80(R) HB 3693 - Engrossed version

BILL=20 ANALYSIS

Senate Research=20 Center &= nbsp; &n= bsp; &nb= sp; &nbs= p; = ; = &= nbsp; &n= bsp; =20 H.B. 3693

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AUTHOR'S / = SPONSOR'S=20 STATEMENT OF INTENT

The Utilities Code = requires=20 certain activities by electric utilities to achieve energy efficiency = and=20 conservation in Texas.

Continued growth in = peak demand=20 for electricity in Texas, particularly in the short term, could result = in=20 electric generation shortages. Texas=92 population is growing at = nearly two=20 percent per year and the economy is expanding at an even greater rate, = nearly=20 four percent annually. This is causing a growth in demand for=20 electricity. The Electric Reliability Council of Texas (ERCOT) = reports=20 that peak demand on the ERCOT system increased by about 2.5 percent per = year=20 between 1990 and 2006. The current forecast is for peak demand to = increase=20 by 2.3 percent annually from 2007 through 2012. ERCOT has = established a=20 reserve margin of electric generation capacity to provide a cushion for = peak=20 demand times. However, with continued growth in Texas, it is = possible that=20 peak demand could exceed the margin and possibly result in = blackouts.

H.B. 3693 proposes = energy=20 efficiency mechanisms intended to provide near-term reductions in = consumption=20 and demand that should protect the reserve margin and avoid crises = during the=20 peak. H.B. 3693 enhances existing energy efficiency programs, = enables more=20 customer demand management, updates building energy codes, and requires = state=20 agencies to purchase more efficient equipment and appliances. = These=20 measures should result in reductions in electricity consumption = sufficient to=20 avoid short-term peak demand problems and also avoid some new costs for = power=20 plants and power lines.

RULEMAKING=20 AUTHORITY

Rulemaking=20 authority is expressly granted to the Texas Building and Procurement = Commission in SECTION 7 (Section 2165.058, Government Code) of this = bill.

Rulemaking authority = is expressly=20 granted to the Texas Department of Housing and Community Affairs in = SECTION 9=20 (Section 2306.187, Government Code) of this bill.

Rulemaking authority = is expressly=20 granted to the State Energy Conservation Office in SECTION 10 (Section = 388.003,=20 Health and Safety Code) of this bill.

Rulemaking authority = previously=20 granted to the Public Utility Commission is modified in SECTION 21 = (Section=20 39.905, Utilities Code) of this bill.

Rulemaking authority = is expressly=20 granted to a governing body of a municipality in SECTION 22 (Section = 39.9051,=20 Utilities Code) of this bill.

Rulemaking authority = is expressly=20 granted to the Public Utility Commission in SECTION 22 (Sections = 39.9051,=20 39.9053 and 39.914, Utilities Code) of this bill.

SECTION = BY SECTION=20 ANALYSIS

[While the statutory = reference in=20 this bill is to the Texas Natural Resource Conservation Commission = (TNRCC), the=20 following amendments affect the Texas Commission on Environmental = Quality, as=20 the successor agency to TNRCC.]

SECTION 1. = Amends=20 Subchapter Z, Chapter 44, Education Code, by adding Section 44.902, as=20 follows:

Sec.=20 44.902. GOAL TO REDUCE CONSUMPTION OF ELECTRIC ENERGY. = Requires the=20 board of trustees of a school district to establish a goal to reduce the = school=20 district's annual electric consumption by five percent each state fiscal = year=20 for six years beginning September 1, 2007.

SECTION 2. = Amends=20 Subchapter Z, Chapter 44, Education Code, by adding Section 44.903, as=20 follows:

Sec.=20 44.903. ENERGY-EFFICIENT LIGHT BULBS IN INSTRUCTIONAL = FACILITIES. =20 (a) Defines "instructional facility."

(b) =20 Requires a school district to purchase for use in each type of light = fixture in=20 an instructional facility the commercially available model of light bulb = that=20 meets certain requirements.

SECTION 3. = Amends=20 Subchapter Z, Chapter 51, Education Code, by adding Section 51.9271, as=20 follows:

Sec.=20 51.9271. ENERGY-EFFICIENT LIGHT BULBS IN EDUCATIONAL AND HOUSING=20 FACILITIES. (a) Defines "housing facility."

