May 9, 2019
Update on Renewable Energy Bills in the Texas Legislature
McGuireWoods Consulting’s Texas Government Relations team has been tracking renewable energy bills in the Texas Legislature throughout its 2019 legislative session. Read on below for a short summary of current renewable energy bills in the Texas House and Senate, an overview of their current status, plus an update on renewable energy bills with no anticipated movement this session.
The updates below are current as of May 8, 2019.
Ch. 312/ Ch. 313 – Property Redevelopment and Tax Abatement Act/ Texas Economic Development Act – HB 360/HB 2129
The Property Redevelopment and Tax Abatement Act (Texas Tax Code Ch. 312) is set to expire in September 2019. House Bill 360 extends the deadline to 2029, and allows cities and counties to exclude new development from rising property taxes. House Bill 3143 adds additional public notice and reporting requirements for Ch. 312 agreements in an effort to increase transparency and public participation in the process.
The Texas Economic Development Act (Texas Tax Code Ch. 313) is set to expire in December 2022. House Bill 2129 would extend the deadline to December 2032, and allows school districts to offer limited taxes in exchange for property improvements and job creation.
Rep. Jim Murphy has authored the bills in the House, and Senator Royce West has authored the companion bill to HB 360 in the Senate (SB 118). HB 360, HB 3143 and HB 2129 have passed the House Chamber and have been sent to the Senate Committee on Natural Resources & Economic Development.
UPDATE: The Ch. 313 bill (HB 2129) will most likely not move in the Senate. There is a lack of concern from the Senate side to move this bill quickly, because the expiration date is not until 2022. Instead, the Senate will focus on the Ch. 312 bill, and save the Ch. 313 issue for next session.
The Ch. 312 bills were heard in Senate NRED on May 8, 2019. The language was amended from HB 360 into HB 3143, so there will only be one omnibus bill going forward. The hearing was relatively uneventful, with no opposition. The committee is expected to vote out the bill in the coming days, and bring it to the senate floor for a vote. The renewables industry will continue to monitor the legislation closely to ensure that there are not any harmful amendments added to the bill on the senate floor.
HB 360 HRO Report
HB 3143 HRO Report
HB 2129 HRO Report
Mergers and Acquisitions among Power Generation Companies – SB 1211/HB 2553
Senator Kelly Hancock and Representative Phil King have filed SB 1211/HB 2553. The Public Utility Regulatory Act (PURA) Section 39.158 requires "incremental" reviews targeting transactions that involve more than one percent of the "total electricity for sale" in the state. SB 1211 would amend Section 39.158 of PURA to increase the official review trigger increment from one percent to 10 percent.
PURA Section 39.154 sets an accepted threshold by prohibiting a power generation company from owning more than 20 percent of the total installed generation capacity in ERCOT. SB
1211 would not change the 20 percent cap.
The Senate bill has passed the Senate Chamber, and is currently in the House Committee on State Affairs. The House bill has passed out of the House Committee on State Affairs, and is currently waiting to be set on the Calendar.
UPDATE: SB 1211 has been voted out of the House Committee on State Affairs, and is currently in the Calendars Committee. The bill will need to be placed on the House Calendar before May 19, 2019 in order to be debated on the house floor before the final deadline.
Wind Power Facilities Decommissioning – HB 2845
Rep. Terry Canales has filed HB 2845, which would require lease agreements to include provisions for decommissioning once the project has fulfilled its lifespan. This is the second session that Rep. Canales has filed a similar bill. The wind industry has been diligently working with Rep. Canales to come to an agreement that both parties would be amenable to, and have signed off on the agreed to language (the committee substitute should be available online soon).
The bill has been passed out of the House Committee on State Affairs, and is in Calendars.
UPDATE: The bill has been voted out of the House and is currently in the Senate Committee on Business and Commerce. Senator Creighton has agreed to sponsor the bill in the senate. A hearing is expected next week.
