State and Local Policy Database

Texas

State Scorecard Rank

27

Texas

15.5Scored out of 50Updated 9/2016
State Government
Score: 4.5 out of 7
State Government Summary List All

The state offers a major loan program for energy efficiency investments - Texas LoanSTAR - as well as PACE financing. The state government leads by example by requiring energy efficient public buildings and fleets, benchmarking energy use in state buildings, and promoting the use of energy savings performance contracts. Research and development focused on energy efficiency is conducted at several institutions in the state.

Financial Incentives List All

Financial incentive information for Texas is provided by the Database of State Incentives for Renewables and Efficiency (DSIRE Texas). In addition to the state-funded incentives on DSIRE, Texas has enabled Property Assessed Clean Energy (PACE) financing and has one active program. For additional information on PACE, visit PACENation.

Last Updated: July 2016

Building Energy Disclosure List All

There is no disclosure policy in place.

Last Updated: July 2016

Public Building Requirements List All

In 2007, Governor Perry signed HB 3693—an omnibus energy efficiency bill, which established efficiency provisions applicable to school districts and to certain institutions of higher education and executive branch state agencies, requiring them to establish a goal of reducing their annual electricity consumption by 5% for six consecutive years beginning September 1, 2007.  Executive Order RP 49 in 2005 was updated by SB 700 in 2013 and requires uniform reporting of self-determined energy saving goals by state agencies and institutions of higher education. In September 2014, the state began to use Energy Star Portfolio Manager as the tracking tool for SB 700 reporting. 

State Statute (19 TX Administrative Code 34.1.C) requires that before beginning construction of a new state building or a major renovation project, a state agency or an institution of higher education establishes that the project complies with minimum energy efficiency design requirements.

The 81st Legislature also passed HB 1831 and HB 4409, both of which require critical government buildings to obtain a combined heat and power (CHP) feasibility study prior to construction or major renovation.

As published in April 2016, the State Energy Conservation Office (SECO) established ASHRAE 90.1-2013 as the standard for state-funded new construction or major renovation projects, except low-rise residential buildings, which must comply with the 2015 IECC. This code went into effect on June 1, 2016.

Last Updated: July 2016

Fleets List All

In accordance with SB 700 of 2013, each state agency and institution of higher education is required to create a plan that sets a goal for reducing gasoline usage. Also, the State Vehicle Management Plan contains low-emission and alternative fuel vehicle purchase requirements.

TXDoT, the largest state fleet, is in the process of reducing its fleet by 37%.

Last Updated: July 2016

Energy Savings Performance Contracting List All

The Texas State Energy Conservation Office (SECO) and Texas Higher Education Coordinating Board provide services to state agencies and institutions of higher education, respectively, to review and analyze savings in performance contracts (SB 533, 2013). SECO offers a number of financing options to help mitigate the cost of ESPCs to state agencies, including a revolving loan fund and bond financing. SECO also provides numerous model documents and lays out the process for establishing an ESPC in a guide.

Last Updated: July 2016

Research & Development List All

The Texas A&M Energy Systems Laboratory (ESL) is a division of the Texas Engineering Experiment Station and focuses on energy-related research, energy efficiency, and emissions reduction. ESL directs its efforts toward innovative energy technologies and systems and commercializing affordable results for industry, and also plays an important role in the implementation of state energy standards. TEES researchers are also developing web based tools to test the energy efficiency of new homes before construction. 

The Center for Energy and Environmental Resources (CEER) serves as the central liaison for energy and environmental research, education, and public service at the University of Texas at Austin. It focuses on efficient and economical use of energy and on ensuring a cleaner environment by developing, in cooperation with industry, processes and technologies that minimize waste and conserve natural resources. CEER occupies over 43,000 sq. feet of lab and office space, and is funded from numerous state, federal, and private sources.

In addition, the State Energy Office supports clean energy business technology incubators affiliated with three universities. Companies served by these incubators deliver products and services for the overall energy efficiency space. 

Last Updated: July 2016

Buildings
Score: 7 out of 7
Buildings Summary List All

Effective September 1, 2016, single-family residential construction must comply with the 2015 IRC. All other residential and commercial building construction must comply with the 2015 IECC starting November 1, 2016. State-funded building construction must comply with ASHRAE 90.1-2013 starting June 1, 2016. The state works with a stakeholder advisory group, has completed a baseline study, and offers training and outreach.

Residential Codes List All

Texas' building codes are mandatory for residential construction. Effective September 1, 2016 Texas Building Energy Performance Standards require single family homes to comply with the 2015 IRC. For all other residential buildings, the 2015 IECC will go into effect November 1, 2016. For all buildings, jurisdictions can choose to adopt more stringent standards. More than 50 jurisdictions, representing approximately 5.3 million people, have adopted codes more stringent than the minimum state requirements. 

