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A BILL TO BE ENTITLED
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AN ACT
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relating to the interconnection and integration of distributed |
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energy resources. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 31.002, Utilities Code, is amended by |
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adding Subdivisions (2-a) and (4-c) and amending Subdivision (10) |
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to read as follows: |
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(2-a) "Aggregated distributed energy resource" means |
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a group of distributed energy resources joined together to be |
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operated as a single distributed energy resource. |
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(4-c) "Distributed energy resource" means a source of |
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electricity connected at a voltage less than 60 kilovolts, |
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including electric energy storage, distributed generation, |
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distributed natural gas generation, or electric vehicles that |
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provide electricity onto the distribution system. The term does |
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not include a facility that provides temporary emergency electric |
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energy under Section 39.918. |
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(10) "Power generation company" means a person[, |
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including a person who owns or operates a distributed natural gas |
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generation facility,] that: |
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(A) generates electricity that is intended to be |
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sold at wholesale, including the owner or operator of electric |
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energy storage equipment or facilities to which Subchapter E, |
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Chapter 35, applies; |
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(B) does not own a transmission or distribution |
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facility in this state other than an essential interconnecting |
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facility, a facility not dedicated to public use, or a facility |
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otherwise excluded from the definition of "electric utility" under |
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this section; and |
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(C) does not have a certificated service area, |
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although its affiliated electric utility, [or] transmission and |
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distribution utility, municipally owned utility, or electric |
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cooperative may have a certificated service area. |
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SECTION 2. Subchapter H, Chapter 39, Utilities Code, is |
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amended by adding Section 39.3515 to read as follows: |
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Sec. 39.3515. REGISTRATION OF DISTRIBUTED ENERGY |
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RESOURCES. (a) An owner or operator of a distributed energy |
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resource may provide energy or ancillary services in the wholesale |
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market in the ERCOT power region through generating electricity and |
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providing that electricity onto a distribution system only if: |
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(1) the owner or operator is registered with the |
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commission as a power generation company under Section 39.351 and |
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authorized by the independent organization certified under Section |
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39.151 for the ERCOT power region; or |
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(2) the distributed energy resource is part of an |
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aggregated distributed energy resource and: |
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(A) is included in the registration of a power |
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generation company under Section 39.351 and the independent |
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organization certified under Section 39.151 for the ERCOT power |
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region; and |
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(B) has complied with the interconnection |
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requirements of the interconnecting transmission and distribution |
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utility, municipally owned utility, or electric cooperative. |
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(b) The commission may establish simplified filing |
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requirements to facilitate the registration of aggregated |
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distributed energy resources. The filing requirements must require |
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the registrant to disclose the name of the power generation company |
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that operates the aggregated distributed energy resource. |
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(c) A facility described by Section 39.914 or 39.916 is not |
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considered to be a distributed energy resource unless the facility |
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is interconnected and operated in parallel with the distribution |
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system, and either: |
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(1) electricity from the facility provides energy or |
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ancillary services in the wholesale market in the ERCOT power |
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region in a manner described by this section; or |
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(2) at the time the facility is installed, the |
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estimated annual amount of electricity to be produced by the |
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facility is more than the retail electric customer's estimated |
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annual electricity consumption. |
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(d) The commission by rule shall: |
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(1) authorize the registrations described by |
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Subsection (a); and |
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(2) adopt procedures for the creation of aggregated |
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distributed energy resources. |
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SECTION 3. Chapter 39, Utilities Code, is amended by adding |
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Subchapter O to read as follows: |
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SUBCHAPTER O. INTERCONNECTION OF DISTRIBUTED ENERGY RESOURCES |
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Sec. 39.701. METERING EQUIPMENT AND INFORMATION. An |
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interconnecting transmission and distribution utility, municipally |
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owned utility, or electric cooperative is not required to provide |
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an owner or operator of a distributed energy resource access to the |
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utility's meter equipment if access to essential metering |
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information is made available by the utility or cooperative. |
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Sec. 39.702. INTEGRATION AND COST RECOVERY. (a) The |
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commission by rule shall establish for the ERCOT power region: |
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(1) requirements for the dispatchability, |
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reliability, and other characteristics of each type or |
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classification of distributed energy resource; |
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(2) appropriate disclosure requirements and other |
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customer protections for residential and small commercial |
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customers of providers of aggregated distributed energy services; |
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(3) information an owner or operator of a distributed |
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energy resource must provide to the interconnecting transmission |
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and distribution utility, municipally owned utility, or electric |
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cooperative to ensure the resource will not adversely affect the |
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transmission or distribution system; |
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(4) interconnection guidelines that address: |
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(A) the determination of whether a given |
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interconnection or combination of interconnections would exceed a |
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transmission and distribution utility's, municipally owned |
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utility's, or electric cooperative's system capacity in a |
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particular location; |
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(B) considerations for feeder locations related |
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to distributed energy resources; |
