S.B. No. 1699

AN ACT

relating to electricity service in the ERCOT power region, including the participation of aggregated distributed energy resources in the ERCOT market.

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

SECTION 1. Section 31.002(17), Utilities Code, is amended to read as follows:

(17) "Retail electric provider" means a person that sells electric energy to retail customers in this state. A retail electric provider may not own or operate generation assets but may aggregate distributed energy resources under Section 39.3515. The term does not include a person not otherwise a retail electric provider who owns or operates equipment used solely to provide electricity charging service for consumption by an alternatively fueled vehicle, as defined by Section 502.004, Transportation Code.

SECTION 2. Section 39.101(b), Utilities Code, is amended to read as follows:

(b) A customer is entitled:

(1) to be informed about rights and opportunities in the transition to a competitive electric industry;

(2) to choose the customer's retail electric provider consistent with this chapter, to have that choice honored, and to assume that the customer's chosen provider will not be changed without the customer's informed consent;

(3) to have access to providers of energy efficiency services, to on-site distributed generation, and to providers of energy generated by renewable energy resources;

(4) to be served by a provider of last resort that offers a commission-approved standard service package;

(5) to receive sufficient information to make an informed choice of service provider;

(6) to be protected from unfair, misleading, or deceptive practices, including protection from being billed for services that were not authorized or provided; [and]

(7) to have an impartial and prompt resolution of disputes with its chosen retail electric provider and transmission and distribution utility;

(8) to participation in demand response programs through retail electric providers that offer demand response programs; and

(9) to receive notice from the retail electric provider that serves the customer when the independent organization certified under Section 39.151 for the ERCOT power region issues an emergency energy alert.

SECTION 3. Section 39.351, Utilities Code, is amended by amending Subsection (a) and adding Subsection (a-1) to read as follows:

(a) A person may not generate electricity unless:

(1) the person is registered with the commission as a power generation company in accordance with this section; or

(2) the electricity is generated as part of a registered aggregate distributed energy resource under Section 39.3515.

(a-1) A person may register as a power generation company by filing the following information with the commission:

(1) a description of the location of any facility used to generate electricity;

(2) a description of the type of services provided;

(3) a copy of any information filed with the Federal Energy Regulatory Commission in connection with registration with that commission; and

(4) any other information required by commission rule, provided that in requiring that information the commission shall protect the competitive process in a manner that ensures the confidentiality of competitively sensitive information.

SECTION 4. Subchapter H, Chapter 39, Utilities Code, is amended by adding Section 39.3515 to read as follows:

Sec. 39.3515. AGGREGATE DISTRIBUTED ENERGY RESOURCES. (a) A person who aggregates distributed energy resources:

(1) is not required to register as a power generation company to aggregate the resources;

(2) shall comply with rules, guidelines, and registration requirements established by the commission and by Chapter 17 and this chapter; and

(3) remains accountable for compliance with the applicable statutes and rules by a subcontractor, an agent, or any other entity compensated by the person for activities conducted on the person's behalf.

(b) The commission may establish rules and registration requirements for the aggregation of distributed energy resources.

SECTION 5. Subchapter Z, Chapter 39, Utilities Code, is amended by adding Section 39.919 to read as follows:

Sec. 39.919. AVERAGE TOTAL RESIDENTIAL LOAD REDUCTION GOALS. (a) The commission by rule shall establish goals in the ERCOT power region to reduce the average total residential load.

(b) The rules adopted under Subsection (a) must provide for the adoption of a program that:

(1) provides demand response participation to residential customers where reasonably available;

(2) promotes the use of smart metering technology;

(3) is capable of responding to an emergency energy alert about low operating reserves issued by the independent organization certified under Section 39.151 for the ERCOT power region;

(4) provides opportunities for demand response providers to contract with retail electric providers to provide demand response services;

(5) ensures the program does not impact the critical needs of vulnerable populations;

(6) facilitates the widespread deployment of smart responsive appliances and devices in a manner that enables the customer's appliance or device to be enrolled as part of a demand response product or plan offered by a retail electric provider;

(7) establishes the method by which the components of the ratio described by Subsection (c) are calculated for purposes of determining whether the goals described by Subsection (a) have been achieved;

(8) provides for achievement of demand reductions within both summer and winter seasons; and

(9) allows a retail electric provider that offers a demand response program under this section to obtain funding for the demand response program through an energy efficiency incentive program established under Section 39.905 if the program complies with commission requirements related to the evaluation, measurement, and verification of demand response programs adopted under Section 39.905.

(c) The goals described by Subsection (a) must be calculated as a ratio by dividing the amount of load reduced at peak demand by the total amount of demand, at the same time, of all residential customers who have responsive appliances or devices at their premises that reduce the electric consumption of the customers.

(d) A transmission and distribution utility required to provide an energy efficiency incentive program under Section 39.905 may use up to 10 percent of the budgeted spending for demand response programs on the programs described by Subsection (b)(9).

SECTION 6. The Public Utility Commission of Texas shall adopt rules as necessary for the adoption of a program to begin facilitating the widespread deployment of appliances and devices capable of being part of a demand response product or plan offered by a retail electric provider, as provided by Section 39.919(b)(6), Utilities Code, as added by this Act, before December 31, 2024.

SECTION 7. This Act takes effect September 1, 2023.

______________________________ ______________________________

President of the Senate Speaker of the House

I hereby certify that S.B. No. 1699 passed the Senate on April 12, 2023, by the following vote: Yeas 31, Nays 0; and that the Senate concurred in House amendments on May 28, 2023, by the following vote: Yeas 31, Nays 0.

______________________________ Secretary of the Senate

I hereby certify that S.B. No. 1699 passed the House, with amendments, on May 23, 2023, by the following vote: Yeas 145, Nays 0, one present not voting.

______________________________ Chief Clerk of the House

Approved:

______________________________

Date

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Governor