Honorable Joseph Pickett, Chair, House Committee on Environmental Regulation
FROM:
Ursula Parks, Director, Legislative Budget Board
IN RE:
HB3175 by Reynolds (Relating to the funding through greenhouse gas emissions fees of energy efficiency programs administered by certain utilities; authorizing a fee.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB3175, As Introduced: an impact of $0 through the biennium ending August 31, 2019.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
Fiscal Year
Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2018
$0
2019
$0
2020
$0
2021
$0
2022
$0
Fiscal Year
Probable Revenue Gain from New General Revenue Dedicated Greenhouse Gas Emissions Fee Account
Probable (Cost) from New General Revenue Dedicated Greenhouse Gas Emissions Fee Account
Change in Number of State Employees from FY 2017
2018
$1,500,000
($1,500,000)
1.0
2019
$1,600,000
($1,600,000)
1.0
2020
$1,600,000
($1,600,000)
1.0
2021
$1,700,000
($1,700,000)
1.0
2022
$1,700,000
($1,700,000)
1.0
Fiscal Analysis
The bill would amend Texas Health and Safety Code, Section 382.0621(f) to allow the Texas Commission on Environmental Quality (TCEQ) to impose operating fees for emissions of greenhouse gas.
The bill would add Texas Health and Safety Code, Section 382.0623 to define "carbon dioxide equivalent," and to instruct TCEQ to adopt, charge, and collect an annual fee on certain permitted that are subject to federal greenhouse gas reporting requirements. The fee is set at $5 per ton of carbon dioxide equivalent emitted from the facility each year; TCEQ may provide for an automatic annual increase in the fee by adjusting for the consumer price index. The bill would instruct facilities subject to the fee under the provisions of the bill to submit to TCEQ the annual report required by federal greenhouse gas reporting requirement not later than April 15 each year, from which TCEQ is instructed to compute the total amount of the fee to be imposed on the reporting facility.
The bill would amend Texas Utilities Code, Section 39.905(f) to require each unbundled transmission and distribution utility to include in its energy efficiency plan a targeted low-income energy efficiency program. The bill would allow utilities to include grants received by an unbundled transmission and distribution utility as part of the utility's energy efficiency budget. The bill would create Texas Utilities Code, Section 39.905(f-1) to define a "low-income energy efficiency program."
The bill would establish a Greenhouse Gas Emissions Fee Account in the General Revenue Fund, into which TCEQ would deposit the greenhouse gas emissions fee. The bill would require that the fees collected may only be appropriated for the purposes of Section 39.9053, Utilities Code. The bill would prohibit TCEQ from increasing the fee established by the bill before August 31, 2018.
The bill would create Texas Utilities Code, Section 39.9053 to require PUC to establish a grant program that would allow electric utilities, municipally owned utilities, and electric cooperatives to receive money from the Greenhouse Gas Emissions Fee Account in order to assist those entities in meeting energy efficiency goals. Use of the fees collected by TCEQ and deposited to the Greenhouse Gas Emissions Fee Account would be limited to funding this grant program. The bill would require PUC to make grant money available to the entities in proportion to the percentage of electric energy consumed by the retail customers served by each entity, except that at least 50 percent of the grant funding must be allocated for low-income energy efficiency programs each year.
The bill would take effect September 1, 2017.
This legislation would do one or more of the following: create or recreate a dedicated account in the General Revenue Fund, create or recreate a special or trust fund either with or outside of the Treasury, or create a dedicated revenue source. The fund, account, or revenue dedication included in this bill would be subject to funds consolidation review by the current Legislature.
Methodology
TCEQ estimates that implementing the provisions of the bill would require modification of TCEQ's existing State of Texas Air Reporting System (STARS) in order to enter, load, and store the greenhouse gas emissions data, develop a new fee rate assessment, and invoicing files as the existing system does not accommodate different fee rates for different pollutants. This analysis estimates that the one-time cost of the modification would not be significant.
Texas Health and Safety Code, Section 382.0621(d) imposes a cap on emissions of 4,000 tons per pollutant per year from any source; emissions above this cap are not subject to fees. TCEQ estimates that the seventy-seven facilities that would be subject to the provisions of the bill all emit above the statutory cap, based on historically reported emissions. At $5 per ton of carbon dioxide equivalent emissions, the Comptroller estimates that $1,500,000 in revenue will be deposited in fiscal year 2018 to the credit of the Greenhouse Gas Emissions Fee Account, with revenue gain in future years estimated by the Comptroller using a CPI growth rate.
PUC estimates that implementing the provisions of the bill would require 1.0 FTE to administer the new program created by the bill, with associated costs of $127,958 each fiscal year. This analysis assumes that the cost of the FTE would be supported by the Greenhouse Gas Emissions Fee Account because these expenditures would be for the purposes of Section 39.9053, Utilities Code. This analysis also assumes that the remaining available funding in the account would be used to implement the provisions of the bill.
Technology
TCEQ estimates that implementing the provisions of the bill would require modification of TCEQ's existing State of Texas Air Reporting System (STARS) in order to enter, load, and store the greenhouse gas emissions data, develop a new fee rate assessment, and invoicing files as the existing system does not accommodate different fee rates for different pollutants. This analysis estimates that the one-time cost of the modification would not be significant.
Local Government Impact
According to the Texas Commission on Environmental Quality, local municipalities and the LCRA do have affected electric utility facilities, and would thereby incur an additional estimated $20,000 fee for each site for the first year. The fee could increase annually based on the change in the consumer price index.
According to the Texas Municipal League, the fiscal impact to municipalities cannot be determined at this time.
Source Agencies:
304 Comptroller of Public Accounts, 473 Public Utility Commission of Texas, 582 Commission on Environmental Quality