Texas 2011 - 82nd Regular

Texas Senate Bill SB15 Compare Versions

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1	1	By: Fraser S.B. No. 15
2	2	(In the Senate - Filed March 11, 2011; March 14, 2011, read
3	3	first time and referred to Committee on Natural Resources;
4	4	April 13, 2011, reported adversely, with favorable Committee
5	5	Substitute by the following vote: Yeas 6, Nays 1; April 13, 2011,
6	6	sent to printer.)
7	7	COMMITTEE SUBSTITUTE FOR S.B. No. 15 By: Fraser
8	8
9	9
10	10	A BILL TO BE ENTITLED
11	11	AN ACT
12	12	relating to state energy policy and the planning of energy
13	13	development and utilization.
14	14	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
15	15	ARTICLE 1
16	16	SECTION 1.01. This article may be cited as the Energy Policy
17	17	Act.
18	18	SECTION 1.02. The Utilities Code is amended by adding Title
19	19	6 to read as follows:
20	20	TITLE 6. ENERGY POLICY ACT
21	21	CHAPTER 300. STRATEGIC ENERGY PLANNING
22	22	SUBCHAPTER A. GENERAL PROVISIONS
23	23	Sec. 300.001. PURPOSE AND FINDINGS. (a) This title is
24	24	enacted to promote, in accordance with the public interest, the
25	25	strategic planning of energy development, production, delivery,
26	26	commercialization, and utilization in this state.
27	27	(b) The purpose of this title is to establish a statewide
28	28	energy policy planning entity and process that recognizes:
29	29	(1) public health and general welfare as a critical
30	30	concern in the development of energy policies;
31	31	(2) energy as a valuable and vital commodity in the
32	32	state's economy;
33	33	(3) protection of the environment as a major
34	34	consideration in the production of energy and utilization of
35	35	natural resources;
36	36	(4) cost-effective, market-based solutions as a
37	37	preferred policy for energy planning;
38	38	(5) utilization of Texas-based resources to help
39	39	provide energy security, stability, and reliability; and
40	40	(6) the importance of portfolio diversity in promoting
41	41	energy system flexibility, affordability, and efficiency.
42	42	Sec. 300.002. DEFINITIONS. In this title:
43	43	(1) "Council" means the Texas Energy Policy Council.
44	44	(2) "Office" means the State Energy Conservation
45	45	Office.
46	46	(3) "Plan" means the statewide energy policy plan.
47	47	Sec. 300.003. TEXAS ENERGY POLICY COUNCIL. (a) The Texas
48	48	Energy Policy Council is created to develop and present a statewide
49	49	energy policy plan to the legislature. The plan must include a
50	50	20-year planning horizon and be updated to reflect changing
51	51	conditions and should be considered a living document.
52	52	(b) The council is composed of 12 members as follows:
53	53	(1) the chairman of the Public Utility Commission of
54	54	Texas;
55	55	(2) the chairman of the Railroad Commission of Texas;
56	56	(3) the chairman of the Texas Commission on
57	57	Environmental Quality;
58	58	(4) the president and chief executive officer of the
59	59	Electric Reliability Council of Texas;
60	60	(5) the commissioner of the General Land Office;
61	61	(6) two members of the senate appointed by the
62	62	lieutenant governor;
63	63	(7) two members of the house of representatives
64	64	appointed by the speaker of the house of representatives;
65	65	(8) one member of the academic community with
66	66	expertise in energy appointed by the governor;
67	67	(9) one member of the academic community with
68	68	expertise in environmental issues related to energy appointed by
69	69	the governor; and
70	70	(10) the director of the office.
71	71	(c) The governor shall designate the presiding officer from
72	72	among the members of the council.
73	73	(d) An appointed member of the council serves for a full
74	74	planning cycle and may be reappointed at the pleasure of the
75	75	appointing official.
