Bill Text: TX SB304 | 2021-2022 | 87th Legislature | Introduced
Bill Title: Relating to a state goal for competitive zero-carbon electric generation.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2021-03-09 - Referred to Business & Commerce [SB304 Detail]
Download: Texas-2021-SB304-Introduced.html
87R3413 CXP-F | ||
By: Eckhardt | S.B. No. 304 |
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relating to a state goal for competitive zero-carbon electric | ||
generation. | ||
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 39.1516, 39.155, 39.157(e), 39.203, 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. Section 39.402(a), Utilities Code, is amended to | ||
read as follows: | ||
(a) Until the date on which an electric utility subject to | ||
this subchapter is authorized by the commission to implement | ||
customer choice, the rates of the utility shall be regulated under | ||
traditional cost of service regulation and the utility is subject | ||
to all applicable regulatory authority prescribed by this subtitle | ||
and Subtitle A, including Chapters 14, 32, 33, 36, and 37. Until | ||
the date on which an electric utility subject to this subchapter | ||
implements customer choice, the provisions of this chapter, other | ||
than this subchapter, Sections 39.1516, 39.904, [ |
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39.918, and the provisions relating to the duty to obtain a permit | ||
from the Texas Commission on Environmental Quality for an electric | ||
generating facility and to reduce emissions from an electric | ||
generating facility, shall not apply to that utility. That portion | ||
of any commission order entered before September 1, 2001, to comply | ||
with this subchapter shall be null and void. | ||
SECTION 3. Section 39.452(d), Utilities Code, is amended to | ||
read as follows: | ||
(d) Until the date on which an electric utility subject to | ||
this subchapter implements customer choice: | ||
(1) the provisions of this chapter do not apply to that | ||
electric utility, other than this subchapter, Sections 39.1516, | ||
39.904, [ |
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duty to obtain a permit from the Texas Commission on Environmental | ||
Quality for an electric generating facility and to reduce emissions | ||
from an electric generating facility, and the provisions of | ||
Subchapter G that pertain to the recovery and securitization of | ||
hurricane reconstruction costs authorized by Sections | ||
39.458-39.463; and | ||
(2) the electric utility is not subject to a rate | ||
freeze and, subject to the limitation provided by Subsection (b), | ||
may file for rate changes under Chapter 36 and for approval of one | ||
or more of the rate rider mechanisms authorized by Sections 39.454 | ||
and 39.455. | ||
SECTION 4. Section 39.502(b), Utilities Code, is amended to | ||
read as follows: | ||
(b) Until the date on which an electric utility subject to | ||
this subchapter implements customer choice, the provisions of this | ||
chapter, other than this subchapter and Sections 39.1516, 39.904, | ||
[ |
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SECTION 5. Section 39.552(b), Utilities Code, is amended to | ||
read as follows: | ||
(b) Until the date on which an electric utility subject to | ||
this subchapter implements customer choice, the provisions of this | ||
chapter, other than this subchapter and Sections 39.1516, 39.904, | ||
[ |
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SECTION 6. Subchapter Z, Chapter 39, Utilities Code, is | ||
amended by adding Section 39.918 to read as follows: | ||
Sec. 39.918. GOAL FOR COMPETITIVE ZERO-CARBON ENERGY. (a) | ||
In this section: | ||
(1) "Biomass fuel" means fuel developed from organic | ||
material, including material derived from plants, crops, wood or | ||
forest residues, waste residues, waste from food crops, | ||
horticulture, food processing, animal farming, animal waste, | ||
landfills, and sewage treatment facilities. | ||
(2) "Zero-carbon energy technology" means a | ||
technology that relies exclusively on an energy source that does | ||
not emit a greenhouse gas in the production of electricity. The | ||
term includes a technology that effectively captures and sequesters | ||
greenhouse gases before their release into the atmosphere. | ||
(b) It is the intent of the legislature that the amount of | ||
electric power generated in this state from zero-carbon energy | ||
technology for delivery by a retail electric provider, municipally | ||
owned utility, or electric cooperative each year will increase to | ||
meet the following percentages on or before the specified dates: | ||
(1) by January 1, 2025, not less than 65 percent of the | ||
annual total; | ||
(2) by January 1, 2030, not less than 85 percent of the | ||
annual total; and | ||
(3) by January 1, 2035, 100 percent of the annual | ||
total. | ||
(c) The commission by rule shall: | ||
(1) establish the minimum annual zero-carbon energy | ||
technology generation requirement for each retail electric | ||
provider, municipally owned utility, and electric cooperative | ||
operating in this state in a manner designed to produce, on a | ||
statewide basis, compliance with the requirement prescribed by | ||
Subsection (b); and | ||
(2) specify reasonable standards that zero-carbon | ||
energy generation must meet to count toward compliance with the | ||
requirement prescribed by Subsection (b) and that: | ||
(A) are designed and operated so as to maximize | ||
the use of all resources available to meet electric demand and | ||
reliability needs from the capacity additions in accordance with | ||
then-current industry standards; and | ||
(B) encourage the development, construction, and | ||
operation of new zero-carbon energy technology projects at sites in | ||
