By: Strama H.B. No. 3582
A BILL TO BE ENTITLED
AN ACT
relating to emission and water reduction in permitted generation
facilities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 382.003, Health and Safety Code, is
amended by adding (1-b) to read as follows:
(1-b) "Emission and Water Reduction Project" means a
project in which a generation facility has a valid permit under this
chapter and which applies for a modified permit under this chapter
before January 1, 2020, in order to achieve:
(A) a 50% reduction in the annual average
emission rate for nitrogen oxides;
(B) a 25% reduction in the rate of water
consumption; and
(C) to maintain or exceed the previous rated
capacity of the facility.
SECTION 2. The Health and Safety Code is amended by adding
Chapter 395 to read as follows:
CHAPTER 395. EMISSION AND WATER REDUCTION INITIATIVE FOR
PERMITTED GENERATION FACILITIES
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 395.001. DEFINITIONS. In this chapter:
(1) "Best available control technology" has the
meaning assigned by Section 169 of the federal Clean Air Act (42
U.S.C. Section 7479(3)).
(2) "Commission" means the Texas Commission on
Environmental Quality.
(3) "Facility" has the meaning assigned by Section
382.003.
(4) "Incremental cost" has the meaning assigned by
Section 386.001.
(5) "New technology" means emissions control
technology that results in emissions reductions that exceed state
or federal requirements in effect at the time of submission of a new
technology implementation grant application.
(6) "Stationary source" has the meaning assigned by
Section 302 of the federal Clean Air Act (42 U.S.C. Section
7602(z)).
Sec. 395.002. EMISSION AND WATER REDUCTION INITIATIVE. (a)
The commission shall establish and administer an emission and water
reduction initiative to assist with the re-powering of electric
generation facilities as a means of reducing emissions and water
consumption in this state. Under the initiative, the commission
shall provide loan guarantees or other financial incentives for
eligible projects to facilitate the re-powering and modification
needed to reduce emissions and water consumption.
(b) Emission and Water Reduction Projects as defined by
Section 382.003 may be considered eligible projects.
Sec. 395.003. GUIDELINES AND CRITERIA. (a) The commission
shall adopt loan guaranty guidelines and criteria consistent with
the requirements of this chapter.
(b) The guidelines must include:
(1) protocols to compute projected emissions and water
reductions;
(2) safeguards to ensure that the projects funded
result in emissions reductions not otherwise required by state or
federal law;
(3) rules to establish loan guarantees not to exceed
85% of the direct cost of the project with the total cost of
installed capacity not to exceed $1000 per KW; and
(4) rules to ensure the loan guaranty will expire upon
the earlier of:
(A) three years after the Public Utility
Commission implements a forward capacity market; or
(B) the loan to value of the clean energy project
falls at or below 50%; or
(C) 18 years from the date of approval.
(c) The commission may propose revisions to the guidelines
and criteria adopted under this section as necessary to improve the
ability of the initiative to achieve the its goals.
(d) The commission may adopt emergency rules under Section
2001.034, Government Code, with abbreviated notice, to carry out
any rulemaking necessary to implement this chapter.
(e) Except as provided by Subsection (d), the rulemaking
requirements of Chapter 2001, Government Code, do not apply to the
adoption or revision of guidelines and criteria under this section.
Sec. 395.004. AVAILABILITY OF EMISSIONS REDUCTION CREDITS
IN CERTAIN NONATTAINMENT AREAS. A project funded under this
chapter must comply with Sections 386.055 and 386.056, as
applicable.
SUBCHAPTER B. INITIATIVE APPLICATIONS AND REVIEW
Sec. 395.101. APPLICATION FOR LOAN GUARANTY. (a) The owner
of a facility located in this state may apply for a loan guaranty
under the initiative established under Section 395.002. To improve
the ability of the initiative to achieve its goals, the commission
may adopt guidelines to allow a person other than the owner to apply
for and receive a loan guaranty.
(b) An application for a loan guaranty under this chapter
must be made on a form provided by the commission and must contain
information required by the commission, including:
(1) a detailed description of the proposed project;
(2) information necessary for the commission to
determine whether the project meets the commission's eligibility
requirements, including a statement of the amounts of any other
public financial assistance the project will receive; and
(3) other information the commission may require.
