Part 1. RAILROAD COMMISSION OF TEXAS

Chapter 7. GAS UTILITIES DIVISION

The Railroad Commission of Texas simultaneously proposes the repeal of §7.45, relating to Quality of Service, and new §§7.401, 7.405, 7.410, 7.415, 7.420, 7.425, 7.430, 7.435, 7.440, 7.445, 7.470, 7.475, 7.480, and 7.485, relating to General Provisions and Definitions; Information to Customers; Request for Service; Credit Requirements, Deposits; and Re-Establishment of Credit; Refusal of Service; Issuance and Format of Natural Gas Bills; Disputed Bills; Alternate Payment Arrangements; Bill Adjustments; Involuntary Service Disconnection; Meters; Gas Utility Obligations Regarding Customer Deposits; Reliability and Continuity of Service; and Complaints. The Commission proposes the repeal and adoption of the new rules to reorganize §7.45, which is a lengthy rule, into several shorter, clearer rules and to position the new rules in a new numbering and organizational scheme for Chapter 7. The proposed new rules will join new §7.460, relating to Suspension of Gas Utility Service Disconnection During an Extreme Weather Emergency, which was adopted in a separate rulemaking, and proposed new §7.450, relating to Gas Distribution in Mobile Home Parks, Apartment Houses, and Apartment Units; §7.455, relating to Curtailment Standards; and §7.465, relating to Abandonment, which were published in the May 3, 2002, issue of the Texas Register (27 TexReg 3676) in new subchapter D, to be entitled Customer Service and Protection.

The proposed new rules are generally the same in content as current §7.45; by reorganizing them into discrete rules by topic, the Commission believes that they will be easier for both utilities and customers to use. The proposed new rules generally clarify existing Commission standards and requirements; however, the Commission is proposing some changes to current requirements and practices in the new rules. Two significant changes are first, the proposed new rules explicitly apply to all customers taking gas utility service at the distribution level, and second, a three-day extension of the due date on bills, from the current 15 days to 18 days.

Proposed new §7.401 contains general provisions, such as the guideline for computing time periods and the requirement that each gas utility file a tariff containing customer service standards that meet the minimum requirements set out in the subchapter. This proposed new rule consolidates in subsection (d) definitions of terms used in the new subchapter that currently are found in several rules throughout Chapter 7. Proposed new §7.401(d) also contains definitions for words and phrases that are not currently defined in Chapter 7. Of note are proposed definitions for "alternate payment arrangements," "average payment plan," "base bill," "customer line," "deferred payment plan," "distribution system," "energy assistance provider," "guarantee agreement," "issuance date," "level payment plan," "main line," "main line extension," "seasonal service," "service line," and "temporary service."

Proposed new §7.405, Information to Customers, sets forth the standards by which gas utilities provide information to customers and applicants for service. The rule requires gas utilities to provide to their customers, either at the time service is initiated or in the first billing, a pamphlet (in English and Spanish) containing the information specified. The pamphlet must contain, at a minimum, the following information:

--the customer's right to have information concerning rates and services and to inspect or obtain a copy of the applicable tariffs and service rules, for a reasonable reproduction fee for copies not to exceed ten cents per page;

--descriptions of any alternative payment arrangements the gas utility may offer, and a statement that a customer has the right to request an alternative plan if the gas utility offers one;

--the gas utility's credit requirements for customers;

--a summary of the gas utility's policy regarding the provision of credit based on the credit history of a customer's former spouse;

--the circumstances under which the gas utility may require the customer to make a deposit or require an additional deposit;

--how the gas utility calculates the amount of an initial or an additional deposit;

--the interest rate the gas utility pays on deposits and the time frame and requirement for return of the deposit to the customer;

--the time allowed for payment of outstanding bills;

--grounds for disconnection and for termination of service;

--the steps the gas utility must take before it disconnects or terminates a customer's service;

--the steps the customer must take to have service reconnected after involuntary disconnection;

--how the customer can resolve billing disputes with the gas utility and how disputes and health emergencies may affect disconnection or termination of service;

--the appropriate regulatory authority with which the customer may register a complaint and how the customer can contact such authority;

--the customer's right to have his or her meter checked without charge;

--the customer's right to be instructed by the gas utility how to read the customer's meter;

--the hours, addresses, and telephone numbers of gas utility offices, and any other authorized locations where customers may pay bills and obtain information, or a toll-free telephone number that customers may call to obtain this information; and

--a statement that the gas utility provides services without discrimination as to a customer's race, ethnicity, color, sex, nationality, religion, or marital status.

Other subsections of proposed new §7.405 require gas utilities to provide additional information at other times and other formats, and to maintain a complete set of service facility maps in a central location and to provide each business office with maps for the immediate area.

Proposed new §7.410, Request for Service, outlines general policies for gas utilities to follow when processing applications for distribution service; these are not significantly different from the requirements under the current rules, but are explained with greater specificity and clarity. Every gas utility is required to serve each qualified applicant for service within its service area as rapidly as practical. As a general policy, a gas utility shall fill those applications for distribution service that do not require the construction of main line or service line extensions within seven working days after an applicant has met the credit requirements. Each gas utility is required to fill those applications for service that do require construction of main line or service line extensions no later than the 90th day after the applicant has met the credit requirements, unless the unavailability of materials or other causes beyond the control of the gas utility result in unavoidable delays.

If a gas utility must construct facilities to provide the requested service, then the utility must contact the applicant within a reasonable period of time, not to exceed 10 working days from the date the utility receives an application for distribution service, and must give the applicant an estimated completion date and an estimated cost for all charges to be incurred by the applicant, pursuant to the utility's tariff. Following the assessment of necessary main line or service line construction work and before commencing construction, the utility must explain to the applicant any construction cost options, such as rebates to the customer, sharing of construction costs between the gas utility and the customer, or sharing of costs between the customer and other applicants.

In the event that a utility does not initiate service on or before the 90th day after an applicant has met credit requirements and made satisfactory arrangements for payment of any required construction charges, the utility must file a report with the regulatory authority and deliver a copy to the applicant. The report must list the name of the applicant, the location of the requested service, and the cause or causes for delay. The gas utility must file this report on the 91st day after the applicant has met credit requirements and made payment arrangements. Unless the delay is beyond the reasonable control of the utility, as determined by the regulatory authority, or the applicant and the utility have agreed to a longer term, a delay of more than 90 days in initiating new service constitutes a failure to serve.

Each gas utility is required to include its main line extension policy and its service line extension policy in the tariff the utility files with the regulatory authority. The policies must be consistent and nondiscriminatory, and are subject to the approval of the regulatory authority. The utility may not require an applicant to make any contribution in aid of construction except as provided for in the main line extension policy and the service line extension policy included in the approved tariff. The main line extension policy and the service line extension policy also must include either a specific unit rate or a methodology by which an applicant can reasonably estimate the customer's cost of a main line or service line extension.

Each gas utility must construct, install, operate, and maintain its plant, structures, equipment, and lines in accordance with the provisions of such codes and standards as are generally accepted by the industry, and must construct its facilities in such a manner as to best accommodate the public and to prevent interference with service furnished by other public utilities.

As part of the initial contact, the gas utility representative must give an applicant a copy of the service information required by proposed new §7.405, and inform the applicant of the applicant's right to file a complaint with the regulatory authority pursuant to proposed new §7.485. The gas utility may also make this information available on the gas utility's web site.

Proposed new §7.415, Credit Requirements, Deposits and Re- Establishment of Credit, establishes standards by which a gas utility customer may establish credit and whether the gas utility will require a deposit. A significant new provision in subsection (a)(4) allows victims of family violence to be exempted from the requirement to pay a deposit if the applicant provides a certification letter developed by the Texas Council on Family Violence.

Gas utilities may require applicants for gas utility service to establish satisfactory credit; establishing credit does not relieve customers from complying with the utility's rules for prompt payment of bills. Gas utilities are required to apply the credit-worthiness of divorced spouses established during shared service in the 12 months prior to the divorce equally to both spouses for 12 months immediately after their divorce. A utility may not require an applicant to pay a deposit if the applicant:

--is 65 years of age or older and does not have an outstanding account balance with the gas utility or another gas utility for the same type of gas utility service that accrued within the last two years; or

--has been a customer of any gas utility within the last two years; is not delinquent in payment with another gas utility; has not had gas utility service disconnected for nonpayment during the last 12 consecutive months of service; did not have more than one occasion on which a bill for gas utility service became delinquent; and never had service disconnected for nonpayment; or

--furnishes either a satisfactory written guarantee to secure payment of bills for the service or a satisfactory credit rating by appropriate means, which are listed in subsection (a)(3) of the proposed new rule;

--has been determined to be a victim of family violence as defined in Texas Family Code, §71.004, by a family violence center or by treating medical personnel, as evidenced by submission of a certification letter developed by the Texas Council on Family Violence.

If a gas utility requires customers to pay an initial deposit to initiate service, the deposit may not exceed an amount equivalent to one-sixth of the estimated annual billings for the requested service. The gas utility must state in its tariff either the dollar amount of the required deposit or the formula by which the gas utility calculates the required deposit.

A gas utility may also require a customer to make an additional deposit in two circumstances. First, if the average of the customer's actual billings for the last 12 months are at least twice the amount of the original estimated annual billings and a disconnection notice has been issued for the account within the previous 12 months, the utility may require an additional deposit no greater than the amount necessary to bring the total deposit amount to one-sixth of the customer's actual billings for the last 12 months. Second, if a customer is delinquent twice within a 12-month period, the utility may require an additional deposit not to exceed one-fourth of the estimated annual billings, and the total amount of the deposit may not exceed five-twelfths of the estimated annual billings. In this situation, instead of an additional deposit, and at the customer's election, the customer may pay the total amount due on the current bill, including any past due amounts, by the due date of the bill, provided that the customer has not exercised this option in the previous 12 months. If the customer has exercised this option in the previous 12 months, the additional deposit is required.

If a customer does not pay a required additional deposit within 10 days of the date the gas utility notifies the customer that an additional deposit is required, the gas utility may disconnect service under the standard disconnection procedure set forth in proposed new §7.445 for failure to comply with deposit requirements.

A gas utility may require a customer to make a deposit for temporary, weekend, or seasonal service in an amount no greater than one-sixth the estimated annual billings and no less than $25. Each gas utility must return deposits for temporary, weekend, or seasonal service according to guidelines set out in proposed new §7.475.

Each gas utility is required to set forth in its tariff all terms and conditions of a guarantee agreement. A guarantee agreement between a gas utility and a guarantor must be in writing and must be in an amount no greater than the amount of deposit the gas utility would be able to require on the applicant's account pursuant to proposed new §7.415(b). The dollar amount of the guarantee and the period of time that the guarantee will be valid and enforceable must be clearly stated in the signed agreement. Upon default in payment of a bill by a distribution customer, the guarantor of that customer's account is responsible for the unpaid balance of the account, but only up to the amount stated in the written agreement.

The utility must provide written notice to the guarantor of the customer's default, the amount owed by the guarantor, and the due date for the amount owed. The gas utility must allow the guarantor 10 days from the date of the notice to pay the amount owed on the defaulted account; however, if the tenth day falls on a Saturday, Sunday, or holiday, the due date becomes the next workday. The utility may transfer the amount owed on the defaulted account to the guarantor's own service bill, provided the utility separately identifies the guaranteed amount on the bill. The utility may disconnect service to the guarantor for nonpayment of the guaranteed amount only if the potential for disconnection of the guarantor's service was included in the terms of the written agreement, and only after the gas utility has given the guarantor proper notice. The gas utility must void the guarantee and return it to the guarantor according to the provisions of proposed new §7.475.

A gas utility may require an applicant who has previously been a customer of the utility and whose service has been discontinued for nonpayment of bills or meter tampering to pay all amounts due the gas utility before service is again initiated. The customer may enter into a deferred payment agreement and re-establish credit as provided in proposed new §7.415. The gas utility must have records showing the amount of gas utility service received but not paid for and the reasonableness of any charges for the unpaid service, and any other charges required to be paid as a condition of service restoration.

Proposed new §7.420, Refusal of Service, sets forth the basis for a gas utility to decline service to an applicant, and sets forth both valid and invalid reasons for a utility to refuse service. A gas utility may decline to serve an applicant for whom service would be provided from existing facilities:

--until the applicant has complied with the state and municipal regulations and approved rules and regulations of the gas utility on file with the regulatory authority governing the requested service;

--if the utility has information that the applicant's installation or equipment is hazardous or of such character that the utility cannot provide safe, adequate, efficient, and reasonable service;

--if the applicant is indebted to any gas utility for the same kind of service as that applied for unless the indebtedness of the applicant is in dispute, in which event the gas utility must provide service upon the applicant complying with the deposit requirement;

--if the applicant refuses to pay a deposit that is required under this subchapter;

--if the applicant has defaulted as a guarantor for another customer of the gas utility, where such guarantee was made in writing to the gas utility and was a condition of service for the other customer; or

--if the applicant applies for service at a location where another customer received or continues to receive service and the gas utility bill is unpaid at that location and the gas utility can reasonably show that the change in identity is made in an attempt to help the other customer avoid or evade payment of the gas bill.

If a gas utility refuses to serve an applicant, the utility must inform the applicant of the basis of the refusal of service; the applicant's option to file a complaint with the regulatory authority; and the appropriate regulatory authority with which to file any complaint.

