81R4398 JJT-D

By: Deshotel H.B. No. 3375

A BILL TO BE ENTITLED

AN ACT

relating to energy efficiency measures and technologies.

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

SECTION 1. Chapter 447, Government Code, is amended by adding Section 447.015 to read as follows:

Sec. 447.015. GOAL FOR ENERGY EFFICIENCY RESOURCES. (a) It is the goal of the legislature that by January 1, 2025, through investments in energy efficiency resources the per capita electric energy consumption and natural gas consumption in this state will each be reduced by 25 percent as compared to per capita consumption in 2006.

(b) To achieve the goal established by Subsection (a), the state energy conservation office shall establish an energy efficiency resources credit program. The program must be designed to provide an incentive for the implementation or installation of energy efficiency measures and technologies by electric and natural gas utility customers to reduce the consumption of electric and natural gas energy resources. The office may establish interim per capita reduction goals to monitor the progress of the program in meeting the goal established by Subsection (a).

(c) Each retail electric provider, investor-owned electric utility, municipally owned utility, electric cooperative, or gas utility shall earn or purchase energy efficiency resources credits under the program. The program must provide that:

(1) an implemented or installed eligible energy efficiency measure or technology earns one credit for:

(A) each megawatt-hour of electricity saved; and

(B) each unit of natural gas saved that is the equivalent of one megawatt-hour of electricity;

(2) the earned credits are tradable in a market established and monitored by the office;

(3) the earned credits expire annually; and

(4) the credits may be earned by:

(A) residential and commercial customers who implement or install energy efficiency measures or technologies; and

(B) electric or natural gas utilities for implementing or installing energy efficiency measures or technologies in the utility systems or for utility customers.

(d) The state energy conservation office by rule shall identify energy efficiency measures and technologies eligible for earning credits under the program for energy savings that result from their implementation or installation. The office shall ensure that measures implemented and technologies installed that are also eligible for credits in other energy efficiency credit programs are not eligible for credits in both programs simultaneously. The office shall make publicly available a list of eligible measures and technologies that includes an indication of the expected useful life for each. The office must include as eligible measures and technologies:

(1) conventional passive energy efficiency technologies;

(2) customer-sited distributed renewable generation technologies;

(3) thermal solar heating technologies;

(4) solar hot water heating technologies;

(5) combined heat and power technologies;

(6) use of water system energy;

(7) efficient operations of natural gas pipelines and distribution systems;

(8) efficient operations of electric utility systems; and

(9) insulation, weather sealants, or similar measures.

(e) To promote the implementation and installation of energy efficiency measures and technologies, the state energy conservation office shall initiate and supervise an outreach program to inform consumers, industry, and the public regarding energy efficiency measures and technologies and their economic and environmental benefits. The program must be designed to facilitate market development by focusing on the needs of those who may adopt energy efficiency measures or technologies. The office shall consult with or contract with the Clean Energy Applications Center at the Houston Advanced Research Center or an entity engaged in similar research and outreach projects.

(f) The state energy conservation office shall establish a continuing study of the effectiveness of measures and technologies for which credits may be earned under the program. The office shall estimate, measure, and verify energy savings resulting from the program.

(g) The state energy conservation office by rule shall establish an administrative penalty and procedure for collecting administrative penalties for a violation of the program established under this section. The rules must provide for graduated penalties according to the severity of the violation and the economic benefit to the violator as a result of the violation. A penalty for a single violation may not exceed $10,000. A penalty collected for a violation of this section shall be deposited in the general revenue fund and may be appropriated only to the state energy conservation office for purposes of implementing or enforcing this section.

SECTION 2. Sections 39.905(a) and (b), Utilities Code, are amended to read as follows:

(a) It is the goal of the legislature that by January 1, 2025, statewide per capita electric energy consumption in this state will be reduced by 25 percent, as compared to per capita consumption in 2006, by the implementation of programs to ensure that:

(1) electric utilities will administer energy efficiency incentive programs in a market-neutral, nondiscriminatory manner but will not offer underlying competitive services;

(2) all customers, in all customer classes, will 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 energy costs;

(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 for residential and commercial customers [equivalent to at least:

[(A) 10 percent of the electric utility's annual growth in demand of residential and commercial customers by December 31, 2007;

[(B) 15 percent of the electric utility's annual growth in demand of residential and commercial customers by December 31, 2008, provided that the electric utility's program expenditures for 2008 funding may not be greater than 75 percent above the utility's program budget for 2007 for residential and commercial customers, as included in the April 1, 2006, filing; and

[(C) 20 percent of the electric utility's annual growth in demand of residential and commercial customers by December 31, 2009, provided that the electric utility's program expenditures for 2009 funding may not be greater than 150 percent above the utility's program budget for 2007 for residential and commercial customers, as included in the April 1, 2006, filing];

(4) each electric utility in the ERCOT region shall use its best efforts to encourage and facilitate the involvement of the region's retail electric providers in the delivery of efficiency programs and demand response programs under this section;

(5) retail electric providers in the ERCOT region, and electric utilities outside of the ERCOT region, shall provide customers with energy efficiency educational materials; and

(6) notwithstanding Subsection (a)(3), electric utilities shall continue to make available, at 2007 funding and participation levels, any load management standard offer programs developed for industrial customers and implemented prior to May 1, 2007.

(b) The commission shall provide oversight and adopt rules and procedures to ensure that the utilities can achieve the goal of this section, including:

(1) establishing a program that requires each electric utility to 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 for residential and commercial customers equivalent to a fixed percentage of statewide electric energy sales as the commission determines will result in a per capita reduction sufficient to meet the goal of this section;

(1-a) establishing an energy efficiency cost recovery factor for ensuring timely and reasonable cost recovery for utility expenditures made to satisfy the goal of this section;

(2) establishing an incentive under Section 36.204 to reward utilities administering programs under this section that exceed the minimum goals established by this section;

(3) providing a utility that is unable to establish an energy efficiency cost recovery factor in a timely manner due to a rate freeze with a mechanism to enable the utility to:

(A) defer the costs of complying with this section; and

(B) recover the deferred costs through an energy efficiency cost recovery factor on the expiration of the rate freeze period;

(4) ensuring that the costs associated with programs provided under this section are borne by the customer classes that receive the services under the programs; and

(5) ensuring the program rules encourage the value of the incentives to be passed on to the end-use customer.

SECTION 3. Section 31.005, Utilities Code, is amended by adding Subsection (c) to read as follows:

(c) The commission by rule shall provide for a distributed energy generation technology program described by Subsection (b) to allow interconnection at a point of common coupling of an electric generating facility with a capacity of 25 megawatts that consists of distributed renewable generation as defined by Section 39.916 or a combined heating and power unit.

SECTION 4. This Act takes effect September 1, 2009.