88R4001 DIO-F
By: King S.B. No. 1287
A BILL TO BE ENTITLED
AN ACT
relating to the cost of interconnecting certain electric generation
and energy storage facilities with the ERCOT transmission system.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 35.004, Utilities Code, is amended by
amending Subsection (d) and adding Subsections (d-1) and (d-2) to
read as follows:
(d) The commission shall price wholesale transmission
services within ERCOT based on the postage stamp method of pricing
under which a transmission-owning utility's rate is based on the
ERCOT utilities' combined annual costs of transmission, other than
costs described by Subsection (d-2), divided by the total demand
placed on the combined transmission systems of all such
transmission-owning utilities within a power region. An electric
utility subject to the freeze period imposed by Section 39.052 may
treat transmission costs in excess of transmission revenues during
the freeze period as an expense for purposes of determining annual
costs in the annual report filed under Section 39.257.
Notwithstanding Section 36.201, the commission may approve
wholesale rates that may be periodically adjusted to ensure timely
recovery of transmission investment. Notwithstanding Section
36.054(a), if the commission determines that conditions warrant the
action, the commission may authorize the inclusion of construction
work in progress in the rate base for transmission investment
required by the commission under Section 39.203(e).
(d-1) The commission by rule shall establish an allowance to
be applied on a per megawatt basis for capital costs incurred to
interconnect generation resources and electric energy storage
resources described by Section 35.152(a) with the ERCOT
transmission system, including costs of utility interconnection
facilities and all necessary system upgrades. The allowance must:
(1) take into account average historical
interconnection costs and system upgrade costs, other than
transmission costs associated with Section 39.904(g); and
(2) be designed to lower costs to consumers and
encourage owners of generation resources and electric energy
storage resources to locate the resources closer to load.
(d-2) Capital costs in excess of the allowance provided by
Subsection (d-1) incurred to interconnect generation resources and
electric energy storage resources described by Section 35.152(a)
with the ERCOT transmission system, including costs of utility
interconnection facilities and all necessary system upgrades, must
be directly assigned to the generation resource or electric energy
storage resource receiving interconnection service through the
facilities.
SECTION 2. This Act takes effect September 1, 2023.