Bill Text: TX HB1500 | 2023-2024 | 88th Legislature | Enrolled

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Bill Title: Relating to the continuation and functions of the Public Utility Commission of Texas and the Office of Public Utility Counsel, and the functions of the independent organization certified for the ERCOT power region; increasing an administrative penalty.

Spectrum: Moderate Partisan Bill (Republican 5-1)

Status: (Passed) 2023-06-09 - Effective on 9/1/23 [HB1500 Detail]

Download: Texas-2023-HB1500-Enrolled.html

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H.B. No. 1500

AN ACT
relating to the continuation and functions of the Public Utility
Commission of Texas and the Office of Public Utility Counsel, and
the functions of the independent organization certified for the
ERCOT power region; increasing an administrative penalty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 12.005, Utilities Code, is amended to
read as follows:
Sec. 12.005. APPLICATION OF SUNSET ACT. The Public Utility
Commission of Texas is subject to Chapter 325, Government Code
(Texas Sunset Act). Unless continued in existence as provided by
that chapter or by Chapter 39, the commission is abolished [and this
title expires] September 1, 2029 [2023].
SECTION 2. Section 12.059, Utilities Code, is amended to
read as follows:
Sec. 12.059. TRAINING PROGRAM FOR COMMISSIONERS. (a) A
person who is appointed to and qualifies for office as a member of
the commission may not vote, deliberate, or be counted as a member
in attendance at a meeting of the commission until the person
completes a [Before a commissioner may assume the commissioner's
duties and before the commissioner may be confirmed by the senate,
the commissioner must complete at least one course of the] training
program that complies with [established under] this section.
(b) The [A] training program must [established under this
section shall] provide the person with information [to the
commissioner] regarding:
(1) the law governing [enabling legislation that
created the] commission operations [and its policymaking body to
which the commissioner is appointed to serve];
(2) the programs, functions, rules, and budget of
[operated by] the commission;
(3) the scope [role and functions] of and limitations
on the rulemaking authority of the commission;
(4) the results [rules] of the most recent formal
audit of the commission [with an emphasis on the rules that relate
to disciplinary and investigatory authority];
(5) the requirements of:
(A) laws relating to open meetings, public
information, administrative procedure, and disclosing conflicts of
interest; and
(B) other laws applicable to members of a state
policy-making body in performing their duties [current budget for
the commission]; and
(6) [the results of the most recent formal audit of the
commission;
[(7) the requirements of Chapters 551, 552, and 2001,
Government Code;
[(8) the requirements of the conflict of interest laws
and other laws relating to public officials; and
[(9)] any applicable ethics policies adopted by the
commission or the Texas Ethics Commission.
(c) A person [who is] appointed to the commission is
entitled to reimbursement, as provided by the General
Appropriations Act, for the travel expenses incurred in attending
the training program regardless of whether the attendance at the
program occurs before or after the person qualifies for office.
(d) The executive director of the commission shall create a
training manual that includes the information required by
Subsection (b). The executive director shall distribute a copy of
the training manual annually to each member of the commission. Each
member of the commission shall sign and submit to the executive
director a statement acknowledging that the member received and has
reviewed the training manual.
SECTION 3. Section 12.202, Utilities Code, is amended by
adding Subsections (a-1) and (a-2) to read as follows:
(a-1) The policies adopted under this section must require
the agenda for each regular commission meeting to include public
testimony as a meeting agenda item and allow members of the public
to comment on:
(1) each meeting agenda item unrelated to a contested
case; and
(2) other matters under the commission's jurisdiction.
(a-2) The commission may prohibit public comment at a
regular commission meeting on a meeting agenda item related to a
contested case.
SECTION 4. Section 12.203, Utilities Code, is amended to
read as follows:
Sec. 12.203. BIENNIAL REPORT. (a) Not later than January
15 of each odd-numbered year, the commission shall prepare a
written report that includes:
(1) suggestions regarding modification and
improvement of the commission's statutory authority and for the
improvement of utility regulation in general, including the
regulation of water and sewer service under Chapter 13, Water Code,
that the commission considers appropriate for protecting and
furthering the interest of the public;
(2) a report on the scope of competition in the
electric and telecommunications markets that includes:
(A) an assessment of:
(i) the effect of competition and industry
restructuring on customers in both competitive and noncompetitive
electric markets; and
(ii) the effect of competition on the rates
and availability of electric services for residential and small
commercial customers;
(B) an assessment of the effect of competition
on:
(i) customers in both competitive and
noncompetitive telecommunications markets, with a specific focus
on rural markets; and
(ii) the rates and availability of
telecommunications services for residential and business
customers, including any effects on universal service; and
(C) a summary of commission action over the
preceding two years that reflects changes in the scope of
competition in regulated electric and telecommunications markets;
and
(3) recommendations for legislation that the
commission determines appropriate to promote the public interest in
the context of partially competitive electric and
telecommunications markets.
