83R6198 JJT-F

By: Lucio III H.B. No. 3701

A BILL TO BE ENTITLED

AN ACT

relating to compensation for excess electricity generated by a retail electric customer's on-site generation.

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

SECTION 1. Section 31.002(6), Utilities Code, is amended to read as follows:

(6) "Electric utility" means a person or river authority that owns or operates for compensation in this state equipment or facilities to produce, generate, transmit, distribute, sell, or furnish electricity in this state. The term includes a lessee, trustee, or receiver of an electric utility and a recreational vehicle park owner who does not comply with Subchapter C, Chapter 184, with regard to the metered sale of electricity at the recreational vehicle park. The term does not include:

(A) a municipal corporation;

(B) a qualifying facility;

(C) a power generation company;

(D) an exempt wholesale generator;

(E) a power marketer;

(F) a corporation described by Section 32.053 to the extent the corporation sells electricity exclusively at wholesale and not to the ultimate consumer;

(G) an electric cooperative;

(H) a retail electric provider;

(I) this state or an agency of this state; [or]

(J) a person not otherwise an electric utility who:

(i) furnishes an electric service or commodity only to itself, its employees, or its tenants as an incident of employment or tenancy, if that service or commodity is not resold to or used by others;

(ii) owns or operates in this state equipment or facilities to produce, generate, transmit, distribute, sell, or furnish electric energy to an electric utility, if the equipment or facilities are used primarily to produce and generate electric energy for consumption by that person; or

(iii) owns or operates in this state a recreational vehicle park that provides metered electric service in accordance with Subchapter C, Chapter 184; or

(K) a distributed renewable generation owner, as defined by Section 39.916.

SECTION 2. Section 39.002, Utilities Code, is amended to read as follows:

Sec. 39.002. APPLICABILITY. Except as provided by this section, this [This] chapter, other than Sections 39.155, 39.157(e), 39.203, 39.903, 39.904, 39.9051, 39.9052, and 39.914(e), does not apply to a municipally owned utility or to 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. Section 39.916 applies to an electric cooperative. Section 39.9161 applies to a municipally owned utility. 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 3. The heading to Section 39.916, Utilities Code, is amended to read as follows:

Sec. 39.916. [INTERCONNECTION OF] DISTRIBUTED RENEWABLE GENERATION.

SECTION 4. Section 39.916(a), Utilities Code, is amended by adding Subdivision (4) to read as follows:

(4) "Surplus electricity" means electricity generated by distributed renewable generation that is not consumed at the place the distributed renewable generation is installed and that flows onto the electric distribution system.

SECTION 5. Section 39.916, Utilities Code, is amended by amending Subsections (b), (c), (e), (f), and (j) and adding Subsections (d-1), (l), (m), (n), (o), and (p) to read as follows:

(b) A transmission and distribution utility, electric cooperative, or electric utility shall allow interconnection if:

(1) the distributed renewable generation to be interconnected has a five-year warranty against breakdown or undue degradation; and

(2) the rated capacity of the distributed renewable generation does not exceed the transmission and distribution utility, electric cooperative, or electric utility service capacity.

(c) A customer may request interconnection by filing an application for interconnection with the transmission and distribution utility, electric cooperative, or electric utility. Procedures of a transmission and distribution utility, electric cooperative, or electric utility for the submission and processing of a customer's application for interconnection shall be consistent with rules adopted by the commission regarding interconnection.

(d-1) The sale, rental, lease, or maintenance of distributed renewable generation equipment, or the sale of electric energy produced by distributed renewable generation to the customer on whose side of the meter the distributed renewable generation is installed, does not constitute provision of retail electric service.

(e) A transmission and distribution utility, electric cooperative, electric utility, or retail electric provider may not require a distributed renewable generation owner whose distributed renewable generation meets the standards established by rule under Subsection (d) to purchase an amount, type, or classification of liability insurance the distributed renewable generation owner would not have in the absence of the distributed renewable generation.