Last Updated: July 2016

Commercial Code List All

Texas' building codes are mandatory for commercial construction. Effective November 1, 2016, commercial and multi-family buildings must comply with the 2015 IECC. Effective June 1, 2016, State-funded buildings must meet the ASHRAE 90.1 – 2013 standard. For all buildings, jurisdictions can choose to adopt more stringent standards.

Last Updated: July 2016

Compliance List All
  • Gap Analysis/Strategic Compliance Plan: The South-Central Partnership for Energy Efficiency as a Resource (SPEER) collaborated with the Texas State Energy Conservation Office (SECO) to conduct a baseline study. The study did not attempt to measure compliance rates, nor was it released to the public. The main goal was to determine a starting point for Texas to evaluate compliance, to determine what could be documented and to identify next steps: http://energycodesocean.org/resource/texas-gap-analysis-report.
  • Baseline & Updated Compliance Studies: Texas is one of eight states selected to participate in US DOE's Residential Energy Code Field Study. Through the project, DOE plans to establish a sufficient data set to represent statewide construction trends and detect significant changes in energy use from training, education and outreach activities. The first stage of the study included field data collection that suggested a high overall compliance rate. Phase II, in which SPEER will conduct intensive Education and Outreach Program, is ongoing.
  • Utility Involvement: Regulatory guidelines have been established enabling significant utility involvement in supporting building energy code compliance. SPEER is working with EUMMOT to use the data collected in the compliance study to develop new utility programs that will provide incentives to increase residential energy efficiency in new homes and improve compliance with energy codes.
  • Stakeholder Advisory Group: The Texas Energy Code Compliance Collaborative meets quarterly and is run by SPEER in collaboration with SECO: http://eepartnership.org/texas-energy-code-compliance-collaborative/.
  • Training/Outreach: SPEER has developed a statewide Energy Code Ambassador Program and these professionals have advanced training in the energy codes and provide peer-to-peer assistance to code officials and builders in their local areas, which is being expanded in 2014. SECO also provides several training programs around the state and has established an online training center, the Texas Energy Code Training Center: http://www.txenergycodetraining.org/. Approximately $300,000 were provided for close to 100 SECO trainings held between February and July 2016.

Last Updated: September 2016

CHP
Score: 1.5 out of 4
CHP Summary List All

Texas has some policies to support CHP and has made strides in its work on interconnection. Four new CHP systems were installed in Texas in 2015.

Interconnection StandardsList All

In response to the 1999 Texas Public Utility Regulatory Act that determined that on-site generation was an entitlement to all customers, the Public Utility Commission of Texas developed generous interconnection regulations, effective 2001. Texas’ rules allow the interconnection of distributed generation, including CHP, up to 10 MW, and do not establish a limit on the total interconnected distributed generation capacity at any one facility. Rules apply to a variety of size tiers, which allow for less restrictive interconnection for systems of smaller sizes. Additionally, the rules establish customer-friendly timelines on approval or rejection of interconnection applications, ensuring proposed projects do not sit in regulatory limbo.

For systems larger than 10 MW, a step-by-step guide on how to interconnect larger distributed generation to the ERCOT transmission grid. The Distributed Generation Interconnection Tool for Texas was developed by the Houston Advanced Research Center (HARC) and the State Energy Conservation Office (SECO) with support from the US Department of Energy. It can help ensure a successful and timely interconnection process from beginning to end.

Last Updated: August 2016

Encouraging CHP as a ResourceList All

There are currently no state policies designed to acquire energy savings from CHP (like other efficiency resources) or energy generation from CHP (in terms of kWh production) that apply to all forms of CHP.

Last Updated: June 2016

Deployment IncentivesList All

There are currently no statewide policies that provide incentives for CHP deployment. CHP system owners may benefit from financing opportunities in some localities. The Property Assessed Clean Energy (PACE) statute, Chapter 399 of the Texas Local Government Code, authorizes municipalities and counties in Texas to work with private sector lenders and property owners to finance qualified improvements using contractual assessments voluntarily imposed on the property by the owner. City of Houston, City of Dallas, Travis County, Williams County, Willacy County have all created districts. CHP is eligible and being promoted for PACE financing in these areas.

Last Updated: August 2016

Additional Supportive PoliciesList All

Several additional supportive policies exist to encourage CHP in Texas. 

In 2013, Texas passed House Bill 2049, which allows CHP system owners to sell electric energy to multiple customers. It ensures that cogenerators selling electricity to more than one customer are not subject to regulation as a retail electric utility or subject to regulation as a retail electric provider or power generation company.

