Texas 2009 - 81st Regular

Texas Senate Bill SB545 Compare Versions

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1	1	81R34885 TJS-D
2	2	By: Fraser, et al. S.B. No. 545
3	3	Substitute the following for S.B. No. 545:
4	4	By: Crabb C.S.S.B. No. 545
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to the creation of a distributed and wholesale solar
10	10	generation incentive program and to encouraging the use of solar
11	11	energy devices.
12	12	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
13	13	SECTION 1. Section 39.002, Utilities Code, is amended to
14	14	read as follows:
15	15	Sec. 39.002. APPLICABILITY. This chapter, other than
16	16	Sections 39.155, 39.157(e), 39.203, 39.903, 39.904, 39.9051,
17	17	39.9052, [and] 39.914(e), and 39.9156, does not apply to a
18	18	municipally owned utility or an electric cooperative. Sections
19	19	39.157(e), 39.203, and 39.904, however, apply only to a municipally
20	20	owned utility or an electric cooperative that is offering customer
21	21	choice. If there is a conflict between the specific provisions of
22	22	this chapter and any other provisions of this title, except for
23	23	Chapters 40 and 41, the provisions of this chapter control.
24	24	SECTION 2. Subchapter Z, Chapter 39, Utilities Code, is
25	25	amended by adding Section 39.9155 to read as follows:
26	26	Sec. 39.9155. SOLAR GENERATION INCENTIVE PROGRAM. (a) In
27	27	this section:
28	28	(1) "Distributed solar generation" means distributed
29	29	renewable generation, as defined by Section 39.916, using solar
30	30	energy technology.
31	31	(2) "Owner of distributed solar generation" includes a
32	32	retail electric customer who contracts with another person to
33	33	install or maintain distributed solar generation on the customer's
34	34	side of the meter, regardless of whether the customer takes
35	35	ownership of the installed distributed solar generation.
36	36	(3) "Surplus electricity" means electricity generated
37	37	by distributed solar generation that is not consumed at the place
38	38	the distributed solar generation is installed but flows onto the
39	39	electric distribution system.
40	40	(b) It is the goal of the legislature that electric
41	41	utilities administer incentive programs for residential and
42	42	commercial customers to increase the amount of distributed solar
43	43	generation and wholesale solar generation installed within the
44	44	state in a cost-effective, market-neutral, and nondiscriminatory
45	45	manner, with a goal of installing at least 3,000 megawatts of solar
46	46	generation capacity in this state by 2020, at least 1,000 megawatts
47	47	of which must be distributed renewable generation. It is the intent
48	48	of the legislature that the incentive program be developed and
49	49	administered in a manner that, to the greatest extent practicable,
50	50	creates employment opportunities for residents of this state.
51	51	(c) The commission by rule shall:
52	52	(1) establish a solar generation incentive program, to
53	53	be implemented by electric utilities;
54	54	(2) oversee the implementation of the program required
55	55	by Subdivision (1);
56	56	(3) establish procedures to achieve the goal described
57	57	by Subsection (b); and
58	58	(4) provide for:
59	59	(A) deferral of the costs of complying with the
60	60	requirements of this section by a utility that is unable to
61	61	implement the nonbypassable fees allowed by Subsection (d)(1)
62	62	because of a rate freeze; and
63	63	(B) recovery of the costs on expiration of the
64	64	rate freeze.
65	65	(d) The rules adopted under Subsection (c) must include
66	66	provisions for:
67	67	(1) recovery of the cost of electric utility programs
68	68	authorized by this section through nonbypassable fees of:
69	69	(A) $0.000650 per kilowatt hour for each
70	70	residential or commercial customer meter; and
71	71	(B) $40 per month for each industrial customer
72	72	meter;
73	73	(2) rebates to defray the cost of installing solar
74	74	generation as provided by Subsection (f);
75	75	(3) the wholesale solar provisions described by
76	76	Subsection (g); and
77	77	(4) eliminating the incentives provided by this
78	78	subsection on the date the goals established by Subsection (b) are
79	79	achieved.
80	80	(e) Except as provided by Subsection (l), electric
81	81	utilities may not assess the fees authorized by this section after
82	82	the fifth anniversary of the date the program required by this
83	83	section is established by commission rule. The commission shall
84	84	ensure that all fees collected under this section are used for the
85	85	programs authorized by this section, except that utilities may not
86	86	use more than 2.5 percent of the fees collected for administrative
87	87	expenses related to this section, as approved by the commission.
