Current through Reg. 50, No. 13; March 28, 2025
(a)
Purpose. To protect against anticompetitive practices, consistent with the
provisions of the Public Utility Regulatory Act (PURA) §39.157(e) and
Chapters 40 and 41, the provisions of this section establish safeguards to
govern the interaction between the transmission and distribution business unit
(TDBU), as defined in subsection (c) of this section, of a municipally owned
utility (MOU) or electric cooperative (COOP) and its competitive affiliates,
and establish specific anticompetitive standards to apply to the activities of
Bundled MOU/COOPS, as defined in subsection (c) of this section. It is intended
by this section that no MOU/COOP subject to this section shall engage in the
following anticompetitive practices:
(1)
Subsidize competitive activities directly or indirectly through rates charged
for the provision of electric service;
(2) Allow discriminatory access to
transmission and distribution products and services;
(3) Allow preferential access to transmission
and distribution-related information;
(4) Allow unauthorized access to confidential
customer information; and
(5) Allow
employees performing transmission and distribution functions to provide leads
to or promote the products of competitive affiliates or any persons providing
competitive energy-related activities on behalf of a Bundled
MOU/COOP.
(b)
Application.
(1) General application. This
section applies to the TDBU of a municipally owned utility or an electric
cooperative (collectively referred to as MOU/COOP) operating in the State of
Texas, and the transactions or activities between the TDBU and its competitive
affiliates, and to an MOU/COOP that is conducting the activities of a TDBU and
of a competitive affiliate on a bundled basis, provided that each of the
following conditions is met:
(A) The MOU/COOP
has chosen to participate in customer choice pursuant to PURA §40.051(b)
or PURA §41.051(b).
(B) The
competitive affiliate of an MOU/COOP or a Bundled MOU/COOP is providing
electric energy at retail to consumers in Texas outside its certificated retail
service area. For the purposes of this section, an MOU/COOP shall not be
considered to be providing electric energy to retail consumers outside its
certificated retail service area if:
(i) the
MOU/COOP was serving the area prior to the date of customer choice;
(ii) after receiving notice that the MOU/COOP
or its affiliate is selling electric energy at retail outside its retail
service area, which identifies the service location, the MOU/COOP or its
affiliate promptly investigates and thereafter takes reasonable steps to cease
the provision of service outside its service area as soon as reasonably
practicable; or
(iii) there is a
dispute concerning the service area boundary and no commission order resolving
the dispute has become final or the commission's order is subject to
appeal.
(2)
Effect of unbundling on application. Pursuant to PURA §40.055 and
§41.055 it is the discretion of the governing body of the MOU/COOP to
determine whether to unbundle any energy-related activities, and whether to do
so structurally or functionally. The MOU/COOP shall file with the commission,
in conjunction with the filing required by subsections (n)(1)(A) or (o)(3)(A)
of this section, a written declaration of whether it chooses to structurally or
functionally unbundle or whether it will provide services in a competitive
market on a bundled basis. The written declaration may be amended from time to
time but no amendment shall be effective before it is filed with the
commission. The MOU/COOP shall comply with this section as follows:
(A) A structurally or functionally unbundled
MOU/COOP shall comply with the provisions of this subsection, as applicable to
entities of its size. Subsection (o) of this section is not applicable to a
functionally or structurally unbundled MOU/COOP.
(B) A Bundled MOU/COOP shall comply with the
requirements of paragraphs (5) and (7)-(9) of this subsection, subsection
(n)(2)-(10), and subsection (o) of this section.
(3) Small TDBU. A small unbundled TDBU is
subject to the following provisions of this section only:
(A) paragraphs (1) and (5)-(9) of this
subsection, application;
(B)
subsection (i)(4) of this section, separate books and records;
(C) subsection (j)(1) of this section,
transactions with competitive affiliates; however, transactions provided for
under subsection (j)(1) of this section shall be conducted at pricing levels
that are fair and reasonable to the customers of the small TDBU and that
reflect not less than the book value of the assets and the cost of employee
time determined on the basis of aggregate percentage of time devoted by the
employee to the competitive function or transmission and distribution function
and do not include any discounts, rebates, fee waivers or alternative tariff
terms and conditions;
(D)
subsection (k)(1) of this section, tying arrangements prohibited;
(E) subsection (k)(2) of this section,
products and services available on a non-discriminatory basis; and
(F) subsection (n) of this section, remedies
and enforcement.
(4)
Mid-size TDBU. A mid-size unbundled TDBU is subject to the following provisions
of this section only:
(A) paragraphs (1) and
(5)-(9) of this subsection, application;
(B) subsection (d) of this section, annual
report of code-related activities; however, a mid-size TDBU shall report only
with respect to the activities for which it is subject to regulation under this
section;
(C) subsection (e) of this
section, copies of contracts or agreements;
(D) subsection (f) of this section, tracking
migration and sharing of employees;
(E) subsection (g) of this section, reporting
deviations from the code of conduct; however, a mid-sized TDBU shall only
report deviations with respect to the activities for which it is subject to
regulation under this section;
(F)
subsection (h) of this section, ensuring compliance for new competitive
affiliates;
(G) subsection (i) of
this section, separation of a TDBU from its competitive affiliates; however,
sharing of employees, facilities, or other resources with competitive
affiliates shall be allowed, and the safeguards shall be deemed achieved
through compliance with the transactional, information transfer, and marketing
and advertising standards applicable to a mid-size TDBU under subsections (j),
(k), and (l) of this section;
(H)
subsection (j)(1) of this section, transactions with competitive affiliates;
however, transactions provided for under subsection (j)(1) of this section
shall be conducted at pricing levels that are fair and reasonable to the
customers of the mid-size TDBU and that reflect not less than the book value of
the assets and the cost of employee time determined on the basis of aggregate
percentage of time devoted by the employee to the competitive function or
transmission and distribution function and do not include any discounts,
rebates, fee waivers or alternative tariff terms and conditions;
(I) subsection (j)(2) of this section,
records of transactions;
(J)
subsection (j)(3) of this section, provision of corporate support services,
except to the extent that sharing of confidential information may not
practicably be avoided due to cross-functional responsibilities of
employees;
(K) subsection (k)(1) of
this section, tying arrangements prohibited;
(L) subsection (k)(2) of this section,
products and services available on a non-discriminatory basis;
(M) subsection (l)(1) of this section,
proprietary customer information;
(N) subsection (1)(2) of this section,
nondiscriminatory availability of aggregate customer information. A mid-size
TDBU shall make aggregate customer information available to all non-affiliates
under the same terms and conditions and at the same price or fully allocated
cost that it is made available to any of its competitive affiliates, but is not
otherwise subject to the reporting requirements in subsection (l)(2) of this
section.
