Part 2.
PUBLIC UTILITY COMMISSION OF TEXAS
Chapter 25.
SUBSTANTIVE RULES APPLICABLE TO ELECTRIC SERVICE PROVIDERS
Subchapter H. ELECTRICAL PLANNING
1.
RENEWABLE ENERGY RESOURCES AND USE OF NATURAL GAS
16 TAC §25.173
The Public Utility Commission of Texas (commission) proposes
an amendment to §25.173, relating to the Goal for Renewable Energy. The
proposed amendment will increase the state's renewable portfolio standard
(RPS) and will establish a target of having at least 500 megawatts (MW) of
capacity from a renewable energy technology other than a source using wind
energy. Both changes are required by Senate Bill 20, 79th Legislature, 1st
Called Session (2005), which amended Public Utility Regulatory Act (PURA) §39.904,
relating to the Goal for Renewable Energy. This amendment is a competition
rule subject to judicial review as specified in PURA §39.001(e). Project
Number 33492 is assigned to this proceeding.
In addition to the aforementioned changes required by SB 20, the amendment
includes a number of other modifications of, and clarifications to the existing
rule. The threshold for "small generators" would increase from 2 MW to 10
MW; small fossil-fueled generators in existence before 1999 could earn renewable
energy credits (RECs) if repowered to use renewable fuel; and a REC offset
would cease to be effective if the power purchase agreement on which it was
based is no longer in effect.
Ms. Lauren Damen, Senior Retail Market Analyst, Electric Industry Oversight,
has determined that for each year of the first five-year period the amendment
is in effect there will be no fiscal implications for state or local government
as a result of enforcing or administering the amendment.
Ms. Damen has determined that for each year of the first five years the
proposed amendment is in effect the public benefit anticipated as a result
of enforcing the amendment will be to increase the amount of electricity delivered
to customers using renewable generation resources in Texas, consistent with
the goals established in state law. The expected benefits also include increasing
the state's use of renewable-energy sources, reducing the use of generation
technologies that result in air emissions, and diversifying the state's electric
generating resource portfolio. For the longer term, the amendment is expected
to foster further reductions in the cost of renewable energy technologies.
There will be no adverse economic effect on small businesses or micro-businesses
as a result of enforcing this amendment. There may be economic costs to retail
electric providers and other persons who are required to comply with the amendment,
specifically with regard to the extended RPS. However, these costs are necessary
to implement PURA §39.904 as amended by SB 20. Ms. Damen has also determined
that for each year of the first five years the amendment is in effect, local
economies where renewable resources are developed may experience employment
growth.
The commission staff will conduct a public hearing on this rulemaking,
if requested pursuant to the Administrative Procedure Act, Texas Government
Code §2001.029, at the commission's offices located in the William B.
Travis Building, 1701 North Congress Avenue, Austin, Texas 78701 on Tuesday,
March 27, 2007, at 9:00 a.m. in the Commissioner's Hearing Room. The request
for a public hearing must be received by Monday, March 12, 2007.
Comments on the amendment may be submitted to the Filing Clerk, Public
Utility Commission of Texas, 1701 North Congress Avenue, P.O. Box 13326, Austin,
Texas 78711-3326, by Monday, March 12, 2007. Sixteen copies of comments to
the proposed amendment are required to be filed pursuant to §22.71(c)
of this title. Reply comments may be submitted by Monday, March 26, 2007.
Comments should be organized in a manner consistent with the organization
of the rule. The commission invites specific comments regarding the costs
associated with, and benefits that will be gained by, implementation of the
amendment. The commission will consider the costs and benefits in deciding
whether to adopt the section. All comments should refer to Project Number
33492. In addition to the proposed language, the commission requests that
parties submit comments on the following questions:
1)
Subsection (e)(2) provides that in order for
a facility that requires fossil fuel to be eligible to produce RECs, the facility's
use of fossil fuel must not exceed 2.0% of the total annual fuel input on
a British thermal unit (BTU) or equivalent basis. Would it be appropriate
to raise the percentage as high as 25%? What technologies should be able to
take advantage of such an increased allowance in the use of fossil fuel? Are
there negative consequences that would result from such an increase?
2)
This proposal contemplates that RECs and compliance
premiums will have the same life span of three years. Would the value of the
compliance premiums be increased or decreased if the rule established a longer
life-span for compliance premiums? Would a different life-span for compliance
premiums be appropriate?
3)
Proposed subsection (l)(1) provides that eligible
non-wind renewable technologies that have no air emissions will be awarded
two compliance premiums rather than the one compliance premium awarded to
other technologies. Is it appropriate for this rule to make this distinction
among renewable technologies?
When commenting on specific subsections of the proposed amendment, 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 implementing renewable energy programs, if the parties
believe that Texas would benefit from application of the same policies. The
commission is interested in receiving only "leading edge" examples which are
specifically related and directly applicable to the Texas statute, rather
than broad citations to other state efforts.
