TITLE 16. ECONOMIC REGULATION

PART 2. PUBLIC UTILITY COMMISSION OF TEXAS

CHAPTER 25. SUBSTANTIVE RULES APPLICABLE TO ELECTRIC SERVICE PROVIDERS

SUBCHAPTER G. SUBMETERING

16 TAC §25.141, §25.142

The Public Utility Commission of Texas (commission) adopts an amendment to §25.141, relating to Central System or Non-submetered Master Metered Utilities, without changes and §25.142, relating to Submetering for Apartments, Condominiums, and Mobile Home Parks, with changes to the proposed text as published in the October 29, 2010, issue of the Texas Register (35 TexReg 9599). The amendments implement certain provisions of Texas House Bill 882, 81st Legislature (2009) (HB 882), which amended Texas Property Code §92.008(b) to provide that a landlord may not interrupt or cause the interruption of water, wastewater, gas, or electric service furnished to a tenant by the landlord as an incident of the tenancy or by other agreement unless the interruption results from bona fide repairs, construction, or an emergency. The amendments reflect that a landlord of an apartment house or landlord that leases mobile homes in a mobile home park can no longer disconnect electric service because of a tenant's nonpayment for that service.

No public hearing on the proposed amendments was requested by any person. The commission received one comment on the amendments, from the Texas Apartment Association. The amendments are adopted under Project Number 37684.

Comments

The Texas Apartment Association, which represents more than 10,500 members that own or manage more than 1.7 million rental units in Texas, supported the amendments to §25.141 and §25.142.

Commission Response

The commission appreciates the Texas Apartment Association's comments and adopts the amendments with changes to §25.142(f)(9)(A) and (f)(11) to clarify the references to American National Standards Institute (ANSI) standards.

These sections are adopted under the Public Utility Regulatory Act, Texas Utilities Code Annotated §14.002 (Vernon 2007 and Supp. 2010) (PURA), which provides the commission with the authority to make and enforce rules reasonably required in the exercise of its powers and jurisdiction, and specifically, Texas Utilities Code §§184.011 - 184.014, which authorizes the commission to adopt rules relating to submetering of electricity by the owner, operator, or manager of an apartment house or mobile home park, and §§184.051 - 184.052, which authorizes the commission to adopt rules governing billing systems or methods used by an apartment house owner; and Texas Property Code §92.008(b), which prohibits a landlord or a landlord's agent from interrupting or causing the interruption of utility service, except in connection with repairs, construction or emergencies.

Cross Reference to Statutes: Public Utility Regulatory Act §14.002, Texas Utilities Code §§184.011 - 184.014, §§184.051 - 184.052: and Texas Property Code §92.008(b).

§25.142.Submetering for Apartments, Condominiums, and Mobile Home Parks.

(a) Purpose. This section implements Texas Utilities Code §184.052.

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

(1) Apartment house--One or more buildings containing more than five dwelling units, each of which is rented primarily for non-transient use with rent paid at intervals of one week or longer. The term includes a rented or owner-occupied residential condominium.

(2) Dwelling unit--One or more rooms suitable for occupancy as a residence and that contain kitchen and bathroom facilities, or a mobile home in a mobile home park.

(3) Master meter--A meter used to measure, for billing purposes, all electric usage of an apartment house or mobile home park, including common areas, common facilities, and dwelling units.

(4) Month or monthly--The period between any two consecutive meter readings by the utility, either actual or estimated, at approximately 30-day intervals.

(5) Owner--Any owner, operator, or manager of any apartment house or mobile home park engaged in electric submetering.

(6) Electric submetering--Individual dwelling unit metering of electric service performed by the owner.

(c) Records and reports.

(1) The owner shall maintain and make available for inspection by the tenant the following records:

(A) the billing from the utility or retail electric provider to the apartment owner for the current month and the 12 preceding months;

(B) the calculation of the average cost per billing unit, i.e., kilowatt-hour for the current month and the 12 preceding months;

(C) all submeter readings and tenant billings for the current month and the 12 preceding months;

(D) all submeter test results for the current month and the 12 preceding months.

(2) Records shall be made available at the resident manager's office during reasonable business hours or, if there is no resident manager, at the dwelling unit of the tenant at the convenience of both the apartment owner and tenant.

(3) All records shall be made available to the commission upon request.

(d) Billing. All rental agreements between the owner and the tenants shall clearly state that the dwelling unit is submetered, that the bills will be issued thereon, that electrical consumption charges for all common areas and common facilities will be the responsibility of the owner and not of the tenant, and that any disputes relating to the computation of the tenant's bill and the accuracy of the submetering device will be between the tenant and the owner. Each owner shall provide a tenant, at the time the lease is signed, a copy of this section or a narrative summary as approved by the commission to assure that the tenant is informed of his rights and the owner's responsibilities under this section.

(1) Rendering and form of bill.

(A) Bills shall be rendered for the same billing period as that of the electric utility, generally monthly, unless service is rendered for less than that period. Bills shall be rendered as promptly as possible following the reading of the submeters. The submeters shall be read within three days of the scheduled reading date of the electric utility's master meter.

(B) The billing unit shall be that used by the electric utility in its billing to the owner.

(C) The owner shall be responsible for determining that the energy billed to any dwelling unit shall be only for that submetered and consumed within that unit.

(D) Submetered billings shall not be included as part of the rental payment or as part of billings for any other service to the tenant. A separate billing must be issued or, if issued on a multi-item bill, submetered billing information must be separate and distinct from any other charges on the bill and conform to information required in subparagraph (H) of this paragraph. The submetered bill must clearly state "submetered electricity."

(E) The bill shall reflect only submetered usage. Utility consumption at all common facilities will be the responsibility of the owner and not of the tenant. Allocation of central systems for air conditioning, heating and hot water is not prohibited by this section as set forth in §25.141 of this title (relating to Central System or Non-submetered Master Metered Utilities).

(F) The owner shall not impose any extra charges on the tenant over and above those charges which are billed by the retail electric provider or utility to the owner. The bill may not include a deposit, late penalty, reconnect charge, or any other charges unless otherwise provided for by these sections.

(i) A one-time penalty not to exceed 5.0% may be made on delinquent accounts. If the penalty is applied, the bill shall indicate the amount due if paid by the due date and the amount due if the late penalty is incurred. No late penalty may be applied unless agreed to by the tenant in a written lease which states the exact dollar or percentage amount of the late penalty.

(ii) In a mobile home park a reconnect fee may be applied for a mobile home not leased by the mobile home park owner if service to the pad site tenant is disconnected for non-payment of submetered bills in accordance with subsection (e)(1) of this section. Such reconnect fee shall be calculated based on the average actual cost to the owner for the expenses associated with the reconnection, but under no circumstances shall exceed $10. No reconnect charge may be applied unless agreed to by the tenant in a written lease which states the exact dollar amount of such reconnect charge.

(G) The tenant's submeter bills shall be calculated in the following manner: after the electric bill is received from the utility or retail electric provider, the owner shall divide the net total charges for electrical consumption, plus applicable tax, by the total number of kilowatt-hours to obtain an average cost per kilowatt-hour. The average kilowatt-hour cost shall then be multiplied by each tenant's kilowatt-hour consumption to obtain the charge to the tenant. The computation of the average cost per kilowatt-hour shall not include any penalties charged by the utility or the retail electric provider to the owner for disconnect, reconnect, late payment, or other similar service charges.

(H) The tenant's electric submeter bill shall show all of the following information:

(i) the date and reading of the submeter at the beginning and at the end of the period for which the bill is rendered;

(ii) the number of billing units metered;

(iii) the computed rate per billing unit;

(iv) the total amount due for electricity used;

(v) a clear and unambiguous statement that the bill is not from the utility or retail electric provider, which shall be named in the statement;

(vi) the name and address of the tenant to whom the bill is applicable;

(vii) the name of the firm rendering the submetering bill and the name or title, address, and telephone number of the person or persons to be contacted in case of a billing dispute;

(viii) the date by which the tenant must pay the bill; and

(ix) the name, address, and telephone number of the party to whom payment is to be made.