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(C) considerations of the size or capacity of a |
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distributed energy resource; |
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(D) the assessment by the interconnecting |
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transmission and distribution utility, municipally owned utility, |
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or electric cooperative of potential impacts to other customers in |
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the area of the distributed energy resource; and |
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(E) other operating parameters necessary for the |
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transmission and distribution utility's, municipally owned |
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utility's, or electric cooperative's reliable operation of its |
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transmission and distribution system; |
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(5) a methodology for the appropriate allocation and |
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recovery of the transmission and distribution utility's, |
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municipally owned utility's, or electric cooperative's costs to |
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interconnect a distributed energy resource; and |
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(6) requirements for the independent organization |
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certified under Section 39.151 for the ERCOT power region to report |
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to the commission periodically: |
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(A) the categories and generation levels of |
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distributed energy resources allowed to participate in the ERCOT |
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wholesale market; |
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(B) the categories and megawatt levels of |
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aggregated distributed energy resources allowed to participate in |
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the ERCOT wholesale market; |
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(C) performance metrics for distributed energy |
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resources allowed to participate in the ERCOT wholesale market; and |
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(D) other information the commission may |
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require. |
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(b) The commission shall authorize a transmission and |
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distribution utility and, as applicable, a municipally owned |
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utility or electric cooperative, to: |
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(1) defer for recovery in a later ratemaking |
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proceeding the incremental operations and maintenance expenses, or |
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other expenses, and the return, not otherwise recovered in a rate |
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proceeding, associated with the installation, modification, |
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upgrade, or maintenance of its transmission or distribution |
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facilities required by an interconnection with a distributed energy |
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resource; and |
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(2) request recovery of the costs associated with an |
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interconnection with a distributed energy resource, including any |
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deferred expenses, through a proceeding under Section 35.004 or |
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36.210 or in another ratemaking proceeding regardless of whether |
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the utility or cooperative first requested recovery in a base-rate |
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proceeding. |
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(c) Facilities required by an interconnection with a |
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distributed energy resource are considered used and useful in |
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providing service to the public and are prudent and includable in |
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the rate base, regardless of the extent of the actual use of the |
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facilities. |
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(d) This subchapter does not: |
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(1) require or authorize a distribution service |
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provider to procure distributed energy resource services to enable |
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the operation of the distribution system; |
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(2) require a distribution service provider to |
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disclose to any third party, except as required by the independent |
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system operator, the provider's system planning information, |
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studies, models, critical infrastructure information, or other |
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confidential information; |
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(3) diminish a distribution service provider's rights |
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or obligations to own or operate its distribution system and |
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provide electric delivery service to retail customers in the |
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provider's certificated service area; |
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(4) obligate a distribution service provider to |
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interconnect a distributed energy resource with a capacity equal to |
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or greater than 10 megawatts; or |
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(5) prohibit an interconnecting distribution service |
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provider from shedding a distributed energy resource, or otherwise |
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obligate an interconnecting distribution service provider to |
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provide preferential treatment to feeders with distributed energy |
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resources, to meet its load shedding obligations during an |
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involuntary load shedding event initiated by the independent system |
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operator or a planned or unplanned outage of the distribution |
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system. |
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Sec. 39.703. LIABILITY. An interconnecting transmission |
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and distribution utility, municipally owned utility, electric |
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cooperative, or retail electric provider providing service to a |
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distributed energy resource to which this subchapter applies is not |
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liable for: |
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(1) a violation of reliability or service metrics |
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caused by distributed energy resource operations that violate its |
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interconnection agreement; or |
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(2) a distributed energy resource's inability or |
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failure to provide services that violate its interconnection |
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agreement or a penalty for such inability or failure. |
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SECTION 4. (a) This section takes effect only if the Act of |
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the 88th Legislature, Regular Session, 2023, relating to |
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nonsubstantive additions to and corrections in enacted codes |
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becomes law. |
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(b) Subchapter Z, Chapter 39, Utilities Code, is amended by |
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adding Section 39.9166 to read as follows: |
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Sec. 39.9166. DISTRIBUTED ENERGY RESOURCES. (a) A |
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customer who purchases or leases a distributed energy resource or |
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enters into a power purchase agreement for a distributed energy |
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resource in the ERCOT power region is entitled to the information |
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and disclosures required under Chapter 115, Business & Commerce |
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Code, and is entitled to protection from fraudulent, unfair, |
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misleading, or deceptive practices. |
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(b) An owner or operator of a distributed energy resource |
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may provide energy or ancillary services in the wholesale market in |
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the ERCOT power region through generating electricity and providing |
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that electricity onto a distribution system in an area in which |
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customer choice has been introduced in the manner provided by this |
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section. |
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(c) A person who owns or operates a distributed energy |
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resource in an area in which customer choice has been introduced and |
