Bill Text: TX HB3214 | 2013-2014 | 83rd Legislature | Introduced
Bill Title: Relating to the creation of an incentive program for solar and wind-powered distributed electric generation for public school property.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2013-04-17 - Left pending in committee [HB3214 Detail]
Download: Texas-2013-HB3214-Introduced.html
By: Strama | H.B. No. 3214 |
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relating to the creation of an incentive program for solar and | ||
wind-powered distributed electric generation for public school | ||
property. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Section 39.002, Utilities Code, is amended to | ||
read as follows: | ||
Sec. 39.002. APPLICABILITY. This chapter, other than | ||
Sections 39.155, 39.157(e), 39.203, 39.903, 39.904, 39.9051, | ||
39.9052, [ |
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municipally owned utility or an electric cooperative. Sections | ||
39.157(e), 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 2. Subchapter Z, Chapter 39, Utilities Code, is | ||
amended by adding Section 39.9155 to read as follows: | ||
Sec. 39.9155. SOLAR SCHOOLS INCENTIVE PROGRAM. (a) In this | ||
section: | ||
(1) "Distributed renewable generation" has the | ||
meaning assigned by Section 39.916. | ||
(2) "Distributed solar generation" means distributed | ||
renewable generation using an energy source derived directly from | ||
the sun. | ||
(3) "Low-income electric customer" has the meaning | ||
assigned by Section 39.903(l). | ||
(4) "Rated watts" means the output of a solar energy | ||
device as specified by the manufacturer of the device expressed in | ||
watts of direct current. | ||
(5) "School district" has the meaning assigned by | ||
Section 21.201, Education Code. | ||
(b) The program developed under this section applies to an | ||
electric utility operating inside or outside of ERCOT. | ||
(c) The commission shall develop and implement a program as | ||
provided by this section to increase the amount of distributed | ||
solar generation installed on property owned by school districts in | ||
the state. The program must apply statewide and must be designed to | ||
be transparent, cost-effective, and limited in scope. The | ||
commission shall act as program administrator to oversee and | ||
administer the implementation of the program. | ||
(d) The solar schools incentive fund is established as a | ||
special trust fund held by the comptroller outside of the state | ||
treasury and administered by the program administrator for the | ||
payment of the incentives authorized by this section, without the | ||
necessity of an appropriation. Money in the fund may be used only | ||
for the purposes of the program as provided by this section, | ||
including the administrative costs incurred by the commission. The | ||
fund consists of: | ||
(1) fees imposed under this section and remitted to | ||
the comptroller for deposit to the credit of the fund; | ||
(2) gifts or grants awarded for the purposes of the | ||
program and deposited to the credit of the fund; and | ||
(3) interest and other income from investment of the | ||
money deposited to the credit of the fund. | ||
(e) The commission by rule shall provide for the assessment | ||
and collection of nonbypassable fees by electric utilities and | ||
transmission and distribution utilities. An electric utility or | ||
transmission and distribution utility shall remit all fees | ||
collected to the comptroller for deposit to the credit of the solar | ||
schools incentive fund. The fees must appear as a separate charge | ||
on customers' bills. In an area where customer choice has been | ||
introduced, a fee assessed under this subsection must be included | ||
in delivery charges assessed by a transmission and distribution | ||
utility and collected by the customer's retail electric provider. | ||
The fee for each industrial electric service identifier is $25 each | ||
month. The fees for residential and commercial electric service | ||
identifiers must be assessed in an amount established as applicable | ||
for each billing period that falls during the next six-month | ||
period. For a six-month period that follows a six-month period in | ||
which the average natural gas futures closing price is less than $6 | ||
per million British thermal units, the fee for a residential or | ||
commercial electric service identifier is $0.00025 per kilowatt | ||
hour. For a six-month period that follows a six-month period in | ||
which the average natural gas futures closing price is $6 or more | ||
per million British thermal units, the fee for a residential or | ||
commercial electric service identifier is $0.00013 per kilowatt | ||
hour. Commission rules must provide that the average natural gas | ||
futures closing price be evaluated for the purposes of this | ||
subsection on a semiannual basis and that the resulting assessment | ||
of the fee for a residential or commercial electric service | ||
identifier applies only to billing periods that begin at least 30 | ||
days after the resulting assessment is made. | ||
(f) The commission by rule shall provide for incentives to | ||
defray the cost of installing distributed solar generation on | ||
property owned by school districts and for the incentives to be | ||
