Texas 2021 - 87th Regular

Texas House Bill HB1607 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1		87R16686 BRG-F
2	2		By: Darby, Lucio III, King of Parker, H.B. No. 1607
3		-	Hernandez, Hunter, et al.
	3	+	Hernandez, Hunter
	4	+	Substitute the following for H.B. No. 1607:
	5	+	By: Paddie C.S.H.B. No. 1607
4	6
5	7
6	8		A BILL TO BE ENTITLED
7	9		AN ACT
8	10		relating to certificates of public convenience and necessity for
9	11		certain transmission projects.
10	12		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	13		SECTION 1. The legislature finds that:
12	14		(1) this state has long been a leader in energy policy
13	15		that has delivered economic, electricity, and environmental
14	16		benefits to millions of electricity consumers, businesses,
15	17		state-owned lands, and landowners;
16	18		(2) this state continues to experience population,
17	19		business, industrial, and manufacturing growth that increases the
18	20		need for reliable, low-cost electricity;
19	21		(3) the ERCOT electric power grid is experiencing
20	22		congestion, constraint, and curtailment that are economically
21	23		undesirable;
22	24		(4) the ERCOT electric power grid is experiencing load
23	25		growth management challenges;
24	26		(5) while this state does not import large amounts of
25	27		electricity, working to ensure that this state's electricity needs
26	28		are met as fully as possible from in-state resources is of strategic
27	29		interest to the legislature;
28	30		(6) all of the electric power industry's available
29	31		power generation resources, including its wind and solar
30	32		generation, natural gas-fired generation, energy storage, and
31	33		transmission components, can play a substantial role in this
32	34		state's economic recovery;
33	35		(7) this state's oil and natural gas industries
34	36		continue to grow and prosper, and those industries require low-cost
35	37		electricity and a reliable electric power grid to thrive; and
36	38		(8) to attract new capital projects to this state,
37	39		create jobs, promote substantial new economic development, ensure a
38	40		reliable and stable electric power grid that is powered by in-state
39	41		resources, and keep this state as a leader on energy policy in the
40	42		United States, a timely and targeted expansion of this state's
41	43		electric transmission system is necessary to enhance the
42	44		reliability of the system.
43	45		SECTION 2. Section 37.0541, Utilities Code, is amended to
44	46		read as follows:
45	47		Sec. 37.0541. CONSOLIDATION OF CERTAIN PROCEEDINGS. The
46	48		commission shall consolidate the proceeding on an application to
47	49		obtain or amend a certificate of convenience and necessity for the
48	50		construction of a transmission line with the proceeding on another
49	51		application to obtain or amend a certificate of convenience and
50	52		necessity for the construction of a transmission line if it is
51	53		apparent from the applications or a motion to intervene in either
52	54		proceeding that the transmission lines that are the subject of the
53	55		separate proceedings share a common point of interconnection. [This
54	56		section does not apply to a proceeding on an application for a
55	57		certificate of convenience and necessity for a transmission line to
56	58		serve a competitive renewable energy zone as part of a plan
57	59		developed by the commission under Section 39.904(g)(2).]
58	60		SECTION 3. Section 37.056, Utilities Code, is amended by
59	61		adding Subsections (a-1), (d-1), (d-2), and (d-3) and amending
60	62		Subsection (d) to read as follows:
61	63		(a-1) In this section:
62	64		(1) "Interzonal" means involving more than one ERCOT
63	65		load zone.
64	66		(2) "Intrazonal" means involving a single ERCOT load
65	67		zone.
66	68		(d) The commission by rule shall establish criteria, in
67	69		addition to the criteria described by Subsection (c), for granting
68	70		a certificate for a transmission project that serves the ERCOT
69	71		power region and[,] that is not necessary to meet state or federal
70	72		reliability standards[, and that does not serve a competitive
71	73		renewable energy zone].
