87R11028 CXP-F
By: Thierry H.B. No. 3470
A BILL TO BE ENTITLED
AN ACT
relating to electricity service in this state; imposing
administrative penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 15.023, Utilities Code, is amended by
amending Subsections (b), (c), and (d) and adding Subsections (b-1)
and (b-2) to read as follows:
(b) Except as provided by Subsection (b-1), the [The]
penalty for a violation may be in an amount not to exceed $25,000.
Each day a violation continues or occurs is a separate violation for
purposes of imposing a penalty.
(b-1) The penalty for a violation of a reliability standard
adopted by the independent organization certified under Section
39.151 or of a commission rule relating to reliability in the
wholesale electric market may be in an amount not to exceed
$100,000. Each day a violation continues or occurs is a separate
violation for purposes of imposing a penalty.
(b-2) If a person pays a penalty to a federal authority for a
violation of a reliability standard that is the same or
substantially the same as a reliability standard adopted by the
independent organization certified under Section 39.151:
(1) the commission may not assess an administrative
penalty for the same instance or circumstance for which the person
paid the federal penalty; and
(2) the commission shall refund the full amount of an
administrative penalty that the commission assessed against the
person before the date the person paid the federal penalty, if the
commission assessed the penalty for the same instance or
circumstance for which the person paid the federal penalty.
(c) The commission by rule shall establish a classification
system for violations described by Subsection (b) and a separate
classification system for violations described by Subsection
(b-1). Each system must include [that includes] a range of
administrative penalties that may be assessed for each class of
violation, based on:
(1) the seriousness of the violation, including:
(A) the nature, circumstances, extent, and
gravity of a prohibited act; and
(B) the hazard or potential hazard created to the
health, safety, or economic welfare of the public;
(2) the economic harm to property or the environment
caused by the violation;
(3) the history of previous violations;
(4) the amount necessary to deter future violations;
(5) efforts to correct the violation; and
(6) any other matter that justice may require.
(d) The classification system established under Subsection
(c) shall provide that a penalty in an amount that exceeds $5,000
may be assessed only if the violation is included in the highest
class of violations in the classification system. This subsection
does not apply to the classification system established under
Subsection (c) for a violation described by Subsection (b-1).
SECTION 2. Section 15.104(a), Utilities Code, is amended to
read as follows:
(a) The commission on its own motion may issue a cease and
desist order:
(1) after providing notice and an opportunity for a
hearing if practicable or without notice or opportunity for a
hearing; and
(2) if the commission determines that the conduct of a
person:
(A) poses a threat to continuous and adequate
electric service;
(B) is fraudulent;
(C) is hazardous;
(D) [(C)] creates an immediate danger to the
public safety; or
(E) [(D)] is causing or can be reasonably
expected to cause an immediate injury to a customer of electric
services and that the injury is incapable of being repaired or
rectified by monetary compensation.
SECTION 3. Subchapter D, Chapter 15, Utilities Code, is
amended by adding Section 15.108 to read as follows:
Sec. 15.108. ADMINISTRATIVE PENALTY. The commission may
impose an administrative penalty under Subchapter B against a
person who violates an order issued under this subchapter.
SECTION 4. Section 31.003, Utilities Code, is amended by
adding Subsection (c) to read as follows:
(c) A report issued under this section before September 1,
2023, must include a summary of the information required by Section
39.926 to be provided on the Internet website found at
http://www.puc.state.tx.us. This subsection expires September 1,
2023.
SECTION 5. Section 39.002, Utilities Code, is amended to
read as follows:
Sec. 39.002. APPLICABILITY. This chapter, other than
Sections 39.1516, 39.155, 39.157(e), 39.203, 39.904, 39.9051,
39.9052, [and] 39.914(e), and 39.9161, does not apply to a
municipally owned utility or an electric cooperative. Sections
39.157(e), 39.203, and 39.904, however, apply only to a municipally
owned utility or an electric cooperative that is offering customer
choice. If there is a conflict between the specific provisions of
this chapter and any other provisions of this title, except for
Chapters 40 and 41, the provisions of this chapter control.
SECTION 6. Section 39.151, Utilities Code, is amended by
amending Subsections (d-1), (d-2), (d-3), and (e) and adding
Subsections (g-2) and (g-3) to read as follows:
(d-1) The commission shall require an independent
organization certified by the commission under this section to
annually submit to the commission for review and approval the
organization's entire proposed annual budget. The commission
[shall review the proposed budgets either annually or biennially
and] may approve, disapprove, or modify any item included in the [a]
proposed budget. The commission by rule shall establish the type of
information or documents needed to effectively evaluate the
proposed budget and reasonable dates for the submission of that
information or those documents. The commission shall establish a
procedure to provide public notice of and public participation in
the budget review process.
