16 TAC §25.214
The Public Utility Commission of Texas (commission) adopts
new §25.214, relating to Terms and Conditions of Retail Delivery Service
Provided by Investor Owned Transmission and Distribution Utilities, with changes
to the text as published in the August 4, 2000,
Texas Register
(25 TexReg 7286). The commission also makes changes
to the text of the standard Tariff (pro-forma tariff), adopted by reference
in §25.214. This rule is necessary to implement the Public Utility Regulatory
Act, Texas Utilities Code Annotated §39.203 (Vernon 1998, Supplement
2001) (PURA), as it relates to the establishment of non- discriminatory terms
and conditions of retail distribution service provided by a transmission and
distribution utility. PURA Chapter 39, Restructuring of Electric Utility Industry,
became effective September 1, 1999, as part of Senate Bill 7, 76th Legislative
Session, (SB7) to effectuate a competitive retail electric market that allows
each Retail Customer to choose its provider of electricity and encourages
full and fair competition among all providers of electricity. This new rule
is adopted under Project Number 22187.
This section incorporates a standard, pro-forma tariff which contains the
terms and conditions of retail distribution service. This pro-forma tariff
is adopted by reference and can only be changed through the rulemaking process.
Each transmission and distribution utility (TDU) operating in Texas shall
file with the commission a Tariff to govern its retail distribution service,
using pro-forma tariff chapters 1, 3, 4, and 5 as written, but with the ability
to modify chapters 2 and 6 to reflect individual utility characteristics.
The pro-forma tariff is divided into six chapters as follows: Chapter 1 defines
various terms used throughout the pro-forma tariff; Chapter 2 involves descriptions
of the TDU's certified service area; Chapter 3 sets forth rules and regulations
applicable to both the relationship between the TDU and Retail Electric Provider
(REP) and the relationship between the TDU and Retail Customer; Chapter 4
sets forth the rules and regulations governing the REPs' access to the TDU's
Delivery System; Chapter 5 sets forth the rules and regulations governing
the TDU's provision of Delivery Service and conditions of service to the Retail
Customer; and Chapter 6 involves TDU specific Rate Schedules.
As part of the drafting process, commission staff conducted workshops in
Austin to receive input from potentially affected persons. Following the first
workshop, commission staff received proposed pro-forma tariffs from both the
investor owned utilities, representing the TDUs, and the REPs. After consideration
of these proposals, commission staff issued a first draft pro-forma tariff
upon which it received informal comments. Commission staff then held a second
workshop at which it received further input from the parties and attempted
to work towards a consensus document. Commission staff later issued a second
draft pro-forma tariff and a draft rule upon which further informal comments
were received.
After the proposed new section was published in the
Texas Register
, the commission received written comments and/or reply
comments on the proposed rule and pro- forma tariff from the following entities:
Alcoa, Inc. (Alcoa); Automated Energy, Inc. (Automated Energy); Consumers
Union, Texas Ratepayers' Organization to Save Energy and Texas Legal Services
Center (Consumers); Entergy Gulf States, Inc. on behalf of its Affiliated
Retail Electric Provider, Entergy Retail Texas Limited Partnership (Entergy
Texas REP); Enron Energy Services, Exelon Corporation, Green Mountain Energy
Company, New Energy Texas, and Shell Energy Services Company, L.L.C. (Independent
Retailers); Investor Owned Utilities (IOUs); Entergy Gulf States, Inc. and
Southwestern Public Service Company (Non-ERCOT Utilities); Nucor Steel (Nucor);
Occidental Chemical Corporation (OxyChem); Texas Association of Builders (TAB);
Texas Electric Cooperatives, Inc. (TEC); Texas Industrial Energy Consumers
(TIEC); Texas Industries, Inc. (TXI); and TXU Electric Company on behalf of
its future retail electric provider (TXU REP).
After receiving written comments, the commission held a public hearing
regarding the proposed new rule and pro-forma tariff at the commission offices
on September 29, 2000. Representatives from the following entities attended
the public hearing and made oral comments: Automated Energy, IOUs and TAB.
Such oral comments are summarized herein to the extent that they differ from
the submitted written comments.
Almost all of the comments received were in response to the pro-forma tariff
adopted by reference in subsection (d) of the proposed rule. As a result of
changes to the Tariff, the commission modifies subsection (d) to reflect the
new effective date of the revised pro-forma tariff.
Non-ERCOT Utilities commented that the commission should clarify in subsection
(b) that the terms and conditions contained in the pro-forma tariff do not
apply to the provision of transmission service by non-ERCOT utilities to Retail
Customers since the transmission service provided by the non-ERCOT utilities
falls under the jurisdiction of the Federal Energy Regulatory Commission (FERC)
rather than by the commission. They also pointed out that in the future the
non-ERCOT distribution utilities will neither have control over operation
nor control of the access to the transmission facilities. The revenues derived
from transmission service will be charged and collected by an independent
operator under the terms and conditions of the Independent Operator's FERC
tariffs.
For the non-ERCOT utilities, the commission agrees that the pro-forma tariff
should govern distribution service only. A similar issue arose in connection
with the unbundling cost of service cases, and the commission expressed its
view that transmission service from non-ERCOT utilities would be available
under FERC-approved tariffs. The commission modifies subsection (b) accordingly.
In the preamble to the proposed rule the commission posed the following
questions:
1. Are the provisions of this rule consistent with the protocols of the
relevant independent organizations (as defined in PURA §39.151) in Texas?
If not, please identify which provisions are inconsistent and explain why.
Also explain how these provisions need to be modified, if at all, to make
them consistent with those protocols.
No party identified any major discrepancy between the pro-forma tariff
and the protocols of the Independent Organization, except that TXU REP and
IOUs identified one provision in Section 4.8.4 regarding procedures for the
assignment of an ESI ID that is not consistent with the protocols of the Independent
Organization. Both TXU REP and IOUs recommended that this section simply refer
to the protocols of the Independent Organization.
The commission agrees with TXU REP and IOUs and makes the suggested modification.
This modification is consistent with the rest of the Tariff. As IOUs pointed
out the proposed Tariff avoids the possibility of any conflict by simply stating
that certain actions need to be carried out in accordance with the protocols
or Applicable Legal Authorities.
Nucor pointed out that the Electric Reliability Council of Texas (ERCOT
) protocols are not final yet, so it is difficult to comment. IOUs pointed
out that non-ERCOT Protocols are not finalized yet either.
The commission concludes, as it notes above, that any possibility of a
conflict with the final version of the protocols is avoided in the rule by
simply referring to the protocols or Applicable Legal Authorities, rather
than to any details of the protocols.
Nucor also suggested that the commission adopt the appropriate terms and
conditions and that any inconsistent protocols adopted by an Independent Organization
should be amended to conform to the commission rules. The parties, however,
have not pointed out other specific conflicts between this rule and the protocols.
2. Are the provisions of this rule consistent with the commission's customer
protection rules as proposed in Project Number 22255? If not, please identify
which provisions are inconsistent and explain why. Also explain how these
provisions need to be modified, if at all, to make them consistent with the
proposed customer protection rules. (Note: The commission plans to consider
the Project Number 22255 customer protection rules for publication at the
August 10, 2000 Open Meeting. The rules as approved for publication should
be available in Central Records and on the commission's web site no later
than August 17, 2000. If for some reason there is a delay in Project Number
22255, staff will attempt to make a draft available for your review no later
than August 17, 2000.)
Entergy Texas REP identified a few technical differences (
e.g.
, regarding definitions of terms used) between the two rules and
recommended changes in the two rules to make them consistent. For example,
it pointed out that some situations discussed in the present rule regarding
suspension of service with or without notice are not covered in the customer
protection rules. Entergy Texas REP then identified one substantive difference
in the two rules regarding the ability of the Competitive Retailers to disconnect
Retail Customers for non- payment. Entergy Texas REP favored the treatment
in the present rule, which permits a Competitive Retailer to disconnect a
Retail Customer for non-payment. IOUs discussed the differences in their detailed
comments on different sections of the Tariff.
The commission addresses the differences identified by Entergy Texas REP
and IOUs in the discussion of various sections of the Tariff below.
3. The proposed rule incorporates certain provisions (
e.g.
, provisions relating to line extension, service connection) of
the existing customer protection rules §§25.21 - 25.31. What other
provisions, if any, of the existing customer protection rules, should be incorporated
in this rule assuming that the existing §§25.21 - 25.31 will be
replaced with new rules (viz., new customer protection rules to be adopted
in Project Number 22255 and the present rule dealing with the terms and conditions
of retail delivery service provided by a TDU) in the restructured market in
Texas?
IOUs pointed out that §25.26 of this title (relating to Spanish Language
Requirements) and the non-English language provisions in the customer protection
rules should be incorporated in this rule. This requirement is relevant for
outage notification (repair requests.) IOUs also recommended keeping §25.27
of this title (relating to Retail Electric Service Switchovers) as a separate
rule because of the level of detail contained in that rule.
The commission agrees and adds the Spanish language provision in Section
5.12.1. The switchover rule is a separate rule that is not affected by the
adoption of this rule.
IOUs claimed that the appropriateness of repealing §§25.21-25.31
should be examined on a rule by rule basis in the customer protection rulemaking
proceeding. TXU REP pointed out that replacing existing customer protection
rules with the new rules would create a gap in customer protections during
the pilot programs for customers of utilities that choose to remain with their
utility providers.
The commission in proposing new customer protection rules recognized the
need to leave the existing rules in place until the beginning of full retail
competition, at the earliest.
4. Are the standard electronic transaction (SET) protocols and testing
procedures referenced in Section 4.3.1, Eligibility, sufficient to ensure
accurate data transfer between Competitive Retailers and TDUs, or does there
need to be an Electronic Trading Agreement to supplement those protocols?
If so, what are the elements and provisions needed for that agreement?
IOUs claimed that the policy decisions regarding system architecture and
related issues surrounding the implementation of the Tariff are beyond the
scope of Texas SET and should be dealt with at the commission. They requested
that a work group be established to address these implementation issues including
development of the Electronic Trading Partner Agreement and testing of all
data transfer protocols. TXU REP also pointed out that while Texas SET protocols
define transaction data elements and codes, they do not specify parameters
of transport mechanisms, timing, and other technical information. TXU REP,
however, recommended an Electronic Trading Partner Agreement similar to the
one in the document developed by the Coalition for Uniform Business Rules
(CUBR).
The commission finds that a requirement of successful system testing based
on a test plan developed by the SET team, in coordination with the commission,
as adopted in this Tariff in Section 4.3.1, alleviates the need for an Electronic
Trading Partner Agreement and ensures a transparent and impartial process
that will facilitate smooth transactions between TDUs and Competitive Retailers.
Comments on the Pro-forma Tariff
Comments on Chapter 1: Definitions
Applicable Legal Authorities:
Nucor suggested
that the definition should exclude ERCOT or its authorized entities since
these entities are not legal authorities and should not be granted such unfettered
authority. IOUs disagreed and cited PURA §38.005 and §39.151 to
support ERCOT's important role in the restructured electric market. TEC recommended
deletion of the term "Applicable" from "Applicable Legal Authorities" since
not all entities, rules, or statutes cited in the definition are applicable
to all situations. IOUs disagreed claiming that the use of the word "Applicable"
in the definition makes it clear that only some rules or laws will be applicable,
not all. They also argued that the concept "Applicable Legal Authorities"
has been used in other jurisdictions (
e.g.
,
New Jersey) and hence should be used here.
The commission agrees with IOUs.
Central Prevailing Time:
TXU REP recommended
adding a definition of Central Prevailing Time, which is used in Section 4.8.1,
and specifying that all references to a time certain are to be interpreted
to refer to Central Prevailing Time.
The commission agrees and adds the definition used in the ERCOT protocols.
Company:
TEC recommended clarification
of the definition by adding that it is a TDU and hence not a municipally owned
utility or a cooperative.
The commission agrees and has made such clarification.
Competitive Retailer:
TEC recommended clarification
of the definition by adding Provider of Last Resort (POLR) explicitly in the
definition and also by replacing the phrase "conducts business" with "sells
Electric Power and Energy." Entergy Texas REP pointed out that the proposed
customer protection rule uses the term "Energy Service Provider" (ESP) rather
than "Competitive Retailer" and suggested that the use of terms and their
definitions in the two rules should be made consistent.
The commission concludes that TEC's inclusion of POLR in the definition
is redundant since a POLR is by definition a REP and hence already included.
However, the commission agrees with TEC's second suggestion. The commission
also agrees that consistency should be achieved in the rules on the use of
terms and their definitions. The commission decides to use the term "Competitive
Retailer" in the present rule since the terminology is already being used
in the protocols proposed by ERCOT and is also used in the commission's Substantive
Rule §25.173 of this title (relating to Goal for Renewable Energy). The
commission will decide on the use of the term ESP in the customer protection
rule when it finalizes that rule.
Construction Service:
IOUs recommended
that the definition be expanded to reflect services normally provided under
a facilities extension policy.
The commission agrees and makes the proposed changes.
Delivery Service Agreement:
Independent
Retailers recommended deleting the definition and modifying the definition
of "Service Agreement" by emphasizing that this is the agreement attached
to the Tariff and cannot be modified by parties to the agreement. They argued
that allowing a TDU to offer different terms to selected Competitive Retailers
introduces a potential means to discriminate and to delay new service. IOUs
discussed the issue when commenting on Section 4.3.1. They pointed out that
Service Agreement encompasses all commission-approved agreements that the
Company may enter into with any entity pursuant to this Tariff including Delivery
Service Agreement, and Facility Extension Agreement.
The commission agrees with IOUs' explanation that Delivery Service Agreement
is one of the commission-approved Service Agreements that a TDU will have
with Competitive Retailers. The commission, however, modifies the definition
of Delivery Service Agreement to address the concerns of the Independent Retailers
under Section 4.3.1, ELIGIBILITY. (See discussion under Section 4.3.1.)
Discretionary Services:
IOUs proposed replacing
the term "tariff" with "Rate Schedule" and changing the reference from Section
6.1.3 to Section 6.1.
The commission agrees to change the term "tariff" with "Rate Schedules"
but declines to change the reference. The commission believes that referring
specifically to the section in Rate Schedules for Discretionary Services enhances
the definition of Discretionary Services.
Distribution Cooperative:
TEC recommends
deleting this definition and replacing the term "distribution cooperative"
with "electric cooperative" since that approach is consistent with PURA.
The commission agrees and makes the recommended changes.
Good Utility Practice:
IOUs suggested that
the definition should be modified to refer to the most current Substantive
Rule definition of the term, which is Substantive Rule §25.5(31) of this
title (relating to Definitions).
The commission acknowledges the discrepancy and addresses the problem by
making the reference to §25.5, rather than to the definition number.
Point of Delivery and Point of Supply:
Independent Retailers added the concept of "designated point" to the definitions.
IOUs argued that such a modification is not necessary. IOUs argued that electric
power enters the Company's Delivery System at numerous Points of Supply and
there is no way in the Tariff to designate a Point of Supply. IOUs argued
that there is no need for the designation since "Point of Supply" and "Point
of Delivery" are only used in defining "Delivery". In the case of "Point of
Delivery" IOUs argued that a particular point is "designated" by the physical
act of interconnecting to the TDU's Delivery System with the Retail Customer's
Electrical Installation unless otherwise agreed to by the TDU and Retail Customer.
The commission agrees and retains the proposed definitions without modification.
Premises:
Independent Retailers modified
the definition of "Premises" by including "related or commonly used tracts"
in the definition. IOUs disagreed and pointed out that the definition in the
published draft is the same as the definition in Substantive Rule §25.5(37)
(currently §25.5(51)). They argued that the definition is intended to
provide a limitation on the unwarranted expansion of electric facilities by
a Retail Customer without utility approval. (Related issues are discussed
in the context of Section 5.6.3.)
Consistent with its decision on Section 5.6.3, the commission modifies
the definition as suggested by Independent Retailers.
Retail Customer:
Entergy Texas REP suggested
a modification to make this definition consistent in both the present rule
and the customer protection rules.
The commission believes that the definition used in the proposed pro-forma
Tariff is the most appropriate for the present rule. The commission will decide
on the definition used in the proposed customer protection rule during the
adoption of that rule.
Retail Customer's Electrical Load:
Independent
Retailers suggested modifications to the definition of "Retail Customer's
Electrical Load" without providing any explanation. IOUs disagreed with that
definition and recommended replacing the expression "may be" in the definition
with "are." The purpose is to define "connected load" and not "maximum demand"
as the proposed definition implies.
The commission agrees with IOUs' and makes the suggested change.
Retail Electric Provider:
Entergy Texas
REP suggested a modification to make this definition consistent in both the
present rule and the customer protection rule. Consumers preferred the definition
of REP that includes the idea that any officer or employee, etc., representing
the REP will also be considered a REP. IOUs disagreed by pointing out that
the current definition is consistent with the definition in PURA §31.002(17).
The commission agrees with IOUs and maintains the definition in the proposed
pro-forma tariff. The commission will decide on the definition used in the
proposed customer protection rule during adoption of that rule.
Service Agreement:
Independent Retailers
asked the commission to clarify that neither the utility nor the Competitive
Retailer may negotiate terms other than the commission- approved standard
agreement. Otherwise, there is potential for discrimination
The commission agrees and has added such clarifying language.
Tamper or Tampering:
Both Independent Retailers
and IOUs proposed changes to the definition of "Tamper or Tampering." IOUs
claimed that their definition reflects the commission's current definition
of meter tampering in Substantive Rule §25.126 of this title (relating
to Meter Tampering).
The commission agrees with IOUs and modifies the proposed definition.