This amendment is proposed under the Public Utility Regulatory
Act, Texas Utilities Code Annotated §§14.001, 14.002, 15.023, 39.101(b)(3)
and 39.904 (Vernon 1998 & Supplement 2006). Section 14.001 provides the
commission the general power to regulate and supervise the business of each
public utility within its jurisdiction and to do anything specifically designated
or implied by PURA that is necessary and convenient to the exercise of that
power and jurisdiction; Section 14.002 provides the commission with the authority
to make and enforce rules reasonably required in the exercise of its powers
and jurisdiction; Section 15.023 provides the commission the power to impose
administrative penalties against a person regulated under PURA who violates
PURA or an order adopted under PURA; Section 39.101(b)(3) provides that a
customer is entitled to have access to providers of energy generated by renewable
energy resources; and Section 39.904, provides the commission the power to
adopt rules necessary to administer and enforce the programs to promote the
development of renewable energy technologies.
Cross Reference to Statutes: Public Utility Regulatory Act §§14.001,
14.002, 15.023, 36.204, 39.101, and 39.904.
§25.173.Goal for Renewable Energy.
(a)
Purpose. The
purposes
[
(1)
to ensure that
the cumulative installed
generating capacity from renewable energy technologies in this state totals
2,280 megawatts (MW) by January 1, 2007, 3,272 MW by January 1, 2009, 4,264
MW by January 1, 2011, 5,256 MW by January 1, 2013, and 5,880 MW by January
1, 2015, with at least 500 MW of the total installed renewable capacity after
September 1, 2005, coming from a renewable energy technology other than a
source using wind energy, and that the means exist for the state to achieve
a target of 10,000 MW of installed renewable capacity by January 1, 2025;
[
(2)
to
provide for
[
(3)
to encourage the development, construction,
and operation of new renewable energy resources at those sites in this state
that have the greatest economic potential for capture and development of this
state's environmentally beneficial resources
;
[
(4)
to protect and enhance the quality of the environment
in Texas through increased use of renewable resources
; and
[
(5)
to
ensure
[
(b)
Application. This section applies to power generation companies
as defined in §25.5 of this title (relating to definitions), and
retail entities
[
(c)
Definitions.
[
(1)
[
(2)
Compliance premium--A premium
awarded by the program administrator in conjunction with a renewable energy
credit that is generated by a renewable energy source that is not powered
by wind and meets the criteria of subsection (l) of this section. For the
purpose of the renewable energy portfolio standard requirements, one compliance
premium is equal to one renewable energy credit.
(3)
Designated representative--A responsible natural person
authorized by the owners or operators of a renewable resource to register
that resource with the program administrator. The designated representative
must have the authority to represent and legally bind the owners and operators
of the renewable resource in all matters pertaining to the renewable energy
credits trading program.
[
(4)
[
(5)
[
(6)
Microgenerator--A customer
who owns one or more eligible renewable energy generating units with a rated
capacity of 10 kW or less operating on the customer's side of the utility
meter.
(7)
New facilities--Renewable energy generators placed in service
on or after September 1, 1999. A new facility includes the incremental capacity
and associated energy from an existing renewable facility achieved through
repowering activities undertaken on or after September 1, 1999.
(8)
Off-grid generation--The generation of renewable energy
in an application that is not interconnected to a utility transmission or
distribution system.
(9)
Program administrator--The entity approved by the commission
that is responsible for carrying out the administrative responsibilities related
to the renewable energy credits trading program as set forth in subsection
(g) of this section.
(10)
REC aggregator--An entity
managing the participation of two or more microgenerators in the REC trading
program.
(11)
[
(12)
[
(13)
[
(14)
[
(15)
[
(16)
[
(17)
Renewable Portfolio Standard
(RPS)--The amount of capacity required to meet the requirements of PURA §39.904
pursuant to subsection (h) of this section.
(18)
[
(19)
Retail entity--Municipally-owned
utilities, generation and transmission cooperatives or distribution cooperatives
that offer customer choice, retail electric providers (REPs), and investor-owned
utilities that have not unbundled pursuant to PURA Chapter 39.
(20)
[
(21)
[
(d)
Renewable energy credits trading program (trading program).
Renewable energy credits may be generated, transferred, and retired by renewable
energy power generators
certified pursuant to subsection (n) of this
section, retail entities,
[
(1)
The program administrator shall apportion
an RPS
[
(2)
A power generating company may participate in the program
and may generate RECs and buy or sell RECs as set forth in subsection (j)
of this section.
(3)
RECs shall be credited on an energy basis as set forth
in subsection (j) of this section.
(4)
Municipally-owned utilities and distribution cooperatives
that do not offer customer choice
have no RPS requirement
[
(5)
Except where specifically stated, the provisions of this
section shall apply uniformly to all participants in the trading program.
(e)
Facilities eligible for producing RECs in the renewable
energy credits trading program. For a renewable facility to be eligible to
produce RECs in the trading program it must be either a new facility or a
small producer as defined in subsection (c) of this section and must also
meet the requirements of this subsection
.
[
(1)
A renewable energy resource must not be ineligible under
subsection (f) of this section and must register pursuant to subsection (n)
of this section
.
