83R3782 JXC-D
By: Anchia H.B. No. 723
A BILL TO BE ENTITLED
AN ACT
relating to renewable energy capacity, jobs, and trading credits.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. The purpose of this Act is to continue Texas'
leadership in installing clean, renewable energy in Texas in a
market-based manner that provides price protection for businesses
and consumers.
SECTION 2. Section 36.053(d), Utilities Code, is amended to
read as follows:
(d) If the commission issues a certificate of convenience
and necessity or, acting under Section 39.203(e), orders an
electric utility or a transmission and distribution utility to
construct or enlarge transmission or transmission-related
facilities to facilitate meeting the goals [goal] for generating
capacity from renewable energy technologies established by
Sections [under Section] 39.904(a) and (a-1), the commission shall
find that the facilities are used and useful to the utility in
providing service for purposes of this section and are prudent and
includable in the rate base, regardless of the extent of the
utility's actual use of the facilities.
SECTION 3. Section 37.056(c), Utilities Code, is amended to
read as follows:
(c) The commission shall grant each certificate on a
nondiscriminatory basis after considering:
(1) the adequacy of existing service;
(2) the need for additional service;
(3) the effect of granting the certificate on the
recipient of the certificate and any electric utility serving the
proximate area; and
(4) other factors, such as:
(A) community values;
(B) recreational and park areas;
(C) historical and aesthetic values;
(D) environmental integrity;
(E) the probable improvement of service or
lowering of cost to consumers in the area if the certificate is
granted; and
(F) to the extent applicable, the effect of
granting the certificate on the ability of this state to meet the
goals [goal] established by Sections [Section] 39.904(a) and (a-1)
of this title.
SECTION 4. Section 39.203(e), Utilities Code, is amended to
read as follows:
(e) The commission may require an electric utility or a
transmission and distribution utility to construct or enlarge
facilities to ensure safe and reliable service for the state's
electric markets and to reduce transmission constraints within
ERCOT in a cost-effective manner where the constraints are such
that they are not being resolved through Chapter 37 or the ERCOT
transmission planning process. The commission shall require an
electric utility or a transmission and distribution utility to
construct or enlarge transmission or transmission-related
facilities for the purpose of meeting the goals [goal] for
generating capacity from renewable energy technologies established
by Sections [under Section] 39.904(a) and (a-1). In any proceeding
brought under Chapter 37, an electric utility or transmission and
distribution utility ordered to construct or enlarge facilities
under this subchapter need not prove that the construction ordered
is necessary for the service, accommodation, convenience, or safety
of the public and need not address the factors listed in Sections
37.056(c)(1)-(3) and (4)(E). Notwithstanding any other law,
including Section 37.057, in any proceeding brought under Chapter
37 by an electric utility or a transmission and distribution
utility related to an application for a certificate of public
convenience and necessity to construct or enlarge transmission or
transmission-related facilities under this subsection, the
commission shall issue a final order before the 181st day after the
date the application is filed with the commission. If the
commission does not issue a final order before that date, the
application is approved.
SECTION 5. Section 39.904, Utilities Code, is amended by
amending Subsections (a), (b), (c), (d), (n), and (o) and adding
Subsections (a-1), (n-1), and (p) to read as follows:
(a) It is the intent of the legislature that by January 1,
2015, an additional 5,000 megawatts of generating capacity from
tier 1 renewable energy technologies will have been installed in
this state. The cumulative installed tier 1 renewable capacity in
this state shall total 5,880 megawatts by January 1, 2015, and the
commission shall establish a target of 10,000 megawatts of
installed renewable capacity by January 1, 2025. [The cumulative
installed renewable capacity in this state shall total 2,280
megawatts by January 1, 2007, 3,272 megawatts by January 1, 2009,
4,264 megawatts by January 1, 2011, 5,256 megawatts by January 1,
2013, and 5,880 megawatts by January 1, 2015. Of the renewable
energy technology generating capacity installed to meet the goal of
this subsection after September 1, 2005, the commission shall
establish a target of having at least 500 megawatts of capacity from
a renewable energy technology other than a source using wind
energy.]
(a-1) It is the goal of the legislature that by January 1,
2022, an additional 1,500 megawatts of generating capacity from
tier 2 renewable energy technologies will have been installed in
this state. The cumulative installed tier 2 renewable capacity in
this state shall total at least 100 megawatts by January 1, 2014;
200 megawatts by January 1, 2015; 350 megawatts by January 1, 2016;
500 megawatts by January 1, 2017; 750 megawatts by January 1, 2018;
900 megawatts by January 1, 2019; 1,000 megawatts by January 1,
2020; 1,250 megawatts by January 1, 2021; and 1,500 megawatts by
January 1, 2022. On January 1, 2018, if the commission determines
the state has not made significant progress toward the goal of this
subsection, then the commission may take action to suspend future
obligations under this subsection.
