Skip Navigation to main content U.S. Department of Energy Energy Efficiency and Renewable Energy
Federal Energy Management Program
 
About the ProgramProgram AreasLaws and RegulationsInformation ResourcesFinancing MechanismsTechnologiesServicesHome

Energy Incentive Programs, Texas

Updated October 2008

Below you will find questions and answers regarding Texas's utility energy efficiency programs, including options for load management, demand response, and distributed energy resources, and information about state-sponsored energy efficiency programs.

What public-purpose-funded energy efficiency programs are available in my state?

The Public Utility Commission of Texas (PUCT) oversees a set of statewide standard offer and market transformation programs that are available to customers in each of the investor-owned utilities' service territories. The programs are funded through a systems benefits charge on transmission and distribution services and are administered by the utilities. Nearly $80 million/year was spent in 2007 across all program types (including residential and low-income). To access utility-by-utility information on specific offerings, visit the Texas Energy Efficiency web site.

The Commercial and Industrial Standard Offer Program, which is offered by all of the state's investor-owned utilities, provides incentives to implement energy efficiency measures in retrofits or renovations. Incentives are paid for both energy and summer peak demand savings and are based on either deemed savings values or measurement and verification. Though incentive levels and eligibility requirements vary across the utilities in Texas, the basic program requirement is that customers have peak demands of at least 100 kW. Service providers can include local contractors, energy service companies (ESCOs), and even the site itself. Conservation measures are not prescribed, but together must provide at least 10 or 20 kW (depending on the utility) of summer peak demand savings per project. Incentive payments range from $150 to $200/kW (at peak) and $0.05 to $0.07/kWh (of 1st year savings).

CenterPoint, AEP, Entergy, El Paso Electric, Texas-New Mexico Power, and Oncor sponsor small facility (< 100 kW peak) standard offer programs, in which program-eligible contractors make retrofits to small facilities and receive incentives from the respective utilities, thereby subsidizing the rates at which they charge participants. Measures range from air sealing and insulation to energy-efficient windows and photovoltaic systems.

Commercial Air-Conditioning Program follows a similar incentive structure, but is focused specifically on 1-20 ton packaged air conditioning systems. Incentives for installations of high-efficiency models are provided to dealers and distributors, lowering the cost to the end-use customer.

CenterPoint's Commercial and Industrial Retro-Commissioning Program is geared towards identifying low-cost peak demand savings. CenterPoint provides a qualified commissioning agent to commission customers' facilities in exchange for a commitment by the facility to invest at least $10,000 in recommended measures.

What utility energy efficiency programs are available to me?

Please see the section above for information regarding standard offer programs offered by Texas' investor-owned utilities. A number of municipal utilities and rural cooperatives also offer energy efficiency programs to their customers. These are profiled on the DSIRE energy efficiency site.

Austin Energy offers a Commercial Rebate Program, which covers air conditioning, lighting, roofs, chillers, energy recovery ventilators, motors, variable speed drives, windows, and custom measures. A separate program offers free (installation included) Energy Miser vending machine controllers.

What load management/demand response options are available to me?

Federal customers can receive payments for providing load curtailments through several programs offered by the Electric Reliability Council of Texas (ERCOT).

  • Balancing Up Loads (BUL): Customer load curtailment offers can be bid into the Balancing Energy Market. If the bid is selected and the load reduction is provided, compensation is made both in terms of an energy payment based on the prevailing market clearing price for energy (MCPE), and a capacity payment based on the market clearing price for capacity in the Non-Spinning Reserves Market.

  • Load Acting as a Resource (LaaR): Customer load curtailment offers can be bid into a number of different ancillary services markets. Participation requirements and compensation depend upon the particular market, although all programs require that customers have real-time telemetry installed. For the Responsive Reserve and Non-Spinning Reserve markets, capacity payments are made regardless of whether the customer is called upon to curtail.

  • Voluntary Load Reduction: Customers receive payment for curtailing load at their discretion, in response to the actual or projected hourly MCPE.

  • Emergency Interruptible Load Service (EILS): As with the BUL and LaaR programs, customers bid to provide load reductions. However, this program is aimed solely at alleviating emergency (as opposed to high price) conditions on the ERCOT grid.

For all programs, the customer participates through their Retail Electricity Provider (REP), and transactions with ERCOT are conducted by the qualified scheduling entity (QSE) for the customer's REP. The specific terms for customer participation, including compensation, are based on the contractual arrangement between the customer and their REP.

CenterPoint Energy's Standard Offer Load Management Program provides participants with a $40/kW incentive for curtailing load for up to four hours during four unscheduled peak (1-7 P.M.) events during summer (May-September) weekdays. There is also a one-hour scheduled curtailment each year to validate reduction capability. Participants must have an aggregate load of 750 kW (at least 250 kW per individual site) and agree to curtail at least 100 kW per site. Aggregators (e.g., ESCOs or curtailment service providers) can also participate in the program.

Oncor's Load Management Program is very similar, except that program events are only called from June through September, and remuneration is provided to service contractors, which then split the savings with customers at a negotiable rate.

Xcel (Southwestern Public Service Company) offers its Interruptible Credit Option to customers who can curtail at least 500 kW. Remuneration is based on the amount of reduction enrolled and the advance notice needed, so ranges widely (from a 4% to 79% bill discount).

SWEPCO (American Electric Power) offers its large (> 5 MW) customers in East Texas an interruptible rate, where SWEPCO can call up to 30 five-hr. events per year (with at least 30 minutes notice). In exchange, participants receive a favorable electric rate.

Austin Energy offers the Load Cooperative Program wherein customers receive incentives (payable June through September) for committed load reductions. Incentives are $5/kW (paid monthly at $1.25/kW per month) for all committed load, along with a payment of 15 cents/kWh for energy reduced during any actual load curtailment.

What distributed energy resource options are available to me?

The Database of State Incentives for Renewable Energy (DSIRE) provides information on programs that offer incentives for renewable distributed generation. The following programs may of interest to federal customers:

  • Austin Energy's Solar Rebate Program offers a $4.50 per watt rebate (up to $100,000 or 80% of system cost, whichever is less) for photovoltaic installations by program-approved installers.

  • CPS Energy (San Antonio's municipal utility) offers $3/W (AC), up to $50,000, to customers who install solar PV systems through its Solar Initiative Rebate program. Installers must be registered with CPS.

Are there energy efficiency programs sponsored by state government?

For information on state-sponsored energy efficiency programs, contact the State Energy Conservation Office at the Texas Comptroller of Public Accounts.

What additional opportunities are available to me?

Federal customers also have opportunities to pursue energy efficiency projects with utilities (e.g., Atmos Energy (Lone Star Gas), CenterPoint Energy, Central Power & Light, CPS Energy, El Paso Electric, Entergy, and Southwestern Public Service Company) that have area-wide contracts with GSA and, by extension, all other federal agencies. Federal facilities should contact their account executive to determine the level of participation by their local utility.

NOTE: Energy efficiency funds and demand response programs are updated at least annually. Please contact the FEMP webmaster if changes are needed between updates.