88R8944 JXC-F     By: King S.B. No. 1075       A BILL TO BE ENTITLED   AN ACT   relating to facilities and construction machinery used to respond   to power outages.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 39.918, Utilities Code, is amended to   read as follows:          Sec. 39.918.  UTILITY FACILITIES FOR RESPONDING TO   SIGNIFICANT [POWER RESTORATION AFTER WIDESPREAD] POWER   OUTAGE.  (a) In this section, "significant ["widespread] power   outage" means an event that [results in]:                (1)  results in a loss of electric power that:                      (A)  affects a significant number of distribution   customers of a transmission and distribution utility, creates a   risk to public health or safety,[;] and                      [(B)]  has lasted or is expected to last for at   least six [eight] hours;                      (B)  affects distribution customers of a   transmission and distribution utility in an area for which the   governor has issued a disaster or emergency declaration;                      (C)  affects customers served by a radial   transmission or distribution facility, creates a risk to public   health or safety, and has lasted or is expected to last for at least   twelve hours; or                      (D)  creates [and                [(2)] a risk to public health or safety because it   affects a critical infrastructure facility, hospital, health care   facility, law enforcement facility, fire station, or water or   wastewater facility; or                (2)  causes the independent system operator to order a   transmission and distribution utility to shed load.          (a-1)  The Texas Division of Emergency Management, the   independent organization certified under Section 39.151 for the   ERCOT power region, or the executive director of the commission may   determine that a power outage other than an outage described by   Subsection (a) is a significant power outage for the purposes of   this section.          (b)  Notwithstanding any other provision of this subtitle, a   transmission and distribution utility may:                (1)  lease or own and operate facilities that provide   temporary emergency electric energy to aid in providing power to   the utility's distribution customers when a significant power   outage is imminent or restoring power to the utility's distribution   customers during a significant [widespread] power outage [in which:                      [(A)  the independent system operator has ordered   the utility to shed load; or                      [(B)  the utility's distribution facilities are   not being fully served by the bulk power system under normal   operations]; and                (2)  procure, own, and operate, or enter into a   cooperative agreement with other transmission and distribution   utilities to procure, own, and operate jointly, transmission and   distribution facilities that have a lead time of at least six months   and would aid in restoring power to the utility's distribution   customers following a significant [widespread] power outage.            (b-1)  In this section, long lead time facilities described   by Subsection (b) may not be electric energy storage equipment or   facilities described by [under] Chapter 35[, Utilities Code].          (c)  A transmission and distribution utility that [leases   and] operates a facility [facilities] under Subsection (b)(1) may   not sell electric energy or ancillary services from the facility   [those facilities].          (d)  A facility [Facilities] described by Subsection (b)(1):                (1)  must be operated in isolation from the bulk power   system; and                (2)  may not be included in independent system   operator:                      (A)  locational marginal pricing calculations;                      (B)  pricing; or                      (C)  reliability models.          (e)  A transmission and distribution utility that [leases   and] operates a facility [facilities] under Subsection (b)(1) shall   ensure, to the extent reasonably practicable, that retail customer   usage during operation of the facility [those facilities] is   adjusted out of the usage reported for billing purposes by the   retail customer's retail electric provider.          (f)  A transmission and distribution utility shall, when   reasonably practicable, use a competitive bidding process to lease   a facility [facilities] under Subsection (b)(1).          (g)  A transmission and distribution utility that leases or   owns and operates facilities under Subsection (b)(1) or that   procures, owns, and operates facilities under Subsection (b)(2)   shall include in the utility's emergency operations plan filed with   the commission, as described by Section 186.007, a detailed plan on   the utility's use of those facilities.          (h)  The commission shall allow [permit]:                (1)  a transmission and distribution utility that   leases or owns and operates facilities under Subsection (b)(1) to   recover the reasonable and necessary costs of leasing or owning and   operating the facilities, including the present value of future   payments required under a [the] lease, using the rate of return on   investment established in the commission's final order in the   utility's most recent base rate proceeding; and                (2)  a transmission and distribution utility that   procures, owns, and operates facilities under Subsection (b)(2) to   recover the reasonable and necessary costs of procuring, owning,   and operating the facilities, using the rate of return on   investment established in the commission's final order in the   utility's most recent base rate proceeding.          (i)  The commission shall authorize a transmission and   distribution utility to defer for recovery in a future ratemaking   proceeding the incremental operations and maintenance expenses and   the return, not otherwise recovered in a rate proceeding,   associated with the leasing, [or] procurement, ownership, and   operation of the facilities.          (j)  A transmission and distribution utility may request   recovery of the reasonable and necessary costs of leasing, [or]   procuring, owning, or [and] operating facilities under this   section, including any deferred expenses, through an expedited   periodic rate adjustment [a] proceeding under Section 36.210 or in   another ratemaking proceeding. The commission may review costs   recovered through a periodic rate adjustment in the following base   rate proceeding and order refunds to customers if appropriate.          (k)  A transmission and distribution utility requesting cost   recovery under Subsection (j) is entitled to select whether the   costs are considered to be distribution substation equipment costs   or distribution transformer costs unless the commission has found   in a previous base rate proceeding for the utility that temporary   emergency electric energy costs should be categorized in a   different manner. A lease under Subsection (b)(1) must be treated   as a capital lease or finance lease for ratemaking purposes.          (l)  The fact that the commission has not previously approved   a facility operated under this section or a cost of leasing,   procuring, owning, or operating a facility under this section is   not grounds for dismissal of the facility or the cost from a   proceeding under Section 36.210 or another ratemaking proceeding.          (m)  If the capacity of facilities a transmission and   distribution utility operates under Subsection (b)(1) is less than   or equal to three percent of the utility's historical peak load, the   commission shall find that:                (1)  the facilities are used and useful to the utility   in providing service; and                 (2)  the costs of leasing or owning and operating the   facilities are prudent, reasonable, and necessary.          [(k)  This section expires September 1, 2029.]          SECTION 2.  Section 502.146(b), Transportation Code, is   amended to read as follows:          (b)  An owner is not required to register a vehicle that is   used only temporarily on the highways if the vehicle is:                (1)  a farm trailer or farm semitrailer with a gross   weight of more than 4,000 pounds but not more than 34,000 pounds   that is  used exclusively:                      (A)  to transport seasonally harvested   agricultural products or livestock from the place of production to   the place of processing, market, or storage;                      (B)  to transport farm supplies from the place of   loading to the farm; or                      (C)  for the purpose of participating in equine   activities or attending livestock shows, as defined by Section   87.001, Civil Practice and Remedies Code;                (2)  machinery used exclusively for the purpose of   drilling water wells;                (3)  oil well servicing or drilling machinery and if at   the time of obtaining the license plates, the applicant submits   proof that the applicant has a permit under Section 623.142; or                (4)  construction machinery, including construction   machinery that is:                       (A)  owned by a transmission and distribution   utility as defined by Section 31.002, Utilities Code; and                      (B)  used to maintain or repair electrical lines   or substations in response to a power outage.          SECTION 3.  The changes in law made by this Act apply only to   a proceeding before the Public Utility Commission of Texas, or   other regulatory authority described by Section 11.003, Utilities   Code, that commences on or after the effective date of this Act. A   proceeding before the Public Utility Commission of Texas or other   regulatory authority described by Section 11.003, Utilities Code,   that commenced before the effective date of this Act is governed by   the law in effect on the date the proceeding commenced, and that law   is continued in effect for that purpose.          SECTION 4.  To the extent of any conflict, this Act prevails   over another Act of the 88th Legislature, Regular Session, 2023,   relating to nonsubstantive additions to and corrections in enacted   codes.          SECTION 5.  This Act takes effect September 1, 2023.