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  88R4503 CXP-F
 
  By: Darby H.B. No. 2263
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the authority of a natural gas local distribution
  company to offer energy conservation programs.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Chapter 104, Utilities Code, is amended by
  adding Subchapter J to read as follows:
  SUBCHAPTER J. NATURAL GAS ENERGY CONSERVATION PROGRAMS
         Sec. 104.401.  DEFINITIONS. In this subchapter:
               (1)  "Energy conservation program" means a program that
  promotes energy conservation or energy efficiency.
               (2)  "Local distribution company" means a gas utility
  that operates a retail gas distribution system.
         Sec. 104.402.  ENERGY CONSERVATION PROGRAM AUTHORITY. (a)
  A local distribution company may offer to customers and prospective
  customers and provide to customers an energy conservation program
  in the manner provided by this subchapter.
         (b)  The railroad commission has exclusive original
  jurisdiction over energy conservation programs implemented by
  local distribution companies.
         (c)  A political subdivision served by a local distribution
  company that implements an energy conservation program approved by
  the railroad commission under this subchapter may not limit,
  restrict, or otherwise prevent an eligible customer from
  participating in the energy conservation program based on the type
  or source of energy delivered to the customer.
         Sec. 104.403.  ENERGY CONSERVATION PROGRAM COST RECOVERY.
  (a) A local distribution company may recover costs prudently
  incurred to implement one or more energy conservation programs if:
               (1)  the company applies to the railroad commission at
  least once every three years under this subchapter for review and
  approval of the company's energy conservation programs; and
               (2)  the railroad commission approves cost recovery for
  the company's energy conservation programs.
         (b)  The railroad commission by rule shall require a local
  distribution company that implements an energy conservation
  program under this subchapter to submit to the railroad commission
  an annual report on:
               (1)  the performance of the company's energy
  conservation programs for the preceding year; and
               (2)  the company's planned energy conservation programs
  for the upcoming year.
         (c)  An application submitted under Subsection (a) must
  include:
               (1)  a summary of and objectives for the local
  distribution company's energy conservation programs;
               (2)  a description of each program;
               (3)  a proposed budget for each program; and
               (4)  the projected consumption reduction or cost
  savings for each program.
         (d)  The railroad commission by rule shall:
               (1)  determine a cost recovery mechanism for timely
  recovery of all costs incurred in implementing an energy
  conservation program, including:
                     (A)  costs incurred to design, market, implement,
  administer, and deliver an energy conservation program; and
                     (B)  an amount equal to the reduction in the local
  distribution company's marginal revenues due to the lower sales or
  demand resulting from the energy conservation program; and
               (2)  ensure that costs associated with an energy
  conservation program are allocated to the customer classes eligible
  for participation in the energy conservation program.
         (e)  Energy conservation programs proposed under this
  section may be combined in a portfolio to provide incentives and
  services to encourage energy conservation. The portfolio:
               (1)  must be designed to overcome barriers to the
  adoption of energy-efficient equipment, technologies, and
  processes and be designed to change customer behavior as necessary;
  and
               (2)  may include measures such as:
                     (A)  direct financial incentives;
                     (B)  technical assistance and information,
  including building energy performance analyses performed by the
  local distribution company or a third party approved by the
  company;
                     (C)  discounts or rebates for products; and
                     (D)  weatherization for low-income customers.
         (f)  A local distribution company may purchase carbon
  offsets or credits to meet stated conservation objectives in the
  company's energy conservation programs and is entitled to recover
  the costs of the carbon offsets or credits through a purchased gas
  adjustment for operational emissions or as a regulatory asset for
  recovery in a future proceeding.
         (g)  A proceeding filed under this section is not a
  ratemaking proceeding for the purposes of Section 103.022.
         (h)  A local distribution company implementing an energy
  conservation program under this subchapter shall reimburse the
  railroad commission for the utility's proportionate share of the
  railroad commission's costs related to administration of reviewing
  and approving or denying cost recovery applications under this
  subchapter.
         SECTION 2.  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, 2023.