Bill Text: TX HB3964 | 2023-2024 | 88th Legislature | Introduced
Bill Title: Relating to energy efficiency goals and programs, public information regarding energy efficiency programs, and the participation of loads in certain energy markets.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2023-03-20 - Referred to State Affairs [HB3964 Detail]
Download: Texas-2023-HB3964-Introduced.html
88R11656 JXC-F | ||
By: Morales of Maverick | H.B. No. 3964 |
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relating to energy efficiency goals and programs, public | ||
information regarding energy efficiency programs, and the | ||
participation of loads in certain energy markets. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Section 39.905, Utilities Code, is amended by | ||
amending Subsections (a), (b), (e), (g), (h), (i), and (j) and | ||
adding Subsection (i-1) to read as follows: | ||
(a) It is the goal of the legislature that: | ||
(1) electric utilities will administer energy | ||
efficiency incentive programs in a market-neutral, | ||
nondiscriminatory manner but will not offer underlying competitive | ||
services; | ||
(2) all customers, in all customer classes, will have | ||
a choice of and access to energy efficiency alternatives and other | ||
choices from the market that allow each customer to reduce energy | ||
consumption, summer and winter peak demand, or energy costs; | ||
(3) each electric utility will administer energy | ||
efficiency programs that: | ||
(A) cause the utility's portfolio of programs to | ||
be cost-effective; | ||
(B) include load management programs and demand | ||
response programs; | ||
(C) acquire the following minimum quantifiable | ||
reductions in demand annually: | ||
(i) 5,000 kilowatts for utilities with an | ||
average of less than 300,000 total eligible residential and | ||
commercial customers in the previous five years; | ||
(ii) 15,000 kilowatts for utilities with an | ||
average of greater than 300,000 but less than 750,000 total | ||
eligible residential and commercial customers in the previous five | ||
years; | ||
(iii) 25,000 kilowatts for utilities with | ||
an average of greater than 750,000 but less than 1.5 million total | ||
eligible residential and commercial customers in the previous five | ||
years; | ||
(iv) 75,000 kilowatts for utilities with an | ||
average of greater than 1.5 million but less than 3 million total | ||
eligible residential and commercial customers in the previous five | ||
years; | ||
(v) 100,000 kilowatts for utilities with an | ||
average of greater than 3 million but less than 4 million total | ||
eligible residential and commercial customers in the previous five | ||
years; or | ||
(vi) 125,000 kilowatts for utilities with | ||
an average of greater than 4 million total eligible residential and | ||
commercial customers in the previous five years; and | ||
(D) acquire energy savings in the following | ||
amounts corresponding to that utility's total demand reductions | ||
identified by Paragraph (C): | ||
(i) 8,760,000 kilowatt hours for a demand | ||
reduction goal of 5,000 kilowatts; | ||
(ii) 26,280,000 kilowatt hours for a demand | ||
reduction goal of 15,000 kilowatts; | ||
(iii) 43,800,000 kilowatt hours for a | ||
demand reduction goal of 25,000 kilowatts; | ||
(iv) 131,400,000 kilowatt hours for a | ||
demand reduction goal of 75,000 kilowatts; | ||
(v) 175,200,000 kilowatt hours for a demand | ||
reduction goal of 100,000 kilowatts; or | ||
(vi) 219,000,000 kilowatt hours for a | ||
demand reduction goal of 125,000 kilowatts [ |
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(4) each electric utility in the ERCOT region will | ||
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involvement of the region's retail electric providers in the | ||
delivery of efficiency programs and demand response programs under | ||
this section, including programs for demand-side renewable energy | ||
systems that: | ||
(A) use distributed renewable generation, as | ||
defined by Section 39.916; or | ||
(B) reduce the need for energy consumption by | ||
using a renewable energy technology, a geothermal technology [ |
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environment; | ||
(5) retail electric providers in the ERCOT region, and | ||
electric utilities outside of the ERCOT region, shall provide | ||
customers with energy efficiency educational materials; and | ||
(6) notwithstanding Subsection (a)(3), electric | ||
utilities shall continue to make available, at 2023 [ |
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and participation levels, any load management [ |
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programs or demand response programs developed for [ |
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customers and implemented before January 1, 2023 [ |
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(b) The commission shall provide oversight and adopt rules | ||
and procedures to ensure that the utilities can achieve the goals | ||
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(1) establishing an energy efficiency cost recovery | ||
factor for ensuring timely and reasonable cost recovery for utility | ||
expenditures made to satisfy the goals [ |
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(2) establishing an incentive under Section 36.204 to | ||
reward utilities administering programs under this section that | ||
exceed the minimum goals established by this section; | ||
(2-a) prohibiting an incentive achieved under this | ||
section from being included in an electric utility's revenues or | ||
net income for the purposes of establishing a utility's rates or the | ||
utility's earnings monitoring report under Section 36.157, 36.210, | ||
or 36.212; | ||
(2-b) providing that an incentive achieved by an | ||
electric utility under this section entitles the utility to receive | ||
an amount equal to the net benefits realized in meeting the | ||
applicable demand reduction and energy savings established under | ||
this section, provided that: | ||
(A) the net benefits must be calculated by | ||
subtracting the total program costs from the total of the avoided | ||
costs associated with the portfolio of programs administered by the | ||
utility; and | ||
(B) an electric utility that exceeds its demand | ||
reduction and energy savings goals is entitled to receive an | ||