Sec. 395.102. LOAN GUARANTY APPLICATION REVIEW PROCEDURES.
(a) The commission shall review an application for a loan guaranty
for a project authorized under this chapter according to dates
specified in a request for grant applications. If the commission
determines that an application is incomplete, the commission shall
notify the applicant and provide an explanation of the information
missing from the application. The commission shall evaluate the
completed application according to the guidelines and criteria
adopted under Section 395.003.
(b) To the extent possible, the commission shall coordinate
project review and approval with any timing constraints related to
project purchases or installations to be made by an applicant.
(c) The commission may deny a loan guaranty application for
a project that does not meet the applicable criteria or that the
commission determines is not made in good faith, is not credible, or
is not in compliance with this chapter or the goals of this chapter.
(d) Subject to the availability of funding, the commission
shall award a loan guaranty under this chapter in conjunction with
the execution of a contract that obligates the commission to make
the loan guaranty and the recipient to perform the actions
described by the recipient's application.
Sec. 395.103. EVIDENCE OF EMISSIONS REDUCTION POTENTIAL
REQUIRED. (a) An application for a emissions and water reduction
project under this chapter must show reasonable evidence that the
proposed project is capable of providing a significant reduction in
emissions and water consumption.
(b) The commission shall consider specifically, for each
application:
(1) the projected potential for reduced emissions; and
(2) the projected potential for reduced water
consumption
Sec. 395.104. REPORTING REQUIREMENTS. The commission
annually shall prepare a report that summarizes the applications
received and loan guarantees awarded in the preceding year.
SUBCHAPTER C. PROJECT REQUIREMENTS
Sec. 391.201. ELIGIBILITY OF PROJECTS FOR LOAN GUARANTEES.
(a) The commission shall establish criteria for prioritizing
projects eligible to receive loan guarantees under this chapter.
The commission shall review and may modify the criteria and
priorities as appropriate.
(b) A proposed project must meet the requirements of this
section to be eligible for a loan guarantee under the initiative
established under Section 391.002.
(d) An emissions and water reduction project must document,
in a manner acceptable to the commission, an achieved reduction
from the baseline emissions adopted by the commission for the
relevant facility or stationary source.
(e) If a baseline emissions standard does not exist for a
facility, the commission, for purposes of this subchapter, shall
adopt an appropriate baseline emissions level for comparison
purposes.
(f) An emissions and water reduction project must document,
in a manner acceptable to the commission, an achieved reduction in
water consumption. Planned water usage for proposed projects must
be consistent with the state water plan.
(g) Upon completion of the project, the installed capacity
must meet or exceed the previous rated capacity of the facility.
Sec. 395.203. DETERMINATION OF LOAN GUARANTY AMOUNT AND
DURATION OF LOAN GUARANTY.
(a) The commission may not award a loan guaranty that, net
of taxes, exceeds 85% of the project cost with the total project
cost not to exceed $1000 per KW of installed capacity.
(b) The loan guaranty will expire upon the earlier of :
(1) 18 years from the date of approval;
(2) three years after the Public Utility Commission
implements a forward capacity market; or
(3) at any such time that the loan to value of the
emission and water reduction project falls at or below 50%.
Sec. 395.205. PREFERENCES. (a) On awarding grants under
this chapter the commission shall give preference to projects that
are located in non-attainment or near non-attainment areas of
Texas.
SUBCHAPTER D. FUNDING; EXPIRATION
Sec. 395.302. COMPTROLLER REVIEW OF USE OF GRANT FUNDS. (a)
The comptroller annually shall conduct a review of each recipient
of a emission and water reduction project loan guaranty under this
chapter to ensure that the recipient's use of the loan complies with
state law and the terms of the award.
(b) To assist with a review under this section, the
commission shall provide the comptroller with all monitoring
reports received from loan guaranty recipients and any other
documentation requested by the comptroller.
(c) On a finding of any misuse of loan money or other
noncompliance with grant requirements, the comptroller shall
provide a report to the commission with recommendations for
subsequent action.
(d) The comptroller shall notify the Commission and the
applicant when the loan to value of the emission and water reduction
project falls at or below %50 and the loan guarantee is withdrawn.
(d) The comptroller may adopt rules to implement this
section.
Sec. 391.304. EXPIRATION. This chapter expires August 31,
2019.
SECTION 3: 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, 2013.