Texas Utilities Code

§ 303.0005 — REQUIRED AGREEMENT PROVISIONS ON FINANCIAL ASSURANCE

UT § 303.0005Title 6. PRIVATE POWER AGREEMENTS · Ch. 303. BATTERY ENERGY STORAGE FACILITY AGREEMENTS

Statute text

(a)A battery energy storage facility agreement must provide that the grantee shall obtain and deliver to the landowner evidence of financial assurance that conforms to the requirements of this section to secure the performance of the grantee's obligations under Section 303.0004. Acceptable forms of financial assurance include a parent company guaranty with a minimum investment grade credit rating for the parent company issued by a major domestic credit rating agency, a letter of credit, a bond, or another form of financial assurance reasonably acceptable to the landowner.

(b)The amount of financial assurance must be at least equal to the estimated amount by which the cost of removing the battery energy storage facilities from the landowner's property, recycling or disposing of all the components of the battery energy storage facilities, and restoring the property to as near as reasonably possible the condition of the property as of the date the agreement begins, as described by Section 303.0004, exceeds the salvage value of the battery energy storage facilities, less any portion of the value of the battery energy storage facilities pledged to secure outstanding debt.

(c)The agreement must provide that:

(1)the estimated cost of removing the battery energy storage facilities from the landowner's property, recycling or disposing of all the components of the battery energy storage facilities, and restoring the property to as near as reasonably possible the condition of the property as of the date the agreement begins, as described by Section 303.0004, and the estimated salvage value of the battery energy storage facilities must be determined by an independent, third-party professional engineer licensed in this state;

(2)the grantee must deliver to the landowner the estimated cost of removal and recycling or disposal of the battery energy storage facilities and the salvage value on or before the 10th anniversary of the battery operation date of the grantee's battery energy storage resources located on the landowner's property; and

(3)the grantee must deliver an updated estimate of the cost and salvage value described by Subdivision (2) at least once every five years after the initial estimate for the remainder of the term of the agreement.

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Legislative history

Added by Acts 2025, 89th Leg., R.S., Ch. 281 (H.B. 3809), Sec. 1, eff. September 1, 2025.