Part 1. RAILROAD COMMISSION OF TEXAS

Chapter 3. OIL AND GAS DIVISION

The Railroad Commission of Texas (Commission) proposes the repeal of §3.68 (commonly called Statewide Rule 73), relating to Pipeline Connection; Cancellation of Certificate of Compliance; Severance, and proposes new §3.73 with the same title. The Commission proposes the repeal and new section in order to have the commonly-used Statewide Rule number match with the Texas Administrative Code section number. In addition, the Commission proposes some changes to the wording in the new rule to clarify Commission intent and to establish requirements and a procedure for the cessation of pipeline services from wells or leases when the pipeline operator is unable to obtain the written consent for cessation from the well or lease operator.

The Commission proposes to delete the last sentence from existing §3.68(a), move it to stand alone in new §3.73(b), and modify the sentence to state that except as otherwise provided in this section, no pipeline operator shall physically disconnect its facilities from or cease providing pipeline services to any well or lease without obtaining either prior written permission from the Commission or prior written consent of the well or lease operator. The Commission proposes to add a new last sentence to §3.73(a) which states that for purposes of this section, the term "Commission" means the Railroad Commission of Texas, the Director of the Oil and Gas Division or the Director's delegate.

The Commission proposes to move the current provisions of §3.68(b) to proposed new §3.73(d), with grammatical and syntax changes for consistency with modern usage.

The Commission proposes to add new provisions in §3.73(c) which describe the process a pipeline operator must follow to either physically disconnect from or cease providing service to a well or lease when the well or lease operator does not consent to the disconnection or termination of service. The Commission proposes to move the current provisions of §3.68(c) to proposed new §3.73(e), and change the word "remedy" to "correct."

The Commission proposes new §3.73(c) to provide that if the pipeline operator is unable to obtain the written consent of the well or lease operator to physically disconnect from or cease providing service to the well or lease, the pipeline operator may file an application with the Commission requesting permission to physically disconnect its facilities from or cease providing service to the well or lease. The process established in this rule is intended to apply to circumstances in which the pipeline operator desires a permanent cessation of service, whether by physical disconnection or otherwise, and does not have the consent of the well or lease operator. The process established in this rule is not intended to apply to temporary suspension of service that is either authorized by other rules in this title or attributable to maintenance, safety or quality control issues.

The Commission proposes new §3.73(c)(1) to provide that the pipeline operator must file its application with the Commission at least 30 days before the date on which the pipeline operator wants to disconnect its facilities or cease providing service. The pipeline operator must also send a copy of the application to the operator of the well or lease affected by the application by certified mail, return receipt requested, on the same date as the pipeline operator files its application with the Commission.

The Commission proposes new §3.73(c)(2) which provides that if the operator of the well or lease does not object to the application in writing within 14 days following the filing of the application, the Commission may administratively approve or deny the application. The Commission will notify the pipeline operator and the well or lease operator of the decision and advise that both parties have 14 days following the date of the notice of administrative approval or denial to file a request for hearing. If neither party files a timely request for hearing, the administrative approval or denial is final.

The Commission proposes new §3.73(c)(3) which provides that if either party files a timely request for hearing, the Commission will refer the application to the Commission's docket services section to be set for hearing within 60 days.

The Commission proposes new §3.73(c)(4) to notify the public of subject matter that is important to the Commission when deciding issues contested under this section. Different circumstances may call for some factors to be more important in some cases and less important in other cases; and some cases may raise factors not enumerated in proposed §3.73(c)(4). Accordingly, the proposed subsection states that in determining whether or not to approve a request to physically disconnect from or cease serving a well or lease, the Commission may consider the following factors, including but not limited to: operational integrity of the pipeline facilities, operational integrity of the equipment on the well or lease, cost of continued operation of the physical connection, risk to human health and the environment, availability of alternative transportation, protection of correlative rights, and prevention of waste.