(b) A telecommunications utility, as defined by Section
51.002, shall cooperate with the commission as necessary for the
commission to satisfy the requirements of this section.
SECTION 5. Subchapter E, Chapter 12, Utilities Code, is
amended by adding Section 12.205 to read as follows:
Sec. 12.205. STRATEGIC COMMUNICATIONS PLAN. The commission
shall:
(1) develop an agency-wide plan for:
(A) improving the effectiveness of commission
communications with the public, market participants, and other
relevant audiences; and
(B) responding to changing communications needs;
(2) include in the plan required by Subdivision (1)
goals, objectives, and metrics to assess commission efforts; and
(3) update the plan required by Subdivision (1) at
least once every two years.
SECTION 6. Section 13.002, Utilities Code, is amended to
read as follows:
Sec. 13.002. APPLICATION OF SUNSET ACT. The Office of
Public Utility Counsel is subject to Chapter 325, Government Code
(Texas Sunset Act). Unless continued in existence as provided by
that chapter, the office is abolished [and this chapter expires]
September 1, 2029 [2023].
SECTION 7. Sections 15.023(b-1) and (f), Utilities Code,
are amended to read as follows:
(b-1) Notwithstanding Subsection (b), the penalty for a
violation of a voluntary mitigation plan entered into under
Subsection (f) or of a provision of Section 35.0021 or 38.075 may be
in an amount not to exceed $1,000,000 for a violation. Each day a
violation continues or occurs is a separate violation for purposes
of imposing a penalty.
(f) The commission and a person may develop and enter into a
voluntary mitigation plan relating to a violation of Section 39.157
or rules adopted by the commission under that section. The
commission may approve the plan only if the commission determines
that the plan is in the public interest. The voluntary mitigation
plan must be reviewed at least once every two years and not later
than the 90th day after the implementation date of a wholesale
market design change. As part of the review, the commission must
determine whether the voluntary mitigation plan remains in the
public interest. If the commission determines that the voluntary
mitigation plan is no longer in the public interest, the commission
and the person must agree to a modification of the plan or the
commission must terminate the plan. Adherence [If the commission
and a person enter into a voluntary mitigation plan, adherence] to
the plan must be considered in determining whether a violation
occurred and, if so, the penalty to be assessed [constitutes an
absolute defense against an alleged violation with respect to
activities covered by the plan].
SECTION 8. Subchapter A, Chapter 35, Utilities Code, is
amended by adding Section 35.0022 to read as follows:
Sec. 35.0022. SERVICE INTERRUPTION NOTIFICATIONS. (a)
This section applies only to a provider of electric generation
service described by Section 35.0021(a).
(b) The commission by rule shall require a provider of
electric generation service to provide to the independent
organization certified under Section 39.151 for the ERCOT power
region the reason for each unplanned service interruption. Not
later than the third business day after the service is restored, the
independent organization shall include the reason for each
unplanned service interruption in a publicly available report
published on the independent organization's Internet website.
SECTION 9. Section 35.004, Utilities Code, is amended by
amending Subsection (d) and adding Subsections (d-1), (d-2), and
(d-3) to read as follows:
(d) The commission shall price wholesale transmission
services within ERCOT based on the postage stamp method of pricing
under which a transmission-owning utility's rate is based on the
ERCOT utilities' combined annual costs of transmission, other than
costs described by Subsections (d-2) and (d-3), divided by the
total demand placed on the combined transmission systems of all
such transmission-owning utilities within a power region. An
electric utility subject to the freeze period imposed by Section
39.052 may treat transmission costs in excess of transmission
revenues during the freeze period as an expense for purposes of
determining annual costs in the annual report filed under Section
39.257. Notwithstanding Section 36.201, the commission may approve
wholesale rates that may be periodically adjusted to ensure timely
recovery of transmission investment. Notwithstanding Section
36.054(a), if the commission determines that conditions warrant the
action, the commission may authorize the inclusion of construction
work in progress in the rate base for transmission investment
required by the commission under Section 39.203(e).
