grid battery leases must cover removing even the buried cables

The text as introduced · 1,424 words

89R5030 SCR-D

By: Gerdes
H.B. No. 3422

A BILL TO BE ENTITLED

AN ACT

relating to the removal of battery energy storage facilities.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Title 6, Utilities Code, is amended by adding

Chapter 303 to read as follows:

CHAPTER 303. BATTERY ENERGY STORAGE FACILITY AGREEMENTS

Sec. 303.0001. DEFINITIONS. In this chapter:

(1) "Battery energy storage facility" includes a

facility or equipment used to support the operation of battery

energy storage, including an underground or aboveground electrical

transmission or communications line, an electric transformer,

telecommunications equipment, a road, a meteorological tower, or a

maintenance yard.

(2) "Battery energy storage facility agreement" means

a lease agreement between a grantee and a landowner that authorizes

the grantee to operate a battery energy storage facility on the

leased property.

(3) "Grantee" means a person who:

(A) leases property from a landowner; and

(B) operates a battery energy storage facility on

the property.

Sec. 303.0002. APPLICABILITY. This chapter applies only to

battery energy storage that is a generation asset as defined by

Section 39.251.

Sec. 303.0003. WAIVER VOID; REMEDIES. (a) A provision of a

battery energy storage facility agreement that purports to waive a

right or exempt a grantee from a liability or duty established by

this chapter is void.

(b) A person who is harmed by a violation of this chapter is

entitled to appropriate injunctive relief to prevent further

violation of this chapter.

(c) The provisions of this section are not exclusive. The

remedies provided in this section are in addition to any other

procedures or remedies provided by other law.

Sec. 303.0004. REQUIRED AGREEMENT PROVISIONS ON FACILITY

REMOVAL. (a) A battery energy storage facility agreement must

provide that the grantee is responsible for removing the grantee's

battery energy storage facilities from the landowner's property and

that the grantee shall, in accordance with any other applicable

laws or regulations, safely:

(1) clear, clean, and remove from the property each

piece of battery energy storage equipment, including any

transformers or substations;

(2) for each foundation of battery energy storage

equipment, including a transformer or substation installed in the

ground:

(A) clear, clean, and remove the foundation from

the ground to a depth of at least three feet below the surface grade

of the land in which the foundation is installed; and

(B) ensure that each hole or cavity created in

the ground by the removal is filled with topsoil of the same type or

a similar type as the predominant topsoil found on the property;

(3) for each buried cable, including power,

fiber-optic, and communications cables, installed in the ground:

(A) clear, clean, and remove the cable from the

ground to a depth of at least three feet below the surface grade of

the land in which the cable is installed; and

(B) ensure that each hole or cavity created in

the ground by the removal is filled with topsoil of the same type or

a similar type as the predominant topsoil found on the property; and

(4) clear, clean, and remove from the property each

overhead power or communications line installed by the grantee on

the property.

(b) The agreement must provide that, at the request of the

landowner, the grantee shall:

(1) clear, clean, and remove each road constructed by

the grantee on the property; and

(2) ensure that each hole or cavity created in the

ground by the removal is filled with topsoil of the same type or a

similar type as the predominant topsoil found on the property.

(c) The agreement must provide that, at the request of the

landowner, if reasonable, the grantee shall:

(1) remove from the property all rocks over 12 inches

in diameter excavated during the decommissioning or removal

process;

(2) return the property to a tillable state using

scarification, V-rip, or disc methods, as appropriate; and

(3) ensure that:

(A) each hole or cavity created in the ground by

the removal is filled with topsoil of the same type or a similar

type as the predominant topsoil found on the property; and

(B) the surface is returned as near as reasonably

possible to the same condition as before the grantee dug holes or

cavities, including by reseeding pastureland with native grasses

prescribed by an appropriate governmental agency, if any.

(d) The landowner shall make a request under Subsection (b)

or (c) not later than the 180th day after the later of:

(1) the date on which the battery energy storage

facility is no longer capable of storing electricity in commercial

quantities; or

(2) the date the landowner receives written notice of

intent to decommission the battery energy storage facility from the

grantee.

Sec. 303.0005. REQUIRED AGREEMENT PROVISIONS ON FINANCIAL

ASSURANCE. (a) A battery energy storage facility agreement must

provide that the grantee shall obtain and deliver to the landowner

evidence of financial assurance that conforms to the requirements

of this section to secure the performance of the grantee's

obligation to remove the grantee's battery energy storage

facilities located on the landowner's property as described by

Section 303.0004. Acceptable forms of financial assurance include a

parent company guaranty with a minimum investment grade credit

rating for the parent company issued by a major domestic credit

rating agency, a letter of credit, a bond, or another form of

financial assurance acceptable to the landowner.

(b) The amount of the financial assurance must be at least

equal to the estimated amount by which the cost of removing the

battery energy storage facilities from the landowner's property and

restoring the property to as near as reasonably possible the

condition of the property as of the date the agreement begins

exceeds the salvage value of the battery energy storage facilities,

less any portion of the value of the battery energy storage

facilities pledged to secure outstanding debt.

(c) The agreement must provide that:

(1) the estimated cost of removing the battery energy

storage facilities from the landowner's property and restoring the

property to as near as reasonably possible the condition of the

property as of the date the agreement begins and the estimated

salvage value of the battery energy storage facilities must be

determined by an independent, third-party professional engineer

licensed in this state;

(2) the grantee must deliver to the landowner an

updated estimate, prepared by an independent, third-party

professional engineer licensed in this state, of the cost of

removal and the salvage value at least once every five years for the

remainder of the term of the agreement; and

(3) the grantee is responsible for ensuring that the

amount of the financial assurance remains sufficient to cover the

amount required by Subsection (b), consistent with the estimates

required by this subsection.

(d) The grantee is responsible for the costs of obtaining

financial assurance described by this section and costs of

determining the estimated removal costs and salvage value.

(e) The agreement must provide that the grantee shall

deliver the financial assurance not later than the earlier of:

(1) the date the battery energy storage facility

agreement is terminated; or

(2) the 10th anniversary of the commercial operations

date of the battery energy storage facilities located on the

landowner's leased property.

(f) For purposes of this section, "commercial operations

date" means the date on which the battery energy storage facilities

are approved for participation in market operations by a regional

transmission organization and does not include the generation of

electrical energy or other operations conducted before that date

for purposes of maintenance and testing.

(g) The grantee may not cancel financial assurance before

the date the grantee has completed the grantee's obligation to

remove the grantee's battery energy storage facilities located on

the landowner's property in the manner provided by this chapter,

unless the grantee provides the landowner with replacement

financial assurance at the time of or before the cancellation. In

the event of a transfer of ownership of the grantee's battery energy

storage facilities, the financial security provided by the grantee

shall remain in place until the date evidence of financial security

meeting the requirements of this chapter is provided to the

landowner.

SECTION 2. Chapter 303, Utilities Code, as added by this

Act, applies only to a battery energy storage facility agreement

entered into on or after the effective date of this Act. A battery

energy storage facility agreement entered into before the effective

date of this Act is governed by the law as it existed immediately

before that date, and that law is continued in effect for that

purpose.

SECTION 3. This Act takes effect September 1, 2025.