Interim Report to the 83rd Texas Legislature House Committee on STATE AFFAIRS December 2012 HOUSE COMMITTEE ON STATE AFFAIRS TEXAS HOUSE OF REPRESENTATIVES INTERIM REPORT 2012 A REPORT TO THE HOUSE OF REPRESENTATIVES 83RD TEXAS LEGISLATURE BYRON COOK CHAIRMAN COMMITTEE CLERK TONI BARCELLONA Committee On State Affairs December 13, 2012 Byron Cook P.O. Box 2910 Chairman Austin, Texas 78768-2910 The Honorable Joe Straus Speaker, Texas House of Representatives Members of the Texas House of Representatives Texas State Capitol, Rm. 2W.13 Austin, Texas 78701 Dear Mr. Speaker and Fellow Members: The Committee on State Affairs of the 82nd Legislature hereby submits its interim report for consideration by the 83rd Legislature. Respectfully submitted, _______________________ _______________________ Byron Cook, Chairman Jose Menendez, Vice-Chairman _______________________ _______________________ _______________________ Tom Craddick John Frullo Pete Gallego _______________________ _______________________ _______________________ Charlie Geren Patricia Harless Harvey Hilderbran _______________________ _______________________ ________________________ Dan Huberty Rene Oliveira John Smithee _______________________ ________________________ Burt Solomons Sylvester Turner Jose Menendez Vice-Chairman Members: Tom Craddick, John Frullo, Pete Gallego, Charlie Geren, Patricia Harless, Harvey Hilderbran, Dan Huberty, Rene Oliveira, John Smithee, Burt Solomons and Sylvester Turner 6915 ANTOINE, SUITE E P.O. BOX 2910 HOUSTON, TEXAS 77091 AUSTIN, TEXAS 78768-2910 713-683-6363 State of Texas 512-463-0554 House of Representatives SYLVESTER TURNER state representative District 139 Harris County Appropriations, Vice Chair • State Affairs • Legislative Budget Board TABLE OF CONTENTS INTRODUCTION .......................................................................................................................... 5 INTERIM CHARGES .................................................................................................................... 7 RESOURCE ADEQUACY ............................................................................................................ 8 Background ................................................................................................................................. 8 Regulatory Factors Affecting Resource Adequacy ................................................................. 9 Weather Related Factors Affecting Resource Adequacy ...................................................... 10 Market Factors Affecting Resource Adequacy ..................................................................... 10 Findings..................................................................................................................................... 11 Regulatory Initiatives to Improve Resource Adequacy ......................................................... 11 Improvements to the Market Design ..................................................................................... 12 Energy-only Market with Administrative Support ................................................................ 13 Texas Capacity Market ......................................................................................................... 14 Conclusion ................................................................................................................................ 14 POLE ATTACHMENTS .............................................................................................................. 15 Background ............................................................................................................................... 15 Findings..................................................................................................................................... 16 Conclusion ................................................................................................................................ 17 PRIVATIZATION OF SERVICES .............................................................................................. 18 Background ............................................................................................................................... 18 Findings..................................................................................................................................... 20 Texas Health and Human Services Commission Contract ................................................... 20 Texas Department of Information Resources Contract ........................................................ 23 Successful State Privatization ............................................................................................... 25 A Single eProcurement ......................................................................................................... 26 Conclusion ................................................................................................................................ 28 PUBLIC UTILITY REGULATION ............................................................................................. 29 Background ............................................................................................................................... 29 The Public Utility Commission of Texas (PUC) ................................................................... 29 The Railroad Commission of Texas (RRC) ........................................................................... 30 Findings..................................................................................................................................... 30 The Public Utility Commission of Texas (PUC) ................................................................... 30 The Railroad Commission of Texas (RRC) ........................................................................... 32 Conclusion ................................................................................................................................ 33 CLOUD COMPUTING ................................................................................................................ 34 3 Background ............................................................................................................................... 34 Cloud Services ...................................................................................................................... 34 Considerations for Utilizing Cloud Services ........................................................................ 34 Federal and State Agencies' Implementation ....................................................................... 35 Findings..................................................................................................................................... 36 Conclusion ................................................................................................................................ 37 AGENCY RULEMAKING .......................................................................................................... 38 Background ............................................................................................................................... 38 Finding ...................................................................................................................................... 40 Conclusion ................................................................................................................................ 44 Finding ...................................................................................................................................... 44 Conclusion ................................................................................................................................ 48 PUBLIC-PRIVATE PARTNERSHIPS ........................................................................................ 49 Background ............................................................................................................................... 49 SB 1048 ................................................................................................................................. 49 Potential Benefits and Risks of P3s ...................................................................................... 50 Findings..................................................................................................................................... 51 Best Practices for Evaluating P3s ........................................................................................ 52 Statutes .................................................................................................................................. 53 Partnership Advisory Commission ....................................................................................... 54 Conclusion ................................................................................................................................ 55 PROCUREMENT AND STATE CONTRACTING .................................................................... 56 Background ............................................................................................................................... 56 Comptroller of Public Accounts (CPA) ................................................................................ 56 Department of Information Resources (DIR) ....................................................................... 57 Texas Facilities Commission (TFC) ....................................................................................