82R3970 JXC-D
	By: Anchia	H.B. No. 774

	A BILL TO BE ENTITLED
	AN ACT
	relating to renewable energy capacity, jobs, and trading credits.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  The purpose of this Act is to continue Texas'
	leadership in installing clean, renewable energy in Texas in a
	market-based manner that provides price protection for businesses
	and consumers.
	SECTION 2.  Section 36.053(d), Utilities Code, is amended to
	read as follows:
	(d)  If the commission issues a certificate of convenience
	and necessity or, acting under Section 39.203(e), orders an
	electric utility or a transmission and distribution utility to
	construct or enlarge transmission or transmission-related
	facilities to facilitate meeting the goals [goal] for generating
	capacity from renewable energy technologies established by
	Sections [under Section] 39.904(a) and (a-1), the commission shall
	find that the facilities are used and useful to the utility in
	providing service for purposes of this section and are prudent and
	includable in the rate base, regardless of the extent of the
	utility's actual use of the facilities.
	SECTION 3.  Section 37.056(c), Utilities Code, is amended to
	read as follows:
	(c)  The commission shall grant each certificate on a
	nondiscriminatory basis after considering:
	(1)  the adequacy of existing service;
	(2)  the need for additional service;
	(3)  the effect of granting the certificate on the
	recipient of the certificate and any electric utility serving the
	proximate area; and
	(4)  other factors, such as:
	(A)  community values;
	(B)  recreational and park areas;
	(C)  historical and aesthetic values;
	(D)  environmental integrity;
	(E)  the probable improvement of service or
	lowering of cost to consumers in the area if the certificate is
	granted; and
	(F)  to the extent applicable, the effect of
	granting the certificate on the ability of this state to meet the
	goals [goal] established by Sections [Section] 39.904(a) and (a-1)
	of this title.
	SECTION 4.  Section 39.203(e), Utilities Code, is amended to
	read as follows:
	(e)  The commission may require an electric utility or a
	transmission and distribution utility to construct or enlarge
	facilities to ensure safe and reliable service for the state's
	electric markets and to reduce transmission constraints within
	ERCOT in a cost-effective manner where the constraints are such
	that they are not being resolved through Chapter 37 or the ERCOT
	transmission planning process.  The commission shall require an
	electric utility or a transmission and distribution utility to
	construct or enlarge transmission or transmission-related
	facilities for the purpose of meeting the goals [goal] for
	generating capacity from renewable energy technologies established
	by Sections [under Section] 39.904(a) and (a-1).  In any proceeding
	brought under Chapter 37, an electric utility or transmission and
	distribution utility ordered to construct or enlarge facilities
	under this subchapter need not prove that the construction ordered
	is necessary for the service, accommodation, convenience, or safety
	of the public and need not address the factors listed in Sections
	37.056(c)(1)-(3) and (4)(E).  Notwithstanding any other law,
	including Section 37.057, in any proceeding brought under Chapter
	37 by an electric utility or a transmission and distribution
	utility related to an application for a certificate of public
	convenience and necessity to construct or enlarge transmission or
	transmission-related facilities under this subsection, the
	commission shall issue a final order before the 181st day after the
	date the application is filed with the commission.  If the
	commission does not issue a final order before that date, the
	application is approved.
	SECTION 5.  Section 39.904, Utilities Code, is amended by
	amending Subsections (a), (b), (c), (d), (n), and (o) and adding
	Subsections (a-1), (c-1), (n-1), and (p) to read as follows:
	(a)  It is the intent of the legislature that by January 1,
	2015, an additional 5,000 megawatts of generating capacity from
	tier 1 renewable energy technologies will have been installed in
	this state. The cumulative installed renewable capacity in this
	state shall total 5,880 megawatts by January 1, 2015, and the
	commission shall establish a target of 10,000 megawatts of
	installed renewable capacity by January 1, 2025. The cumulative
	installed tier 1 renewable capacity in this state shall total
	[2,280 megawatts by January 1, 2007, 3,272 megawatts by January 1,
	2009, 4,264 megawatts by January 1, 2011,] 5,256 megawatts by
	January 1, 2013, and 5,880 megawatts by January 1, 2015. [Of the
	renewable energy technology generating capacity installed to meet
	the goal of this subsection after September 1, 2005, the commission
	shall establish a target of having at least 500 megawatts of
	capacity from a renewable energy technology other than a source
	using wind energy.]
	(a-1)  It is the goal of the legislature that by January 1,
	2020, an additional 1,500 megawatts of generating capacity from
	tier 2 renewable energy will have been installed in this state.  The
	cumulative installed tier 2 renewable capacity in this state shall
	total at least 100 megawatts by January 1, 2012; 200 megawatts by
	January 1, 2013; 350 megawatts by January 1, 2014; 500 megawatts by
	January 1, 2015; 750 megawatts by January 1, 2016; 900 megawatts by
	January 1, 2017; 1,000 megawatts by January 1, 2018; 1,250
	megawatts by January 1, 2019; and 1,500 megawatts by January 1,
	2020. On January 1, 2016, if the commission determines the state
	has not made significant progress toward the goals of this
	subsection, then the commission may take action to suspend future
	obligations under this subsection.
