| 1 | 1 | | 87R10952 JXC-F |
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| 2 | 2 | | By: Vasut H.B. No. 4502 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to cost recovery for costs arising from the |
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| 8 | 8 | | interconnection of certain electric generation facilities with the |
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| 9 | 9 | | ERCOT transmission system. |
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| 10 | 10 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 11 | 11 | | SECTION 1. Section 35.004, Utilities Code, is amended by |
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| 12 | 12 | | amending Subsection (d) and adding Subsection (d-1) to read as |
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| 13 | 13 | | follows: |
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| 14 | 14 | | (d) The commission shall price wholesale transmission |
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| 15 | 15 | | services within ERCOT based on the postage stamp method of pricing |
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| 16 | 16 | | under which a transmission-owning utility's rate is based on the |
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| 17 | 17 | | ERCOT utilities' combined annual costs of transmission, other than |
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| 18 | 18 | | costs described in Subsection (d-1), divided by the total demand |
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| 19 | 19 | | placed on the combined transmission systems of all such |
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| 20 | 20 | | transmission-owning utilities within a power region. An electric |
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| 21 | 21 | | utility subject to the freeze period imposed by Section 39.052 may |
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| 22 | 22 | | treat transmission costs in excess of transmission revenues during |
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| 23 | 23 | | the freeze period as an expense for purposes of determining annual |
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| 24 | 24 | | costs in the annual report filed under Section 39.257. |
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| 25 | 25 | | Notwithstanding Section 36.201, the commission may approve |
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| 26 | 26 | | wholesale rates that may be periodically adjusted to ensure timely |
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| 27 | 27 | | recovery of transmission investment. Notwithstanding Section |
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| 28 | 28 | | 36.054(a), if the commission determines that conditions warrant the |
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| 29 | 29 | | action, the commission may authorize the inclusion of construction |
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| 30 | 30 | | work in progress in the rate base for transmission investment |
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| 31 | 31 | | required by the commission under Section 39.203(e). |
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| 32 | 32 | | (d-1) Capital costs incurred to interconnect with the ERCOT |
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| 33 | 33 | | transmission system generation resources and electric energy |
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| 34 | 34 | | storage resources described by Section 35.152(a), including costs |
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| 35 | 35 | | of utility interconnection facilities and all necessary system |
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| 36 | 36 | | upgrades, must be directly assigned by the ERCOT independent system |
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| 37 | 37 | | operator to the generation resource or electric energy storage |
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| 38 | 38 | | resource receiving interconnection service through the facilities. |
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| 39 | 39 | | SECTION 2. This Act takes effect September 1, 2021. |
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