(2) Due date. The due date of the bill shall not be less than seven days after issuance. A bill for submetered service is delinquent if not received by the party indicated on the bill by the due date. The postmark date, if any, on the envelope of the bill or on the bill itself shall constitute proof of the date of issuance. An issuance date on the bill shall constitute proof of the date of issuance if there is no postmark on the envelope or bill. If the due date falls on a holiday or weekend, the due date for payment purposes shall be the next work day after the due date.

(3) Disputed bills. In the event of a dispute between the tenant and the owner regarding any bill, the owner shall promptly make an investigation as shall be required by the particular case, and report the results to the tenant. The investigation and report shall be completed within 30 days from the date the tenant notified the owner of the dispute.

(4) Tenant access to records. The tenants of any dwelling unit whose electrical consumption is submetered shall be allowed by the owner to review and copy the master billing for the current month's billing period and for the 12 preceding months, and all submeter readings of the entire apartment house or mobile home park for the current month and for the 12 preceding months.

(5) Estimated bills. Estimated bills shall not be rendered unless the meter has been tampered with or is out of order, and shall be distinctly marked "estimated bill".

(6) Overbilling and underbilling. If submetered billings are found to be in error, the owner shall calculate a billing adjustment. If the tenant is due a refund, an adjustment shall be made for the entire period of the overcharges. If the tenant was undercharged, the owner may backbill the tenant for the amount which was underbilled. The backbilling is not to exceed six months unless the owner can produce records to identify and justify the additional amount of backbilling. If the underbilling is $50 or more, the owner shall offer to the tenant a deferred payment plan option, for the same length of time as that of the underbilling. However, in a mobile home park, the mobile home park owner may not disconnect electric service to a mobile home not leased by the mobile home park owner if the pad site tenant fails to pay charges arising from an underbilling more than six months prior to the date the tenant was initially notified of the amount of the undercharges and the total additional amount due. Furthermore, adjustments for usage by a previous tenant may not be backbilled to the current tenant.

(7) Level and average payment plans. An owner may offer a level payment plan or average payment plan consistent with this paragraph.

(A) The payment plan may be one of the following methods:

(i) A level payment plan allowing eligible tenants to pay on a monthly basis a fixed billing rate of one-twelfth of that tenant's estimated annual consumption at the appropriate rates, with provisions for quarterly adjustments as may be determined based on actual usage.

(ii) An average payment plan allowing tenants to pay on a monthly basis one-twelfth of the sum of that tenant's current month's consumption plus the previous 11 month's consumption (or an estimate thereof, for a new customer) at the appropriate customer class rates, plus a portion of any unbilled balance. Provisions for annual adjustments as may be determined based on actual usage shall be provided. If at the end of a year the owner determines that he has collected an amount different than he has been charged by the utility or retail electric provider, the owner must refund any overcollection and may surcharge any undercollection over the next year.

(B) Under either of the plans outlined in subparagraph (A) of this paragraph the owner is prohibited from charging the tenant any interest that may accrue. Any seasonal overcharges or undercharges will be carried by the owner of the complex.

(C) A mobile home park owner may disconnect service to a mobile home not leased by the mobile home park owner, pursuant to subsection (e) of this section, if the pad site tenant does not fulfill the terms of a level payment plan or an average payment plan.

(D) The owner may collect a deposit from all tenants entering into level payment plans or average payment plans; the deposit will not exceed an amount equivalent to one-sixth of the estimated annual billing. Notwithstanding any other provision in these sections, the owner may retain said deposit for the duration of the level or average payment plan; however, the owner shall pay interest on the deposit as is provided in §25.24 of this title (relating to Credit Requirements and Deposits).

(e) Discontinuance of electric service.

(1) Application. This subsection applies only to mobile homes in a mobile home park that are not leased by the mobile home park owner. Disconnection of any other dwelling unit by the owner is governed by Texas Property Code §92.008(b).

(2) Disconnection for delinquent bills.

(A) Electric service may be disconnected only for nonpayment of electric bills. A pad site tenant's electric service may be disconnected if a bill has not been paid within 12 days from the date of issuance and proper notice has been given. Proper notice shall consist of a separate mailing or hand delivery at least five days prior to a stated date of disconnection, with the words "termination notice" or similar language prominently displayed on the notice. The notice shall include the office or street address where a tenant can go during normal working hours to make arrangements for payment of the bill and for reconnection of service.

(B) Under these provisions, a pad site tenant's electric service may be discontinued only for nonpayment of electric service.

(3) Disconnection on holidays or weekends. Unless a dangerous condition exists, or unless the pad site tenant requests disconnection, electric service shall not be disconnected on a day, or on a day immediately preceding a day, when personnel of the mobile home park are not available for the purpose of making collections and reconnecting electric service.

(4) Disconnection under special circumstances.

(A) Disconnection of ill and disabled. A mobile home park owner shall not disconnect electric service to a pad site tenant when that tenant establishes that disconnection of electric service will cause some person residing at the tenant's mobile home to become seriously ill or more seriously ill;

(i) Each time a pad site tenant seeks to avoid disconnection of electric service under this subparagraph, the tenant must accomplish all of the following by the stated date of disconnection:

(I) have the person's attending physician (for purposes of this subsection, the term "physician" shall mean any public health official, including medical doctors, doctors of osteopathy, nurse practitioners, registered nurses, and any other similar public health official) call or contact the mobile home park owner by the stated date of disconnection;

(II) have the person's attending physician submit a written statement to the mobile home park owner; and

(III) enter into a deferred payment plan.

(ii) The prohibition against electric service termination provided by this subparagraph shall last 63 days from the issuance of the electric bill or a shorter period agreed upon by the mobile home park owner and the customer or physician.

(B) Disconnection of energy assistance clients. A mobile home park owner shall not disconnect electric service to a pad site tenant for a billing period in which the mobile home park owner receives a pledge, letter of intent, purchase order, or other notification that the energy assistance provider is forwarding sufficient payment to continue service; and

(C) Disconnection during extreme weather. A mobile home park owner shall not disconnect electric service to a pad site tenant on a day when:

(i) the previous day's highest temperature did not exceed 32 degrees Fahrenheit, and the temperature is predicted to remain at or below that level for the next 24 hours, according to the nearest National Weather Service (NWS) reports; or

(ii) the NWS issues a heat advisory for any county in which the mobile home park is located, or when such advisory has been issued on any one of the preceding two calendar days.

(f) Submeters.

(1) Submeter requirements.

(A) Use of submeter. All electrical energy sold by an owner shall be charged for by meter measurements.

(B) Installation by owner. Unless otherwise authorized by the commission, each owner shall be responsible for providing, installing, and maintaining all submeters necessary for the measurement of electrical energy to its tenants.

(2) Submeter records. Each owner shall keep the following records:

(A) Submeter equipment record. Each owner shall keep a record of all of its submeters, showing the tenant's address and date of the last test.

(B) Records of submeter tests. All submeter tests shall be properly referenced to the submeter record provided in this section. The record of each test made shall show the identifying number of the submeter, the standard meter and other measuring devices used, the date and kind of test made, by whom made, the error (or percentage of accuracy), and sufficient data to permit verification of all calculations.

(3) Submeter unit indication. Each meter shall indicate clearly the kilowatt-hours consumed by the tenant.

(4) Submeter tests on request of tenant. Each owner shall, upon the request of a tenant, and if the tenant so desires, in the tenant's or the tenant's authorized representative's presence, make a test of the accuracy of the tenant's submeter. The test shall be made during reasonable business hours at a time convenient to the tenant desiring to observe the test. If the submeter tests within the accuracy standards for self-contained watt-hour meters as established by the latest edition of American National Standards Institute, Incorporated, (ANSI), Standard C12 (American National Code for Electricity Metering), a charge of up to $15 may be charged the tenant for making the test. However, if the submeter has not been tested within a period of one year, or if the submeter's accuracy is not within the appropriate accuracy standards, no charge shall be made to the tenant for making the test. Following completion of any requested test, the owner shall promptly advise the tenant of the results of the test.

(5) Bill adjustment due to submeter error. If any submeter is found not to be within the accuracy standards in subsection (f)(4) of this section proper correction shall be made of previous readings. An adjusted bill shall be rendered in accordance with subsection (d)(6) of this section. If a submeter is found not to register for any period, unless bypassed or tampered with, the owner may make a charge for units used, but not metered, for a period not to exceed one month based on amounts used under similar conditions during periods preceding or subsequent thereto, or during the corresponding period in previous years.

