Current through Reg. 50, No. 13; March 28, 2025
(a) Definitions.
The following words and terms, when used in this section, have the following
meanings unless the context indicates otherwise:
(1) Construction or extension--Does not
include the purchase or condemnation of real property for use as facility sites
or right-of-way. Acquisition of right-of-way must not be deemed to entitle an
electric utility to the grant of a certificate of convenience and necessity
without showing that the construction or extension is necessary for the
service, accommodation, convenience, or safety of the public.
(2) Generating unit--Any electric generating
facility. This section does not apply to any generating unit that is ten
megawatts or less and is built for experimental purposes only.
(3) Habitable structures--Structures normally
inhabited by humans or intended to be inhabited by humans on a daily or regular
basis. Habitable structures include, but are not limited to: single-family and
multi-family dwellings and related structures, mobile homes, apartment
buildings, commercial structures, industrial structures, business structures,
churches, hospitals, nursing homes, and schools.
(4) Municipal Power Agency (MPA)--Agency or
group created under Texas Utilities Code, Chapter 163 - Joint Powers
Agencies.
(5) Municipal Public
Entity (MPE)--A municipally owned utility (MOU) or a municipal power
agency.
(6) Prudent avoidance--The
limiting of exposures to electric and magnetic fields that can be avoided with
reasonable investments of money and effort.
(7) Tie line--A facility to be interconnected
to the Electric Reliability Council of Texas (ERCOT) transmission grid by a
person, including an electric utility or MPE, that would enable additional
power to be imported into or exported out of the ERCOT power grid.
(b) Certificates of convenience
and necessity for new service areas and facilities. Except for certificates
granted under subsection (e) of this section, the commission will grant an
application and issue a certificate only if it finds that the certificate is
necessary for the service, accommodation, convenience, or safety of the public,
and complies with the statutory requirements in the Public Utility Regulatory
Act (PURA) §37.056. The commission may issue a certificate as applied for,
or refuse to issue it, or issue it for the construction of a portion of the
contemplated system or facility or extension thereof, or for the partial
exercise only of the right or privilege. The commission will render a decision
approving or denying an application for a certificate within one year of the
date of filing of a complete application for such a certificate, unless good
cause is shown for exceeding that period. A certificate, or certificate
amendment, is required for the following:
(1)
Change in service area. Any certificate granted under this section must not be
construed to vest exclusive service or property rights in and to the area
certificated.
(A) Uncontested applications: An
application for a certificate under this paragraph must be approved
administratively within 80 days from the date of filing a complete application
if:
(i) no motion to intervene has been filed
or the application is uncontested;
(ii) all owners of land that is affected by
the change in service area and all customers in the service area being changed
have been given direct mail notice of the application; and
(iii) commission staff has determined that
the application is complete and meets all applicable statutory criteria and
filing requirements, including, but not limited to, the provision of proper
notice of the application.
(B) Minor boundary changes or service area
exceptions: Applications for minor boundary changes or service area exceptions
must be approved administratively within 45 days of the filing of the
application provided that:
(i) every utility
whose certificated service area is affected agrees to the change;
(ii) all customers within the affected area
have given prior consent; and
(iii)
commission staff has determined that the application is complete and meets all
applicable statutory criteria and filing requirements, including, but not
limited to, the provision of proper notice of the application.
(2) Generation
facility.
(A) In a proceeding involving the
purchase of an existing electric generating facility by an electric utility
that operates solely outside of ERCOT, the commission will issue a final order
on a certificate for the facility not later than the 181st day after the date a
request for the certificate is filed with the commission under PURA
§37.058(b).
(B) In a
proceeding involving a newly constructed generating facility by an electric
utility that operates solely outside of ERCOT, the commission will issue a
final order on a certificate for the facility not later than the 366th day
after the date a request for the certificate is filed with the commission under
PURA §37.058(b).
(C) An
electric utility operating solely outside of the ERCOT region may, but is not
required to, obtain a certificate to install, own, or operate a generation
facility with a capacity of 10 megawatts or less.
(3) Electric transmission line. All new
electric transmission lines must be reported to the commission in accordance
with §
25.83 of this title (relating to
Transmission Construction Reports). This reporting requirement is also
applicable to new electric transmission lines to be constructed by an MPE
seeking to directly or indirectly construct, install, or extend a transmission
facility outside of its applicable boundaries. For an MOU, the applicable
boundaries are the municipal boundaries of the municipality that owns the MOU.
For an MPA, the applicable boundaries are the municipal boundaries of the
public entities participating in the MPA.
(A)
Determination of need:
(i) Economic projects.
