88R19092 CXP-F
By: Metcalf, Cunningham, Manuel, Bailes, H.B. No. 4287
Ashby, et al.
Substitute the following for H.B. No. 4287:
By: Slawson C.S.H.B. No. 4287
A BILL TO BE ENTITLED
AN ACT
relating to the use of customer-sited distributed generation
facilities owned by certain non-ERCOT electric utilities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter E, Chapter 36, Utilities Code, is
amended by adding Section 36.215 to read as follows:
Sec. 36.215. RECOVERY OF INVESTMENT IN DISTRIBUTED
GENERATION AND RATES FOR BACKUP ELECTRIC SERVICE FOR CERTAIN
NON-ERCOT UTILITIES. (a) In this section:
(1) "Customer-sited distributed generation facility"
means a dispatchable generation facility that is installed on the
electric utility's side of the retail meter and owned and operated
by the electric utility:
(A) with a nameplate capacity of not more than 10
megawatts;
(B) that is capable of generating and providing
backup electric service to a customer during a power grid outage;
and
(C) sited at or adjacent to the customer's
premises.
(2) "Host customer" means a customer receiving backup
electric service under this section.
(b) This section applies only to an electric utility that
operates solely outside of ERCOT in areas of this state included in
the Southeastern Electric Reliability Council.
(c) An electric utility may provide backup electric service
to a nonresidential retail customer through a customer-sited
distributed generation facility.
(d) The commission, on the petition of an electric utility,
shall establish just and reasonable rates for backup electric
service supplied using a customer-sited distributed generation
facility, consistent with this chapter, provided that costs are
allocated as follows:
(1) if the facility is capable of directly supplying
energy to the distribution system or of disconnecting the host
customer from the distribution system when not being used to supply
backup electric service to the host customer and thereby reducing
system load, the commission shall allocate the cost of owning and
operating the facility between the host customer and the electric
utility's broader customer base, including an allocation of any
margins from energy sales attributable to the facility to the host
customer in reasonable proportion to the allocation of nonfuel
costs as provided by Subdivision (2); and
(2) the allocation of nonfuel costs to the host
customer must be based on the cost to purchase, install,
interconnect, own, operate, and maintain the facility that is above
the electric utility's levelized avoided cost to install, own,
operate, and maintain a single-cycle combustion turbine, on a per
kilowatt basis, grossed up for avoided line losses based on the
utility's transmission and distribution line loss factors last
approved by the commission.
(e) In a rate proceeding in which an electric utility seeks
to recover the full cost of the utility's investment in a
customer-sited distributed generation facility that is
interconnected to the utility's distribution system, the cost of
the facility and backup electric service revenues must be allocated
among customer classes on the same basis used to allocate the
utility's distribution-level investments.
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.