HBA-SEB H.B. 78 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 78 By: Gallego State Affairs 2/5/1999 Introduced BACKGROUND AND PURPOSE Texas currently produces most of its electricity through the burning of fossil fuels such as coal, petroleum, and natural gas. The finite nature of these resources suggests that a transition to renewable energy resources might benefit the producers and consumers of electricity. H.B. 78 facilitates that transition by creating a credit program for electricity production from renewable resources and establishing a schedule which guides electricity producers to a more diverse resource portfolio. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Public Utility Commission in SECTION 2 (Section 34.0055, Utilities Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 34.003(c), Utilities Code, to provide that the mix of resources, rather than an appropriate and reliable mix, under Subsection (b)(4) (regarding the cost of an electric utility's integrated resource plan), must, rather than may, include a portfolio of cost-effective sources of power. SECTION 2. Amends Subchapter A, Chapter 34, Utilities Code, by adding Section 34.0055, as follows: Sec. 34.0055. RENEWABLE RESOURCES REQUIREMENT. (a) Requires the Public Utility Commission of Texas (commission), by rule, to establish a renewable generation credit program which requires each generating electric utility that sells power to another entity to submit renewable generation credits to the commission. Sets forth the amounts of the renewable generation credits. (b) Requires the commission to issue to a generating electric utility that sells power to another entity one renewable generation credit for each megawatt of power the utility generates using renewable resources. (c) Authorizes an electric utility that possesses a renewable generation credit to convey the credit to another utility that is subject to the credit program. (d) Requires the commission, by rule, to prescribe procedures governing the issuance and submission of renewable generation credits and the recording and monitoring of credits conveyed under the program. (e) Authorizes the commission to charge a fee to a person who submits or conveys renewable generation credits, in order to cover the administrative costs of the credit program. SECTION 3. Requires the commission to submit a report not later than January 15, 2005, to the 79th Legislature on the use of renewable resources for electric generation in this state, the progress of electric utilities under this Act, and the feasibility of utilities meeting the requirements of Section 34.0055, Utilities Code, by January 1, 2010, without threatening the reliability of the state's electric power system. SECTION 4. Effective date: September 1, 1999. SECTION 5. Emergency clause.