By: Rodriguez	S.B. No. 1239
	(In the Senate - Filed March 6, 2013; March 13, 2013, read
	first time and referred to Committee on Business and Commerce;
	May 2, 2013, reported adversely, with favorable Committee
	Substitute by the following vote:  Yeas 6, Nays 0; May 2, 2013, sent
	to printer.)
	COMMITTEE SUBSTITUTE FOR S.B. No. 1239	By:  Watson

	A BILL TO BE ENTITLED
	AN ACT
	relating to distributed renewable generation and compensation for
	excess electricity generated by distributed renewable generation.
	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. Except as provided by this
	section, this [This] chapter, other than Sections 39.155,
	39.157(e), 39.203, 39.903, 39.904, 39.9051, 39.9052, and
	39.914(e), does not apply to a municipally owned utility or to 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.  Section 39.9161
	applies to a municipally owned utility. Section 39.9162 applies to
	an electric cooperative. 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.  The heading to Section 39.916, Utilities Code,
	is amended to read as follows:
	Sec. 39.916.  [INTERCONNECTION OF] DISTRIBUTED RENEWABLE
	GENERATION.
	SECTION 3.  Subsection (a), Section 39.916, Utilities Code,
	is amended by adding Subdivision (4) to read as follows:
	(4)  "Surplus electricity" means electricity generated
	by distributed renewable generation that is not consumed at the
	place the distributed renewable generation is installed and that
	flows onto the electric distribution system.
	SECTION 4.  Section 39.916, Utilities Code, is amended by
	amending Subsections (c), (f), and (j) and adding Subsections
	(k-1), (l), (m), (n), (o), and (p) to read as follows:
	(c)  A distributed renewable generation owner [customer] may
	request interconnection by filing an application for
	interconnection with the transmission and distribution utility or
	electric utility.  Procedures of a transmission and distribution
	utility or electric utility for the submission and processing of a
	distributed renewable generation owner's [customer's] application
	for interconnection shall be consistent with rules adopted by the
	commission regarding interconnection.
	(f)  On request of a distributed renewable generation owner,
	a [A] transmission and distribution utility or electric utility
	shall make available to the [a] distributed renewable generation
	owner for purposes of this section metering required for services
	provided under this section, including separate meters that measure
	the load and generator output or a single meter capable of measuring
	in-flow and out-flow at the point of common coupling meter point.
	The distributed renewable generation owner must pay the
	differential cost of the metering unless the meters are provided at
	no additional cost.  Except as provided by this section, Section
	39.107 applies to metering under this section.
	(j)  A [For] distributed renewable generation owner who
	chooses to sell the owner's surplus electricity in an area [owners
	in areas] in which customer choice has been introduced[, the
	distributed renewable generation owner] must sell the owner's
	surplus electricity produced to the retail electric provider that
	serves the retail electric customer's [distributed renewable
	generation owner's] load.  A distributed renewable generation owner
	who chooses to sell the owner's surplus electricity in an area in
	which customer choice has not been introduced must sell the owner's
	surplus electricity to the electric utility that serves the retail
	electric customer's load [at a value agreed to between the
	distributed renewable generation owner and the provider that serves
	the owner's load which may include, but is not limited to, an agreed
	value based on the clearing price of energy at the time of day that
	the electricity is made available to the grid or it may be a credit
	applied to an account during a billing period that may be carried
	over to subsequent billing periods until the credit has been
	redeemed]. The independent organization identified in Section
	39.151 shall develop procedures so that the amount of electricity
	purchased from a distributed renewable generation owner under this
	section is accounted for in settling the total load served by the
	retail electric provider that serves that retail electric
	customer's [owner's] load [by January 1, 2009].  A distributed
	renewable generation owner requesting [net] metering services for
	purposes of this section must have metering devices capable of
	providing measurements consistent with the independent
	organization's settlement requirements.
	(k-1)  In areas in which customer choice has been introduced,
	a retail electric provider shall purchase surplus electricity at a
	fair market value determined using a price that provides a periodic
	proxy, using a period of a month or longer, for the load zone
	real-time market clearing price, unless the provider chooses to use
	a fair market value determined by a reasonable alternative method,
	including the load zone real-time market clearing price at the time
	of day the surplus electricity is made available to the grid or by
	the simple average, during the period for which the surplus
	electricity being purchased was generated, of the load zone
	real-time market clearing price for energy at the time of day
	specified in the ERCOT protocols for the applicable type of
	distributed renewable generation for load reduction at locations
	without interval data meters. A retail electric provider may
	compensate a distributed renewable generation owner for purchased
	surplus electricity at a value greater than the fair market value.
	A distributed renewable generation owner may file a written
	complaint with the commission for a violation of this subsection or
	Subsection (l).  This section does not apply to a retail electric
	provider providing service under Section 39.106.