(d-2) An [Except as otherwise agreed to by the commission
and an] independent organization certified by the commission under
this section[, the organization] must submit to the commission for
review and approval proposals for obtaining debt financing or for
refinancing existing debt. The commission may approve, disapprove,
or modify a proposal.
(d-3) An independent organization certified by the
commission under this section shall develop proposed performance
measures to track the organization's operations. The independent
organization must submit the proposed performance measures to the
commission for review and approval. The commission shall annually
review the organization's performance as part of the budget review
process under Subsection (d-1). The commission shall prepare an
annual [a] report [at the time the commission approves the
organization's budget] detailing the organization's performance
and submit the report to the lieutenant governor, the speaker of the
house of representatives, and each house and senate standing
committee that has jurisdiction over electric utility issues.
(e) After approving the budget of an independent
organization under Subsection (d-1), the commission shall
authorize the organization to charge to wholesale buyers and
sellers a system administration fee, within a range determined by
the commission, that is reasonable and competitively neutral to
fund the independent organization's approved budget. The
commission shall investigate the organization's cost efficiencies,
salaries and benefits, and use of debt financing and may require the
organization to provide any information needed to effectively
evaluate the reasonableness and neutrality of the fee or to
evaluate the effectiveness or efficiency of the organization. The
commission shall work with the organization to establish the detail
of information, both current and historical, and the time frames
the commission needs to effectively evaluate the fee. The
commission shall require the independent organization to closely
match actual revenues generated by the fee [and other sources of
revenue] with revenue necessary to fund the budget and make
quarterly fee adjustments[, taking into account the effect of a fee
change on market participants and consumers,] to ensure that the
budget year does not end with surplus or insufficient funds. The
commission shall require the organization to submit to the
commission quarterly[, on a schedule determined by the commission,]
reports that compare actual expenditures with budgeted
expenditures.
(g-2) To maintain certification as an independent
organization under this section, the organization's governing body
must establish and implement a formal process for adopting new
protocols or revisions to existing protocols. The process must
require that:
(1) a majority of the organization's governing body
initiate the creation or revision of protocols; and
(2) the organization's staff develop the new or
revised protocols and submit the protocols to the governing body
for adoption.
(g-3) The governing body of an independent organization
certified by the commission under this section shall, in accordance
with formal bylaws or protocols adopted by the organization and
approved by the commission, establish and maintain an advisory
committee whose membership is broadly representative of the
organization's members to assist the organization's governing body
and staff in developing or revising protocols or in performing the
organization's other duties and functions. This subsection does
not prohibit the governing body of the organization from appointing
one or more additional committees or subcommittees to assist the
organization's governing body and staff in performing the
organization's duties and functions.
SECTION 7. Section 39.904(d), Utilities Code, is amended to
read as follows:
(d) In this section, "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, or
on gasified waste, including landfill gas. A renewable energy
technology does not rely solely on energy resources derived from
fossil fuels, waste products from fossil fuels, or waste products
from inorganic sources.
SECTION 8. The heading to Section 39.916, Utilities Code,
is amended to read as follows:
Sec. 39.916. [INTERCONNECTION OF] DISTRIBUTED RENEWABLE
GENERATION.
SECTION 9. Section 39.916(a), Utilities Code, is amended by
adding Subdivision (4) to read as follows:
(4) "Surplus electricity" means electricity generated
by distributed renewable generation that is not consumed at the
place the distributed renewable generation is installed and that
flows onto the electric distribution system.
SECTION 10. Section 39.916, Utilities Code, is amended by
adding Subsections (i), (j-1), (j-2), (j-3), (j-4), (j-5), and (l)
and amending Subsection (j) to read as follows:
(i) A distributed renewable generation owner may sell
surplus electricity to a retail electric provider or electric
utility under this section only if the owner's distributed
renewable generation is rated to produce an amount of electricity
that is less than or equal to the amount of electricity that the
retail electric customer for whom the distributed renewable
generation is installed is reasonably expected to consume annually.
(j) A [For] distributed renewable generation owner that
sells surplus electricity [owners] in an area [areas] in which
customer choice has been introduced [, the distributed renewable
generation owner] must sell the [owner's surplus] electricity
[produced] to the retail electric provider that serves the
[distributed renewable generation owner's] load of the retail
electric customer for whom the distributed renewable generation is
installed at a value agreed to by [between] the distributed
renewable generation owner and the provider. The value [that serves
the owner's load which] may include, but is not limited to, an
agreed value based on the clearing price of energy at the time of
day that the electricity is made available to the grid or the value
[it] may be a monetary credit applied to an account during a billing
period that may be carried over to subsequent billing periods until
the credit has been redeemed.
