HB2303 - Relating to electric market payments for and an exemption from sales and use taxes for customer-sited distributed generation.

  89R4443 JXC/CJC-D     By: Bell of Montgomery H.B. No. 2303       A BILL TO BE ENTITLED   AN ACT   relating to electric market payments for and an exemption from   sales and use taxes for customer-sited distributed generation.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Subchapter H, Chapter 151, Tax Code, is amended   by adding Section 151.360 to read as follows:           Sec.   151.360.     CERTAIN STANDBY ELECTRIC POWER DEVICES.     (a)     In this section, "standby electric power device"   means a   non-portable device capable of supplying electric power to the   structure or facility at which it is permanently installed in the   event of a power grid outage.           (b)     A device that has a rated capacity to supply less than   200 kilowatts that is purchased with the intent that it be   permanently installed and connected to the main electrical panel of   a structure or facility by a manual or automatic transfer switch for   use as a standby electric power device is exempt from the taxes   imposed by this chapter.           (c)     The comptroller by rule shall prescribe the manner by   which a person who purchases a standby electric power device must   establish that the person is entitled to the exemption provided by   this section.          SECTION 2.  Subchapter Z, Chapter 39, Utilities Code, is   amended by adding Section 39.9166 to read as follows:           Sec.   39.9166.     AGGREGATED DISTRIBUTED GENERATION FACILITY   PROGRAM FOR DISPATCHABLE GENERATION. (a)     In this section,   "customer-sited backup generation facility" means a distributed   generation facility in the ERCOT power region that is installed on a   retail electric customer's side of the meter:                 (1)     with a nameplate capacity of not more than 10   megawatts;                 (2)     that is capable of generating and providing backup   or supplementary power to the customer's premises and the power   grid; and                 (3)     that is capable of being dispatched by the   independent organization certified under Section 39.151 for the   ERCOT power region.           (b)  This section does not apply to:                 (1)     a distributed natural gas generation facility   operated by a power generation company; or                 (2)     a distributed generation facility to which Section   35.037 applies.           (c)     The commission shall establish an ancillary service   program to allow a retail electric provider, a municipally owned   utility that has not adopted customer choice, or an electric   cooperative that has not adopted customer choice to aggregate   customer-sited backup generation facilities to provide   dispatchable generation during a power grid outage if the   participation of the facilities in such a program is   technologically feasible.           (d)     A retail electric provider, municipally owned utility,   or electric cooperative participating in the program shall provide   to the independent organization certified under Section 39.151 for   the ERCOT power region information about the facilities that the   independent organization determines is necessary for maintaining   system reliability.           (e)     A customer that participates in the program is not   required to register as a power generation company solely because   of the person's participation in the program.           (f)     The program may allow participating customers to sell   electric energy produced by customer-sited backup generation   facilities at:                 (1)     a value based on the clearing price of energy at   the time of day and at the location at which the electricity is   generated, including electric energy consumed on customer   premises; or                 (2)     another value as determined by the commission or   the independent organization certified under Section 39.151 for the   ERCOT power region.           (g)     The sale may be applied as a credit to the customer's   account during a billing period that may be carried over to   subsequent billing periods until the credit has been redeemed.           (h)  This section expires September 1, 2035.          SECTION 3.  Section 151.360, Tax Code, as added by this Act,   does not affect tax liability accruing before the effective date of   this Act.  That liability continues in effect as if Section 151.360,   Tax Code, had not been enacted, and the former law is continued in   effect for the collection of taxes due and for civil and criminal   enforcement of the liability for those taxes.          SECTION 4.  This Act takes effect September 1, 2025.