Texas 2025 - 89th Regular

Texas House Bill HB5479 Compare Versions

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1	1		By: Anchía H.B. No. 5479
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4	6		A BILL TO BE ENTITLED
5	7		AN ACT
6	8		relating to energy efficiency goals and programs.
7	9		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
8	10		SECTION 1. Section 39.905, Utilities Code, is amended by
9	11		amending Subsections (a), (b), (e), (f), (g), (h), (i), and (j) and
10	12		adding Subsections (a-1),(i-1), and (i-2) to read as follows:
11	13		(a) [It is the goal of the legislature] The commission shall
12	14		ensure that:
13	15		(1) electric utilities will administer energy
14	16		efficiency incentive programs in a market-neutral,
15	17		nondiscriminatory manner but will not offer underlying competitive
16	18		services;
17	19		(2) all customers, in all customer classes, will have
18	20		a choice of and access to energy efficiency alternatives and other
19	21		choices from the market that allow each customer to reduce energy
20	22		consumption, summer and winter peak demand, summer and winter peak
21	23		net demand, or energy costs;
22	24		(3) each electric utility administers energy
23	25		efficiency programs that:
24	26		(A) cause the utility's portfolio of programs to
25	27		be cost-effective;
26	28		(B) for an electric utility in an area of the
27	29		state not open to competition, include demand response programs;
28	30		(C) acquire the following minimum quantifiable
29	31		reductions in demand annually from energy efficiency programs,
30	32		without the inclusion of demand reduction achieved through load
31	33		management programs:
32	34		(i) 2,500 kilowatts for utilities with an
33	35		average of less than 300,000 total eligible residential and
34	36		commercial customers in the previous five years;
35	37		(ii) 7,500 kilowatts for utilities with an
36	38		average of greater than 300,000 but less than 750,000 total
37	39		eligible residential and commercial customers in the previous five
38	40		years;
39	41		(iii) 12,500 kilowatts for utilities with
40	42		an average of greater than 750,000 but less than 1.5 million total
41	43		eligible residential and commercial customers in the previous five
42	44		years;
43	45		(iv) 37,500 kilowatts for utilities with an
44	46		average of greater than 1.5 million but less than 3 million total
45	47		eligible residential and commercial customers in the previous five
46	48		years;
47	49		(v) 50,000 kilowatts for utilities with an
48	50		average of greater than 3 million but less than 5 million total
49	51		eligible residential and commercial customers in the previous five
50	52		years; or
51	53		(vi) 62,500 kilowatts for utilities with an
52	54		average of greater than 5 million total eligible residential and
53	55		commercial customers in the previous five years; and
54	56		(D) acquire energy savings of no less than 75% of
55	57		what the utility achieved in energy savings in 2024 as previously
56	58		reported by the utility to the commission;
57	59		(E) Beginning with the 2027 calendar year, the
58	60		goals in Subsections (a)(3)(C) and (a)(3)(D) shall increase by
59	61		three percent each year through 2028. The commission shall update
60	62		the goals to set appropriate energy savings increases for years
61	63		2028 and thereafter;
62	64		(F) For an electric utility in an area of the
63	65		state open to competition, the commission shall allow utilities to
64	66		claim energy savings and demand reduction from programs described
65	67		by PURA 39.919 (b) (9). The commission shall adopt rules that
66	68		establish a deemed savings and avoided demand per device to be used
67	69		for this purpose;
68	70		(4) each electric utility annually provides, through
69	71		market-based standard offer programs or through targeted
70	72		market-transformation programs, incentives sufficient for retail
71	73		electric providers and competitive energy service providers to
72	74		acquire additional cost-effective energy efficiency, subject to
73	75		cost ceilings established by the commission, for the utility's
74	76		residential and commercial customers; [ equivalent to:
75	77		[(A) not less than:
76	78		[(i) 30 percent of the electric utility's
77	79		annual growth in demand of residential and commercial customers by
78	80		December 31 of each year beginning with the 2013 calendar year; and
79	81		[(ii) the amount of energy efficiency to be
80	82		acquired for the utility's residential and commercial customers for
81	83		the most recent preceding year; and
82	84		[(B) for an electric utility whose amount of
83	85		energy efficiency to be acquired under this subsection is
84	86		equivalent to at least four-tenths of one percent of the electric
85	87		utility's summer weather-adjusted peak demand for residential and
86	88		commercial customers in the previous calendar year, not less than:
87	89		[(i) four-tenths of one percent of the
88	90		utility's summer weather-adjusted peak demand for residential and
89	91		commercial customers by December 31 of each subsequent year; and
90	92		[(ii) the amount of energy efficiency to be
91	93		acquired for the utility's residential and commercial customers for
92	94		the most recent preceding year;]
93	95		(5) [(4)] each electric utility in the ERCOT region
94	96		[shall] uses its best efforts to encourage and facilitate the
95	97		involvement of the region's retail electric providers in the
96	98		delivery of efficiency programs [and], demand response programs, or
97	99		both under this section, including programs for demand-side
98	100		renewable energy systems that:
99	101		[(A) use distributed renewable energy
100	102		generation, as defined by Section 39.916; or]
101	103		[(B)] reduce the need for energy consumption by
102	104		using a renewable energy technology, a geothermal technology [heat
103	105		pump], a solar water heater, or another natural mechanism of the
104	106		environment;.
