TITLE 16.ECONOMIC REGULATION

Part 1. RAILROAD COMMISSION OF TEXAS

Chapter 1. PRACTICE AND PROCEDURE

Subchapter A. DEFINITIONS AND GENERAL PROVISIONS

16 TAC §1.10

The Railroad Commission of Texas adopts new §1.10, concerning commissioner conduct, with changes to the proposal published in the February 23, 2001, issue of the Texas Register (26 TexReg 1622). The new section is intended to promote public confidence in the integrity and impartiality of the commission and is to be construed and applied to that end. A commissioner should participate in establishing, maintaining, and enforcing high standards of conduct, and should personally observe those standards of conduct so that the integrity and independence of the commission is preserved. A commissioner shall avoid impropriety and the appearance of impropriety in all activities; be knowledgeable of, and comply with, the law; and neither allow any relationship to influence commission business, quasi-judicial conduct or judgment nor lend the prestige of public office to advance the private interests of the commissioner or others. Further, a commissioner shall not convey, or permit others to convey, the impression that any person is in a special position to influence the commissioner.

Subsection (a) of the new rule sets forth the standards applicable to commissioners in contested cases. The rule would require that a commissioner, when considering contested case issues, not allow any relationship, personal or pecuniary, to influence decisions or policies. In addition, a commissioner should not convey, or permit others to convey, the impression that any person is in a special position to influence commission decisions.

Under the new rule, a commissioner would recuse himself or herself from a contested case issue any time his or her impartiality might reasonably be questioned, including but not limited to, any time he or she, or anyone within the third degree of kinship by affinity or consanguinity with the commissioner is a party to the proceeding; is acting as counsel to a party; or has a financial or any other interest in the matter in controversy that could be substantially affected by the outcome of the proceeding. Should the commissioner choose not to recuse himself or herself, the commissioner would place in the record, and in the Texas Register , a written explanation of any potential conflict and a reasoned justification for not complying with the recusal standards. A commissioner who believes another commissioner has violated this section would raise the issue in a posted meeting at the first opportunity.

As proposed, subsection (b) was intended to provide interpretation and guidance in applying the provisions of subsection (a). Paragraphs (1)-(3) of subsection (b) were modeled on Texas Rules of Civil Procedure, Rule 18b, and were intended only as a reference for commissioners acting in their quasi-judicial capacity as decision-makers in contested cases. The text of paragraph (4) of subsection (b) was taken directly from Texas Government Code, Chapter 573, and was included simply for convenience and ease of reference.

The commission received no comments from associations or groups, but did receive one comment from Commissioner Charles R. Matthews, who opposes adoption of the rule.

Commissioner Matthews' comments address the constitutional and statutory foundations for agency rulemaking, generally, and for the Railroad Commission, specifically. Although the comments refer to the constitutional provision (Texas Constitution, Article XVI, §30) and a portion of the statutory provision (Texas Civil Statutes, Article 6447) pertaining to the creation of the Railroad Commission, significantly the comments omit reference to that portion of Article 6447 which provides, in pertinent part, that "[t]he Commissioners . . . may make all rules necessary for their government and proceedings." This is a specific grant of legislative authority for the commission to adopt new §1.10 as a part of "their government."

Commissioner Matthews' comments argue further that, even if the commission had constitutional or statutory authority to promulgate a rule relating to the recusal of commissioners in a contested case, it could not promulgate new §1.10 because it is inconsistent with other state law, specifically Texas Government Code, Chapter 572, and goes far beyond the specific provisions applicable to commissioners under that chapter.

In response, the commission acknowledges that in the event of a conflict between an applicable statute and an applicable rule, the statutory provision will control. In addition, the commission re-states here what was stated during the February 6, 2001, open meeting deliberations when new §1.10 was proposed: the provisions of this rule are not binding on a commissioner. They are offered as guidance to commissioners, whose constitutional and statutory duties necessarily combine the legislative and the judicial functions. And they are offered as a rule so that members of the public will know the standards of ethical conduct to which the commissioners, individually and voluntarily, hold themselves.

The commission has made changes to new §1.10, as adopted. The commission has removed the detailed wording of paragraphs (1)-(4) of subsection (b), and instead, in paragraphs (1) and (2) refers to the sources for the guidance, Rule 18b, Texas Rules of Civil Procedure, and Texas Government Code, Chapter 573, that was included in the proposal.

