Current through Reg. 50, No. 13; March 28, 2025
(a) Purpose.
This section allows electric utilities to offer a renewable energy tariff to
all retail customers. The purpose of the renewable energy tariff is to use
market-based methods to promote the use of renewable energy technologies to
supply electricity to Texas, to protect and enhance the quality of Texas'
environment, and to respond to customers' expressed preferences for renewable
resources.
(b) Application. This
section applies to electric utilities as defined in the Public Utility
Regulatory Act (PURA) §31.002(1) choosing to offer a tariff under this
section.
(c) Definitions.
(1) Existing renewable resources--Renewable
resources that are in operation on the effective date of this rule.
(2) New resources--Renewable resources placed
in service after the effective date of this rule.
(3) Renewable energy--Energy derived from
renewable energy technologies as defined in §
25.5 of this title (relating to
Definitions).
(4) Renewable energy
premium--The sum of the purchase cost per kWh of renewable energy acquired to
serve customers under this tariff minus the average embedded cost per kWh of
the utility's existing generation and purchased resources outside this tariff,
plus the appropriate per kWh cost of renewable energy tariff marketing and
administrative activities pursuant to subsection (l)(1) of this
section.
(5) Renewable energy
price--The sum of the utility's average delivered retail cost per kWh for its
embedded mix of energy and capacity from all resources excluding those acquired
for this tariff, and the renewable energy premium as defined in paragraph (4)
of this subsection.
(d)
Eligible renewable resources. Except where specifically noted, renewable
resources that are acceptable under this tariff shall meet the following
requirements:
(1) Renewable energy resource.
A renewable energy resource eligible under this tariff must meet the
requirements of subsection (c)(3) of this section.
(2) New and existing resources. A new or
existing resource is eligible if its costs have not been placed in any
utility's rates or in a purchase power cost recovery factor (PCRF) as of the
effective date of this rule.
(3)
Repowered or retrofitted projects. The incremental energy achieved from
renewable energy projects that are repowered or retrofitted to improve the
overall efficiency of the facility would qualify as a new resource under this
section.
(4) Affiliated purchases.
Any renewable resources obtained from an affiliate of the regulated utility
must be secured through an arm's-length, competitive solicitation.
(e) Renewable energy tariff
requirements. All electric utilities choosing to offer a renewable resource
tariff under this section shall submit for commission review and approval a
tariff that implements the provisions of this section. No utility may conduct
any sales or marketing activities under a renewable energy program until a
renewable energy tariff has been filed and approved by the commission. Each
tariff submitted shall, at a minimum, contain the following provisions:
(1) Definitions. This section shall define
all relevant terms and concepts in a manner that is simple and easy to
understand.
(2) Rates and charges.
This section shall clearly identify the charges that the participants will
incur for participating at various levels in the program. The tariff shall
allow participation at a variety of monthly costs or energy demand volume
levels and will clearly state how much renewable energy a given monthly charge
will buy, or alternatively, the cost to buy a given number of kWh from a
renewable resource.
(f)
Tariff attributes and operation. A renewable energy tariff enables a utility's
customers to receive all or part of their energy needs from renewable energy
resources. All tariffs filed shall contain the following attributes:
(1) All retail customers shall be given the
opportunity to purchase all or a portion of their energy requirements under
this tariff.
(2) The renewable
energy price must be cost-based. The relationship between the renewable energy
price and the cost of the acquired resource must be demonstrated in the
utility's initial tariff-filing package. The tariff must identify with
specificity the elements of the price, including the portion of the price that
is attributable to the cost of the renewable energy, and the utility's profit,
if any. The filing shall identify the utility's projections of renewable energy
demand in kWh and renewable marketing and advertising costs that underlie the
per kWh marketing and advertising cost included in the total renewable energy
price, and show that it meets the limits identified in subsection (l)(1) of
this section.
(3) No utility may
sell existing renewable energy under a tariff pursuant to this section until it
has made a commitment to acquire renewable energy from new resources. These new
resources shall be deployed within 24 months of tariff approval.
(4) A utility may not charge customers for
any more kWh of renewable energy provided under this tariff than it has
specifically received to serve customers under this tariff.
(g) Marketing.
(1) Marketing plan. Each utility shall
include a description of its marketing plan with its initial tariff filing
package. Included in this description shall be an explanation of how the
utility intends to provide customers with clear information regarding how they
may obtain the service(s).
(2)
Disclosure of resource location. Each utility shall disclose the location of
the renewable resource offered under the tariff on all advertising,
educational, or promotional materials in a bold and conspicuous
manner.
(h)
Accountability. Each utility shall provide a report to renewable energy tariff
subscribers on the status of the program and use of funds. This report shall
contain information that will allow customers to review the benefits they have
received as a result of the costs they have voluntarily incurred to buy
renewable energy under the tariff.
