81R9438 TRH-F
By: Swinford H.B. No. 2520
A BILL TO BE ENTITLED
AN ACT
relating to the state's goal for electric generating capacity
derived from emerging renewable energy resources.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 39.002, Utilities Code, is amended to
read as follows:
Sec. 39.002. APPLICABILITY. This chapter, other than
Sections 39.155, 39.157(e), 39.203, 39.903, 39.904, 39.9041,
39.9051, 39.9052, and 39.914(e), does not apply to a municipally
owned utility or an electric cooperative. Sections 39.157(e),
39.203, [and] 39.904, and 39.9041, however, apply only to a
municipally owned utility or an electric cooperative that is
offering customer choice. If there is a conflict between the
specific provisions of this chapter and any other provisions of
this title, except for Chapters 40 and 41, the provisions of this
chapter control.
SECTION 2. Sections 39.904(a) and (o), Utilities Code, are
amended to read as follows:
(a) It is the intent of the legislature that by January 1,
2015, an additional 5,000 megawatts of generating capacity from
renewable energy technologies will have been installed in this
state. The cumulative installed renewable capacity in this state
shall total 5,880 megawatts by January 1, 2015, and the commission
shall establish a target of 10,000 megawatts of installed renewable
capacity by January 1, 2025. The cumulative installed renewable
capacity in this state shall total 2,280 megawatts by January 1,
2007, 3,272 megawatts by January 1, 2009, 4,264 megawatts by
January 1, 2011, 5,256 megawatts by January 1, 2013, and 5,880
megawatts by January 1, 2015. [Of the renewable energy technology
generating capacity installed to meet the goal of this subsection
after September 1, 2005, the commission shall establish a target of
having at least 500 megawatts of capacity from a renewable energy
technology other than a source using wind energy.]
(o) The commission may establish an alternative compliance
payment. An entity that has a renewable energy purchase
requirement under this section may elect to pay the alternative
compliance payment instead of applying renewable energy credits
toward the satisfaction of the entity's obligation under this
section. [The commission may establish a separate alternative
compliance payment for the goal of 500 megawatts of capacity from
renewable energy technologies other than wind energy.] The
alternative compliance payment for a renewable energy purchase
requirement that could be satisfied with a renewable energy credit
from wind energy may not be less than $2.50 per credit or greater
than $20 per credit. Prior to September 1, 2009, an alternative
compliance payment under this subsection may not be set above $5 per
credit. In implementing this subsection, the commission shall
consider:
(1) the effect of renewable energy credit prices on
retail competition;
(2) the effect of renewable energy credit prices on
electric rates;
(3) the effect of the alternative compliance payment
level on the renewable energy credit market; and
(4) any other factors necessary to ensure the
continued development of the renewable energy industry in this
state while protecting ratepayers from unnecessary rate increases.
SECTION 3. Subchapter Z, Chapter 39, Utilities Code, is
amended by adding Section 39.9041 to read as follows:
Sec. 39.9041. GOAL FOR EMERGING RENEWABLE ENERGY RESOURCES.
(a) In this section:
(1) "Emerging renewable energy resource" means a
facility that produces energy derived from a renewable energy
technology, including generation offset technology, other than a
wind generation facility that produces more than 10 megawatts of
capacity.
(2) "Generation offset technology" means any
renewable energy technology that reduces the demand for electricity
at a site where a customer consumes electricity.
(3) "New emerging renewable energy resource" means a
facility first placed into service on or after September 1, 2009.
(4) "Renewable energy resource" means a facility that
produces energy derived from a renewable energy technology.
(5) "Renewable energy technology" has the meaning
assigned by Section 39.904.
(b) It is the intent of the legislature that by January 1,
2020, an additional 3,000 megawatts of generating capacity from
emerging renewable energy resources will have been installed in
this state. The cumulative installed new emerging renewable energy
resource generating capacity in this state shall total 150
megawatts by January 1, 2011, 300 megawatts by January 1, 2012, 450
megawatts by January 1, 2013, 600 megawatts by January 1, 2014, 900
megawatts by January 1, 2015, 1,200 megawatts by January 1, 2016,
1,500 megawatts by January 1, 2017, 1,800 megawatts by January 1,
2018, 2,400 megawatts by January 1, 2019, and 3,000 megawatts by
January 1, 2020.
(c) Not later than January 1, 2010, in addition to the
renewable energy credits trading program established by Section
39.904(b) or any other renewable energy credits trading program
established by the commission, the commission shall establish an
emerging renewable energy credits trading program. Any retail
electric provider, investor-owned electric utility operating
solely outside of ERCOT, municipally owned utility, or electric
cooperative that does not satisfy the requirements of Subsection
(b) by directly owning or purchasing new emerging renewable energy
resource generating capacity shall purchase sufficient emerging
renewable energy credits to satisfy the requirements by holding
emerging renewable energy credits in lieu of emerging renewable
energy resource generating capacity.
