CHAPTER 152. RIVER AUTHORITIES ENGAGED IN DISTRIBUTION AND SALE OF ELECTRIC ENERGY
WATER CODE
TITLE 5. SPECIAL LAW DISTRICTS
CHAPTER 152. RIVER AUTHORITIES ENGAGED IN DISTRIBUTION AND SALE
OF ELECTRIC ENERGY
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 152.001. APPLICABILITY. (a) This chapter applies only to
a river authority that, directly or through a corporation created
under Section 152.051, is engaged in the distribution and sale of
electric energy to the public.
(b) This chapter does not apply to any litigation instituted
before May 28, 1981, that questions the legality of an act taken
or a proceeding conducted by a river authority before that date.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 26, eff. Sept. 1,
1999. Amended by Acts 1999, 76th Leg., ch. 1064, Sec. 24, eff.
Sept. 1, 1999.
Sec. 152.002. APPLICATION OF OTHER LAW. (a) Unless this
chapter expressly provides otherwise, a law that limits,
restricts, or imposes an additional requirement on a matter
authorized by this chapter does not apply to an action or
proceeding under this chapter.
(b) Chapters 1202 and 1204, Government Code, apply to revenue
bonds, notes, or other obligations issued under this chapter.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 26, eff. Sept. 1,
1999.
SUBCHAPTER B. NONPROFIT CORPORATION ACTING ON BEHALF OF RIVER
AUTHORITY
Sec. 152.051. CREATION OF NONPROFIT CORPORATION. (a) The board
of directors of a river authority by order may create one or more
nonprofit corporations to act on behalf of the river authority as
its authority and instrumentality.
(b) The Texas Non-Profit Corporation Act (Article 1396-1.01 et
seq., Vernon's Texas Civil Statutes) applies to a corporation
created under this section.
(c) Sections 501.052, 501.053, 501.056, 501.057(b) and (c),
501.058, 501.062, 501.063, 501.064, except as that section
applies to amending a corporation's bylaws, 501.065, 501.066,
501.068-501.072, 501.401-501.406, and Subchapters G and H,
Chapter 501, Local Government Code, apply to a corporation
created under this section, except that in those sections:
(1) a reference to the Development Corporation Act (Subtitle C1,
Title 12, Local Government Code) includes this chapter; and
(2) a reference to a unit includes a river authority to which
this chapter applies.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 26, eff. Sept. 1,
1999.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 3.75, eff. April 1, 2009.
Sec. 152.052. POWERS OF NONPROFIT CORPORATION. (a) A
corporation created under Section 152.051 may exercise any power
of the creating river authority except a power relating to solid
waste management activities or activities as an exempt wholesale
generator, but including the authority to acquire, develop,
operate, and sell fuel, fuel reserves, and mineral interests. In
this subsection, "exempt wholesale generator" has the meaning
assigned by Section 32(a), Public Utility Holding Company Act of
1935 (15 U.S.C. Section 79z-5a(a)).
(b) When exercising a power under this chapter, a corporation
created under Section 152.051 and the board of directors of the
corporation have the same powers as the creating river authority
and the authority's board, including the power to issue bonds or
other obligations or otherwise borrow money on behalf of the
river authority to accomplish any purpose of the corporation.
(c) With regard to the issuance of an obligation, the board of
directors of a corporation created under Section 152.051 may
exercise the powers granted to the governing body of:
(1) an issuer under Chapters 1201 and 1371, Government Code; and
(2) a public agency under Chapter 1204, Government Code.
(d) A corporation created under Section 152.051 and the creating
river authority may:
(1) share officers, directors, employees, equipment, and
facilities; and
(2) provide goods or services to each other at cost without the
requirement of competitive bidding.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 26, eff. Sept. 1,
1999. Amended by Acts 1999, 76th Leg., ch. 1064, Sec. 25, eff.
Sept. 1, 1999.
Sec. 152.053. BOARD OF DIRECTORS. (a) The board of directors
of the river authority shall appoint the directors of a
corporation created under Section 152.051.
(b) A member of the river authority's board of directors may
serve as a member of the corporation's board of directors.
(c) The directors of the corporation serve at the will of the
river authority's board of directors.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 26, eff. Sept. 1,
1999.
Sec. 152.054. SUPERVISION BY BOARD OF DIRECTORS OF RIVER
AUTHORITY. (a) The budget of a corporation created under
Section 152.051 must be approved by the board of directors of the
river authority.
(b) The activities of the corporation are subject to the
continuing review and supervision of the river authority's board
of directors.
(c) The issuance of bonds or other obligations under this
chapter by a corporation created under Section 152.051 must be
approved by the board of directors of the river authority.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 26, eff. Sept. 1,
1999.
