Johnson Bill Lets Home Batteries And Generators Sell Into ERCOT

The text as introduced · 1,691 words

89R15531 CXP-F

By: Johnson
S.B. No. 2021

A BILL TO BE ENTITLED

AN ACT

relating to the interconnection and integration of distributed

energy resources.

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

SECTION 1. Section 31.002, Utilities Code, is amended by

adding Subdivisions (2-a) and (4-c) and amending Subdivision (10)

to read as follows:

(2-a) "Aggregated distributed energy resource" means

a group of distributed energy resources joined together to be

operated as a single distributed energy resource, where each

individual resource in the aggregation produces not more than 1.5

megawatts of electricity, subject to an increase or decrease by

commission rule if the commission determines that a different

capacity size limit is appropriate and does not adversely affect

the ERCOT power region or distribution system reliability.

(4-c) "Distributed energy resource" means a source of

electricity connected at a voltage less than 60 kilovolts,

including electric energy storage, distributed generation,

distributed natural gas generation, or electric vehicles that

provide electricity onto the distribution system. The term does

not include a facility that provides temporary emergency electric

energy under Section 39.918.

(10) "Power generation company" means a person[ ,

including a person who owns or operates a distributed natural gas

generation facility, ] that:

(A) generates electricity that is intended to be

sold at wholesale, including the owner or operator of electric

energy storage equipment or facilities to which Subchapter E,

Chapter 35, applies;

(B) does not own a transmission or distribution

facility in this state other than an essential interconnecting

facility, a facility not dedicated to public use, or a facility

otherwise excluded from the definition of "electric utility" under

this section; and

(C) does not have a certificated service area,

although its affiliated electric utility or transmission and

distribution utility may have a certificated service area.

SECTION 2. Section 39.351(a), Utilities Code, is amended to

read as follows:

(a) A person may not generate electricity unless:

(1) the person is registered with the commission as a

power generation company in accordance with this section; or

(2) the electricity is generated as part of a

registered aggregated [ aggregate ] distributed energy resource

[ under Section 39.3515 ].

SECTION 3. Subchapter H, Chapter 39, Utilities Code, is

amended by adding Section 39.3514 to read as follows:

Sec. 39.3514. REGISTRATION OF DISTRIBUTED ENERGY

RESOURCES. An owner or operator of a distributed energy resource

may provide energy or ancillary services in the wholesale market in

the ERCOT power region through generating electricity and providing

that electricity onto a distribution system only if:

(1) the owner or operator is registered with the

commission as a power generation company under Section 39.351 and

authorized by the independent organization certified under Section

39.151 for the ERCOT power region; or

(2) the distributed energy resource:

(A) is part of an aggregated distributed energy

resource that is:

(i) included in the registration of a power

generation company under Section 39.351 and the independent

organization certified under Section 39.151 for the ERCOT power

region; or

(ii) authorized by the commission and

registered under Section 39.3515; and

(B) has complied with the interconnection

requirements of the interconnecting transmission and distribution

utility.

SECTION 4. Chapter 39, Utilities Code, is amended by adding

Subchapter O to read as follows:

SUBCHAPTER O. INTERCONNECTION OF DISTRIBUTED ENERGY RESOURCES

Sec. 39.701. INTEGRATION AND COST RECOVERY. (a) The

commission by rule shall establish for the ERCOT power region:

(1) requirements for the dispatchability,

reliability, and other characteristics of each type or

classification of distributed energy resource;

(2) appropriate disclosure requirements and other

customer protections for residential and small commercial

customers of providers of aggregated distributed energy services;

(3) information an owner or operator of a distributed

energy resource must provide to the interconnecting transmission

and distribution utility to ensure the resource will not adversely

affect the transmission or distribution system;

(4) interconnection guidelines that address:

(A) the determination of whether a given

interconnection or combination of interconnections would exceed a

transmission and distribution utility's system capacity in a

particular location;

(B) considerations for feeder locations related

to distributed energy resources;

(C) considerations of the size or capacity of a

distributed energy resource;

(D) the assessment by the interconnecting

transmission and distribution utility of potential impacts to other

customers in the area of the distributed energy resource; and

(E) other operating parameters necessary for the

transmission and distribution utility's reliable operation of its

transmission and distribution system;

(5) a methodology for the appropriate allocation and

recovery of the transmission and distribution utility's costs to

interconnect a distributed energy resource; and

(6) requirements for the independent organization

certified under Section 39.151 for the ERCOT power region to report

to the commission periodically:

(A) the categories and generation levels of

distributed energy resources allowed to participate in the ERCOT

wholesale market;

(B) the categories and megawatt levels of

aggregated distributed energy resources allowed to participate in

the ERCOT wholesale market;

(C) performance metrics for distributed energy

resources allowed to participate in the ERCOT wholesale market; and

(D) other information the commission may

require.

