82R13299 T
	By: Darby	H.B. No. 2961

	A BILL TO BE ENTITLED
	AN ACT
	relating to the creation of a program for the development of solar
	energy industry in this state.
	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, [and] 39.914(e), and 39.9156, does not apply to a
	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 GENERATION INCENTIVE PROGRAM. (a) In
	this section:
	(1)  "Distributed solar generation" means distributed
	renewable generation as defined by Section 39.916 that uses an
	energy source derived directly from the sun.
	(2)  "Low-income electric customer" has the meaning
	assigned by Section 39.903(l).
	(3)  "Rated watts" means the output of a solar energy
	device as specified by the manufacturer of the device expressed in
	watts of direct current.
	(4)  "Small commercial customer" means a non
	residential customer as classified by the appropriate electric
	utility or transmission and distribution utility tariff whose
	electricity consumption averages less than 2500 kilowatt hours per
	month over the 12 month period ending on the last full calendar
	month before the effective date of this section.
	(5)  "Solar energy device" has the meaning assigned by
	Section 185.001.
	(6)  "Wholesale solar generation" means a solar
	generation system that:
	(A)  regardless of the system's generation
	capacity, is installed on the utility's side of the meter; or
	(B)  has a generation capacity of two megawatts or
	more and is installed on a retail customer's side of the meter.
	(b)  The program developed under this section applies only 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 facilitate the development of a solar
	energy market and solar energy industry in this state by increasing
	the amount of wholesale and distributed solar generation installed
	in this state. The program shall be transparent, cost effective,
	limited in scope and duration, apply statewide, and that
	residential and small commercial customers may choose to
	participate at a higher level than that prescribed by this section
	or may choose not to participate in the program. The commission
	shall act as the program administrator to oversee and administer
	the implementation of the program or may designate a third party as
	the program administrator in accordance with an agreement with the
	designated party.
	(d)  The commission shall establish a goal of achieving
	through the program the installation of at least 1,000 megawatts of
	solar generation over the duration of the program.
	(e)  The solar generation rebate 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. Not
	more than 2.5 percent of the fund may be spent annually for costs of
	administering the fund and the program. 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.
	(f)  Money collected under the program may be spent only for
	program purposes. Except for spending authorized by Subsections
	(e), (o), and (p), 50 percent of all money spent under the program
	must be used for incentives for wholesale solar generation projects
	and the remaining money spent under the program must be used for
	incentives for distributed solar generation projects. The money
	spent for distributed solar generation projects must be divided
	proportionately between residential and nonresidential market
	segments in accordance with the relative percentage of money
	contributed under the program from those market segments. A
	portion of the money allocated for the residential market segment,
	as determined by the commission, must be reserved to be spent only
	for incentives for distributed solar generation projects in new
	residential construction.
	(g)  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
	generation rebate fund. The fees assessed under this subsection
	must be in the following amounts:
	(1)  $1 each month for each residential meter which, if
	applicable, must be included in nonbypassable delivery charges paid
	by the customer's retail electric provider;
	(2)  $5 each month for each commercial meter; and
	(3)  $50 each month for each industrial meter, except
	that the total of nonbypassable fees assessed against a retail
	electric provider for a single industrial account may not exceed
	$250 in a single month.
	(h)  The commission by rule shall establish a mechanism to
	ensure that fees collected under this section and remitted for
	deposit to the solar generation rebate fund are made continuously
	available as necessary to provide for payment of incentives in the
	form of rebate payments as provided by this section to defray the
	cost of installing solar generation.
	(i)  the commission shall establish a method by which
	residential and small commercial customers may request to increase
	the amount of the nonbypassable fee assessed to them under this
	section by $1 per month, or by which residential and small
	commercial customers may waive the assessment of the nonbypassable
	fee assessed to them under this section by:
	(A)  submitting a written request after receiving
	an initial notification of the implementation of this program,
	which notice shall be issued by an electric utility or a
	transmission and distribution utility to its residential and small
	commercial customers within 60 days after the commission adopts
	rules implementing this program; or
	(B)  making a request when establishing service
	with a retail electric provider or an electric utility;
	(j)  Customers who request a waiver under subsection (i) will
	not be eligible for rebates under the program.
	(k)  When a customer requests a waiver under subsection (i),
	the commission shall ensure that the retail electric provider is
	not responsible for the fees that normally would be collected for
	that customer account.
	(l)  The commission shall establish a schedule of rebate
	amounts for installed solar generation that vary according to the
	rated watts of, or the kilowatt-hours produced by, the solar
	generation equipment and that decrease in proportion to the
	capacity of solar generation installed. The commission shall
	ensure that the schedule:
	(1)  is publicly available;
	(2)  provides for reducing rebate amounts per unit of
	solar generation capacity by not less than 12 percent for each year
	of the program;
	(3)  does not obligate payment of rebates in amounts
	that would cause the rebate program payments to exceed the amount
	budgeted for rebate payments over the duration of the program; and
	(4)  provides for rebates to be paid directly to
	customers, qualified installers, homebuilders, remodelers, or
	third-party owners of installed solar generation in a simple,
	uniform, and reliable administrative manner that:
	(A)  ensures the timely payment of rebates; and
	(B)  allows for the assignment of the rebate to
	another person at the direction of the qualified recipient.
	(m)  The commission shall establish as the initial rebate
	amounts:
	(1)  $2 per rated watt for installed distributed solar
	generation with a capacity of not more than 10 kilowatts, or an
	equivalent amount per kilowatt-hour produced;
	(2)  $1.40 per rated watt for installed distributed
	solar generation with a capacity of more than 10 but not more than
	2,000 kilowatts, or an equivalent amount per kilowatt-hour
	produced; and
	(3)  $1 per rated watt for installed wholesale solar
	generation, or an equivalent amount per kilowatt-hour produced.