The Commission proposes to retain, with minor grammatical and syntax changes, the text in current §3.68(b), re-designated as §3.73(d); current §3.68(c) re-designated as §3.73(e); current §3.68(d) re-designated as §3.73(f); current §3.68(e) re-designated as §3.73(g); current §3.68(f) re- designated as §3.73(h); current §3.68(g) re-designated as §3.73(i); and current §3.68(h) re-designated as §3.73(j). In these subsections, the Commission has proposed minor wording changes to correct the references to Commission statutes, rules, permits and orders, and other non-substantive clarifications. For example, a sentence is added to proposed new subsections 3.73(h) and (i) explicitly advising operators of potential statutory penalties pursuant to Texas Natural Resources Code, §85.3855, for producing or transporting oil or gas from a well or facility capped or sealed by the Commission in violation of Texas Natural Resources Code, §85.165 or §85.166. This proposal does not create or change the Commission's statutory authority to impose a penalty for such violations because that authority exists by statute, whether it is mentioned in the rule or not. However, the Commission has determined that direct reference to such potential penalties in the rule itself is the most effective method of clearly advising operators and the public of potential consequences for producing or transporting oil or gas from a well or facility capped or sealed by the Commission.

Leslie Savage, Oil and Gas Division planner, has determined that for each year of the first five years the repeal and new section will be in effect, there will be some minimal fiscal implications to state government as a result of enforcing or administering the repeal and new section. The minimal fiscal implications may result from additional administrative hearings that may be requested as specified in the new rule. However, the Commission's hearing process is already established and available to resolve issues such as those described in the proposal, so the proposed new rule is not expected to cause significant fiscal impact to state government. In addition, some Commission staff time will be necessary to evaluate applications for termination of pipeline services, but this time will be balanced by the time Commission staff will save in having a clearly defined process for handling disagreements between pipeline operators and well and lease operators concerning cessation of pipeline services. There are no fiscal implications for local governments.

The cost of compliance with the proposed repeal and new section for the individual, small business, or micro-business operator will vary according to the number of applications for cessation filed each year, but the Commission does not find that the repeal and new section will result in any additional cost, primarily because persons who must comply with the rule have always been subject to a similar process, potentially culminating in a Commission hearing, when faced with oilfield pipeline service issues.

David Cooney, Assistant Director, Environmental Section, Office of General Counsel, has determined that for each year of the first five years that the repeal and new section will be in effect, there will be a public benefit in that the process for handling pipeline disconnection issues will be clarified by clearer regulations.

Comments on the proposal may be submitted to Rules Coordinator, Office of General Counsel, Railroad Commission of Texas, P.O. Box 12967, Austin, Texas 78711-2967; online at www.rrc.state.tx.us/rules/commentform.html; or by electronic mail to rulescoordinator@rrc.state.tx.us, and should refer to Oil and Gas Docket No. 20-0234023. The Commission will accept comments for 60 days after publication in the Texas Register . The Commission encourages all interested persons to submit comments no later than the deadline. The Commission cannot guarantee that comments submitted after the deadline will be considered. For further information, call Mr. Cooney at (512) 463-6977. The status of Commission rulemakings in progress is available at www.rrc.state.tx.us/rules/proposed.html.

The Commission proposes the repeal of §3.68 and new §3.73 pursuant to Texas Natural Resources Code, §§81.051 and 81.052, which provide the Commission with jurisdiction over all persons owning or engaged in drilling or operating oil or gas wells and persons owning or operating pipelines in Texas and the authority to adopt all necessary rules for governing and regulating persons and their operations under Commission jurisdiction; pursuant to Texas Natural Resources Code §§85.042, 85.202, 86.041 and 86.042, which require the Commission to adopt rules to control waste of oil and gas; and pursuant to Texas Natural Resources Code §§85.165, 85.166, and 85.3855 which prohibit production and transport of oil and gas from an oil well, gas well, oil and gas well, or other associated oil or gas gathering equipment on which the Commission has placed a cap, seal or other device indicating the Commission has shut in the facility.

16 TAC §3.68

(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.)

Statutory authority: Texas Natural Resources Code, §§81.051, 81.052, 85.042, 85.165, 85.166, 85.3855, 85.202, 86.041, and 86.042.

Cross-reference to statute: Texas Natural Resources Code, §§81.051, 81.052, 85.042, 85.165, 85.166, 85.3855, 85.202, 86.041, and 86.042.

Issued in Austin, Texas, on March 25, 2003.

§3.68.Pipeline Connection; Cancellation of Certificate of Compliance; Severance.