A gas utility may not refuse service to a current customer or a qualified applicant because of the:

--delinquency in payment for gas utility service by a previous occupant of the premises being or to be served;

--failure of the customer or applicant to pay for merchandise or charges for non-gas utility service purchased by the customer or applicant from the gas utility;

--failure of the customer or applicant to pay a bill to correct previous under-billing due to the gas utility's misapplication of rates more than six months prior to the date of application, unless the under-billing is the result of theft of service;

--violation by the customer or applicant of the gas utility's rules pertaining to operation of nonstandard equipment or unauthorized attachments which interfere with the service of others, unless the gas utility first notified the customer or applicant and afforded the customer or applicant a reasonable opportunity of not less than 10 days to comply with the gas utility's rules;

--failure of the customer or applicant to pay the bill of another customer as guarantor unless the guarantee was made in writing to the gas utility as a condition precedent to the other customer's service;

--failure of the customer or applicant to pay the bill of another customer at the same address, except where the change of customer identity is made to avoid or evade payment of a gas utility bill; or

--failure of the customer or applicant to pay for another service, even if the applicant owes an outstanding sum for a different type of energy, including but not limited to electricity, to the same service provider.

Proposed new §7.425, Issuance and Format of Natural Gas Bills, prescribes the minimum information to be reported on a natural gas bill and extends the minimum due date to 18 days after issuance from the current 15 days. A gas utility may offer an inducement for prompt payment of bills by allowing a discount in the amount of 5% of the total bill for payment of a bill within 13 days after issuance. A bill for gas utility service is delinquent if the customer has not paid it by the due date. A utility may charge a late payment fee not to exceed 5% of the total bill; however, a gas utility would not be permitted to assess a fee, penalty, interest or other charge to the State. Utilities are required to render bills for gas utility service monthly, unless otherwise authorized or unless the utility provides service for less than one billing cycle, and must render and issue bills promptly following the reading of meters. Gas utilities may offer customers the option of electronic billing and payment of bills, provided that the utilities include procedures for electronic billing and payment in the tariff.

Gas utilities are required to include all the following information on customer bills, whether the bills are issued on paper or electronically:

--if the gas utility reads the customer's meter, the date and reading of the meter at the beginning and end of the period for which the bill is rendered;

--the number and kind of units billed;

--the applicable rate schedule title or code;

--the total base bill, as defined in proposed new §7.401;

--each adjustment to the base bill and the amount of each adjustment per billing unit;

--the date by which the customer must pay the bill to receive a prompt payment discount;

--the total amount due before and after any discount for prompt payment;

--the date after which payment must include any penalty for late payment and the total amount due if the gas utility imposes a late payment penalty; and

--a distinct marking to identify an estimated bill.

The gas utility must arrange and display the required information on the bill in such a manner that the customer can compute the bill with the applicable rate schedule. Upon request by a customer, the gas utility must mail or deliver a copy of the applicable rate schedule to the customer.

When a gas utility's meter reader is unable to read a customer's meter, the utility may render and issue an estimated bill, provided that the gas utility makes an actual meter reading at least every sixth billing cycle. For any second and subsequent month in which a meter reader is unable to read a customer's meter on regular meter reading trips, or in months in which meters are not regularly read, the gas utility must provide the customer with a postcard and instruct the customer to read the meter and return the card to the gas utility by a specified date. The date of return must allow the gas utility a reasonable opportunity to receive the postcard in time for the gas utility to render and issue the customer's bill in the regular billing cycle for that customer. The gas utility must include on the postcard instructions for reading the meter properly, and the gas utility must have provided the customer with a meter of a type that the customer can read without significant inconvenience or special tools or equipment. If the gas utility does not receive the postcard from the customer in time to render and issue a bill based on the customer's meter reading, the utility may render and issue an estimated bill.

For purposes of estimated billings only, the customer's average usage for the billing period is the average of the customer's usage for the same billing period during the preceding two years. When the utility has no customer-specific previous usage history, the utility must estimate the customer's average usage on the basis of usage levels of similar customers under similar conditions.

Each gas utility is required to do an actual meter reading at least every sixth billing cycle and to reconcile the customer's bill. Customers are required to allow the gas utility's meter reader access to the meter. A gas utility may not apply an interest charge to an estimated billing or to any amount billed as part of a reconciliation of an estimated bill or bills; conversely, the utility is not required to pay interest on any amount refunded as part of a reconciliation of an estimated bill or bills.

Proposed new §7.430, Disputed Bills, provides a dispute resolution mechanism in the event of a dispute between the customer and a gas utility. In addition, the new section sets out procedures to be followed until the issue is resolved.

In the event of a dispute between the customer and a gas utility regarding a bill, the gas utility is required to make an investigation sufficient to determine the facts and circumstances of the particular case and promptly report the results to the customer. If the customer notifies the gas utility of the dispute prior to the date the bill becomes delinquent, the customer is not required to pay the disputed portion of the bill until the earlier of the resolution of the dispute or the 61st day after the issuance of the disputed bill. The customer is obligated to pay by the due date stated on the bill any billings not disputed. If the dispute is not resolved, the gas utility must inform the customer of the complaint procedures of the appropriate regulatory authority. The gas utility may not disconnect the customer's service for nonpayment of the disputed portion of the bill until the gas utility completely resolves the dispute.

Proposed new §7.435, Alternate Payment Arrangements, sets forth several methods of payment that will prevent disconnection of service for consumers who fall behind on payments.

If a gas utility issued a disconnection notice before an alternate payment arrangement was made, the utility must suspend that disconnection until after the due date for the alternate payment arrangement. If a customer does not fulfill the terms of the alternate payment arrangement, the utility may disconnect service after the later of either the due date for the alternate payment arrangement or the disconnection date stated in the disconnection notice, pursuant to proposed new §7.445.

Gas utilities with seasonal usage patterns or seasonal demands are encouraged to offer a level or average payment plan.

Interest does not apply to level and average payment plans.

A gas utility may use one or both of the following payment plan methods: a level payment plan, which allows a customer to pay one-twelfth of that customer's estimated annual consumption at the appropriate customer class rates each month, with provisions for annual adjustments as may be determined based on actual gas use; or an average payment plan, which allows a customer to pay one-twelfth of the sum of that customer's current month's consumption plus the previous 11 months consumption (or an estimate, for a new customer) at the appropriate customer class rates each month, plus a portion of any unbilled balance. If the failure of a customer to fulfill the terms and obligations of a level payment agreement or an average payment plan causes the customer's account to become delinquent, the utility has the right to disconnect service to that customer pursuant to proposed new §7.445.

Proposed new §7.435 also contains provisions for delayed payment of bills by elderly persons that apply only to a gas utility or a municipally-owned utility that assesses late payment charges on customers and that suspends service before the 26th day after the date of the bill for which collection action is taken; and to an elderly person who is a residential customer and who occupies the entire premises for which a payment delay is requested. An elderly person may request that a gas utility or municipally-owned utility implement the delay for either the most recent utility bill or for the most recent utility bill and each subsequent utility bill. On receiving such a request from an elderly person, a gas utility or municipally-owned utility is required to delay without penalty the payment date of a bill for providing utility services to that person until the 25th day after the date on which the bill is issued. The gas utility or municipally-owned utility may require the requesting person to present reasonable proof that the person is 60 years of age or older. Each gas utility and municipally-owned utility must notify its customers of this delayed payment option no less often than yearly, but may include this notice with other information provided pursuant to proposed new §7.405.

Each gas utility is required to offer to any distribution customer, including a guarantor of an account, who expresses an inability to pay a current bill in full or whose account for gas utility service is delinquent, a deferred payment plan that conforms to the requirements set out in proposed new §7.435. A gas utility is prohibited from refusing an otherwise qualified customer participation in a deferred payment plan on the basis of race, color, ethnic origin, creed, sex, marital status, age, or any other form of discrimination prohibited by law.

A gas utility must allow a qualified customer to establish a deferred payment plan in person or by telephone; however, the deferred payment plan is required to be in writing and signed by the customer. Every deferred payment plan must explicitly state that the gas utility will not discontinue gas utility service if the customer pays current bills in full plus a reasonable portion of the outstanding bill in no fewer than three installments over at least three billing cycles. The reasonableness of the amount of an installment payment shall be based on the amount due on the delinquent account; the customer's ability to pay; the customer's payment history; the period of time that the debt has been outstanding; and the reason or reasons the debt has been outstanding. A utility may include in a deferred payment plan a one-time 5% penalty for late payment on the original amount of the outstanding bill, but may not include a finance charge in any deferred payment plan.

A deferred payment plan must state the total amount to be paid under the plan, the specific amount of each installment, the number of installments, and the due date of each installment. On the written deferred payment plan, immediately preceding the space provided for the customer's signature and in bold-face print at least two sizes larger than any other print used in the document, the following statement must appear:

"If you are not satisfied with this agreement, or if the agreement was made by telephone and you feel this contract does not reflect your understanding of the agreement, do not sign this contract and contact the gas utility immediately. If you are satisfied with this agreement, you give up your right to dispute the amount due under the agreement except for the gas utility's failure or refusal to comply with the terms of this agreement."

The gas utility representative is required to read this statement to the customer, whether the deferred payment plan is being established in person or over the telephone. The gas utility is also required to provide information to the customer in English and Spanish as necessary to make the statement understandable to the customer. The plan must be signed by the customer and a copy of the signed plan must be given to the customer. If the agreement is made over the telephone, then the gas utility must send a copy of the plan to the customer for signature.

If a customer does not fulfill the terms of a deferred payment agreement or if the customer refuses to sign a deferred payment plan offered by the gas utility, the gas utility has the right to disconnect the customer's service pursuant to proposed new §7.445, and is not required again to offer a deferred payment agreement prior to disconnection. Either the customer or the gas utility may initiate a renegotiation of the deferred payment plan if the customer's economic or financial circumstances change substantially while the deferred payment plan is in effect.

Proposed new §7.440, Bill Adjustments, establishes how billings will be handled when over- or under-billings occur and when interest may be included. For over-billings, a gas utility must make a correction to a customer's bill by applying a one- time credit for the entire period of the over-billing. If the gas utility corrects the over-billing within three billing cycles of the initial error, the utility is not required to pay interest on the amount of the credit for the over-billed amount. However, if the gas utility does not apply the credit of the over-billed amount within three billing cycles of the initial error, the utility must pay interest on the amount of the overcharge at the rate for utility deposits set by the Public Utility Commission each year, pursuant to Texas Utilities Code, Chapter 183.

A gas utility may make a correction to a customer's bill if the gas utility under-billed the customer for service, but may not bill for usage more than six billing periods prior to the date the gas utility discovers the error unless the under-billing is a result of theft of service by the customer. At the customer's choice, the utility must enter into a deferred payment plan for the same number of billing periods as that of the under- billing, except that the utility is not permitted to charge a 5% penalty. The utility is not required to offer a deferred payment to a customer whose underpayment is due to theft of service.

The utility may not charge interest on under-billed amounts unless such amounts are found to be the result of meter tampering by the customer, as defined in proposed new §7.470. The utility may charge interest on under-billed amounts that are the result of theft of service and may compound interest monthly at the annual rate for gas utility deposits set by the Public Utility Commission each year, pursuant to Texas Utilities Code, Chapter 183. Interest shall accrue from the day the customer is found to have first tampered with the meter. The gas utility may disconnect service if the customer fails to pay under-billed charges.

Proposed new §7.440(c) governs bill adjustments due to meter error. If any meter test reveals a meter to be more than nominally defective, as that term is defined in proposed new §7.470(b)(6)(B), the utility must correct previous readings consistent with the inaccuracy found in the meter for the shorter of either the previous six billing periods or the period of time to the previous meter test. The gas utility must apply the resulting adjustments to subsequent bills, unless service is terminated, in which event the utility shall refund or collect the amount of the adjustment. The gas utility may apply this adjustment to subsequent bills or may forgo this adjustment if the error is in the gas utility's favor.

If a meter is found not to register for any period of time and has not been by-passed or tampered with, the gas utility may bill the customer for an estimated number of units used but not metered for a period not to exceed three billing periods preceding the date on which the gas utility finds the meter is not registering. The utility is required to determine the units used but not metered based on consumption during other like periods by the same customer at the same location, when those data are available. When customer-specific data are not available, the gas utility must calculate the estimate on consumption under similar conditions at the same location or by other similarly situated customers. The gas utility must inform the customer of the methodology used to calculate an estimated bill for an amount not metered.

If a customer has an outstanding balance due from another account in the same customer class, then a gas utility may transfer that balance to the customer's current account. The specific account and the amount of the delinquent balance must be identified on the bill.

Each gas utility is required to maintain monthly billing records for each account for at least two years after the date the bill is mailed. The billing records must contain sufficient data to reconstruct a customer's billing for a given billing period. The gas utility must provide a customer copies of his or her own billing records upon request and without charge.

Proposed new §7.445, Involuntary Service Disconnection, requires that proper notice of disconnection be sent by certified mail or hand-delivered to the customer at least 10 working days prior to disconnection. This section also establishes that payment of a delinquent bill at the utility's authorized payment agency is to be considered payment to the gas utility. Reasons for a utility to disconnect service without prior notice are set forth as well as reasons that disconnection is prohibited.

Proper notice of involuntary disconnection of a customer's gas utility service must be given by the gas utility in a written notice, in English and in Spanish, in not less than 10-point type, with the words "Termination Notice" or "Disconnection Notice" prominently displayed at the top of the notice in not less than 18-point type, that includes the date of termination; the hours, address, and telephone number where the customer may make payment to avoid disconnection of service; a statement that if a health or other emergency exists, the customer may contact the gas utility concerning the nature of the emergency and a description of the relief available, if any, to meet such emergency; must be sent postage prepaid by certified mail through the United States Postal Service or hand-delivered to the customer at least 10 working days prior to the stated date of disconnection; must not be mailed or delivered before the first day after a bill is due, to enable the gas utility to determine whether it received the customer's payment by the due date. Payment of the delinquent bill at the gas utility's authorized payment agency is considered payment to the gas utility.

