Texas Statutes
Subchapter B. Transition to Competitive Retail Electric Market
Section 39.051. Unbundling

Sec. 39.051. UNBUNDLING. (a) On or before September 1, 2000, each electric utility shall separate from its regulated utility activities its customer energy services business activities that are otherwise also already widely available in the competitive market.
(b) Not later than January 1, 2002, each electric utility shall separate its business activities from one another into the following units:
(1) a power generation company;
(2) a retail electric provider; and
(3) a transmission and distribution utility.
(c) An electric utility may accomplish the separation required by Subsection (b) 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 and distribution utilities. Notwithstanding any other provision of this chapter, an electric utility that does not have stranded costs described by Section 39.254 and that on September 1, 2005, has not finalized unbundling pursuant to a commission order approving an unbundling plan may also meet the requirements of Subsection (b) for generation facilities existing on September 1, 2005, in the Electric Reliability Council of Texas if it meets and maintains compliance with the following requirements:
(1) the electric utility has no more than 400 megawatts of Texas jurisdictional capacity from generating units within the Electric Reliability Council of Texas that have not been mothballed or retired;
(2) the electric utility has a contract or contracts with separate nonaffiliated companies or separate affiliated companies for the sale of all of the output from its generating units that have not been mothballed or retired with a contract term that is no shorter than 20 years or the life of the generating units, whichever is shorter; and
(3) the electric utility has a separate division within the electric utility for its generation business activities.
(c-1) A separate division described by Subsection (c)(3) is subject to Subsection (d) and, for the purposes of this chapter, is considered a separate affiliated power generation company and a competitive affiliate.
(d) Each electric utility shall unbundle under this section in a manner that provides for a separation of personnel, information flow, functions, and operations, consistent with Section 39.157(d).
(e) Each electric utility shall file with the commission a plan to implement this section by January 10, 2000.
(f) The commission shall adopt the utility's plan for business separation required by Subsection (b), adopt the plan with changes, or reject the plan and require the utility to file a new plan.
(g) Transactions by electric utilities involving sales, transfers, or other disposition of assets to accomplish the purposes of this section are not subject to Section 14.101, 35.034, or 35.035.
Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.
Amended by:
Acts 2005, 79th Leg., Ch. 413 (S.B. 1668), Sec. 3, eff. June 17, 2005.

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