The commission adopts the section under Texas Civil Statutes, Article 6447, which gives the Railroad Commissioners authority to make all rules necessary for their government and proceedings, and under Texas Government Code, §2001.004, which, among other things, requires the commission to make available for public inspection all written statements of policy or interpretations that are prepared, adopted, or used by the agency in discharging its functions. The commission elects to make this policy statement through the proposal and adoption of a procedural rule.

Texas Civil Statutes, Article 6447, and Texas Government Code, §2001.004, are affected by the new section.

Issued in Austin, Texas, on May 8, 2001.

§1.10.Commissioner Conduct.

(a)

Participation in Contested Cases.

(1)

When considering contested case issues, a Railroad Commissioner shall not allow any relationship, personal or pecuniary, to influence decisions or policies, and shall not convey, or permit others to convey, the impression that any person is in a special position to influence commission decisions.

(2)

A commissioner will recuse himself or herself from a contested case issue any time his or her impartiality might reasonably be questioned, including but not limited to, any time he or she, or anyone within the third degree of kinship by affinity or consanguinity with the commissioner:

(A)

is a party to the proceeding;

(B)

is acting as counsel to a party; or

(C)

has a financial or other interest in the matter in controversy that could be substantially affected by the outcome of the proceeding.

(3)

A commissioner otherwise subject to the provisions of paragraph (2) of this subsection who elects not to recuse himself or herself will place in the record, and in the Texas Register , a written explanation of any potential conflict and a reasoned justification for not complying with paragraph (2) of this subsection.

(4)

A commissioner who believes another commissioner has violated this section shall raise the issue in a posted meeting at the first opportunity.

(b)

Interpretation guidance. The following commentary is to assist in the application of this section.

(1)

In considering whether to recuse himself or herself from deliberation or decision in any particular contested case, a commissioner should consult Rule 18b, Texas Rules of Civil Procedure, which pertains to judges. Reference to this rule is appropriate for a commissioner acting in a quasi-judicial capacity.

(2)

In subsection (a) of this section, the degree of relationship should be computed according to Texas Government Code, Chapter 573.

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 May 8, 2001.

TRD-200102584

Mary Ross McDonald

Deputy General Counsel

Railroad Commission of Texas

Effective date: May 28, 2001

Proposal publication date: February 23, 2001

For further information, please call: (512) 475-1295


Chapter 7. GAS UTILITIES DIVISION

Subchapter B. SUBSTANTIVE RULES

16 TAC §7.60

The Railroad Commission of Texas adopts new §7.60, relating to suspension of gas utility service during winter months, with changes to the proposal published in the March 9, 2001, issue of the Texas Register (26 TexReg 1929). The basis for new §7.60 is emergency rule §7.60 adopted by the Commission in the November 28, 2000 issue of the Texas Register (25 TexReg 12274). The Commission had received a petition for rulemaking filed by Consumers Union, the American Association of Retired Persons, the Texas Ratepayers' Organization to Save Energy, and the Texas Legal Services Center, requesting the Commission to adopt a rule addressing this situation. The Commission determined that an emergency rule was necessary because of the extreme weather conditions present at that time in many areas of Texas and because of the dramatic increases in the cost of natural gas.

The Commission found that adopting §7.60 on an emergency basis was necessary because heating costs would be higher during the winter season due to a combination of higher than normal gas costs and colder than average temperatures. The Commission projected that natural gas prices, which averaged $3.07 per Mcf for Texas residential customers during the 1999-2000 heating season, to more than double for the same period in 2000-2001. Commission data showed that even during relatively mild winter heating seasons, residential natural gas consumption is at its highest during those months, averaging 10 Mcf per month compared to five Mcf on an annual basis. In addition, the National Oceanic and Atmospheric Administration (NOAA) data for the week ending November 18, 2000, showed that weather in Texas, measured by heating-degree days, had so far this heating season been 67% colder than normal. The Commission found that residential natural gas consumption would be higher than average and that the average winter residential gas bill would be more than 50% higher under this combination of factors.

