88R6200 DIO-F
By: Johnson S.B. No. 1212
A BILL TO BE ENTITLED
AN ACT
relating to the interconnection and integration of distributed
energy resources.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 31.002, Utilities Code, is amended by
adding Subdivisions (2-a) and (4-c) and amending Subdivision (10)
to read as follows:
(2-a) "Aggregated distributed energy resource" means a
group of distributed energy resources joined together to be
operated as a single distributed energy resource, where each
individual resource in the aggregation produces not more than one
megawatt of electricity, for the purpose of providing electric
energy or ancillary services in the wholesale market.
(4-c) "Distributed energy resource" means a source of
not more than 10 megawatts of electricity connected at a voltage
less than 60 kilovolts, including electric energy storage,
distributed generation, distributed natural gas generation, or
electric vehicles that provide electricity onto the distribution
system and are located on the customer's side of the point of common
coupling meter point. The term does not include a facility that
provides temporary emergency electric energy under Section 39.918.
(10) "Power generation company" means a person[,
including a person who owns or operates a distributed natural gas
generation facility,] that:
(A) generates electricity that is intended to be
sold at wholesale, including the owner or operator of electric
energy storage equipment or facilities to which Subchapter E,
Chapter 35, applies;
(B) does not own a transmission or distribution
facility in this state other than an essential interconnecting
facility, a facility not dedicated to public use, or a facility
otherwise excluded from the definition of "electric utility" under
this section; and
(C) does not have a certificated service area,
although its affiliated electric utility or transmission and
distribution utility may have a certificated service area.
SECTION 2. Subchapter H, Chapter 39, Utilities Code, is
amended by adding Section 39.3515 to read as follows:
Sec. 39.3515. REGISTRATION OF DISTRIBUTED ENERGY
RESOURCES. (a) An owner or operator of a distributed energy
resource may provide energy or ancillary services in the wholesale
market in the ERCOT power region through generating electricity and
providing that electricity onto a distribution system only if:
(1) the owner or operator is registered with the
commission as a power generation company under Section 39.351 and
authorized by the independent organization certified under Section
39.151 for the ERCOT power region; or
(2) the distributed energy resource is part of an
aggregated distributed energy resource and:
(A) the aggregated distributed energy resource
is registered in its own corporate capacity as a power generation
company with the commission under Section 39.351, the independent
organization certified under Section 39.151 for the ERCOT power
region, and the interconnecting transmission and distribution
utility; or
(B) the owner is not registered separately as a
power generation company, but the distributed energy resource is
operated by, and included in the registration of, a power
generation company that is registered with the commission under
Section 39.351, the independent organization certified under
Section 39.151 for the ERCOT power region, and the interconnecting
transmission and distribution utility.
(b) A retail customer may participate as part of an
aggregated distributed energy resource that is registered with the
independent organization certified under Section 39.151 for the
ERCOT power region and the interconnecting transmission and
distribution utility without being individually registered with
the commission as a power generation company under Section 39.351.
(c) The commission may establish simplified filing
requirements for load-serving entities to facilitate the
registration of aggregated distributed energy resources. The
filing requirements must require the registrant to disclose the
name of the power generation company that operates the aggregated
distributed energy resource.
(d) A facility described by Section 39.914 or 39.916 is not
considered to be a distributed energy resource unless:
(1) electricity from the facility provides energy or
ancillary services in the wholesale market in the ERCOT power
region in a manner described by this section; or
(2) at the time the facility is installed, the
estimated annual amount of electricity to be produced by the
facility is more than the retail electric customer's estimated
annual electricity consumption.
(e) The commission by rule shall:
(1) authorize the registrations described by
Subsection (a); and
(2) adopt procedures for the creation of aggregated
distributed energy resources.
SECTION 3. Chapter 39, Utilities Code, is amended by adding
Subchapter O to read as follows:
SUBCHAPTER O. INTERCONNECTION OF DISTRIBUTED ENERGY RESOURCES
Sec. 39.701. INTERCONNECTION. (a) Except as otherwise
provided by this title, the requirements of this section apply to a
distributed energy resource interconnected to a transmission and
distribution utility's distribution system in the ERCOT power
region.
(b) A transmission and distribution utility may allow
interconnection only if:
(1) the distributed energy resource meets applicable
safety, technical, and operational performance and cybersecurity
standards; and
(2) the owner or operator of the distributed energy
resource meets any applicable qualifications and testing
requirements of the independent organization certified under
Section 39.151 for the ERCOT power region.
