Texas 2011 - 82nd Regular

Texas House Bill HB3532 Compare Versions

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1	1	82R7843 JJT-F
2	2	By: Strama H.B. No. 3532
3	3	Substitute the following for H.B. No. 3532:
4	4	By: Sheffield C.S.H.B. No. 3532
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to the creation of an incentive program for solar and
10	10	wind-powered distributed electric generation for public school
11	11	property.
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 SCHOOLS INCENTIVE PROGRAM. (a) In this
27	27	section:
28	28	(1) "Distributed renewable generation" has the
29	29	meaning assigned by Section 39.916.
30	30	(2) "Distributed solar generation" means distributed
31	31	renewable generation using an energy source derived directly from
32	32	the sun.
33	33	(3) "Low-income electric customer" has the meaning
34	34	assigned by Section 39.903(l).
35	35	(4) "Rated watts" means the output of a solar energy
36	36	device as specified by the manufacturer of the device expressed in
37	37	watts of direct current.
38	38	(5) "School district" has the meaning assigned by
39	39	Section 21.201, Education Code.
40	40	(b) The program developed under this section applies to an
41	41	electric utility operating inside or outside of ERCOT.
42	42	(c) The commission shall develop and implement a program as
43	43	provided by this section to increase the amount of distributed
44	44	solar generation installed on property owned by school districts in
45	45	the state. The program must apply statewide and must be designed to
46	46	be transparent, cost-effective, and limited in scope. The
47	47	commission shall act as program administrator to oversee and
48	48	administer the implementation of the program.
49	49	(d) The solar schools incentive fund is established as a
50	50	special trust fund held by the comptroller outside of the state
51	51	treasury and administered by the program administrator for the
52	52	payment of the incentives authorized by this section, without the
53	53	necessity of an appropriation. Money in the fund may be used only
54	54	for the purposes of the program as provided by this section,
55	55	including the administrative costs incurred by the commission. The
56	56	fund consists of:
57	57	(1) fees imposed under this section and remitted to
58	58	the comptroller for deposit to the credit of the fund;
59	59	(2) gifts or grants awarded for the purposes of the
60	60	program and deposited to the credit of the fund; and
61	61	(3) interest and other income from investment of the
62	62	money deposited to the credit of the fund.
63	63	(e) The commission by rule shall provide for the assessment
64	64	and collection of nonbypassable fees by electric utilities and
65	65	transmission and distribution utilities. An electric utility or
66	66	transmission and distribution utility shall remit all fees
67	67	collected to the comptroller for deposit to the credit of the solar
68	68	schools incentive fund. The fees must appear as a separate charge
69	69	on customers' bills. In an area where customer choice has been
70	70	introduced, a fee assessed under this subsection must be included
71	71	in delivery charges assessed by a transmission and distribution
72	72	utility and collected by the customer's retail electric provider.
73	73	The fee for each industrial electric service identifier is $50 each
74	74	month. The fees for residential and commercial electric service
75	75	identifiers must be assessed in an amount established as applicable
76	76	for each billing period that falls during the next six-month
77	77	period. For a six-month period that follows a six-month period in
78	78	which the average natural gas futures closing price is less than $6
79	79	per million British thermal units, the fee for a residential or
80	80	commercial electric service identifier is $0.00028 per kilowatt
81	81	hour. For a six-month period that follows a six-month period in
82	82	which the average natural gas futures closing price is $6 or more
83	83	per million British thermal units, the fee for a residential or
84	84	commercial electric service identifier is $0.00014 per kilowatt
85	85	hour. Commission rules must provide that the average natural gas
86	86	futures closing price be evaluated for the purposes of this
87	87	subsection on a semiannual basis and that the resulting assessment
88	88	of the fee for a residential or commercial electric service
89	89	identifier applies only to billing periods that begin at least 30
90	90	days after the resulting assessment is made.
91	91	(f) The commission by rule shall provide for incentives to
92	92	defray the cost of installing distributed solar generation on
93	93	property owned by school districts and for the incentives to be
94	94	distributed as provided by this section. The commission shall
95	95	ensure that:
96	96	(1) the schedule for payment of the incentives does
97	97	not obligate payment of incentives in amounts that would cause the
98	98	incentive payments to exceed the amount budgeted for incentive
99	99	payments over the duration of the program; and
100	100	(2) incentives are paid directly to school districts,
101	101	qualified installers, or third-party owners of installed
102	102	distributed solar generation in a simple, uniform, and reliable
103	103	administrative manner that:
104	104	(A) ensures the timely payment of incentives; and
105	105	(B) allows for the assignment of the incentive to
106	106	another person at the direction of the qualified recipient.