(O) subsection (l)(3) of
this section, no preferential access to transmission and distribution
information. A mid-size TDBU shall comply with this paragraph except to the
extent preferential access may not practicably be avoided due to
cross-functional responsibilities of employees or other operating constraints
as reasonably determined by the mid-size TDBU;
(P) instead of the restrictions in subsection
(m)(2) of this section, a mid-sized TDBU may participate in joint marketing,
advertising, and promotional activities with a competitive affiliate, provided
that the mid-size TDBU informs the customer that the competitive energy
services to which the promotional activities are directed are available from
other providers as well as the mid-size TDBU and makes available to the
customer upon request a copy of the most recent list of competitive energy
service providers as developed and maintained by the commission;
(Q) instead of the restrictions in
subsections (m)(3) and (m)(4) of this section, if a customer or potential
customer of a mid-size TDBU makes an unsolicited request for distribution
service, competitive service, or information relating to such services, the
mid-size TDBU shall inform the customer that competitive energy-related
activities are available not only from the mid-size TDBU but also from other
providers. The mid-size TDBU shall make available to a customer upon request a
copy of the most recent list of competitive energy service providers as
developed and maintained by the commission and may make available telephone
numbers and other commonly available information; and
(R) subsection (n) of this section, remedies
and enforcement.
(5)
Duration of code application. This section applies to a TDBU and a Bundled
MOU/COOP, regardless of whether it is classified as large, mid-size or small,
only so long as each of the conditions of paragraph (1) of this subsection
continue to be met.
(6) Report of
energy system sales and declaration of code applicability. A report of total
metered electric energy (MWh) delivered through the TDBU's system for sale at
retail and wholesale, for the average of the three most recent calendar years,
shall be filed annually with the commission by each MOU/COOP subject to the
provisions of this section. The initial report shall be filed in conjunction
with subsection (n)(1) of this section. After the initial report filing, the
report of energy system sales shall be filed annually by June 1, and shall
encompass the period from January 1 through December 31 of the preceding year.
The annual report of energy system sales shall be filed under a control number
designated by the commission for each calendar year. Both the initial and
annual reports of energy sales shall include a statement from the MOU/COOP
affirming that it is classified as either a small, mid-size, or large TDBU.
(A) In the event that the MWhs delivered
through the TDBU's system increase so that a TDBU is reclassified to a larger
size, the TDBU shall notify the commission through the annual report of energy
system sales. The TDBU shall have one year from the date of the
reclassification to implement the applicable provisions of this
section.
(B) Petition for exception
to reclassification. Any TDBU may petition the commission for exception to the
size determination. Upon request, if a small TDBU is reclassified as a
mid-sized TDBU, the commission may consider an adjustment for growth based upon
total Texas retail sales.
(7) No circumvention of the code of conduct.
An MOU/COOP shall not circumvent the provisions of PURA §39.157(e) or this
section by using any affiliate to provide information, services, products, or
subsidies that would be prohibited by this section between a competitive
affiliate and a TDBU. A Bundled MOU/COOP shall not circumvent the provisions of
PURA §39.157(e) or this section by using any persons to provide
information, services, products, or subsidies that would be prohibited by this
section between persons providing transmission and distribution service on
behalf of the Bundled MOU/COOP and persons providing competitive energy-related
activities on behalf of the Bundled MOU/COOP.
(8) Good cause exception. An MOU/COOP that is
or may become subject to this section may petition the commission at any time
for an exception or waiver of any provision of this section on a showing of
good cause. Good cause may be demonstrated by showing that the cost or
difficulty of achieving compliance outweighs the benefit to be achieved or that
there are other alternative actions that are likely to produce reasonable
results under the circumstances.
(9) Notice of conflict with other regulation
and petition for waiver. Nothing in this section shall affect or modify the
obligation or duties relating to any rules or standards of conduct that may
apply to an MOU/COOP or its affiliates, whether competitive or noncompetitive,
under orders or regulations of the Federal Energy Regulatory Commission (FERC),
Securities and Exchange Commission (SEC), or shall violate PURA, Chapters 40
and 41, subchapter C. An MOU/COOP shall file with the commission a notice of
any provision in this section that conflicts with FERC or SEC orders or
regulations. An MOU/COOP 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 meanings unless the context clearly indicates otherwise:
(1) Affiliate--An entity, including a
business unit or division, that controls, is controlled by, or is under common
control with, an MOU/COOP. Control means the power and authority to direct the
management or policies of an entity through directly or indirectly owning or
holding at least a 5.0% voting or ownership interest. Affiliate includes an
entity determined to be an affiliate by the commission after notice and hearing
based on criteria parallel to those prescribed in PURA §11.006.
(2) Bundled MOU/COOP--An MOU/COOP that is
conducting both transmission and distribution activities and competitive
energy-related activities on a bundled basis without structural or functional
separation of transmission and distribution functions from competitive
energy-related activities and that makes a written declaration of its status as
a Bundled MOU/COOP pursuant to subsection (o)(3)(A) of this section.
(3) Competitive affiliate--An affiliate of an
MOU/COOP that provides services or sells products at retail in a competitive
energy-related market in this state, including telecommunications services to
the extent those services are energy-related. An affiliate of an MOU/COOP that
is selling energy only in the capacity of a provider of last resort within the
scope of PURA §40.053(c) and (d) or PURA §41.053 (c) and (d) is not a
competitive affiliate under this definition. The term competitive affiliate
shall include both competitive divisions and competitive
subsidiaries.