this state that have the greatest economic potential for capture | ||
and development of resources for zero-carbon energy technology. | ||
(d) The commission by rule shall establish a zero-carbon | ||
energy generation credits trading program. A retail electric | ||
provider, municipally owned utility, or electric cooperative that | ||
does not satisfy the requirements of Subsection (b) by directly | ||
owning or purchasing energy generated using zero-carbon energy | ||
technologies shall purchase sufficient zero-carbon energy | ||
generation credits to satisfy the requirements by holding | ||
zero-carbon energy generation credits in lieu of energy generated | ||
from zero-carbon energy technologies. | ||
(e) The commission by rule shall establish a means for a | ||
retail electric provider, municipally owned utility, or electric | ||
cooperative to satisfy the requirements of Subsection (b) by | ||
generating electricity using biomass fuel instead of directly | ||
owning or purchasing energy generated using zero-carbon energy | ||
technologies. | ||
(f) The commission may cap the price of zero-carbon energy | ||
credits and may suspend the goal established by Subsection (b) as | ||
necessary to protect the reliability and operation of the grid. A | ||
price cap established under this subsection must equal or exceed | ||
the social cost of carbon as determined by the United States | ||
Environmental Protection Agency. | ||
(g) The commission by rule shall establish a carbon offset | ||
alternative payment program. An entity required by this section to | ||
purchase a zero-carbon energy generation credit may choose to | ||
purchase and apply a carbon capture and sequestration credit | ||
instead of a zero-carbon energy generation credit toward the | ||
satisfaction of the entity's obligation under this section. A | ||
carbon capture and sequestration credit must be purchased through a | ||
marketplace certified by the commission to offset the same amount | ||
of carbon as is produced by the entity's carbon energy generation. | ||
The offset payment must equal or exceed the social cost of carbon as | ||
determined by the United States Environmental Protection Agency. | ||
In implementing this subsection, the commission shall consider: | ||
(1) the effects of zero-carbon energy credit prices on | ||
electric rates; and | ||
(2) the effects of the carbon offset alternative | ||
payments on the zero-carbon energy credit market. | ||
SECTION 7. Section 40.001(a), Utilities Code, is amended to | ||
read as follows: | ||
(a) Notwithstanding any other provision of law, except | ||
Sections 39.155, 39.157(e), 39.203, [ |
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chapter governs the transition to and the establishment of a fully | ||
competitive electric power industry for municipally owned | ||
utilities. With respect to the regulation of municipally owned | ||
utilities, this chapter controls over any other provision of this | ||
title, except for sections in which the term "municipally owned | ||
utility" is specifically used. | ||
SECTION 8. Section 40.004, Utilities Code, is amended to | ||
read as follows: | ||
Sec. 40.004. JURISDICTION OF COMMISSION. Except as | ||
specifically otherwise provided in this chapter, the commission has | ||
jurisdiction over municipally owned utilities only for the | ||
following purposes: | ||
(1) to regulate wholesale transmission rates and | ||
service, including terms of access, to the extent provided by | ||
Subchapter A, Chapter 35; | ||
(2) to regulate certification of retail service areas | ||
to the extent provided by Chapter 37; | ||
(3) to regulate rates on appeal under Subchapters D | ||
and E, Chapter 33, subject to Section 40.051(c); | ||
(4) to establish a code of conduct as provided by | ||
Section 39.157(e) applicable to anticompetitive activities and to | ||
affiliate activities limited to structurally unbundled affiliates | ||
of municipally owned utilities, subject to Section 40.054; | ||
(5) to establish terms and conditions for open access | ||
to transmission and distribution facilities for municipally owned | ||
utilities providing customer choice, as provided by Section 39.203; | ||
(6) to administer the renewable energy credits program | ||
under Section 39.904(b), [ |
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program under Section 39.9044(b), and the zero-carbon energy | ||
generation credits trading program under Section 39.918(d); | ||
(7) to require reports of municipally owned utility | ||
operations only to the extent necessary to: | ||
(A) enable the commission to determine the | ||
aggregate load and energy requirements of the state and the | ||
resources available to serve that load; or | ||
(B) enable the commission to determine | ||
information relating to market power as provided by Section 39.155; | ||
and | ||
(8) to evaluate and monitor the cybersecurity | ||
preparedness of a municipally owned utility described by Section | ||
39.1516(a)(3) or (4). | ||
SECTION 9. Section 41.001, Utilities Code, is amended to | ||
read as follows: | ||
Sec. 41.001. APPLICABLE LAW. Notwithstanding any other | ||
provision of law, except Sections 39.155, 39.157(e), 39.203, [ |
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39.904, and 39.918, this chapter governs the transition to and the | ||
establishment of a fully competitive electric power industry for | ||
electric cooperatives. Regarding the regulation of electric | ||
cooperatives, this chapter shall control over any other provision | ||
of this title, except for sections in which the term "electric | ||
cooperative" is specifically used. | ||
SECTION 10. The Public Utility Commission of Texas shall | ||
adopt rules required by Section 39.918, Utilities Code, as added by | ||
this Act, not later than January 1, 2022. | ||
SECTION 11. This Act takes effect September 1, 2021. |