By: Fraser S.B. No. 546

A BILL TO BE ENTITLED

AN ACT

relating to the state goal for energy efficiency.

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

SECTION 1. Section 39.905, Utilities Code, is amended by amending Subsection (a) and adding Subsections (h), (i), and (j) to read as follows:

(a) It is the goal of the legislature 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, or programs that address the major barriers to energy efficiency, 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;

(D) the lower of 30 percent of the electric utility's annual growth in demand or 0.3 percent of the total peak demand of residential and commercial customers by December 31, 2012, provided that the average cost of the programs charged by the electric utility to residential and commercial customers is not more than 25 cents per megawatt hour; and

(E) the lower of 50 percent of the electric utility's annual growth in demand or 0.7 percent of the total peak demand of residential and commercial customers by December 31, 2016, provided that the average cost of the programs charged by the electric utility to residential and commercial customers is not more than 35 cents per megawatt hour;

(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 Subdivision (3) [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; and

(7) for an electric utility operating outside of ERCOT in areas of this state that were included in the Western Electricity Coordinating Council on January 1, 2009, the utility may continue to provide standard offer programs, limited, targeted market-transformation programs, or programs that address the major barriers to energy efficiency as required by Subdivision (3) or may provide energy efficiency programs and measures directly to a customer class.

(h) If the commission finds that an electric utility is unable to meet the goals specified in this section due to the establishment of new building energy codes; new appliance standards; federal funding of conservation, weatherization, and energy efficiency programs; or other factors unique to a particular utility, the commission may establish alternative goals for the utility, subject to the average rate impact limitations listed in Subsection (a)(3).

(i) In the event the federal government establishes national mandates, requirements, or goals for energy efficiency, the commission may suspend the goals in this section if it finds that the maintenance of a separate state requirement is duplicative or more costly than the suspension of the requirement.

(j) In the event funding is not provided for customer education efforts under Section 39.903(e)(2) at a level sufficient to allow the commission to adequately inform customers of the programs authorized by this section, electric utilities may conduct advertising or other outreach activities to retail customers if insufficient demand for incentives exists in the utility's service area. Outreach funds shall not be included in the average rate impact cap provided by this section. The commission shall approve the amount of funds to be expended in outreach efforts and the electric utility's plan for the activities to ensure that the activities are coordinated with other customer education initiatives of the commission.

SECTION 2. Section 39.905, Utilities Code, is amended by adding Subsections (k) and (l) to read as follows:

(k) An electric utility that was not subject to this section on January 1, 2009, shall be subject to the energy efficiency goals established in this section on a phased-in basis, as prescribed by the commission, starting from the effective date of the final rates from the first rate case filed by the electric utility with the commission after January 1, 2010.

(l) Notwithstanding any other law, this section shall apply to every electric utility as defined by Section 31.002.

SECTION 3. Subdivision (1), Subsection (a), Section 388.005, Health and Safety Code, is amended to read as follows:

(1) "Institution of higher education" includes an institution of higher education as defined by Section 61.003, Education Code, and a private institution of higher education that receives direct funding from the state for general operating purposes.

SECTION 4. Section 388.005, Health and Safety Code, is amended by adding Subsection (g) to read as follows:

(g) A private or independent institution of higher education as defined by Section 61.003, Education Code, that does not receive direct funding from the state for general operating purposes may seek and receive advice and assistance from the State Energy Conservation Office concerning energy conservation measures to reduce electricity consumption by the existing facilities of the institution.

SECTION 5. The following provisions of the Utilities Code are repealed:

(1) Subsection (b-2), Section 39.905; and

(2) Section 39.913.

SECTION 6. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2009.