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 March 25, 2003.

TRD-200302008

Mary Ross McDonald

Deputy General Counsel

Railroad Commission of Texas

Earliest possible date of adoption: May 11, 2003

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

16 TAC §3.73

Statutory authority: Texas Natural Resources Code, §§81.051, 81.052, 85.042, 85.165, 85.166, 85.3855, 85.202, 86.041, and 86.042.

Cross-reference to statute: Texas Natural Resources Code, §§81.051, 81.052, 85.042, 85.165, 85.166, 85.3855, 85.202, 86.041, and 86.042.

Issued in Austin, Texas, on March 25, 2003.

§3.73.Pipeline Connection; Cancellation of Certificate of Compliance; Severance.

(a) No pipeline shall be connected with any oil, gas, or geothermal resources well until the operator of the well provides the pipeline operator with a certificate from the Commission that the rules in this title have been complied with. This section shall not prevent a temporary connection with any well in order to take care of production and prevent waste until the operator has a reasonable time, not to exceed 30 days from the date of such connection, within which to obtain such certificate. For purposes of this section, the term "Commission" means the Railroad Commission of Texas, the Director of the Oil and Gas Division, or the Director's delegate.

(b) Except as otherwise provided in this section, no pipeline operator shall physically disconnect its facilities from or cease providing pipeline services to any well or lease without obtaining either:

(1) prior written permission from the Commission; or

(2) prior written consent of the well or lease operator.

(c) If the pipeline operator is unable to obtain the written consent of the well or lease operator to physically disconnect from or cease providing service to the well or lease, the pipeline operator may file an application with the Commission requesting permission to physically disconnect its facilities from or cease providing service to the well or lease.

(1) The pipeline operator shall file its application with the Commission at least 30 days prior to the date on which the pipeline operator desires to make the physical disconnection or cease providing service. On the same date as the pipeline operator files its application with the Commission, the pipeline operator shall send a copy of the application to the operator of the well or lease affected by the application by certified mail, return receipt requested.

(2) If the operator of the well or lease does not file with the Commission a written objection to the application within 14 days following the filing of the application, the Commission shall administratively approve or deny the application and shall notify the pipeline operator and the well or lease operator of the decision. Following such notification, either party shall have 14 days to file a written request for hearing. If neither party files a timely request for hearing, the administrative approval or denial shall be deemed final.

(3) If either party files a timely request for hearing, the Commission shall refer the application to the Commission's Docket Services Section to be set for hearing within 60 days following the date of referral.

(4) In determining whether or not to approve a request to physically disconnect from or cease providing service to a well or lease, the Commission may consider relevant factors, including but not limited to:

(A) operational integrity of the pipeline facilities;

(B) operational integrity of the equipment on the well or lease;

(C) cost of continued operation of the physical connection or service;

(D) risk to human health and the environment;

(E) availability of alternative transportation;

(F) protection of correlative rights; and

(G) prevention of waste.

(d) The Commission may shut in and seal any well, and cancel any certificate of compliance if it appears that the operator of a well has violated or is violating, in connection with the operation of the well, any statutes, rules in this title, permits, or orders of the Commission. Upon receipt of information that indicates operations are being conducted in violation of statutes, rules in this title, or a Commission permit or order, the Commission shall send a notice letter to the operator directing the operator to correct the violation. The letter shall state the facts or conduct alleged to warrant the shut-in and sealing of the well, and cancellation of the certificate of compliance. The letter shall give the operator an opportunity to show compliance with the statutes, rules in this title, or Commission permits or orders. The letter shall be sent by registered or certified mail, and shall indicate the time within which compliance shall be demonstrated or achieved. The time period allowed for the operator to achieve compliance shall not be less than 10 days from the date the notice letter is sent.

(e) Within the time period set out in the notice letter, the operator shall either demonstrate compliance or correct the violation, and notify the Commission of its action.

(f) If the violation is not corrected within the time period set out in the notice letter, the Commission may shut in and seal the well, and cancel the certificate of compliance.

