88R10973 JXC-D
By: Hall S.B. No. 1752
A BILL TO BE ENTITLED
AN ACT
relating to the generation and transmission of electricity.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter A, Chapter 312, Tax Code, is amended
by adding Section 312.0022 to read as follows:
Sec. 312.0022. PROHIBITION ON ABATEMENT OF TAXES ON CERTAIN
ELECTRIC GENERATING FACILITY PROPERTY. (a) In this section,
"electric generating facility" means an electric generating
facility described by Section 39.166(a), Utilities Code.
(b) The governing body of a taxing unit may not enter into an
agreement under this chapter to exempt from taxation a portion of
the value of real property on which an electric generating facility
is located or is planned to be located during the term of the
agreement, or of tangible personal property that is located or is
planned to be located on the real property during that term.
SECTION 2. Section 36.053, Utilities Code, is amended by
adding Subsection (e) to read as follows:
(e) Notwithstanding Subsection (d), after September 1,
2023, the commission may not authorize the recovery in the rate base
of an electric utility or a transmission and distribution utility
of investments made for transmission or transmission-related
facilities in a competitive renewable energy zone.
SECTION 3. Section 39.001, Utilities Code, is amended by
amending Subsection (a) and adding Subsection (d-1) to read as
follows:
(a) The legislature finds that the production and sale of
electricity is not a monopoly warranting regulation of rates,
operations, and services and that the public interest in
competitive electric markets requires that, except for
transmission and distribution services and for the recovery of
stranded costs, generation capacity and electric services and their
prices should be determined by customer choices and the normal
forces of competition. As a result, this chapter is enacted to
protect the public interest during the transition to and in the
establishment of a fully competitive electric power industry.
(d-1) The legislature finds that the amount of installed
generation capacity is best determined by investor, generator, and
customer choices through the normal forces of competition. As a
result, except as provided by Sections 39.152-39.158 and
notwithstanding any other law, a regulatory authority may not
mandate or otherwise regulate the amount of installed generation
capacity or require a surplus or reserve of installed generation
capacity above actual or forecasted levels of load.
SECTION 4. Subchapter D, Chapter 39, Utilities Code, is
amended by adding Section 39.166 to read as follows:
Sec. 39.166. PARTICIPATION IN MARKET BY CERTAIN GENERATING
FACILITIES. (a) The commission by rule shall require each electric
cooperative, power generation company, or exempt wholesale
generator that sells electric energy at wholesale in the ERCOT
power region and has received a federal tax credit provided under 26
U.S.C. Section 45 or 48 to notify the commission of the tax credit.
(b) The commission and the independent organization
certified under Section 39.151 for the ERCOT power region shall
adopt rules and protocols that:
(1) prohibit an entity described by Subsection (a)
from offering electric energy for wholesale in the ERCOT power
region at a price below $27.50 per megawatt hour;
(2) prohibit an entity described by Subsection (a)
from being reimbursed for the costs of interconnecting a new
generation facility; and
(3) notwithstanding Chapter 35, incorporate marginal
losses in locational marginal pricing for electric energy sold from
a generating facility by an entity described by Subsection (a).
(c) The commission by rule shall require the independent
organization certified under Section 39.151 for the ERCOT power
region to:
(1) impose a periodic fee on each entity described by
Subsection (a) that uses transmission service in a competitive
renewable energy zone; and
(2) regularly disburse the fee revenue to each
electric utility or transmission and distribution utility
described by Section 36.053(e) to provide for the recovery of the
utility's transmission facility investment described by Section
36.053(e).
(d) The disbursements described by Subsection (c)(2) must
be made on a pro rata basis according to the amount of investment to
be recovered.
SECTION 5. Section 39.904, Utilities Code, is amended by
amending Subsections (a), (b), (c), (h), (j), and (o) and adding
Subsections (h-1) and (h-2) to read as follows:
(a) It is the intent of the legislature that by January 1,
2015, an additional 5,000 megawatts of generating capacity from
renewable energy technologies will have been installed in this
state. The cumulative installed renewable capacity in this state
shall total 5,880 megawatts by [January 1, 2015, and the commission
shall establish a target of 10,000 megawatts of installed renewable
capacity by January 1, 2025. The cumulative installed renewable
capacity in this state shall total 2,280 megawatts by January 1,
2007, 3,272 megawatts by January 1, 2009, 4,264 megawatts by
January 1, 2011, 5,256 megawatts by January 1, 2013, and 5,880
megawatts by] January 1, 2015. Of the renewable energy technology
generating capacity installed to meet the goal of this subsection
after September 1, 2005, the commission shall establish a target of
having at least 500 megawatts of capacity from a renewable energy
technology other than a source using wind energy. The goal and
targets established under this subsection terminate on December 31,
2023.
