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SYSTEM BENEFIT FUNDS FOR ENERGY EFFICIENCY-STATE SUMMARY
SECTION LINKS
I. Policy
II. Administration
III. Financing
IV. Program information
V. Policy/Program Assessment
I. POLICY
Date Enacted: July 1, 1999
Date Effective: January 1, 2002
Time Period: Jan 2002 - indefinite
Extensions to Time Period: Not applicable
Applicable Laws, Orders, and Regulations
Electric Industry Restructuring
SB 7 (July 1999)
Section 39.903 details the Systems Benefit Fund (SBF)
http://www.capitol.state.tx.us/data/docmodel/76r/billtext/rtf/SB00007F.RTF
Electric Industry Restructuring (SB 7) Implementation
http://www.puc.state.tx.us/electric/projects/20970/20970.cfm
Texas Utilities Code
Public Utility Regulatory Act - PURA2001
Restructuring of Electric Utility Industry (Chapter 39)
http://www.puc.state.tx.us/rules/statutes/Pura01.pdf
Texas Emissions Reduction Plan (TERP)
SB 5 (May 2001)
Subchapter E details the Energy Efficiency Grant Program (Sections 386.200-386.205)
http://www.capitol.state.tx.us/data/docmodel/77r/billtext/rtf/SB00005F.RTF
Public Utility Commission of Texas (PUCT) Rules
Chapter 25, Subchapter H, Division 2, 25.181-183
Electrical Planning: Energy Efficiency and Customer-Owned Resources
http://www.puc.state.tx.us/rules/subrules/electric/index.cfm#CH25suchapterH
Description
Two distinct energy efficiency mechanisms exist in Texas, those created by SB5 and SB7.
SB7 creates a System Benefit Fund (SBF) that provides funding for low-income rate assistance, customer education, low-income assistance in targeted energy efficiency programs, and a school funding loss mechanism. The SB7 energy efficiency program goal is 10% reduction in annual demand growth.
SB5 creates the Texas Emissions Reductions Plan (TERP) which is aimed at lowering emissions regulated under the Federal Clean Air Act through grants and other funding for several incentive programs. Specifically, grants are provided to utilities to develop and administer energy efficiency programs. Utilities are required to show that disbursement of grants lead to measurable reductions in emissions.
Restructuring Policy in Place (Y/N): Yes
Date Restructured: Retail competition in the sale of electricity began in Texas on January 1, 2002.
II. ADMINISTRATION
Administering Entity:
Funds allocated by the Public Utilities Commission of Texas (PUCT) to the Grant Program under SB5 are administered by participating utilities. The System Benefit Fund created under SB7 is administered by the PUCT.
Public Utilities Commission of Texas
www.puc.state.tx.us
(512) 936-7000.
Type of Entity:
SB5 Grant Program - Utilities
SB7 System Benefit Fund - State
Administrative Contact
SB5 Administrator:
Theresa Gross (512) 936-7367, theresa.gross@puc.state.tx.us
SB7 Administrator:
Nieves Lopez 512-936-7307, nieves.lopez@puc.state.tx.us
Outreach/Customer Education:
Customer Education funded by the SBF at $12 million per year
III. FINANCING
Funding Level (All SBC Programs):
SB5--Programs funded by TERP at $134 million in 2002 increasing to an expected $165 million in 2006. Energy Efficiency Grants are allocated 7.5% of TERP Fund revenues, estimated at $10 million for 2002.
SB7--Through fiscal year 2001, the SBF is expected to collect more than $90 million to fund early customer education programs and payments to school districts affected by electric utility restructuring. To establish the necessary balance in the system benefit fund, the PUCT required electric utilities to pay an initial $62.3 million into the fund in 2001.
Funding Source:
SB5 - TERP Fund funded by surcharges and fees on motor vehicle registration, construction equipment sales/leases/rentals, and sale/lease of certain motor vehicles
SB7 - System Benefit Fund funded by non-bypassable wires charge
Charge:
SB5 - 10% of truck trailer and commercial vehicle registration fees; 1% of charge for sale/lease/rental of construction equipment; 2.5% of charge for sale/lease of pre-1997 on-road deisel motor vehicles over 14,000 lbs; $225 first time motor vehicle registration fee; and a $10 fee per commercial motor vehicle inspection.
SB7 - 0.050-0.065 mills/kwh
IV. PROGRAM INFORMATION
Name
SB 5 - Energy Efficiency Grants Program
SB7 - Commission Approved State Wide Energy Efficiency Programs
--Air Conditioning Installer Information and Training Market Transformation Program
--Air Conditioning Distributor Market Transformation Program
--Large Commercial/Industrial Standard Offer Program
--Energy Star Homes Market Transformation Program
--Hard to Reach Standard Offer Program
--Load Management Standard Offer Program
--Residential/Small Commercial Standard Offer
--Residential Energy Star Windows Market Transformation Program
Description
The System Benefit Fund (SBF) under SB7 was created to fund four different programs:
--Electric rate reductions for low-income customers;
--A targeted low-income weatherization program administered by the Texas Department of Housing and Community Affairs (TDHCA);
--Appropriations for customer education programs and administrative costs of the Office of Public Utility Counsel; and
--A mechanism to compensate the state and school districts for losses in property values of utilities' assets directly caused by restructuring.
Funding: The source of revenues for the fund is a fee charged to customers based on the kilowatt-hours of electricity used. Through fiscal year 2001, the SBF is expected to collect more than $90 million to fund early customer education programs and payments to school districts affected by electric utility restructuring.
Press Releases: PUC PR Releases
V. POLICY/PROGRAM ASSESSMENT
Reporting Requirements
SB5 - The Texas Natural Resource Conservation Commission, in consultation with the Texas Emissions Reduction Plan Advisory Board, annually shall review programs established under the plan, including each project funded under the plan, the amount granted for the project, the emissions reductions attributable to the project, and the cost-effectiveness of the project.
Under SB5 the State Energy Conservation Office (SECO) requires annual reports from political subdivisions. For more information see: sb5compliance.htm
SB7 - Requirements for Reporting and Evaluation of Energy Efficiency Programs under SB7 are detailed in the following document: 25.183.pdf
Assessing Entity: Senate Electric Utility Restructuring Legislative Oversight Committee
Report Date: November 2000
Report Name: Electric Utility Restructuring Legislative Oversight Committee: Report to the 77th Legislature [Adobe Acrobat File]
Assessment Contact: Senate Committee Co-Chairs: Senator Troy Fraser and Rep. Steven Wolens
Clerk: Barbara Henderson, (512) 463-0365
Attachments:
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