86R30217 BRG-F
By: Hancock S.B. No. 1941
(Holland)
Substitute the following for S.B. No. 1941: No.
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
distribution 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 prior approval of the commission, may contract with a
power generation company to provide electric energy from an
electric energy storage facility to ensure reliable service to
distribution 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 distribution customers.
(f) A power generation company that owns or operates 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 company
reserves capacity as required by the contract.
(g) A power generation company that owns or operates an
electric energy storage facility subject to a contract under
Subsection (a) may not discharge the facility to satisfy the
contract's requirements unless directed by the transmission and
distribution utility.
(h) A contract under Subsection (a) must require a power
generation company that owns or operates an electric energy storage
facility to reimburse a transmission and distribution utility for
the cost of an administrative penalty 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 a power generation company 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 include a reasonable return on the payments required
under the contract only if the contract terms satisfy the relevant
accounting standards for a capital lease or finance lease.
(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.