Texas 2009 - 81st Regular

Texas Senate Bill SB541 Compare Versions

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1	1	By: Watson, et al. S.B. No. 541
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	relating to renewable energy and to incentives for Texas renewable
7	7	energy jobs and manufacturing.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. The purpose of this Act is to continue Texas'
10	10	leadership in installing clean, renewable energy in Texas in a
11	11	market-based manner that drives manufacturing jobs and provides
12	12	price protection for businesses and consumers.
13	13	SECTION 2. Section 39.002, Utilities Code, is amended to
14	14	read as follows:
15	15	Sec. 39.002. APPLICABILITY. Except as provided by this
16	16	section, this [This] chapter, other than Sections 39.155,
17	17	39.157(e), 39.203, 39.903, 39.904, 39.9051, 39.9052, and
18	18	39.914(e), does not apply to a municipally owned utility or an
19	19	electric cooperative. Sections 39.157(e), 39.203, and 39.904[,
20	20	however,] apply only to a municipally owned utility or an electric
21	21	cooperative that is offering customer choice. Section 39.9041
22	22	applies to a municipally owned utility. If there is a conflict
23	23	between the specific provisions of this chapter and any other
24	24	provisions of this title, except for Chapters 40 and 41, the
25	25	provisions of this chapter control.
26	26	SECTION 3. Section 39.904, Utilities Code, is amended by
27	27	amending Subsections (a), (b), (c), (d), (n), and (o), and adding
28	28	Subsections (a-1), (c-1), (c-2), (c-3), (n-1), and (p) to read as
29	29	follows:
30	30	(a) It is the intent of the legislature that by January 1,
31	31	2015, an additional 5,000 megawatts of generating capacity from
32	32	tier 1 renewable energy technologies will have been installed in
33	33	this state. The cumulative installed renewable capacity in this
34	34	state shall total 5,880 megawatts by January 1, 2015, and the
35	35	commission shall establish a target of 10,000 megawatts of
36	36	installed renewable capacity by January 1, 2025. The cumulative
37	37	installed tier 1 renewable capacity in this state shall total 2,280
38	38	megawatts by January 1, 2007, 3,272 megawatts by January 1, 2009,
39	39	4,264 megawatts by January 1, 2011, 5,256 megawatts by January 1,
40	40	2013, and 5,880 megawatts by January 1, 2015. [Of the renewable
41	41	energy technology generating capacity installed to meet the goal of
42	42	this subsection after September 1, 2005, the commission shall
43	43	establish a target of having at least 500 megawatts of capacity from
44	44	a renewable energy technology other than a source using wind
45	45	energy.]
46	46	(a-1) It is the goal of the legislature that by January 1,
47	47	2020, an additional 1,500 megawatts of tier 2 renewable energy will
48	48	have been installed in this state. Of the renewable energy
49	49	generating capacity installed to meet the goal of this subsection,
50	50	up to 500 megawatts of renewable energy storage may qualify to meet
51	51	the tier 2 goal. The cumulative installed tier 2 renewable energy
52	52	resource capacity in this state shall total 50 megawatts by January
53	53	1, 2011; 100 megawatts by January 1, 2012; 200 megawatts by January
54	54	1, 2013; 350 megawatts by January 1, 2014; 500 megawatts by January
55	55	1, 2015; 750 megawatts by January 1, 2016; 900 megawatts by January
56	56	1, 2017; 1,000 megawatts by January 1, 2018; 1,250 megawatts by
57	57	January 1, 2019; and 1,500 megawatts by January 1, 2020. On January
58	58	1, 2016, if the commission determines the state has not made
59	59	significant progress toward the goals of this subsection, then the
60	60	commission may take action to suspend future obligations under this
61	61	subsection.
62	62	(b) The commission shall establish a tier 1 renewable energy
63	63	credits trading program and a tier 2 renewable energy credits
64	64	trading program. Any retail electric provider, municipally owned
65	65	utility, or electric cooperative that does not satisfy the
66	66	requirements of Subsection (a) by directly owning or purchasing
67	67	capacity using renewable energy technologies shall purchase
68	68	sufficient renewable energy credits to satisfy the requirements by
69	69	holding renewable energy credits in lieu of capacity from renewable
70	70	energy technologies. In calculating capacity factors for tier 2
71	71	renewable energy credits, the commission shall encourage a diverse
72	72	portfolio of tier 2 renewable energy technologies.
