Floor Packet Page No. 45 Amend CSSB 7 (House committee report) as follows: (1) In Section 39.901(e), Utilities Code, as added by SECTION 40 of the bill (page 141, line 26 through page 142, line 8), strike the first two sentences of Subsection (e) and substitute the following: Not later than May 1 of each year, the commission shall transfer from the system benefit fund to the foundation school fund the amounts determined by the Texas Education Agency under Subsections (b) and (c) to the extent money in the system benefit fund is available. If in any year the system benefit fund is insufficient to make the transfer designated by the Texas Education Agency, the shortfall shall be included in the projected revenue requirement for the system benefit fund the next time the commission sets the fee under Section 39.903, and the shortfall amount shall be transferred to the Foundation School Program the following year if sufficient money in the fund is available. (2) Strike Section 39.903, Utilities Code, as added by SECTION 40 of the bill (page 143, line 24 through page 146, line 6), and substitute a new Section 39.903 to read as follows: Sec. 39.903. SYSTEM BENEFIT FUND. (a) The system benefit fund is created as a trust fund with the comptroller and shall be administered by the commission as trustee on behalf of the recipients of money from the fund. (b) The system benefit fund is financed by a nonbypassable fee set by the commission in an amount not to exceed 50 cents per megawatt hour, except beginning on January 1, 2002, and ending on December 31, 2006, the commission may set the fee in an amount not to exceed 65 cents per megawatt hour to the extent necessary to collect sufficient revenue to fund the 10 percent reduced rate requirements of the program required by Subsection (h). The system benefit fund fee is allocated to customers based on the amount of kilowatt hours used. (c) The nonbypassable fee may not be imposed on the retail electric customers of a municipally owned utility or electric cooperative before the sixth month preceding the date on which the utility or cooperative implements customer choice. Money distributed from the system benefit fund to a municipally owned utility or an electric cooperative shall be proportional to the nonbypassable fee paid by the municipally owned utility or the electric cooperative, subject to the reimbursement provided by Subsection (i). On request by a municipally owned utility or electric cooperative, the commission shall reduce the nonbypassable fee imposed on retail electric customers served by the municipally owned utility or electric cooperative by an amount equal to the amount provided by the municipally owned utility or electric cooperative or its ratepayers for local low-income programs and local programs that educate customers about the retail electric market in a neutral and nonpromotional manner. (d) The commission shall annually review and approve system benefit fund accounts, projected revenue requirements, and proposed nonbypassable fees. (e) The system benefit fund shall provide funding solely for the following regulatory purposes: (1) programs to assist low-income electric customers provided by Subsections (f)-(l); (2) customer education programs; and (3) the school funding loss mechanism provided by Section 39.901. (f) Notwithstanding Section 39.106(b), the commission shall adopt rules regarding programs to assist low-income electric customers on the introduction of customer choice. The programs may not be targeted to areas served by municipally owned utilities or electric cooperatives that have not adopted customer choice. The programs shall include: (1) reduced electric rates as provided by Subsections (h)-(l); and (2) targeted energy efficiency programs to be administered by the Texas Department of Housing and Community Affairs in coordination with existing weatherization programs. (g) Until customer choice is introduced in a power region, an electric utility may not reduce, in any manner, programs already offered to assist low-income electric customers. (h) The commission shall adopt rules for a retail electric provider to determine a reduced rate for eligible customers to be discounted off the standard retail service package as approved by the commission under Section 39.106, or the price to beat established by Section 39.202, whichever is lower. Municipally owned utilities and electric cooperatives shall establish a reduced rate for eligible customers to be discounted off the standard retail service package established under Section 40.053 or 41.053, as appropriate. The reduced rate for a retail electric provider shall result in a total charge that is at least 10 percent, and if sufficient money in the system benefit fund is available, up to 20 percent, lower than the amount the customer would otherwise be charged. For a municipally owned utility or electric cooperative, the reduced rate shall be equal to an amount that can be fully funded by that portion of the nonbypassable fee proceeds paid by the municipally owned utility or electric cooperative that is allocated to the utility or cooperative by the commission under Subsection (e) for programs for low-income customers of the utility or cooperative. The reduced rate for municipally owned utilities and electric cooperatives under this section is in addition to any rate reduction that may result from local programs for low-income customers of the municipally owned utilities or electric cooperatives. (i) A retail electric provider, municipally owned utility, or electric cooperative seeking reimbursement from the system benefit fund may not charge an eligible low-income customer a rate higher than the appropriate rate determined under Subsection (h). A retail electric provider not subject to the price to beat, or a municipally owned utility or electric cooperative subject to the nonbypassable fee under Subsection (c), shall be reimbursed from the system benefit fund for the difference between the reduced rate and the rate established under Section 39.106, or as appropriate, the rate established under Section 40.053 or 41.053. A retail electric provider who is subject to the price to beat shall be reimbursed from the system benefit fund for the difference between the reduced rate and the price to beat. The commission shall adopt rules providing for the reimbursement. (j) The commission shall adopt rules providing for methods of enrolling customers eligible to receive reduced rates under Subsection (h). The rules must provide for automatic enrollment as one enrollment option. The Texas Department of Human Services, on request of the commission, shall assist in the adoption and implementation of these rules. The commission and the Texas Department of Human Services shall enter into a memorandum of understanding establishing the respective duties of the commission and the department in relation to the automatic enrollment. (k) A retail electric provider is prohibited from charging the customer a fee for participation in the reduced rate program. (l) For the purposes of this section, a "low-income electric customer" is an electric customer: (1) whose household income is not more than 125 percent of the federal poverty guidelines; or (2) who receives food stamps from the Texas Department of Human Services or medical assistance from a state agency administering a part of the medical assistance program. (m) Funding of programs to assist low-income customers under Subsections (f)-(l) and customer education programs shall be given funding priority over the school funding loss mechanism provided by Section 39.901.