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A BILL TO BE ENTITLED
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AN ACT
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relating to state energy policy and the planning of energy |
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development and utilization. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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ARTICLE 1 |
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SECTION 1.01. This article may be cited as the Energy Policy |
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Act. |
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SECTION 1.02. The Utilities Code is amended by adding Title |
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6 to read as follows: |
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TITLE 6. ENERGY POLICY ACT |
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CHAPTER 300. STRATEGIC ENERGY PLANNING |
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SUBCHAPTER A. GENERAL PROVISIONS |
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Sec. 300.001. PURPOSE AND FINDINGS. (a) This title is |
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enacted to promote, in accordance with the public interest, the |
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strategic planning of energy development, production, delivery, |
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commercialization, and utilization in this state. |
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(b) The purpose of this title is to establish a statewide |
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energy policy planning entity and process that recognizes: |
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(1) public health and general welfare as a critical |
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concern in the development of energy policies; |
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(2) energy as a valuable and vital commodity in the |
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state's economy; |
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(3) protection of the environment as a major |
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consideration in the production of energy and utilization of |
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natural resources; |
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(4) cost-effective, market-based solutions as a |
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preferred policy for energy planning; |
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(5) utilization of Texas-based resources to help |
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provide energy security, stability, and reliability; and |
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(6) the importance of portfolio diversity in promoting |
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energy system flexibility, affordability, and efficiency. |
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Sec. 300.002. DEFINITIONS. In this title: |
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(1) "Council" means the Texas Energy Policy Council. |
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(2) "Office" means the State Energy Conservation |
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Office. |
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(3) "Plan" means the statewide energy policy plan. |
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Sec. 300.003. TEXAS ENERGY POLICY COUNCIL. (a) The Texas |
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Energy Policy Council is created to develop and present a statewide |
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energy policy plan to the legislature. The plan must include a |
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20-year planning horizon and be updated to reflect changing |
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conditions and should be considered a living document. |
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(b) The council is composed of 12 members as follows: |
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(1) the chairman of the Public Utility Commission of |
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Texas; |
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(2) the chairman of the Railroad Commission of Texas; |
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(3) the chairman of the Texas Commission on |
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Environmental Quality; |
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(4) the president and chief executive officer of the |
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Electric Reliability Council of Texas; |
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(5) the commissioner of the General Land Office; |
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(6) two members of the senate appointed by the |
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lieutenant governor; |
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(7) two members of the house of representatives |
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appointed by the speaker of the house of representatives; |
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(8) one member of the academic community with |
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expertise in energy appointed by the governor; |
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(9) one member of the academic community with |
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expertise in environmental issues related to energy appointed by |
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the governor; and |
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(10) the director of the office. |
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(c) The governor shall designate the presiding officer from |
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among the members of the council. |
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(d) An appointed member of the council serves for a full |
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planning cycle and may be reappointed at the pleasure of the |
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appointing official. |
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(e) The council shall meet at least quarterly in |
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even-numbered years while developing a plan for submission to the |
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legislature. The council may meet annually in odd-numbered years |
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after submitting plans to the legislature. |
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(f) The council shall develop and implement policies and |
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procedures that provide the public with reasonable opportunity to |
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appear before the council and to speak on issues under the |
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jurisdiction of the council. |
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(g) The office is designated as the state agency responsible |
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for administering the council. Staff from the office shall be |
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tasked, as necessary, with assisting the council in carrying out |
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its duties. |
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Sec. 300.004. POWERS, DUTIES, AND RESPONSIBILITIES OF |
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COUNCIL. (a) In developing the plan, the council shall: |
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(1) encourage cooperation and coordination between |
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public and private entities regarding energy usage, planning, |
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research and development, and commercialization; |
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(2) seek policies that promote a diverse portfolio of |
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clean, reliable, and competitively priced energy sources; |
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(3) promote research, pilot projects, and |
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market-based incentives to explore and expand long-term energy |
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options; |
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(4) develop policies to prevent supply interruptions |
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and infrastructure failure; |
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(5) examine the impact on the environment of energy |
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exploration, production, and use; |
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(6) take into account the statewide and regional water |
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planning process; and |
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(7) make recommendations for increasing public |
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knowledge of energy use issues and public awareness of the |
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importance of more efficient consumption of energy. |
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(b) The council shall submit to the legislature the initial |
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plan by December 1, 2012. Thereafter, the council shall report to |
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the legislature by December 1 of each even-numbered year the status |
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of the plan's implementation and make any recommendations for |
