Texas 2021 - 87th Regular

Texas Senate Bill SB398 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	S.B. No. 398
	1	+	By: Menéndez, et al. S.B. No. 398
	2	+	(Deshotel)
2	3
3	4
	5	+	A BILL TO BE ENTITLED
4	6		AN ACT
5		-	relating to certain resources and facilities for distributed
6		-	generation.
	7	+	relating to distributed renewable generation resources.
7	8		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
8	9		SECTION 1. Subtitle C, Title 5, Business & Commerce Code, is
9	10		amended by adding Chapter 113 to read as follows:
10	11		CHAPTER 113. SALES AND LEASING OF DISTRIBUTED RENEWABLE GENERATION
11	12		RESOURCES
12	13		Sec. 113.001. DEFINITIONS. In this chapter:
13	14		(1) "Distributed renewable generation" has the
14	15		meaning assigned by Section 39.916, Utilities Code.
15	16		(2) "Small commercial customer" has the meaning
16	17		assigned by Section 39.202(o), Utilities Code.
17	18		Sec. 113.002. APPLICABILITY. (a) This chapter applies to a
18	19		seller or lessor of distributed renewable generation resources.
19	20		(b) This chapter does not apply to:
20	21		(1) a transaction involving the sale or transfer of
21	22		the real property on which a distributed renewable generation
22	23		resource is located;
23	24		(2) a person, including a person acting through the
24	25		person's officers, employees, brokers, or agents, who markets,
25	26		sells, solicits, negotiates, or enters into an agreement for the
26	27		sale or financing of a distributed renewable generation resource as
27	28		part of a transaction involving the sale or transfer of the real
28	29		property on which the distributed renewable generation resource is
29	30		or will be affixed; or
30	31		(3) a third party that enters into an agreement for the
31	32		financing of a distributed renewable generation resource.
32	33		Sec. 113.003. LEASE, SALES, AND INSTALLATION DISCLOSURES.
33	34		A seller or lessor who enters into a purchase, lease, or power
34	35		purchase agreement with a residential or small commercial customer
35	36		for the operation of a distributed renewable generation resource
36	37		shall provide to the customer in writing:
37	38		(1) contact information of the salesperson and
38	39		installer of the generation resource;
39	40		(2) a description of all equipment to be installed;
40	41		(3) the cost of all equipment to be installed;
41	42		(4) a detailed accounting of fees associated with the
42	43		installation or operation of the generation resource;
43	44		(5) representations, if any, made as part of the
44	45		agreement regarding the expected operational performance and
45	46		financial performance of the generation resource; and
46	47		(6) all applicable warranties.
47	48		Sec. 113.004. ADDITIONAL DISCLOSURES FOR LEASE AGREEMENTS.
48	49		In addition to the disclosures required under Section 113.003, a
49	50		lessor shall provide to a leasing residential or small commercial
50	51		customer in writing:
51	52		(1) the term and rate of the lease, including any
52	53		payment escalators or other terms that affect the customer's
53	54		payments; and
54	55		(2) a statement of whether the lease and any
55	56		applicable warranty or maintenance agreement is transferable to a
56	57		subsequent purchaser of the property where the distributed
57	58		renewable generation resource is installed.
58	59		Sec. 113.005. DISCLOSURES FOR POWER PURCHASE AGREEMENTS. A
59	60		residential or small commercial customer who enters into a power
60	61		purchase agreement is entitled to receive in writing:
61	62		(1) the disclosures required under Sections
62	63		113.003(1), (2), (5), and (6);
63	64		(2) the term and rate of the power purchase agreement,
64	65		including any payment escalators or other terms that affect the
65	66		customer's payments; and
66	67		(3) whether the power purchase agreement and any
67	68		applicable warranty or maintenance agreement is transferable to a
68	69		subsequent purchaser of the property where the distributed
69	70		renewable generation resource is installed.
70	71		SECTION 2. Chapter 229, Local Government Code, is amended
71	72		by adding Subchapter C to read as follows:
72	73		SUBCHAPTER C. REGULATION OF SOLAR ENERGY DEVICES
73	74		Sec. 229.101. REGULATION OF SOLAR ENERGY DEVICES. (a) In
74	75		this section:
75	76		(1) "Municipally owned utility" has the meaning
76	77		assigned by Section 11.003, Utilities Code.