(6) Bill adjustment due to conversion. If, during the 90-day period preceding the installation of meters or submeters, an owner increases rental rates, and such increase is attributable to increased costs of electric service, then such owner shall immediately reduce the rental rate by the amount of such increase and shall refund all of the increase that has previously been collected within the 90-day period.

(7) Location of submeters. Submeters, service switches, or cut-off valves in conjunction with the submeters shall be installed in accordance with the latest edition of ANSI, Standard C12, and will be readily accessible for reading, testing, and inspection, with minimum interference and inconvenience to the tenant.

(8) Submeter testing facilities and equipment.

(A) Qualified expert. Each owner engaged in electric submetering shall engage an independent qualified expert to provide such instruments and other equipment and facilities as may be necessary to make the submeter tests required by this section. Such equipment and facilities shall generally conform to the ANSI, Standard C12, unless otherwise prescribed by the commission, and shall be available at all reasonable times for the inspection by its authorized representatives.

(B) Portable standards. Each owner engaged in electrical submetering shall, unless specifically excused by the commission, provide or utilize a testing firm which provides portable test instruments as necessary for testing billing submeters.

(C) Reference standards. Each owner shall provide or have access to suitable indicating instruments as reference standards for insuring the accuracy of shop and portable instruments used for testing billing submeters.

(D) Testing of reference standards. All reference standards shall be submitted once each year or on a scheduled basis approved by the commission to a standardizing laboratory of recognized standing, for the purpose of testing and adjustment.

(E) Calibration of test equipment. All shop and portable instruments used for testing billing submeters shall be calibrated by comparing them with a reference standard at least every 120 days during the time such test instruments are being regularly used. Test equipment shall at all times be accompanied by a certified calibration card signed by the proper authority, giving the date when it was last certified and adjusted. Records of certifications and calibrations shall be kept on file in the office of the owner.

(9) Accuracy requirements for submeters.

(A) Limits. No submeter that exceeds the test calibration limits for self-contained watt-hour meters as set by the ANSI, Standard C12, shall be placed in service or left in service. All electrical current transformers, potential transformers, or other such devices used in conjunction with an electric submeter shall be considered part of the submeter and must also meet test calibration and phase angle limits set by the ANSI Standard C12 and the ANSI Standard C57.13 for revenue billing. A nameplate shall be attached to each transformer and shall include or refer to calibration and phase angle data and other information required by the ANSI Standard C12 and the ANSI Standard C57.13 for revenue billing. Whenever on installation, periodic, or other tests, an electric submeter or transformer is found to exceed these limits, it shall be adjusted, repaired, or replaced.

(B) Adjustments. Submeters shall be adjusted as closely as possible to the condition of zero error. The tolerances are specified only to allow for necessary variations.

(10) Submeter tests prior to installation. No submeter shall be placed in service unless its accuracy has been established. If any submeter is removed from actual service and replaced by another submeter for any purpose whatsoever, it shall be properly tested and adjusted before being placed in service again.

(11) Testing of electric submeters in service. Standard electromechanical single stator watt-hour meters with permanent braking magnets shall be tested in accordance with the ANSI Standard C12 for periodic, variable interval, or statistical sampling testing programs. All other types of submeters shall be tested at least annually unless specified otherwise by the commission.

(12) Restriction. Unless otherwise provided by the commission, no dwelling unit in an apartment house or mobile home park may be submetered unless all dwelling units are submetered.

(13) Same type meters required. All submeters which are served by the same master meter shall be of the same type, such as induction or electronic.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 17, 2010.

TRD-201007200

Adriana A. Gonzales

Rules Coordinator

Public Utility Commission of Texas

Effective date: January 6, 2011

Proposal publication date: October 29, 2010

For further information, please call: (512) 936-7223


CHAPTER 25. SUBSTANTIVE RULES APPLICABLE TO ELECTRIC SERVICE PROVIDERS

The Public Utility Commission of Texas (commission) adopts amendments to §25.214, relating to Terms and Conditions of Retail Delivery Service Provided by Investor Owned Transmission and Distribution Utilities (Tariff), and §25.272, relating to Code of Conduct for Electric Utilities and Their Affiliates, with changes to the proposed text as published in the October 15, 2010, issue of the Texas Register (35 TexReg 9200). The amendment to the Tariff makes changes to conform the Tariff to new §25.497, relating to Critical Care Customers, adopted by the commission in Project Number 37622, Rulemaking to Amend Customer Protection Rules Relating to Designation of Critical Care Customers. The amendment to §25.272 allows an electric utility to submit customer information upon request of the Texas Division of Emergency Management. The amendment to §25.497 provides additional protections to customers who have been designated as critical load customers, chronic condition residential customers, or critical care residential customers. The amendments are competition rules subject to judicial review as specified in Public Utility Regulatory Act (PURA) §39.001(e). The amendments are adopted under Project Number 38676.

The commission received comments on the proposed amendments from One Voice Texas (One Voice); AEP Texas Central Company, AEP Texas North Company, CenterPoint Energy Houston Electric, LLC, Oncor Electric Delivery Company LLC, and Texas-New Mexico Power Company (Joint TDUs); the Retail Electric Provider Coalition, which consists of the Alliance for Retail Markets (ARM), CPL Retail Energy LP, Direct Energy LP, Reliant Energy Retail Services LLC, Texas Energy Association for Marketers (TEAM), TXU Energy Retail Company LLC, and WTU Retail Energy LP; and Texas Industrial Energy Consumers (TIEC). The members of ARM that participated in the comments were Direct Energy LP, First Choice Power, Green Mountain Energy Company, Gexa Energy, LP, and Stream Energy. The members of TEAM that participated in the comments were Accent Energy, Amigo Energy, Bounce Energy, Cirro Energy, Green Mountain Energy Company, Hudson Energy Services, Just Energy, StarTex Power, Stream Energy, Tara Energy, and TriEagle.

The commission solicited comments on a question concerning the release of information to first responders. The Order Adopting the Repeal of §25.497 and New §25.497 in Project No. 37622, Rulemaking Related to Critical Care Customers, states:

"the commission concludes that the process for turning lists over to first responders should be more thoroughly considered in the compliance project, to be opened following adoption of this rulemaking. The commission is concerned that the current substantive rules addressing proprietary customer information, most notably §25.272(g)(1), relating to privacy of customer information, may prohibit a Transmission and Distribution Utility (TDU) from providing the list. Therefore, the commission finds that the upcoming project to develop the critical care form shall address these issues, as well as the Joint TDUs' concerns relating to how this information would be provided to the correct people."

The amendment to §25.272 in the current project allows the electric utility to provide customer information to a public safety first responder. The commission posed the following question in connection with the amendments:

Are there any hurdles in commission rules, the Public Utility Regulatory Act, or other law that would prevent a utility from sharing this information to a First Responder, even with customer consent?

TIEC recommended that critical load industrial customers should be excluded from the changes to §25.272(g)(1)(E). TIEC commented that it is unclear whether the commission intended to include critical load industrial customers. TIEC pointed out that the amendment and the question stem from comments presented by OPC and Texas One Voice, and the intent is to provide additional protections to residential customers. TIEC argued that the reasoning does not apply to critical load industrial facilities. TIEC further explained that critical load industrial facilities operate under extensive regulatory requirements and have telemetry and other systems in place to deal with emergencies involving power outages. TIEC concluded that including industrial customers in the changes is unnecessary and inappropriate. TIEC added that allowing proprietary information from critical load industrial customers to be released without stringent controls and safeguards could compromise the security of these facilities. The Joint TDUs agreed with TIEC on this issue.

Commission Response

The commission agrees with TIEC and the Joint TDUs that critical load industrial customers should be removed from the language in §25.272(g)(1)(E) and changes that subparagraph accordingly so that it applies only to critical care residential customers.

The REP Coalition noted that there may be compelling policy reasons supporting the utility's release of information to first responders. The REP Coalition stated that it is important to analyze the applicability of other law to determine whether a utility could share medical or health information with a first responder. Further, the REP Coalition pointed out that even if PURA and the commission's rules would appear to allow the release of such information with customer consent, other statutes that more directly address medical and health information could potentially act to prohibit such release.

