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.