|(a) Purpose. This section establishes the requirements for
the implementation of contracts between utilities and their competitive affiliates
resulting from a fair, competitive bidding process.
(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 the electric utility, transmission and distribution
utility, and a competitive affiliate.
(3) Notice of conflicts 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 conflicts
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. Any terms defined in §25.272 of this
title (relating to Code of Conduct for Electric Utilities and Their Affiliates)
have the same meanings herein.
(d) Competitive bidding required. A utility shall conduct competitive
bidding, as required by §25.272 of this title, to procure products and
services, other than corporate support services, that are offered by an competitive
affiliate or to sell to any competitive affiliate assets that have a per unit
value of more than $75,000, or a total value of more than $1 million. This
section does not apply to transfers that facilitate unbundling under PURA §39.051
or asset valuation under PURA §39.262.
(1) Notice. The utility shall provide reasonable notice of
any request for proposals required pursuant to this section. Such notice shall
(A) notice by publication in trade journals or newspapers as
(B) notice by mail to persons who previously requested to be
notified of the request for proposals; and
(C) conspicuous notice on the utility's Internet site or other
public electronic bulletin board.
(2) Independent evaluator. The utility shall use
an independent evaluator when a competitive affiliate's bid is included among
the bids to be evaluated. If an independent evaluator is required, the utility
shall maintain a record of communications with the independent evaluator.
The independent evaluator shall identify in writing the bids that are most
advantageous and warrant negotiation and contract execution, in accordance
with the criteria set forth in the request for proposals. The utility retains
responsibility for final selection of products or services.
(3) Competitive bidding procedures. The utility shall
make a request for proposals available to interested persons by conspicuously
posting the request on its Internet site or other public electronic bulletin
(A) The request for proposals must clearly set forth the eligibility
and selection criteria and shall specify the weight to be given to any non-cost
(B) The utility shall strictly enforce the criteria specified
in the request for proposals.
(4) Evaluation of bids. The utility or independent
evaluator, as appropriate, shall evaluate each bid submitted in accordance
with the criteria specified in the request for proposals. The utility or independent
evaluator may not give preferential treatment or consideration to any bid.
(5) Rejection of bids. The utility is not required to
accept a bid and may reject any or all bids in accordance with the selection
criteria specified in the request for proposals.
(e) Contracts. A utility shall file with the commission a signed
copy of any contracts entered into with a competitive affiliate as the result
of the fair, competitive bidding process described in this section. A contract
shall include, at a minimum, the following provisions:
(1) the effective date of the agreement and parties to the
(2) the term of the agreement;
(3) a narrative describing the products or services provided
to the utility, including a list by specific service of all the affiliated
companies who provide or receive these services, or a narrative describing
the assets being sold by the utility to the competitive affiliate;
(4) the obligations of the parties;
(5) the price for those products, services, or assets
governed by the contract; and
(6) billing and payment procedures.