73	73	(c) Not later than January 1, 2000, the commission shall
74	74	adopt rules necessary to administer and enforce this section. At a
75	75	minimum, the rules shall:
76	76	(1) establish the minimum annual renewable energy
77	77	requirement for each retail electric provider, municipally owned
78	78	utility, and electric cooperative operating in this state in a
79	79	manner reasonably calculated by the commission to produce, on a
80	80	statewide basis, compliance with the requirement prescribed by
81	81	Subsections (a) and (a-1) [Subsection (a)]; and
82	82	(2) specify reasonable performance standards that all
83	83	renewable capacity additions must meet to count against the
84	84	requirement prescribed by Subsections (a) and (a-1) [Subsection
85	85	(a)] and that:
86	86	(A) are designed and operated so as to maximize
87	87	the energy output from the capacity additions in accordance with
88	88	then-current industry standards; and
89	89	(B) encourage the development, construction, and
90	90	operation of new renewable energy projects at those sites in this
91	91	state that have the greatest economic potential for capture and
92	92	development of this state's environmentally beneficial renewable
93	93	resources.
94	94	(c-1) Not later than January 1, 2011, the commission shall
95	95	adopt rules necessary to provide a "Made in Texas" incentive for
96	96	tier 1 and tier 2 renewable energy credits generated by generation
97	97	equipment that is wholly produced or substantially transformed by a
98	98	Texas workforce, as determined by the commission. The incentive
99	99	under this subsection shall be available for the first three years
100	100	after the renewable energy equipment first produces electricity on
101	101	a commercial basis.
102	102	(c-2) Not later than January 1, 2010, the commission shall
103	103	adopt rules necessary to track and account for renewable energy
104	104	credits earned from electric generating capacity derived from
105	105	renewable energy storage. The rules shall:
106	106	(1) allow for the renewable energy storage to be
107	107	located on the same or on a different site as the renewable
108	108	generation being stored;
109	109	(2) ensure that only one renewable energy credit is
110	110	retired for every megawatt hour of renewable energy generated prior
111	111	to being stored for later release onto the electricity grid; and
112	112	(3) account for any loss in energy resulting from
113	113	storage for later use.
114	114	(c-3) Not later than January 1, 2010, the commission shall
115	115	adopt rules necessary to allow generators of tier 2 renewable
116	116	energy installed before September 1, 1999, to qualify annually for
117	117	not more than 40 megawatts of tier 2 renewable energy credits.
118	118	(d) For purposes of [In] this section:
119	119	(1) "Tier 1 renewable energy technology" [, "renewable
120	120	energy technology"] means any technology that exclusively relies on
121	121	an energy source that is naturally regenerated over a short time and
122	122	derived directly from the sun, indirectly from the sun, or from
123	123	moving water or other natural movements and mechanisms of the
124	124	environment. Renewable energy technologies include those that rely
125	125	on energy derived directly from the sun, on wind, geothermal,
126	126	hydroelectric, wave, or tidal energy, or on biomass or
127	127	biomass-based waste products, including landfill gas. A renewable
128	128	energy technology does not rely on energy resources derived from
129	129	fossil fuels, waste products from fossil fuels, or waste products
130	130	from inorganic sources.
131	131	(2) "Tier 2 renewable energy" means tier 1 renewable
132	132	energy technology excluding energy derived from wind with a
133	133	capacity of more than 150 kilowatts.
134	134	(3) "Renewable energy storage" means energy storage
135	135	technology that stores for later release energy derived from tier 1
136	136	or tier 2 renewable energy.
137	137	(n) Notwithstanding any other provision of law, the
138	138	commission shall have the authority to cap the price of renewable
139	139	energy credits and may suspend the goal contained in Subsections
140	140	(a) and (a-1) [Subsection (a)] if such suspension is necessary to
141	141	protect the reliability and operation of the grid.
142	142	(n-1) If the commission determines that complying with the
143	143	goals of Subsection (a-1) and a federal renewable portfolio
144	144	standard that is more stringent than those goals would cause an
145	145	undue burden to ratepayers in this state, the commission may
146	146	suspend any requirement relating to meeting those goals.