77	78		(2) "Small commercial customer" has the meaning
78	79		assigned by Section 39.202(o), Utilities Code.
79	80		(3) "Solar energy device" has the meaning assigned by
80	81		Section 171.107, Tax Code.
81	82		(b) A municipality may not prohibit or restrict the
82	83		installation of a solar energy device by a residential or small
83	84		commercial customer except to the extent:
84	85		(1) a property owner's association may prohibit the
85	86		installation under Sections 202.010(d)(1) through (7), Property
86	87		Code; or
87	88		(2) the interconnection guidelines and
88	89		interconnection agreement of a municipally owned utility serving
89	90		the customer's service area, the rules of the Public Utility
90	91		Commission of Texas, or the protocols of an independent
91	92		organization certified under Section 39.151, Utilities Code, limit
92	93		the installation of solar energy devices due to reliability, power
93	94		quality, or safety of the distribution system.
94		-	SECTION 3. Subchapter B, Chapter 35, Utilities Code, is
95		-	amended by adding Section 35.037 to read as follows:
96		-	Sec. 35.037. INTERCONNECTION AND OPERATION OF CERTAIN
97		-	DISTRIBUTED GENERATION FACILITIES FOR FOOD SUPPLY CHAIN. (a) In
98		-	this section:
99		-	(1) "Customer" means a retail electric customer:
100		-	(A) with a distributed generation facility
101		-	installed on the retail electric customer's side of the meter; and
102		-	(B) that has a primary purpose of or derives a
103		-	material source of revenue from:
104		-	(i) retail grocery sales; or
105		-	(ii) food manufacturing or distribution for
106		-	retail grocery sales.
107		-	(2) "Distributed generation facility" means a
108		-	facility installed on the customer's side of the meter but
109		-	separately metered from the customer:
110		-	(A) with a nameplate capacity of at least 250
111		-	kilowatts and not more than 10 megawatts;
112		-	(B) that is capable of generating and providing
113		-	backup or supplementary power to the customer's premises; and
114		-	(C) that is owned or operated by a person
115		-	registered as a power generation company in accordance with Section
116		-	39.351.
117		-	(b) This section only applies in the ERCOT power region in
118		-	areas where retail customer choice has not been implemented.
119		-	(c) A person who owns or operates a distributed generation
120		-	facility served by a municipally owned utility or electric
121		-	cooperative in the ERCOT power region may sell electric power
122		-	generated by the distributed generation facility at wholesale,
123		-	including the provision of ancillary services, subject to the
124		-	limitations of this section.
125		-	(d) A person who owns or operates a distributed generation
126		-	facility may sell electric power generated by the distributed
127		-	generation facility at wholesale to a municipally owned utility or
128		-	electric cooperative certificated for retail service to the area
129		-	where the distributed generation facility is located or to a
130		-	related generation and transmission electric cooperative. The
131		-	municipally owned utility or electric cooperative shall purchase at
132		-	wholesale the quantity of electric power generated by the
133		-	distributed generation facility needed to satisfy the full electric
134		-	requirements of the customer on whose side of the meter the
135		-	distributed generation facility is installed and operated at a
136		-	wholesale price agreed to by the customer and shall resell that
137		-	quantity of power at retail to the customer at the rate applicable
138		-	to the customer for retail service, which must at minimum include
139		-	all amounts paid for the wholesale electric power, during:
140		-	(1) an emergency declared by the independent
141		-	organization certified under Section 39.151 for the ERCOT power
142		-	region that creates the potential for interruption of service to
143		-	the customer;
144		-	(2) any service interruption at the customer's
145		-	premises;
146		-	(3) construction on the customer's premises that
147		-	creates the potential for interruption of service to the customer;
148		-	(4) maintenance and testing of the distributed
149		-	generation facility; and
150		-	(5) additional times mutually agreed on by the owner
151		-	or operator of the distributed generation facility and the
152		-	municipally owned utility or electric cooperative.
153		-	(e) The customer shall provide written notice as soon as
154		-	reasonably practicable to the municipally owned utility or electric
155		-	cooperative of a circumstance described by Subsection (d)(3) or
156		-	(4).
