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A BILL TO BE ENTITLED
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AN ACT
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relating to the removal of electric energy storage facilities. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Title 6, Utilities Code, is amended by adding |
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Chapter 303 to read as follows: |
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CHAPTER 303. ELECTRIC ENERGY STORAGE FACILITY AGREEMENTS |
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Sec. 303.0001. DEFINITIONS. In this chapter: |
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(1) "Electric energy storage facility" includes a |
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facility or equipment, other than a facility or equipment owned by |
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an electric utility, as defined by Section 31.002, used to support |
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the operation of electric energy storage, including an underground |
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or aboveground electrical transmission or communications line, an |
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electric transformer, telecommunications equipment, a road, a |
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meteorological tower, or a maintenance yard. |
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(2) "Electric energy storage facility agreement" |
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means a lease agreement between a grantee and a landowner that |
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authorizes the grantee to operate an electric energy storage |
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facility on the leased property. |
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(3) "Grantee" means a person, other than an electric |
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utility, as defined by Section 31.002, who: |
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(A) leases property from a landowner; and |
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(B) operates an electric energy storage facility |
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on the property. |
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Sec. 303.0002. APPLICABILITY. This chapter applies only to |
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electric energy storage that is a generation asset as defined by |
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Section 39.251. |
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Sec. 303.0003. WAIVER VOID; REMEDIES. (a) A provision of |
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an electric energy storage facility agreement that purports to |
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waive a right or exempt a grantee from a liability or duty |
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established by this chapter is void. |
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(b) A person who is harmed by a violation of this chapter is |
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entitled to appropriate injunctive relief to prevent further |
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violation of this chapter. |
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(c) The provisions of this section are not exclusive. The |
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remedies provided in this section are in addition to any other |
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procedures or remedies provided by other law. |
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Sec. 303.0004. REQUIRED AGREEMENT PROVISIONS ON FACILITY |
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REMOVAL. (a) An electric energy storage facility agreement must |
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provide that the grantee is responsible for removing the grantee's |
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electric energy storage facilities from the landowner's property |
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and that the grantee shall, in accordance with any other applicable |
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laws or regulations, safely: |
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(1) clear, clean, and remove from the property each |
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piece of electric energy storage equipment, including any |
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transformers or substations; |
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(2) for each foundation of electric energy storage |
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equipment, including a transformer or substation installed in the |
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ground: |
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(A) clear, clean, and remove the foundation from |
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the ground to a depth of at least three feet below the surface grade |
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of the land in which the foundation is installed; and |
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(B) ensure that each hole or cavity created in |
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the ground by the removal is filled with topsoil of the same type or |
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a similar type as the predominant topsoil found on the property; |
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(3) for each buried cable, including power, |
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fiber-optic, and communications cables, installed in the ground: |
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(A) clear, clean, and remove the cable from the |
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ground to a depth of at least three feet below the surface grade of |
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the land in which the cable is installed; and |
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(B) ensure that each hole or cavity created in |
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the ground by the removal is filled with topsoil of the same type or |
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a similar type as the predominant topsoil found on the property; and |
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(4) clear, clean, and remove from the property each |
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overhead power or communications line installed by the grantee on |
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the property. |
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(b) The agreement must provide that, at the request of the |
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landowner, the grantee shall: |
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(1) clear, clean, and remove each road constructed by |
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the grantee on the property; and |
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(2) ensure that each hole or cavity created in the |
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ground by the removal is filled with topsoil of the same type or a |
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similar type as the predominant topsoil found on the property. |
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(c) The agreement must provide that, at the request of the |
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landowner, if reasonable, the grantee shall: |
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(1) remove from the property all rocks over 12 inches |
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in diameter excavated during the decommissioning or removal |
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process; |
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(2) return the property to a tillable state using |
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scarification, V-rip, or disc methods, as appropriate; and |
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(3) ensure that: |
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(A) each hole or cavity created in the ground by |
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the removal is filled with topsoil of the same type or a similar |
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type as the predominant topsoil found on the property; and |
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(B) the surface is returned as near as reasonably |
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possible to the same condition as before the grantee dug holes or |
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cavities, including by reseeding pastureland with native grasses |