	(l)  A retail electric provider that purchases surplus
	electricity from a distributed renewable generation owner under
	Subsection (k-1) must compensate the distributed renewable
	generation owner by making a payment not less frequently than once
	each quarter or by applying a monetary credit to an account the
	monetary credit balance of which may be carried forward until the
	monetary credit has been redeemed. The retail electric provider
	shall inform the distributed renewable generation owner of the
	amount of surplus electricity purchased, measured in kilowatt
	hours, and the price paid for the surplus electricity purchased.
	(m)  In areas in which customer choice has not been
	introduced, an electric utility shall purchase surplus electricity
	at a value that is at least equal to the avoided cost of the electric
	utility as determined by commission rule.  A distributed renewable
	generation owner may file a written complaint with the commission
	for a violation of this subsection or Subsection (n).
	(n)  An electric utility that purchases surplus electricity
	from a distributed renewable generation owner under Subsection (m)
	must compensate the distributed renewable generation owner by
	making a payment not less frequently than once each quarter or by
	applying a monetary credit to an account the monetary credit
	balance of which may be carried forward until the monetary credit
	has been redeemed. The electric utility shall inform the
	distributed renewable generation owner of the amount of surplus
	electricity purchased, measured in kilowatt hours, and the price
	paid for the surplus electricity purchased.
	(o)  A distributed renewable generation owner is qualified
	to be compensated for surplus electricity purchased under this
	section only if:
	(1)  the distributed renewable generation is:
	(A)  rated to produce an amount of electricity
	annually that is less than or equal to the amount of electricity the
	retail electric customer for whom the distributed renewable
	generation is installed is reasonably expected to consume annually;
	and
	(B)  installed on the customer's side of the meter
	for a residential retail electric customer or a retail electric
	customer that is:
	(i)  a public school; or
	(ii)  the premises of a religious
	organization if those premises are exempt from ad valorem taxation
	under Section 11.20, Tax Code; and
	(2)  the generating capacity of the distributed
	renewable generation does not exceed:
	(A)  10 kilowatts for a residential retail
	electric customer;
	(B)  150 kilowatts for a retail electric customer
	that is the premises of a religious organization if those premises
	are exempt from ad valorem taxation under Section 11.20, Tax Code;
	or
	(C)  250 kilowatts for a retail electric customer
	that is a public school.
	(p)  Notwithstanding Subsections (k-1) and (o), in areas in
	which customer choice has been introduced, a distributed renewable
	generation owner that does not meet the qualifications prescribed
	by Subsection (o) may be paid or credited for the owner's surplus
	electricity at a value agreed on by the owner and the retail
	electric provider that serves the retail electric customer's load.
	SECTION 5.  Subchapter Z, Chapter 39, Utilities Code, is
	amended by adding Sections 39.9161 and 39.9162 to read as follows:
	Sec. 39.9161.  DISTRIBUTED RENEWABLE GENERATION WITH
	MUNICIPALLY OWNED UTILITIES. (a)  In this section, "distributed
	renewable generation," "distributed renewable generation owner,"
	and "interconnection" have the meanings assigned by Section 39.916.
	(b)  A municipally owned utility shall:
	(1)  allow interconnection by distributed renewable
	generation owners and payment for surplus electricity produced by
	those owners; and
	(2)  provide the utility's customers access to
	interconnection of distributed renewable generation and payment
	for surplus electricity produced.
	(c)  The governing body of a municipally owned utility shall
	provide oversight and adopt rates, rules, and procedures to allow
	interconnection and provide payment for surplus electricity
	consistent with the goals established by Section 39.916.  This
	subsection does not prevent the governing body of a municipally
	owned utility from adopting rates, rules, and procedures for
	interconnection and payment for surplus electricity that are more
	favorable to a distributed renewable generation owner than those
	established by any other law or rule of the commission.
	(d)  If a municipally owned utility implements customer
	choice under Chapter 40, the commission:
	(1)  has jurisdiction over the municipally owned
	utility's distributed renewable generation interconnection and
	payment for surplus electricity; and
	(2)  by rule shall establish minimum standards and
	procedures for interconnection and payment for surplus electricity
	by the municipally owned utility.
	(e)  A municipally owned utility that had retail sales of
	500,000 megawatt hours or more in 2012 shall:
	(1)  file the utility's interconnection and surplus
	electricity rates, rules, and procedures with the State Energy
	Conservation Office not later than January 1, 2015; and
	(2)  make timely updates to the utility's rates, rules,
	and procedures filed under Subdivision (1).
	(f)  A municipally owned utility that has adopted rules and
	procedures related to interconnection and payment for surplus
	electricity shall make available, on a publicly accessible Internet
	website or at the customary location for publicly posted notices:
	(1)  information on the purchase price offered per
	kilowatt hour for surplus electricity produced by distributed
	renewable generation; and
	(2)  information instructing customers with
	distributed renewable generation how to request and obtain the
	purchase rates offered.
