Relating to the removal of battery energy storage facilities, the official text

H.B. No. 3809

AN ACT

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) a battery energy storage resource; and

(B) any facility or equipment necessary to

support the operation of a battery energy storage resource, other

than a facility or equipment owned by an electric utility, as

defined by Section 31.002.

(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

leased property.

(3) "Battery energy storage resource" means an

electrochemical device, whether connected at the transmission or

distribution level, with a capacity of one megawatt hour or greater

that charges from the grid or a colocated generation resource and

discharges that energy at a later time.

(4) "Battery operation date" means the date on which a

battery energy storage resource is first used for its intended

purpose.

(5) "Grantee" means a person, other than an electric

utility as defined by Section 31.002, who:

(A) leases property from a landowner; and

(B) operates a battery energy storage facility on

the property.

(6) "Recycle" means the processing, including

disassembling, dismantling, and shredding of battery energy

storage cells, modules or other equipment, or their components, to

recover a usable product.

Sec. 303.0002. APPLICABILITY. Except as provided by

Section 303.0004(c), this chapter applies only to an agreement that

authorizes a grantee to operate a battery energy storage facility

that is not subject to Chapter 301 or 302.

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

this chapter is void.

(b) A person who is harmed by a violation of this chapter is

entitled to appropriate injunctive relief to prevent further

violation of this chapter.

(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 battery

energy storage facility from the landowner's property and that the

grantee shall, in accordance with any other applicable laws or

regulations, safely:

(1) clear, clean, and remove from the property each

battery energy storage resource, transformer, and substation

installed and owned by the grantee;

(2) for each foundation installed in the ground for a

battery energy storage resource, transformer, or substation

installed and owned by the grantee:

(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 soil of the same type or a

similar type as the predominant soil found on the property;

(3) for each buried cable, including power,

fiber-optic, and communications cables, installed and owned by the

grantee:

(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 soil of the same type or a

similar type as the predominant soil found on the property; and

(4) clear, clean, and remove from the property each

overhead power or communications line installed and owned by the

grantee on the property.

(b) The agreement must provide that the grantee is

responsible for:

(1) collecting and reusing or recycling, or shipping

for reuse or recycling, all components of the battery energy

storage facility practicably capable of being reused or recycled,

in accordance with any other applicable laws or regulations; and

(2) properly disposing of components of the battery

energy storage facility not practicably capable of being reused or

recycled:

(A) at a facility authorized under state and

federal law to dispose of hazardous substances for a component

considered hazardous under those laws; or

(B) for nonhazardous components, at a municipal

solid waste landfill or other appropriate waste disposal facility

authorized under state and federal law to dispose of that type of

component.

(c) A wind power facility agreement entered into under

Chapter 301 or solar power facility agreement entered into under

Chapter 302 that authorizes the operation of a battery energy

storage facility must include the provisions described by

Subsection (b) and the financial assurance required by those

chapters must be sufficient to secure the performance of the

grantee's obligations under that subsection, in the manner provided

by Section 303.0005.

(d) The agreement must provide that, at the request of the

landowner, the grantee shall:

(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 soil of the same type or a

similar type as the predominant soil found on the property.

(e) 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

process;

(2) return the property to a tillable state using

scarification, V-rip, or disc methods, as appropriate; and

(3) ensure that:

(A) each hole or cavity created in the ground by

the removal is filled with soil of the same type or a similar type as

the predominant soil 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.

(f) The landowner shall make a request under Subsection (d)

or (e) not later than the 180th day after the later of:

(1) the date on which the landowner receives from the

grantee via certified mail a copy of a notification of intent to

suspend operations filed with a grid operator indicating an intent

to permanently cease operations; or

(2) the date the landowner receives written notice of

intent to decommission the battery energy storage facility from the

grantee.

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

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.

(d) The grantee is responsible for the costs of obtaining

financial assurance described by this section and determining the

estimated removal, recycling, and disposal costs and salvage value.

(e) The agreement must provide that the grantee shall

deliver financial assurance not later than the earlier of:

(1) the date the battery energy storage facility

agreement is terminated; or

(2) the 15th anniversary of the battery operation date

of the grantee's battery energy storage resources located on the

landowner's property.

(f) The grantee is responsible for ensuring that the amount

of financial assurance remains sufficient to cover the amount

required by Subsection (b), consistent with the estimates required

by this section.

(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, financial assurance provided by the grantee

shall remain in place until the date evidence of financial

assurance meeting the requirements of this chapter is provided to

the landowner.

SECTION 2. The changes in law made by this Act apply only to

an agreement entered into on or after the effective date of this

Act. An agreement entered into before the effective date of this

Act is governed by the law in effect on the date the agreement was

entered into, and the former law is continued in effect for that

purpose.

SECTION 3. This Act takes effect September 1, 2025.

______________________________
______________________________

President of the Senate
Speaker of the House

I certify that H.B. No. 3809 was passed by the House on April

29, 2025, by the following vote: Yeas 145, Nays 0, 1 present, not

voting; and that the House concurred in Senate amendments to H.B.

No. 3809 on May 19, 2025, by the following vote: Yeas 128, Nays 0,

1 present, not voting.

______________________________

Chief Clerk of the House

I certify that H.B. No. 3809 was passed by the Senate, with

amendments, on May 13, 2025, by the following vote: Yeas 31, Nays

0.

______________________________

Secretary of the Senate

APPROVED: __________________

Date

__________________

Governor