Comments on Chapter 3: General Service Rules and
Regulations
Comments on Section
3.1, Applicability
;
Section
3.12, Good Faith Obligation
; Section 3.14, Cooperation in Emergencies
; and Section 3.16, Exercise of Right to Consent
Independent Retailers argued that the Tariff cannot "apply to" Competitive
Retailers, and cannot require them to negotiate in good faith, to cooperate
in emergencies, or not unreasonably withhold their consent since the commission
possesses jurisdiction over only the utility. Rather the Tariff sets forth
the terms and conditions under which the utility offers service. Independent
Retailers would move these obligations to the agreement to be signed between
a TDU and a Competitive Retailer. IOUs replied that the commission has jurisdiction
to promulgate substantive rules that apply to Competitive Retailers. Furthermore,
the IOUs contended that, the provisions of the Tariff "apply" to anyone who
seeks to use the utilities' services.
The commission agrees with IOUs. The Tariff applies to Delivery Service
offered by TDUs to REPs and prescribes the terms and conditions for such service.
The Tariff applies to REPs in the sense that it prescribes the conditions
that REPs must meet to qualify for Delivery Service under the Tariff. The
commission concludes that this section of the Tariff is accurate and need
not be changed.
Consistent with their comments on subsection (b) of the proposed rule,
Non-ERCOT Utilities claimed that the pro-forma Tariff should explicitly state
that the Tariff does not apply to the provision of transmission service by
non-ERCOT utilities to Retail Customers
As in subsection (b), the commission agrees.
Comments on Section 3.2, General
Entergy Texas REP raised various questions including liability issues stemming
from the statement that: "Company has no ownership interest in any Electric
Power and Energy it delivers." It posed the hypothetical of a passer-by who
contacts a low-hanging power line and is injured by the electric current flowing
through the line, and then asked the question whether the "owner" of the electric
power is liable for the damages. IOUs explained that the language in the Tariff
merely reflects PURA §39.105(a). IOUs, on the other hand, recommended
that the preamble clarify that access to the Delivery System does not give
Competitive Retailer a vested property interest in Company's Delivery System
facilities. In response, Independent Retailers agreed that access to the Delivery
System does not create a vested property interest but wanted the Tariff clarified
to acknowledge that eligible Competitive Retailers do possess a right to access
that system according to the Tariff terms and conditions.
Regarding ownership of Electric Power and Energy, the commission agrees
with IOUs that a TDU does not have an ownership interest in any Electric Power
and Energy it delivers. On the associated liability issues raised by Entergy
Texas REP, the commission believes that any liability for injury caused by
contact with a low-hanging/drooping power line resides not with the owner
of the electrons flowing through that line, if that could even be determined,
but with the entity responsible for operation and maintenance of that line, i.e.
, the TDU. The commission also clarifies that
eligible Competitive Retailers possess a right to access a TDU's Delivery
System facilities in accordance with the Tariff although that access does
not give Competitive Retailer a vested property interest in those facilities.
Comments on Section 3.7, Non-Discrimination
Independent Retailers demanded that the non-discrimination provision expressly
apply to "affiliated REPs" in addition to all affiliates because there is
a possibility, as in the case of Reliant HL&P, that an "affiliated REP"
may not be an actual affiliate of the Company if the affiliate divests its
affiliated REP.
The commission agrees with Independent Retailers that the particulars of
the Reliant Business Separation Plan may lead to an "affiliated REP" that
is not an actual affiliate of the Company. As such, the commission has added
language to clarify that neither "affiliates" nor an "affiliated retail electric
provider" may receive preferential treatment under this Tariff. For completeness,
the commission has also added the definition of "affiliated retail electric
provider" found in PURA §31.002(2).
So that the general provisions of Section 3.7 would trump other, more specific
provisions of the Tariff, TXI recommended adding the following language prefacing
the first sentence of this section: "Notwithstanding any other provision of
this Tariff." It also recommended adding language to ensure that the requirement
of a Company's non-discriminatory treatment regarding the discharge of its
responsibilities under the Tariff also applies to a Company's exercise of
its authority and discretion under the Tariff, and to further emphasize the
requirement of equality of treatment. IOUs replied that a TDUs' compliance
with the very specific requirements of the Tariff should mean that the TDU
has complied with the general non-discrimination provision in Section 3.7
and that a Retail Customer or Competitive Retailer should not be able to argue
that a TDU has somehow violated the general non-discrimination provision in
Section 3.7 even though the TDU has complied with the specific requirements
of the Tariff. Further, the IOUs stated that TXI's suggested language, "and
in a manner that is reasonable and comparable to the manner in which Company
treats itself and its affiliates," is unnecessary because PURA §39.203,
on which TXI relies, makes it clear that the commission is to adopt "reasonable
terms and conditions" for Delivery Service and that the reasonable and comparable
terms and conditions referenced by these sections are the Tariff terms and
conditions,
i.e.
, these code sections are
fully effectuated by the commission's adoption of the Tariff.
The commission agrees with the reasoning of the IOUs on both accounts and,
therefore, declines to adopt TXI's proposed additional language.
Consumers recommended additional language to explicitly rule out discrimination
against Retail Customers based on race, nationality, color, religion, sex,
marital status, income level, source of income, or geographic location. In
Reply, IOUs pointed out that such discrimination is already prohibited under
Substantive Rule §25.4 of this title (relating to Statement of Nondiscrimination)
as proposed by staff in Project Number 21232,
Rule
Changes to Conform Rules to Electric Restructuring Act (Senate Bill 7)
,
and, hence, it is not necessary, or even appropriate, to repeat those same
prohibitions in this section of the Tariff. However the IOUs proposed including
a reference to Applicable Legal Authorities which would include Substantive
Rule §25.4.
The commission agrees with IOUs and modifies the Tariff language accordingly.
Comments on Section 3.8, Required Notice
IOUs claimed that a more appropriate heading for this section is "Form
of Notice."
TEC recommended application of the "mail box rule" (Texas Rules of Civil
Procedure, Rule 21), under which it is presumed that a document is received
three days after it has been mailed. The presumption no longer stands if a
party offers proof that the document was not received within the three days
or not received at all. Consumers, however, prefer the proposed language where
the burden of proof is on the sending party to establish that the notice was
sent when a party claims that the notice was not received.
The commission agrees with IOUs and changes the title of the section. The
commission also agrees with Consumers and retains the proposed language since
it is easier for the sending party to prove that a document is sent and received
by the sender than for the receiving party to establish that it has not received
the document.
Comments on Section 3.9, Designation of Company
Contact Persons for Matters Relating to Delivery Service
IOUs requested clarification that a website listing of Company contact
persons by title only is also allowed as the section allows for identification
of Company contact person by either name or by title. Consumers would like
to have a direct notice to Retail Customers of a change in designation of
a customer contact.
The commission agrees with IOUs and has provided the requested clarification.
Regarding Consumers' request, the commission would like to note that the proposed
Tariff does call for direct notice to Retail Customer of a change in designation
of customer contact where Retail Customer directly contacts Company for Construction
Services.
Comments on Chapter 4: Service Rules and Regulations
to Access to Delivery System of Company by Competitive Retailer
Comments on Section 4.2, Limits on Liability,
and Section 5.2, Limits on Liability
Comments on Sections 4.2.1, Liability Between
Company and Competitive Retailers, and 5.2.1, Liability Between Company and
Retail Customers
IOUs argued that in light of the commission's decision to limit the TDUs'
liability for outages or fluctuations of Delivery Service caused by a TDU's
ordinary negligence, these sections should be modified to promote certainty
and avoid the potential for unnecessary litigation. Specifically, in order
to prevent the possible misunderstanding that violation of the terms of the
pro-forma Tariff is itself a tort, the IOUs requested that the first sentence
of Sections 4.2.1 and 5.2.1 be replaced with the following language: "This
Tariff is not intended to limit the liability of Company or Competitive Retailer
for damages except as expressly provided herein."
As for the remainder of Sections 4.2.1 and 5.2.1, the IOUs provided two
alternatives for consideration to, in their words, accomplish the commission's
goal of avoiding a flood of litigation, while simultaneously protecting the
rights of Competitive Retailers and Retail Customers to recover damages for
events other than interruptions or fluctuations in service. Alternative A
is composed of the suggested replacement first sentence above and, in the
second paragraph, the language approved by the Texas Supreme Court in Houston Lighting & Power Co. v. Auchan USA
,
995 S.W.2d 668 (Tex. 1999). The IOUs argued that although the language at
issue in the
Auchan
case appears more complicated
than the published language, it will actually be easier to administer because
the Texas Supreme Court has already upheld its validity, whereas, the published
language has not been tested and may encourage litigation over its meaning.
The final sentence makes clear, they argued, that a TDU is liable for damages
arising from its ordinary negligence that are not attributable to interruptions
or fluctuations in service.
Alternative A:
This Tariff is not intended to limit the liability of Company or Competitive
Retailer for damages except as expressly provided herein.
Company will make reasonable provisions to supply steady and continuous
Delivery Service, but does not guarantee the Delivery Service against fluctuations
or interruptions. Company will not be liable to any person or entity for any
damages, whether direct or consequential, including, without limitation, loss
of profits, loss of revenue, or loss of production capacity, occasioned by
fluctuations or interruptions of Delivery Service; provided, however, in the
event of Company's failure to make reasonable provisions (whether as a result
of negligence or otherwise) to supply steady and continuous Delivery Service,
Company's liability shall be limited to the cost of necessary repairs of physical
damage proximately caused by the Delivery Service failure to those electrical
facilities of Retail Customer which were then equipped with the protective
safeguards recommended or required by the then current edition of the National
Electrical Code.
However, if damages result from fluctuations or interruptions in Delivery
Service that are caused by Company's or Competitive Retailer's gross negligence
or intentional misconduct, this Tariff shall not preclude the recovery of
appropriate damages when legally due.
In the event the commission decides not to adopt Alternative A, the IOUs
also proposed Alternative B which, they argued, avoids the concerns over the
proposed language but achieves the same purposes. Alternative B is composed
of the suggested replacement first sentence above, the proposed language of
Section 3.13 as the second sentence, the proposed language as the third sentence
(with one minor correction: the replacement of the defined term "Delivery
Service" for the undefined term "delivery of electric power"), and the same
final sentence as in Alternative A.
Alternative B:
This Tariff is not intended to limit the liability of Company or Competitive
Retailer for damages except as expressly provided herein.
Company will use reasonable diligence to provide continuous and adequate
Delivery of Electric Power and Energy in conformance with Applicable Legal
Authorities, but Company does not guarantee against fluctuations or interruptions.
With regard to damages arising from fluctuations or interruptions in Company's
Delivery Service that are due to Company's ordinary negligence, Company shall
have no liability for such damages.
However, if damages result from fluctuations or interruptions in Delivery
Service that are caused by Company's or Competitive Retailer's gross negligence
or intentional misconduct, this Tariff shall not preclude the recovery of
appropriate damages when legally due.
Finally, with regard to the whole of Sections 4.2 and 5.2, the IOUs argued
that the language in these sections should be emphasized so as to meet the
conspicuousness tests outlined in Texas Law. Specifically, the IOUs cited
to
Dresser Industries, Inc. v. Page Petroleum, Inc.
, 853 S.W.2d 505, 511 (Tex. 1993) for the propositions that language
that relieves a party of its own negligence or otherwise shifts risk must
be conspicuous and that language in capital headings or in contrasting type
or color is considered conspicuous.
In response to the IOUs' comments, TIEC noted that much evidence exists
that calls into question the utilities' position on negligence liability.
They argued that insurance is available for utilities, and that utilities,
not customers, are in the best position to guard against their own negligence.
Furthermore, they argued that holding utilities liable for their own negligence
will give them incentive to avoid unnecessary interruptions. They argued that
if the commission decides to limit the liability of TDUs, the commission should
not go any farther than the provisions that were at issue in the
Auchan
case. They argued that the Tariff as currently written, as well
as IOU Alternative B, would completely exempt utilities from their own negligence,
whereas the
Auchan
case allows for negligence
liability but limits damages to electrical facilities. They also argued that
the IOUs are now attempting to narrow the definition of electrical facilities
by adding the phrase "which were then equipped with the protective safeguards
recommended or required by the then current edition of the National Electrical
Code." This definition, they argued, limits the scope to physical damage to
electrical equipment used in the provision or delivery of electricity, such
as meters and transformers, and is not the same as the definition given by
the late Dean Page Keeton on cross-examination in PUC Docket Number 3198, Application of Central Power & Light Co. for Approval
of Tariff Amendment
, to the effect that electrical equipment is any
kind of equipment receiving electricity. Therefore, TIEC suggested that the
phrase "if applicable" should be added after the words "National Electrical
Code" and that "Electrical Facilities of Retail Customer" be defined to mean
any and all equipment and facilities that use electricity.
In its reply comments, Entergy Texas REP stated that its own position was
most closely approximated by the IOUs proposed alternative language.
In their comments regarding Sections 4.2.1 and 5.2.1, the Independent Retailers
argued that indemnity from the TDU to the REPs (an indemnity clause) is necessary
because Retail Customers, finding that they cannot recover against the TDU
because of the Tariff limitations, will almost certainly bring suits against
their electric providers seeking to recover damages caused by the TDU's negligence.
They argued that without such an indemnity clause, REPs will be forced to
procure liability insurance against potential damage awards and potential
settlements. The Independent Retailers recommended adoption of the transmission
rule's indemnity provision, §25.202(b)(2) of this title (relating to
Billing and Payment for Transmission Service and Ancillary Services). However,
they argued, that as long as the liability of utilities is limited, REPs can
not file third party claims against a utility for indemnity or attempt to
use a TDU's negligence to reduce the REP's percentage of negligence. Any efforts
to obtain indemnity will not work if the proposed limitation of liability
for TDUs is present. The Independent Retailers also noted that they cannot
easily contract around potential liability to customers in this instance because
obtaining a binding contractual limitation of liability often proves extremely
difficult, the proposed customer protection rules do not expressly sanction
a limitation of liability and marketplace economics may not permit it. Also,
they argued that Section 4.2.2 of the published language, which declares that
a REP bears no liability to a third party or customer for a TDU's negligence,
might prompt a court to declare that the commission lacks jurisdiction to
enact a civil liability rule for entities outside its jurisdiction. The Independent
Retailers would rewrite Section 4.2.1 to read as follows:
"Company is responsible for the design, installation, replacement, operation,
and maintenance of distribution facilities up to and including the Point of
Delivery except as specifically provided otherwise in this Tariff.
"Company shall assume all liability for and shall indemnify Competitive
Retailer for any claims, losses, costs, and expenses of any kind or character
to the extent that they result from Company's negligence in connection with
the design, construction, or operation of its Distribution System or provision
of Distribution Service; provided, however, that Company shall have no obligation
to indemnify Competitive Retailer for claims brought by claimants who cannot
recover directly from Company. Such indemnity shall include, but is not limited
to, financial responsibility for: (a) Competitive Retailer's monetary losses;
(b) reasonable costs and expenses of defending an action or claim made by
a third person; (c) damages related to the death or injury of a third person;
(d) damages to the property of Competitive Retailer; (e) damages to the property
of a third person for which liability is imposed on Competitive Retailer;
(f) damages for the disruption of the business of a third person for which
liability is imposed on Competitive Retailer. In no event shall Company be
liable for consequential, special, incidental or punitive damages, including,
without limitation, loss of profits, loss of revenue, or loss of production.
The Company does not assume liability for any costs for damages arising from
the disruption of the business of the Competitive Retailer or for the Competitive
Retailer's costs and expenses of prosecuting or defending an action or claim
against the Company. This paragraph does not create a liability on the part
of the Company to the Competitive Retailer or a third person, but requires
indemnification where such liability exists. The limitations of liability
in Company's favor provided in this section do not apply in cases of gross
negligence or intentional wrongdoing.
"If Company or Competitive Retailer is found to be grossly negligent or
to have committed intentional misconduct, nothing herein shall preclude the
recovery of all appropriate damages, including, but not limited to, indirect,
consequential, and exemplary damages."
In reply to Independent Retailers, the IOUs argued that the commission
has made its decision to limit TDUs' liability for damages resulting from
interruptions/fluctuations in Delivery Service caused by a TDU's ordinary
negligence and that the Independent Retailers have not given any legitimate
reason to revisit that decision. The IOUs also argued that, in light of the
Texas Supreme Court's reliance on the commission's reasoning in the Auchan
case, Section 4.2.2 provides adequate protection
for the Competitive Retailers against lawsuits arising from the TDU's operation
of the Delivery System. The IOUs noted that Texas law authorizes sanctions
against litigants who bring suit against obviously non-negligent defendants, i.e.
, Texas Revised Civil Procedures 13, Texas Civil
Practice and Remedies Code Annotated §§10.001-.006 (Vernon Supplement
2000). Furthermore, they argued that unlike TDUs, Competitive Retailers can
contract for limitations on liability, and if such is refused by a Retail
Customer, the Competitive Retailer can raise the customer's prices to account
for the increased risks or simply refuse to serve that customer if the risks
outweigh potential profits. Moreover, they argued that although the proposed
customer protection rules do not expressly approve such a limitation of liability,
they do not prohibit it either.
In commenting on Sections 4.2.1 and 5.2.1, TIEC argued that the limitation
on liability contained in these sections should be eliminated because no utility
should enjoy special exemption from Texas common law merely because it is
a regulated utility and because making utilities liable for their own negligence
will give them proper incentive to avoid unnecessary interruptions that are
caused by their unreasonable conduct. Moreover, they argued that the policy
reason advanced for such a limitation of liability,
i.e.
