Texas
State Scorecard Rank
29
Texas
10.0Scored out of 50Updated 12/2022
State Government
Score: 2 out of 4.5
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 Reviewed: July 2017
Equity Metrics and Workforce DevelopmentList All
We were unable to determine if the state's energy plans or electrification strategies establish specific policies or equity-related metrics to ensure access for underserved customers or if they include specific measures to prioritize clean energy workforce development.
Last Reviewed: September 2020
Carbon Pricing PoliciesList All
The State of Texas does not yet have carbon pricing policies in place.
At this time, the state does not have a statewide emissions reduction goal in place.
Last Reviewed: September 2022
Building Energy Disclosure List All
There is no disclosure policy in place.
Last Reviewed: July 2017
Public Building Requirements List All
The Texas Health and Safety Code §388.005(c) requires political subdivisions in 41 non-attainment or affected counties to establish a goal to reduce electric consumption by at least five percent each state fiscal year. In 2019, the 86th Legislature passed Senate Bill 241, extending the timeline for this requirement seven years beginning September 1, 2019. Each political subdivision must submit a report annually to SECO regarding the entity's progress and efforts to meet the five percent annual reduction goal.
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. School Energy Reporting Education Code §44.902: Each ISD shall establish a long-range energy plan with the goal of reducing the district's annual electricity consumption by 5 percent beginning with 2008 state fiscal year. Plan must include strategies for energy savings and cost effectiveness. Energy Savings Performance Contracts and Pay For Success Programs are encouraged (Education Code §44.901 and §44.904) Plans may be voluntarily submitted to SECO, as SECO can help to identify funding or incentives, which may be available to the district.
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. As published in May 2020, SECO published a rule for comments to update the standard for state funded new construction or major innovation from 90.1-2013 to 90.1-2018. 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.
Per the Long-range Utility Services Plan: 34 Tex. Admin. Code Rule §19.16, each shall develop a comprehensive plan that outlines percentage goals for reducing electric, water, transportation fuel, and natural gas consumption. SECO aids in developing an EWMP. Reporting includes a record of monthly electric, water and natural gas consumption data in the ENERGY STAR Portfolio Manager tool. Each shall prepare a long-range plan for the delivery of reliable, cost-effective utility services to the agency or institution, and shall update every 5 years and post plan on a public website.
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.
State agencies track energy data on EnergyStar Portfolio Manager.
Last Reviewed: July 2020
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.
The Office of Vehicle Fleet Management (OVFM) within the Statewide Procurement Division (SPD) is charged with the establishment and management of the state vehicle reporting system to assist agencies in the management of their vehicle fleets. The requirement to manage the state vehicle reporting system, in addition to the Vehicle Fleet Management Plan, is found in Chapter 2171, Subchapter C of the Government Code for Vehicle Fleet Services.
These directives address the OVFM responsibilities of establishing the vehicle reporting system to collect state agency fleet reports on inventory, operating costs and other related data. Additionally, OVFM monitors agency compliance with the state's alternative fuel program purchasing requirements, in accordance with Chapter 2158, Subchapter A, Government Code, and vehicle utilization information in accordance with Chapter 2203, Use of State Property, Section 2203.001.
TXDoT, the largest state fleet, is in the process of reducing its fleet by 37%.
Last Reviewed: July 2020
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 revolving loan fund to help mitigate the cost of ESPCs to state agencies. SECO also provides numerous model documents and lays out the process for establishing an ESPC in a guide. Title 10, Texas Government Code §2166.406 mandates SECO develop guidelines and review ESPCs.
Last Reviewed: July 2020
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 Reviewed: July 2017
Important Links List All
Buildings
Score: 4.5 out of 12
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. 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. The Texas Building Energy Performance Standards requires single family homes to comply with the 2015 IRC and all other residential buildings to comply with the 2015 IECC. 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 Reviewed: September 2020
Commercial Code List All
Texas' building codes are mandatory for commercial construction. Commercial and multi-family buildings must comply with the 2015 IECC and state-funded buildings must meet the ASHRAE 90.1 – 2013 standard. For all buildings, jurisdictions can choose to adopt more stringent standards.
