Bill Text: TX SB1287 | 2023-2024 | 88th Legislature | Comm Sub
Bill Title: Relating to the cost of interconnecting certain electric generation facilities with the ERCOT transmission system.
Spectrum: Partisan Bill (Republican 5-0)
Status: (Engrossed - Dead) 2023-05-22 - Postponed 6/1/23 10:00 AM [SB1287 Detail]
Download: Texas-2023-SB1287-Comm_Sub.html
| By: King, et al. | S.B. No. 1287 | |
| (Slawson) | ||
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| 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. | ||