(b) The commission shall authorize a transmission and

distribution utility to:

(1) defer for recovery in a later ratemaking

proceeding the incremental operations and maintenance expenses, or

other expenses, and the return, not otherwise recovered in a rate

proceeding, associated with the installation, modification,

upgrade, or maintenance of its transmission or distribution

facilities required by an interconnection with a distributed energy

resource; and

(2) request recovery of the costs associated with an

interconnection with a distributed energy resource, including any

deferred expenses, through a proceeding under Section 35.004 or

36.210 or in another ratemaking proceeding regardless of whether

the utility or cooperative first requested recovery in a base-rate

proceeding.

(c) This subchapter does not:

(1) require or authorize a distribution service

provider to procure distributed energy resource services to enable

the operation of the distribution system;

(2) require a distribution service provider to

disclose to any third party, except as required by the independent

system operator, the provider's system planning information,

studies, models, critical infrastructure information, or other

confidential information;

(3) diminish a distribution service provider's rights

or obligations to own or operate its distribution system and

provide electric delivery service to retail customers in the

provider's certificated service area;

(4) obligate a distribution service provider to

interconnect a distributed energy resource with a capacity equal to

or greater than 10 megawatts; or

(5) prohibit an interconnecting distribution service

provider from shedding a distributed energy resource, or otherwise

obligate an interconnecting distribution service provider to

provide preferential treatment to feeders with distributed energy

resources or prevent a transmission and distribution utility from

fulfilling its load shedding obligations during an involuntary load

shedding event initiated by the independent system operator or a

planned or unplanned outage of the distribution system.

Sec. 39.702. LIABILITY. An interconnecting transmission

and distribution utility or retail electric provider providing

service to a distributed energy resource to which this subchapter

applies is not liable for:

(1) a violation of reliability or service metrics

caused by distributed energy resource operations that violate its

interconnection agreement; or

(2) a distributed energy resource's inability or

failure to provide services that violate its interconnection

agreement or a penalty for such inability or failure.

SECTION 5. Subchapter Z, Chapter 39, Utilities Code, is

amended by adding Section 39.9166 to read as follows:

Sec. 39.9166. DISTRIBUTED ENERGY RESOURCES. (a) A

customer who purchases or leases a distributed energy resource or

enters into a power purchase agreement for a distributed energy

resource in the ERCOT power region is entitled to the information

and disclosures required under Chapter 115, Business & Commerce

Code, and is entitled to protection from fraudulent, unfair,

misleading, or deceptive practices.

(b) An owner or operator of a distributed energy resource

may provide energy or ancillary services in the wholesale market in

the ERCOT power region.

(c) A person who owns or operates a distributed energy

resource in an area in which customer choice has been introduced and

is part of an aggregated distributed energy resource, or has not

individually registered with the commission as its own power

generation company, may only sell the surplus electricity that is

produced by the distributed energy resource and not consumed by the

owner's premise to the retail electric provider that serves the

premise's load at a value agreed to between the distributed energy

resource owner and the retail electric provider that serves the

premise's load. The value may be an agreed value based on the

clearing price of energy or ancillary service at the time of day

that the electricity is made available to the grid.

(d) A person who operates an aggregated distributed energy

resource in an area in which customer choice has been introduced is

subject to customer protection rules established by the commission

under Chapter 17 and this chapter.

(e) The independent organization certified under Section

39.151 for the ERCOT power region shall adopt procedures to ensure

that the amount of electricity purchased from a distributed energy

resource owner under this section is accounted for when settling

the total load served by the retail electric provider that serves

that premise owner's load.

(f) A distributed energy resource owner that requests net

metering services for purposes of this section must have metering

devices capable of providing measurements consistent with the

independent organization's settlement requirements.

(g) A transmission and distribution utility may provide to

customers educational information regarding the technical

requirements for the interconnection of distributed energy

resources to the distribution system. The provision of information

under this subsection is not considered a competitive energy

service.

(h) This section does not apply to a purchase or agreement

entered into under Section 39.914 or 39.916.

SECTION 6. As soon as practicable after the effective date

of this Act, the Public Utility Commission of Texas shall adopt

rules necessary to implement the changes in law made by this Act.

SECTION 7. This Act takes effect immediately if it receives

a vote of two-thirds of all the members elected to each house, as

provided by Section 39, Article III, Texas Constitution. If this

Act does not receive the vote necessary for immediate effect, this

Act takes effect September 1, 2025.