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A BILL TO BE ENTITLED
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AN ACT
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relating to the state's goal for electric generating capacity |
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derived from emerging renewable energy resources. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 39.002, Utilities Code, is amended to |
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read as follows: |
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Sec. 39.002. APPLICABILITY. This chapter, other than |
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Sections 39.155, 39.157(e), 39.203, 39.903, 39.904, 39.9041, |
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39.9051, 39.9052, and 39.914(e), does not apply to a municipally |
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owned utility or an electric cooperative. Sections 39.157(e), |
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39.203, [and] 39.904, and 39.9041, however, apply only to a |
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municipally owned utility or an electric cooperative that is |
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offering customer choice. If there is a conflict between the |
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specific provisions of this chapter and any other provisions of |
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this title, except for Chapters 40 and 41, the provisions of this |
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chapter control. |
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SECTION 2. Sections 39.904(a) and (o), Utilities Code, are |
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amended to read as follows: |
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(a) It is the intent of the legislature that by January 1, |
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2015, an additional 5,000 megawatts of generating capacity from |
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renewable energy technologies will have been installed in this |
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state. The cumulative installed renewable capacity in this state |
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shall total 5,880 megawatts by January 1, 2015, and the commission |
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shall establish a target of 10,000 megawatts of installed renewable |
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capacity by January 1, 2025. The cumulative installed renewable |
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capacity in this state shall total 2,280 megawatts by January 1, |
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2007, 3,272 megawatts by January 1, 2009, 4,264 megawatts by |
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January 1, 2011, 5,256 megawatts by January 1, 2013, and 5,880 |
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megawatts by January 1, 2015. [Of the renewable energy technology
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generating capacity installed to meet the goal of this subsection
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after September 1, 2005, the commission shall establish a target of
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having at least 500 megawatts of capacity from a renewable energy
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technology other than a source using wind energy.] |
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(o) The commission may establish an alternative compliance |
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payment. An entity that has a renewable energy purchase |
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requirement under this section may elect to pay the alternative |
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compliance payment instead of applying renewable energy credits |
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toward the satisfaction of the entity's obligation under this |
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section. [The commission may establish a separate alternative
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compliance payment for the goal of 500 megawatts of capacity from
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renewable energy technologies other than wind energy.] The |
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alternative compliance payment for a renewable energy purchase |
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requirement that could be satisfied with a renewable energy credit |
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from wind energy may not be less than $2.50 per credit or greater |
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than $20 per credit. Prior to September 1, 2009, an alternative |
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compliance payment under this subsection may not be set above $5 per |
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credit. In implementing this subsection, the commission shall |
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consider: |
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(1) the effect of renewable energy credit prices on |
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retail competition; |
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(2) the effect of renewable energy credit prices on |
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electric rates; |
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(3) the effect of the alternative compliance payment |
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level on the renewable energy credit market; and |
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(4) any other factors necessary to ensure the |
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continued development of the renewable energy industry in this |
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state while protecting ratepayers from unnecessary rate increases. |
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SECTION 3. Subchapter Z, Chapter 39, Utilities Code, is |
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amended by adding Section 39.9041 to read as follows: |
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Sec. 39.9041. GOAL FOR EMERGING RENEWABLE ENERGY RESOURCES. |
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(a) In this section: |
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(1) "Emerging renewable energy resource" means a |
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facility that produces energy derived from a renewable energy |
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technology, including generation offset technology, other than a |
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wind generation facility that produces more than 10 megawatts of |
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capacity. |
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(2) "Generation offset technology" means any |
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renewable energy technology that reduces the demand for electricity |
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at a site where a customer consumes electricity. |
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(3) "New emerging renewable energy resource" means a |
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facility first placed into service on or after September 1, 2009. |
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(4) "Renewable energy resource" means a facility that |
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produces energy derived from a renewable energy technology. |
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(5) "Renewable energy technology" has the meaning |
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assigned by Section 39.904. |
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(b) It is the intent of the legislature that by January 1, |
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2020, an additional 3,000 megawatts of generating capacity from |
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emerging renewable energy resources will have been installed in |
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this state. The cumulative installed new emerging renewable energy |
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resource generating capacity in this state shall total 150 |
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megawatts by January 1, 2011, 300 megawatts by January 1, 2012, 450 |
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megawatts by January 1, 2013, 600 megawatts by January 1, 2014, 900 |
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megawatts by January 1, 2015, 1,200 megawatts by January 1, 2016, |
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1,500 megawatts by January 1, 2017, 1,800 megawatts by January 1, |
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2018, 2,400 megawatts by January 1, 2019, and 3,000 megawatts by |
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January 1, 2020. |
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(c) Not later than January 1, 2010, in addition to the |
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renewable energy credits trading program established by Section |
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39.904(b) or any other renewable energy credits trading program |
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established by the commission, the commission shall establish an |
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emerging renewable energy credits trading program. Any retail |
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electric provider, investor-owned electric utility operating |
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solely outside of ERCOT, municipally owned utility, or electric |
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cooperative that does not satisfy the requirements of Subsection |
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(b) by directly owning or purchasing new emerging renewable energy |
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resource generating capacity shall purchase sufficient emerging |
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renewable energy credits to satisfy the requirements by holding |
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emerging renewable energy credits in lieu of emerging renewable |
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energy resource generating capacity. |
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(d) Not later than January 1, 2010, the commission shall |
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adopt rules necessary to administer and enforce this section. At a |
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minimum, the rules shall: |
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(1) establish the minimum annual new emerging |
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renewable energy resource requirement for each retail electric |
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provider, investor-owned utility operating solely outside of |
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ERCOT, municipally owned utility, and electric cooperative |
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operating in this state in a manner reasonably calculated by the |
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commission to produce, on a statewide basis, compliance with the |
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requirement prescribed by Subsection (b); |
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(2) specify reasonable performance standards that all |
