By: Ogden S.B. No. 2349

(In the Senate - Filed March 13, 2009; March 31, 2009, read first time and referred to Committee on Business and Commerce; April 24, 2009, reported adversely, with favorable Committee Substitute by the following vote: Yeas 6, Nays 0; April 24, 2009, sent to printer.)

COMMITTEE SUBSTITUTE FOR S.B. No. 2349 By: Watson

A BILL TO BE ENTITLED

AN ACT

relating to distributed generation of electric power by natural gas powered generation facilities.

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

SECTION 1. Section 31.002, Utilities Code, is amended by adding Subdivision (4-a) and amending Subdivision (10) to read as follows:

(4-a) "Distributed natural gas generation facility" means a facility installed on the customer's side of the meter that is used for the generation of not more than 2,000 kilowatts of electricity.

(10) "Power generation company" means a person, including a person who owns or operates a distributed natural gas generation facility, that:

(A) generates electricity that is intended to be sold at wholesale;

(B) does not own a transmission or distribution facility in this state other than an essential interconnecting facility, a facility not dedicated to public use, or a facility otherwise excluded from the definition of "electric utility" under this section; and

(C) does not have a certificated service area, although its affiliated electric utility or transmission and distribution utility may have a certificated service area.

SECTION 2. The heading to Subchapter B, Chapter 35, Utilities Code, is amended to read as follows:

SUBCHAPTER B. EXEMPT WHOLESALE GENERATORS, DISTRIBUTED NATURAL GAS

GENERATION FACILITIES, AND POWER MARKETERS

SECTION 3. Subchapter B, Chapter 35, Utilities Code, is amended by adding Section 35.036 to read as follows:

Sec. 35.036. DISTRIBUTED NATURAL GAS GENERATION FACILITIES. (a) A person who owns or operates a distributed natural gas generation facility may sell electric power generated by the facility. The electric utility, electric cooperative, or retail electric provider that provides retail electricity service to the facility shall:

(1) purchase electric power tendered to it by the owner or operator of the facility at a fair market value price; or

(2) allow the owner or operator of the facility to use the transmission and distribution facilities to transmit the electric power to another market that is acceptable to the owner or operator in accordance with commission rules.

(b) A distributed natural gas generation facility must comply with emissions limitations established by the Texas Commission on Environmental Quality for a standard emissions permit for an electric generation facility unit installed after January 1, 1995.

SECTION 4. Subsection (c), Section 39.351, Utilities Code, is amended to read as follows:

(c) The commission may establish simplified filing requirements for distributed natural gas generation facilities [A power generation company may register any time after September 1, 2000].

SECTION 5. This Act takes effect September 1, 2009.

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