Further, the Commission found that the weather is inherently unpredictable and variable across the different regions in Texas. For example, extreme weather conditions can exist in the panhandle while coastal areas are unaffected. Customers in one area of the state could already be adversely impacted by the weather conditions that would invoke the emergency rule by the time the conditions were known with certainty at the Commission's Austin headquarters.

The Commission also found that, in times of higher energy costs, consumers may restrict their consumption of natural gas for residential heating to levels that could be detrimental to their well-being. The Texas Department of Health recognizes the dangers of cold weather and was, at the time the Commission adopted emergency §7.60, developing educational material on hypothermia (severe or prolonged loss of body heat because of cold environments). In 1999, at least 21 people died in Texas from hypothermia; of those 21, at least 17 (81%) were age 60 or older and many of them died unexpectedly in their own homes. Without adequate heat, many people, especially the elderly, are in danger long before the temperature drops to freezing. Hypothermia is a below-normal body temperature, typically 96 degree Fahrenheit or lower, and can threaten the health of older people in cool indoor temperatures as high as 60 degrees Fahrenheit. In Texas, it is uncommon for temperatures to drop to freezing for 24 hours or more. It is not, however, uncommon for temperatures to be below 60 degrees for extended periods of time.

The Commission found that having emergency §7.60 in place before the onset of the combination of extreme weather conditions and higher gas prices would provide appropriate assurance to residential consumers that, during periods of extreme cold, their residential natural gas service would not be disconnected because of delinquent bills. Thus, the emergency would likely prevent unnecessary suffering and, perhaps, irremediable harm. Therefore, the Commission found that an imminent peril to the public health, safety, and welfare existed, necessitating the adoption of emergency §7.60.

At the time the Commission adopted the emergency rule, the Commission indicated that it would request informal comments from the industry and the public regarding rule language to be proposed and adopted on a permanent basis. Using the emergency rule as the "draft" of the proposed permanent rule, the Commission posted the draft rule text on the Commission's web site so that commenters could respond on a web-based form, by electronic mail, or by regular mail. The Commission received six comments suggesting the changes, some of which were incorporated into the proposal that was published on March 9, 2001.

The Commission proposed new §7.60 to prohibit disconnection of service to residential customers in certain instances and to encourage utilities and master meter operators to offer deferred payment plans and level or average payment plans to customers to help prevent service disconnection during severe weather events. The Commission's experience indicates that utilities have in the past voluntarily suspended service disconnections during extreme weather conditions, and that all utilities have in place some form (formal or informal) of deferred payment plan for customers who are unable to remain current on gas bills. The new rule will establish a consistent threshold to prohibit disconnection of delinquent customers for all jurisdictional utilities and master meter operators.

New §7.60 applies to gas utilities and to owners, operators, and managers of master meter systems within the original jurisdiction of the Railroad Commission, including environs customers and special rate customers in unincorporated areas. The rule defines all such gas utilities and owners, operators and managers of master meter systems as "providers."

Subsection (b)(1) prohibits providers from disconnecting a customer on a day when the previous day's temperature at the approved National Weather Station for the county where the customer takes service fell below 32 degrees Fahrenheit and the National Weather Service predicts that the temperature in that county is likely to fall below that level during the next 24 hours. Subsection (b)(2) prohibits providers from disconnecting service to a delinquent residential customer for a billing period in which the provider receives a written pledge, letter of intent, purchase order or other notification from the energy assistance provider that it is forwarding sufficient payment to continue service. Finally, subsection (b)(3) prohibits providers from disconnecting service to a delinquent residential customer on a day or on a day immediately preceding a day when personnel or agents of the provider are not available for the purpose of receiving payment or making collections and reconnecting service.

To address delinquent bills, subsection (c) encourages providers to offer customers a deferred payment plan as set forth in the Commission's existing quality of service rule §7.45(D). New §7.60(c)(1) and (2) also encourage providers to offer a level or average payment plan consistent with the standards set forth in the rule.

Subsection (c)(3) states that if a customer does not fulfill the terms and obligations of a level or average payment plan, a provider that is a gas utility shall have the right to disconnect service to that customer pursuant to Commission rule §7.45(4), unless disconnection would be prohibited under §7.60(b). A provider that is a gas utility may require a deposit from all customers entering into level or average payment plans pursuant to the requirements of §7.45(5). The gas utility would be required to pay interest on the deposit and may retain the deposit for the duration of the level or average payment plan.