(b) The commission shall establish a tier 1 renewable energy
credits trading program and a tier 2 renewable energy credits
trading program. Any retail electric provider, municipally owned
utility, or electric cooperative that does not satisfy the
requirements of Subsection (a) or (a-1) by directly owning or
purchasing capacity using renewable energy technologies shall
purchase sufficient renewable energy credits to satisfy the
requirements by holding renewable energy credits in lieu of
capacity from renewable energy technologies. In calculating
capacity factors for tier 2 renewable energy credits, the
commission shall encourage a diverse portfolio of tier 2 renewable
energy technologies. The commission may adopt rules to establish a
sub-tier within the tier 2 renewable energy credits trading program
for one or more types of renewable energy technology included in the
tier 2 program.
(c) The [Not later than January 1, 2000, the] commission
shall adopt rules necessary to administer and enforce this section.
At a minimum, the rules shall:
(1) establish the minimum annual renewable energy
requirement for each retail electric provider, municipally owned
utility, and electric cooperative operating in this state in a
manner reasonably calculated by the commission to produce, on a
statewide basis, compliance with the requirements [requirement]
prescribed by Subsections (a) and (a-1) [Subsection (a)]; and
(2) specify reasonable performance standards that all
renewable capacity additions must meet to count against the
requirements [requirement] prescribed by Subsections (a) and (a-1)
[Subsection (a)] and that:
(A) are designed and operated so as to maximize
the energy output from the capacity additions in accordance with
then-current industry standards; and
(B) encourage the development, construction, and
operation of new renewable energy projects at those sites in this
state that have the greatest economic potential for capture and
development of this state's environmentally beneficial renewable
resources.
(d) For purposes of [In] this section:
(1) "Renewable energy technology" means a tier 1 or
tier 2 renewable energy technology.
(2) "Tier 1 renewable energy technology" [, "renewable
energy technology"] means any technology that exclusively relies on
an energy source that is naturally regenerated over a short time and
derived directly from the sun, indirectly from the sun, or from
moving water or other natural movements and mechanisms of the
environment. Renewable energy technologies include those that rely
on energy derived directly from the sun, on wind, geothermal,
hydroelectric, wave, or tidal energy, or on biomass or
biomass-based waste products, including landfill gas. A renewable
energy technology does not rely on energy resources derived from
fossil fuels, waste products from fossil fuels, or waste products
from inorganic sources.
(3) "Tier 2 renewable energy technology" means tier 1
renewable energy technology, excluding technology that derives
energy from wind, with a capacity of more than 150 kilowatts.
(n) Notwithstanding any other provision of law, the
commission shall have the authority to cap the price of renewable
energy credits and may suspend the goals [goal] contained in
Subsections (a) and (a-1) [Subsection (a)] if such suspension is
necessary to protect the reliability and operation of the grid.
(n-1) The commission shall reduce the requirement under
Subsection (c)(1) for a retail electric provider, municipally owned
utility, or electric cooperative that is subject to a renewable
energy requirement under this section if the commission determines
that compliance with the goals of Subsection (a-1) and a federal
renewable portfolio standard that is more stringent than those
goals would result in a net rate increase of one percent or more for
retail customers.
(o) The commission may establish tier 1 and tier 2 [an]
alternative compliance payments [payment]. An entity that has a
renewable energy purchase requirement under this section may elect
to pay the alternative compliance payment instead of applying
renewable energy credits toward the satisfaction of the entity's
obligation under this section. [The commission may establish a
separate alternative compliance payment for the goal of 500
megawatts of capacity from renewable energy technologies other than
wind energy.] The tier 1 alternative compliance payment for a
renewable energy purchase requirement that could be satisfied with
a renewable energy credit from wind energy may not be less than
$2.50 per credit or greater than $20 per credit. The tier 2
alternative compliance payment for a renewable energy purchase
requirement that could be satisfied with a tier 2 renewable energy
credit may not be set above $90 per credit before December 31, 2016;
$80 per credit before December 31, 2017; $65 per credit before
December 31, 2018; $45 per credit before December 31, 2019; $40 per
credit before December 31, 2020; $35 per credit before December 31,
2021; and $30 per credit before December 31, 2022. [Prior to
September 1, 2009, an alternative compliance payment under this
subsection may not be set above $5 per credit.] In implementing
this subsection, the commission shall consider:
(1) the effect of renewable energy credit prices on
retail competition;
(2) the effect of renewable energy credit prices on
electric rates;
(3) the effect of the alternative compliance payment
level on the renewable energy credit market; and
(4) any other factors necessary to ensure the
continued development of the renewable energy industry in this
state while protecting ratepayers from unnecessary rate increases.
(p) If the commission suspends the tier 2 renewable energy
technology goal under Subsection (a-1), retail electric providers
shall refund, under the guidance of the commission, all alternative
compliance payment funds collected to the residential and
commercial electric customers covered by this subchapter. If the
commission does not suspend the tier 2 renewable energy technology
goal under Subsection (a-1), the alternative compliance payment
funds collected by the commission shall be used for the purposes of
a solar rebate program established by the commission.
SECTION 6. This Act takes effect September 1, 2013.