After giving proper notice, a gas utility may disconnect gas utility service because of a customer's failure to pay a delinquent account or failure to comply with the terms of a deferred payment plan for installment payment of a delinquent account; violation of the gas utility's rules pertaining to either the use of service in such a manner that it interferes with the service of others, or the operation of nonstandard equipment, if the gas utility has made a reasonable attempt to notify the customer and has given the customer a reasonable opportunity to remedy the situation; or failure to comply with deposit or credit requirements pursuant to proposed new §7.415.

A gas utility may disconnect gas utility service without notice where a known dangerous condition exists. The gas utility is prohibited from re-connecting service until the dangerous condition has been removed, repaired, or otherwise remedied. A utility may disconnect gas utility service without notice where service is connected without authority by a person who has not made application for service; service was reconnected without authority after termination for nonpayment; or there has been tampering with the gas utility's meter or equipment or evidence of theft of service.

A gas utility may not disconnect a customer's gas utility service because of a delinquency in payment for service by a previous occupant of the premises or because of a customer's failure to pay for merchandise or charges for non-gas utility service including but not limited to air conditioners or heating units provided by the gas utility; for a different type or class of utility service; the account of another customer as guarantor, unless the gas utility has in writing the guarantee as a condition precedent to the other customer's service; charges arising from an under-billing, except for theft of service, more than six billing periods prior to the current billings; charges arising from an under-billing due to any faulty metering, unless the meter has been tampered with or unless such under-billing charges are due for failure to meet a payment obligation under proposed new §7.440(b); or a disputed bill, until a determination as to the accuracy of the bill has been made by the gas utility and the customer has been notified of this determination.

Unless a dangerous condition exists or the customer requests disconnection, a gas utility must not disconnect gas utility service on a day or on a day immediately preceding a day when personnel or agents of the gas utility are not available to customers for the purpose of making collections and reconnecting service. No gas utility may disconnect service to a delinquent residential customer permanently residing in an individually metered dwelling unit when that customer establishes that disconnection of service will cause some person residing at that residence who is disabled or who may become seriously ill or more seriously ill if the service is disconnected. A customer seeking to avoid termination of service under this provision must make a written request, supported by a written statement from a licensed physician, to the gas utility and enter into a deferred payment plan. The customer must deliver the written request, the physician's statement, and the deferred payment plan to the gas utility prior to the stated date of disconnection. The prohibition against disconnection of gas utility service under this provision is valid for 60 days from the date the gas utility receives the customer's request, the physician's statement, and the deferred payment plan, unless a shorter period is agreed upon by the gas utility and the customer or physician.

No gas utility may abandon a customer or a service area without written notice to its customers and approval from the Commission, pursuant to proposed new §7.465, relating to Abandonment (published in the May 3, 2002, issue of the Texas Register at 27 TexReg 3676) nor may a gas utility terminate service to a delinquent customer for a billing period in which the gas utility receives a written pledge, letter of intent, purchase order, or other written notification from an energy assistance provider that the energy assistance provider is forwarding sufficient payment to continue service. No gas utility may disconnect a customer within its service territory during an extreme weather emergency pursuant to §7.460, relating to Suspension of Gas Utility Service Disconnection During an Extreme Weather Emergency.

Proposed new §7.470, Meters, prescribes the utility's responsibility with regard to meters, including reading, testing, adjustments to bills due to meter errors, and meter tampering.

Each gas utility is required to charge for all gas the gas utility sells to its customers based on meter measurements, except where otherwise provided for by applicable law or tariff. Unless otherwise authorized by the regulatory authority, each gas utility must provide, install, own, and maintain all meters necessary for measurement of gas delivered to its customers. No gas utility may furnish, install, or put in use any meter that is not reliable and of a standard type that meets generally accepted industry standards, except that a gas utility may use special meters not conforming to such standard types for investigation, testing, or experimental purposes.

Each gas utility is required to keep specified meter equipment, meter test, and meter reading records. These include a record of every meter that shows the customer's address and the date of the most recent test. For special meters used for investigation or experimental purposes, the record shall include a statement of the purpose of the investigation or experiment. In addition, each gas utility must properly record each meter test. The record of each test made at the request of a customer must include:

--the identifying number and constants of the meter;

--the standard meter and other measuring devices used;

--the date and kind of test made, and by whom;

--the error (or percentage of accuracy) at each load tested; and

--sufficient data to permit independent verification of all calculations.

Each gas utility must ensure that each customer's meter indicates clearly the number of units of service for which the gas utility charges the customer, and must read customers' service meters at monthly intervals, and as nearly as possible on the corresponding day of each meter reading period; however, the gas utility may read meters at other than monthly intervals if the circumstances warrant, pursuant to proposed new §7.425(j).

If a gas utility has a customer-read program in which customers read their own meters and report their usage monthly, the gas utility must consider such readings to be the equivalent of actual meter readings by the gas utility for billing purposes. However, a gas utility is required to read the meters of customers on a customer-read program at least once every 12 months to verify the accuracy of the meter. Upon a customer's request, the utility must inform the customer of the method of reading meters.

Each gas utility must, upon the request of a customer, test the accuracy of the meter serving that customer. The utility must inform the customer of the time and place of the test and permit the customer or customer's authorized representative to be present if the customer so desires. The gas utility should conduct the meter test on the customer's premises, but at the gas utility's discretion, the test may be conducted at a test laboratory. If the utility has not performed a meter test within the previous four years for the same customer at the same location, the gas utility must perform the test without charge. If the gas utility has performed a meter test for the same customer at the same location within the previous four years, the gas utility is entitled to charge a fee for the test, provided that the fee is specified in the gas utility's tariff properly on file with the regulatory authority. The gas utility must promptly inform the customer in writing of the result of any test on a meter that serves the customer, and the name of the testing company.

If a utility finds that a tested meter is more than nominally defective, to either the customer's or the gas utility's disadvantage, the gas utility must refund any fee charged for the meter test to the customer. The term "more than nominally defective" means a deviation of more than 2% from accurate registration. The term "meter tampering" means interference with the normal operation of a gas utility's meter or equipment by physically disorienting the meter, attaching objects to the meter, inserting objects into the meter, or other means of causing or attempting to cause the meter to record less gas than is being delivered through the meter. "Bypass" or "diversion" means attaching objects to the gas utility's meter or equipment or performing any other act to cause gas delivered to a location not to go through the meter before being consumed.

The utility has the burden of proving meter tampering, bypass, or diversion, and may use photographs or other reliable and credible evidence; however, when the utility initiates any action against a customer on the basis of alleged meter tampering, the gas utility must provide a sworn affidavit to accompany any other evidence the gas utility may offer. The gas utility may use a court finding of meter tampering instead of photographs or other evidence.

Proposed new §7.475, Utility Obligations Regarding Customer Deposits, establishes minimum standards for gas utilities' policies regarding customer deposits, including payment of interest, deposit records, and refunds of deposits. In addition, this section sets forth the procedures for handling customer deposits when a gas utility is sold or transferred.

Each gas utility that requires its customers to pay a deposit is required to pay interest on the deposit according to the rate established under and for the period of time prescribed by Texas Utilities Code, Chapter 183. If the gas utility refunds a deposit within 30 days of receiving it, the utility is not required to pay interest on that deposit. If the utility retains a deposit for 30 days or longer, the utility must pay interest on the deposit from the date the customer makes the deposit. The utility must credit interest to the customer's billing account annually or at the time the deposit is returned or credited to the customer's billing account. The deposit ceases to draw interest on the date the gas utility either refunds the deposit or credits it to the customer's account.

Each gas utility must keep records to show the name and address of each depositor, the amount and date of the deposit, and each transaction concerning the deposit; issue a receipt of deposit to each applicant from whom a deposit is received and provide means for a depositor to establish a claim to the deposit if the receipt is lost; maintain a record of each unclaimed deposit for at least four years, during which time the utility must make reasonable efforts to return the deposit to the depositor; and in the event a deposit remains unclaimed after four years, forward the deposit to the Office of the Comptroller of Public Accounts in compliance with applicable law.

Each gas utility must promptly and automatically refund the deposit plus accrued interest to the customer in the form of cash or credit to a customer's account, or cancel and return the guarantee or provide written documentation that the contract has been canceled if new service is not initiated or service has been disconnected. The transfer of service from one location to another within the service area of the gas utility is not a disconnection within the meaning of these proposed new rules, and a gas utility may not demand any additional deposit unless otherwise permitted by the proposed new rules. The utility must also refund a deposit if a customer has paid bills for service for 12 consecutive months without having service disconnected for nonpayment, has not had more than two occasions in which a bill was delinquent; and is not delinquent in the payment of the current bill.

Upon the sale or transfer of any gas utility or any operating unit of a gas utility, the selling or transferring utility must transfer to the gas utility's legal successor all records of customer deposits and all transactions concerning each customer's deposit. In addition, the selling or transferring gas utility is required to notify the regulatory authority of the sale or transfer of gas utility property, and declare whether customers' deposits were returned to the depositors or whether the legal successor accepted transfer of the deposits.

Proposed new §7.480, Reliability and Continuity of Service, requires a gas utility to make all reasonable efforts to prevent interruptions of service. When interruptions occur, the utility must re-establish service within the shortest possible time consistent with prudent operating principles so that the smallest number of customers is affected. Utilities are also required to make reasonable provisions to meet emergencies resulting from failure of service, and to issue instructions to its employees covering procedures to be followed in the event of an emergency in order to prevent or mitigate interruption or impairment of service. In the event that a national emergency or local disaster disrupts normal service, a gas utility may, in the public interest, interrupt service to other customers to provide necessary service to civil defense or other emergency service agencies on a temporary basis until normal service to all customers can be restored.

In addition, each gas utility is required to maintain a current set of maps showing the physical location of all service facilities and must label all distribution facilities on the maps to indicate the size or material of the piping or any other information that will accurately describe the gas utility's facilities. The utility must keep these maps and any other maps that the regulatory authority may require in a central location and make them available for inspection by the regulatory authority during normal working hours.

Each gas utility must keep a complete record of every interruption, both emergency and schedule, other than momentary interruptions that do not cause a major disruption of service. The gas utility must state for each interruption the date, time duration, location, approximate number of customers affected, and, for emergency interruptions, the remedial action and the steps the gas utility has taken to prevent recurrence. Each utility must notify the Commission within 48 hours of any interruption in service that affects either the entire system or a major division and lasts more than four hours, and the cause of any such interruption. These reports may be made either telephonically or through the Commission's web site. If a utility reports a service interruption to the Commission in a standard report (for example, in a curtailment report or a safety report), the standard report is sufficient to comply with this requirement.

Proposed new §7.485, Complaints, sets forth requirements for the utilities with regard to processing customer complaints and record keeping requirements for complaints. Each July, each gas utility must file electronically with the Commission a list of contacts in every municipality in which the gas utility serves to whom customers within the municipality may address complaints about the gas utility. In turn, the Commission will make the municipal contact information available through its web site. A customer or applicant may also file a complaint in person, by correspondence, or by telephone with the gas utility, municipality, or the Commission.

On receipt of a complaint by a customer, a gas utility must promptly investigate and advise the complainant of the results. On receipt of a complaint from a regulatory authority on behalf of a customer, a gas utility is required to promptly investigate and advise the regulatory authority and complainant of the results.

All response deadlines run from the date the gas utility receives a complaint from either a customer or a regulatory authority. The gas utility's initial response is due no later than the next working day. The gas utility must make a preliminary response within 15 days and a complete, final response within 30 days. The gas utility must provide its preliminary and final responses to the customer and, if a regulatory authority filed the complaint, to the regulatory authority.

Each gas utility must keep a record of every complaint showing the name and address of the complainant, the date and nature of the complaint, and the disposition of the complaint for a period of two years from the date of the final disposition of the complaint. No later than the fifth working day of each month, each gas utility must file with the Commission a summary, by type, of all complaints the gas utility received in the previous month.

If a customer is not satisfied with a gas utility's disposition of a complaint, the customer has the right to file a complaint with the regulatory authority. Each gas utility must require its personnel who are engaged in initial contact with an applicant or customer seeking to establish or reestablish credit under the provisions of these rules to inform customers of this right and to provide customers with the name and address of the regulatory authority having jurisdiction of the matter.

Jackie Standard, Research Specialist, Regulatory Analysis and Policy Section, Gas Services Division, has determined that for each year of the first five years that the repeal and new rules will be in effect, there may be some fiscal implications for state government as a result of enforcing or administering the repeal and new sections. While the proposed new rules are not significantly different from the current rule, there will be some changes to Commission record-keeping and reporting; however, the Commission expects to handle the requirements under the proposed new rules with the current staffing and budget. There may be some fiscal implications for local governments because customers may contact municipal regulators with complaints.

Ms. Standard has determined that for each year of the first five years that the repeal and new rules will be in effect, the primary public benefit will be Commission rules that are more clearly organized. Gas utility customers, gas utility customer service representatives, and regulatory authority staff will be able to locate applicable provisions more quickly and to have a clearer and more comprehensive explanation of the minimum standards for service to gas utility customers located outside municipal boundaries.

Ms. Standard has also estimated that there will be only a minimal increase, if any, in the cost of compliance with the proposal for the individual, small business or micro-business natural gas service provider because of the proposed repeal and new rules. The proposed new rules are substantially similar to the current rule, with which individual, small business, and micro-business gas utilities have had to comply for many years under the Commission rules in Chapter 7. There may be some increase in the cost of compliance for record-keeping and reporting changes, but these are anticipated to be minimal. The Commission expects that the most significant change for the utilities is the proposed three-day extension of the due date for bills from 15 days, currently found in §7.45(4)(A), to 18 days, in proposed new §7.425(a). Not only could this have some (incalculable) impact on utilities' cash flows, there will be some one-time expenses (amount indeterminable) for re-programming computerized billing systems. Conversely, however, allowing customers 18 days to pay their bills could reduce the number of delinquent accounts and costs associated with dispatching work crews to make disconnections that ultimately are not made (because the customers pay at the last minute) and for which the utilities do not collect any compensating revenue. The Commission finds that an 18-day initial payment period is similar to the 16 days allowed for other utility bills (16 Tex. Admin. Code §25.28(a) for electric; 16 Tex. Admin. Code §26.27(a)(1) and (b)(1) for telephone; and 30 Tex. Admin. Code §291.87(b) for water and sewer).