Sec. 152.055. LIABILITY OF CORPORATE PROPERTY FOR TAXES AND
SPECIAL ASSESSMENTS. The property of a corporation created under
Section 152.051 is not exempt from taxes or special assessments
imposed by this state or a municipality or other political
subdivision of this state.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 26, eff. Sept. 1,
1999.
Sec. 152.056. TRANSFER OF RIVER AUTHORITY ASSETS TO CORPORATION.
Notwithstanding any other law, the board of directors of a river
authority may sell, lease, loan, or otherwise transfer some, all,
or substantially all of the electric generation property of the
river authority to a corporation created under Section 152.051.
The property transfer must be made under terms approved by the
board of directors of the river authority.
Added by Acts 1999, 76th Leg., ch. 1064, Sec. 26, eff. Sept. 1,
1999.
Sec. 152.057. APPLICATION OF OTHER LAW TO RIVER AUTHORITY.
Reference in any other law to a river authority that is engaged
in the distribution and sale of electric energy to the public
includes a river authority that has created a corporation under
Section 152.051 that is engaged in the distribution and sale of
electric energy to the public.
Added by Acts 1999, 76th Leg., ch. 1064, Sec. 26, eff. Sept. 1,
1999.
Sec. 152.058. GUARANTEE AND OTHER CREDIT SUPPORT RELATING TO
PUBLIC SECURITIES AND OTHER OBLIGATIONS. (a) In this section,
"public security" has the meaning assigned by Section 1202.001,
Government Code.
(b) Under Section 52-a, Article III, Texas Constitution, a river
authority that has created a corporation under Section 152.051
may guarantee or otherwise provide credit support for any public
security or other obligation or contract of that corporation if
the board of directors of the river authority determines that the
guarantee or other credit agreement:
(1) is beneficial to a public purpose of the river authority;
and
(2) is for the public purpose of:
(A) the development and diversification of the economy of the
state;
(B) the elimination of unemployment or underemployment in the
state; or
(C) the development or expansion of commerce in the state.
(c) A determination by the board of directors of a river
authority under Subsection (b) is conclusive.
(d) A guarantee or other credit agreement authorized by
Subsection (b) may provide for the guarantee of or other credit
support for public securities or other obligations or contracts
of the corporation, all or a portion of which may be authorized,
executed, and delivered in the future.
(e) Chapter 1202, Government Code, applies to a guarantee or
other credit agreement under this section as if the guarantee or
other credit agreement were a public security.
Added by Acts 2001, 77th Leg., ch. 430, Sec. 1, eff. Sept. 1,
2001.
SUBCHAPTER C. ENERGY OR WATER CONSERVATION PROGRAMS
Sec. 152.101. AUTHORITY TO PARTICIPATE IN ENERGY OR WATER
CONSERVATION PROGRAM. (a) A river authority may undertake,
sponsor, initiate, coordinate, or otherwise participate in a
program intended to conserve electric energy or water, including
a program that:
(1) encourages the more efficient use of electric energy or
water;
(2) reduces the total use of electric energy or water; or
(3) reduces maximum total electric generating capacity
requirements through load management techniques.
(b) A determination by the board of directors of a river
authority that a program described by Subsection (a) is intended
and expected to accomplish a purpose described by that subsection
is conclusive with respect to whether the program serves the
stated purpose.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 26, eff. Sept. 1,
1999.
Sec. 152.102. PARTICIPATION IN CONSERVATION PROGRAM BY PERSON
OTHER THAN RIVER AUTHORITY. (a) A conservation program may
involve a grant or loan of money, services, or equipment to a
person or entity other than the river authority engaged in the
program.
(b) Any person, including an individual or any public or private
entity, may enter into an agreement with a river authority with
respect to a conservation program.
(c) A person participating in or receiving a benefit from a
conservation program shall comply with the requirements of the
program.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 26, eff. Sept. 1,
1999.
Sec. 152.103. PUBLIC PURPOSE AND GOVERNMENTAL FUNCTION. Each
conservation program is a public purpose and governmental
function of a river authority to conserve the natural resources
of this state, including the air and the waters of the rivers and
streams of this state, electricity, and fuels used in the
generation of electricity, in accordance with Section 59(a),
Article XVI, Texas Constitution.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 26, eff. Sept. 1,
1999.
SUBCHAPTER D. ECONOMIC DEVELOPMENT PROGRAMS
Sec. 152.151. DEFINITION. In this subchapter, "economic
development program":
(1) includes a program designed to:
(A) encourage economic diversification;
(B) contribute to the health and development of a community to
improve the attractiveness of the community to public and private
enterprises; or
(C) improve the quality or quantity of services essential for
the development of viable communities and economic growth,
including services related to education, transportation, public
safety, recreation, health care, training, community planning, or
employment; and
(2) does not include the promotion of retail wheeling of
electric power and energy.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 26, eff. Sept. 1,
1999.
