HB 4363

relating to battery energy storage facilities; authorizing  fees.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Chapter 35, Utilities Code, is amended by adding
Subchapter F to read as follows:
SUBCHAPTER F.  BATTERY ENERGY STORAGE FACILITY PERMIT
Sec. 35.201.  DEFINITIONS; APPLICABILITY.  (a)  In this
(1)  "Battery energy storage facility" includes
lithium ion battery energy storage and a facility or equipment used
to support the operation of lithium ion battery energy storage,
including an underground or aboveground electrical transmission or
communications line, or an electric transformer.
(2)  "Permit holder" means a person who holds a permit
(3)  "Person" includes an electric cooperative and a
(b)  This subchapter applies only to a battery energy storage
facility that is intended to be used to sell energy or ancillary
Sec. 35.202.  PERMIT REQUIRED.  (a)  A person may not
interconnect a battery energy storage facility to a transmission
facility unless the person holds a permit to operate a battery
energy storage facility issued by the commission under this
(b)  The commission by rule shall require each permitted
battery energy storage facility to comply with the rules adopted by
the state fire marshal under Section 35.203.
(c)  The commission by rule shall adopt a fee to be imposed on
each permit applicant to cover the commission's costs associated
with implementing this subchapter.
(d)  For purposes of this subchapter:
(1)  a provision of Subchapter B or E, Chapter 14, that
authorizes the commission to regulate a public utility also applies
to a person required to obtain a permit under this section,
including an electric cooperative or a municipally owned utility;
(2)  a reference in Chapter 15 to a person includes a
person required to obtain a permit under this section, including an
electric cooperative or a municipally owned utility.
Sec. 35.203.  FIRE SAFETY STANDARDS FOR BATTERY ENERGY
STORAGE FACILITIES.  (a)  The state fire marshal shall adopt and
periodically update fire safety standards for a battery energy
storage facility operating under a permit issued under this
subchapter.  The standards must include:
(1)  minimum distances between battery energy storage
facilities and buildings and critical infrastructure;
(2)  requirements for fireproof barriers to protect
other structures and vegetation;
(3)  minimum standards related to the installation,
design, and maintenance of battery energy storage facilities and
related electrical equipment, including ventilation and cooling;
(4)  fire hazard management standards, including
standards for emergency shutdown systems;
(5)  lithium ion battery safety standards, including
standards for specialized fire suppression equipment; and
(6)  standards for signage near a battery energy
(b)  Each permit holder that owns or operates a permitted
battery energy storage facility shall ensure that the facility
meets the fire safety standards adopted by the state fire marshal
under Subsection (a) at the time of interconnection.
Sec. 35.204.  EMERGENCY OPERATIONS PLANS FOR BATTERY ENERGY
STORAGE FACILITIES.  (a)  A permit holder shall collaborate with
local fire departments to develop a site-specific emergency
operations plan for each battery energy storage facility owned or
operated by the permit holder, including emergency response and
communications protocols for an equipment failure incident.
(b)  The permit holder shall offer to local fire departments
training regarding responding to a fire at the battery energy
storage facility, including specialized training for hazards
related to characteristics of lithium ion battery fires and related
to responding to a fire at a battery energy storage facility that is
integrated with a solar power generation facility.
Sec. 35.205.  FIRE DEPARTMENT RESPONSE FUNDING.  (a) An
applicant for a permit under this subchapter shall obtain from the
fire department, as defined by Section 419.021, Government Code,
volunteer fire department, fire marshal, or other first responder
entity that may reasonably be expected to be the primary first
responder to a fire at the location of the battery energy storage
facility an estimate of the expenses required for the first
responder entity to adequately prepare to respond to a fire at the
battery energy storage facility during the first year after the
date the facility is installed.
(b)  The estimated amount of expenses under Subsection (a)
may not include expenses the first responder entity would incur
regardless of the existence of the battery energy storage facility.
(c)  The commission shall require the applicant to deposit
with the comptroller under Subsection (d) an amount of money the
commission determines is sufficient to compensate the first
responder entity for expenses required for the first responder
entity to adequately prepare to respond to a fire at the battery
energy storage facility during the first year after the date the
facility is installed. The applicant shall provide the estimate
described by Subsection (a) to the commission, who shall consider
the estimate in determining the amount of money required to be
deposited under Subsection (d).
(d)  The comptroller shall deposit money received from an
applicant for the purposes of this section in a separate suspense
account to be held in trust for the first responder entity. The
suspense account is outside the state treasury and the comptroller
may make a payment authorized by this subchapter without the
(e)  After the commission approves the permit application:
(1)  the commission shall notify the comptroller of the
(2)  the comptroller shall pay to the first responder
entity the amount deposited by the permit applicant for that first
Sec. 35.206.  PUBLIC AWARENESS CAMPAIGN.  A permit holder
shall develop a public awareness campaign to educate the public in
the area of the permitted battery energy storage facility about
specific risks and safety measures related to the battery energy
SECTION 2.  The changes in law made by this Act apply only to
a battery energy storage facility interconnected on or after the
SECTION 3.  This Act takes effect September 1, 2025.