(4) Competitive
division (CD)--A competitive affiliate that is organized as a division or other
part of an MOU/COOP.
(5)
Competitive energy-related activities--Services or products that are sold at
retail in a competitive energy-related market in this state, including
telecommunications services to the extent those services are
energy-related.
(6) Competitive
subsidiary (CS)--A competitive affiliate that is organized as a corporation or
other legally distinct entity.
(7)
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 an MOU/COOP's
transmission or distribution systems, proprietary customer information, trade
secrets, competitive information relating to internal manufacturing processes,
and information about an MOU/COOP's transmission or distribution system,
operations, or plans for expansion.
(8) Corporate support services--Services
shared by a TDBU, or an affiliate created to perform corporate support
services, with the MOU/COOP's affiliates of joint corporate oversight,
governance, support systems, and personnel. For a Bundled MOU/COOP, "corporate
support services" includes governance, support systems, and personnel.
(A) Examples of services that may be shared,
to the extent the services comply with this section, 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, corporate planning, and community
economic development if the economic development activities are within the
MOU/COOP's certificated retail service area.
(B) Examples of services that may not be
shared, except as otherwise allowed under the terms of this section, include
engineering, purchasing of electric transmission facilities and service,
transmission and distribution system operations, and marketing.
(9) Fully allocated cost--The cost
of a product, service, or asset based on book values for the component elements
established through generally accepted accounting principles (GAAP); or
alternatively, an internal transfer price based upon the actual or expected
(budgeted) operating and maintenance expenses and a capital component, as
appropriate, divided by the expected or actual units for the service or product
produced. Such transfer prices may be set as needed but shall not be used
beyond a three year period without review. The operating and maintenance
expenses shall be fully loaded with applicable overheads. The capital component
shall consider the original cost of the associated assets and a reasonable
return. Such internal prices may include an allowance for transfers to a
municipal general fund at the discretion of the municipality.
(10) Large transmission and distribution
business unit (TDBU)--A TDBU that:
(A)
delivers total metered electric energy through its system for sale at retail
for the average of the three most recent calendar years greater than 6,000,000
MWh; and
(B) is otherwise subject
to the provisions of this section as provided in subsection (b)(1) of this
section.
(11) Mid-size
transmission and distribution business unit (TDBU)--A TDBU that:
(A) delivers total metered electric energy
through its system for sale at retail for the average of the three most recent
calendar years that is less than or equal to 6,000,000 MWh and is greater than
500,000 MWh; and
(B) is otherwise
subject to the provisions of this section as provided in subsection (b)(1) and
(b)(4) of this section.
(12) Municipally owned utility/electric
cooperative (MOU/COOP)--A municipally owned utility (MOU) as defined in PURA
§11.003(11) or an electric cooperative (COOP) as defined in PURA
§11.003(9). As used in this section, MOU/COOP does not include a
competitive affiliate but does include an MOU, a COOP, or a river authority
that has an affiliate relationship with a TDBU that is a division or part of
the MOU/COOP.
(13) Proprietary
customer information--Any information compiled by a TDBU 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.
(14) Small
transmission and distribution business unit (TDBU)--A TDBU that:
(A) delivers total metered electric energy
through its system for sale at retail of less than 500,000 MWh for the average
of the three most recent calendar years; and
(B) is otherwise subject to the provisions of
this section as provided in subsection (b)(1) and (b)(3) of this
section.
(15)
Transaction--Any interaction between a TDBU and its competitive affiliates in
which a service, asset, product, property, right, or other item is transferred
or received by either the TDBU or its competitive affiliates.
(16) Transmission and distribution business
unit (TDBU)--The business unit of an MOU/COOP, whether structurally unbundled
as a separate legal entity or functionally unbundled as a division, that owns
or operates for compensation in this state equipment or facilities to transmit
or distribute electricity at retail, except for facilities necessary to
interconnect a generation facility with the transmission or distribution
network, a facility not dedicated to public use, or a facility otherwise
excluded from the definition of electric utility in a qualifying power region
certified under PURA §39.152. TDBU does not include an MOU/COOP that owns,
controls, or is an affiliate of the TDBU if the TDBU is organized as a separate
corporation or other legally distinct entity. Except as specifically authorized
by statute, a TDBU shall not provide competitive energy-related
activities.
(d) Annual
report of code-related activities. A report of activities related to this
section shall be filed annually with the commission. Using forms approved by
the commission, a TDBU shall report activities among itself and its competitive
affiliates in accordance with the requirements of this section. The report
shall be filed by June 1, and shall encompass the period from January 1 through
December 31 of the preceding year during which the MOU/COOP was subject to this
section.
(e) Copies of contracts or
agreements. A TDBU shall reduce to writing and file with the commission copies
of any contracts or agreements it has with its competitive affiliates. The
filing of an earnings report does not satisfy the requirements of this section.
All contracts or agreements shall be filed by June 1 of each year as
attachments to the annual report of code-related activities required in
subsection (d) of this section. In subsequent years, if no significant changes
have been made to the contract or agreement, an amendment sheet may be filed in
lieu of refiling the entire contract or agreement.
(f) Tracking migration and sharing of
employees. An MOU/COOP shall track and document the movement between the TDBU
and its competitive affiliates of all employees engaged in transmission or
distribution system operations, including persons employed by the MOU/COOP who
are engaged in transmission or distribution system operations on a day-to-day
basis or who have knowledge of transmission or distribution system operations.
An MOU/COOP shall also document the assignment of shared employees engaged in
both transmission or distribution system operations and competitive
energy-related activities, if any. Employee migration and sharing information
shall be included in the MOU/COOP's annual report of code-related activities.
For migrating employees, the tracking information shall include an
identification code, the respective titles held while employed at the TDBU and
the competitive affiliate, and the effective dates of the migration. For shared
employees, the tracking information shall include the employees' name, job
title, scope of activities, and allocation of time to transmission and
distribution functions and competitive energy-related activities.
