TITLE 16.ECONOMIC REGULATION

Part 2. PUBLIC UTILITY COMMISSION OF TEXAS

Chapter 25. SUBSTANTIVE RULES APPLICABLE TO ELECTRIC SERVICE PROVIDERS

Subchapter O. UNBUNDLING AND MARKET POWER

1. UNBUNDLING

16 TAC §25.343

The Public Utility Commission of Texas (commission) proposes an amendment to §25.343, relating to Competitive Energy Services. The proposed amendment will allow an electric utility to provide services to the electric distribution systems of military bases as a discretionary service, rather than as a competitive energy service. This rule is a competition rule subject to judicial review as specified in Public Utility Regulatory Act (PURA) §39.001(e). Project Number 30719 is assigned to this proceeding.

United States military bases have traditionally owned and operated their own electric distribution systems. However, the Utility System Privatization Act, effective November 24, 2003, gave individual bases the option to convey or lease their distribution systems to outside entities to lower costs for operation and maintenance. See 10 U.S.C. §2688 (2003).

Under the commission's rule on competitive energy services, providing operations and maintenance services for customer-owned electric facilities is classified as a competitive service. Military bases in Texas that are not situated within or very near major metropolitan areas have sought to acquire such services on a competitive basis but have had difficulty attracting offers for service from private providers. The transmission and distribution utilities (TDU), however, can credibly offer operation and maintenance service for a military base distribution system. Current commission rules, however, bar TDUs from providing competitive energy services. The proposed amendment would permit TDUs to bid on contracts to operate and maintain military base distribution systems by providing that services to those bases shall be considered discretionary services rather than competitive energy services.

Jeff Luna, Analyst, Electric Division has determined that, for each year of the first five-year period the proposed section is in effect, there will be no fiscal implications for local government as a result of enforcing or administering the section; there is no foreseeable direct or indirect implication for costs or revenues for local governments.

Mr. Luna has determined that, for each year of the first five years the proposed section is in effect, the public benefit anticipated as a result of enforcing this section is the potential for reduced military expenditures and higher quality of service in the provision of electric delivery service to customers on military bases in Texas. There will be no adverse economic effect on small businesses or micro-businesses as a result of enforcing this section; it is expected that small and micro-businesses would have difficulty in qualifying to bid to perform operation and maintenance for military base distribution systems. There is no anticipated economic cost to persons who are required to comply with the section as proposed.

Mr. Luna has also determined that, for each year of the first five years the proposed section is in effect, there should be no impact on local employment; therefore, no local employment impact statement is required under Administrative Procedure Act (APA), Texas Government Code §2001.022.

If requested pursuant to the Administrative Procedure Act, Texas Government Code §2001.029, the commission staff will conduct a public hearing on this rulemaking on Friday, April 8, 2005, at the commission's offices located in the William B. Travis Building, 1701 North Congress Avenue, Austin, Texas 78701. The request for a public hearing must be received within 30 days after publication.

Comments on the proposed amendment may be submitted to the Filing Clerk, Public Utility Commission of Texas, 1701 North Congress Avenue, P.O. Box 13326, Austin, Texas 78711-3326, within 30 days after publication. Sixteen copies of comments to the amendment are required to be filed pursuant to §22.71(c) of this title. Reply comments may be submitted within 45 days after publication. Comments should be organized in a manner consistent with the organization of the proposed rule. The commission invites specific comments regarding the costs associated with, and benefits that will be gained by, implementation of the proposed section. The commission will consider the costs and benefits in deciding whether to adopt the section. All comments should refer to Project Number 30719. When commenting on specific subsections of the proposed rule, parties are encouraged to describe "best practice" examples of regulatory policies, and their rationale, that have been proposed or implemented successfully in other states already undergoing electric industry restructuring, if the parties believe that Texas would benefit from application of the same policies. The commission is interested in receiving "leading edge" examples which are specifically related and directly applicable to the Texas statute rather than broad citations to other state restructuring efforts.

This amendment is proposed under PURA §14.002, which authorizes the Public Utility Commission to make and enforce rules reasonably required in the exercise of its powers and jurisdiction, and, specifically, §14.001, which authorizes the commission to regulate the business of public utilities within its jurisdiction; §39.001, which authorizes the commission to adopt rules for transition to a fully competitive electric power industry; §39.051, which requires each electric utility to separate its regulated utility activities from its customer energy services activities by unbundling its business activities to create, inter alia , a separate transmission and distribution utility; and §39.203, which requires TDUs to provide transmission and distribution services.

Cross Reference to Statutes: Public Utility Regulatory Act: §§14.001, 14.002, 39.001, 39.051, and 39.203.

§25.343.Competitive Energy Services.

(a) - (e) (No change.)

(f) Exceptions related to certain competitive energy services. An electric utility may not own, operate, maintain or provide other services related to equipment of the type described in §25.341(3)(F) of this title, except in any of the following instances or as otherwise provided in this subchapter or by commission order.

(1) - (4) (No change.)