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new emerging renewable energy resource generating capacity |
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additions must meet to count against the requirement prescribed by |
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Subsection (b) and that: |
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(A) are designed and operated so as to maximize |
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the energy output from the capacity additions in accordance with |
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then-current industry standards; and |
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(B) encourage the development, construction, and |
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operation of new emerging renewable energy resource generating |
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capacity at those sites in this state that have the greatest |
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economic potential for capture and development of this state's |
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environmentally beneficial renewable resources; |
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(3) treat all renewable energy technologies equally; |
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and |
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(4) provide that installed new emerging renewable |
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energy resource generating capacity that receives emerging |
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renewable energy credits under Subsection (c) may not also receive |
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renewable energy credits under the program established by Section |
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39.904(b) or any other renewable energy credit program established |
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by the commission. |
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(e) A municipally owned utility operating a gas |
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distribution system may credit toward satisfaction of the |
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requirements of this section any production or acquisition of |
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landfill gas supplied to the gas distribution system, based on |
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conversion to kilowatt hours of the thermal energy content in |
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British thermal units of the emerging renewable energy resource and |
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using for the conversion factor the annual heat rate of the most |
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efficient gas-fired unit of the combined utility's electric system |
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as measured in British thermal units per kilowatt hour and using the |
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British thermal unit measurement based on the higher heating value |
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measurement. |
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(f) A municipally owned utility operating a gas |
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distribution system may credit toward satisfaction of the |
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requirements of this section any production or acquisition of |
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landfill gas supplied to the gas distribution system, based on |
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conversion to kilowatt hours of the thermal energy content in |
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British thermal units of the renewable energy resource and using |
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for the conversion factor the systemwide average heat rate of the |
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gas-fired units of the combined utility's electric system as |
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measured in British thermal units per kilowatt hour. |
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(g) The commission may adopt rules requiring installed |
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emerging renewable energy resource generating capacity to have |
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reactive power control capabilities or any other feasible |
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technology designed to reduce the resources' effects on system |
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reliability. |
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(h) An emerging renewable energy credit required for |
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purposes other than to meet the requirements of Subsection (d)(1) |
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may not affect the minimum annual renewable energy requirement |
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under Subsection (d)(1) for a retail electric provider, |
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investor-owned electric utility operating solely outside of ERCOT, |
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municipally owned utility, or electric cooperative. |
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(i) The commission shall reduce the requirement under |
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Subsection (d)(1) for a retail electric provider, investor-owned |
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utility operating solely outside of ERCOT, municipally owned |
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utility, or electric cooperative that is subject to an emerging |
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renewable energy requirement under this section and that serves a |
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customer receiving electric service at transmission-level voltage |
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if, before any year for which the commission calculates emerging |
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renewable energy requirements under Subsection (d)(1), the |
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customer notifies the commission in writing that the customer |
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chooses not to support the goal for emerging renewable energy |
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technology generation under this section for that year. The |
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commission shall exclude from the calculation of the applicable |
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requirement under Subsection (d)(1) energy sold by the retail |
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electric provider, investor-owned utility operating solely outside |
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of ERCOT, municipally owned utility, or electric cooperative at |
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transmission-level voltage to customers who have submitted the |
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notice to the commission under this subsection for the applicable |
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year. |
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(j) The commission shall determine the reporting |
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requirements and schedule necessary to implement Subsections (h) |
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and (i). |
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(k) Subsections (g), (h), and (i) do not affect the goals |
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established by Subsection (b) or reduce the minimum statewide |
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emerging renewable energy requirements of Subsection (d)(1). |
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(l) Notwithstanding any other provision of law, the |
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commission shall have the authority to cap the price of emerging |
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renewable energy credits and may suspend the goal contained in |
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Subsection (b) if such suspension is necessary to protect the |
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reliability and operation of the grid. |
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(m) The commission shall establish an alternative |
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compliance payment. An entity that has a new emerging renewable |
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energy resource capacity requirement under this section may elect |
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to pay the alternative compliance payment instead of applying |
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renewable energy credits toward the satisfaction of the entity's |
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obligation under this section. The alternative compliance payment |
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for an emerging renewable energy capacity requirement that could be |
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satisfied with an emerging renewable energy credit shall not be |
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more than the equivalent of 9 cents per kilowatt hour or $90 per |
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emerging renewable energy credit. The commission may allow an |
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entity that has an emerging renewable energy capacity requirement |
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under this section to pay the alternative compliance payment into a |
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social service fund that benefits the energy needs of low-income |
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retail electric customers. In implementing this subsection, the |
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commission shall consider: |
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(1) the effect of emerging renewable energy credit |
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prices on retail competition; |
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(2) the effect of emerging renewable energy credit |
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prices on electric rates; |
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(3) the effect of the alternative compliance payment |
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level on the renewable energy credit market; |
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(4) any federal legislation requiring the use of |
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renewable energy or renewable energy credits; and |
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(5) any other factors necessary to ensure the |
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continued development of the renewable energy industry in this |
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state while protecting ratepayers from unnecessary rate increases. |
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(n) This section expires on the third anniversary of the |
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date the commission determines that the final megawatt goal under |
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Subsection (b) has been reached. |
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SECTION 4. This Act takes effect September 1, 2009. |