HB5479 - Relating to energy efficiency goals and programs.

      By: Anchía H.B. No. 5479       A BILL TO BE ENTITLED   AN ACT   relating to energy efficiency goals and programs.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 39.905, Utilities Code, is amended by   amending Subsections (a), (b), (e), (f), (g), (h), (i), and (j) and   adding Subsections (a-1),(i-1), and (i-2) to read as follows:          (a)  [ It is the goal of the legislature ] The commission shall   ensure that:                (1)  electric utilities will administer energy   efficiency incentive programs in a market-neutral,   nondiscriminatory manner but will not offer underlying competitive   services;                (2)  all customers, in all customer classes, will have   a choice of and access to energy efficiency alternatives and other   choices from the market that allow each customer to reduce energy   consumption, summer and winter peak demand, summer and winter peak   net demand, or energy costs;                (3)  each electric utility administers energy   efficiency programs that:                       (A)     cause the utility's portfolio of programs to   be cost-effective;                       (B)     for an electric utility in an area of the   state not open to competition, include demand response programs;                       (C)     acquire the following minimum quantifiable   reductions in demand annually from energy efficiency programs,   without the inclusion of demand reduction achieved through load   management programs:                             (i)     2,500 kilowatts for utilities with an   average of less than 300,000 total eligible residential and   commercial customers in the previous five years;                             (ii)     7,500 kilowatts for utilities with an   average of greater than 300,000 but less than 750,000 total   eligible residential and commercial customers in the previous five   years;                             (iii)     12,500 kilowatts for utilities with   an average of greater than 750,000 but less than 1.5 million total   eligible residential and commercial customers in the previous five   years;                             (iv)     37,500 kilowatts for utilities with an   average of greater than 1.5 million but less than 3 million total   eligible residential and commercial customers in the previous five   years;                             (v)     50,000 kilowatts for utilities with an   average of greater than 3 million but less than 5 million total   eligible residential and commercial customers in the previous five   years; or                             (vi)     62,500 kilowatts for utilities with an   average of greater than 5 million total eligible residential and   commercial customers in the previous five years; and                       (D)     acquire energy savings of no less than 75% of   what the utility achieved in energy savings in 2024 as previously   reported by the utility to the commission;                         (E)     Beginning with the 2027 calendar year, the   goals in Subsections (a)(3)(C) and (a)(3)(D) shall increase by   three percent each year through 2028. The commission shall update   the goals to set appropriate energy savings increases for years   2028 and thereafter;                       (F)     For an electric utility in an area of the   state open to competition, the commission shall allow utilities to   claim energy savings and demand reduction from programs described   by PURA 39.919 (b) (9). The commission shall adopt rules that   establish a deemed savings and avoided demand per device to be used   for this purpose;                 (4)  each electric utility annually provides, through   market-based standard offer programs or through targeted   market-transformation programs, incentives sufficient for retail   electric providers and competitive energy service providers to   acquire additional cost-effective energy efficiency, subject to   cost ceilings established by the commission, for the utility's   residential and commercial customers ; [ equivalent to:                      [ (A)  not less than:                            [ (i)     30 percent of the electric utility's   annual growth in demand of residential and commercial customers by   December 31 of each year beginning with the 2013 calendar year; and                            [ (ii)     the amount of energy efficiency to be   acquired for the utility's residential and commercial customers for   the most recent preceding year; and                      [ (B)     for an electric utility whose amount of   energy efficiency to be acquired under this subsection is   equivalent to at least four-tenths of one percent of the electric   utility's summer weather-adjusted peak demand for residential and   commercial customers in the previous calendar year, not less than:                            [ (i)     four-tenths of one percent of the   utility's summer weather-adjusted peak demand for residential and   commercial customers by December 31 of each subsequent year; and                            [ (ii)     the amount of energy efficiency to be   acquired for the utility's residential and commercial customers for   the most recent preceding year; ]                (5) [ (4) ]  each electric utility in the ERCOT region   [ shall ] use s its best efforts to encourage and facilitate the   involvement of the region's retail electric providers in the   delivery of efficiency programs [ and ] , demand response programs , or   both under this section, including programs for demand-side   renewable energy systems that :                      [ (A)     use distributed renewable energy   generation, as defined by Section 39.916; or ]                      [ (B) ]  reduce the need for energy consumption by   using a renewable energy technology, a geothermal technology [ heat   pump ], a solar water heater, or another natural mechanism of the   environment ; .                [ (5)     retail electric providers in the ERCOT region,   and electric utilities outside of the ERCOT region, shall provide   customers with energy efficiency educational materials; and                [ (6)     notwithstanding Subsection (a)(3), electric   utilities shall continue to make available, at 2007 funding and   participation levels, any load management standard offer programs   developed for industrial customers and implemented prior to May 1,   2007 ].           (a-1)     Utilities subject to Sections 39.9051 or 39.9052 are   not subject to the requirements of this section, although such   utilities may offer programs described by this section.          (b)  The commission shall provide oversight and adopt rules   and procedures to ensure that the utilities can achieve the goals   [ goal ] of this section, including:                (1)  establishing an energy efficiency cost recovery   factor for ensuring timely and reasonable cost recovery for utility   expenditures made to satisfy the goals [ goal ] of this section;                (2)  establishing an incentive under Section 36.204 to   reward utilities administering programs under this section that   exceed the minimum goals established by this section;                 (3)     prohibiting an incentive achieved under this   section from being included in an electric utility's revenues or   net income for the purposes of establishing a utility's rates or the   utility's earnings monitoring report under Section 36.157, 36.210,   or 36.212;                 (4)  [ (3) ]  providing a utility that is unable to   establish an energy efficiency cost recovery factor in a timely   manner due to a rate freeze with a mechanism to enable the utility   to:                      (A)  defer the costs of complying with this   section; and                      (B)  recover the deferred costs through an energy   efficiency cost recovery factor on the expiration of the rate   freeze period;                 (5)  [ (4) ]  ensuring that the costs associated with   programs provided under this section and any shareholder incentive   [ bonus ] awarded are borne by the customer classes that receive the   services under the programs;                 (6)  establishing cost caps that:                       (A)     allow electric utilities to meet the goals of   this section; and                       (B)  exclude:                             (i)  any shareholder incentive; and                             (ii)     any third-party evaluation   measurement and verification costs;                 (7)  [ (5) ]  ensuring the program rules encourage the   value of the incentives to be passed on to the end-use customer;                 (8)  [ (6) ]  ensuring that programs are evaluated,   measured, and verified using a framework established by the   commission that promotes effective program design and consistent   and streamlined reporting; and                 (9)  [ (7) ]  ensuring that an independent organization   certified under Section 39.151 allows load participation in all   energy markets for residential, commercial, and industrial   customer classes, either directly or through aggregators of retail   electric providers and aggregations as permitted by commission   rules or the independent organization, to the extent that load   participation by each of those customer classes complies with   reasonable requirements adopted by the organization relating to the   reliability and adequacy of the regional electric network and in a   manner that will increase market efficiency, competition, and   customer benefits. &# [Text truncated for display. 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