House Bill 3693 amends provisions of several codes relating primarily to energy efficiency. The bill strengthens statutory requirements under which electric utilities must meet new electricity demand through cost-effective efficiency gains by incrementally increasing certain energy efficiency goals, measured as an increasing percentage of annual growth in demand, through the end of 2009 while limiting those goals to residential and customer demand. The Public Utility Commission of Texas (PUC) must take certain actions to allow cost recovery and establish incentives to promote meeting or exceeding the goals. Additional provisions apply to industrial customers and to energy efficiency activities among municipal utilities and electric cooperatives on which those municipal utilities and coopertives must report to the comptroller's State Energy Conservation Office (SECO). The bill requires the PUC to study and report to the legislature on the potential for further energy efficiency in the electricity sector and on the installation and use of combined heating and power technology. In consultation with SECO, the PUC for a period of five years must compute, and report annually to the Electric Reliability Council of Texas (ERCOT), data on projected energy savings and demand impacts from specified energy management programs. The PUC may encourage retail electric providers to deliver individualized home electric energy reports to educate consumers on electricity use and energy efficiency.

It includes provisions relating to the interconnection of distributed renewable electricity generation with a capacity of up to 2,000 kilowatts provided by a renewable energy technology installed by retail electric customers. The bill requires an electric utility or transmission and distribution utility to allow interconnection if the distributed generation has a five-year warranty against breakdown or undue degradation and its rated capacity does not exceed the utility's service capacity and to make certain metering available to the owner of the distributed generation to measure both in-flow and out-flow. A renewable energy credit earned by the owner remains his or her sole property unless the owner sells or trades the credit. The bill requires the PUC to provide information to school districts on how they may finance the installation of solar electric generation panels for school district buildings and contains provisions under which school districts may furnish surplus electricity from such panels to the grid and, like other owners of renewable distributed generation, be compensated for the surplus electricity's net value.

Efficiency provisions applicable to school districts and to certain institutions of higher education and executive branch state agencies require them to establish a goal of reducing their annual electricity consumption by five percent for each of six state fiscal years beginning September 1, 2007. School districts for purposes of instructional facilities, and institutions of higher education for purposes of educational facilities, dormitories, and certain other buildings, must purchase commercially available light bulbs, compatible with light fixtures, that use the fewest watts for the necessary illumination. An identical requirement applies to executive branch agencies and certain judicial entities, which must also purchase other equipment and appliances that meet or exceed federal energy standards whenever such purchases are cost‑effective. Governmental entities must report via the Internet on the electricity, natural gas, or water that they consume and pay for and their aggregate utility services costs. The bill includes energy efficiency requirements applicable to vending machines in state-owned or state-leased buildings.

Current law establishes Texas building energy performance standards based on the 2001 editions of the International Residential Code and International Energy Conservation Code. The bill gives SECO the discretion--if it determines based on recommendations from the Energy Systems Laboratory at Texas A&M University that provisions of the latest editions are equivalent to or more stringent than the 2001 provisions--to upgrade the building standards to reflect the newest editions. Other provisions relating to the laboratory authorize it to cooperate with an industry organization or trade association to develop guidelines for home energy ratings, offer training to individuals performing or providing such ratings, and provide a registry of ratings by which to compute resultant energy savings and emissions reductions benefits of the home energy ratings program. The laboratory must include information on those program benefits in an annual report to the Texas Commission on Environmental Quality. The bill requires certain energy efficiency measures for single and multifamily dwellings that are constructed or rehabilitated with assistance awarded by the Texas Department of Housing and Community Affairs, other than dwellings that receive assistance under the weatherization or first-time homebuyer programs.

It creates a Memorial Day Weekend sales and use tax exemption for dishwashers, clothes washers, programmable thermostats, light bulbs, ceiling fans, dehumidifiers, air conditioners priced at $6,000 or less, and refrigerators priced at $2,000 or less, that have been designated by federal agencies as energy-efficient products. Amendments to the Texas Economic Development Act, relating to job-creating projects that are eligible for certain property tax incentives, require the comptroller to report biennially on job, wage, investment, appraisal, and other data for each agreement under that act that involves an energy-related project.

The bill includes provisions, substantially equivalent to those of House Bill 624, that require PUC approval of certain utility mergers and consolidations.

House Bill 3693	House Author: Straus et al.
Effective: 9-1-07	Senate Sponsor: Fraser