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prescribed by an appropriate governmental agency, if any. |
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(d) The landowner shall make a request under Subsection (b) |
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or (c) not later than the 180th day after the later of: |
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(1) the date on which the electric energy storage |
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facility is no longer capable of storing electricity in commercial |
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quantities; or |
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(2) the date the landowner receives written notice of |
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intent to decommission the electric energy storage facility from |
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the grantee. |
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Sec. 303.0005. REQUIRED AGREEMENT PROVISIONS ON FINANCIAL |
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ASSURANCE. (a) An electric energy storage facility agreement must |
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provide that the grantee shall obtain and deliver to the landowner |
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evidence of financial assurance that conforms to the requirements |
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of this section to secure the performance of the grantee's |
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obligation to remove the grantee's electric energy storage |
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facilities located on the landowner's property as described by |
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Section 303.0004. Acceptable forms of financial assurance include a |
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parent company guaranty with a minimum investment grade credit |
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rating for the parent company issued by a major domestic credit |
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rating agency, a letter of credit, a bond, or another form of |
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financial assurance acceptable to the landowner. |
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(b) The amount of the financial assurance must be at least |
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equal to the estimated amount by which the cost of removing the |
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electric energy storage facilities from the landowner's property |
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and restoring the property to as near as reasonably possible the |
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condition of the property as of the date the agreement begins |
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exceeds the salvage value of the electric energy storage |
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facilities, less any portion of the value of the electric energy |
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storage facilities pledged to secure outstanding debt. |
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(c) The agreement must provide that: |
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(1) the estimated cost of removing the electric energy |
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storage facilities from the landowner's property and restoring the |
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property to as near as reasonably possible the condition of the |
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property as of the date the agreement begins and the estimated |
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salvage value of the electric energy storage facilities must be |
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determined by an independent, third-party professional engineer |
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licensed in this state; |
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(2) the grantee must deliver to the landowner an |
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updated estimate, prepared by an independent, third-party |
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professional engineer licensed in this state, of the cost of |
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removal and the salvage value at least once every five years for the |
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remainder of the term of the agreement; and |
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(3) the grantee is responsible for ensuring that the |
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amount of the financial assurance remains sufficient to cover the |
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amount required by Subsection (b), consistent with the estimates |
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required by this subsection. |
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(d) The grantee is responsible for the costs of obtaining |
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financial assurance described by this section and costs of |
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determining the estimated removal costs and salvage value. |
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(e) The agreement must provide that the grantee shall |
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deliver the financial assurance not later than the earlier of: |
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(1) the date the electric energy storage facility |
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agreement is terminated; or |
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(2) the 10th anniversary of the commercial operations |
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date of the electric energy storage facilities located on the |
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landowner's leased property. |
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(f) For purposes of this section, "commercial operations |
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date" means the date on which the electric energy storage |
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facilities are approved for participation in market operations by a |
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regional transmission organization and does not include the |
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generation of electrical energy or other operations conducted |
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before that date for purposes of maintenance and testing. |
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(g) The grantee may not cancel financial assurance before |
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the date the grantee has completed the grantee's obligation to |
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remove the grantee's electric energy storage facilities located on |
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the landowner's property in the manner provided by this chapter, |
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unless the grantee provides the landowner with replacement |
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financial assurance at the time of or before the cancellation. In |
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the event of a transfer of ownership of the grantee's electric |
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energy storage facilities, the financial security provided by the |
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grantee shall remain in place until the date evidence of financial |
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security meeting the requirements of this chapter is provided to |
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the landowner. |
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SECTION 2. Chapter 303, Utilities Code, as added by this |
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Act, applies only to an electric energy storage facility agreement |
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entered into on or after the effective date of this Act. An |
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electric energy storage facility agreement entered into before the |
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effective date of this Act is governed by the law as it existed |
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immediately before that date, and that law is continued in effect |
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for that purpose. |
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SECTION 3. This Act takes effect September 1, 2021. |