(b) =20 Requires an institution of higher education to purchase for use in each = type of=20 light fixture in an educational or housing facility the commercially = available=20 model of light bulb that meets certain requirements.

SECTION 4. = Amends Section=20 2155.068(d), Government Code, to require the Texas Building and = Procurement=20 Commission (commission) to develop and update a list of equipment and = appliances=20 that meet the energy efficiency standards provided by Section 2158.301 = and to=20 assist state agencies in selecting products under Section 2158.301, as=20 appropriate.

SECTION 5. = Amends Chapter=20 2158, Government Code, by adding Subchapter F, as follows:

SUBCHAPTER F. =20 ENERGY AND EFFICIENCY=20 STANDARDS &nbs= p; = ; = =20 FOR EQUIPMENT AND APPLIANCES

Sec.=20 2158.301. ENERGY CONSERVATION. Requires a state agency, if = available=20 and cost-effective, to purchase equipment and appliances for state use = that meet=20 or exceed certain standards.

SECTION 6. = Amends=20 Subchapter A, Chapter 2165, Government Code, by adding Section 2165.008, = as=20 follows:

Sec.=20 2165.008. ENERGY-EFFICIENT LIGHT BULBS IN STATE BUILDINGS. = Requires=20 a state agency or institution of higher education in charge and control = of a=20 state building to purchase for use in each type of light fixture in the = building=20 the commercially available light bulb that meets certain = requirements.

SECTION 7. = Amends=20 Subchapter B, Chapter 2165, Government Code, by adding Section 2165.058, = as=20 follows:

Sec.=20 2165.058. VENDING MACHINES; ENERGY-SAVING DEVICE REQUIRED. = (a) =20 Sets forth certain vending machines to which this section does not = apply.

(b) =20 Requires the commission to require an entity that owns or operates a = vending=20 machine located in a building owned or leased by the state to activate = and=20 maintain any internal energy-saving or energy-management device or = option that=20 is already part of the machine or contained in the machine.

(c) =20 Requires the commission to require the use of an external energy-saving = or=20 energy-management device for certain vending machines.

(d) =20 Provides that an entity that owns or operates a vending machine subject = to this=20 section is responsible for certain expenses related to the energy-saving = device.

(e) =20 Authorizes the commission to impose an administrative fine on an entity = that=20 operates a vending machine subject to this section in an amount not to = exceed=20 $250 a year for each machine found to be in violation of this section or = rules=20 adopted by the commission under this section.

(f) =20 Requires the commission to adopt rules relating to the specifications = for and=20 regulation of energy-saving devices required by this section.

SECTION 8. = Amends Subtitle=20 F, Title 10, Government Code, by adding Chapter 2264, as follows:

CHAPTER = 2264. =20 REQUIRED PUBLICATION AND=20 REPORTING &nbs= p; = ; = =20 BY GOVERNMENTAL ENTITIES

Sec.=20 2264.001. RECORDING AND REPORTING OF ELECTRICITY, WATER, AND = NATURAL GAS=20 CONSUMPTION. (a) Defines "governmental entity."

(b) =20 Requires a governmental entity responsible for payments for electric, = water, or=20 natural gas utility services, notwithstanding any other law, to record = in an=20 electronic repository the governmental entity's metered amount of = electricity,=20 water, or natural gas consumed for which it is responsible to pay and = the=20 aggregate costs for those utility services. Requires the = governmental=20 entity to report the recorded information on a publicly accessible = Internet=20 website with an interface designed for ease of navigation.

SECTION 9. = Amends=20 Subchapter H, Chapter 2306, Government Code, by adding Section 2306.187, = as=20 follows:

Sec.=20 2306.187. ENERGY EFFICIENCY STANDARDS FOR CERTAIN SINGLE AND = MULTIFAMILY=20 DWELLINGS. (a) Requires a newly constructed single or = multifamily=20 dwelling that is constructed with assistance awarded by the Texas = Department of=20 Housing and Community Affairs (department), including state or federal = money,=20 housing tax credits, or multifamily bond financing, to include energy=20 conservation and efficiency measures specified by the department. = Requires=20 the department by rule to establish a minimum level of energy efficiency = measures that must be included in a newly constructed single or = multi-family=20 dwelling as a condition of eligibility to receive assistance awarded by = the=20 department for housing construction. Authorizes certain measures = to be=20 adopted by the department.