157		-	(f) In addition to a sale authorized under Subsection (d),
158		-	on request by an owner or operator of a distributed generation
159		-	facility, the municipally owned utility or electric cooperative
160		-	shall provide wholesale transmission service to the distributed
161		-	generation facility owner in the same manner as to other power
162		-	generation companies for the sale of power from the distributed
163		-	generation facility at wholesale, including for the provision of
164		-	ancillary services, in the ERCOT market. The distributed generation
165		-	facility owner shall comply with all applicable commission rules
166		-	and protocols and with governing documents of the independent
167		-	organization certified under Section 39.151 for the ERCOT power
168		-	region. This section does not require a municipally owned utility
169		-	or electric cooperative to transmit electricity to a retail point
170		-	of delivery in the certificated service area of the municipally
171		-	owned utility or electric cooperative.
172		-	(g) In addition to a sale authorized under Subsection (d) or
173		-	(f), a municipally owned utility or electric cooperative or related
174		-	generation and transmission electric cooperative may purchase
175		-	electric power provided by the owner or operator of the distributed
176		-	generation facility at wholesale at a mutually agreed on price. The
177		-	price may be based wholly or partly on the ERCOT market clearing
178		-	price of energy at the time of day and at the location at which the
179		-	electric power is made available.
180		-	(h) A municipally owned utility or electric cooperative
181		-	shall make available a standard interconnection application and
182		-	agreement for distributed generation facilities that is
183		-	substantially similar to the commission's interconnection
184		-	agreement form and consistent with this section to facilitate the
185		-	connection of distributed generation facilities. A municipally
186		-	owned utility or electric cooperative shall allow interconnection
187		-	of a distributed generation facility and provide to a distributed
188		-	generation facility on a nondiscriminatory basis wholesale
189		-	transmission service, including at distribution voltage, in the
190		-	same manner as for other power generation companies to transmit to
191		-	the ERCOT power grid the electric power generated by the
192		-	distributed generation facility. A municipally owned utility or
193		-	electric cooperative may recover from the owner or operator of the
194		-	distributed generation facility all reasonable costs necessary for
195		-	and directly attributable to the interconnection of the facility,
196		-	including the reasonable costs of necessary system upgrades and
197		-	improvements directly attributable to the distributed generation
198		-	facility.
199		-	(i) Not later than the 30th day after the date a complete
200		-	application for interconnection of a distributed generation
201		-	facility is received, the municipally owned utility or electric
202		-	cooperative shall provide the applicant with a written good faith
203		-	cost estimate for interconnection-related costs. The municipally
204		-	owned utility or electric cooperative may not incur any
205		-	interconnection-related costs without entering into a written
206		-	agreement for the payment of those costs by the applicant.
207		-	(j) The process to interconnect a distributed generation
208		-	facility must be completed not later than the 240th day after the
209		-	date the municipally owned utility or electric cooperative receives
210		-	payment of all estimated costs to complete the interconnection,
211		-	except that:
212		-	(1) the period may be extended by written agreement
213		-	between the parties; or
214		-	(2) the period may be extended after a good faith
215		-	showing by the municipally owned utility or electric cooperative
216		-	that the interconnection requires improvements, upgrades, or
217		-	construction of new facilities that cannot reasonably be completed
218		-	within that period, in which case the period may be extended for a
219		-	time not to exceed the time necessary for the improvements,
220		-	upgrades, or construction of new facilities to be completed.
221		-	(k) A municipally owned utility or electric cooperative
222		-	shall charge the owner or operator of a distributed generation
223		-	facility rates on a reasonable and nondiscriminatory basis for
224		-	providing wholesale transmission service to the distributed
225		-	generation facility owner in the same manner as for other power
226		-	generation companies to transmit to the ERCOT power grid the
227		-	electric power generated by the distributed generation facility in
228		-	accordance with a tariff filed by the municipally owned utility or
229		-	electric cooperative with the commission.