[
[
(2)
[
(3)
[
(4)
[
(5)
[
(f)
Facilities not eligible for producing RECs in the renewable
energy credits trading program. A renewable facility is not eligible to produce
RECs in the trading program if it is:
(1)
A renewable energy capacity addition associated with an
emissions reductions project described in Health and Safety Code §382.05193,
that is used to satisfy the permit requirements in Health and Safety Code §382.0519;
(2)
An existing facility that is not a small producer as defined
in subsection (c) of this section; or
(3)
A
[
(4)
A facility built with the assistance
of a federal grant that was given for the purpose of developing that particular
facility as a renewable energy demonstration project.
(g)
Responsibilities of program administrator.
The
[
(1)
Create accounts that track RECs
or compliance premiums
for each participant in the trading program;
(2)
Award RECs
or compliance premiums
to registered
renewable energy facilities on a quarterly basis based on verified meter reads;
(3)
Award
[
(4)
Annually
record the retirement of RECs or compliance
premiums
[
(5)
Retire RECs at the end of each REC's three-year life;
(6)
Maintain public information on its website that provides
trading program information to interested buyers and sellers of RECs;
(7)
Create an exchange procedure where persons may purchase
and sell RECs
or compliance premiums
. The exchange shall ensure
the anonymity of persons purchasing or selling RECs
or compliance premiums
. The program administrator may delegate this function to an independent
third party
, subject to commission approval
[
(8)
Make public each month the total energy sales of
retail entities
[
(9)
Perform audits of generators participating in the trading
program to verify accuracy of metered production data;
(10)
Allocate the
RPS requirement
[
(11)
Submit an annual report to the commission.
The
[
(A)
the amount of existing and new renewable energy capacity
in MW installed in the state by technology type, the owner/operator of each
facility, the date each facility began to produce energy, the amount of energy
generated in megawatt-hours (MWh) each quarter for all capacity participating
in the trading program or that was retired from service; and
(B)
a listing of all
retail entities
[
(h)
Allocation of
RPS
[
(1)
The total statewide
RPS
[
(A)
1,400
[
(B)
1,400
[
(C)
2,392
[
(D)
2,392
[
(E)
3,384
[
(F)
3,384
[
(G)
4,376
[
(H)
4,376 MW of new resources in
2013;
(I)
5,000 MW of new resources in
2014; and
(J)
[
(2)
The final
RPS allocation
[
(A)
Each
retail entity's
[
(B)
The adjusted
RPS allocation
[
(C)
Each
retail entity's
[
(3)
Concurrent with determining
final individual RPS allocations
[
(i)
Nomination and
award
[
(1)
A REP, municipally-owned utility, G&T cooperative,
distribution cooperative, or an affiliate of a REP, municipally-owned utility,
or distribution cooperative, may apply offsets to meet all or a portion of
its renewable energy purchase requirement, as calculated in subsection (h)
of this section, only if those offsets
were
[
(2)
The
program administrator shall award offsets consistent
with the commission's actions to verify
[
(3)
REC offsets shall be equal to the average annual MWh output
of an existing resource for the years 1991-2000 or the entire life of the
existing resource, whichever is less.
(4)
REC offsets qualify for use in a compliance period under
subsection (h) of this section only to the extent that:
(A)
The resource producing the REC offset has continuously
since September 1, 1999 been owned by or its output has been committed under
contract to a utility, municipally-owned utility, or cooperative nominating
the resource under paragraph (1) of this subsection or, if the resource has
been committed under a contract that expired after September 1, 1999 and before
January 1, 2002, it is owned by or its output
was
[
(B)
The facility producing the REC offsets is operated and
producing energy during the compliance period in a manner consistent with
historic practice.
(5)
If the production
of energy
from a facility
that is eligible for an award of REC offsets
[
(6)
REC offsets shall not be traded.
(j)
Calculation of capacity conversion factor. The capacity
conversion factor used by the program administrator to allocate credits to
retail entities
[
(1)
Reflect actual generator performance
data associated with all renewable resources in the trading program for the
previous two years;
(2)
Be based on all renewable resources
in the trading program for which at least 12 months of performance data are
available;
(3)
Represent a weighted average
of generator performance; and
(4)
Use all valid performance data
that is available for each renewable resource, excluding data for testing
periods prior to commercial operation.
[
[
[(A)
be based on all renewable energy resources in the trading
program for which at least 12 months of performance data is available;]
[(B)
represent a weighted average of generator performance;]
[(C)
use all valid performance data that is available for each
renewable resource; and]
[(D)
ensure that the renewable capacity goals are attained.]
(k)
Production
,
[
(1)
The
[
(2)
The transfer of RECs between parties shall be effective
only when the transfer is recorded by the program administrator.
(3)
The program administrator shall require that RECs be adequately
identified prior to recording a transfer and shall issue an acknowledgement
of the transaction to parties upon provision of adequate information. At a
minimum, the following information shall be provided:
(A)
identification of the parties;
(B)
REC serial number, REC issue date, and the renewable resource
that produced the REC;
(C)
the number of RECs to be transferred; and
(D)
the transaction date.