88	88	(f) The commission shall set rebate amounts for the
89	89	installation of solar generation. The commission shall
90	90	periodically adjust the rebate amounts such that the quantity of
91	91	solar generation installed under this section is maximized, but
92	92	shall reduce rebate amounts by not less than five percent per year.
93	93	To the extent allowed by law, the commission shall set a higher
94	94	rebate amount for solar generation manufactured wholly or
95	95	substantially in this state, provided that the higher amount is not
96	96	more than 20 percent higher than the rebate applicable to all other
97	97	solar generation. The commission may provide for rebates to be
98	98	provided directly to customers or to qualified installers of solar
99	99	generation. Unless otherwise adjusted by the commission, the
100	100	initial rebate amounts are:
101	101	(1) $2.40 per watt for installation of distributed
102	102	renewable generation with a capacity of not more than 10 kilowatts;
103	103	(2) $1.50 per watt for installation of distributed
104	104	renewable generation with a capacity of more than 10 but not more
105	105	than 2,000 kilowatts; and
106	106	(3) $1 per watt for installation of wholesale or
107	107	industrial generation.
108	108	(g) If the demand for rebates under this section for
109	109	wholesale generation exceeds the money available for those
110	110	installations, the commission shall consider the following in
111	111	determining which projects receive rebates:
112	112	(1) projects that require the lowest amount per
113	113	megawatt installed of subsidy to be commercially viable;
114	114	(2) projects that use the transmission capacity built
115	115	under Section 39.904(g) and require minimal additional
116	116	transmission facilities;
117	117	(3) projects that enhance the reliability of the
118	118	transmission and distribution grid or defer the need for additional
119	119	transmission and distribution infrastructure;
120	120	(4) projects in development that can use rebates
121	121	awarded to secure additional financing for that project;
122	122	(5) projects that provide maximum output during
123	123	periods when electricity demand is highest in this state;
124	124	(6) projects that can provide ancillary services to
125	125	the electric grid;
126	126	(7) projects with the potential to improve ambient air
127	127	quality in areas designated by the United States Environmental
128	128	Protection Agency as nonattainment areas under Section 107(d) of
129	129	the federal Clean Air Act (42 U.S.C. Section 7407); and
130	130	(8) projects with the potential to place this state in
131	131	a leadership position for emerging solar technology research or
132	132	development.
133	133	(h) For the first 24 months of the program, the commission
134	134	shall reserve 25 percent of the rebates available for installation
135	135	of distributed renewable generation for use by public school
136	136	districts in this state. The interested districts must obtain
137	137	funding for the balance of the installation cost not later than 90
138	138	days after filing an application with the commission. If the 25
139	139	percent reservation provided under this subsection is fully used
140	140	before the expiration of the 24-month period, the commission may
141	141	continue to reserve for an additional 24 months 25 percent of the
142	142	available rebates.
143	143	(i) Notwithstanding any other provision of this title, a
144	144	retail electric provider or any other person may own distributed
145	145	solar generation and enter into a contract with the retail customer
146	146	on whose property the generation is located to lease the generation
147	147	or sell the output to the retail customer or to the customer's
148	148	retail electric provider. The owner of the generation is not an
149	149	electric utility and is not required to register with the
150	150	commission as a power generation company or self generator unless
151	151	the commission determines that such registration is necessary to
152	152	maintain the reliability of the distribution grid. The commission
153	153	may establish appropriate reporting requirements for trading
154	154	renewable energy credits. An area of this state in which a
155	155	distributed renewable generation owner sells output as provided by
156	156	this subsection is not for that reason considered an area in which
157	157	customer choice has been introduced. Not more than 25 percent of
158	158	the annual program budget may be allocated to rebates awarded to
159	159	retail electric providers for distributed renewable generation
160	160	installed on retail customers' property as described by this
161	161	subsection.
162	162	(j) The commission, in consultation with the Electric
163	163	Reliability Council of Texas, shall prepare and make available a
164	164	study indicating geographic areas where utility scale non-wind
165	165	renewable energy can be located with minimal additional
166	166	transmission facilities.
167	167	(k) Selection of projects by the commission under
168	168	Subsection (g) is not required to be conducted as a contested case
169	169	proceeding. The commission may appoint an advisory committee to
170	170	assist the commission in evaluating proposals made under Subsection
171	171	(g), provided, however, that members of the committee may not have a
172	172	financial interest in any of the proposals. After conclusion of a
173	173	process authorized by Subsection (g), the commission shall release
174	174	a complete record of the proposals and the evaluation of the factors
175	175	required to be considered under Subsection (g).
