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. Â
- 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 workÂ
-
- Hunter – Put a $1b limit on this; no one is able to say what the PCM costsÂ
- SB 7 is about the $1b cap; without the cap it will cost ratepayers $9b-$15b per yearÂ
- Will have PCM charges on top of all other charges on ratepayer billsÂ
- SB 7 allows PCM to go forward and puts guardrails inÂ
- 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 CouncilÂ
- PUC/ERCOT’s constituency is the generators and utilities, ours is the ratepayerÂ
- This is about money, nothing wrong with putting the cap; will come back in two years and can be changedÂ
- Turner POO, Rule 4, Sec 18, withdrawnÂ
- FA 1 Morales Shaw – Raises cap from $1b to $1.5bÂ
-
- Morales Shaw – Cost cap should be raised to make to better to incentivize more generation on the gridÂ
- Hunter – Most groups agree on $1b, first I’ve heard of $1.5b is today; will not go up, let’s keep it at $1bÂ
- FA 1 fails (46-96)Â
- FA 2 Zwiener – HB 4211*Â
-
- Zwiener – Senate has ignored this bill, good bill worked on with PUC to create Texas Energy Efficiency Council; would be structured similarly to TERCÂ
- Energy efficiency is cost effective and boosts survivability; spoke with Chair Hunter & will be withdrawingÂ
- FA 2 withdrawnÂ
- 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 reliabilityÂ
-
- Turner – According to ERCOT market analysis, guardrails will lead to loss of load 2 out of every 3 years, other analyses show similarÂ
- 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 offeredÂ
- S Thompson – Does the current market have price caps?Â
-
- Turner – Yes it doesÂ
- S Thompson – Would replacing cost cap with price cap allow PCM to function for consumers?Â
-
- Turner – I believe it would, price caps would allow PCM to perform appropriatelyÂ
- S Thompson – Cost caps mean asking ratepayers to pay higher bills without higher reliability?Â
-
- Turner – Yes, provisions add cost without increasing reliabilityÂ
- S Thompson – Would cost cap result in less reliability?Â
-
- Turner – Yes, data from ERCOT shows thatÂ
- 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 reliabilityÂ
-
- 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 costÂ
- Anchia – What does the cap doe to reliability?Â
-
- 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 yearsÂ
- Anchia – Not in ERCOT’s interest for us to have blackouts?Â
-
- Turner – No, not in anyone’s interestÂ
- 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 certaintyÂ
-
- Raymond – Need market certainty, not a perfect bill but is needed; many would agree with Rep. Turner, but this is a good step forwardÂ
- Passed to third reading (119-21)Â
Â
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.Â
- Passed to third reading (103-35)Â
Â
SB 2627 (Schwertner / et al. SP: Hunter) Relating to funding mechanisms to support the construction and operation of electric facilities. Â
- Postponed until after SJR 93, brought back at 5:31pmÂ
- Hunter – Please listen to all the amendments & work together; think you will find a very constructive programÂ
- FA 1 Metcalf – Grant program for non-ERCOT facilities to weatherize and modernizesÂ
-
- FA 1 adoptedÂ
- FA 2 Goodwin – Directs PUC to consider air quality permits with applicantsÂ
-
- Goodwin – Important for applicants to be in compliance with air quality standardsÂ
- 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 programÂ
- FA 2 fails (52-93)Â
- FA 3 Anchia – Cuts loan term from 20 years to 10 yearsÂ
-
- Anchia – Cutting loan term so constituents won’t be on the hook for the long termÂ
- FA 3 adoptedÂ
- 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 RateÂ
-
- Anchia – Still 2 or 3 basis points of incentive based on average ratesÂ
- FA 4 adoptedÂ
- FA 5 Anchia – Moving the deadline up for the bonus program;Â
-
- Anchia – Should get bigger bonus for those getting steel in the ground earlierÂ
- Will need about 5.6k megawatts by Summer of 2026, in line with E3 reportÂ
- FA 5 adoptedÂ
- FA 6 Howard – Allows loans & grants to also apply for energy efficiency upgrades in homes & buildingsÂ
-
- 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 consumersÂ
- Patterson opposes – This removes funding from putting steel in the ground and puts it into home fundingÂ
- FA 6 withdrawnÂ
- FA 7 Geren – Clarifies funds cannot be used to build natural gas pipelineÂ
-
- FA 7 adoptedÂ
- FA 8 Hernandez – Allows for grant fund to be used for backup power at facilities for health, safety, or wellbeingÂ
-
- FA 8 adoptedÂ
- FA 9 Patterson – Allows choice of completion bonus or loan, also allows PUC to establish performance standardsÂ
-
- FA 9 adoptedÂ
- Anchia speaks for the bill – Want to give author credit for working to make bill betterÂ
- Passed to third reading (129-16)Â