distributed as provided by this section. The commission shall | ||
ensure that: | ||
(1) the schedule for payment of the incentives does | ||
not obligate payment of incentives in amounts that would cause the | ||
incentive payments to exceed the amount budgeted for incentive | ||
payments over the duration of the program; and | ||
(2) incentives are paid directly to school districts, | ||
qualified installers, or third-party owners of installed | ||
distributed solar generation in a simple, uniform, and reliable | ||
administrative manner that: | ||
(A) ensures the timely payment of incentives; and | ||
(B) allows for the assignment of the incentive to | ||
another person at the direction of the qualified recipient. | ||
(g) Electric utilities may not assess the fees authorized by | ||
this section after the fifth anniversary of the date the program | ||
required by this section is established by commission rule. Each | ||
biennium, the commission shall report to the legislature on the | ||
progress of the program. The report may include recommendations on | ||
how the program can be modified to increase the deployment of | ||
distributed solar generation on school district property. For the | ||
biennium in which the program is scheduled to end, the report must | ||
include a recommendation to the legislature on whether to extend | ||
the program. | ||
(h) The commission must distribute the incentives provided | ||
by rules adopted under Subsection (f) by administering reverse | ||
auctions quarterly. The total of incentives available in each | ||
quarter's auction must be determined by the commission based on the | ||
projected amount of available funding and on the number of quarters | ||
remaining in the program, allowing for a reasonable margin of error | ||
for the conversion to production-based incentives in accordance | ||
with Subsection (n). The commission may establish the total of | ||
incentives available for a quarter in terms of cost or in terms of | ||
capacity. | ||
(i) A participant in a reverse auction for an incentive to | ||
install distributed solar generation on school district property | ||
must submit a bid and a deposit as provided by this subsection. | ||
Each bid must include a price component, expressed in dollars per | ||
installed watt of capacity, and a volume component, expressed in | ||
terms of the proposed total capacity, measured in rated watts, to be | ||
installed by the proposed project. The deposit must be in an amount | ||
equal to five percent of the total value of the bid. The commission | ||
shall retain the deposit for an accepted bid and shall refund the | ||
deposit for a bid that is not accepted. | ||
(j) At a reverse auction, a bid is not qualified unless the | ||
bidder: | ||
(1) demonstrates, in accordance with any procedure and | ||
guideline the commission may adopt for that purpose, the bidder's | ||
ability to finance the costs of the project if the incentive were | ||
awarded; and | ||
(2) meets all other requirements adopted by the | ||
commission to ensure successful implementation of the program. | ||
(k) The commission may not accept a bid for a quarter's | ||
reverse auction if the bid exceeds the quarter's bid price limit. | ||
The bid price limit for a quarter is the lesser of: | ||
(1) $1.50 per rated watt of capacity; | ||
(2) the bid limit from the previous quarter's reverse | ||
auction; or | ||
(3) the quarterly incentive clearing price | ||
established for the previous quarter in the manner provided by | ||
Subsection (l), unless that price was established by a bid for a | ||
wind-powered electric generation project. | ||
(l) On receiving bids in a reverse auction under this | ||
section, the commission shall order the qualified bids from the | ||
lowest bid to the highest bid according to the price component of | ||
the qualified bids. The commission shall accept qualified bids | ||
from the bid stack in that order, from lowest to highest, until the | ||
limit on the total of incentives available, as determined under | ||
Subsection (h), is reached. The price component of the highest bid | ||
accepted is the quarterly incentive clearing price for that | ||
quarter, and the commission shall award the incentives to each | ||
bidder for each accepted bid according to the quarter's incentive | ||
clearing price. | ||
(m) If, following the awarding of incentives through a | ||
quarterly reverse auction, funding remains available, the | ||
commission shall make available to applicants on a first-come, | ||
first-served basis, in the form of nonparticipating incentives, | ||
incentives set at a dollar-per-watt value of 90 percent of that | ||
quarter's incentive clearing price. The commission shall carry | ||
forward any quarterly funding remaining after the incentives are | ||
awarded under this subsection, with the remaining funding divided | ||
equally among the quarters remaining in the program. If funding is | ||
carried forward under this subsection in two consecutive quarters, | ||
the commission may implement any of the following measures that the | ||
commission determines may increase the installation of distributed | ||
solar generation on school district property: | ||
(1) making distributed solar generation projects for | ||
community college property in this state eligible for program | ||