Subsection (d) sets forth the procedures by which providers must give notice of this rule to the social services agencies that distribute funds from the Low Income Home Energy Assistance Program or provide financial assistance to low income customers, and to residential customers and any customers who are owners, operators or managers of master metered systems.

The Commission received comments from four groups, Consumers Union, American Association of Retired Persons, Texas Ratepayers Organization to Save Energy, and Texas Legal Services Center, which filed jointly as "Consumer Groups," and from one gas utility. The commenters generally either supported or did not oppose the adoption of the proposed new rule, but all offered suggestions for changes to the rule.

As proposed, subsection (b) stated that except where there is a known dangerous condition or a use of natural gas service in a manner that is dangerous or unreasonably interferes with service to others, a provider shall not disconnect natural gas service. A comment from a gas utility requested the addition of "is unauthorized" as an exception to the prohibited disconnection to address the situation in which an individual may tamper with gas utility facilities in order to obtain gas without requesting service from the utility provider (and thus without paying for it). The Commission finds that the suggested language is too broad; further, this situation is provided for in §7.45, relating to Quality of Service.

As proposed, subsection (b)(1) stated a delinquent residential customer could not be disconnected on a day when the previous day's temperature in the county where the customer takes service fell below 32 degrees Fahrenheit and the National Weather Service predicts that the temperature in that county will fall below that level during the next 24 hours. One comment suggested that language be added to specify the previous day's temperature at the approved National Weather Station for the county where the customer takes service. The Commission agrees with and has made this clarifying change.

Consumer Groups objected to the 32 degree threshold and offered detailed information regarding health risks associated with temperatures below 65 degrees, not just at freezing and below. The Commission finds that this temperature threshold is more consistent with Public Utility Commission rules for electric utilities and rules of surrounding states. In addition the Commission recognizes the potential for small utilities to be severely affected by the higher threshold of 40 degrees because of revenue shortfalls as a result of higher uncollectibles. Consumer Groups stated their disbelief that the proposed 32 degree threshold balances the needs of both consumers and service providers, stating, "it puts the cash flow concerns of service providers before the health and safety needs of consumers." The Commission acknowledges these concerns, but must also recognize that the gas utility industry is much more diverse in terms of size and cash flow than electric utilities. Based on Commission records for calendar year 1999, the largest total income for a gas utility, $603,096,000, was 13,402 times greater than the smallest total income for a gas utility, $45,000; and the largest net income for a gas utility, $32,940,000, was more than 4,392 times greater than the smallest net income for a gas utility, ($7,500). In addition, this rule applies to providers that are not utilities, master meter operators. These providers can have very small operations, e.g. , an apartment building with four units. In that situation, one tenant's failure to pay could indeed jeopardize the ability of the master meter operator to continue to pay for supplies to provide service to the other tenants. Finally, the Commission recognizes that while natural gas providers should take every reasonable step to avoid disconnecting residential customers not only during the coldest weather but any time during the heating season, the natural gas providers are not the only source of financial assistance for customers unable to pay for service.

Proposed subsection (b)(2) referred to a delinquent residential customer for a billing period in which the provider receives a pledge, letter of intent, purchase order, or other notification from an energy assistance provider that it is forwarding sufficient payment to continue service. A comment suggested including the word "written" before the word "notification" to eliminate possible confusion regarding notification. In addition, the change would provide clarity to the Commission's stated intent concerning energy assistance providers. On the other hand, Consumer Groups objected to the requirement that the notice be in writing for two reasons: first, because written notification, in and of itself, does not eliminate the potential for false or unauthorized notifications, and second, because that will tie up scarce resources and unnecessarily hamper assistance providers. The Commission still believes that written notification will eliminate the possibility of receiving calls from individuals who are not authorized to give such notice, and notes that written notification does not necessarily mean a letter sent through the United States mail. Written notification can also include e-mail (which can be printed out and included in a customer's file) and facsimile transmission from the assistance provider. The Commission agrees with the requirement for written notification and has made this change in subsection (b)(2).