The REP Coalition did not argue that utilities should be prohibited from releasing pertinent information to first responders. The REP Coalition highlighted the potential regulatory complexities raised by the preamble question. The REP Coalition commented that §159.002(c) of the Texas Occupations Code provides that a person who receives information from a confidential communication or record (i.e., a communication between a physician and a patient) may not disclose the information except to the extent that disclosure is consistent with the authorized purposes for which the information was first obtained. The REP Coalition stated that as applied in this context, the information contained on the application, which is completed by the customer and his physician, could arguably be used only for purposes of determining critical care or chronic condition eligibility.

The Joint TDUs recommended against revising the application to ask customers whether they want their information provided to first responders. Joint TDUs opined that while at first blush this sounds like a positive idea, the difficult issues associated with implementation, the uncertainty with regard to whether first responders need or want the information, and the cost and potential liability for the TDU overshadow any potential benefit. They argued that it is inappropriate to burden the TDU with a costly task that is unrelated to the provision of electric delivery service that can better be performed by public service agencies.

The Joint TDUs provided several reasons for their opposition. First, Joint TDUs argued it should not be assumed that the release of information will be a simple, ministerial task that can easily be performed in conjunction with the other responsibilities assigned to them with regard to critical care customers. TDUs will be required to establish separate databases and will have to add the capability for putting an electronic flag on the account indicating whether the customer has opted in or opted out. Joint TDUs explained this will be a manual process and the TDU will incur costs in setting up this new system and for the ongoing staff time to maintain it.

Second, Joint TDUs pointed out that it is unclear what, if any, actual use will be made of this information, and it is unknown whether first responders would ever seek to use it. Outside of a hurricane in the Gulf Coast region, it is hard to conceive of any event that would occasion agencies to want this type of information, and a hurricane, flood, or tornado with this type of wide impact is a rare event. Third, because transferring the information from the application to the database (and possibly setting the flag) will be a manual process, human error could lead to incorrect assignment of the customer. Joint TDUs suggested this could result in liability for the TDU associated with giving out information that should have remained private or with failing to give out information regarding a customer who needed help.

Joint TDUs offered an alternative solution. They suggested that language could be added to the letter informing the customer of the designation and recommending that those applying for critical care status for purposes of their electric service consider calling the 2-1-1 Texas/United Way Helpline to register for available emergency services. This approach would provide the customer with information on an existing process for obtaining emergency assistance and is more appropriate than developing and setting up an entirely new process.

The Joint TDUs did not support the idea of providing electric customer information to first responders, either with or without customer consent. However, they added that if the commission determines that the information should be provided, the better approach is to allow the TDU to provide the entire critical care list, without asking for customer consent. This would limit the need for the TDU to develop and maintain a system for tracking customer consent. It would also decrease the TDU's potential liability for providing or not providing the correct information. In order to allow the TDU to provide the information without customer consent, §25.272(g)(1)(E) should be adopted but with the reference to the customer's consent removed.

The Joint TDUs explained that the TDU should not be required to make its own determination of the appropriate individuals or agencies to receive the list or in which events it should be released. Joint TDUs further argued that the categories of proposed recipients of the list, "state, federal, or local government Agency," are too broad. Joint TDUs commented that they are not equipped to make these kinds of decisions and should not be required to be the gatekeeper for deciding who gets the information and in what circumstances.

One Voice urged the commission to coordinate with the Texas Division of Emergency Management to share the list of Critical Care and Chronic Condition residential customers with disaster first responders in order to ensure their needs are met during a disaster. One Voice explained when there is a disaster, government agencies and nonprofit responders are coordinated through the Texas Division of Emergency Management. For people with disabilities and other health issues in need of assistance, first responders from the Texas Department of State Health Services, the Texas Department of Family and Protective Services (Adult Protective Services), and local emergency responders are deployed to assist with medical needs, food, and evacuation to safe areas.

The Joint TDUs responded that the suggestion by One Voice may be the better approach. They maintained that in either instance, the TDU should provide the information only upon the request of the agency or office, and customer authorization should not be required. Joint TDUs recommended that contact information for the Division of Emergency Management be added to the letter informing a customer of its critical care designation and a statement be included encouraging the customer to sign up for available services, and the TDU not be required to provide lists of critical care customers. This would mean that §25.272 need not be amended. If the commission does not agree with this recommendation, then the Joint TDUs recommended that §25.272 be amended to allow the TDU to provide information to the Division of Emergency Management, upon request, and without customer authorization.

Commission Response

The commission agrees that there would be additional administrative responsibility placed on the Joint TDU in tracking customer consent for critical care residential customers if information release were subject to customer or patient approval. The commission concludes that the recommendation by the Joint TDUs regarding the reference to the 2-1-1 Texas/United Way Helpline is reasonable and should be added in the letter sent to the customers by the TDU. The commission further concludes that the Joint TDUs should not be prohibited by commission rules from releasing critical care residential customer information to the Division of Emergency Management, if it is requested. The commission changes §25.272(g)(1)(E) accordingly.

Section 25.214(d)

Tariff section 4.3.9.1(1)

The REP Coalition proposed that this section be clarified to state that the TDU will notify the Competitive Retailer and Retail Customer of "the designation and any change in Retail Customer's designation." This change would make it clear that the customer and the REP are informed of an initial designation, a new REP is informed of the customer's designation if the customer switches providers, and the customer and REP are informed of any changes in designation.

Commission Response

The commission agrees with the REP Coalition's proposal and changes the section accordingly.

Tariff section 5.2.5

Joint TDUs pointed out that this section does not make it clear that an application for designation as critical care must be made following the procedures in §25.497, and a customer might assume that another method could be used to "notify the TDU" that it believes it qualifies for critical care status. The Joint TDUs requested that this subsection be changed to make it clear that customers must follow the procedures in §25.497.

Commission Response

The commission agrees with the Joint TDUs recommendation and changes the section accordingly.

Tariff section 5.3.7.4

Joint TDUs pointed out an additional issue in section 5.3.7.4(1)(E) and suggested clarification. As written, (1)(E) applies to any disconnection or suspension other than one "related to dangerous conditions, clearance requests, or move-out requests." It mandates that in all other instances, the procedures in §25.497 and §25.483 must be followed prior to disconnecting or suspending service to a critical care customer. The procedures in §25.483, however, are only applicable to disconnections for failure to pay, and there are no additional procedures mandated in §25.497. Joint TDUs concluded that section 5.3.7.4(1)(E) appears to conflict with §25.483 when it purports to make the procedures applicable to any type of suspension or disconnection of service other than dangerous conditions, clearance, or move out. As other sections of the tariff make clear, however, the instances in which the TDU may need to interrupt or suspend service are much broader than "dangerous conditions". For example, Tariff sections 4.3.8.1 and 5.3.7.1 allow the TDU not only to suspend service for a dangerous condition but also if authorized by Applicable Legal Authorities, as would be the case, for example, if ERCOT ordered rolling blackouts. If required to follow the procedures established for a disconnection for non-payment (DNP) before interrupting service in these circumstances, the TDU's hands would be tied. Joint TDUs therefore recommended that section 5.3.7.4(1)(E) be changed so that it does not appear that the procedures in §25.497 and §25.483 are applicable in all circumstances other than a "dangerous condition," a clearance, or move-out request. Joint TDUs stated that instead, this section should make clear that the DNP procedures must be followed only when the disconnection is authorized by the REP as a DNP.

Commission Response

The commission agrees with the Joint TDUs that this section should be clear that DNP procedures must be followed only when the disconnection is authorized by the REP as a DNP. The commission changes the section accordingly.

All comments, including any not specifically referenced herein, were fully considered by the commission. In adopting the amendments, the commission makes other changes for the purpose of clarifying its intent.

SUBCHAPTER I. TRANSMISSION AND DISTRIBUTION

DIVISION 2. TRANSMISSION AND DISTRIBUTION APPLICABLE TO ALL ELECTRIC UTILITIES

16 TAC §25.214

(Editor's note: In accordance with Texas Government Code, §2002.014, which permits the omission of material which is "cumbersome, expensive, or otherwise inexpedient," the figure in 16 TAC §25.214 is not included in the print version of the Texas Register. The figure is available in the on-line version of the December 31, 2010, issue of the Texas Register.)