, the potential impact on rates, has never been demonstrated with
any evidence and is speculative at best.
In their reply comments, the Independent Retailers generally agreed with
the comments of TIEC.
In reply to TIEC's comments, the IOUs argued that being a regulated utility
with universal service obligations does justify a limitation of liability
because TDUs must serve high risk customers and cannot raise rates to account
for these risks. The IOUs also argued that TDUs do not need to be subject
to liability to provide them with the proper incentive to avoid interruptions
in service because TDUs already have adequate incentives to avoid outages,
including lost revenues, increased service costs, performance based rates
and commission penalties for poor service. As to TIEC's argument that the
connection between utility liability and higher rates is speculative at best,
the IOUs argued that this statement displays a misunderstanding of the rate
making process. Finally, the IOUs noted that allowing such lawsuits could
possibly force the TDUs to defend against hundreds and possibly thousands
of lawsuits resulting from a single power outage and that this is unnecessary
because most Retail Customers have the capability to protect against such
damages.
In reply to TIEC's comments, Entergy Texas REP maintained that a widespread
power outage would lead to multiple lawsuits and ultimately to higher rates
for electricity consumers.
With regard to Sections 4.2.1 and 5.2.1, TXI argued that the changes indicated
below should be added to the published language in order to satisfy PURA's
new express requirements that the TDU provide service at retail to a REP or
Retail Customer at rates, terms of access, and conditions that are reasonable
and comparable to those that apply to the TDU and its affiliates. Otherwise,
it argued, asymmetrical Tariff provisions may not be comparable to those the
TDU applies to itself. TXI also argued that these changes are necessary to
prevent certain requirements of PURA, commission rules/orders, or the Tariff
from being rendered toothless,
e.g.
, the prohibitions
on discrimination, the requirement to maintain the Delivery System in accordance
with Good Utility Practice and to provide continuous and adequate delivery
of Electric Power and Energy:
"A Company or Competitive Retailer that, as a result of its actions under
this Tariff, is found to be negligent, grossly negligent, or to have committed
intentional misconduct,
or to have acted in a manner
that is discriminatory or anti-competitive
is liable in damages toward
the other for such behavior.
"However,
except as otherwise provided in this
Tariff
, with regard to damages resulting from fluctuations or interruptions
in Company's delivery of electric power due to Company's ordinary negligence,
Company shall have no liability.
"If Company or Competitive Retailer is found to be
negligent
or grossly negligent or to have committed intentional misconduct, or to have acted in a manner that is discriminatory or
anti-competitive
, nothing herein shall preclude the recovery of all
appropriate damages, including, but not limited to, indirect, consequential,
and exemplary damages."
In their reply comments, the Independent Retailers generally agreed with
TXI's comments and particularly agreed on the need to clarify that the limitation
of liability does not affect the commission's enforcement of PURA, antitrust
actions, or preclude filing a complaint against a utility with the commission.
In reply to TXI's comments, the IOUs argued that with regard to the so-called
asymmetrical provisions which would supposedly allow a TDU to discriminate
in favor of its affiliated REP, it is simply not the case that a TDU can apply
one Tariff to its affiliated REP and force non- affiliated REPs to accept
a different, less favorable Tariff. Furthermore, they argued that Section
4.2.1 does not shift risk from the TDU to the REPs but simply limits the TDUs'
liability, and because REPs are not harmed by the limitation of liability,
there is no merit to TXI's argument that the limitation favors an affiliated
REP over a non-affiliated REP. Finally, the IOUs argued that two phrases suggested
by TXI should not be adopted. First, the phrase "or to have acted in a manner
that is discriminatory or anti-competitive" is unnecessary and clutters the
Tariff language because at least four other provisions prohibit a TDU from
acting in a manner that is discriminatory or anti-competitive,
i.e.
, PURA §39.157(d), Substantive Rule §25.272(f), Code
of Conduct for Electric Utilities and Their Affiliates, and Tariff Sections
3.2 and 3.7. Moreover, they argued, this language would open the floodgates
to litigation seeking consequential damages over even spurious charges of
discrimination. Second, the phrase "except as otherwise provided in this Tariff"
should be rejected because the Tariff does not contain exceptions to the limitation
of liability for damages resulting from interruptions or fluctuations of Delivery
Service.
In reply to TXI's comments, Entergy Texas REP argued that TXI may be reading
more into the Tariff than was intended and that the Tariff does not exempt
the utility from liability for discriminatory or anti-competitive activities.
Entergy Texas REP argued that Sections 4.2.1 and 5.2.1 should be framed
in terms of contract principles and not tort principles because they set forth
the relationship between the TDU and the REP or Retail Customer "in the performance
of obligations under this Tariff," with the Tariff taking the place of a contract
for purposes of breach by either party. Entergy Texas REP noted that expectancy
damages are available for breach of contract and that the tort concepts of
negligence, gross negligence and intentional misconduct do not apply in a
contract dispute. It also argued that because Tariffs have the force of law,
the unintended effect of the published language may be to increase liability
for TDUs because it does not contain all of the potential defenses and off-sets
that are contained in tort law. Entergy Texas REP proposed that the first
sentence of Section 4.2.1 be revised to read as follows: "A Company or Competitive
Retailer that, as a result of its actions towards the other in the performance
of its obligations under this Tariff, is found to have breached the Tariff,
shall be liable to the other for the expected performance under this Tariff."
Entergy Texas REP further argued that with regard to liability to third parties,
TDUs should continue to be governed by existing Tariffs until the Legislature
or courts change the allocation of liability contained in utility Tariffs, i.e.
, the existing Tariff limitation of liability
should remain in effect for at least the time period that the price to beat
is in effect. It recommended placing limitation of liability provisions in
Chapter 6 of the Tariff.
In the interest of preserving the status quo as closely as possible as
it relates to exposure to potential liability by TDUs in relation to Competitive
Retailers and Retail Customers, the commission adopts IOU Alternative A but
substitutes the exact tariff language at issue in the
Auchan
case
(Houston Lighting & Power
Co. v. Auchan USA
, 995 S.W.2d 668 (Tex. 1999)) for the second paragraph
of Alternative A. The provisions of Alternative A make clear that 4.2.1 and
5.2.1 are not intended to limit the liability of the parties for damages except
as expressly provided therein. That is to say, under Alternative A, the parties
remain subject to liability for damages to the full extent allowed by the
law except as expressly limited in the Tariff. The express limitation of liability
contained in the second paragraph of 4.2.1 and 5.2.1 limits a TDU's liability
only for damages resulting from fluctuations or interruptions in Delivery
Service predicated only upon the TDU's ordinary negligence, or other types
of causes of action that are not tort based (this being the meaning of the
parenthetical phrase "(whether as a result of negligence or otherwise)" -
the purpose of this being to prevent creative lawyers from pleading around
the ordinary negligence language to reach liability). In such a case, a liable
TDU is responsible only for the cost of necessary repairs of physical damage
(proximately caused by the service failure) to a Retail Customer's electrical
delivery facilities that were equipped with the protective safeguards recommended
or required by the current edition of the National Electrical Code. The term
"electrical delivery facilities" is intended to mean those electrical delivery
type facilities that deal with the delivery of electricity and not with the
ultimate consumption of it. Furthermore, the National Electrical Code is intended
to be the statewide standard to be met by a customer for purposes of being
eligible to receive restitution for the damage to that customer's electrical
delivery facilities, whether or not the National Electrical Code has been
adopted as the standard by the jurisdiction in which that customer lives.
But for this narrow limitation, a TDU, as previously discussed, remains liable
for damages to the full extent allowed by the law, which includes possible
liability for damages resulting from fluctuations or interruptions in Delivery
Service caused by a TDU's gross negligence or intentional misconduct.
In response to TXI's argument that additional language is needed to satisfy
PURA's requirement of non-discrimination in a TDU's provision of service,
the commission notes that this requirement is set out in Section 3.7, NON-DISCRIMINATION,
the remedy for which is also found in the processes set forth in the Tariff.
The commission believes that the additional language suggested by TXI is superfluous.
In response to Entergy Texas REP's comment that Sections 4.2.1 and 5.2.1 should
be framed in terms of contract principles and not tort principles, it is correct
that the Tariff is contractual in nature; however, as stated in
Houston Lighting & Power Co. v. Auchan USA
, 995 S.W.2d at 673-675,
the commission has the authority to limit in a utility tariff a utility's
liability for damages. The purpose of these sections is to limit such liability.
Therefore, with two exceptions, the commission declines to adopt proposed
changes to the language of Sections 4.2.1 and 5.2.1. The first exception is
that in the second paragraph of Sections 4.2.1 and 5.2.1 the commission changes
the phrase "electric service" from the
Auchan
case to the defined term "Delivery Service." The second exception is that,
out of an abundance of caution, the commission adopts the IOUs' suggestion
that language relieving a party of its own negligence or otherwise shifting
risk must meet the conspicuousness test outlined in Texas law. Therefore,
such language within the Tariff is bolded and italicized so as to draw the
reader's attention to such language.
Comments on Section 4.2.2, Limitation of Duty
and Liability of Competitive Retailer, and Section 5.2.2, Limitation of Duty
and Liability of Competitive Retailer
IOUs supported the proposed language as a way to limit the responsibility
of REPs for fluctuations or interruptions of Delivery Service. IOUs argued
that, in light of the Texas Supreme Court's reliance on the commission's reasoning
in the
Auchan
case, Section 4.2.2 provides
adequate protection for Competitive Retailers against lawsuits arising from
the TDU's operation of the Delivery System.
Independent Retailers commented that Sections 4.2.2 and 5.2.2 may provide
no real protection for the REPs against lawsuits by their customers arising
from a TDU's negligence in operating the Delivery System.
Sections 4.2.2 and 5.2.2 make it very clear that a REP is in no way involved
with the design, construction or operation of a TDU's facilities, and, therefore,
should have no legal duty with regards to the design, construction or operation
of such facilities. The commission believes that this provision will provide
guidance to trial judges in assessing the existence of a legal duty on the
part of a REP and, where appropriate, prevent suits against REP where the
real responsibility resides with the TDU.
Comments on Section 4.2.3, Duty to Avoid or Mitigate
Damages, and Section 5.2.3, Duty to Avoid or Mitigate Damages
IOUs commented that these sections follow well settled Texas law in imposing
on a person who suffers damages a duty to mitigate those damages.
Comments on Section 4.2.4 Force Majeure, and Section
5.2.4, Force Majeure
IOUs commented that these force majeure clauses appropriately limit parties'
liability for events beyond their control. They suggested, however, that the
word "act" in the phrase "in damages for any act that is beyond such party's
control" could be argued to mean only a human act. Therefore, to avoid the
potential for misinterpretation, they suggested that the underlined language
be added so that the phrase reads "in damages for any act
or event
that is beyond such party's control...."
The commission adopts the IOUs' suggestion and amends the language of Sections
4.2.4 and 5.2.4 to refer to "any act or event."
Comments on Sections 4.2.5, Emergencies and Necessary
Interruptions, and Section 5.2.5, Emergencies and Necessary Interruptions
IOUs argued that because of safety and reliability concerns, a TDU must
have the ability to curtail or interrupt service in the event of an emergency
on the Delivery System. They suggested, however, that the word "service" be
replaced with the defined term "Delivery Service" to make clear what service
is being referred to.
Independent Retailers commented that the commission should define the term
"emergency" because otherwise, incentives exist for a TDU to declare emergencies
where the facts may not justify doing so,
e.g.
,
where it would allow the utility to curtail power to particular customers
and areas in a manner benefiting its affiliated REP or power generation company.
They argued that the public interest suffers if a monopoly obtains "sole discretion"
over a critical public resource under any circumstance, particularly where
the conditions necessary to exercise that discretion remain undefined. As
the last sentence of Sections 4.2.5 and 5.2.5, they proposed adding the following
language: "Company shall exercise such judgment consistent with all notice
requirements of Section 4.3.7 of this Tariff."
In its comments, TXI urged that the following language be added as the
last sentence of Sections 4.2.5 and 5.2.5: "Nothing herein shall prevent the
Company from being liable if found to be grossly negligent or to have committed
intentional misconduct, or to have acted in a manner that is discriminatory
or anti-competitive, with respect to its exercise of its authority herein."
In their reply comments, Independent Retailers argued that utilities should
not have unbridled discretion to simply declare an emergency without justification
and that there should be a commission standard on what constitutes an emergency.
They argued that too often the IOUs relate everything to reliability to preserve
their unchallenged control over matters.
In reply, IOUs argued that the proposed revisions of Independent Retailers
and TXI should be rejected because these sections are needed to prevent or
alleviate emergency conditions and to maintain the integrity of the transmission
and distribution systems. They argued that TXI's proposal would hamper the
ability of utilities to respond to emergency conditions and inevitably lead
to unnecessary litigation over whether a particular interruption resulted
from gross negligence or intentional misconduct. Also, they argued that under
Independent Retailers' proposed additional language, it is unclear how a TDU
could exercise judgment consistent with the notice requirements in Section
4.3.7,
i.e.
, that judgment and notice are
different concepts. They further argued that allowing parties to second-guess
their decisions and to seek remedies for allegedly improper decisions would
frustrate their abilities to respond quickly and decisively in emergency circumstances.
The commission finds that the language of Sections 4.2.5 and 5.2.5 sufficiently
sets forth the nature of an "emergency" during which the TDU may interrupt
service. The relevant portion reads as follows: "which emergency poses a threat
to the integrity of its system or the systems to which it is directly or indirectly
connected...." No party presented language to define the term "emergency."
The commission adds TXI's proposed language as the last sentence of these
sections, but it deletes from this added language the words "or to have acted
in a manner that is discriminatory or anti-competitive" because this issue
is already addressed in Section 3.7 of the Tariff. Moreover, in keeping with
the intent of TXI's proposed additional language to make known that a TDU
is subject to liability for its behavior even in emergency situations, the
commission deletes the phrase "without liability therefor" in two places.
These modifications ensure that the TDU has the authority in emergency situations
to curtail/interrupt Delivery Service but is subject to the full range of
liability for damages in such situations in keeping with Sections 4.2.1 and
5.2.1 as limited therein. Moreover, the commission adopts the IOUs' suggestion
to change the word "service" to the defined term "Delivery Service." The commission
declines to adopt the Retailers' proposed additional language for the reasons
stated by IOUs. Finally, the commission agrees that the Company should provide
advance notice of curtailments or interruptions to a Competitive Retailer
if reasonably possible. Language has been added noting this requirement and
specifying that such notice may be provided in electronic form to all certificated
REPs. The commission finds that this solution best addresses the need to inform
REPs of outages while still ensuring that restoration of service is done as
quickly as possible. As discussed below, this provision now makes some of
the more detailed language in Sections 4.3.8.1, 5.3.7.1, 4.3.8.2, and 5.3.7.2
unnecessary.
Comments on Section 4.2.6, Limitation of Warranties
by Company, and Section 5.2.6, Limitation of Warranties by Company
IOUs argued that the Texas Business and Commerce Code permits a disclaimer
of warranties for goods and that the Texas Supreme Court has held that the
law of warranty with respect to goods applies as well to warranties in service
contracts. They argued that such a limitation of warranties is appropriate
because it helps avoid any potential argument that the provision of Delivery
Service includes an express or implied warranty, that warranties are unnecessary
anyway because the Tariff contains specific remedies for failure of the TDU
to satisfy its obligations under the Tariff, and allowing customers to claim
such warranties would create uncertainty over TDUs' duties and liabilities.
For clarification, however, they urged the replacement of the word "service"
with the defined term "Delivery Service."
Independent Retailers commented that although the apparent purpose of these
sections is to preclude utilities from incurring strict or warranty liability,
these sections could have the unintended effect of enabling utility employees
to misrepresent utility service terms or make other deceptive statements to
obtain business. As the last sentence of Sections 4.2.6 and 5.2.6, they proposed
adding the following language: "Company may assume such warranties by subsequent
agreement, which shall be offered on a non-discriminatory basis consistent
with Section 3.7 of this Tariff."
In its comments, TXI recommended adding the phrase "Except as otherwise
provided in this Tariff," at the beginning of the language of Sections 4.2.6
and 5.2.6.
In their reply comments, IOUs urged the rejection of the proposed additions
of Independent Retailers and responded that the Tariff does not in fact contain
any warranties for Delivery Service, nor should it. Aggrieved parties should
look to the commission for resolution of purported breaches of Tariff terms,
not to civil courts, which are inexpert in construing the terms of the Tariff
and would likely make inconsistent interpretations of the Tariff. They also
argued that Independent Retailers' proposed language is inappropriate because
even if a TDU is willing to provide a warranty, it should have to do so in
the Tariff itself so that all REPs can take advantage of it pursuant to the
non-discrimination provision.
Except for changing the word "service" to the defined term "Delivery Service,"
the commission declines to adopt the changes proposed by the parties. The
commission finds that warranties for Delivery Service should not be created
because it would provide an opportunity for TDUs to discriminate in their
treatment of REP. Independent Retailers' proposed additional language appears
unworkable as it would be possible to police any subsequent warranties made
by a TDU. TXI's proposed additional language is without meaning because there
is not another provision in this Tariff that is contrary to this subsection.
Additional comments on Sections 4.2 and 5.2:
In addition to the proposed Sections 4.2.1 through 4.2.6 and 5.2.1 through
5.2.6, TXI proposed new Sections 4.2.7 and 4.2.8, with identical Sections
5.2.7 and 5.2.8 for chapter 5, which read as follows:
4.2.7 Effect on Enforcement of PURA
"Nothing in this section shall restrict the authority of the commission
to institute a proceeding, or the right of Company or Competitive Retailer
to file a complaint with the commission, under the relevant portions of the
PURA or the commission's rules or orders, where that right is available, or
the authority of the commission or a court with jurisdiction to award such
remedies as are available under the PURA or the commission's rules or orders."