incentives; | ||
(2) using available program funding for outreach | ||
programs that may increase program participation; | ||
(3) conducting or commissioning a study on the | ||
available capacity and optimal locations for installation of | ||
distributed solar generation on the property of school districts or | ||
community colleges; or | ||
(4) only if 25 percent or more of quarterly funding is | ||
carried forward in two consecutive quarters, increasing the bid | ||
price limit. | ||
(n) Incentives awarded under this section must be in the | ||
form of a production-based incentive and must be disbursed by 12 | ||
quarterly payments over a term of three years with the amount paid | ||
determined by the units of electricity produced by the installed | ||
distributed solar generation during the previous quarter. The | ||
commission shall establish the amount of the payment per unit of | ||
electricity produced by the installed distributed solar generation | ||
by converting the quarterly incentive clearing price or the | ||
nonparticipating incentive price from a capacity incentive price to | ||
a production-based incentive price. In making this conversion, the | ||
commission must consider a reasonable production factor, including | ||
an appropriate discount rate, that would result in the quarterly | ||
incentive clearing price or the nonparticipating incentive price | ||
being fully paid with the final quarterly payment of the three-year | ||
payment period, were the distributed solar generation system to | ||
produce at the production factor's assumed rate. | ||
(o) Quarterly payments of an incentive awarded under this | ||
section must begin not later than the fourth quarter following the | ||
acceptance of bids for a quarter. Payment of an incentive may begin | ||
earlier than the fourth quarter on the filing of a claim with the | ||
commission by the person awarded the incentive. | ||
(p) A person awarded an incentive under this section must | ||
have the distributed solar generation interconnected not later than | ||
the end of the fourth quarter following the quarter in which the bid | ||
was accepted. If the person has not interconnected the distributed | ||
solar generation by the end of the period prescribed by this | ||
subsection, the person's claim to the incentive is rescinded and | ||
the capacity and funding returns to the program and available | ||
program funding, except that the commission may grant one extension | ||
of the period for interconnection, not to exceed two additional | ||
quarters, if the commission finds based on evidence provided in the | ||
person's application for extension that substantial construction | ||
work has been completed by the date of the application for | ||
extension. Quarterly payments may resume if the distributed solar | ||
generation is interconnected during the fifth or sixth quarter, but | ||
the person awarded the incentive may not recover a quarterly | ||
payment lost because of a failure to interconnect. | ||
(q) The commission by rule shall provide a method by which a | ||
retail electric provider and a transmission and distribution | ||
utility shall use money collected through nonbypassable fees | ||
imposed in accordance with rules adopted under Subsection (e) to | ||
credit the electric service bill of a low-income electric customer | ||
for an amount equal to the customer's share of the fee, based on the | ||
customer's electric energy consumption during the billing period. | ||
(r) The commission by rule shall provide for making | ||
incentives under the program available to projects to install on | ||
property owned by school districts distributed renewable | ||
generation that uses wind-driven turbines, subject to all | ||
requirements for a distributed solar generation incentive. The | ||
eligibility under the rules may extend only to projects for wind | ||
turbine distributed renewable technology projects with a combined | ||
capacity of not more than 150 kilowatts at any one school district | ||
property location. | ||
(s) Notwithstanding any provision of this title: | ||
(1) any person, including a retail electric provider, | ||
may own distributed renewable generation installed under the | ||
program and enter into a contract with a school district on the | ||
property of which the distributed renewable generation is installed | ||
to lease the generation or to sell the surplus electricity | ||
generated by the distributed renewable generation to a retail | ||
customer or the district's retail electric provider; | ||
(2) the owner of distributed renewable generation | ||
installed under the program is not, as a result of that ownership, | ||
an electric utility and is not required, as a result of that | ||
ownership, to register with the commission as a power generation | ||
company or self-generator unless the commission determines that | ||
requiring registration is necessary to maintain the reliability of | ||
the electric distribution grid; | ||
(3) the commission may establish appropriate | ||
reporting requirements to provide for trading renewable energy | ||
credits gained by the installation of distributed renewable | ||
generation under the program; and | ||
(4) an area of this state in which distributed | ||
renewable generation is installed under the program is not, for | ||
