89R13843 SCR-D
By: Darby, Gerdes, AnchÃa, et al. H.B. No. 3809
A BILL TO BE ENTITLED
AN ACT
relating to the removal of battery energy storage facilities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Title 6, Utilities Code, is amended by adding
Chapter 303 to read as follows:
CHAPTER 303. BATTERY ENERGY STORAGE FACILITY AGREEMENTS
Sec. 303.0001. DEFINITIONS. In this chapter:
(1) "Battery energy storage facility" includes:
(A) a battery energy storage resource; and
(B) a facility or equipment, other than a
facility or equipment owned by an electric utility, as defined by
Section 31.002, used to support the operation of a battery energy
storage resource, including an underground or aboveground
electrical transmission or communications line, an electric
transformer, a power conversion system, a battery management
system, a heating, ventilation, and air conditioning system,
telecommunications equipment, a road, or a maintenance yard.
(2) "Battery energy storage facility agreement" means
a lease agreement between a grantee and a landowner that authorizes
the grantee to operate a battery energy storage facility on the
leased property.
(3) "Battery energy storage resource" means a battery
energy storage system, whether connected at the transmission or
distribution level, that is used to provide energy or ancillary
services at wholesale and is not registered with the independent
organization certified under Section 39.151 for the ERCOT power
region as a self-generator.
(4) "Commercial operations date" means the date on
which the battery energy storage resource is approved for
participation in market operations by a regional transmission
organization and does not include the generation of electrical
energy or other operations conducted before that date for purposes
of maintenance and testing.
(5) "Grantee" means a person, other than an electric
utility, as defined by Section 31.002, who:
(A) leases property from a landowner; and
(B) operates a battery energy storage facility on
the property.
(6) "Recycle" means the processing, including
disassembling, dismantling, and shredding of battery energy
storage cells, modules or other equipment, or their components, to
recover a usable product.
Sec. 303.0002. APPLICABILITY. An agreement that authorizes
the grantee to operate a battery energy storage facility:
(1) in the same modeled generation station and
interconnected at the same point of interconnection as a wind power
facility is subject to Chapter 301 and this chapter; or
(2) in the same modeled generation station and
interconnected at the same point of interconnection as a solar
power facility is subject to Chapter 302 and this chapter.
Sec. 303.0003. WAIVER VOID; REMEDIES. (a) A provision of a
battery energy storage facility agreement that purports to waive a
right or exempt a grantee from a liability or duty established by
this chapter is void.
(b) A person who is harmed by a violation of this chapter is
entitled to appropriate injunctive relief to prevent further
violation of this chapter.
(c) The provisions of this section are not exclusive. The
remedies provided in this section are in addition to any other
procedures or remedies provided by other law.
Sec. 303.0004. REQUIRED AGREEMENT PROVISIONS ON FACILITY
REMOVAL. (a) A battery energy storage facility agreement must
provide that the grantee is responsible for removing the battery
energy storage facility from the landowner's property and that the
grantee shall, in accordance with any other applicable laws or
regulations, safely:
(1) clear, clean, and remove from the property each
battery energy storage resource, transformer, and substation;
(2) for each foundation of a battery energy storage
resource, transformer, or substation installed in the ground:
(A) clear, clean, and remove the foundation from
the ground to a depth of at least three feet below the surface grade
of the land in which the foundation is installed; and
(B) ensure that each hole or cavity created in
the ground by the removal is filled with soil of the same type or a
similar type as the predominant soil found on the property;
(3) for each buried cable, including power,
fiber-optic, and communications cables, installed in the ground:
(A) clear, clean, and remove the cable from the
ground to a depth of at least three feet below the surface grade of
the land in which the cable is installed; and
(B) ensure that each hole or cavity created in
the ground by the removal is filled with soil of the same type or a
similar type as the predominant soil found on the property; and
(4) clear, clean, and remove from the property each
overhead power or communications line installed by the grantee on
the property.
(b) The agreement must provide that the grantee is
responsible for:
(1) collecting and reusing or recycling, or shipping
for reuse or recycling, all components of the battery energy
storage facility practicably capable of being reused or recycled,
in accordance with any other applicable laws or regulations; and
(2) properly disposing of components of the battery
energy storage facility not practicably capable of being reused or
recycled:
(A) at a facility authorized under state and
federal law to dispose of hazardous substances for a component
considered hazardous under those laws; or
(B) for nonhazardous components, at a municipal
solid waste landfill or other appropriate waste disposal facility
authorized under state and federal law to dispose of that type of
component.
