Texas Register, Volume 26, Number 41, Pages 7949-8244, October 12, 2001 Page: 8,028

                                
The commission further notes that as 25.476 will be part of Sub-
chapter R, the term "competitive retailer" as used in this rule is
defined in 25.471 (d)(3), which includes MOUs and co-ops that
have opted into competition only to the extent that they operate
outside their certificated service areas. Therefore, the reporting
required by 25.476(g)(1) does not apply to service by an MOU
or co-op within that entity's certificated service area. Within its
certificated service area, however, an MOU or co-op may volun-
tarily use the provisions of this rule as a mechanism for its own
electricity labeling, if offered, and may voluntarily report supplier
information as San Antonio suggests.
Question No. 2: The proposed rule allows electricity generated
outside of Texas to be included in a competitive retailer's fuel
and environmental disclosure if there is a supply contract be-
tween the competitive retailer and the owner of the out-of-state
generation facility (subsection (g)(2)). However, subsection (f)
excludes non-Texas facilities from the proposed certificates pro-
gram. Does this allow a competitive retailer sufficient means to
authenticate its use of out-of-state generation to meet customer
demand in Texas ?
AEP, Environmental Defense, Independent Marketers, Reliant,
SPS, State of Texas and TXU said the rule as proposed
provides sufficient means for REPs to authenticate out-of-state
generation. Green Mountain also supported the provision,
but suggested language that would allow authentication
through power marketers who have direct contracts with power
generation companies (PGCs) and can provide the contract
documentation needed to verify fuel and emission sources for
generating facilities used to serve a REP's load. AEP sought
clarification on the timing of reporting out-of-state contracts
used to support fuel mix and environmental impact claims.
The commission declines to expand 25.476(g)(2) as sug-
gested by Green Mountain. Tracking purchases through power
marketers raises the kind of technical and accounting difficulties
the commission has sought to avoid throughout this rulemaking.
However, the commission has no objection to reporting under
this section, where a power marketer acts as a broker between
a specific generator and a specific retailer, as long as the
result is a supply contract that involves no other generator or
retailer. Otherwise, supplies purchased by a retailer from a
power marketer are considered system power and shall be
represented by the default scorecard. With regard to timing,
the commission modifies 25.476(g) to clarify that information
pertaining to out-of-state supply contracts must be included in
the retailer's six-month supply reports.
AEP noted that PURA 39.9044(d)(2) specifies that electricity
generated from natural gas may be marketed as "green" only
if the natural gas is produced in Texas, and that the proposed
rule does not address this distinction. State of Texas also sug-
gested adding language specifying that when out-of-state sup-
ply contracts are used for green energy, natural gas cannot be
included as a component of that supply. Similarly, Public Citi-
zen said that a REP should be able to use non-Texas renew-
able or green power in its disclosures to customers only if it can
provide data that are functionally equivalent to what is required
under Texas rules. Consumer Commenters said that non-Texas
resources should be subject to the same verification procedures
as in-state resources.
The commission finds that it is not necessary to distinguish be-
tween Texas and non-Texas natural gas with respect to the fuel
mix calculations described in this rule. Natural gas produced in
New Mexico, Oklahoma or Louisiana may not qualify as "green"

under PURA 39.9044(d)(2), but it is still natural gas and there-
fore should be shown as such in the fuel mix on the Electricity
Facts label. PURA 39.9044(d)(2) pertains only if the retailer
plans to market the power as "green." The commission therefore
adds new paragraphs to 25.476(d) and (g)(1) specifying that if
a retailer intends to tell customers that the natural gas in its fuel
mix is "green," it must provide the commission with proof that the
natural gas was produced in Texas.
Question No. 3: Subsection (d) of the proposed rule sets forth a
general principle for marketing electricity products as "green" or
"renewable." Should the proposed rule set such standards, and
if so, what should they be? If there is to be a fixed benchmark
for marketing an electricity product as 'green,' how much of the
fuel mix should be renewable or natural gas? How much should
come from renewable fuels before it can be sold to customers as
"renewable"?
SPS, Public Citizen, State of Texas, Consumer Commenters,
and Environmental Defense all supported fixed benchmarks
for marketing "green" and "renewable" products. SPS, State of
Texas, and Environmental Defense agreed that energy products
labeled "renewable" should be 100% renewable generation
sources. SPS, Public Citizen, and State of Texas said that
power marketed as "green" should come from generation
sources that use only natural gas. Consumer Commenters,
however, said that any product marketed as "green" should be
100% renewable. Replying to SPS, Environmental Defense
argued that it should be permissible to count generation from
either natural gas or renewable sources as "green," otherwise
customers would likely be confused.
TXU, AEP, Reliant Energy, Independent Marketers, TRPC, and
Green Mountain all opposed fixed benchmarks. TXU and AEP
argued that if customers do not know the criteria used, the
benchmarks may be confusing. In addition, the two companies
stated that a benchmark would not allow consumers the op-
portunity to choose products that only in part contain "green"
or "renewable" energy if their products fail to meet the criteria.
Green Mountain, Independent Marketers, Reliant, San Antonio,
and TXU argued further that the fixed benchmark for marketing
"green" or "renewable" energy retards product differentiation.
Independent Marketers argued that setting benchmarks "would
be analogous to removing the detailed information required by
law on current food labels concerning grams of fat, protein,
carbohydrate, etc." In its reply comments, Green Mountain said
that a fixed benchmark is not a protection against misleading
claims by retailers and could possibly retard the growth of the
market for renewable generation.
State of Texas and Environmental Defense agreed that it would
be appropriate for companies whose products do not meet a
benchmark to label their products with the percentage of "green"
and "renewable" as long as the claim was accurate. To this end,
State of Texas suggested amending subsection (d)(1) so that it
corresponds to subsection (d)(2): "A product may be marketed
as 'green' without reference to a fuel mix percentage only if the
product's authenticated fuel mix is 100% 'green.'" TRPC, how-
ever, suggested modifying subsection (d)(1) so that marketing
statements about a "green" product include the individual per-
centage of natural gas and the individual percentage of renew-
able energy, rather than the sum of the two. Similarly, Consumer
Commenters said that when renewable power sources are com-
bined with other resources, all advertising and all marketing ma-
terials should specifically state the renewable percentage. Pub-
lic Citizen argued that so little renewable energy exists that it

26 TexReg 8028  October 12, 2001

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