16 TAC §25.476
The Public Utility Commission of Texas (commission) proposes
new §25.476, relating to Labeling of Electricity with Respect to Fuel
Mix and Environmental Impact. The proposed new rule supplements §25.475,
relating to Information Disclosures to Residential and Small Commercial Customers,
and the Public Utility Regulatory Act (PURA), Texas Utilities Code Annotated §39.101,
Customer Safeguards. Project Number 22816 has been assigned to this proceeding.
This rulemaking was initiated on July 21, 2000, in the context of Project
Number 22255,
Rulemaking Proceeding for Customer
Protection Rules for Electric Restructuring Implementing SB 7 and SB 86
.
After conducting several fact-gathering workshops, commission staff prepared
a strawman rule for discussion at a workshop that was held on November 14,
2000, at the commission's offices in Austin, Texas. Following the workshop,
interested parties submitted informal written comments.
Commission staff has considered all of those informal comments and now
proposes new §25.476. When commenting on specific subsections of the
proposed rule, parties are encouraged to describe "best practice" examples
of regulatory policies, and their rationale, that have been proposed or implemented
successfully in other states already undergoing electric industry restructuring,
if the parties believe that Texas would benefit from application of the same
policies. The commission is only interested in receiving "leading edge" examples
which are specifically related and directly applicable to the Texas statute,
rather than broad citations to other state restructuring efforts.
In addition to comments on specific subsections of the proposed rules,
the commission requests that parties specifically address the following issues:
1. Should the commission require a competitive retailer to disclose the
megawatt-hours (MWh) of electricity it sells under each of its various products,
as proposed under subsection (g)(7)(A), if those products are marketed with
different fuel mix and environmental disclosures? If not, how should the commission
verify that a competitive retailer has not sold more electricity under a "green"
or "renewable" label than it obtained from its suppliers?
2. The proposed rule allows electricity generated outside of Texas to be
included in a competitive retailer's fuel and environmental disclosure if
there is a supply contract between the competitive retailer and the owner
of the out-of-state generation facility (subsection (g)(2)). However, subsection
(f) excludes non-Texas facilities from the proposed certificates program.
Does this allow a competitive retailer sufficient means to authenticate its
use of out-of-state generation to meet customer demand in Texas?
3. Subsection (d) of the proposed rule sets forth a general principle for
marketing electricity products as "green" or "renewable." Should the proposed
rule set such standards, and if so, what should they be? If there is to be
a fixed benchmark for marketing an electricity product as "green," how much
of the fuel mix should be renewable or natural gas? How much should come from
renewable fuels before it can be sold to customers as "renewable"?
4. PURA §39.262 requires affiliated power generation companies (PGCs)
to auction entitlements to 15% of their generating capacity. Section 25.381,
relating to Capacity Auctions, establishes four kinds of capacity auction
products, three of which are fueled by natural gas and the other by coal,
lignite, and nuclear energy. How should the proposed labeling rule treat the
fuel mix and associated emissions of generation that a retail electric provider
(REP) acquires under capacity auctions?
David Hurlbut, Economic Analyst, Policy Development Division, has determined
that for each year of the first five-year period the proposed section is in
effect the fiscal implications for state government as a result of enforcing
or administering the section will be minimal, as new costs will be offset
by transaction fees assessed on optional activities created by this proposed
section. Mr. Hurlbut has determined that there will be no fiscal implications
for local government as a result of enforcing or administering the section,
except in the case of a municipally owned utility that has opted into competition,
is operating outside its certificated service area, and chooses to use some
of the optional provisions created by this proposed section.
Mr. Hurlbut has determined that for each year of the first five years the
proposed section is in effect the public benefit anticipated as a result of
enforcing the section will be an orderly, fair, and efficient market for retail
electric services that promotes competition and ensures that customers have
adequate information to make informed choices. There are no anticipated adverse
effects on small businesses or micro-businesses as a result of enforcing this
section. There are no anticipated additional economic costs to persons who
comply with the minimum requirements of this section as proposed; optional
provisions of this section simultaneously introduce potential costs and potential
benefits that are left to the market to resolve.
Mr. Hurlbut has also determined that for each year of the first five years
the proposed section is in effect there should be no effect on a local economy,
and therefore no local employment impact statement is required under Administrative
Procedure Act §2001.022.
Comments on the proposed new section (16 copies) may be submitted to the
Filing Clerk, Public Utility Commission of Texas, 1701 North Congress Avenue,
PO Box 13326, Austin, Texas 78711-3326, within 30 days after publication.
