By: King, Kolkhorst, Schwertner	S.B. No. 2015
	(In the Senate - Filed March 9, 2023; March 13, 2023, read
	first time and referred to Committee on Business & Commerce;
	March 31, 2023, reported adversely, with favorable Committee
	Substitute by the following vote:  Yeas 7, Nays 3; March 31, 2023,
	sent to printer.)
Click here to see the committee vote
	COMMITTEE SUBSTITUTE FOR S.B. No. 2015	By:  King

	A BILL TO BE ENTITLED
	AN ACT
	relating to the legislature's goals for electric generation
	capacity in this state.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Section 39.9044, Utilities Code, is amended to
	read as follows:
	Sec. 39.9044.  GOAL FOR DISPATCHABLE GENERATION [NATURAL
	GAS]. (a) It is the intent of the legislature that 50 percent of
	the megawatts of generating capacity installed in the ERCOT power
	region [this state] after January 1, 2024 [2000], be sourced from
	dispatchable generation [use natural gas]. [To the extent
	permitted by law, the commission shall establish a program to
	encourage utilities to comply with this section by using natural
	gas produced in this state as the preferential fuel. This section
	does not apply to generating capacity for renewable energy
	technologies.]
	(b)  The commission shall establish a dispatchable
	generation [natural gas energy] credits trading program. Any power
	generation company, municipally owned utility, or electric
	cooperative that does not satisfy the requirements of Subsection
	(a) by directly owning or purchasing rights to dispatchable
	generation capacity [using natural gas technologies] shall
	purchase sufficient dispatchable generation [natural gas energy]
	credits to satisfy the requirements of this section [by holding
	natural gas energy credits in lieu of capacity from natural gas
	energy technologies].
	(c)  The [Not later than January 1, 2000, the] commission
	shall adopt rules necessary to administer and enforce this section
	[and to perform any necessary studies in cooperation with the
	Railroad Commission of Texas]. At a minimum, the rules must
	[shall]:
	(1)  describe how the commission will calculate
	[establish] the [minimum] annual dispatchable [natural gas]
	generation requirement for each power generation company,
	municipally owned utility, and electric cooperative operating in
	the ERCOT power region [this state] in a manner reasonably
	calculated by the commission to produce[, on a statewide basis,]
	compliance with the requirement prescribed by Subsection (a); and
	(2)  specify reasonable performance standards that all
	dispatchable generation [natural gas] capacity additions must meet
	to count against the requirement prescribed by Subsection (a) and
	that:
	(A)  are designed and implemented [operated] so as
	to maximize reliability [the energy output from the capacity
	additions in accordance with then-current industry standards and
	best industry standards]; and
	(B)  encourage the development, construction, and
	operation of new natural gas energy projects at those sites in the
	ERCOT power region [this state] that have the greatest economic
	potential for capture and development of this state's
	environmentally beneficial natural gas resources.
	(d)  On or before January 1, 2025, the commission shall
	activate the dispatchable generation credits trading program
	established by this section if the commission determines that
	dispatchable generation may provide less than 55 percent of all new
	generating capacity installed in the ERCOT power region after
	January 1, 2024. Not later than the 180th day after the date of the
	program's activation, the commission by rule shall determine the
	conditions for compliance and penalties for noncompliance for each
	power generation company, municipally owned utility, and electric
	cooperative subject to the program. The commission may adopt rules
	providing for alternative compliance payments [The commission,
	with the assistance of the Railroad Commission of Texas, shall
	adopt rules allowing and encouraging retail electric providers and
	municipally owned utilities and electric cooperatives that have
	adopted customer choice to market electricity generated using
	natural gas produced in this state as environmentally beneficial.
	The rules shall allow a provider, municipally owned utility, or
	cooperative to:
	[(1) emphasize that natural gas produced in this state
	is the cleanest-burning fossil fuel; and
	[(2) label the electricity generated using natural gas
	produced in this state as "green" electricity].
	(e)  In this section, "dispatchable generation" ["natural
	gas technology"] means generating technologies other than
	technologies considered non-dispatchable under Section 39.159(a),
	as added by Chapter 426 (S.B. 3), Acts of the 87th Legislature,
	Regular Session, 2021 [any technology that exclusively relies on
	natural gas as a primary fuel source].
	(f)  The independent organization certified under Section
	39.151 for the ERCOT power region shall establish a tracking system
	to award dispatchable generation credits to new dispatchable
	generation facilities that meet eligibility requirements
	established by the commission. Each megawatt of installed
	dispatchable generation capacity energized after January 1, 2024,
	is eligible for one dispatchable generation credit.
	(g)  Not later than September 15 of each year, the
	independent organization certified under Section 39.151 for the
	ERCOT power region shall file with the commission a report on all
	generating facilities energized in the ERCOT power region during
	the prior year that includes a calculation of whether the prior
	year's installed dispatchable generation capacity is in compliance
	with this section.
	(h)  Not later than January 15 of each year, the commission
	shall notify each power generation company, municipally owned
	utility, and electric cooperative of the power generation
	company's, municipally owned utility's, or electric cooperative's
	dispatchable generation credits requirement for the prior year, if
	any.
	(i)  Each power generation company, municipally owned
	utility, or electric cooperative shall retire sufficient
	dispatchable generation credits to meet the power generation
	company's, municipally owned utility's, or electric cooperative's
	dispatchable generation credits requirement not later than an
	annual deadline established by the commission.
	SECTION 2.  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) and the dispatchable generation [natural
	gas energy] credits program under Section 39.9044(b);
	(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 3.  This Act takes effect September 1, 2023.
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