Bill Text: TX HB2303 | 2025-2026 | 89th Legislature | Introduced

Texas House Bill 2303

Introduced

Bill Title: Relating to electric market payments for and an exemption from sales and use taxes for customer-sited distributed generation.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced) 2025-01-31 - Filed [HB2303 Detail]

Download: Texas-2025-HB2303-Introduced.html

	89R4443 JXC/CJC-D

	By: Bell of Montgomery	H.B. No. 2303



	A BILL TO BE ENTITLED
	AN ACT
	relating to electric market payments for and an exemption from
	sales and use taxes for customer-sited distributed generation.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1. Subchapter H, Chapter 151, Tax Code, is amended
	by adding Section 151.360 to read as follows:
	Sec. 151.360. CERTAIN STANDBY ELECTRIC POWER DEVICES.
	(a) In this section, "standby electric power device" means a
	non-portable device capable of supplying electric power to the
	structure or facility at which it is permanently installed in the
	event of a power grid outage.
	(b) A device that has a rated capacity to supply less than
	200 kilowatts that is purchased with the intent that it be
	permanently installed and connected to the main electrical panel of
	a structure or facility by a manual or automatic transfer switch for
	use as a standby electric power device is exempt from the taxes
	imposed by this chapter.
	(c) The comptroller by rule shall prescribe the manner by
	which a person who purchases a standby electric power device must
	establish that the person is entitled to the exemption provided by
	this section.
	SECTION 2. Subchapter Z, Chapter 39, Utilities Code, is
	amended by adding Section 39.9166 to read as follows:
	Sec. 39.9166. AGGREGATED DISTRIBUTED GENERATION FACILITY
	PROGRAM FOR DISPATCHABLE GENERATION. (a) In this section,
	"customer-sited backup generation facility" means a distributed
	generation facility in the ERCOT power region that is installed on a
	retail electric customer's side of the meter:
	(1) with a nameplate capacity of not more than 10
	megawatts;
	(2) that is capable of generating and providing backup
	or supplementary power to the customer's premises and the power
	grid; and
	(3) that is capable of being dispatched by the
	independent organization certified under Section 39.151 for the
	ERCOT power region.
	(b) This section does not apply to:
	(1) a distributed natural gas generation facility
	operated by a power generation company; or
	(2) a distributed generation facility to which Section
	35.037 applies.
	(c) The commission shall establish an ancillary service
	program to allow a retail electric provider, a municipally owned
	utility that has not adopted customer choice, or an electric
	cooperative that has not adopted customer choice to aggregate
	customer-sited backup generation facilities to provide
	dispatchable generation during a power grid outage if the
	participation of the facilities in such a program is
	technologically feasible.
	(d) A retail electric provider, municipally owned utility,
	or electric cooperative participating in the program shall provide
	to the independent organization certified under Section 39.151 for
	the ERCOT power region information about the facilities that the
	independent organization determines is necessary for maintaining
	system reliability.
	(e) A customer that participates in the program is not
	required to register as a power generation company solely because
	of the person's participation in the program.
	(f) The program may allow participating customers to sell
	electric energy produced by customer-sited backup generation
	facilities at:
	(1) a value based on the clearing price of energy at
	the time of day and at the location at which the electricity is
	generated, including electric energy consumed on customer
	premises; or
	(2) another value as determined by the commission or
	the independent organization certified under Section 39.151 for the
	ERCOT power region.
	(g) The sale may be applied as a credit to the customer's
	account during a billing period that may be carried over to
	subsequent billing periods until the credit has been redeemed.
	(h) This section expires September 1, 2035.
	SECTION 3. Section 151.360, Tax Code, as added by this Act,
	does not affect tax liability accruing before the effective date of
	this Act. That liability continues in effect as if Section 151.360,
	Tax Code, had not been enacted, and the former law is continued in
	effect for the collection of taxes due and for civil and criminal
	enforcement of the liability for those taxes.
	SECTION 4. This Act takes effect September 1, 2025.