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A BILL TO BE ENTITLED
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AN ACT
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relating to the use of customer-sited distributed generation |
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facilities owned by certain non-ERCOT electric utilities. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter E, Chapter 36, Utilities Code, is |
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amended by adding Section 36.215 to read as follows: |
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Sec. 36.215. RECOVERY OF INVESTMENT IN DISTRIBUTED |
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GENERATION AND RATES FOR BACKUP ELECTRIC SERVICE FOR CERTAIN |
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NON-ERCOT UTILITIES. (a) In this section: |
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(1) "Customer-sited distributed generation facility" |
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means a dispatchable generation facility that is installed on the |
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electric utility's side of the retail meter and owned and operated |
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by the electric utility: |
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(A) with a nameplate capacity of not more than 10 |
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megawatts; |
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(B) that is capable of generating and providing |
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backup electric service to a customer during a power grid outage; |
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and |
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(C) sited at or adjacent to the customer's |
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premises. |
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(2) "Host customer" means a customer receiving backup |
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electric service under this section. |
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(b) This section applies only to an electric utility that |
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operates solely outside of ERCOT in areas of this state included in |
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the Southeastern Electric Reliability Council. |
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(c) An electric utility may provide backup electric service |
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to a nonresidential retail customer through a customer-sited |
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distributed generation facility. |
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(d) The commission, on the petition of an electric utility, |
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shall establish just and reasonable rates for backup electric |
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service supplied using a customer-sited distributed generation |
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facility, consistent with this chapter, provided that costs are |
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allocated as follows: |
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(1) if the facility is capable of directly supplying |
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energy to the distribution system or of disconnecting the host |
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customer from the distribution system when not being used to supply |
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backup electric service to the host customer and thereby reducing |
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system load, the commission shall allocate the cost of owning and |
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operating the facility between the host customer and the electric |
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utility's broader customer base, including an allocation of any |
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margins from energy sales attributable to the facility to the host |
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customer in reasonable proportion to the allocation of nonfuel |
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costs as provided by Subdivision (2); and |
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(2) the allocation of nonfuel costs to the host |
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customer must be based on the cost to purchase, install, |
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interconnect, own, operate, and maintain the facility that is above |
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the electric utility's levelized avoided cost to install, own, |
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operate, and maintain a single-cycle combustion turbine, on a per |
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kilowatt basis, grossed up for avoided line losses based on the |
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utility's transmission and distribution line loss factors last |
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approved by the commission. |
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(e) In a rate proceeding in which an electric utility seeks |
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to recover the utility's investment in a customer-sited distributed |
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generation facility that is interconnected to the utility's |
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distribution system: |
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(1) the full cost of the utility's investment is |
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eligible for recovery; and |
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(2) the cost of the facility and backup electric |
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service revenues must be allocated among customer classes on the |
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same basis used to allocate the utility's distribution-level |
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investments. |
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SECTION 2. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2023. |
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