Bill Text: TX HB3239 | 2023-2024 | 88th Legislature | Introduced

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Bill Title: Relating to the participation of distributed energy resources in the ERCOT ancillary services and wholesale energy markets.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2023-03-15 - Referred to State Affairs [HB3239 Detail]

Download: Texas-2023-HB3239-Introduced.html

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88R10513 JXC-F
By: Hernandez H.B. No. 3239

A BILL TO BE ENTITLED
AN ACT
relating to the participation of distributed energy resources in
the ERCOT ancillary services and wholesale energy markets.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 31.002, Utilities Code, is amended by
adding Subdivision (4-c) and amending Subdivisions (10) and (17) to
read as follows:
(4-c) "Distributed energy resource" means a resource
that:
(A) is capable of providing energy, providing
ancillary services, or providing both energy and ancillary
services;
(B) is operated in parallel with and is connected
to the distribution system at a voltage of less than 60 kilovolts;
and
(C) has an installed capacity of more than 100
kilowatts and less than 10 megawatts.
(10) "Power generation company" means a person,
including a person who owns or operates a distributed natural gas
generation facility, that:
(A) generates electricity:
(i) that is intended to be sold at
wholesale, including the owner or operator of electric energy
storage equipment or facilities to which Subchapter E, Chapter 35,
applies; or
(ii) from a facility that is part of an
aggregated distributed energy resource or that is owned by a person
who is part of an aggregated distributed energy resource;
(B) does not own a transmission or distribution
facility in this state other than an essential interconnecting
facility, a facility not dedicated to public use, or a facility
otherwise excluded from the definition of "electric utility" under
this section; and
(C) does not have a certificated service area,
although its affiliated electric utility or transmission and
distribution utility may have a certificated service area.
(17) "Retail electric provider" means a person that
sells electric energy to retail customers in this state. A retail
electric provider may not own or operate generation assets but may
aggregate distributed energy resources. The term does not include
a person not otherwise a retail electric provider who owns or
operates equipment used solely to provide electricity charging
service for consumption by an alternatively fueled vehicle, as
defined by Section 502.004, Transportation Code.
SECTION 2. Section 39.351, Utilities Code, is amended by
amending Subsections (b) and (c) and adding Subsection (d) to read
as follows:
(b) A power generation company shall comply with the
reliability standards adopted by an independent organization
certified by the commission to ensure the reliability of the
regional electrical network for a power region in which the power
generation company is generating or selling electricity and
aggregated distributed energy resources.
(c) The commission may establish simplified filing
requirements for distributed natural gas generation facilities and
aggregated distributed energy resources.
(d) Notwithstanding Subsection (a):
(1) a facility or owner of a facility that is part of
an aggregated distributed energy resource, or a retail electric
provider that is involved in aggregating facilities as part of an
aggregated distributed energy resource, is not considered to be a
power generation company solely as a result of those activities;
and
(2) a facility or owner of a facility that is part of
an aggregated distributed energy resource is not required to
register as a power generation company if the person who aggregates
the resources registers as a power generation company.
SECTION 3. Subchapter Z, Chapter 39, Utilities Code, is
amended by adding Section 39.9166 to read as follows:
Sec. 39.9166. PARTICIPATION OF DISTRIBUTED ENERGY
RESOURCES IN MARKET. (a) The commission may delegate authority to
the independent organization certified under Section 39.151 for the
ERCOT power region to enforce requirements adopted by the
commission under this section.
(b) The commission by rule shall allow a person who owns or
operates a distributed energy resource or an aggregation of
distributed energy resources to participate in the ancillary
services and wholesale energy markets in the ERCOT power region if:
(1) the owner or operator is registered as a power
generation company if required under Section 39.351 or is exempt
from registration under Section 39.916(k); and
(2) the resource meets all requirements established by
the commission and the independent organization, including
electric utility specifications applicable under the
commission-approved tariff.
(c) The commission by rule shall allow a person to aggregate
resources that are geographically linked to the same electric bus
or node so that the resources may be considered to be a single
distributed energy resource for the purposes of operations,
compliance, and participation in the ancillary services and
wholesale energy markets in the ERCOT power region. The commission
by rule shall direct the independent organization certified under
Section 39.151 for the ERCOT power region to enable aggregations
broader than a single electric bus or node when technically
feasible. In addition to any other applicable requirements,
aggregated distributed energy resources must:
(1) demonstrate the ability to deploy energy,
ancillary services, or both at the direction of the independent
organization certified under Section 39.151 for the ERCOT power
region; and
(2) comply with applicable distribution system
reliability and market requirements.
(d) In allowing for the participation of a person who owns
or operates a distributed energy resource or aggregation of
distributed energy resources under this section, the commission
shall adopt registration, qualification, interconnection,
telemetry, data submission, compliance, cost allocation, and other
appropriate requirements. The requirements:
(1) must ensure that:
(A) participation does not unduly affect the
security or reliability of the transmission and distribution
system; and
(B) the provision of ancillary services by a
distributed energy resource or aggregation of distributed energy
resources, to the extent technically necessary to the provision of
ancillary services, can be measured and verified separately from
any associated load;
(2) may differ from requirements for a generation
resource that is not a distributed energy resource; and
(3) must provide for energy production and consumption
at a single metering point to be accounted for and settled by the
independent organization certified under Section 39.151 for the
ERCOT power region to the distributed energy provider and the
retail electric provider in a manner that prevents double counting.
(e) A retail electric provider may aggregate distributed
energy resources or assist in the aggregation of distributed energy
resources for a third party. The retail electric provider:
(1) is not:
(A) considered to be a power generation company
solely for that reason;
(B) required to register as a power generation
company; or
(C) exempt from Chapter 17, this chapter, or
commission rules relating to the aggregation; and
(2) is responsible for ensuring the compliance of a
subcontractor, an agent, or any other entity compensated by the
retail electric provider for aggregation services.
(f) Participation in an aggregated distributed energy
resource by a market participant or consumer is subject to the
commission's consumer protection rules, jurisdiction, and
authority under this title.
SECTION 4. (a) The Public Utility Commission of Texas shall
adopt the rules required by Section 39.9166, Utilities Code, as
added by this Act, as soon as practicable after the effective date
of this Act to ensure that the requirements of Subsection (b) of
this section are met.
(b) The Public Utility Commission of Texas shall allow the
participation as required by Section 39.9166, Utilities Code, as
added by this Act, not later than September 1, 2024.
(c) The Public Utility Commission of Texas:
(1) may operate a pilot program to allow the
participation described by Section 39.9166, Utilities Code, as
added by this Act, before September 1, 2024; and
(2) before September 1, 2024, is not required to
modify a pilot program operated before the effective date of this
Act to allow the participation of distributed energy resources in
the ancillary services and wholesale energy markets in the ERCOT
power region.
SECTION 5. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2023.