Except as otherwise stated in this subparagraph, the following must be met for
a transmission line in the ERCOT region. The applicant must present an economic
cost-benefit study that analyzes the transmission project under a congestion
cost savings test and a production cost savings test. The commission will give
great weight to such a study if it is conducted by the ERCOT independent system
operator. Adequately quantifiable and ongoing direct and indirect costs and
benefits to the transmission system attributable to the project may be included
in the cost-benefit study.
(I) Congestion cost
savings test. ERCOT, in consultation with commission staff, must develop a
congestion cost savings test.
(-a-) The
congestion cost savings test must include an analysis of whether the levelized
ERCOT-wide annual congestion cost savings attributable to the proposed project
are equal to or greater than the average of the first three years annual
revenue requirement of the proposed project of which the transmission line is a
part.
(-b-) Prior to the effective
date of the test developed by ERCOT under this subclause ERCOT may immediately,
without updating its current protocols, utilize the generator revenue reduction
test, effective Dec. 1, 2011 under ERCOT Nodal Protocols §3.11.2(6), as
the congestion cost benefit test required under this clause. ERCOT may continue
to rely upon completed calculations using the generator revenue reduction test
to evaluate ongoing applications after the effective date of the test developed
under this subclause.
(II) Production cost savings test. The
production cost savings test must include an analysis of whether the levelized
ERCOT-wide annual production cost savings attributable to the proposed project
are equal to or greater than the first-year annual revenue requirement of the
proposed project of which the transmission line is a part.
(III) Economic cost-benefit analysis must be
studied for the projected in-service date of the project using the study case
identified in the ERCOT planning guide.
(IV) ERCOT may recommend, and the commission
may approve, a transmission line in the ERCOT region that demonstrates a
savings under either a congestion cost savings test or a production cost
savings test.
(ii)
Reliability projects.
(I) The requirements of
clause (i) of this subparagraph do not apply to an application for a
transmission line that is necessary to meet state or federal reliability
standards, including: a transmission line needed to interconnect a transmission
service customer or end-use customer; or needed due to the requirements of any
federal, state, county, or municipal government body or agency for purposes
including, but not limited to, highway transportation, airport construction,
public safety, or air or water quality.
(II) For a transmission line not addressed by
clause (i) of this subparagraph, the commission will consider, among other
factors, the needs of the interconnected transmission systems to support a
reliable and adequate network and to facilitate robust wholesale competition.
When evaluating reliability for a proposed project in the ERCOT region, the
commission will consider and any review conducted by ERCOT must incorporate the
historical load, forecasted load growth, and additional load currently seeking
interconnection. The forecasted load growth and additional load currently
seeking interconnection must be substantiated by quantifiable evidence of
projected load growth. The commission will give great weight to:
(-a-) the recommendation of an organization
that meets the requirement of PURA §39.151; and/or
(-b-) written documentation provided by a
transmission service provider to ERCOT that the transmission line is needed to
interconnect transmission service or retail customers.
(iii) Resiliency. ERCOT may
recommend, and the commission may approve, a transmission project that is
submitted as an economic or reliability project and does not demonstrate
sufficient economic savings or reliability benefits to merit approval on those
grounds if ERCOT determines the line would address a resiliency issue
identified in the grid reliability and resiliency assessment required by
subparagraph (E) of this paragraph. In determining whether to approve such a
project the commission will consider:
(I) the
margin by which the transmission project was unable to demonstrate sufficient
economic savings or reliability benefits to merit approval on those
grounds;
(II) whether the
resiliency benefits the transmission project would provide by reducing the
impacts to customers of potential outages caused by regional extreme weather
scenarios are sufficient to compensate for the project's inability to
demonstrate sufficient economic savings or reliability benefits to merit
approval on those grounds.
(III)
the cost effectiveness of the transmission project's ability to address the
resiliency issue identified by ERCOT compared to other possible
solutions,
(IV) other factors
listed in PURA §37.056(c), as appropriate.
(B) Routing: An application for a new
transmission line must address the criteria in PURA §37.056(c) and
considering those criteria, engineering constraints, and costs, the line must
be routed to the extent reasonable to moderate the impact on the affected
community and landowners unless grid reliability and security dictate
otherwise. The following factors must be considered in the selection of the
utility's alternative routes unless a route is agreed to by the utility, the
landowners whose property is crossed by the proposed line, and owners of land
that contains a habitable structure within 300 feet of the centerline of a
transmission project of 230 kV or less, or within 500 feet of the centerline of
a transmission project greater than 230 kV, and otherwise conforms to the
criteria in PURA §37.056(c):
(i) whether
the routes parallel or utilize existing compatible rights-of-way for electric
facilities, including the use of vacant positions on existing multiple- circuit
transmission lines;
(ii) whether
the routes parallel or utilize other existing compatible rights-of- way,
including roads, highways, railroads, or telephone utility
rights-of-way;
(iii) whether the
routes parallel property lines or other natural or cultural features;
and
(iv) whether the routes conform
with the policy of prudent avoidance.
