Texas BESS Decommissioning and Financial Assurance: What HB 3809 Requires

Governor Abbott signed House Bill 3809 on May 29, 2025, and it applies to covered leases entered into on or after September 1, 2025. The law created Chapter 303 of the Texas Utilities Code, a decommissioning framework for battery energy storage systems not owned by electric utilities.

Chapter 303 closely tracks the existing regimes for wind (Chapter 301) and solar (Chapter 302), but it is not a copy. It adds obligations that have no analogue in the earlier chapters — most significantly an affirmative recycling mandate and an earlier financial assurance deadline. And critically, none of it can be waived by agreement.

More than a year into its operation, the practical question has shifted from "what does the statute say" to "does the lease on my desk actually comply." This is a provision-by-provision guide for both sides of that question.

Which leases are covered

Chapter 303 reaches:

• Standalone BESS lease agreements executed on or after September 1, 2025
• Wind or solar facility leases that authorize battery storage operations
• Amendments to pre-existing leases — which deserve careful thought, because an amendment can pull an older lease into the regime

It applies to facilities not owned by electric utilities.

The amendment point is the one most often missed. A landowner or developer amending a 2023 solar lease to add storage should assume Chapter 303 is in play and structure accordingly, rather than assuming the original execution date governs.

Physical removal

The statute requires removal of all BESS infrastructure:

• Battery units, transformers, and substations
• Overhead lines and buried cables, to at least three feet below the surface
• Foundations, excavated to three feet below the original structure
• Backfilling with similar soil

The landowner may additionally request, within 180 days of receiving notice of decommissioning or end of commercial life:

• Removal of roads
• Extraction of rocks 12 inches or larger
• Grade restoration and return to a tillable state
• Reseeding with native plants

That 180-day window is a genuine trap for landowners. These are not automatic obligations — they must be requested, and the right lapses. A landowner who is not tracking the notice, or who does not know the request right exists, simply loses it. We advise landowners to build a calendaring obligation into the lease itself rather than relying on the statute alone.

The recycling mandate

This is what most distinguishes Chapter 303 from the solar and wind regimes. Operators must:

• Reuse or recycle all components capable of being recycled
• Ship materials off-site for recycling where they cannot be processed on-site
• Properly dispose of non-recyclable components
• Comply with environmental standards applicable to hazardous materials

Neither Chapter 301 nor Chapter 302 imposes an equivalent affirmative recycling duty. It reflects the reality that end-of-life battery material is a different problem from a decommissioned turbine or panel — and it has cost consequences that flow into the financial assurance calculation below.

Financial assurance

Deadline. Assurance must be provided by the earlier of lease termination or the 15th anniversary of battery operations.

That is materially earlier than the comparable deadlines elsewhere — 20 years for solar, 10 years for wind — and sits in the middle of a typical project's operating life rather than near its end.

Amount. The assurance must cover the estimated cost of:

• Facility removal
• Land restoration
• Recycling and disposal — a component with no counterpart in the wind or solar regimes

less salvage value, and excluding assets pledged as collateral.

Who calculates it. An independent professional engineer licensed in Texas must provide an initial estimate by the 10th anniversary of operations, and update it at least every five years thereafter.

Acceptable forms. Parent guaranties (backed by investment-grade credit), letters of credit, bonds, or other instruments reasonably acceptable to the landowner.

The recurring engineering estimate deserves attention at drafting. Who selects the engineer, who pays, what happens if the parties disagree with the estimate, and what happens if the updated figure exceeds the posted assurance are all questions the statute leaves to the lease.

Non-waivable, and enforceable by the landowner

Any lease provision purporting to waive Chapter 303 obligations is void and unenforceable. Landowners retain the right to seek injunctive relief and all other available remedies.

This changes the negotiating posture. A developer cannot trade these obligations away, and a landowner cannot accidentally give them up. What remains negotiable is everything the statute does not specify — the mechanics, the timing, the engineer, the form of security, and the consequences of a shortfall.

Practical guidance

For developers. The 15-year assurance deadline should be modeled from the outset, not treated as a distant compliance item. A parent guaranty that depends on investment-grade credit is only as good as the parent's rating in year fifteen, and projects change hands. Build the recycling cost into the decommissioning estimate rather than discovering it at the first engineering update.

For landowners, you should calendar the 180-day request window in the lease. Do not accept a financial assurance instrument whose adequacy depends on the continued creditworthiness of an entity you have no visibility into. Ask what happens if the engineer's updated estimate exceeds the assurance in place.

For both sides. Where storage is co-located with solar, the lease has to work under Chapters 302 and 303 simultaneously, with different deadlines running against different components of the same project. We cover the surrounding lease provisions in Solar Leases: Negotiating Key Provisions.

How we can help

At S Deatherage Law we have negotiated more than 100 renewable energy leases and worked on more than $10 billion in solar, wind, battery, and natural gas generation projects across Texas and other states. We represent developers and landowners alike, which means we can usually tell a client early which of their positions will hold.

If you are negotiating a storage lease, amending an existing lease to add storage, or reviewing whether a lease signed since September 2025 actually complies, we would be glad to discuss it.

This article reflects Texas law as of January 2026.