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A BILL TO BE ENTITLED
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AN ACT
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relating to utility facilities for restoring electric service after |
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a widespread power outage. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter Z, Chapter 39, Utilities Code, is |
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amended by adding Section 39.918 to read as follows: |
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Sec. 39.918. UTILITY FACILITIES FOR POWER RESTORATION AFTER |
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WIDESPREAD POWER OUTAGE. (a) In this section, "widespread power |
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outage" means an event that results in: |
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(1) a loss of electric power that: |
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(A) affects a significant number of distribution |
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customers of a transmission and distribution utility; and |
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(B) has lasted or is expected to last for at least |
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eight hours; and |
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(2) a risk to public safety. |
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(b) Notwithstanding any other provision of this subtitle, a |
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transmission and distribution utility may: |
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(1) lease and operate facilities that provide |
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temporary emergency electric energy to aid in restoring power to |
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the utility's distribution customers during a widespread power |
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outage in which: |
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(A) the independent system operator has ordered |
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the utility to shed load; or |
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(B) the utility's distribution facilities are |
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not being fully served by the bulk power system under normal |
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operations; and |
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(2) procure, own, and operate, or enter into a |
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cooperative agreement with other transmission and distribution |
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utilities to procure, own, and operate jointly, transmission and |
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distribution facilities that have a lead time of at least six months |
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and would aid in restoring power to the utility's distribution |
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customers following a widespread power outage. In this section, |
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long lead time facilities may not be electric energy storage |
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equipment or facilities under Chapter 35, Utilities Code. |
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(c) A transmission and distribution utility that leases and |
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operates facilities under Subsection (b)(1) may not sell electric |
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energy or ancillary services from those facilities. |
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(d) Facilities described by Subsection (b)(1): |
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(1) must be operated in isolation from the bulk power |
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system; and |
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(2) may not be included in independent system |
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operator: |
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(A) locational marginal pricing calculations; |
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(B) pricing; or |
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(C) reliability models. |
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(e) A transmission and distribution utility that leases and |
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operates facilities under Subsection (b)(1) shall ensure, to the |
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extent reasonably practicable, that retail customer usage during |
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operation of those facilities is adjusted out of the usage reported |
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for billing purposes by the retail customer's retail electric |
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provider. |
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(f) A transmission and distribution utility shall, when |
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reasonably practicable, use a competitive bidding process to lease |
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facilities under Subsection (b)(1). |
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(g) A transmission and distribution utility that leases and |
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operates facilities under Subsection (b)(1) or that procures, owns, |
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and operates facilities under Subsection (b)(2) shall include in |
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the utility's emergency operations plan filed with the commission, |
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as described by Section 186.007, a detailed plan on the utility's |
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use of those facilities. |
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(h) The commission shall permit: |
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(1) a transmission and distribution utility that |
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leases and operates facilities under Subsection (b)(1) to recover |
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the reasonable and necessary costs of leasing and operating the |
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facilities, including the present value of future payments required |
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under the lease, using the rate of return on investment established |
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in the commission's final order in the utility's most recent base |
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rate proceeding; and |
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(2) a transmission and distribution utility that |
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procures, owns, and operates facilities under Subsection (b)(2) to |
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recover the reasonable and necessary costs of procuring, owning, |
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and operating the facilities, using the rate of return on |
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investment established in the commission's final order in the |
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utility's most recent base rate proceeding. |
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(i) The commission shall authorize a transmission and |
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distribution utility to defer for recovery in a future ratemaking |
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proceeding the incremental operations and maintenance expenses and |
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the return, not otherwise recovered in a rate proceeding, |
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associated with the leasing or procurement, ownership, and |
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operation of the facilities. |
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(j) A transmission and distribution utility may request |
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recovery of the reasonable and necessary costs of leasing or |
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procuring, owning, and operating facilities under this section, |
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including any deferred expenses, through a proceeding under Section |
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36.210 or in another ratemaking proceeding. A lease under |
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Subsection (b)(1) must be treated as a capital lease or finance |
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lease for ratemaking purposes. |
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(k) This section expires September 1, 2029. |
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SECTION 2. Not later than January 1, 2029, the Public |
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Utility Commission of Texas shall: |
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(1) analyze the effects of authorizing transmission |
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and distribution utilities to lease, operate, procure, or own the |
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facilities described by Section 39.918(b), Utilities Code, as added |
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by this Act; and |
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(2) submit a report to the legislature that includes |
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the analysis produced under Subdivision (1) of this section and a |
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recommendation of whether the legislature should allow Section |
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39.918, Utilities Code, as added by this Act, to expire. |
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SECTION 3. This Act takes effect September 1, 2021. |
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