176	176	(l) The commission may extend the fees and program
177	177	authorized by this section for an additional five years if the
178	178	commission finds that a substantial amount of manufacturing of
179	179	solar generation products has located in Texas after the initial
180	180	five-year program and that the extension of the fees does not
181	181	present an undue burden to customers.
182	182	(m) Notwithstanding any other law, this section applies to
183	183	every electric utility in this state.
184	184	SECTION 3. Subchapter Z, Chapter 39, Utilities Code, is
185	185	amended by adding Section 39.9156 to read as follows:
186	186	Sec. 39.9156. SOLAR GENERATION INCENTIVE PROGRAMS. (a) It
187	187	is the goal of the legislature that:
188	188	(1) electric cooperatives and municipally owned
189	189	utilities administer incentive programs that increase the amount of
190	190	solar generation installed in this state in a cost-effective,
191	191	market-neutral, and nondiscriminatory manner;
192	192	(2) customers of electric cooperatives and
193	193	municipally owned utilities will have access to incentives for the
194	194	installation of distributed solar generation; and
195	195	(3) electric cooperatives and municipally owned
196	196	utilities expend funds to increase the amount of solar generation
197	197	at a total funding level consistent with the requirements for
198	198	electric utilities in this state under Sections 39.9155(d)(1) and
199	199	(e).
200	200	(b) This section applies only to an electric cooperative or
201	201	municipally owned utility with retail sales of more than 500,000
202	202	megawatt hours in 2007.
203	203	(c) Beginning not later than September 1, 2012, a
204	204	municipally owned utility or electric cooperative must report
205	205	annually to the state energy conservation office, in a form and
206	206	manner determined by the office, information regarding the efforts
207	207	of the municipally owned utility or electric cooperative related to
208	208	this section.
209	209	(d) This section does not prevent the governing body of an
210	210	electric cooperative or municipally owned utility from adopting
211	211	rules, programs, and incentives to encourage or provide for the
212	212	installation of more solar generation capacity than the goals
213	213	established by Section 39.9155 or rules adopted under that section.
214	214	(e) An electric cooperative or municipally owned utility
215	215	may recover the costs required by this section through a
216	216	nonbypassable fee consistent with that authorized by the commission
217	217	for electric utilities under Section 39.9155(d)(1) or another cost
218	218	recovery mechanism as determined by the governing body of the
219	219	electric cooperative or municipally owned utility.
220	220	SECTION 4. Chapter 202, Property Code, is amended by adding
221	221	Section 202.010 to read as follows:
222	222	Sec. 202.010. REGULATION OF SOLAR ENERGY DEVICES. (a) In
223	223	this section, "solar energy device" has the meaning assigned by
224	224	Section 171.107, Tax Code.
225	225	(b) Except as otherwise provided by this section, a property
226	226	owners' association may not include or enforce a provision in a
227	227	dedicatory instrument that prohibits or restricts a property owner
228	228	from installing a solar energy device.
229	229	(c) A provision that violates Subsection (b) is void.
230	230	(d) This section does not prohibit the inclusion or
231	231	enforcement of a provision in a dedicatory instrument that
232	232	prohibits a solar energy device that:
233	233	(1) threatens the public health or safety;
234	234	(2) violates a law;
235	235	(3) is located on property owned or maintained by the
236	236	property owners' association;
237	237	(4) is located on property owned in common by the
238	238	members of the property owners' association;
239	239	(5) is located in an area on the property owner's
240	240	property other than:
241	241	(A) on the roof of the home; or
242	242	(B) in a fenced yard or patio maintained by the
243	243	property owner; or
244	244	(6) is mounted on a device that is taller or more
245	245	visually obtrusive than is necessary for the solar energy device to
246	246	operate at not less than 90 percent of its rated efficiency.
247	247	SECTION 5. The heading to Subtitle F, Title 16, Property
248	248	Code, is amended to read as follows:
249	249	SUBTITLE F. REGULATION [INSPECTION] OF [NEW] RESIDENTIAL
250	250	CONSTRUCTION GENERALLY
251	251	SECTION 6. The heading to Chapter 446, Property Code, is
252	252	amended to read as follows:
253	253	CHAPTER 446. INSPECTION OF RESIDENTIAL CONSTRUCTION IN
254	254	UNINCORPORATED AREAS AND OTHER AREAS NOT SUBJECT TO MUNICIPAL
255	255	INSPECTIONS
256	256	SECTION 7. Subtitle F, Title 16, Property Code, is amended
257	257	by adding Chapter 447 to read as follows:
258	258	CHAPTER 447. REQUIREMENTS FOR NEW CONSTRUCTION CONTRACTS
259	259	Sec. 447.001. SOLAR PANEL OPTION REQUIRED IN CERTAIN
260	260	SUBDIVISIONS. (a) In this section, "solar energy device" means a
261	261	system or series of mechanisms designed primarily to provide
262	262	heating or cooling or to produce electrical or mechanical power by
263	263	collecting and transferring solar-generated energy. The term
264	264	includes a mechanical or chemical device that has the ability to
265	265	store solar-generated energy for use in heating or cooling or in the
266	266	production of power.
