H.B. No. 2263
AN ACT
relating to the authority of a natural gas local distribution
company to offer energy conservation programs.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 104, Utilities Code, is amended by
adding Subchapter J to read as follows:
SUBCHAPTER J. NATURAL GAS ENERGY CONSERVATION PROGRAMS
Sec. 104.401. DEFINITIONS. In this subchapter:
(1) "Energy conservation program" means a program that
promotes energy conservation or energy efficiency.
(2) "Local distribution company" means a gas utility
that operates a retail gas distribution system.
Sec. 104.402. ENERGY CONSERVATION PROGRAM AUTHORITY. (a)
A local distribution company may offer to customers and prospective
customers and provide to customers an energy conservation program
in the manner provided by this subchapter.
(b) The railroad commission has exclusive original
jurisdiction over energy conservation programs implemented by
local distribution companies.
(c) A political subdivision served by a local distribution
company that implements an energy conservation program approved by
the railroad commission under this subchapter may not limit,
restrict, or otherwise prevent an eligible customer from
participating in the energy conservation program based on the type
or source of energy delivered to the customer.
Sec. 104.403. ENERGY CONSERVATION PROGRAM COST RECOVERY.
(a) A local distribution company may recover costs of energy
conservation programs implemented under this subchapter if
approved by the railroad commission in the manner provided by this
subchapter. A local distribution company seeking to recover the
costs must apply to the railroad commission before beginning
recovery of the costs and at least once every three years after the
date the company first applies for the cost recovery.
(b) If the railroad commission approves the local
distribution company's application or approves the application
with modifications, the company may recover costs prudently
incurred to implement the energy conservation programs, including
costs incurred to design, market, implement, administer, and
deliver an energy conservation program.
(c) If the local distribution company provides an earnings
monitoring report for the preceding calendar year demonstrating
that the company did not earn above the rate of return established
in the latest effective rates approved by the railroad commission
for the company, the railroad commission may allow the company to
recover an amount equal to the reduction in the company's marginal
revenues due to lower sales or demand resulting from the energy
conservation program.
(d) The railroad commission by rule shall require a local
distribution company that implements an energy conservation
program under this subchapter to submit to the railroad commission
an annual report on:
(1) the performance of the company's energy
conservation programs for the preceding year; and
(2) the company's planned energy conservation programs
for the upcoming year.
(e) An application for cost recovery under Subsection (a)
must include:
(1) a summary of and objectives for the local
distribution company's energy conservation programs;
(2) a description of each program;
(3) a proposed budget for each program;
(4) the projected consumption reduction or cost
savings for each program; and
(5) any public input compiled by the local
distribution company on the proposed programs as required by the
railroad commission.
(f) The railroad commission by rule may:
(1) determine a cost recovery mechanism for timely
recovery of costs described by Subsection (a); and
(2) ensure that costs described by Subsection (a) are
allocated to the customer classes eligible for participation in the
energy conservation program.
(g) Energy conservation programs proposed under this
section may be combined in a portfolio to provide incentives and
services to encourage energy conservation. The portfolio:
(1) must be designed to overcome barriers to the
adoption of energy-efficient equipment, technologies, and
processes and be designed to change customer behavior as necessary;
and
(2) may include measures such as:
(A) direct financial incentives;
(B) technical assistance and information,
including building energy performance analyses performed by the
local distribution company or a third party approved by the
company;
(C) discounts or rebates for products; and
(D) weatherization for low-income customers.
(h) A proceeding filed under this section is not a
ratemaking proceeding for the purposes of Section 103.022.
(i) A local distribution company implementing an energy
conservation program under this subchapter shall reimburse the
railroad commission for the utility's proportionate share of the
railroad commission's costs related to administration of reviewing
and approving or denying cost recovery applications under this
subchapter.
SECTION 2. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2023.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 2263 was passed by the House on May 4,
2023, by the following vote: Yeas 140, Nays 4, 1 present, not
voting; and that the House concurred in Senate amendments to H.B.
No. 2263 on May 25, 2023, by the following vote: Yeas 120, Nays 19,
1 present, not voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 2263 was passed by the Senate, with
amendments, on May 22, 2023, by the following vote: Yeas 27, Nays
4.
______________________________
Secretary of the Senate
APPROVED: __________________
Date
__________________
Governor