(d-1) The commission by rule shall establish a reasonable
allowance for transmission-owning utility costs incurred to
interconnect generation resources directly with the ERCOT
transmission system at transmission voltage. The allowance must
take into account:
(1) the potential to reduce the costs to consumers of
generation interconnection;
(2) historical generation interconnection costs; and
(3) any other factor that the commission considers
reasonable to accomplish the goal of this subsection.
(d-2) Costs in excess of the transmission-owning utility
allowance provided by Subsection (d-1) incurred to interconnect
generation resources with the ERCOT transmission system must be
directly assigned to and collected from the generation resource
interconnecting through the facilities.
(d-3) Not later than September 1 of every fifth year, the
commission shall review and may adjust the allowance provided by
Subsection (d-1) to account for inflation or supply chain issues.
SECTION 10. Section 36.053(d), Utilities Code, is amended
to read as follows:
(d) If the commission issues a certificate of convenience
and necessity or if the commission, acting under the authority
formerly provided by Section 39.203(e), ordered [orders] an
electric utility or a transmission and distribution utility to
construct or enlarge transmission or transmission-related
facilities to facilitate meeting the goal for generating capacity
from renewable energy technologies under former Section 39.904(a),
the commission shall find that the facilities are used and useful to
the utility in providing service for purposes of this section and
are prudent and includable in the rate base, regardless of the
extent of the utility's actual use of the facilities.
SECTION 11. Section 37.0541, Utilities Code, is amended to
read as follows:
Sec. 37.0541. CONSOLIDATION OF CERTAIN PROCEEDINGS. The
commission shall consolidate the proceeding on an application to
obtain or amend a certificate of convenience and necessity for the
construction of a transmission line with the proceeding on another
application to obtain or amend a certificate of convenience and
necessity for the construction of a transmission line if it is
apparent from the applications or a motion to intervene in either
proceeding that the transmission lines that are the subject of the
separate proceedings share a common point of interconnection.
[This section does not apply to a proceeding on an application for a
certificate of convenience and necessity for a transmission line to
serve a competitive renewable energy zone as part of a plan
developed by the commission under Section 39.904(g)(2).]
SECTION 12. Sections 37.056(c) and (d), Utilities Code, are
amended to read as follows:
(c) The commission shall grant each certificate on a
nondiscriminatory basis after considering:
(1) the adequacy of existing service;
(2) the need for additional service;
(3) the effect of granting the certificate on the
recipient of the certificate and any electric utility serving the
proximate area; and
(4) other factors, such as:
(A) community values;
(B) recreational and park areas;
(C) historical and aesthetic values;
(D) environmental integrity; and
(E) the probable improvement of service or
lowering of cost to consumers in the area if the certificate is
granted, including any potential economic or reliability benefits
associated with dual fuel and fuel storage capabilities in areas
outside the ERCOT power region[; and
[(F) to the extent applicable, the effect of
granting the certificate on the ability of this state to meet the
goal established by Section 39.904(a) of this title].
(d) The commission by rule shall establish criteria, in
addition to the criteria described by Subsection (c), for granting
a certificate for a transmission project that serves the ERCOT
power region and[,] that is not necessary to meet state or federal
reliability standards[, and that is not included in a plan
developed under Section 39.904(g)]. The criteria must include a
comparison of the estimated cost of the transmission project for
consumers and the estimated congestion cost savings for consumers
that may result from the transmission project, considering both
current and future expected congestion levels and the transmission
project's ability to reduce those congestion levels. The
commission shall include with its decision on an application for a
certificate to which this subsection applies findings on the
criteria.
SECTION 13. Subchapter D, Chapter 38, Utilities Code, is
amended by adding Section 38.078 to read as follows:
Sec. 38.078. CIRCUIT SEGMENTATION STUDY AND COST RECOVERY.
(a) Not later than September 15, 2023, the commission shall direct
each transmission and distribution utility to perform a circuit
segmentation study.
