By: Puente H.B. No. 2666
A BILL TO BE ENTITLED
AN ACT
relating to demonstration and deployment of fuel cells for electric
generation.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 31.002, Utilities Code, is amended by
adding Subdivision (21) to read as follows:
(21) "Fuel cell" means an electronic device that uses
fuel and oxidant to generate electricity continuously.
SECTION 2. Subchapter Z, Chapter 39, Utilities Code, is
amended by adding Sections 39.910-39.912 to read as follows:
Sec. 39.910. FUEL CELL ELECTRIC GENERATION DEMONSTRATION
AND DEPLOYMENT. (a) This section applies only to an electric
utility, electric cooperative, or municipally owned utility that is
located in or that serves an area that is in a nonattainment area as
defined by Title I of the federal Clean Air Act (42 U.S.C. Section
7401 et seq.) or an area that is an affected county, as defined in
the Health and Safety Code Sec. 386.001(2).
(b) Each electric utility, electric cooperative, and
municipally owned utility shall establish a demonstration and
deployment program to achieve the generation capacity goals of this
subsection by the dates specified by this subsection. The
generation capacity goals may be met by the installation of fuel
cell electric generation capacity on or off of the electric power
grid. The total generation capacity goals for this state are:
(1) 35 megawatts by January 1, 2005;
(2) 100 megawatts by January 1, 2006;
(3) 200 megawatts by January 1, 2007;
(4) 325 megawatts by January 1, 2008;
(5) 475 megawatts by January 1, 2009;
(6) 700 megawatts by January 1, 2010; and
(7) 1,000 megawatts by January 1, 2011.
(c) To meet the generation capacity goals established under
this section, an electric utility, electric cooperative, or
municipally owned utility shall:
(1) purchase and own fuel cells, to the extent allowed
by law; or
(2) provide incentives to its customers through
standard-offer programs as provided by commission rule.
(d) The incentives under Subsection (c)(2) must be:
(1) administered in a market-neutral and
nondiscriminatory manner; and
(2) offered to all customer classes.
(e) To provide for implementation of the incentive programs
under this section, the commission shall adopt rules similar to
those governing the design and implementation of efficiency
programs established under Section 39.905. The rules must:
(1) allow for measures or incentives to encourage
installation of fuel cell electric generation capacity to relieve
present or potential transmission congestion or distribution
congestion;
(2) be technology-neutral with respect to fuel or fuel
cell technology;
(3) ensure that a percentage of money is designated
for generators of categories of:
(A) less than 100 kilowatts;
(B) greater than 100 kilowatts;
(4) allow backup or intermittent generation systems;
(5) allow customers to select appropriate fuel cell
technologies and products from their chosen providers to meet a
wide variety of potential applications at various scales; and
(6) establish a project open to all persons to
receive:
(A) comments on the commission's development of
rules under this section;
(B) comments on the progress of the incentive
programs toward meeting the goals of this section; and
(C) recommendations for changes to the rules,
incentive programs, or incentive levels.
(f) The commission by rule shall establish goals for each
electric utility, electric cooperative, and municipally owned
utility that is proportional to its share of the electric
generation load. The commission may exempt small electric
cooperatives or municipally owned utilities from participation
under this section.
(g) The commission shall establish incentive levels, with
different incentive levels for different sizes of fuel cells, that
are necessary and sufficient to meet the generation capacity goals
by the appropriate dates.
Sec. 39.911. TEXAS COUNCIL ON ENVIRONMENTAL TECHNOLOGY
PARTICIPATION IN FUEL CELL ELECTRIC GENERATION DEMONSTRATION AND
DEPLOYMENT. (a) In this section, "council" means the Texas Council
on Environmental Technology.
(b) The council shall:
(1) provide coordination and support for the Texas
Consortium for Advanced Fuel Cell Research.
(2) monitor and evaluate the status of the fuel cell
industry in this state for both mobile and stationary applications
including the general market conditions and other factors that may
affect the introduction of fuels cells and related products to the
market; and
(3) develop legislative recommendations for:
(A) instituting other means of accelerating the
commercial availability of stationary fuel cell electric
generating capacity in this state;
(B) instituting means of fostering the
development or manufacture of fuel cells or related products or
services in this state; and
(C) instituting appropriate means to prepare
this state to accept the early introduction of fuel cell vehicles or
other ultra-low-emissions vehicles.
SECTION 3. Section 39.002, Utilities Code, is amended to
read as follows:
Sec. 39.002. APPLICABILITY. This chapter, other than
Sections 39.155, 39.157(e), 39.203, 39.903, [and] 39.904, and
39.910, does not apply to a municipality owned utility or an
electric cooperative. Sections 39.157(e), 39.203, and 39.904,
however, apply only to a municipally owned utility or an electric
cooperative that is offering customer choice. If there is a
conflict between the specific provisions of this chapter and any
other provisions of this title, except for Chapters 40 and 41, the
provisions of this chapter control.
