SB1789 - Relating to electric service quality and reliability; providing an administrative penalty.

      S.B. No. 1789         AN ACT   relating to electric service quality and reliability; providing an   administrative penalty.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 36.402, Utilities Code, is amended by   adding Subsection (b-1) to read as follows:           (b-1)     Notwithstanding Subsection (b), if an electric   utility fails to comply with the standards required by Section   38.006 and the utility's system is damaged by a weather-related   event or natural disaster, the commission may at the utility's next   rate proceeding reduce the utility's return on equity for   infrastructure used or installed to repair or replace the damaged   portion of the system.          SECTION 2.  Section 38.005(b), Utilities Code, is amended to   read as follows:          (b)  The commission may take appropriate enforcement action   under this section, including action against a utility, if any of   the utility's feeders with 10 or more customers has had a SAIDI or   SAIFI average that is more than 200 [ 300 ] percent greater than the   system average of all feeders during any two-year period[ ,   beginning in the year 2000 ].  In determining the appropriate   enforcement action, the commission shall consider:                (1)  the feeder's operating and maintenance history;                (2)  the cause of each interruption in the feeder's   service;                (3)   the duration of each interruption in the feeder's   service;                 (4)   any action taken by a utility to address the   feeder's performance;                 (5)  [ (4) ]  the estimated cost and benefit of   remediating a feeder's performance; and                 (6)  [ (5) ]  any other relevant factor as determined by   the commission.          SECTION 3.  Subchapter A, Chapter 38, Utilities Code, is   amended by adding Section 38.006 to read as follows:           Sec.   38.006.     STRUCTURAL INTEGRITY STANDARDS FOR   TRANSMISSION AND DISTRIBUTION POLES. (a) This section applies   only to an electric utility, municipally owned utility, or electric   cooperative that operates transmission or distribution assets.           (b)     The commission by rule shall adopt standards for the   structural integrity of transmission and distribution poles.           (c)  The standards adopted under this section must:                 (1)  require an electric utility to:                       (A)     inspect, maintain, remediate, and replace   transmission and distribution poles as necessary on a timeline   established by the commission; and                       (B)     maintain records of the actions described by   Paragraph (A);                 (2)     account for geographic and weather   characteristics of this state;                 (3)     consider national guidelines such as the National   Electrical Safety Code and guidelines developed by the Rural   Utilities Service of the United States Department of Agriculture;                 (4)     establish a classification system to assess the   serviceability of transmission and distribution poles that   accounts for pole maintenance and extending the service life of   transmission and distribution poles; and                 (5)     consider the characteristics of electric utility,   municipally owned utility, and electric cooperative transmission   and distribution systems throughout this state.           (d)     The governing body of a municipally owned utility or an   electric cooperative shall adopt for the utility or cooperative, as   applicable, the standards adopted by the commission under   Subsection (b). If the commission revises the standards adopted   under Subsection (b), the governing body of each municipally owned   utility and electric cooperative shall adopt the revised standards   not later than the 120th day after the effective date of the   commission's revised standards.           (e)     Not later than May 1 of each year, each electric   utility, municipally owned utility, and electric cooperative shall   submit to the commission a report on:                 (1)     the implementation of the utility's or   cooperative's transmission and distribution pole maintenance   schedule;                 (2)     the results of the utility's or cooperative's   inspection of transmission and distribution poles, including the   number of poles inspected and any remediation or replacement action   taken; and                 (3)  any other information the commission requires.           (f)     A municipally owned utility or electric cooperative   shall include with the first report required under Subsection (e)   after the utility or cooperative adopts initial or revised   standards under Subsection (d) an attestation from the utility's or   cooperative's highest-ranking representative, official, or officer   with binding authority over the utility or cooperative stating that   the utility or cooperative has adopted standards in compliance with   this section.           (g)     The commission may impose an administrative penalty   under Section 15.023 against a municipally owned utility or   electric cooperative for a violation of this section or a rule   adopted under this section.          SECTION 4.  The heading to Subchapter E, Chapter 38,   Utilities Code, is amended to read as follows:   SUBCHAPTER E. INFRASTRUCTURE IMPROVEMENT AND MAINTENANCE [ REPORT ]          SECTION 5.  Section 38.101(a), Utilities Code, is amended to   read as follows:          (a)  Not later than May 1 of each year, each electric utility   shall submit to the commission a report describing the utility's   activities related to:                (1)  identifying areas that are susceptible to damage   during severe weather and hardening transmission and distribution   facilities in those areas; and                (2)  vegetation management[ ; and                [ (3)  inspecting distribution poles ].          SECTION 6.  (a) The changes in law made by this Act to   Section 38.005, Utilities Code, apply only to an enforcement action   initiated by the Public Utility Commission of Texas on or after the   effective date of this Act. An enforcement action initiated before   the effective date of this Act is governed by the law in effect   immediately before the effective date of this Act, and the former   law is continued in effect for that purpose.          (b)  In adopting rules under Section 38.006, Utilities Code,   as added by this Act, the Public Utility Commission of Texas shall   allow an electric utility to complete any required inspection,   remediation, or replacement of transmission and distribution poles   installed before the effective date of the rules according to a   reasonable timeline approved by the commission that allows the   utility to prioritize high-risk transmission and distribution   poles.          (c)  A municipally owned utility or an electric cooperative   operating on the effective date of the initial standards adopted by   the Public Utility Commission of Texas under Section 38.006(b),   Utilities Code, as added by this Act, shall adopt the standards as   required by Section 38.006(d), Utilities Code, as added by this   Act, not later than the 120th day after the date the Public Utility   Commission of Texas adopts the standards required by Section   38.006(b), Utilities Code, as added by this Act.          SECTION 7.  This Act takes effect September 1, 2025.               ______________________________ ______________________________      President of the Senate Speaker of the House                 I hereby certify that S.B. No. 1789 passed the Senate on   April 23, 2025, by the following vote: Yeas 31, Nays 0; and that   the Senate concurred in House amendments on May 26, 2025, by the   following vote: Yeas 31, Nays 0.       ______________________________   Secretary of the Senate                I hereby certify that S.B. No. 1789 passed the House, with   amendments, on May 20, 2025, by the following vote: Yeas 107,   Nays 40, two present not voting.       ______________________________   Chief Clerk of the House            Approved:     ______________________________                Date       ______________________________              Governor