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A BILL TO BE ENTITLED
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AN ACT
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relating to use of electric energy storage facilities in the ERCOT |
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power region. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 35.151, Utilities Code, is amended to |
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read as follows: |
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Sec. 35.151. ELECTRIC ENERGY STORAGE. This subchapter |
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applies only to the ownership or operation of electric energy |
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storage equipment or facilities in the ERCOT power region that are |
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intended to: |
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(1) provide energy or ancillary services at wholesale, |
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including electric energy storage equipment or facilities listed on |
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a power generation company's registration with the commission or, |
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for an exempt wholesale generator, on the generator's registration |
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with the Federal Energy Regulatory Commission; or |
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(2) provide reliable delivery of electric energy to |
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distribution customers. |
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SECTION 2. Subchapter E, Chapter 35, Utilities Code, is |
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amended by adding Section 35.153 to read as follows: |
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Sec. 35.153. CONTRACTS FOR ELECTRIC ENERGY STORAGE FOR |
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RELIABILITY SERVICES. (a) A transmission and distribution |
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utility, with prior approval of the commission, may contract with a |
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power generation company to provide electric energy from an |
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electric energy storage facility to ensure reliable service to |
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distribution customers. |
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(b) The commission may not authorize ownership of an |
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electric energy storage facility by a transmission and distribution |
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utility. |
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(c) Before entering into a contract under Subsection (a), |
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the transmission and distribution utility must issue a request for |
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proposals for use of an electric energy storage facility to meet the |
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utility's reliability needs. |
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(d) A transmission and distribution utility may enter into a |
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contract under Subsection (a) only if use of an electric energy |
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storage facility is more cost-effective than construction or |
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modification of traditional distribution facilities. |
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(e) A transmission and distribution utility may not enter |
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into a contract under Subsection (a) that reserves an amount of |
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capacity exceeding the amount of capacity required to ensure |
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reliable service to the utility's distribution customers. |
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(f) A power generation company that owns or operates an |
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electric energy storage facility subject to a contract under |
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Subsection (a) may sell electric energy or ancillary services |
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through use of the facility only to the extent that the company |
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reserves capacity as required by the contract. |
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(g) A power generation company that owns or operates an |
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electric energy storage facility subject to a contract under |
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Subsection (a) may not discharge the facility to satisfy the |
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contract's requirements unless directed by the transmission and |
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distribution utility. |
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(h) A contract under Subsection (a) must require a power |
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generation company that owns or operates an electric energy storage |
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facility to reimburse a transmission and distribution utility for |
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the cost of an administrative penalty assessed against the utility |
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for a violation caused by the facility's failure to meet the |
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requirements of the agreement. |
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(i) In establishing the rates of a transmission and |
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distribution utility, a regulatory authority shall review a |
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contract between the utility and a power generation company under |
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Subsection (a). The utility has the burden of proof to establish |
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that the costs of the contract are reasonable and necessary. The |
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regulatory authority may authorize a transmission and distribution |
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utility to include a reasonable return on the payments required |
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under the contract only if the contract terms satisfy the relevant |
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accounting standards for a capital lease or finance lease. |
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(j) The total amount of electric energy storage capacity |
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reserved by contracts under Subsection (a) may not exceed 100 |
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megawatts. The commission shall by rule establish the maximum |
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amount of electric energy storage capacity allotted to each |
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transmission and distribution utility. |
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(k) The commission shall adopt rules as necessary to |
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implement this section and establish criteria for approving |
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contracts under Subsection (a). |
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SECTION 3. The Public Utility Commission of Texas shall |
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adopt rules required by Section 35.153, Utilities Code, as added by |
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this Act, as soon as practicable after the effective date of this |
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Act. |
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SECTION 4. This Act takes effect September 1, 2021. |