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A BILL TO BE ENTITLED
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AN ACT
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relating to the cost of interconnecting certain electric generation |
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and energy storage facilities with the ERCOT transmission system. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 35.004, Utilities Code, is amended by |
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amending Subsection (d) and adding Subsections (d-1) and (d-2) to |
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read as follows: |
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(d) The commission shall price wholesale transmission |
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services within ERCOT based on the postage stamp method of pricing |
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under which a transmission-owning utility's rate is based on the |
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ERCOT utilities' combined annual costs of transmission, other than |
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costs described by Subsection (d-2), divided by the total demand |
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placed on the combined transmission systems of all such |
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transmission-owning utilities within a power region. An electric |
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utility subject to the freeze period imposed by Section 39.052 may |
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treat transmission costs in excess of transmission revenues during |
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the freeze period as an expense for purposes of determining annual |
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costs in the annual report filed under Section 39.257. |
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Notwithstanding Section 36.201, the commission may approve |
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wholesale rates that may be periodically adjusted to ensure timely |
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recovery of transmission investment. Notwithstanding Section |
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36.054(a), if the commission determines that conditions warrant the |
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action, the commission may authorize the inclusion of construction |
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work in progress in the rate base for transmission investment |
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required by the commission under Section 39.203(e). |
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(d-1) The commission by rule shall establish an allowance to |
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be applied on a per megawatt basis for capital costs incurred to |
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interconnect generation resources and electric energy storage |
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resources described by Section 35.152(a) with the ERCOT |
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transmission system, including costs of utility interconnection |
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facilities and all necessary system upgrades. The allowance must: |
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(1) take into account average historical |
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interconnection costs and system upgrade costs, other than |
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transmission costs associated with Section 39.904(g); and |
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(2) be designed to lower costs to consumers and |
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encourage owners of generation resources and electric energy |
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storage resources to locate the resources closer to load. |
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(d-2) Capital costs in excess of the allowance provided by |
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Subsection (d-1) incurred to interconnect generation resources and |
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electric energy storage resources described by Section 35.152(a) |
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with the ERCOT transmission system, including costs of utility |
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interconnection facilities and all necessary system upgrades, must |
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be directly assigned to the generation resource or electric energy |
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storage resource receiving interconnection service through the |
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facilities. |
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SECTION 2. This Act takes effect September 1, 2023. |