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	Amend SB 743 on third reading by striking the section of the 
bill amending Section 39.904, Utilities Code, as added on second 
reading by Amendment No. 1 by Hunter amendment and by Amendment No. 
2 Swinford amendment and substituting:
	SECTION     .  Section 39.904, Utilities Code, is amended by 
amending Subsections (a) and (d) and adding Subsections (a-1) and 
(g)-(o) to read as follows:
	(a)  It is the intent of the legislature that by January 1, 
2017 [2009], an additional 7,000 [2,000] megawatts of generating 
capacity from renewable energy technologies will have been 
installed in this state. The cumulative installed renewable 
capacity in this state shall total 7,880 [1,280] megawatts by 
January 1, 2017.  The cumulative installed renewable capacity in 
this state shall total 3,113 megawatts by January 1, 2007, 3,946 
megawatts by January 1, 2009, 4,779 megawatts by January 1, 2011, 
5,612 megawatts by January 1, 2013, 6,445 megawatts by January 1, 
2015, and 7,880 megawatts by January 1, 2017 [2003, 1,730 megawatts 
by January 1, 2005, 2,280 megawatts by January 1, 2007, and 2,880 
megawatts by January 1, 2009].
	(a-1)  The commission shall establish a target of 10,000 
megawatts of installed renewable capacity by January 1, 2025. The 
commission shall also establish a target of 500 megawatts of 
generating capacity from non-wind renewable technologies or 
emerging ultra-clean distributed generation technologies including 
generation from industrial waste heat and fuel cells, installed in 
this state after September 1, 2005.  Non-renewable utlra-clean 
distributed generation projects as defined in this section, shall 
not exceed 200 megawatts of the 500 megawatt target and individual 
projects shall not exceed 10 megawatts capacity.
	(d)  In this section, "renewable energy technology" means any 
technology that exclusively relies on an energy source that is 
naturally regenerated over a short time and derived directly from 
the sun, indirectly from the sun, or from moving water or other 
natural movements and mechanisms of the environment. Renewable 
energy technologies include those that rely on energy derived 
directly from the sun, on wind, geothermal, hydroelectric, wave, or 
tidal energy, [or] on biomass or biomass-based waste products, 
including landfill gas, or on gasification of municipal solid 
waste.  In this subsection, "municipal solid waste" means 
nondurable goods, containers, packaging, food wastes, yard 
trimmings, and miscellaneous organic wastes from residential, 
commercial, and industrial nonprocess sources.  A renewable energy 
technology, other the gasification of municipal solid waste, does 
not rely on energy resources derived from fossil fuels, waste 
products from fossil fuels, or waste products from inorganic 
sources.
	(g)  The commission, after consultation with each appropriate 
independent organization, electric reliability council, or 
regional transmission organization:
		(1)  shall designate competitive renewable energy zones 
throughout this state in areas in which renewable energy resources 
and suitable land areas are sufficient to develop generating 
capacity from renewable energy technologies;
		(2)  shall develop a plan to construct transmission 
capacity necessary to deliver to electric customers, in a manner 
that is most beneficial and cost-effective to the customers, the 
electric output from renewable energy technologies in the 
competitive renewable energy zones; and 
		(3)  shall consider the level of financial commitment by 
generators for each competitive renewable energy zone in 
determining whether to designate an area as a competitive renewable 
energy zone and whether to grant a certificate of convenience and 
necessity.
	(h)  In considering an application for a certificate of 
convenience and necessity for a transmission project intended to 
serve a competitive renewable energy zone, the commission is not 
required to consider the factors provided by Sections 37.056(c)(1) 
and (2).
	(i)  Transmission service to a competitive renewable energy 
zone must be provided in a manner consistent with Subchapter A, 
Chapter 35.
	(j)  The commission, after consultation with the comptroller, 
the Texas Commission on Environmental Quality, the State Energy 
Conservation Office, the Office of Rural Community Affairs, and 
each appropriate independent organization, electric reliability 
council, or regional transmission organization, shall file a report 
with the legislature not later than December 31 of each 
even-numbered year. The report must include:
		(1) an evaluation of the commission's implementation of 
competitive renewable energy zones;
		(2)  the estimated cost of transmission service 
improvements needed for each competitive renewable energy zone;
		(3)  an evaluation of the effects that additional 
renewable generation has on system reliability and on the cost of 
alternatives to mitigate the effects;
		(4)  an assessment of the net impact of renewable energy 
generation on statewide fuel use, fuel cost savings, and wholesale 
energy costs; and
		(5)  an assessment of the economic development and tax 
revenue impacts of historical and additional renewable energy 
generation.
	(k)  The commission and the independent organization 
certified for ERCOT shall study the need for increased transmission 
and generation capacity throughout this state and report to the 
legislature the results of the study and any recommendations for 
legislation. The report must be filed with the legislature not 
later than December 31 of each even-numbered year and may be filed 
as a part of the report required by Subsection (j).
	(1)  The commission may adopt rules requiring renewable power 
facilities to have reactive power control capabilities or any other 
feasible technology designed to reduce the facilities' effects on 
system reliability.
	(m)  Notwithstanding any other provision of law, the 
commission shall ensure that all renewable capacity installed in 
this state and all renewable energy credits awarded, produced, 
procured, or sold in this state are counted toward the goal in 
Subsection (a).
	(n)  Notwithstanding any other provision of law, the 
commission may cap the price of renewable energy credits and may 
suspend the goal contained in Subsection (a) if that suspension is 
necessary to protect the reliability and operation of the grid.
	(o)  The commission, after consultation with the comptroller, 
the Texas Commission on Environmental Quality, the State Energy 
Conservation Office, the Office of Rural Community Affairs, and 
with each appropriate independent organization, electric 
reliability council, or regional transmission organization, shall 
file a report with the legislature not later than December 31, 2006, 
detailing the costs and benefits of additional renewable energy use 
in this state. The report must include the projected net effects 
throughout this state on fuel costs, transmission costs, wholesale 
energy costs, environmental impacts, tax revenues, and economic 
development of achieving renewable energy use of up to 10 percent of 
electric energy consumption in this state on or before January 1, 
2020.