By: King, et al. S.B. No. 2014
A BILL TO BE ENTITLED
AN ACT
relating to the legislature's goals for renewable electric
generating capacity.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 36.053(d), Utilities Code, is amended to
read as follows:
(d) If the commission issues a certificate of convenience
and necessity or if the commission, acting under the authority
formerly provided by Section 39.203(e), ordered [orders] an
electric utility or a transmission and distribution utility to
construct or enlarge transmission or transmission-related
facilities to facilitate meeting the goal for generating capacity
from renewable energy technologies under former Section 39.904(a),
the commission shall find that the facilities are used and useful to
the utility in providing service for purposes of this section and
are prudent and includable in the rate base, regardless of the
extent of the utility's actual use of the facilities.
SECTION 2. Section 37.0541, Utilities Code, is amended to
read as follows:
Sec. 37.0541. CONSOLIDATION OF CERTAIN PROCEEDINGS. The
commission shall consolidate the proceeding on an application to
obtain or amend a certificate of convenience and necessity for the
construction of a transmission line with the proceeding on another
application to obtain or amend a certificate of convenience and
necessity for the construction of a transmission line if it is
apparent from the applications or a motion to intervene in either
proceeding that the transmission lines that are the subject of the
separate proceedings share a common point of interconnection.
[This section does not apply to a proceeding on an application for a
certificate of convenience and necessity for a transmission line to
serve a competitive renewable energy zone as part of a plan
developed by the commission under Section 39.904(g)(2).]
SECTION 3. Sections 37.056(c) and (d), Utilities Code, are
amended to read as follows:
(c) The commission shall grant each certificate on a
nondiscriminatory basis after considering:
(1) the adequacy of existing service;
(2) the need for additional service;
(3) the effect of granting the certificate on the
recipient of the certificate and any electric utility serving the
proximate area; and
(4) other factors, such as:
(A) community values;
(B) recreational and park areas;
(C) historical and aesthetic values;
(D) environmental integrity; and
(E) the probable improvement of service or
lowering of cost to consumers in the area if the certificate is
granted, including any potential economic or reliability benefits
associated with dual fuel and fuel storage capabilities in areas
outside the ERCOT power region[; and
[(F) to the extent applicable, the effect of
granting the certificate on the ability of this state to meet the
goal established by Section 39.904(a) of this title].
(d) The commission by rule shall establish criteria, in
addition to the criteria described by Subsection (c), for granting
a certificate for a transmission project that serves the ERCOT
power region and[,] that is not necessary to meet state or federal
reliability standards[, and that is not included in a plan
developed under Section 39.904(g)]. The criteria must include a
comparison of the estimated cost of the transmission project for
consumers and the estimated congestion cost savings for consumers
that may result from the transmission project, considering both
current and future expected congestion levels and the transmission
project's ability to reduce those congestion levels. The
commission shall include with its decision on an application for a
certificate to which this subsection applies findings on the
criteria.
SECTION 4. Section 39.002, Utilities Code, as amended by
Chapters 908 (H.B. 4492) and 950 (S.B. 1580), Acts of the 87th
Legislature, Regular Session, 2021, is reenacted and amended to
read as follows:
Sec. 39.002. APPLICABILITY. This chapter, other than
Sections 39.151, 39.1516, 39.155, 39.157(e), 39.159, 39.160,
39.203, [39.904,] 39.9051, 39.9052, and 39.914(e), and Subchapters
M and N, does not apply to a municipally owned utility or an
electric cooperative. Sections 39.157(e) and[,] 39.203[, and
39.904, however,] apply only to a municipally owned utility or an
electric cooperative that is offering customer choice. If there is
a conflict between the specific provisions of this chapter and any
other provisions of this title, except for Chapters 40 and 41, the
provisions of this chapter control.