(C) Uncontested transmission lines: An
application for a certificate for a transmission line will be approved
administratively within 80 days from the date of filing a complete application
if:
(i) no motion to intervene has been filed
or the application is uncontested; and
(ii) commission staff has determined that the
application is complete and meets all applicable statutory criteria and filing
requirements, including, but not limited to, the provision of proper notice of
the application.
(D)
Projects deemed critical to reliability. Applications for transmission lines
which have been formally designated by a PURA §39.151 organization as
critical to the reliability of the system will be considered by the commission
on an expedited basis. The commission will render a decision approving or
denying an application for a certificate under this subparagraph within 180
days of the date of filing a complete application for such a certificate unless
good cause is shown for extending that period.
(E) Grid reliability and resiliency
assessment. ERCOT must conduct a biennial assessment of the ERCOT power grid's
reliability and resiliency in extreme weather scenarios. Each assessment must:
(i) consider the impact of different levels
of thermal and renewable generation availability;
(ii) identify areas of the state that face
significant grid reliability and resiliency issues, taking into account the
impact of potential outages caused by regional extreme weather scenarios on
customers, including multiple element outage analysis when appropriate,
and
(iii) recommend transmission
projects that may increase the grid's reliability or resiliency in extreme
weather scenarios.
(4) Tie line. An application for a tie line
must include a study of the tie line by ERCOT. The study must include, at a
minimum, an ERCOT-approved reliability assessment of the proposed tie line. If
an independent system operator intends to conduct a study to evaluate a
proposed tie line or intends to provide confidential information to another
entity to permit the study of a proposed tie line, the independent system
operator must file notice with the commission at least 45 days prior to the
commencement of such a study or the provision of such information.
(c) Projects or activities not
requiring a certificate. A certificate, or certificate amendment, is not
required for the following:
(1) An extension
of facilities as described in PURA §37.052(a) and (b);
(2) A new electric high voltage switching
station, or substation;
(3) The
repair or reconstruction of a transmission facility due to emergencies. The
repair or reconstruction of a transmission facility due to emergencies should
proceed without delay or prior approval of the commission and must be reported
to the commission in accordance with §
25.83 of this title;
(4) The construction or upgrading of
distribution facilities within the electric utility's service area;
(5) Routine activities associated with
transmission facilities that are conducted by transmission service providers.
Nothing contained in the following subparagraphs should be construed as a
limitation of the commission's authority as set forth in PURA. Any activity
described in the following subparagraphs must be reported to the commission in
accordance with §
25.83 of this title. The
commission may require additional facts or call a public hearing thereon to
determine whether a certificate of convenience and necessity is required.
Routine activities are defined as follows:
(A)
The modification, construction, or extension of a transmission line that
connects existing transmission facilities to a substation or metering point
provided that:
(i) the transmission line
modification, construction, or extension does not exceed:
(I) three miles if the line connects to a
load-serving substation or metering point; or
(II) two miles if the line connects to a
generation substation or metering point; and
(ii) all rights-of-way necessary for the
modification, construction, or extension have been acquired, and
(iii) all landowners whose property is
directly affected by the transmission line, as defined in §
22.52(a)(3) of
this title, have given written consent for the modification, construction, or
extension. If the transmission line modification, construction, or extension
does not exceed one mile to provide service to a substation or metering point,
written consent is only required by landowners whose property is crossed by the
transmission line.
(B)
The rebuilding, replacement, or respacing of structures along an existing route
of the transmission line; upgrading to a higher voltage not greater than 230
kV; bundling of conductors or reconductoring of an existing transmission
facility, provided that:
(i) no additional
right-of-way is required; or
(ii)
if additional right-of-way is required, all landowners of property crossed by
the electric facilities have given prior written consent.
(C) The installation, on an existing
transmission line, of an additional circuit not previously certificated,
provided that:
(i) the additional circuit is
not greater than 230 kV; and
(ii)
all landowners whose property is crossed by the transmission facilities have
given prior written consent.
(D) The relocation of all or part of an
existing transmission facility due to a request for relocation, provided that:
(i) the relocation is to be done at the
expense of the requesting party; and
(ii) the relocation is solely on a
right-of-way provided by the requesting party.
(E) The relocation or alteration of all or
part of an existing transmission facility to avoid or eliminate existing or
impending encroachments, provided that all landowners of property crossed by
the electric facilities have given prior written consent.