107	107	(g) Electric utilities may not assess the fees authorized by
108	108	this section after the fifth anniversary of the date the program
109	109	required by this section is established by commission rule. Each
110	110	biennium, the commission shall report to the legislature on the
111	111	progress of the program. The report may include recommendations on
112	112	how the program can be modified to increase the deployment of
113	113	distributed solar generation on school district property. For the
114	114	biennium in which the program is scheduled to end, the report must
115	115	include a recommendation to the legislature on whether to extend
116	116	the program.
117	117	(h) The commission must distribute the incentives provided
118	118	by rules adopted under Subsection (f) by administering reverse
119	119	auctions quarterly. The total of incentives available in each
120	120	quarter's auction must be determined by the commission based on the
121	121	projected amount of available funding and on the number of quarters
122	122	remaining in the program, allowing for a reasonable margin of error
123	123	for the conversion to production-based incentives in accordance
124	124	with Subsection (n). The commission may establish the total of
125	125	incentives available for a quarter in terms of cost or in terms of
126	126	capacity.
127	127	(i) A participant in a reverse auction for an incentive to
128	128	install distributed solar generation on school district property
129	129	must submit a bid and a deposit as provided by this subsection.
130	130	Each bid must include a price component, expressed in dollars per
131	131	installed watt of capacity, and a volume component, expressed in
132	132	terms of the proposed total capacity, measured in rated watts, to be
133	133	installed by the proposed project. The deposit must be in an amount
134	134	equal to five percent of the total value of the bid. The commission
135	135	shall retain the deposit for an accepted bid and shall refund the
136	136	deposit for a bid that is not accepted.
137	137	(j) At a reverse auction, a bid is not qualified unless the
138	138	bidder:
139	139	(1) demonstrates, in accordance with any procedure and
140	140	guideline the commission may adopt for that purpose, the bidder's
141	141	ability to finance the costs of the project if the incentive were
142	142	awarded; and
143	143	(2) meets all other requirements adopted by the
144	144	commission to ensure successful implementation of the program.
145	145	(k) The commission may not accept a bid for a quarter's
146	146	reverse auction if the bid exceeds the quarter's bid price limit.
147	147	The bid price limit for a quarter is the lesser of:
148	148	(1) $1.50 per rated watt of capacity;
149	149	(2) the bid limit from the previous quarter's reverse
150	150	auction; or
151	151	(3) the quarterly incentive clearing price
152	152	established for the previous quarter in the manner provided by
153	153	Subsection (l), unless that price was established by a bid for a
154	154	wind-powered electric generation project.
155	155	(l) On receiving bids in a reverse auction under this
156	156	section, the commission shall order the qualified bids from the
157	157	lowest bid to the highest bid according to the price component of
158	158	the qualified bids. The commission shall accept qualified bids
159	159	from the bid stack in that order, from lowest to highest, until the
160	160	limit on the total of incentives available, as determined under
161	161	Subsection (h), is reached. The price component of the highest bid
162	162	accepted is the quarterly incentive clearing price for that
163	163	quarter, and the commission shall award the incentives to each
164	164	bidder for each accepted bid according to the quarter's incentive
165	165	clearing price.
166	166	(m) If, following the awarding of incentives through a
167	167	quarterly reverse auction, funding remains available, the
168	168	commission shall make available to applicants on a first-come,
169	169	first-served basis, in the form of nonparticipating incentives,
170	170	incentives set at a dollar-per-watt value of 90 percent of that
171	171	quarter's incentive clearing price. The commission shall carry
172	172	forward any quarterly funding remaining after the incentives are
173	173	awarded under this subsection, with the remaining funding divided
174	174	equally among the quarters remaining in the program. If funding is
175	175	carried forward under this subsection in two consecutive quarters,
176	176	the commission may implement any of the following measures that the
177	177	commission determines may increase the installation of distributed
178	178	solar generation on school district property:
179	179	(1) making distributed solar generation projects for
180	180	community college property in this state eligible for program
181	181	incentives;
182	182	(2) using available program funding for outreach
183	183	programs that may increase program participation;
184	184	(3) conducting or commissioning a study on the
185	185	available capacity and optimal locations for installation of
186	186	distributed solar generation on the property of school districts or
187	187	community colleges; or
188	188	(4) only if 25 percent or more of quarterly funding is
189	189	carried forward in two consecutive quarters, increasing the bid
190	190	price limit.
