|(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 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
(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,
(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
(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.
(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
(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.