(g) If a certificate of compliance has been cancelled, the Commission may not issue a new certificate of compliance until the owner or operator of the property covered by the certificate of compliance submits to the Commission a reissuance fee as required by §3.78 of this title (relating to Fees, Performance Bonds and Alternate Forms of Financial Security Required To Be Filed) (Statewide Rule 78); and

(1) the property covered by the certificate is brought into compliance with the statutes, rules in this title, and Commission permits and orders; or

(2) the Commission determines that there are just and equitable grounds for reissuing the certificate.

(h) Pursuant to Texas Natural Resources Code, §85.165, upon notice from the Commission to any operator of a pipeline or other carrier connected to any oil, gas, or geothermal resource well that the certificate of compliance applicable to the well has been cancelled by the Commission, the operator of the pipeline or other carrier shall disconnect from or suspend service to the well and shall not transport any oil or gas produced from that well until a new certificate of compliance has been issued by the Commission. Pursuant to Texas Natural Resources Code, §85.3855, failure to comply with this subsection may subject a person to a penalty of up to $10,000 per violation.

(i) Pursuant to Texas Natural Resources Code, §85.166, upon notice from the Commission that a certificate of compliance as to any oil, gas, or geothermal resource well has been cancelled as provided in this section, the operator of such well shall not produce oil, gas, or geothermal resources from that well until a new certificate of compliance with respect to the well has been issued by the Commission as provided in this section. Pursuant to Texas Natural Resources Code, §85.3855, failure to comply with this subsection may subject a person to a penalty of up to $10,000 per violation.

(j) The provisions of this section shall be cumulative of other Commission actions and procedures relating to violations of state statutes or Commission permits, rules, and orders, including the authority of the Commission to immediately shut in a well or lease, or to direct the operator to shut in a well or lease, when an emergency exists due to pollution or an imminent threat of harm to people or property.

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 March 25, 2003.

TRD-200302009

Mary Ross McDonald

Deputy General Counsel

Railroad Commission of Texas

Earliest possible date of adoption: May 11, 2003

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

2. GENERAL REQUIREMENTS FOR PERMITS AND PERMIT APPLICATIONS

16 TAC §12.108

The Railroad Commission of Texas proposes an amendment to §12.108, relating to Permits Fees. This section addresses fees to be paid to the Commission for the processing of applications for new coal mining permits, permit revisions, and permit renewals, as well as annual fees paid for each acre of land mined.

The Commission proposes to amend subsection (b) to increase the annual per-acre fee to facilitate recovery of the Commission's costs of providing various services. Specifically, the proposed amendment adds new language to increase the annual fee from $120 to $300 for each acre of land in the permit area on which the permittee actually conducted operations for the removal of coal and lignite during a calendar year. The fee currently in effect is set at the statutory minimum and has not been increased since the provision in the Texas Surface Coal Mining and Reclamation Act that authorizes the Commission to set the fee, Texas Natural Resources Code, §134.055, became effective September 1, 1985 (Acts 1985, 69th Leg., ch 239, §70); Vernon's Ann. Civ. Stat. art. 5920-11, §18(c).

As proposed, the new fee amount would go into effect on September 1, 2003. The per-acre fee for calendar year 2003 would be calculated as follows: for each acre of land on which a permittee actually conducted operations for the removal of coal and lignite during the period January 1, 2003, through August 31, 2003, each permittee would pay to the Commission an annual fee of $120 per acre. For each acre of land on which a permittee actually conducted operations for the removal of coal and lignite during the period September 1, 2003, through December 31, 2003, each permittee would pay to the Commission an annual fee of $300 per acre. Beginning January 1, 2004, the annual $300 per acre fee would apply for each acre of land within the permit area on which a permittee actually conducted operations for the removal of coal and lignite during the calendar year.

The Commission also proposes to amend the title of §12.108 to change the word "permits" to "permit."

Melvin Hodgkiss, Director, Surface Mining and Reclamation Division, has determined that, during each year of the first five years the proposed amendment is in effect, there will be an increase in revenue to the state. Based on the proposed annual fee increase beginning September 1, 2003, the annual revenue for calendar year 2003 would increase by approximately $174,000. This estimated increase is based on an average of 2,900 acres mined annually in the state. Beginning January 1, 2004, the annual $300 per acre fee would apply for each acre of land within the permit area on which a permittee actually conducted operations for the removal of coal and lignite during the calendar year. For fiscal year 2004 (which begins on September 1, 2003), and for the remaining four years of the first five years the proposed amendment would be in effect, the annual increase in revenue would be $522,000 per fiscal year, based on the $180 per acre increase applied to the average of 2,900 acres mined annually in the state. There are no fiscal impacts on local governments.