(d) Not later than January 1, 2010, the commission shall
adopt rules necessary to administer and enforce this section. At a
minimum, the rules shall:
(1) establish the minimum annual new emerging
renewable energy resource requirement for each retail electric
provider, investor-owned utility operating solely outside of
ERCOT, municipally owned utility, and electric cooperative
operating in this state in a manner reasonably calculated by the
commission to produce, on a statewide basis, compliance with the
requirement prescribed by Subsection (b);
(2) specify reasonable performance standards that all
new emerging renewable energy resource generating capacity
additions must meet to count against the requirement prescribed by
Subsection (b) and that:
(A) are designed and operated so as to maximize
the energy output from the capacity additions in accordance with
then-current industry standards; and
(B) encourage the development, construction, and
operation of new emerging renewable energy resource generating
capacity at those sites in this state that have the greatest
economic potential for capture and development of this state's
environmentally beneficial renewable resources;
(3) treat all renewable energy technologies equally;
and
(4) provide that installed new emerging renewable
energy resource generating capacity that receives emerging
renewable energy credits under Subsection (c) may not also receive
renewable energy credits under the program established by Section
39.904(b) or any other renewable energy credit program established
by the commission.
(e) A municipally owned utility operating a gas
distribution system may credit toward satisfaction of the
requirements of this section any production or acquisition of
landfill gas supplied to the gas distribution system, based on
conversion to kilowatt hours of the thermal energy content in
British thermal units of the emerging renewable energy resource and
using for the conversion factor the annual heat rate of the most
efficient gas-fired unit of the combined utility's electric system
as measured in British thermal units per kilowatt hour and using the
British thermal unit measurement based on the higher heating value
measurement.
(f) A municipally owned utility operating a gas
distribution system may credit toward satisfaction of the
requirements of this section any production or acquisition of
landfill gas supplied to the gas distribution system, based on
conversion to kilowatt hours of the thermal energy content in
British thermal units of the renewable energy resource and using
for the conversion factor the systemwide average heat rate of the
gas-fired units of the combined utility's electric system as
measured in British thermal units per kilowatt hour.
(g) The commission may adopt rules requiring installed
emerging renewable energy resource generating capacity to have
reactive power control capabilities or any other feasible
technology designed to reduce the resources' effects on system
reliability.
(h) An emerging renewable energy credit required for
purposes other than to meet the requirements of Subsection (d)(1)
may not affect the minimum annual renewable energy requirement
under Subsection (d)(1) for a retail electric provider,
investor-owned electric utility operating solely outside of ERCOT,
municipally owned utility, or electric cooperative.
(i) The commission shall reduce the requirement under
Subsection (d)(1) for a retail electric provider, investor-owned
utility operating solely outside of ERCOT, municipally owned
utility, or electric cooperative that is subject to an emerging
renewable energy requirement under this section and that serves a
customer receiving electric service at transmission-level voltage
if, before any year for which the commission calculates emerging
renewable energy requirements under Subsection (d)(1), the
customer notifies the commission in writing that the customer
chooses not to support the goal for emerging renewable energy
technology generation under this section for that year. The
commission shall exclude from the calculation of the applicable
requirement under Subsection (d)(1) energy sold by the retail
electric provider, investor-owned utility operating solely outside
of ERCOT, municipally owned utility, or electric cooperative at
transmission-level voltage to customers who have submitted the
notice to the commission under this subsection for the applicable
year.
(j) The commission shall determine the reporting
requirements and schedule necessary to implement Subsections (h)
and (i).
(k) Subsections (g), (h), and (i) do not affect the goals
established by Subsection (b) or reduce the minimum statewide
emerging renewable energy requirements of Subsection (d)(1).
(l) Notwithstanding any other provision of law, the
commission shall have the authority to cap the price of emerging
renewable energy credits and may suspend the goal contained in
Subsection (b) if such suspension is necessary to protect the
reliability and operation of the grid.
(m) The commission shall establish an alternative
compliance payment. An entity that has a new emerging renewable
energy resource capacity requirement under this section may elect
to pay the alternative compliance payment instead of applying
renewable energy credits toward the satisfaction of the entity's
obligation under this section. The alternative compliance payment
for an emerging renewable energy capacity requirement that could be
satisfied with an emerging renewable energy credit shall not be
more than the equivalent of 9 cents per kilowatt hour or $90 per
emerging renewable energy credit. The commission may allow an
entity that has an emerging renewable energy capacity requirement
under this section to pay the alternative compliance payment into a
social service fund that benefits the energy needs of low-income
retail electric customers. In implementing this subsection, the
commission shall consider:
(1) the effect of emerging renewable energy credit
prices on retail competition;
(2) the effect of emerging renewable energy credit
prices on electric rates;
(3) the effect of the alternative compliance payment
level on the renewable energy credit market;
(4) any federal legislation requiring the use of
renewable energy or renewable energy credits; and
(5) any other factors necessary to ensure the
continued development of the renewable energy industry in this
state while protecting ratepayers from unnecessary rate increases.
(n) This section expires on the third anniversary of the
date the commission determines that the final megawatt goal under
Subsection (b) has been reached.
SECTION 4. This Act takes effect September 1, 2009.