(b) =20 Requires a single or multifamily dwelling to include energy conservation = and=20 efficiency measures specified by the department if certain conditions = apply.

(c) =20 Prohibits the energy conservation and efficiency measures the department = requires under Subsection (b) from being more stringent that the = measures the=20 department requires under Subsection (a).

(d) =20 Requires the department to review the measures required to meet the = energy=20 efficiency standards at least annually to determine if additional = measures are=20 desirable and to ensure that the most recent energy efficient technology = is=20 considered.

(e) =20 Provides that Subsections (a) and (b) do not apply to a single or = multifamily=20 dwelling that receives weatherization assistance money from the = department or=20 money provided under the first-time homebuyer program.

SECTION 10. = Amends Section=20 388.003, Health and Safety Code, by adding Subsections (b-1), (b-2), and = (b-3),=20 as follows:

(b-1) =20 Authorizes the State Energy Conservation Office (office) by rule to = adopt and=20 substitute in the energy code the equivalent or more stringent = provisions for=20 the provisions of the initial editions described by Subsection (a) or = (b) if the=20 office determines that such a case arises. Requires the office to=20 establish an effective date for the new provisions that is not earlier = than nine=20 months after the date of adoption. Requires the Energy Systems = Laboratory=20 at the Texas Engineering Experiment Station of the Texas A&M = University=20 System (laboratory) to submit recommendations concerning the latest = published=20 editions of the International Residential Code or the International = Energy=20 Conservation Code not later than six months after publication of new=20 editions.

(b-2) =20 Requires the office by rule to establish a procedure for allowing an = opportunity=20 for persons who have an interest in the adoption of energy efficiency = codes=20 under Subsection (b-1) to comment on a code considered for adoption, = including=20 certain persons.

(b-3) =20 Requires the laboratory to consider the comments submitted under = Subsection=20 (b-2) in developing written recommendations under Subsection (b-1)

SECTION 11. = Amends Section=20 388.005, Health and Safety Code, as follows:

Sec.=20 388.005. New heading: ENERGY EFFICIENCY PROGRAMS IN CERTAIN=20 GOVERNMENTAL ENTITIES. (a) Defines "institution of higher = education"=20 and "state agency." Makes nonsubstantive changes.

(b) =20 Requires each institution of higher education or state agency to = implement all=20 energy efficiency measures that meet the standards established for a = contract=20 for energy conservation measures under Section 302.004(b) (regarding = terms of an=20 energy savings performance contract), Local Government Code, in order to = reduce=20 electricity consumption by the existing facilities of the entity.

(c) =20 Requires each political subdivision, institution of higher education, or = state=20 agency to establish a goal to reduce the electric consumption by the = entity by=20 five percent each state fiscal year for six years, beginning September = 1,=20 2007. Deletes existing text requiring each political subdivision = to=20 establish a goal to reduce the electrical consumption by the political=20 subdivision by five percent each year for five years, beginning January = 1,=20 2002.

(d) = and (e)=20 Makes conforming changes.

(f) =20 Provides that this section does not apply to a state agency or an = institution of=20 higher education that the office determines that, before September 1, = 2007,=20 adopted a plan for conserving energy under which the agency or = institution=20 established a percentage goal for reducing the consumption of = electricity. =20 Provides that the exemption provided by this section applies only while = the=20 agency or institution has an energy conservation plan in effect and only = if the=20 agency or institution submits reports on the conservation plan each = calendar=20 quarter to the governor, the Legislative Budget Board, and the = office.

SECTION 12. = Amends Section=20 388.008, Health and Safety Code, by amending Subsections (a) and (c) and = adding=20 Subsection (d), as follows:

(a) =20 Authorizes the laboratory to develop different report formats for rating = newly=20 constructed residences from those for existing residences.

(c) =20 Authorizes the laboratory to cooperate with an industry organization or = trade=20 association for certain purposes. Deletes existing text requiring = the home=20 energy rating program to be implemented by September 1, 2002.

(d) =20 Requires the laboratory to include information on the benefits attained = from=20 this program in an annual report to the Texas Natural Resource = Conservation=20 Commission.

SECTION 13. = Amends the=20 heading to Section 74.3013, Property Code, to read as = follows:

Sec.=20 74.3013. DELIVERY OF MONEY FOR RURAL SCHOLARSHIP, ECONOMIC = DEVELOPMENT,=20 AND ENERGY EFFICIENCY ASSISTANCE.