(g) Reporting deviations from the code of
conduct. A TDBU shall report information regarding the instances in which
deviations from this section were necessary to ensure public safety or system
reliability pursuant to this section. The information reported shall include
the nature of the circumstances involved and the date of the deviation. Within
30 days of each deviation relating to a competitive affiliate, the MOU/COOP
shall report this information to the commission and shall conspicuously post
the information on its Internet site or a public electronic bulletin board for
30 consecutive calendar days. Information regarding a deviation shall be
summarized in the MOU/COOP's annual report of code-related
activities.
(h) Ensuring compliance
for new competitive affiliates. An MOU/COOP and a new competitive affiliate are
bound by this code of conduct, to the extent applicable, immediately upon
creation of the new competitive affiliate. The MOU/COOP shall post a
conspicuous notice of any newly created competitive affiliates on its Internet
site or a public electronic bulletin board for 30 consecutive calendar days.
Additionally, the MOU/COOP shall ensure that its annual report of code-related
activities reflects all changes that result from the creation of new
competitive affiliates.
(i)
Separation of a TDBU from its competitive affiliates.
(1) Sharing of employees, officers and
directors, property, equipment, computer and information systems, other
resources, and corporate support services. An MOU/COOP and its competitive
affiliate may share common employees, officers and trustees/directors,
property, equipment, computer and information systems, other resources, and
corporate support services, if the TDBU implements safeguards that the
commission determines are adequate to preclude employees of a competitive
affiliate from gaining access to confidential information in a manner that
would allow or provide a means to transfer confidential information from the
TDBU to the competitive affiliate, create an opportunity for preferential
treatment or unfair competitive advantage, lead to customer confusion, or
create significant opportunities for cross-subsidization of a competitive
affiliate.
(2) Employee transfers
and temporary assignments.
(A) An MOU/COOP
shall not assign to a competitive affiliate for less than one year employees
engaged in transmission or distribution system operations unless safeguards are
in place to prevent transfer of confidential information. TDBU employees
engaged in transmission or distribution system operations, including persons
employed by a structurally unbundled service company affiliate of the TDBU who
are engaged on a day-to-day basis in 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 information or
information gained from the TDBU 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.
(B) Movement of employees to a competitive
affiliate may be accomplished either through the employee's termination of
employment with the TDBU and acceptance of employment with the CS or through a
transfer to the CD as long as the transfer results in the TDBU bearing no
ongoing costs associated with that employee.
(C) Transferring employees shall sign a
statement indicating that they are aware of and understand the restrictions set
forth in this section. The TDBU 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.
(D) Employees may be temporarily assigned to
an affiliate or non-affiliated TDBU to assist in restoring power in the event
of a major service interruption or to assist in resolving emergency situations
affecting system reliability. Any such deviation shall be reported and posted
on the TDBU's Internet site or other public electronic bulletin board within 24
hours and for at least 30 consecutive calendar days.
(3) Sharing of office space. A TDBU's office
space shall be physically separate from the office space of its competitive
affiliates. 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.
(4) Separate books and records. A TDBU shall
maintain separate books of accounts and records from those of any CS. In a
proceeding under subsection (n)(3) of this section, the commission may review
records relating to a transaction between a TDBU and a CS. Costs of CDs, other
than those costs related to corporate support services, shall be segregated by
account.
(A) In accordance with generally
accepted accounting principles, a TDBU shall record all transactions with its
CS whether they involve direct or indirect expenses, and all transactions with
CDs that relate to the transmission and distribution function.
(B) A TDBU shall prepare financial statements
that are not consolidated with those of a CS.
(5) Limitations on credit support by a TDBU
for a competitive affiliate. A TDBU and its affiliates may share credit,
investment, or financing arrangements with a competitive affiliate if the TDBU
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 the TDBU to the competitive
affiliate or lead to customer confusion. Nothing in this section shall impair
existing contracts, covenants, or obligations between an MOU/COOP and its
lenders and holders of bonds issued on behalf of or by an MOU/COOP.
(A) MOU. In issuing debt related to
competitive affiliates, an MOU shall be governed by and maintained, operated,
and managed in accordance with the laws of the State of Texas, including the
ordinances and resolutions authorizing the issuance of any form of indebtedness
and the provisions thereof, which require that funds reasonably necessary for
operation and maintenance expenses (including TDBU operation and maintenance
expenses) have priority in any pledge of gross revenues of the municipally
owned utility system.
(B) COOP. A
COOP TDBU shall not allow a competitive affiliate to obtain credit under any
arrangement that would include a specific pledge of assets reasonably necessary
for TDBU operations or a pledge of gross revenues of the TDBU.
(j) Transactions
between a TDBU and its competitive affiliates.
(1) Transactions with competitive affiliates.
Except for transfers implementing unbundling, transfers of property pursuant to
a rate order having the effect of a financing order, credit support, and
corporate support services provided by a TDBU to its competitive affiliate, any
transaction between a TDBU and its competitive affiliate shall be accomplished
at pricing levels that are fair and reasonable to the customers of the TDBU and
that reflect the approximate market value of the assets or the fully allocated
cost of the assets, services, or products, and that do not include any
preferential discounts, rebates, fee waivers or alternative tariff terms and
conditions. Such transfers include, but are not limited to, the following:
(A) sale or provision of products or services
by a TDBU to its competitive affiliate;
(B) purchase or acquisition of products,
services, or assets by a TDBU from a competitive affiliate; or
(C) assets transferred from a TDBU to a
competitive affiliate.
(2) Records of transactions. Each transaction
between a TDBU and its competitive affiliates, other than those involving
corporate support services or transactions governed by tariffs of general
applicability filed at the commission or approved by the TDBU's governing body,
shall be reflected in a contemporaneous written record of the transaction
including the date of the transaction, name of the competitive affiliate, name
of a TDBU employee knowledgeable about the transaction, and description of the
transaction. Such records shall be maintained for three years.
(3) Provision of corporate support services.
A TDBU may engage in transactions directly related to the provision of
corporate support services with its competitive affiliate. Such transactions
shall be carried out in such a way as to not allow or provide the means for the
transfer of confidential information from the TDBU to the competitive
affiliate, the opportunity for preferential treatment or unfair competitive
advantage, customer confusion, or significant opportunities for
cross-subsidization of the competitive affiliate.
