By: Ogden S.B. No. 2349
A BILL TO BE ENTITLED
AN ACT
relating to distributed generation of electric power by natural gas
powered generation facilities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 31.002, Utilities Code, is amended by
adding Subdivision (4-a) and amending Subdivision (10) to read as
follows:
(4-a) "Distributed natural gas generation facility"
means a facility installed on the customer's side of the meter that
is used for the generation of not more than 2,000 kilowatts of
electricity.
(10) "Power generation company" means a person,
including a person who owns or operates a distributed natural gas
generation facility, that:
(A) generates electricity that is intended to be
sold at wholesale;
(B) does not own a transmission or distribution
facility in this state other than an essential interconnecting
facility, a facility not dedicated to public use, or a facility
otherwise excluded from the definition of "electric utility" under
this section; and
(C) does not have a certificated service area,
although its affiliated electric utility or transmission and
distribution utility may have a certificated service area.
SECTION 2. The heading to Subchapter B, Chapter 35,
Utilities Code, is amended to read as follows:
SUBCHAPTER B. EXEMPT WHOLESALE GENERATORS, DISTRIBUTED NATURAL GAS
GENERATION FACILITIES, AND POWER MARKETERS
SECTION 3. Subchapter B, Chapter 35, Utilities Code, is
amended by adding Section 35.036 to read as follows:
Sec. 35.036. DISTRIBUTED NATURAL GAS GENERATION
FACILITIES. (a)(1) A person who owns or operates a distributed
natural gas generation facility may sell electric power generated
by the facility.
(2) The electric utility, electric cooperative, or
retail electric provider that provides retail electricity service
to the facility may purchase electric power tendered to it by the
owner or operator of the facility at a value agreed to by the
electric utility, electric cooperative, or retail electric
provider and the owner or operator of the facility, which may
include a value based on the clearing price of energy at the time of
day and location that the electricity is made available to the
electric grid.
(3) At the request of the owner or operator of the
facility, the electric utility or electric cooperative shall allow
the owner or operator of the facility to use the transmission and
distribution facilities to transmit the electric power to another
entity that is acceptable to the owner or operator in accordance
with commission rules or a tariff approved by the Federal Energy
Regulatory Commission.
(b) If the owner or operator of a distributed natural gas
generation facility requests to be interconnected to an electric
utility or electric cooperative that does not have a transmission
tariff approved by the Federal Energy Regulatory Commission, the
electric utility or electric cooperative may recover from the owner
or operator of the facility the reasonable costs of interconnecting
the facility with the electric utility or electric cooperative that
are necessary for and directly attributable to the interconnection
of the facility. If the rated capacity of the distributed natural
gas generation exceeds the capacity of the electric utility or
electric cooperative and the owner or operator of the facility
requests that such an electric utility or electric cooperative make
upgrades to accommodate the distributed natural generation
capacity, the electric utility or electric cooperative may recover
from the owner or operator of the facility the reasonable cost of
electric facility upgrades and improvements that are necessary for
and directly attributable to the requested accommodation of the
distributed natural gas generation capacity.
(c) In order to recover costs under Subsection (b), an
electric utility or electric cooperative must have provided a
good-faith cost estimate in writing to the owner or operator of the
distributed natural gas generation facility and the owner or
operator must have, prior to the incurring of any cost by the
electric utility or electric cooperative, agreed in writing to pay
the reasonable and necessary cost of interconnection or capacity
accommodation requested by the owner or operator and described in
the cost estimate. If an electric utility or electric cooperative
seeks to recover from the owner or operator of the facility an
amount that exceeds the good-faith estimate by more than five
percent and the owner or operator of the facility disputes the
amount that exceeds the good-faith estimate, the commission shall
resolve the dispute at the request of the owner or operator of the
facility.
(d) A distributed natural gas generation facility must
comply with emissions limitations established by the Texas
Commission on Environmental Quality for a standard emissions permit
for an electric generation facility unit installed after January 1,
1995.
SECTION 4. Subsection (c), Section 39.351, Utilities Code,
is amended to read as follows:
(c) The commission may establish simplified filing
requirements for distributed natural gas generation facilities [A
power generation company may register any time after September 1,
2000].
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.