Relating to electric service quality and reliability; providing an administrative penalty, the official text

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