72	74		(d-1) Except as provided by Subsection (d-2), an
73	75		application for a certificate described by Subsection (d) [The
74	76		criteria] must include a comparison of the levelized estimated cost
75	77		of the transmission project and the levelized estimated cost
76	78		savings and economic benefits that may result from the
77	79		[transmission] project. The commission shall include with the
78	80		commission's decision to grant or deny the certificate the
79	81		commission's findings on the comparison. The comparison must
80	82		account for:
81	83		(1) the probable improvement of service and reduction
82	84		of costs for consumers that may be realized from the project;
83	85		(2) an estimated value of the reduction in interzonal
84	86		and intrazonal constraint and congestion costs and interzonal and
85	87		intrazonal curtailment costs that may be realized from the project;
86	88		(3) an estimation of reduced transmission losses that
87	89		may be realized from the project;
88	90		(4) an assessment of whether the project will provide
89	91		improved access to ERCOT for new generation facilities and the
90	92		benefits that improved access could provide to generation
91	93		facilities, industrial load, and the ERCOT market;
92	94		(5) an estimation of reduced future transmission
93	95		investment costs that may be realized from the project;
94	96		(6) an estimation of costs of projects described by
95	97		Subsection (d-2) that may be avoided as a result of the project; and
96	98		(7) an estimation of direct economic benefits that may
97	99		be realized from the construction of the project [The commission
98	100		shall include with its decision on an application for a certificate
99	101		to which this subsection applies findings on the criteria].
100	102		(d-2) If an application does not include a comparison
101	103		described by Subsection (d-1), the commission may not grant a
102	104		certificate for a project described by Subsection (d) unless the
103	105		commission finds that the project is needed to support a reliable
104	106		and adequate transmission network, to facilitate wholesale
105	107		competition, or to minimize curtailments due to interzonal
106	108		constraints and intrazonal congestion.
107	109		(d-3) Not less than once per year, the independent
108	110		organization certified under Section 39.151 for the ERCOT power
109	111		region shall identify transmission projects that will meet
110	112		commission findings under Subsection (d-2).
111	113		SECTION 4. Section 39.904(k), Utilities Code, is amended to
112	114		read as follows:
113	115		(k) The commission and the independent organization
114	116		certified for ERCOT shall study the need for increased transmission
115	117		and generation capacity throughout this state and report to the
116	118		legislature the results of the study and any recommendations for
117	119		legislation. The report must be filed with the legislature not
118	120		later than December 31 of each even-numbered year [and may be filed
119	121		as a part of the report required by Subsection (j)].
120	122		SECTION 5. Subchapter Z, Chapter 39, Utilities Code, is
121	123		amended by adding Section 39.918 to read as follows:
122	124		Sec. 39.918. CRITICAL DESIGNATION TRANSMISSION
123	125		INFRASTRUCTURE PROJECTS. (a) In this section:
124	126		(1) "Interzonal" means involving more than one ERCOT
125	127		load zone.
126	128		(2) "Intrazonal" means involving a single ERCOT load
127	129		zone.
128	130		(b) Not later than December 30, 2021, the independent
129	131		organization certified under Section 39.151 for the ERCOT power
130	132		region shall:
131	133		(1) identify, in consultation with the commission,
132	134		critical designation transmission infrastructure projects and the
133	135		electric utilities or transmission and distribution utilities that
134	136		will construct and operate the projects in a manner consistent with
135	137		Section 37.056; and
136	138		(2) submit a written description of each project to
137	139		the commission.
138	140		(c) Projects identified under Subsection (b) must
139	141		facilitate a timely and targeted expansion of the electric power
140	142		grid in ERCOT for the purposes of:
141	143		(1) resolving existing interzonal and intrazonal
142	144		transmission constraints, congestion, or curtailments, including
143	145		generic transmission constraints; and
144	146		(2) ensuring the future reliability of the ERCOT
145	147		electric power grid.
