Legislative Background

In 1999, Senate Bill 7 was passed by the Texas Legislature that established the Renewable Portfolio Standard (RPS) and required 2,000 MW of new renewable engergy by 2009 (on top of 880 MW then-existing). In addition, SB7 established a Renewable Energy Credit (REC) program that required load-serving entities to buy RECs to meet a load-ratio share of the RPS requirement.

In 2005, Senate Bill 20 increased the RPS to 5,880 megawatts by January 1, 2015 and introduced a new concept -- the designation of Competitive Renewable Energy Zones (CREZ). Why? To break the "chicken and egg" deadlock: Transmission Service Providers (TSPs) would not build to wind developers without the wind developer putting up significant money to ensure that the project would actually be built and wind developers were unwilling to commit the security without a guarantee from the TSPs that the transmission would be built.

This act also established a target of 10,000 megawatts of installed renewable capacity by January 1, 2025. To achieve the RPS targets for installed capacities, SB20 ordered the Public Utility Commission of Texas (PUCT) to:

• Designate CREZs in areas in which renewable energy resources and suitable land areas are sufficient to develop generating capacity from renewable energy technologies;
• Consider the level of financial commitment by developers;
• Develop a transmission plan with sufficient capacity to deliver output from renewable resources to electric customers.

Click here to review legislative language in the Texas Utilities Code, Public Utility Regulatory Act, Section 39.904 Goal for Renewable Energy