Goal for Renewable Energy Section 39.904

Section 39.904 of Texas State Bill Seven (PUC discussed below is the Public Utility Commision of Texas)

Goal for Renewable Energy

• Provides that by January 1, 2009, an additional 2,000 megawatts of generating capacity from renewable technologies will have been installed in Texas (i.e., estimated to be 3% of the state total) and lists specified deadlines for installation of the renewable capacity (i.e., timetable);
• Requires PUC to establish a renewable energy credits trading program.
• Requires a retail electric provider, municipally owned utility, or electric cooperative that does not satisfy the requirements of Subsection (a) by directly owning or purchasing capacity using renewable energy technologies to purchase sufficient renewable energy credits to satisfy the requirements by holding renewable energy credits in lieu of capacity from renewable energy technologies;
• Requires PUC, no later than January 1, 2000, to adopt rules necessary to administer and enforce this section.
• Requires the rules to at a minimum achieve the enumerated goals;
• Defines "renewable energy technology" (specifically biomass products, geothermal, hydroelectric, solar, wind, wave, or tidal energy).
• Energy resources derived from fossil fuels or waste products from inorganic sources are excluded;
• Authorizes a municipally-owned utility operating a gas distribution system to credit toward satisfaction of the requirements of this section any production or acquisition of landfill gas supplied to the gas distribution system based on a certain conversion calculation.

Goal for Natural Gas

• Provides that 50% of the megawatts of generating capacity installed after January 1, 2000 use natural gas.
• Requires PUC, to the extent permitted by law, to establish a program to encourage utilities to comply with this section by using natural gas produced in this state as the preferential fuel.
• Provides that this section does not apply to generating capacity for renewable technologies.
• This provision is expected to have little immediate effect since most generation currently is gas-fired (e.g., for 1998, the electric utility natural gas generating capability in Texas is 61%);
• Requires PUC to establish a natural gas energy credits trading program. Requires any power generation company, municipally owned utility, or electric cooperative that does not satisfy the requirements of Subsection (a) by directly owning or purchasing capacity using natural gas technologies to purchase sufficient natural gas energy credits in lieu of capacity from natural gas energy technologies;
• Authorizes PUC, not later than January 1, 2000, to adopt rules necessary to administer and enforce this section and to perform any necessary studies in cooperation with the Railroad Commission of Texas (RC). Requires the rules, at a minimum, to achieve the specified provisions; and
• Authorizes PUC, with the assistance of the RC (Railroad Commision), to adopt rules allowing and encouraging retail electric providers and municipally-owned utilities and electric cooperatives that have adopted customer choice to market electricity generated using natural gas produced in Texas as "environmentally beneficial".
• Requires the rules to allow a provider, municipally-owned utility, or cooperative to achieve the specified provisions.