By: Strama H.B. No. 3583

A BILL TO BE ENTITLED

AN ACT

relating to renewable energy technology capable of serving peak demand.

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

SECTION 1. Section 39.904, Utilities Code, is amended by amending Subsections (a), (b), and (o) and adding Subsection (d-1) to read as follows:

(a) It is the intent of the legislature that after January 1, 2022, [by January 1, 2015, an additional 5,000] 10,880 megawatts of generating capacity from renewable energy technologies will have been installed in this state, 5,000 megawatts of which must be renewable energy technology capable of serving peak demand. The cumulative installed renewable capacity in this state shall total:

(1) 6,880 megawatts by January 1, 2015, 1,000 megawatts of which must be from renewable energy technology capable of serving peak demand and 5,880 megawatts of which may be from other renewable energy technologies;

(2) 7,880 megawatts by January 1, 2016, 2,000 megawatts of which must be from renewable energy technology capable of serving peak demand and 5,880 megawatts of which may be from other renewable energy technologies;

(3) 8,880 megawatts by January 1, 2018, 3,000 megawatts of which must be from renewable energy technology capable of serving peak demand and 5,880 megawatts of which may be from other renewable energy technologies;

(4) 9,880 megawatts by January 1, 2020, 4,000 megawatts of which must be from renewable energy technology capable of serving peak demand and 5,880 megawatts of which may be from other renewable energy technologies;

(5) 10,880 megawatts after January 1, 2022, 5,000 megawatts of which must be from renewable energy technology capable of serving peak demand and 5,880 megawatts of which may be from other renewable energy technologies[5,880 megawatts by January 1, 2015, and the commission shall establish a target of 10,000 megawatts of installed renewable capacity by January 1, 2025. The cumulative installed renewable capacity in this state shall total 2,280 megawatts by January 1, 2007, 3,272 megawatts by January 1, 2009, 4,264 megawatts by January 1, 2011, 5,256 megawatts by January 1, 2013, and 5,880 megawatts by January 1, 2015. Of the renewable energy technology generating capacity installed to meet the goal of this subsection after September 1, 2005, the commission shall establish a target of having at least 500 megawatts of capacity from a renewable energy technology other than a source using wind energy].

(b) The commission shall establish a renewable energy credits trading program. Any retail electric provider, municipally owned utility, or electric cooperative that does not satisfy the requirements of Subsection (a) by directly owning or purchasing capacity using renewable energy technologies shall purchase sufficient renewable energy credits to satisfy the requirements by holding renewable energy credits in lieu of capacity from renewable energy technologies.

(d-1) In this section, "renewable energy technology capable of serving peak demand" means a renewable energy technology that:

(1) may be dispatched by the operator regardless of environmental or weather conditions; or

(2) during the preceding year, provided energy at a capacity factor of at least 40 percent between 1 p.m. and 8 p.m. in June, July, August, and September.

(o) The commission may establish an alternative compliance payment. An entity that has a renewable energy purchase requirement under this section may elect to pay the alternative compliance payment instead of applying renewable energy credits toward the satisfaction of the entity's obligation under this section. The commission may establish a separate alternative compliance payment for the goal of installing 5,000 [500] megawatts of capacity from renewable energy technologies capable of serving peak demand [other than wind energy]. The alternative compliance payment for a renewable energy purchase requirement that could be satisfied with a renewable energy credit from wind energy may not be less than $2.50 per credit or greater than $20 per credit. Prior to September 1, 2009, an alternative compliance payment under this subsection may not be set above $5 per credit. In implementing this subsection, the commission shall consider:

(1) the effect of renewable energy credit prices on retail competition;

(2) the effect of renewable energy credit prices on electric rates;

(3) the effect of the alternative compliance payment level on the renewable energy credit market; and

(4) any other factors necessary to ensure the continued development of the renewable energy industry in this state while protecting ratepayers from unnecessary rate increases.

SECTION 2. This Act takes effect September 1, 2013.