SECTION 14. = Amends Sections=20 74.3013(a), (b), (e), (f), and (g), Property Code, as follows:

(a) =20 Authorizes a nonprofit cooperative corporation to deliver reported money = to=20 provide energy efficiency assistance to members of electric = cooperatives,=20 notwithstanding and in addition to any other provision of this chapter = or other=20 law.

(b) =20 Authorizes a nonprofit corporation to deliver the money under this = section only=20 to, among other funds, an energy efficiency assistance fund to assist = members of=20 an electric cooperative in reducing their energy consumption and = electricity=20 bills.

(e) =20 Requires the comptroller of public accounts (comptroller) to prescribe = forms and=20 procedures relating to delivery of reported money to a energy efficiency = assistance fund.

(f) =20 Deletes existing text stating the reason for the comptroller being = required to=20 adopt procedures to record the total amount of money transferred = annually is to=20 allow equitable opportunity for participation with preferences given to=20 corporations already providing similar scholarship opportunities in = other=20 states.

(g) =20 Authorizes nonprofit corporations to combine any funds, rather than only = economic development funds, from other sources with any funds, rather = than any=20 economic development funds, delivered under this section.

SECTION 15. = Amends=20 Subchapter H, Chapter 151, Tax Code, by adding Section 151.333, as = follows:

Sec.=20 151.333. ENERGY-EFFICIENT PRODUCTS. (a) Defines=20 "energy-efficient product."

(b) Sets=20 forth the energy-efficient products to which this section applies.

(c) =20 Exempts the sale of an energy-efficient product to which this section = applies=20 from the taxes imposed by this chapter (Limited Sales, Excise, and Use = Tax) if=20 the sale takes place during a certain period of time in May.

SECTION 16. = Amends=20 Subchapter A, Chapter 313, Tax Code, by adding Section 313.008, as = follows:

Sec.=20 313.008. REPORT ON COMPLIANCE WITH ENERGY-RELATED = AGREEMENTS. =20 (a) Requires the comptroller, before the beginning of each regular = session=20 of the legislature, to submit to certain elected officials a report on = each=20 agreement entered into under this chapter (Texas Economic Development = Act)=20 involving energy-related projects, including certain projects. = Requires=20 certain information to be stated in the report for each agreement.

(b) =20 Prohibits the report from including information that is made = confidential by=20 law.

(c) =20 Authorizes the comptroller to require a recipient to submit, on a form = provided=20 by the comptroller, information required to complete the report.

SECTION 17. = Amends Section=20 31.004, Utilities Code, by adding Subsection (c), to require the Public = Utility=20 Commission (PUC) to provide information to school districts regarding = how a=20 school district may finance the installation of solar electric = generation panels=20 for school district buildings.

SECTION 18. = Amends Section=20 39.002, Utilities Code, as follows:

Sec.=20 39.002. APPLICABILITY. Provides that Sections 39.9051, = 39.9052, and=20 39.914(e) apply to a municipally owned utility or an electric = cooperative.

SECTION 19. = Amends Section=20 39.107, Utilities Code, by adding Subsection (i), to set forth that it = is the=20 intent of the legislature that net metering and advanced meter data = networks be=20 deployed as rapidly as possible to allow customers to better manage = energy use=20 and control costs, and to facilitate demand response initiatives. =

SECTION 20. = Amends=20 Subchapter Z, Chapter 39, Utilities Code, by adding Section 39.9025, as=20 follows:

Sec.=20 39.9025. HOME ELECTRIC ENERGY REPORTS. Authorizes PUC to = encourage=20 retail electric providers to deliver individualized home electric energy = reports=20 to educate consumers about electric energy use and energy efficiency to = assist=20 consumers to use energy more efficiently.