4.2.8 Effect on Antitrust Laws
"Nothing in this section shall affect the right of any person to pursue
remedies otherwise available under the antitrust laws or other laws intended
to protect or encourage competition."
In reply, IOUs argued that proposed new Sections 4.2.7 and 5.2.7 are unnecessary
because Tariff Section 3.11 states that Delivery Service is governed by all
Applicable Legal Authorities, which is defined to include Texas statutes and
regulations, Texas Utilities Code Chapter 15 expressly authorizes persons
to bring complaints to the commission, and nothing in Sections 4.2 or 5.2
suggests that those sections override the commission's grant of authority
by the Legislature to investigate and act on complaints. Additionally, they
argued that TXI's reference to the authority of "a court with jurisdiction
to award such remedies" erroneously suggests that courts have authority to
adjudicate claims alleging violation of the terms of the Tariff.
IOUs also argued that proposed new Sections 4.2.8 and 5.2.8 should be rejected
as superfluous because Texas Utilities Code §39.158 expressly states
that nothing in Chapter 39 of the Utilities Code shall be construed to confer
immunity from state or federal antitrust laws. Further, they argued that §25.272(i)(6)
of this title provides that the affiliate rules do not shield any party from
enforcement of the antitrust laws. Finally, they argued that adding such unnecessary
language might lead to the belief that in adopting this rule the commission
meant to create new antitrust causes of action.
For the reasons stated by IOUs, the commission declines to adopt proposed
new Sections 4.2.7 and 4.2.8.
Comments on Section 4.3, Service
Comments on Section 4.3.1, Eligibility
IOUs proposed adding two prerequisites for eligibility: Execution of an
Electronic Trading Partner Agreement and, for a TDU subject to a financing
order, payment of the security deposit by Competitive Retailer prior to serving
Retail Customers in the TDU's service area. They also proposed eliminating
the requirement that the system testing procedures should be limited to the
protocols developed by an Independent Organization for SET transactions. Independent
Retailers disagreed. They proposed that the Texas SET protocols define and
delimit the appropriate testing parameters, which would be developed by the
Texas SET team. They argued that requiring the Competitive Retailers to post
the deposit before it recovers any money from its Retail Customers simply
adds to the significant up-front costs. They maintained that nothing in the
REP certification rule requires a REP to post this deposit before beginning
service. They argued that waiting for a few days after the first invoice is
received by the Competitive Retailer for the deposit would not increase a
TDU's risk of REP default since at that time the REP would have just established
to the commission that it possesses the requisite creditworthiness to obtain
certification. They also pointed out that the utilities obtained a triple-A
rating on their securitization bonds without the confirmation that they would
receive up-front deposits.
The commission agrees with the Independent Retailers that it is inappropriate
to require Competitive Retailers to provide security for Transition Charges
as a condition of being eligible for initiating service under the Tariff.
The commission notes that the financing orders issued by the commission to
date, as well as §25.108 of this title (relating to Financial Standards
for Retail Electric Providers Regarding the Billing and Collection of Transition
Charges), provide specific requirements for the establishment of any required
deposit. However, the financing orders and §25.108 are silent as to the
timing of the establishment of the initial deposit. As such, language has
been added to Section 4.5, Security Deposits and Creditworthiness, to clarify
that a Competitive Retailer is required to establish the deposit within ten
calendar days of receipt of the first valid invoice from a utility for which
a financing order has been granted.
Independent Retailers then argued that eligibility should not be conditioned
on Company executing the Delivery Service Agreement either. They argued that
the TDU might improperly delay execution of the agreement. Independent Retailers
claimed that by offering service under the terms and conditions of the Tariff,
Company has already assented to the agreement and that the Company needs only
notice that a Competitive Retailer has executed the Agreement. IOUs disagreed.
They argued that TDUs should have an opportunity to assess whether the Competitive
Retailer is in compliance with Tariff requirements (
e.g.
, whether it is competent to send and receive electronic communications,
and whether it has posted a deposit if the TDU is subject to Financing Order)
before signing the agreement and beginning service. IOUs continued to argue
that TDUs would never intentionally delay signing the agreement for anti-competitive
purposes since that would lead to commission sanction. Finally, IOUs argued
that the Independent Retailers' position regarding the formation of a binding
contract is contrary to Texas law which requires that a contract must be signed
by both parties to be binding unless the parties have otherwise indicated
assent to be bound by the writing. The IOUs stated that the legal case cited
by the Independent Retailers as authority for their position that both sides
do not have to sign a contract to form a binding contract is not on point
because the court in that case held that the non-signing party still had to
accept the contract through his acts, conduct or acquiescence. Independent
Retailers also recommended developing a plan to conduct system testing and
to appoint an independent third party to oversee all testing procedures and
intervene in the event that disputes arise. IOUs concurred.
The commission concludes that eligibility should be conditioned on the
following: (1) successful completion of system testing for electronic and
other communication requirements for data exchange, outage reporting, and
service requests where system testing, and certification of successful system
testing will be based on a test plan developed by Texas SET in coordination
with the commission; (2) either a Delivery Service Agreement fully executed
by both parties, or, during an interim period of investigation only, a partially
executed Delivery Service Agreement filed with the commission if Competitive
Retailer has signed such Delivery Service Agreement and presented it to Company
for signature to no avail. The commission believes this is the best approach
because once a Competitive Retailer successfully completes system testing,
Company should have no grounds at that time for refusing to execute the Delivery
Service Agreement, and any delay in being deemed eligible to receive Delivery
Service could result in a significant loss of income to the Competitive Retailer.
Comments on Section 4.3.2.1, Initiation of Delivery
System Service where Construction Services are not Required
IOUs suggested changing the language of condition (1) to prevent an interpretation
that the Company has a duty to inspect the Retail Customer's Electrical Facilities
for hazardous conditions. Independent Retailers responded by stating that
a TDU cannot blind itself to substandard Retail Customer's facility if it
adversely affects system security. They claimed that if the TDU declines to
ascertain that it can safely connect a facility, thereby damaging the Delivery
System, the associated costs should either be born by the TDU or be recovered
from the Retail Customer.
The commission agrees with IOUs that a TDU has no affirmative duty to inspect
a Retail Customer's electrical facilities. The TDU may withhold initiation
of Delivery System Service if Retail Customer's Electrical Installation is
known to be hazardous under applicable safety codes, is of such character
that adequate service cannot be provided by Company, or interferes with the
service of other Retail Customers. In response to the Independent Retailers'
concern over possible damages resulting from the TDUs' declining to accept
the duty to inspect Retail Customers' Electrical Installation prior to initiating
Delivery System Service, the commission notes that the liability provisions
of 4.2.1 and 5.2.1 apply at all times, and, although the TDU has no duty to
inspect, it may be subject to negligence liability for damages resulting from
matters of which it reasonably should have had knowledge,
e.g.
, an open and obvious hazard.
Independent Retailers and Consumers objected to the phrase "material obligation"
in condition (3). They claimed that since the term grants an unreasonable
degree of discretion to the TDUs to refuse service to a Retail Customer, and
because it is not defined, it will generate controversy over its meaning.
Consumers wondered how a Retail Customer would know what their material obligation
is. IOUs responded by pointing out that the term "material" is frequently
used in contracts and business contexts and also is used in the commission's
proposed customer protection rule. They claimed that it is an expression of
such common use that it is not even defined for a jury in a trial, and that
the use of the term here clarifies that trivial breaches of the Tariff will
not lead to default. IOUs then responded to Consumers' comment by stating
that Retail Customer should know of its obligation from the Tariff. In addition,
IOUs proposed inclusion of a provision in which IOUs will notify the Retail
Customer of a breach of a material obligation and provide an opportunity to
cure it.
The commission concurs with the reasoning of IOUs and declines to define
the term "material obligation."
Independent Retailers suggested deleting the word "satisfaction" as used
in condition (3). IOUs expressed that they do not have objection. IOUs recommended
a modification to reflect the fact that all requests for service initiation
should come from the Registration Agent. TXU REP recommended that the notification
by the Registration Agent that a Retail Customer has designated an eligible
Competitive Retailer, as required in condition (2), should be made electronically
since that would be the most efficient means. Similar changes were recommended
for Section 5.3.1.1(2). IOUs suggested that the seven day deadline for service
initiation should start, where applicable, after Company's receipt of both
the request and the notification of approval of Retail Customer's Electrical
Installation by the proper authority.
The commission agrees with these comments with one exception and has made
appropriate changes. In response to TXU REP's comments, the commission revises
condition (2) to spell out that notification by the Registration Agent should
be in accordance with the protocols of the Independent Organization rather
than to require any specific mode of communication as recommended by TXU REP.
This treatment is consistent with the treatment of other aspects of the Tariff
that are affected by the protocols of the Independent Organization.
Comments on 4.3.2.2, Initiation of Delivery System
Service Where Construction Services are Required
IOUs provided a more detailed process that should be followed in this section.
They claimed that a Competitive Retailer needs to use the EDI transaction
being developed by Texas SET Protocols working group to electronically request
a Discretionary Service (including Construction Service) from a TDU. IOUs
also pointed that the Competitive Retailer needs to request an ESI ID from
the TDU if the premise in question has not been served before. Independent
Retailers opposed the use of EDI transaction for all customer service requests.
They claimed that this requirement increases a Competitive Retailer's costs
without any corresponding benefit, and preclude them from utilizing call forwarding
or web portal. They also argued that the request for ESI ID does not have
to precede the request for Construction Service but that the two requests
can be handled simultaneously.
The commission agrees with IOUs that the service initiation process is
better explained when spelled out the way the IOUs suggested, and, therefore,
follows those suggestions. However the commission disagrees that all service
requests should be processed via EDI transactions. The nature of some service
requests may be difficult to be made electronically. Rather, the requirement
to use EDI transactions should be limited to service requests for which EDI
transactions are set up by Texas SET. While the commission's preference is
that Competitive Retailers act as the first point of contact for all Retail
Customer needs, the commission also believes that it is appropriate to allow
smaller Competitive Retailers to be able to forward Retail Customer's calls
regarding specific issues about Delivery Service to the Company (or put the
Company's number on their bill to the Retail Customer). As such, this section
has been revised to state that Competitive Retailers are responsible for informing
customers about obtaining Discretionary Services, using the same options that
Competitive Retailers are allowed for purposes of outage reporting (see discussion
on Section 4.11.1). The commission also disagrees with IOUs that the request
for a new ESI ID needs to precede the Construction Service request.
IOUs argued that since request for Delivery Service always comes through
the Registration Agent, IOUs do not need the information listed in Section
4.3.2.2. On the other hand, requests for Discretionary Services would come
directly from Competitive Retailer, and hence would need to include some customer
and service information. So IOUs proposed a new section regarding request
for Discretionary Service.
The commission agrees with the IOUs and has made changes to the section
reflecting IOUs suggestions. A new section 4.3.3, Requests for Discretionary
Services including Construction Services, has been added to clarify the differences.
Comments on Section 4.3.3 (proposed), Changing
of Designated Competitive Retailer
IOUs argued that, consistent with the provision in Section 4.3.2.1(3),
TDUs should not be required to switch service to another Competitive Retailer
if that Competitive Retailer is in default. Independent Retailers found that
adding this provision in this section is unnecessary since the Tariff does
not allow a Competitive Retailer to obtain Delivery Service if it is in default.
IOUs also proposed to clarify that Competitive Retailers may be charged for
customer data that they request if such charges are approved by the commission.
The commission agrees with IOUs that TDUs should not be required to switch
service to another Competitive Retailer if that Competitive Retailer is in
default, and, therefore, has added the clarifications. However the commission
rejects the IOUs' proposal to charge for customer information. See the commission
discussion for Section 4.8.
TIEC suggested that customer information would be released to a Retail
Customer's Competitive Retailer only to the extent authorized by the Retail
Customer. IOUs disagreed by pointing out that the commission's code of conduct
rules contain several examples of situations in which proprietary customer
information may be released to entities -- some of which can be Competitive
Retailers -- without customer authorization. IOUs recommended that the release
of proprietary customer information should be consistent with Applicable Legal
Authorities. TXU REP also suggested replacing "Commission" with "Applicable
Legal Authorities" to make it consistent with Section 4.8. Consumers asserted
that the limitation on the release of customer information should be expressed
negatively (
i.e.
, shall not be released, except
as permitted under the commission's customer protection rule), whereas the
proposed Tariff expresses it positively (
i.e.
,
shall release proprietary customer information to Competitive Retailer in
a manner prescribed by the commission.). IOUs disagreed and claimed that what
is important is that the customer information is governed by Applicable Legal
Authorities.
The commission agrees with IOUs and retains the published language on the
release of customer information but replaces "Commission" with "Applicable
Legal Authorities."
TXU REP recommended that the notification of a change in a Retail Customer's
designated Competitive Retailer be sent electronically by the Registration
Agent.
The commission maintains that the current language addresses this concern.
A response to the notification by the Registration Agent must be done in accordance
with the protocols developed by the Independent Organization.
Comments on 4.3.4 (proposed), Switching Fee
IOUs argued that prohibition against Switching Fees should not preclude
Company from charging Competitive Retailer any other commission approved charge
(
e.g.
, out of cycle meter reading), if applicable,
associated with a switching event. In response, Independent Retailers recommended
including an explicit definition of Switching Fee (along with retention of
the prohibition against Switching Fee).
The commission agrees with the Independent Retailers and has added a definition
of Switching Fee.
Comments on Section 4.3.5 (proposed), Selection
of Rate Schedules
IOUs argued that a Competitive Retailer may select only a rate for which
a Retail Customer is eligible. They also recommended extending the number
of Business Days before a Rate Schedule becomes effective from two to five
since, according to them, the switch requires: receiving and routing the request,
verifying that the requested Rate Schedule is applicable, and modifying the
Retail Customer's billing parameters in the Company's database. Independent
Retailers recommended rejection of IOUs request for additional days.
The commission agrees with IOUs that a Competitive Retailer can only select
a rate for which the Retail Customer is eligible. However, the commission
is not persuaded by IOUs' argument that a TDU will need five days to make
the rate effective.
Comments on Section 4.3.6 (proposed), Provision
of Data
IOUs argued that Competitive Retailers should timely supply to Company
current customer names, telephone numbers, and mailing addresses. These data
are needed by Company for communications concerning noticed suspensions, outage,
facilities extension, and maintenance efforts that require access to the Retail
Customer's Premises. Independent Retailers pointed out the affiliate abuse
potential when a TDU is a repository of all current customer information.
The commission agrees with IOUs, since the data is essential for a TDU
to efficiently and effectively provide Delivery Service to Retail Customers
in the newly structured market. Any abuse by an affiliate REP can be dealt
with using the complaint process of the commission.
Independent Retailers proposed replacing the section with a provision that
will require all TDUs to maintain a website which a demand metered Retail
Customer and its Competitive Retailer can access to obtain its usage information
including interval data. IOUs disagreed and argued that TDU should not serve
as the central depository for all metering information that the Competitive
Retailers want to use in evaluating potential customers. Also, the cost considerations
of maintaining the website for the purposes above need to be taken into account.
The commission notes that this section is intended to encompass data going
from the Competitive Retailer to the Company and has renamed the section title
accordingly. As will be discussed in further detail in the discussion of Section
4.8, Data Exchange, the commission agrees with Competitive Retailers that
it is important that the REPs have immediate access to load information and
agrees that, to the extent such data cannot or will not be provided by the
Independent Organization, the TDU should be required to set up systems to
provide such data on a real-time basis. Language has been added to Section
4.8.1, Data from Meter Reading, to clarify the responsibility of the TDU to
provide Retail Customers' meter data to Competitive Retailers that have obtained
that customers permission through the use of a web portal or other equivalent
means.
Comments on Section 4.3.7.1 (proposed), Suspensions
Without Prior Notice, and Section 5.3.6.1 (proposed), Suspensions Without
Prior Notice
Both Independent Retailers and Consumers argued that suspensions without
prior notice should be allowed only under very limited circumstances, namely
where imminent danger exists, where an emergency threatens the system, or
where a court, the commission, or the ISO so orders. This is because Delivery
Service suspension without prior notice:
(1) can result in property damage and endanger lives;
(2) will generate system imbalances for Competitive Retailers for which
Competitive Retailers will be liable; and
(3) is not permitted in the existing commission rules (including §25.29)
for at least one situation allowed in the proposed Tariff, routine service
restoration or repairs, changes, and tests.
Independent Retailers recommended that even for these suspensions "where
a known and dangerous condition exists" a suspension would be undertaken "unless
such suspension will result in a dangerous or life threatening condition elsewhere."
IOUs argued that Independent Retailer's recommendation would impair a TDU's
ability to respond in emergency situations.
The commission agrees with Independent Retailers that, to the extent a
suspension of service due to a dangerous condition leads to another dangerous
condition, the TDU should provide notice to the affected Retail Customers.
The commission notes, as stated in this section, that the notice requirements
in this section are not intended to prevent the timely restoration of service.
