RPS Texas
(Last updated July 1st, 2004)

RENEWABLE PORTFOLIO STANDARDS—STATE SUMMARY

I. POLICY
II. ADMINISTRATION
III. FINANCING
IV. CRITICAL ELEMENTS
V. POLICY/PROGRAM ASSESSMENT
VI. PUBLIC OUTREACH AND EDUCATION


I. POLICY

Date Enacted
December 16, 1999

Effective Date
January 1, 2002

Time Period
2002-2019

Extensions to Time Period
Not addressed in legislation


Applicable Laws, Orders, and Regulations
Public Utility Commission's Substantive Rules
€25.173. Goal for Renewable Energy (05/15/00)
http://www.puc.state.tx.us/rules/subrules/electric/25.173/25.173.pdf

Texas Utilities Code Annotated
Chapter 39. Restructuring of Electric Utility Industry
€ 39.904. Goal for Renewable Energy
http://www.capitol.state.tx.us/statutes/ut/ut0003900.html#ut079.39.904

Renewable Energy Mandate (07/27/99)
http://www.puc.state.tx.us/rules/rulemake/20944/20944.cfm

Description
This is a capacity-based standard to ensure that 2,000 megawatts (MW) of new generating capacity from renewable energy technologies is installed in Texas by 2009, for a cumulative installed renewable capacity of at least 2,880 MW by January 1, 2009. The initial goal is 400 MW for 2002. The 2000 MW goal remains constant from 2009 through 2019. New facilities are defined as renewable energy generators placed in service on or after September 1, 1999. The portfolio standard affects all electricity retailers in competitive markets in Texas.

Program Name
Goal for Renewable Energy

Standard

Compliance period	Cumulative new renewable energy capacity
January 1, 2002	400 MW
January 1, 2003	1,280 MW
January 1, 2004	1,280 MW
January 1, 2005	1,730 MW
January 1, 2006	1,730 MW
January 1, 2007	2,280 MW
January 1, 2008	2,280 MW
January 1, 2009 through January 1, 2019	2,880 MW

Eligibility Date
Only new facilities are eligible. New facilities are defined as renewable energy generators placed in service on or after September 1, 1999.

Generation Limit
Renewable resources that are less than two megawatts (MW) in size and placed in service before September 1, 1999 are eligible under the "small producer" definition.

Fuels/Technologies
Any technology that exclusively relies on an energy source that is naturally regenerated over a short time and derived directly from the sun, indirectly from the sun, or from moving water or other natural movements and mechanisms of the environment. Renewable energy technologies include those that rely on energy derived directly from the sun, on wind, geothermal, hydroelectric, wave, or tidal energy, or on biomass or biomass-based waste products, including landfill gas.


II. ADMINISTRATION

Administering Entities
Texas Public Utilities Commission
The Independent System Operator for the Electric Reliability
Council of Texas (ERCOT) administers the REC trading system

Type of Entity
State

Administrative Contacts
Public Utility Commission of Texas
1701 N. Congress Ave., PO Box 13326, Austin, TX 78711-3326
General Information 512-936-7000

Electric Reliability Council of Texas, Inc.
2705 W. Lake Dr., Taylor, TX 76574
Telephone: 512-248-3131 Fax: 512-248-3995
www.texasrenewables.com


III. FINANCING

Funding Level
none specified

Funding Source
included in rate base

Cost Cap
none specified

Charge
included in rate base

IV. CRITICAL ELEMENTS

Trading
Renewable energy credits (RECs) may be traded or retired.

Green Pricing
Renewable generation under Green Pricing programs is eligible under the RPS.

Certification
A certification began July 1, 2001. A renewable energy credit (REC) represents one megawatt hour (MWh) of renewable energy that is physically metered and verified in Texas meeting the RPS requirements. The capacity conversion factor used by the program administrator to allocate credits to competitive retailers is calculated as follows:

(1) The capacity conversion factor (CCF) shall be administratively set at 35% for 2002 and 2003, the first two compliance periods of the program.

(2) During the fourth quarter of the second compliance year (2003), the CCF shall be readjusted to reflect actual generator performance data associated with all renewable resources in the trading program. The program administrator shall adjust the CCF every two years thereafter.

Out-of-State
Renewable generation from out-of-state that is sold and metered in Texas is eligible under the RPS.

Self-generation
Generation-offset, off-grid, or on-site distributed renewable facilities are eligible for the REC system if they otherwise meets the requirements of the RPS. Generation offset technology is any renewable technology that reduces the demand for electricity at a site where a customer consumes electricity, such as solar water heating and ground-source geothermal heat pumps.

Flexibility
Credits can be banked up to 3 years. A 3-month "true-up" period is allowed, and credits from the 6-month early compliance period in 2001 can be used. A competitive retailer may incur a deficit allowance equal to 5.0% of its REC requirement in 2002 and 2003. All competitive retailers incurring a 5.0% deficit must make up the amount of RECs associated with the deficit in the next compliance period. Retailers will be subject to a penalty for any REC shortfall that is greater than 5.0% during this period. Penalties shall be the lesser of $50 per MWh or, upon presentation of suitable evidence of market value by the competitive retailer, 200% of the average market value of credits for that compliance period.

V. POLICY/PROGRAM ASSESSMENT

Reporting Requirement

The renewable energy credit trading program administrator,(ERCOT) must submit an annual report to the PUC on or before April 15 of each calendar year.

Assessing Entity
Electric Reliability Council of Texas, Inc. (ERCOT)

Report Date
May 16, 2002

Report Name
See the 2002 annual RPS report:
http://www.texasrenewables.com/publicReports/2002_Report.doc

Texas Renewable Energy Credit Trading Program: Annual Program Summary for 2001
http://www.texasrenewables.com/publicReports/2001_Report.xls

An analysis of the RPS program is also available from Lawrence Berkeley National Laboratory:
"The Renewables Portfolio Standard in Texas: An Early Assessment"
Ryan Wiser and Ole Langniss. LBNL-49107. November 13, 2001.
http://eetd.lbl.gov/ea/EMS/reports/49107.pdf

Status
Texas has met and surpassed its 2002 RPS requirement of 400 MW. The Texas RPS seeks to ensure that 2000 MW of new generating capacity is installed by 2009.

According to ERCOT public reports over 596,000 MWh were generated by renewables in the 3rd through 4th quarters of 2001, and 648,000 MWh were generated by renewables in the 1st through 2nd quarters of 2002. The generation mix over this time period was approximately 95% from wind and 5% from hydropower. As of July 2002, ERCOT reports 942 MW of wind capacity and 10.2 MW of hydropower capacity in place.

For more information see:
http://www.texasrenewables.com/publicReports/rpt8.asp


Cost Information
Currently, there is no information on costs from renewable contracts; however, it was reported that renewable energy credits were selling at about 1–2.5 ¢/kWh.

Assessment Contact
Electric Reliability Council of Texas, Inc.
2705 W. Lake Dr.,
Taylor, TX 76574
Telephone: 512-248-3131 Fax: 512-248-3995
www.texasrenewables.com

VI. PUBLIC OUTREACH AND EDUCATION

Outreach/Customer Education
Renewable Alternatives to Line Extension
http://www.puc.state.tx.us/renewable/index.cfm

Press Releases

http://www.puc.state.tx.us/nrelease/index.cfm

http://www.texasrenewables.com/newsroom.htm