81R9438 TRH-F
 
  By: Swinford H.B. No. 2520
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the state's goal for electric generating capacity
  derived from emerging renewable energy resources.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 39.002, Utilities Code, is amended to
  read as follows:
         Sec. 39.002.  APPLICABILITY.  This chapter, other than
  Sections 39.155, 39.157(e), 39.203, 39.903, 39.904, 39.9041,
  39.9051, 39.9052, and 39.914(e), does not apply to a municipally
  owned utility or an electric cooperative. Sections 39.157(e),
  39.203, [and] 39.904, and 39.9041, however, apply only to a
  municipally owned utility or an electric cooperative that is
  offering customer choice. If there is a conflict between the
  specific provisions of this chapter and any other provisions of
  this title, except for Chapters 40 and 41, the provisions of this
  chapter control.
         SECTION 2.  Sections 39.904(a) and (o), Utilities Code, are
  amended to read as follows:
         (a)  It is the intent of the legislature that by January 1,
  2015, an additional 5,000 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 5,880 megawatts by January 1, 2015, and the commission
  shall establish a target of 10,000 megawatts of installed renewable
  capacity by January 1, 2025.  The cumulative installed renewable
  capacity in this state shall total 2,280 megawatts by January 1,
  2007, 3,272 megawatts by January 1, 2009, 4,264 megawatts by
  January 1, 2011, 5,256 megawatts by January 1, 2013, and 5,880
  megawatts by January 1, 2015.  [Of the renewable energy technology
  generating capacity installed to meet the goal of this subsection
  after September 1, 2005, the commission shall establish a target of
  having at least 500 megawatts of capacity from a renewable energy
  technology other than a source using wind energy.]
         (o)  The commission may establish an alternative compliance
  payment.  An entity that has a renewable energy purchase
  requirement under this section may elect to pay the alternative
  compliance payment instead of applying renewable energy credits
  toward the satisfaction of the entity's obligation under this
  section.  [The commission may establish a separate alternative
  compliance payment for the goal of 500 megawatts of capacity from
  renewable energy technologies other than wind energy.]  The
  alternative compliance payment for a renewable energy purchase
  requirement that could be satisfied with a renewable energy credit
  from wind energy may not be less than $2.50 per credit or greater
  than $20 per credit.  Prior to September 1, 2009, an alternative
  compliance payment under this subsection may not be set above $5 per
  credit.  In implementing this subsection, the commission shall
  consider:
               (1)  the effect of renewable energy credit prices on
  retail competition;
               (2)  the effect of renewable energy credit prices on
  electric rates;
               (3)  the effect of the alternative compliance payment
  level on the renewable energy credit market; and
               (4)  any other factors necessary to ensure the
  continued development of the renewable energy industry in this
  state while protecting ratepayers from unnecessary rate increases.
         SECTION 3.  Subchapter Z, Chapter 39, Utilities Code, is
  amended by adding Section 39.9041 to read as follows:
         Sec. 39.9041.  GOAL FOR EMERGING RENEWABLE ENERGY RESOURCES.
  (a) In this section:
               (1)  "Emerging renewable energy resource" means a
  facility that produces energy derived from a renewable energy
  technology, including generation offset technology, other than a
  wind generation facility that produces more than 10 megawatts of
  capacity.
               (2)  "Generation offset technology" means any
  renewable energy technology that reduces the demand for electricity
  at a site where a customer consumes electricity.
               (3)  "New emerging renewable energy resource" means a
  facility first placed into service on or after September 1, 2009.
               (4)  "Renewable energy resource" means a facility that
  produces energy derived from a renewable energy technology.
               (5)  "Renewable energy technology" has the meaning
  assigned by Section 39.904.
         (b)  It is the intent of the legislature that by January 1,
  2020, an additional 3,000 megawatts of generating capacity from
  emerging renewable energy resources will have been installed in
  this state. The cumulative installed new emerging renewable energy
  resource generating capacity in this state shall total 150
  megawatts by January 1, 2011, 300 megawatts by January 1, 2012, 450
  megawatts by January 1, 2013, 600 megawatts by January 1, 2014, 900
  megawatts by January 1, 2015, 1,200 megawatts by January 1, 2016,
  1,500 megawatts by January 1, 2017, 1,800 megawatts by January 1,
  2018, 2,400 megawatts by January 1, 2019, and 3,000 megawatts by
  January 1, 2020.
         (c)  Not later than January 1, 2010, in addition to the
  renewable energy credits trading program established by Section
  39.904(b) or any other renewable energy credits trading program
  established by the commission, the commission shall establish an
  emerging renewable energy credits trading program. Any retail
  electric provider, investor-owned electric utility operating
  solely outside of ERCOT, municipally owned utility, or electric
  cooperative that does not satisfy the requirements of Subsection
  (b) by directly owning or purchasing new emerging renewable energy
  resource generating capacity shall purchase sufficient emerging
  renewable energy credits to satisfy the requirements by holding
  emerging renewable energy credits in lieu of emerging renewable
  energy resource generating capacity.
