By: Fraser, Van de Putte S.B. No. 545
A BILL TO BE ENTITLED
AN ACT
relating to the creation of a distributed solar generation
incentive program and to encouraging the use of solar energy
devices.
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, [and] 39.914(e), and 39.9156, 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
Chapter 40 and 41, the provisions of this chapter control.
SECTION 2. Subchapter Z, Chapter 39, Utilities Code, is
amended by adding Section 39.9155 to read as follows:
Sec. 39.9155. DISTRIBUTED SOLAR GENERATION INCENTIVE
PROGRAM. (a) It is the goal of the legislature that electric
utilities administer incentive programs for residential and
commercial customers to increase the amount of distributed solar
generation, utility scale solar generation, and energy storage
installed within the state in a cost-effective, market-neutral, and
nondiscriminatory manner.
(b) The commission by rule shall:
(1) establish a distributed solar generation
incentive program, to be implemented by electric utilities;
(2) oversee the implementation of the program required
by Subdivision (1); and
(3) establish procedures to achieve the goal described
by Subsection (a).
(c) The rules adopted under Subsection (b) must include
provisions for:
(1) recovery of the cost of electric utility programs
authorized by this section through nonbypassable fees, which may
not exceed:
(A) 20 cents per month for residential customers;
(B) $2 per month for commercial customers; and
(C) $20 per month for industrial customers;
(2) rebates to customers to defray the cost of
installing distributed solar generation as provided by Subsection
(e);
(3) a requirement that customers within the Electric
Reliability Council of Texas who install distributed solar
generation will have the option to be equipped with an advanced
meter and appropriate procedures such that the customers have the
option to be settled on their real-time energy usage instead of a
load profile and receive the real-time energy price for net energy
exported to the grid by the customer;
(4) a requirement that:
(A) a retail electric provider offer service to a
retail electric service customer who has installed distributed
solar generation; and
(B) a retail electric provider that provides
service to a retail electric service customer who has installed
distributed solar generation:
(i) purchase the customer's surplus
electricity at a price equal to or greater than a fair market price
determined in accordance with this section; or
(ii) credit the customer's bill for the
billing cycling in which the customer's surplus electricity is
generated at a price equal to or greater than the equivalent of a
fair market price determined in accordance with this section and
allow any unused credit on the customer's bill to be carried forward
to subsequent billing cycles for the customer;
(5) appropriate net metering policies and retail rate
options for customers served by electric utilities outside the
Electric Reliability Council of Texas; and
(6) the utility scale solar and energy storage program
provided by Subsection (f).
(d) Electric utilities may not assess the fees authorized by
this section after the fifth anniversary of the date the program
required by this section is established by commission rule, except
as provided by Subsection (k). The commission shall ensure that all
fees collected under this section are used for the programs
authorized by this section, except that utilities may not use more
than 2.5 percent of the funds collected for administrative expenses
related to this section, as approved by the commission.
(e) The commission shall set a rebate amount for the
installation of solar generation. The commission shall
periodically adjust the rebate amount such that the quantity of
solar generation installed under this section is maximized, but
shall reduce rebate amounts by not less than five percent per year.
The commission may set a higher rebate amount for solar generation
manufactured wholly or substantially in this state, provided that
the higher amount is not more than 20 percent higher than the rebate
applicable to all other solar generation. The commission may
provide for rebates to be provided directly to customers or to
qualified installers of solar generation. Unless otherwise
adjusted by the commission, the initial rebates shall be:
(1) $2.40 per watt for installations on residential
buildings;
(2) $1.50 per watt for installations on commercial
buildings; and
(3) $1 per watt for installations at industrial
facilities.
(f) The commission may direct not more than 70 percent of
the funds collected by the fees authorized by this section to
utility scale solar generation if the commission determines such
projects are more cost-effective per megawatt installed than
distributed solar generation or will provide a greater benefit to
the reliability of the electric grid. The commission may establish
rebate amounts not to exceed $1 per watt for such projects or may
consider a competitive bidding process, a reverse auction, or other
methods to award funds in order to maximize the quantity of
generation installed under this section. If the demand for funds
under this section exceeds the available funds, the commission
shall consider the following in determining which projects receive
subsidies:
(1) projects that require the lowest amount per
megawatt installed of subsidy to be commercially viable;
(2) projects that use the transmission capacity built
under Section 39.904(g) and require minimal additional
transmission facilities;
(3) projects that enhance the reliability of the
transmission and distribution grid or defer the need for additional
transmission and distribution infrastructure;
(4) projects in development that can use rebates
awarded to secure additional financing for that project;
(5) projects that provide maximum output during
periods when electricity demand is highest in this state; and
(6) projects that can provide ancillary services to
the electric grid.
