By: Chisum H.B. No. 3595
A BILL TO BE ENTITLED
AN ACT
relating to energy efficiency goals and energy efficiency programs.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 39.905, Utilities Code, is amended to read as
follows:
(a) It is the goal of the legislature that:
(1) electric utilities will administer energy
efficiency incentive programs in a market-neutral,
nondiscriminatory manner but will not offer underlying competitive
services;
(2) all customers, in all customer classes and
geographic regions, will have a choice of and access to energy
efficiency alternatives and other choices from the market that
allow each customer to reduce energy consumption, summer or winter
peak demand, or energy costs;
(3) each electric utility will provide, through
market-based standard offer programs or [limited, targeted,]
market-transformation programs, incentives sufficient for retail
electric providers and competitive energy service providers to
acquire additional cost-effective energy efficiency for
residential and commercial customers equivalent to at least:
(A) 25 [10] percent of the electric utility's
annual growth in demand of residential and commercial customers by
December 31, 2012 [2007];
(B) one-half of one [15] percent of the electric
utility's peak [annual growth in] demand of residential and
commercial customers by December 31, 2013 [2008, provided that the
electric utility's program expenditures for 2008 funding may not be
greater than 75 percent above the utility's program budget for 2007
for residential and commercial customers, as included in the April
1, 2006, filing]; and
(C) a percentage of peak demand of residential
and commercial customers by December 31, 2014 and each year
thereafter that the Commission annually shall determine to be
reasonable to achieve, although the percentage shall not be less
than one-half of one percent of the electric utility's peak demand
of residential and commercial customers nor, except for good cause
shown for an electric utility, less than any prior year's goal [20
percent of the electric utility's annual growth in demand of
residential and commercial customers by December 31, 2009, provided
that the electric utility's program expenditures for 2009 funding
may not be greater than 150 percent above the utility's program
budget for 2007 for residential and commercial customers, as
included in the April 1, 2006, filing];
(4) each electric utility in the ERCOT region shall
use its best efforts to encourage and facilitate the involvement of
the region's retail electric providers in the delivery of
efficiency programs and demand response programs under this
section;
(5) retail electric providers in the ERCOT region, and
electric utilities outside of the ERCOT region, shall provide
customers with energy efficiency educational materials;
(6) electric utilities may communicate with customers
and provide rebate or incentive funds to their customers to promote
of facilitate the success of programs; and
(7) [(6)] notwithstanding Subsection (a)(3), electric
utilities shall continue to make available, at 2007 funding and
participation levels, any load management standard offer programs
developed for industrial customers and implemented prior to May 1,
2007.
(b) The commission shall provide oversight and adopt rules
and procedures to ensure that the utilities can achieve the goal of
this section, including:
(1) establishing an energy efficiency cost recovery
factor for ensuring timely and reasonable cost recovery for utility
expenditures made to satisfy the goal of this section;
(2) establishing an incentive under Section 36.204 to
reward utilities administering programs under this section that
exceed the minimum goals established by this section;
(3) providing a utility that is unable to establish an
energy efficiency cost recovery factor in a timely manner due to a
rate freeze with a mechanism to enable the utility to:
(A) defer the costs of complying with this
section; and
(B) recover the deferred costs through an energy
efficiency cost recovery factor on the expiration of the rate
freeze period;
(4) ensuring that the costs associated with programs
provided under this section are borne by the customer classes that
receive the services under the programs; and
(5) ensuring the program rules encourage the value of
the incentives to be passed on to the end-use customer.
(b-1) The energy efficiency cost recovery factor under
Subsection (b)(1) may not result in an over-recovery of costs but
may be adjusted each year to change rates to enable utilities to
match revenues against energy efficiency costs and any incentives
to which they are granted. The factor shall be adjusted to reflect
any over-collection or under-collection of energy efficiency cost
recovery revenues in previous years.
(b-2) [The commission shall conduct a study, to be funded by
electric utilities, regarding cost effective energy efficiency in
this state. Not later than January 15, 2009, the commission shall
submit to the legislature a report regarding the commission's
findings that:
(1) considers the technical, economic, and achievable
potential, and natural occurrence of energy efficiency in this
state in terms of kilowatts and kilowatt hours for each element;
(2) determines the amount of savings that is
achievable through utility programs in compliance with commission
rules;
(3) recommends whether:
(A) utility funding of energy efficiency in areas
of the state with competitive retail electric service should
continue;
(B) energy efficiency in areas with competitive
retail electric service is best provided by the competitive market;
and
(C) utilities should fund education programs to
be conducted by the commission regarding the provision of energy
efficiency service from the competitive market;
(4) provides estimates of achievable savings specific
to each utility service area and each customer class;
(5) quantifies the costs and rate impacts associated
with meeting energy efficiency goals;
(6) determines whether an increase in the goal to 30
percent of the growth in demand for each utility is achievable by
December 31, 2010, and whether an increase in the goal to 50 percent
of the growth in demand for electricity is achievable by December
31, 2015, by each utility in the service area served through the
energy efficiency programs described by this section;
(7) recommends policies designed to promote energy
efficiency in the areas of the state that are not served by the
utilities which administer programs under this section; and
(8) identifies potential barriers to the increased
participation by retail electric providers in the delivery of
energy efficiency services to ERCOT customers, and to the increased
potential for energy efficiency in ERCOT or in this state
generally, including any recommended regulatory or statutory
changes to eliminate such barriers or facilitate greater
efficiency.
