial obligations is the cause of a service | ||
interruption described by Subsection (e), the railroad commission | ||
may delegate the operation of the system to a homeowners' | ||
association or municipal utility district until another | ||
distribution system retailer can assume control over the system or | ||
until a court in bankruptcy proceedings instructs otherwise. | ||
Sec. 141.006. GROUNDS FOR REFUSAL TO SERVE. (a) A | ||
distribution system retailer may refuse service to an applicant if: | ||
(1) an applicant fails to pay fees, advances, | ||
contributions, or deposits required for service under the | ||
distribution system retailer's policies; | ||
(2) an applicant fails to furnish a service or meter | ||
location specified for service by the distribution system retailer; | ||
(3) the existence or repeated creation of an unsafe | ||
condition, such as impaired meter access or a leak in the | ||
applicant's piping system, may potentially endanger life or | ||
property in the distribution system retailer's opinion; | ||
(4) an applicant or service location owner is | ||
delinquent in payment for services provided by a distribution | ||
system retailer service location owner; | ||
(5) another current resident of the premises to | ||
receive service is delinquent in payment for services provided by a | ||
distribution system retailer; or | ||
(6) an applicant fails to adhere to an agreed payment | ||
plan. | ||
(b) The right to refuse service ends when the cause for the | ||
refusal to serve is corrected. | ||
Sec. 141.007. REASONABLE TIME TO BEGIN SERVICE. A | ||
distribution system retailer may delay providing service following | ||
an application or execution of an agreement for service for a | ||
reasonable amount of time considering required approvals or | ||
permits, the extent of the facilities to be built, and the | ||
distribution system retailer's workload at the time. | ||
Sec. 141.008. CUSTOMER COMPLAINTS. (a) A distribution | ||
system retailer that receives a written complaint promptly and | ||
suitably shall investigate the complaint and advise the complainant | ||
of the results of the investigation. A distribution system | ||
retailer shall keep for at least three years after the final | ||
disposition of each complaint a record that includes each | ||
complainant's name and address, the date and nature of the | ||
complaint, and the adjustment or disposition of the complaint. A | ||
distribution system retailer is not required to keep a record of a | ||
complaint that does not require the distribution system retailer to | ||
take specific further action. A distribution system retailer shall | ||
notify each complainant of the right to file a complaint with the | ||
railroad commission if the complainant is not satisfied by the | ||
distribution system retailer's resolution of the matter. | ||
(b) On receipt of a complaint from the railroad commission | ||
on behalf of a customer, a distribution system retailer promptly | ||
and suitably shall investigate and notify the railroad commission | ||
and complainant of the results of the investigation. An initial | ||
response must be made not later than the third business day after | ||
the date the distribution system retailer receives the complaint | ||
electronically to up to two electronic addresses designated by the | ||
distribution system retailer. A distribution system retailer shall | ||
send a final and complete response to the railroad commission and | ||
complainant not later than the 15th day after the date the complaint | ||
was received, unless the railroad commission grants additional time | ||
before the expiration of the 15-day period. | ||
(c) The railroad commission may impose sanctions on a | ||
distribution system retailer if, after an investigation, the | ||
railroad commission determines that the distribution system | ||
retailer has violated Section 141.003. Sanctions may include: | ||
(1) ordering a distribution system retailer to refund | ||
the amounts of any overcharges to the distribution system | ||
retailer's customers; or | ||
(2) drawing all or a portion of the financial surety | ||
for the purpose of refunding the amounts of any overcharges to the | ||
distribution system retailer's customers not refunded before the | ||
61st day after the date the railroad commission orders a refund. | ||
Sec. 141.009. PERFORMANCE GUARANTEE. (a) A distribution | ||
system retailer shall post, in favor of the railroad commission, | ||
financial surety in the form of a letter of credit or cash deposited | ||
with the railroad commission in an amount equal to the lesser of $3 | ||
multiplied by the number of gallons of storage capacity in all of | ||
the systems operated by the distribution system retailer or | ||
$100,000. The issuer of a letter of credit used to meet this | ||
requirement shall honor the letter of credit if the issuer receives | ||
from the railroad commission notice that the letter of credit is due | ||
and payable. The railroad commission may draw all or a portion of | ||
the financial surety. | ||
(b) A distribution system retailer is exempt from posting | ||
the financial surety if, during the most recent five years: | ||
(1) the distribution system retailer continuously has | ||
met the definition of distribution system retailer under Section | ||
141.001; | ||
(2) the distribution system retailer has not | ||
experienced a service interruption that would have allowed the | ||
railroad commission to place any system operated by the | ||
distribution system retailer in temporary receivership under | ||
Section 141.005(e) if that subsection had been in effect during | ||
that period; and | ||
(3) the distribution system retailer has maintained | ||