(g) The commission shall develop a "Made in Texas"
certification program for energy products that include distributed
solar generation. The commission shall post a list of energy
products that are wholly or substantially produced in Texas and
shall conduct education efforts to inform customers of the
availability of Texas-manufactured energy products. The
commission may partner or contract with third parties or nonprofit
organizations to achieve this goal.
(h) Notwithstanding any other provision of this title, a
retail electric provider or any other person may own distributed
generation and enter into a contract with the retail customer on
whose property the generation is located to lease the generation or
sell the output to the retail customer or to the customer's retail
electric provider. The owner of the generation is not an electric
utility and is not required to register with the commission as a
power generation company or self generator unless the commission
determines that such registration is necessary to maintain the
reliability of the distribution grid. The commission may establish
appropriate reporting and other requirements for distributed
generation owners to be eligible to earn renewable energy credits.
(i) The commission, in consultation with the Electric
Reliability Council of Texas, shall prepare and make available a
study indicating geographic areas where utility scale non-wind
renewable energy can be located with minimal additional
transmission facilities.
(j) Selection of projects by the commission under
Subsection (f) is not required to be conducted as a contested case
proceeding. The commission may appoint an advisory committee to
assist the commission in evaluating proposals made under Subsection
(f), provided, however, that members of the committee may not have a
financial interest in any of the proposals. After conclusion of a
process authorized by Subsection (f), the commission shall release
a complete record of the proposals and the evaluation of the factors
required to be considered under Subsection (f).
(k) The commission may extend the fees and program
authorized by this section for an additional five years if the
commission finds that a substantial amount of manufacturing of
solar generation products has located in Texas after the initial
five-year program and that the extension of the fees does not
present an undue burden to customers.
(l) The commission by rule shall provide a methodology for
determining a fair market value price for surplus electricity. The
fair market value may not be less than an amount equal to 80 percent
of the customer's applicable retail rate minus any nonbypassable
charges. The commission shall post on the commission's Internet
website the fair market value prices derived from the methodology
provided under this subsection.
(m) In an area in which customer choice has been introduced,
a retail electric provider shall pay an owner of distributed solar
generation for surplus electricity the local market clearing price
for energy at the time of day the surplus electricity is made
available to the grid or a price that is not less than the fair
market value price determined in accordance with the methodology
provided under Subsection (l).
(n) An owner of distributed solar generation is qualified to
be paid for surplus electricity under Subsection (m) only if the
owner's distributed solar generation:
(1) is installed on a residential retail electric
customer's side of the meter;
(2) has a generating capacity of not greater than 50
kilowatts; and
(3) is rated to produce an amount of electricity less
than or equal to the amount of electricity the residential retail
electric customer for whom the distributed solar generation is
installed is reasonably expected to consume.
(o) The commission by rule shall require a retail electric
provider that purchases a customer's surplus electricity to include
on each bill of the customer line items to inform the owner of:
(1) the amount of surplus electricity, in terms of
kilowatt hours;
(2) the price credited to the owner for each kilowatt
hour; and
(3) the amount of any credit for surplus electricity
applied or carried forward from the previous billing period.
(p) Until the commission provides the methodology under
Subsection (l) for determining a fair market value price, a retail
electric provider shall pay a price for surplus electricity that is
not less than five cents per kilowatt hour.
(q) If, at the time distributed solar generation is
installed on a retail electric customer's side of the meter, the
estimated annual amount of electric energy to be generated by the
distributed solar generation is less than or equal to the
customer's estimated annual electric energy consumption, the
commission may not consider the owner of distributed solar
generation to be a power generation company or require the owner of
distributed solar generation to register as a power generation
company.
(r) In this section:
(1) "Distributed solar generation" means distributed
renewable generation, as defined by Section 39.916, using solar
energy technology.