reason of that installation, considered an area in which customer | ||
choice has been introduced. | ||
SECTION 3. Subchapter Z, Chapter 39, Utilities Code, is | ||
amended by adding Section 39.9156 to read as follows: | ||
Sec. 39.9156. SOLAR SCHOOLS PROGRAMS; MUNICIPALLY OWNED | ||
UTILITIES AND COOPERATIVES. (a) It is the goal of the legislature | ||
that: | ||
(1) electric cooperatives and municipally owned | ||
utilities administer incentive programs that increase the amount of | ||
distributed solar generation installed on property owned by school | ||
districts in this state in a cost-effective, market-neutral, and | ||
nondiscriminatory manner; | ||
(2) customers of electric cooperatives and | ||
municipally owned utilities have access to incentives for the | ||
installation of distributed solar generation on property owned by | ||
school districts; and | ||
(3) electric cooperatives and municipally owned | ||
utilities spend money to increase the amount of distributed solar | ||
generation at a total funding level consistent with the | ||
requirements for electric utilities in this state under Section | ||
39.9155(e). | ||
(b) This section applies only to an electric cooperative or | ||
municipally owned utility with retail sales of more than 500,000 | ||
megawatt hours in 2009. | ||
(c) Beginning not later than September 1, 2014, a | ||
municipally owned utility or electric cooperative must report | ||
annually to the State Energy Conservation Office, in a form and | ||
manner determined by the office, information regarding the efforts | ||
of the municipally owned utility or electric cooperative related to | ||
this section. | ||
(d) This section does not prevent the governing body of an | ||
electric cooperative or municipally owned utility from adopting | ||
rules, programs, or incentives to encourage or provide for the | ||
installation of more solar generation capacity than the goal | ||
established by Subsection (a)(3). | ||
(e) An electric cooperative or municipally owned utility | ||
may recover the costs required by this section through a | ||
nonbypassable fee consistent with that authorized by the commission | ||
for electric utilities under Section 39.9155(e) or another cost | ||
recovery mechanism as determined by the governing body of the | ||
electric cooperative or municipally owned utility. | ||
(f) The commission shall credit toward compliance with this | ||
section funding for distributed solar generation provided after May | ||
1, 2011. | ||
SECTION 4. The heading to Section 39.914, Utilities Code, | ||
is amended to read as follows: | ||
Sec. 39.914. CREDIT FOR SURPLUS DISTRIBUTED RENEWABLE | ||
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SECTION 5. Section 39.914, Utilities Code, is amended by | ||
amending Subsections (a), (b), and (c) and adding Subsection (a-1) | ||
to read as follows: | ||
(a) In this section, "distributed renewable generation" has | ||
the meaning assigned by Section 39.916. | ||
(a-1) An electric utility or retail electric provider shall | ||
offer service to [ |
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independent school district so that: | ||
(1) surplus electricity produced by distributed | ||
renewable generation on school district property [ |
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sale to the electric transmission grid and distribution system; and | ||
(2) the [ |
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credited to the school district at a price that is at least the fair | ||
market price. | ||
(b) For areas of this state in which customer choice has not | ||
been introduced, the commission by rule shall require that credits | ||
for electricity produced by distributed renewable generation on | ||
school district property [ |
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(c) For independent school districts in areas in which | ||
customer choice has been introduced, the [ |
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electric provider that serves the school district's load shall | ||
provide a credit to the school district for the surplus electricity | ||
produced by distributed renewable generation on school district | ||
property at a fair market value [ |
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electricity is made available to the grid and shall allow any unused | ||
credits to be carried forward to a subsequent billing cycle until | ||
used. The independent organization identified in Section 39.151 | ||
shall develop procedures so that the amount of electricity | ||
purchased from a school district under this section is accounted | ||
for in settling the total load served by the provider that serves | ||
the school district's load. A school district requesting [ |
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metering services for purposes of this section must have metering | ||
devices capable of providing measurements consistent with the | ||
independent organization's settlement requirements. | ||
SECTION 6. The Public Utility Commission of Texas shall | ||
adopt rules establishing the program required under Section | ||
39.9155, Utilities Code, as added by this Act, as soon as | ||
practicable. | ||
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, 2013 | ||
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