Reply comments may be submitted within 45 days after publication. The commission
invites specific comments regarding the costs associated with, and benefits
that will be gained by, implementation of the proposed section. The commission
will consider the costs and benefits in deciding whether to adopt the section.
All comments should refer to Project Number 22816.
This new section is proposed under the Public Utility Regulatory
Act, Texas Utilities Code Annotated §14.002 (Vernon 1998, Supplement
2001) (PURA), which provides the Public Utility Commission with the authority
to make and enforce rules reasonably required in the exercise of its powers
and jurisdiction; and specifically, PURA §39.101 which grants the commission
authority to establish various specific protections for retail customers,
including entitling customers to have information concerning the environmental
impact of certain production facilities, and information sufficient to make
an informed choice of electric service provider; §39.9044 which grants
the commission authority to establish rules allowing and encouraging competitive
retailers to market electricity generated using natural gas produced in this
state as environmentally beneficial; and PURA Chapter 17, Subchapter A, which
authorizes the commission to adopt rules to protect retail customers and requires
the commission to promote public awareness of changes in the electric utility
market.
Cross Reference to Statutes: Public Utility Regulatory Act §§14.002,
39.101, 39.9044, and Chapter 17, Subchapter A.
§25.476.Labeling of Electricity with Respect to Fuel Mix and Environmental Impact.
(a)
Purpose. The purpose of this section is to establish the
procedures by which competitive retailers calculate and disclose information
on the Electricity Facts label pursuant to §25.475 of this title (relating
to Information Disclosures to Residential and Small Commercial Customers).
(b)
Application. This section applies to all competitive retailers
and affiliated retail electric providers (affiliated REPs) as defined in §25.471(d)
of this title (relating to General Provisions of Customer Protection Rules).
Additionally, the reporting requirements established in this section apply
to all power generation companies (PGCs) as defined in §25.5 of this
title (relating to Definitions).
(c)
Definitions. The following words and terms, when used in
this section, shall have the following meanings unless the context indicates
otherwise:
(1)
Authenticated generation - Generated electricity with quantity,
fuel mix, and environmental attributes accounted for by a retired certificate
of generation, retired renewable energy credit (REC), or supply contract between
a competitive retailer and a PGC.
(2)
Certificate of generation - A tradable instrument issued
by a PGC designating the megawatt-hours (MWh), fuel and environmental attributes
of a specific quantity of production from a specific electricity generating
facility.
(3)
Default scorecard - The estimated fuel mix and environmental
impact of all electricity in Texas that is not authenticated as defined in
paragraph (1) of this subsection.
(4)
Electricity Facts label - A standardized format, as described
in §25.475(e) of this title, for disclosure information and contract
terms made available to customers to help them choose a provider and an electricity
product.
(5)
Electricity product - A product offered by a competitive
retailer or affiliated REP to a customer for the provision of retail electric
service under specific terms and conditions, and marketed under a specific
Electricity Facts label.
(6)
Environmental impact - The information that is to be reported
on the Electricity Facts label under the heading "emissions and waste per
kWh generated," comprising indicators for carbon dioxide, nitrogen oxides,
particulates, sulfur dioxide, and spent nuclear reactor fuel. For the purposes
of this section, environmental impact refers specifically to emissions and
waste from generating facilities located in Texas, except as provided in subsection
(g)(3) of this section.
(7)
Fuel mix - The information that is to be reported on the
Electricity Facts label under the heading "sources of power generation." The
fuel mix shall be the percentage of total MWh obtained from each of the following
fuel categories: coal and lignite, natural gas, nuclear, renewable energy,
and other known sources. Renewable energy shall include power defined as renewable
by the Public Utility Regulatory Act (PURA) §39.904(d).
(8)
New product - An electricity product during the first year
it is marketed to customers.
(9)
Other generation sources - A competitive retailer's or
affiliated REP's supply of generated electricity that is not accounted for
by a direct supply contract with a PGC.
(10)
PGC scorecard - The aggregated fuel mix and environmental
impact of all the PGC's generating facilities located in Texas, adjusted by
subtracting any generation for which a REC has been issued or a certificate
of generation has been retired.
(11)
Renewable energy credit (REC) - A tradable instrument
representing the generation attributes of one MWh of electricity from renewable
energy sources, as authorized by PURA §39.904 and implemented under §25.173
of this title (relating to the Goal for Renewable Energy).
(12)
Renewable energy credit offset (REC offset) - A REC offset
represents one MWh of renewable energy that may be used in place of a REC,
according to the provisions of §25.173 of this title.
