82R13299 T

By: Darby H.B. No. 2961

A BILL TO BE ENTITLED

AN ACT

relating to the creation of a program for the development of solar energy industry in this state.

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, 39.9051, 39.9052, [and] 39.914(e), and 39.9156, does not apply to a municipally owned utility or an electric cooperative. Sections 39.157(e), 39.203, and 39.904, 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. Subchapter Z, Chapter 39, Utilities Code, is amended by adding Section 39.9155 to read as follows:

Sec. 39.9155. SOLAR GENERATION INCENTIVE PROGRAM. (a) In this section:

(1) "Distributed solar generation" means distributed renewable generation as defined by Section 39.916 that uses an energy source derived directly from the sun.

(2) "Low-income electric customer" has the meaning assigned by Section 39.903(l).

(3) "Rated watts" means the output of a solar energy device as specified by the manufacturer of the device expressed in watts of direct current.

(4) "Small commercial customer" means a non residential customer as classified by the appropriate electric utility or transmission and distribution utility tariff whose electricity consumption averages less than 2500 kilowatt hours per month over the 12 month period ending on the last full calendar month before the effective date of this section.

(5) "Solar energy device" has the meaning assigned by Section 185.001.

(6) "Wholesale solar generation" means a solar generation system that:

(A) regardless of the system's generation capacity, is installed on the utility's side of the meter; or

(B) has a generation capacity of two megawatts or more and is installed on a retail customer's side of the meter.

(b) The program developed under this section applies only to an electric utility operating inside or outside of ERCOT.

(c) The commission shall develop and implement a program as provided by this section to facilitate the development of a solar energy market and solar energy industry in this state by increasing the amount of wholesale and distributed solar generation installed in this state. The program shall be transparent, cost effective, limited in scope and duration, apply statewide, and that residential and small commercial customers may choose to participate at a higher level than that prescribed by this section or may choose not to participate in the program. The commission shall act as the program administrator to oversee and administer the implementation of the program or may designate a third party as the program administrator in accordance with an agreement with the designated party.

(d) The commission shall establish a goal of achieving through the program the installation of at least 1,000 megawatts of solar generation over the duration of the program.

(e) The solar generation rebate fund is established as a special trust fund held by the comptroller outside of the state treasury and administered by the program administrator for the payment of the incentives authorized by this section, without the necessity of an appropriation. Money in the fund may be used only for the purposes of the program as provided by this section. Not more than 2.5 percent of the fund may be spent annually for costs of administering the fund and the program. The fund consists of:

(1) fees imposed under this section and remitted to the comptroller for deposit to the credit of the fund;

(2) gifts or grants awarded for the purposes of the program and deposited to the credit of the fund; and

(3) interest and other income from investment of the money deposited to the credit of the fund.

(f) Money collected under the program may be spent only for program purposes. Except for spending authorized by Subsections (e), (o), and (p), 50 percent of all money spent under the program must be used for incentives for wholesale solar generation projects and the remaining money spent under the program must be used for incentives for distributed solar generation projects. The money spent for distributed solar generation projects must be divided proportionately between residential and nonresidential market segments in accordance with the relative percentage of money contributed under the program from those market segments. A portion of the money allocated for the residential market segment, as determined by the commission, must be reserved to be spent only for incentives for distributed solar generation projects in new residential construction.

(g) The commission by rule shall provide for the assessment and collection of nonbypassable fees by electric utilities and transmission and distribution utilities. An electric utility or transmission and distribution utility shall remit all fees collected to the comptroller for deposit to the credit of the solar generation rebate fund. The fees assessed under this subsection must be in the following amounts:

(1) $1 each month for each residential meter which, if applicable, must be included in nonbypassable delivery charges paid by the customer's retail electric provider;

(2) $5 each month for each commercial meter; and

(3) $50 each month for each industrial meter, except that the total of nonbypassable fees assessed against a retail electric provider for a single industrial account may not exceed $250 in a single month.

(h) The commission by rule shall establish a mechanism to ensure that fees collected under this section and remitted for deposit to the solar generation rebate fund are made continuously available as necessary to provide for payment of incentives in the form of rebate payments as provided by this section to defray the cost of installing solar generation.

(i) the commission shall establish a method by which residential and small commercial customers may request to increase the amount of the nonbypassable fee assessed to them under this section by $1 per month, or by which residential and small commercial customers may waive the assessment of the nonbypassable fee assessed to them under this section by:

(A) submitting a written request after receiving an initial notification of the implementation of this program, which notice shall be issued by an electric utility or a transmission and distribution utility to its residential and small commercial customers within 60 days after the commission adopts rules implementing this program; or

(B) making a request when establishing service with a retail electric provider or an electric utility;

(j) Customers who request a waiver under subsection (i) will not be eligible for rebates under the program.

(k) When a customer requests a waiver under subsection (i), the commission shall ensure that the retail electric provider is not responsible for the fees that normally would be collected for that customer account.

(l) The commission shall establish a schedule of rebate amounts for installed solar generation that vary according to the rated watts of, or the kilowatt-hours produced by, the solar generation equipment and that decrease in proportion to the capacity of solar generation installed. The commission shall ensure that the schedule:

(1) is publicly available;

(2) provides for reducing rebate amounts per unit of solar generation capacity by not less than 12 percent for each year of the program;

(3) does not obligate payment of rebates in amounts that would cause the rebate program payments to exceed the amount budgeted for rebate payments over the duration of the program; and

(4) provides for rebates to be paid directly to customers, qualified installers, homebuilders, remodelers, or third-party owners of installed solar generation in a simple, uniform, and reliable administrative manner that:

(A) ensures the timely payment of rebates; and

(B) allows for the assignment of the rebate to another person at the direction of the qualified recipient.