76	76	(e) The council shall meet at least quarterly in
77	77	even-numbered years while developing a plan for submission to the
78	78	legislature. The council may meet annually in odd-numbered years
79	79	after submitting plans to the legislature.
80	80	(f) The council shall develop and implement policies and
81	81	procedures that provide the public with reasonable opportunity to
82	82	appear before the council and to speak on issues under the
83	83	jurisdiction of the council.
84	84	(g) The office is designated as the state agency responsible
85	85	for administering the council. Staff from the office shall be
86	86	tasked, as necessary, with assisting the council in carrying out
87	87	its duties.
88	88	Sec. 300.004. POWERS, DUTIES, AND RESPONSIBILITIES OF
89	89	COUNCIL. (a) In developing the plan, the council shall:
90	90	(1) encourage cooperation and coordination between
91	91	public and private entities regarding energy usage, planning,
92	92	research and development, and commercialization;
93	93	(2) seek policies that promote a diverse portfolio of
94	94	clean, reliable, and competitively priced energy sources;
95	95	(3) promote research, pilot projects, and
96	96	market-based incentives to explore and expand long-term energy
97	97	options;
98	98	(4) develop policies to prevent supply interruptions
99	99	and infrastructure failure;
100	100	(5) examine the impact on the environment of energy
101	101	exploration, production, and use;
102	102	(6) take into account the statewide and regional water
103	103	planning process; and
104	104	(7) make recommendations for increasing public
105	105	knowledge of energy use issues and public awareness of the
106	106	importance of more efficient consumption of energy.
107	107	(b) The council shall submit to the legislature the initial
108	108	plan by December 1, 2012. Thereafter, the council shall report to
109	109	the legislature by December 1 of each even-numbered year the status
110	110	of the plan's implementation and make any recommendations for
111	111	legislative action as necessary to implement or revise the plan.
112	112	The council may update the plan as necessary to reflect evolving
113	113	conditions.
114	114	Sec. 300.005. FUELS AND TECHNOLOGIES. (a) The council
115	115	shall consider the following fuel sources, types of generation, and
116	116	innovative technologies associated with these fuels and types of
117	117	generation when creating the plan. These fuels, types of
118	118	generation, and technologies include:
119	119	(1) oil and natural gas;
120	120	(2) coal and lignite;
121	121	(3) nuclear;
122	122	(4) renewable energy technologies;
123	123	(5) geothermal;
124	124	(6) methane;
125	125	(7) distributed generation;
126	126	(8) fuel cells and storage;
127	127	(9) water conservation technologies that could be
128	128	utilized in the exploration, production, and generation of energy
129	129	resources; and
130	130	(10) any other fuels and technologies as defined in
131	131	Section 39.904(d).
132	132	(b) The council shall develop policies that ensure fuel
133	133	resources available to the state are utilized in a balanced and
134	134	efficient manner. The council shall consider the economic
135	135	viability, price stability and volatility, and environmental
136	136	impact of types of fuel and technology when making its
137	137	recommendations.
138	138	Sec. 300.006. ENERGY EFFICIENT TECHNOLOGY. (a) In order
139	139	to reduce the energy demand of customers in this state, the council
140	140	shall consider energy-efficient technologies when formulating the
141	141	plan and include them in its recommendations. Energy-efficient
142	142	technologies shall be considered for the following:
143	143	(1) residential, commercial, industrial, and state
144	144	and local energy users; and
145	145	(2) any other user group or application the council
146	146	deems appropriate.
147	147	(b) The council shall consider the economic viability and
148	148	competitiveness of new technologies when making its
149	149	recommendations.
150	150	(c) The council shall consider the ability of
151	151	energy-efficient technologies to reduce the demand for energy and
152	152	the need for additional transmission capacity in the state and
153	153	shall consider opportunities for reducing transmission constraints
154	154	by using these technologies.
155	155	Sec. 300.007. TRANSMISSION. (a) The council shall
156	156	consider and recommend strategies to ensure that customers in this
157	157	state have access to reliable energy.