(1)
Contents. The report required by this section shall be organized to clearly
convey the following information to tariff subscribers and other interested
customers:
(A) The number of program
participants.
(B) The total
revenues collected through the renewable energy tariff, total expenditures
under the tariff, and how renewable energy tariff revenues were spent for the
calendar year.
(C) The amount of
renewable energy sold to subscribers under the tariff and the amount of new
renewable resources acquired.
(D)
The unit cost of the new renewable resource acquisition (by renewable
technology if appropriate), and how it compares to benchmark prices for the
utility's current resource mix and to new non-renewable resources.
(E) The location, technology, and providers
of new and existing renewable energy provided to customers under the
tariff.
(F) The amount of
generation-related air emissions that have been avoided as a result of the
program.
(G) Information regarding
any local demonstration or education projects (e.g., school photovoltaic
installations) to support either the renewable energy tariff or the education
program.
(2) Information
shall be provided to renewable energy tariff subscribers annually and shall be
filed with the commission and the Texas Natural Resource Conservation
Commission on the same date the information is provided to
subscribers.
(i) Tariff
approval process. The commission will review and approve or deny each utility's
tariff filed under this section within 90 days of filing. It will consider the
following matters in its review:
(1) Cost
analysis. Each utility shall file supporting analysis showing that the proposed
cost of renewable energy is reasonable and meets the requirements of subsection
(f)(2) of this section.
(2) Program
marketing and administrative costs analysis. Each utility shall develop a
marketing plan for its renewable energy tariff that explains how the utility
will publicize, market, and advertise the tariff. The plan shall include the
schedule of renewable energy prices, and itemized costs to execute the
marketing plan. Disclosure of this material may be subject to a protective
order if the commission determines it involves confidential competitive
business information.
(3) Relevant
assumptions. Each utility shall explain all relevant assumptions, including the
cost of non-renewable electric resources.
(4) Resource procurement plan. The utility
shall explain how it intends to secure the renewable energy needed to meet its
projected customer demand for the first two years the tariff is in effect;
disclosure of this material may be protected if the commission determines it
involves confidential competitive business information.
(j) Education program. Each utility that
offers a renewable energy tariff shall also design and implement a customer
education program about renewable energy. The utility shall provide educational
materials to all of its customers on renewable resources as supply-side options
and as demand-side options. Each utility shall inform its customers of the
utility's generation mix and generation emissions. This information shall be
comprehensible and succinct. Customer educational materials shall be sent to
customers during the initial tariff offering in conjunction with the initial
renewable energy marketing materials, and shall be distributed at least
annually.
(k) Criteria for
educational materials.
(1) Educational
materials may include the utility's name and the name of the utility's
commission-approved program with information on how to participate, but shall
otherwise not be used to promote the utility or any of its other service
offerings in any way.
(2)
Educational materials should include information on renewable energy technology
applications as defined in §
25.5 of this title, as well as
information regarding the potential for renewable energy technology development
in the State of Texas. It should include information on renewable resources
both for supply- and demand-side applications, including off-grid and
peak-shaving uses.
(3) The
utility's generation mix shall be disclosed to all customers in table form as a
component of the tariff's educational campaign. Disclosure statements shall
indicate the utility's generation mix in percentages rounded to the nearest
whole number for the previous calendar year using the following categories:
coal and lignite, natural gas, nuclear fuel, renewable resource, and fuel oil
and other.
(4) The utility's
generation emissions, as well as nuclear waste, shall be disclosed in total and
shall include emissions associated with the utility's power purchases to the
extent that this information is available. Disclosure statements shall indicate
the utility's average monthly generation emissions or average nuclear waste per
customer for each customer class and by MWh generated for the previous calendar
year, based on the average emissions or nuclear waste by fuel type, for:
nitrogen oxide (NO[sub]x[/sub]), sulfur dioxide (SO[sub]2[/sub]), carbon
dioxide (CO[sub]2[/sub]), particulate matter, and nuclear waste.
(5) Each utility shall file these materials
with the commission as part of its tariff-filing package for
approval.
(l) Cost
recovery. Utilities shall be allowed to recover costs incurred through the
tariff in the following manner:
(1) Marketing
and administration costs. Program marketing and administration costs may be
included within the premium for renewable energy, and shall not exceed 20% of
the total revenues collected from the renewable energy price in the first two
years that the tariff is in effect and 10% in subsequent years. Prudently
incurred marketing and administration costs in excess of these limits may be
recoverable through base rates pursuant to §23.21(c)(1)(E) of this title
(relating to Cost of Service).
(2)
Education program costs. All prudently incurred costs of commission approved
customer education materials and activities shall be recoverable and allocated
among all customers through base rates.
(m) Commission review. The commission will
periodically review each utility's renewable energy tariff and activities to
ensure that new renewable energy resources are deployed in/or next to the State
of Texas and that program participants are receiving appropriate benefits from
participation.