(4)
A
retail entity
[
(5)
On or after each April 1, the program administrator will
retire RECs that have not been retired by
retail entities
[
(6)
The program administrator may establish a procedure to
ensure that the award, transfer, and retirement of credits are accurately
recorded.
(7)
The issue date of RECs created
by a renewable energy resource shall coincide with the beginning of the compliance
year in which the credits are generated. All RECs shall have a life of three
compliance periods, after which the program administrator will retire them
from the trading program. RECs that have exceeded their life shall not be
used to satisfy an RPS requirement.
(8)
Each REC that is not used in
the year of its creation may be banked and is valid for the next two compliance
periods.
(l)
Target for renewable technologies
other than wind power. In order to meet the target of at least 500 MW of the
total installed renewable capacity after September 1, 2005, coming from a
renewable energy technology other than a source using wind energy as set forth
in subsection (a)(1) of this section, the program administrator shall award
compliance premiums to certified REC generators other than those powered by
wind that were installed and certified by the commission pursuant to subsection
(n) of this section after September 1, 2005. A compliance premium is created
in conjunction with a REC.
(1)
Compliance premiums shall be awarded as follows:
(A)
For eligible non-wind renewable technologies,
one compliance premium shall be awarded for each REC awarded; and
(B)
For eligible non-wind renewable technologies
that have no air emissions, two compliance premiums shall be awarded for each
REC awarded.
(2)
Except as provided in this subsection, the award,
retirement, trade, and registration of compliance premiums shall follow the
requirements of subsections (k) and (m) of this section.
(3)
A compliance premium may be used by any entity
toward its RPS requirement pursuant to subsection (h) of this section.
(4)
The program administrator shall increase the
statewide RPS requirement calculated for each compliance period pursuant to
subsection (h)(1) of this section by the number of compliance premiums retired
during the previous compliance period.
(m)
[
(1)
By January 31, the program administrator will notify each
retail entity
[
(2)
By March 31, each
retail entity shall
[
(3)
The program administrator may request the commission to
adjust the deadlines set forth in this section if changes to the ERCOT settlement
calendar or other factors affect the availability of reliable retail sales
data.
[
[(1)
The first compliance period shall begin on January 1,
2002 and there will be 18 consecutive compliance periods. Early banking of
RECs is permissible and may commence no earlier than July 1, 2001. The program's
first settlement period shall take place during the first quarter of 2003.]
[(2)
A competitive retailer may incur a deficit allowance equal
to 10% of its REC requirement in 2002 and 2003 (the first two compliance periods
of the program). This 10% deficit allowance shall not apply to entities that
initiate customer choice after 2003. During the first settlement period, each
competitive retailer will be subject to a penalty for any REC shortfall that
is greater than 10% of its REC requirement under subsection (h) of this section.
During the second settlement period, each competitive retailer will be subject
to the penalty process for any REC shortfall greater than 10% of the second
year REC allocation. All competitive retailers incurring a 10% deficit pursuant
to this subsection must make up the amount of RECs associated with the deficit
in the next compliance period.]
[(3)
The issue date of RECs created by a renewable energy resource
shall coincide with the beginning of the compliance year in which the credits
are generated. All RECs shall have a life of three compliance periods, after
which the program administrator will retire them from the trading program.]
[(4)
Each REC that is not used in the year of its creation
may be banked and is valid for the next two compliance years.]
[(5)
A competitive retailer may meet its renewable energy requirements
for a compliance period with RECs issued in or prior to that compliance period
which have not been retired.]
(n)
Certification
[
(1)
The designated representative of the generating facility
shall file an application with the commission on a form approved by the commission
for each renewable energy generation facility. At a minimum, the application
shall include the location, owner, technology, and rated capacity of the facility
and shall demonstrate that the facility meets the resource eligibility criteria
in subsection (e) of this section.
Any subsequent changes to the information
in the application shall be filed with the commission within 30 days of such
changes.
(2)
No later than 30 days after the designated representative
files the certification form with the commission, the commission shall inform
both the program administrator and the designated representative whether the
renewable facility has met the certification requirements. At that time, the
commission shall either certify the renewable facility as eligible to receive
[
(3)
Upon receiving notice of certification of new facilities,
the program administrator shall create an REC account for the designated representative
of the renewable resource.
(4)
The commission
or program administrator
may
make on-site visits to any certified
facility, and the commission shall
[
(5)
A decertified renewable generator may not be awarded RECs.
However, any RECs awarded by the program administrator and transferred to
a
retail entity
[
(o)
Penalties and enforcement. If by April 1 of the year following
a compliance year
the program administrator determines that a real entity
[
[
[
[
[
[
(p)
Microgenerators and REC aggregators.
A REC aggregator may manage the participation of multiple microgenerators
in the REC trading program. The program administrator shall assign to the
REC aggregator all RECs accrued by the microgenerators who are under a REC
management contract with the REC aggregator.
(1)
The microgenerator's units shall be installed
by a technician who is currently certified either by the unit's manufacturer
or by a recognized industry certification organization.