Mr. Hodgkiss has also determined that the public benefit from adoption of the proposed amendments will be sufficient revenue to the State to enable the Commission to continue administering the State's surface mining program. Through the Commission, the Texas mining program administers federal and state statutes and rules that assure continued adherence to environmental protection; protection of the rights of surface land owners from unregulated surface coal mining; and conduct of surface coal mining and reclamation operations in a manner that will prevent unreasonable degradation of land and water resources.

Mr. Hodgkiss has also determined that, during each year of the first five years the proposed amendment is in effect, the annual increased economic cost to operators required to comply with this rule is an additional $180 per acre of land where coal or lignite is removed. The actual economic cost will vary among operators according to the number of acres from which a particular operator removes coal or lignite. In accordance with Texas Government Code, §2006.002, Mr. Hodgkiss has determined that there will be no adverse economic effects on small businesses or micro- businesses as a result of the proposed amendment because there are no small businesses or micro-businesses, as those terms are defined in Texas Government Code, §2006.001, holding permits from the Commission.

The Commission has not requested a local employment impact statement pursuant to Texas Government Code, §2002.022.

Comments on the proposed amendment should be submitted to Rules Coordinator, Office of General Counsel, Railroad Commission of Texas, P.O. Box 12967, Austin, Texas 78711-2967; online at http://www.rrc.state.tx.us/rules/commentform.html; or by electronic mail to rulescoordinator@rrc.state.tx.us and should refer to SMRD Docket No. 1-03. Comments will be accepted for 60 days after publication in the Texas Register . The Commission encourages all interested persons to submit comments no later than the deadline. The Commission cannot guarantee that comments submitted after the deadline will be considered. For further information, call Melvin Hodgkiss, Director, Surface Mining and Reclamation Division, at (512) 463-6901. The status of Commission rulemakings in progress is available at http://www.rrc.state.tx.us/rules/proposed.html.

The Commission proposes the amendments under Texas Natural Resources Code, §134.013, which authorizes the Commission to promulgate rules pertaining to surface coal mining operations, and §134.055, which authorizes the Commission to obtain annual fees.

Statutory authority: Texas Natural Resources Code, §§134.013 and 134.055.

Cross-reference to statute: Texas Natural Resources Code, §§134.013 and 134.055.

Issued in Austin, Texas, on March 25, 2003.

§12.108. Permit [ Permits ] Fees.

(a) (No change.)

(b) In addition to application fees required by this section, each permittee shall pay to the Commission an annual fee in the amount of $300 [ $120 ] for each acre of land within the permit area on which the permittee actually conducted operations for the removal of coal and lignite during the calendar year. The total amount of this fee is due and payable not later than March 15th of the year following the year of removal operations. For calendar year 2003 only, the annual fee shall be calculated as follows: for each acre of land on which a permittee actually conducted operations for the removal of coal and lignite during the period January 1, 2003, through August 31, 2003, the permittee shall pay to the Commission an annual fee of $120 per acre. For each acre of land on which a permittee actually conducted operations for the removal of coal and lignite during the period September 1, 2003, through December 31, 2003, the permittee shall pay to the Commission an annual fee of $300 per acre.

(c) (No change.)

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

Filed with the Office of the Secretary of State on March 25, 2003.