158	158	(b) The council shall consider transmission constraints,
159	159	and make recommendations in the plan to alleviate or prevent those
160	160	constraints, for the following sources of energy:
161	161	(1) oil and natural gas;
162	162	(2) coal and lignite;
163	163	(3) wind and solar; and
164	164	(4) electricity.
165	165	Sec. 300.008. ALTERNATIVE FUEL VEHICLES. (a) The council
166	166	shall consider and make recommendations on strategies and
167	167	incentives that promote the use of alternative fuel vehicles such
168	168	as natural gas vehicles and plug-in electric vehicles.
169	169	(b) The council shall consider the economic feasibility of
170	170	alternative fuel vehicles and infrastructure constraints and may
171	171	make recommendations on incentives to incorporate and promote these
172	172	vehicles as a component of the plan.
173	173	Sec. 300.009. ENVIRONMENT. (a) The council, when creating
174	174	the plan or in formulating recommendations, shall consider the
175	175	effects of energy exploration, production, and consumption on the
176	176	environment.
177	177	(b) The council shall recommend strategies that protect and
178	178	preserve the environment of the state and allow for access to and
179	179	the production of safe, economically viable, and reliable sources
180	180	of energy. The council shall consider:
181	181	(1) air quality;
182	182	(2) water quality;
183	183	(3) water supply; and
184	184	(4) waste disposal.
185	185	ARTICLE 2
186	186	SECTION 2.01. Chapter 39, Utilities Code, is amended by
187	187	adding Subchapter L to read as follows:
188	188	SUBCHAPTER L. REPORT ON RESERVES AND VOLUNTARY EMISSIONS
189	189	REDUCTIONS PLAN
190	190	Sec. 39.551. STATEMENT OF INTENT. It is not the intent of
191	191	this subchapter to:
192	192	(1) transfer environmental regulation from the
193	193	Railroad Commission of Texas or the Texas Commission on
194	194	Environmental Quality to the commission; or
195	195	(2) reduce the competitiveness of the existing energy
196	196	market in Texas by re-regulating the market or requiring the
197	197	decommissioning of any lawfully operating generating plant.
198	198	Sec. 39.552. REPORT ON RESERVES. (a) Not later than
199	199	December 1, 2011, the Railroad Commission of Texas shall prepare
200	200	and submit to the commission a report on coal and gas reserves in
201	201	this state that includes information relating to:
202	202	(1) natural gas reserves in this state proven and
203	203	probable on November 1, 2011;
204	204	(2) estimates of the proven and probable natural gas
205	205	reserves in this state for each of the next 15 years;
206	206	(3) estimates of natural gas prices and potential
207	207	price volatility for each of the next 15 years;
208	208	(4) coal reserves in this state proven and probable on
209	209	November 1, 2011;
210	210	(5) estimates of the proven and probable coal reserves
211	211	in this state for each of the next 15 years; and
212	212	(6) estimates of coal prices and potential price
213	213	volatility for each of the next 15 years.
214	214	(b) The Railroad Commission of Texas may request financial
215	215	information and forecasts from the comptroller to assist the
216	216	Railroad Commission of Texas in carrying out its duties under this
217	217	section. The comptroller shall provide that information and those
218	218	forecasts to the Railroad Commission of Texas as quickly as
219	219	possible after receiving such request.
220	220	Sec. 39.553. REPORT AND PLAN. (a) The commission shall
221	221	prepare a report on electric energy generation in this state. The
222	222	report must include an analysis of and policy recommendations for
223	223	how to most cost-effectively comply with environmental regulation.
224	224	(b) In preparing the report, the commission shall:
225	225	(1) analyze information from the reports submitted
226	226	under this subchapter by electric generating facilities and the
227	227	Railroad Commission of Texas; and
228	228	(2) use information already in the possession of
229	229	existing regulators by consulting with the Railroad Commission of
230	230	Texas, the Texas Commission on Environmental Quality, the Electric
231	231	Reliability Council of Texas, the Southwest Power Pool, the
232	232	Southeastern Electric Reliability Council, and the Western
233	233	Electricity Coordinating Council.