Sec. 152.152. APPLICABILITY. This subchapter applies only to a
river authority that generates at least an annual average of 55
million kilowatt hours of electric energy.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 26, eff. Sept. 1,
1999.
Sec. 152.153. AUTHORITY FOR ECONOMIC DEVELOPMENT PROGRAM. (a)
A river authority may sponsor and participate in an economic
development program intended to strengthen the economic base and
further the economic development of this state.
(b) A determination by the board of directors of a river
authority that an economic development program is intended and
expected to accomplish the program's stated purposes is
conclusive with respect to whether the program serves the
purposes of this subchapter.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 26, eff. Sept. 1,
1999.
Sec. 152.154. PROGRAM AREA. An economic development program
must be within:
(1) the territorial boundaries of the sponsoring or
participating river authority; or
(2) the river authority's electric or water service area.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 26, eff. Sept. 1,
1999.
Sec. 152.155. ESTABLISHMENT OF PROGRAM. (a) An economic
development program may be established only by formal action of
the board of directors of a river authority.
(b) The board of directors shall:
(1) establish the goals of the program;
(2) impose requirements on persons participating in or receiving
a benefit from the program; and
(3) provide restrictions, procedures, and budget limits the
board of directors determines are necessary to ensure that the
governmental purposes of this subchapter and the program are
achieved.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 26, eff. Sept. 1,
1999.
Sec. 152.156. PARTICIPATION IN PROGRAM BY PERSON OTHER THAN
RIVER AUTHORITY. An economic development program may involve the
granting or lending of money, services, or property to a person
engaged in an economic development activity.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 26, eff. Sept. 1,
1999. Amended by Acts 1999, 76th Leg., ch. 1064, Sec. 27, eff.
Sept. 1, 1999.
Sec. 152.157. STAFFING AND FUNDING OF PROGRAM. (a) A river
authority may employ staff and spend its resources, other than
money received from an ad valorem tax or a general appropriation,
to further an economic development program.
(b) A river authority may apply for and receive money, grants,
or other assistance from any source to implement an economic
development program.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 26, eff. Sept. 1,
1999.
Sec. 152.158. AGREEMENT. A river authority and any public or
private person may enter into an agreement with respect to an
economic development program.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 26, eff. Sept. 1,
1999.
Sec. 152.159. GUIDELINES FOR ASSISTANCE TO PUBLIC FIRE-FIGHTING
ORGANIZATIONS. A river authority that proposes to provide
scholarships, grants, loans, or financial assistance to a public
fire-fighting organization shall adopt guidelines for
determining:
(1) eligibility for the assistance;
(2) the amount of any loan, grant, or other assistance the river
authority may provide; and
(3) the types of equipment, facilities, education, or training
for which the assistance may be used.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 26, eff. Sept. 1,
1999.
Sec. 152.160. RECEIPT OF ELECTRIC SERVICE AS CONDITION FOR
PARTICIPATION IN PROGRAM. A river authority may not condition
participation in or the receipt of a benefit from an economic
development program on the receipt of electric service from the
authority.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 26, eff. Sept. 1,
1999.
Sec. 152.161. LIMITATIONS ON USE OF PROGRAM. (a) A river
authority may not use an economic development program to:
(1) promote fuel switching or the substitution of electric power
for another fuel or energy source; or
(2) provide an economic or other incentive to use electric power
to preferentially market the use of electric power over another
fuel or energy source.
(b) This section does not limit a power granted to a river
authority by other law.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 26, eff. Sept. 1,
1999.
SUBCHAPTER E. DEBT OBLIGATIONS OF RIVER AUTHORITY
Sec. 152.201. AUTHORITY TO ISSUE OBLIGATIONS. (a) A river
authority may issue revenue bonds, notes, or other obligations
for a purpose authorized by:
(1) this chapter; or
(2) another law, if the purpose relates to the generation,
transmission, or distribution of electricity.
(b) This chapter constitutes full authority for a river
authority to issue revenue bonds and other obligations without
reference to any other law.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 26, eff. Sept. 1,
1999. Amended by Acts 1999, 76th Leg., ch. 1064, Sec. 28, eff.
Sept. 1, 1999.