(2)
Notwithstanding subsection (e)(4) of this section,
a REC aggregator may use either of the following methods for reporting generation
to the program administrator, as long as the same method is used for each
microgenerator in an aggregation unit, as defined by the REC aggregator. A
REC aggregator may have more than one aggregation and may choose either method
for each aggregation unit.
(A)
A generating unit may have a meter that transmits
actual generation data to the program administrator using protocols and procedures
determined by the program administrator. Such protocols and procedures shall
require that actual data be collected and transmitted within a reasonable
time. REC aggregators using this method shall be awarded one REC for every
MWh generated.
(B)
The REC aggregator may provide the program administrator
with sufficient information for the program administrator to estimate with
reasonable accuracy the output of each unit, based on known or observed information
that correlates closely with the generation output. REC aggregators using
this method shall be awarded one REC for every 1.25 MWh generated. After installing
the unit, the certified technician shall provide the microgenerator, the REC
aggregator, and the program administrator the information required by the
program administrator pursuant to this paragraph (2) of this subsection.
(3)
REC aggregators shall register with the commission
and the program administrator and also register to participate in the REC
trading program.
(4)
A microgenerator participating in the REC trading
program individually without the assistance of a REC aggregator shall comply
with the requirements of this subsection.
(5)
All microgenerator units that are connected
to the grid or that are installed with the capability of connecting to the
grid shall comply with the applicable requirements of §25.211 and §25.212,
of this title (relating to Transmission and Distribution Applicable to all
Electric Utilities).
[
[
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 29, 2007.
TRD-200700232
Adriana A. Gonzales
Rules Coordinator
Public Utility Commission of Texas
Earliest possible date of adoption: March 11, 2007
For further information, please call: (512) 936-7223
Subchapter J. COSTS, RATES AND TARIFFS
purpose
] of
this section
are:
[
is
]
an additional 2,000 megawatts (MW) of generating capacity from
renewable energy technologies is installed in Texas by 2009 pursuant to the
Public Utility Regulatory Act (PURA) §39.904,
]
establish
]
a renewable energy credits trading program
by which the renewable energy
requirements established by the Public Utility Regulatory Act (PURA) §39.904(a)
may be achieved
[
that would ensure that the new renewable energy
capacity is built
] in the most efficient and economical manner
;
[
,
]
,
]
,
]
respond to customers'
expressed preferences for renewable resources by ensuring
] that all
customers have access to providers of energy generated by renewable energy
resources pursuant to PURA §39.101(b)(3)[
, and to ensure that the
cumulative installed renewable capacity in Texas will be at least 2,880 MW
by January 1, 2009
].
competitive retailers
] as defined in subsection
(c) of this section. [
This section shall not apply to an electric utility
subject to PURA §39.102(c) until the expiration of the utility's rate
freeze period.
]
(1)
Competitive retailer--A municipally-owned
utility, generation and transmission cooperative (G&T), or distribution
cooperative that offers customer choice in the restructured competitive electric
power market in Texas or a retail electric provider (REP) as defined in §25.5
of this title.]
(2)
] Compliance period--A calendar
year beginning January 1 and ending December 31 of each year in which renewable
energy credits are required of a
retail entity
[
competitive
retailer
].
(4)
Early banking--Awarding renewable
energy credits (RECs) to generators for sale in the trading program prior
to the program's first compliance period.]
(5)
] Existing facilities--Renewable
energy generators placed in service before September 1, 1999.
(6)
] Generation offset technology--Any
renewable technology that reduces the demand for electricity at a site where
a customer consumes electricity. An example of this technology is solar water
heating.
(10)
] REC offset (offset)--An REC
offset represents one
megawatt-hour (MWh)
[
MWh
] of
renewable energy from an existing facility that
is not eligible to earn
renewable energy credits or compliance premiums
[
may be used in
place of an REC to meet a renewable energy requirement imposed under this
section. REC offsets may not be traded, shall be calculated as set forth in
subsection (i) of this section, and shall be applied as set forth in subsection
(h) of this section
].
(11)
] Renewable energy credit (REC
or credit)--
A
[
An
] REC represents one
MWh
[
megawatt hour (MWh)
] of renewable energy that is physically metered
and verified in Texas and meets the requirements set forth in subsection (e)
of this section.
(12)
] Renewable energy credit account
(REC account)--An account maintained by the renewable energy credits trading
program administrator for the purpose of tracking the production, sale, transfer,
purchase, and retirement of RECs
or compliance premiums
by a program
participant.
(13)
] Renewable energy credits
trading program (trading program)--The process of awarding, trading, tracking,
and submitting RECs
or compliance premiums
as a means of meeting
the renewable energy requirements set out in subsection (d) of this section.
(14)
] Renewable energy resource
(renewable resource)--A resource that produces energy derived from renewable
energy technologies.
(15)
] Renewable energy technology--Any
technology that exclusively relies on an energy source that is naturally regenerated
over a short time and derived directly from the sun, indirectly from the sun,
or from moving water or other natural movements and mechanisms of the environment.