230		-	(l) The owner or operator of the distributed generation
231		-	facility shall contract with the municipally owned utility or
232		-	electric cooperative or the municipally owned utility's or electric
233		-	cooperative's designee for any scheduling, settlement,
234		-	communication, telemetry, or other services required to
235		-	participate in the ERCOT wholesale market, but only to the extent
236		-	that the utility, cooperative, or designee offers the services on a
237		-	nondiscriminatory basis and at a commercially reasonable cost. If
238		-	the municipally owned utility or electric cooperative or the
239		-	municipally owned utility's or electric cooperative's designee does
240		-	not offer or declines to offer the services, or fails to do so on a
241		-	nondiscriminatory basis and at a commercially reasonable cost as
242		-	determined by quotes from at least three third parties providing
243		-	the same services, the owner or operator of the distributed
244		-	generation facility may contract with a third party provider to
245		-	obtain the services.
246		-	(m) A distributed generation facility must comply with
247		-	emissions limitations established by the Texas Commission on
248		-	Environmental Quality for a standard emissions permit for an
249		-	electric generation facility unit installed after January 1, 1995.
250		-	(n) A municipally owned utility or electric cooperative is
251		-	not required to interconnect a distributed generation facility
252		-	under this section if, on the date the utility or cooperative
253		-	receives an application for interconnection of the facility, the
254		-	municipally owned utility or electric cooperative has
255		-	interconnected distributed generation facilities with an aggregate
256		-	capacity that equals the lesser amount of:
257		-	(1) 5 percent of the municipally owned utility's or
258		-	electric cooperative's average of the 15-minute summer peak load
259		-	coincident with the independent system operator's 15-minute summer
260		-	peak load in each of the months of June, July, August, and
261		-	September; or
262		-	(2) 300 megawatts, adjusted annually by the percentage
263		-	of total system load growth in the ERCOT power region beginning in
264		-	2022.
265		-	(o) A municipally owned utility or electric cooperative
266		-	that, on the date the utility or cooperative receives an
267		-	application for interconnection of a distributed generation
268		-	facility, has interconnected distributed generation facilities
269		-	with an aggregate capacity less than the threshold described by
270		-	Subsection (n) is required to increase that capacity only up to that
271		-	threshold.
272		-	(p) This section is not intended to change registration
273		-	standards or other qualifications required by the independent
274		-	organization certified under Section 39.151 for the ERCOT power
275		-	region related to the participation of distributed generation
276		-	facilities in the wholesale market. This section is not intended to
277		-	allow distributed generation facilities to participate in a manner
278		-	that is not technically feasible or that is otherwise in conflict
279		-	with wholesale rules and requirements adopted by the independent
280		-	organization certified under Section 39.151 for the ERCOT power
281		-	region.
282		-	SECTION 4. It is the intent of the legislature in enacting
283		-	Section 35.037, Utilities Code, to allow grocers the ability to
284		-	deploy back-up generation in the ERCOT power region in areas that
285		-	have not implemented retail customer choice.
286		-	SECTION 5. The changes in law made by this Act apply only to
	95	+	SECTION 3. The changes in law made by this Act apply only to
287	96		an agreement governing the sale or lease of distributed renewable
288	97		generation, as defined by Section 39.916, Utilities Code, or a
289	98		power purchase agreement entered into on or after the effective
290	99		date of this Act. An agreement entered into before the effective
291	100		date of this Act is governed by the law as it existed immediately
292	101		before the effective date of this Act, and that law is continued in
293	102		effect for that purpose.
294		-	SECTION 6. This Act takes effect September 1, 2021.
295		-	______________________________ ______________________________
296		-	President of the Senate Speaker of the House
297		-	I hereby certify that S.B. No. 398 passed the Senate on
298		-	April 9, 2021, by the following vote: Yeas 31, Nays 0; and that
299		-	the Senate concurred in House amendment on May 28, 2021, by the
300		-	following vote: Yeas 31, Nays 0.
301		-	______________________________
302		-	Secretary of the Senate
303		-	I hereby certify that S.B. No. 398 passed the House, with
304		-	amendment, on May 25, 2021, by the following vote: Yeas 126,
305		-	Nays 16, two present not voting.
306		-	______________________________
307		-	Chief Clerk of the House
308		-	Approved:
309		-	______________________________
310		-	Date
311		-	______________________________
312		-	Governor
	103	+	SECTION 4. This Act takes effect September 1, 2021.