Independent Retailers also recommended deletion of the TDU's right to suspend
Delivery Service without notice for routine maintenance, even when these suspensions
are for short duration and do not affect load bigger than one MW. They suggested
that if these suspensions are allowed, TDUs should take the responsibility
of the resulting scheduling imbalances. IOUs replied that the imbalances resulting
from service suspensions of less than one hour will be insignificant, especially
compared to imbalances associated with forecast errors. And that under no
circumstances should TDUs assume the imbalance risk. Independent Retailers
also argued that even with one hour or one MW restrictions, suspensions without
notice can cause significant property damage and personal injury (for small
industrial or commercial customers). Independent Retailers argued that the
convenience of foregoing notice does not justify such harm. They then argued
that the TDU should bear the liability of any such damage. IOUs replied that
to impose liability on the TDU in these instances contradicts the commission
decision with regard to limitations on liability for the TDU, would raise
costs, increase litigation, and impair the ability of the TDU to operate the
Delivery System safely for the benefit of all. According to IOUs, the Retail
Customer is in the best position to know about the dangerous condition or
significant exposure on its side of the Point of Delivery and do something
about it. IOUs also pointed out that P.U.C. Substantive Rule §25.29 deals
only with disconnections that are permanent in nature and, therefore, are
very different from the ones discussed here.
The commission recognizes that REPs are at risk for imbalance energy when
a Retail Customer's service is suspended for any reason. However, TDU's must
also be able to perform routine maintenance and repair in an efficient fashion.
The commission's adopted changes in Section 4.2.5, Emergencies and Necessary
Interruptions and Section 5.2.5, Emergencies and Necessary Interruptions,
state that the Company is required to give notice of interruptions due to
system emergencies, maintenance, repair, or when performed to lessen possible
danger when reasonably possible and prescribes the form of that notice. Language
has also been added noting the requirement for the Company, if it is not able
to provide advance notice, to provide notice as soon as possible after the
suspension. All other language referring to these circumstances has been removed
from this section, which now allows suspension without notice only due to
dangerous conditions, or if authorized by the commission.
TIEC suggested additional language to clarify that in case of suspension
of Delivery Service where such suspension may result in a dangerous or life-threatening
condition on the Retail Customer's facility, notice of suspension should be
given directly to Retail Customer. ALCOA and OxyChem concurred with TIEC and
urged that this requirement be added to all other provisions in the Tariff
that allow interruption without notice. IOUs proposed to omit the restriction
on suspension resulting in a dangerous or life-threatening condition on the
retail customer's facility as stated in proposed Section 5.3.6.1. IOUs pointed
out that the Customer Protection rules do not have this restriction. IOUs
also suggested that lawsuits could result even if the TDU were following an
order to relieve a grid problem or suspending service in an emergency. Furthermore
the IOUs argued that a TDU may not know who the Retail Customer is and might
not know whether it could disconnect that customer. In response to industrial
customers' concerns, IOUs stated that IOUs' current practice of closely coordinating
service suspensions and restorations with industrial customers will continue.
But they also pointed out that that the obligation on the part of the Retail
Customers to proactively protect against any unexpected electrical failures
should continue as well. They also pointed out that a TDU has no knowledge
of these special risks that may exist for the Retail Customer and cannot protect
against circumstances of which it is not aware. The Retail Customer is in
the best position to protect against such failures. TIEC disagreed with IOUs'
deletion of the notice provision in a life threatening situation and cited
provisions in the existing utility tariffs whereby such notices are provided
(Entergy Gulf States, Terms and Conditions Applicable to Electric Service,
paragraph 13; Reliant Energy tariff; TXU Tariff 4.5.2.2.). TIEC also pointed
towards the current utility practice of giving notice to industrial facilities
like chemical plants and refineries prior to an intentional interruption so
that the industrial customer can safely shut down facilities and not endanger
life and limb. They argued that the logic of adding a notice requirement to
these customers is no different than the requirement for critical care customers.
In fact, TIEC supported a procedure by which the Retail Customer would give
notice to the TDU in order to implement this protection.
The commission agrees with TIEC, Alcoa, and OxyChem that it is critical
that facilities or customers not be disconnected when such disconnection may
result in life-threatening conditions on a Retail Customer's premise, especially
for critical care customers or certain industrial facilities. Thus, appropriate
language has been added to this section and the corresponding section in Chapter
5 requiring the Company to provide notice to those customers who have such
special needs. In response to the IOUs concern about the obligation of Retail
Customers to inform the TDU of such circumstance, the commission has added
language in these two sections requiring Retail Customers to notify their
Competitive Retailer of such circumstances and has added language in Section
5.3.7.4, Prohibited Suspension of Disconnection, detailing the responsibility
of the Company to not disconnect such customers without providing notice and
a reasonable time to ameliorate the effects of suspension or disconnection.
IOUs proposed addition of the provision by which Company should be able
to suspend service without prior notice in the event of unauthorized use,
unauthorized reconnection, diversion of service, tampering or bypassing of
Company equipment. Current and proposed customer protection rules (§25.29(c)(1)
and §25.48(c)(1) respectively) provide for that. Any delay in disconnection
due to unauthorized use would increase unaccounted for energy, and, therefore,
cause inappropriate shifting of costs among Competitive Retailers and potentially
unrecoverable costs for the TDU. Independent Retailers opposed IOUs proposal
and argued that continuing to provide service until the utility provides notice
in this situation would not adversely affect the TDU since it can always estimate
the unmetered usage and charge the Competitive Retailer for it. On the other
hand, any discontinuance disrupts the Competitive Retailer's relationship
with its Retail Customer.
The commission recognizes that the right to disconnect Delivery Service
for unauthorized use exists in the currently existing customer protection
rule for utilities and has been unopposed in the proposed customer protection
rule for the Energy Service Providers. The commission agrees with Independent
Retailers that a Customer's REP, if one exists, should be informed of such
a suspension. The commission also agrees that a TDU has the right to charge
the customer's REP for such unmetered usage. No change to the Tariff has been
made.
Consumers argued for prompt updating of Competitive Retailers regarding
suspensions since Competitive Retailers would get inquiries from the Retail
Customers. Independent Retailers recommended that within 30 minutes of a suspension
without notice, notice should be provided to Competitive Retailers. IOUs argued
that this kind of specific time limit will not fit the variety of situations
faced by TDUs and is not in the public interest.
The commission agrees with Consumers and Independent Retailers that it
is critical that Competitive Retailers be kept apprised of suspensions and
their expected durations in order to ensure the same level of quality of service
as exists today. The commission notes that customers taking service from those
Competitive Retailers that elect to forward calls to the TDU will receive
answers to their inquiries in that manner. The commission also notes that
its changes to Section 4.11.1 require that Competitive Retailers who rely
on outage information to the Company be kept informed of restoration efforts.
The commission further believes that the limited circumstances in which a
TDU can suspend service without notice minimize any imbalance risk to Competitive
Retailers.
IOUs suggested deleting the phrase "on Retail Customer's Electrical Installation"
from the first paragraph since it is not in the parallel section of the existing
and proposed customer protection rule and may restrict Company's ability to
act in the event the dangerous situation occurs outside the Retail Customer'
Electrical Installation.
The commission agrees and has deleted the phrase.
Comments on Section 4.3.7.2 (proposed), Noticed
Suspension, and Section 5.3.6.2 (proposed), Noticed Suspension
Independent Retailers argued that clause (3) is unreasonably broad in that
it authorizes the TDU to suspend Delivery Service if a Retail Customer fails
to comply with the terms of "any written agreement made between Company and
the Retail Customer" since that would allow the TDU to suspend service for
breach of an agreement unrelated to Delivery Service. IOUs rejected this argument
saying that under the unbundling requirement of SB 7 and the commission's
Substantive Rules, IOUs cannot provide any service other than Delivery Service
and hence cannot have any agreement other than one related to Delivery Service.
Consumers also pointed out that there should not be any other agreement between
a Retail Customer and a TDU other than Facilities Extension Agreement.
The commission agrees with IOUs and maintains the proposed language. The
commission agrees with Consumers and notes that the only other agreement that
may exist between Retail Customers and the TDU other than this Tariff is a
Facilities Extension Agreement.
IOUs suggested adding another provision for suspension of Retail Customer
upon notice and due to non-payment of charges directly billed to Retail Customer.
The commission agrees but adds language noting that the only such charges
are those authorized under Section 5.8.2, Billing to Retail Customer by Company
and only includes construction services, damage caused by Retail Customer,
or costs incurred to cure adverse effects of the Retail Customer's Electrical
Installation.
TIEC suggested additional language to clarify that in case of suspension
of Delivery Service where such suspension may result in a dangerous or life-threatening
condition on the Retail Customer's facility, notice of suspension should be
given directly to Retail Customers. Consumers also expressed concern that
Retail Customers would not get the notice of suspension. IOUs argued that
under proposed Section 5.3.6.1, notice will be given to Retail Customers when
large numbers of Retail Customers are affected for a significant amount of
time. In other cases, electronically notifying Competitive Retailers would
be more efficient.
The commission agrees with TIEC and adds language in Section 5.3.7.4, Prohibited
Suspension or Disconnection, to prohibit suspension or disconnection without
notice in those cases where a life-threatening condition may result. The commission
also clarifies that it is the Retail Customer's responsibility to inform their
REP of such conditions, who is then obligated to inform the TDU. Under the
revised Tariff, TDUs are thus not permitted to suspend service if such suspension
creates a dangerous or life-threatening condition without notice. The commission
agrees with IOUs that when large numbers of Retail Customers are affected
for more than a significant amount of time, notice is already required to
Retail Customers.
TXU REP suggested that information regarding the location of customers
whose service is suspended needs to be supplied to the Competitive Retailers
in order for them to provide useful information to their Retail Customers.
Independent Retailers agree with TXU REP.
The commission agrees and notes that the electronic notice required to
be given to REPs should specify the location of suspensions, interruptions,
etc.
Comments on Section 4.3.8 (proposed), Restoration
of Delivery Service, and Section 5.3.6.3, Restoration of Service
TIEC recommends that the Tariff should require reasonable notice when power
is restored so that the Retail Customer can implement restart procedures at
the earliest possible moment.
The commission agrees with TIEC and has added language to require notice
of the restoration of service.
Comments on Section 4.3.9 (proposed), Disconnection
of Service to Retail Customer's Facilities, and Section 5.3.7, Disconnection
of Service to Retail Customers Facilities
IOUs suggested making it explicit that when Competitive Retailer directly
requests disconnection (the situations discussed in this section), Company
should not be responsible for ascertaining the appropriateness of the request,
except as provided in proposed Section 5.3.6.4, Prohibited Suspension or Disconnection.
The commission generally agrees but would emphasize that in situations
where a TDU has knowledge that a customer should not be disconnected (for
example, the customer is critically ill), the TDU has an obligation to convey
that information to the Competitive Retailer before actually disconnecting
the Retail Customer.
IOUs also pointed out that with regard to requests for disconnection relating
to move-outs, there will be no delay based on extreme weather conditions or
special situations. Therefore, the provision that Competitive Retailer be
responsible for charges accrued during such a delay is not necessary. However,
requests for disconnection for non-payment may be delayed for these factors
and hence charges may be due from the Competitive Retailer.
TXU REP pointed out that the first paragraph of this section should not
list emergencies as an event when a Competitive Retailer must provide three
Business Days notice to a utility in order to obtain a disconnection.
The commission agrees with all the suggested changes and has made the appropriate
modifications.
TXU REP also pointed out that the second paragraph fails to specify by
when the utility will be required to disconnect. TXU REP recommended no later
than five days. In response IOUs argued in favor of seven Business Days if
TXU REP's language is adopted to accommodate time for processing, scheduling,
and implementing the request.
The commission agrees with IOUs' compromise.
Comments on Section 4.4, Billing and Remittance
Comments on Section 4.4.1, Calculation and Transmittal
of Delivery Service Invoices
IOUs recommended use of
Functional Acknowledgement
- a widely used SET protocol - whereby the recipient of a SET transaction
acknowledges receipt of SET transaction - in place of the
validate/reject
provision. (IOUs also included a definition of Functional
Acknowledgement). Independent Retailers disagreed. They argued for
validation
which is different from acknowledgement of just the receipt
of a transaction; rather validation, as used in CUBR tariff, ensures that
the Competitive Retailers get a proper
readable
invoice with
the appropriate information
including
the dollar amount, the billing determinants, ESI IDs, the due dates, etc.
The commission agrees with the Independent Retailers and maintains the
requirement of validation/rejection of an invoice rather than Functional Acknowledgement
since the latter does not imply receipt of a readable invoice with appropriate
information in the proper field. The commission also notes that the concept
of validation/rejection is adopted by CUBR.
IOUs added a provision by which a TDU will use other temporary means to
transmit an invoice if and when it is unable to transmit the invoice electronically.
Independent Retailers disagreed and argued that they should not be required
to add additional resources to process invoices manually.
The commission agrees with Independent Retailers and declines to change
the rule. The commission notes that the Tariff cannot be written to encompass
every eventuality that may occur and that it expects that parties will work
together to address unforeseen events.
Comments on Section 4.4.3, Invoice Corrections
IOUs argued that since metering error affects both settlement processes
for Electric Power and Energy, and billing by Company for Delivery Services,
the procedures for adjustment for any error should be consistent. In particular,
IOUs advised that, the time period for billing adjustment by a TDU should
be the same as what is decided in the ERCOT settlement group for settlement
purposes. They also argued that the adjustment period for over and under recovery
should be symmetrical. Independent Retailers pointed out that this period
is not symmetrical under the existing commission rules. They also argued that
if Competitive Retailers are back billed for the past twelve months, they
may no longer serve the Retail Customers who underpaid.
The commission concludes that the issue should be decided here at the commission,
and, if needed, the ERCOT settlement group should recognize the rule requirement.
The proposed language is reasonable since it is consistent with existing commission
rules.
TIEC argued that the provisions of Sections 4.4.3 and 4.4.4 should be added
to Chapter 5 of the Tariff, with the rationale that Retail Customers should
be able to directly raise Meter Reading and billing cycle issues with the
TDU. IOUs disagreed. According to them, Delivery Service invoices are a matter
between TDU and Competitive Retailer. If a Retail Customer has a Meter Reading
or billing related issue it should take it to its Competitive Retailer who
may then, if appropriate, take it to the TDU.
The commission agrees with IOUs. TDUs will not bill Retail Customers, except
for Construction Services, and will not be in a position to respond to Retail
Customers billing inquiries.
Comments on Section 4.4.4, Billing Cycle
IOUs argued that it may not be possible to make all potentially requested
changes to Meter Read/billing cycles even where Company has remote Meter Reading
capability. Large volumes of Retail Customers on the same cycle will exceed
the processing capacity of Company's billing system. Hence, requests for only available
cycles will be accommodated. Independent
Retailers argued that IOUs' proposal is contrary to CUBR requirements, and
is based on a very unlikely situation. Even if IOUs' argument had merit, the
TDUs alone should not determine the appropriate meter read date, as that may
become an avenue for discriminatory treatment.
The commission agrees with Independent Retailers and retains the proposed
language.
TXU REP recommends that a Competitive Retailer be notified, in accordance
with appropriate SET protocol, when any changes are made to the billing cycle
of a Competitive Retailer's Retail Customer. IOUs agree, but only for permanent
billing cycle changes.
The commission agrees with the compromise offered by IOUs.
Comments on Section 4.4.5, Remittance of Invoice
Charges
IOUs suggested changing the term "validated" to "functionally acknowledge."
(See summary of Comments on Section 4.4.1 above). They also suggested that
electronic invoices transmitted after 3:00 p.m. should be considered transmitted
on the following
calendar day
, not
business day
, to correspond to current practice. The IOUs also clarified
that a Facility Extension Agreement may vary not only the payment timeline
but also the billing procedure for Construction Services.
The commission agrees with IOUs suggested modifications with the exception
of the first suggestion. See the commission discussion under Section 4.4.1.
Comments on Section 4.4.6, Delinquent Payments
IOUs suggested certain changes to clarify the delinquency and default issues.
Independent Retailers disagreed. They claimed that the 3:00 p.m. deadline
suggested by IOUs is not necessary since all transactions will occur electronically
and will post automatically. They object to IOUs striking the concept of validation
since that would require Competitive Retailers to pay even an invalid invoice
(for example, with a wrong due date). Independent Retailers wanted the counting
of 35 days to begin with the date specified on a
validated
invoice. They also wanted the grace period to extend to Monday
in cases where the grace period ends on a Saturday since Saturday is not a
Business Day.
The commission agrees that there is an inconsistency between when an invoice
is considered received and when payment is considered received. The Tariff
has been revised to state that both a validated invoice and payment shall
be considered received if transmitted by 5:00 p.m. The commission declines
to extend the grace period.
Comments on Section 4.4.8, Invoice Disputes
Independent Retailers argued that they should not be required to pay the
disputed portion of an invoice. However, they agreed to provide written notice
to the Company when they withhold a disputed amount, and to pay interest on
the disputed amount if the Competitive Retailer is found withholding amounts
properly invoiced. They argued that CUBR allows withholding of the disputed
amount. IOUs pointed out that not all CUBR provisions are accepted in the
published rule, in particular, cash deposit requirement for creditworthiness.
Independent Retailers also argued that electric and telephone retail customers
currently have the right to withhold disputed amounts. IOUs also pointed out
that Retail Customers are currently required to establish and maintain satisfactory
credit with the utility, whereas Competitive Retailers are not. IOUs also
argued that the potential exposure to a utility for a Competitive Retailer's
disputed amount is significantly greater than the exposure resulting from
nonpayment of a disputed amount by one Retail Customer. Finally, IOUs argued
that Retail Customers currently have 16 days to remit payment compared to
the 35-day payment provision afforded to Competitive Retailers. Independent
Retailers also argued that withholding payment will provide an incentive to
a TDU to address a billing problem. IOUs argued that the requirement to pay
interest on any over billed account would provide them with the same incentive.
