Staff report

AUSTIN — A Tuesday release from the office of Rep. Phil King (R-Weatherford) lamented the failure of State Bill 482 as the Texas Legislature wound up business Monday evening.

“An expansive bill that would have lowered retail electric rates and increased consumer protections was killed on a hyper-technical procedural motion on Monday night.” The release stated. “SB 482, sponsored by Rep. Phil King included a process to scrutinize the pending $45 billion buy-out of TXU by private investors.”

According to the statement, the bill had the support of lawmakers.

“Over two thirds of the House voted for this legislation last night,” King said. “It is disappointing that one member chose to kill this bill, which provided rate reductions for electric bills, real consumer protections, and more stringent oversight of public utility buy-outs.”

King’s release said SB 482 would have:

n Guaranteed a rate cut for customers on the highest rates in Texas.

n Authorized the PUC to review rates and adjust them if they rise unjustifiably.

n Protected consumers by:

1. Eliminating the use of credit scoring.

2. Protecting critical care, elderly low-income, and low-income customers from disconnection who enter into five month deferred payment plans.

3. Prohibiting disconnection of any customer on any day when the temperature is below freezing or above 100 degrees.

4. Eliminating deposits for service for elderly low-income customers.

5. Barring deposits for electric service for customers with 12 months of positive bill payment history.

6. Eliminating deceptive advertising by utilities with regard to the level of service a customer will receive by selecting the incumbent retail electric provider.

7. Eliminating any cancellation fees for month-to-month contracts for electricity.

n Required the functional separation of TXU into four smaller companies and forced each of these companies to:

1. Use separate and distinct names and logos.

2. Operate under exclusive boards of directors with no overlap.

3. Retain separate officers with no overlap.

4. Maintain separate headquarters, operations facilities and other office space.

5. Maintain arm’s length relationships and not share any information among the several companies that could be used to manipulate the market or exercise market power abuse.

6. Adhere to an enhanced PUC code of conduct in all business transactions with their respective companies.

7. Require preparation of separate financial statements.

8. Provide the PUC complete access to all books and records.

9. Mandate that each CEO sign an affidavit of compliance yearly under threat of felony prosecution.

10. Prevented TXU from shifting debt onto the ratepayer-funded wires and poles company.

n Accelerated retail competition by requiring affiliated retail electric providers (TXU, Reliant and Direct Energy) to gain customers outside their service territory or face fines. The fines will be used to fund any unfunded portion of the System Benefit Fund.

n Allowed monies appropriated for the System Benefit Fund to be used for its intended purpose and expanding eligibility for low income discounts on electricity.

n Increased the authority of the PUC to investigate and punish market power abuse. Specifically, the PUC would have now had the ability to assess fines of up to one million dollars a day or treble damages.



“Consumers are going to be hurt because SB 482 was killed,” King said. “It is a shame when petty partisan differences stand in the way of good public policy.”

King did proclaim a victory with the last minute passage of HB 624 and HB 1386. HB 624, the last bill passed by the Legislature, empowers the state to enforce the commitments made to consumers by KKR, the buyers of TXU. The commitments required of KKR are very substantial and provide protections demanded by legislators and consumer groups.

The bill also gives the PUC oversight of future sales of certain electric utilities.

HB 1386 opens the door for construction of nuclear power plants in Texas, which King claims will provide clean, less expensive electricity.