By: King S.B. No. 1075
(In the Senate - Filed February 21, 2023; March 3, 2023,
read first time and referred to Committee on Business & Commerce;
April 20, 2023, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 11, Nays 0; April 20, 2023,
sent to printer.)
Click here to see the committee vote
COMMITTEE SUBSTITUTE FOR S.B. No. 1075 By: King
A BILL TO BE ENTITLED
AN ACT
relating to facilities and construction machinery used to respond
to power outages.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 39.918, Utilities Code, is amended to
read as follows:
Sec. 39.918. UTILITY FACILITIES FOR RESPONDING TO
SIGNIFICANT [POWER RESTORATION AFTER WIDESPREAD] POWER
OUTAGE. (a) In this section, "significant ["widespread] power
outage" means an event that [results in]:
(1) results in a loss of electric power that:
(A) affects a significant number of distribution
customers of a transmission and distribution utility[;] and
[(B)] has lasted or is expected to last for at
least six [eight] hours;
(B) affects distribution customers of a
transmission and distribution utility in an area for which the
governor has issued a disaster or emergency declaration;
(C) affects distribution customers served by a
radial transmission or distribution facility, creates a risk to
public health or safety, and has lasted or is expected to last for
at least 12 hours; or
(D) creates [and
[(2)] a risk to public health or safety because it
affects a critical infrastructure facility that serves the public
such as a hospital, health care facility, law enforcement facility,
fire station, or water or wastewater facility; or
(2) causes the independent system operator to order a
transmission and distribution utility to shed load.
(a-1) The Texas Division of Emergency Management, the
independent organization certified under Section 39.151 for the
ERCOT power region, or the executive director of the commission may
determine that a power outage other than an outage described by
Subsection (a) is a significant power outage for the purposes of
this section.
(a-2) A transmission and distribution utility is entitled
to determine whether a loss of electric power described by
Subsection (a)(1)(C) creates a risk to public health or safety for
the purposes of determining whether the loss event is a significant
power outage.
(b) Notwithstanding any other provision of this subtitle, a
transmission and distribution utility may:
(1) lease or own and operate facilities that provide
temporary emergency electric energy to aid in restoring power to
the utility's distribution customers during a significant
[widespread] power outage [in which:
[(A) the independent system operator has ordered
the utility to shed load; or
[(B) the utility's distribution facilities are
not being fully served by the bulk power system under normal
operations]; and
(2) procure, own, and operate, or enter into a
cooperative agreement with other transmission and distribution
utilities to procure, own, and operate jointly, transmission and
distribution facilities that have a lead time of at least six months
and would aid in restoring power to the utility's distribution
customers following a significant [widespread] power outage.
(b-1) In this section, long lead time facilities described
by Subsection (b) may not be electric energy storage equipment or
facilities described by [under] Chapter 35[, Utilities Code].
(c) A transmission and distribution utility that [leases
and] operates a facility [facilities] under Subsection (b)(1) may
not sell electric energy or ancillary services from the facility
[those facilities]. As soon as reasonably practicable after the
utility deploys the facility, the utility shall provide written
notice to the commission and a written market notice to advise
competitive market participants of the details of the deployment.
Not later than the fifth business day after the date the deployment
ends, the utility shall file a report, in a form approved by the
commission, providing the details of the deployment, including the
start and end times of the deployment, the number of kilowatts or
megawatts deployed, the number of facilities used, the locations of
the facilities, and any other information required by the
commission.
(d) A facility [Facilities] described by Subsection (b)(1):
(1) must be operated in isolation from the bulk power
system; and
(2) may not be included in independent system
operator:
(A) locational marginal pricing calculations;
(B) pricing; or
(C) reliability models.
(e) A transmission and distribution utility that [leases
and] operates a facility [facilities] under Subsection (b)(1) shall
ensure, to the extent reasonably practicable, that retail customer
usage during operation of the facility [those facilities] is
adjusted out of the usage reported for billing purposes by the
retail customer's retail electric provider.
(f) A transmission and distribution utility that decides to
lease a facility under Subsection (b)(1) shall, when reasonably
practicable, solicit [use a] competitive bids and consider any bids
received before leasing the facility [bidding process to lease
facilities under Subsection (b)(1)].
(g) A transmission and distribution utility that leases or
owns and operates facilities under Subsection (b)(1) or that
procures, owns, and operates facilities under Subsection (b)(2)
shall include in the utility's emergency operations plan filed with
the commission, as described by Section 186.007, a detailed plan on
the utility's use of those facilities.
(h) The commission shall allow [permit]:
(1) a transmission and distribution utility that
leases or owns and operates facilities under Subsection (b)(1) to
recover the reasonable and necessary costs of leasing or owning and
operating the facilities, including the present value of future
payments required under a [the] lease, using the rate of return on
investment established in the commission's final order in the
utility's most recent base rate proceeding; and
(2) a transmission and distribution utility that
procures, owns, and operates facilities under Subsection (b)(2) to
recover the reasonable and necessary costs of procuring, owning,
and operating the facilities, using the rate of return on
investment established in the commission's final order in the
utility's most recent base rate proceeding.
(i) The commission shall authorize a transmission and
distribution utility to defer for recovery in a future ratemaking
proceeding the incremental operations and maintenance expenses and
the return, not otherwise recovered in a rate proceeding,
associated with the leasing, [or] procurement, ownership, and
operation of the facilities.
(j) A transmission and distribution utility may request
recovery of the reasonable and necessary costs of leasing, [or]
procuring, owning, or [and] operating facilities under this
section, including any deferred expenses, through a proceeding
under Section 36.210 or in another ratemaking proceeding. The
commission may review costs recovered through a proceeding under
Section 36.210 in the following base rate proceeding and order
refunds to customers if appropriate.
