Texas 2023 - 88th Regular

Texas Senate Bill SB1752 Compare Versions

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1	1	88R10973 JXC-D
2	2	By: Hall S.B. No. 1752
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the generation and transmission of electricity.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. Subchapter A, Chapter 312, Tax Code, is amended
10	10	by adding Section 312.0022 to read as follows:
11	11	Sec. 312.0022. PROHIBITION ON ABATEMENT OF TAXES ON CERTAIN
12	12	ELECTRIC GENERATING FACILITY PROPERTY. (a) In this section,
13	13	"electric generating facility" means an electric generating
14	14	facility described by Section 39.166(a), Utilities Code.
15	15	(b) The governing body of a taxing unit may not enter into an
16	16	agreement under this chapter to exempt from taxation a portion of
17	17	the value of real property on which an electric generating facility
18	18	is located or is planned to be located during the term of the
19	19	agreement, or of tangible personal property that is located or is
20	20	planned to be located on the real property during that term.
21	21	SECTION 2. Section 36.053, Utilities Code, is amended by
22	22	adding Subsection (e) to read as follows:
23	23	(e) Notwithstanding Subsection (d), after September 1,
24	24	2023, the commission may not authorize the recovery in the rate base
25	25	of an electric utility or a transmission and distribution utility
26	26	of investments made for transmission or transmission-related
27	27	facilities in a competitive renewable energy zone.
28	28	SECTION 3. Section 39.001, Utilities Code, is amended by
29	29	amending Subsection (a) and adding Subsection (d-1) to read as
30	30	follows:
31	31	(a) The legislature finds that the production and sale of
32	32	electricity is not a monopoly warranting regulation of rates,
33	33	operations, and services and that the public interest in
34	34	competitive electric markets requires that, except for
35	35	transmission and distribution services and for the recovery of
36	36	stranded costs, generation capacity and electric services and their
37	37	prices should be determined by customer choices and the normal
38	38	forces of competition. As a result, this chapter is enacted to
39	39	protect the public interest during the transition to and in the
40	40	establishment of a fully competitive electric power industry.
41	41	(d-1) The legislature finds that the amount of installed
42	42	generation capacity is best determined by investor, generator, and
43	43	customer choices through the normal forces of competition. As a
44	44	result, except as provided by Sections 39.152-39.158 and
45	45	notwithstanding any other law, a regulatory authority may not
46	46	mandate or otherwise regulate the amount of installed generation
47	47	capacity or require a surplus or reserve of installed generation
48	48	capacity above actual or forecasted levels of load.
49	49	SECTION 4. Subchapter D, Chapter 39, Utilities Code, is
50	50	amended by adding Section 39.166 to read as follows:
51	51	Sec. 39.166. PARTICIPATION IN MARKET BY CERTAIN GENERATING
52	52	FACILITIES. (a) The commission by rule shall require each electric
53	53	cooperative, power generation company, or exempt wholesale
54	54	generator that sells electric energy at wholesale in the ERCOT
55	55	power region and has received a federal tax credit provided under 26
56	56	U.S.C. Section 45 or 48 to notify the commission of the tax credit.
57	57	(b) The commission and the independent organization
58	58	certified under Section 39.151 for the ERCOT power region shall
59	59	adopt rules and protocols that:
60	60	(1) prohibit an entity described by Subsection (a)
61	61	from offering electric energy for wholesale in the ERCOT power
62	62	region at a price below $27.50 per megawatt hour;
63	63	(2) prohibit an entity described by Subsection (a)
64	64	from being reimbursed for the costs of interconnecting a new
65	65	generation facility; and
66	66	(3) notwithstanding Chapter 35, incorporate marginal
67	67	losses in locational marginal pricing for electric energy sold from
68	68	a generating facility by an entity described by Subsection (a).
69	69	(c) The commission by rule shall require the independent
70	70	organization certified under Section 39.151 for the ERCOT power
71	71	region to:
72	72	(1) impose a periodic fee on each entity described by
73	73	Subsection (a) that uses transmission service in a competitive
74	74	renewable energy zone; and
75	75	(2) regularly disburse the fee revenue to each
76	76	electric utility or transmission and distribution utility
77	77	described by Section 36.053(e) to provide for the recovery of the
78	78	utility's transmission facility investment described by Section
79	79	36.053(e).
80	80	(d) The disbursements described by Subsection (c)(2) must
81	81	be made on a pro rata basis according to the amount of investment to
82	82	be recovered.
83	83	SECTION 5. Section 39.904, Utilities Code, is amended by
84	84	amending Subsections (a), (b), (c), (h), (j), and (o) and adding
85	85	Subsections (h-1) and (h-2) to read as follows:
86	86	(a) It is the intent of the legislature that by January 1,
87	87	2015, an additional 5,000 megawatts of generating capacity from
88	88	renewable energy technologies will have been installed in this
89	89	state. The cumulative installed renewable capacity in this state
90	90	shall total 5,880 megawatts by [January 1, 2015, and the commission
91	91	shall establish a target of 10,000 megawatts of installed renewable
92	92	capacity by January 1, 2025. The cumulative installed renewable
93	93	capacity in this state shall total 2,280 megawatts by January 1,
94	94	2007, 3,272 megawatts by January 1, 2009, 4,264 megawatts by
95	95	January 1, 2011, 5,256 megawatts by January 1, 2013, and 5,880
96	96	megawatts by] January 1, 2015. Of the renewable energy technology
97	97	generating capacity installed to meet the goal of this subsection
98	98	after September 1, 2005, the commission shall establish a target of
99	99	having at least 500 megawatts of capacity from a renewable energy
100	100	technology other than a source using wind energy. The goal and
101	101	targets established under this subsection terminate on December 31,
102	102	2023.