On-site Distributed Generation and Energy Storage – SB 2066/HB 2860
Sen. Jose Menendez and Rep. Richard Raymond have filed SB 2066/HB 2860, which establishes a solar homeowners’ bill of rights, including the right to timely interconnection to the electric grid and protection against discriminatory fees.
Both bill have had a hearing in their respective committees. The solar industry and environmental groups testified in favor of the bills, however AECT and Manufacturers came out in opposition to the bills. Both bills have been left pending in committee.
UPDATE: SB 2066 has been voted out of the Senate and is currently in the House Committee on State Affairs. The identical House bill has not been voted out of State Affairs, an indication that the bills may not move.
Study on Renewable Energy Subsidies – SB 2232/HB 2908
Sen. Kelly Hancock has filed SB 2232, which would direct the PUC to study and identify the effects that renewable energy subsidies have on the ERCOT market, and specifies certain critical market components that must be evaluated as a part of that study. The bill also directs the PUC to identify a range of potential actions to eliminate the identified effects of renewable energy subsidies through policies that can mitigate or offset the subsidy impacts.
Additionally, Rep. Jared Patterson has substituted his HB 2908 to mirror SB 2232.
Both bills encountered heavy anti-wind testimony during their hearings that were bolstered by TPPF. Additionally, Texas Association of Manufacturing testified heavily in favor of the bill during the senate hearing. Video of the senate hearing can be found here, time stamp 00:56:00.
UPDATE: SB 2232 passed the Senate and was heard in the House Committee on State Affairs on May 8, 2019. There was significant concern from multiple members on the committee as to why the bill was so narrowly written to directly target wind. They indicated that they would prefer a bill that would study subsidies for all industries (wind, solar, natural gas, oil, etc). The bill was also recently amended to remove solar, and is now strictly targeting wind.
Ch. 313 Taxable Value Reduction – SB 1161
Sen. Lois Kolkhorst has filed SB 1161, which would reduce the amount of taxable value for Ch. 313 agreements by half.
The bill was heard in Senate Property Tax last week, and it was indicated that there will be a complete committee substitute.
UPDATE: The bill has been pending in the Senate Committee since April 9, 2019. It will most likely not move before session deadlines.
Bills With No Anticipated Movement
HB 4554 – Introduced by Rep. Cyrier, the bill would give Texas Parks and Wildlife the authority to designate wind-powered energy construction areas near the Devils River. The bill had a hearing on May 8, 2019, but is not expected to move. The landowner, wind company, and APA are currently in negotiations to mitigate this issue. The hearing will most likely help push the negotiations along.
HB 4368 – Introduced by Rep. Martinez Fischer, the bill would limit wind projects in areas near a base. There has been no movement on this bill.
HB 4180 – Introduced by Rep. Miller, the bill would expand provisions from SB 277 from last session to include helicopters. Technically, the bill is unnecessary because the only base that would be affected is Mabry, and wind farms cannot be built in the middle of Austin. Rep. Miller’s office requested a hearing on March 29, 2019, but the bill has not been set for a hearing as of yet (the committee it is in currently has 393 bills, and this bill does not seem to be high on the agenda).
HB 3168 – Introduced by Rep. Flynn, the bill is identical to Rep. Miller’s HB 4180. Rep. Flynn’s office has not requested a hearing.
SB 1372 – Introduced by Sen. Campbell, the bill would require decommissioning in contracts. There has been no movement on this bill.
SB 1610 – Introduced by Sen. Hall, the bill would require solar decommissioning. There has been no movement on this bill.
SB 1617 – Introduced by Sen. Hall, the bill would prohibit Ch. 312 agreements for wind and solar; it also repeals Ch. 313. There has been no movement on this bill.
SB 565 – Introduced by Sen. Campbell, the bill would remove the jobs waiver for Ch. 313 projects. Most wind project rely upon this waiver. There has been no movement on this bill.