267	267	(b) This chapter applies only to a contract for construction
268	268	of a new home in a subdivision that contains more than 50 lots on
269	269	which the builder has built or is offering to build new homes.
270	270	(c) A builder who enters into a contract to which this
271	271	chapter applies shall offer the homebuyer at least one plan in the
272	272	subdivision on which the homebuyer may purchase an option to
273	273	install a solar energy device on the home for heating or cooling or
274	274	for the production of power.
275	275	SECTION 8. Subchapter D, Chapter 2305, Government Code, is
276	276	amended by adding Section 2305.0321 to read as follows:
277	277	Sec. 2305.0321. REVOLVING LOAN PROGRAM FOR SOLAR ENERGY
278	278	IMPROVEMENTS. (a) The energy office shall establish a revolving
279	279	loan program patterned after the loanstar revolving loan program to
280	280	provide loans to pay the costs of installing photovoltaic solar
281	281	panels on and associated energy efficiency improvements to public
282	282	school buildings and buildings owned by religious organizations.
283	283	The energy office shall allocate to the program at least $75 million
284	284	from money available under the American Recovery and Reinvestment
285	285	Act of 2009 (Pub. L. No. 111-5), subject to federal approval of the
286	286	use of that money for the purposes of the program.
287	287	(b) The energy office by rule shall establish the terms
288	288	under which a loan may be made under the program, including the
289	289	interest rate for repayment of program loans. A program loan must
290	290	be paid over a 15-year term.
291	291	(c) Through the program, the energy office shall offer to
292	292	each school district the opportunity to apply for a loan to pay the
293	293	cost of installing photovoltaic solar panels on at least one school
294	294	building of the school district's choice and the cost of associated
295	295	energy efficiency improvements to that building.
296	296	(d) The energy office by rule shall establish a procedure
297	297	for determining which school district buildings or religious
298	298	organization buildings qualify for a program loan.
299	299	(e) Each school district that receives a program loan shall
300	300	pay for the principal of and interest on the loan primarily from the
301	301	amount budgeted for the energy costs of the school at which the
302	302	improvements are installed. The school district may make
303	303	additional payments of the principal of or interest on a program
304	304	loan from money rebated to it as compensation for electric energy
305	305	generated by the solar panels or money received as a gift or grant
306	306	for the purpose of paying the loan.
307	307	(f) In this section, "religious organization" means a
308	308	synagogue, mosque, church, or other institution:
309	309	(1) the purpose of which is the propagation of
310	310	religious beliefs; and
311	311	(2) that is exempt from federal income tax under
312	312	Section 501(a) of the Internal Revenue Code of 1986 (26 U.S.C.
313	313	Section 501(a)) by being listed under Section 501(c) of that code
314	314	(26 U.S.C. Section 501(c)).
315	315	SECTION 9. The Public Utility Commission of Texas shall
316	316	adopt rules establishing the programs required under Sections
317	317	39.9155 and 39.9156, Utilities Code, as added by this Act, as soon
318	318	as practicable.
319	319	SECTION 10. Section 202.010, Property Code, as added by
320	320	this Act, applies to a deed restriction enacted before, on, or after
321	321	the effective date of this Act.
322	322	SECTION 11. Chapter 447, Property Code, as added by this
323	323	Act, applies only to a contract for new home construction entered
324	324	into on or after the effective date of this Act. A contract entered
325	325	into before the effective date of this Act is governed by the law in
326	326	effect immediately before the effective date of this Act, and that
327	327	law is continued in effect for that purpose.
328	328	SECTION 12. The state energy conservation office shall
329	329	establish a program under Section 2305.0321, Government Code, as
330	330	added by this Act, not later than January 1, 2010.
331	331	SECTION 13. This Act takes effect immediately if it
332	332	receives a vote of two-thirds of all the members elected to each
333	333	house, as provided by Section 39, Article III, Texas Constitution.
334	334	If this Act does not receive the vote necessary for immediate
335	335	effect, this Act takes effect September 1, 2009.