191	191	(n) Incentives awarded under this section must be in the
192	192	form of a production-based incentive and must be disbursed by 12
193	193	quarterly payments over a term of three years with the amount paid
194	194	determined by the units of electricity produced by the installed
195	195	distributed solar generation during the previous quarter. The
196	196	commission shall establish the amount of the payment per unit of
197	197	electricity produced by the installed distributed solar generation
198	198	by converting the quarterly incentive clearing price or the
199	199	nonparticipating incentive price from a capacity incentive price to
200	200	a production-based incentive price. In making this conversion, the
201	201	commission must consider a reasonable production factor, including
202	202	an appropriate discount rate, that would result in the quarterly
203	203	incentive clearing price or the nonparticipating incentive price
204	204	being fully paid with the final quarterly payment of the three-year
205	205	payment period, were the distributed solar generation system to
206	206	produce at the production factor's assumed rate.
207	207	(o) Quarterly payments of an incentive awarded under this
208	208	section must begin not later than the fourth quarter following the
209	209	acceptance of bids for a quarter. Payment of an incentive may begin
210	210	earlier than the fourth quarter on the filing of a claim with the
211	211	commission by the person awarded the incentive.
212	212	(p) A person awarded an incentive under this section must
213	213	have the distributed solar generation interconnected not later than
214	214	the end of the fourth quarter following the quarter in which the bid
215	215	was accepted. If the person has not interconnected the distributed
216	216	solar generation by the end of the period prescribed by this
217	217	subsection, the person's claim to the incentive is rescinded and
218	218	the capacity and funding returns to the program and available
219	219	program funding, except that the commission may grant one extension
220	220	of the period for interconnection, not to exceed two additional
221	221	quarters, if the commission finds based on evidence provided in the
222	222	person's application for extension that substantial construction
223	223	work has been completed by the date of the application for
224	224	extension. Quarterly payments may resume if the distributed solar
225	225	generation is interconnected during the fifth or sixth quarter, but
226	226	the person awarded the incentive may not recover a quarterly
227	227	payment lost because of a failure to interconnect.
228	228	(q) The commission by rule shall provide a method by which a
229	229	retail electric provider and a transmission and distribution
230	230	utility shall use money collected through nonbypassable fees
231	231	imposed in accordance with rules adopted under Subsection (e) to
232	232	credit the electric service bill of a low-income electric customer
233	233	for an amount equal to the customer's share of the fee, based on the
234	234	customer's electric energy consumption during the billing period.
235	235	(r) The commission by rule shall provide for making
236	236	incentives under the program available to projects to install on
237	237	property owned by school districts distributed renewable
238	238	generation that uses wind-driven turbines, subject to all
239	239	requirements for a distributed solar generation incentive. The
240	240	eligibility under the rules may extend only to projects for wind
241	241	turbine distributed renewable technology projects with a combined
242	242	capacity of not more than 150 kilowatts at any one school district
243	243	property location.
244	244	(s) Notwithstanding any provision of this title:
245	245	(1) any person, including a retail electric provider,
246	246	may own distributed renewable generation installed under the
247	247	program and enter into a contract with a school district on the
248	248	property of which the distributed renewable generation is installed
249	249	to lease the generation or to sell the surplus electricity
250	250	generated by the distributed renewable generation to a retail
251	251	customer or the district's retail electric provider;
252	252	(2) the owner of distributed renewable generation
253	253	installed under the program is not, as a result of that ownership,
254	254	an electric utility and is not required, as a result of that
255	255	ownership, to register with the commission as a power generation
256	256	company or self-generator unless the commission determines that
257	257	requiring registration is necessary to maintain the reliability of
258	258	the electric distribution grid;
259	259	(3) the commission may establish appropriate
260	260	reporting requirements to provide for trading renewable energy
261	261	credits gained by the installation of distributed renewable
262	262	generation under the program; and
263	263	(4) an area of this state in which distributed
264	264	renewable generation is installed under the program is not, for
265	265	reason of that installation, considered an area in which customer
266	266	choice has been introduced.
267	267	SECTION 3. Subchapter Z, Chapter 39, Utilities Code, is
268	268	amended by adding Section 39.9156 to read as follows:
269	269	Sec. 39.9156. SOLAR SCHOOLS PROGRAMS; MUNICIPALLY OWNED
270	270	UTILITIES AND COOPERATIVES. (a) It is the goal of the legislature
271	271	that:
272	272	(1) electric cooperatives and municipally owned
273	273	utilities administer incentive programs that increase the amount of
274	274	distributed solar generation installed on property owned by school
275	275	districts in this state in a cost-effective, market-neutral, and
276	276	nondiscriminatory manner;
277	277	(2) customers of electric cooperatives and
278	278	municipally owned utilities have access to incentives for the
279	279	installation of distributed solar generation on property owned by
280	280	school districts; and
281	281	(3) electric cooperatives and municipally owned
282	282	utilities spend money to increase the amount of distributed solar
283	283	generation at a total funding level consistent with the
284	284	requirements for electric utilities in this state under Section
285	285	39.9155(e).