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is part of an aggregated distributed energy resource, or has not |
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individually registered with the commission as its own power |
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generation company, must sell the surplus electricity that is |
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produced by the distributed energy resource and not consumed by the |
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owner's premise to the retail electric provider that serves the |
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premise's load at a value agreed to between the distributed energy |
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resource owner and the retail electric provider that serves the |
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premise's load. The value may be an agreed value based on the |
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clearing price of energy or ancillary service at the time of day |
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that the electricity is made available to the grid. |
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(d) A person who operates an aggregated distributed energy |
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resource in an area in which customer choice has been introduced is |
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subject to customer protection rules established by the commission |
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under Chapter 17 and this chapter. |
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(e) A retail electric provider may direct the offering or |
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dispatch of aggregated distributed energy resources for which the |
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retail electric provider facilitated aggregation. |
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(f) The independent organization certified under Section |
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39.151 for the ERCOT power region shall adopt procedures to ensure |
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that the amount of electricity purchased from a distributed energy |
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resource owner under this section is accounted for when settling |
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the total load served by the retail electric provider that serves |
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that premise owner's load. |
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(g) A distributed energy resource owner that requests net |
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metering services for purposes of this section must have metering |
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devices capable of providing measurements consistent with the |
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independent organization's settlement requirements. |
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(h) A transmission and distribution utility, municipally |
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owned utility, or electric cooperative may provide to customers |
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educational information regarding the technical requirements for |
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the interconnection of distributed energy resources to the |
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distribution system. The provision of information under this |
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subsection is not considered a competitive energy service. |
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(i) This section does not apply to a purchase or agreement |
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entered into under Section 39.914 or 39.916. |
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SECTION 5. (a) This section takes effect only if the Act of |
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the 88th Legislature, Regular Session, 2023, relating to |
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nonsubstantive additions to and corrections in enacted codes does |
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not become law. |
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(b) Subchapter Z, Chapter 39, Utilities Code, is amended by |
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adding Section 39.9166 to read as follows: |
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Sec. 39.9166. DISTRIBUTED ENERGY RESOURCES. (a) A |
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customer who purchases or leases a distributed energy resource or |
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enters into a power purchase agreement for a distributed energy |
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resource in the ERCOT power region is entitled to the information |
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and disclosures required under Chapter 113, Business & Commerce |
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Code, as added by Chapter 561 (S.B. 398), Acts of the 87th |
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Legislature, Regular Session, 2021, and is entitled to protection |
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from fraudulent, unfair, misleading, or deceptive practices. |
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(b) An owner or operator of a distributed energy resource |
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may provide energy or ancillary services in the wholesale market in |
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the ERCOT power region through generating electricity and providing |
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that electricity onto a distribution system in an area in which |
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customer choice has been introduced in the manner provided by this |
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section. |
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(c) A person who owns or operates a distributed energy |
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resource in an area in which customer choice has been introduced and |
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is part of an aggregated distributed energy resource, or has not |
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individually registered with the commission as its own power |
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generation company, must sell the surplus electricity that is |
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produced by the distributed energy resource and not consumed by the |
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owner's premise to the retail electric provider that serves the |
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premise's load at a value agreed to between the distributed energy |
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resource owner and the retail electric provider that serves the |
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premise's load. The value may be an agreed value based on the |
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clearing price of energy or ancillary service at the time of day |
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that the electricity is made available to the grid. |
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(d) A person who operates an aggregated distributed energy |
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resource in an area in which customer choice has been introduced is |
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subject to customer protection rules established by the commission |
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under Chapter 17 and this chapter. |
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(e) A retail electric provider may direct the offering or |
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dispatch of aggregated distributed energy resources for which the |
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retail electric provider facilitated aggregation. |
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(f) The independent organization certified under Section |
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39.151 for the ERCOT power region shall adopt procedures to ensure |
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that the amount of electricity purchased from a distributed energy |
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resource owner under this section is accounted for when settling |
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the total load served by the retail electric provider that serves |
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that premise owner's load. |
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(g) A distributed energy resource owner that requests net |
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metering services for purposes of this section must have metering |
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devices capable of providing measurements consistent with the |
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independent organization's settlement requirements. |
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(h) A transmission and distribution utility, municipally |
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owned utility, or electric cooperative may provide to customers |
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educational information regarding the technical requirements for |
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the interconnection of distributed energy resources to the |
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distribution system. The provision of information under this |
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subsection is not considered a competitive energy service. |
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(i) This section does not apply to a purchase or agreement |
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entered into under Section 39.914 or 39.916. |
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SECTION 6. As soon as practicable after the effective date |
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of this Act, the Public Utility Commission of Texas shall adopt |
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rules necessary to implement the changes in law made by this Act. |
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SECTION 7. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2023. |
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