(F) The relocation, alteration, or
reconstruction of a transmission facility due to the requirements of any
federal, state, county, or municipal governmental body or agency for purposes
including, but not limited to, highway transportation, airport construction,
public safety, or air and water quality, provided that:
(i) all landowners of property crossed by the
electric facilities have given prior written consent; and
(ii) the relocation, alteration, or
reconstruction is responsive to the governmental request.
(6) Upgrades to an
existing transmission line by an MPE that do not require any additional land,
right-of-way, easement, or other property not owned by the MOU;
(7) The construction, installation, or
extension of a transmission facility by an MPE that is entirely located not
more than 10 miles outside of an MOU's certificated service area that occurs
before September 1, 2021; or
(8) A
transmission facility by an MOU placed in service after September 1, 2015, that
is developed to interconnect a new natural gas generation facility to the ERCOT
transmission grid and for which, on or before January 1, 2015, an MOU was
contractually obligated to purchase at least 190 megawatts of
capacity.
(d) Standards
of construction and operation. In determining standard practice, the commission
will be guided by the provisions of the American National Standards Institute,
Incorporated, the National Electrical Safety Code, and such other codes and
standards that are generally accepted by the industry, except as modified by
this commission or by municipal regulations within their jurisdiction. Each
electric utility must construct, install, operate, and maintain its plant,
structures, equipment, and lines in accordance with these standards, and in
such manner to best accommodate the public, and to prevent interference with
service furnished by other public utilities insofar as practical.
(1) The standards of construction apply to,
but are not limited to, the construction of any new electric transmission
facilities, rebuilding, upgrading, or relocation of existing electric
transmission facilities.
(2) For
electric transmission line construction requiring the acquisition of new
rights-of-way, an electric utility must include in the easement agreement, at a
minimum, a provision prohibiting the new construction of any above-ground
structures within the right-of-way. For this purpose, new construction of
above-ground structures does not include necessary repairs to existing
structures, farm or livestock facilities, storage barns, hunting structures,
small personal storage sheds, or similar structures. A utility may negotiate
appropriate exceptions in instances where the electric utility is subject to a
restrictive agreement being granted by a governmental agency or within the
constraints of an industrial site. Any exception to this paragraph must meet
all applicable requirements of the National Electrical Safety Code.
(3) Measures must be applied when appropriate
to mitigate the adverse impacts of the construction of any new electric
transmission facilities, and the rebuilding, upgrading, or relocation of
existing electric transmission facilities. Mitigation measures must be adapted
to the specifics of each project and may include such requirements as:
(A) selective clearing of the right-of-way to
minimize the amount of flora and fauna disturbed;
(B) implementation of erosion control
measures;
(C) reclamation of
construction sites with native species of grasses, forbs, and shrubs;
and
(D) returning site to its
original contours and grades.
(e) Certificates of convenience and necessity
for existing service areas and facilities. For purposes of granting these
certificates for those facilities and areas in which an electric utility was
providing service on September 1, 1975, or was actively engaged in the
construction, installation, extension, improvement of, or addition to any
facility actually used or to be used in providing electric utility service on
September 1, 1975, unless found by the commission to be otherwise, the
following provisions prevail for certification purposes:
(1) The electrical generation facilities and
service area boundary of an electric utility having such facilities in place or
being actively engaged in the construction, installation, extension,
improvement of, or addition to such facilities or the electric utility's system
as of September 1, 1975, must be limited, unless otherwise provided, to the
facilities and real property on which the facilities were actually located,
used, or dedicated as of September 1, 1975.
(2) The transmission facilities and service
area boundary of an electric utility having such facilities in place or being
actively engaged in the construction, installation, extension, improvement of,
or addition to such facilities or the electric utility's system as of September
1, 1975, must be, unless otherwise provided, the facilities and a corridor
extending 100 feet on either side of said transmission facilities in place,
used or dedicated as of September 1, 1975.
(3) The facilities and service area boundary
for the following types of electric utilities providing distribution or
collection service to any area, or actively engaged in the construction,
installation, extension, improvement of, or addition to such facilities or the
electric utility's system as of September 1, 1975, must be limited, unless
otherwise found by the commission, to the facilities and the area which lie
within 200 feet of any point along a distribution line, which is specifically
deemed to include service drop lines, for electrical utilities.
(f) Transferability of
certificates. Any certificate granted under this section is not transferable
without approval of the commission and remains in force until further order of
the commission.
(g) Certification
forms. All applications for certificates of convenience and necessity must be
filed on commission-prescribed forms so that the granting of certificates, both
contested and uncontested, may be expedited. Forms may be obtained from Central
Records.
(h) Commission authority.
Nothing in this section is intended to limit the commission's authority to
recommend or direct the construction of transmission under PURA
§§35.005, 36.008, or 39.203(e).