234	234	(c) The report must evaluate and consider measures that
235	235	will:
236	236	(1) maintain electric grid reliability;
237	237	(2) ensure the availability of electric energy at
238	238	reasonable rates;
239	239	(3) reduce air pollution, as defined by Section
240	240	382.003, Health and Safety Code;
241	241	(4) increase the state's ability to comply with state
242	242	and federal clean air standards in nonattainment and
243	243	near-nonattainment areas; and
244	244	(5) reduce the use of water for electricity generation
245	245	in this state.
246	246	(d) The report must identify the 10 percent of electric
247	247	generation capacity that will be most impacted by compliance with
248	248	environmental regulation.
249	249	(e) The report must identify combinations of market
250	250	factors, plant operating characteristics, federal and state
251	251	environmental regulations promulgated after January 1, 2011, and
252	252	other conditions that might make it more economically attractive
253	253	for the electric generation capacity identified in the report to be
254	254	retired rather than comply with the regulations. The market
255	255	factors considered in the analysis must include:
256	256	(1) long-term prices and price volatility for fuel
257	257	sources used to generate electricity in this state;
258	258	(2) price projections for the cost of electricity
259	259	going forward and factors that are relevant to determining the
260	260	market price of electricity; and
261	261	(3) the potential impact of the voluntary
262	262	decommissioning of existing units of electric generation capacity
263	263	from facilities in this state.
264	264	(f) The report must consider plant operating
265	265	characteristics including variable and fixed operating costs of
266	266	electric generation facilities identified in the report. The
267	267	analysis must also incorporate a range of costs projected by
268	268	credible sources for complying with the specified federal and state
269	269	air pollution regulations. In conducting this analysis, the
270	270	commission shall consider electric generation facilities in this
271	271	state of various vintages, sizes, fuel types, conversion
272	272	efficiencies, and emission characteristics. The analysis must:
273	273	(1) estimate the amount of electric generation
274	274	capacity that is likely to voluntarily be retired rather than incur
275	275	the additional expense of complying with the federal and state air
276	276	pollution regulations;
277	277	(2) provide an analysis of the cost and the impact on
278	278	electric rates, and provide price projections, associated with
279	279	voluntarily retiring electric generation facilities included in
280	280	the report;
281	281	(3) identify any additional barriers to the retirement
282	282	of the types of electric generation capacity identified and provide
283	283	recommendations on how to most cost-effectively and voluntarily
284	284	reduce air pollution, including recommendations to accelerate the
285	285	permitting process for certain types of low-polluting generation;
286	286	and
287	287	(4) identify the types, costs, and effects of
288	288	incentives to promote the goals of this section.
289	289	(g) Not later than October 1, 2012, the commission shall
290	290	make a draft of the report available for public review and comment
291	291	for a period of not less than 30 days.
292	292	(h) Not later than December 1, 2012, the commission shall
293	293	finalize and publish the report.
294	294	SECTION 2.02. Section 39.904, Utilities Code, is amended by
295	295	adding Subsection (p) to read as follows:
296	296	(p) This section is intended to increase the amount of
297	297	renewable generating capacity as provided by Subsection (a) and is
298	298	not intended, unless specifically stated otherwise in this section,
299	299	to provide operational or competitive advantages to renewable
300	300	energy generators to the detriment of other generation resources.
301	301	ARTICLE 3
302	302	SECTION 3.01. As soon as practicable after the effective
303	303	date of this Act, the designated appointing officials shall appoint
304	304	the members to the Texas Energy Policy Council established under
305	305	Chapter 300, Utilities Code, as added by this Act.
306	306	SECTION 3.02. This Act takes effect September 1, 2011.
307	307	* * * * *