88R27525 JXC-D
 
  By: Schwertner S.B. No. 2627
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to funding mechanisms to support the construction,
  maintenance, and modernization of dispatchable electric generating
  facilities.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  This Act may be cited as the Powering Texas
  Forward Act.
         SECTION 2.  Subtitle B, Title 2, Utilities Code, is amended
  by adding Chapter 34 to read as follows:
  CHAPTER 34.  GENERATING FACILITY FUNDING
         Sec. 34.0101.  DEFINITIONS. In this chapter:
               (1)  "Advisory committee" means the Texas Energy Fund
  Advisory Committee.
               (2)  "Fund" means the Texas energy fund established by
  Section 49-q, Article III, Texas Constitution.
               (3)  "Trust company" means the Texas Treasury
  Safekeeping Trust Company.
         Sec. 34.0102.  FUND. (a)  The fund is a special fund in the
  state treasury outside the general revenue fund to be administered
  and used by the commission for the purposes authorized by this
  chapter.  The commission may establish separate accounts in the
  fund.
         (b)  The fund and the fund's accounts are kept and held by the
  trust company for and in the name of the commission.
         (c)  Money deposited to the credit of the fund may be used
  only as provided by this chapter.
         (d)  The fund consists of:
               (1)  money appropriated, credited, transferred, or
  deposited to the credit of the fund by or as authorized by law,
  including money from any source transferred or deposited to the
  credit of the fund at the commission's discretion;
               (2)  revenue that the legislature by statute dedicates
  for deposit to the credit of the fund;
               (3)  investment earnings and interest earned on money
  in the fund; and
               (4)  gifts, grants, and donations contributed to the
  fund.
         Sec. 34.0103.  LOANS FOR MAINTENANCE AND MODERNIZATION. (a)
  The commission may use money in the fund without further
  appropriation to provide loans to finance maintenance or
  modernization of dispatchable electric generating facilities
  operating in the ERCOT power region. For the purposes of this
  section, a generating facility is considered to be dispatchable if
  the facility's output can be controlled primarily by forces under
  human control.
         (b)  The commission shall give priority to loan applications
  under this section that the commission determines will provide the
  highest ratio of dispatchable megawatts maintained to project
  costs.
         (c)  The commission shall evaluate an application for a loan
  under this section based on the applicant's:
               (1)  efforts and achievements in conserving resources;
               (2)  quality of services;
               (3)  efficiency of operations;
               (4)  quality of management;
               (5)  proposed improvement in availability of the
  generation facility for which the loan is requested; and
               (6)  previous Texas energy fund loan history, with a
  preference toward entities that have not applied for or been
  granted a loan previously.
         (d)  The commission may provide a loan under this section
  only for maintenance or modernization of a facility that has a
  generation capacity of at least 10 megawatts and is capable of
  operating for at least five years after the date the loan is
  received.
         (e)  Proceeds of a loan received under this section may not
  be used for:
               (1)  compliance with weatherization standards adopted
  before December 1, 2023;
               (2)  debt payments; or 
               (3)  expenses not related to maintaining or modernizing
  the electric generating facility. 
         (f)  An electric utility may not receive a loan under this
  section. 
         (g)  The commission may require immediate repayment of a loan
  issued under this section if the recipient of the loan stops
  operating the facility for which the loan was received before the
  fifth anniversary of the date on which the loan was disbursed.
         (h)  A loan provided under this section:
               (1)  must have a term of five years; and
               (2)  must bear an interest rate of zero percent.
         (i)  Information submitted to the commission in an
  application for a loan under this section is confidential and not
  subject to disclosure under Chapter 552, Government Code.
         Sec. 34.0104.  LOANS FOR CONSTRUCTION. (a) The commission
  may use money in the fund without further appropriation to provide
  loans to finance the construction of dispatchable electric
  generating facilities providing power for the ERCOT power region.