Renewable energy technologies include those that rely on energy derived directly
from the sun, on wind, geothermal, hydroelectric, wave, or tidal energy, or
on biomass or biomass-based waste products, including landfill gas. A renewable
energy technology does not rely on energy resources derived from fossil fuels,
waste products from fossil fuels, or waste products from inorganic sources.
(16)
] Repowering--Modernizing or
upgrading an existing facility in order to increase its capacity or efficiency.
(17)
] Settlement period--The first
calendar quarter following a compliance period in which the settlement process
for that compliance year takes place.
(18)
] Small producer--A renewable
resource that is less than
ten
[
two
] megawatts (MW)
in size.
competitive retailers,
] and other
market participants as set forth in this section.
a renewable resource
] requirement among all
retail entities
[
competitive retailers
] as a percentage of the retail sales of each
retail entity
[
competitive retailer
] as set forth in subsection
(h) of this section. Each
retail entity
[
competitive retailer
] shall be responsible for retiring sufficient RECs as set forth in
subsections (h) and (k) of this section to comply with this section. The requirement
to
retire RECs to comply with
[
purchase RECS pursuant to
]
this section becomes effective on the date
a retail entity
[
each competitive retailer
] begins serving retail electric customers
in Texas
or, for an electric utility, as specified by law
.
are not obligated to purchase RECs
]. However, regardless of whether
the municipally-owned utility or distribution cooperative offers customer
choice, a municipally-owned utility or distribution cooperative possessing
renewable resources that meet the requirements of subsection (e) of this section
may sell RECs generated by such a resource to
retail entities
[
competitive retailers
] as set forth in subsection (j) of this section.
:
]
;
]
(2)
The facility's above-market
costs must not be included in the rates of any utility, municipally-owned
utility, or distribution cooperative through base rates, a power cost recovery
factor (PCRF), stranded cost recovery mechanism, or any other fixed or variable
rate element charged to end users;]
(3)
] For a renewable energy technology
that requires fossil fuel, the facility's use of fossil fuel must not exceed
2.0% of the total annual fuel input on a British thermal unit (BTU) or equivalent
basis
.
[
;
]
(4)
] The output of the facility
must be readily capable of being physically metered and verified in Texas
by the program administrator. Energy from a renewable facility that is delivered
into a transmission system where it is commingled with electricity from non-renewable
resources
before being metered
can not be verified as delivered
to Texas customers. A facility is not ineligible by virtue of the fact that
the facility is a generation-offset, off-grid, or on-site distributed renewable
facility if it otherwise meets the requirements of this section
.
[
; and
]
(5)
] For a municipally owned utility
operating a gas distribution system, any production or acquisition of landfill
gas that is directly supplied to the gas distribution system is eligible to
produce RECs based upon the conversion of the thermal energy in BTUs to electric
energy in kWh using for the conversion factor the systemwide average heat
rate of the gas-fired units of the combined utility's electric system as measured
in BTUs per kWh.
(6)
] For industry-standard thermal
technologies, the RECs can be earned only on the renewable portion of energy
production. Furthermore, the contribution toward statewide renewable capacity
megawatt goals from such facilities
shall
[
would
] be
equal to the fraction of the facility's annual MWh energy output from renewable
fuel multiplied by the facility's nameplate MW capacity.
An existing
] fossil
fueled
generating
plant that is repowered to use a renewable fuel
, unless
the plant is a small producer; or
[
.
]
No later than June 1, 2000, the
] commission shall
appoint
[
approve
] an independent entity to serve as the trading program administrator.
At a minimum, the program administrator shall perform the following functions:
Assign
] offsets to
retail
entities
[
competitive retailers
] on an annual basis based
on a nomination submitted by the
retail entity
[
competitive
retailer
] pursuant to subsection
(i)
[
(n)
] of this
section;
retire RECs
] that each
retail entity submits
[
competitive retailer submits to meet its renewable energy requirement
];
. The commission
shall approve any such delegation
];
competitive retailers
] in Texas for the
previous month;
renewable
energy responsibility
] to each
retail entity
[
competitive
retailer
] in accordance with subsection (h) of this section; and
Beginning with the program's first compliance period, the
] program administrator
shall submit a report to the commission on or before
May
[
April
] 15 of each calendar year. The report shall contain information
pertaining to renewable energy power generators and
retail entities
[
competitive retailers
]. At a minimum, the report shall contain:
competitive
retailers
] participating in the trading program, each
retail entity's
RPS
[
competitive retailer's renewable energy credit
] requirement,
the number of offsets used by each
retail entity
[
competitive
retailer
], the number of
RECs
[
credits
] retired
by each
retail entity
[
competitive retailer
],
the number of compliance premiums retired by each retail entity,
a listing
of all
retail entities
[
competitive retailers
] that
were in compliance with the
RPS
[
REC
] requirement, a
listing of all
retail entities
[
competitive retailers
]
that failed to
comply with the RPS
[
retire sufficient REC
] requirement, and the deficiency of each
retail entity
[
competitive retailer
] that failed to retire sufficient RECs
or
compliance premiums
to meet its
RPS
[
REC
] requirement.
REC purchase
]
requirement to
retail entities
[
competitive retailers
].