incentive equal to one percent of the net benefits for every two | ||
percent that the demand reduction goal has been exceeded, with a | ||
maximum of 10 percent of the utility's total net benefits; | ||
(3) providing a utility that is unable to establish an | ||
energy efficiency cost recovery factor in a timely manner due to a | ||
rate freeze with a mechanism to enable the utility to: | ||
(A) defer the costs of complying with this | ||
section; and | ||
(B) recover the deferred costs through an energy | ||
efficiency cost recovery factor on the expiration of the rate | ||
freeze period; | ||
(4) ensuring that the costs associated with programs | ||
provided under this section and any shareholder incentive [ |
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awarded are borne by the customer classes that receive the services | ||
under the programs; | ||
(5) establishing cost caps that: | ||
(A) allow electric utilities to meet the goals of | ||
this section; and | ||
(B) exclude: | ||
(i) any shareholder incentive; and | ||
(ii) any third-party evaluation | ||
measurement and verification costs; | ||
(6) requiring that, for an industrial customer to opt | ||
out of an electric utility's energy efficiency cost recovery | ||
factor, the industrial customer must submit a notice to the | ||
electric utility and the commission; | ||
(7) ensuring the program rules encourage the value of | ||
the incentives to be passed on to the end-use customer; | ||
(8) [ |
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measured, and verified using a framework established by the | ||
commission that promotes effective program design and consistent | ||
and streamlined reporting; and | ||
(9) [ |
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certified under Section 39.151 allows load participation in all | ||
energy markets for residential, commercial, and industrial | ||
customer classes, either directly or through aggregators of retail | ||
customers, to the extent that load participation by each of those | ||
customer classes complies with reasonable requirements adopted by | ||
the organization relating to the reliability and adequacy of the | ||
regional electric network and in a manner that will increase market | ||
efficiency, competition, and customer benefits. | ||
(e) An electric utility may use money approved by the | ||
commission for energy efficiency programs to perform necessary | ||
energy efficiency research and development to foster continuous | ||
improvement and innovation in the application of energy efficiency | ||
technology and energy efficiency program design and | ||
implementation. Money the utility uses under this subsection may | ||
not exceed 10 percent of the greater of: | ||
(1) the amount the commission approved for energy | ||
efficiency programs in the utility's most recent [ |
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proceeding in which an energy efficiency cost recovery factor is | ||
set; or | ||
(2) the commission-approved expenditures by the | ||
utility for energy efficiency in the previous year. | ||
(g) The commission shall [ |
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exemption to a utility's liability for an administrative penalty or | ||
other sanction if the utility fails to meet a goal [ |
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the goal is caused by one or more factors outside of the utility's | ||
control, including: | ||
(1) limitations caused by the imposition of cost caps | ||
on the energy efficiency cost recovery factor; | ||
(2) insufficient demand by retail electric providers | ||
and competitive energy service providers for program incentive | ||
funds made available by the utility through its programs; | ||
(3) [ |
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(4) [ |
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equipment efficiency standards. | ||
(h) For an electric utility operating in an area not open to | ||
competition, the utility may achieve the goal of this section by: | ||
(1) providing rebate or incentive funds directly to | ||
customers to promote or facilitate the success of programs | ||
implemented under this section; or | ||
(2) developing, subject to commission approval, new | ||
programs other than standard offer programs and market | ||
transformation programs, to the extent that the new programs make | ||
the portfolio of programs no longer cost-effective [ |
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(i) For an electric utility operating in an area open to | ||
competition that provides [ |
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notice [ |
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under Subsection (a) cannot be met [ |
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electric providers or competitive energy service providers in | ||
hard-to-reach areas or areas with low-income customers, the utility | ||
may achieve the goal of this section by providing rebate or | ||
incentive funds directly to customers in those areas [ |
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under this section. The electric utility must provide the notice to | ||
the commission at least once every two years. In this subsection: | ||
(1) "Hard-to-reach area" means a rural area not | ||
adequately served by retail electric providers or competitive | ||
energy service providers. | ||
(2) "Low-income customer" means a residential | ||
customer with an annual household income at or below 200 percent of | ||
the federal poverty guidelines or who meets income eligibility | ||
requirements established by the commission. | ||
(i-1) An electric utility described by Subdivision (i) may | ||
receive information identifying low-income electric customers | ||
under Section 17.007(a). | ||
(j) An electric utility may use energy audit programs to | ||
achieve the goal of this section if[ |
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utility's portfolio of programs to no longer be cost-effective. | ||
SECTION 2. Section 39.905(k), Utilities Code, is repealed. | ||
SECTION 3. The Public Utility Commission of Texas shall | ||
adopt rules to implement Section 39.905, Utilities Code, as amended | ||
by this Act, not later than January 1, 2024. | ||
SECTION 4. 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. |