(d)
Marketing standards for "green" and "renewable" electricity
products.
(1)
Any marketing statement made by a competitive retailer
or affiliated REP describing an electricity product as "green" must prominently
include the product's combined natural gas and renewable fuel mix percentage
consistent with its Electricity Facts label. A product may not be marketed
as "green" without reference to a fuel mix percentage.
(2)
Any marketing statement made by a competitive retailer
or affiliated REP describing an electricity product as "renewable" must prominently
include the product's renewable fuel mix percentage as shown on its Electricity
Facts label and may not include the product's natural gas fuel mix percentage.
A product may be marketed as "renewable" without reference to a fuel mix percentage
only if the product's authenticated fuel mix is 100% renewable.
(e)
Compilation of scorecard data.
(1)
The commission will create and maintain a database of PGC
scorecards reflecting PGCs' company-wide fuel mix and environmental impact
data based on generating facilities located in Texas. These scorecards shall
be used by competitive retailers and affiliated REPs in determining the fuel
and environmental attributes of electricity sold to retail customers.
(2)
PGC scorecards will be published on the commission's internet
web site beginning July 1, 2001, and shall state:
(A)
MWh obtained from each fuel source (coal and lignite, natural
gas, nuclear, renewable energy, and other sources), excluding generation for
which a REC has been issued, and the corresponding percentages of total MWh;
(B)
tons of carbon dioxide, nitrogen oxides, particulates,
sulfur dioxide, and spent nuclear fuel produced, excluding emissions from
generation for which a REC has been issued, and the corresponding emission
rates in tons per MWh; and
(C)
sources from which data were obtained.
(3)
Not later than March 1 of each year, the commission will
update all PGC scorecards to reflect:
(A)
changes in generation facilities' emission rates and fuel
use;
(B)
new plants in operation and the retirement of plants previously
in operation; and
(C)
certificates of generation issued for the previous calendar
year by the PGC that a competitive retailer or affiliated REP intends to retire
to authenticate fuel mix and environmental impact disclosures.
(4)
Not later than March 1 of each year, the commission will
calculate a default scorecard to account for all electric generation in the
state that is not authenticated as defined in subsection (c)(1) of this section.
(A)
The default fuel mix shall be the percentage of total MWh
of generation not authenticated that has been obtained from each fuel type.
(B)
Default emission rates for each environmental criterion
shall be calculated by dividing total tons of emissions or waste by total
MWh, using data only for generation not authenticated.
(C)
The default scorecard shall be published on the commission's
internet web site beginning July 1, 2001.
(f)
Certificates of generation. At its option, a PGC may issue
and sell certificates of generation representing the fuel mix and environmental
attributes of a specific generating facility that it operates in Texas. Certificates
of generation may be traded by competitive retailers, affiliated REPs, power
marketers, or any other party, and may be retired by competitive retailers
and affiliated REPs to authenticate the fuel mix and environmental attributes
of electricity sold to retail customers.
(1)
The commission shall appoint a program administrator who
shall:
(A)
establish a registry of certificates issued by PGCs;
(B)
maintain public information on its website that provides
trading program information to interested buyers and sellers of certificates;
(C)
create an exchange procedure where persons may purchase
and sell certificates anonymously;
(D)
perform audits of generators participating in the certificates
program to verify the accuracy of production data reported on registered certificates;
(E)
inform participating PGCs of the certificates that have
been submitted for retirement by competitive retailers and affiliated REPs;
(F)
collect user fees sufficient for the program to be self-sustaining;
and
(G)
submit an annual report to the commission describing the
number and characteristics of certificates issued by PGCs, number and characteristics
of certificates retired by competitive retailers, and other pertinent information
regarding the operation of the certificates program.
(2)
A certificate shall be based on electricity generated prior
to the certificate issue date. A certificate may cover any length of time
within a single calendar year. Certificates for electricity generated during
a given calendar year must be issued before February 8 of the following year.
(3)
A certificate shall account for all of the facility's electricity
output for the period covered by the certificate.
(4)
No quantity of generation may be included in more than
one certificate.
(5)
Certificates shall not represent electricity output associated
with a REC or a REC offset.
(6)
Certificates may be sold as independent instruments or
in conjunction with supply contracts between the issuing PGC and a competitive
retailer. If a PGC sells certificates to a retailer in conjunction with a
supply contract, and the retailer chooses to resell the certificates to another
party while retaining the electricity, the retailer shall use the PGC's company
scorecard to describe the attributes of the retained electricity.
