81R3776 TRH-D
By: Anchia H.B. No. 695
A BILL TO BE ENTITLED
AN ACT
relating to the establishment of a loan incentive program to
promote energy efficiency in apartment buildings.
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, 39.9051,
39.9052, 39.9054, 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, 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. Section 39.905(a), Utilities Code, is amended to
read as follows:
(a) It is the goal of the legislature that:
(1) electric utilities will administer energy
efficiency incentive programs in a market-neutral,
nondiscriminatory manner but will not offer underlying competitive
services;
(2) all customers, in all customer classes, will have
a choice of and access to energy efficiency alternatives and other
choices from the market that allow each customer to reduce energy
consumption, peak demand, or energy costs;
(3) each electric utility will provide, through
market-based standard offer programs, low-interest energy
efficiency improvement loan programs, or limited, targeted,
market-transformation programs, incentives sufficient for retail
electric providers and competitive energy service providers to
acquire additional cost-effective energy efficiency for
residential and commercial customers equivalent to at least:
(A) 10 percent of the electric utility's annual
growth in demand of residential and commercial customers by
December 31, 2007;
(B) 15 percent of the electric utility's annual
growth in demand of residential and commercial customers by
December 31, 2008, provided that the electric utility's program
expenditures for 2008 funding may not be greater than 75 percent
above the utility's program budget for 2007 for residential and
commercial customers, as included in the April 1, 2006, filing; and
(C) 20 percent of the electric utility's annual
growth in demand of residential and commercial customers by
December 31, 2009, provided that the electric utility's program
expenditures for 2009 funding may not be greater than 150 percent
above the utility's program budget for 2007 for residential and
commercial customers, as included in the April 1, 2006, filing;
(4) each electric utility in the ERCOT region shall
use its best efforts to encourage and facilitate the involvement of
the region's retail electric providers in the delivery of
efficiency programs and demand response programs under this
section;
(5) retail electric providers in the ERCOT region, and
electric utilities outside of the ERCOT region, shall provide
customers with energy efficiency educational materials; and
(6) notwithstanding Subsection (a)(3), electric
utilities shall continue to make available, at 2007 funding and
participation levels, any load management standard offer programs
developed for industrial customers and implemented prior to May 1,
2007.
SECTION 3. Subchapter Z, Chapter 39, Utilities Code, is
amended by adding Section 39.9054 to read as follows:
Sec. 39.9054. ENERGY EFFICIENCY IMPROVEMENT LOAN PROGRAM
FOR APARTMENT BUILDINGS. (a) As a means of accomplishing the goals
of Section 39.905, an electric utility may administer a
low-interest loan program to promote energy efficiency
improvements in apartment buildings. The commission shall adopt
rules and procedures for the loan programs. Commission rules must:
(1) establish the manner in which loans are repaid;
(2) establish an energy efficiency cost recovery
factor for ensuring timely and reasonable recovery of other costs
associated with loans made under this section to the extent the
costs are not recovered through interest payments;
(3) provide a mechanism for a utility that is unable to
establish an energy efficiency cost recovery factor in a timely
manner because of a rate freeze to:
(A) defer the other costs of a loan program under
this section; and
(B) recover those deferred costs through an
energy efficiency cost recovery factor on the expiration of the
rate freeze period;
(4) ensure that the other costs of loans provided
under this section are borne by the customer classes that receive
the benefits of loan proceeds; and
(5) encourage a utility to pass on the value of the
incentives to the end-use customer.
(b) The energy efficiency cost recovery factor under
Subsection (a) may not result in an over-recovery of costs but may
be adjusted each year to change rates to enable electric utilities
to match revenues against energy efficiency costs and any
incentives to which they are granted. The commission shall adjust
the factor to reflect any over-collection or under-collection of
energy efficiency cost recovery revenues in previous years.
(c) To be eligible for a loan under a program, an applicant
must:
(1) be an owner of an existing multi-unit apartment
building; and
(2) use the loan for installation of an appliance or
equipment designed to reduce demand for energy in the apartment
building or for a renovation or repair intended to reduce demand for
energy in the apartment building.
(d) The commission by rule shall specify:
(1) the types of appliances, equipment, renovations,
and repairs for which a loan may be made under the program; and
(2) the types of apartment buildings for which a loan
may be made under the program.
(e) The rules relating to repayment of loans must provide
that each loan be repaid:
(1) over a period determined by the commission:
(A) by a surcharge on the electricity bills of
the rental units improved through loan proceeds, if the building's
rental units are separately submetered and billed directly by a
utility provider;
(B) by a surcharge on the electricity bill of the
building's owner, if:
(i) the building's rental units are not
separately submetered or billed directly by a utility provider, and
the improvements are made to a specific unit; or
(ii) the improvements are made to a common
area of the building; or
(C) by a combination of surcharges on the
electricity bill of the building's owner and tenants of improved
units;
(2) according to a formula:
(A) based on the difference between total monthly
energy costs after improvements are made and the estimated monthly
energy costs if the improvements had not been made;
(B) that allocates loan repayment costs in a
submetered apartment building, or an apartment building that uses
central system utilities in which the building owner prorates
utility costs among tenants, only to those rental units that are
directly improved using loan proceeds;
(C) that allows the tenant of an improved unit in
a separately submetered apartment building, or the tenant of an
improved unit in an apartment building using central system
utilities in which the building owner prorates utility costs among
tenants, to realize at least 40 percent of the energy cost savings
computed in Paragraph (A); and
(D) that allows the owner of an apartment
building using central system utilities in which the owner does not
prorate utility costs among tenants to realize at least 40 percent
of the energy cost savings computed in Paragraph (A); and
(3) by periodic assessments against the recipient of
the loan, determined according to the amount owed and the
building's property tax valuation, if, before the loan is fully
repaid, the building is sold, is no longer leased to tenants, or is
destroyed.
(f) The loan repayment surcharge required by Subsection (e)
may not be charged to a tenant or building owner after a loan has
been repaid in full.
(g) The commission may establish the rate used to compute a
loan repayment surcharge.
SECTION 4. Not later than December 1, 2009, the Public
Utility Commission of Texas shall establish the energy efficiency
improvement loan program under Section 39.9054, Utilities Code, as
added by this Act, and the commission shall begin accepting
applications for loans under that program not later than January 1,
2010.
SECTION 5. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2009.