(c) An interconnecting transmission and distribution
utility is not required to provide an owner or operator of a
distributed energy resource access to the utility's meter
equipment.
Sec. 39.702. INTEGRATION AND COST RECOVERY. (a) The
commission by rule shall establish for the ERCOT power region:
(1) requirements for the dispatchability,
reliability, and other characteristics of each type or
classification of distributed energy resource;
(2) appropriate disclosure requirements and other
customer protections for customers who purchase or lease
distributed energy resources or purchase electric energy or
ancillary services from distributed energy resources;
(3) information an owner or operator of a distributed
energy resource must provide to the interconnecting transmission
and distribution utility to ensure the resource will not adversely
affect the transmission or distribution system;
(4) interconnection guidelines that address:
(A) the determination of whether a given
interconnection or combination of interconnections would exceed a
transmission and distribution utility's system capacity in a
particular location;
(B) considerations for feeder locations related
to distributed energy resources;
(C) considerations of the size or capacity of a
distributed energy resource;
(D) the assessment of potential adverse impacts
to other customers in the area of the distributed energy resource;
(E) means of recognizing and accounting for the
fact that a distributed energy resource may be unavailable during a
firm load shedding event or a power outage of the distribution
system; and
(F) other operating parameters necessary for the
transmission and distribution utility's reliable operation of its
transmission and distribution system;
(5) a methodology for the appropriate allocation and
recovery of the transmission and distribution utility's costs to
interconnect a distributed energy resource; and
(6) requirements for the independent organization
certified under Section 39.151 for the ERCOT power region to report
to the commission periodically:
(A) the categories and generation levels of
distributed energy resources allowed to participate in the ERCOT
wholesale market;
(B) the categories and megawatt levels of
aggregated distributed energy resources allowed to participate in
the ERCOT wholesale market;
(C) accreditation of distributed energy
resources allowed to participate in the ERCOT wholesale market;
(D) performance metrics for distributed energy
resources allowed to participate in the ERCOT wholesale market; and
(E) other information the commission may
require.
(b) The commission shall authorize a transmission and
distribution utility to:
(1) defer for recovery in a later ratemaking
proceeding the incremental operations and maintenance expenses, or
other expenses, and the return, not otherwise recovered in a rate
proceeding, associated with the installation, modification,
upgrade, or maintenance of its transmission or distribution
facilities required by an interconnection under Sections 39.701(b)
and (c); and
(2) request recovery of the costs associated with an
interconnection under Sections 39.701(b) and (c), including any
deferred expenses, through a proceeding under Section 35.004 or
36.210 or in another ratemaking proceeding regardless of whether
the utility first requested recovery in a base-rate proceeding.
(c) Facilities required by an interconnection under
Sections 39.701(b) and (c) are considered used and useful in
providing service to the public and are prudent and includable in
the rate base, regardless of the extent of the actual use of the
facilities.
(d) This subchapter does not:
(1) require or authorize a distribution utility to
procure distributed energy resource services to enable the
operation of the distribution utility system;
(2) require a distribution utility to disclose to any
third party the utility's system planning information, studies,
models, critical infrastructure information, or other confidential
information; or
(3) diminish a distribution utility's rights or
obligations to own or operate its distribution system and provide
electric delivery service to retail customers in the utility's
certificated service area.
Sec. 39.703. LIABILITY. An interconnecting transmission
and distribution utility or retail electric provider providing
service to a distributed energy resource to which this subchapter
applies is not liable for:
(1) a violation of reliability or service metrics
caused by distributed energy resource operations;
(2) damage, injury, or loss caused by distributed
energy resource operations; or
(3) a distributed energy resource's inability or
failure to provide services or a penalty for such inability or
failure.
SECTION 4. (a) This section takes effect only if the Act of
the 88th Legislature, Regular Session, 2023, relating to
nonsubstantive additions to and corrections in enacted codes
becomes law.
(b) Subchapter Z, Chapter 39, Utilities Code, is amended by
adding Section 39.9166 to read as follows:
Sec. 39.9166. DISTRIBUTED ENERGY RESOURCES. (a) A
customer who purchases or leases a distributed energy resource or
enters into a power purchase agreement for a distributed energy
resource in the ERCOT power region is entitled to the information
and disclosures required under Chapter 115, Business & Commerce
Code, and is entitled to protection from fraudulent, unfair,
misleading, or deceptive practices.