These amendments are adopted under the Public Utility Regulatory Act, Texas Utilities Code Annotated §14.001 (Vernon 2007 and Supp. 2010) (PURA), which provides the commission the general power to regulate and supervise the business of each public utility within its jurisdiction and to do anything specifically designated or implied by PURA that is necessary and convenient to the exercise of that power and jurisdiction; §14.002, which provides the commission with the authority to make and enforce rules reasonably required in the exercise of its powers and jurisdiction; §39.101(a), which requires that the commission ensure customers have safe, reliable, and reasonably priced electricity, including protection from disconnection in cases of medical emergency; §39.101(e), which provides the commission with the authority to adopt and enforce rules relating to the termination of service; and §39.203, which directs the commission to establish terms and conditions for transmission and distribution service.

Cross Reference to Statutes: Public Utility Regulatory Act §§14.001, 14.002, 39.101(a), 39.101(e), and 39.203.

§25.214.Terms and Conditions of Retail Delivery Service Provided by Investor Owned Transmission and Distribution Utilities.

(a) Purpose. The purpose of this section is to implement Public Utility Regulatory Act (PURA) §39.203 as it relates to the establishment of non-discriminatory terms and conditions of retail delivery service, including delivery service to a Retail Customer at transmission voltage, provided by a transmission and distribution utility (TDU), and to standardize the terms of service among TDUs. A TDU shall provide retail delivery service in accordance with the terms and conditions set forth in this section to those Retail Customers participating in the pilot project pursuant to PURA §39.104 on and after June 1, 2001, and to all Retail Customers on and after January 1, 2002. By clearly stating these terms and conditions, this section seeks to facilitate competition in the sale of electricity to Retail Customers and to ensure reliability of the delivery systems, customer safeguards, and services.

(b) Application. This section, which includes the pro-forma tariff set forth in subsection (d) of this section, governs the terms and conditions of retail delivery service by all TDUs in Texas. The terms and conditions contained herein do not apply to the provision of transmission service by non-ERCOT utilities to retail customers.

(c) Tariff. Each TDU in Texas shall file with the commission a tariff to govern its retail delivery service using the pro-forma tariff in subsection (d) of this section. The provisions of this tariff are requirements that shall be complied with and offered to all REPs and Retail Customers unless otherwise specified. TDUs may add to or modify only Chapters 2 and 6 of the tariff, reflecting individual utility characteristics and rates, in accordance with commission rules and procedures to change a tariff; however the only modifications the TDU may make to 6.1.2.1 are to insert the commission-approved rates. Additionally, in Company specific discretionary service filings, Company shall propose timelines for discretionary services to the extent applicable and practical. Chapters 1, 3, 4, and 5 of the pro-forma tariff shall be used exactly as written. These chapters can be changed only through the rulemaking process. If any provision in Chapter 2 or 6 conflicts with another provision of Chapters 1, 3, 4, and 5, the provision found in Chapters 1, 3, 4, and 5 shall apply, unless otherwise specified in Chapters 1, 3, 4, and 5.

(d) Pro-forma Retail Delivery Tariff. Tariff for Retail Delivery Service.

Figure: 16 TAC §25.214(d) (.pdf)

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 20, 2010.

TRD-201007244

Adriana A. Gonzales

Rules Coordinator

Public Utility Commission of Texas

Effective date: January 9, 2011

Proposal publication date: October 15, 2010

For further information, please call: (512) 936-7223


SUBCHAPTER K. RELATIONSHIPS WITH AFFILIATES

16 TAC §25.272

These amendments are adopted under the Public Utility Regulatory Act, Texas Utilities Code Annotated §14.001 (Vernon 2007 and Supp. 2010) (PURA), which provides the commission the general power to regulate and supervise the business of each public utility within its jurisdiction and to do anything specifically designated or implied by PURA that is necessary and convenient to the exercise of that power and jurisdiction; §14.002, which provides the commission with the authority to make and enforce rules reasonably required in the exercise of its powers and jurisdiction; §39.101(a), which requires that the commission ensure customers have safe, reliable, and reasonably priced electricity, including protection from disconnection in cases of medical emergency; §39.101(e), which provides the commission with the authority to adopt and enforce rules relating to the termination of service; and §39.203, which directs the commission to establish terms and conditions for transmission and distribution service.

Cross Reference to Statutes: Public Utility Regulatory Act §§14.001, 14.002, 39.101(a), 39.101(e), and 39.203.

§25.272.Code of Conduct for Electric Utilities and Their Affiliates.

(a) Purpose. The provisions of this section establish safeguards to govern the interaction between utilities and their affiliates, both during the transition to and after the introduction of competition, to avoid potential market-power abuses and cross-subsidization between regulated and unregulated activities.

(b) Application.

(1) General application. This section applies to:

(A) electric utilities operating in the State of Texas as defined in the Public Utility Regulatory Act (PURA) §31.002(6), and transactions or activities between electric utilities and their affiliates, as defined in PURA §11.003(2); and

(B) transmission and distribution utilities operating in a qualifying power region in the State of Texas as defined in PURA §31.002(19) upon commission certification of a qualifying power region pursuant to PURA §39.152, and transactions or activities between transmission and distribution utilities and their affiliates, as defined in PURA §11.003(2).

(2) No circumvention of the code of conduct. An electric utility, transmission and distribution utility, or competitive affiliate shall not circumvent the provisions or the intent of PURA §39.157 or any rules implementing that section by using any affiliate to provide information, services, products, or subsidies between a competitive affiliate and an electric utility or a transmission and distribution utility.

(3) Notice of conflict and/or petition for waiver. Nothing in this section is intended to affect or modify the obligation or duties relating to any rules or standards of conduct that may apply to a utility or the utility's affiliates under orders or regulations of the Federal Energy Regulatory Commission (FERC) or the Securities and Exchange Commission (SEC). A utility shall file with the commission a notice of any provision in this section that conflict with FERC or SEC orders or regulations. A utility that is subject to statutes or regulations in any state that conflict with a provision of this section may petition the commission for a waiver of the conflicting provision on a showing of good cause.

(c) Definitions. The following words and terms when used in this section shall have the following meaning unless the context clearly indicates otherwise:

(1) Arm's length transaction--The standard of conduct under which unrelated parties, each acting in its own best interest, would carry out a particular transaction. Applied to related parties, a transaction is at arm's length if the transaction could have been made on the same terms to a disinterested third party in a bargained transaction.

(2) Competitive affiliate--An affiliate of a utility that provides services or sells products in a competitive energy-related market in this state, including telecommunications services, to the extent those services are energy-related.

(3) Confidential information--Any information not intended for public disclosure and considered to be confidential or proprietary by persons privy to such information. Confidential information includes but is not limited to information relating to the interconnection of customers to a utility's transmission or distribution systems, proprietary customer information, trade secrets, competitive information relating to internal manufacturing processes, and information about a utility's transmission or distribution system, operations, or plans for expansion.

(4) Corporate support services--Services shared by a utility, its parent holding company, or a separate affiliate created to perform corporate support services, with its affiliates of joint corporate oversight, governance, support systems, and personnel. Examples of services that may be shared, to the extent the services comply with the requirements prescribed by PURA §39.157(d) and (g) and rules implementing those requirements, include human resources, procurement, information technology, regulatory services, administrative services, real estate services, legal services, accounting, environmental services, research and development unrelated to marketing activity and/or business development for the competitive affiliate regarding its services and products, internal audit, community relations, corporate communications, financial services, financial planning and management support, corporate services, corporate secretary, lobbying, and corporate planning. Examples of services that may not be shared include engineering, purchasing of electric transmission facilities and service, transmission and distribution system operations, and marketing, unless such services are provided by a utility, or a separate affiliate created to perform such services, exclusively to affiliated regulated utilities and only for provision of regulated utility services.

(5) Proprietary customer information--Any information compiled by an electric utility on a customer in the normal course of providing electric service that makes possible the identification of any individual customer by matching such information with the customer's name, address, account number, type or classification of service, historical electricity usage, expected patterns of use, types of facilities used in providing service, individual contract terms and conditions, price, current charges, billing records, or any other information that the customer has expressly requested not be disclosed. Information that is redacted or organized in such a way as to make it impossible to identify the customer to whom the information relates does not constitute proprietary customer information.