(k) Safeguards relating to provision of
products and services.
(1) Tying arrangements
prohibited. A TDBU 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 TDBU or its competitive affiliate.
(2) Products and services available on a
non-discriminatory basis. Any product or service, other than corporate support
services or credit arrangements, made available by a TDBU to its competitive
affiliate shall be made available to all similarly situated entities at the
same price and on the same basis and manner that the product or service was
made available to the competitive affiliate, provided however, that such
provision does not violate PURA §40.104 or §41.104, or the Texas
Constitution, Article III, section 52. Any service required to be provided in
compliance with PURA §39.203 shall be provided in a non-discriminatory
manner and in accordance with the tariffs developed pursuant to any commission
rule implementing that section.
(l) Information safeguards.
(1) Proprietary customer information. Upon
request by the customer, a TDBU shall provide a customer with the customer's
proprietary customer information. Unless a TDBU 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 to 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 (j)(3) of this section. The TDBU 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 TDBU shall maintain records of such
information for a minimum of three years and shall make the records available
for third party review within three business days of a written request or at a
time mutually agreeable to the TDBU 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 TDBU may release proprietary customer
information to another entity without customer authorization where authorized
or requested to do so by the commission or by law, regulation, or legal
process. Nothing in this rule requires disclosure of information that may be
withheld from disclosure under Texas Government Code, Chapter 552.
(B) Exception for release to governmental
entity. Without customer authorization, a TDBU may release proprietary customer
information to a federal, state, or local governmental entity or in connection
with a court or administrative proceeding involving the customer or the TDBU,
provided however, that the TDBU 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, an
MOU/COOP may release proprietary customer information to its competitive
affiliate without authorization of those customers, where either entity will be
exercising the function of retail electric provider or provider of last resort,
provided however, that such information may be released only during the
six-month period prior to implementation of customer choice, during the
six-month period prior to implementation or expansion of a pilot project, or
such additional periods as may be prescribed by the commission.
(D) Exception for release to providers of
last resort. On or after January 1, 2002, a TDBU 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 customer's selected competitive retailer. Subject to
demonstration by the competitive retailer that the customer has selected that
competitive retailer, a TDBU shall release proprietary customer information for
a particular customer to the competitive retailer chosen by that customer in
connection with provision of metering data or otherwise in compliance with the
Access Tariff applicable to the TDBU under PURA §39.203.
(2) Nondiscriminatory availability
of aggregate customer information. A TDBU may aggregate non-proprietary
customer information, including, but not limited to, information about a TDBU's
energy-related goods or services. However, except in circumstances solely
involving the provision of corporate support services in accordance with
subsection (j)(3) of this section, a TDBU shall aggregate non-proprietary
customer information for a competitive affiliate only if the TDBU makes such
aggregation service available to all non-affiliates under the same terms and
conditions and at the same price or fully allocated cost as it is made
available to any of its competitive affiliates. In addition, no later than 24
hours prior to a TDBU's provision to its competitive affiliate of aggregate
customer information, the TDBU 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 or cost
allocated for the information, a meaningful description of the information
provided, and the procedures by which non-affiliates may obtain the same
information under the terms and conditions. The TDBU shall maintain records of
such disclosure information for a minimum of three years and shall make such
records available for third party review within three business days of a
written request or at a time mutually agreeable to the TDBU and the third
party.
(3) No preferential access
to transmission and distribution information. A TDBU 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 TDBU shall not
share information with competitive affiliates, except for information required
to perform allowed corporate support services unless the TDBU 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.
(m) Safeguards relating to joint marketing
and advertising.
(1) Name and logo. A TDBU
may not, prior to September 1, 2005, allow the use of its corporate trademark,
name, brand, or logo by a CS 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 TDBU's
certificated service area, whether through radio or television, Internet-based,
or other electronic format accessible to the public unless the CS includes a
disclaimer with its use of the TDBU's corporate trademark, name, brand, or
logo. Such disclaimer of the corporate trademark, name, 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 CS} is not the same entity as {name of TDBU} and you
do not have to buy {name of CS}'s products to continue to receive quality
services from {name of TDBU}." A TDBU may allow the use of its corporate name,
brand, or logo by a CD in any context.
(2) Joint marketing, advertising, and
promotional activities.
(A) A TDBU 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
in connection with any marketing, advertising or promotional activities, other
than community economic development activities;
(iv) share market analysis reports or other
types of proprietary or non-publicly available reports relating to retail
energy sales, including, but not limited to, market forecast, planning, or
strategic reports with its competitive affiliates; or
(v) request authorization from its customers
to pass on information exclusively to its competitive affiliate.
(B) A TDBU 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
competitive 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;
(iii) joint proposals,
either as requests for proposals or responses to requests for
proposals;
(iv) joint promotional
communications or correspondence, except that a TDBU may allow a competitive
affiliate access to customer bill advertising inserts 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
TDBU's Internet web site to a competitive affiliate's Internet web
site.
(C) At a
customer's unsolicited request, a TDBU may participate in meetings with a
competitive affiliate to discuss technical or operational subjects regarding
the TDBU's provision of transmission or distribution services to the customer
but only in the same manner and to the same extent the TDBU participates in
such meetings with unaffiliated electric or energy services suppliers and their
customers. Representatives of a TDBU may be present during a sales discussion
between a customer and the TDBU's competitive affiliate but shall not
participate in the discussion or purport to act on behalf of the competitive
affiliate.
(3) Requests
for specific competitive affiliate information. If a customer or potential
customer makes an unsolicited request to a TDBU for information specifically
about any of its competitive affiliates, the TDBU may refer the customer or
potential customer to the competitive affiliate for more information. Under
this paragraph, the only information that a TDBU may provide to the customer or
potential customer is the competitive affiliate's address and telephone number.
The TDBU 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 TDBU. When providing the customer or potential customer information
about the competitive affiliate, the TDBU 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 TDBU
about products or services provided by its competitive affiliate or the
competitors of its CS or CD, the TDBU shall not promote its competitive
affiliate or its competitive affiliate's products or services, nor shall the
TDBU offer the customer or potential customer any opinion regarding the service
of the competitive affiliate or any other service provider. The TDBU 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 TDBU may not refer the customer or
potential customer to the competitive affiliate except as provided for in
paragraph (3) of this subsection.
