HB 3422

relating to the removal of battery energy storage facilities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Title 6, Utilities Code, is amended by adding
Chapter 303 to read as follows:
CHAPTER 303.  BATTERY ENERGY STORAGE FACILITY AGREEMENTS
Sec. 303.0001.  DEFINITIONS.  In this chapter:
(1)  "Battery energy storage facility" includes a
facility or equipment used to support the operation of battery
energy storage, including an underground or aboveground electrical
transmission or communications line, an electric transformer,
telecommunications equipment, a road, a meteorological tower, or a
(2)  "Battery energy storage facility agreement" means
a lease agreement between a grantee and a landowner that authorizes
the grantee to operate a battery energy storage facility on the
(3)  "Grantee" means a person who:
(A)  leases property from a landowner; and
(B)  operates a battery energy storage facility on
Sec. 303.0002.  APPLICABILITY.  This chapter applies only to
battery energy storage that is a generation asset as defined by
Sec. 303.0003.  WAIVER VOID; REMEDIES.  (a)  A provision of a
battery energy storage facility agreement that purports to waive a
right or exempt a grantee from a liability or duty established by
(b)  A person who is harmed by a violation of this chapter is
entitled to appropriate injunctive relief to prevent further
(c)  The provisions of this section are not exclusive.  The
remedies provided in this section are in addition to any other
procedures or remedies provided by other law.
Sec. 303.0004.  REQUIRED AGREEMENT PROVISIONS ON FACILITY
REMOVAL.  (a)  A battery energy storage facility agreement must
provide that the grantee is responsible for removing the grantee's
battery energy storage facilities from the landowner's property and
that the grantee shall, in accordance with any other applicable
(1)  clear, clean, and remove from the property each
piece of battery energy storage equipment, including any
(2)  for each foundation of battery energy storage
equipment, including a transformer or substation installed in the
(A)  clear, clean, and remove the foundation from
the ground to a depth of at least three feet below the surface grade
of the land in which the foundation is installed; and
(B)  ensure that each hole or cavity created in
the ground by the removal is filled with topsoil of the same type or
a similar type as the predominant topsoil found on the property;
(3)  for each buried cable, including power,
fiber-optic, and communications cables, installed in the ground:
(A)  clear, clean, and remove the cable from the
ground to a depth of at least three feet below the surface grade of
the land in which the cable is installed; and
(B)  ensure that each hole or cavity created in
the ground by the removal is filled with topsoil of the same type or
a similar type as the predominant topsoil found on the property; and
(4)  clear, clean, and remove from the property each
overhead power or communications line installed by the grantee on
(b)  The agreement must provide that, at the request of the
(1)  clear, clean, and remove each road constructed by
the grantee on the property; and
(2)  ensure that each hole or cavity created in the
ground by the removal is filled with topsoil of the same type or a
similar type as the predominant topsoil found on the property.
(c)  The agreement must provide that, at the request of the
landowner, if reasonable, the grantee shall:
(1)  remove from the property all rocks over 12 inches
in diameter excavated during the decommissioning or removal
(2)  return the property to a tillable state using
scarification, V-rip, or disc methods, as appropriate; and
(A)  each hole or cavity created in the ground by
the removal is filled with topsoil of the same type or a similar
type as the predominant topsoil found on the property; and
(B)  the surface is returned as near as reasonably
possible to the same condition as before the grantee dug holes or
cavities, including by reseeding pastureland with native grasses
prescribed by an appropriate governmental agency, if any.
(d)  The landowner shall make a request under Subsection (b)
or (c) not later than the 180th day after the later of:
(1)  the date on which the battery energy storage
facility is no longer capable of storing electricity in commercial
(2)  the date the landowner receives written notice of
intent to decommission the battery energy storage facility from the
Sec. 303.0005.  REQUIRED AGREEMENT PROVISIONS ON FINANCIAL
ASSURANCE.  (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
obligation to remove the grantee's battery energy storage
facilities located on the landowner's property as described by
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 acceptable to the landowner.
(b)  The amount of the 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 and
restoring the property to as near as reasonably possible the
condition of the property as of the date the agreement begins
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 and restoring the
property to as near as reasonably possible the condition of the
property as of the date the agreement begins and the estimated
salvage value of the battery energy storage facilities must be
determined by an independent, third-party professional engineer
(2)  the grantee must deliver to the landowner an
updated estimate, prepared by an independent, third-party
professional engineer licensed in this state, of the cost of
removal and the salvage value at least once every five years for the
remainder of the term of the agreement; and
(3)  the grantee is responsible for ensuring that the
amount of the financial assurance remains sufficient to cover the
amount required by Subsection (b), consistent with the estimates
(d)  The grantee is responsible for the costs of obtaining
financial assurance described by this section and costs of
determining the estimated removal costs and salvage value.
(e)  The agreement must provide that the grantee shall
deliver the financial assurance not later than the earlier of:
(1)  the date the battery energy storage facility
(2)  the 10th anniversary of the commercial operations
date of the battery energy storage facilities located on the
(f)  For purposes of this section, "commercial operations
date" means the date on which the battery energy storage facilities
are approved for participation in market operations by a regional
transmission organization and does not include the generation of
electrical energy or other operations conducted before that date
for purposes of maintenance and testing.
(g)  The grantee may not cancel financial assurance before
the date the grantee has completed the grantee's obligation to
remove the grantee's battery energy storage facilities located on
the landowner's property in the manner provided by this chapter,
unless the grantee provides the landowner with replacement
financial assurance at the time of or before the cancellation.  In
the event of a transfer of ownership of the grantee's battery energy
storage facilities, the financial security provided by the grantee
shall remain in place until the date evidence of financial security
meeting the requirements of this chapter is provided to the
SECTION 2.  Chapter 303, Utilities Code, as added by this
Act, applies only to a battery energy storage facility agreement
entered into on or after the effective date of this Act.  A battery
energy storage facility agreement entered into before the effective
date of this Act is governed by the law as it existed immediately
before that date, and that law is continued in effect for that
SECTION 3.  This Act takes effect September 1, 2025.