(c) The agreement must provide that, at the request of the
landowner, the grantee shall:
(1) clear, clean, and remove each road constructed by
the grantee on the property; and
(2) ensure that each hole or cavity created in the
ground by the removal is filled with soil of the same type or a
similar type as the predominant soil found on the property.
(d) The agreement must provide that, at the request of the
landowner, if reasonable, the grantee shall:
(1) remove from the property all rocks over 12 inches
in diameter excavated during the decommissioning or removal
process;
(2) return the property to a tillable state using
scarification, V-rip, or disc methods, as appropriate; and
(3) ensure that:
(A) each hole or cavity created in the ground by
the removal is filled with soil of the same type or a similar type as
the predominant soil found on the property; and
(B) the surface is returned as near as reasonably
possible to the same condition as before the grantee dug holes or
cavities, including by reseeding pastureland with native grasses
prescribed by an appropriate governmental agency, if any.
(e) The landowner shall make a request under Subsection (c)
or (d) not later than the 180th day after the later of:
(1) the date on which the battery energy storage
resource is no longer capable of generating electricity in
commercial quantities; or
(2) the date the landowner receives written notice of
intent to decommission the battery energy storage facility from the
grantee.
Sec. 303.0005. REQUIRED AGREEMENT PROVISIONS ON FINANCIAL
ASSURANCE. (a) A battery energy storage facility agreement must
provide that the grantee shall obtain and deliver to the landowner
evidence of financial assurance that conforms to the requirements
of this section to secure the performance of the grantee's
obligations under Section 303.0004. Acceptable forms of financial
assurance include a parent company guaranty with a minimum
investment grade credit rating for the parent company issued by a
major domestic credit rating agency, a letter of credit, a bond, or
another form of financial assurance reasonably acceptable to the
landowner.
(b) The amount of financial assurance must be at least equal
to the estimated amount by which the cost of removing the battery
energy storage facilities from the landowner's property, recycling
or disposing of all the components of the battery energy storage
facilities, and restoring the property to as near as reasonably
possible the condition of the property as of the date the agreement
begins, as described by Section 303.0004, exceeds the salvage value
of the battery energy storage facilities, less any portion of the
value of the battery energy storage facilities pledged to secure
outstanding debt.
(c) The agreement must provide that:
(1) the estimated cost of removing the battery energy
storage facilities from the landowner's property, recycling or
disposing of all the components of the battery energy storage
facilities, and restoring the property to as near as reasonably
possible the condition of the property as of the date the agreement
begins, as described by Section 303.0004, and the estimated salvage
value of the battery energy storage facilities must be determined
by an independent, third-party professional engineer licensed in
this state;
(2) the grantee must deliver to the landowner the
estimated cost of removal and recycling or disposal of the battery
energy storage facilities and the salvage value on or before the
10th anniversary of the commercial operations date of the battery
energy storage facilities; and
(3) the grantee must deliver an updated estimate of
the cost and salvage value described by Subdivision (2) at least
once every five years after the initial estimate for the remainder
of the term of the agreement.
(d) The grantee is responsible for the costs of obtaining
financial assurance described by this section and determining the
estimated removal, recycling, and disposal costs and salvage value.
(e) The agreement must provide that the grantee shall
deliver financial assurance not later than the earlier of:
(1) the date the battery energy storage facility
agreement is terminated; or
(2) the 15th anniversary of the commercial operations
date of the battery energy storage facilities located on the
landowner's leased property.
(f) The grantee is responsible for ensuring that the amount
of financial assurance remains sufficient to cover the amount
required by Subsection (b), consistent with the estimates required
by this section.
(g) The grantee may not cancel financial assurance before
the date the grantee has completed the grantee's obligation to
remove the grantee's battery energy storage facilities located on
the landowner's property in the manner provided by this chapter,
unless the grantee provides the landowner with replacement
financial assurance at the time of or before the cancellation. In
the event of a transfer of ownership of the grantee's battery energy
storage facilities, financial assurance provided by the grantee
shall remain in place until the date evidence of financial
assurance meeting the requirements of this chapter is provided to
the landowner.
SECTION 2. Chapter 303, Utilities Code, as added by this
Act, applies only to a battery energy storage facility agreement
entered into on or after the effective date of this Act.
SECTION 3. This Act takes effect September 1, 2025.