TRD-200302007

Mary Ross McDonald

Deputy General Counsel

Railroad Commission of Texas

Earliest possible date of adoption: May 11, 2003

For further information, please call: (512) 415-1295

Chapter 25. SUBSTANTIVE RULES APPLICABLE TO ELECTRIC SERVICE PROVIDERS

Subchapter I. TRANSMISSION AND DISTRIBUTION

1. OPEN-ACCESS COMPARABLE TRANSMISSION SERVICE FOR ELECTRIC UTILITIES IN THE ELECTRIC RELIABILITY COUNCIL OF TEXAS

16 TAC §25.193

The Public Utility Commission of Texas (commission) proposes an amendment to §25.193, relating to Distribution Service Provider Transmission Cost Recovery Factors (TCRF). The proposed amendment will modify the TCRF formula presented in §25.193(c). The current formula in §25.193(c) includes a "NL" component, which represents the new load of a distribution service provider (DSP), and a "BL" component, which represents the base load of the DSP. The proposed change replaces the "BL" component with the "NL" component. By removing the "BL" component from the formula, the TCRF will only reflect changes in wholesale transmission rates, and not be ratcheted upwards/downwards for changes in 4CP Load. Project Number 27290 is assigned to this proceeding.

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

Mr. Troxle 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 an increased match between the amount of revenues that DSPs collect from retail customers and the expenses that the DSPs pay to transmission service providers, thereby providing a more accurate tracking and pass through of wholesale transmission costs to the non-bypassable charges. 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.

Mr. Troxle 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.

The commission staff will conduct a public hearing on this rulemaking, if requested pursuant to the Administrative Procedure Act, Texas Government Code §2001.029, at the commission's offices located in the William B. Travis Building, 1701 North Congress Avenue, Austin, Texas 78701 on Thursday, May 8, 2003 at 9:30 a.m. The request for a public hearing must be received within 21 days after publication.

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 21 days after publication. Comments should be organized in a manner consistent with the organization of the proposed rule(s). The commission invites specific comments regarding the costs associated with, and benefits that will be gained by, implementation of the proposed section. The commission will consider the costs and benefits in deciding whether to adopt the section. All comments should refer to Project Number 27290.

This amendment is proposed under the Public Utility Regulatory Act, Texas Utilities Code Annotated §14.002 (Vernon 1998, Supplement 2003) (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 §35.006 requiring the commission to adopt rules relating to wholesale transmission service rates and access, and PURA §39.203(a) relating to transmission and distribution service.

Cross Reference to Statutes: Public Utility Regulatory Act §§14.002, 35.006, and 39.203(a).

§25.193.Distribution Service Provider Transmission Cost Recovery Factors (TCRF).

(a) - (b) (No change.)

(c) TCRF Formula. The TCRF for each class shall be computed pursuant to the following formula:

Figure: 16 TAC §25.193(c)

(d) - (e) (No change.)

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

Filed with the Office of the Secretary of State on March 25, 2003.

TRD-200301995

Rhonda G. Dempsey

Rules Coordinator

Public Utility Commission of Texas

Earliest possible date of adoption: May 11, 2003

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

16 TAC §26.131

(Editor's Note: In accordance with Government Code, §2002.014, which permits the omission of material which is "cumbersome, expensive, or otherwise inexpedient," Figure: 16 TAC §26.131(d) is not included in the print version of the Texas Register. The Figure is available in the on-line issue of the April 11, 2003, issue of the Texas Register.)

The Public Utility Commission of Texas (commission) proposes new §26.131, relating to Competitive Local Exchange Carrier (CLEC)-to-CLEC and CLEC-to-Incumbent Local Exchange Carrier (ILEC) Migration Guidelines. The proposed new rule is necessary to ensure that: (1) customers can migrate from one CLEC to another or from a CLEC to an ILEC in a seamless manner without encountering abnormal delays, service interruptions, and cumbersome procedures; (2) customer are not switched from one telecommunications provider to another without their permission (also known as "slamming"); and (3) customers do not have unauthorized charges placed on their bills (also known as "cramming"). The guidelines proposed for publication in this rulemaking were developed through a collaborative process involving telecommunications providers and emergency 9-1-1 administrators. Project Number 24389 is assigned to this proceeding.

Patrick Tyler, Director of Telecommunications, Legal and Enforcement 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.

Mr. Tyler 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 the establishment of standardized procedures, general business rules, and privacy protocols governing end user or customer migrations between CLECs, or from a CLEC to an ILEC with 31,000 or more access lines in Texas, to ensure that customers can seamlessly migrate from one telecommunications provider to another; and to ensure better customer protection against slamming and cramming. There will be no adverse economic effect on small businesses or micro-businesses as a result of enforcing this section. There may be economic costs to persons who are required to comply with the proposed section. These costs are likely to vary from business to business and are difficult to ascertain. However, it is believed that the benefits accruing from implementation of the proposed section will outweigh these costs.