	(b)  The commission shall establish a tier 1 renewable energy
	credits trading program and a tier 2 renewable energy credits
	trading program. Any retail electric provider, municipally owned
	utility, or electric cooperative that does not satisfy the
	requirements of Subsection (a) or (a-1) by directly owning or
	purchasing capacity using renewable energy technologies shall
	purchase sufficient renewable energy credits to satisfy the
	requirements by holding renewable energy credits in lieu of
	capacity from renewable energy technologies. In calculating
	capacity factors for tier 2 renewable energy credits, the
	commission shall encourage a diverse portfolio of tier 2 renewable
	energy technologies.  The commission may adopt rules to establish a
	sub-tier within the tier 2 renewable energy credits trading program
	for one or more types of renewable energy technology included in the
	tier 2 program.
	(c)  The [Not later than January 1, 2000, the] commission
	shall adopt rules necessary to administer and enforce this section.
	At a minimum, the rules shall:
	(1)  establish the minimum annual renewable energy
	requirement for each retail electric provider, municipally owned
	utility, and electric cooperative operating in this state in a
	manner reasonably calculated by the commission to produce, on a
	statewide basis, compliance with the requirements [requirement]
	prescribed by Subsections (a) and (a-1) [Subsection (a)]; and
	(2)  specify reasonable performance standards that all
	renewable capacity additions must meet to count against the
	requirements [requirement] prescribed by Subsections (a) and (a-1)
	[Subsection (a)] and that:
	(A)  are designed and operated so as to maximize
	the energy output from the capacity additions in accordance with
	then-current industry standards; and
	(B)  encourage the development, construction, and
	operation of new renewable energy projects at those sites in this
	state that have the greatest economic potential for capture and
	development of this state's environmentally beneficial renewable
	resources.
	(c-1)  Not later than January 1, 2013, the commission shall
	adopt rules necessary to provide a "Made in Texas" incentive for
	tier 1 and tier 2 renewable energy credits generated by electricity
	generation equipment that is manufactured in Texas.  The commission
	by rule shall define "manufactured" for the purposes of this
	subsection.  The incentive provided by this subsection is available
	for the first three years after the electricity generation
	equipment first produces electricity on a commercial basis.
	(d)  For purposes of [In] this section:
	(1)  "Tier 1 renewable energy technology" [, "renewable
	energy technology"] means any technology that exclusively relies on
	an energy source that is naturally regenerated over a short time and
	derived directly from the sun, indirectly from the sun, or from
	moving water or other natural movements and mechanisms of the
	environment. Renewable energy technologies include those that rely
	on energy derived directly from the sun, on wind, geothermal,
	hydroelectric, wave, or tidal energy, or on biomass or
	biomass-based waste products, including landfill gas. A renewable
	energy technology does not rely on energy resources derived from
	fossil fuels, waste products from fossil fuels, or waste products
	from inorganic sources.
	(2)  "Tier 2 renewable energy" means tier 1 renewable
	energy technology, excluding energy derived from wind, with a
	capacity of more than 150 kilowatts.
	(n)  Notwithstanding any other provision of law, the
	commission shall have the authority to cap the price of renewable
	energy credits and may suspend the goals [goal] contained in
	Subsections (a) and (a-1) [Subsection (a)] if such suspension is
	necessary to protect the reliability and operation of the grid.
	(n-1)  The commission shall reduce the requirement under
	Subsection (c)(1) for a retail electric provider, municipally owned
	utility, or electric cooperative that is subject to a renewable
	energy requirement under this section if the commission determines
	that compliance with the goals of Subsection (a-1) and a federal
	renewable portfolio standard that is more stringent than those
	goals would result in a net rate increase of one percent or more for
	retail customers.
	(o)  The commission may establish tier 1 and tier 2 [an]
	alternative compliance payments [payment]. An entity that has a
	renewable energy purchase requirement under this section may elect
	to pay the alternative compliance payment instead of applying
	renewable energy credits toward the satisfaction of the entity's
	obligation under this section. [The commission may establish a
	separate alternative compliance payment for the goal of 500
	megawatts of capacity from renewable energy technologies other than
	wind energy.] The tier 1 alternative compliance payment for a
	renewable energy purchase requirement that could be satisfied with
	a renewable energy credit from wind energy may not be less than
	$2.50 per credit or greater than $20 per credit.  The tier 2
	alternative compliance payment for a renewable energy purchase
	requirement that could be satisfied with a tier 2 renewable energy
	credit may not be set above $90 per credit before December 31, 2014;
	$80 per credit before December 31, 2015; $65 per credit before
	December 31, 2016; $45 per credit before December 31, 2017; $40 per
	credit before December 31, 2018; $35 per credit before December 31,
	2019; and $30 per credit before December 31, 2020. [Prior to
	September 1, 2009, an alternative compliance payment under this
	subsection may not be set above $5 per credit.]  In implementing
	this subsection, the commission shall consider:
	(1)  the effect of renewable energy credit prices on
	retail competition;
	(2)  the effect of renewable energy credit prices on
	electric rates;
	(3)  the effect of the alternative compliance payment
	level on the renewable energy credit market; and
	(4)  any other factors necessary to ensure the
	continued development of the renewable energy industry in this
	state while protecting ratepayers from unnecessary rate increases.
	(p)  If the commission suspends the tier 2 renewable energy
	goals under Subsection (a-1), retail electric providers shall
	refund, under the guidance of the commission, all alternative
	compliance payment funds collected to the residential and
	commercial electric customers covered by this subchapter. If the
	commission does not suspend the tier 2 renewable energy goal under
	Subsection (a-1), the alternative compliance payment funds
	collected by the commission shall be used for the purposes of a
	solar rebate program established by the commission.
	SECTION 6.  This Act takes effect September 1, 2011.