88R6200 DIO-F
	By: Anchía	H.B. No. 2793

	A BILL TO BE ENTITLED
	AN ACT
	relating to the interconnection and integration of distributed
	energy resources.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Section 31.002, Utilities Code, is amended by
	adding Subdivisions (2-a) and (4-c) and amending Subdivision (10)
	to read as follows:
	(2-a) "Aggregated distributed energy resource" means a
	group of distributed energy resources joined together to be
	operated as a single distributed energy resource, where each
	individual resource in the aggregation produces not more than one
	megawatt of electricity, for the purpose of providing electric
	energy or ancillary services in the wholesale market.
	(4-c) "Distributed energy resource" means a source of
	not more than 10 megawatts of electricity connected at a voltage
	less than 60 kilovolts, including electric energy storage,
	distributed generation, distributed natural gas generation, or
	electric vehicles that provide electricity onto the distribution
	system and are located on the customer's side of the point of common
	coupling meter point.  The term does not include a facility that
	provides temporary emergency electric energy under Section 39.918.
	(10)  "Power generation company" means a person[,
	including a person who owns or operates a distributed natural gas
	generation facility,] that:
	(A)  generates electricity 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;
	(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.
	SECTION 2.  Subchapter H, Chapter 39, Utilities Code, is
	amended by adding Section 39.3515 to read as follows:
	Sec. 39.3515.  REGISTRATION OF DISTRIBUTED ENERGY
	RESOURCES. (a) An owner or operator of a distributed energy
	resource may provide energy or ancillary services in the wholesale
	market in the ERCOT power region through generating electricity and
	providing that electricity onto a distribution system only if:
	(1)  the owner or operator is registered with the
	commission as a power generation company under Section 39.351 and
	authorized by the independent organization certified under Section
	39.151 for the ERCOT power region; or
	(2)  the distributed energy resource is part of an
	aggregated distributed energy resource and:
	(A)  the aggregated distributed energy resource
	is registered in its own corporate capacity as a power generation
	company with the commission under Section 39.351, the independent
	organization certified under Section 39.151 for the ERCOT power
	region, and the interconnecting transmission and distribution
	utility; or
	(B)  the owner is not registered separately as a
	power generation company, but the distributed energy resource is
	operated by, and included in the registration of, a power
	generation company that is registered with the commission under
	Section 39.351, the independent organization certified under
	Section 39.151 for the ERCOT power region, and the interconnecting
	transmission and distribution utility.
	(b)  A retail customer may participate as part of an
	aggregated distributed energy resource that is registered with the
	independent organization certified under Section 39.151 for the
	ERCOT power region and the interconnecting transmission and
	distribution utility without being individually registered with
	the commission as a power generation company under Section 39.351.
	(c)  The commission may establish simplified filing
	requirements for load-serving entities to facilitate the
	registration of aggregated distributed energy resources.  The
	filing requirements must require the registrant to disclose the
	name of the power generation company that operates the aggregated
	distributed energy resource.
	(d)  A facility described by Section 39.914 or 39.916 is not
	considered to be a distributed energy resource unless:
	(1)  electricity from the facility provides energy or
	ancillary services in the wholesale market in the ERCOT power
	region in a manner described by this section; or
	(2)  at the time the facility is installed, the
	estimated annual amount of electricity to be produced by the
	facility is more than the retail electric customer's estimated
	annual electricity consumption.
	(e)  The commission by rule shall:
	(1)  authorize the registrations described by
	Subsection (a); and
	(2)  adopt procedures for the creation of aggregated
	distributed energy resources.
	SECTION 3.  Chapter 39, Utilities Code, is amended by adding
	Subchapter O to read as follows:
	SUBCHAPTER O.  INTERCONNECTION OF DISTRIBUTED ENERGY RESOURCES
	Sec. 39.701.  INTERCONNECTION. (a) Except as otherwise
	provided by this title, the requirements of this section apply to a
	distributed energy resource interconnected to a transmission and
	distribution utility's distribution system in the ERCOT power
	region.
	(b)  A transmission and distribution utility may allow
	interconnection only if:
	(1)  the distributed energy resource meets applicable
	safety, technical, and operational performance and cybersecurity
	standards; and
	(2)  the owner or operator of the distributed energy
	resource meets any applicable qualifications and testing
	requirements of the independent organization certified under
	Section 39.151 for the ERCOT power region.
	(c)  An interconnecting transmission and distribution
	utility is not required to provide an owner or operator of a
	distributed energy resource access to the utility's meter
	equipment.