the same or substantially similar ownership. | ||
Sec. 141.010. MARKET SURVEY RULES. (a) The market survey | ||
described by Section 141.003(a) shall be conducted according to | ||
rules developed by the railroad commission under this chapter. The | ||
railroad commission, by rule, shall: | ||
(1) limit the survey pool to traditional retail | ||
liquefied petroleum gas companies that provide service to an area | ||
not more than 10 miles from the distribution system retailer's | ||
system; | ||
(2) determine the geographic area of the survey area | ||
where surveyed companies may be located in the event that fewer than | ||
six companies provide service to the service area; | ||
(3) determine the appropriate survey sample size in | ||
the event that fewer than six companies provide service to an area; | ||
(4) allow the distribution system retailer to | ||
determine the survey sample size provided the sample size includes | ||
a minimum of six companies; | ||
(5) provide that the railroad commission and the | ||
distribution system retailer may each select half of the companies | ||
to be included in the survey and, if necessary, alternates to be | ||
included in the survey; | ||
(6) require a survey to be conducted twice a month | ||
during the period from November to April and once a month during the | ||
period from May to October; | ||
(7) require the survey quotes to include delivery | ||
amounts to be more than 100 gallons and not greater than 500 gallons | ||
during the period from November to April and less than 100 gallons | ||
during the period from May to October; | ||
(8) prohibit a company from being surveyed twice in a | ||
seven-day period; and | ||
(9) require a survey company retained by a | ||
distribution system retailer to be a disinterested third party. | ||
(b) A survey company shall conduct a survey once during each | ||
half of the month during the period from November to April. A | ||
survey company shall have discretion when to conduct a survey | ||
during that period. | ||
(c) The railroad commission by rule may require an officer | ||
of the survey company and a distribution system retailer to provide | ||
a signed sworn statement attesting to the survey company's | ||
disinterested third-party status and disclosing compensation the | ||
survey company received. The railroad commission shall qualify a | ||
company that meets these requirements unless the railroad | ||
commission shows the company is not capable of performing the | ||
survey or is not a disinterested third party. | ||
(d) Except for the information described in Subsection (b), | ||
the railroad commission may not require a survey company: | ||
(1) to disclose: | ||
(A) private financial information; | ||
(B) a list of employees or contractors; or | ||
(C) proprietary methodology; or | ||
(2) to provide information or perform an activity that | ||
violates the survey company's industry standards or that increases | ||
the cost of the survey. | ||
(e) The railroad commission shall maintain a list of two or | ||
more qualified survey companies that a distribution system retailer | ||
may select and provide 30-day advance notice to affected | ||
distribution system retailers when a qualified surveyor's | ||
qualification is terminated. | ||
Sec. 141.011. RULES. (a) The railroad commission shall | ||
adopt rules implementing this chapter, including rules that | ||
establish procedures for: | ||
(1) calculating gas rate ceilings; | ||
(2) reporting market surveys and gas rates to the | ||
railroad commission; | ||
(3) addressing unresolved complaints from a customer | ||
of a distribution system retailer; and | ||
(4) establishing rates to apply to a retailer whose | ||
rates are based on flawed market surveys. | ||
(b) The procedure the railroad commission adopts for | ||
calculating a gas rate ceiling based on information from a survey of | ||
six or more companies must provide for using the average of surveyed | ||
prices, excluding a single highest and a single lowest quote. | ||
(c) The railroad commission may institute nonfinancial | ||
resolutions of complaints under this chapter. | ||
(d) The railroad commission may institute financial | ||
resolutions only for violations of this chapter. | ||
Sec. 141.012. DISCLOSURE TO HOMEOWNERS. (a) A | ||
distribution system retailer shall provide to a homeowners' | ||
association or municipal utility district with jurisdiction over | ||
property that receives service from a distribution system retailer, | ||
or to the distribution system retailer's customers if there is no | ||
homeowners' association or municipal utility district, a | ||
disclosure that includes: | ||
(1) the general methodology used to determine the | ||
distribution system retailer's gas rates; | ||
(2) a copy of this chapter or a summary of the | ||
customers' rights under this chapter; and | ||
(3) for development agreements entered into after | ||
September 1, 2011, a statement disclosing the existence of a | ||
financial interest a homeowners' association, municipal utility | ||
district, or developer holds in the gas system. | ||
(b) A homeowners' association or municipal utility district | ||
that has jurisdiction over real property that receives service from | ||
a distribution system retailer shall provide the disclosure | ||
described by Subsection (a) to all homeowners along with a list of | ||
the homeowners' covenants and deed restrictions. The homeowners' | ||
association or municipal utility district shall post the | ||
information required to be disclosed under this subsection on the | ||
homeowners' association or municipal utility district website. | ||
SECTION 2. This Act takes effect September 1, 2011. |