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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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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), (d-2), and |
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(d-3) to 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 Subsections (d-2) and (d-3), divided by the |
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total demand placed on the combined transmission systems of all |
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such transmission-owning utilities within a power region. An |
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electric utility subject to the freeze period imposed by Section |
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39.052 may treat transmission costs in excess of transmission |
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revenues during the freeze period as an expense for purposes of |
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determining annual costs in the annual report filed under Section |
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39.257. 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 a reasonable |
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allowance to be applied on a per megawatt basis for costs incurred |
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to interconnect generation resources directly with the ERCOT |
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transmission system at transmission voltage, including costs of |
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utility interconnection facilities. The allowance must: |
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(1) take into account: |
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(A) average historical dispatchable generation |
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interconnection costs; and |
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(B) the reliability impact to the grid of the |
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interconnecting resource and whether the interconnecting resource |
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increases reliability or volatility in managing the grid; and |
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(2) be designed to lower costs to consumers and |
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encourage owners of generation resources to locate the resources |
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closer to load. |
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(d-2) Costs in excess of the allowance provided by |
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Subsection (d-1) incurred to interconnect generation resources |
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with the ERCOT transmission system, including costs of utility |
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interconnection facilities, must be directly assigned to and |
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collected from the generation resource interconnecting through the |
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facilities. |
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(d-3) Not later than September 1 of every fifth year after |
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2023, the commission shall review and may adjust the allowance |
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provided by Subsection (d-1) to account for inflation or supply |
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chain issues. |
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SECTION 2. This Act takes effect September 1, 2023. |
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