103	103	(b) The commission shall establish a renewable energy
104	104	credits trading program. Before December 31, 2023, a [Any] retail
105	105	electric provider, municipally owned utility, or electric
106	106	cooperative that does not satisfy the requirements of Subsection
107	107	(a) by directly owning or purchasing capacity using renewable
108	108	energy technologies shall purchase sufficient renewable energy
109	109	credits to satisfy the requirements by holding renewable energy
110	110	credits in lieu of capacity from renewable energy technologies. On
111	111	or after December 31, 2023, a retail electric provider shall
112	112	purchase sufficient renewable energy credits to verify any
113	113	marketing claims the provider makes related to the content of
114	114	renewable energy, as determined by the commission.
115	115	(c) Not later than January 1, 2000, the commission shall
116	116	adopt rules necessary to administer and enforce this section. At a
117	117	minimum, the rules shall:
118	118	(1) establish the minimum annual renewable energy
119	119	requirement for each retail electric provider, municipally owned
120	120	utility, and electric cooperative operating in this state in a
121	121	manner reasonably calculated by the commission to produce, on a
122	122	statewide basis, compliance with the requirement prescribed by
123	123	Subsection (a); and
124	124	(2) specify reasonable performance standards that all
125	125	renewable capacity additions must meet to earn renewable energy
126	126	credits [count against the requirement prescribed by Subsection
127	127	(a)] and that:
128	128	(A) are designed and operated so as to maximize
129	129	the energy output from the capacity additions in accordance with
130	130	then-current industry standards; and
131	131	(B) encourage the development, construction, and
132	132	operation of new renewable energy projects at those sites in this
133	133	state that have the greatest economic potential for capture and
134	134	development of this state's environmentally beneficial renewable
135	135	resources.
136	136	(h) The commission, in consultation with the independent
137	137	organization certified under Section 39.151 for the ERCOT power
138	138	region, shall plan for transmission needs related to the
139	139	incorporation of renewable energy in a manner consistent with the
140	140	planning process for other types of generation resources, including
141	141	by considering in the planning process [In considering an
142	142	application for a certificate of public convenience and necessity
143	143	for a transmission project intended to serve a competitive
144	144	renewable energy zone, the commission is not required to consider]
145	145	the factors provided by Section 37.056 [Sections 37.056(c)(1) and
146	146	(2)].
147	147	(h-1) The commission may not designate a new competitive
148	148	renewable energy zone after September 1, 2023.
149	149	(h-2) After September 1, 2023, the commission may not
150	150	approve additional transmission facilities in a previously
151	151	approved competitive renewable energy zone unless the facilities
152	152	have been evaluated through the planning process described by
153	153	Subsection (h).
154	154	(j) The commission, after consultation with each
155	155	appropriate independent organization, electric reliability
156	156	council, or regional transmission organization, shall file a report
157	157	with the legislature not later than December 31 of each
158	158	even-numbered year. The report must include[:
159	159	[(1) an evaluation of the commission's implementation
160	160	of competitive renewable energy zones;
161	161	[(2) the estimated cost of transmission service
162	162	improvements needed for each competitive renewable energy zone; and
163	163	[(3)] an evaluation of the effects that additional
164	164	renewable generation has on system reliability and on the cost of
165	165	alternatives to mitigate the effects.
166	166	(o) The commission may establish an alternative compliance
167	167	payment to meet the goal established by Subsection (a) before its
168	168	termination. An entity that has a renewable energy purchase
169	169	requirement under this section may elect to pay the alternative
170	170	compliance payment instead of applying renewable energy credits
171	171	toward the satisfaction of the entity's obligation under this
172	172	section. The commission may establish a separate alternative
173	173	compliance payment for the goal of 500 megawatts of capacity from
174	174	renewable energy technologies other than wind energy that an entity
175	175	may use until January 1, 2024, to meet that goal. The alternative
176	176	compliance payment for a renewable energy purchase requirement that
177	177	could be satisfied with a renewable energy credit from wind energy
178	178	may not be less than $2.50 per credit or greater than $20 per
179	179	credit. Prior to September 1, 2009, an alternative compliance
180	180	payment under this subsection may not be set above $5 per credit.
181	181	In implementing this subsection, the commission shall consider:
182	182	(1) the effect of renewable energy credit prices on
183	183	retail competition;
184	184	(2) the effect of renewable energy credit prices on
185	185	electric rates;
186	186	(3) the effect of the alternative compliance payment
187	187	level on the renewable energy credit market; and
188	188	(4) any other factors necessary to ensure the
189	189	continued development of the renewable energy industry in this
190	190	state while protecting ratepayers from unnecessary rate increases.
191	191	SECTION 6. Section 39.159, Utilities Code, as added by
192	192	Chapter 426 (S.B. 3), Acts of the 87th Legislature, Regular
193	193	Session, 2021, is repealed.
194	194	SECTION 7. Section 312.0022, Tax Code, as added by this Act,
195	195	applies only to an agreement entered into under Chapter 312, Tax
196	196	Code, on or after the effective date of this Act.
197	197	SECTION 8. This Act takes effect September 1, 2023.