(b) An owner or operator of a distributed energy resource
may provide energy or ancillary services in the wholesale market in
the ERCOT power region through generating electricity and providing
that electricity onto a distribution system in an area in which
customer choice has been introduced in the manner provided by this
section.
(c) A person who owns or operates a distributed energy
resource in an area in which customer choice has been introduced and
is part of an aggregated distributed energy resource, or has not
individually registered with the commission as its own power
generation company, must sell the surplus electricity or ancillary
services that are produced by the distributed energy resource and
that are not consumed by the owner's premise to the retail electric
provider that serves the premise's load at a value agreed to between
the distributed energy resource owner and the retail electric
provider that serves the premise's load. The value may be an agreed
value based on the clearing price of energy or ancillary service at
the time of day that the electricity is made available to the grid.
(d) A retail electric provider may direct the offering or
dispatch of aggregated distributed energy resources for which the
retail electric provider facilitated aggregation.
(e) The independent organization certified under Section
39.151 for the ERCOT power region shall adopt procedures to ensure
that the amount of electricity purchased from a distributed energy
resource owner under this section is accounted for when settling
the total load served by the retail electric provider that serves
that premise owner's load.
(f) A distributed energy resource owner that requests net
metering services for purposes of this section must have metering
devices capable of providing measurements consistent with the
independent organization's settlement requirements.
(g) A transmission and distribution utility may provide to
customers educational information regarding the technical
requirements for the interconnection of distributed energy
resources to the distribution system. The provision of information
under this subsection is not considered a competitive energy
service.
(h) This section does not apply to a purchase or agreement
entered into under Section 39.914 or 39.916.
SECTION 5. (a) This section takes effect only if the Act of
the 88th Legislature, Regular Session, 2023, relating to
nonsubstantive additions to and corrections in enacted codes does
not become law.
(b) Subchapter Z, Chapter 39, Utilities Code, is amended by
adding Section 39.9166 to read as follows:
Sec. 39.9166. DISTRIBUTED ENERGY RESOURCES. (a) A
customer who purchases or leases a distributed energy resource or
enters into a power purchase agreement for a distributed energy
resource in the ERCOT power region is entitled to the information
and disclosures required under Chapter 113, Business & Commerce
Code, as added by Chapter 561 (S.B. 398), Acts of the 87th
Legislature, Regular Session, 2021, and is entitled to protection
from fraudulent, unfair, misleading, or deceptive practices.
(b) An owner or operator of a distributed energy resource
may provide energy or ancillary services in the wholesale market in
the ERCOT power region through generating electricity and providing
that electricity onto a distribution system in an area in which
customer choice has been introduced in the manner provided by this
section.
(c) A person who owns or operates a distributed energy
resource in an area in which customer choice has been introduced and
is part of an aggregated distributed energy resource, or has not
individually registered with the commission as its own power
generation company, must sell the surplus electricity or ancillary
services that are produced by the distributed energy resource and
that are not consumed by the owner's premise to the retail electric
provider that serves the premise's load at a value agreed to between
the distributed energy resource owner and the retail electric
provider that serves the premise's load. The value may be an agreed
value based on the clearing price of energy or ancillary service at
the time of day that the electricity is made available to the grid.
(d) A retail electric provider may direct the offering or
dispatch of aggregated distributed energy resources for which the
retail electric provider facilitated aggregation.
(e) The independent organization certified under Section
39.151 for the ERCOT power region shall adopt procedures to ensure
that the amount of electricity purchased from a distributed energy
resource owner under this section is accounted for when settling
the total load served by the retail electric provider that serves
that premise owner's load.
(f) A distributed energy resource owner that requests net
metering services for purposes of this section must have metering
devices capable of providing measurements consistent with the
independent organization's settlement requirements.
(g) A transmission and distribution utility may provide to
customers educational information regarding the technical
requirements for the interconnection of distributed energy
resources to the distribution system. The provision of information
under this subsection is not considered a competitive energy
service.
(h) This section does not apply to a purchase or agreement
entered into under Section 39.914 or 39.916.
SECTION 6. As soon as practicable after the effective date
of this Act, the Public Utility Commission of Texas shall adopt
rules necessary to implement the changes in law made by this Act.
SECTION 7. 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.