H.B. No. 3402 aims to enhance risk mitigation planning and liability management for electric service providers in Texas, particularly concerning wildfire risks. The bill amends Section 36.064 of the Utilities Code, allowing electric utilities to self-insure against potential liabilities and catastrophic property losses, including those from wildfires. It introduces new criteria for the approval of self-insurance plans by the Public Utility Commission, emphasizing the need for plans to be in the public interest and to consider the potential extent of wildfire losses. Additionally, it specifies that utilities cannot self-insure for damages caused by wildfires if they acted intentionally, recklessly, or with gross negligence.

The bill also adds Section 38.080 to the Utilities Code, requiring electric utilities and cooperatives operating in wildfire risk areas to file a wildfire mitigation plan with the commission. This plan must include details on vegetation management, operations to reduce wildfire ignition, and community outreach efforts. The commission is tasked with approving or modifying these plans within 60 days of submission. Importantly, utilities with an approved plan are granted an affirmative defense against liability for damages caused by wildfires, provided they comply with their mitigation measures. The bill mandates the Public Utility Commission to adopt necessary rules for implementation within 180 days of the act's effective date.

Statutes affected:
Introduced: Utilities Code 36.064 (Utilities Code 36)