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A BILL TO BE ENTITLED
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AN ACT
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relating to electric market payments for and an exemption from |
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sales and use taxes for customer-sited distributed generation. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter H, Chapter 151, Tax Code, is amended |
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by adding Section 151.360 to read as follows: |
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Sec. 151.360. CERTAIN STANDBY ELECTRIC POWER DEVICES. |
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(a) In this section, "standby electric power device" means a |
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non-portable device capable of supplying electric power to the |
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structure or facility at which it is permanently installed in the |
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event of a power grid outage. |
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(b) A device that has a rated capacity to supply less than |
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200 kilowatts that is purchased with the intent that it be |
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permanently installed and connected to the main electrical panel of |
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a structure or facility by a manual or automatic transfer switch for |
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use as a standby electric power device is exempt from the taxes |
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imposed by this chapter. |
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(c) The comptroller by rule shall prescribe the manner by |
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which a person who purchases a standby electric power device must |
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establish that the person is entitled to the exemption provided by |
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this section. |
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SECTION 2. Subchapter Z, Chapter 39, Utilities Code, is |
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amended by adding Section 39.9166 to read as follows: |
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Sec. 39.9166. AGGREGATED DISTRIBUTED GENERATION FACILITY |
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PROGRAM FOR DISPATCHABLE GENERATION. (a) In this section, |
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"customer-sited backup generation facility" means a distributed |
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generation facility in the ERCOT power region that is installed on a |
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retail electric customer's side of the meter: |
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(1) with a nameplate capacity of not more than 10 |
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megawatts; |
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(2) that is capable of generating and providing backup |
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or supplementary power to the customer's premises and the power |
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grid; and |
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(3) that is capable of being dispatched by the |
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independent organization certified under Section 39.151 for the |
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ERCOT power region. |
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(b) This section does not apply to: |
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(1) a distributed natural gas generation facility |
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operated by a power generation company; or |
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(2) a distributed generation facility to which Section |
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35.037 applies. |
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(c) The commission shall establish an ancillary service |
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program to allow a retail electric provider, a municipally owned |
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utility that has not adopted customer choice, or an electric |
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cooperative that has not adopted customer choice to aggregate |
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customer-sited backup generation facilities to provide |
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dispatchable generation during a power grid outage if the |
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participation of the facilities in such a program is |
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technologically feasible. |
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(d) A retail electric provider, municipally owned utility, |
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or electric cooperative participating in the program shall provide |
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to the independent organization certified under Section 39.151 for |
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the ERCOT power region information about the facilities that the |
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independent organization determines is necessary for maintaining |
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system reliability. |
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(e) A customer that participates in the program is not |
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required to register as a power generation company solely because |
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of the person's participation in the program. |
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(f) The program may allow participating customers to sell |
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electric energy produced by customer-sited backup generation |
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facilities at: |
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(1) a value based on the clearing price of energy at |
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the time of day and at the location at which the electricity is |
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generated, including electric energy consumed on customer |
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premises; or |
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(2) another value as determined by the commission or |
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the independent organization certified under Section 39.151 for the |
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ERCOT power region. |
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(g) The sale may be applied as a credit to the customer's |
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account during a billing period that may be carried over to |
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subsequent billing periods until the credit has been redeemed. |
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(h) This section expires September 1, 2035. |
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SECTION 3. Section 151.360, Tax Code, as added by this Act, |
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does not affect tax liability accruing before the effective date of |
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this Act. That liability continues in effect as if Section 151.360, |
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Tax Code, had not been enacted, and the former law is continued in |
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effect for the collection of taxes due and for civil and criminal |
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enforcement of the liability for those taxes. |
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SECTION 4. This Act takes effect September 1, 2025. |