Last Reviewed: September 2020
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. The final report should be available soon. SPEER has recently began a data project looking at compliance paths and building trends in Texas. The first report from the project will be available soon.
- 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.
- 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. Approximately $300,000 were provided for close to 100 SECO trainings held between February and July 2016. SPEER regularly conducts webinars and in-person trainings with average yearly attendance well over 2000 people.
Last Reviewed: September 2020
Important Links List All
CHP
CHP Summary List All
Texas has some policies to support CHP and has made strides in its work on interconnection. No new CHP systems were installed in Texas in 2018.
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 2017
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: August 2017
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 2017
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 2017
Utilities
Score: 2 out of 15
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:
- Potential for Energy Efficiency, Demand Response, and Onsite Renewable Energy to Meet Texas's Growing Electricity Needs
- The Economic Benefits of an Energy Efficiency and Onsite Renewable Energy Strategy to Meet Growing Electricity Needs in Texas
- Role of Energy Efficiency and Onsite Renewables in Meeting Energy and Environmental Needs in the Dallas/Fort Worth and Houston/Galveston Metro Areas
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). In the 2011 legislative session, Texas adopted Senate Bill 1125, which amended the EERS policy by requiring utilities to eventually achieve savings of 0.4% of each company’s peak demand.
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 2017
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 2017
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 established 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 2017
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.
Last Updated: July 2017
Evaluation, Measurement, & Verification List All
- Primary cost-effectiveness test(s) used: utility cost test
- Secondary cost-effectiveness test(s) used: none
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). The state maintains a Technical Reference Manual, which includes deemed savings values for energy efficiency measures.
According to the Database of State Efficiency Screening Practices (DSESP), Texas relies on the utility cost test (UCT) and considers it to be its primary cost-effectiveness test. Texas accounts for low-income programs, technologies, and pilots in a different cost-effectiveness test. A savings-to-investment ratio is used to assess low-income efficiency programs and component measures, and a societal discount rate of 3% is used. Only incentive costs are included and customer avoided energy costs are used as benefits.
Further information on cost-effectiveness screening practices for Texas is available in the Database of State Efficiency Screening Practices (DSESP), a resource of the National Efficiency Screening Project (NESP).
Last updated: May 2019
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 a SIR of 1.0 or greater qualifies for installation. 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
Utility low-income programs are administered separately from WAP programs.
Last updated: July 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. Please see Energy Efficiency Rule, section W.
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 2017
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: July 2017
Important Links List All
Transportation
Score: 2.5 out of 13
Transportation Summary List All
Although Texas has issued legislation supporting complete streets, it has not pursued other policies that encourage efficient transportation systems.
Transportation System Efficiency List All
Transportation and Land use Integration: No policy in place or proposed.
VMT Targets: No policy in place or proposed.
FAST Freight Plans and Goals: Texas has a state freight plan that identifies a multimodal freight network, but it does not include freight energy or greenhouse gas reduction goals. One interesting aspect of this plan is the emphasis on project selection criteria in the planning process that support and prioritize funding of first and last mile connectors in locations with regional, statewide and national significance, including both urban and rural connectors.
Last Reviewed: November 2022
Incentives for High-Efficiency Vehicles List All
The Texas Emissions Reduction Program, which promotes clean air, includes a $2,500 rebate for electric-car buyers, who are also eligible for a $7,500 federal tax credit. Governor Abbott signed the program into law on June 12th and the rebate goes into effect on Sept. 1, 2017.
Last Reviewed: November 2022
Equitable Access to TransportationList All
Texas does not have any state programs in place to incentivize the creation of low-income housing near transit facilities, nor does it consider the proximity of transit facilities when distributing federal Low-Income Housing Tax Credits to qualifying property owners.
Last Reviewed: November 2022