(f) A transmission and distribution utility, electric cooperative, or electric utility shall make available to a distributed renewable generation owner for purposes of this section metering required for services provided under this section, including separate meters that measure the load and generator output or a single meter capable of measuring in-flow and out-flow at the point of common coupling meter point. The distributed renewable generation owner must pay the differential cost of the metering unless the meters are provided at no additional cost. Except as provided by this section, Section 39.107 applies to metering under this section.

(j) A [For] distributed renewable generation owner who chooses to sell the owner's surplus electricity in an area [owners in areas] in which customer choice has been introduced[, the distributed renewable generation owner] must sell the owner's surplus electricity produced to the retail electric provider that serves the [distributed renewable generation] owner's load. A distributed renewable generation owner who chooses to sell the owner's surplus electricity in an area in which customer choice has not been introduced must sell the owner's surplus electricity to the electric utility or electric cooperative that serves the owner's load [at a value agreed to between the distributed renewable generation owner and the provider that serves the owner's load which may include, but is not limited to, an agreed value based on the clearing price of energy at the time of day that the electricity is made available to the grid or it may be a credit applied to an account during a billing period that may be carried over to subsequent billing periods until the credit has been redeemed]. The independent organization identified in Section 39.151 shall develop procedures so that the amount of electricity purchased from a distributed renewable generation owner under this section is accounted for in settling the total load served by the provider that serves that owner's load [by January 1, 2009]. A distributed renewable generation owner requesting [net] metering services for purposes of this section must have metering devices capable of providing measurements consistent with the independent organization's settlement requirements.

(l) In areas in which customer choice has been introduced, a retail electric provider shall purchase surplus electricity at a fair market value determined using a price that provides a periodic proxy, using a period of a month or longer, for the load zone real-time market clearing price, unless the provider chooses to use a fair market value by an alternative method authorized by this subsection. A retail electric provider may choose to determine the fair market value for purchasing surplus electricity by the load zone real-time market clearing price at the time of day the surplus electricity is made available to the grid or by the simple average, during the period for which the surplus electricity being purchased was generated, of the load zone real-time market clearing price for energy at the time of day specified in the ERCOT protocols for the applicable type of distributed renewable generation for load reduction at locations without interval data meters. A retail electric provider must use the same method of determining fair market value for all distributed renewable generation owners eligible to be compensated for purchased surplus electricity. A retail electric provider that chooses to determine the fair market value by an alternative method at any time may not after that date use the periodic proxy method described by this subsection. A distributed renewable generation owner may file a written complaint with the commission for a violation of this subsection or Subsection (m).

(m) A retail electric provider that purchases surplus electricity from a distributed renewable generation owner under Subsection (l) must compensate the distributed renewable generation owner by making a payment not less frequently than once each quarter or by applying a credit to an account the credit balance of which may be carried forward until the credit has been redeemed. The retail electric provider shall inform the distributed renewable generation owner of the amount of surplus electricity purchased, measured in kilowatt hours, and the price paid for the surplus electricity purchased.

(n) In areas in which customer choice has not been introduced, an electric utility or electric cooperative shall purchase surplus electricity at a value that is at least equal to the avoided cost of the electric utility or electric cooperative, as applicable. A distributed renewable generation owner may file a written complaint with the commission for a violation of this subsection or Subsection (o).

(o) An electric utility or electric cooperative that purchases surplus electricity from a distributed renewable generation owner under Subsection (n) must compensate the distributed renewable generation owner by making a payment made not less frequently than once each quarter or by applying a credit to an account the credit balance of which may be carried forward until the credit has been redeemed. The electric utility or electric cooperative shall inform the distributed renewable generation owner of the amount of surplus electricity purchased, measured in kilowatt hours, and the price paid for the surplus electricity purchased.