SECTION 21. = Amends Section=20 39.905, Utilities Code, by amending Subsections (a), (b), (d), (e), and = (f), and=20 adding Subsections (b-1), (b-2), (b-3), (b-4), and (g), as follows:

(a) =20 Sets forth the legislative goal that electric utilities will administer = energy=20 efficiency, rather than savings, incentive programs in a market-neutral, = nondiscriminatory manner but will not offer underlying competitive=20 services. Sets forth the legislative goal that each electric = utility will=20 provide, by certain means, incentives sufficient for retail electric = providers=20 and competitive energy service providers to acquire additional = cost-effective=20 energy efficiency for residential and commercial customers equivalent to = at=20 least a certain percent of the electric utility's annual growth in = demand. =20 Sets forth the legislative goal that each electric utility in the ERCOT=20 (Electric Reliability Council of Texas) region shall use its best = efforts to=20 encourage and facilitate the involvement of the region's retail electric = providers in the delivery of efficiency programs and demand response = programs=20 under this section. Sets forth the legislative goal that retail = electric=20 providers in the ERCOT region, and electric utilities outside of the = ERCOT=20 region, shall provide customers with energy efficiency educational=20 materials. Sets forth the legislative goal that ERCOT shall = incorporate=20 into its long-range demand forecast the energy and demand savings = projected in=20 the annual report under Subsection (b-3). Makes nonsubstantive=20 changes.

(b) =20 Sets forth certain oversight, rules, and procedures that PUC is required = to=20 provide to ensure that the utilities can achieve the goal of this = section (Goal=20 for Energy Efficiency).

(b-1) =20 Prohibits the energy efficiency cost recovery factor under Subsection = (b)(1)=20 from resulting in an over-recovery of costs but authorizes this factor = to be=20 adjusted each year to change rates to enable utilities to match revenues = against=20 energy efficiency costs and any incentives to which they are = granted. =20 Requires the factor to be adjusted to reflect any over-collection or=20 under-collection of energy efficiency cost recovery revenues in previous = years.

(b-2) =20 Requires PUC to conduct a study, to be funded by electric utilities, = regarding=20 cost-effective energy efficiency in this state. Requires PUC, not = later=20 than January 15, 2009, to submit to the legislature a report containing = certain=20 information regarding PUC's findings.

(b-3) =20 Requires PUC, beginning not later than January 1, 2008, and in = consultation with=20 the office, to compute an report to ERCOT annually for a period of five = years=20 the projected energy savings and demand impacts for each entity in the = ERCOT=20 region that administers relevant programs that are reasonably = anticipated to=20 reduce electricity energy or peak demand or that serve as substitutes = for=20 electric supply.

(b-4) =20 Requires PUC and ERCOT to develop a method to account for the projected=20 efficiency impacts under Subsection (b-3) in ERCOT's annual forecasts of = future=20 capacity, demand, and reserves.

(d) =20 Requires PUC to establish a procedure for reviewing and evaluating=20 market-transformation program options described by this subsection and = other=20 options. Authorizes PUC, in evaluating program options, to = consider the=20 ability of a program option to reduce costs to customers through demand, = energy=20 savings, and relief of congestion. Authorizes utilities to choose = to=20 implement any program option approved by PUC, including certain program = options,=20 after its evaluation in order to satisfy the goal in Subsection = (a). =20 Deletes existing text requiring PUC to adopt certain = market-transformation=20 program options that the utilities may choose to implement in order to = satisfy=20 the goal in Subsection (a).

(e) =20 Authorizes an electric utility to use money approved by PUC for energy=20 efficiency programs to perform necessary energy efficiency research and=20 development, rather than for any research and development, for certain=20 purposes. Prohibits money the utility uses under this subsection = from=20 exceeding 10 percent of the greater of the amount PUC approved for = energy=20 efficiency programs in the utility's most recent full rate proceeding or = the=20 PUC-approved expenditures by the utility for energy efficiency in the = previous=20 year, rather than prohibiting money the utility uses under this = subsection from=20 exceeding 10 percent of only the amount PUC approved for energy = efficiency=20 programs in the utility's most recent full rate proceeding. Makes=20 conforming changes.

(f) =20 Deletes existing text relating to certain funding being provided under = Section=20 39.903 beginning January 1, 2006.

(g) =20 Authorizes PUC to provide for a good cause exemption to a utility's = liability=20 for an administrative penalty or other sanction if the utility fails to = meet a=20 goal for energy efficiency under this section and the utility's failure = to meet=20 the goal is caused by one or more factors outside of the utility's = control,=20 including certain factors.

SECTION 22. = Amends=20 Subchapter Z, Chapter 39, Utilities Code, by adding Sections 39.9051, = 39.9052,=20 39.9053, 39.911, 39.912, and 39.913, as follows:

Sec.=20 39.9051. ENERGY EFFICIENCY FOR MUNICIPALLY OWNED UTILITIES. =20 (a) Defines "municipally owned utility."