         (d)  Not later than January 1, 2010, the commission shall
  adopt rules necessary to administer and enforce this section. At a
  minimum, the rules shall:
               (1)  establish the minimum annual new emerging
  renewable energy resource requirement for each retail electric
  provider, investor-owned utility operating solely outside of
  ERCOT, 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 (b);
               (2)  specify reasonable performance standards that all
  new emerging renewable energy resource generating capacity
  additions must meet to count against the requirement prescribed by
  Subsection (b) and that:
                     (A)  are designed and operated so as to maximize
  the energy output from the capacity additions in accordance with
  then-current industry standards; and
                     (B)  encourage the development, construction, and
  operation of new emerging renewable energy resource generating
  capacity at those sites in this state that have the greatest
  economic potential for capture and development of this state's
  environmentally beneficial renewable resources;
               (3)  treat all renewable energy technologies equally;
  and
               (4)  provide that installed new emerging renewable
  energy resource generating capacity that receives emerging
  renewable energy credits under Subsection (c) may not also receive
  renewable energy credits under the program established by Section
  39.904(b) or any other renewable energy credit program established
  by the commission.
         (e)  A municipally owned utility operating a gas
  distribution system may credit toward satisfaction of the
  requirements of this section any production or acquisition of
  landfill gas supplied to the gas distribution system, based on
  conversion to kilowatt hours of the thermal energy content in
  British thermal units of the emerging renewable energy resource and
  using for the conversion factor the annual heat rate of the most
  efficient gas-fired unit of the combined utility's electric system
  as measured in British thermal units per kilowatt hour and using the
  British thermal unit measurement based on the higher heating value
  measurement.
         (f)  A municipally owned utility operating a gas
  distribution system may credit toward satisfaction of the
  requirements of this section any production or acquisition of
  landfill gas supplied to the gas distribution system, based on
  conversion to kilowatt hours of the thermal energy content in
  British thermal units of the renewable energy resource and using
  for the conversion factor the systemwide average heat rate of the
  gas-fired units of the combined utility's electric system as
  measured in British thermal units per kilowatt hour.
         (g)  The commission may adopt rules requiring installed
  emerging renewable energy resource generating capacity to have
  reactive power control capabilities or any other feasible
  technology designed to reduce the resources' effects on system
  reliability.
         (h)  An emerging renewable energy credit required for
  purposes other than to meet the requirements of Subsection (d)(1)
  may not affect the minimum annual renewable energy requirement
  under Subsection (d)(1) for a retail electric provider,
  investor-owned electric utility operating solely outside of ERCOT,
  municipally owned utility, or electric cooperative.
         (i)  The commission shall reduce the requirement under
  Subsection (d)(1) for a retail electric provider, investor-owned
  utility operating solely outside of ERCOT, municipally owned
  utility, or electric cooperative that is subject to an emerging
  renewable energy requirement under this section and that serves a
  customer receiving electric service at transmission-level voltage
  if, before any year for which the commission calculates emerging
  renewable energy requirements under Subsection (d)(1), the
  customer notifies the commission in writing that the customer
  chooses not to support the goal for emerging renewable energy
  technology generation under this section for that year. The
  commission shall exclude from the calculation of the applicable
  requirement under Subsection (d)(1) energy sold by the retail
  electric provider, investor-owned utility operating solely outside
  of ERCOT, municipally owned utility, or electric cooperative at
  transmission-level voltage to customers who have submitted the
  notice to the commission under this subsection for the applicable
  year.
         (j)  The commission shall determine the reporting
  requirements and schedule necessary to implement Subsections (h)
  and (i).
         (k)  Subsections (g), (h), and (i) do not affect the goals
  established by Subsection (b) or reduce the minimum statewide
  emerging renewable energy requirements of Subsection (d)(1).
         (l)  Notwithstanding any other provision of law, the
  commission shall have the authority to cap the price of emerging
  renewable energy credits and may suspend the goal contained in
  Subsection (b) if such suspension is necessary to protect the
  reliability and operation of the grid.
         (m)  The commission shall establish an alternative
  compliance payment.  An entity that has a new emerging renewable
  energy resource capacity requirement under this section may elect
  to pay the alternative compliance payment instead of applying
  renewable energy credits toward the satisfaction of the entity's
  obligation under this section.  The alternative compliance payment
  for an emerging renewable energy capacity requirement that could be
  satisfied with an emerging renewable energy credit shall not be
  more than the equivalent of 9 cents per kilowatt hour or $90 per
  emerging renewable energy credit. The commission may allow an
  entity that has an emerging renewable energy capacity requirement
  under this section to pay the alternative compliance payment into a
  social service fund that benefits the energy needs of low-income
  retail electric customers.  In implementing this subsection, the
  commission shall consider:
               (1)  the effect of emerging renewable energy credit
  prices on retail competition;
               (2)  the effect of emerging renewable energy credit
  prices on electric rates;
               (3)  the effect of the alternative compliance payment
  level on the renewable energy credit market;
               (4)  any federal legislation requiring the use of
  renewable energy or renewable energy credits; and
               (5)  any other factors necessary to ensure the
  continued development of the renewable energy industry in this
  state while protecting ratepayers from unnecessary rate increases.
         (n)  This section expires on the third anniversary of the
  date the commission determines that the final megawatt goal under
  Subsection (b) has been reached.
         SECTION 4.  This Act takes effect September 1, 2009.