The program administrator shall allocate
RPS
[
REC
] requirements
among
retail entities
[
competitive retailers
]. Any renewable
capacity that is retired before January 1,
2015
[
2009
]
or any capacity shortfalls that arise due to purchases of RECs from out-of-state
facilities shall be replaced and incorporated into the allocation methodology
set forth in this subsection. Any changes to the allocation methodology to
reflect replacement capacity shall occur two compliance periods after
the facility is
[
which the facility was
] retired or
the
capacity shortfall
occurs
[
occurred
]. The
program administrator shall use the following methodology to determine the
total annual
RPS
[
REC
] requirement for a given year
and the final
RPS allocation
[
REC requirement
] for individual
retail entities
[
competitive retailers
]:
REC
] requirement
for each compliance period shall be calculated in terms of MWh and shall be
equal to the
applicable capacity requirement set forth in this paragraph
[
renewable capacity target
] multiplied by 8,760 hours per
year, multiplied by the appropriate capacity conversion factor set forth in
subsection (j) of this section. The renewable energy capacity
requirements
[
targets
] for the compliance period beginning January 1,
of the year indicated shall be:
400
] MW of new resources in
2006
[
2002
];
400
] MW of new resources in
2007
[
2003
];
850
] MW of new resources in
2008
[
2004
];
850
] MW of new resources in
2009
[
2005
];
1,400
] MW of new resources
in
2010
[
2006
];
1,400
] MW of new resources
in
2011
[
2007
];
2,000
] MW of new resources
in
2012;
[
2008; and
]
(H)
]
5,000
[
2,000
] MW of new resources
for each year after 2014
[
in 2009
through 2019
].
REC requirement
] for an individual
retail entity
[
competitive retailer
] for a compliance period shall be calculated as follows:
competitive retailer's
] preliminary
RPS allocation
[
REC requirement
]
is determined by dividing its total retail energy sales in Texas by the total
retail sales in Texas of all
retail entities
[
competitive
retailers
], and multiplying that percentage by the total statewide
RPS
[
REC
] requirement for that compliance period.
REC requirement
] for each
retail entity
[
competitive retailer
]
that is entitled to an offset is determined by reducing its preliminary
RPS allocation
[
REC requirement
] by the offsets to which
it qualifies, as determined under subsection (i) of this section, with the
maximum reduction equal to the
retail entity's
[
competitive
retailer's
] preliminary
RPS allocation
[
REC requirement
]. The total reduction for all
retail entities
[
competitive
retailers
] is equal to the total usable offsets for that compliance
period.
competitive retailer's
] final
RPS allocation
[
REC requirement
] for a
compliance period shall be increased to recapture the total usable offsets
calculated under subparagraph (B) of this paragraph. The additional
RPS allocation
[
REC requirement
] shall be calculated by dividing
the
retail entity's
[
competitive retailer's
] preliminary
RPS allocation
[
REC requirement
] by the total preliminary
RPS allocation
[
REC requirement
] of all
retail entities
[
competitive retailers
]. This fraction shall be multiplied
by the total usable offsets for that compliance period and this amount shall
be added to the
retail entity's
[
competitive retailer's
]
adjusted
RPS allocation
[
REC requirement
] to produce
the
retail entity's
[
competitive retailer's
] final
RPS allocation
[
REC requirement
] for the compliance period.
competitive retailers' final REC requirements
] for the
current compliance period in accordance with this subsection, the
program
administrator
[
Program Administrator
] shall recalculate the
final
RPS allocations
[
REC requirements
] for the previous
compliance periods, taking into account corrections to retail sales resulting
from resettlements. The difference between a
retail entity's
[
competitive retailer's
] corrected final
RPS allocation
[
REC requirement
] and its original final
RPS allocation
[
REC requirement
] for the previous compliance periods shall be added
to or subtracted from the
retail entity's
[
retailer's
]
final
RPS allocation
[
REC requirement
] for the current
compliance period.
calculation
]
of REC offsets.
are
] nominated
in a filing with the commission by June 1, 2001. [
A G&T may nominate
the combined offsets for itself and its member distribution cooperatives upon
the presentation of a resolution by its Board authorizing it to do so.
]
commission shall verify
any
] designations of REC offsets and
with this section
[
notify the program administrator of its determination by December 31, 2001
].
has been
] committed under contract to a utility, municipally-owned utility,
or cooperative on January 1, 2002; and
producing the REC
offset energy
] ceases for any reason,
or if the power purchase
agreement with the facility's owner (or successor in interest) that is referred
to in paragraph (4)(A) of this subsection is no longer in effect, the retail
entity shall
[
the competitive retailer may
] no longer
be awarded REC offsets related to the facility
[
claim the REC offset
against its REC requirement
].
competitive retailers
] shall be calculated
during the fourth quarter of each odd numbered compliance year. The capacity
conversion factor shall
[
as follows
]:
(1)
The capacity conversion factor
(CCF) shall be administratively set at 35% for 2002 and 2003, the first two
compliance periods of the program.]
