By: Ogden S.B. No. 365
(In the Senate - Filed January 18, 2011; February 2, 2011,
read first time and referred to Committee on Business and Commerce;
April 20, 2011, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 8, Nays 0; April 20, 2011,
sent to printer.)
COMMITTEE SUBSTITUTE FOR S.B. No. 365 By: Estes
A BILL TO BE ENTITLED
AN ACT
relating to distributed generation of electric power.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 31.002, Utilities Code, is amended by
adding Subdivision (4-a) and amending Subdivision (10) to read as
follows:
(4-a) "Distributed natural gas generation facility"
means a facility installed on the customer's side of the meter that
uses natural gas to generate not more than 2,000 kilowatts of
electricity.
(10) "Power generation company" means a person,
including a person who owns or operates a distributed natural gas
generation facility, that:
(A) generates electricity that is intended to be
sold at wholesale;
(B) does not own a transmission or distribution
facility in this state other than an essential interconnecting
facility, a facility not dedicated to public use, or a facility
otherwise excluded from the definition of "electric utility" under
this section; and
(C) does not have a certificated service area,
although its affiliated electric utility or transmission and
distribution utility may have a certificated service area.
SECTION 2. The heading to Subchapter B, Chapter 35,
Utilities Code, is amended to read as follows:
SUBCHAPTER B. EXEMPT WHOLESALE GENERATORS, DISTRIBUTED NATURAL GAS
GENERATION FACILITIES, AND POWER MARKETERS
SECTION 3. Subchapter B, Chapter 35, Utilities Code, is
amended by adding Section 35.036 to read as follows:
Sec. 35.036. DISTRIBUTED NATURAL GAS GENERATION
FACILITIES. (a) A person who owns or operates a distributed
natural gas generation facility may sell electric power generated
by the facility. The electric utility, electric cooperative, or
retail electric provider that provides retail electricity service
to the facility may purchase electric power tendered to it by the
owner or operator of the facility at a value agreed to by the
electric utility, electric cooperative, or retail electric
provider and the owner or operator of the facility. The value of
the electric power may be based wholly or partly on the clearing
price of energy at the time of day and at the location at which the
electric power is made available to the electric grid.
(b) At the request of the owner or operator of the
distributed natural gas generation facility, the electric utility
or electric cooperative shall allow the owner or operator of the
facility to use transmission and distribution facilities to
transmit the electric power to another entity that is acceptable to
the owner or operator in accordance with commission rules or a
tariff approved by the Federal Energy Regulatory Commission.
(c) Subject to Subsections (e) and (f), if the owner or
operator of a distributed natural gas generation facility requests
to be interconnected to an electric utility or electric cooperative
that does not have a transmission tariff approved by the Federal
Energy Regulatory Commission, the electric utility or electric
cooperative may recover from the owner or operator of the facility
the reasonable costs of interconnecting the facility with the
electric utility or electric cooperative that are necessary for and
directly attributable to the interconnection of the facility.
(d) Subject to Subsections (e) and (f), an electric utility
or electric cooperative may recover from the owner or operator of a
distributed natural gas generation facility the reasonable costs of
electric facility upgrades and improvements if:
(1) the rated capacity of the distributed natural gas
generation facility is greater than the rated capacity of the
electric utility or electric cooperative; and
(2) the costs are necessary for and directly
attributable to accommodating the distributed natural gas
generation facility's capacity.
(e) An electric utility or electric cooperative may recover
costs under Subsection (c) or (d) only if:
(1) the electric utility or electric cooperative
provides a written good faith cost estimate to the owner or operator
of the distributed natural gas generation facility; and
(2) the owner or operator of the distributed natural
gas generation facility agrees in writing to pay the reasonable and
necessary costs of interconnection or capacity accommodation
requested by the owner or operator and described in the estimate
before the electric utility or electric cooperative incurs the
costs.
(f) If an electric utility or electric cooperative seeks to
recover from the owner or operator of a distributed natural gas
generation facility an amount that exceeds the amount in the
estimate provided under Subsection (e) by more than five percent,
the commission shall resolve the dispute at the request of the owner
or operator of the facility.
(g) A distributed natural gas generation facility must
comply with emissions limitations established by the Texas
Commission on Environmental Quality for a standard emissions permit
for an electric generation facility unit installed after January 1,
1995.
(h) This section does not require an electric cooperative to
transmit electricity to a retail point of delivery in the
certificated service area of the electric cooperative if the
electric cooperative has not adopted customer choice.
SECTION 4. Subsection (c), Section 39.351, Utilities Code,
is amended to read as follows:
(c) The commission may establish simplified filing
requirements for distributed natural gas generation facilities [A
power generation company may register any time after September 1,
2000].
SECTION 5. This Act takes effect September 1, 2011.
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