By: Hancock S.B. No. 1941
A BILL TO BE ENTITLED
AN ACT
relating to use of electric energy storage facilities in the ERCOT
power region.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 35.151, Utilities Code, is amended to
read as follows:
Sec. 35.151. ELECTRIC ENERGY STORAGE. This subchapter
applies only to the ownership or operation of electric energy
storage equipment or facilities in the ERCOT power region that are
intended to:
(1) provide energy or ancillary services at wholesale,
including electric energy storage equipment or facilities listed on
a power generation company's registration with the commission or,
for an exempt wholesale generator, on the generator's registration
with the Federal Energy Regulatory Commission; or
(2) provide reliable delivery of electric energy to
retail customers.
SECTION 2. Subchapter E, Chapter 35, Utilities Code, is
amended by adding Section 35.153 to read as follows:
Sec. 35.153. CONTRACTS FOR ELECTRIC ENERGY STORAGE FOR
RELIABILITY SERVICES. (a) A transmission and distribution
utility, with the approval of the commission, may contract with the
owner or operator of an electric energy storage facility to provide
electric energy from an electric energy storage facility to ensure
reliable service to retail customers.
(b) The commission may not authorize ownership of an
electric energy storage facility by a transmission and distribution
utility.
(c) Before entering into a contract under Subsection (a),
the transmission and distribution utility must issue a request for
proposals for use of an electric energy storage facility to meet the
utility's reliability needs.
(d) A transmission and distribution utility may enter into a
contract under Subsection (a) only if use of an electric energy
storage facility is more cost-effective than construction or
modification of traditional distribution facilities.
(e) A transmission and distribution utility may not enter
into a contract under Subsection (a) that reserves an amount of
capacity exceeding the amount of capacity required to ensure
reliable service to the utility's retail customers.
(f) An owner or operator of an electric energy storage
facility subject to a contract under Subsection (a) may sell
electric energy or ancillary services through use of the facility
only to the extent that the owner or operator reserves capacity as
required by the contract.
(g) An owner or operator of an electric energy storage
facility subject to a contract under Subsection (a) may not
discharge the facility for reliability purposes unless directed by
the transmission and distribution utility.
(h) A contract under Subsection (a) must require an owner or
operator of an electric energy storage facility to reimburse a
transportation and distribution utility for the cost of
administrative penalties assessed against the utility for a
violation caused by the facility's failure to meet the requirements
of the agreement.
(i) In establishing the rates of a transmission and
distribution utility, a regulatory authority shall review a
contract between the utility and an owner or operator of an electric
energy storage facility under Subsection (a). The utility has the
burden of proof to establish that the costs of the contract are
reasonable and necessary. The regulatory authority may authorize a
transmission and distribution utility to earn a reasonable return
on the present value of future payments required under the
contract.
(j) The total amount of electric energy storage capacity
reserved by contracts under Subsection (a) may not exceed 40
megawatts. The commission shall by rule establish the maximum
amount of electric energy storage capacity allotted to each
transmission and distribution utility.
(k) The commission shall adopt rules as necessary to
implement this section and establish criteria for approving
contracts under Subsection (a).
SECTION 3. The Public Utility Commission of Texas shall
adopt rules required by Section 35.153, Utilities Code, as added by
this Act, as soon as practicable after the effective date of this
Act.
SECTION 4. This Act takes effect September 1, 2019.