| 1 | 1 | | By: Darby (Senate Sponsor - Hughes) H.B. No. 2262 |
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| 2 | 2 | | (In the Senate - Received from the House May 8, 2023; |
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| 3 | 3 | | May 9, 2023, read first time and referred to Committee on Natural |
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| 4 | 4 | | Resources & Economic Development; May 18, 2023, reported favorably |
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| 5 | 5 | | by the following vote: Yeas 7, Nays 1; May 18, 2023, sent to |
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| 6 | 6 | | printer.) |
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| 7 | 7 | | Click here to see the committee vote |
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| 8 | 8 | | |
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| 9 | 9 | | |
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| 10 | 10 | | A BILL TO BE ENTITLED |
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| 11 | 11 | | AN ACT |
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| 12 | 12 | | relating to gas utility alternative gas expenses and infrastructure |
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| 13 | 13 | | investments. |
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| 14 | 14 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 15 | 15 | | SECTION 1. Subchapter B, Chapter 104, Utilities Code, is |
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| 16 | 16 | | amended by adding Section 104.061 to read as follows: |
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| 17 | 17 | | Sec. 104.061. CONSIDERATION OF ALTERNATIVE GAS EXPENSES AND |
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| 18 | 18 | | INFRASTRUCTURE INVESTMENTS. (a) In this section, "alternative |
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| 19 | 19 | | gas" means: |
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| 20 | 20 | | (1) any pipeline-compatible gaseous fuel that is |
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| 21 | 21 | | derived from: |
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| 22 | 22 | | (A) the anaerobic digestion of biomass, |
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| 23 | 23 | | gasification of biomass, or another biomass conversion process; |
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| 24 | 24 | | (B) agricultural waste; or |
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| 25 | 25 | | (C) landfill gas; |
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| 26 | 26 | | (2) hydrogen produced using: |
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| 27 | 27 | | (A) carbon capture and storage; |
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| 28 | 28 | | (B) renewable energy to break down water into |
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| 29 | 29 | | hydrogen and oxygen through electrolysis; or |
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| 30 | 30 | | (C) pyrolysis to break down methane into hydrogen |
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| 31 | 31 | | and solid carbon; |
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| 32 | 32 | | (3) gas certified in a manner approved by the railroad |
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| 33 | 33 | | commission under Subsection (c); or |
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| 34 | 34 | | (4) another gaseous fuel designated by the railroad |
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| 35 | 35 | | commission under Subsection (c). |
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| 36 | 36 | | (b) This section applies only to a gas utility that owns or |
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| 37 | 37 | | operates for compensation in this state equipment or facilities to |
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| 38 | 38 | | distribute combustible hydrocarbon natural gas or synthetic |
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| 39 | 39 | | natural gas under rates, terms, and conditions approved by a |
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| 40 | 40 | | regulatory authority. |
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| 41 | 41 | | (c) The railroad commission by rule may: |
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| 42 | 42 | | (1) approve a certification process used by an |
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| 43 | 43 | | organization to certify that a type of gas has a lower carbon |
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| 44 | 44 | | content than natural gas; and |
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| 45 | 45 | | (2) designate a gaseous fuel as an alternative gas if |
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| 46 | 46 | | the fuel has a lower carbon content than natural gas. |
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| 47 | 47 | | (d) A gas utility may include one or more forms of purchased |
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| 48 | 48 | | alternative gas in its gas supply portfolio used for the provision |
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| 49 | 49 | | of gas service to the utility's customers. When establishing a gas |
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| 50 | 50 | | utility's rates, the regulatory authority shall allow a gas utility |
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| 51 | 51 | | to recover as a cost or expense expenditures associated with |
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| 52 | 52 | | purchasing the alternative gas if the expenditures were prudent, |
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| 53 | 53 | | reasonable, and necessary. |
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| 54 | 54 | | (e) A gas utility may invest in infrastructure to acquire, |
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| 55 | 55 | | interconnect with, or produce an alternative gas supply for its |
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| 56 | 56 | | customers. When establishing a gas utility's rates, the regulatory |
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| 57 | 57 | | authority shall allow a gas utility to include in its invested |
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| 58 | 58 | | capital prudent, reasonable, and necessary alternative gas supply |
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| 59 | 59 | | infrastructure costs while the infrastructure is used and useful in |
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| 60 | 60 | | providing service to the utility's customers. |
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| 61 | 61 | | SECTION 2. This Act takes effect September 1, 2023. |
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| 62 | 62 | | * * * * * |
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