(m) The commission shall establish as the initial rebate amounts:

(1) $2 per rated watt for installed distributed solar generation with a capacity of not more than 10 kilowatts, or an equivalent amount per kilowatt-hour produced;

(2) $1.40 per rated watt for installed distributed solar generation with a capacity of more than 10 but not more than 2,000 kilowatts, or an equivalent amount per kilowatt-hour produced; and

(3) $1 per rated watt for installed wholesale solar generation, or an equivalent amount per kilowatt-hour produced.

(n) The fees authorized by this section may not be assessed after the fifth anniversary of the date the program is established under commission rules, and the program ends when all money in the solar generation rebate fund that is available for paying incentives under the program is exhausted.

(o) Using available money from the solar generation rebate fund, the commission, in consultation with an independent organization certified under Section 39.151, shall identify and report to the 83rd Legislature before January 1, 2013, the geographic areas of this state where wholesale solar generation can be located with minimal additional transmission facilities.

(p) The commission by rule shall provide a method by which the program administrator shall use money from the solar generation rebate fund to pay for a credit to the electric service bill of each low-income electric customer for an amount equal to the amount of the fee assessed in the customer's bill.

(q) This section may not be construed as mandating distributed solar generation or any design, construction, or installation of solar-ready products to be installed by homebuilders.

SECTION 3. Subchapter Z, Chapter 39, Utilities Code, is amended by adding Sections 39.9156 and 39.9157 to read as follows:

Sec. 39.9156. SOLAR GENERATION PROGRAMS. (a) This section applies only to an electric cooperative or municipally owned utility with retail sales of more than 500,000 megawatt hours in 2009.

(b) It is the goal of the legislature that:

(1) electric cooperatives and municipally owned utilities administer incentive programs to facilitate the development of a solar energy market and solar energy industry in this state by increasing the amount of wholesale and distributed solar generation installed in this state;

(2) customers of electric cooperatives and municipally owned utilities will have access to incentives for the installation of distributed solar generation; and

(3) electric cooperatives and municipally owned utilities spend money to increase the amount of solar generation to a funding level consistent with the requirements for electric utilities in this state under Section 39.9155.

(c) Beginning not later than March 1, 2012, an electric cooperative or municipally owned utility annually, in a form and manner determined by the program administrator, shall report to the program administrator designated under Section 39.9155, information regarding the efforts of the municipally owned utility or electric cooperative related to this section.

(d) This section does not prevent the governing body of an electric cooperative or municipally owned utility from adopting rules, programs, and incentives to encourage or provide for the installation of more solar generation capacity beyond the goals established by Section 39.9155, or rules adopted under that section.

(e) An electric cooperative or municipally owned utility may recover the costs required by this section through a nonbypassable fee consistent with the nonbypassable fees authorized by the commission for electric utilities under Section 39.9155(g), or another cost recovery mechanism as determined by the governing body of the electric cooperative or municipally owned utility.

Sec. 39.9157. OWNERSHIP OF DISTRIBUTED SOLAR GENERATION. Notwithstanding any other provision of this title:

(1) any person may own distributed solar generation and enter into a contract with the retail customer on whose property the solar generation capacity is located to lease the solar generation equipment or sell the generated output to the retail customer or to that customer's retail electric provider;

(2) an owner of the distributed solar generation is not an electric utility and is not required to register with the commission as a power generation company or self-generator; and

(3) the commission may establish appropriate reporting and other requirements for an owner of distributed solar generation to be eligible to earn renewable energy credits.

SECTION 4. Section 151.318(c), Tax Code, is amended to read as follows:

(c) The exemption does not include:

(1) intraplant transportation equipment, including intraplant transportation equipment used to move a product or raw material in connection with the manufacturing process and specifically including all piping and conveyor systems, provided that the following remain eligible for the exemption:

(A) piping or conveyor systems that are a component part of a single item of manufacturing equipment or pollution control equipment eligible for the exemption under Subsection (a)(2), (a)(4), or (a)(5);

(B) piping through which the product or an intermediate or preliminary product that will become an ingredient or component part of the product is recycled or circulated in a loop between the single item of manufacturing equipment and the ancillary equipment that supports only that single item of manufacturing equipment if the single item of manufacturing equipment and the ancillary equipment operate together to perform a specific step in the manufacturing process; and

(C) piping through which the product or an intermediate or preliminary product that will become an ingredient or component part of the product is recycled back to another single item of manufacturing equipment and its ancillary equipment in the same manufacturing process;

(2) hand tools;

(3) maintenance supplies not otherwise exempted under this section, maintenance equipment, janitorial supplies or equipment, office equipment or supplies, equipment or supplies used in sales or distribution activities, research or development of new products, or transportation activities;

(4) machinery and equipment or supplies to the extent not otherwise exempted under this section used to maintain or store tangible personal property; [or]

(5) tangible personal property used in the transmission or distribution of electricity, including transformers, cable, switches, breakers, capacitor banks, regulators, relays, reclosers, fuses, interruptors, reactors, arrestors, resistors, insulators, instrument transformers, and telemetry units not otherwise exempted under this section, and lines, conduit, towers, and poles; or

(6) solar energy devices as defined by Section 185.001(2), Utilities Code.

SECTION 5. Except Section 39.9157, Utilities Code, as added by this Act, this Act expires when the fund established pursuant to Section 39.9155, Utilities Code, as added by this Act, is exhausted.

SECTION 6. The Public Utility Commission of Texas shall adopt rules establishing the programs required under Sections 39.9155 and 39.9156, Utilities Code, as added by this Act, not later than December 1, 2011.

SECTION 7. 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, 2011.