In 2011, Texas passed House Bill 3268 requiring that the state’s Commission on Environmental Quality (TCEQ) develop a “permit-by-rule” option of a simplified air permitting process for CHP systems that would allow for expedited permitting for certain qualifying systems. For CHP to be eligible under this section, systems must be designed such that its useful thermal energy is greater than 20% of the total heat energy output.

In 2009, Texas also passed two bills aimed at securing and strengthening critical government-owned buildings and facilities. They require that those facilities deemed “critical” conduct a feasibility assessment for CHP prior to initial construction or at points of major renovation.

Last Updated: August 2016

Utilities
Score: 0 out of 20
Utilities Summary List All

Since 1999, Texas law has required electric utilities to meet energy efficiency goals, which became the nation's first EERS.  In 2010, the Public Utilities Commission of Texas (PUCT) increased the goals from 20% of electric demand growth to 25% growth in demand in 2012 and 30% in 2013 and beyond, and later adopted S.B. 1125, which will eventually require utilities to meet EERS targets based on peak demand rather than growth in demand. While the goals have increased modestly in recent years, they are still far below most other EERS policies and as a result, utility energy efficiency program investments and savings in Texas are below the national average. 

To meet the efficiency goals, utilities administer incentive programs, which retail electric providers and energy efficiency service providers implement. Programs are typically funded through the utilities’ tariff or base rate. Utilities submit plans for the forthcoming year and reports on energy and capacity savings from the previous year to the PUCT. The PUCT approves the plans. Utilities receive performance bonuses based on their energy savings.

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables.

In 2007, as part of its State Clean Energy Resource Project, ACEEE completed the following reports about energy efficiency in Texas: 

Customer Energy Efficiency Programs List All

Texas law requires all electric transmission and distribution utilities (TDUs) to meet energy efficiency goals — currently, 30 percent of load growth (see information below on Energy Efficiency Resource Standards for more information). To meet these goals, utilities administer incentive programs. Retail electric providers and energy efficiency service providers implement the programs. All programs are designed to reduce system peak demand, energy consumption, and/or energy costs and are available to customers in all customer classes. 

An Energy Efficiency Cost Recovery Factor (EECRF) rate schedule is included in tariffs and permits utilities to recover the costs of providing energy efficiency programs. The commission also has the option of approving an energy charge or a monthly customer charge for the EECRF.

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables.

Last Updated: July 2016

Energy Efficiency as a Resource List All

While Texas has no integrated resource planning rules, the state does have a filing requirement for long-term energy plans.

Last Updated: July 2016

Energy Efficiency Resource Standards List All

Summary: 20% Incremental Load Growth in 2011 (equivalent to ~0.10% incremental savings per year); 25% in 2012, 30% in 2013. After 2013, the goal metric is shifting to 0.4% of peak.

In 1999, Texas became the first state to establish an energy efficiency resource standard, requiring electric utilities to offset 10% of load growth through end-use energy efficiency (Texas Senate Bill 7). Demand growth is the average growth of the five previous weather adjusted peak demands for each utility. In 2007, after several years of meeting this goal at low costs, the legislature increased the standard to 15% of load growth by December 31, 2008 and 20% of load growth by December 31, 2009 (Texas House Bill 3693).  The legislation also required utilities to submit energy savings goals. The Public Utility Commission of Texas (PUCT) approved these rules in March 2008.

While the 2007 legislation required utilities to submit GWh savings goals to ensure they did not overly focus on load management, the PUCT determined that utilities could convert their demand savings goals into corresponding energy savings goals. In practice, however, the energy savings (MWh) resulting from Texas utility demand response and energy efficiency programs are about twice the amount of the energy saving goals.

In 2010, the PUCT approved Substantive Rule § 25.181, which increased the goals from 20% of electric demand growth to 25% growth in demand in 2012 and 30% in 2013. The rule also establishes customer cost caps to limit efficiency expenditures. The cost caps may not affect every utility, but some have already hit the caps, which are inhibiting investment in cost-effective energy efficiency programs.

In the 2011 legislative session, Texas adopted Senate Bill 1125, which amends the EERS policy by requiring utilities to eventually achieve savings of 0.4% of each company’s peak demand. As a result, utilities with rapidly growing load growth will have more predictable and consistent goals than those that were set based on load growth. The Bill also added focus on reducing demand in the winter. The Bill does not remove the cost caps adopted in 2010.

Texas has no natural gas EERS.

Last Updated: July 2016

Utility Business Model List All

Texas does not decouple utilities’ profits from their sales. In 2009, the state considered a bill on decoupling, but the legislation did not pass (SB 1972).

