H.B. No. 2303 proposes amendments to the Texas Tax Code and Utilities Code to establish provisions for customer-sited distributed generation. The bill introduces Section 151.360 to the Tax Code, which exempts certain standby electric power devices with a capacity of less than 200 kilowatts from sales and use taxes, provided they are permanently installed and connected to a facility's main electrical panel. Additionally, the bill adds Section 39.9166 to the Utilities Code, defining "customer-sited backup generation facility" and establishing a program for aggregating these facilities to provide dispatchable generation during power outages.

The bill outlines the criteria for customer-sited backup generation facilities, including a maximum capacity of 10 megawatts and the ability to provide backup power to both the customer and the grid. It also specifies that participants in the program are not required to register as power generation companies solely due to their participation. Furthermore, the bill allows for the sale of electricity produced by these facilities, which can be credited to the customer's account. The provisions of this act will expire on September 1, 2035, and the bill is set to take effect on September 1, 2025.

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