Additionally, IOUs pointed out that the Tariff requires the TDU to investigate
the disputed matter and report back to the Competitive Retailer within ten
days.
In the interest of encouraging retail competition in Texas, the commission
modifies the Tariff to allow Competitive Retailers to pay only the undisputed
portion of a bill. This arrangement is recommended in CUBR. However, the commission
clarifies that a commission- approved methodology to estimate meter reads
may not be disputes. The commission also requires that if the Competitive
Retailer is later found to have withheld amounts properly invoiced, the Competitive
Retailer will pay interest along with the principal amount withheld.
IOUs suggested that if the amount due was invoiced incorrectly, the Company
shall pay interest on the amount from the date the payment was
received by the Company
, not the date the payment was
due
.
The commission agrees.
Comments on Section 4.5, Security Deposits and
Creditworthiness
Comments on Section 4.5.1, Security Related to
Other Delivery Charges
IOUs believed that the commission has not done enough to protect the TDUs
from the risk of a defaulting REP in Substantive Rule §25.107. They claimed
that the commission established financial requirements for the REPs but has
not effectively provided TDUs access to the funds in case of REP default.
IOUs claimed that the commission's goal to provide financial security for
the TDUs can only be effectuated if the money or financial instruments required
in §25.107 are pledged, secured, or held in escrow in such a way that
they cannot be converted or used for any purpose other than payment of penalties
to the commission or amounts owed to the TDU. They requested that the commission
put escrow provisions in the rules so that the commission and TDU have access
to REP financial resources in the event of REP default. Independent Retailers
argued that the commission has already decided on the deposit issue in §25.107
and should not change its decision in this rule.
The commission agrees with the Independent Retailers that this issue was
exhaustively discussed and debated in the rules relating to the certification
of retail electric providers. The commission, in that rule, established its
policy with respect to the balancing of credit risk of TDUs and the promotion
of a robust retail market and sees no compelling reason to change that policy
at this time.
Comments on Section 4.5.1.1, Deposit Requirements
IOUs stated that they should be able to collect a security payment (deposit)
from a REP if they have defaulted in
any
TDU
territory in Texas (not just their TDU territory) in the past 24 months. Independent
Retailers argued that IOUs proposal will create a barrier to entry for Competitive
Retailers. According to them a Competitive Retailer who has never defaulted
with a TDU is of no greater or less credit risk due to its other business
relationships.
The commission agrees with Independent Retailers. Default by a Competitive
Retailer with respect to one TDU may not be indicative of a potential for
default for all TDUs as the default could, at times, be the result of extraordinary
circumstances.
Comments on Section 4.5.1.2, Size of Deposit
The IOUs proposed to clarify that TDU will be responsible for estimating
annual billings and determining deposit amounts. Independent Retailers disagreed
and argued that under this proposal, TDUs will have ability to create barriers
to entry. Also, a TDU will not have the information to estimate a Competitive
Retailer's annual billing since it would not know the Competitive Retailer's
business plan. Independent Retailers also pointed out that CUBR requires Competitive
Retailers to estimate annual billing. Finally, they cited commission financing
orders (that allowed for issuing triple-A rated securitization bonds) that
did not allow the utilities to estimate annual billing.
The commission finds that the same procedures included in the financing
orders for the establishment of deposits required for Transition Charges should
be incorporated here. As such, language has been added to this section to
clarify that the Competitive Retailer and TDU shall mutually agree upon the
size of a required deposit. The commission fully expects that Competitive
Retailers and TDUs will negotiate the size of the deposit in good faith and
that the parties will utilize the dispute resolution procedures provided in
the Tariff to resolve any disputes.
The Competitive Retailers requested adjustment of the size of the deposit
required in the present rule to reflect cash resources that a REP maintains
pursuant to commission Substantive Rule §25.107(f)(1)(A)(iii). IOUs disagreed
and argued that the certification process does not require an actual deposit
but merely a demonstration of financial ability in a yearly report. The funds
are not pledged to a TDU.
The commission agrees with IOUs. In the REP rule it was decided that the
financial resources would be available to the REP and not payable to the commission
(except bonds) or TDUs. After a REP default, it would seem reasonable that
any deposit would be payable to the TDU for services rendered, and not netted
against any REP financial resources that might have once existed in the past.
However, because the cash resources requirement in commission Substantive
Rule §107(f)(1)(A)(iii) is intended to in part address the obligations
due to a TDU, the commission believes that it would be appropriate for a REP
to include an unused deposit held by a TDU in its demonstration of unused
cash resources for purposes of the annual demonstration of financial ability.
No change to the rule is required.
Comments on Section 4.5.1.3, Form of Deposit
Independent Retailers requested expansion of the list of forms the deposits
can take by adding certificates of deposit, lines of credit or other loans,
shareholder or principal guaranties, or any other financial instrument approved
by the commission. IOUs disagreed by pointing out that the forms of deposits
included in the published proposal are consistent with the deposit requirements
in the Financing Orders. The forms of deposits proposed by the Independent
Retailers here would not be pledged or secured to a TDU. IOUs, however, asked
for more flexibility by stating that other forms of security may be mutually
agreed to by Company and Competitive Retailer.
The commission agrees with IOUs, and agrees that TDUs and Competitive Retailers
may mutually agree to other forms of security, provided that such other arrangements
are made available to all Competitive Retailers.
Comments on Section 4.5.1.4, Interest
Competitive Retailers demanded that TDUs pay interest on a certificate
of deposit, if allowed, when it is refunded. TDUs disagreed by arguing that
Competitive Retailers could be entitled to the interest paid by the bank on
a certificate of deposit but a TDU should not be required to also pay interest.
The commission finds that if, consistent with the above discussion, TDUs
and Competitive Retailers mutually agree to this form of security, part of
that agreement should include the appropriate levels of interest, if any,
to be paid by the TDU.
Comments on Section 4.6, Default and Remedies
of Default
Comments on Section 4.6.1, Competitive Retailer
Default
As they argued under Section 4.3.2.1, Independent Retailers pointed out
that the phrase "material obligation" is unreasonably broad, allowing TDUs
to hold a Competitive Retailer in default for violating trivial terms or conditions.
IOUs responded by claiming that a trivial condition would not be a "material
obligation" and it is this type of result that the term "material obligation"
would avoid.
See the commission response to comments on Section 4.3.2.1.
Competitive Retailers claimed that a suspension by the commission should
not lead to default where all rights are lost and re-qualification is required
for resumption of service. Rather, a commission suspension should merely make
a Competitive Retailer ineligible for service and eligibility should resume
once the suspension ends. IOUs disagreed. They argued that suspension should
lead to default since that is the only avenue by which the affected Retail
Customers are transferred to either another Competitive Retailer or a POLR
without a "gap" in responsibility for Delivery Charges associated with these
customers. They also argued that a deposit should be required of the Competitive
Retailers who have been suspended before a TDU continues Delivery Service
since the associated risk is higher. IOUs argued that a Competitive Retailer
who is suspended should re-qualify for Delivery Service since suspension can
be for a long period of time and that by that time the Competitive Retailer
may not still be able to perform under the Tariff.
The commission agrees with Independent Retailers. Some of the violations
for which a certificate may be suspended are not related to the performance
of a REP under this Tariff. Also, the commission may suspend a REP's certificate
but still require the REP to continue to serve its existing customers. In
such cases, the REP will still need Delivery Service for those customers.
However, to the extent a TDU brings a complaint to the commission regarding
a REP's failure to abide by the Tariff, that TDU may request that the REP's
customers be transferred to the POLR as part of the relief that the TDU seeks.
The Tariff has been revised accordingly.
Comments on Section 4.6.2.1, Default Related to
Failure to Remit Charges or Maintain Required Security
Parties expressed concern over non-specificity or shear lack of procedure
for the transfer of a defaulted Competitive Retailer's Retail Customer or
billing and collection to the POLR. IOUs questioned how promptly the hand
over of customers from the defaulted Competitive Retailer to the POLR would
happen; when the POLR would receive the names and addresses of the REPs retail
customers; how soon the TDU would send invoices to the POLR; whether the Registration
Agent would be involved; and how the Competitive Retailer would be responsible
for the costs of the POLR billing and collection.
Independent Retailers explained that TDUs can provide the relevant customer
information to the POLR. According to Entergy Texas REP, it should be recognized
that it would take time to transfer the customers of a defaulting REP to a
POLR or another REP. IOUs argued that transferring customers or the billing
and collection responsibility was adopted by the commission in lieu of allowing
TDUs to take an initial deposit and so the purpose was to shield the IOUs
from financial exposure. In their view, the transfer should occur within one
day so that the IOUs have minimum exposure. Otherwise, the IOUs argued, the
commission should require a deposit from the Competitive Retailers.
Consumers recommended that the procedure of transferring customers to the
POLR be established either in the POLR rulemaking or customer protection rules.
Consumers also demanded that Retail Customers be given a choice regarding
which Competitive Retailer to transfer to and be provided notice when transferred
to the POLR.
Because of the potential difficulties with implementing option (5)(a),
IOUs proposed to be allowed a choice between option (5)(a) and option (5)(b)
in the event that Competitive Retailer does not select option (5)(c).
The commission agrees that certain customer information would need to be
transferred to the POLR in order for the POLR to be able to bill Retail Customers
either for the charges of a defaulting REP or to take over service of the
Customers. The commission also agrees with Consumers that the Customer should
be notified of the transfer to the POLR of either billing or service. The
Tariff has been revised to require REPs choosing either of these options to
promptly convey that information to the POLR and to provide notice to their
customers. The commission further finds that having the POLR bill only for
Delivery Charges while a defaulting REP bills for energy-related charges may
create unneeded customer confusion. As such, the commission finds it is appropriate
for the POLR to assume billing for all charges, not just Delivery Charges
and make corresponding changes to the Tariff. The commission declines to adopt
the IOUs proposal to give the IOU the choice of options (5)(a) and (5)(b).
Entergy Texas REP recommended either TDU compensation of the POLR for billing
and collection of payments from customers of a defaulted Competitive Retailer
or deletion of the requirement. IOUs disagreed that the cost of billing and
collection by POLR should be collected from the TDU. Rather, they and Independent
Retailers recommended that these costs be recovered in POLR rates.
The commission concludes that the POLR will be compensated for this service
in accordance with the commission contract with the POLR.
Comments on 4.6.2.2, Default Related to Failure
to Satisfy Obligations Under Tariff
IOUs proposed adding a remedy to apply to MOU/Coops that are in violation
of a material obligation under the Tariff since de-certification will not
apply to the MOU/Coops. IOUs suggested that in the situation of MOU/Coop default,
TDUs will notify the commission and immediately arrange for MOU/Coop customers
to be served by another Retail Electric Provider or the POLR. Entergy Texas
REP recommended substituting the term "immediately" with "within a commercially
reasonable time."
The commission agrees with IOUs and makes the suggested changes, with a
modification to allow the TDU to request that the MOU's/Coop's customers be
transferred to another retailer. This will allow the commission to determine
how customers should be orderly transferred to another retailer or the POLR.
The commission believes this modification addresses Entergy Texas REP's concern.
Comments on Section 4.6.2.3, Default Related to
De-certification
TIEC requested that the affected Retail Customer be given at least seven
days notice before arranging to transfer service to another Retailer or POLR.
The commission will consider the proper procedures for transferring customers
to other REPs or the POLR on a case-by-case basis in any proceeding in which
the commission decertifies a REP. No change to the Tariff is required.
Comments on Section 4.7, Measurement and Metering
of Service
Independent Retailers suggested that the commission initiate a project
to determine the metering requirements in a competitive retail market. IOUs
agreed. But IOUs disagreed with the Independent Retailers' suggestion that
the metering standards for Texas should conform to CUBR. IOUs argued that
CUBR's metering section is applicable to competitive metering services, whereas
in Texas, metering is still provided by a regulated monopoly.
Comments on Section 4.7.3, Reporting Measurement
Data
Independent Retailers demanded that all TDUs electronically report all
measurement data via a web portal since otherwise, data would be delayed and
the Competitive Retailers' ability to remit charges and provide competitive
services would be impaired. IOUs argued that this particular electronic data
transfer mechanism (namely, web portal) has not been discussed before; it
may not be feasible to have such a mechanism up and running before the market
opens; web portal mechanism may not be as reliable or secure as EDI that is
being developed for the Independent Organization in ERCOT; it will be a costly
but redundant system; and finally, it is not as standardized as EDI. Accordingly,
IOUs recommended keeping the existing language and forming an implementation
task force to explore the issue.
As discussed in more detail in the discussion of Section 4.8, the commission
agrees with the Competitive Retailers that it is critical that REPs timely
get load and meter data. The commission notes that once a REP has a customer,
it will receive monthly meter reads through the ERCOT settlements system.
Language has been added to Section 4.7.1 requiring the Company to provide
monthly meter reads in accordance with the protocols developed by the Independent
Organization.
Comments on 4.7.5, Invoice Adjustment Due to Meter
Inaccuracy
Competitive Retailers proposed that the methodology or standards for invoice
correction should be specified now in the Tariff (
e.g.
, measured during the same period in the three preceding years
normalized for weather). IOUs preferred the existing language. (Same issues
as under Section 5.4.7)
The commission agrees with IOUs.
Comments on Section 4.8, Data Exchange
Consumers objected to the provision that allows for charges for provision
of customer data since that may deter shopping by customers. IOUs pointed
out that they will incur costs associated with the release of such information.
They also argued that this is a rate issue and hence should be decided in
the rate cases. Independent Retailers sided with Consumers and argued that
TDUs should recover their costs associated with the provision of customer
data to Retail Customers through their system charges, not by assessing a
separate fee, as the relevant costs are mainly system costs.
The commission agrees with Competitive Retailers and Consumers. Assessing
a fee is likely to deter customers from obtaining information that would help
them evaluate competitive offers. Language has been added to this section
expressly prohibiting the assessment of charges for load or meter data.
Comments on Section 4.8.1, Data from Meter Reading
IOUs claimed that the only data that they should be required to make available
to Competitive Retailers is the data used for their billing purposes.
The commission concludes that all data
recorded
should be made available.
The Independent Retailers asked for clarification that "make available"
information, in fact, means to electronically forward it to a web portal at
the same time it sends the electronic invoice. IOUs argued against a "web
portal" mechanism. See IOU comments under Section 4.7.3.
The commission agrees with Independent Retailers that it is critical to
the development of the competitive market that REPs receive historical load
and meter data for current and prospective customers as soon as possible.
If such information is available from the Independent Organization in a timely
manner, then obligation on the TDU is not needed. However, to the extent an
Independent Organization is unable or unwilling to provide such data in a
near real- time manner, the commission believes it is appropriate to require
the TDU to do so for certain customers. As such, language has been added requiring
the Company to provide 12 months of historic load and meter data to a Competitive
Retailer if requested in the switch request sent to the Independent Organization.
Language has also been added requiring the TDUs to set up a web portal in
order for Retail Customers and their current and/or prospective REPs (with
the customer's permission) to obtain historical data in a real time manner
for IDR-metered customers and to provide for the confidentiality of such data
through the use of customer-specific passwords, if not available from the
relevant ISO. The commission believes that this function is likely to be most
efficiently provided for by the Independent Organizations, and encourages
market participants to encourage the development of the appropriate systems.
Comments on Section 4.8.1.1, Data Related to Interval
Meters
IOUs clarified that KW or KVA information need not be calculated - as the
present language implies. Rather, IOUs will obtain these data directly from
interval meters. TIEC recommended including the concept of calculation of
KVA demand explicitly. TIEC also suggested inclusion of definition of "KVAR"
and "Reactive Power" in order to properly explain KVA billing. IOUs questioned
the need for such definitions. IOUs also objected to TIEC's proposal of defining
a 60 minute interval demand using 15 minute interval data since data from
smaller intervals should provide more accurate information.
The commission agrees with IOUs.
Comments on Section 4.8.1.2, Data Reported by
Volumetric (kWh) Meters
IOUs proposed substituting the word "available" with "applicable" since
they claimed that the demand readings will be supplied for all Retail Customers
taking service under Rate Schedules that are based on demand billing determinants.
Consistent with its decision for Section 4.8.1, the commission rejects
IOUs' claim.
Comments on Section 4.8.1.3, Out of Cycle Meter
Reads
IOUs proposed to do an out of cycle meter read within three business days,
rather than the next business day, since that is consistent with the provision
in Section 4.8.1.2.
The commission notes that Section 4.8.1.2 relates to a final meter read
for a premise that has been disconnected. This section relates to a switch
in REPs. In order to provide accurate meter reads to both the old and new
REP, out-of-cycle meter reads must be done the day the switch is requested
to occur. For out-of-cycle meter reads not associated with a change in REPs,
the commission agrees with IOUs. Appropriate changes to the Tariff have been
made.
TXU REP requested that a Competitive Retailer be charged for only those
out of cycle meter reads that the Competitive Retailer requests. IOUs responded
that the commission has already decided that Retail Customers will directly
contact a TDU only for Construction Services and outages, and that Competitive
Retailer should be billed for all Discretionary Services except for Constructions
Services, and hence should be charged for all out of cycle meter reads for
its Retail Customers.
The commission agrees with IOUs.
Comments on Section 4.8.1.4, Estimated Usage
The IOUs stated that there is no field in SET transactions for a description
of the reason for estimation. Therefore they proposed deleting that requirement
from the rule. Independent Retailers argued that the commission should require
the SET team to develop a field for this purpose. They argued that a retailer
needs this information to protect its own business interests.