286	286	(b) This section applies only to an electric cooperative or
287	287	municipally owned utility with retail sales of more than 500,000
288	288	megawatt hours in 2007.
289	289	(c) Beginning not later than September 1, 2014, a
290	290	municipally owned utility or electric cooperative must report
291	291	annually to the State Energy Conservation Office, in a form and
292	292	manner determined by the office, information regarding the efforts
293	293	of the municipally owned utility or electric cooperative related to
294	294	this section.
295	295	(d) This section does not prevent the governing body of an
296	296	electric cooperative or municipally owned utility from adopting
297	297	rules, programs, or incentives to encourage or provide for the
298	298	installation of more solar generation capacity than the goal
299	299	established by Subsection (a)(3).
300	300	(e) An electric cooperative or municipally owned utility
301	301	may recover the costs required by this section through a
302	302	nonbypassable fee consistent with that authorized by the commission
303	303	for electric utilities under Section 39.9155(e) or another cost
304	304	recovery mechanism as determined by the governing body of the
305	305	electric cooperative or municipally owned utility.
306	306	(f) The commission shall credit toward compliance with this
307	307	section funding for distributed solar generation provided after May
308	308	1, 2009.
309	309	SECTION 4. The heading to Section 39.914, Utilities Code,
310	310	is amended to read as follows:
311	311	Sec. 39.914. CREDIT FOR SURPLUS DISTRIBUTED RENEWABLE
312	312	[SOLAR] GENERATION BY PUBLIC SCHOOLS.
313	313	SECTION 5. Section 39.914, Utilities Code, is amended by
314	314	amending Subsections (a), (b), and (c) and adding Subsection (a-1)
315	315	to read as follows:
316	316	(a) In this section, "distributed renewable generation" has
317	317	the meaning assigned by Section 39.916.
318	318	(a-1) An electric utility or retail electric provider shall
319	319	offer service to [provide for net metering] and contract with an
320	320	independent school district so that:
321	321	(1) surplus electricity produced by distributed
322	322	renewable generation on school district property [a school
323	323	building's solar electric generation panels] is made available for
324	324	sale to the electric transmission grid and distribution system; and
325	325	(2) the [net] value of that surplus electricity is
326	326	credited to the school district at a price that is at least the fair
327	327	market price.
328	328	(b) For areas of this state in which customer choice has not
329	329	been introduced, the commission by rule shall require that credits
330	330	for electricity produced by distributed renewable generation on
331	331	school district property [a school building's solar electric
332	332	generation panels] reflect the value of the surplus electricity
333	333	[that is made available for sale to the electric utility in
334	334	accordance with federal regulations].
335	335	(c) For independent school districts in areas in which
336	336	customer choice has been introduced, the [district must sell the
337	337	school buildings' surplus electricity produced to the] retail
338	338	electric provider that serves the school district's load shall
339	339	provide a credit to the school district for the surplus electricity
340	340	produced by distributed renewable generation on school district
341	341	property at a fair market value [agreed to between the district and
342	342	the provider that serves the district's load. The agreed value may
343	343	be] based on the clearing price of energy at the time of day that the
344	344	electricity is made available to the grid and shall allow any unused
345	345	credits to be carried forward to a subsequent billing cycle until
346	346	used. The independent organization identified in Section 39.151
347	347	shall develop procedures so that the amount of electricity
348	348	purchased from a school district under this section is accounted
349	349	for in settling the total load served by the provider that serves
350	350	the school district's load. A school district requesting [net]
351	351	metering services for purposes of this section must have metering
352	352	devices capable of providing measurements consistent with the
353	353	independent organization's settlement requirements.
354	354	SECTION 6. The Public Utility Commission of Texas shall
355	355	adopt rules establishing the program required under Section
356	356	39.9155, Utilities Code, as added by this Act, as soon as
357	357	practicable.
358	358	SECTION 7. This Act takes effect immediately if it receives
359	359	a vote of two-thirds of all the members elected to each house, as
360	360	provided by section 39, Article III, Texas Constitution. If this
361	361	Act does not receive the vote necessary for immediate effect, this
362	362	Act takes effect September 1, 2011.