Sec. 301.0004. REQUIRED AGREEMENT PROVISIONS ON FINANCIAL ASSURANCE. (a) A wind power 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 wind power facilities located on the landowner's property as described by Section 301.0003. 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 wind power 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 wind power facilities, less any portion of the value of the wind power facilities pledged to secure outstanding debt.
(c) The agreement must provide that:
(1) the estimated cost of removing the wind power 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 wind power facilities must be determined by an independent, third-party professional engineer licensed in this state;
(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 required by this subsection.
(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 wind power facility agreement is terminated; or
(2) the 10th anniversary of the commercial operations date of the wind power facilities located on the landowner's leased property.
(f) For purposes of this section, "commercial operations date" means the date on which the wind power 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 wind power 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 wind power 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 landowner.
Added by Acts 2019, 86th Leg., R.S., Ch. 1293 (H.B. 2845), Sec. 1, eff. September 1, 2019.