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A BILL TO BE ENTITLED
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AN ACT
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relating to incentives for Texas renewable energy jobs and |
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manufacturing. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. The purpose of this Act is to continue Texas' |
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leadership in installing clean, renewable energy in Texas in a |
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market-based manner that drives manufacturing jobs and provides |
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price protection for businesses and consumers. |
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SECTION 2. Section 39.904, Utilities Code, is amended by |
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amending Subsections (a), (b), (c), (d), (n), and (o), and adding |
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Subsections (a-1), (c-1), and (c-2), and (p), 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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tier 1 renewable energy technologies will have been installed in |
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this state. The cumulative installed renewable capacity in this |
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state shall total 5,880 megawatts by January 1, 2015, and the |
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commission shall establish a target of 10,000 megawatts of |
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installed renewable capacity by January 1, 2025. The cumulative |
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installed tier 1 renewable capacity in this state shall total 2,280 |
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megawatts by January 1, 2007, 3,272 megawatts by January 1, 2009, |
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4,264 megawatts by January 1, 2011, 5,256 megawatts by January 1, |
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2013, and 5,880 megawatts by January 1, 2015. [Of the renewable
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energy technology generating capacity installed to meet the goal of
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this subsection after September 1, 2005, the commission shall
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establish a target of having at least 500 megawatts of capacity from
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a renewable energy technology other than a source using wind
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energy.] |
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(a-1) It is the goal of the legislature that by January 1, |
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2020, an additional 3,000 megawatts of tier 2 renewable energy will |
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have been installed in this state. Of the renewable energy |
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generating capacity installed to meet the goal of this subsection, |
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up to 1,000 megawatts of renewable energy storage may qualify to |
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meet the tier 2 goal. The cumulative installed tier 2 renewable |
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energy resource capacity in this state shall total 150 megawatts by |
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January 1, 2011; 300 megawatts by January 1, 2012; 700 megawatts by |
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January 1, 2013; 800 megawatts by January 1, 2014; 1,000 megawatts |
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by January 1, 2015; 1,300 megawatts by January 1, 2016; 1,500 |
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megawatts by January 1, 2017; 1,800 megawatts by January 1, 2018; |
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2,400 megawatts by January 1, 2019; and 3,000 megawatts by January |
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1, 2020. |
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(b) The commission shall establish a tier 1 renewable energy |
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credits trading program and a tier 2 renewable energy credits |
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trading program. Any retail electric provider, municipally owned |
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utility, or electric cooperative that does not satisfy the |
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requirements of Subsection (a) by directly owning or purchasing |
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capacity using renewable energy technologies shall purchase |
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sufficient renewable energy credits to satisfy the requirements by |
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holding renewable energy credits in lieu of capacity from renewable |
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energy technologies. In calculating capacity factors for tier 2 |
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renewable energy credits, the commission shall encourage a diverse |
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portfolio of tier 2 renewable energy technologies. |
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(c) Not later than January 1, 2000, 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 renewable energy |
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requirement for each retail electric provider, municipally owned |
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utility, and electric cooperative operating in this state in a |
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manner reasonably calculated by the commission to produce, on a |
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statewide basis, compliance with the requirement prescribed by |
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Subsections (a) and (a-1) [Subsection (a)]; and |
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(2) specify reasonable performance standards that all |
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renewable capacity additions must meet to count against the |
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requirement prescribed by Subsections (a) and (a-1) [Subsection
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(a)] 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 renewable energy projects at those sites in this |
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state that have the greatest economic potential for capture and |
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development of this state's environmentally beneficial renewable |
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resources. |
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(c-1) Not later than January 1, 2011, the commission shall |
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adopt rules necessary to provide a "Made in Texas" incentive for |
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tier 1 and tier 2 renewable energy credits generated by generation |
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equipment that is wholly produced or substantially transformed by a |
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Texas workforce, as determined by the commission. The incentive |
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under this subsection shall be available for the first three years |
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after the renewable energy equipment first produces electricity on |
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a commercial basis. |
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(c-2) Not later than January 1, 2010, the commission shall |
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adopt rules necessary to track and account for renewable energy |
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credits earned from electric generating capacity derived from |
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renewable energy storage. The rules shall: |
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(1) allow for the renewable energy storage to be |
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located on the same or on a different site as the renewable |
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generation being stored; |
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(2) ensure that only one renewable energy credit is |
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retired for every megawatt hour of renewable energy generated prior |
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to being stored for later release onto the electricity grid; and |
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(3) account for any loss in energy resulting from |
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storage for later use. |
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(d) For purposes of [In] this section: |
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(1) "Tier 1 renewable energy technology" [, "renewable
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energy technology"] means any technology that exclusively relies on |
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an energy source that is naturally regenerated over a short time and |
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derived directly from the sun, indirectly from the sun, or from |
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moving water or other natural movements and mechanisms of the |
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environment. Renewable energy technologies include those that rely |
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on energy derived directly from the sun, on wind, geothermal, |
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hydroelectric, wave, or tidal energy, or on biomass or |
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biomass-based waste products, including landfill gas. A renewable |
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energy technology does not rely on energy resources derived from |
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fossil fuels, waste products from fossil fuels, or waste products |
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from inorganic sources. |
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(2) "Tier 2 renewable energy" means tier 1 renewable |
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energy technology excluding energy derived from wind with a |
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capacity of more than 150 kilowatts. |
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(3) "Renewable energy storage" means energy storage |
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technology that stores for later release energy derived from tier 1 |
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or tier 2 renewable energy. |
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(n) Notwithstanding any other provision of law, the |
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commission shall have the authority to cap the price of renewable |
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energy credits and may suspend the goal contained in Subsections |
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(a) and (a-1) [Subsection (a)] if such suspension is necessary to |
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protect the reliability and operation of the grid. |
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(o) The commission may establish tier 1 and tier 2 [an] |
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alternative compliance payments [payment]. An entity that has a |
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renewable energy purchase 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 commission may establish a
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separate alternative compliance payment for the goal of 500
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megawatts of capacity from renewable energy technologies other than
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wind energy.] The tier 1 alternative compliance payment for a |
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renewable energy purchase requirement that could be satisfied with |
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a renewable energy credit from wind energy may not be less than |
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$2.50 per credit or greater than $20 per credit. Prior to September |
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1, 2009, an alternative compliance payment under this subsection |
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may not be set above $5 per credit. The tier 2 alternative |
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compliance payment that could be satisfied with a tier 2 renewable |
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energy credit shall not exceed $90 per renewable energy credit |
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before December 31, 2014; $80 per renewable energy credit before |
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December 31, 2015; $65 per renewable energy credit before December |
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31, 2016; $45 per renewable energy credit before December 31, 2017; |
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$40 per renewable energy credit before December 31, 2018; $35 per |
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renewable energy credit before December 31, 2019; $30 per renewable |
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energy credit before December 31, 2020. In implementing this |
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subsection, the commission shall 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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(p) Tier 2 alternative compliance payment funds collected |
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by the commission shall be deposited into the Texas emerging |
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technology fund or other fund and allocated exclusively for the |
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research and development of tier 2 renewable energy technologies |
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and to renewable energy storage technologies for the purpose of |
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making tier 2 renewable energy more affordable for consumers. |
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SECTION 3. This Act takes effect September 1, 2009. |
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* * * * * |