Texas Bill Would Establish Disclosures Required For Sale, Lease, PPAs From Distributed Generation

A bill (S.B. No. 398) has been introduced in Texas that would establish required disclosures, to residential and small commercial customers, by sellors or lessors of distributed renewable generation resources, including PPAs from such facilities

Under S.B. No. 398, "small commercial customer" has the meaning assigned by Section 39.202(o), Utilities Code -- a commercial customer having a peak demand of 1,000 kilowatts or less.

The bill would not apply to the following

(1) a transaction involving the sale or transfer of the real property on which a distributed renewable generation resource is located;

(2) a person, including a person acting through the person's officers, employees, brokers, or agents, who markets, sells, solicits, negotiates, or enters into an agreement for the sale or financing of a distributed renewable generation resource as part of a transaction involving the sale or transfer of the real property on which the distributed renewable generation resource is or will be affixed; or

(3) a third party that enters into an agreement for the financing of a distributed renewable generation resource.

S.B. No. 398 would provide for the following disclosures for leases, sales, and installations of distributed renewable generation resources

Under the bill, a seller or lessor who enters into a purchase, lease, or power purchase agreement with a residential or small commercial customer for the operation of a distributed renewable generation resource shall provide to the customer in writing:

(1) contact information of the salesperson and installer of the generation resource;

(2) a description of all equipment to be installed;

(3) the cost of all equipment to be installed;

(4) a detailed accounting of fees associated with the installation or operation of the generation resource;

(5) representations, if any, made as part of the agreement regarding the expected operational performance and financial performance of the generation resource; and

(6) all applicable warranties.

Furthermore, the bill would require additional disclosures for lease agreements, and provides that, a lessor shall also provide to a leasing residential or small commercial customer in writing:

(1) the term and rate of the lease, including any payment escalators or other terms that affect the customer's payments; and

(2) a statement of whether the lease and any applicable warranty or maintenance agreement is transferable to a subsequent purchaser of the property where the distributed renewable generation resource is installed.

The bill would also require disclosures for power purchase agreements.

Under the bill, a residential or small commercial customer who enters into a power purchase agreement is entitled to receive in writing:

(1) the disclosures required under items (1), (2), (5), and (6) for leases, sales, and installations as described above

(2) the term and rate of the power purchase agreement, including any payment escalators or other terms that affect the customer's payments; and

(3) whether the power purchase agreement and any applicable warranty or maintenance agreement is transferable to a subsequent purchaser of the property where the distributed renewable generation resource is installed.

The bill would apply only to sale, leases, or agreements entered into on or after the effective date of the bill