(n) Remedies and enforcement.
(1) Code implementation filing.
(A) Not later than 120 days prior to the
implementation of customer choice by an MOU/COOP, a TDBU shall file with the
commission its plan for implementing the provisions of this section, addressing
all applicable requirements of this section in the context of its operations as
they will be conducted in the competitive retail market. The TDBU shall post
notice of its filing on its Internet site or a public electronic bulletin board
for 30 consecutive days and shall provide copies of the filing to requesting
parties. Interested parties may file comments on the filing with the commission
within 30 days following the filing and shall provide copies of such comments
to the TDBU. Commission staff shall review the code implementation filing and
provide to the TDBU its comments and recommendations as to any suggested
changes in the filing within 60 days following the date of the filing. The TDBU
may amend its initial filing based on the comments and recommendations and
shall file any such amendments not later than 75 days following the date of the
initial filing. The filing provided for in this paragraph is not subject to the
contested hearings process, except upon complaint by an interested party or the
commission staff.
(B) In lieu of
the implementation filing provided for in subparagraph (A) of this paragraph,
an MOU/COOP may file with the commission a statement that it does not at this
time intend to provide electric energy at retail to consumers in Texas outside
its certificated retail service area as provided for in subsection (b)(1)(B) of
this section. Subsequently, if an MOU/COOP intends to provide electric energy
at retail to consumers in Texas outside its certificated retail service area as
provided for in subsection (b)(1)(B) of this section, it shall file with the
commission the implementation filing provided for in subparagraph (A) of this
paragraph not later than 120 days prior to the time it provides retail electric
energy in Texas outside its certificated retail service area.
(2) Informal complaint procedure.
A TDBU or a Bundled MOU/COOP 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 or other person employed
by the TDBU or the Bundled MOU/COOP.
(A) All
complaints shall contain:
(i) the name of the
complainant;
(ii) a detailed
factual report of the complaint, including all relevant dates, entities or
divisions involved, employees involved, and the specific claim.
(B) A complaint must be filed with
the TDBU or the Bundled MOU/COOP within 90 days of the date the complaining
party knew, or with diligent investigation should have known, that the
violation occurred, but in no event may a complaint be filed more than three
years after the violation occurred.
(C) 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 30 days after receipt
of the complaint, including a description of any course of action that will be
taken.
(D) In the event the TDBU or
the Bundled MOU/COOP and the complainant are unable to resolve the complaint,
the complainant may file a formal complaint with the commission. In the event
the complainant advises the TDBU or the Bundled MOU/COOP that the complainant
does not consider the complaint fully resolved by the course of action proposed
by the TDBU or the Bundled MOU/COOP then the TDBU or the Bundled MOU/COOP 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 informal complaint process shall be a prerequisite for
filing a formal complaint with the commission.
(E) A large TDBU or Bundled MOU/COOP shall
report to the commission regarding the nature and status of informal complaints
handled in accordance with this paragraph in its annual report of code-related
activities filed pursuant to subsection (d) of this section. The information
reported to the commission shall include the name of the complainant and a
summary report of the complaint, including all relevant dates, companies
involved, employees involved, the specific claim, and any actions taken to
address the complaint. Such information on all informal complaints that were
initiated or remained unresolved during the reporting period shall be included
in the annual report of code-related activities of the large TDBU or Bundled
MOU/COOP.
(3) Filing a
complaint. Following the informal process, a formal complaint may be filed with
the commission alleging a violation of this section. No complaint shall be
valid unless filed with the commission within 30 days after the designated
officer or employee of the TDBU or the Bundled MOU/COOP mails its written
report communicating the results of the preliminary investigation to the
complainant. Each complaint shall contain the name of the complainant and a
detailed factual report of the complaint, including all relevant dates,
entities or divisions involved, employees involved, and the specific claim.
Additionally, each complaint shall identify the specific provisions of this
section that are alleged to have been violated, contain a sworn affidavit that
the facts alleged are true and correct to the best of the affiant's knowledge
and belief, and if the complainant is a corporation, a statement from a
corporate officer that he or she is authorized to file the complaint.
(4) Notification of complaint and opportunity
to respond. The commission shall provide a copy of the complaint to the TDBU or
the Bundled MOU/COOP. The TDBU or the Bundled MOU/COOP shall respond to the
complaint in writing within 15 days. The TDBU or the Bundled MOU/COOP and the
complainant shall make a good faith effort to resolve the complaint on an
informal basis as promptly as practicable.
(5) Settlement conference. Upon request by
the MOU/COOP subject to the complaint, commission staff shall conduct a
settlement conference. At such settlement conference, each party, including the
commission staff, shall recommend what steps are necessary to cure any
violation that it believes has occurred. Discussions at the settlement
conference, including the recommendations to cure the violation, shall not be
admissible at a hearing on the complaint.
(6) Opportunity to cure. The MOU/COOP shall
have three months to cure the violation in accordance with an agreement arising
from the settlement conference or following a hearing. An MOU/COOP may cure the
violation in any reasonable manner as set forth in the settlement agreement or
hearing, including taking action designed to prevent recurrence of the
violation or amending the rule or order.
(7) Enforcement by the commission. In the
event the commission finds there has been a violation which has not been
reasonably cured, the commission may enforce the provisions of this section.
(A) The commission may recommend actions to
be taken by the MOU/COOP within a prescribed time, and if such actions are not
taken, the commission may:
(i) seek an
injunction to eliminate or remedy the violation or series or set of violations;
or
(ii) limit or prohibit retail
service outside the certificated retail service area of the TDBU or the Bundled
MOU/COOP until the violation or violations are adequately remedied. This remedy
shall not be applied in a manner that would interfere with or abrogate the
rights or obligations of parties to a lawful contract.