Also, in a concurrent proposal, the Commission proposes the review of §7.45, under Texas Government Code, §2001.039. The separate rule review documents will be filed with the Texas Register concurrently with this rulemaking.

Comments on the proposed review, repeal and new rules may be submitted to Rules Coordinator, Office of General Counsel, Railroad Commission of Texas, P.O. Box 12967, Austin, Texas 78711-2967. Comments may also be submitted online at www.rrc.state.tx.us/rules/proposed.html; by facsimile transmission to the attention of Ms. Jackie Standard at (512) 463-7962; or by electronic mail to rulescoordinator@rrc.state.tx.us. Comments should refer to Gas Utilities Docket (GUD) No. 9221. The Commission will accept comments for 90 days after publication in the Texas Register . For further information, call Ms. Standard at (512) 463-7118.

Subchapter B. SUBSTANTIVE RULES

16 TAC §7.45

(Editor's note: The text of the following section proposed for repeal will not be published. The section may be examined in the offices of the Railroad Commission of Texas or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)

The Commission proposes the repeal under Texas Utilities Code, §102.001, which gives 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; Texas Utilities Code, §102.151, which requires gas utilities to file schedules showing all rates for a gas utility service, product, or commodity offered by the gas utility and each rule or regulation that relates to or affects a rate of the gas utility or a gas utility service, product, or commodity furnished by the gas utility; Texas Utilities Code, §104.001, which vests in the Railroad Commission all the authority and power of this state to ensure compliance with the obligations of gas utilities in Texas Utilities Code, Title 3, Subtitle A, and which authorizes the regulatory authority to adopt rules for determining the classification of customers and services; Texas Utilities Code, §104.005, which prohibits a gas utility from directly or indirectly charging, demanding, collecting, or receiving from a person a greater or lesser compensation for a service provided or to be provided by the utility than the compensation prescribed by the applicable schedule of rates filed under Texas Utilities Code, §102.151; and Texas Utilities Code, §104.251, which requires gas utilities to furnish service, instrumentalities, and facilities that are safe, adequate, efficient, and reasonable.

Texas Utilities Code, §§102.001, 102.151, 104.001, 104.005, and 104.251, are affected by the proposed repeal.

Issued in Austin, Texas, on June 4, 2002.

§7.45.Quality of Service.

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

Filed with the Office of the Secretary of State on June 4, 2002.

TRD-200203454

Mary Ross McDonald

Deputy General Counsel

Railroad Commission of Texas

Earliest possible date of adoption: July 21, 2002

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

16 TAC §§7.401, 7.405, 7.410, 7.415, 7.420, 7.425, 7.430, 7.435, 7.440, 7.445, 7.470, 7.475, 7.480, 7.485

The Commission proposes new §§7.401, 7.405, 7.410, 7.415, 7.420, 7.425, 7.430, 7.435, 7.440, 7.445, 7.470, 7.475, 7.480, and 7.485 under Texas Utilities Code, §102.001, which gives 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; Texas Utilities Code, §102.151, which requires gas utilities to file schedules showing all rates for a gas utility service, product, or commodity offered by the gas utility and each rule or regulation that relates to or affects a rate of the gas utility or a gas utility service, product, or commodity furnished by the gas utility; Texas Utilities Code, §104.001, which vests in the Railroad Commission all the authority and power of this state to ensure compliance with the obligations of gas utilities in Texas Utilities Code, Title 3, Subtitle A, and which authorizes the regulatory authority to adopt rules for determining the classification of customers and services; Texas Utilities Code, §104.005, which prohibits a gas utility from directly or indirectly charging, demanding, collecting, or receiving from a person a greater or lesser compensation for a service provided or to be provided by the utility than the compensation prescribed by the applicable schedule of rates filed under Texas Utilities Code, §102.151; and Texas Utilities Code, §104.251, which requires gas utilities to furnish service, instrumentalities, and facilities that are safe, adequate, efficient, and reasonable.

Texas Utilities Code, §§102.001, 102.151, 104.001, 104.005, and 104.251, are affected by the proposed new sections.

Issued in Austin, Texas, on June 4, 2002.

§7.401. General Provisions and Definitions.

(a) Purpose and scope. For gas utility service to distribution customers, the minimum service standards set forth in this subchapter shall apply in unincorporated areas.

(b) Computation of time. In computing any period of time prescribed in this subchapter, the last day of the period being computed shall be included, unless it is a Saturday, Sunday, or holiday, in which event the period shall continue to run until 5:00 p.m. on the next day that is not a Saturday, Sunday, or holiday.

(c) Tariff requirement. Each gas utility shall include in its tariffs all rates, terms, and conditions of service that meet the standards set forth in this subchapter. Each gas utility providing distribution service shall prepare tariffs that contain service rules incorporating the minimum service standards and shall file those tariffs with the Railroad Commission and with all municipalities in which the gas utility provides service, in accord with Texas Utilities Code, §102.151.

(d) Definitions. The following words and terms when used in this subchapter shall have the following meanings unless the context clearly indicates otherwise.

(1) Alternate payment arrangements--Any agreement between the gas utility and a customer that allows a customer to pay an outstanding bill after its due date but before the due date of the next bill.

(2) Applicant--A person who applies for service for the first time or reapplies after discontinuance of service.

(3) Average payment plan--A written agreement between a gas utility and a customer that allows the customer to pay one- twelfth of the sum of the customer's current month's charges plus the previous 11 months charges at the appropriate customer class rates each month, plus a portion of any unbilled balance.

(4) Base bill--That portion of a customer's monthly bill that is billed at the rate that is intended to recover the gas utility's cost of service. The base bill does not include other rate adjustments that include but are not limited to gas cost adjustments or purchased gas adjustments, franchise fees, authorized rate case expense surcharges, and authorized weather normalization adjustments.

(5) Commission--The Railroad Commission of Texas or its delegate.

(6) Complainant--An applicant for gas utility service or a gas utility customer who initiates a complaint about a gas utility's service, rates, terms, and conditions of service.

(7) Customer--A person who is currently receiving service from a gas utility in the person's own name or the person's agent.

(8) Customer line--A line that transports gas from either a customer meter or a service line (if there is no customer meter) to the internal piping of a residence or business, and for which the customer is responsible.

(9) Customer meter--The meter that measures the transfer of gas from a gas utility to a customer.

(10) Day--A calendar day unless specifically stated otherwise.

(11) Deferred payment plan--Any written agreement between the gas utility and a customer that allows a customer to pay an outstanding bill in installments that extend beyond the due date of the next bill.

(12) Delinquent account--A customer account with charges that are unpaid past the stated due date and for which there is no alternative billing arrangement in place.

(13) Deposit--Money given by a customer to a gas utility as security for payment of charges for gas utility service.

(14) Disconnection--Temporary discontinuance of a customer's natural gas distribution service provided by a gas utility; such disconnection may be voluntary or involuntary on the customer's part.

(15) Distribution system--A densely configured system of interconnected pipes, regulators, valves, and meters composed primarily of small diameter pipe and used predominantly for the delivery of natural gas in cities, towns, and other densely populated areas.

(16) Division--The Gas Services Division of the Railroad Commission of Texas, the director of the Gas Services Division, or the director's delegate.

(17) Elderly person--A human being who is 60 years of age or older.

(18) Energy assistance provider--An organization that provides monetary assistance for payment of gas utility bills.

(19) Gas utility--Has the same meaning as the term is defined in Texas Utilities Code, §§101.003(7) and 121.001.

(20) Guarantee agreement--A written agreement between a gas utility and a person other than the customer that the person will make payment of the charges for gas utility service if the customer defaults.

(21) In writing--Words written on paper or sent electronically.

(22) Interest rate--The percentage paid on an annual basis for the use of money.

(23) Issuance date--The date a gas utility issues a bill for service. On a bill sent through the United States mail, it is the date of the postmark on the envelope; if there is no postmark, it is the issuance date stated on the bill. If the bill is electronically rendered, it is the date on the bill.

(24) Level payment plan--A written agreement between a gas utility and a customer that allows the customer to pay one- twelfth of the customer's estimated annual charges at the appropriate customer class rates each month, with provisions for annual adjustments based on actual use.

(25) Main line--A line that serves as a common source of gas supply for more than one service line.

(26) Main line extension--The installation of a new main line by a gas utility to provide service to a new customer or customers.

(27) Municipally-owned utility--Has the same meaning as the term is defined in Texas Utilities Code, §101.003(8).

(28) Person--Has the same meaning as the term is defined in Texas Utilities Code, §101.003(10).

(29) Rate--Has the same meaning as that term is defined in Texas Utilities Code, §101.003(12).

(30) Regulatory authority--Has the same meaning as that term is defined in Texas Utilities Code, §101.003(13).

(31) Seasonal service--Natural gas service that is permanent but is used only certain times during a year; for example, service that is initiated and used only during the winter months each year.

(32) Service--Has the same meaning as that term is defined in Texas Utilities Code, §101.003(14).

(33) Service line--A line that transports gas from a main line to either a customer meter or the connection to a customer line (if there is no customer meter) and for which the gas utility is responsible.

(34) Temporary service--Natural gas service that is not intended to be permanent and either has a predetermined ending date or is expected to last less than one year.

(35) Termination--Permanent discontinuance of a customer's natural gas distribution service provided by a gas utility; such termination may be voluntary or involuntary on the customer's part.

§7.405. Information to Customers.

(a) Information at initiation of service. At the time service is initiated or as an insert in the first billing, each gas utility shall provide to new customers a pamphlet containing service information. The pamphlet shall provide this information in English and Spanish; however, upon the gas utility's application and showing of good cause, the regulatory authority may exempt the gas utility from the requirement that the pamphlet provide the information in Spanish. If the gas utility is exempt from the requirement of providing the pamphlet in Spanish, the gas utility shall notify all customers through a statement in the packet, in both English and Spanish, that the information is available in Spanish from the gas utility, both by mail and at the gas utility's offices.

(b) Contents of pamphlet. The service information pamphlet shall contain the following information:

(1) the customer's right to have information concerning rates and services and the customer's right to inspect or obtain a copy of the applicable tariffs and service rules. The gas utility may charge the customer a reasonable reproduction fee for copies, not to exceed ten cents per page, provided that the fee is included in the gas utility's tariff and in the annual notice to customers required by subsection (c) of this section;

(2) descriptions of any alternative payment arrangements the gas utility may offer, including but not limited to deferred payment plans, level billing programs, and average payment plans, as well as a statement that a customer has the right to request an alternative plan if the gas utility offers one;

(3) the gas utility's credit requirements for customers; a summary of the gas utility's policy regarding the provision of credit based on the credit history of a customer's former spouse; the circumstances under which the gas utility may require the customer to make a deposit or require an additional deposit; how the gas utility calculates the amount of an initial or an additional deposit; the interest rate the gas utility pays on deposits and the time frame and requirement for return of the deposit to the customer;

(4) the time allowed for payment of outstanding bills;

(5) grounds for disconnection and for termination of service;

(6) the steps the gas utility must take before it disconnects or terminates a customer's service;

(7) the steps the customer must take to have service reconnected after involuntary disconnection;

(8) how the customer can resolve billing disputes with the gas utility and how disputes and health emergencies may affect disconnection or termination of service;

(9) the appropriate regulatory authority with which the customer may register a complaint and how the customer can contact such authority;

(10) the customer's right to have the customer's meter checked without charge under Texas Utilities Code, §104.257, and §7.470 of this title (relating to Meters);

(11) the customer's right to be instructed by the gas utility how to read the customer's meter;

(12) the hours, addresses, and telephone numbers of gas utility offices, and any other authorized locations where customers may pay bills and obtain information, or a toll-free telephone number that customers may call to obtain this information; and

(13) a statement that the gas utility provides services without discrimination as to a customer's race, ethnicity, color, sex, nationality, religion, or marital status.

(c) Additional information to customers. Each gas utility shall provide the following additional information or services to the customer or applicant:

(1) The gas utility shall post a notice in a conspicuous place in each business office of the gas utility informing the public that copies of rate schedules and rules relating to the service of the gas utility as filed with the regulatory authority and up- to-date maps are available for inspection.

(2) At least once each calendar year, the gas utility shall notify all its customers that, upon request, they may obtain information concerning the items listed in subsection (a) of this section. The gas utility may charge customers a reasonable fee, not to exceed ten cents per page for copies of documents, provided that the fee is included in the gas utility's tariff and in the annual notice to customers. The gas utility may notify customers by using a billing insert or by printing the statement on the bill itself.

(3) The gas utility shall assist the customer or applicant in selecting the most economical rate schedule.

(4) In compliance with applicable statutes or rules, the gas utility shall notify customers affected by a change in rates or customer classification.

(d) Service facility maps. Each gas utility shall maintain a current set of maps showing the physical location of all service facilities. The gas utility shall label all distribution facilities on the maps to indicate the size or material of piping or any other information that will accurately describe the gas utility's facilities. Each gas utility shall keep these maps and any other maps that the regulatory authority may require in a central location and shall make them available for inspection by the regulatory authority during normal working hours. Each gas utility shall provide in each of its business offices up-to-date maps, plans, or records of its immediate area, and all other information necessary to enable the gas utility to advise applicants and others entitled to the information accurately about the facilities available for serving that locality.

§7.410. Request for Service.

(a) Response to request for service. Every gas utility shall serve each qualified applicant for service within its service area as rapidly as practical. As a general policy, a gas utility shall fill those applications for distribution service that do not require the construction of main line extensions within seven working days after an applicant has met the credit requirements as set forth in §7.415 of this title (relating to Credit Requirements, Deposits, and Re-Establishment of Credit).

