Turner CookThe Public Utility Commission cannot authorize massive and expensive changes to the state’s electricity market without first conducting a cost-benefit study, under legislation given preliminary approval this week by the Texas House of Representatives.

The so-called PUC “Sunset” Bill also includes provisions that reauthorize operations of the PUC for 10 years, that allow the agency to issue emergency “cease and desist” orders, and that transfers water utility regulation from a separate agency.  The House approved the far-reaching legislation on Thursday, although it still requires Senate action.

The biggest surprise so far was the approval of the cost-benefit study provision, which was included in an amendment by Rep. Sylvester Turner, D-Houston. The provision requires the PUC to analyze consumer impacts before adopting any change to the energy market that is reasonably expected to cost Texans $100 million or more. The PUC currently is considering a so-called “capacity market” that could cost Texans in excess of $1 billion annually.

Both Republicans and Democrats expressed support for the amendment, with one House member calling it “one of the most important pro-consumer amendments to be considered this legislative session.” But most amendments failed in the House, and the cost-benefit amendment only succeeded after receiving the endorsement of Rep. Byron Cook, who chairs the powerful House State Affairs Committee.

The Sunset Bill also includes a provision allowing the PUC to issue emergency “cease and desist” orders against electric companies if the agency fears for the the stability of the power grid. That provision was almost removed after opposition emerged from the Texas Public Policy Foundation, an Austin-based think tank known for receiving financing from the electric industry.

The Texas Coalition for Affordable Power, an organization of more than 160 cities and other political subdivisions that purchase power together for their own governmental use, supports both the cost-benefit study provision and the cease-and-desist rules. The Sunset bill now goes to the Texas Senate, where it eventually will be considered by that chamber’s Business and Commerce Committee.

The PUC Sunset legislation is designated House Bill 1600. More information about it can be found here.

— R.A. Dyer

ABOUT the Texas Coalition for Affordable Power

TCAP is a coalition of more than 165 cities and other political subdivisions that purchase electricity in the deregulated market for their own governmental use. Because high energy costs can impact municipal budgets and the ability to fund essential services, TCAP, as part of its mission, actively promotes affordable energy policies. High energy prices also place a burden on local businesses and home consumers.