(2)
During the fourth quarter
of the second compliance year (2003), the CCF shall be readjusted to reflect
actual generator performance data associated with all renewable resources
in the trading program. The program administrator shall adjust the CCF every
two years thereafter and shall:]
and
] transfer
,
and expiration
of RECs. The program administrator shall administer a
trading program for renewable energy credits in accordance with the requirements
of this subsection.
A REC will be awarded to the
]
owner of a renewable resource
shall earn one REC
when a MWh is
metered at that renewable resource. [
A generator producing 0.5 MWh or
greater as its last unit generated should be awarded one REC on a quarterly
basis.
] The program administrator shall record the
energy in
[
amount of
] metered MWh and credit the REC account of the renewable resource
that generated the energy on a quarterly basis.
Quarterly production
shall be rounded to the nearest whole MWh, with fractions of 0.5 MWh or greater
rounded up.
competitive retailer
]
shall surrender RECs to the program administrator for retirement from the
market in order to meet its
RPS requirement
[
REC allocation
] for a compliance period. The program administrator will document all
REC retirements annually.
competitive retailers
] and have reached the end of their three-year
life.
(l)
] Settlement process.
The
[
Beginning in January 2003, the
] first quarter following
the compliance period shall be the settlement period during which the following
actions shall occur:
competitive retailer
] of its total
RPS
[
REC
] requirement for the previous compliance period as
determined pursuant to subsection (h) of this section.
competitive retailer must
] submit credits
or compliance premiums
to the program administrator from its account equivalent to its
RPS
[
REC
] requirement for the previous compliance period.
If the
retail entity does not submit sufficient
[
competitive
retailer has insufficient
] credits
or compliance premiums
[
in its account
] to satisfy its obligation, [
and this shortfall
exceeds the applicable deficit allowance as set forth in subsection (m)(2)
of this section,
] the
retail entity
[
competitive retailer
] is subject to the penalty provisions in subsection (o) of this section.
(m)
Trading program compliance
cycle.]
Registration and certification
] of renewable energy facilities. The commission shall [
register
and
] certify all renewable facilities that will produce either REC offsets
,
[
or
] RECs
, or compliance premiums
for sale in
the trading program. To be awarded RECs
, or
REC offsets,
or compliance premiums,
a power generator must complete the
certification
[
registration
] process described in this subsection. The
program administrator shall not award offsets
, RECs, or compliance premiums
[
or credits
] for energy produced by a power generator before
it has been certified by the commission.
either
] RECs
,
[
or
] offsets,
or compliance
premiums,
or describe any insufficiencies to be remedied. If the application
is contested, the time for acting is extended
for such time as is necessary
for commission action
[
by 30 days
].
unit of a renewable energy resource and may
] decertify
any
facility
[
unit
] if it is not in compliance with
the provisions of this
section
[
subsection
].
competitive retailer
] prior to the
decertification remain valid.
it is determined that a competitive retailer with an allocated
REC purchase requirement
] has insufficient credits to satisfy its allocation,
the
retail entity
[
competitive retailer
] shall be subject
to
an administrative penalty of $50 per MWh pursuant to PURA §15.023
[
the administrative penalty provisions of PURA §15.023 as
specified in this subsection
].
(1)
Except as provided in paragraph
(4) of this subsection, a penalty will be assessed for that portion of the
deficient credits.]
(2)
The penalty shall be the lesser
of $50 per MWh. or, upon presentation of suitable evidence of market value
by the competitive retailer, 200% of the average market value of credits for
that compliance period.]
(3)
There will be no obligation
on the competitive retailer to purchase RECs for deficits, whether or not
the deficit was within or was not within the competitive retailer's reasonable
control, except as set forth in subsection (m)(2) of this section.]
(4)
In the event that the commission
determines that events beyond the reasonable control of a competitive retailer
prevented it from meeting its REC requirement there will be no penalty assessed.]
(5)
A party is responsible for
conducting sufficient advance planning to acquire its allotment of RECs. Failure
of the spot or short-term market to supply a party with the allocated number
of RECs shall not constitute an event outside the competitive retailer's reasonable
control. Events or circumstances that are outside of a party's reasonable
control may include weather-related damage, mechanical failure, lack of transmission
capacity or availability, strikes, lockouts, actions of a governmental authority
that adversely effect the generation, transmission, or distribution of renewable
energy from an eligible resource under contract to a purchaser.]
(p)
Renewable resources eligible
for sale in the Texas wholesale and retail markets. Any energy produced by
a renewable resource may be bought and sold in the Texas wholesale market
or to retail customers in Texas and marketed as renewable energy if it is
generated from a resource that meets the definition in subsection (c)(14)
of this section.]
(q)
Periodic review. The commission
shall periodically assess the effectiveness of the energy-based credits trading
program in this section to maximize the energy output from the new capacity
additions and ensure that the goal for renewable energy is achieved in the
most economically-efficient manner. If the energy-based trading program is
not effective, performance standards will be designed to ensure that the cumulative
installed renewable capacity in Texas meets the requirements of PURA §39.904.]
Chapter 26.
SUBSTANTIVE RULES APPLICABLE TO TELECOMMUNICATIONS SERVICE PROVIDERS