(b) Request for new service involving construction of main line extensions. Each gas utility shall fill those applications for service that require construction of main line extensions no later than the 90th day after the applicant has met the credit requirements set forth in §7.415 of this title (relating to Credit Requirements, Deposits, and Re-Establishment of Credit), unless unavailability of materials or other causes beyond the control of the gas utility result in unavoidable delays.

(1) If the gas utility must construct facilities to provide the requested service, then the gas utility shall contact the applicant within a reasonable period of time, not to exceed 10 working days from the date the gas utility receives an application for distribution service. The gas utility shall give the applicant an estimated completion date and an estimated cost for all charges to be incurred by the applicant, pursuant to the gas utility's tariff.

(2) Following the assessment of necessary construction work and before commencing construction, the gas utility shall explain to the applicant any construction cost options, such as rebates to the customer, sharing of construction costs between the gas utility and the customer, or sharing of costs between the customer and other applicants.

(c) Request for new service delayed more than 90 days. In the event that a gas utility does not initiate service on or before the 90th day after an applicant has met credit requirements and made satisfactory arrangements for payment of any required construction charges, the gas utility shall file a report with the regulatory authority and shall deliver a copy to the applicant. The report shall list the name of the applicant, the location of the requested service, and the cause or causes for delay. The gas utility shall file this report on the 91st day after the applicant has met credit requirements and made payment arrangements. Unless the delay is beyond the reasonable control of the gas utility, as determined by the regulatory authority, or the applicant and the gas utility have agreed to a longer term, a delay of more than 90 days in initiating new service shall constitute failure to serve.

(d) Main line extension, service line extension, and construction charges. Each gas utility shall include its main line extension policy and service line extension policy in the tariff the gas utility files with the regulatory authority. The policies shall be consistent and nondiscriminatory, and are subject to the approval of the regulatory authority. The gas utility shall not require an applicant to make any contribution in aid of construction except as provided for in the main line extension policy and the service line extension policy included in the gas utility's approved tariff. The gas utility shall include in its main line extension policy and its service line extension policy either a specific unit rate or a methodology by which an applicant can reasonably estimate the customer's cost of a main line extension or a service line extension.

(e) Standards of construction. Each gas utility shall construct, install, operate, and maintain its plant, structures, equipment, and lines in accordance with the provisions of such codes and standards as are generally accepted by the industry. Each gas utility shall construct its facilities in such a manner to best accommodate the public and to prevent interference with service furnished by other public utilities.

(f) Service information. As part of the initial contact the gas utility representative shall give the applicant a copy of the service information required by §7.405 of this title (relating to Information to Customers), and inform the applicant of the applicant's right to file a complaint with the regulatory authority pursuant to §7.485 of this title (relating to Complaints). The gas utility may also make this information available on the gas utility's web site.

§7.415.Credit Requirements, Deposits, and Re-Establishment of Credit.

(a) Establishment of credit by applicants. Each gas utility may require an applicant for gas utility service to establish satisfactory credit. Establishing credit shall not relieve the customer from complying with the gas utility's rules for prompt payment of bills. Each gas utility shall apply the credit- worthiness of divorced spouses established during shared service in the 12 months prior to the divorce equally to both spouses for 12 months immediately after their divorce. A gas utility shall not require an applicant for gas utility service to pay a deposit if the applicant:

(1) is 65 years of age or older and does not have an outstanding account balance with the gas utility or another gas utility for the same type of gas utility service that accrued within the last two years; or

(2) has been a customer of any gas utility within the last two years; is not delinquent in payment with another gas utility; has not had gas utility service disconnected for nonpayment during the last 12 consecutive months of service; did not have more than one occasion on which a bill for gas utility service became delinquent; and never had service disconnected for nonpayment; or

(3) furnishes either a satisfactory written guarantee to secure payment of bills for the service or a satisfactory credit rating by appropriate means, including but not limited to the production of:

(A) a major credit card, such as Visa, MasterCard, Discover, or American Express;

(B) letters of credit reference;

(C) the names of credit references which may be quickly and inexpensively contacted by the gas utility; or

(D) proof of ownership of substantial equity.

(4) has been determined to be a victim of family violence as defined in Texas Family Code, §71.004, by a family violence center or by treating medical personnel. This determination shall be evidenced by submission of a certification letter developed by the Texas Council on Family Violence.

(b) Amount of deposit. Each gas utility shall establish deposit requirements for customers that comply with the following deposit requirements:

(1) If a gas utility requires customers to pay an initial deposit to initiate service, the deposit shall not exceed an amount equivalent to one-sixth of the estimated annual billings for the requested service. The gas utility shall state in its tariff either the dollar amount of the required deposit or the formula by which the gas utility calculates the required deposit.

(2) A gas utility may require a customer to make an additional deposit if the average of the customer's actual billings for the last 12 months are at least twice the amount of the original estimated annual billings and a disconnection notice has been issued for the account within the previous 12 months. The additional deposit shall be no greater than the amount necessary to bring the total deposit amount to one-sixth of the customer's actual billings for the last 12 months.

(3) A gas utility may require a customer to make an additional deposit if the customer is delinquent twice within a 12-month period. The additional deposit may not exceed one-fourth of the estimated annual billings, and the total amount of the deposit may not exceed five-twelfths of the estimated annual billings. Instead of an additional deposit, and at the customer's election, the customer may pay the total amount due on the current bill, including any past due amounts, by the due date of the bill, provided that the customer has not exercised this option in the previous 12 months. If the customer has exercised this option in the previous 12 months, the additional deposit is required.

(4) If the customer does not pay the additional deposit within 10 days of the date the gas utility notifies the customer that an additional deposit is required, the gas utility may disconnect service under the standard disconnection procedure as set forth in §7.445 of this title (relating to Involuntary Service Disconnection) for failure to comply with deposit requirements.

(c) Deposits for temporary, weekend, or seasonal service. A gas utility may require a customer to make a deposit for temporary, weekend, or seasonal service in an amount no greater than one- sixth the estimated annual billings and no less than $25. Each gas utility shall return deposits for temporary, weekend, or seasonal service according to guidelines set out in §7.475 of this title (relating to Gas Utility Obligations Regarding Customer Deposits).

(d) Guarantees of customer accounts.

(1) Each gas utility shall set forth in its tariff all terms and conditions of a guarantee agreement, which shall comply with the requirements of this subsection.

(2) A guarantee agreement between a gas utility and a guarantor shall be in writing and shall be in an amount no greater than the amount of deposit the gas utility would require on the applicant's account pursuant to subsection (b) of this section. The dollar amount of the guarantee and the period of time that the guarantee shall be valid and enforceable shall be clearly stated in the signed agreement.

(3) Upon default in payment of a bill by a distribution customer, the guarantor of that customer's account shall be responsible for the unpaid balance of the account only up to the amount stated in the written agreement.

(4) The gas utility shall provide written notice to the guarantor of the customer's default, the amount owed by the guarantor, and the due date for the amount owed.

(A) The gas utility shall allow the guarantor 10 days from the date of the notice to pay the amount owed on the defaulted account. If the tenth day falls on a Saturday, Sunday, or holiday, the due date shall be the next workday.

(B) The gas utility may transfer the amount owed on the defaulted account to the guarantor's own service bill provided the guaranteed amount owed is identified separately on the bill.

(5) The gas utility may disconnect service to the guarantor for nonpayment of the guaranteed amount only if the potential for disconnection of the guarantor's service was included in the terms of the written agreement, and only after the gas utility has given the guarantor proper notice as set forth in paragraph (4) of this subsection and §7.445 of this title (relating to Involuntary Service Disconnection).

(6) The gas utility shall void the guarantee and return it to the guarantor according to the provisions of §7.475 of this title (relating to Gas Utility Obligations Regarding Customer Deposits).

(e) Re-establishment of credit. Each gas utility may require every applicant who has previously been a customer of the gas utility and whose service has been discontinued for nonpayment of bills or meter tampering, as that term is defined in §7.470(c) of this title (relating to Meters), to pay all amounts due the gas utility before service is again initiated. The customer may enter into a deferred payment agreement and re-establish credit as provided in subsection (a) of this section. The gas utility shall have records showing the amount of gas utility service received but not paid for and the reasonableness of any charges for the unpaid service, and any other charges required to be paid as a condition of service restoration.

§7.420.Refusal of Service.

(a) Valid basis for gas utility refusal to serve. A gas utility may decline to serve an applicant for whom service would be provided from existing facilities:

(1) until such applicant has complied with the state and municipal regulations and approved rules and regulations of the gas utility on file with the regulatory authority governing the requested service;

(2) if the gas utility has information that the applicant's installation or equipment is hazardous or of such character that the gas utility cannot provide safe, adequate, efficient, and reasonable service;

(3) if the applicant is indebted to any gas utility for the same kind of service as that applied for unless the indebtedness of the applicant is in dispute, in which event the gas utility shall provide service upon the applicant complying with the deposit requirement;

(4) if the applicant refuses to pay a deposit that is required under this subchapter;

(5) if the applicant has defaulted as a guarantor for another customer of the gas utility, where such guarantee was made in writing to the gas utility and was a condition of service for the other customer; or

(6) if the applicant applies for service at a location where another customer received or continues to receive service and the gas utility bill is unpaid at that location and the gas utility can reasonably show that the change in identity is made in an attempt to help the other customer avoid or evade payment of the gas bill.

(b) Notice of refusal to serve. If a gas utility refuses to serve an applicant pursuant to subsection (a) of this section, the gas utility shall inform the applicant of the basis of the refusal of service; of the applicant's option to file a complaint with the regulatory authority; and of the appropriate regulatory authority with which to file any complaint.

(c) Invalid reasons for gas utility refusal to serve. The following shall not constitute sufficient cause for a gas utility to refuse service to a current customer or a qualified applicant:

(1) delinquency in payment for gas utility service by a previous occupant of the premises being or to be served;

(2) failure of the customer or applicant to pay for merchandise or charges for non-gas utility service purchased by the customer or applicant from the gas utility;

(3) failure of the customer or applicant to pay a bill to correct previous under-billing due to the gas utility's misapplication of rates more than six months prior to the date of application, unless the under-billing is the result of theft of service;

(4) violation by the customer or applicant of the gas utility's rules pertaining to operation of nonstandard equipment or unauthorized attachments which interfere with the service of others, unless the gas utility first notified the customer or applicant and afforded the customer or applicant a reasonable opportunity to comply with the gas utility's rules. The amount of time that constitutes a reasonable opportunity will vary according to the particular circumstances but shall not be less than 10 days;

(5) failure of the customer or applicant to pay the bill of another customer as guarantor unless the guarantee was made in writing to the gas utility as a condition precedent to the other customer's service;

(6) failure of the customer or applicant to pay the bill of another customer at the same address, except where the change of customer identity is made to avoid or evade payment of a gas utility bill; or

(7) failure of the customer or applicant to pay for another service, even if the applicant owes an outstanding sum for a different type of energy, including but not limited to electricity, to the same service provider.

§7.425.Issuance and Format of Natural Gas Bills.

(a) Due date and delinquency of bills. Each gas utility shall establish a due date for payment of a bill for gas utility service that shall not be less than 18 days after issuance. A bill for gas utility service is delinquent if the customer has not paid it by the due date, subject to the requirements of §7.401(b) of this title (relating to General Provisions and Definitions).

(b) Prompt payment discount. A gas utility may offer an inducement for prompt payment of bills by allowing a discount in the amount of 5% of the total bill for payment of a bill within 13 days after issuance.

(c) Late payment penalty. A gas utility may charge a late payment fee not to exceed 5% of the total bill.

(d) Service to the State of Texas. No gas utility providing any service to the State of Texas shall assess a fee, penalty, or interest or other charge to the State for delinquent payment of a bill.

(e) Frequency of bills. Each gas utility shall render bills for gas utility service monthly, unless otherwise authorized or unless the gas utility provides service for less than one billing cycle. The gas utility shall render and issue bills promptly following the reading of meters.

(f) Electronic billing. Each gas utility may offer its customers the options of electronic billing and/or electronic payment of bills. The gas utility shall include in its tariff its procedures for electronic billing and payment processing.

(g) Minimum information on customer bills. Each gas utility shall include on customers' bills, whether issued on paper or electronically, all the following information:

(1) if the gas utility reads the customer's meter, the date and reading of the meter at the beginning and end of the period for which the bill is rendered;

(2) the number and kind of units billed;

(3) the applicable rate schedule title or code;

(4) the total base bill, as defined in §7.401 of this title (relating to General Provisions and Definitions);

(5) each adjustment to the base bill and the amount of each adjustment per billing unit;

(6) the date by which the customer must pay the bill to receive a prompt payment discount;

(7) the total amount due before and after any discount for prompt payment;

(8) the date after which payment must include any penalty for late payment and the total amount due if the gas utility imposes a late payment penalty; and

(9) a distinct marking to identify an estimated bill.

(h) Arrangement and display of information. The gas utility shall arrange and display the required information on the bill in such a manner that the customer can compute the bill with the applicable rate schedule.

(i) Rate schedules provided. Upon request by a customer, the gas utility shall mail or deliver a copy of the applicable rate schedule to the customer.

(j) Estimated bills. A gas utility may render and issue an estimated bill in accordance with this subsection.

(1) When a gas utility's meter reader is unable to read a customer's meter:

(A) the gas utility may render and issue an estimated bill, provided that the gas utility makes an actual meter reading at least every sixth billing cycle.