Proposed subsection (c)(1) and (2) referred to a level payment plan allowing the residential customer to pay one-twelfth of that customer's estimated annual consumption at the appropriate customer class rates each month. One comment proposed that the word "consumption" be changed to "charges" because consumption is only one part of a total bill, and cannot be used to determine accurately the previous amounts payable to a provider. The Commission agrees with this wording change.

Proposed subsection (d) required providers to give a copy of this rule to social services agencies and customers each October. One comment proposed that language be added allowing the utilities and owners, operators, and managers of mobile home parks or apartment houses who purchase natural gas through a master meter for delivery to a dwelling unit in a mobile home park or apartment house be allowed to give notice beginning in the September or October billing period, because billing cycles span more than one month, and this would allow adequate time for the information to be mailed. The Commission agrees that this is a better approach, and has made the changes throughout the text in subsection (d).

Consumer Groups commented that natural gas providers should be required, rather than encouraged, to offer deferred payment plans because a deferred payment plan allows the customer that is already at risk of having service disconnected to pay an outstanding bill in installments beyond the due date of the next bill and allows the customer's gas service to continue. This differs from a level or average payment plan that simply allows a customer to better plan their utility payments. The Commission agrees that this suggestion has merit, but because the requirements of a deferred payment plan are already included in a different Commission rule, §7.45, relating to quality of service, the Commission believes that addressing this issue in a separate rulemaking is preferable. Revisions to §7.45 are currently being developed and will be published for comment in the near future.

The Commission adopts the new section under Texas Utilities Code, §§102.001 and 104.251, which give the Railroad Commission exclusive original jurisdiction over the rates and services of a gas utility distributing natural gas or synthetic natural gas in areas outside a municipality and a gas utility that transmits, transports, delivers, or sells natural gas or synthetic natural gas to a gas utility that distributes the gas to the public, and require gas utilities to furnish service, instrumentalities, and facilities that are safe, adequate, efficient, and reasonable; and Texas Utilities Code, §§124.001 and 124.002, which give the Commission jurisdiction over master meter operators and require the Commission to adopt rules requiring master meter operators to allocate fairly the cost of the gas consumption of each dwelling unit.

The Texas Utilities Code, §§104.251, 124.001, and 124.002, are affected by the new section.

Issued in Austin, Texas, on May 8, 2001.

§7.60.Suspension of Gas Utility Service Disconnection During Winter Months.

(a)

Applicability and scope. This rule applies to gas utilities, as defined in Texas Utilities Code, §§101.003(7) and 121.001, and to owners, operators, and managers of mobile home parks or apartment houses who purchase natural gas through a master meter for delivery to a dwelling unit in a mobile home park or apartment house, pursuant to Texas Utilities Code, §§124.001-124.002, within the jurisdiction of the Railroad Commission pursuant to Texas Utilities Code, §102.001. For purposes of this section, all such gas utilities and owners, operators and managers of master meter systems shall be referred to as "providers." Providers shall comply with the following service standards. A gas distribution utility shall file amended service rules incorporating these standards with the Railroad Commission in the manner prescribed by law.

(b)

Disconnection prohibited. Except where there is a known dangerous condition or a use of natural gas service in a manner that is dangerous or unreasonably interferes with service to others, a provider shall not disconnect natural gas service to:

(1)

a delinquent residential customer on a day when the previous day's temperature at the approved National Weather Station for the county where the customer takes service fell below 32 degrees Fahrenheit and the National Weather Service predicts that the temperature in that county will fall below that level during the next 24 hours;

(2)

a delinquent residential customer for a billing period in which the provider receives a written pledge, letter of intent, purchase order, or other written notification from an energy assistance provider that it is forwarding sufficient payment to continue service; or

(3)

a delinquent residential customer on a day, or on a day immediately preceding a day, when personnel or agents of the provider are not available for the purpose of receiving payment or making collections and reconnecting service.

(c)

Payment plans. Providers are encouraged to offer a deferred payment plan for any delinquent bill of a residential customer rendered or past due as set forth in paragraph (2)(D), concerning Deferred Payment Plans, of §7.45 of this title (relating to Quality of Service) and a level or average payment plan to all customers. Any level or average payment plan shall use one of the following methods:

(1)

A level payment plan shall allow residential customers to pay one-twelfth of that customer's estimated annual charges at the appropriate customer class rates each month, with provisions for annual adjustments as may be determined based on actual gas use.