	Sec. 39.702.  INTEGRATION AND COST RECOVERY. (a) The
	commission by rule shall establish for the ERCOT power region:
	(1)  requirements for the dispatchability,
	reliability, and other characteristics of each type or
	classification of distributed energy resource;
	(2)  appropriate disclosure requirements and other
	customer protections for customers who purchase or lease
	distributed energy resources or purchase electric energy or
	ancillary services from distributed energy resources;
	(3)  information an owner or operator of a distributed
	energy resource must provide to the interconnecting transmission
	and distribution utility to ensure the resource will not adversely
	affect the transmission or distribution system;
	(4)  interconnection guidelines that address:
	(A)  the determination of whether a given
	interconnection or combination of interconnections would exceed a
	transmission and distribution utility's system capacity in a
	particular location;
	(B)  considerations for feeder locations related
	to distributed energy resources;
	(C)  considerations of the size or capacity of a
	distributed energy resource;
	(D)  the assessment of potential adverse impacts
	to other customers in the area of the distributed energy resource;
	(E)  means of recognizing and accounting for the
	fact that a distributed energy resource may be unavailable during a
	firm load shedding event or a power outage of the distribution
	system; and
	(F)  other operating parameters necessary for the
	transmission and distribution utility's reliable operation of its
	transmission and distribution system;
	(5)  a methodology for the appropriate allocation and
	recovery of the transmission and distribution utility's costs to
	interconnect a distributed energy resource; and
	(6)  requirements for the independent organization
	certified under Section 39.151 for the ERCOT power region to report
	to the commission periodically:
	(A)  the categories and generation levels of
	distributed energy resources allowed to participate in the ERCOT
	wholesale market;
	(B)  the categories and megawatt levels of
	aggregated distributed energy resources allowed to participate in
	the ERCOT wholesale market;
	(C)  accreditation of distributed energy
	resources allowed to participate in the ERCOT wholesale market;
	(D)  performance metrics for distributed energy
	resources allowed to participate in the ERCOT wholesale market; and
	(E)  other information the commission may
	require.
	(b)  The commission shall authorize a transmission and
	distribution utility to:
	(1)  defer for recovery in a later ratemaking
	proceeding the incremental operations and maintenance expenses, or
	other expenses, and the return, not otherwise recovered in a rate
	proceeding, associated with the installation, modification,
	upgrade, or maintenance of its transmission or distribution
	facilities required by an interconnection under Sections 39.701(b)
	and (c); and
	(2)  request recovery of the costs associated with an
	interconnection under Sections 39.701(b) and (c), including any
	deferred expenses, through a proceeding under Section 35.004 or
	36.210 or in another ratemaking proceeding regardless of whether
	the utility first requested recovery in a base-rate proceeding.
	(c)  Facilities required by an interconnection under
	Sections 39.701(b) and (c) are considered used and useful in
	providing service to the public and are prudent and includable in
	the rate base, regardless of the extent of the actual use of the
	facilities.
	(d)  This subchapter does not:
	(1)  require or authorize a distribution utility to
	procure distributed energy resource services to enable the
	operation of the distribution utility system;
	(2)  require a distribution utility to disclose to any
	third party the utility's system planning information, studies,
	models, critical infrastructure information, or other confidential
	information; or
	(3)  diminish a distribution utility's rights or
	obligations to own or operate its distribution system and provide
	electric delivery service to retail customers in the utility's
	certificated service area.
	Sec. 39.703.  LIABILITY. An interconnecting transmission
	and distribution utility or retail electric provider providing
	service to a distributed energy resource to which this subchapter
	applies is not liable for:
	(1)  a violation of reliability or service metrics
	caused by distributed energy resource operations;
	(2)  damage, injury, or loss caused by distributed
	energy resource operations; or
	(3)  a distributed energy resource's inability or
	failure to provide services or a penalty for such inability or
	failure.
	SECTION 4.  (a) This section takes effect only if the Act of
	the 88th Legislature, Regular Session, 2023, relating to
	nonsubstantive additions to and corrections in enacted codes
	becomes law.
	(b)  Subchapter Z, Chapter 39, Utilities Code, is amended by
	adding Section 39.9166 to read as follows:
	Sec. 39.9166.  DISTRIBUTED ENERGY RESOURCES. (a) A
	customer who purchases or leases a distributed energy resource or
	enters into a power purchase agreement for a distributed energy
	resource in the ERCOT power region is entitled to the information
	and disclosures required under Chapter 115, Business & Commerce
	Code, and is entitled to protection from fraudulent, unfair,
	misleading, or deceptive practices.