(2) "Owner of distributed solar generation" includes a
retail electric customer who contracts with another person to
install or maintain distributed solar generation on the customer's
side of the meter, regardless of whether the customer takes
ownership of the installed distributed solar generation.
(3) "Surplus electricity" means electricity generated
by distributed solar generation that is not consumed at the place
the distributed solar generation is installed but flows onto the
electric distribution system.
SECTION 3. Subchapter Z, Chapter 39, Utilities Code, is
amended by adding Section 39.9156 to read as follows:
Sec. 39.9156. SOLAR GENERATION INCENTIVE PROGRAMS. (a) It
is the goal of the legislature that:
(1) electric cooperatives and municipally owned
utilities administer incentive programs that increase the amount of
solar generation installed within the state in a cost-effective,
market-neutral, and nondiscriminatory manner;
(2) customers of electric cooperatives and
municipally owned utilities will have access to incentives for the
installation of distributed solar generation; and
(3) electric cooperatives and municipally owned
utilities expend funds to increase the amount of solar generation
and energy storage projects at a total funding level consistent
with the requirements for electric utilities in this state under
Sections 39.9155(c)(1) and (d).
(b) Beginning not later than September 1, 2012, a
municipally owned utility or electric cooperative must report
annually to the state energy conservation office, in a form and
manner determined by the office, information regarding the efforts
of the municipally owned utility or electric cooperative related to
this section.
(c) Nothing in this section shall be construed to prevent
the governing body of an electric cooperative or municipally owned
utility from adopting rules, programs, and incentives that
encourage or provide for the installation of more solar generation
capacity than the goals set forth in Section 39.9155 or the rules
adopted by the commission under that section.
(d) Funding for solar generation provided after May 1, 2007,
shall count toward compliance with this section.
(e) An electric cooperative or municipally owned utility may
recover the costs required by this section through a nonbypassable
fee consistent with that authorized by the commission for electric
utilities under Section 39.9155(c)(1) or such other cost recovery
mechanism as determined by the governing body of the electric
cooperative or municipally owned utility.
(f) This section applies only to an electric cooperative or
municipally owned utility with retail sales of more than 500,000
megawatt hours in 2007.
SECTION 4. Subchapter Z, Chapter 39, Utilities Code, is
amended by adding Section 39.929 to read as follows:
Sec. 39.929. INFORMATION ON INTERNET REGARDING PURCHASE OF
SURPLUS ELECTRICITY PRODUCED BY DISTRIBUTED SOLAR GENERATION.
(a) In this section:
(1) "Distributed solar generation" means distributed
renewable generation, as defined by Section 39.916, using solar
energy technology.
(2) "Owner of distributed solar generation" includes a
retail electric customer who contracts with another person to
install or maintain distributed solar generation on the customer's
side of the meter, regardless of whether the customer takes
ownership of the installed distributed solar generation.
(3) "Surplus electricity" means electricity generated
by distributed solar generation that is not consumed at the place
the distributed solar generation is installed but flows onto the
electric distribution system.
(b) On the Internet website found at
http://www.powertochoose.org, the commission shall provide for
access to easily comparable information regarding retail electric
providers' offers to owners of distributed solar generation for
their surplus electricity, including information regarding their
contract terms, for each retail electric provider using that
website.
(c) On the Internet website found at
http://www.powertochoose.org, the commission shall provide for
access to easily comparable information regarding offers of
renewable energy credit marketers to owners of distributed solar
generation, for each renewable energy credit marketer using that
website.
(d) The commission by rule shall require electric
utilities, electric cooperatives, and retail electric providers to
provide on publicly accessible Internet websites information on
purchase price offers per kilowatt hour for surplus electricity and
information instructing customers with distributed solar
generation on how to request and obtain the purchase rates offered.
SECTION 5. Chapter 202, Property Code, is amended by adding
Section 202.010 to read as follows:
Sec. 202.010. REGULATION OF SOLAR ENERGY DEVICES. (a) In
this section, "solar energy device" has the meaning assigned by
Section 171.107, Tax Code.
(b) Except as otherwise provided by this section, a property
owners' association may not include or enforce a provision in a
dedicatory instrument that prohibits or restricts a property owner
from installing a solar energy device.
(c) A provision that violates Subsection (b) is void.