(b) =20 Provides that this section applies only to a municipally owned utility = that had=20 retail sales of more than 500,000 megawatt hours in 2005.

(d) =20 Requires the governing body of a municipally owned utility to provide = oversight=20 and adopt rules and procedures, as necessary, to ensure that the utility = can=20 achieve the goal of this section.

(e) =20 Requires PUC, if a municipally owned utility adopts customer choice by = decision=20 of the governing body under Chapter 40 (Competition for Municipally = Owned=20 Utilities and River Authorities), to provide oversight and adopt rules = and=20 procedures, as necessary, to ensure that the municipally owned utility = can=20 achieve the goal in this section in a market-neutral, nondiscriminatory=20 manner. Requires PUC, to the extent possible, to include existing = energy=20 efficiency programs already adopted by the municipally owned = utility.

(f) =20 Requires a municipally owned utility to report to the office, in a form = and=20 manner determined by the utility in consultation with the office, = information=20 regarding the combined effects of the energy efficiency activities of = the=20 utility, not later than September 1, 2009.

Sec.=20 39.9052. ENERGY EFFICIENCY FOR ELECTRIC COOPERATIVES. = (a) =20 Requires an electric cooperative to consider adopting and implementing = energy=20 efficiency programs that reduce the cooperative's annual growth in = demand in a=20 manner consistent with standards established in the state for other=20 utilities.

(b) =20 Requires an electric cooperative that had retail sales of more than = 500,000=20 megawatt hours in 2005 to report to the office, in a form and manner = determined=20 by the electric cooperative in consultation with the office, information = regarding the combined effects of the energy efficiency activities of = the=20 utility, not later than September 1, 2009.

Sec.=20 39.9053. ENERGY EFFICIENCY DEMONSTRATION PROJECTS FOR SOLAR = ELECTRIC=20 SYSTEM; GRANT PROGRAM. (a) Requires PUC by rule to establish = grant=20 programs for certain demonstration projects for installation of solar = electric=20 systems.

(b) Sets=20 forth requirements that a solar electric system must meet to qualify for = a grant=20 under this section.

(c) =20 Requires a demonstration project grant program established under this = section to=20 provide for full or partial payment of the cost of equipment and = installation=20 for the solar electric systems. Requires PUC to establish for each = grant=20 program a competitive bidding process for grant applicants. = Requires PUC=20 to consider the value of funding demonstration projects in different = parts of=20 this state, after considering the demographic and geographic diversity = of this=20 state.

(d) =20 Requires an applicant to meet certain requirements in order to qualify = for a=20 grant under Subsection (a)(1).

(e) =20 Requires an applicant to meet certain requirements in order to qualify = for a=20 grant under Subsection (a)(2).

(f) =20 Requires an applicant to meet certain requirements in order to qualify = for a=20 grant under Subsection (a)(3).

(g) =20 Requires PUC to issue a report to certain elected officials not later = than=20 December 1 of each even-numbered year summarizing the status of the = grant=20 programs established under Subsection (a). Requires certain = information to=20 be included in the report.

(h) =20 Provides that this section expires December 31, 2010.

Sec.=20 39.911. ALTERNATIVE FUNDING FOR ENERGY EFFICIENCY AND RENEWABLE = ENERGY=20 SYSTEMS. Requires the office, in coordination with the governor = and=20 certain appropriate state agencies, to solicit gifts, grants, and other=20 financial resources available to fund energy efficiency improvements and = renewable energy systems for public and private facilities in this = state.

Sec.=20 39.912. REPORT ON COMBINED HEATING AND POWER TECHNOLOGY. = Requires=20 PUC to study the installation and use of combined heating and power = technology=20 in this state and submit a report regarding their findings to the 81st=20 Legislature. Requires certain information to be included in the=20 report.

Sec.=20 39.913. COMBINING CERTAIN REPORTS. Authorizes PUC to combine = the=20 reports required under Sections 39.905(b-2) and 39.912.

SECTION 23. = Amends=20 Subchapter Z, Chapter 39, Utilities Code, by adding Section 39.914, as=20 follows:

Sec.=20 39.914. CREDIT FOR SURPLUS SOLAR GENERATION BY PUBLIC = SCHOOLS. =20 (a) Requires an electric utility or retail electric provider to = provide=20 for net metering and contract with an independent school district for = certain=20 purposes.

