On March 9th Lt. Governor Dan Patrick started the Powering Texas Forward press conference pointing out there were 9 bills with bi-partisan support to address electric reliability. Governor Patrick was surrounded by eight senators from the Senate Business & Commerce Committee to roll out Chairman Schwertner’s bills, as well as Senator King’s bills.
The bills would make several significant changes and among other things would add dispatchable power generation through a state-sponsored rate-based approach, requires expedited treatment by TDUs to connect the emergency assets to the grid, shifts the cost of ancillary services depending on dispatchability in peak (net load) hours, introduces DRRS (dispatchable reliability reserve service). HillCo will review the bills and provide brief descriptions of each bill in the following days.
Bills to address:
SB 6 (Schwertner | King) – Relating to the establishment of the Texas Energy Insurance Program and other funding mechanisms to support the construction and operation of electric generating facilities.
- Promotes construction of new dispatchable (gas-fired) generation units to be used during extreme scarcity periods. The generation units would be cost-based and have a regulated return approved by the PUCT. Many criteria are included for the entities qualified to construct and operate the units.
SB 7 (Schwertner | King) – Relating to the reliability of the ERCOT power grid.
- Reallocates the costs and returns on ancillary services to allocate more revenues to dispatchable generation.
SB 2010 (Schwertner | King) – Relating to reporting by the market monitor of potential manipulation of the wholesale electric market.
- Requires IMM to send market manipulation information to the legislature annually.
SB 2011 (Schwertner | King) – Relating to the authority of the Public Utility Commission of Texas to impose administrative penalties and enter into voluntary mitigation plans; increasing an administrative penalty.
- Increases the maximum penalty for violations of market abuse or market manipulation from $25,000 to $1,000,000 per violation. Requires voluntary mitigation plans for generators to be updated every two years (to ensure the plans conform to any market changes).
SB 2012 (Schwertner | King) – Relating to electricity services; increasing an administrative penalty.
- A “Reliability Program” is established that pays only dispatchable generators credits that are funded from other generators (not loads) on a “cost-causation basis” and is capped at $500M. Establishes the Grid Reliability Oversight Committee (4 senators, 4 house members). Limits retail market share to 20% of customers in the competitive market. For REPs exceeding 20% today, a plan will be developed with the PUCT to comply with this limit. If 5000 MWs of generation are not built between 6/1/2023 and 12/31/2026, then TDUs are required to build dispatchable generation to reach 5000MWs. The TDU then must register as a power generation company and rate base the units.
SB 2013 (Schwertner | King) – Relating to access to and the security of certain critical infrastructure.
- Addresses security measures to ensure people with a criminal history cannot access data on critical electric infrastructure. ERCOT authorized to see criminal history. Addresses involvement in grid infrastructure by foreign-owned companies from certain countries or equipment that was manufactured in those countries.
SB 1287 (King) – Relating to the cost of interconnecting certain electric generation and energy storage facilities with the ERCOT transmission system.
- Provides an allowance for interconnecting dispatchable generation to the grid with transmission, and costs in excess of that allowance will be assigned to the generator. This promotes interconnection of generation closer to load centers.
SB 2014 (King | Schwertner) – Relating to the legislature’s goal for renewable electric generating capacity.
- Strikes 39.904 from requirements for renewable purchases by the ERCOT market participants and the REC program. Also, “The commission may adopt rules requiring renewable power facilities to have reactive power control capabilities or any other feasible technology designed to reduce the facilities’ effects on system reliability.”
SB 2015 (King | Schwertner) – Relating to the legislature’s goals for electric generation capacity in this state.
- Changes the language that currently states that 50% of electric generation must come from natural gas to 50% of generation must be dispatchable. Establishes a dispatchable generation energy credits trading program on or before 1/1/27 IF dispatchable capacity falls below 55% of all generation after 1/1/24.