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  By: Hancock  S.B. No. 1941
         (In the Senate - Filed March 7, 2019; March 19, 2019, read
  first time and referred to Committee on Business & Commerce;
  April 9, 2019, reported adversely, with favorable Committee
  Substitute by the following vote:  Yeas 9, Nays 0; April 9, 2019,
  sent to printer.)
Click here to see the committee vote
 
  COMMITTEE SUBSTITUTE FOR S.B. No. 1941 By:  Hancock
 
 
A BILL TO BE ENTITLED
 
AN ACT
 
  relating to use of electric energy storage facilities in the ERCOT
  power region.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 35.151, Utilities Code, is amended to
  read as follows:
         Sec. 35.151.  ELECTRIC ENERGY STORAGE. This subchapter
  applies only to the ownership or operation of electric energy
  storage equipment or facilities in the ERCOT power region that are
  intended to:
               (1)  provide energy or ancillary services at wholesale,
  including electric energy storage equipment or facilities listed on
  a power generation company's registration with the commission or,
  for an exempt wholesale generator, on the generator's registration
  with the Federal Energy Regulatory Commission; or
               (2)  provide reliable delivery of electric energy to
  retail customers.
         SECTION 2.  Subchapter E, Chapter 35, Utilities Code, is
  amended by adding Section 35.153 to read as follows:
         Sec. 35.153.  CONTRACTS FOR ELECTRIC ENERGY STORAGE FOR
  RELIABILITY SERVICES. (a)  A transmission and distribution
  utility, with the approval of the commission, may contract with the
  owner or operator of an electric energy storage facility to provide
  electric energy from an electric energy storage facility to ensure
  reliable service to retail customers.
         (b)  The commission may not authorize ownership of an
  electric energy storage facility by a transmission and distribution
  utility.
         (c)  Before entering into a contract under Subsection (a),
  the transmission and distribution utility must issue a request for
  proposals for use of an electric energy storage facility to meet the
  utility's reliability needs.
         (d)  A transmission and distribution utility may enter into a
  contract under Subsection (a) only if use of an electric energy
  storage facility is more cost-effective than construction or
  modification of traditional distribution facilities.
         (e)  A transmission and distribution utility may not enter
  into a contract under Subsection (a) that reserves an amount of
  capacity exceeding the amount of capacity required to ensure
  reliable service to the utility's retail customers.
         (f)  An owner or operator of an electric energy storage
  facility subject to a contract under Subsection (a) may sell
  electric energy or ancillary services through use of the facility
  only to the extent that the owner or operator reserves capacity as
  required by the contract.
         (g)  An owner or operator of an electric energy storage
  facility subject to a contract under Subsection (a) may not
  discharge the facility for reliability purposes unless directed by
  the transmission and distribution utility.
         (h)  A contract under Subsection (a) must require an owner or
  operator of an electric energy storage facility to reimburse a
  transportation and distribution utility for the cost of
  administrative penalties assessed against the utility for a
  violation caused by the facility's failure to meet the requirements
  of the agreement.
         (i)  In establishing the rates of a transmission and
  distribution utility, a regulatory authority shall review a
  contract between the utility and an owner or operator of an electric
  energy storage facility under Subsection (a). The utility has the
  burden of proof to establish that the costs of the contract are
  reasonable and necessary.  The regulatory authority may authorize a
  transmission and distribution utility to earn a reasonable return
  on the present value of future payments required under the
  contract.
         (j)  The total amount of electric energy storage capacity
  reserved by contracts under Subsection (a) may not exceed 40
  megawatts.  The commission shall by rule establish the maximum
  amount of electric energy storage capacity allotted to each
  transmission and distribution utility.
         (k)  The commission shall adopt rules as necessary to
  implement this section and establish criteria for approving
  contracts under Subsection (a).
         SECTION 3.  The Public Utility Commission of Texas shall
  adopt rules required by Section 35.153, Utilities Code, as added by
  this Act, as soon as practicable after the effective date of this
  Act.
         SECTION 4.  This Act takes effect September 1, 2019.
 
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