(a) Purpose. The purpose of this section is to identify the competitive electric industry business activities that must be separated from the regulated transmission and distribution utility and performed by a power generation company (PGC), a retail electric provider (REP), or some other business unit pursuant to the Public Utility Regulatory Act (PURA) §39.051. This section establishes procedures for the separation of such business activities.
(b) Application. This section shall apply to electric utilities, as defined in §25.5 of this title (relating to Definitions).
(c) Compliance and timing.
(1) The commission shall prescribe a schedule for the filing of a business separation plan prior to the introduction of customer choice for an electric utility that is subject to PURA §39.102(c) or §39.402. Pursuant to such schedule, an affected electric utility shall separate from its regulated utility activities its customer energy services business activities and shall separate its business activities in accordance with subsection (d) of this section.
(2) Upon review of the filing, the commission shall adopt the electric utility's plan for business separation, adopt the plan with changes, or reject the plan and require the electric utility to file a new plan.
(d) Business separation.
(1) An electric utility may not offer competitive energy services; however, an electric utility may petition the commission pursuant to §25.343(d) of this title (relating to Competitive Energy Services) for authority to provide to its Texas customers or some subset of its customers any service otherwise identified as a competitive energy service.
(2) Each electric utility shall separate its business activities and related costs into the following units: power generation company; retail electric provider; and transmission and distribution utility company. An electric utility may accomplish this separation either through the creation of separate nonaffiliated companies or separate affiliated companies owned by a common holding company or through the sale of assets to a third party. An electric utility may create separate transmission utility and distribution utility companies.
(3) Each electric utility, subject to PURA §39.157(d), shall comply with this section in a manner that provides for a separation of personnel, information flow, functions, and operations, consistent with PURA §39.157(d) and §25.272 of this title (relating to Code of Conduct for Electric Utilities and Their Affiliates).
(4) All transfers of assets and liabilities to separate affiliated or nonaffiliated companies, a power generation company, retail electric provider, or a transmission and distribution utility company during the initial business separation process shall be recorded at book value.
(5) The commission, in approving a plan under subsection (c) of this section, may prescribe dates for the discontinuation of competitive energy services and the separation of business activities.
(e) Business separation plans. Each electric utility subject to PURA §39.051(e) that has not separated its business functions shall file a business separation plan with the commission according to a commission-approved Business Separation Plan Filing Package (BSP-FP) on a date prescribed by the commission. An electric utility for which the commission has previously approved a business separation plan is not required to file an additional plan under this section. If necessary, however, the commission may require such electric utility to file updated information or modifications to its existing business separation plan.
(1) The business separation plan shall include, but shall not be limited to, the following:
(2) To the extent that not all of the detailed information required to be filed on the date prescribed by the commission is available, the electric utility shall provide a firm schedule for supplemental filings. The commission shall approve only portions of the business separation plan for which complete information is provided.
(f) Separation of transmission and distribution utility services.
(1) Classification of services. Each service offered, or potentially offered, by a transmission and distribution utility shall be classified as one of the following:
(2) Competitive energy services. A transmission and distribution utility shall not provide competitive energy services as defined by §25.341 of this title except as permitted pursuant to §25.343 of this title.
Source Note: The provisions of this §25.342 adopted to be effective February 9, 2000, 25 TexReg 720; amended to be effective October 9, 2003, 28 TexReg 8586