(B) For any second and subsequent month in which a meter reader is unable to read a customer's meter on regular meter reading trips, or in months in which meters are not regularly read, the gas utility shall provide the customer with a postcard and instruct the customer to read the meter and return the card to the gas utility by a specified date. The date of return shall allow the gas utility a reasonable opportunity to receive the postcard in time for the gas utility to render and issue the customer's bill in the regular billing cycle for that customer. The gas utility shall include on the postcard instructions for reading the meter properly, and the gas utility shall have provided the customer with a meter of a type that the customer can read without significant inconvenience or special tools or equipment. If the gas utility does not receive the postcard from the customer in time to render and issue a bill based on the customer's meter reading, the gas utility may render and issue an estimated bill.

(2) For purposes of this section only, the customer's average usage for the billing period shall be the average of the customer's usage for the same billing period during the preceding two years. When the gas utility has no customer-specific previous usage history, the gas utility shall estimate the customer's average usage on the basis of usage levels of similar customers under similar conditions.

(3) Each gas utility shall do an actual meter reading at least every sixth billing cycle and shall reconcile the customer's bill. Each gas utility customer shall allow the gas utility's meter reader access to the meter.

(4) No gas utility shall apply an interest charge to an estimated billing or to any amount billed as part of a reconciliation of an estimated bill or bills. The utility shall not be required to pay interest on any amount refunded as part of a reconciliation of an estimated bill or bills.

§7.430.Disputed Bills.

(a) Gas utility investigation of dispute. In the event of a dispute between the customer and a gas utility regarding a bill, the gas utility shall make an investigation sufficient to determine the facts and circumstances of the particular case and promptly report the results to the customer. If the customer wishes to obtain the benefits of subsection (c) of this section, the customer shall notify the gas utility of the dispute prior to the date the bill becomes delinquent.

(b) Information about regulatory authority. In the event the dispute is not resolved, the gas utility shall inform the customer of the complaint procedures of the appropriate regulatory authority.

(c) Payment of disputed portion of bill. The customer shall not be required to pay the disputed portion of the bill until the earlier of the following:

(1) resolution of the dispute; or

(2) the expiration of the 60-day period beginning on the day the disputed bill is issued.

(d) No disconnection pending resolution. The gas utility shall not disconnect the customer's service for nonpayment of the disputed portion of the bill until the gas utility completely resolves the dispute.

(e) Obligation to pay undisputed portion of bill. The customer is obligated to pay by the due date stated on the bill any billings not disputed.

§7.435.Alternate Payment Arrangements.

(a) Alternate payment arrangements. If a gas utility issued a disconnection notice before an alternate payment arrangement was made, the gas utility shall suspend that disconnection until after the due date for the alternate payment arrangement. If the customer does not fulfill the terms of the alternate payment arrangement, the gas utility may disconnect service after the later of either the due date for the alternate payment arrangement or the disconnection date stated in the disconnection notice, pursuant to §7.445 of this title (relating to Involuntary Service Disconnection).

(b) Level and average payment plans. Gas utilities with seasonal usage patterns or seasonal demands are encouraged to offer a level or average payment plan. Interest shall not apply to level and average payment plans. A gas utility may use one or both of the following payment plan methods:

(1) a level payment plan allowing customers to pay one-twelfth of that customer's estimated annual consumption at the appropriate customer class rates each month, with provisions for annual adjustments as may be determined based on actual gas use; or

(2) an average payment plan allowing customers to pay one- twelfth of the sum of that customer's current month's consumption plus the previous 11 months consumption (or an estimate, for a new customer) at the appropriate customer class rates each month, plus a portion of any unbilled balance. If the failure of a customer to fulfill the terms and obligations of a level payment agreement or an average payment plan causes the customer's account to become delinquent, the gas utility shall have the right to disconnect service to that customer pursuant to §7.445 of this title (relating to Involuntary Service Disconnection).

(c) Delayed payment of bills by elderly persons.

(1) This subsection applies only to a gas utility or a municipally-owned utility, as both terms are defined in §7.401 of this title (relating to General Provisions and Definitions), that assesses late payment charges on customers and that suspends service before the 26th day after the date of the bill for which collection action is taken; and to an elderly person, as defined in §7.401 of this title (relating to General Provisions and Definitions), who is a residential customer and who occupies the entire premises for which a payment delay is requested.

(2) An elderly person may request that a gas utility or municipally-owned utility implement the delay for either the most recent utility bill or for the most recent utility bill and each subsequent utility bill.

(3) On request of an elderly person, a gas utility or municipally-owned utility shall delay without penalty the payment date of a bill for providing utility services to that person until the 25th day after the date on which the bill is issued.

(4) The gas utility or municipally-owned utility may require the requesting person to present reasonable proof that the person is 60 years of age or older.

(5) Every gas utility or municipally-owned utility shall notify its customers of this delayed payment option no less often than yearly. A gas utility or municipally-owned utility may include this notice with other information provided pursuant to §7.405 of this title (relating to Information to Customers).

(d) Deferred payment plans. Each gas utility shall offer to any distribution customer, including a guarantor of an account, who expresses an inability to pay a current bill in full or whose account for gas utility service is delinquent, a deferred payment plan that conforms to the requirements set out in this subsection. No gas utility shall refuse an otherwise qualified customer participation in a deferred payment plan on the basis of race, color, ethnic origin, creed, sex, marital status, age, or any other form of discrimination prohibited by law.

(1) The gas utility shall allow a customer to establish a deferred payment plan in person or by telephone; however, the deferred payment plan shall be in writing and signed by the customer.

(2) Every deferred payment plan shall explicitly state that the gas utility will not discontinue gas utility service if the customer pays current bills in full plus a reasonable portion of the outstanding bill in no fewer than three installments over at least three billing cycles. The reasonableness of the amount of an installment payment shall be based on:

(A) the amount due on the delinquent account;

(B) the customer's ability to pay;

(C) the customer's payment history;

(D) the period of time that the debt has been outstanding; and

(E) the reason or reasons the debt has been outstanding.

(3) A gas utility may include in a deferred payment plan a one- time 5% penalty for late payment on the original amount of the outstanding bill.

(4) The gas utility shall not include a finance charge in any deferred payment plan.

(5) A deferred payment plan shall state the total amount to be paid under the plan, the specific amount of each installment, the number of installments, and the due date of each installment.

(6) On the written document, immediately preceding the space provided for the customer's signature and in bold-face print at least two sizes larger than any other print used in the document, a deferred payment plan shall include the following statement: "If you are not satisfied with this agreement, or if the agreement was made by telephone and you feel this contract does not reflect your understanding of the agreement, do not sign this contract and contact the gas utility immediately. If you are satisfied with this agreement, you give up your right to dispute the amount due under the agreement except for the gas utility's failure or refusal to comply with the terms of this agreement." The gas utility representative shall read this statement to the customer, whether the deferred payment plan is being established in person or over the telephone. The gas utility shall provide information to the customer in English and Spanish as necessary to make the statement understandable to the customer.

(7) The plan shall be signed by the customer and a copy of the signed plan shall be provided to the customer. If the agreement is made over the telephone, then the gas utility shall send a copy of the plan to the customer for signature.

(8) If a customer does not fulfill the terms of a deferred payment agreement or if the customer refuses to sign a deferred payment plan offered by the gas utility, the gas utility shall have the right to disconnect the customer's service pursuant to §7.445 of this title (relating to Involuntary Service Disconnection), and shall not be required again to offer a deferred payment agreement prior to disconnection.

(9) Either the customer or the gas utility shall be allowed to initiate a renegotiation of the deferred payment plan if the customer's economic or financial circumstances change substantially while the deferred payment plan is in effect.

§7.440.Bill Adjustments.

(a) Bill adjustments due to over-billing. Each gas utility shall make a correction to a customer's bill by applying a one- time credit for the entire period of the over-billing. If the gas utility corrects the over-billing within three billing cycles of the initial error, the gas utility shall not be required to pay interest on the amount of the credit for the over-billed amount. However, if the gas utility does not apply the credit of the over-billed amount within three billing cycles of the initial error, the gas utility shall pay interest on the amount of the overcharge at the rate for utility deposits set by the Public Utility Commission each year, pursuant to Texas Utilities Code, Chapter 183.

(b) Bill adjustments due to under-billing. Each gas utility may make a correction to a customer's bill if the gas utility under- billed the customer for service. The gas utility shall not bill for usage more than six billing periods prior to the date the gas utility discovers the error unless the under-billing is a result of theft of service by the customer.

(1) At the customer's choice, the gas utility shall enter into a deferred payment plan for the same number of billing periods as that of the under-billing, except that the gas utility shall not charge a 5% penalty. However, the gas utility shall not be required to offer a deferred payment to a customer whose underpayment is due to theft of service.

(2) The gas utility shall not charge interest on under-billed amounts unless such amounts are found to be the result of meter tampering by the customer, as defined in §7.470 of this title (relating to Meters). The gas utility may charge interest on under-billed amounts that are the result of theft of service and may compound interest monthly at the annual rate for gas utility deposits set by the Public Utility Commission each year, pursuant to Texas Utilities Code, Chapter 183. Interest shall accrue from the day the customer is found to have first tampered with the meter.

(3) The gas utility may disconnect service if the customer fails to pay under-billed charges.

(c) Bill adjustments due to meter error.

(1) If any meter test reveals a meter to be more than nominally defective, as that term is defined in §7.470(b)(6)(B) of this title (relating to Meters), the gas utility shall correct previous readings consistent with the inaccuracy found in the meter for the shorter of either:

(A) the previous six billing periods; or

(B) the period of time to the previous meter test.

(2) The gas utility shall apply the resulting adjustments to subsequent bills, unless service is terminated, in which event the utility shall refund or collect the amount of the adjustment. The gas utility may apply this adjustment to subsequent bills or may forgo this adjustment if the error is in the gas utility's favor.

(3) If a meter is found not to register for any period of time and has not been by-passed or tampered with, the gas utility may bill the customer for an estimated number of units used but not metered for a period not to exceed three billing periods preceding the date on which the gas utility finds the meter is not registering.

(4) The gas utility shall determine the units used but not metered based on consumption during other like periods by the same customer at the same location, when those data are available. When customer-specific data are not available, the gas utility shall calculate the estimate on consumption under similar conditions at the same location or by other similarly situated customers. The gas utility shall inform the customer of the methodology used to calculate an estimated bill for an amount not metered.

(d) Transfer of delinquent balances. If a customer has an outstanding balance due from another account in the same customer class, then the gas utility may transfer that balance to the customer's current account. The specific account and the amount of the delinquent balance shall be identified on the bill.

(e) Record retention. Each gas utility shall maintain monthly billing records for each account for at least two years after the date the bill is mailed. The billing records shall contain sufficient data to reconstruct a customer's billing for a given billing period. The gas utility shall provide a customer copies of his or her own billing records upon request and without charge.

§7.445.Involuntary Service Disconnection.

(a) Disconnection policy. Each gas utility shall comply with the requirements of this section in disconnecting a customer's gas utility service.

(b) Proper notice. Proper notice of involuntary disconnection of a customer's gas utility service shall:

(1) be given by the gas utility in a written notice, in English and in Spanish, in not less than 10-point type, with the words "Termination Notice" or "Disconnection Notice" prominently displayed at the top of the notice in not less than 18-point type, that includes:

(A) the date of termination;

(B) the hours, address, and telephone number where the customer may make payment to avoid disconnection of service;

(C) a statement that if a health or other emergency exists, the customer may contact the gas utility concerning the nature of the emergency and a description of the relief available, if any, to meet such emergency;

(2) be sent postage prepaid by certified mail through the United States Postal Service or hand-delivered to the customer at least 10 working days prior to the stated date of disconnection;

(3) not be mailed or delivered before the first day after a bill is due, to enable the gas utility to determine whether it received the customer's payment by the due date. Payment of the delinquent bill at the gas utility's authorized payment agency shall be considered payment to the gas utility.

(c) Disconnection with prior notice. After giving proper notice as set forth in subsection (b) of this section, a gas utility may disconnect gas utility service because of a customer's:

(1) failure to pay a delinquent account or failure to comply with the terms of a deferred payment plan for installment payment of a delinquent account;

(2) violation of the gas utility's rules pertaining to either the use of service in such a manner that it interferes with the service of others, or the operation of nonstandard equipment, if the gas utility has made a reasonable attempt to notify the customer and has given the customer a reasonable opportunity to remedy the situation; or

(3) failure to comply with deposit or credit requirements pursuant to §7.415 of this title (relating to Credit Requirements, Deposits, and Re-Establishment of Credit);

(d) Disconnection without prior notice. A gas utility may disconnect gas utility service without notice where:

(1) a known dangerous condition exists. The gas utility shall not re-connect service until the dangerous condition has been removed, repaired, or otherwise remedied;

(2) service is connected without authority by a person who has not made application for service;

(3) service was reconnected without authority after termination for nonpayment; or

(4) there has been tampering with the gas utility's meter or equipment or evidence of theft of service.

(e) Disconnection prohibition. A gas utility shall not disconnect a customer's gas utility service because of a delinquency in payment for service by a previous occupant of the premises or because of a customer's failure to pay:

(1) for merchandise or charges for non-gas utility service including but not limited to air conditioners or heating units provided by the gas utility;

(2) for a different type or class of utility service;

(3) the account of another customer as guarantor, unless the gas utility has in writing the guarantee as a condition precedent to the other customer's service;

(4) charges arising from an under-billing, except for theft of service, more than six billing periods prior to the current billings;

(5) charges arising from an under-billing due to any faulty metering, unless the meter has been tampered with or unless such under-billing charges are due for failure to meet a payment obligation under §7.440(b) of this title (relating to Bill Adjustments);

(6) a disputed bill, until a determination as to the accuracy of the bill has been made by the gas utility and the customer has been notified of this determination.

(f) Disconnection of service on holidays or weekends. Unless a dangerous condition exists or the customer requests disconnection, a gas utility shall not disconnect gas utility service on a day or on a day immediately preceding a day when personnel or agents of the gas utility are not available to customers for the purpose of making collections and reconnecting service.

