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Vote NO Unless Amended: This legislation expands the Public Utility Commission’s (PUC) regulatory authority by giving the agency “emergency cease and desist" authority to shut down utilities without due process in certain circumstances. If a utility is suspected of violating laws or regulations, they should be provided with a notice and opportunity for a hearing in order to present their case. In fact, the PUC already has authority to issue a cease and desist order after notice and a hearing - they should not be given broad new authority to shut down market participants without basic due process. Unless and until HB 1600 is amended to remove the cease and desist provision, we recommend legislators vote against the bill when it comes to the floor. We support the underlying premise of this legislation - the Public Utility Commission should be reauthorized and it makes sense to move regulation of water utility rates from the Texas Commission on Environmental Quality to the PUC. If the legislation is amended to strike the cease and desist language, we will revise our vote recommendation accordingly.
Summary of Legislation: The Public Utilities Commission (PUC) which regulates the state’s electric and telecommunication utilities is subject to the Sunset Act and will be abolished effective September 1, 2013 unless it is reauthorized first. HB 1600 will reauthorize the PUC for another ten years. This legislation also transfer the regulation of water and wastewater utility rates from the Texas Commission on Environmental Quality (TCEQ) to the PUC. Chapter 15, Utilities Code, Subchapter (D) authorizes the PUC to issue emergency cease and desist orders to electric industries participants. The PUC is directed to adopt rules relating to the renewal and registration of a Certificate of Operating Authority and service Provider Certificate of Operating Authority. Section 64.003 Utilities Code (requirements to promote customers awareness) is repealed.
Analysis: We recognize the wisdom of consolidating and streamlining the regulation of public utilities and we understand that the job of regulators is to ensure that utilities comply with the law and safety regulations. The House should reauthorize the PUC for a new ten year period rather than kick the can down the road for another biennium. However, the legislation should not pass in its current form. The broad new "emergency cease and desist" authority puts too much power in the hands of regulators by taking away due process rights for market participants. Such power would be ripe for abuse and ought to be off the table completely. The PUC is an important part of Electrical, Telecommunication, and soon to be Water utility operations - they are well equipped with regulatory tools adequate to their mission and do not need a new tool that has high potential for scandal and abuse.
Recommendations: Amend HB 1600 to remove the "emergency cease and desist" authority.
Of the three amendments above, it is unclear which will actually be voted on. Any of those three will achieve the same objective.
We do not have recommendations on any other amendments at this time.