(7)
Each certificate must include the following information
specific to the generation for which it has been issued:
(A)
name of the issuing PGC;
(B)
unique identification for the generating facility, including
meter identification number;
(C)
date of issue;
(D)
time and date of the beginning of the period covered by
the certificate;
(E)
time and date of the end of the period covered by the certificate;
(F)
MWh metered during the period covered by the certificate;
(G)
types of fuel used during the period covered by the certificate;
(H)
the amount (in tons) of carbon dioxide, nitrogen oxides,
sulfur dioxide, particulates, and spent nuclear fuel produced by the facility
as a result of generating the MWh represented by the certificate; and
(I)
an affidavit that the information contained in the certificate
is true and accurate.
(8)
A PGC shall register each of its certificates of generation
with the program administrator. Certificates not registered by February 8
following the reporting year shall be invalid.
(9)
For the purposes of calculating its fuel and environmental
impact disclosures for its Electricity Facts labels, a competitive retailer
or affiliated REP may purchase and retire certificates of generation to account
for other generation sources as defined in subsection (c)(9) of this section.
If all of a competitive retailer's or affiliated REP's other generation sources
are represented by certificates, the retailer may retire additional certificates
to represent power obtained under a supply contract with any PGC that otherwise
would have been represented by the PGC's scorecard. All certificates that
a competitive retailer or affiliated REP intends to use to authenticate its
disclosures must be included in the supply report required under subsection
(g)(1) of this section.
(10)
Not later than February 15 of each year, the program administrator
shall inform participating PGCs of the certificates that competitive retailers
and affiliated REPs intend to retire. Not later than March 1 of each year,
each PGC that has issued certificates shall provide the commission with an
adjusted PGC scorecard. The adjusted scorecard shall be based on the same
data used by the commission in determining the PGC's unadjusted scorecard
and shall exclude:
(A)
all certificated generation that a competitive retailer
or affiliated REP intends to retire; and
(B)
generation represented by a REC or a REC offset.
(11)
A certificate is not valid if the issuing PGC has failed
to register the certificate or has failed to provide the commission with an
adjusted scorecard as stipulated in paragraphs (8) and (10) of this subsection.
(g)
Calculating fuel mix and environmental impact disclosures.
(1)
Not later than February 8 of each year, each competitive
retailer and affiliated REP shall report to the commission:
(A)
all PGCs and other entities from which the competitive
retailer or affiliated REP purchased electricity for delivery to customers
during the previous calendar year and the MWh obtained from each supplier,
with sources that together supplied less than 5.0% of the competitive retailer's
electricity combined and treated as other generation sources;
(B)
MWh sold under each electricity product offered by the
competitive retailer or affiliated REP during the previous calendar year;
and
(C)
all certificates of generation that the competitive retailer
or affiliated REP intends to retire to authenticate fuel mix and environmental
impact disclosures for the previous calendar year.
(2)
Not later than April 1 of each year, each competitive retailer
and affiliated REP shall calculate its fuel mix and environmental impact for
the previous calendar year, concurrent with settlement period established
in §25.173(l) of this title. Calculations shall include a disclosure
that aggregates all electricity products offered by the competitive retailer,
and specific disclosures for each electricity product. Disclosures provided
on an Electricity Facts label shall describe a specific electricity product
sold to customers during the calendar year preceding the settlement period,
except as provided in paragraph (9) of this subsection.
(3)
For power purchased from sources outside of Texas, a supply
contract between a competitive retailer or affiliated REP and the owner of
a generating facility may be used to authenticate fuel mix and environmental
impact claims.
(A)
The contract must identify a specific generating facility
from which the competitive retailer or affiliated REP is to obtain electricity.
(B)
The competitive retailer or affiliated REP shall include
fuel mix and environmental impact information for the specified generating
facility in its report to the commission pursuant to paragraph (1) of this
subsection. Data shall come from the same sources used by the commission as
reported pursuant to subsection (e)(2)(C) of this section. If the generating
facility is not included in any database used by the commission, the retailer
and the generating facility owner may provide other comparable public data
that have been reported to a federal or state agency for the specified facility.
(4)
For the purposes of disclosures on the Electricity Facts
label, the retirement of RECs shall be the only method of authenticating generation
for which a REC has been issued in accordance with §25.173 of this title.
The retirement of a REC shall be equivalent to one megawatt-hour of generation
from renewable resources. The use of RECs to authenticate the use of renewable
fuels on the Electricity Facts label must be consistent with REC account information
maintained by the renewable energy credits trading program administrator.
