Texas 2021 - 87th Regular

Texas Senate Bill SB304 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	87R3413 CXP-F
2	2	By: Eckhardt S.B. No. 304
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to a state goal for competitive zero-carbon electric
8	8	generation.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Section 39.002, Utilities Code, is amended to
11	11	read as follows:
12	12	Sec. 39.002. APPLICABILITY. This chapter, other than
13	13	Sections 39.1516, 39.155, 39.157(e), 39.203, 39.904, 39.9051,
14	14	39.9052, [and] 39.914(e), and 39.918, does not apply to a
15	15	municipally owned utility or an electric cooperative. Sections
16	16	39.157(e), 39.203, and 39.904, however, apply only to a municipally
17	17	owned utility or an electric cooperative that is offering customer
18	18	choice. If there is a conflict between the specific provisions of
19	19	this chapter and any other provisions of this title, except for
20	20	Chapters 40 and 41, the provisions of this chapter control.
21	21	SECTION 2. Section 39.402(a), Utilities Code, is amended to
22	22	read as follows:
23	23	(a) Until the date on which an electric utility subject to
24	24	this subchapter is authorized by the commission to implement
25	25	customer choice, the rates of the utility shall be regulated under
26	26	traditional cost of service regulation and the utility is subject
27	27	to all applicable regulatory authority prescribed by this subtitle
28	28	and Subtitle A, including Chapters 14, 32, 33, 36, and 37. Until
29	29	the date on which an electric utility subject to this subchapter
30	30	implements customer choice, the provisions of this chapter, other
31	31	than this subchapter, Sections 39.1516, 39.904, [and] 39.905, and
32	32	39.918, and the provisions relating to the duty to obtain a permit
33	33	from the Texas Commission on Environmental Quality for an electric
34	34	generating facility and to reduce emissions from an electric
35	35	generating facility, shall not apply to that utility. That portion
36	36	of any commission order entered before September 1, 2001, to comply
37	37	with this subchapter shall be null and void.
38	38	SECTION 3. Section 39.452(d), Utilities Code, is amended to
39	39	read as follows:
40	40	(d) Until the date on which an electric utility subject to
41	41	this subchapter implements customer choice:
42	42	(1) the provisions of this chapter do not apply to that
43	43	electric utility, other than this subchapter, Sections 39.1516,
44	44	39.904, [and] 39.905, and 39.918, the provisions relating to the
45	45	duty to obtain a permit from the Texas Commission on Environmental
46	46	Quality for an electric generating facility and to reduce emissions
47	47	from an electric generating facility, and the provisions of
48	48	Subchapter G that pertain to the recovery and securitization of
49	49	hurricane reconstruction costs authorized by Sections
50	50	39.458-39.463; and
51	51	(2) the electric utility is not subject to a rate
52	52	freeze and, subject to the limitation provided by Subsection (b),
53	53	may file for rate changes under Chapter 36 and for approval of one
54	54	or more of the rate rider mechanisms authorized by Sections 39.454
55	55	and 39.455.
56	56	SECTION 4. Section 39.502(b), Utilities Code, is amended to
57	57	read as follows:
58	58	(b) Until the date on which an electric utility subject to
59	59	this subchapter implements customer choice, the provisions of this
60	60	chapter, other than this subchapter and Sections 39.1516, 39.904,
61	61	[and] 39.905, and 39.918, do not apply to that utility.
62	62	SECTION 5. Section 39.552(b), Utilities Code, is amended to
63	63	read as follows:
64	64	(b) Until the date on which an electric utility subject to
65	65	this subchapter implements customer choice, the provisions of this
66	66	chapter, other than this subchapter and Sections 39.1516, 39.904,
67	67	[and] 39.905, and 39.918, do not apply to that utility.
68	68	SECTION 6. Subchapter Z, Chapter 39, Utilities Code, is
69	69	amended by adding Section 39.918 to read as follows:
70	70	Sec. 39.918. GOAL FOR COMPETITIVE ZERO-CARBON ENERGY. (a)
71	71	In this section:
72	72	(1) "Biomass fuel" means fuel developed from organic
73	73	material, including material derived from plants, crops, wood or
74	74	forest residues, waste residues, waste from food crops,
75	75	horticulture, food processing, animal farming, animal waste,
76	76	landfills, and sewage treatment facilities.
77	77	(2) "Zero-carbon energy technology" means a
78	78	technology that relies exclusively on an energy source that does
79	79	not emit a greenhouse gas in the production of electricity. The
80	80	term includes a technology that effectively captures and sequesters
81	81	greenhouse gases before their release into the atmosphere.
82	82	(b) It is the intent of the legislature that the amount of
83	83	electric power generated in this state from zero-carbon energy
84	84	technology for delivery by a retail electric provider, municipally
85	85	owned utility, or electric cooperative each year will increase to
86	86	meet the following percentages on or before the specified dates:
87	87	(1) by January 1, 2025, not less than 65 percent of the
88	88	annual total;
89	89	(2) by January 1, 2030, not less than 85 percent of the
90	90	annual total; and
91	91	(3) by January 1, 2035, 100 percent of the annual
92	92	total.
93	93	(c) The commission by rule shall:
94	94	(1) establish the minimum annual zero-carbon energy
95	95	technology generation requirement for each retail electric
96	96	provider, municipally owned utility, and electric cooperative
97	97	operating in this state in a manner designed to produce, on a
98	98	statewide basis, compliance with the requirement prescribed by
99	99	Subsection (b); and
100	100	(2) specify reasonable standards that zero-carbon
101	101	energy generation must meet to count toward compliance with the
102	102	requirement prescribed by Subsection (b) and that:
103	103	(A) are designed and operated so as to maximize
104	104	the use of all resources available to meet electric demand and
105	105	reliability needs from the capacity additions in accordance with
106	106	then-current industry standards; and
107	107	(B) encourage the development, construction, and
108	108	operation of new zero-carbon energy technology projects at sites in
109	109	this state that have the greatest economic potential for capture
110	110	and development of resources for zero-carbon energy technology.
