By:  Carona                                                       S.B. No. 712


A BILL TO BE ENTITLED

AN ACT

relating to the legislature's goal for energy efficiency in this 
state and related energy efficiency programs.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 39.905, Utilities Code, is amended to 
read as follows:   
	Sec. 39.905.  GOAL FOR ENERGY EFFICIENCY.  (a)  It is the 
goal of the legislature that:
		(1)  electric utilities will administer energy savings 
incentive programs in a market-neutral, nondiscriminatory manner 
but will not offer underlying competitive services;
		(2)  all customers, in all customer classes, have a 
choice of and access to energy efficiency alternatives and other 
choices from the market that allow each customer to reduce energy 
consumption, peak demand, or [and reduce] energy costs; [and]
		(3)  each electric utility will provide, through 
market-based standard offer programs or limited, targeted, 
market-transformation programs, incentives sufficient for retail 
electric providers and competitive energy service providers to 
acquire additional cost-effective energy efficiency equivalent to 
at least 10 percent of the electric utility's annual growth in 
demand;
		(4)  each electric utility may use up to 10 percent of 
the money approved for energy efficiency programs in the utility's 
most recent full rate proceeding before the commission, for the 
purpose of performing the necessary research and development to 
foster continuous improvement and innovation in the application of 
technologies and program design and implementation; and
		(5)  in addition to cost recovery for expenditures 
related to the goals in this section, the commission shall allow 
each utility, in its next full rate case before the commission, to 
recover the costs for acquiring additional cost-effective energy 
efficiency equivalent to an amount of up to 20 percent of the 
utility's growth in demand and, in addition, shall allow as a 
motivation to maximize cost-effective energy efficiency an 
incentive to the utility equal to five percent of the additional 
program payments.
	(b)  The commission shall provide oversight and adopt rules 
and procedures, as necessary, to ensure that the utilities can 
achieve the goal of this section [is achieved by January 1, 2004].
	(c)  A standard offer program under Subsection (a)(3) must be 
neutral with respect to technologies, equipment, and fuels, 
including thermal, chemical, mechanical, and electrical energy 
storage technologies.
	(d)  The commission shall adopt the following 
market-transformation program options that the utilities may 
choose to implement in order to satisfy the goal in Subsection 
(a)(3):
		(1)  energy-smart schools;                                             
		(2)  appliance retirement and recycling;                               
		(3)  air conditioning system tune-ups; and                             
		(4)  the use of trees or other landscaping for energy 
efficiency.    
	SECTION 2.  This Act takes effect September 1, 2005.