79R8592 JJT-F
By: Gallego H.B. No. 2692
A BILL TO BE ENTITLED
AN ACT
relating to the state's goal for electric generating capacity by
renewable energy technologies and distributed renewable energy
generation.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 35.004(d), Utilities Code, is amended to
read as follows:
(d) The commission shall price wholesale transmission
services within ERCOT based on the postage stamp method of pricing
under which a transmission-owning utility's rate is based on the
ERCOT utilities' combined annual costs of transmission divided by
the total demand placed on the combined transmission systems of all
such transmission-owning utilities within a power region. An
electric utility subject to the freeze period imposed by Section
39.052 may treat transmission costs in excess of transmission
revenues during the freeze period as an expense for purposes of
determining annual costs in the annual report filed under Section
39.257. Notwithstanding Section 36.201, the commission may approve
wholesale rates that may be periodically adjusted to ensure timely
recovery of transmission investment. Notwithstanding Section
36.054(a), if the commission requires an electric utility or a
transmission and distribution utility to construct and enlarge
facilities in accordance with Section 39.203(e) and if the utility
has an executed interconnection agreement with a renewable energy
technology generator, the commission shall authorize the inclusion
of all costs incurred by the utility for engineering, procuring,
planning, and developing the facilities. Notwithstanding Section
36.054(a), if the commission determines that conditions warrant the
action, the commission may authorize the inclusion of construction
work in progress in the rate base for transmission investment
[required by the commission under Section 39.203(e)].
SECTION 2. Section 35.006, Utilities Code, is amended by
adding Subsection (c) to read as follows:
(c) The commission shall design the commission's protocols
regarding locational marginal pricing to maximize the benefits of
renewable energy technologies, including benefits to the
environment, benefits to reliability, economic benefits, and
security benefits.
SECTION 3. Section 37.056(c), Utilities Code, is amended to
read as follows:
(c) The commission shall grant each certificate on a
nondiscriminatory basis after considering:
(1) the adequacy of existing service;
(2) the need for additional service;
(3) the effect of granting the certificate on the
recipient of the certificate and any electric utility serving the
proximate area;
(4) the effect of granting the certificate on the
ability of this state to meet the goals established by Section
39.904; and
(5) [(4)] other factors, such as:
(A) community values;
(B) recreational and park areas;
(C) historical and aesthetic values;
(D) environmental integrity; and
(E) the probable improvement of service or
lowering of cost to consumers in the area if the certificate is
granted[; and
[(F) to the extent applicable, the effect of
granting the certificate on the ability of this state to meet the
goal established by Section 39.904(a) of this title].
SECTION 4. Section 39.203(e), Utilities Code, is amended to
read as follows:
(e) The commission may require an electric utility or a
transmission and distribution utility to construct or enlarge
facilities to ensure safe and reliable service for the state's
electric markets, to interconnect renewable energy technology
generators to the transmission and distribution system, and to
reduce transmission constraints within ERCOT in a cost-effective
manner where the constraints are such that they are not being
resolved through Chapter 37 or the ERCOT transmission planning
process. In any proceeding brought under Chapter 37, an electric
utility or transmission and distribution utility ordered to
construct or enlarge facilities under this subchapter need not
prove that the construction ordered is necessary for the service,
accommodation, convenience, or safety of the public and need not
address the factors listed in Sections 37.056(c)(1)-(3) and (5)(E)
[(4)(E)]. The commission shall approve or deny an application for a
certificate of convenience and necessity for facilities being
enlarged to serve a renewable energy technology generator not later
than the 90th day after the date the application is filed.
SECTION 5. Section 39.904, Utilities Code, is amended by
amending Subsections (a), (b), (c), and (d) and adding Subsection
(g) to read as follows:
(a) It is the goal of this state that before January 1, 2020,
not less than 20 percent of electric energy consumed in this state
must be generated by renewable energy technologies. The [intent of
the] legislature intends that the goal be met incrementally so that
[by January 1, 2009, an additional 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 [1,280 megawatts by January 1,
2003, 1,730 megawatts by January 1, 2005,] 2,280 megawatts by
January 1, 2007, [and] 2,880 megawatts by January 1, 2009, and
10,880 megawatts by January 1, 2015. Of the generating capacity
from renewable energy technologies installed by January 1, 2015,
the goal is for at least 500 megawatts to be generating capacity
from distributed renewable energy technologies, and, of that 500
megawatts of distributed capacity, the goal is for at least 100
megawatts to be generating capacity installed on the customer's
side of the meter.
(b) The commission shall establish a renewable energy
credits trading program and a program for recognizing the credits
representing generating capacity by distributed renewable
technologies on either side of the meter. Any retail electric
provider, municipally owned utility, or electric cooperative that
does not satisfy the requirements of Subsection (a) by directly
owning or purchasing capacity using renewable energy technologies
shall purchase sufficient renewable energy credits to satisfy the
requirements by holding renewable energy credits in lieu of
capacity from renewable energy technologies.
(c) The [Not later than January 1, 2000, the] commission
shall adopt rules necessary to administer and enforce this section.
At a minimum, the rules shall:
(1) establish the minimum annual renewable energy
technology and distributed renewable energy technology generating
capacity requirement for each retail electric provider,
municipally owned utility, and electric cooperative operating in
this state in a manner reasonably calculated by the commission to
produce, on a statewide basis, compliance with the requirement
prescribed by Subsection (a); and
(2) specify reasonable performance standards that all
renewable and distributed generating capacity additions must meet
to count against the requirement prescribed by Subsection (a) and
that:
(A) are designed and operated so as to maximize
the energy output from the generating capacity additions in
accordance with then-current industry standards; and
(B) encourage the development, construction, and
operation of new renewable energy technology projects at those
sites in this state that have the greatest economic potential for
capture and development of this state's environmentally beneficial
renewable resources.
(d) In this section:
(1) "Distributed renewable energy technology"
includes renewable energy technology:
(A) connected to the electric energy
transmission system at the distribution level, such as photovoltaic
generation, solar thermal electric generation, small wind-powered
generation, generation using biomass, or geothermal generation
technologies; and
(B) that offsets electric energy generation when
operated at a facility connected to the distribution system, such
as solar water heating systems or geothermal water heating systems.
(2) "Renewable [, "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. A renewable energy technology
does not rely on energy resources derived from fossil fuels, waste
products from fossil fuels, or waste products from inorganic
sources.
(g) The commission and each appropriate independent
organization certified under Section 39.151 and transmission group
shall approve a plan to provide new transmission infrastructure
necessary to support the goals established by Subsection (a). The
commission may adopt rules as necessary to implement the plan. The
plan must address:
(1) timely recovery of transmission infrastructure
costs by transmission service providers before renewable energy
technology generating capacity is installed;
(2) transmission and distribution infrastructure
security;
(3) reliability benefits; and
(4) the priority of projects.
SECTION 6. Not later than June 1, 2006, the Public Utility
Commission of Texas in conjunction with each appropriate
independent organization certified under Section 39.151, Utilities
Code, and appropriate transmission group shall approve a plan for
new transmission infrastructure as required by Section 39.904(g),
Utilities Code, as added by this Act.
SECTION 7. The lieutenant governor and the speaker of the
house of representatives shall appoint a study group that has
expertise necessary to develop a plan by which this state may meet a
goal of having 20 percent of all energy consumption in this state by
January 1, 2020, be from renewable energy technology sources, as
defined by Section 39.904, Utilities Code. The study group shall
develop a plan to meet that goal and shall issue a report on the plan
to the legislature not later than January 1, 2007.
SECTION 8. This Act takes effect September 1, 2005.