111	111	(d) The commission by rule shall establish a zero-carbon
112	112	energy generation credits trading program. A retail electric
113	113	provider, municipally owned utility, or electric cooperative that
114	114	does not satisfy the requirements of Subsection (b) by directly
115	115	owning or purchasing energy generated using zero-carbon energy
116	116	technologies shall purchase sufficient zero-carbon energy
117	117	generation credits to satisfy the requirements by holding
118	118	zero-carbon energy generation credits in lieu of energy generated
119	119	from zero-carbon energy technologies.
120	120	(e) The commission by rule shall establish a means for a
121	121	retail electric provider, municipally owned utility, or electric
122	122	cooperative to satisfy the requirements of Subsection (b) by
123	123	generating electricity using biomass fuel instead of directly
124	124	owning or purchasing energy generated using zero-carbon energy
125	125	technologies.
126	126	(f) The commission may cap the price of zero-carbon energy
127	127	credits and may suspend the goal established by Subsection (b) as
128	128	necessary to protect the reliability and operation of the grid. A
129	129	price cap established under this subsection must equal or exceed
130	130	the social cost of carbon as determined by the United States
131	131	Environmental Protection Agency.
132	132	(g) The commission by rule shall establish a carbon offset
133	133	alternative payment program. An entity required by this section to
134	134	purchase a zero-carbon energy generation credit may choose to
135	135	purchase and apply a carbon capture and sequestration credit
136	136	instead of a zero-carbon energy generation credit toward the
137	137	satisfaction of the entity's obligation under this section. A
138	138	carbon capture and sequestration credit must be purchased through a
139	139	marketplace certified by the commission to offset the same amount
140	140	of carbon as is produced by the entity's carbon energy generation.
141	141	The offset payment must equal or exceed the social cost of carbon as
142	142	determined by the United States Environmental Protection Agency.
143	143	In implementing this subsection, the commission shall consider:
144	144	(1) the effects of zero-carbon energy credit prices on
145	145	electric rates; and
146	146	(2) the effects of the carbon offset alternative
147	147	payments on the zero-carbon energy credit market.
148	148	SECTION 7. Section 40.001(a), Utilities Code, is amended to
149	149	read as follows:
150	150	(a) Notwithstanding any other provision of law, except
151	151	Sections 39.155, 39.157(e), 39.203, [and] 39.904, and 39.918, this
152	152	chapter governs the transition to and the establishment of a fully
153	153	competitive electric power industry for municipally owned
154	154	utilities. With respect to the regulation of municipally owned
155	155	utilities, this chapter controls over any other provision of this
156	156	title, except for sections in which the term "municipally owned
157	157	utility" is specifically used.
158	158	SECTION 8. Section 40.004, Utilities Code, is amended to
159	159	read as follows:
160	160	Sec. 40.004. JURISDICTION OF COMMISSION. Except as
161	161	specifically otherwise provided in this chapter, the commission has
162	162	jurisdiction over municipally owned utilities only for the
163	163	following purposes:
164	164	(1) to regulate wholesale transmission rates and
165	165	service, including terms of access, to the extent provided by
166	166	Subchapter A, Chapter 35;
167	167	(2) to regulate certification of retail service areas
168	168	to the extent provided by Chapter 37;
169	169	(3) to regulate rates on appeal under Subchapters D
170	170	and E, Chapter 33, subject to Section 40.051(c);
171	171	(4) to establish a code of conduct as provided by
172	172	Section 39.157(e) applicable to anticompetitive activities and to
173	173	affiliate activities limited to structurally unbundled affiliates
174	174	of municipally owned utilities, subject to Section 40.054;
175	175	(5) to establish terms and conditions for open access
176	176	to transmission and distribution facilities for municipally owned
177	177	utilities providing customer choice, as provided by Section 39.203;
178	178	(6) to administer the renewable energy credits program
179	179	under Section 39.904(b), [and] the natural gas energy credits
180	180	program under Section 39.9044(b), and the zero-carbon energy
181	181	generation credits trading program under Section 39.918(d);
182	182	(7) to require reports of municipally owned utility
183	183	operations only to the extent necessary to:
184	184	(A) enable the commission to determine the
185	185	aggregate load and energy requirements of the state and the
186	186	resources available to serve that load; or
187	187	(B) enable the commission to determine
188	188	information relating to market power as provided by Section 39.155;
189	189	and
190	190	(8) to evaluate and monitor the cybersecurity
191	191	preparedness of a municipally owned utility described by Section
192	192	39.1516(a)(3) or (4).
193	193	SECTION 9. Section 41.001, Utilities Code, is amended to
194	194	read as follows:
195	195	Sec. 41.001. APPLICABLE LAW. Notwithstanding any other
196	196	provision of law, except Sections 39.155, 39.157(e), 39.203, [and]
197	197	39.904, and 39.918, this chapter governs the transition to and the
198	198	establishment of a fully competitive electric power industry for
199	199	electric cooperatives. Regarding the regulation of electric
200	200	cooperatives, this chapter shall control over any other provision
201	201	of this title, except for sections in which the term "electric
202	202	cooperative" is specifically used.
203	203	SECTION 10. The Public Utility Commission of Texas shall
204	204	adopt rules required by Section 39.918, Utilities Code, as added by
205	205	this Act, not later than January 1, 2022.
206	206	SECTION 11. This Act takes effect September 1, 2021.