(j-1) The independent organization identified in Section
39.151 shall develop procedures so that the amount of electricity
purchased from a distributed renewable generation owner under this
section in an area in which customer choice has been introduced is
accounted for in settling the total load served by the provider that
serves the [that owner's] load of the retail electric customer for
whom the distributed renewable generation is installed [by January
1, 2009]. A distributed renewable generation owner requesting net
metering services for purposes of this section must have metering
devices capable of providing measurements consistent with the
independent organization's settlement requirements.
(j-2) A distributed renewable generation owner that sells
surplus electricity in an area in which customer choice has not been
introduced must sell the electricity to the electric utility that
serves the load of the retail electric customer for whom the
distributed renewable generation is installed. The electric
utility shall purchase the surplus electricity at a value that is
equal to the avoided cost of the electric utility, as determined in
accordance with commission rules.
(j-3) An electric utility that purchases surplus
electricity under this section shall:
(1) make a payment to the seller at least once each
quarter; or
(2) apply a monetary credit to the seller's account and
allow the credit balance to be carried forward onto the seller's
next monthly bill for not more than 12 months.
(j-4) An electric utility that purchases surplus
electricity under this section shall inform the distributed
renewable generation owner of the amount of surplus electricity
purchased from the owner in kilowatt hours during the owner's most
recent billing cycle and the price paid for the electricity.
(j-5) A distributed renewable generation owner may file a
written complaint with the commission relating to a violation of
Subsection (j-2), (j-3), or (j-4).
(l) This section does not apply to a municipally owned
utility or electric cooperative.
SECTION 11. Subchapter Z, Chapter 39, Utilities Code, is
amended by adding Section 39.9161 to read as follows:
Sec. 39.9161. DISTRIBUTED RENEWABLE GENERATION WITH
MUNICIPALLY OWNED UTILITIES OR ELECTRIC COOPERATIVES. (a) A
municipally owned utility or electric cooperative shall provide the
utility's or cooperative's customers access to interconnection of
distributed renewable generation and payment for surplus
electricity produced.
(b) The governing body of a municipally owned utility or
board of directors of an electric cooperative shall provide
oversight and adopt rates, rules, and procedures to allow
interconnection and payment for surplus electricity on or before
the 120th day after the date the governing body or board receives a
bona fide request for interconnection.
(c) A municipally owned utility or electric cooperative
that had retail sales of 500,000 megawatt hours or more in 2010
shall file the utility's or cooperative's interconnection and
surplus electricity rates, rules, and procedures with the State
Energy Conservation Office not later than January 1, 2022, and
shall make timely updates to the filed rates, rules, and
procedures.
(d) An electric cooperative shall allow interconnection if:
(1) the distributed renewable generation to be
interconnected has a five-year warranty against breakdown or undue
degradation;
(2) the rated capacity of the distributed renewable
generation does not exceed the electric cooperative service
capacity; and
(3) the distributed renewable generation meets other
technical requirements for interconnection that are consistent
with commission rules.
(e) An electric cooperative may not require a distributed
renewable generation owner whose distributed renewable generation
meets the standards established under Subsection (d) to purchase an
amount, type, or classification of liability insurance the
distributed renewable generation owner would not have in the
absence of the distributed renewable generation.
SECTION 12. Subchapter Z, Chapter 39, Utilities Code, is
amended by adding Section 39.918 to read as follows:
Sec. 39.918. INFORMATION ON INTERNET REGARDING PURCHASE OF
SURPLUS ELECTRICITY PRODUCED BY DISTRIBUTED RENEWABLE GENERATION.
On an Internet website administered by the commission, the
commission shall provide for access to easily comparable
information regarding retail electric providers' offers to
residential distributed renewable generation owners for their
surplus electricity.
SECTION 13. Section 39.916(h), Utilities Code, is repealed.
SECTION 14. The changes in law made by this Act to Section
15.023, Utilities Code, apply only to a violation that occurs on or
after the effective date of this Act. For purposes of this section,
a violation occurs before the effective date of this Act if any
element of the violation occurs before that date. A violation that
occurs before the effective date of this Act is covered by the law
in effect on the date the violation occurred, and the former law is
continued in effect for that purpose.
SECTION 15. This Act takes effect September 1, 2021.