(5) An electric utility may provide services associated with the privatization of electric distribution systems of military bases undertaken pursuant to the Utility System Privatization Act, codified at 10 U.S.C. §2688. The provision of such services by an electric utility shall be considered discretionary services and shall not be considered competitive energy services.

(g) - (i) (No change.)

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on February 24, 2005.

TRD-200500859

Adriana A. Gonzales

Rules Coordinator

Public Utility Commission of Texas

Earliest possible date of adoption: April 10, 2005

For further information, please call: (512) 936-7223


Part 8. TEXAS RACING COMMISSION

Chapter 303. GENERAL PROVISIONS

Subchapter A. ORGANIZATION OF THE COMMISSION

16 TAC §303.17

The Texas Racing Commission proposes new §303.17, relating to vendor protests. The Commission is required to adopt protest procedures for resolving vendor protests relating to purchasing issues pursuant to Government Code, §2155.076.

Paula C. Flowerday, Executive Secretary for the Texas Racing Commission, has determined that for the first five year period the new section is in effect there will be no fiscal implications for state or local government as a result of enforcing the section.

Ms. Flowerday has also determined that for each of the first five years the new section is in effect the anticipated public benefit will be that the Commission's purchasing processes will conform fully to applicable state law. There may be costs for vendors who avail themselves of the protest procedures. However, those costs would be associated with the administrative requirements for filing a protest and the Commission expects those costs would be minimal. There is no anticipated economic cost to an individual required to comply with the new section as proposed. The new section will have no effect on the state's agricultural, horse breeding, horse training, greyhound training, and greyhound breeding industries.

Comments on the proposal may be submitted on or before April 15, 2005, to Paula C. Flowerday, Executive Secretary for the Texas Racing Commission, P.O. Box 12080, Austin, Texas 78711-2080.

The new section is proposed under the Texas Civil Statutes, Article 179e, §3.02 which authorizes the Commission to make rules relating exclusively to horse and greyhound racing; and under Government Code, §2155.076.

The new section implements Government Code, §2155.076.

§303.17.Vendor Protests.

(a) Any actual or prospective bidder, offeror, or contractor who is aggrieved in connection with the solicitation, evaluation, or award of a contract may formally protest to the Commission's chief fiscal officer. The protest must be in writing and received in the Commission's main office in Austin not later than the 10th day after the date the aggrieved person knows, or should have known, of the occurrence of the action which is protested.

(b) The chief fiscal officer is authorized to settle and resolve the dispute concerning the solicitation or award of a contract. If the protest is not resolved by mutual agreement, the chief fiscal officer shall issue a written determination on the protest.

(c) Not later than the 10th day after receiving notice of the chief fiscal officer's determination, the protesting party may file a written appeal to the executive secretary. The executive secretary's decision on the appeal is final.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on February 25, 2005.

TRD-200500867

Paula C. Flowerday

Executive Secretary

Texas Racing Commission

Earliest possible date of adoption: April 10, 2005

For further information, please call: (512) 833-6699


Subchapter D. TEXAS BRED INCENTIVE PROGRAMS

1. GENERAL PROVISIONS

16 TAC §303.83

The Texas Racing Commission proposes an amendment to §303.83, relating to audits, financial statements and performance measures. The amendment clarifies that an official breed registry need submit audited financial statements only with respect to the registry's operation of the Texas Bred Incentive Program.

Paula C. Flowerday, Executive Secretary for the Texas Racing Commission, has determined that for the first five year period the amendment is in effect there will be no fiscal implications for state or local government as a result of enforcing the amendment.

Ms. Flowerday has also determined that for each of the first five years the amendment is in effect the anticipated public benefit will be that the horse and greyhound breed registries will have more flexibility when acquiring audited financial statements for submission to the Commission. There may be fiscal implications for the breed registries who will be obtaining audited financial statements. Because the Commission will not require financial statements on all of a breed registry's operations, the breed registry may have a cost savings. The exact amount of the cost savings cannot be determined at this time, as it will depend on the particular breed registry's operations and the particular audit firm used. The Commission estimates, however, that the savings could be up to $4,000 annually. There is no anticipated economic cost to an individual required to comply with the amendment as proposed. The amendment will have no effect on the state's agricultural, horse training, and greyhound training industries. The amendment may have an effect on the horse and greyhound breeding industries, in that the official breed registries may be able to save money on administrative expenditures, thereby making their operations more efficient.

Comments on the proposal may be submitted on or before April 15, 2005, to Paula C. Flowerday, Executive Secretary for the Texas Racing Commission, P.O. Box 12080, Austin, Texas 78711-2080.

The amendment is proposed under the Texas Civil Statutes, Article 179e, §3.02 which authorizes the Commission to make rules relating exclusively to horse and greyhound racing; and §6.08(g), which authorizes the Commission to adopt rules relating to the accounting, audit, and distribution of money set aside for the Texas Bred Incentive Programs.

The proposed amendment implements Texas Civil Statutes, Article 179e.

§303.83.Audits, Financial Statements and Performance Measures.

