By: Rodriguez H.B. No. 3431
A BILL TO BE ENTITLED
AN ACT
Relating to promoting economic development by accelerating the
commercialization of the fuel cell industry in Texas through a
statewide demonstration incentive program, a temporary tax
exemption, leveraging federal funds, coordination of research and
development, and market analysis.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Title 3, Utilities Code, Chapter 121 is amended
by adding Subchapter K to read as follows:
SUBCHAPTER K. FUEL CELL POWER PLANT DEMONSTRATION
Sec. 121.601 Findings. The Legislature finds that:
(a) the development of a fuel cell incentive program is
necessary to assure economic development and to leverage federal
funds available for fuel cells;
(b) stimulating the market for fuel cells in Texas will
create jobs in manufacturing, installation, and maintenance of fuel
cells;
(c) creating a robust fuel cell market will help to mitigate
air pollution concerns that threaten economic development; and
(d) research and development of fuel cells in our higher
education institutions will assure continued economic development
of the fuel cell industry and related industries and position Texas
at the forefront of clean power technologies.
Sec. 121.602 Definitions. In this chapter "fuel cell power
plant" means an integrated system comprised of a fuel cell stack
assembly and associated balance of plant components that converts a
fuel into electricity using electrochemical means.
Sec. 121.603. TEXAS COUNCIL ON ENVIRONMENTAL TECHNOLOGY
PARTICIPATION IN FUEL CELL ELECTRIC GENERATION DEMONSTRATION. (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 fuel cells and related products to the
market; and
(3) develop legislative recommendations for:
(A) instituting means of accelerating the
commercial availability of stationary fuel cell electric
generating capacity in this state in addition to those required by
this section;
(B) instituting means of fostering the
development or manufacture of fuel cells or related products or
services in this state; and
(C) instituting appropriate measures to prepare
this state to accept the early introduction of fuel cell vehicles or
other ultra-low-emmisions vehicles.
Sec. 121.604. Program Established. (a) The commission
shall establish an incentive program for fuel cell demonstration to
achieve the fuel cell power plant installation capacity goals of
this subsection by the dates specified by this subsection. The fuel
cell power plant goals may be met by the installation of fuel cell
power plant capacity on or off of the electric power grid on or
after September 1, 2003. The installation goal schedule for this
state is:
(1) 5 megawatts by January 1, 2005; and
(2) 50 megawatts by January 1, 2006.
(b) To meet the fuel cell power plant installation goals
established under this section, the commission shall provide
incentives to its customers through programs that are similar to
the standard-offer programs as defined by Chapter 39.905, of Title
2 of the Utilities Code, as implemented by the Public Utility
Commission of Texas.
(c) The incentives under Subsection (b) must be:
(1) administered in a market-neutral and
nondiscriminatory manner; and
(2) offered to all customer classes.
(d) To provide for implementation of the incentive programs
under this section, the commission shall adopt rules that:
(1) allow for measures or incentives to encourage
installation of fuel cell power plant capacity to relieve present
or potential transmission congestion or distribution congestion;
(2) are technology-neutral with respect to fuel or
fuel cell technology;
(3) ensure that a percentage of the fuel cell power
plant installation goal is achieved by fuel cell power plant units
in the categories of:
(A) less than 100 kilowatts per unit; and
(B) greater than 100 kilowatts per unit;
(4) allow backup or intermittent generation systems;
(5) allow customers to select appropriate fuel cell
power plant technologies and products from their chosen providers
to meet a wide variety of potential applications at various scales.
(f) The commission shall establish incentive levels,
including different incentive levels for different sizes of fuel
cell power plants that are necessary and sufficient to meet the
generation capacity goals by the appropriate dates.
Sec. 121.605. Fee Imposed. (a) The commission shall
develop rules to require a fee to be paid by each gas utility as
defined by Section 121.001(a)(1) for the purpose of implementing
the fuel cell demonstration program.
(b) Each gas utility shall pay a fee of one-cent per million
cubic feet of natural gas transported.
SECTION 2. Section 102.001, Utilities Code, is amended to
read as follows:
Section 102.001. Railroad Commission Jurisdiction. (a)
The railroad commission has exclusive original jurisdiction over
the rates and services of a gas utility:
(1) that distributes gas or synthetic natural gas in:
(A) areas outside a municipality; and
(B) areas inside a municipality that surrenders
its jurisdiction to the railroad commission under Section 103.003;
and
(2) that transmits, transports, delivers, or sells
natural gas or synthetic natural gas to a gas utility that
distributes the gas to the public.
(b) The railroad commission has exclusive appellate
jurisdiction to review an order or ordinance of a municipality
exercising exclusive original jurisdiction as provided by this
subtitle.
(c) The railroad commission has exclusive jurisdiction to
administer the fuel cell power plant demonstration and deployment
programs under Chapter 125.
SECTION 3. The Railroad Commission of Texas shall adopt
rules under Chapter 125, Utilities Code, as added by this Act,
before January 1, 2004.
SECTION 4. 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, use and
consumption of stationary fuel cells is exempted from the taxes
imposed by this chapter.
(b) This section expires January 1 , 2011.
SECTION 5. 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 6. 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
Railroad 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 125, 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 7. This Act takes effect September 1, 2003.