Sec. 152.202. SALE OR EXCHANGE OF OBLIGATIONS. Revenue bonds,
notes, or other obligations issued under this subchapter may be:
(1) sold for cash at a public or private sale;
(2) issued on terms determined by the board of directors of the
river authority in exchange for property or an interest in
property the board of directors considers necessary or convenient
for a purpose described by Section 152.201;
(3) issued in exchange for other matured or unmatured
obligations of the river authority in the same principal amounts;
or
(4) sold for cash in the amount equal to the principal amount of
the obligations to:
(A) this state or an agency of this state;
(B) the United States; or
(C) an agency or corporation created or designated by this state
or the United States.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 26, eff. Sept. 1,
1999.
Sec. 152.203. INDEPENDENT APPRAISAL. (a) Before a river
authority may acquire property under Section 152.202(2) through
the exchange of revenue bonds, notes, or other obligations, the
authority must obtain a written appraisal of the property by an
independent appraiser certifying that the property has a value
equal to or greater than the par value of the bonds, notes, or
other obligations.
(b) The river authority shall:
(1) maintain the appraisal on file as a public record; and
(2) file a copy of the appraisal with the Texas Commission on
Environmental Quality.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 26, eff. Sept. 1,
1999. Amended by Acts 2003, 78th Leg., ch. 785, Sec. 55, eff.
Sept. 1, 2003.
SUBCHAPTER F. HEDGING TRANSACTIONS
Sec. 152.251. DEFINITION. In this subchapter, "hedging" means
buying or selling crude oil, fuel oil, natural gas, or electric
energy futures or options, or similar contracts on those
commodity futures, as a protection against loss due to price
fluctuations.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 26, eff. Sept. 1,
1999.
Sec. 152.252. AUTHORITY TO ENTER INTO HEDGING CONTRACT. (a) A
river authority or a corporation created under Section 152.051
may enter into a hedging contract and related security and
insurance agreements.
(b) A hedging transaction must comply with the regulations of
the Commodity Futures Trading Commission and the Securities and
Exchange Commission.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 26, eff. Sept. 1,
1999.
Sec. 152.253. PAYMENT CONSIDERED FUEL EXPENSE. A payment by a
river authority or a corporation created under Section 152.051
under a hedging contract or related agreement in relation to fuel
supplies or fuel reserves is a fuel expense. The authority or
corporation may credit any amount it receives under the contract
or agreement against fuel expenses.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 26, eff. Sept. 1,
1999.
Sec. 152.254. INVESTMENT OF MONEY IN HEDGING TRANSACTION. (a)
Except as provided by Subsection (b), the board of directors of a
river authority may determine and designate the amount of money
to be invested in a hedging transaction.
(b) The board of directors of the river authority by formal
policy shall regulate the investment of money in hedging
contracts. An investment may be made only for hedging purposes.
The policy must provide restrictions and procedures for making an
investment that a person of ordinary prudence, discretion, and
intelligence, exercising the judgment and care under the
circumstances then prevailing, would follow in the management of
the person's own affairs, not in regard to speculation but in
regard to the permanent disposition of the person's money,
considering:
(1) the probable income; and
(2) the probable safety of the person's capital.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 26, eff. Sept. 1,
1999.
Sec. 152.255. RECOVERABILITY OF COSTS FROM RATEPAYERS. This
subchapter does not limit the authority of the Public Utility
Commission of Texas to determine the recoverability of costs from
ratepayers.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 26, eff. Sept. 1,
1999.
SUBCHAPTER G. ELECTRIC TRANSMISSION SERVICES AND FACILITIES OF
RIVER AUTHORITY
Sec. 152.301. ELECTRIC TRANSMISSION SERVICES AND FACILITIES.
Notwithstanding any other law, a river authority may:
(1) provide transmission services, as defined by the Utilities
Code or the Public Utility Commission of Texas, on a regional
basis to any eligible transmission customer at any location
within or outside the boundaries of the river authority; and
(2) acquire, including by lease-purchase, lease from or to any
person, finance, construct, rebuild, operate, or sell electric
transmission facilities at any location within or outside the
boundaries of the river authority.
Added by Acts 1999, 76th Leg., ch. 1064, Sec. 29, eff. Sept. 1,
1999. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.108(a),
eff. Sept. 1, 2001.
Sec. 152.302. LIMITATION ON ELECTRIC TRANSMISSION FACILITIES.
This subchapter does not:
(1) authorize a river authority to construct electric
transmission facilities for an ultimate consumer of electricity
to enable that consumer to bypass the transmission or
distribution facilities of its existing provider; or
(2) relieve a river authority from an obligation to comply with
each provision of the Utilities Code concerning a certificate of
convenience and necessity for a transmission facility.
Added by Acts 1999, 76th Leg., ch. 1064, Sec. 29, eff. Sept. 1,
1999. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.108(a),
eff. Sept. 1, 2001.