87R19140 CXP-F

By: Goldman H.B. No. 3916

Substitute the following for H.B. No. 3916:

By: Paddie C.S.H.B. No. 3916

A BILL TO BE ENTITLED

AN ACT

relating to the interconnection and operation of certain distributed electric generation facilities.

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

SECTION 1. Section 39.002, Utilities Code, is amended to read as follows:

Sec. 39.002. APPLICABILITY. This chapter, other than Sections 39.1516, 39.155, 39.157(e), 39.203, 39.904, 39.9051, 39.9052, [and] 39.914(e), and 39.9161, does not apply to a municipally owned utility or 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. 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 2. Subchapter Z, Chapter 39, Utilities Code, is amended by adding Section 39.9161 to read as follows:

Sec. 39.9161. INTERCONNECTION AND OPERATION OF CERTAIN DISTRIBUTED GENERATION FACILITIES. (a) In this section:

(1) "Distributed generation facility" means a facility installed on the customer's side of the meter:

(A) with a nameplate capacity of at least 250 kilowatts and not more than 2,500 kilowatts; and

(B) that is capable of providing backup or supplementary power to the customer's premises.

(2) "Electric utility" includes an electric utility, a municipally owned utility, and an electric cooperative.

(b) A person who owns or operates a distributed generation facility in the ERCOT power region may sell electric power generated by the distributed generation facility:

(1) in areas where retail customer choice exists, to the retail electric customer on whose side of the meter the distributed generation facility is installed and operated;

(2) notwithstanding Sections 37.051 and 39.105, in areas where retail customer choice does not exist, to the retail electric customer on whose side of the meter the distributed generation facility is installed and operated for on-site use:

(A) during an emergency declared by the independent organization certified under Section 39.151 for the ERCOT power region;

(B) during times of service interruption or inadequacy at the customer's premises;

(C) during construction on the customer's premises;

(D) for maintenance and testing of the distributed generation facility; and

(E) up to an additional 75 hours per calendar year in a situation not described by Paragraph (A), (B), (C), or (D); and

(3) at wholesale in the ERCOT power region market, including for ancillary services in that market.

(c) An electric cooperative, municipally owned utility, or retail electric provider that provides retail electric service to the owner or operator of a distributed generation facility may purchase electric power provided to the cooperative, utility, or provider by the owner or operator of the distributed generation facility at a value agreed to by the cooperative, utility, or provider and the owner or operator of the distributed generation facility. The value of the electric power may be based wholly or partly on the ERCOT power region market clearing price of energy at the time of day and at the location at which the electric power is made available.

(d) An electric utility shall allow interconnection and provide distribution and transmission service to a distributed generation facility on a nondiscriminatory basis and in a timely manner. An electric utility may recover from the owner or operator of the distributed generation facility the reasonable costs directly attributable to the interconnection of the facility, including the reasonable costs of necessary system upgrades and improvements directly attributable and proportionate to the capacity of the distributed generation facility.

(e) When an electric utility receives a request for interconnection from the owner or operator of a distributed generation facility, the electric utility:

(1) shall provide the owner or operator with a written good-faith cost estimate for interconnection-related costs; and

(2) may not incur a cost for the interconnection without entering into a written agreement for payment of the costs by the owner or operator of the distributed generation facility.

(f) An electric utility shall interconnect a distributed generation facility not later than the 90th day after the date the electric utility receives a request from the owner or operator of the facility for interconnection, except that the process may be extended for up to an additional 30 days if the request for interconnection requires the construction of an additional feeder line or upgrades to an existing line.

(g) An electric utility may charge the owner or operator of a distributed generation facility reasonable and nondiscriminatory rates for distribution service only to the extent that the rates are in accordance with a tariff filed with the commission.

(h) If the distributed generation facility is located in the certificated area of an electric utility that owns and operates generation and that has adopted retail customer choice, the owner or operator of the distributed generation facility shall contract with the electric utility for any services required to participate in the ERCOT power region wholesale market if the electric utility offers the services on a nondiscriminatory basis at a commercially reasonable cost. If the owner or operator of the distributed generation facility, in the owner's or operator's sole reasonable discretion, determines that the services are not offered on a nondiscriminatory basis at a commercially reasonable cost, the owner or operator may contract with a third-party provider to obtain the services.

(i) Except as provided by this section, an electric utility or political subdivision may not impose an additional charge or pricing difference on a development, building permit application, ERCOT power region wholesale market access request, or interconnection agreement related to the connection or reconnection of a distributed generation facility.

(j) The commission has jurisdiction to resolve a dispute between an electric utility and the owner or operator of a distributed generation facility that arises under this section.

(k) A distributed generation facility must comply with emissions limitations established by the Texas Commission on Environmental Quality for electric generation facilities installed after January 1, 1995, that are subject to standard permit requirements under Section 39.264 of this code or Chapter 382, Health and Safety Code.

SECTION 3. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2021.