  For the purposes of this section, a generating facility is
  considered to be dispatchable if the facility's output can be
  controlled primarily by forces under human control.  An electric
  energy storage facility is not eligible for a loan under this
  section.
         (b)  The commission may provide a loan under this section
  only:
               (1)  for construction of a facility that will have a
  generation capacity of at least 10 megawatts the construction of
  which does not begin before September 1, 2023; and
               (2)  in an amount that does not exceed 75 percent of the
  estimated cost of the facility to be constructed.
         (c)  The commission shall evaluate an application for a loan
  under this section based on regional and reliability needs in the
  ERCOT power region and:
               (1)  the applicant's:
                     (A)  efforts and achievements in conserving
  resources;
                     (B)  quality of services and management;
                     (C)  efficiency of operations;
                     (D)  history of electricity generation operations
  in this country; and
                     (E)  previous Texas energy fund loan history, with
  a preference toward entities that have not applied for or been
  granted a loan previously; and
               (2)  the generation capacity and estimated
  construction costs of the facility for which the loan is requested.
         (d)  Outstanding loans provided under this section may not
  support the construction of more than 10,000 megawatts of
  generation capacity.
         (e)  An electric utility may not receive a loan under this
  section.
         (f)  A loan provided under this section:
               (1)  must have a term of 20 years; and
               (2)  must bear an interest rate of zero percent.
         (g)  The commission shall require each recipient of a loan
  under this section to deposit in an escrow account held by the
  comptroller an amount of money equal to five percent of the
  estimated cost of constructing the facility for which the loan is
  provided. The deposit must be made before the loan funds are
  disbursed. The loan recipient may not withdraw the deposit unless
  authorized by the commission. The commission:
               (1)  shall authorize the loan recipient to withdraw the
  deposit from the escrow account if the facility for which the loan
  was provided is interconnected in the ERCOT power region before the
  third anniversary of the date the loan funds were disbursed; or
               (2)  after the third anniversary of the date the loan
  funds were disbursed, may authorize the loan recipient to withdraw
  the deposit from the escrow account if the facility for which the
  loan was provided is interconnected in the ERCOT power region not
  later than the fourth anniversary of the date the loan funds were
  disbursed and the commission determines that extenuating
  circumstances justify the delay in completion.
         (h)  The comptroller shall deposit to the credit of the fund
  any escrow funds described by Subsection (g) that the commission
  may not authorize to be withdrawn by a loan recipient.
         (i)  Information submitted to the commission in an
  application for a loan under this section is confidential and not
  subject to disclosure under Chapter 552, Government Code.
         (j)  This section expires September 1, 2050.
         Sec. 34.0105.  COMPLETION BONUS. (a)  The commission shall
  provide, using money available in the fund for the purpose without
  further appropriation, a completion bonus grant for the
  construction of dispatchable electric generating facilities in the
  ERCOT power region. For the purposes of this section, a generating
  facility is considered to be dispatchable if the facility's output
  can be controlled primarily by forces under human control. An
  electric energy storage facility is not eligible for a grant under
  this section.
         (b)  The amount of a grant under this section must be based on
  the megawatts of capacity provided to the ERCOT power region by the
  facility. 
         (c)  The commission shall provide a grant under this section
  only for a facility the construction of which begins before
  December 1, 2024, and is interconnected in the ERCOT power region
  not later than:
               (1)  the third anniversary of the date on which the
  construction began; or
               (2)  the fourth anniversary of the date on which the
  construction began if the commission determines that extenuating
  circumstances justify the delay in completion.
         (d)  Information submitted to the commission in an
  application for a grant under this section is confidential and not
  subject to disclosure under Chapter 552, Government Code.
         Sec. 34.0106.  MANAGEMENT AND INVESTMENT OF FUND. (a) The
  trust company shall hold the fund, and any accounts established in
  the fund, for and in the name of the commission, taking into account
  the purposes for which money in the fund may be used. The fund may
  be invested with the state treasury pool and comingled with other
  investments.