All investor-owned utilities have a shared benefit incentive in place. When a utility exceeds its demand reduction goal within the prescribed cost limit it is awarded a performance bonus. The performance bonus is based on the utility’s energy efficiency achievements for programs implemented in the previous year (PUCT Substantive Rule §25.181).

A utility that exceeds 100% of its demand and energy reduction goals shall receive a bonus equal to 1% of the net benefits for every 2% that the demand reduction goal has been exceeded, with a maximum of 10% of the utility’s total net benefits.. Additionally, a utility that meets at least 120% of its demand reduction goal with at least 10% of its savings achieved through Hard-to-Reach programs (which benefit customers with an annual household income at or below 200% of the federal poverty guidelines) can receive an additional bonus equal to 10% of the regular performance bonus.

Last Updated: July 2016

Evaluation, Measurement, & Verification List All

The evaluation of ratepayer-funded energy efficiency programs in Texas relies on both legislative mandates (Senate Bill 1125) and regulatory orders, The Public Utility Commission of Texas (PUCT) hires an independent third-party contractor to perform evaluations.

In 2011, the Texas Legislature enacted SB 1125, which requires PUCT to develop an EM&V framework for effective program design and streamlined reporting. The EM&V framework is embodied in P.U.C. SUBST. R. 25.181, relating to Energy Efficiency Goal (see section P)

Last updated: July 2016

Guidelines for Low-Income Energy Efficiency Programs List All

Requirements for State and Utility Support of Low-Income Energy Efficiency Programs

As amended by SB 1434 in June 2011, Substantive Rule § 25.181 states “…each utility shall ensure that annual expenditures for the targeted low-income energy efficiency program are not less than 10% of the utility’s energy efficiency budget for the program year.”

Cost-Effectiveness Rules for Low-Income Energy Efficiency Programs

In an Order adopted September 28, 2012, the commission directed that low-income programs would not be required to meet the cost-effectiveness standard in Substantive Rule § 25.181, but rather would only need to meet standards required by the Savings-to-Investment ratio (SIR) methodology. All measures with an SIR of 1.0 or greater qualifies for installation, up to a total of $6,500 per home. The SIR is the ratio of the present value of a customer’s estimated lifetime electricity cost savings from energy efficiency measures to the present value of the installation costs, inclusive of any incidental repairs, of those energy efficiency measures.

Coordination of Ratepayer-Funded Low-Income Programs with WAP Services

Level of coordination is unclear from publicly available data.

Last updated: April 2017

Self Direct and Opt-Out Programs List All

In Texas, for-profit customers that take electric service at the transmission level are not allowed to participate in utilities' energy efficiency programming and therefore do not pay for it.  Instead industrial customers develop their own energy efficiency plans if desired and work with third-party providers to implement and finance energy efficiency investments.  There is no measurement or monitoring of the investments. 

More information on large customer self-direct programs can be found in the ACEEE report, Follow the Leaders: Improving Large Customer Self-Direct Programs.

 Last Updated: July 2016

Data AccessList All

Guidelines for Third Party Access​

All customers in Texas can access their energy usage data through the Smart Meter Texas portal or grant a third party access to analyze the data. ​
 
Requirements for Provision of Energy Data​
 
PUCT rules have been established with the following requirement for the provision of energy data: "An electric utility shall provide a customer, the customer’s REP, and other entities authorized by the customer read-only access to the customer’s advanced meter data, including meter data used to calculate charges for service, historical load data, and any other proprietary customer information. The access shall be convenient and secure, and the data shall be made available no later than the day after it was created." 
 
Energy Use Data Availability​
 
Customers who register on Smart Meter Texas can access their individual data.
 
 

Last Updated: October 2016

Transportation
Score: 2.5 out of 10
Transportation Summary List All

Although Texas has issued legislation supporting complete streets, it has not pursued other policies that encourage efficient transportation systems.

Tailpipe Emission Standards List All

No policy in place or proposed.

Last Updated: July 2015

Transportation System Efficiency List All

Transportation and Land use Integration: No policy in place or proposed.

VMT Targets: No policy in place or proposed.

Complete Streets: The Texas Department of Transportation has released guidelines requiring the inclusion of acccomodations for bikers and pedestrians in all road projects. 

MAP 21 Freight Plans and Goals: The state has a comprehensive state freight plan but it does not highlight concrete freight system efficiency strategies or include efficiency performance measures. 

Last Updated: June 2016

Transit Funding List All

No policy in place or proposed.

Last Updated: July 2015

Incentives for High-Efficiency Vehicles List All

No policy in place or proposed.

Last Updated: June 2016

Appliance Standards
Score: 0 out of 2
Appliance Standards Summary List All

Texas adopted standards on plumbing products in 2009 for toilets and urinals. No analysis has been completed that estimates energy savings.

Last Updated: August 2016