Subscribe to receive our Floor Reports covering all the action on the Texas House and Senate floor!
Relating to the governance of certain municipal power agencies; providing authority to issue bonds.
No significant fiscal implications are expected.
HB 1926 would implement a new subchapter in the Utilities Code concerning the governance of certain types of municipal power agencies (MPAs). Specifically, this subchapter would apply to an MPA created by two or more public entities. The public entities of an MPA would be able to elect to apply this new subchapter instead of using Subchapter C of the Utilities Code.
According to this legislation, an MPA is a municipal corporation, which means, by law, it has the powers of municipally owned utility. However, the MPA would not have taxing authority.
HB 1926 would allow entities within an MPA to vote another public entity into the MPA.
Each MPA would appoint its own board of directors. The board’s responsibilities would include managing and operating the agency’s properties. It would consist of one director from each public entity that is in the agency. These directors would be local officials and they would not be compensated for this position.
This bill would allow MPAs to set up separate boards of directors. This means an MPA could have a board overseeing the agency’s generation system and another board overseeing the agency’s transmission system.
HB 1926 issues guidelines for the powers of an MPA, which includes everything from the ability to enter into contracts, to being able to sell, lease, and convey property.
Public entities could dissolve the MPA so long as doing so would not undermine any obligations.
Additionally MPAs would be permitted to participate in power-pooling and power exchange contracts with other entities. An MPA could also establish and maintain rates and charges for electric power and other electrical delivery systems. However, Texas would still hold the right to regulate these rates and charges if it so chooses.
Lastly, this bill would permit MPAs to issue the following:
The Senate committee made changes to this bill that would not affect the overall substance of the bill. For this reason, we still remain neutral on this legislation.
Senate chamber sponsor: Fraser
First chamber analysis:
Currently, Chapter 163 Subchapter C of the Utilities Code governs municipal power agencies (MPAs). MPAs allow municipalities to collectively generate, transmit, and sell electrical power. The benefits of this are that the costs of generating and transmitting electricity are shared across each municipality within the agency; this cost sharing results in lower prices to the consumers.
HB 1926 would concern four cities in Texas: Bryan, Denton, Garland, and Greenville. All four cities are a part of the Texas Municipal Power Agency (TMPA). These four cities are operating under a long term power sales contract with TMPA, but that contract is set to expire in a few years. Additionally, current provisions of Subchapter C do not allow these municipalities to make certain changes to TMPA, such as the ability to continue power generation under this agency and the ability to issue new debt obligations to help finance future power generation and transmission infrastructure.
Since these four cities have each invested large amounts into the TMPA infrastructure, they would like the flexibility to have control of where future investments are directed. For instance, the city of Bryan currently only receives roughly 25% of its power generation from TMPA, but it would like to increase that generation over the long term. Moreover, these cities would like the ability to issue debt obligations to help finance construction projects for expanding the infrastructure of power generation and transmission.
HB 1926 would allow Bryan, Denton, Garland, and Greenville to have this flexibility, but without changing the current governance of TMPA and other MPAs. This legislation would create Subchapter C-1 to address this issue. Many of the provisions of Subchapter C-1 are reflected in existing statutes under Subchapter C; however it would allow the aforementioned changes to take effect.
We stand neutral on HB 1926 because it would allow these particular cities to have more flexibility in determining their future power needs, but without infringing on our liberties.