|(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.
(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
(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
(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
(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
(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.
(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
(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
(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
(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
(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
(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 (NOx ),
sulfur dioxide (SO2 ), carbon dioxide
(CO2 ), particulate matter, and nuclear
(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
(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.