(d) This section does not prohibit the inclusion or
enforcement of a provision in a dedicatory instrument that
prohibits a solar energy device that:
(1) as adjudicated by a court:
(A) threatens the public health or safety; or
(B) violates a law;
(2) is located on property owned or maintained by the
property owners' association;
(3) is located on property owned in common by the
members of the property owners' association; or
(4) is located in an area on the property owner's
property other than:
(A) on the roof of the home; or
(B) in a fenced yard or patio maintained by the
property owner.
SECTION 6. The heading to Subtitle F, Title 16, Property
Code, is amended to read as follows:
SUBTITLE F. REGULATION [INSPECTION] OF [NEW] RESIDENTIAL
CONSTRUCTION GENERALLY
SECTION 7. The heading to Chapter 446, Property Code, is
amended to read as follows:
CHAPTER 446. INSPECTION OF RESIDENTIAL CONSTRUCTION IN
UNINCORPORATED AREAS AND OTHER AREAS NOT SUBJECT TO MUNICIPAL
INSPECTIONS
SECTION 8. Subtitle F, Title 16, Property Code, is amended
by adding Chapter 447 to read as follows:
CHAPTER 447. REQUIREMENTS FOR NEW CONSTRUCTION CONTRACTS
Sec. 447.001. SOLAR PANEL OPTION REQUIRED IN CERTAIN
SUBDIVISIONS. (a) In this section, "solar energy device" means a
system or series of mechanisms designed primarily to provide
heating or cooling or to produce electrical or mechanical power by
collecting and transferring solar-generated energy. The term
includes a mechanical or chemical device that has the ability to
store solar-generated energy for use in heating or cooling or in the
production of power.
(b) This chapter applies only to a contract for construction
of a new home in a subdivision that contains more than 50 lots on
which the builder has built or is offering to build new homes.
(c) A builder who enters into a contract to which this
chapter applies shall offer the homebuyer an option to install a
solar energy device on the home for heating or cooling or for the
production of power.
SECTION 9. Subchapter D, Chapter 2305, Government Code, is
amended by adding Section 2305.0321 to read as follows:
Sec. 2305.0321. PILOT REVOLVING LOAN PROGRAM FOR SOLAR
ENERGY FOR SCHOOL BUILDINGS. (a) The energy office shall
establish a pilot program under the loanstar revolving loan program
to provide loans to pay the cost of installing photovoltaic solar
panels on public school buildings and the cost of associated energy
efficiency improvements to the buildings. The energy office shall
allocate to the pilot program at least $4 million from the funds
available to the loanstar revolving loan program.
(b) The energy office by rule shall establish the terms
under which a loan may be made under the pilot program, including
the interest rate for repayment of pilot program loans.
(c) Through the pilot program, the energy office shall offer
to each school district the opportunity to apply for a loan to pay
the cost of installing photovoltaic solar panels on at least one
school building of the school district's choice and the cost of
associated energy efficiency improvements to that building. The
energy office by rule shall establish a procedure for determining
which school districts qualify for a loan under the pilot program,
including rules for selecting the school districts that will
receive a loan if there is not sufficient money set aside for pilot
program improvements at all school districts.
(d) Each school district that receives a loan shall pay for
the principal of and interest on the loan for each school building
improvement primarily from the amount budgeted for the energy costs
of the school at which the solar panels are installed. The school
district may make additional payments of the principal of or
interest on a loan from money rebated to it as compensation for
electric energy generated by the solar panels or money received as a
gift or grant for the purpose of paying the loan.
(e) This section expires September 1, 2011, and the pilot
program established under this section is abolished on that date.
SECTION 10. The Public Utility Commission of Texas shall
adopt rules establishing the programs required under Section
39.9155, Utilities Code, as added by this Act, as soon as
practicable.
SECTION 11. Section 202.010, Property Code, as added by
this Act, applies to a deed restriction enacted before, on, or after
the effective date of this Act.
SECTION 12. Chapter 447, Property Code, as added by this
Act, applies only to a contract for new home construction entered
into on or after the effective date of this Act. A contract entered
into before the effective date of this Act is governed by the law in
effect immediately before the effective date of this Act, and that
law is continued in effect for that purpose.
SECTION 13. The state energy conservation office shall
establish a program under Section 2305.0321, Government Code, as
added by this Act, not later than January 1, 2010.
SECTION 14. 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.