Amend CSHB 1243 (Senate committee printing) by adding the 
following appropriately numbered SECTIONS and renumbering 
subsequent SECTIONS accordingly:
	SECTION __.  Section 31.002, Utilities Code, is amended by 
adding Subdivision (4-a) and amending Subdivision (10) to read as 
follows:
		(4-a) "Distributed natural gas generation facility" 
means a facility installed on the customer's side of the meter that 
is used for the generation of not more than 2,000 kilowatts of 
electricity.
		(10)  "Power generation company" means a person, 
including a person who owns or operates a distributed natural gas 
generation facility, that:
			(A)  generates electricity that is intended to be 
sold at wholesale;       
			(B)  does not own a transmission or distribution 
facility in this state other than an essential interconnecting 
facility, a facility not dedicated to public use, or a facility 
otherwise excluded from the definition of "electric utility" under 
this section; and
			(C)  does not have a certificated service area, 
although its affiliated electric utility or transmission and 
distribution utility may have a certificated service area.
	SECTION __.  The heading to Subchapter B, Chapter 35, 
Utilities Code, is amended to read as follows:

SUBCHAPTER B.  EXEMPT WHOLESALE GENERATORS, DISTRIBUTED NATURAL GAS 
GENERATION FACILITIES, AND POWER MARKETERS
	SECTION __.  Subchapter B, Chapter 35, Utilities Code, is 
amended by adding Section 35.036 to read as follows:
	Sec. 35.036.  DISTRIBUTED NATURAL GAS GENERATION 
FACILITIES.  (a)(1)  A person who owns or operates a distributed 
natural gas generation facility may sell electric power generated 
by the facility.
		(2)  The electric utility, electric cooperative, or 
retail electric provider that provides retail electricity service 
to the facility may purchase electric power tendered to it by the 
owner or operator of the facility at a value agreed to by the 
electric utility, electric cooperative, or retail electric 
provider and the owner or operator of the facility, which may 
include a value based on the clearing price of energy at the time of 
day and location that the electricity is made available to the 
electric grid.
		(3)  At the request of the owner or operator of the 
facility, the electric utility or electric cooperative shall allow 
the owner or operator of the facility to use the transmission and 
distribution facilities to transmit the electric power to another 
entity that is acceptable to the owner or operator in accordance 
with commission rules or a tariff approved by the Federal Energy 
Regulatory Commission.
	(b)  If the owner or operator of a distributed natural gas 
generation facility requests to be interconnected to an electric 
utility or electric cooperative that does not have a transmission 
tariff approved by the Federal Energy Regulatory Commission, the 
electric utility or electric cooperative may recover from the owner 
or operator of the facility the reasonable costs of interconnecting 
the facility with the electric utility or electric cooperative that 
are necessary for and directly attributable to the interconnection 
of the facility.  If the rated capacity of the distributed natural 
gas generation exceeds the capacity of the electric utility or 
electric cooperative and the owner or operator of the facility 
requests that such an electric utility or electric cooperative make 
upgrades to accommodate the distributed natural generation 
capacity, the electric utility or electric cooperative may recover 
from the owner or operator of the facility the reasonable cost of 
electric facility upgrades and improvements that are necessary for 
and directly attributable to the requested accommodation of the 
distributed natural gas generation capacity.
	(c)  In order to recover costs under Subsection (b), an 
electric utility or electric cooperative must have provided a 
good-faith cost estimate in writing to the owner or operator of the 
distributed natural gas generation facility and the owner or 
operator must have, prior to the incurring of any cost by the 
electric utility or electric cooperative, agreed in writing to pay 
the reasonable and necessary cost of interconnection or capacity 
accommodation requested by the owner or operator and described in 
the cost estimate.  If an electric utility or electric cooperative 
seeks to recover from the owner or operator of the facility an 
amount that exceeds the good-faith estimate by more than five 
percent and the owner or operator of the facility disputes the 
amount that exceeds the good-faith estimate, the commission shall 
resolve the dispute at the request of the owner or operator of the 
facility.
	(d)  A distributed natural gas generation facility must 
comply with emissions limitations established by the Texas 
Commission on Environmental Quality for a standard emissions permit 
for an electric generation facility unit installed after January 1, 
1995.
	SECTION __.  Subsection (c), Section 39.351, Utilities Code, 
is amended to read as follows:
	(c)  The commission may establish simplified filing 
requirements for distributed natural gas generation facilities [A 
power generation company may register any time after September 1, 
2000].