         (b)  The overall objective for the investment of the fund is
  to maintain sufficient liquidity to meet the needs of the fund while
  striving to preserve the purchasing power of the fund.
         (c)  In managing the assets of the fund, the trust company
  may acquire, exchange, sell, supervise, manage, or retain any kind
  of investment that a prudent investor, exercising reasonable care,
  skill, and caution, would acquire or retain in light of the
  purposes, terms, distribution requirements, and other
  circumstances of the fund then prevailing, taking into
  consideration the investment of all the assets of the fund rather
  than a single investment.
         (d)  The reasonable expenses of managing the fund's assets
  shall be paid from the fund.
         (e)  The trust company annually shall provide a written
  report to the commission and to the advisory committee with respect
  to the investment of the fund.
         (f)  The trust company shall adopt a written investment
  policy that is appropriate for the fund. The trust company shall
  present the investment policy to the investment advisory board
  established under Section 404.028, Government Code. The investment
  advisory board shall submit to the trust company recommendations
  regarding the policy.
         (g)  The commission annually shall provide to the trust
  company a forecast of the cash flows into and out of the fund. The
  commission shall provide updates to the forecasts as appropriate to
  ensure that the trust company is able to achieve the objective
  specified by Subsection (b).
         (h)  The trust company shall disburse money from the fund as
  directed by the commission.
         Sec. 34.0107.  RECEIVERSHIP OF DEFAULT GENERATING FACILITY.
  (a) In this section, "default" means:
               (1)  default in payment of the principal of or interest
  on a loan; or
               (2)  a failure to perform any of the terms of a loan.
         (b)  The state, including the commission, the advisory
  committee, and the trust company, may not retain an ownership
  interest in a project or facility for which a loan is provided under
  this chapter.
         (c)  In the event of a default on a loan made under this
  chapter, at the request of the commission, the attorney general
  shall bring suit in a district court in Travis County for the
  appointment of a receiver to collect the assets and carry on the
  business of a loan recipient if the action is necessary to cure a
  default by the recipient.
         (d)  The court shall vest a receiver appointed by the court
  with any power or duty the court finds necessary to cure the
  default, including the power or duty to:
               (1)  perform audits;
               (2)  direct ongoing operation of the assets;
               (3)  fund reserve accounts;
               (4)  make payments of the principal of or interest on
  bonds, securities, or other obligations; and
               (5)  take any other action necessary to prevent or to
  remedy the default, including the sale of assets.
         (e)  The receiver shall execute a bond in an amount to be set
  by the court to ensure the proper performance of the receiver's
  duties.
         (f)  After appointment and execution of bond, the receiver
  shall take possession of the books, records, accounts, and assets
  of the defaulting loan recipient specified by the court. Until
  discharged by the court, the receiver shall perform the duties that
  the court directs and shall strictly observe the final order
  involved. 
         (g)  On a showing of good cause by the defaulting loan
  recipient, the court may dissolve the receivership.
         Sec. 34.0108.  TEXAS ENERGY FUND ADVISORY COMMITTEE. (a)
  The advisory committee is composed of the following six members:
               (1)  three members of the senate appointed by the
  lieutenant governor, including:
                     (A)  a member of the committee of the senate
  having primary jurisdiction over matters relating to the generation
  of electricity; and
                     (B)  a member of the committee of the senate
  having primary jurisdiction over finance; and
               (2)  three members of the house of representatives
  appointed by the speaker of the house of representatives,
  including:
                     (A)  a member of the committee of the house of
  representatives having primary jurisdiction over the generation of
  electricity; and
                     (B)  a member of the committee of the house of
  representatives having primary jurisdiction over finance.
         (b)  A member of the advisory committee serves at the will of
  the person who appointed the member.