(6) Similarly situated--The standard for determining whether a non-affiliate is entitled to the same benefit a utility offers, or grants upon request, to its competitive affiliate for any product or service. For purposes of this section, all non-affiliates serving or proposing to serve the same market as a utility's competitive affiliate are similarly situated to the utility's competitive affiliate.

(7) Transaction--Any interaction between a utility and its affiliate in which a service, good, asset, product, property, right, or other item is transferred or received by either a utility or its affiliate.

(8) Utility--An electric utility as defined in PURA §31.002(6) or a transmission and distribution utility as defined in PURA §31.002(19). For purposes of this section, a utility does not include a river authority operating a steam generating plant on or before January 1, 1999, or a corporation authorized by Chapter 245, Acts of the 67th Legislature, Regular Session, 1981 (Article 717p, Vernon's Texas Civil Statutes). In addition, with respect to a holding company exempt under the Public Utility Holding Company Act (PUHCA) §3(a)(2), the term "utility," as used in this section, means the division or business unit through which the holding company conducts utility operations and not the holding company as a legal entity.

(d) Separation of a utility from its affiliates.

(1) Separate and independent entities. A utility shall be a separate, independent entity from any competitive affiliate.

(2) Sharing of employees, facilities, or other resources. Except as otherwise allowed in paragraphs (3), (4), (5), or (7) of this subsection, a utility shall not share employees, facilities, or other resources with its competitive affiliates unless the utility can prove to the commission prior to such sharing that the sharing will not compromise the public interest. Such sharing may be allowed if the utility implements adequate safeguards precluding employees of a competitive affiliate from gaining access to information in a manner that would allow or provide a means to transfer confidential information from a utility to an affiliate, create an opportunity for preferential treatment or unfair competitive advantage, lead to customer confusion, or create significant opportunities for cross-subsidization of affiliates.

(3) Sharing of officers and directors, property, equipment, computer systems, information systems, and corporate support services. A utility and a competitive affiliate may share common officers and directors, property, equipment, computer systems, information systems, and corporate support services, if the utility implements safeguards that the commission determines are adequate to preclude employees of a competitive affiliate from gaining access to information in a manner that would allow or provide a means to transfer confidential information from a utility to an affiliate, create an opportunity for preferential treatment or unfair competitive advantage, lead to customer confusion, or create significant opportunities for cross-subsidization of affiliates.

(4) Employee transfers and temporary assignments. A utility shall not assign, for less than one year, utility employees engaged in transmission or distribution system operations to a competitive affiliate unless the employee does not have knowledge of confidential information. Utility employees engaged in transmission or distribution system operations, including persons employed by a service company affiliated with the utility who are engaged in transmission system operations on a day-to-day basis or have knowledge of transmission or distribution system operations and are transferred to a competitive affiliate, shall not remove or otherwise provide or use confidential property or information gained from the utility or affiliated service company in a discriminatory or exclusive fashion, to the benefit of the competitive affiliate or to the detriment of non-affiliated electric suppliers. Movement of an employee engaged in transmission or distribution system operations, including a person employed by a service company affiliated with the utility who is engaged in transmission or distribution system operations on a day-to-day basis or has knowledge of transmission or distribution system operations from a utility to a competitive affiliate or vice versa, may be accomplished through either the employee's termination of employment with one company and acceptance of employment with the other, or a transfer to another company, as long as the transfer of an employee from the utility to an affiliate results in the utility bearing no ongoing costs associated with that employee. Transferring employees shall sign a statement indicating that they are aware of and understand the restrictions and penalties set forth in this section. The utility also shall post a conspicuous notice of such a transfer on its Internet site or other public electronic bulletin board within 24 hours and for at least 30 consecutive calendar days. The exception to this provision is that employees may be temporarily assigned to an affiliate or non-affiliated utility to assist in restoring power in the event of a major service interruption or assist in resolving emergency situations affecting system reliability. Consistent with §25.84(h) of this title, however, within 30 days of such a deviation from the code of conduct, the utility shall report this information to the commission and shall conspicuously post the information on its Internet site or other public electronic bulletin board for 30 consecutive calendar days.

(5) Sharing of office space. A utility's office space shall be physically separate from that of its competitive affiliates, where physical separation is accomplished by having office space in separate buildings or, if within the same building, by a method such as having offices on separate floors or with separate access, unless otherwise approved by the commission.

(6) Separate books and records. A utility and its affiliates shall keep separate books of accounts and records, and the commission may review records relating to a transaction between a utility and an affiliate.

(A) In accordance with generally accepted accounting principles or state and federal guidelines, as appropriate, a utility shall record all transactions with its affiliates, whether they involve direct or indirect expenses.

(B) A utility shall prepare financial statements that are not consolidated with those of its affiliates.

(C) A utility and its affiliates shall maintain sufficient records to allow for an audit of the transactions between the utility and its affiliates. At any time, the commission may, at its discretion, require a utility to initiate, at the utility's expense, an audit of transactions between the utility and its affiliates performed by an independent third party.

(7) Limited credit support by a utility. A utility may share credit, investment, or financing arrangements with its competitive affiliates if it complies with subparagraphs (A) and (B) of this paragraph.

(A) The utility shall implement adequate safeguards precluding employees of a competitive affiliate from gaining access to information in a manner that would allow or provide a means to transfer confidential information from a utility to an affiliate, create an opportunity for preferential treatment or unfair competitive advantage, lead to customer confusion, or create significant opportunities for cross-subsidization of affiliates.

(B) The utility shall not allow an affiliate to obtain credit under any arrangement that would include a specific pledge of any assets in the rate base of the utility or a pledge of cash reasonably necessary for utility operations. This subsection does not affect a utility's obligations under other law or regulations, such as the obligations of a public utility holding company under §25.271(c)(2) of this title (relating to Foreign Utility Company Ownership by Exempt Holding Companies).

(e) Transactions between a utility and its affiliates.

(1) Transactions with all affiliates. A utility shall not subsidize the business activities of any affiliate with revenues from a regulated service. In accordance with PURA and the commission's rules, a utility and its affiliates shall fully allocate costs for any shared services, including corporate support services, offices, employees, property, equipment, computer systems, information systems, and any other shared assets, services, or products.

(A) Sale of products or services by a utility. Unless otherwise approved by the commission and except for corporate support services, any sale of a product or service by a utility shall be governed by a tariff approved by the commission. Products and services shall be made available to any third party entity on the same terms and conditions as the utility makes those products and services available to its affiliates.

(B) Purchase of products, services, or assets by a utility from its affiliate. Products, services, and assets shall be priced at levels that are fair and reasonable to the customers of the utility and that reflect the market value of the product, service, or asset.

(C) Transfers of assets. Except for asset transfers implementing unbundling pursuant to PURA §39.051, asset valuation in accordance with PURA §39.262, and transfers of property pursuant to a financing order issued under PURA, Chapter 39, Subchapter G, assets transferred from a utility to its affiliates shall be priced at levels that are fair and reasonable to the customers of the utility and that reflect the market value of the assets or the utility's fully allocated cost to provide those assets.

(D) Transfer of assets implementing restructuring legislation. The transfer from a utility to an affiliate of assets implementing unbundling pursuant to PURA §39.051, asset valuation in accordance with PURA §39.262, and transfers of property pursuant to a financing order issued under PURA, Chapter 39, Subchapter G will be reviewed by the commission pursuant to the applicable provisions of PURA, and any rules implementing those provisions.

(2) Transactions with competitive affiliates. Unless otherwise allowed in this subsection, transactions between a utility and its competitive affiliates shall be at arm's length. A utility shall maintain a contemporaneous written record of all transactions with its competitive affiliates, except those involving corporate support services and those transactions governed by tariffs. Such records, which shall include the date of the transaction, name of affiliate involved, name of a utility employee knowledgeable about the transaction, and a description of the transaction, shall be maintained by the utility for three years. In addition to the requirements specified in paragraph (1) of this subsection, the following provisions apply to transactions between utilities and their competitive affiliates.

(A) Provision of corporate support services. A utility may engage in transactions directly related to the provision of corporate support services with its competitive affiliates. Such provision of corporate support services shall not allow or provide a means for the transfer of confidential information from the utility to the competitive affiliate, create the opportunity for preferential treatment or unfair competitive advantage, lead to customer confusion, or create significant opportunities for cross-subsidization of the competitive affiliate.