(p) The commission by rule may establish standards distributed renewable generation must meet to be eligible for compensation under this section, including interconnection standards and standards for the generating equipment. The standards must be designed so that small-scale distributed renewable generation at residential addresses is eligible for compensation. A distributed renewable generation owner is qualified to be compensated for surplus electricity purchased under this section only if:

(1) the distributed renewable generation is:

(A) rated to produce an amount of electricity that is less than or equal to the amount of electricity the retail electric customer for whom the distributed renewable generation is installed is reasonably expected to consume; and

(B) installed on the customer's side of the meter for a residential retail electric customer or a retail electric customer that is a public school or a facility owned by a religious organization and used primarily as a place of religious worship, such as a church, synagogue, or mosque; and

(2) the generating capacity of the distributed renewable generation does not exceed:

(A) 10 kilowatts for a residential retail electric customer;

(B) 150 kilowatts for a retail electric customer at a facility owned by a religious organization and used primarily as a place of religious worship, such as a church, synagogue, or mosque; or

(C) 250 kilowatts for a retail electric customer that is a public school.

SECTION 6. Subchapter Z, Chapter 39, Utilities Code, is amended by adding Section 39.9161 to read as follows:

Sec. 39.9161. DISTRIBUTED RENEWABLE GENERATION WITH MUNICIPALLY OWNED UTILITIES. (a) In this section, "distributed renewable generation," "distributed renewable generation owner," and "interconnection" have the meanings assigned by Section 39.916.

(b) A municipally owned utility shall:

(1) allow interconnection and metering to account for electricity produced by distributed renewable generation owners; and

(2) provide the utility's customers access to interconnection and metering of distributed renewable generation.

(c) The governing body of a municipally owned utility shall provide oversight and adopt rates, rules, and procedures to allow interconnection and provide metering consistent with the goals established by Section 39.916. This subsection does not prevent the governing body of a municipally owned utility from adopting rates, rules, and procedures for interconnection and metering that are more favorable to a distributed renewable generation owner than those established by any other law or rule of the commission.

(d) If a municipally owned utility implements customer choice under Chapter 40, the commission:

(1) has jurisdiction over the municipally owned utility's distributed renewable generation interconnection and metering; and

(2) by rule shall establish minimum standards and procedures for interconnection and metering by the municipally owned utility.

(e) A municipally owned utility that had retail sales of 500,000 megawatt hours or more in 2012 shall file the utility's interconnection and metering rates, rules, and procedures with the State Energy Conservation Office not later than January 1, 2014. The municipally owned utility shall make timely updates to the utility's filed rates, rules, and procedures.

(f) A municipally owned utility that has adopted rules and procedures related to interconnection and metering shall make available, on a publicly accessible Internet website or at the customary location for publicly posted notices:

(1) information on the purchase price offered per kilowatt hour for surplus electricity produced by distributed renewable generation; and

(2) information instructing customers with distributed renewable generation how to request and obtain the purchase rates offered.

(g) The governing body of a municipally owned utility that had retail sales of less than 500,000 megawatt hours in 2012 shall provide oversight and adopt rules and procedures related to interconnection and metering of distributed renewable generation systems with a generating capacity considered appropriate by the municipally owned utility on or before the 120th day after the date the governing body receives a bona fide request for interconnection.

SECTION 7. Subchapter Z, Chapter 39, Utilities Code, is amended by adding Section 39.926 to read as follows:

Sec. 39.926. INFORMATION ON INTERNET REGARDING PURCHASE OF SURPLUS ELECTRICITY PRODUCED BY DISTRIBUTED RENEWABLE GENERATION. On the Internet website found at http://www.powertochoose.org, the commission shall provide for access to easily comparable information regarding retail electric providers' offers to residential distributed renewable generation owners for their surplus electricity, including information regarding their contract terms, for each retail electric provider using that website.

SECTION 8. Section 39.916(h), Utilities Code, is repealed.

SECTION 9. This Act takes effect January 1, 2014.