         (c)  The lieutenant governor shall appoint a co-presiding
  officer of the advisory committee from among the members appointed
  by the lieutenant governor. The speaker of the house of
  representatives shall appoint a co-presiding officer of the
  advisory committee from among the members appointed by the speaker.
         (d)  The advisory committee may hold public hearings, formal
  meetings, and work sessions. Either co-presiding officer of the
  advisory committee may call a public hearing, formal meeting, or
  work session of the advisory committee at any time. The advisory
  committee may not take formal action at a public hearing, formal
  meeting, or work session unless a quorum of the committee is
  present.
         (e)  Except as otherwise provided by this subsection, a
  member of the advisory committee is not entitled to receive
  compensation for service on the committee or reimbursement for
  expenses incurred in the performance of official duties as a member
  of the committee. Service on the advisory committee by a member of
  the senate or house of representatives is considered legislative
  service for which the member is entitled to reimbursement and other
  benefits in the same manner and to the same extent as for other
  legislative service.
         (f)  The advisory committee:
               (1)  may provide comments and recommendations to the
  commission for the commission to use in adopting rules regarding
  the use of the fund or on any other matter; and
               (2)  shall review the overall operation, function, and
  structure of the fund at least semiannually.
         (g)  The advisory committee may adopt rules, procedures, and
  policies as needed to administer this section and implement its
  responsibilities.
         (h)  Chapter 2110, Government Code, does not apply to the
  size, composition, or duration of the advisory committee.
         (i)  The advisory committee is subject to Chapter 325,
  Government Code (Texas Sunset Act). Unless continued in existence
  as provided by that chapter, the advisory committee is abolished
  September 1, 2035.
         Sec. 34.0109.  RULES. (a)  The commission by rule may
  establish procedures for:
               (1)  the application for and award of a loan under this
  chapter; and
               (2)  the administration of the fund.
         (b)  The commission shall give full consideration to
  comments and recommendations of the advisory committee before the
  commission adopts rules under this chapter.
         SECTION 3.  Section 35.005, Utilities Code, is amended by
  adding Subsections (d), (e), and (f) to read as follows:
         (d)  The independent organization certified under Section
  39.151 for the ERCOT power region shall work with electric
  utilities to ensure that each facility for which a loan or grant is
  provided under Chapter 34 is fully interconnected in the ERCOT
  power region not later than the date the facility is ready for
  commercial operation. The independent organization certified under
  Section 39.151 for the ERCOT power region shall give priority to
  interconnecting each facility for which a loan or grant is provided
  under Chapter 34.  An electric utility that enters into an
  interconnection agreement for a facility for which a loan or grant
  is provided under Chapter 34 shall give priority to interconnecting
  the facility and complete construction of any other facilities
  necessary to interconnect the facility not later than the date the
  facility is ready for commercial operation.
         (e)  If the commission receives an application under Chapter
  37 for a certificate of convenience and necessity related to
  facilities necessary to interconnect a facility for which a loan or
  grant is provided under Chapter 34 and does not approve the
  application before the 90th day after the date the commission
  received the application, the deadline established by Subsection
  (d) is extended one day for each day after the 90th day in which the
  commission does not approve the application.
         (f)  The commission may extend the deadline established by
  Subsection (d) after notice, hearing, and a determination on a
  showing of good cause that fully interconnecting the facility
  before the deadline is not feasible.
         SECTION 4.  Not later than December 31, 2023, the Public
  Utility Commission of Texas shall accept loan applications for
  loans authorized by Chapter 34, Utilities Code, as added by this
  Act, approve or deny each loan application, and disburse loan funds
  for each approved applicant.
         SECTION 5.  This Act takes effect on the date on which the
  constitutional amendment proposed by the 88th Legislature, Regular
  Session, 2023, providing for the creation of the Texas energy fund
  and the authorization of other funding mechanisms to support the
  construction, maintenance, and modernization of electric
  generating facilities takes effect.  If that amendment is not
  approved by the voters, this Act has no effect.