(B) Purchase of products or services by a utility from its competitive affiliate. Except for corporate support services, a utility may not enter into a transaction to purchase a product or service from a competitive affiliate that has a per unit value of $75,000 or more, or a total value of $1 million or more, unless the transaction is the result of a fair, competitive bidding process formalized in a contract subject to the provisions of §25.273 of this title (relating to Contracts Between Electric Utilities and Their Competitive Affiliates).

(C) Transfers of assets. Except for asset transfers facilitating unbundling pursuant to PURA §39.051, asset valuation in accordance with PURA §39.262, and transfers of property pursuant to a financing order issued under PURA, Chapter 39, Subchapter G, any transfer from a utility to its competitive affiliates of assets with a per unit value of $75,000 or more, or a total value of $1 million or more, must be the result of a fair, competitive bidding process formalized in a contract subject to the provisions of §25.273 of this title.

(f) Safeguards relating to provision of products and services.

(1) Products and services available on a non-discriminatory basis. If a utility makes a product or service, other than corporate support services, available to a competitive affiliate, it shall make the same product or service available, contemporaneously and in the same manner, to all similarly situated entities, and it shall apply its tariffs, prices, terms, conditions, and discounts for those products and services in the same manner to all similarly situated entities. A utility shall process all requests for a product or service from competitive affiliates or similarly situated non-affiliated entities on a non-discriminatory basis. If a utility's tariff allows for discretion in its application, the utility shall apply that provision in the same manner to its competitive affiliates and similarly situated non-affiliates, as well as to their respective customers. If a utility's tariff allows no discretion in its application, the utility shall strictly apply the tariff. A utility shall not use customer-specific contracts to circumvent these requirements, nor create a product or service arrangement with its competitive affiliate that is so unique that no competitor could be similarly situated to utilize the product or service.

(2) Discounts, rebates, fee waivers, or alternative tariff terms and conditions. If a utility offers its competitive affiliate or grants a request from its competitive affiliate for a discount, rebate, fee waiver, or alternative tariff terms and conditions for any product or service, it must make the same benefit contemporaneously available, on a non-discriminatory basis, to all similarly situated non-affiliates. The utility shall post a conspicuous notice on its Internet site or public electronic bulletin board for at least 30 consecutive calendar days providing the following information: the name of the competitive affiliate involved in the transaction; the rate charged; the normal rate or tariff condition; the period for which the benefit applies; the quantities and the delivery points involved in the transaction (if any); any conditions or requirements applicable to the benefit; documentation of any cost differential underlying the benefit; and the procedures by which non-affiliates may obtain the same benefit. The utility shall maintain records of such information for a minimum of three years, and shall make such records available for third party review within 72 hours of a written request, or at a time mutually agreeable to the utility and the third party. A utility shall not create any arrangement with its competitive affiliate that is so unique that no competitor could be similarly situated to benefit from the discount, rebate, fee waiver, or alternative tariff terms and conditions.

(3) Tying arrangements prohibited. Unless otherwise allowed by the commission through a rule or tariff prior to a utility's unbundling pursuant to PURA §39.051, a utility shall not condition the provision of any product, service, pricing benefit, or alternative terms or conditions upon the purchase of any other good or service from the utility or its competitive affiliate.

(g) Information safeguards.

(1) Proprietary customer information. A utility shall provide a customer with the customer's proprietary customer information, upon request by the customer. Unless a utility obtains prior affirmative written consent or other verifiable authorization from the customer as determined by the commission, or unless otherwise permitted under this subsection, it shall not release any proprietary customer information to a competitive affiliate or any other entity, other than the customer, an independent organization as defined by PURA §39.151, or a provider of corporate support services for the sole purpose of providing corporate support services in accordance with subsection (e)(2)(A) of this section. The utility shall maintain records that include the date, time, and nature of information released when it releases customer proprietary information to another entity in accordance with this paragraph. The utility shall maintain records of such information for a minimum of three years, and shall make the records available for third party review within 72 hours of a written request, or at a time mutually agreeable to the utility and the third party. When the third party requesting review of the records is not the customer, commission, or Office of Public Utility Counsel, the records may be redacted in such a way as to protect the customer's identity. If proprietary customer information is released to an independent organization or a provider of corporate support services, the independent organization or entity providing corporate support services is subject to the rules in this subsection with respect to releasing the information to other persons.

(A) Exception for law, regulation, or legal process. A utility may release proprietary customer information to another entity without customer authorization where authorized or requested to do so by the commission or where required to do so by law, regulation, or legal process.

(B) Exception for release to governmental entity. A utility may release proprietary customer information without customer authorization to a federal, state, or local governmental entity or in connection with a court or administrative proceeding involving the customer or the utility; provided, however, that the utility shall take all reasonable actions to protect the confidentiality of such information, including, but not limited to, providing such information under a confidentiality agreement or protective order, and shall also promptly notify the affected customer in writing that such information has been requested.

(C) Exception to facilitate transition to customer choice. In order to facilitate the transition to customer choice, a utility may release proprietary customer information to its affiliated retail electric provider or providers of last resort without authorization of those customers only during a period prescribed by the commission.

(D) Exception for release to providers of last resort. On or after January 1, 2002, a utility may provide proprietary customer information to a provider of last resort without customer authorization for the purpose of serving customers who have been switched to the provider of last resort.

(E) Exception for release to State of Texas' Division of Emergency Management. Beginning January 1, 2011, a utility may provide proprietary customer information to the State of Texas' Division of Emergency Management, upon that agency's request for purposes of identifying the customer as a critical care residential customer pursuant to §25.497 of this title (relating to Critical Load Industrial Customers, Critical Load Public Safety Customers, Critical Care Residential Customers, and Chronic Condition Residential Customers).

(2) Nondiscriminatory availability of aggregate customer information. A utility may aggregate non-proprietary customer information, including, but not limited to, information about a utility's energy purchases, sales, or operations or about a utility's energy-related goods or services. However, except in circumstances solely involving the provision of corporate support services in accordance with subsection (e)(2)(A) of this section, a utility shall aggregate non-proprietary customer information for a competitive affiliate only if the utility makes such aggregation service available to all non-affiliates under the same terms and conditions and at the same price as it is made available to any of its affiliates. In addition, no later than 24 hours prior to a utility's provision to its competitive affiliate of aggregate customer information, the utility shall post a conspicuous notice on its Internet site or other public electronic bulletin board for at least 30 consecutive calendar days, providing the following information: the name of the competitive affiliate to which the information will be provided, the rate charged for the information, a meaningful description of the information provided, and the procedures by which non-affiliates may obtain the same information under the same terms and conditions. The utility shall maintain records of such information for a minimum of three years, and shall make such records available for third party review within 72 hours of a written request, or at a time mutually agreeable to the utility and the third party.

(3) No preferential access to transmission and distribution information. A utility shall not allow preferential access by its competitive affiliates to information about its transmission and distribution systems.

(4) Other limitations on information disclosure. Nothing in this rule is intended to alter the specific limitations on disclosure of confidential information in the Texas Utilities Code, the Texas Government Code, Chapter 552, or the commission's substantive and procedural rules.

(5) Other information. Except as otherwise allowed in this subsection, a utility shall not share information, except for information required to perform allowed corporate support services, with competitive affiliates unless the utility can prove to the commission that the sharing will not compromise the public interest prior to any such sharing. Information that is publicly available, or that is unrelated in any way to utility activities, may be shared.

(h) Safeguards relating to joint marketing and advertising.

(1) Utility name or logo. Before September 1, 2005, a utility shall not allow the use of its corporate name, trademark, brand, or logo by a competitive affiliate, on employee business cards or in any written or auditory advertisements of specific services to existing or potential residential or small commercial customers located within the utility's certificated service area, whether through radio or television, Internet-based, or other electronic format accessible to the public, unless the competitive affiliate includes a disclaimer with its use of the utility's corporate name, trademark, brand, or logo. Such disclaimer of the corporate name, trademark, brand, or logo in the material distributed must be written in a bold and conspicuous manner or clearly audible, as appropriate for the communication medium, and shall state the following: "{Name of competitive affiliate} is not the same company as {name of utility} and is not regulated by the Public Utility Commission of Texas, and you do not have to buy {name of competitive affiliate}'s products to continue to receive quality regulated services from {name of utility}."

