The Texas House has given initial approval to SB 7, relating to grid reliability, and SB 2627/SJR 93, creating the Texas Energy Fund, by passing them to third reading. Each bill will also need a final passage vote in the House, which typically occurs the day after. The HillCo report below details floor discussions and votes on each bill.

SB 7 (Schwertner / et al. SP: Hunter) Relating to the reliability of the ERCOT power grid.  

  • Hunter – Bill is about money; this bill has generators on one side of the penalty box, PUC, ERCOT, and utilities want map for the future, which is good, but not all concepts work 
    • Hunter – Put a $1b limit on this; no one is able to say what the PCM costs 
    • SB 7 is about the $1b cap; without the cap it will cost ratepayers $9b-$15b per year 
    • Will have PCM charges on top of all other charges on ratepayer bills 
    • SB 7 allows PCM to go forward and puts guardrails in 
    • I want the cap, have support from Cyrus Reed of Sierra Club and Todd Staples of TXOGA in support, have Environmental Defense Fund and Chemical Council 
    • PUC/ERCOT’s constituency is the generators and utilities, ours is the ratepayer 
    • This is about money, nothing wrong with putting the cap; will come back in two years and can be changed 
  • Turner POO, Rule 4, Sec 18, withdrawn 
  • FA 1 Morales Shaw – Raises cap from $1b to $1.5b 
    • Morales Shaw – Cost cap should be raised to make to better to incentivize more generation on the grid 
    • Hunter – Most groups agree on $1b, first I’ve heard of $1.5b is today; will not go up, let’s keep it at $1b 
    • FA 1 fails (46-96) 
    • Zwiener – Senate has ignored this bill, good bill worked on with PUC to create Texas Energy Efficiency Council; would be structured similarly to TERC 
    • Energy efficiency is cost effective and boosts survivability; spoke with Chair Hunter & will be withdrawing 
    • FA 2 withdrawn 
  • Turner speaks in opposition – Need reliable grid that can withstand extreme cold and extreme heat; set policy objectives last session and left it to ERCOT and PUC to develop plan to address; SB 7 essentially strips work done last session to address Uri, will increases costs and not increase reliability 
    • Turner – According to ERCOT market analysis, guardrails will lead to loss of load 2 out of every 3 years, other analyses show similar 
    • Have to decide if we have deregulated market or not; PCM is a mechanism to remain consistent with deregulated market and increase reliability & there are no alternatives offered 
  • S Thompson – Does the current market have price caps? 
    • Turner – Yes it does 
  • S Thompson – Would replacing cost cap with price cap allow PCM to function for consumers? 
    • Turner – I believe it would, price caps would allow PCM to perform appropriately 
  • S Thompson – Cost caps mean asking ratepayers to pay higher bills without higher reliability? 
    • Turner – Yes, provisions add cost without increasing reliability 
  • S Thompson – Would cost cap result in less reliability? 
    • Turner – Yes, data from ERCOT shows that 
  • Anchia – This is really Goliath versus Goliath is it not? Have some invested in scarcity system and they are the ones in favor of SB 7, then you have others who asked for market changes to be partners in improving reliability 
    • Turner – Yes; not only have we not seen credible alternative proposals, but the incumbent system benefits large industrial users because they can sell power back & ratepayers are absorbing the $5b cost 
  • Anchia – What does the cap doe to reliability? 
    • Turner – Analysis done by E3 for ERCOT looked at different cost caps, for $1b that was a loss of load 2 out of every 3 years 
  • Anchia – Not in ERCOT’s interest for us to have blackouts? 
    • Turner – No, not in anyone’s interest 
  • Raymond speaks for the bill – Need to do something to prevent what happened in Uri; State Affairs has looked at SB 7 & tried to involve everyone, and this is what we came up with, will provide more certainty 
    • Raymond – Need market certainty, not a perfect bill but is needed; many would agree with Rep. Turner, but this is a good step forward 
  • Passed to third reading (119-21) 

 

SJR 93 (Schwertner SP: Hunter) Proposing a constitutional amendment providing for the creation of the Texas energy fund to support the construction, maintenance, modernization, and operation of electric generating facilities. 

  • Passed to third reading (103-35) 

 

SB 2627 (Schwertner / et al. SP: Hunter) Relating to funding mechanisms to support the construction and operation of electric facilities.  

  • Postponed until after SJR 93, brought back at 5:31pm 
  • Hunter – Please listen to all the amendments & work together; think you will find a very constructive program 
  • FA 1 Metcalf – Grant program for non-ERCOT facilities to weatherize and modernizes 
    • FA 1 adopted 
  • FA 2 Goodwin – Directs PUC to consider air quality permits with applicants 
    • Goodwin – Important for applicants to be in compliance with air quality standards 
    • Hunter opposes – Good concept, some can already be done, some needs to be looked at, but have a program in place & can handle much of this already, but don’t think it fits into program 
    • FA 2 fails (52-93) 
  • FA 3 Anchia – Cuts loan term from 20 years to 10 years 
    • Anchia – Cutting loan term so constituents won’t be on the hook for the long term 
    • FA 3 adopted 
  • FA 4 Anchia – Requires loan repayment on earlier of when you begin commercial operations or if you are distressed on 2nd anniversary of when you said you’d begin commercial operations; also ties interest rate at Fed Fund Rate 
    • Anchia – Still 2 or 3 basis points of incentive based on average rates 
    • FA 4 adopted 
  • FA 5 Anchia – Moving the deadline up for the bonus program; 
    • Anchia – Should get bigger bonus for those getting steel in the ground earlier 
    • Will need about 5.6k megawatts by Summer of 2026, in line with E3 report 
    • FA 5 adopted 
  • FA 6 Howard – Allows loans & grants to also apply for energy efficiency upgrades in homes & buildings 
    • Howard – It has been said that the cheapest megawatt is the one we don’t use, energy efficiency is 39% cheaper than building new fossil fuel plants; lowers total demand and costs for consumers 
    • Patterson opposes – This removes funding from putting steel in the ground and puts it into home funding 
    • FA 6 withdrawn 
  • FA 7 Geren – Clarifies funds cannot be used to build natural gas pipeline 
    • FA 7 adopted 
  • FA 8 Hernandez – Allows for grant fund to be used for backup power at facilities for health, safety, or wellbeing 
    • FA 8 adopted 
  • FA 9 Patterson – Allows choice of completion bonus or loan, also allows PUC to establish performance standards 
    • FA 9 adopted 
  • Anchia speaks for the bill – Want to give author credit for working to make bill better 
  • Passed to third reading (129-16)