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A BILL TO BE ENTITLED
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AN ACT
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relating to procedures of the Public Utility Commission of Texas |
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with regard to certain transactions. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 14.101, Utilities Code, is amended to |
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read as follows: |
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Sec. 14.101. REPORT OF CERTAIN TRANSACTIONS; COMMISSION |
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CONSIDERATION. (a) Unless a public utility, holding company, or |
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affiliate reports the transaction to the commission within a |
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reasonable time, and the commission approves the transaction, the |
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public utility, holding company, or affiliate may not: |
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(1) sell, acquire, or lease a plant as an operating |
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unit or system in this state for a total consideration of more than |
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$100,000; or |
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(2) merge or consolidate with another public utility |
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operating in this state. |
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(b) Prior to the close of each transaction, and prior to the |
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receipt of all necessary regulatory approvals, a [A] public |
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utility, holding company, or affiliate shall report to the |
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commission [within a reasonable time] each transaction that |
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involves the sale of at least 50 percent of the stock of the |
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utility, holding company, or affiliate. On the filing of a report |
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with the commission, the commission shall investigate the |
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transaction, with or without a public hearing, to determine whether |
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the action is consistent with the public interest. In reaching its |
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determination, the commission shall consider: |
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(1) the reasonable value of the property, facilities, |
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or securities to be acquired, disposed of, merged, transferred, or |
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consolidated; |
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(2) whether the transaction will: |
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(A) adversely affect the health or safety of |
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customers or employees; |
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(B) result in the transfer of jobs of citizens of |
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this state to workers domiciled outside this state; or |
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(C) result in the decline of service; |
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(3) whether the public utility, holding company, or |
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affiliate will receive consideration equal to the reasonable value |
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of the assets when it sells, leases, or transfers assets; and |
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(4) whether the transaction is consistent with the |
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public interest. |
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(c) If the commission finds that a transaction is not in the |
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public interest, the commission shall take appropriate action, |
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which may include: |
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(1) disapproving the transaction; or |
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(2) if appropriate, taking the effect of the |
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transaction into consideration in ratemaking proceedings and |
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disallowing [disallow] the effect of the transaction if the |
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transaction will unreasonably affect rates or service. |
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(d) This section does not apply to: |
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(1) the purchase of a unit of property for |
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replacement; or |
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(2) an addition to the facilities of a public utility |
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by construction[; or
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[(3) transactions that facilitate unbundling, asset
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valuation, minimization of ownership or control of generation
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assets, or other purposes consistent with Chapter 39]. |
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(e) In conducting the analysis under this section, the |
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commission shall consider the extent to which the transaction |
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facilitates the development of the competitive market, the extent |
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to which the transaction mitigates market power in either the |
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retail or wholesale electricity market, or other purposes |
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consistent with Chapter 39. |
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(f) Before approving a transaction under this section, the |
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commission shall require the public utility, holding company, or |
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affiliate reporting the transaction to provide any and all |
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information necessary for the commission to carry out its duties |
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under this section, including but not limited to: |
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(1) identification of all costs, both short-term and |
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long-term, of the transaction; |
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(2) specification of each promise, pledge, |
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concession, or agreement made by the public utility or other |
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entity; |
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(3) identification of any potential rate and service |
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impacts that may occur as a result of the transaction; and |
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(4) identification of any and all benefits of the |
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transaction. |
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(g) Notwithstanding Subsection (b), at the request of any |
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party to the proceeding, the commission shall conduct a public |
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hearing on the transaction. |
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(h) The commission may impose conditions that it deems |
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necessary before granting approval of any transaction under this |
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section. |
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(i) The commission shall adopt rules to enforce the |
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requirements of this section. Such rules shall include periodic |
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reports by the public utility, holding company, or affiliate as |
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necessary to determine whether the public utility, holding company, |
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or affiliate has satisfied the requirements of this section and any |
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requirements established by the commission in any order issued |
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under this section. |
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(j) On the dates specified in Section 31.003, the commission |
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shall report to the legislature the status of any transactions |
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approved, denied, or under review pursuant to this section and any |
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utility, holding company, or affiliate that has failed to satisfy |
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the requirements of any order issued under this section. |
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SECTION 2. Section 37.154, Utilities Code, is amended by |
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adding Subsection (c) to read as follows: |
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(c) Notwithstanding Subsection (a), the commission shall |
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not approve the sale, assignment, or lease of a certificate or a |
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right obtained under a certificate if the commission determines |
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that the purchaser, assignee, or lessee has debts or is capitalized |
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in a manner that would adversely affect the rates or services of the |
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purchaser, assignee, or lessee. |
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SECTION 3. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2007. |