(2) Joint marketing, advertising, and promotional activities.

(A) A utility shall not:

(i) provide or acquire leads on behalf of its competitive affiliates;

(ii) solicit business or acquire information on behalf of its competitive affiliates;

(iii) give the appearance of speaking or acting on behalf of any of its competitive affiliates;

(iv) share market analysis reports or other types of proprietary or non-publicly available reports, including, but not limited to, market forecast, planning, or strategic reports, with its competitive affiliates;

(v) represent to customers or potential customers that it can offer competitive retail services bundled with its tariffed services; or

(vi) request authorization from its customers to pass on information exclusively to its competitive affiliate.

(B) A utility shall not engage in joint marketing, advertising, or promotional activities of its products or services with those of a competitive affiliate in a manner that favors the affiliate. Such joint marketing, advertising, or promotional activities include, but are not limited to, the following activities:

(i) acting or appearing to act on behalf of a competitive affiliate in any communications and contacts with any existing or potential customers;

(ii) joint sales calls;

(iii) joint proposals, either as requests for proposals or responses to requests for proposals;

(iv) joint promotional communications or correspondence, except that a utility may allow a competitive affiliate access to customer bill advertising inserts according to the terms of a commission-approved tariff so long as access to such inserts is made available on the same terms and conditions to non-affiliates offering similar services as the competitive affiliate that uses bill inserts;

(v) joint presentations at trade shows, conferences, or other marketing events within the State of Texas; and

(vi) providing links from a utility's Internet web site to a competitive affiliate's Internet web site.

(C) At a customer's unsolicited request, a utility may participate in meetings with a competitive affiliate to discuss technical or operational subjects regarding the utility's provision of transmission or distribution services to the customer, but only in the same manner and to the same extent the utility participates in such meetings with unaffiliated electric or energy services suppliers and their customers. The utility shall not listen to, view, or otherwise participate in any way in a sales discussion between a customer and a competitive affiliate or an unaffiliated electric or energy services supplier.

(3) Requests for specific competitive affiliate information. If a customer or potential customer makes an unsolicited request to a utility for information specifically about any of its competitive affiliates, the utility may refer the customer or potential customer to the competitive affiliate for more information. Under this paragraph, the only information that a utility may provide to the customer or potential customer is the competitive affiliate's address and telephone number. The utility shall not transfer the customer directly to the competitive affiliate's customer service office via telephone or provide any other electronic link whereby the customer could contact the competitive affiliate through the utility. When providing the customer or potential customer information about the competitive affiliate, the utility shall not promote its competitive affiliate or its competitive affiliate's products or services, nor shall it offer the customer or potential customer any opinion regarding the service of the competitive affiliate or any other service provider.

(4) Requests for general information about products or services offered by competitive affiliates and their competitors. If a customer or potential customer requests general information from a utility about products or services provided by its competitive affiliate or its affiliate's competitors, the utility shall not promote its competitive affiliate or its affiliate's products or services, nor shall the utility offer the customer or potential customer any opinion regarding the service of the competitive affiliate or any other service provider. The utility may direct the customer or potential customer to a telephone directory or to the commission, or provide the customer with a recent list of suppliers developed and maintained by the commission, but the utility may not refer the customer or potential customer to the competitive affiliate except as provided for in paragraph (3) of this subsection.

(i) Remedies and enforcement.

(1) Internal codes of conduct for the transition period. During the transition to competition, including the period prior to and during utility unbundling pursuant to PURA §39.051, each utility shall implement an internal code of conduct consistent with the spirit and intent of PURA §39.157(d) and with the provisions of this section. Such internal codes of conduct are subject to commission review and approval in the context of a utility's unbundling plan submitted pursuant to PURA §39.051(e); however, such internal codes of conduct shall take effect, on an interim basis, on January 10, 2000. The internal codes of conduct shall be developed in good faith by the utility based on the extent to which its affiliate relationships are known by January 10, 2000, and then updated as necessary to ensure compliance with PURA and commission rules. A utility exempt from PURA Chapter 39 pursuant to PURA §39.102(c) shall adopt an internal code of conduct that is consistent with its continued provision of bundled utility service during the period of its exemption.

(2) Ensuring compliance for new affiliates. A utility and a new affiliate are bound by the code of conduct immediately upon creation of the new affiliate. Upon the creation of a new affiliate, the utility shall immediately post a conspicuous notice of the new affiliate on its Internet site or other public electronic bulletin board for at least 30 consecutive calendar days. Within 30 days of creation of the new affiliate, the utility shall file an update to its internal code of conduct and compliance plan, including all changes due to the addition of the new affiliate. The utility shall ensure that any interaction with the new affiliate is in compliance with this section.

(3) Compliance Audits. No later than one year after the utility has unbundled pursuant to PURA §39.051, and, at a minimum, every third year thereafter, the utility shall have an audit prepared by independent auditors that verifies that the utility is in compliance with this section. The utility shall file the results of each audit with the commission within one month of the audit's completion. The cost of the audits shall not be charged to utility ratepayers.

(4) Informal complaint procedure. A utility shall establish and file with the commission a complaint procedure for addressing alleged violations of this section. This procedure shall contain a mechanism whereby all complaints shall be placed in writing and shall be referred to a designated officer of the utility. All complaints shall contain the name of the complainant and a detailed factual report of the complaint, including all relevant dates, companies involved, employees involved, and the specific claim. The designated officer shall acknowledge receipt of the complaint in writing within five working days of receipt. The designated officer shall provide a written report communicating the results of the preliminary investigation to the complainant within thirty days after receipt of the complaint, including a description of any course of action that will be taken. In the event the utility and the complainant are unable to resolve the complaint, the complainant may file a formal complaint with the commission. The utility shall notify the complainant of his or her right to file a formal complaint with the commission, and shall provide the complainant with the commission's address and telephone number. The utility and the complainant shall make a good faith effort to resolve the complaint on an informal basis as promptly as practicable. The informal complaint process shall not be a prerequisite for filing a formal complaint with the commission, and the commission may, at any time, institute a complaint against a utility on its own motion.

(5) Enforcement by the commission. A violation or series or set of violations of this section that materially impairs, or is reasonably likely to materially impair, the ability of a person to compete in a competitive market shall be deemed an abuse of market power.

(A) In addition to other methods that may be available, the commission may enforce the provisions of this rule by:

(i) seeking an injunction or civil penalties to eliminate or remedy the violation or series or set of violations;

(ii) suspending, revoking, or amending a certificate or registration as authorized by PURA §39.356; or

(iii) pursuing administrative penalties under PURA, Chapter 15, Subchapter B.

(B) The imposition of one penalty under this section does not preclude the imposition of other penalties as appropriate for the violation or series or set of violations.

(C) In assessing penalties, the commission shall consider the following factors:

(i) the utility's prior history of violations;

(ii) the utility's efforts to comply with the commission's rules, including the extent to which the utility has adequately and physically separated its office, communications, accounting systems, information systems, lines of authority, and operations from its affiliates, and efforts to enforce these rules;

(iii) the nature and degree of economic benefit gained by the utility's competitive affiliate;

(iv) the damages or potential damages resulting from the violation or series or set of violations;

(v) the size of the business of the competitive affiliate involved;

(vi) the penalty's likely deterrence of future violations; and

(vii) such other factors deemed appropriate and material to the particular circumstances of the violation or series or set of violations.

(6) No immunity from antitrust enforcement. Nothing in these affiliate rules shall confer immunity from state or federal antitrust laws. Sanctions imposed by the commission for violations of this rule do not affect or preempt antitrust liability, but rather are in addition to any antitrust liability that may apply to the anti-competitive activity. Therefore, antitrust remedies also may be sought in federal or state court to cure anti-competitive activities.

(7) No immunity from civil relief. Nothing in these affiliate rules shall preclude any form of civil relief that may be available under federal or state law, including, but not limited to, filing a complaint with the commission consistent with this subsection.

(8) Preemption. This rule supersedes any procedures or protocols adopted by an independent organization as defined by PURA §39.151, or similar entity, that conflict with the provisions of this rule.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 20, 2010.

TRD-201007245

Adriana A. Gonzales

Rules Coordinator

Public Utility Commission of Texas

Effective date: January 9, 2011

Proposal publication date: October 15, 2010

For further information, please call: (512) 936-7223