(k) A transmission and distribution utility requesting cost
recovery under Subsection (j) is entitled to select whether the
costs are considered to be distribution substation equipment costs
or distribution transformer costs unless the commission has found
in a previous base rate proceeding for the utility that temporary
emergency electric energy costs should be categorized in a
different manner. The costs may not be considered transmission
costs. A lease under Subsection (b)(1) must be treated as a capital
lease or finance lease for ratemaking purposes.
(l) The fact that the commission has not previously approved
a facility operated under this section or a cost of leasing,
procuring, owning, or operating a facility under this section is
not grounds for dismissal of the facility or the cost from a
proceeding under Section 36.210 or another ratemaking proceeding.
(m) The total capacity of facilities a transmission and
distribution utility leases or owns and operates under Subsection
(b)(1) may not exceed three percent of the utility's historical
peak load. Each transmission and distribution utility that leases
or owns and operates a facility under Subsection (b)(1) shall:
(1) assess every four years the total capacity of
facilities needed to aid in restoring power during a significant
power outage, considering:
(A) the presence and frequency of extreme weather
conditions, including hurricanes, tornadoes, high winds,
lightning, flooding, icing, and freezes, in all or a portion of the
utility's certificated service area;
(B) the utility's current and planned system
hardening efforts;
(C) the utility's current and planned vegetation
management efforts;
(D) the utility's current and planned
expenditures on traditional distribution facilities;
(E) the utility's current and planned
expenditures on automation of its distribution system;
(F) the utility's allocated load shed obligation
based on historical seasonal peak demand, as determined by the
independent system operator;
(G) the presence or number of communities that
are remotely located or served radially in the utility's
certificated service area;
(H) the number or location of critical
infrastructure facilities that serve the public such as hospitals,
health care facilities, law enforcement facilities, fire stations,
and water or wastewater facilities in the utility's certificated
service area;
(I) the utility's emergency operations plan
filed with the commission; and
(J) other engineering or operational needs; and
(2) submit to the commission the assessment under
Subdivision (1) for review.
(n) The commission:
(1) may:
(A) notwithstanding the total capacity
prescribed by Subsection (m), establish the capacity of facilities
that may be operated by a transmission and distribution utility in
aid of restoration for each type or category of significant power
outage, with the total capacity equal to or greater than three
percent of the utility's historical peak load;
(B) establish reasonable conditions on the
operation and use of facilities, including duration times and
prioritizing use to serve critical infrastructure facilities that
serve the public such as hospitals, health care facilities, law
enforcement facilities, fire stations, and water or wastewater
facilities; and
(C) require compliance with applicable law,
including any rule or order of the commission; and
(2) shall establish a rebuttable presumption that the
facilities leased or owned and operated under Subsection (m) are
used and useful to the utility in providing service and the
utility's costs of leasing or owning and operating the facilities
are prudent, reasonable, necessary, and recoverable under Section
36.210 or in another ratemaking proceeding.
(o) Notwithstanding Subsections (m) and (n), a transmission
and distribution utility may:
(1) provide facilities to or use facilities from other
entities as part of a mutual assistance agreement during a
significant power outage; and
(2) lease facilities on a short-term basis in response
to a significant power outage if:
(A) the significant power outage constitutes an
emergency and the utility determines that additional facilities are
necessary;
(B) the term of the lease is only for the duration
of that emergency;
(C) the utility notifies the commission of the
lease not later than the 30th day after the date of the lease
agreement; and
(D) the commission reviews the costs incurred by
the utility in a proceeding under Section 36.210 or in another
ratemaking proceeding.
[(k) This section expires September 1, 2029.]
SECTION 2. Section 502.146(b), Transportation Code, is
amended to read as follows:
(b) An owner is not required to register a vehicle that is
used only temporarily on the highways if the vehicle is:
(1) a farm trailer or farm semitrailer with a gross
weight of more than 4,000 pounds but not more than 34,000 pounds
that is used exclusively:
(A) to transport seasonally harvested
agricultural products or livestock from the place of production to
the place of processing, market, or storage;
(B) to transport farm supplies from the place of
loading to the farm; or
(C) for the purpose of participating in equine
activities or attending livestock shows, as defined by Section
87.001, Civil Practice and Remedies Code;
(2) machinery used exclusively for the purpose of
drilling water wells;
(3) oil well servicing or drilling machinery and if at
the time of obtaining the license plates, the applicant submits
proof that the applicant has a permit under Section 623.142; or
(4) construction machinery, including construction
machinery that is:
(A) owned by a transmission and distribution
utility as defined by Section 31.002, Utilities Code; and
(B) used to maintain or repair electrical lines
or substations in response to a power outage.
SECTION 3. (a) The changes in law made in Section 1 of this
Act apply only to a proceeding before the Public Utility Commission
of Texas or other regulatory authority described by Section 11.003,
Utilities Code, that commences on or after the effective date of
this Act. A proceeding before the Public Utility Commission of
Texas or other regulatory authority described by Section 11.003,
Utilities Code, that commenced before the effective date of this
Act is governed by the law in effect on the date the proceeding
commenced, and that law is continued in effect for that purpose.
(b) The changes in law made in Section 1 of this Act apply
only to a contract or lease entered into or facilities procured on
or after the effective date of this Act.
SECTION 4. To the extent of any conflict, this Act prevails
over another Act of the 88th Legislature, Regular Session, 2023,
relating to nonsubstantive additions to and corrections in enacted
codes.
SECTION 5. This Act takes effect September 1, 2023.
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