(B) In assessing enforcement remedies, the
commission shall consider the following factors:
(i) the prior history of violations by the
TDBU or the Bundled MOU/COOP, if any, found by the commission after
hearing;
(ii) the efforts made by
the TDBU or the Bundled MOU/COOP to comply with the commission's
rules;
(iii) the nature and extent
of economic benefit gained by the TDBU's competitive affiliate or the Bundled
MOU/COOP;
(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; and
(vi) such other factors deemed appropriate
and material to the particular circumstances of the violation or series or set
of violations.
(C) The
commission may conduct a compliance audit of affiliate activities to ensure
compliance with the code of conduct.
(8) No immunity from antitrust enforcement.
Nothing in these affiliate rules shall confer immunity from state or federal
antitrust laws. Enforcement actions by the commission for violations of this
section 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 may also be sought in federal or state
court to cure anti-competitive activities.
(9) 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.
(10) Preemption. This section 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
section.
(o) Provisions
for Bundled MOU/COOPs.
(1) Transactional
safeguards relating to provision of products and services. To protect against
anticompetitive activities, the provisions of this subsection apply to all
Bundled MOU/COOPs meeting the qualifications set forth in subsection (b)(1)(A)
and (B) of this section, regardless of whether the MOU/COOP has any affiliates
or competitive affiliates.
(A) Tying
arrangements prohibited. A Bundled MOU/COOP shall not condition the provision
of any transmission or distribution product, service, pricing benefit, or
alternative terms or conditions upon the purchase of any other good or service
from the Bundled MOU/COOP.
(B)
Products and services available on a non-discriminatory basis. Any product or
service, other than corporate support services or credit arrangements, made
available by a Bundled MOU/COOP to any third party or any persons providing
competitive energy-related activities on behalf of the Bundled MOU/COOP, shall
be made available to all similarly situated entities at the same price and on
the same basis and manner that the product or service was made available to any
persons providing competitive energy-related activities on behalf of the
Bundled MOU/COOP, provided however, that such provision does not violate PURA
§40.104 or §41.104, or the Texas Constitution, Article III, section
52. Any service required to be provided in compliance with PURA §39.203
shall be provided in a non-discriminatory manner and in accordance with the
tariffs developed pursuant to any commission rule implementing that
section.
(C) Cross-subsidization
prohibited. A Bundled MOU/COOP shall not create significant opportunities for
cross subsidization of competitive energy-related activities with revenues from
distribution and transmission rates.
(D) Records of transactions involving
competitive energy-related activities. A Bundled MOU/COOP shall maintain
segregated accounts and records of all transactions regarding the provision of
competitive energy-related activities consistent with the FERC chart of
accounts or a comparable tracking method. In accordance with generally accepted
accounting principles, a Bundled MOU/COOP shall separately record all
transactions regarding the provision of competitive energy-related activities
and all transactions relating to the transmission and distribution function.
Such records shall include all expenses, whether direct or indirect, and at the
fully allocated cost to provide such competitive energy service. Such expenses
shall not be included in the Bundled MOU/COOP's transmission and distribution
rates.
(E) Transfer or use of
assets or products to provide competitive energy-related activities. A Bundled
MOU/COOP shall implement procedures and safeguards to ensure that the transfer
or use of assets or products by a person providing competitive energy-related
activities on behalf of the Bundled MOU/COOP shall be accomplished at pricing
levels that are fair and reasonable to the customers of the transmission and
distribution system of the Bundled MOU/COOP and at pricing levels that do not
include any preferential discounts, rebates, fee waivers or alternative tariff
terms and conditions.
(F) Provision
of corporate support services. The provision of corporate support services by a
Bundled MOU/COOP to provide competitive energy-related activities shall be
carried out in such a way as to comply with the provisions of paragraph
(2)(A)-(D) of this subsection, thereby preventing the opportunity for
preferential treatment or unfair competitive advantage, customer confusion, or
significant opportunities for cross-subsidization.
(G) No preferential access to transmission
and distribution information. A Bundled MOU/COOP shall not allow preferential
access by any person providing competitive energy-related activities on behalf
of the Bundled MOU/COOP to information about its transmission and distribution
systems. Such information shall be provided as required in paragraph (2)(D) of
this subsection.
(H) Sharing of
personnel, facilities, and resources. A Bundled MOU/COOP shall implement
procedures and safeguards governing the sharing of personnel, facilities,
officers and directors, equipment, and corporate support services with persons
providing competitive energy-related activities on behalf of the Bundled
MOU/COOP to ensure that confidential information is protected, that there are
no opportunities for preferential treatment or unfair competitive advantage,
that undue customer confusion will be prevented, and that no significant
opportunities for cross-subsidization are created. A Bundled MOU/COOP shall
document the assignment of shared employees engaged in both transmission or
distribution system operations and the provision of competitive energy-related
activities. For shared employees, the tracking documentation shall include the
employees' name, job title, scope of activities, and allocation of time to the
transmission and distributions functions and competitive energy-related
activities. The tracking documentation for shared employees shall be filed
annually with the annual report of code-related activities required by
paragraph (3)(B) of this subsection.
(I) Marketing and advertising. A Bundled
MOU/COOP shall implement procedures and safeguards relating to the marketing
and advertising of the Bundled MOU/COOP's competitive energy-related activities
to prevent favoritism being shown to the competitive energy-related activities
provided by the Bundled MOU/COOP, to prevent customer confusion, to prevent the
inappropriate sharing of customer information, and to prevent significant
opportunities for cross-subsidization.
(2) Informational safeguards. The following
provisions apply to Bundled MOU/COOPs.
(A)
Sharing of customer information. A Bundled MOU/COOP shall implement adequate
safeguards to preclude any persons providing competitive energy-related
activities on behalf of the Bundled MOU/COOP, or any other entities, from
gaining access to information in a manner that would allow or provide a means
to transfer confidential information, create an opportunity for preferential
treatment or unfair competitive advantage, lead to customer confusion, or
create significant opportunities for cross-subsidization. Non-proprietary
information possessed by the Bundled MOU/COOP that is made available to any
persons providing competitive energy-related activities provided by the Bundled
MOU/COOP shall likewise be made available to third parties providing
competitive energy-related activities at the Bundled MOU/COOP's cost to produce
such information for the third party.
