Sec. 40.055.  JURISDICTION OF MUNICIPAL GOVERNING BODY.  (a)  The municipal governing body or a body vested with the power to manage and operate a municipally owned utility has exclusive jurisdiction to:
(1)  set all terms of access, conditions, and rates applicable to services provided by the municipally owned utility, subject to Sections 40.054 and 40.056, including nondiscriminatory and comparable rates for distribution but excluding wholesale transmission rates, terms of access, and conditions for wholesale transmission service set by the commission under this subtitle, provided that the rates for distribution access established by the municipal governing body shall be comparable to the distribution access rates that apply to the municipally owned utility and the municipally owned utility's affiliates;
(2)  determine whether to unbundle any energy-related activities and, if the municipally owned utility chooses to unbundle, whether to do so structurally or functionally;
(3)  reasonably determine the amount of the municipally owned utility's stranded investment;
(4)  establish nondiscriminatory transition charges reasonably designed to recover the stranded investment over an appropriate period of time, provided that recovery of retail stranded costs shall be from all existing or future retail customers, including the facilities, premises, and loads of those retail customers, within the utility's geographical certificated service area as it existed on May 1, 1999;
(5)  determine the extent to which the municipally owned utility will provide various customer services at the distribution level, including other services that the municipally owned utility is legally authorized to provide, or will accept the services from other providers;
(6)  manage and operate the municipality's electric utility systems, including exercise of control over resource acquisition and any related expansion programs;
(7)  establish and enforce service quality and reliability standards and consumer safeguards designed to protect retail electric customers, including safeguards that will accomplish the objectives of Sections 39.101(a) and (b), consistent with this chapter;
(8)  determine whether a base rate reduction is appropriate for the municipally owned utility;
(9)  determine any other utility matters that the municipal governing body or body vested with power to manage and operate the municipally owned utility believes should be included;
(10)  make any other decisions affecting the municipally owned utility's participation in customer choice that are not inconsistent with this chapter; and
(11)  determine the extent to which the municipally owned utility offers energy efficiency programs and how the programs are administered by the utility, except as provided by Section 39.9051(e).
(b)  In multiply certificated areas, a retail customer, including a retail customer of an electric cooperative or a municipally owned utility, may not avoid stranded cost recovery charges by switching to another electric utility, electric cooperative, or municipally owned utility.
Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.
Amended by: 
Acts 2007, 80th Leg., R.S., Ch. 939 (H.B. 3693), Sec. 27, eff. September 1, 2007.