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                                                                  S.B. No. 712




AN ACT

relating to the legislature's goal for energy efficiency and 
related energy efficiency programs.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 39.905, Utilities Code, is amended to 
read as follows:   
	Sec. 39.905.  GOAL FOR ENERGY EFFICIENCY.  (a)  It is the 
goal of the legislature that:
		(1)  electric utilities will administer energy savings 
incentive programs in a market-neutral, nondiscriminatory manner 
but will not offer underlying competitive services;
		(2)  all customers, in all customer classes, have a 
choice of and access to energy efficiency alternatives and other 
choices from the market that allow each customer to reduce energy 
consumption, peak demand, or [and reduce] energy costs; and
		(3)  each electric utility will provide, through 
market-based standard offer programs or limited, targeted, 
market-transformation programs, incentives sufficient for retail 
electric providers and competitive energy service providers to 
acquire additional cost-effective energy efficiency equivalent to 
at least 10 percent of the electric utility's annual growth in 
demand.
	(b)  The commission shall provide oversight and adopt rules 
and procedures, as necessary, to ensure that the utilities can 
achieve the goal of this section [is achieved by January 1, 2004].
	(c)  A standard offer program provided under Subsection 
(a)(3) must be neutral with respect to technologies, equipment, and 
fuels, including thermal, chemical, mechanical, and electrical 
energy storage technologies.
	(d)  The commission shall adopt the following 
market-transformation program options that the utilities may 
choose to implement in order to satisfy the goal in Subsection 
(a)(3):
		(1)  energy-smart schools;                                             
		(2)  appliance retirement and recycling;                               
		(3)  air conditioning system tune-ups; and                             
		(4)  the use of trees or other landscaping for energy 
efficiency.    
	(e)  An electric utility may use money approved by the 
commission for energy efficiency programs to perform necessary 
research and development to foster continuous improvement and 
innovation in the application of technology and program design and 
implementation.  Money the utility uses under this subsection may 
not exceed 10 percent of the amount the commission approved for 
energy efficiency programs in the utility's most recent full rate 
proceeding.
	(f)  Unless funding is provided under Section 39.903, 
beginning January 1, 2006, each unbundled transmission and 
distribution utility shall include in its energy efficiency plan a 
targeted low-income energy efficiency program as described by 
Section 39.903(f)(2), and the savings achieved by the program shall 
count toward the transmission and distribution utility's energy 
efficiency goal.  The commission shall determine the appropriate 
level of funding to be allocated to both targeted and standard offer 
low-income energy efficiency programs in each unbundled 
transmission and distribution utility service area.  The total 
expenditures for both targeted and standard offer low-income energy 
efficiency programs will be based on the amount spent by the 
transmission and distribution utility on the commission's 
hard-to-reach program in calendar year 2003.  This level of funding 
for low-income energy efficiency programs shall be provided from 
money approved by the commission for the transmission and 
distribution utility's energy efficiency programs.  The state 
agency that administers the federal weatherization assistance 
program shall provide reports as required by the commission to 
provide the most current information available on energy and peak 
demand savings achieved in each transmission and distribution 
utility service area.
	SECTION 2.  This Act takes effect September 1, 2005.                           

                                                                              




______________________________    ______________________________
President of the Senate             Speaker of the House
	I hereby certify that S.B. No. 712 passed the Senate on 
May 3, 2005, by the following vote:  Yeas 31, Nays 0; 
May 26, 2005, Senate refused to concur in House amendments and 
requested appointment of Conference Committee; May 27, 2005, House 
granted request of the Senate; May 29, 2005, Senate adopted 
Conference Committee Report by the following vote:  Yeas 31, 
Nays 0.




______________________________ 
   Secretary of the Senate             
	I hereby certify that S.B. No. 712 passed the House, with 
amendments, on May 25, 2005, by a non-record vote; May 27, 2005, 
House granted request of the Senate for appointment of Conference 
Committee; May 29, 2005, House adopted Conference Committee Report 
by a non-record vote.




______________________________ 
   Chief Clerk of the House            



Approved:


______________________________ 
           Date



______________________________ 
          Governor