Gas-rich Texas is moving to include preferences for the fuel andfor distributed generation in electric industry restructuring.

Texas gas-fired generation and distributed generation stand togain from recent actions by the state’s Public Utility Commission.Commission staff has proposed a natural gas energy credits (NGEC)trading program with the goal of ensuring that at least 50% of allnew generating capacity, except that powered by renewabletechnologies, be gas-fired after Jan. 1. The proposal does notinclude modifications to generation facilities that merely increaseefficiency of currently installed equipment.

The proposal says a credit shall be granted for each megawatt ofnew generating capacity fueled by gas installed after Jan. 1.Eligible for credits are power generating companies, municipallyowned utilities and electric cooperatives.

“After the commission activates the NGEC trading program, thenumber of NGECs required to be owned or held. shall equal [theholder’s] new non-gas-fired generating capacity additions (MW),other than capacity from renewable energy technologies, installedin this state after January 1, 2000.”

Further, electric providers would be allowed to marketelectricity generated from gas produced in Texas as”environmentally beneficial and may label such generation as’green’ electricity.”

Also, Texas electricity customers will have a greateropportunity to own distributed generation following two recent PUCdecisions. One decision involves proposed rules to let customersuse on-site distributed generation. The second decision treatsrenewable technologies as energy efficiency measures if theyproduce less energy than the customer’s total needs. This issuewill be in proposed rules on energy efficiency that should bepublished next month.

These proposed rules and the one dealing with gas-firedgeneration credits are subject to public comment periods, and finalproposals are expected to be enacted later this year. The proposalswould implement parts of Senate Bill 7, the electric industryrestructuring bill passed by the Texas Legislature this year andsigned by Gov. George W. Bush. The proposed rules are available onthe PUC Web site at

Joe Fisher, Houston

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