81R34885 TJS-D
By: Fraser, et al. S.B. No. 545
Substitute the following for S.B. No. 545:
By: Crabb C.S.S.B. No. 545
A BILL TO BE ENTITLED
AN ACT
relating to the creation of a distributed and wholesale 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
Chapters 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. SOLAR GENERATION INCENTIVE PROGRAM. (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) 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 and wholesale solar generation installed within the
state in a cost-effective, market-neutral, and nondiscriminatory
manner, with a goal of installing at least 3,000 megawatts of solar
generation capacity in this state by 2020, at least 1,000 megawatts
of which must be distributed renewable generation. It is the intent
of the legislature that the incentive program be developed and
administered in a manner that, to the greatest extent practicable,
creates employment opportunities for residents of this state.
(c) The commission by rule shall:
(1) establish a solar generation incentive program, to
be implemented by electric utilities;
(2) oversee the implementation of the program required
by Subdivision (1);
(3) establish procedures to achieve the goal described
by Subsection (b); and
(4) provide for:
(A) deferral of the costs of complying with the
requirements of this section by a utility that is unable to
implement the nonbypassable fees allowed by Subsection (d)(1)
because of a rate freeze; and
(B) recovery of the costs on expiration of the
rate freeze.
(d) The rules adopted under Subsection (c) must include
provisions for:
(1) recovery of the cost of electric utility programs
authorized by this section through nonbypassable fees of:
(A) $0.000650 per kilowatt hour for each
residential or commercial customer meter; and
(B) $40 per month for each industrial customer
meter;
(2) rebates to defray the cost of installing solar
generation as provided by Subsection (f);
(3) the wholesale solar provisions described by
Subsection (g); and
(4) eliminating the incentives provided by this
subsection on the date the goals established by Subsection (b) are
achieved.
(e) Except as provided by Subsection (l), 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. 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 fees collected for administrative
expenses related to this section, as approved by the commission.
(f) The commission shall set rebate amounts for the
installation of solar generation. The commission shall
periodically adjust the rebate amounts 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.
To the extent allowed by law, the commission shall 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 rebate amounts are:
(1) $2.40 per watt for installation of distributed
renewable generation with a capacity of not more than 10 kilowatts;
(2) $1.50 per watt for installation of distributed
renewable generation with a capacity of more than 10 but not more
than 2,000 kilowatts; and
(3) $1 per watt for installation of wholesale or
industrial generation.
(g) If the demand for rebates under this section for
wholesale generation exceeds the money available for those
installations, the commission shall consider the following in
determining which projects receive rebates:
(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;
(6) projects that can provide ancillary services to
the electric grid;
(7) projects with the potential to improve ambient air
quality in areas designated by the United States Environmental
Protection Agency as nonattainment areas under Section 107(d) of
the federal Clean Air Act (42 U.S.C. Section 7407); and
(8) projects with the potential to place this state in
a leadership position for emerging solar technology research or
development.
(h) For the first 24 months of the program, the commission
shall reserve 25 percent of the rebates available for installation
of distributed renewable generation for use by public school
districts in this state. The interested districts must obtain
funding for the balance of the installation cost not later than 90
days after filing an application with the commission. If the 25
percent reservation provided under this subsection is fully used
before the expiration of the 24-month period, the commission may
continue to reserve for an additional 24 months 25 percent of the
available rebates.
(i) Notwithstanding any other provision of this title, a
retail electric provider or any other person may own distributed
solar 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 requirements for trading
renewable energy credits. An area of this state in which a
distributed renewable generation owner sells output as provided by
this subsection is not for that reason considered an area in which
customer choice has been introduced. Not more than 25 percent of
the annual program budget may be allocated to rebates awarded to
retail electric providers for distributed renewable generation
installed on retail customers' property as described by this
subsection.
(j) 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.
(k) Selection of projects by the commission under
Subsection (g) 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
(g), 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 (g), the commission shall release
a complete record of the proposals and the evaluation of the factors
required to be considered under Subsection (g).
(l) 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.
(m) Notwithstanding any other law, this section applies to
every electric utility in this state.
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 in this 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
at a total funding level consistent with the requirements for
electric utilities in this state under Sections 39.9155(d)(1) and
(e).
(b) This section applies only to an electric cooperative or
municipally owned utility with retail sales of more than 500,000
megawatt hours in 2007.
(c) 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.
(d) This section does not prevent the governing body of an
electric cooperative or municipally owned utility from adopting
rules, programs, and incentives to encourage or provide for the
installation of more solar generation capacity than the goals
established by Section 39.9155 or rules adopted under that 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(d)(1) or another cost
recovery mechanism as determined by the governing body of the
electric cooperative or municipally owned utility.
SECTION 4. 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) threatens the public health or safety;
(2) violates a law;
(3) is located on property owned or maintained by the
property owners' association;
(4) is located on property owned in common by the
members of the property owners' association;
(5) 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; or
(6) is mounted on a device that is taller or more
visually obtrusive than is necessary for the solar energy device to
operate at not less than 90 percent of its rated efficiency.
SECTION 5. 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 6. 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 7. 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 at least one plan in the
subdivision on which the homebuyer may purchase an option to
install a solar energy device on the home for heating or cooling or
for the production of power.
SECTION 8. Subchapter D, Chapter 2305, Government Code, is
amended by adding Section 2305.0321 to read as follows:
Sec. 2305.0321. REVOLVING LOAN PROGRAM FOR SOLAR ENERGY
IMPROVEMENTS. (a) The energy office shall establish a revolving
loan program patterned after the loanstar revolving loan program to
provide loans to pay the costs of installing photovoltaic solar
panels on and associated energy efficiency improvements to public
school buildings and buildings owned by religious organizations.
The energy office shall allocate to the program at least $75 million
from money available under the American Recovery and Reinvestment
Act of 2009 (Pub. L. No. 111-5), subject to federal approval of the
use of that money for the purposes of the program.
(b) The energy office by rule shall establish the terms
under which a loan may be made under the program, including the
interest rate for repayment of program loans. A program loan must
be paid over a 15-year term.
(c) Through the 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.
(d) The energy office by rule shall establish a procedure
for determining which school district buildings or religious
organization buildings qualify for a program loan.
(e) Each school district that receives a program loan shall
pay for the principal of and interest on the loan primarily from the
amount budgeted for the energy costs of the school at which the
improvements are installed. The school district may make
additional payments of the principal of or interest on a program
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.
(f) In this section, "religious organization" means a
synagogue, mosque, church, or other institution:
(1) the purpose of which is the propagation of
religious beliefs; and
(2) that is exempt from federal income tax under
Section 501(a) of the Internal Revenue Code of 1986 (26 U.S.C.
Section 501(a)) by being listed under Section 501(c) of that code
(26 U.S.C. Section 501(c)).
SECTION 9. The Public Utility Commission of Texas shall
adopt rules establishing the programs required under Sections
39.9155 and 39.9156, Utilities Code, as added by this Act, as soon
as practicable.
SECTION 10. 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 11. 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 12. 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 13. 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.