(B) Proprietary customer information. Upon
request by the customer, a Bundled MOU/COOP shall provide a customer with the
customer's proprietary customer information. Unless a Bundled MOU/COOP obtains
prior affirmative written consent or other verifiable authorization from the
customer as determined by the commission, or unless otherwise permitted under
this subparagraph, it shall not release any proprietary customer information to
a person providing competitive energy-related activities on behalf of the
Bundled MOU/COOP or to 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. The Bundled MOU/COOP shall be permitted to release proprietary
customer information under the same terms and conditions as a TDBU as set forth
in subsections (l)(1)(A)-(E) of this section.
(C) Nondiscriminatory availability of
aggregate customer information. A Bundled MOU/COOP may aggregate
non-proprietary customer information, including, but not limited to,
information about a Bundled MOU/COOP's energy-related goods or services.
However, except in circumstances solely involving the provision of corporate
support services, a Bundled MOU/COOP shall aggregate non-proprietary customer
information for a third party or any person providing competitive
energy-related activities only if the Bundled MOU/COOP makes such aggregation
service available to all non-affiliates and third parties under the same terms
and conditions and at the same price or fully allocated cost as it is made
available to any person providing competitive energy-related activities on
behalf of the Bundled MOU/COOP.
(D)
Requests for information. If a customer or potential customer of a Bundled
MOU/COOP makes an unsolicited request for distribution service, competitive
energy-related activities, products or services provided by an Bundled
MOU/COOP, or for information relating to such products or services, the Bundled
MOU/COOP shall inform the customer that competitive energy-related activities
are available not only from the Bundled MOU/COOP, but also from other
providers. If the Bundled MOU/COOP provides the customer or potential customer
with information about competitive energy-related activities offered by the
Bundled MOU/COOP, the Bundled MOU/COOP must record and allocate the costs
associated with the provision of such information in the same manner as
transactions involving the provision of competitive energy related activities,
in accordance with paragraph (1)(C) of this subsection. The Bundled MOU/COOP
shall not offer the customer or potential customer any opinion regarding the
service of any other competitive energy service provider. Upon request, the
Bundled MOU/COOP shall make available to a customer a copy of the most recent
list of competitive energy service providers as developed and maintained by the
commission and may make available telephone numbers and other commonly
available information. Such information shall also be made available by the
Bundled MOU/COOP to its transmission and distribution customers at the time the
Bundled MOU/COOP undertakes marketing to those customers of its competitive
energy-related activities.
(3) Reporting and auditing requirements. A
Bundled MOU/COOP shall maintain and file the following information so the
commission can ensure that the Bundled MOU/COOP is not engaging in any
anticompetitive activities as a result of its competitive energy-related
activities being bundled with the transmission and distribution operation.
(A) Code implementation filing.
(i) Not later than 120 days prior to the
implementation of customer choice by a Bundled MOU/COOP, the Bundled MOU/COOP
shall file with the commission a written declaration that it will operate as a
Bundled MOU/COOP and its plan for implementing the provisions of this section.
The plan shall address all applicable requirements of this section in the
context of operations as they will be conducted in the competitive retail
market. The Bundled MOU/COOP shall post notice of its filing on its Internet
site or a public electronic bulletin board for 30 consecutive days and shall
provide copies of the plan to requesting parties. The code implementation plan
proposed by the Bundled MOU/COOP shall be subject to a contested hearing
process. Interested parties may file comments on the filing with the
commission. The commission shall issue an order either approving the code
implementation plan, approving the plan with modifications, or rejecting the
plan within 120 days.
(ii) In lieu
of the implementation filing provided for in clause (i) of this subparagraph, a
Bundled MOU/COOP may file with the commission a statement that it does not at
this time intend to provide electric energy at retail to customers in Texas
outside its certificated retail service area as provided for in subsection
(b)(1)(B) of this section. Subsequently, if a Bundled MOU/COOP intends to
provide electric energy at retail to consumers in Texas outside its
certificated retail service area as provided for in subsection (b)(1)(B) of
this section, it shall file the implementation filing provided for in clause
(i) of this subparagraph with the commission not later than 120 days prior to
the time it intends to provide retail electric energy in Texas outside its
certificated retail service area.
(B) Annual report of code-related activities.
A report of activities related to this subsection shall be filed annually with
the commission under a control number designated by the commission. The report
shall be filed by June 1 and shall encompass the period from January 1 through
December 31 of the preceding year. The report shall contain detailed
information on how the Bundled MOU/COOP met each of the provisions of
paragraphs (1) and (2) of this subsection and any deviations from the actions
set forth in the initial code compliance filing. Commission staff shall review
the annual report of code-related activities. The filing provided for in this
paragraph is not subject to the contested hearings process, except upon
complaint by an interested party or the commission staff.
(C) Copies of contracts or agreements. A
Bundled MOU/COOP shall reduce to writing and file with the commission copies of
any contracts or agreements it has with any persons providing competitive
energy-related activities on behalf of the Bundled MOU/COOP. The Bundled
MOU/COOP does not have to produce any contracts it has with third parties if
such contracts were negotiated on an arm's length basis. The requirements of
this section are not satisfied by the filing of an earnings report. All
contracts or agreements shall be filed by June 1 of each year as attachments to
the annual report of code-related activities required in subparagraph (B) of
this paragraph. In subsequent years, if no significant changes have been made
to the contract or agreement, an amendment sheet may be filed in lieu of
refiling the entire contract or agreement.
(D) Compliance audits. No later than one year
after the Bundled MOU/COOP becomes subject to this section as set forth in
subsection (b)(1) and (2) of this section, and, at a minimum, every third year
thereafter, the Bundled MOU/COOP shall have an audit prepared by independent
auditors that verifies that the Bundled MOU/COOP is in compliance with this
section. The Bundled MOU/COOP shall file the results of each audit with the
commission within one month of the audit's completion.
(4) Remedies and enforcement. Bundled
MOU/COOPs shall be subject to the provisions of subsection (n)(2)-(10) of this
section on the same terms and conditions as the TDBU.