(g) Disconnection of service to ill and disabled customers. No gas utility shall disconnect service to a delinquent residential customer permanently residing in an individually metered dwelling unit when that customer establishes that disconnection of service will cause some person residing at that residence who is disabled or who may become seriously ill or more seriously ill if the service is disconnected.

(1) A customer seeking to avoid termination of service under this section shall:

(A) make a written request, supported by a written statement from a licensed physician, to the gas utility; and

(B) enter into a deferred payment plan.

(2) The customer shall deliver the written request, the physician's statement, and the deferred payment plan to the gas utility prior to the stated date of disconnection.

(3) The prohibition against disconnection of gas utility service under this subsection shall be valid for 60 days from the date the gas utility receives the customer's request, the physician's statement, and the deferred payment plan unless a shorter period is agreed upon by the gas utility and the customer or physician.

(h) Disconnection due to gas utility abandonment. No gas utility shall abandon a customer or a service area without written notice to its customers and approval from the Commission, pursuant to §7.465 of this title (relating to Abandonment).

(i) Disconnection of energy assistance clients. No gas utility shall terminate gas utility service to a delinquent customer for a billing period in which the gas utility receives a written pledge, letter of intent, purchase order, or other written notification from an energy assistance provider that the energy assistance provider is forwarding sufficient payment to continue service.

(j) Disconnection during extreme weather. No gas utility shall disconnect a customer within its service territory during an extreme weather emergency pursuant to §7.460 of this title (relating to Suspension of Gas Utility Service Disconnection During an Extreme Weather Emergency).

§7.470.Meters.

(a) Meter requirements. Each gas utility and each gas utility customer shall comply with the requirements of this section.

(1) Each gas utility shall charge for all gas the gas utility sells to its customers based on meter measurements, except where otherwise provided for by applicable law or tariff.

(2) Unless otherwise authorized by the regulatory authority, each gas utility shall provide, install, own, and maintain all meters necessary for measurement of gas delivered to its customers.

(3) No gas utility shall furnish, install, or put in use any meter that is not reliable and of a standard type that meets generally accepted industry standards, except that a gas utility may use special meters not conforming to such standard types for investigation, testing, or experimental purposes.

(b) Meter records. Each gas utility shall keep the following meter equipment, meter test, and meter reading records:

(1) Each gas utility shall keep a record of every meter that shows the customer's address and the date of the most recent test. For special meters used for investigation or experimental purposes, the record shall include a statement of the purpose of the investigation or experiment.

(2) Each gas utility shall properly record each meter test. The gas utility shall include in the record of each test made at the request of a customer:

(A) the identifying number and constants of the meter;

(B) the standard meter and other measuring devices used;

(C) the date and kind of test made, and by whom;

(D) the error (or percentage of accuracy) at each load tested; and

(E) sufficient data to permit independent verification of all calculations.

(3) Each gas utility shall ensure that each customer's meter indicates clearly the number of units of service for which the gas utility charges the customer.

(A) Each gas utility shall read customers' service meters at monthly intervals, and as nearly as possible on the corresponding day of each meter reading period; however, the gas utility may read meters at other than monthly intervals if the circumstances warrant pursuant to §7.425(j) of this title (relating to Issuance and Format of Natural Gas Bills).

(B) If a gas utility has a customer-read program in which customers read their own meters and report their usage monthly, the gas utility shall consider such readings to be the equivalent of actual meter readings by the gas utility for billing purposes. However, a gas utility shall read the meters of customers on a customer-read program at least once every 12 months to verify the accuracy of the meter.

(4) Upon a customer's request, a gas utility shall inform the customer of the method of reading meters.

(5) Meter test on request of customer.

(A) Each gas utility shall upon the request of a customer test the accuracy of the meter serving that customer.

(B) The gas utility shall inform the customer of the time and place of the test and permit the customer or customer's authorized representative to be present if the customer so desires. The gas utility should conduct the meter test on the customer's premises, but at the gas utility's discretion, the test may be conducted at a test laboratory.

(C) If the gas utility has not performed a meter test within the previous four years for the same customer at the same location, the gas utility shall perform the test without charge.

(D) If the gas utility has performed a meter test for the same customer at the same location within the previous four years, the gas utility is entitled to charge a fee for the test, provided that the fee is specified in the gas utility's tariff properly on file with the regulatory authority.

(E) The gas utility shall promptly inform the customer in writing of the result of any test on a meter that serves the customer, and the name of the testing company.

(6) Adjustments due to meter errors.

(A) If a gas utility finds that a tested meter is more than nominally defective, to either the customer's or the gas utility's disadvantage, the gas utility shall refund any fee charged for the meter test to the customer.

(B) In this chapter, "more than nominally defective" shall mean a deviation of more than 2% from accurate registration.

(c) Meter tampering.

(1) In this chapter, "meter tampering" shall mean interference with the normal operation of a gas utility's meter or equipment by physically disorienting the meter, attaching objects to the meter, inserting objects into the meter, or other means of causing or attempting to cause the meter to record less gas than is being delivered through the meter. "Bypass" or "diversion" shall mean attaching objects to the gas utility's meter or equipment or performing any other act to cause gas delivered to a location not to go through the meter before being consumed.

(2) The gas utility shall have the burden of proving meter tampering, bypass, or diversion. The gas utility may use photographs or other reliable and credible evidence; however, when the gas utility initiates any action against a customer on the basis of alleged meter tampering, the gas utility shall provide a sworn affidavit to accompany any other evidence the gas utility may offer. The gas utility may use a court finding of meter tampering instead of photographs or other evidence.

§7.475.Gas Utility Obligations Regarding Customer Deposits.

(a) Gas utility deposit policies. Each gas utility shall develop policies regarding interest on customer deposits, records of customer deposits, and refunds of customer deposits that comply with the requirements of this section.

(b) Interest on deposits.

(1) Each gas utility that requires its customers to pay a deposit shall pay interest on the deposit according to the rate established under and for the period of time prescribed by Texas Utilities Code, Chapter 183. If the gas utility refunds a deposit within 30 days of receiving it, the gas utility shall not be required to pay interest on that deposit. If the gas utility retains a deposit for 30 days or longer, the gas utility shall pay interest on the deposit from the date the customer makes the deposit.

(2) The gas utility shall credit interest to the customer's billing account annually or at the time the deposit is returned or credited to the customer's billing account.

(3) The deposit shall cease to draw interest on the date the gas utility either refunds the deposit or credits it to the customer's account.

(c) Records of deposits. Each gas utility shall:

(1) keep records to show the name and address of each depositor, the amount and date of the deposit, and each transaction concerning the deposit;

(2) issue a receipt of deposit to each applicant from whom a deposit is received and shall provide means for a depositor to establish a claim to the deposit if the receipt is lost;

(3) maintain a record of each unclaimed deposit for at least four years, during which time the gas utility shall make reasonable efforts to return the deposit to the depositor; and

(4) in the event a deposit remains unclaimed after four years, forward the deposit to the Office of the Comptroller of Public Accounts in compliance with applicable law.

(d) Refund of deposit and canceling letters of guarantee. Each gas utility shall promptly and automatically refund the deposit plus accrued interest to the customer in the form of cash or credit to a customer's account, or cancel and return the guarantee or provide written documentation that the contract has been canceled if:

(1) new service is not initiated or service has been disconnected. The transfer of service from one location to another within the service area of the gas utility shall not be deemed a disconnection within the meaning of these rules, and a gas utility shall not demand any additional deposit unless otherwise permitted by this subchapter;

(2) the customer has paid bills for service for 12 consecutive months without having service disconnected for nonpayment; and the customer has not had more than two occasions in which a bill was delinquent; and the customer is not delinquent in the payment of the current bill.

(e) Customer deposit list when gas utility is sold or transferred. Upon the sale or transfer of any gas utility or any operating unit of a gas utility in this State, the selling or transferring gas utility shall transfer to the gas utility's legal successor all records of customer deposits and all transactions concerning each customer's deposit. In addition, the selling or transferring gas utility shall notify the regulatory authority of the sale or transfer of gas utility property, and shall state whether customers' deposits were returned to the depositors or whether the legal successor accepted transfer of the deposits.

§7.480.Reliability and Continuity of Service.

(a) Service interruptions.

(1) Each gas utility shall make all reasonable efforts to prevent interruptions of service. When interruptions occur, the gas utility shall re-establish service within the shortest possible time consistent with prudent operating principles so that the smallest number of customers is affected.

(2) Each gas utility shall make reasonable provisions to meet emergencies resulting from failure of service, and each gas utility shall issue instructions to its employees covering procedures to be followed in the event of an emergency in order to prevent or mitigate interruption or impairment of service.

(3) In the event that a national emergency or local disaster disrupts normal service, the gas utility may, in the public interest, interrupt service to other customers to provide necessary service to civil defense or other emergency service agencies on a temporary basis until normal service to all customers can be restored.

(b) Current maps of facilities required. Each gas utility shall maintain a current set of maps showing the physical location of all service facilities. The gas utility shall label all distribution facilities on the maps to indicate the size or material of the piping or any other information that will accurately describe the gas utility's facilities. Each gas utility shall keep these maps and any other maps that the regulatory authority may require in a central location and shall make them available for inspection by the regulatory authority during normal working hours.

(c) Record of interruption. Each gas utility shall keep a complete record of every interruption, both emergency and scheduled, other than momentary interruptions that do not cause a major disruption of service. The gas utility shall state for each interruption the date, time duration, location, approximate number of customers affected, and, for emergency interruptions, the remedial action and the steps the gas utility has taken to prevent recurrence.

(d) Report to Commission. Each gas utility shall notify the Commission within 48 hours of any interruption in service that affects either the entire system or a major division and lasts more than four hours. The gas utility may report either telephonically at (512) 463-6788 or electronically at www.rrc.state.tx.us. The gas utility shall also notify the Commission of the cause of any such interruption. If a gas utility reports a service interruption to the Commission in a standard report (for example, in a curtailment report or a safety report), the standard report is sufficient to comply with the terms of this subsection.

(e) Abandonment of customer. No gas utility shall abandon a customer without prior written approval from the regulatory authority pursuant to §7.465 of this title (relating to Abandonment).

§7.485.Complaints.

(a) General information. The Commission encourages customers located in an environs area to file any complaints in writing through the Commission's web site at www.rrc.state.tx.us, or mailed to the Commission at its mailing address: Railroad Commission of Texas, Gas Services Division, P.O. Box 12967, Austin, Texas 78711-2967. Each July, each gas utility shall file electronically with the Commission a list of contacts in every municipality in which the gas utility serves to whom customers within the municipality may address complaints about the gas utility. The Commission will make the municipal contact information available through its web site. A customer or applicant may also file a complaint in person, by correspondence, or by telephone with the gas utility, municipality, or the Commission. The Commission's telephone number is (512) 463-7164.

(b) Customer complaints. On receipt of a complaint by a customer, a gas utility shall promptly investigate and advise the complainant of the results.

(c) Complaint from regulatory authority. On receipt of a complaint from a regulatory authority on behalf of a customer, the gas utility shall promptly investigate and advise the regulatory authority and complainant of the results.

(d) Response by gas utility. All response deadlines in this section shall run from the date the gas utility receives a complaint from either a customer or a regulatory authority. The gas utility shall make an initial response no later than the next working day. The gas utility shall make a preliminary response within 15 days and a complete, final response within 30 days. The gas utility shall provide its preliminary and final responses to the customer and, if a regulatory authority filed the complaint, to the regulatory authority.

(e) Complaint records. Each gas utility shall keep a record of every complaint showing the name and address of the complainant, the date and nature of the complaint, and the disposition of the complaint. The gas utility shall maintain each complaint record for a period of two years from the date of the final disposition of the complaint. No later than the fifth working day of each month, each gas utility shall file with the Commission a summary, by type, of all complaints the gas utility received in the previous month.

(f) Customer dissatisfaction. If a customer is not satisfied with a gas utility's disposition of a complaint, the customer has the right to file a complaint with the regulatory authority. Each gas utility shall require its personnel who are engaged in initial contact with an applicant or customer seeking to establish or reestablish credit under the provisions of these rules to inform the customer of this right and to provide customers with the name and address of the regulatory authority having jurisdiction of the matter.

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

Filed with the Office of the Secretary of State on June 4, 2002.

TRD-200203455

Mary Ross McDonald

Deputy General Counsel

Railroad Commission of Texas

Earliest possible date of adoption: July 21, 2002

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

Chapter 26. SUBSTANTIVE RULES APPLICABLE TO TELECOMMUNICATIONS SERVICE PROVIDERS

Subchapter B. CUSTOMER SERVICE AND PROTECTION

16 TAC §26.25

The Public Utility Commission of Texas (commission) proposes an amendment to §26.25, relating to Issuance and Format of Bills. The proposed amendment will implement Senate Bill 1659 (SB 1659), 77th Legislature, Public Utilities Regulatory Act (PURA) §55.016, which requires the establishment of an annual review of telecommunications companies' billing format changes. Project Number 24524 is assigned to this proceeding.

Janis Ervin, Senior Telecommunications Analyst, Telecommunications Division, has determined that for each year of the first five-year period the proposed section is in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the section.

Ms. Ervin has determined that for each year of the first five years the proposed section is in effect the public benefit anticipated as a result of enforcing the section will be a timely review of telecommunications utilities' billing statements for compliance with required standards. This amendment will require certificated telecommunications utilities (CTUs) to provide consumers with brief, clear, non-misleading language describing the contents of telephone bills and increasing the clarity for consumers while reducing instances of slamming and cramming. There will be no adverse economic effect on small businesses or micro-businesses as a result of enforcing this section. There is no anticipated economic cost to persons who are required to comply with the section as proposed.

Janis Ervin has also determined that for each year of the first five years the proposed section is in effect there should be no effect on a local economy, and therefore no local employment impact statement is required under Administrative Procedure Act 2001.022.