(b) The commission shall establish a renewable energy
credits trading program. Before December 31, 2023, a [Any] retail
electric provider, municipally owned utility, or electric
cooperative that does not satisfy the requirements of Subsection
(a) by directly owning or purchasing capacity using renewable
energy technologies shall purchase sufficient renewable energy
credits to satisfy the requirements by holding renewable energy
credits in lieu of capacity from renewable energy technologies. On
or after December 31, 2023, a retail electric provider shall
purchase sufficient renewable energy credits to verify any
marketing claims the provider makes related to the content of
renewable energy, as determined by the commission.
(c) Not later than January 1, 2000, the commission shall
adopt rules necessary to administer and enforce this section. At a
minimum, the rules shall:
(1) establish the minimum annual renewable energy
requirement for each retail electric provider, municipally owned
utility, and electric cooperative operating in this state in a
manner reasonably calculated by the commission to produce, on a
statewide basis, compliance with the requirement prescribed by
Subsection (a); and
(2) specify reasonable performance standards that all
renewable capacity additions must meet to earn renewable energy
credits [count against the requirement prescribed by Subsection
(a)] and that:
(A) are designed and operated so as to maximize
the energy output from the capacity additions in accordance with
then-current industry standards; and
(B) encourage the development, construction, and
operation of new renewable energy projects at those sites in this
state that have the greatest economic potential for capture and
development of this state's environmentally beneficial renewable
resources.
(h) The commission, in consultation with the independent
organization certified under Section 39.151 for the ERCOT power
region, shall plan for transmission needs related to the
incorporation of renewable energy in a manner consistent with the
planning process for other types of generation resources, including
by considering in the planning process [In considering an
application for a certificate of public convenience and necessity
for a transmission project intended to serve a competitive
renewable energy zone, the commission is not required to consider]
the factors provided by Section 37.056 [Sections 37.056(c)(1) and
(2)].
(h-1) The commission may not designate a new competitive
renewable energy zone after September 1, 2023.
(h-2) After September 1, 2023, the commission may not
approve additional transmission facilities in a previously
approved competitive renewable energy zone unless the facilities
have been evaluated through the planning process described by
Subsection (h).
(j) The commission, after consultation with each
appropriate independent organization, electric reliability
council, or regional transmission organization, shall file a report
with the legislature not later than December 31 of each
even-numbered year. The report must include[:
[(1) an evaluation of the commission's implementation
of competitive renewable energy zones;
[(2) the estimated cost of transmission service
improvements needed for each competitive renewable energy zone; and
[(3)] an evaluation of the effects that additional
renewable generation has on system reliability and on the cost of
alternatives to mitigate the effects.
(o) The commission may establish an alternative compliance
payment to meet the goal established by Subsection (a) before its
termination. An entity that has a renewable energy purchase
requirement under this section may elect to pay the alternative
compliance payment instead of applying renewable energy credits
toward the satisfaction of the entity's obligation under this
section. The commission may establish a separate alternative
compliance payment for the goal of 500 megawatts of capacity from
renewable energy technologies other than wind energy that an entity
may use until January 1, 2024, to meet that goal. The alternative
compliance payment for a renewable energy purchase requirement that
could be satisfied with a renewable energy credit from wind energy
may not be less than $2.50 per credit or greater than $20 per
credit. Prior to September 1, 2009, an alternative compliance
payment under this subsection may not be set above $5 per credit.
In implementing this subsection, the commission shall consider:
(1) the effect of renewable energy credit prices on
retail competition;
(2) the effect of renewable energy credit prices on
electric rates;
(3) the effect of the alternative compliance payment
level on the renewable energy credit market; and
(4) any other factors necessary to ensure the
continued development of the renewable energy industry in this
state while protecting ratepayers from unnecessary rate increases.
SECTION 6. Section 39.159, Utilities Code, as added by
Chapter 426 (S.B. 3), Acts of the 87th Legislature, Regular
Session, 2021, is repealed.
SECTION 7. Section 312.0022, Tax Code, as added by this Act,
applies only to an agreement entered into under Chapter 312, Tax
Code, on or after the effective date of this Act.
SECTION 8. This Act takes effect September 1, 2023.