80R10774 JJT-D

By: Burnam H.B. No. 3897

A BILL TO BE ENTITLED

AN ACT

relating to establishing a goal of reducing carbon dioxide emissions from electric generation in this state to 1990 levels not later than 2020.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter Z, Chapter 39, Utilities Code, is amended by adding Section 39.911 to read as follows:

Sec. 39.911. STATEWIDE CARBON DIOXIDE EMISSIONS GOAL FOR ELECTRIC GENERATION; ALLOWANCES TRADING. (a) The commission and the Texas Commission on Environmental Quality jointly by rule shall establish a program to encourage electric generation in this state by means that produce lower carbon dioxide emissions levels.

(b) The commission and the Texas Commission on Environmental Quality by rule separately or jointly may establish incentives for persons:

(1) to generate electricity in this state to be made available for consumers or for consumption by a type of generator that will produce electric power by means that produce relatively low carbon dioxide emissions, including by:

(A) solar power;

(B) wind power;

(C) biomass technologies;

(D) geothermal technologies; or

(E) combined heat and power; and

(2) to reduce the consumption of electric power generated by means that produce relatively high carbon dioxide emissions, including by energy efficiency projects or programs.

(c) The commission and the Texas Commission on Environmental Quality jointly by rule shall establish an emissions allowance program for electric generation facilities' emissions of carbon dioxide in this state. The program must establish an annual limit on the amount of statewide emissions of carbon dioxide from electric generation, and the limit must be reduced incrementally so that by January 1, 2020, the limit must be equal to or below the amount of carbon dioxide emissions in this state from electric generation in 1990, as estimated by the Texas Commission on Environmental Quality.

(d) The program adopted under Subsection (c) must provide for the issuance to electric generation facilities in this state of an appropriate number of emissions allowances that authorize the electric generation facilities each to emit a limited amount of carbon dioxide in a year or in another compliance period specified by rule. Emissions allowances under the program must be made available and issued to various persons, companies, organizations, or other entities through a sale by auction or by direct allocation. The allowances made available in any specified compliance period may not in the aggregate authorize emissions of carbon dioxide in an amount greater than the adopted statewide limit for that compliance period. The program must provide for persons to be eligible for carbon dioxide emissions allowances for reducing demand for electric generation by energy efficiency projects or programs.

(e) An electric generation facility subject to the emissions allowance program shall:

(1) completely and accurately measure and report all carbon dioxide emissions subject to the allowance; and

(2) acquire and submit the number of allowances necessary to authorize the facility to emit the appropriate amount of carbon dioxide at the end of the compliance period.

(f) The program must be designed to allow a holder of a carbon dioxide emissions allowance to trade the allowance with other persons, and the program may allow trading of carbon dioxide emissions allowances available through similar allowance trading programs in other states or countries.

SECTION 2. The Public Utility Commission of Texas and the Texas Commission on Environmental Quality shall establish the emissions allowance program required by Section 39.911, Utilities Code, as added by this Act so that the initial carbon dioxide emissions limit is enforced not later than January 1, 2009.

SECTION 3. This Act takes effect September 1, 2007.