88R4001 DIO-F
 
  By: King S.B. No. 1287
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the cost of interconnecting certain electric generation
  and energy storage facilities with the ERCOT transmission system.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 35.004, Utilities Code, is amended by
  amending Subsection (d) and adding Subsections (d-1) and (d-2) to
  read as follows:
         (d)  The commission shall price wholesale transmission
  services within ERCOT based on the postage stamp method of pricing
  under which a transmission-owning utility's rate is based on the
  ERCOT utilities' combined annual costs of transmission, other than
  costs described by Subsection (d-2), divided by the total demand
  placed on the combined transmission systems of all such
  transmission-owning utilities within a power region.  An electric
  utility subject to the freeze period imposed by Section 39.052 may
  treat transmission costs in excess of transmission revenues during
  the freeze period as an expense for purposes of determining annual
  costs in the annual report filed under Section 39.257.
  Notwithstanding Section 36.201, the commission may approve
  wholesale rates that may be periodically adjusted to ensure timely
  recovery of transmission investment.  Notwithstanding Section
  36.054(a), if the commission determines that conditions warrant the
  action, the commission may authorize the inclusion of construction
  work in progress in the rate base for transmission investment
  required by the commission under Section 39.203(e).
         (d-1)  The commission by rule shall establish an allowance to
  be applied on a per megawatt basis for capital costs incurred to
  interconnect generation resources and electric energy storage
  resources described by Section 35.152(a) with the ERCOT
  transmission system, including costs of utility interconnection
  facilities and all necessary system upgrades.  The allowance must:
               (1)  take into account average historical
  interconnection costs and system upgrade costs, other than
  transmission costs associated with Section 39.904(g); and 
               (2)  be designed to lower costs to consumers and
  encourage owners of generation resources and electric energy
  storage resources to locate the resources closer to load. 
         (d-2)  Capital costs in excess of the allowance provided by
  Subsection (d-1) incurred to interconnect generation resources and
  electric energy storage resources described by Section 35.152(a)
  with the ERCOT transmission system, including costs of utility
  interconnection facilities and all necessary system upgrades, must
  be directly assigned to the generation resource or electric energy
  storage resource receiving interconnection service through the
  facilities.
         SECTION 2.  This Act takes effect September 1, 2023.