EE/RE in the 83 rd Texas Legislature Dub Taylor Director, SECO

Background  Legislature meets 140 days every odd-numbered year (plus any Special Sessions)  181 Legislators  150 House Representatives  31 Senators  2012 Election Results  House: 95 R / 55 D (41 Freshmen)  More than ½ of the House has 2 or fewer sessions of experience  Senate: 19 R / 12 D (6 Freshmen)

Energy Efficiency  Property Assessed Clean Energy (PACE) (SB 385 – Carona/Keffer)  Enables commercial and industrial customers to utilize loans repaid through property assessments to fund water and energy efficiency projects, including renewable energy improvements  State Agency and Higher Education Energy and Water Efficiency (SB 700 – Hegar/Kacal)  Requires state agencies and institutions of higher education to set goals for reducing their use of water, electricity, gasoline, and natural gas and include those goals in their comprehensive energy and water management plans  Energy Savings Performance Contracts (SB 533 – Zaffirini/Keffer)  Requires the State Energy Conservation Office and the Texas Higher Education Coordinating Board to review measurement and verification reports applicable to energy savings performance contracts and periodically provide an analysis of the savings realized to the entity that executed the contract and the Legislative Budget Board

Combined Heating & Power  Expanding Sales from Cogeneration Facility (HB 2049 – Huberty/Williams)  In ERCOT, a qualifying cogenerator may sell electric energy at retail to more than one purchaser of the cogenerator’s thermal output  CHP Evaluation (HB1864 – Wu/Estes)  Adds higher education to "critical governmental facility” definition  Requires SECO to establish guidelines for the evaluation to determine the feasibility of equipping a critical governmental facility with a combined heating and power system

TERP  TCEQ Grant Program Revisions (SB 1727 – Deuell/Isaac)  Assures the program will continue through 2019  $1 million of funds in 2014 and 2015 for new technology implementation grant program that may support electricity storage projects  Amends the Health and Safety Code to revise provisions of the Texas emissions reduction plan relating to the plan's uses  Requires TCEQ to provide specific eligibility requirements under the Texas clean fleet program and under the Texas natural gas vehicle grant program  Amends certain provisions relating to the light-duty motor vehicle purchase or lease incentive program  Revises the overall allocation of Texas emissions reduction plan funds, authorizes TCEQ to allocate unexpended money designated for certain programs  Includes nonattainment areas and affected counties of Texas among the areas for which TCEQ is required to award grants to support the development of a network of natural gas vehicle fueling stations

Renewable Energy  Accelerated Depreciation for Solar Energy Property (HB 2500 – Bohac/Watson)  Requires a tax appraiser to use the cost method for appraising solar energy property and use a useful life of not more than 10 years  Sets a floor for the depreciated value of 20 percent of the cost value adjusted for physical, functional, or economic obsolescence  Chapter 313 Modifications (HB3390 – Hilderbran/Duell)  Amends the Tax Code and Education Code to revise and update provisions relating to the Texas Economic Development Act  Postpones from December 31, 2014, to December 31, 2024, the expiration date of the act's provisions relating to a limitation on the appraised value, for school district maintenance and operations (M&O) property tax purposes  Job creation review and biennial report by Comptroller

Water  State Water Plan (HB 4 – Ritter/Fraser)  Overhauls the Texas Water Development Board  Authorizes issuance of revenue bonds  Creates special funds outside the state treasury to implement the state water plan  Funding State Water Plan (SJR 1 – Williams/Pitts and HB Pitts/Williams)  Creates a revolving water infrastructure fund of $2 billion (20% for conservation/re-use) - voters approved in November 2013  Xeriscape in HOA Jurisdictions (SB198 – Watson/Dukes)  Helps ensure rights of Home Owners Association (HOA) members to xeriscape or otherwise have a drought-resistant, water-conserving lawn

Taxes  Pollution Control Property Ad Valorem Tax Exemption (HB 1897 – Eiland/Carona)  Clarifies the application of the exemption from ad valorem taxes for pollution control property  Prohibits a chief appraiser from accepting an application for a pollution control property tax exemption until the property owner provides a copy of the letter issued by the TCEQ determining that the property is pollution control property

Regulatory  PUC Sunset – HB 1600 (Cook/Nichols)  Changes to PUC Commissioner Qualifications  Transfers water and sewer utility regulation from TCEQ to PUC  System Benefit Fund Phase Out (HB 7 – Darby/Williams)  Surcharge eliminated effective Sept. 1, 2013  Balance of fund used by Sept. 1, 2016  Limitation on Data Sharing from Smart Meter (HB 1600 – Cook/Nichols)  Utility may not share or disclose information from a smart meter except to an affiliated corporation or third party entity unless the information is used for the purpose of providing electric utility service to the customer.  Customer may approve release of information for other services

12 Questions? Dub Taylor, Director State Energy Conservation Office