Texas Staff File Draft Proposal for Adoption Regarding Distributed Generation Ownership, Other Issues

Staff of the Public Utility Commission of Texas have filed a draft proposal for adoption concerning distributed natural gas generation, ownership of distributed renewable generation, and related issues, including issues impacting retail electric providers (39797).

The rulemaking addressed implementation of two bills addressing distributed generation, SB 365 & SB 981, and most notably authorizes third-party ownership of distributed renewable generation.

Among other things, the draft proposal for adoption would define a distributed renewable generation owner as, "[a] person who owns DRG [Distributed renewable generation]; a retail electric customer on whose side of the meter DRG is installed and operated, regardless of whether the customer takes ownership of the distributed renewable generation; or a person who by contract is assigned ownership rights to energy produced from DRG located at the premises of the customer on the customer's side of the meter."

The draft proposal for adoption would decline to revisit the previously adjudicated issue of the measurement of net metering in areas other than El Paso Electric (EPE), which has been subject to specific legislation. Certain renewable interests had sought to reverse the Commission's prior determination that under PURA outflows from distributed generation must be measured separately from inflows (electricity consumed by the customer).

"[T]he commission [previously] found the position of IREC and Public Citizen regarding netting over the billing period to be inconsistent with PURA §39.914(d) and §39.916(f), and further stated in a subsequent order that these sections of PURA do not differentiate whether the meters are located in an area with customer choice. The legislature has not expanded the commission's statutory authority with regards to net metering since the issue was considered in Project No. 34890, with the exception of PURA §39.554, which was enacted in the last legislative session and applies only to EPE."

The instant rulemaking also addresses distributed natural gas generation. With respect to distributed gas generation, REPs had sought an explicit provision in the rule providing that, similar to current rules for distributed renewable generation, a REP may purchase electric power tendered to it by the owner or operator of the distributed facility, at a value agreed to by the retail electric provider and the owner or operator of the facility (e.g. no obligation or rate set by rule).

The draft proposal for adoption would decline to provide such specific relief, and appears to be silent with respect to the issue (although sales of outflows to REPs is currently addressed in Subst. R. 25.217, that rule is specific to distributed "renewable" generation and the proposal for adoption does not appear to modify that rule to expand the current negotiated price provision to other types of distributed generation)