SB2021 - Relating to the interconnection and integration of distributed energy resources.

  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 p [Text truncated for display. Full text available on LegiScan.]