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legislative action as necessary to implement or revise the plan. |
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The council may update the plan as necessary to reflect evolving |
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conditions. |
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Sec. 300.005. FUELS AND TECHNOLOGIES. (a) The council |
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shall consider the following fuel sources, types of generation, and |
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innovative technologies associated with these fuels and types of |
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generation when creating the plan. These fuels, types of |
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generation, and technologies include: |
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(1) oil and natural gas; |
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(2) coal and lignite; |
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(3) nuclear; |
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(4) renewable energy technologies; |
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(5) geothermal; |
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(6) methane; |
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(7) distributed generation; |
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(8) fuel cells and storage; |
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(9) water conservation technologies that could be |
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utilized in the exploration, production, and generation of energy |
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resources; and |
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(10) any other fuels and technologies as defined in |
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Section 39.904(d). |
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(b) The council shall develop policies that ensure fuel |
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resources available to the state are utilized in a balanced and |
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efficient manner. The council shall consider the economic |
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viability, price stability and volatility, and environmental |
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impact of types of fuel and technology when making its |
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recommendations. |
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Sec. 300.006. ENERGY EFFICIENT TECHNOLOGY. (a) In order |
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to reduce the energy demand of customers in this state, the council |
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shall consider energy-efficient technologies when formulating the |
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plan and include them in its recommendations. Energy-efficient |
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technologies shall be considered for the following: |
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(1) residential, commercial, industrial, and state |
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and local energy users; and |
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(2) any other user group or application the council |
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deems appropriate. |
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(b) The council shall consider the economic viability and |
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competitiveness of new technologies when making its |
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recommendations. |
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(c) The council shall consider the ability of |
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energy-efficient technologies to reduce the demand for energy and |
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the need for additional transmission capacity in the state and |
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shall consider opportunities for reducing transmission constraints |
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by using these technologies. |
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Sec. 300.007. TRANSMISSION. (a) The council shall |
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consider and recommend strategies to ensure that customers in this |
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state have access to reliable energy. |
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(b) The council shall consider transmission constraints, |
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and make recommendations in the plan to alleviate or prevent those |
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constraints, for the following sources of energy: |
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(1) oil and natural gas; |
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(2) coal and lignite; |
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(3) wind and solar; and |
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(4) electricity. |
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Sec. 300.008. ALTERNATIVE FUEL VEHICLES. (a) The council |
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shall consider and make recommendations on strategies and |
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incentives that promote the use of alternative fuel vehicles such |
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as natural gas vehicles and plug-in electric vehicles. |
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(b) The council shall consider the economic feasibility of |
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alternative fuel vehicles and infrastructure constraints and may |
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make recommendations on incentives to incorporate and promote these |
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vehicles as a component of the plan. |
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Sec. 300.009. ENVIRONMENT. (a) The council, when creating |
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the plan or in formulating recommendations, shall consider the |
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effects of energy exploration, production, and consumption on the |
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environment. |
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(b) The council shall recommend strategies that protect and |
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preserve the environment of the state and allow for access to and |
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the production of safe, economically viable, and reliable sources |
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of energy. The council shall consider: |
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(1) air quality; |
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(2) water quality; |
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(3) water supply; and |
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(4) waste disposal. |
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ARTICLE 2 |
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SECTION 2.01. Chapter 39, Utilities Code, is amended by |
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adding Subchapter L to read as follows: |
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SUBCHAPTER L. REPORT ON RESERVES AND VOLUNTARY EMISSIONS |
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REDUCTIONS PLAN |
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Sec. 39.551. STATEMENT OF INTENT. It is not the intent of |
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this subchapter to: |
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(1) transfer environmental regulation from the |
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Railroad Commission of Texas or the Texas Commission on |
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Environmental Quality to the commission; or |
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(2) reduce the competitiveness of the existing energy |
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market in Texas by re-regulating the market or requiring the |
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decommissioning of any lawfully operating generating plant. |
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Sec. 39.552. REPORT ON RESERVES. (a) Not later than |
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December 1, 2011, the Railroad Commission of Texas shall prepare |
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and submit to the commission a report on coal and gas reserves in |
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this state that includes information relating to: |
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(1) natural gas reserves in this state proven and |
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probable on November 1, 2011; |
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(2) estimates of the proven and probable natural gas |
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reserves in this state for each of the next 15 years; |
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(3) estimates of natural gas prices and potential |
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price volatility for each of the next 15 years; |
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(4) coal reserves in this state proven and probable on |
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November 1, 2011; |
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(5) estimates of the proven and probable coal reserves |
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in this state for each of the next 15 years; and |