SECTION 4. Section 40.004, Utilities Code, is amended to
read as follows:
Sec. 40.004. JURISDICTION OF COMMISSION. Except as
specifically otherwise provided in this chapter, the commission has
jurisdiction over municipally owned utilities only for the
following purposes:
(1) to regulate wholesale transmission rates and
service, including terms of access, to the extent provided by
Subchapter A, Chapter 35;
(2) to regulate certification of retail service areas
to the extent provided by Chapter 37;
(3) to regulate rates on appeal under Subchapters D
and E, Chapter 33, subject to Section 40.051(c);
(4) to establish a code of conduct as provided by
Section 39.157(e) applicable to anticompetitive activities and to
affiliate activities limited to structurally unbundled affiliates
of municipally owned utilities, subject to Section 40.054;
(5) to establish terms and conditions for open access
to transmission and distribution facilities for municipally owned
utilities providing customer choice, as provided by Section 39.203;
(6) to require collection of the nonbypassable fee
established under Section 39.903(b) and to administer the renewable
energy credits program under Section 39.904(b), [and] the natural
gas energy credits program under Section 39.9044(b), and the fuel
cell incentives under Section 39.910; and
(7) to require reports of municipally owned utility
operations only to the extent necessary to:
(A) enable the commission to determine the
aggregate load and energy requirements of the state and the
resources available to serve that load; or
(B) enable the commission to determine
information relating to market power as provided by Section 39.155.
SECTION 5. Section 41.001, Utilities Code, is amended to
read as follows:
Sec. 41.001. APPLICABLE LAW. Notwithstanding any other
provision of law, except Sections 39.155, 39.157(e), 39.203,
39.903, [and] 39.904, and 39.910, this chapter governs the
transition to and the establishment of a fully competitive electric
power industry for electric cooperatives. Regarding the regulation
of electric cooperatives, the chapter shall control over any other
provision of this title, except for sections in which the term
"electric cooperative" is specifically used.
SECTION 6. Section 41.004, Utilities Code, is amended to
read as follows:
Sec. 41.004. JURISDICTION OF COMMISSION. Except as
specifically provided otherwise in this chapter, the commission has
jurisdiction over electric cooperatives only as follows:
(1) to regulate wholesale transmission rates and
service, including terms of access, to the extent provided in
Subchapter A, Chapter 35;
(2) to regulate certification to the extent provided
in Chapter 37;
(3) to establish a code of conduct as provided in
Section 39.157(e) subject to Section 41.054;
(4) to establish terms and conditions, but not rates,
for open access to distribution facilities for electric
cooperatives providing customer choice, as provided in Section
39.203; [and]
(5) to require reports of electric cooperative
operations only to the extent necessary to:
(A) ensure the public safety;
(B) enable the commission to satisfy its
responsibilities relating to electric cooperatives under this
chapter;
(C) enable the commission to determine the
aggregate electric load and energy requirements in the state and
the resources available to serve that load; or
(D) enable the commission to determine
information relating to market power as provided in Section 39.155;
and
(6) to administer the fuel cell demonstration and
deployment programs under Section 39.910.
SECTION 7. Chapter 447, Government Code, as amended by
Section 10, Chapter 573, Section 28, Chapter 1158, and Section 1,
Chapter 1138, Acts of the 77th Legislature, 2001 is amended by
adding Section 447.012 to read as follows:
Sec. 447.012. FUEL CELL DEVELOPMENT. The state energy
conservation office shall undertake to partner with the United
States Department of Energy and other federal agencies or programs
to develop cooperative programs related to research on, development
of, and demonstration of fuel cell technology in this state.
SECTION 8. Subchapter H, Chapter 151, Tax Code, is amended
by adding Section 151.356 to read as follows:
Sec. 151.356. STATIONARY FUEL CELLS. (a) The sale of
stationary fuel cells is exempted from the taxes imposed by this
chapter.
(b) This section expires January 1, 2011.
SECTION 9. Not later than September 1, 2004, the Texas
Council on Environmental Technology shall present the speaker of
the house of representatives, the lieutenant governor, and the
Public Utility Commission of Texas with a report on the status of
the fuel cell industry in this state. The report must include
recommendations:
(1) for any changes to the fuel cell demonstration and
deployment incentive program under Section 39.910, Utilities Code,
as added by this Act;
(2) for any other steps this state may take to prepare
this state for the introduction of fuel cell vehicles or other
ultra-low-emissions vehicles;
(3) regarding research and development programs at
universities and private research centers in this state to advance
fuel cell research and development in this state and to attract
federal and industry funding of fuel cell research and development;
and
(4) regarding training and education necessary for
developing professional services required to install and service
fuel cells installed in this state.
SECTION 10. The Public Utility Commission of Texas shall
adopt rules under Section 39.910, Utilities Code, as added by this
Act, before January 1, 2004.
SECTION 11. This Act takes effect September 1, 2003.