(b-3)] Beginning not later than January 1, 2008, the
commission, in consultation with the State Energy Conservation
Office, annually for a period of five years shall compute and report
to ERCOT the projected annual and measure-life energy savings and
summer and winter demand impacts for each entity in the ERCOT region
that administers standard offer programs, market transformation
programs, combined heating and power technology, demand response
programs, solar incentive programs, appliance efficiency
standards, energy efficiency programs in public buildings, and any
other relevant programs that are reasonably anticipated to reduce
electricity energy or peak demand or that serve as substitutes for
electric supply.
(b-3) [(b-4)] The commission and ERCOT shall develop a
method to account for the projected efficiency impacts under
Subsection (b-2) [(b-3)] in ERCOT's annual forecasts of future
capacity, demand, and reserves.
(c) A standard offer program provided under Subsection
(a)(3) must be neutral with respect to technologies, equipment, and
fuels, including thermal, chemical, mechanical, and electrical
energy storage technologies.
(d) The commission shall establish a procedure for
reviewing and evaluating market-transformation program options
described by this subsection and other options. In evaluating
program options, the commission may consider the ability of a
program option to reduce costs to customers through reduced demand,
energy savings, and relief of congestion. Utilities may choose to
implement any program option approved by the commission after its
evaluation in order to satisfy the goal in Subsection (a),
including:
(1) energy-smart schools;
(2) appliance retirement and recycling;
(3) air conditioning system tune-ups;
(4) the installation of variable speed air
conditioning system and motors;
(5) the use of trees or other landscaping for energy
efficiency.;
(6) [(5)] customer energy management and demand
response programs;
(7) [(6)] high performance residential and commercial
buildings that will achieve the levels of energy efficiency
sufficient to qualify those buildings for federal tax incentives;
(8) commissioning services for commercial and
institutional buildings that result in operational and maintenance
practices that reduce the buildings' energy consumption;
(9) [(7)] programs for customers who rent or lease
their residence or commercial space;
(10) [(8)] programs providing energy monitoring
equipment to customers that enable a customer to better understand
the amount, price, and time of the customer's energy use;
(11) [(9)] energy audit programs for owners and other
residents of single-family or multifamily residences and for small
commercial customers;
(12) [(10)] net-zero energy new home programs;
(13) [(11)] solar thermal or solar electric programs;
and
(14) [(12)] programs for using windows and other
glazing systems, glass doors, and skylights in residential and
commercial buildings that reduce solar gain by at least 30 percent
from the level established for the federal Energy Star windows
program.
(e) An electric utility may use money approved by the
commission for energy efficiency programs to perform necessary
energy efficiency research and development to foster continuous
improvement and innovation in the application of energy efficiency
technology and energy efficiency program design and
implementation. Money the utility uses under this subsection may
not exceed 10 percent of the greater of:
(1) the amount the commission approved for energy
efficiency programs in the utility's most recent full rate
proceeding; or
(2) the commission-approved expenditures by the
utility for energy efficiency in the previous year.
(f) Unless funding is provided under Section 39.903, each
unbundled transmission and distribution utility shall include in
its energy efficiency plan a targeted low-income energy efficiency
program as described by Section 39.903(f)(2), and the savings
achieved by the program shall count toward the transmission and
distribution utility's energy efficiency goal. The commission
shall determine the appropriate level of funding to be allocated to
both targeted and standard offer low-income energy efficiency
programs in each unbundled transmission and distribution utility
service area. The total expenditures for both targeted and
standard offer low-income energy efficiency programs will be based
on the amount spent by the transmission and distribution utility on
the commission's hard-to-reach program in calendar year 2003. This
level of funding for low-income energy efficiency programs shall be
provided from money approved by the commission for the transmission
and distribution utility's energy efficiency programs. The state
agency that administers the federal weatherization assistance
program shall provide reports as required by the commission to
provide the most current information available on energy and peak
demand savings achieved in each transmission and distribution
utility service area.
(g) Schools may participate in more than one program and may
use more than one product or strategy in order to maximize the
school's energy and cost savings. A utility may claim savings
realized by the school for those programs that utilize utility
resources.
(h) The commission may provide for a good cause exemption to
a utility's liability for an administrative penalty or other
sanction if the utility fails to meet a goal for energy efficiency
under this section and the utility's failure to meet the goal is
caused by one or more factors outside of the utility's control,
including:
(1) insufficient demand by retail electric providers
and competitive energy service providers for program incentive
funds made available by the utility through its programs;
(2) changes in building energy codes; and
(3) changes in government-imposed appliance or
equipment efficiency standards.
SECTION 2. 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, 2011.