	(n)  The fees authorized by this section may not be assessed
	after the fifth anniversary of the date the program is established
	under commission rules, and the program ends when all money in the
	solar generation rebate fund that is available for paying
	incentives under the program is exhausted.
	(o)  Using available money from the solar generation rebate
	fund, the commission, in consultation with an independent
	organization certified under Section 39.151, shall identify and
	report to the 83rd Legislature before January 1, 2013, the
	geographic areas of this state where wholesale solar generation can
	be located with minimal additional transmission facilities.
	(p)  The commission by rule shall provide a method by which
	the program administrator shall use money from the solar generation
	rebate fund to pay for a credit to the electric service bill of each
	low-income electric customer for an amount equal to the amount of
	the fee assessed in the customer's bill.
	(q)  This section may not be construed as mandating
	distributed solar generation or any design, construction, or
	installation of solar-ready products to be installed by
	homebuilders.
	SECTION 3.  Subchapter Z, Chapter 39, Utilities Code, is
	amended by adding Sections 39.9156 and 39.9157 to read as follows:
	Sec. 39.9156.  SOLAR GENERATION PROGRAMS. (a) This section
	applies only to an electric cooperative or municipally owned
	utility with retail sales of more than 500,000 megawatt hours in
	2009.
	(b)  It is the goal of the legislature that:
	(1)  electric cooperatives and municipally owned
	utilities administer incentive programs to facilitate the
	development of a solar energy market and solar energy industry in
	this state by increasing the amount of wholesale and distributed
	solar generation installed in this state;
	(2)  customers of electric cooperatives and
	municipally owned utilities will have access to incentives for the
	installation of distributed solar generation; and
	(3)  electric cooperatives and municipally owned
	utilities spend money to increase the amount of solar generation to
	a funding level consistent with the requirements for electric
	utilities in this state under Section 39.9155.
	(c)  Beginning not later than March 1, 2012, an electric
	cooperative or municipally owned utility annually, in a form and
	manner determined by the program administrator, shall report to the
	program administrator designated under Section 39.9155,
	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, and incentives to encourage or provide for the
	installation of more solar generation capacity beyond the goals
	established by Section 39.9155, or rules adopted under that
	section.
	(e)  An electric cooperative or municipally owned utility
	may recover the costs required by this section through a
	nonbypassable fee consistent with the nonbypassable fees
	authorized by the commission for electric utilities under Section
	39.9155(g), or another cost recovery mechanism as determined by the
	governing body of the electric cooperative or municipally owned
	utility.
	Sec. 39.9157.  OWNERSHIP OF DISTRIBUTED SOLAR GENERATION.
	Notwithstanding any other provision of this title:
	(1)  any person may own distributed solar generation
	and enter into a contract with the retail customer on whose property
	the solar generation capacity is located to lease the solar
	generation equipment or sell the generated output to the retail
	customer or to that customer's retail electric provider;
	(2)  an owner of the distributed solar generation is
	not an electric utility and is not required to register with the
	commission as a power generation company or self-generator; and
	(3)  the commission may establish appropriate
	reporting and other requirements for an owner of distributed solar
	generation to be eligible to earn renewable energy credits.
	SECTION 4.  Section 151.318(c), Tax Code, is amended to read
	as follows:
	(c)  The exemption does not include:
	(1)  intraplant transportation equipment, including
	intraplant transportation equipment used to move a product or raw
	material in connection with the manufacturing process and
	specifically including all piping and conveyor systems, provided
	that the following remain eligible for the exemption:
	(A)  piping or conveyor systems that are a
	component part of a single item of manufacturing equipment or
	pollution control equipment eligible for the exemption under
	Subsection (a)(2), (a)(4), or (a)(5);
	(B)  piping through which the product or an
	intermediate or preliminary product that will become an ingredient
	or component part of the product is recycled or circulated in a loop
	between the single item of manufacturing equipment and the
	ancillary equipment that supports only that single item of
	manufacturing equipment if the single item of manufacturing
	equipment and the ancillary equipment operate together to perform a
	specific step in the manufacturing process; and
	(C)  piping through which the product or an
	intermediate or preliminary product that will become an ingredient
	or component part of the product is recycled back to another single
	item of manufacturing equipment and its ancillary equipment in the
	same manufacturing process;
	(2)  hand tools;
	(3)  maintenance supplies not otherwise exempted under
	this section, maintenance equipment, janitorial supplies or
	equipment, office equipment or supplies, equipment or supplies used
	in sales or distribution activities, research or development of new
	products, or transportation activities;
	(4)  machinery and equipment or supplies to the extent
	not otherwise exempted under this section used to maintain or store
	tangible personal property; [or]
	(5)  tangible personal property used in the
	transmission or distribution of electricity, including
	transformers, cable, switches, breakers, capacitor banks,
	regulators, relays, reclosers, fuses, interruptors, reactors,
	arrestors, resistors, insulators, instrument transformers, and
	telemetry units not otherwise exempted under this section, and
	lines, conduit, towers, and poles; or
	(6)  solar energy devices as defined by Section
	185.001(2), Utilities Code.
	SECTION 5.  Except Section 39.9157, Utilities Code, as added
	by this Act, this Act expires when the fund established pursuant to
	Section 39.9155, Utilities Code, as added by this Act, is
	exhausted.
	SECTION 6.  The Public Utility Commission of Texas shall
	adopt rules establishing the programs required under Sections
	39.9155 and 39.9156, Utilities Code, as added by this Act, not later
	than December 1, 2011.
	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, 2011.