SECTION 5. Section 39.203(e), Utilities Code, is amended to
read as follows:
(e) The commission may require an electric utility or a
transmission and distribution utility to construct or enlarge
facilities to ensure safe and reliable service for the state's
electric markets and to reduce transmission constraints within
ERCOT in a cost-effective manner where the constraints are such
that they are not being resolved through Chapter 37 or the ERCOT
transmission planning process. [The commission shall require an
electric utility or a transmission and distribution utility to
construct or enlarge transmission or transmission-related
facilities for the purpose of meeting the goal for generating
capacity from renewable energy technologies under Section
39.904(a).] In any proceeding brought under Chapter 37, an
electric utility or transmission and distribution utility ordered
to construct or enlarge facilities under this subchapter need not
prove that the construction ordered is necessary for the service,
accommodation, convenience, or safety of the public and need not
address the factors listed in Sections 37.056(c)(1)-(3) and (4)(E).
Notwithstanding any other law, including Section 37.057, in any
proceeding brought under Chapter 37 by an electric utility or a
transmission and distribution utility related to an application for
a certificate of public convenience and necessity to construct or
enlarge transmission or transmission-related facilities under this
subsection, the commission shall issue a final order before the
181st day after the date the application is filed with the
commission. If the commission does not issue a final order before
that date, the application is approved.
SECTION 6. Section 39.402(a), Utilities Code, is amended to
read as follows:
(a) Until the date on which an electric utility subject to
this subchapter is authorized by the commission to implement
customer choice, the rates of the utility shall be regulated under
traditional cost of service regulation and the utility is subject
to all applicable regulatory authority prescribed by this subtitle
and Subtitle A, including Chapters 14, 32, 33, 36, and 37. Until the
date on which an electric utility subject to this subchapter
implements customer choice, the provisions of this chapter, other
than this subchapter, Sections 39.1516[, 39.904,] and 39.905, and
the provisions relating to the duty to obtain a permit from the
Texas Commission on Environmental Quality for an electric
generating facility and to reduce emissions from an electric
generating facility, shall not apply to that utility. That portion
of any commission order entered before September 1, 2001, to comply
with this subchapter shall be null and void.
SECTION 7. Section 39.452(d), Utilities Code, is amended to
read as follows:
(d) Until the date on which an electric utility subject to
this subchapter implements customer choice:
(1) the provisions of this chapter do not apply to that
electric utility, other than this subchapter, Sections 39.1516[,
39.904,] and 39.905, the provisions relating to the duty to obtain a
permit from the Texas Commission on Environmental Quality for an
electric generating facility and to reduce emissions from an
electric generating facility, and the provisions of Subchapter G
that pertain to the recovery and securitization of hurricane
reconstruction costs authorized by Sections 39.458-39.463; and
(2) the electric utility is not subject to a rate
freeze and, subject to the limitation provided by Subsection (b),
may file for rate changes under Chapter 36 and for approval of one
or more of the rate rider mechanisms authorized by Sections 39.454
and 39.455.
SECTION 8. Section 39.502(b), Utilities Code, is amended to
read as follows:
(b) Until the date on which an electric utility subject to
this subchapter implements customer choice, the provisions of this
chapter, other than this subchapter and Sections 39.1516[, 39.904,]
and 39.905, do not apply to that utility.
SECTION 9. Section 39.552(b), Utilities Code, is amended to
read as follows:
(b) Until the date on which an electric utility subject to
this subchapter implements customer choice, the provisions of this
chapter, other than this subchapter and Sections 39.1516[, 39.904,]
and 39.905, do not apply to that utility.
SECTION 10. Subchapter Z, Chapter 39, Utilities Code, is
amended by adding Sections 39.9111, 39.9112, and 39.9113 to read as
follows:
Sec. 39.9111. RULES RELATED TO RENEWABLE POWER FACILITIES.
The commission may adopt rules requiring renewable power facilities
to have reactive power control capabilities or any other feasible
technology designed to reduce the facilities' effects on system
reliability.
Sec. 39.9112. REPORT ON TRANSMISSION AND GENERATION
CAPACITY. The commission and the independent organization
certified under Section 39.151 for the ERCOT power region shall
study the need for increased transmission and generation capacity
throughout this state and report to the legislature the results of
the study and any recommendations for legislation. The report must
be filed with the legislature not later than December 31 of each
even-numbered year.