105	107		[(5) retail electric providers in the ERCOT region,
106	108		and electric utilities outside of the ERCOT region, shall provide
107	109		customers with energy efficiency educational materials; and
108	110		[(6) notwithstanding Subsection (a)(3), electric
109	111		utilities shall continue to make available, at 2007 funding and
110	112		participation levels, any load management standard offer programs
111	113		developed for industrial customers and implemented prior to May 1,
112	114		2007].
113	115		(a-1) Utilities subject to Sections 39.9051 or 39.9052 are
114	116		not subject to the requirements of this section, although such
115	117		utilities may offer programs described by this section.
116	118		(b) The commission shall provide oversight and adopt rules
117	119		and procedures to ensure that the utilities can achieve the goals
118	120		[goal] of this section, including:
119	121		(1) establishing an energy efficiency cost recovery
120	122		factor for ensuring timely and reasonable cost recovery for utility
121	123		expenditures made to satisfy the goals [goal] of this section;
122	124		(2) establishing an incentive under Section 36.204 to
123	125		reward utilities administering programs under this section that
124	126		exceed the minimum goals established by this section;
125	127		(3) prohibiting an incentive achieved under this
126	128		section from being included in an electric utility's revenues or
127	129		net income for the purposes of establishing a utility's rates or the
128	130		utility's earnings monitoring report under Section 36.157, 36.210,
129	131		or 36.212;
130	132		(4) [(3)] providing a utility that is unable to
131	133		establish an energy efficiency cost recovery factor in a timely
132	134		manner due to a rate freeze with a mechanism to enable the utility
133	135		to:
134	136		(A) defer the costs of complying with this
135	137		section; and
136	138		(B) recover the deferred costs through an energy
137	139		efficiency cost recovery factor on the expiration of the rate
138	140		freeze period;
139	141		(5) [(4)] ensuring that the costs associated with
140	142		programs provided under this section and any shareholder incentive
141	143		[bonus] awarded are borne by the customer classes that receive the
142	144		services under the programs;
143	145		(6) establishing cost caps that:
144	146		(A) allow electric utilities to meet the goals of
145	147		this section; and
146	148		(B) exclude:
147	149		(i) any shareholder incentive; and
148	150		(ii) any third-party evaluation
149	151		measurement and verification costs;
150	152		(7) [(5)] ensuring the program rules encourage the
151	153		value of the incentives to be passed on to the end-use customer;
152	154		(8) [(6)] ensuring that programs are evaluated,
153	155		measured, and verified using a framework established by the
154	156		commission that promotes effective program design and consistent
155	157		and streamlined reporting; and
156	158		(9) [(7)] ensuring that an independent organization
157	159		certified under Section 39.151 allows load participation in all
158	160		energy markets for residential, commercial, and industrial
159	161		customer classes, either directly or through aggregators of retail
160	162		electric providers and aggregations as permitted by commission
161	163		rules or the independent organization, to the extent that load
162	164		participation by each of those customer classes complies with
163	165		reasonable requirements adopted by the organization relating to the
164	166		reliability and adequacy of the regional electric network and in a
165	167		manner that will increase market efficiency, competition, and
166	168		customer benefits.
167	169		(e) An electric utility may use money approved by the
168	170		commission for energy efficiency programs to perform necessary
169	171		energy efficiency research and development to foster continuous
170	172		improvement and innovation in the application of energy efficiency
171	173		technology and energy efficiency program design and
172	174		implementation. Money the utility uses under this subsection may
173	175		not exceed 10 percent of the greater of:
174	176		(1) the amount the commission approved for energy
175	177		efficiency programs in the utility's most recent [full rate]
176	178		proceeding in which an energy efficiency cost recovery factor is
177	179		set; or
178	180		(2) the commission-approved expenditures by the
179	181		utility for energy efficiency in the previous year.
180	182		(f) Each unbundled transmission and distribution utility
181	183		shall include in its energy efficiency plan a [targeted] low-income
182	184		energy efficiency program, and the savings achieved by the programs
183	185		shall count toward the transmission and distribution utility's
184	186		energy efficiency goal. Electric utilities may participate in the
185	187		process enabled by Section 17.007 to validate customer eligibility.