147	147	(o) The commission may establish tier 1 and tier 2 [an]
148	148	alternative compliance payments [payment]. An entity that has a
149	149	renewable energy purchase requirement under this section may elect
150	150	to pay the alternative compliance payment instead of applying
151	151	renewable energy credits toward the satisfaction of the entity's
152	152	obligation under this section. [The commission may establish a
153	153	separate alternative compliance payment for the goal of 500
154	154	megawatts of capacity from renewable energy technologies other than
155	155	wind energy.] The tier 1 alternative compliance payment for a
156	156	renewable energy purchase requirement that could be satisfied with
157	157	a renewable energy credit from wind energy may not be less than
158	158	$2.50 per credit or greater than $20 per credit. Prior to September
159	159	1, 2009, an alternative compliance payment under this subsection
160	160	may not be set above $5 per credit. The tier 2 alternative
161	161	compliance payment that could be satisfied with a tier 2 renewable
162	162	energy credit shall not exceed $90 per renewable energy credit
163	163	before December 31, 2014; $80 per renewable energy credit before
164	164	December 31, 2015; $65 per renewable energy credit before December
165	165	31, 2016; $45 per renewable energy credit before December 31, 2017;
166	166	$40 per renewable energy credit before December 31, 2018; $35 per
167	167	renewable energy credit before December 31, 2019; $30 per renewable
168	168	energy credit before December 31, 2020. In implementing this
169	169	subsection, the commission shall consider:
170	170	(1) the effect of renewable energy credit prices on
171	171	retail competition;
172	172	(2) the effect of renewable energy credit prices on
173	173	electric rates;
174	174	(3) the effect of the alternative compliance payment
175	175	level on the renewable energy credit market; and
176	176	(4) any other factors necessary to ensure the
177	177	continued development of the renewable energy industry in this
178	178	state while protecting ratepayers from unnecessary rate increases.
179	179	(p) If the commission suspends the tier 2 renewable energy
180	180	goal under Subsection (a-1), all alternative compliance payment
181	181	funds collected shall be refunded by the retail electric providers
182	182	under the guidance of the commission to the residential and
183	183	commercial electric customers covered by this subchapter. If the
184	184	commission does not suspend the tier 2 renewable energy goal under
185	185	Subsection (a-1), the alternative compliance payment funds
186	186	collected by the commission shall be used for the purpose of a solar
187	187	rebate program established by the commission.
188	188	SECTION 4. Subchapter Z, Chapter 39, Utilities Code, is
189	189	amended by adding Section 39.9041 to read as follows:
190	190	Sec. 39.9041. RENEWABLE ENERGY FOR MUNICIPALLY OWNED
191	191	UTILITIES. (a) It is the goal of the legislature that municipally
192	192	owned utilities:
193	193	(1) increase the installed capacity in this state from
194	194	tier 2 renewable energy or from renewable energy storage in a
195	195	cost-effective, market neutral, and nondiscriminatory manner; and
196	196	(2) install capacity from tier 2 renewable energy or
197	197	from renewable energy storage in proportion to and at a level
198	198	consistent with the requirements for electric utilities under
199	199	Section 39.904(a-1).
200	200	(b) This section applies only to a municipally owned utility
201	201	with retail sales of more than 500,000 megawatt hours for the year
202	202	beginning January 1, 2007.
203	203	(c) Beginning not later than September 1, 2012, a
204	204	municipally owned utility annually shall report to the State Energy
205	205	Conservation Office, in a form determined by the office,
206	206	information regarding the efforts of the utility under this
207	207	section.
208	208	(d) This section does not prevent the governing body of a
209	209	municipally owned utility from adopting rules, programs, and
210	210	incentives that encourage or provide for the installation of
211	211	capacity from tier 2 renewable energy or renewable energy storage
212	212	in addition to the goals in Section 39.904(a-1).
213	213	(e) The commission shall count capacity from tier 2
214	214	renewable energy or renewable energy storage installed on or after
215	215	May 1, 2007, toward a municipally owned utility's compliance with
216	216	this section.
217	217	(f) A municipally owned utility may satisfy the
218	218	requirements of this section:
219	219	(1) by owning or purchasing capacity from tier 2
220	220	renewable energy or renewable energy storage; or
221	221	(2) by purchasing renewable energy credits in lieu of
222	222	capacity from tier 2 renewable energy technologies.
223	223	SECTION 5. This Act takes effect September 1, 2009.