While the commission recognizes that Competitive Retailers may need to
know the reason for estimation of usage, it also notes that the CUBR document
states that the reason for estimation does not need to be provided as part
of SET. Accordingly, the commission adopts the language recommended by CUBR
which requires a TDU to provide the reason for estimation and the method of
estimation when requested.
Comments on Section 4.8.3, Adjustments to Previously
Transmitted Data
TXU REP recommended that the TDUs provide an explanation for adjustment
to previously transmitted data in accordance with SET protocol. TXU REP argued
that Competitive Retailers need the explanation so that they may correct other
records and attempt to prevent transmission of misinformation in the future.
Independent Retailers agreed.
The commission agrees with TXU REP and adds the suggested provision.
Comments on Section 4.8.4, Data Exchange Protocols
Both IOUs and TXU REP proposed deleting specific procedures to establish
ESI IDs from the rule and altering the rule to reflect that procedures will
be established in accordance with the ISO protocols. They were concerned that
the procedures in the current rule will conflict with procedures established
by the Independent Organization.
The commission agrees and makes the suggested change.
Comments on Section 4.9, Dispute Resolution Procedures
Comments on Section 4.9.1, Complaint Procedures
In order to clarify confusion regarding the deadline for the filing of
complaints at the commission, IOUs recommended maintaining only the provision
that will allow a complaint to be filed with the commission 30 calendar days
after the date of the initial complaint if arbitration is not chosen.
The commission agrees with the suggestion and modifies the section accordingly.
Comments on Section 4.9.2, Complaint with Regulatory
Authority
TXI recommended language to ensure that this provision does not limit the
authority of the commission to institute a proceeding; the right of a Retail
Customer to file a complaint with the commission; the authority of the commission
or a court with jurisdiction to award such remedies as are available under
PURA, the commissions rules or orders; or the rights of a Retail Customer
to exercise all other legal rights and remedies.
The commission declines to adopt the language proposed by TXI but, with
the intent of achieving the same objective as that requested by TXI, deletes
the phrase "the relevant portions of the PURA, where that right is available,"
and replaces it with the phrase "any applicable rules or law."
Comments on Section 4.11, Outage Reporting
IOUs made the following general observations:
(1) The introduction of Competitive Retailers as a middleman in the process
of outage management will require significant modifications to an IOU's telecommunications,
information technology, and outage management system.
(2) Adding a third party in the outage management process may result in
increased duration of outages.
(3) IOUs would need to maintain a majority of their current call center
staffing and equipment, hence the associated costs, in order to accommodate
those Competitive Retailers who forward the outage calls to the TDU or have
the Retail Customers call the TDU directly.
(4) IOUs recommended forming a task force to implement the outage reporting
process proposed in the Tariff.
Independent Retailers pointed out that: (1) TDUs would need a call center
to receive outage calls even if Competitive Retailers do not forward Retail
Customers' calls, and (2) while IOUs' current call centers also field calls
other than outage calls, for example, billing inquiries and customer complaints,
in 2002 these calls would be redirected to the Competitive Retailers.
Comments on Section 4.11.1, Notification of Interruptions,
Irregularities, and Service Repair Requests
Independent Retailers suggested that Competitive Retailers be able to select
the option among the three listed on a case by case basis. IOUs disagreed
by saying that this will increase TDUs' costs of operation significantly since
IOUs would then need to be ready to handle any possible choice on the part
of a Competitive Retailer in a particular case. Independent Retailers also
suggested changes to reflect that this section is also for service requests,
not just for outages. IOUs disagreed and pointed out that for service requests
not involving construction services, Retail Customers should contact its Competitive
Retailer, not the TDU, since the Competitive Retailer should be the primary
point of contact with the Retail Customer except for Construction Services
and outage matters. Independent Retailers proposed to add that electronic
communications should be through a web portal. IOUs objected. See discussion
on Section 4.7.3 above. IOUs proposed that the commission form an implementation
task force to resolve the outage issues. Independent Retailers recommended
that the commission delete the requirement for Competitive Retailers to provide
the social security number of the affected Retail Customer since it will not
apply to non-residential customers.
Consumers argued that outage reporting should be part of the customer protection
rule since customers need to know the roles and responsibility of various
parties for outage reporting. Consumers also are concerned that a Competitive
Retailer with a call center may not be able to provide enough information
regarding outage and restoration to its customers unless TDUs feed them the
information on a timely basis. Independent Retailers agreed that TDUs should
keep the Competitive Retailers informed of the nature and duration of outages.
The commission agrees with Consumers and Independent Retailers and requires
that outage reporting done under option (1) be done in a manner that does
not compromise the timely restoration of service and ensures that Competitive
Retailers are kept informed of restoration efforts. The commission agrees
with Independent Retailers that a social security number should not be required
to be provided and has deleted this requirement. As discussed earlier, while
the commission prefers that Competitive Retailers serve as the primary point
of contact for Retail Customer needs, the commission agrees with Independent
Retailers that having service requests from Retail Customers be call forwarded
to the TDU, or having a Competitive Retailer direct the Retail Customer to
call the Company (
i.e.
, through inclusion
of the Company's number on a bill) is consistent with that preference and
recognizes that smaller REPs may not be able to support the personnel and
infrastructure to electronically convey such information. To the extent Competitive
Retailers forward customer calls to the TDU, or direct Retail Customers to
call the TDU directly, the commission finds that it is appropriate for these
Competitive Retailers to make sufficient arrangements with the TDU regarding
the Competitive Retailer's approval of any service requests for which the
Competitive Retailer will be billed, in order to prevent disputes about invoices.
Competitive Retailers who do not make such arrangements should be deemed to
have pre-approved all service requests from Retail Customers. Modifications
to this section have been made to reflect this clarification.
Comments on Section 4.11.2, Response to Reports
of Interruptions and Repair Requests
The Competitive Retailers and Consumers suggested eliminating the possibility
of Company charging them for an investigation if it turns out the problem
is on the Customer's side of the meter. IOUs responded that this is a rate
issue and should be decided in the UCOS cases. TXU REP recommended that the
Company include an explanation of the condition when it notifies the Competitive
Retailer that a reported problem is caused by a condition on Retail Customer's
side of the Point of Delivery. IOUs explained that TXU REP's recommendation
is impossible to undertake since TDUs cannot investigate Customer's side of
the meter.
The commission agrees with IOUs and believes that the appropriate level
of the charge should be determined in the UCOS cases.
Comments on Chapter 5: Service Rules and Regulations
Relating to the Provision of Delivery Service to Retail Customers
Comments on Section 5.1, General
Automated Energy requested that language be included in Chapter 5 to standardize
Tariff structure statewide for pulse outputs, and also for installation of
pulse meters. They claimed that the individual proposed utility tariffs either
reflect high prices or tariff language so vague as to permit the utility to
set its own price. Since pulse output from a Customer's meter can provide
valuable information to a Customer to enable the Customer to really benefit
from competition, Automated Energy asked for commission review of the associated
TDU rates and charges for this service. IOUs responded by claiming that the
rates, terms and conditions of pulse output services should be dealt with
in individual rate cases since the issues involved are rate issues.
The commission agrees with Automated Energy about the importance of reasonable
provision of pulse output to customers. However, the commission also agrees
with IOUs that the issues of concern are rate issues and should be dealt with
in UCOS cases.
Comments on Section 5.1.1, Applicability of Chapter
TIEC cited PURA §39.203(a) in support of language that would allow
Retail Customers to purchase Delivery Service and, at the Retail Customer's
option, be billed directly by TDUs. IOUs argued that maintaining dual billing
-- namely requiring TDUs to bill either REPs or Retail Customers -- will increase
TDUs' overall cost of operation and hence rates. IOUs pointed out that industrial
customers have bargaining power and, therefore, will always have other options
to address their concerns.
The commission has already decided this issue in Project Number 21083, Cost Unbundling and Separation of Utility Business Activities,
Including Separation of Competitive Energy Services and Distributed Generation
, where it concluded that "as a general rule, the primary point of
contact for customers should be the REP, which should be the primary procurer
of T&D service.... While it may be true that in some emergency situations,
the customer may need to directly contact the T&D company, this is not
sufficient justification for requiring a customer to contact multiple entities
to resolve a problem, nor is it justification for T&D utilities to continue
to maintain large and costly customer call centers and billing systems. Larger
customers with unique distribution facility needs may choose to deal directly
with the T&D utility on certain T&D utility service issues. Nothing
in this rule should be read as precluding that contact to meet these unique
distribution needs, so long as the utility observes the code of conduct and
the REP is notified." (25 TexReg 720, 736). The commission believes that the
proposed Tariff has accommodated the above referenced unique service needs
in the second sentence of Section 5.3, SERVICE, by using the phrase "Except
as required for... other unique Delivery Service needs,...." Accordingly,
no change of language in the Tariff is necessary.
Comments on Section 5.3, Service
Comments on Section 5.3.1, Initiation of Delivery
Service (Service Connection)
IOUs suggested that this section should parallel sections 4.3.2.1 and 4.3.2.2.
IOUs pointed out that a Retail Customer does not make the request for service
initiation when existing Company facilities are used, the Competitive Retailer
(via the Registration Agent) does. The IOUs also clarified that a Retail Customer
can request Construction Services directly from the Company.
The commission agrees with IOUs and clarifies the Tariff accordingly. The
following sections are added to this chapter: Section 5.3.1.1, Initiation
of Delivery System Service Where Construction Services are not Required; Section
5.3.1.2, Initiation of Delivery System Service Where Construction Services
are Required; and 5.3.2, Requests for Construction Services.
Comments on Section 5.3.2 (proposed), Changing
of Designated Competitive Retailer
IOUs suggested that consistent with changes they have suggested to Section
4.3.3 (proposed) and the proposed language in Section 4.3.2.1(3), it should
be made clear that the Competitive Retailer chosen by a Retail Customer must
not be in default to make the customer choice effective, and that, if authorized
by the commission, Company may charge the Competitive Retailer for provision
of customer information.
The commission agrees with IOUs suggestions except for the last one. The
commission believes that the issue of any charge to a Competitive Retailer
is more appropriately dealt with in Chapter 4 of the Tariff, where the terms
and conditions of Company's Delivery Service to Competitive Retailers are
discussed.
Comments on Section 5.3.3 (proposed), Switching
Fees and Switchovers
IOU proposed additional language, as in Section 4.3.4 (proposed), that
Company can charge any other commission-approved fee if applicable. The Competitive
Retailers recommended clarification that the Company can charge a Customer
to switch to a different TDU
only
when such
a switchover charge is applicable.
As stated in the commission response to the comments on Section 4.3.4 (proposed),
the Tariff should include a definition of Switching Fee and a prohibition
on charging such fees. The commission also finds that the modification suggested
by Independent Retailers is not necessary. The commission's switchover rules,
together with Company's Rate Schedules, will address their concern.
Comments on Section 5.3.5 (proposed), Changes
in Rate Schedules
IOUs requested allowing a change in a rate schedule to become applicable
for the entire billing cycle if the request is made at least five business
days before the meter reading date. The rule currently reads two business
days.
The commission refuses IOUs' request for the same reasons as discussed
in connection with Section 4.3.5 (proposed).
Comments on Section 5.3.6.4 (proposed), Prohibited
Suspension or Disconnection
IOUs pointed out that the deferral of disconnection based on a medical
emergency has no applicability to the TDU, except when the Retail Customer
fails to pay charges for Discretionary Services that are billed directly to
the Retail Customer by the TDU. They maintain that only the POLR has this
responsibility to defer disconnection for nonpayment of all other Delivery
Charges on medical grounds. The IOUs also suggested that the language in this
section should exactly track the specifics of the current and the proposed
customer protection rules, rather than paraphrase the language there since
important terms and criteria got omitted in the process.
The commission agrees with IOUs and modifies the Tariff accordingly.
Consumers recommend changing Section 5.3.6.4(2) (proposed) to refer to
the customer protection rules for the definition of "extreme weather conditions".
The commission agrees and modifies the Tariff accordingly.
Comments on Section 5.4, Electrical Installation
and Responsibilities
Comments on Section 5.4.1, Retail Customer's Electrical
Installation and Access
IOUs recommended clarifying that protection of a Retail Customer's own
electric facilities is also the customer's responsibility. IOUs also noted
that since under the commission's energy services rule a TDU cannot provide
any service on a Retail Customer's side of the meter, IOU has no responsibility
regarding design, installation, operation, protection, and maintenance of
Retail Customer's electrical facilities.
The commission agrees and has added clarifications.
Comments on Section 5.4.2, Inspection and Approval
of Retail Customer's Electrical Installation
IOUs proposed modifying the section to say that the Company can decline
to interconnect with a Retail Customer's electrical installation that is known
to be hazardous.
The commission concurs and modifies the section accordingly.
Comments on Section 5.4.6, Protection of Company's
Facilities on Retail Customer's Premises
Independent Retailers argued that no reasonable justification exists for
the current wording that requires a Retail Customer to safeguard the TDU's
property,
i.e.
, no affirmative obligations
should be placed on the customer, other than to not intentionally or negligently
injure that property. IOUs pointed out that this is standard Tariff language
that has been approved for years by the commission. They argued that the equipment
is used for the Retail Customer and that the Retail Customer is in the best
position to prevent unauthorized persons from damaging it.
The commission agrees with the Independent Retailers and changes the language
of the Tariff to reflect that a Retail Customer does not have a duty to protect
Company facilities but has a duty not to damage them. In keeping with Sections
4.2.1 and 5.2.1, however, the commission notes that a Retail Customer is subject
to liability with regard to this duty not to damage if the Retail Customer
is negligent himself, or is negligent with respect to controlling another
person over whom the Retail Customer should reasonably have control from so
damaging the Companies property located on the Retail Customer's Premises.
To reflect the change with regard to Retail Customer's duty, the commission
changes the title of this section.
IOUs argued that the Rate Schedules in Section 6.1 should be used to assign
cost responsibility for loss or damage to Company facilities caused by Retail
Customers and that the reference to Section 5.2 should be deleted.
The commission agrees with IOUs that charges for such loss or damage shall
be consistent with Section 6.1, but believes that the reference to Section
5.2 is also appropriate.
Comments on Section 5.4.7, Unauthorized Use of
Delivery System
IOUs proposed adding the costs associated with the investigation and correction
of the unauthorized use to the list of costs to be recovered from the party
responsible for the unauthorized use.
The commission concurs and adds that provision to the Tariff.
The Independent Retailers recommended a definitive estimation method for
estimating unauthorized use and suggested that such estimate must be based
on previous usage over the last three years normalized for weather conditions.
IOUs argued that the method of determining unmeasured consumption is adequately
addressed in the proposed language that reflects the existing practice and
should remain flexible to account for changes in Retail Customer operation.
Independent Retailers also clarified that a Retail Customer is not responsible
for tampering if it occurred before the Retail Customer owned or began using
the facility. They also desired to clarify that Competitive Retailers should
not be charged in this situation. IOUs claimed that the proposed Tariff language
addresses Independent Retailers concerns.
The commission agrees with IOUs and maintains the proposed language.
Comments on Section 5.4.8, Admittance to Retail
Customer's Premises
TIEC proposed amendments to ensure that utility personnel follow essential
safety protocols when working on industrial sites. IOUs agreed so long as
the safety requirements are communicated to the utility.
The commission agrees with TIEC and IOUs and makes appropriate changes
to the Tariff language.
Comments on Section 5.5, Retail Customer's Electrical
Load
Comments on Section 5.5.1, Load Balance
TIEC proposed deletion of the requirement that a Retail Customer's load
should be in reasonable balance because the concept of reasonable balance
is undefined. IOUs argued that it is impossible to have a standard definition
of reasonable balance since load situations may vary. However, IOUs claimed
that it is critical that Retail Customers with multi-phase loads balance them
so that TDU's Delivery System is not harmed. Hence, they argued, the requirement,
which is in IOUs' tariff today (
e.g.
, TXU
Electric Tariff Section 4.7.2.1), should not be deleted. Good Utility Practice
will be used, as is used today, to determine whether the customer load is
in reasonable balance.
The commission agrees with the IOUs and keeps the proposed language unchanged.
Comments on Section 5.5.2, Intermittent Electrical
Loads and Limitation on Adverse Effects
Nucor recommended additional language so that a TDU cannot unreasonably
refuse service to equipment of the types described in the section. Nucor argued
that the equipment is needed for commercial and industrial purposes and that
Company's system and other Retail Customers are protected by the Tariff provision
which requires that Retail Customers installing such equipment make specific
prior arrangements. TXI also recommended changing the language and cited PURA §37.151,
regarding the obligation to serve. IOUs stated that the intention is not to
refuse service but to make Retail Customers aware of their obligation. They
point out that Section 3.16 already provides that consent may not be unreasonably
withheld.
The commission agrees with the IOUs and does not change the published language.
Nucor and TXI both recommended deletion of language in the proposed Tariff
that would allow a TDU to establish Billing Demand intervals for certain customers
that are different from all other customers since that would be arbitrary,
discriminatory, and anticompetitive. IOUs pointed out that if the TDU does
not measure the spiking load of the Retail Customer whose power consumption
creates large spikes in the system and charge the Retail Customer appropriately,
the rest of the customers will need to subsidize that customer. Nucor also
argues that TDUs will use this provision to correct an improperly selected
demand interval.
IOUs, on the other hand, proposed a language change to reflect the fact
that the determination of Billing Demand for intermittent load depends on
the type of equipment and usage pattern and hence does not lend itself to
a standard methodology that could be approved by the commission for generic
application. Nor would it be practical for the commission to conduct separate
cases for each such individual customer. A more appropriate solution, according
to IOUs, is for the Company to determine the billing determinant in accordance
with the Good Utility Practice which will be subject to commission review
if the Retail Customer disagrees.