A REC offset may be used to authenticate the renewable attributes of its associated
supply contract.
(5)
A competitive retailer's or affiliated REP's company fuel
mix shall be the MWh-weighted average of the fuel mixes represented by its
PGC scorecards, retired certificates of generation, out-of-state supply contracts,
retired RECs, and the default scorecard. MWh from generation sources not authenticated
in accordance with this section shall be represented by the fuel mix of the
default scorecard.
(6)
A competitive retailer's or affiliated REP's company environmental
impact shall be the MWh-weighted average of the emission rates represented
by its PGC scorecards, retired certificates of generation, out-of-state supply
contracts, retired RECs, and the default scorecard. Emissions of MWh from
generation sources not authenticated in accordance with this section shall
be represented by the default scorecard. The weighted average of each category
of environmental impact shall then be indexed by dividing it by the corresponding
state average emission rate and multiplying the result by 100.
(7)
If a competitive retailer or affiliated REP offers multiple
electricity products that differ with regard to the fuel mix and environmental
impact disclosures presented on the Electricity Facts labels:
(A)
the retailer shall apportion its company fuel mix and emission
rates consistent with the product-specific MWh sales reported under paragraph
(1)(B) of this subsection; and
(B)
each label shall reflect the number of RECs that the competitive
retailer or affiliated REP has retired to satisfy the requirements of §25.173(h)
of this title, relating to the allocation of REC purchase requirement to competitive
retailers; additional RECs that are retired voluntarily may be applied to
any electricity product offered by the company, except as limited by paragraph
(8) of this subsection.
(8)
An affiliated REP shall use only one fuel mix and environmental
impact disclosure for all price-to-beat products sold to residential and small
commercial customers of its affiliated transmission and distribution utility.
(9)
A competitive retailer or affiliated REP may anticipate
the fuel mix and environmental impact of a new product and adjust the disclosures
for its existing products to account for the new product's projected sales.
(A)
On the fuel mix disclosure of a new product's Electricity
Facts label, the heading "Sources of power generation" shall be replaced with
"Projected sources of power generation."
(B)
On the environmental impact disclosure of a new product's
Electricity Facts label, the heading "Emissions and waste per kWh generated"
shall be replaced with "Projected emissions and waste per kWh generated."
(C)
The competitive retailer or affiliated REP shall exercise
due diligence in its acquisition of purchased power throughout the year so
that the fuel mix and environmental impact authenticated at the end of the
year is at least as favorable as what the retailer projected.
(D)
Nothing in this subsection shall be construed as protecting
a competitive retailer or affiliated REP against prosecution under deceptive
trade practices statutes.
(E)
A projected fuel mix may be used only for new products.
(h)
Special provisions for the first year of competition. Each
competitive retailer and affiliated REP during the first year of competition,
beginning January 1, 2002, and ending December 31, 2002, shall estimate the
fuel mix and environmental impact of its electricity products offered as follows:
(1)
affiliated REPs shall estimate their fuel mixes and environmental
impacts by using the company fuel mixes and emission rates of their affiliated
PGCs; and
(2)
all other competitive retailers shall project the fuel
mix and environmental impacts of products they offer during 2002, and shall
exercise due diligence in their acquisition of purchased power throughout
the year so that the fuel mix verified at the end of the year is at least
as favorable as what was projected.
(i)
Compliance and enforcement.
(1)
If the commission finds that a REP, other than a municipally
owned utility or an electric cooperative, is in violation of this section,
the commission shall order the REP to take corrective action as necessary,
and the REP may be subject to administrative penalties pursuant to PURA §15.023
and §15.024. If the commission finds that an electric cooperative or
a municipally owned utility is in violation, it shall inform the cooperative's
board of directors and general manager, or the municipal utility's general
manager and city council, and may issue an advisory to local news media.
(2)
If the commission finds that a REP, other than a municipally
owned utility or an electric cooperative, repeatedly violates this section,
and if consistent with the public interest, the commission may suspend, restrict,
deny, or revoke the registration or certificate, including an amended certificate,
of the REP, thereby denying the REP the right to provide service in this state.
(3)
The commission shall coordinate its enforcement efforts
regarding the prosecution of fraudulent, misleading, deceptive, and anticompetitive
business practices with the office of the attorney general in order to ensure
consistent treatment of specific alleged violations.
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of
the Secretary of State, on January 17, 2001.
TRD-200100336
Rhonda Dempsey
Rules Coordinator
Public Utility Commission of Texas
Earliest possible date of adoption: March 4, 2001
For further information, please call: (512) 936-7308