	(b)  An owner or operator of a distributed energy resource
	may provide energy or ancillary services in the wholesale market in
	the ERCOT power region through generating electricity and providing
	that electricity onto a distribution system in an area in which
	customer choice has been introduced in the manner provided by this
	section.
	(c)  A person who owns or operates a distributed energy
	resource in an area in which customer choice has been introduced and
	is part of an aggregated distributed energy resource, or has not
	individually registered with the commission as its own power
	generation company, must sell the surplus electricity or ancillary
	services that are produced by the distributed energy resource and
	that are not consumed by the owner's premise to the retail electric
	provider that serves the premise's load at a value agreed to between
	the distributed energy resource owner and the retail electric
	provider that serves the premise's load. The value may be an agreed
	value based on the clearing price of energy or ancillary service at
	the time of day that the electricity is made available to the grid.
	(d)  A retail electric provider may direct the offering or
	dispatch of aggregated distributed energy resources for which the
	retail electric provider facilitated aggregation.
	(e)  The independent organization certified under Section
	39.151 for the ERCOT power region shall adopt procedures to ensure
	that the amount of electricity purchased from a distributed energy
	resource owner under this section is accounted for when settling
	the total load served by the retail electric provider that serves
	that premise owner's load.
	(f)  A distributed energy resource owner that requests net
	metering services for purposes of this section must have metering
	devices capable of providing measurements consistent with the
	independent organization's settlement requirements.
	(g)  A transmission and distribution utility may provide to
	customers educational information regarding the technical
	requirements for the interconnection of distributed energy
	resources to the distribution system.  The provision of information
	under this subsection is not considered a competitive energy
	service.
	(h)  This section does not apply to a purchase or agreement
	entered into under Section 39.914 or 39.916.
	SECTION 5.  (a) This section takes effect only if the Act of
	the 88th Legislature, Regular Session, 2023, relating to
	nonsubstantive additions to and corrections in enacted codes does
	not become law.
	(b)  Subchapter Z, Chapter 39, Utilities Code, is amended by
	adding Section 39.9166 to read as follows:
	Sec. 39.9166.  DISTRIBUTED ENERGY RESOURCES. (a) A
	customer who purchases or leases a distributed energy resource or
	enters into a power purchase agreement for a distributed energy
	resource in the ERCOT power region is entitled to the information
	and disclosures required under Chapter 113, Business & Commerce
	Code, as added by Chapter 561 (S.B. 398), Acts of the 87th
	Legislature, Regular Session, 2021, and is entitled to protection
	from fraudulent, unfair, misleading, or deceptive practices.
	(b)  An owner or operator of a distributed energy resource
	may provide energy or ancillary services in the wholesale market in
	the ERCOT power region through generating electricity and providing
	that electricity onto a distribution system in an area in which
	customer choice has been introduced in the manner provided by this
	section.
	(c)  A person who owns or operates a distributed energy
	resource in an area in which customer choice has been introduced and
	is part of an aggregated distributed energy resource, or has not
	individually registered with the commission as its own power
	generation company, must sell the surplus electricity or ancillary
	services that are produced by the distributed energy resource and
	that are not consumed by the owner's premise to the retail electric
	provider that serves the premise's load at a value agreed to between
	the distributed energy resource owner and the retail electric
	provider that serves the premise's load. The value may be an agreed
	value based on the clearing price of energy or ancillary service at
	the time of day that the electricity is made available to the grid.
	(d)  A retail electric provider may direct the offering or
	dispatch of aggregated distributed energy resources for which the
	retail electric provider facilitated aggregation.
	(e)  The independent organization certified under Section
	39.151 for the ERCOT power region shall adopt procedures to ensure
	that the amount of electricity purchased from a distributed energy
	resource owner under this section is accounted for when settling
	the total load served by the retail electric provider that serves
	that premise owner's load.
	(f)  A distributed energy resource owner that requests net
	metering services for purposes of this section must have metering
	devices capable of providing measurements consistent with the
	independent organization's settlement requirements.
	(g)  A transmission and distribution utility may provide to
	customers educational information regarding the technical
	requirements for the interconnection of distributed energy
	resources to the distribution system.  The provision of information
	under this subsection is not considered a competitive energy
	service.
	(h)  This section does not apply to a purchase or agreement
	entered into under Section 39.914 or 39.916.
	SECTION 6.  As soon as practicable after the effective date
	of this Act, the Public Utility Commission of Texas shall adopt
	rules necessary to implement the changes in law made by this Act.
	SECTION 7.  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.