Schwertner’s bill making battery storage operators clean up

The text as introduced · 1,727 words

89R13843 SCR-D

By: Schwertner
S.B. No. 1824

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) a battery energy storage resource; and

(B) a facility or equipment, other than a

facility or equipment owned by an electric utility, as defined by

Section 31.002, used to support the operation of a battery energy

storage resource, including an underground or aboveground

electrical transmission or communications line, an electric

transformer, a power conversion system, a battery management

system, a heating, ventilation, and air conditioning system,

telecommunications equipment, a road, 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) "Battery energy storage resource" means a battery

energy storage system, whether connected at the transmission or

distribution level, that is used to provide energy or ancillary

services at wholesale and is not registered with the independent

organization certified under Section 39.151 for the ERCOT power

region as a self-generator.

(4) "Commercial operations date" means the date on

which the battery energy storage resource is 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.

(5) "Grantee" means a person, other than an electric

utility, as defined by Section 31.002, who:

(A) leases property from a landowner; and

(B) operates a battery energy storage facility on

the property.

(6) "Recycle" means the processing, including

disassembling, dismantling, and shredding of battery energy

storage cells, modules or other equipment, or their components, to

recover a usable product.

Sec. 303.0002. APPLICABILITY. An agreement that authorizes

the grantee to operate a battery energy storage facility:

(1) in the same modeled generation station and

interconnected at the same point of interconnection as a wind power

facility is subject to Chapter 301 and this chapter; or

(2) in the same modeled generation station and

interconnected at the same point of interconnection as a solar

power facility is subject to Chapter 302 and this chapter.

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 battery

energy storage facility 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

battery energy storage resource, transformer, and substation;

(2) for each foundation of a battery energy storage

resource, 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 soil of the same type or a

similar type as the predominant soil 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 soil of the same type or a

similar type as the predominant soil 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 the grantee is

responsible for:

(1) collecting and reusing or recycling, or shipping

for reuse or recycling, all components of the battery energy

storage facility practicably capable of being reused or recycled,

in accordance with any other applicable laws or regulations; and

(2) properly disposing of components of the battery

energy storage facility not practicably capable of being reused or

recycled:

(A) at a facility authorized under state and

federal law to dispose of hazardous substances for a component

considered hazardous under those laws; or

(B) for nonhazardous components, at a municipal

solid waste landfill or other appropriate waste disposal facility

authorized under state and federal law to dispose of that type of

component.

(c) 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 soil of the same type or a

similar type as the predominant soil found on the property.

(d) 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 soil of the same type or a similar type as

the predominant soil 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.

(e) The landowner shall make a request under Subsection (c)

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

(1) the date on which the battery energy storage

resource is no longer capable of generating 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

obligations under 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 reasonably acceptable to the

landowner.

(b) The amount of 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, recycling

or disposing of all the components of the battery energy storage

facilities, and restoring the property to as near as reasonably

possible the condition of the property as of the date the agreement

begins, as described by Section 303.0004, 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, recycling or

disposing of all the components of the battery energy storage

facilities, and restoring the property to as near as reasonably

possible the condition of the property as of the date the agreement

begins, as described by Section 303.0004, 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 the

estimated cost of removal and recycling or disposal of the battery

energy storage facilities and the salvage value on or before the

10th anniversary of the commercial operations date of the battery

energy storage facilities; and

(3) the grantee must deliver an updated estimate of

the cost and salvage value described by Subdivision (2) at least

once every five years after the initial estimate for the remainder

of the term of the agreement.

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

financial assurance described by this section and determining the

estimated removal, recycling, and disposal costs and salvage value.

(e) The agreement must provide that the grantee shall

deliver financial assurance not later than the earlier of:

(1) the date the battery energy storage facility

agreement is terminated; or

(2) the 15th anniversary of the commercial operations

date of the battery energy storage facilities located on the

landowner's leased property.

(f) The grantee is responsible for ensuring that the amount

of financial assurance remains sufficient to cover the amount

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

by this section.

(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, financial assurance provided by the grantee

shall remain in place until the date evidence of financial

assurance 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.

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