Comments on the proposed amendment (16 copies) may be submitted to the Filing Clerk, Public Utility Commission of Texas, 1701 North Congress Avenue, P.O. Box 13326, Austin, Texas 78711-3326, within 30 days after publication. Reply comments may be submitted within 45 days after publication. Comments should be organized in a manner consistent with the organization of the proposed amendment. The commission invites specific comments regarding the costs associated with, and benefits that will be gained by, implementation of the proposed section. The commission will consider the costs and benefits in deciding whether to adopt the section. The commission requests that comments be limited to no more than 15 pages. All comments should refer to Project Number 24524.

This amendment is proposed under the Public Utility Regulatory Act, Texas Utilities Code Annotated §14.001 and §14.002 (Vernon 1998, Supplement 2002) (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; and specifically, PURA §55.016 which requires the commission to revise the procedure for evaluation of telecommunications utilities' billing statements.

Cross Reference to Statutes: Public Utility Regulatory Act §§14.001, 14.002, and 55.016.

§26.25.Issuance and Format of Bills.

(a) Application. The provisions of this section apply to residential-customer bills issued by all certificated telecommunications utilities (CTUs). [ CTUs shall comply with the changes required by this section within six months of the effective date of the section. ]

(b) Purpose. The purpose of this section is to specify the information that should be included in [ a user-friendly, simplified format for ]residential customer bills that include charges for local exchange telephone service.

(c) (No change.)

(d) Billing information.

(1) All residential customers shall receive their bills via the United States mail, or other mail service, unless the customer agrees with the CTU to receive a bill through different means, such as electronically via the Internet.

(2) Customer billing sent through the United States mail , or other mail service, shall be sent in an envelope or by any other method that ensures the confidentiality of the customer's telephone number and/or account number.

(3) (No change.)

(e) Bill content requirements. The following requirements apply to bills sent via the U.S. mail , or other mail service . Bills rendered via the Internet shall provide the information specified in this subsection in a readily discernible manner.

(1) The first page of each residential customer's bill containing charges for local exchange telephone service shall include the following information, clearly and conspicuously displayed:

(A) - (B) (No change.)

(C) a notification of any change in the identity of a service provider[ , including the identity of the new service provider and notification to the customer that a new provider has begun providing service ]. The notification should describe the nature of the relationship with the customer, including the description of whether the new service provider is the presubscribed local exchange or interexchange carrier. For purposes of this subparagraph, "new service provider" means a service provider that did not bill the customer for services during the service provider's last billing cycle. This definition shall include only providers that have continuing relationships with the customer that will result in periodic charges on the customer's bill, unless the service is subsequently canceled. This notification may be accomplished with a sentence that directs the customers to details of this change located elsewhere on the bill.

(D) (No change.)

[(2) Each residential customer's bill shall include the following information, clearly and conspicuously displayed, on the first page or in a subsequent section dealing with local exchange telephone service:]

[(A) the total amount being charged for basic local telecommunications service, including any charges for mandatory extended/expanded calling scope services and, consistent with paragraph (8) of this subsection, any applicable fees or surcharges authorized by a governmental or regulatory entity; ]

[(B) the service description and total amount being charged for any optional local services provided by the billing CTU, including charges for any optional extended/expanded calling scope services and, consistent with paragraph (8) of this subsection, any applicable fees or surcharges authorized by a governmental or regulatory entity; and]

[(C) the total amount being charged for taxes related to subparagraphs (A) and (B) of this paragraph.]

(2) [ (3) ] Each residential customer's bill [ also ] shall include the following information in a manner that provides customers sufficient information to understand the basis and source of the charges in the bill [ , clearly and conspicuously displayed ]:

(A) the service descriptions and charges for local service provided by the billing CTU;

(B) [ (A) ] the service descriptions and charges[ , including any applicable fees or surcharges authorized by a governmental or regulatory entity, ] for non-local services provided by the billing CTU ; [ . In addition, the charges for such non-local services may be displayed as a subtotal in a manner that is consistent with paragraph (8) of this subsection; ]

(C) [ (B) ] the service description, service provider's name, and charges[ , including any applicable fees or surcharges authorized by a governmental or regulatory entity, ] for any services provided by parties other than the billing CTU, with a separate line for each different provider[ . In addition, the charges for services provided by other parties may be displayed as a subtotal or subtotals in a manner that is consistent with paragraph (8) of this subsection ];

(D) [ (C) ] applicable taxes , fees and surcharges [ associated with the charges required by subparagraphs (A) and (B) of this paragraph, stated separately or as a combined charge if such combination is stated ];

(E) [ (D) ] the billing period or billing end date; and

(F) [ (E) ] an identification of those charges for which non- payment will not result in disconnection of basic local telecommunications service, along with an explicit statement that failure to pay these charges will not result in the loss of basic local service; or an identification of those charges that must be paid to retain basic local telecommunications service, along with an explicit statement that failure to pay these charges will result in the loss of basic local service.

(3) [ (4) ] Charges must be accompanied by a brief, clear, non- misleading, plain-language description of the service being rendered. The description must be sufficiently clear in presentation and specific enough in content to enable customers to accurately assess the services for which they are being billed. Additionally, explanations shall be provided for any non-obvious abbreviations, symbols, or acronyms used to identify specific charges.

(4) [ (5) ] Charges for bundled-service packages that include basic local telecommunications service are not required to be separately stated. [ separated pursuant to paragraph (2)(A)-(B) of this subsection; however, ] However a brief, clear, non-misleading, plain- language description of the services included in a bundled-service package is required to be provided either in the description or as a footnote.

[(6) Non-recurring local charges, such as service-installation charges and per-use charges, may be included in the totals required by paragraph (2)(A)-(B) of this subsection; alternatively, such charges may be displayed as a separate category(ies) in the section dealing with local exchange telephone service. If the totals required by paragraph (2)(A)-(B) of this subsection include such charges, the CTU shall so state and identify the charges in a more detailed itemization elsewhere in the section dealing with local exchange telephone service.]

(5) [ (7) ] Each customer's bill shall include specific per-call detail for time-sensitive charges, itemized by service provider and by telephone or account number (if the customer's bill is for more than one such number). Each customer's bill shall include the rate and specific number of billing occurrences for per-use services, itemized by service provider and by telephone or account number. Additionally, time-sensitive charges and per-use charges may be displayed as subtotals in summary sections of the bill.

(6) [ (8) Flat monthly fees or surcharges, including the 911 service fee, the Federal Communications Commission's subscriber-line charge, and the number-portability charge, related to governmental or regulatory actions shall be included in the amount for basic local telecommunications service described in paragraph (2)(A) of this subsection; the portion of the Texas Universal Service Fund (TUSF) assessment and other percentage-of- revenue-based assessments related to local exchange telephone service may be included in the amount for basic local telecommunications service or may be allocated to basic local telecommunications services and optional local services on a proportionate basis. The portion of the TUSF assessment and other percentage-of-revenue-based assessments related to non-local services shall not be included in either subtotal for local service. Each subtotal for local service, and any subtotal for non-local services, must clearly indicate by an asterisk, footnote, or other conspicuous statement any such assessments included in the subtotal. Similarly, if ] If federal law or regulation requires that a charge be separately stated, using standardized labels, that requirement may be satisfied by use of an asterisk or footnote reference, or other conspicuous statement. If the specific amount of each assessment is not shown on the bill, the CTU must clearly indicate on the bill a toll-free method, including a toll-free telephone number, by which the customer may obtain information regarding such amount and its method of calculation.

(7) [ (9) ] Bills shall provide a toll-free number that a customer can call to resolve disputes and obtain information from the CTU. If the CTU is billing the customer for any services from another service provider, the bill shall identify the name of the service provider and provide a toll-free number that the customer can call to resolve disputes or obtain information from that service provider.

(f) Compliance review of bill formats [ bills ]. A CTU shall file for review a copy of any portion of its bill format that has not previously been reviewed and approved by the commission pursuant to this section. The CTU will be advised if the format does or does not comply with the requirements of this section. Two alternative projects will be established for such reviews. CTUs may submit new or altered bill formats in either of these projects as follows: [ Within 45 days of the effective date of this section, CTUs may seek review from the commission of sample bills that are intended to comply with the requirements of this section. ]

(1) Expedited review. The commission staff shall establish a project for expedited reviews. CTUs may submit proposed new bills or bill format changes prior to implementation in the expedited review project. A notice of sufficiency or a notice of deficiency will be issued to the CTU within 15 business days. The CTU may appeal a notice of deficiency by requesting its submission be docketed for further review or may respond with a revised submission that corrects the deficiency within ten business days of the deficiency notice. The CTU's revised submission will be reviewed and either a notice of sufficiency or a notice of deficiency will be issued within 15 business days. This process will be repeated until the CTU's submission has received a notice of sufficiency or the CTU has requested that its submission be docketed as a contested case. A contested case may also be requested by commission staff to resolve disputes regarding the CTU's submission.

(2) Annual review. The commission staff shall establish a project for annual reviews. CTUs may choose to file bill format changes in the annual review project. If the CTU's bill format change has already been approved pursuant to paragraph (1) of this subsection, the CTU does not need to file the same changes under the annual review process. Submissions for annual review must be made between September 1st and October 1st each year. All submissions shall be responded to with a notice of sufficiency or deficiency issued no later than November 15th of that year. A CTU may appeal a notice of deficiency by requesting its submission be docketed for further review or may respond with a revised submission that corrects the deficiency within ten business days of the deficiency notice. Revised submissions will be reviewed within 15 business days and a new notice of either sufficiency or deficiency will be issued. This process will be repeated until the CTU's submission has received a notice of sufficiency or the CTU has requested that its submission be docketed as a contested case. A contested case may also be requested by commission staff to resolve disputes regarding the CTU's submission.

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

Filed with the Office of the Secretary of State on June 7, 2002.

TRD-200203548

Rhonda Dempsey

Rules Coordinator

Public Utility Commission of Texas

Earliest possible date of adoption: July 21, 2002

For further information, please call: (512) 936-7306

Chapter 37. LEGAL

Subchapter B. PENALTIES

16 TAC §37.60

The Texas Alcoholic Beverage Commission proposes amendments to §37.60 relating to the guidelines for imposition of administrative sanctions against alcoholic beverage licensees and permittees. The amendments are proposed in part to conform the list of described violations with the relevant portions of the Alcoholic Beverage Code, and in part to more closely harmonize the sanctions stated in the rule with the gravity of the related violation.

Lou Bright, General Counsel, has determined that, for the first five year period the proposed amendments are in effect there will be no fiscal impact on units of state or local government as a result of enforcing the rule as amended. This rule governs the imposition of sanctions against alcoholic beverage licensees and permittees, many of whom are small businesses. The proposed amendments will therefore have some fiscal impact on the operation of small businesses. The amount of that impact is not amenable to calculation as it will vary widely from one establishment to another.

Comments should be addressed to Lou Bright, General Counsel, P. O. Box 13127, Austin, Texas 78711.

The amendments are proposed under the authority of Alcoholic Beverage Code §5.31 which provides the commission with the authority to prescribe and publish rules necessary to carry out the provisions of the Alcoholic Beverage Code.

Cross Reference: Section 11.64 of the Alcoholic Beverage Code is affected by these amendments.

§37.60.Standard Penalty Chart.

(a) Agents, compliance officers or other specifically designated commission personnel may offer settlements to persons charged with violating the provisions of the Alcoholic Beverage Code or rules of the commission. Settlement of those cases, unless otherwise provided for elsewhere in this rule, shall be in compliance with the following standard penalty chart.

Figure: 16 TAC §37.60(a)

(b) Each suspension of a permit or license shall run for consecutive days. An alcoholic beverage licensee or permittee penalized by the commission may pay a civil penalty in lieu of a suspension as provided by Alcoholic Beverage Code, §11.64, but no licensee or permittee may pay a civil penalty in lieu of a fraction of its suspension. In other words, any penalty assessed must be either a suspension or a civil penalty, but not a combination of both.

(c) A repeat violation by a licensee or permittee justifies the penalty for a second or third violation if it is a health, safety and welfare violation and occurs within 36 months of the first violation and if it is a major regulatory violation within 24 months of the first violation.

(d) A penalty for an alleged repeat violation shall not be assessed unless the alleged violation occurs after the permittee or licensee, as those terms are defined in the Texas Alcoholic Beverage Code, §1.04(11), has been notified, in writing, of the first alleged violation. Notwithstanding the preceding sentence, if an alleged violation is discovered during an undercover operation, then no notice of any prior alleged violations may be necessary to assess a penalty for a repeat violation. The requirement that written notice be given to a permittee or licensee shall not be interpreted to require that a notice of hearing for the violation be delivered to the permittee or licensee.

(e) The list of violations in the standard penalty chart is not an exclusive list of violations of the Texas Alcoholic Beverage Code or rules of the commission. The administrator or his designee is authorized to assess penalties for any violation of any of the foregoing statutes or rules for which a penalty is not provided on the chart. Any penalty assessed for a violation not provided for on the standard penalty chart shall be approved by either the chief of enforcement or the director of compliance and licensing prior to its assessment.

(f) Any person responsible for assessing a penalty for a violation may deviate from the standard penalty chart if aggravating or mitigating circumstances are involved. If a recommendation deviating from the standard penalty chart is made, it must be made in writing and be filed with the case report. Final approval shall be made by the administrator or his designee.

(g) The standard penalty chart does not bind a hearing examiner, the administrator, or his designee as to penalties for any violation determined to have occurred by the facts presented in an administrative hearing and the record of that proceeding shall be the determining factor as to the sufficiency of the penalty assessed.

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

Filed with the Office of the Secretary of State on June 6, 2002.

TRD-200203508

Rolando Garza

Administrator

Texas Alcoholic Beverage Commission

Earliest possible date of adoption: July 21, 2002

For further information, please call: (512) 206-3204