	(g)  The governing body of a municipally owned utility that
	had retail sales of less than 500,000 megawatt hours in 2012 shall
	provide oversight and adopt rates, rules, and procedures related to
	interconnection and payment for surplus electricity of distributed
	renewable generation systems with a generating capacity considered
	appropriate by the municipally owned utility on or before the 120th
	day after the date the governing body receives a bona fide request
	for interconnection.
	Sec. 39.9162.  DISTRIBUTED RENEWABLE GENERATION WITH
	ELECTRIC COOPERATIVES. (a)  In this section, "distributed
	renewable generation," "distributed renewable generation owner,"
	and "interconnection" have the meanings assigned by Section 39.916.
	(b)  An electric cooperative shall:
	(1)  allow interconnection by distributed renewable
	generation owners and payment for surplus electricity produced by
	those owners; and
	(2)  provide its members access to interconnection of
	distributed renewable generation and payment for surplus
	electricity produced.
	(c)  An electric cooperative shall allow interconnection if:
	(1)  the distributed renewable generation to be
	interconnected has a five-year warranty against breakdown or undue
	degradation;
	(2)  the rated capacity of the distributed renewable
	generation does not exceed the electric cooperative's service
	capacity; and
	(3)  the distributed renewable generation meets other
	technical requirements for interconnection that are consistent
	with commission rules.
	(d)  The board of directors of an electric cooperative shall
	provide oversight and adopt rates, rules, and procedures to allow
	interconnection and provide payment for surplus electricity
	consistent with the goals established by Section 39.916. This
	subsection does not prevent the board of directors of an electric
	cooperative from adopting rates, rules, and procedures for
	interconnection and payment for surplus electricity that are more
	favorable to a distributed renewable generation owner than those
	established by any other law or rule of the commission.
	(e)  A member may request interconnection by filing an
	application for interconnection with the electric cooperative. An
	electric cooperative's procedures for the submission and
	processing of a member's application for interconnection must be
	consistent with rules adopted by the commission regarding
	interconnection.
	(f)  An electric cooperative may not require a distributed
	renewable generation owner whose distributed renewable generation
	meets the standards established under Subsection (c) to purchase an
	amount, type, or classification of liability insurance the
	distributed renewable generation owner would not have in the
	absence of the distributed renewable generation.
	(g)  An electric cooperative shall compensate the
	distributed renewable generation owner for surplus electricity at a
	value that is at least equal to the avoided cost of the cooperative.
	The electric cooperative may determine the cooperative's avoided
	cost as either:
	(1)  the sum of the average wholesale fuel and energy
	costs, expressed in cents per kilowatt hour, on the wholesale power
	bill for the applicable billing period; or
	(2)  the avoided cost of the wholesale power supplier
	as determined in accordance with the rules and regulations of the
	Federal Energy Regulatory Commission if the electric cooperative
	purchases all of its power from a wholesale power supplier
	regulated by the Federal Energy Regulatory Commission.
	(h)  If an electric cooperative implements customer choice
	under Chapter 41, the commission:
	(1)  has jurisdiction over the electric cooperative's
	distributed renewable generation interconnection and payment for
	surplus electricity; and
	(2)  by rule shall establish minimum standards and
	procedures for interconnection and payment for surplus electricity
	by the electric cooperative.
	(i)  An electric cooperative that had retail sales of 500,000
	megawatt hours or more in 2012 shall file the cooperative's
	interconnection and surplus electricity rates, rules, and
	procedures with the State Energy Conservation Office not later than
	January 1, 2015, and shall make timely updates to the cooperative's
	filed rates, rules, and procedures.
	(j)  An electric cooperative that has adopted rules and
	procedures related to interconnection and payment for surplus
	electricity shall make available, on the cooperative's Internet
	website or at the customary location for the cooperative's posted
	notices:
	(1)  information on the purchase price offered per
	kilowatt hour for surplus electricity produced by distributed
	renewable generation; and
	(2)  information instructing members with distributed
	renewable generation how to request and obtain the purchase rates
	offered.
	(k)  The board of directors of an electric cooperative that
	had retail sales of less than 500,000 megawatt hours in 2012 shall
	provide oversight and adopt rates, rules, and procedures related to
	interconnection of distributed renewable generation and payment
	for surplus electricity on or before the 120th day after the date
	the board of directors receives a bona fide request for
	interconnection.
	SECTION 6.  Subchapter Z, Chapter 39, Utilities Code, is
	amended by adding Section 39.926 to read as follows:
	Sec. 39.926.  INFORMATION ON INTERNET REGARDING PURCHASE OF
	SURPLUS ELECTRICITY PRODUCED BY DISTRIBUTED RENEWABLE GENERATION.
	The commission shall provide for access to easily comparable
	information regarding retail electric providers' offers to
	residential distributed renewable generation owners for their
	surplus electricity, including information regarding their
	contract terms, on an Internet website maintained by the
	commission.
	SECTION 7.  Subsection (h), Section 39.916, Utilities Code,
	is repealed.
	SECTION 8.  This Act takes effect January 1, 2014.
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