(2)

An average payment plan shall allow residential customers to pay one-twelfth of the sum of the customer's current month's charges plus the previous 11 months charges (or, for a new customer, an estimate) at the appropriate customer class rates each month, plus a portion of any unbilled balance.

(3)

If a customer does not fulfill the terms and obligations of a level or average payment plan, a provider that is a gas utility shall have the right to disconnect service to that customer pursuant to paragraph (4), concerning Discontinuance of Service, of §7.45 of this title (relating to Quality of Service), unless disconnection is prohibited under subsection (b) of this section.

(4)

A provider that is a gas utility may require a deposit from all customers entering into level or average payment plans pursuant to the requirements of paragraph (5), concerning Applicant Deposit, of §7.45 of this title (relating to Quality of Service). The gas utility shall include the amount already deposited by the customer in calculating a deposit required under this paragraph. The gas utility shall pay interest on the deposit and may retain the deposit for the duration of the level or average payment plan.

(d)

Notice. Beginning in the September or October billing periods utilities and owners, operators, or managers of master metered systems shall give notice as follows:

(1)

utilities shall provide a copy of this rule to the social services agencies that distribute funds from the Low Income Home Energy Assistance Program within its service area;

(2)

utilities shall provide a copy of this rule to any other social service agency of which the provider is aware that provides financial assistance to low income customers in its service area;

(3)

utilities shall provide a copy of this rule to all residential customers of the utility and customers who are owners, operators, or managers of master metered systems; and

(4)

owners, operators, or managers of master metered systems shall provide a copy of this rule to all of their customers.

(e)

In addition to the minimum standards specified in this section, providers may adopt additional or alternative requirements if the provider files a tariff with the Commission pursuant to §7.44 of this title (relating to Filing of Tariffs). The Commission shall review the tariff to ensure that at least the minimum standards of this section are met.

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 May 8, 2001.

TRD-200102585

Mary Ross McDonald

Deputy General Counsel

Railroad Commission of Texas

Effective date: May 28, 2001

Proposal publication date: March 9, 2001

For further information, please call: (512) 475-1295


Chapter 9. LIQUEFIED PETROLEUM GAS DIVISION

Subchapter A. GENERAL REQUIREMENTS

16 TAC §§9.2, 9.3, 9.8, 9.10, 9.51 - 9.54

The Railroad Commission of Texas adopts amendments to §§9.2, 9.3, 9.8, 9.10, 9.51, 9.52, 9.53, and new §9.54, relating to Definitions; LP-Gas Report Forms; Application for a New Certificate; Rules Examination; General Requirements for Training and Continuing Education; Training and Continuing Education Courses; Continuing Education Credit for Previous Courses; and Commission-Approved Outside Instructors, without changes to the versions published in the March 23, 2001, issue of the Texas Register (26 TexReg 2263).

The main purpose of this rulemaking is the adoption of new §9.54, which establishes requirements for individuals who wish to be approved as outside instructors to offer training or continuing education courses approved by the Commission for Commission training or continuing education credit. The Commission has determined that outside instructor applicants must hold a current Railroad Commission Category E LP-gas certification, because this certification authorizes the widest number of LP-gas activities and the Commission believes that outside instructors should be broadly knowledgeable and experienced in LP-gas activities. The outside instructor application includes a $300 registration fee which covers the applicable subject-matter course examinations, the train-the- trainer course, and administrative review of curriculum, credentials, and any other investigation or review that may be necessary.

The Commission also adopts amendments to §§9.2, 9.3, 9.8, 9.10, 9.51, 9.52, and 9.53, to clarify certain issues related to training and continuing education. In §§9.2, 9.3, and 9.51(g), the title of the Pipeline and LP-Gas Safety Section is being changed to the LP-Gas Safety Section due to a recent reorganization in the Commission's Gas Services Division. The amendments to §9.8 add new subsection (b) to address requirements for an employee who wants to pursue a management- level certificate. The examination fee language in §9.10(a)(3)(D) is amended to clarify that the certification examination fee is not included in the Category E or I course fee as stated in §9.51(f)(2)(A). In §9.52, language is added to subsection (a) to clearly specify that certain new employees must attend at least eight hours of training. The table in §9.52(g) is revised to clarify the dates of previous and new Commission courses, to clarify the class hours for the train-the-trainer course, and to add a new National Propane Gas Association Certified Employee Training Program (CETP) course for large industrial/commercial installations. Reference to the new CETP course is also added to §9.53(3).

