The ?IoriorableGarrettRxris
chairman
Public UtilityCcemissionof Texas                 RS: Effectivedate of section
P. 0. Box 12577                                      56 of the Public Utilities
Austin, !rwzas 78711                                 RegulatoryActpenaitting
                                                     certainagremmtsbetween
                                                     retailpublic utilities.

Dear Mr. kxris:

     You&we reguestedouropinion concerningthe effectivedate of
section 56 of the Public Utility RegulatoryAct, article1446c,V.T.C.S.,
kts 1975, 64th kg., cb. 721, p. 2327, wbicb authorizescontracts
between retail public utilitiesdesignatingthe area and custawrs tobe
served by the contractingutilitiesand providesfor Cnnnissionapproval
of such contracts. Section 52 providesfor the filingof maps &wing
all its facilitiesas a prerequx'siteto the issuanceof certificatesof
convenienceand necessity. Since the maps must bs filed by December31,
1975, and certificateswill be issued beginningMarc& 1, 1976, you have
asked when the approvalauthorityof the Cnnnissionconcerningarea
serviceaontractswillbecoweffective.

     sei0n     a7 0f the ii0t provides:

             (a) lbe regulatoryauthorityshall assma
             jurisdictionand all pmers and dutiesof
             regulationundyr this Act on January1, 1976,
             atixtas providedin Subsection(b) of this
                    .

             (b) 'Ikeregulatoryauthorityshall assw
             jurisdictimoverrates andserviceofplblic
             utilitiescm S'eptanber
                                  1, 1976.




                                    p.    3185
The HonorableGarrettMorris - page 2 (H-752)



    sectian     aa provides:

          This Act shall bscune effectivecm Septerber1,
          1975, and the axmission shall thereqm kegin
          organizationandthegatheringofinformtim
          asprovidedinthiskt.

     Thus, yourquestimiswhether the approvalof these contractsis
an incidentof infomation gathering,an exerciseof regulatoryauthority
ova rates or service,or an exerciseof otherregulatorypawers.

     In our view, the approvalprocess is of the third category. Clearly
an approvalismre thanmere informationgathering.The approval
authorityunder section56 is a facet of the regulatoryauthorityof the
&mission. Hcwever,we do not believe this approvalprocess to constitute
anexercise of regulatoryjurisdictionof ratesor service. We are
aware of the broad definitiongiven "sexvice,"in section3(s), but in
ouropinionthe regulatoryauthorityover "service,"   whichunder section
87(b) camot be exerciseduntil September1, 1976, is that authority
providedin section35(b) of the Act or in other similarprovisions.
Were the ccmnission'sjurisdictionover "service"in its broadestsense
delayed until Septmber 1, 1976, it is difficultto ascertainwhat
regulatorypavers could be exercisedon January1, 1976. Thus, in ow
opinion section87(b) relatesto regulationsof servicewhich constitute
or are similarto the fixingof "standards,classifications,  regulations,
or practices.. .witbrespectto the serviceto be furnished.. . .n
Sec. 35(b). We do not believethe approvalauthorityprovidedin
section 56 is such a regulationof service. kmxdinqly, in oux opinion
the authorityprovidedin section56 is a part of the general regulatory
authorityof the Camnissionand can be exercisedon January 1, 1976.
sec. 87(a).

                               SUMMARY

              The approvalauthorityover contractsbetween
              utilitiesprovidedin section 56 of the Public
              UtilityF!egulatory
                               Act may te exercisedafter
              January1, 1976.




                                              d/z@
                                 &          L. HILL
                                         ttorneyGeneralof Texas




                                   p. 3186
.



    The HonorableGarrettMxris - page 3 (H-752)



    APPmvED:




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