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 from sales and use taxes. Specifically, devices with a capacity of less than 200 kilowatts that are permanently installed to provide power during outages will qualify for this exemption. Additionally, the bill mandates that the comptroller will set rules for purchasers to prove their eligibility for this tax exemption.

Furthermore, the bill adds Section 39.9166 to the Utilities Code, creating a program for aggregated distributed generation facilities that can provide dispatchable generation during power outages. This section defines customer-sited backup generation facilities and outlines the criteria for participation in the program, including the capacity limits and the requirement for dispatchability by an independent organization. The program allows participating customers to sell generated electricity and receive credits on their accounts. The provisions of this section will expire on September 1, 2035, and the bill is set to take effect on September 1, 2025.

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