186	188		The commission shall determine the appropriate level of funding to
187	189		be allocated to [both targeted and standard offer] low-income
188	190		energy efficiency programs in each unbundled transmission and
189	191		distribution utility service area. The level of funding for
190	192		low-income energy efficiency programs shall be provided from money
191	193		approved by the commission for the transmission and distribution
192	194		utility's energy efficiency programs. The commission shall ensure
193	195		that annual expenditures for the [targeted] low-income energy
194	196		efficiency programs of each unbundled transmission and
195	197		distribution utility are not less than [10] 15 percent of the
196	198		transmission and distribution utility's energy efficiency budget
197	199		for the year. [A targeted low-income energy efficiency program
198	200		must comply with the same audit requirements that apply to federal
199	201		weatherization subrecipients.] In an energy efficiency cost
200	202		recovery factor proceeding related to expenditures under this
201	203		subsection, the commission shall make findings of fact regarding
202	204		whether the utility meets requirements imposed under this
203	205		subsection. [The state agency that administers the federal
204	206		weatherization assistance program shall participate in energy
205	207		efficiency cost recovery factor proceedings related to
206	208		expenditures under this subsection to ensure that targeted
207	209		low-income weatherization programs are consistent with federal
208	210		weatherization programs and adequately funded.] Low-income
209	211		programs administered under this section do not have to meet
210	212		minimum cost-effectiveness standards but should be evaluated for
211	213		opportunities to improve cost-effectiveness while delivering
212	214		services to low-income customers.
213	215		(g) The commission may provide for a good cause exemption to
214	216		a utility's liability for an administrative penalty or other
215	217		sanction if the utility fails to meet a goal for energy efficiency
216	218		under this section and the utility's failure to meet the goal is
217	219		caused by one or more factors outside of the utility's control,
218	220		including:
219	221		(1) limitations caused by the imposition of cost caps
220	222		on the energy efficiency cost recovery factor;
221	223		(2) [(1)] insufficient demand [by retail electric
222	224		providers and competitive energy service providers] for program
223	225		incentive funds made available by the utility through its programs;
224	226		(3) [(2)] changes in building energy codes; [and]
225	227		(4) [(3)] changes in government-imposed appliance or
226	228		equipment efficiency standards[.]; and
227	229		(5) interruptions in the supply chain.
228	230		(h) For an electric utility operating in an area not open to
229	231		competition, the utility may achieve the goal of this section by:
230	232		(1) providing rebate or incentive funds directly to
231	233		customers to promote or facilitate the success of programs
232	234		implemented under this section; or
233	235		(2) developing, subject to commission approval, new
234	236		programs other than standard offer programs and market
235	237		transformation programs, provided [to the extent] that the new
236	238		programs do not render the portfolio of programs no longer
237	239		cost-effective [satisfy the same cost-effectiveness requirements
238	240		as standard offer programs and market transformation programs].
239	241		(i) For an electric utility operating in an area open to
240	242		competition that provides [, on demonstration] to the commission a
241	243		notice and opportunity for hearing [, after a contested case
242	244		hearing,] that the requirements under Subsection (a) cannot be met
243	245		[in a rural area] through retail electric providers or competitive
244	246		energy service providers in hard-to-reach areas, the utility may
245	247		achieve the goal of this section by providing rebate or incentive
246	248		funds directly to customers in those areas [the rural area] to
247	249		promote or facilitate the success of programs implemented under
248	250		this section. The electric utility must provide the notice to the
249	251		commission at least once every two years. For purposes of this
250	252		subsection, the commission shall adopt rules that define a
251	253		hard-to-reach area.
252	254		(i-1) A person who contests an electric utility notice in a
253	255		hearing described by Subdivision (i) has the burden of proving to
254	256		the commission that the requirements of Subsection (a) can be met
255	257		through retail electric providers or competitive energy service
256	258		providers in hard-to-reach areas.
257	259		(i-2) An electric utility described by Subdivision (i) may
258	260		receive information identifying low-income electric customers
259	261		under Section 17.007 (a). Each electric utility that submits a
260	262		request to the commission to receive such information agrees to
261	263		reimburse the commission for the cost of the development of the
262	264		low-income electric customer matching service on terms agreed to by
263	265		the commission and the low-income electric customer list
264	266		administrator. An electric utility that receives information
265	267		pursuant to this subsection may only use such information
266	268		implementing programs adopted under this section and is prohibited
267	269		from sharing or disclosing such information to affiliates or third
268	270		parties unrelated to these purposes.
269	271		(j) An electric utility may use energy audit programs to
270	272		achieve the goal of this section if[:
271	273		[(1) the programs do not constitute more than three
272	274		percent of total program costs under this section; and
273	275		[(2)] the addition of the programs does not cause a
274	276		utility's portfolio of programs to no longer be cost-effective.
275	277		SECTION 2. The Public Utility Commission of Texas shall
276	278		adopt rules to implement Section 39.905, Utilities Code, as amended
277	279		by this Act, not later than September 1, 202.
278	280		SECTION 3. This Act takes effect immediately if it receives
279	281		a vote of two-thirds of all the members elected to each house, as
280	282		provided by Section 39, Article III, Texas Constitution. If this
281	283		Act does not receive the vote necessary for immediate effect, this
282	284		Act takes effect September 1, 2025.