(b) A circuit segmentation study must:
(1) use an engineering analysis to examine whether and
how the transmission and distribution utility's transmission and
distribution systems can be segmented and sectionalized to manage
and rotate outages more evenly across all customers and circuits,
while maintaining the protections offered to critical facilities;
(2) include an engineering analysis of the feasibility
of using sectionalization, automated reclosers, and other
technology to break up the circuits that host significant numbers
of critical facilities into smaller segments for outage management
purposes to enable more granular and flexible outage management;
(3) identify feeders with critical facilities that, if
equipped with facility-specific backup power systems and
segmentation, can enhance the utility's outage management
flexibility; and
(4) include an estimate of the time, capital cost, and
expected improvements to load-shed management associated with the
circuit segmentation study.
(c) Each transmission and distribution utility shall submit
a report of the conclusions of the utility's study to the commission
not later than September 1, 2024.
(d) The commission shall review each circuit segmentation
study not later than March 15, 2025.
SECTION 14. Section 39.002, Utilities Code, as amended by
Chapters 908 (H.B. 4492) and 950 (S.B. 1580), Acts of the 87th
Legislature, Regular Session, 2021, is reenacted and amended to
read as follows:
Sec. 39.002. APPLICABILITY. This chapter, other than
Sections 39.151, 39.1516, 39.155, 39.157(e), 39.159, 39.160,
39.203, [39.904,] 39.9051, 39.9052, and 39.914(e), and Subchapters
M and N, does not apply to a municipally owned utility or an
electric cooperative. Sections 39.157(e) and[,] 39.203[, and
39.904, however,] apply only to a municipally owned utility or an
electric cooperative that is offering customer choice. If there is
a conflict between the specific provisions of this chapter and any
other provisions of this title, except for Chapters 40 and 41, the
provisions of this chapter control.
SECTION 15. Section 39.151, Utilities Code, is amended by
amending Subsections (d), (g-1), and (g-6) and adding Subsection
(g-7) to read as follows:
(d) The commission shall adopt and enforce rules relating to
the reliability of the regional electrical network and accounting
for the production and delivery of electricity among generators and
all other market participants, or may delegate those
responsibilities to an independent organization [responsibilities
for adopting or enforcing such rules. Rules adopted by an
independent organization and enforcement actions taken by the
organization under delegated authority from the commission are
subject to commission oversight and review and may not take effect
before receiving commission approval]. An independent organization
certified by the commission is directly responsible and accountable
to the commission. The commission has complete authority to
oversee and investigate the independent organization's finances,
budget, and operations as necessary to ensure the organization's
accountability and to ensure that the organization adequately
performs the organization's functions and duties. The independent
organization shall fully cooperate with the commission in the
commission's oversight and investigatory functions. The
commission may take appropriate action against an independent
organization that does not adequately perform the organization's
functions or duties or does not comply with this section, including
decertifying the organization or assessing an administrative
penalty against the organization. The commission by rule shall
adopt procedures governing decertification of an independent
organization, selecting and certifying a successor organization,
and transferring assets to the successor organization to ensure
continuity of operations in the region. The commission may not
implement, by order or by rule, a requirement that is contrary to an
applicable federal law or rule.
(g-1) The [independent organization's] bylaws of an
independent organization certified for the ERCOT power region [or
protocols] must be approved by [the commission] and [must] reflect
the input of the commission. The bylaws must require that every
member of the governing body be a resident of this state and must
prohibit a legislator from serving as a member. The governing body
must be composed of:
(1) two members [the chairman] of the commission as
[an] ex officio nonvoting members:
(A) one of whom must be the presiding officer of
the commission; and
(B) one of whom must be designated by the
presiding officer of the commission to serve a one-year term on the
governing body [member];
(2) the counsellor as an ex officio voting member
representing residential and small commercial consumer interests;
(3) the chief executive officer of the independent
organization as an ex officio nonvoting member; and
(4) eight members selected by the selection committee
under Section 39.1513 with executive-level experience in any of the
following professions:
(A) finance;
(B) business;
(C) engineering, including electrical
engineering;
(D) trading;
(E) risk management;
(F) law; or
(G) electric market design.
(g-6) In this subsection, a reference to a protocol includes
a rule. Protocols adopted by an independent organization and
enforcement actions taken by the organization under delegated
authority from the commission are subject to commission oversight
and review and may not take effect before receiving commission
approval. To maintain certification as an independent organization
under this section, the organization's governing body must
establish and implement a formal process for adopting new protocols
or revisions to existing protocols. The process must require that
new or revised protocols may not take effect until the commission
approves a market impact statement describing the new or revised
protocols. The commission may approve, reject, or remand with
suggested modifications to the independent organization's
governing body protocols adopted by the organization.