The Commission received two comments, both from the Texas Propane Gas Association (TPGA). TPGA generally favored the proposed amendments and the new rule, but offered some suggestions.

TPGA expressed concern that new §9.54 would allow non- Railroad Commission trainers to provide continuing education using curricula other than those developed by the Commission. The comment expressed support for "state-sanctioned" curricula and instructors. The Commission responds that all outside instructor applicants and instructional materials must be reviewed and approved by the Commission prior to any approval being issued. Therefore, any approved outside instructors and curriculum materials will in fact be "state-sanctioned."

TPGA's comment specifically supports the Commission's language in new §9.54 requiring Commission staff to review any outside curricula and requiring outside instructor applicants to pass any subject-matter examinations with a score of at least 85 percent.

TPGA recommended that the Commission should develop, and require approved outside instructors to complete, courses that address any substantial changes that might be made to Commission LP-gas rules, including the adoption by reference of a new edition of NFPA 54 or NFPA 58. The Commission agrees that such refresher courses would be desirable, but chooses not to implement this requirement at this time. Since this provision was not included in the proposed rule published in the Texas Register for public comment and would add another requirement for outside instructors, to accept TPGA's recommendation at this time would require republishing the rule for another comment period. Nevertheless, the Commission will continue to review the new training and continuing education rules as implementation proceeds, and if necessary will consider including this recommendation in a future rulemaking.

TPGA supported the $100 charge for the Commission to review any substantial changes to already-approved outside course curricula and recommended that the Commission also charge $100 per course for the initial review of the curricula. The Commission responds that the $300 fee for initial review of an application is reasonable, considering that three Commission employees will review an outside instructor applicant's credentials and evaluate proposed instructional materials for equivalency with materials developed by the Commission, an effort that will take some time to accomplish and that TPGA, earlier in its comments, had supported.

In a follow-up comment, TPGA also requested that five years' experience teaching LP-gas related classes in Texas and/or 15 years' LP-gas regulatory experience be considered adequate to approve an outside instructor applicant. TPGA commented that as Commission employees retire or are reassigned, they may wish to become outside instructors.

The Commission has made no change in the rule in response to this comment. Section 9.54(b)(4), as recommended by the Commission's LPG Training Task Force, requires an outside instructor to have experience during at least three of the four years prior to the date of filing the application, in both teaching LP-gas classes and in performing or supervising LP-gas activities. The Commission finds it is reasonable to require outside instructors to be experienced in both teaching and in performing or supervising LP-gas activities. In addition, the Commission finds the three-year minimum requirement for teaching experience to be reasonable and adequate and chooses not to increase the requirement to five years. Regarding TPGA's contention that 15 years of LP-gas regulatory experience is adequate qualification for approval as an outside instructor, the Commission notes that regulatory experience takes many forms and may involve neither teaching nor direct experience in performing or supervising LP-gas activities. Thus, a person with extensive regulatory experience may or may not possess the technical expertise to be approved as an outside instructor. Nevertheless, the Commission notes that under the rule as proposed, any outside instructor applicant, including a former Commission employee, who meets all the requirements of §9.54, including the requirements related to teaching and performing or supervising LP-gas activities, can be approved to offer classes for Commission training or continuing education credit.

The new section and amendments are adopted under the Texas Natural Resources Code, §113.051, which authorizes the commission to adopt rules relating to any and all aspects or phases of the LP-gas industry that will protect or tend to protect the health, welfare, and safety of the general public, and §113.052, which authorizes the commission to adopt by reference the published codes of nationally recognized societies, including the National Fire Protection Association.

The Texas Natural Resources Code, §§113.051 and 113.052, are affected by the adopted new section and amendments.

Issued in Austin, Texas, on May 8, 2001.

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 May 8, 2001.