Mr. Tyler 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.

The commission staff will conduct a public hearing on this rulemaking, if requested pursuant to the Administrative Procedure Act, Texas Government Code §2001.029, at the commission's offices located in the William B. Travis Building, 1701 North Congress Avenue, Austin, Texas 78701 on Monday, May 19, 2003, starting at 9:30 a.m. The request for a public hearing must be received within 30 days after publication of this proposed rule.

Comments on the proposed new section (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. Comments should be organized in a manner consistent with the organization of the proposed rule. The commission invites specific comments regarding the costs associated with, and benefits that will be gained by, implementation of the proposed section, as well as whether to include provisions for line loss notifications. The commission will consider the costs and benefits in deciding whether to adopt the section. All comments should refer to Project Number 24389.

In addition, the commission requests comments on the following questions:

1. How do the CLEC-to-CLEC and CLEC-to-ILEC Migration Guidelines differ from the Local Service Ordering Guidelines (LSOG Issues 4 - 8) that have been developed in the ATIS-sponsored Ordering and Billing Forum (OBF)? What is the basis for any difference identified?

2. Should line-loss notification requirements be included in the CLEC-to-CLEC and CLEC-to-ILEC Migration Guidelines?

This new section is proposed under the Public Utility Regulatory Act, Texas Utilities Code Annotated §14.002 (Vernon 1998, Supplement 2003) (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 §17.001(b) and §64.001(b) which confer on the commission the authority to adopt and enforce rules to protect customers from fraudulent, unfair, misleading, deceptive, or anticompetitive practices; §51.001 which grants the commission authority to make and enforce rules necessary to protect customers of telecommunications services consistent with the public interest; §52.001 which requires that rules, policies and principles for formulated and applied to protect the public interest and to provide equal opportunity to each telecommunications utility in a competitive marketplace; and §17.004(a) and §64.004(a) which provide that all buyers of telecommunications services are entitled to a choice of a telecommunications service provider and to have that choice honored.

Cross Reference to Statutes: Public Utility Regulatory Act §§14.002, 17.001, 17.004, 51.001, 52.001, 55.016, Chapter 55, Subchapter K, §§62.022, 64.001, and 64.004.

§26.131.Competitive Local Exchange Carrier (CLEC)-to-CLEC and CLEC-to-Incumbent Local Exchange Carrier (ILEC) Migration Guidelines.

(a) Purpose. The purpose of this section is to establish standardized procedures, general business rules, and privacy protocols governing end user or customer migrations between CLECs, or a CLEC and an ILEC that serves 31,000 or more access lines in the state, to ensure that:

(1) customers can migrate from one CLEC to another or from a CLEC to an ILEC in a seamless manner without encountering abnormal delays, service interruptions, and cumbersome procedures;

(2) customers are not switched from one telecommunications provider to another without their permission pursuant to §26.130 of this title (relating to Selection of Telecommunications Utilities); and

(3) customers do not have unauthorized charges placed on their bills pursuant to §26.32 of this title (relating to Protection Against Unauthorized Billing Charges ("Cramming")).

(b) Application. This section applies to all CLECs and all ILECs with 31,000 or more access lines in the state. This section does not apply to Digital Subscriber Line (DSL) services, line sharing, or line splitting arrangements as defined by the Federal Communications Commission (FCC) or the commission, or to migrations resulting from a CLEC's exit from the Texas market or a major segment of the Texas market.

(c) Terminology. In this section, "CLEC" means a holder of either a certificate of operating authority (COA) or a service provider certificate of authority (SPCOA).

(d) Migration guidelines. All CLECs and applicable ILECs shall follow the Texas CLEC-to-CLEC and CLEC-to-ILEC Migration Guidelines when an end user or customer migrates from one CLEC to another or from a CLEC to an ILEC. These guidelines may only be changed through the rulemaking process.

Figure: 16 TAC §26.131(d) (.pdf format)

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 March 27, 2003.

TRD-200302062

Rhonda G. Dempsey

Rules Coordinator

Public Utility Commission of Texas

Earliest possible date of adoption: May 11, 2003

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