146	148		(d) To the extent practicable, projects identified under
147	149		Subsection (b) should:
148	150		(1) be cost-effective and designed to transmit high
149	151		volumes of electricity in and across ERCOT load zones efficiently;
150	152		(2) minimize the need for the acquisition of new
151	153		rights-of-way by replacing aging infrastructure or following
152	154		routes that align with existing rights-of-way or existing
153	155		transmission infrastructure;
154	156		(3) minimize interzonal constraints and intrazonal
155	157		congestion during construction activities;
156	158		(4) be designed to accommodate new solutions,
157	159		including higher voltages, if the independent organization
158	160		determines that new solutions are required; and
159	161		(5) be designed to significantly reduce present or
160	162		expected future interzonal constraints and intrazonal congestion.
161	163		(e) The independent organization certified under Section
162	164		39.151 for the ERCOT power region shall identify as a critical
163	165		designation transmission infrastructure project under Subsection
164	166		(b) a project addressing an interzonal constraint or intrazonal
165	167		congestion in an area if:
166	168		(1) the constraint or congestion has been present for
167	169		three years or longer; and
168	170		(2) the area has experienced constraint or congestion
169	171		costs greater than or equal to $100 million per year in each of the
170	172		previous three years.
171	173		(f) The independent organization certified under Section
172	174		39.151 for the ERCOT power region may consult with the independent
173	175		organization's market participant segments and other stakeholders
174	176		to identify projects under Subsection (b) that could facilitate:
175	177		(1) the growth of the economy of this state; or
176	178		(2) oil and gas, commercial, and industrial
177	179		development that could provide substantial new tax revenue,
178	180		landowner income, or new jobs in this state.
179	181		(g) Not later than the 450th day after the date that the
180	182		independent organization certified under Section 39.151 for the
181	183		ERCOT power region submits a written description of a project to the
182	184		commission under Subsection (b), the utility that will construct
183	185		and operate the project shall submit to the commission an
184	186		application for a certificate of public convenience and necessity
185	187		for the project.
186	188		(h) In considering an application for a certificate of
187	189		public convenience and necessity for a project identified under
188	190		Subsection (b), the commission is not required to consider the
189	191		factors provided by Sections 37.056(c)(1) and (2). The commission
190	192		shall consider all factors provided by Section 37.056, including
191	193		Sections 37.056(c)(1) and (2), for a project not identified under
192	194		Subsection (b).
193	195		(i) If the commission issues a certificate of public
194	196		convenience and necessity for a project identified under Subsection
195	197		(b), the commission shall find that the project is used and useful
196	198		to the utility in providing service for purposes of this section,
197	199		prudent, and includable in the rate base, regardless of the extent
198	200		of the utility's actual use of the project.
199	201		(j) Transmission service that is facilitated through a
200	202		project identified under Subsection (b) must be provided in a
201	203		manner consistent with Subchapter A, Chapter 35.
202	204		(k) This section expires September 1, 2030.
203	205		SECTION 6. Sections 39.904(g), (h), (i), and (j), Utilities
204	206		Code, are repealed.
205	207		SECTION 7. The changes in law made by this Act apply only to
206	208		a proceeding affecting a certificate of public convenience and
207	209		necessity that commences on or after the effective date of this Act.
208	210		A proceeding affecting a certificate of public convenience and
209	211		necessity that commenced before the effective date of this Act is
210	212		governed by the law in effect on the date the proceeding is
211	213		commenced, and that law is continued in effect for that purpose.
212	214		SECTION 8. The recovery of a transmission facility
213	215		investment made by an electric utility to serve a competitive
214	216		renewable energy zone is governed by the law in effect on the date
215	217		the facility is placed in service, regardless of whether the
216	218		facility is completed before, on, or after the effective date of
217	219		this Act, and that law is continued in effect for that purpose.
218	220		SECTION 9. This Act takes effect September 1, 2021.