(a) (No change.)

(b) Not later than June 15 of each year, each breed registry designated by the Act shall submit to the Commission audited financial statements regarding its operation of the Texas Bred Incentive Program for that breed [ operations ]. The executive secretary may prescribe the form for the financial statements. In conjunction with the financial statements, each breed registry shall submit to the Commission a schedule of awards payable in a format prescribed by the executive secretary.

(c) (No change.)

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on February 25, 2005.

TRD-200500868

Paula C. Flowerday

Executive Secretary

Texas Racing Commission

Earliest possible date of adoption: April 10, 2005

For further information, please call: (512) 833-6699


Chapter 309. RACETRACK LICENSES AND OPERATIONS

Subchapter B. OPERATION OF RACETRACKS

2. FACILITIES AND EQUIPMENT

16 TAC §309.124

The Texas Racing Commission proposes an amendment to §309.124, relating to the requirement that racetrack associations provide and maintain a public address system. The amendment eliminates the requirement that there be a public address system in the kennel area of a greyhound racetrack.

Paula C. Flowerday, Executive Secretary for the Texas Racing Commission, has determined that for the first five year period the amendment is in effect there will be no fiscal implications for state or local government as a result of enforcing the amendment.

Ms. Flowerday has also determined that for each of the first five years the amendment is in effect the anticipated public benefit will be that the health of greyhounds at Texas greyhound racetracks will be enhanced since they will not be disrupted by the public address system. There will be fiscal implications for the greyhound racetracks in that they will not be required to install public address systems in the kennel area. The exact amount of savings cannot be determined as it will depend on the size of the kennel area and the type of equipment involved. There is no anticipated economic cost to an individual required to comply with the amendment as proposed. The amendment will have no effect on the state's agricultural, horse breeding, horse training, greyhound training, and greyhound breeding industries.

Comments on the proposal may be submitted on or before April 15, 2005, to Paula C. Flowerday, Executive Secretary for the Texas Racing Commission, P.O. Box 12080, Austin, Texas 78711-2080.

The amendment is proposed under the Texas Civil Statutes, Article 179e, §3.02 which authorizes the Commission to make rules relating exclusively to horse and greyhound racing; and §6.06, which authorizes the Commission to adopt rules on all matters relating to the planning, construction, and operation of racetracks.

The proposed amendment implements Texas Civil Statutes, Article 179e.

§309.124.Public Address System.

An association shall provide and maintain a public address system capable of transmitting announcements to the patrons and , if the association is a horse racing association, to the stable [ or kennel ] area.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on February 25, 2005.

TRD-200500869

Paula C. Flowerday

Executive Secretary

Texas Racing Commission

Earliest possible date of adoption: April 10, 2005

For further information, please call: (512) 833-6699


Chapter 315. OFFICIALS AND RULES FOR GREYHOUND RACING

Subchapter B. ENTRIES AND PRE-RACE PROCEDURES

16 TAC §315.106

The Texas Racing Commission proposes an amendment to §315.106, relating to liability for fees in stake races. When Chapter 315 was last reviewed in 2000, an error was made in the text of this section. This amendment returns the section to the originally intended language.

Paula C. Flowerday, Executive Secretary for the Texas Racing Commission, has determined that for the first five year period the amendment is in effect there will be no fiscal implications for state or local government as a result of enforcing the amendment.

Ms. Flowerday has also determined that for each of the first five years the amendment is in effect the anticipated public benefit will be that the Commission's rules will accurately reflect their regulatory intent. There are no fiscal implications for small or micro-businesses. There is no anticipated economic cost to an individual required to comply with the amendment as proposed. The amendment will have no effect on the state's agricultural, horse breeding, horse training, greyhound training, and greyhound breeding industries.

Comments on the proposal may be submitted on or before April 15, 2005, to Paula C. Flowerday, Executive Secretary for the Texas Racing Commission, P.O. Box 12080, Austin, Texas 78711-2080.

The amendment is proposed under the Texas Civil Statutes, Article 179e, §3.02 which authorizes the Commission to make rules relating exclusively to horse and greyhound racing; and §6.06, which authorizes the Commission to adopt rules on all matters relating to the planning, construction, and operation of racetracks.

The proposed amendment implements Texas Civil Statutes, Article 179e.

§315.106.Liability for Fees in Stake Races [ Entry Fee ].

(a) The owner of a greyhound nominated to a stakes race is liable for all nomination, sustaining, and other fees associated with the race. The death of a greyhound, failure to start, or mistake in its entry does not release the owner from liability for the applicable fees. If ownership of the greyhound is transferred after the greyhound is nominated for the race, the new owner is liable for all fees associated with the race that accrue after the date the ownership is transferred. [ A greyhound that is entered in a purse race shall start in the race, unless the greyhound is declared or scratched. ]

(b) (No change.)

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on February 25, 2005.

TRD-200500870

Paula C. Flowerday

Executive Secretary

Texas Racing Commission

Earliest possible date of adoption: April 10, 2005

For further information, please call: (512) 833-6699