Sec. 39.9113. RENEWABLE ENERGY CREDITS. To facilitate
voluntary contractual obligations and verify claims regarding
environmental attributes of renewable energy production in this
state, the independent organization certified under Section 39.151
for the ERCOT power region shall maintain an accreditation and
banking system to award and track voluntary renewable energy
credits generated by eligible facilities.
SECTION 11. Section 39.916(a), Utilities Code, is amended
by amending Subdivision (1) and adding Subdivision (4) to read as
follows:
(1) "Distributed renewable generation" means electric
generation with a capacity of not more than 2,000 kilowatts
provided by a renewable energy technology[, as defined by Section
39.904,] that is installed on a retail electric customer's side of
the meter.
(4) "Renewable energy technology" means any
technology that relies exclusively on an energy source that is
naturally regenerated over a short time and is derived from the sun
directly or indirectly or from moving water or other natural
movements or mechanisms of the environment. The term includes a
technology that relies on energy derived from the sun directly, on
wind, geothermal, hydroelectric, wave, or tidal energy, or on
biomass or biomass-based waste products, including landfill gas.
The term does not include a technology that relies on an energy
resource derived from a fossil fuel, a waste product from a fossil
fuel, or a waste product from an inorganic source.
SECTION 12. Section 40.001(a), Utilities Code, is amended
to read as follows:
(a) Notwithstanding any other provision of law, except
Sections 39.155, 39.157(e), and 39.203, [and 39.904,] this chapter
governs the transition to and the establishment of a fully
competitive electric power industry for municipally owned
utilities. With respect to the regulation of municipally owned
utilities, this chapter controls over any other provision of this
title, except for sections in which the term "municipally owned
utility" is specifically used.
SECTION 13. Section 40.004, Utilities Code, is amended to
read as follows:
Sec. 40.004. JURISDICTION OF COMMISSION. Except as
specifically otherwise provided in this chapter, the commission has
jurisdiction over municipally owned utilities only for the
following purposes:
(1) to regulate wholesale transmission rates and
service, including terms of access, to the extent provided by
Subchapter A, Chapter 35;
(2) to regulate certification of retail service areas
to the extent provided by Chapter 37;
(3) to regulate rates on appeal under Subchapters D
and E, Chapter 33, subject to Section 40.051(c);
(4) to establish a code of conduct as provided by
Section 39.157(e) applicable to anticompetitive activities and to
affiliate activities limited to structurally unbundled affiliates
of municipally owned utilities, subject to Section 40.054;
(5) to establish terms and conditions for open access
to transmission and distribution facilities for municipally owned
utilities providing customer choice, as provided by Section 39.203;
(6) to administer [the renewable energy credits
program under Section 39.904(b) and] the natural gas energy credits
program under Section 39.9044(b);
(7) to require reports of municipally owned utility
operations only to the extent necessary to:
(A) enable the commission to determine the
aggregate load and energy requirements of the state and the
resources available to serve that load; or
(B) enable the commission to determine
information relating to market power as provided by Section 39.155;
and
(8) to evaluate and monitor the cybersecurity
preparedness of a municipally owned utility described by Section
39.1516(a)(3) or (4).
SECTION 14. Section 41.001, Utilities Code, is amended to
read as follows:
Sec. 41.001. APPLICABLE LAW. Notwithstanding any other
provision of law, except Sections 39.155, 39.157(e), and 39.203,
[and 39.904,] this chapter governs the transition to and the
establishment of a fully competitive electric power industry for
electric cooperatives. Regarding the regulation of electric
cooperatives, this chapter shall control over any other provision
of this title, except for sections in which the term "electric
cooperative" is specifically used.
SECTION 15. Sections 39.904 and 39.916(g), Utilities Code,
are repealed.
SECTION 16. It is the intent of the 88th Legislature,
Regular Session, 2023, that the amendments made by this Act be
harmonized with another Act of the 88th Legislature, Regular
Session, 2023, relating to nonsubstantive additions to and
corrections in enacted codes.
SECTION 17. This Act takes effect September 1, 2023.