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(6) estimates of coal prices and potential price |
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volatility for each of the next 15 years. |
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(b) The Railroad Commission of Texas may request financial |
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information and forecasts from the comptroller to assist the |
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Railroad Commission of Texas in carrying out its duties under this |
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section. The comptroller shall provide that information and those |
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forecasts to the Railroad Commission of Texas as quickly as |
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possible after receiving such request. |
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Sec. 39.553. REPORT AND PLAN. (a) The commission shall |
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prepare a report on electric energy generation in this state. The |
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report must include an analysis of and policy recommendations for |
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how to most cost-effectively comply with environmental regulation. |
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(b) In preparing the report, the commission shall: |
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(1) analyze information from the reports submitted |
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under this subchapter by electric generating facilities and the |
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Railroad Commission of Texas; and |
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(2) use information already in the possession of |
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existing regulators by consulting with the Railroad Commission of |
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Texas, the Texas Commission on Environmental Quality, the Electric |
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Reliability Council of Texas, the Southwest Power Pool, the |
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Southeastern Electric Reliability Council, and the Western |
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Electricity Coordinating Council. |
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(c) The report must evaluate and consider measures that |
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will: |
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(1) maintain electric grid reliability; |
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(2) ensure the availability of electric energy at |
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reasonable rates; |
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(3) reduce air pollution, as defined by Section |
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382.003, Health and Safety Code; |
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(4) increase the state's ability to comply with state |
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and federal clean air standards in nonattainment and |
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near-nonattainment areas; and |
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(5) reduce the use of water for electricity generation |
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in this state. |
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(d) The report must identify the 10 percent of electric |
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generation capacity that will be most impacted by compliance with |
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environmental regulation. |
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(e) The report must identify combinations of market |
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factors, plant operating characteristics, federal and state |
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environmental regulations promulgated after January 1, 2011, and |
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other conditions that might make it more economically attractive |
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for the electric generation capacity identified in the report to be |
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retired rather than comply with the regulations. The market |
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factors considered in the analysis must include: |
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(1) long-term prices and price volatility for fuel |
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sources used to generate electricity in this state; |
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(2) price projections for the cost of electricity |
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going forward and factors that are relevant to determining the |
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market price of electricity; and |
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(3) the potential impact of the voluntary |
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decommissioning of existing units of electric generation capacity |
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from facilities in this state. |
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(f) The report must consider plant operating |
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characteristics including variable and fixed operating costs of |
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electric generation facilities identified in the report. The |
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analysis must also incorporate a range of costs projected by |
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credible sources for complying with the specified federal and state |
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air pollution regulations. In conducting this analysis, the |
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commission shall consider electric generation facilities in this |
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state of various vintages, sizes, fuel types, conversion |
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efficiencies, and emission characteristics. The analysis must: |
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(1) estimate the amount of electric generation |
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capacity that is likely to voluntarily be retired rather than incur |
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the additional expense of complying with the federal and state air |
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pollution regulations; |
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(2) provide an analysis of the cost and the impact on |
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electric rates, and provide price projections, associated with |
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voluntarily retiring electric generation facilities included in |
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the report; |
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(3) identify any additional barriers to the retirement |
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of the types of electric generation capacity identified and provide |
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recommendations on how to most cost-effectively and voluntarily |
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reduce air pollution, including recommendations to accelerate the |
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permitting process for certain types of low-polluting generation; |
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and |
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(4) identify the types, costs, and effects of |
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incentives to promote the goals of this section. |
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(g) Not later than October 1, 2012, the commission shall |
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make a draft of the report available for public review and comment |
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for a period of not less than 30 days. |
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(h) Not later than December 1, 2012, the commission shall |
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finalize and publish the report. |
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SECTION 2.02. Section 39.904, Utilities Code, is amended by |
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adding Subsection (p) to read as follows: |
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(p) This section is intended to increase the amount of |
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renewable generating capacity as provided by Subsection (a) and is |
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not intended, unless specifically stated otherwise in this section, |
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to provide operational or competitive advantages to renewable |
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energy generators to the detriment of other generation resources. |
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ARTICLE 3 |
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SECTION 3.01. As soon as practicable after the effective |
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date of this Act, the designated appointing officials shall appoint |
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the members to the Texas Energy Policy Council established under |
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Chapter 300, Utilities Code, as added by this Act. |
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SECTION 3.02. This Act takes effect September 1, 2011. |
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