(b) =20 Requires PUC by rule, for areas of this state in which customer choice = has not=20 been introduced, to require that credits for electricity produced by a = school=20 building's solar electric generation panels reflect the value of the = electricity=20 that is made available for sale to the electric utility in accordance = with=20 federal regulations.

(c) =20 Requires independent school districts (districts) in areas in which = customer=20 choice has been introduced to sell the school buildings' surplus = electricity=20 produced to the retail electric provider that serves the district's load = at a=20 value agreed to between the district and the provider that serves the = district's=20 load. Authorizes the agreed value to be based on the clearing = price of=20 energy at the time of day that the electricity is made available to the=20 grid. Requires the independent organization identified in Section = 39.151=20 (Essential Organizations) to develop procedures so that the amount of=20 electricity purchased from a district under this section is accounted = for in=20 settling the total load served by the provider that serves the = district's=20 load. Requires a district requesting net metering services for = purposes of=20 this section to have metering devices capable of providing measurements=20 consistent with the independent organization's settlement = requirements.

(d) =20 Requires a transmission and distribution utility to make available to a = district=20 for purposes of this section metering required for services provided = under this=20 section, including certain meters. Requires the district to pay = the=20 differential cost of the metering unless the meters are provided at no=20 additional cost. Provides that Section 39.107 (Metering and = Billing=20 Services) applies to metering under this section, except as provided by = this=20 section.

(e) =20 Requires a municipally owned utility or electric cooperative to consider = and=20 complete the determinations regarding net metering service as provided = by the=20 federal Utility Regulatory Policies Act of 1978 (16 U.S.C. Section 2601 = et seq.,=20 as amended by the federal Energy Policy Act of 2005 (Pub. L. No. = 109-58)) after=20 proceedings conducted in accordance with that law. Requires a = municipally=20 owned utility or electric cooperative to report the determinations made = under=20 this subsection to the office and include certain information in that=20 report.

SECTION 24. = Amends Section=20 40.055(a), Utilities Code, to provide that the municipal governing body = or a=20 body vested with the power to manage and operate a municipally owned = utility has=20 the exclusive jurisdiction to determine the extent to which the = municipally=20 owned utility offers energy efficiency programs and how the programs are = administered by the utility, except as provided by Section = 39.9051(e).

SECTION 25. = Amends Section=20 41.055, Utilities Code, to provide that the board of directors of an = electric=20 cooperative has exclusive jurisdiction to determine the extent to which = the=20 electric cooperative offers energy efficiency programs and how the = programs are=20 administered by the electric cooperative.

SECTION 26. = Requires the=20 office to adopt rules implementing a procedures for stakeholder = participation as=20 required under Section 388.003(b-2), Health and Safety Code, as added by = this=20 Act, as soon as practicable after the effective date of this Act.

SECTION 27. = (a) Makes=20 application of the energy conservation standards for equipment and = appliances=20 under Section 2158.301, Government Code, prospective.

(b) =20 Requires the commission to develop a list of equipment and appliances = under=20 Section 2155.068, Government Code, as amended by this Act, as soon as=20 practicable after the effective date of this Act.

SECTION 28. = Makes=20 application of Section 2165.058(c), Government Code, as added by this = Act,=20 prospective.

SECTION 29. = (a) =20 Authorizes PUC to apply to a demonstration project grant program = established=20 under Section 39.9053, Utilities Code, as added by this Act, any money=20 appropriated to PUC that may be used for that purpose.

(b) =20 Authorizes PUC to solicit and accept gifts, grants, and other donations = from any=20 source to carry out the demonstration project grant program established = under=20 Section 39.9053, Utilities Code, as added by this Act.

(c) =20 Authorizes fee revenue from a retail electric provider related to the = number of=20 customers the provider gains in a given period to be appropriated for = use by PUC=20 for a demonstration project grant program under Section 39.9053, = Utilities Code,=20 as added by this Act, notwithstanding any law dedicating that fee = revenue for a=20 particular purpose and contingent on the passage and becoming law of = S.B. No.=20 482, Acts of the 80th Legislature, Regular Session, 2007, or similar = legislation=20 that enacts a provision that establishes such a fee.

(d) =20 Provides that this section expires December 31, 2010.

SECTION 30. = Makes=20 application of this Act affecting taxes prospective.

SECTION 31. = Effective date:=20 September 1, 2007.