The commission concludes that the proposed language is adequate and addresses
both TXI's and Nucor's concerns, as well as IOUs' concerns.
Independent Retailers argued that TDU should bill Retail Customer, rather
than its Competitive Retailer, for correction Devices. IOUs point out that
issue is already addressed in Section 5.8.2.
The commission agrees with IOUs and does not change the proposed language.
Comments on Section 5.5.3, Equipment Sensitive
to Voltage and Wave Forms
The IOUs suggested adding motors to examples of electrical equipment that
may be affected by fluctuations and explicitly including provision and installation
of protective equipment as Retail Customer's responsibility.
The commission agrees with IOUs and makes the suggested modifications.
Comments on Section 5.5.4, Change in Retail Customer's
Electrical Load
The IOUs proposed a change in language to make it explicit that the Retail
Customer would pay for damage to a Company's facility resulting from the use
of Delivery Service in excess of the Delivery System's maximum capacity if
the Retail Customer does not give adequate notice of the load change.
The commission concludes that the appropriate standard for liability is
set forth in Section 5.2, namely, but for the express limitation on liability
stated therein, a party is subject to liability for its negligence or intentional
misconduct to the full extent allowed by the law, and that no change to this
section is necessary.
Comments on Section 5.5.5, Power Factor
IOUs proposed inclusion of a formula that needs to be used to adjust Billing
Demand when a Residential Customers' Power Factor lags by more than 95% and
a corrective device has not been installed.
The commission agrees with IOUs and included the formula.
Nucor recommended changing the Power Factor requirement from 95% to 90%.
IOUs pointed out that commission Substantive Rules (§25.192(b)(1)(D)
and §25.198(b)(5)) and proposed ERCOT ISO requirement for distribution
load serving entities both require 95% Power Factor for utility's system.
Therefore, IOUs argued, Retail Customers who use a utility's Delivery System
should have the same requirement. In fact, IOUs proposed language would change
the requirement for Retail Customers when an Independent Organization or a
governing Regional Transmission Organization (RTO) changes the Power Factor
requirement for the TDU Delivery System.
The commission agrees with IOUs that 95% Power Factor standards should
be maintained to support the reliable operation of the transmission and distribution
network. However, it declines to incorporate IOUs' proposed language that
would automatically change the Power Factor requirement for Retail Customers
when the requirements of RTO or Independent Organization change. Given the
fact that most Retail Customers do not directly deal with either RTOs or Independent
Organizations, a more comprehensive notice like a notice for rulemaking is
appropriate to institute such a change.
Comments on Section 5.6, Limitation on Use of
Distribution Service
Comments on Section 5.6.3, Extension of Retail
Customer's Wiring
TIEC and OxyChem argued that the requirement in this section is unreasonable.
Today, plants that span public streets routinely put in their own distribution
systems spanning these streets by obtaining permission and easements from
the affected city or county. Utilities should not be given the power to veto
this option and thereby raise the plants' cost of operation. IOUs pointed
out that similar provisions already exist in IOUs current Tariffs (
e.g.
, Reliant Energy Tariff Section V, Sheet Number E1, page 3; EGSI
Terms and Conditions, Sheet No. 9, No. 9; and TXU Tariff Section 4.7.1.4).
The purpose is to limit a Retail Customer's ability to combine points of delivery
to avoid charges which may ultimately increase costs to others, or to bypass
the utility's facilities by transporting power on its own. According to IOUs,
under SB7 the TDU retains its traditional role as a regulated entity certified
to serve a specific area and maintenance of the prohibition on crossing public
streets is fundamental to safeguarding the public interest in this set up.
A utility does not have the ability to prevent a customer from consolidating
loads on the customer property. A customer should have the same latitude to
join loads on adjacent properties that are separated by public streets. Accordingly,
the commission deletes the section.
Comments on Section 5.7, Facilities Extension
Policy
Comments on Section 5.7.1, General
Independent Retailers suggested deletion of "Installation of standard facilities"
from the list of extensions, implying that installation of standard facilities
will always be without additional costs to the entity requesting such extension.
IOUs disagreed since IOUs' Facilities Extension Policies -- both existing
and proposed -- explicitly cover standard facilities; in other words, utilities
may charge for line extension even when it involves installation of standard
facilities only, if, for example, the cost of the standard facilities in a
particular situation exceeds the standard allowance for the extension.
The commission agrees with the IOUs and notes that any rate issues on line
extension will be dealt with in the pending UCOS cases.
Comments on Section 5.7.2, Contractual Arrangement
Consumers suggested that the Facilities Extension Agreement setting out
all payment, billing and credit items for residential customers should be
standardized and approved by the commission in a public process with comments
from all parties. IOUs responded that standardization of Facilities Extension
Agreement among all utilities involves rate issues and should be dealt with
in the context of UCOS cases which will be a public process.
The commission agrees with the IOUs and defers the issue of standardization
of Facilities Extension Agreement to the UCOS cases since it involves rate
issues.
Comments on Section 5.7.3, Processing of Requests
for Construction of Distribution Facilities
IOUs claimed that the ten-day time period allowed for preparation of an
estimate of the cost of a construction project should begin upon receipt of
a request containing all required detailed information regarding the project.
The commission agrees and modifies the section accordingly.
TXI requested a language change to impose limits on the Company's discretion
regarding Company estimates of the time needed to meet the requests by non-residential
entities by requiring that the time limit be reasonable. It also requested
that commission enforcement be available when a TDU does not meet the time
limit, and that such enforcement could be sought by filing a complaint. IOUs
opposed TXI's proposal and pointed out that an explicit time limitation for
construction for non-residential customers does not currently exist in the
commission's customer protection rules because of varying and non-standard
equipment requirement of non-residential customers, on the delivery of which
the utility has limited control. IOUs pointed out that a Retail Customer always
has the right to file a complaint with the commission if, in its opinion,
the TDU has acted unreasonably.
The commission agrees with IOUs and concludes that TXI's proposed modification
need not be included in the Tariff.
Comments on Section 5.7.4, Allowance for Facilities
TAB asserted that the proposed provisions of the Tariff negatively impact
housing affordability by not defining the term "standard facilities" and,
therefore, possibly charge the builders and developers for the costs of line
extension. It advocated that the cost of line extensions be recouped over
a long period of time in a TDU's rates and proposed a definition of standard
residential service that would include bringing service all the way to the
meter on each house according to the norm (underground or overhead facilities)
in the area. IOUs argued that the definition does not reflect how standard
service is defined today in the IOUs' existing tariffs and pointed out that
even under current tariffs, there may be a customer contribution associated
even with standard facilities in situations where costs of standard facilities
exceed the standard allowance. IOUs recommended that since definitions of
"standard facilities" and "standard allowance" have significant cost impact
on utilities and hence their rates, these issues should be dealt with in UCOS
cases. TAB in their oral presentation in the Public Hearing also stated that
the TDU should have the cost responsibility for everything on the TDU side
of the customer meter and either should be prohibited from requiring the contribution
of easements or should pay developers a fee for an easement. In response,
IOUs maintained that all these issues should be more appropriately handled
in the UCOS cases.
The commission concludes that the standard allowance currently allowed
for in the integrated utilities' tariffs should be continued for the time
being, unless the current tariffs calculate the standard allowance through
an evaluation of the expected revenues from the customer. After the commencement
of retail competition, this calculation would no longer be done on the expected
bundled revenues from the customer, but instead on the expected revenues received
by the TDU from the transmission and distribution rates. If such a calculation
is currently prescribed by a utility's tariff, the utility, in its UCOS case,
should convert this methodology to either a foot-allowance or a dollar allowance.
If a utility's tariff currently prescribes a foot-allowance, dollar allowance,
or other comparable method, the utility should, in its UCOS case, utilize
the same method for its future transmission and distribution utility.
Comments on Section 5.7.5, Non-Standard Facilities
TXI recommended additional language to reduce Company's discretion to refuse
service to non-standard facilities. IOUs argued that because of the special
and unanticipated conditions inherent in the non-standard facilities, those
cannot be dealt with on a standard basis but need to be handled on a case
by case basis.
The commission agrees with TXI and has added the suggested language that
the commission believes is broad enough to address IOUs' concern.
Comments on Section 5.7.6, Customer Requested
Facility Upgrades
IOUs proposed modifying the section to reflect the fact that a Retail Customer
is not always assessed a charge for facilities upgrade. They also suggested
deleting the second sentence since it would require payments even when payments
are not required by Company Rate Schedules.
The commission agrees and makes the suggested change.
Comments on Section 5.7.9, Dismantling of Company's
Facilities
The IOUs suggested deleting the language "Company shall indemnify the Retail
Customer for any such abandonment" because it is redundant and simply restates
the prior clause, which makes the Company subject to liability pursuant to
Section 5.2, Limits of Liability. Additionally, with regard to the issue of
terminating applicable easements upon abandonment of Delivery Service facilities,
they urged that "shall" terminate be changed to "may" terminate to reflect
that the terms of the easement document itself governs the termination of
the easement. The Independent Retailers urged that the commission clarify
that the utility bears all financial responsibility, including liability for
all third party damages claims, in connection with the utility's abandoned
facilities, including the duty to indemnify the customer and Premises owner
for any damages and defense costs that they may incur. In reply, the IOUs
reiterated the reasoning from their initial comments. The Independent Retailers,
in their reply comments, argued that although the IOUs are correct that the
limitation on liability for ordinary negligence does not apply in this case
because such damages do not result from an outage, the commission should impose
an indemnity requirement to ensure that the utility properly bears the responsibility
for its abandoned facilities.
In response to the Independent Retailers' concern, the commission again
notes that Sections 4.2.2 and 5.2.2 shield them from liability for any damages
resulting from the TDUs' operation/maintenance of the TDUs' Delivery Facilities
and, therefore, no indemnity provision is necessary. The commission also notes
that in assessing a TDU's potential liability under Section 5.2.1, a Retail
Customer's negligence or contributory negligence with regard to Company's
abandoned facilities may be considered. Finally, for the reason stated by
the IOUs, the commission adopts the IOUs' proposed change of language from
"shall" to "may."
Comments on Section 5.8, Billing and Remittance
Comments on Section 5.8.2, Billing to Retail Customer
by Company
IOUs pointed out that although the proposed rule refers to the customer
protection rule for the relevant credit standard for Construction Services,
the customer protection rule deals only with credit standards for monthly
electric service and only for residential customers. Accordingly, IOUs suggested
deleting the reference. IOUs also added reference to two more sections to
include in the list of situations that provide for direct billing of Retail
Customer by Company.
Independent Retailers suggest deleting the section defining Retail Customer
to include property owners, builders, developers, contractors, or any other
entity or individual making a request to the Company since the definition
of Retail Customer already includes these entities.
The commission agrees with the modifications suggested by both parties
and has appropriately changed the Tariff. The commission again notes that
the only charge to be billed directly by the Company to Retail Customers are
those authorized by this section.
Comments on Section 5.9, Default and Remedies
on Default
Comments on Section 5.9.1, Company Remedies on
Default by Competitive Retailer
TIEC asserted that the Retail Customer must be given adequate notice (seven
days) prior to a Competitive Retailer default or the date on which the responsibilities
are transferred. Consumers had a similar argument in their comments on Section
4.6.2. As they have argued under Section 4.6.2.1, IOUs responded that implementation
of a remedy upon a default must be immediate. Otherwise, the total bad debt
accruing to the TDU will increase dramatically.
See the commission's response to the comments on Section 4.6.
Comments on Section 5.10, Meter
Comments on Section 5.10.2, Retail Customer Responsibility
and Rights
Consistent with their suggestion for Section 4.8.1, IOUs requested a change
to clarify that only data used by Company for billing purposes will be made
available.
Consistent with its response to IOUs comments on Section 4.8.1, the commission
is not adopting this suggestion. However, the commission does modify the section
to make it consistent with the duty set forth in Section 5.4.6 as discussed
in that section.
In order to protect privacy of customer information in situations where
a Retail Customer is served by multiple Competitive Retailers, TIEC suggested
additional language to clarify that only the data approved by the Retail Customer
for a particular Competitive Retailer will be released by the TDU to that
Competitive Retailer. As they have commented on Section 4.3.3, IOUs point
out that according to the commission's code of conduct rules, proprietary
customer information may be released in certain situations without customer
consent (
e.g.
, §25.272(g)(1)(C) and (D):
to facilitate customer choice and to provider of last resort).
The commission agrees with TIEC that, in general, the TDU should release
customer information to its designated Competitive Retailer only to the extent
authorized by the Retail Customer. However, the commission also agrees with
IOUs that this requirement should be subject to the limitation imposed by
Applicable Legal Authorities.
Comments on Section 5.10.3, Metering of Retail
Customer's Installation in Multi- Metered Buildings
IOUs recommended a language change to make it consistent with Section 5.10.2.1
and to clarify that the Meter Socket is provided by the Retail Customer.
The commission agrees with IOUs' suggestion.
Comments on Section 5.11, Retail Customer Inquiries
Comments on Section 5.11.1, Service Inquiries
IOUs suggested limiting the service inquiries to only the items explicitly
listed in the section and proposed deleting the phrase "including, but not
limited to." Their recommendation was based on the general principle under
retail competition of minimal contact by a TDU with Retail Customers.
The commission agrees with IOUs and has made the proposed modification.
Comments on Section 5.11.3, Billing Inquiries
TIEC asserted that Retail Customers should be given the right to contact
the TDU directly with regard to obtaining interval data to ensure Retail Customers'
flexibility and control of its own proprietary consumption data.
The commission notes that Section 5.10.2 of the Tariff already gives a
Retail Customer access to its metered data. Accordingly, no modification of
the present section is necessary.
Comments on Section 5.12, Outage Reporting
Comments on Section 5.12.1, Notification of Interruptions,
Irregularities, and Service Repair Requests
IOUs recommended that a Spanish language provision be included for outage
reporting. They also added Retail Customer's phone number in the list of information
necessary for outage management, arguing that Company needs to match Premise
phone number in the Company's automated outage management system.
The commission agrees with IOUs on both issues. So far as the second issue
is concerned, the commission notes that Retail Customer's phone number is
included in the parallel section in Chapter 4 (viz, Section 4.11.1).
Comments on Chapter 6: Company Specific Item
IOUs suggested that this chapter should be free format since the contents
will vary among companies.
The commission rejects IOUs' suggestion. One of the main purposes of having
a pro-forma Tariff is to have the different IOUs Tariffs in a standardized
format so that it is easy to locate a TDU's rate, terms and conditions of
one particular service in a definite pre-specified section. Otherwise, it
would be difficult to track different TDUs' rates, especially for a REP operating
in multiple TDUs' service area
This new rule is adopted under the Public Utility Regulatory
Act, Texas Utilities Code Annotated §14.002 (Vernon 1998, Supplement
2001) (PURA), which provides the Public Utility Commission with the authority
to make and enforce rules reasonably required in the exercise of its powers
and jurisdiction. The commission also adopts this rule pursuant to PURA §39.203,
which grants the commission authority to establish reasonable and comparable
terms and conditions for open access on distribution facilities for all retail
electric utilities offering customer choice, and comparable rates for open
access for all retail electric utilities offering customer choice.
Cross Reference to Statutes: Public Utility Regulatory Act §§14.002,
39.104, and 39.203.
§25.214.Terms and Conditions of Retail Delivery Service Provided by Investor Owned Transmission and Distribution Utilities.
(a)
Purpose. The purpose of this section is to implement Public
Utility Regulatory Act (PURA) §39.203 as it relates to the establishment
of non-discriminatory terms and conditions of retail delivery service, including
delivery service to a retail customer at transmission voltage, provided by
a transmission and distribution utility (TDU). A TDU shall provide retail
delivery service in accordance with the terms and conditions set forth in
this section to those retail customers participating in the pilot project
pursuant to PURA §39.104 on and after June 1, 2001, and to all retail
customers on and after January 1, 2002. By clearly stating these terms and
conditions, this section seeks to facilitate competition in the sale of electricity
to retail customers and to ensure reliability of the delivery systems, customer
safeguards, and services.
(b)
Application. This section, which includes the pro-forma
tariff set forth in subsection (d) of this section, governs the terms and
conditions of retail delivery service by all transmission and distribution
utilities in Texas. The terms and conditions contained herein do not apply
to the provision of transmission service by non-ERCOT utilities to retail
customers.
(c)
Tariff. Each TDU in Texas shall file with the Public Utility
Commission of Texas (commission) a tariff to govern its retail delivery service
using the pro-forma tariff in subsection (d) of this section. TDUs may add
to or modify only Chapters 2 and 6 of the tariff, reflecting individual utility
characteristics and rates, in accordance with commission rules and procedures
to change a tariff. Chapters 1, 3, 4, and 5 of the pro- forma tariff shall
be used exactly as written; these chapters can be changed only through the
rulemaking process. If any provision in Chapter 2 or 6 conflicts with another
provision of Chapters 1, 3, 4 and 5, the provision found in Chapters 1, 3,
4 and 5 shall apply, unless otherwise specified in Chapters 1, 3, 4 and 5.
(d)
Pro-forma Retail Delivery Tariff. The commission adopts
by reference the form "Tariff for Retail Delivery Service," effective date
of December 13, 2000. This form is available in the commission's Central Records
division and on the commission's website at www.puc.state.tx.us.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of
the Secretary of State on January 23, 2001.
TRD-200100413
Rhonda Dempsey
Rules Coordinator
Public Utility commission of Texas
Effective date: February 12, 2001
Proposal publication date: August 4, 2000
For further information, please call: (512) 936-7308