TRD-200102583

Mary Ross McDonald

Deputy General Counsel

Railroad Commission of Texas

Effective date: May 28, 2001

Proposal publication date: March 23, 2001

For further information, please call: (512) 475-1295


Part 2. PUBLIC UTILITY COMMISSION OF TEXAS

Chapter 25. SUBSTANTIVE RULES APPLICABLE TO ELECTRIC SERVICE PROVIDERS

Subchapter I. TRANSMISSION AND DISTRIBUTION

2. TRANSMISSION AND DISTRIBUTION APPLICABLE TO ALL ELECTRIC UTILITIES

16 TAC §25.214

The Public Utility Commission of Texas (commission) adopts an amendment to §25.214, relating to Terms and Conditions of Retail Distribution Service Provided by Investor Owned Transmission and Distribution Utilities with changes to the proposed text as published in the March 23, 2001 Texas Register (26 TexReg 2271). The amendment is necessary to promote consistency between the delivery service agreement form (Tariff for Retail Delivery Service, Appendix A, Section II) and section 4.11.1 of the Tariff for Retail Delivery Service. This amendment was adopted under Project Number 22187.

The commission received timely filed comments on the proposed amendment from TXU Energy Services Company (TXU) and from a conglomerate of the following investor owned utilities: Reliant Energy, Texas-New Mexico Power Company, AEP Central Power & Light Company, AEP Southwestern Electric Power Company, AEP West Texas Utilities Company, TXU Electric Company (as future transmission and distribution utility), Entergy Gulf States Utilities, and Southwestern Public Service Company (collectively, IOUs).

All of the comments received were in response to the Tariff for Retail Delivery Service (pro- forma tariff or tariff) adopted by reference in subsection (d) of the proposed rule. As a result of changes to the pro-forma tariff, the commission modifies subsection (d) to reflect the new effective date of the revised pro-forma tariff.

TXU REP stated that this rulemaking should be limited to the specific purpose stated in the Texas Register notice, i.e., revising the delivery service agreement to correct a mistake that was made in failing to conform it to the tariff language approved by the commission on December 13, 2000, and that this rulemaking should not be used to reconsider the merits of expanding a REP's options in the handling of outage calls. TXU REP stated that it fully agrees with the current proposal and that the commission should act expeditiously on this matter.

The IOUs proposed that the reference to "service requests" in the title of tariff section 4.11 be changed to refer to requests for "Discretionary Services other than Construction Services." They stated that the term "Discretionary Services" more precisely identifies the types of services to which the section applies and reinforces the distinction that the tariff as a whole seeks to make between Delivery System Services, Discretionary Services and Construction Services. Further, the IOUs proposed that the three options in tariff section 4.11.1 should apply separately to outage reporting and requests for Discretionary Services, i.e., a Competitive Retailer should be allowed to choose one of the three options for outage reporting and a different one of the three options for requesting Discretionary Services. They stated that this would provide flexibility for Competitive Retailers and was suggested by several parties during recent implementation workshops dealing with outages. They suggested model language to achieve the two proposals in their comments.

The commission believes that the IOUs' first proposal entails a language change to tariff section 4.11.1 that falls outside the scope of this rulemaking. Although the IOUs' proposal might serve to emphasize the desired distinction between the noted three types of services, this rulemaking was initiated for a simpler purpose of conforming the language/options of the tariff's delivery service agreement form to the language/options previously adopted in tariff section 4.11.1. Other parties were not invited to comment on broader changes to the tariff, and REPs might not have understood that broader changes would be considered. Therefore, the commission declines to adopt this proposed change. However, the IOUs' second proposed change does not materially alter the language/options initially adopted in tariff section 4.11.1 and merely provides greater flexibility to competitive retailers within the framework of the three options already adopted. In this case, all of the investor-owned utilities have suggested a change that would give the REPs greater flexibility. Therefore, the commission adopts the IOUs' second proposed change and appropriately amends the tariff.

All comments, including any not specifically referenced herein, were fully considered by the commission.

This amendment is adopted under the Public Utility Regulatory Act, Texas Utilities Code Annotated §14.002 (Vernon 1998 & Supplement 2001) (PURA) which provides the 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 May 8, 2001. 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 May 11, 2001.

TRD-200102641

Rhonda Dempsey

Rules Coordinator

Public Utility Commission of Texas

Effective date: May 31, 2001

Proposal publication date: March 23, 2001

For further information, please call: (512) 936-7308