By: King, Kolkhorst  S.B. No. 1287
         (In the Senate - Filed February 28, 2023; March 9, 2023,
  read first time and referred to Committee on Business & Commerce;
  March 31, 2023, reported adversely, with favorable Committee
  Substitute by the following vote:  Yeas 7, Nays 3; March 31, 2023,
  sent to printer.)
Click here to see the committee vote
 
  COMMITTEE SUBSTITUTE FOR S.B. No. 1287 By:  King
 
 
A BILL TO BE ENTITLED
 
AN ACT
 
  relating to the cost of interconnecting certain electric generation
  facilities with the ERCOT transmission system.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 35.004, Utilities Code, is amended by
  amending Subsection (d) and adding Subsections (d-1), (d-2), and
  (d-3) to read as follows:
         (d)  The commission shall price wholesale transmission
  services within ERCOT based on the postage stamp method of pricing
  under which a transmission-owning utility's rate is based on the
  ERCOT utilities' combined annual costs of transmission, other than
  costs described by Subsections (d-2) and (d-3), divided by the
  total demand placed on the combined transmission systems of all
  such transmission-owning utilities within a power region.  An
  electric utility subject to the freeze period imposed by Section
  39.052 may treat transmission costs in excess of transmission
  revenues during the freeze period as an expense for purposes of
  determining annual costs in the annual report filed under Section
  39.257. Notwithstanding Section 36.201, the commission may approve
  wholesale rates that may be periodically adjusted to ensure timely
  recovery of transmission investment.  Notwithstanding Section
  36.054(a), if the commission determines that conditions warrant the
  action, the commission may authorize the inclusion of construction
  work in progress in the rate base for transmission investment
  required by the commission under Section 39.203(e).
         (d-1)  The commission by rule shall establish a reasonable
  allowance to be applied on a per megawatt basis for costs incurred
  to interconnect generation resources directly with the ERCOT
  transmission system at transmission voltage, including costs of
  utility interconnection facilities.  The allowance must:
               (1)  take into account: 
                     (A)  average historical dispatchable generation
  interconnection costs; and
                     (B)  the reliability impact to the grid of the
  interconnecting resource and whether the interconnecting resource
  increases reliability or volatility in managing the grid; and
               (2)  be designed to lower costs to consumers and
  encourage owners of generation resources to locate the resources
  closer to load. 
         (d-2)  Costs in excess of the allowance provided by
  Subsection (d-1) incurred to interconnect generation resources
  with the ERCOT transmission system, including costs of utility
  interconnection facilities, must be directly assigned to and
  collected from the generation resource interconnecting through the
  facilities.
         (d-3)  Not later than September 1 of every fifth year after
  2023, the commission shall review and may adjust the allowance
  provided by Subsection (d-1) to account for inflation or supply
  chain issues.
         SECTION 2.  This Act takes effect September 1, 2023.
 
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