(g-7) The presiding officer of the commission shall
designate commissioners to serve terms on the independent
organization's governing body under Subsection (g-1)(1)(B) in the
order in which the commissioners were first appointed to the
commission. A commissioner may not serve an additional term until
each commissioner has served a term.
SECTION 16. Section 39.1511, Utilities Code, is amended by
amending Subsection (a) and adding Subsection (a-1) to read as
follows:
(a) Meetings of the governing body of an independent
organization certified under Section 39.151 and meetings of a
subcommittee that includes a member of the governing body must be
open to the public. The bylaws of the independent organization and
the rules of the commission may provide for the governing body or
subcommittee to enter into executive session closed to the public
only to address risk management or a matter that the independent
organization would be authorized to consider in a closed meeting if
the independent organization were governed under Chapter 551,
Government Code [sensitive matters such as confidential personnel
information, contracts, lawsuits, competitively sensitive
information, or other information related to the security of the
regional electrical network].
(a-1) An independent organization's governing body or a
subcommittee may adopt a policy allowing the governing body or
subcommittee to enter into an executive session closed to the
public and commissioners, including the commissioners serving as ex
officio nonvoting members, only to address a contested case, as
defined by Section 2001.003, Government Code, or a personnel matter
that is unrelated to members of the governing body.
SECTION 17. Subchapter D, Chapter 39, Utilities Code, is
amended by adding Section 39.1514 to read as follows:
Sec. 39.1514. COMMISSION DIRECTIVES TO INDEPENDENT
ORGANIZATION. (a) The commission may not use a verbal directive
to direct an independent organization certified under Section
39.151 to take an official action. The commission may direct the
organization to take an official action only through:
(1) a contested case;
(2) rulemaking; or
(3) a memorandum or written order adopted by a
majority vote.
(a-1) The commission must use a contested case or rulemaking
process to direct an independent organization certified under
Section 39.151 to take an official action that will create a new
cost or fee, increase an existing cost or fee, or impose significant
operational obligations on an entity.
(b) The commission by rule shall:
(1) specify the types of directives the commission may
issue through a contested case, rulemaking, memorandum, or written
order, in accordance with Subsection (a-1);
(2) require that proposed commission directives be
included as an item on a commission meeting agenda and require the
commission to allow members of the public an opportunity to comment
on the agenda item; and
(3) establish a reasonable timeline for the release
before a commission meeting of discussion materials relevant to
any proposed commission directives included as agenda items for
that meeting.
(c) Notwithstanding another provision of this section, the
commission may use a verbal directive to direct an independent
organization to take an official action in an urgent or emergency
situation that poses an imminent threat to public health, public
safety, or the reliability of the power grid. If the commission
uses a verbal directive, the commission shall provide written
documentation of the directive to the independent organization not
later than 72 hours after the urgent or emergency situation ends.
The commission by rule shall establish criteria for determining
whether a situation is urgent or an emergency under this subsection
and establish a process by which the commission will issue
directives to the independent organization under this subsection.
SECTION 18. Section 39.1515, Utilities Code, is amended by
amending Subsections (a) and (f) and adding Subsection (i) to read
as follows:
(a) An independent organization certified under Section
39.151 shall contract with an entity selected by the commission to
act as the commission's wholesale electric market monitor to detect
and prevent market manipulation strategies, [and] recommend
measures to enhance the efficiency of the wholesale market, and
provide independent analysis of any material changes proposed to
the wholesale market. The commission may not restrict the market
monitor from appearing or speaking before or providing analysis to
the legislature. The independent organization may not
substantially modify the market monitor's contract unless the
modification is approved by a majority of the commissioners.
(f) The market monitor immediately shall report in writing
directly to the commission and commission staff all [any] potential
market manipulations and all [any] discovered or potential
violations of commission rules or rules of the independent
organization.
(i) Not later than December 1 of each year, the commission
shall submit a report to the legislature that describes for the
12-month period preceding the report's submission:
(1) the number of instances in which the market
monitor reported potential market manipulation to the commission or
commission staff;
(2) the statutes, commission rules, and rules of the
independent organization alleged to have been violated by the
reported entities; and
(3) the number of instances reported under Subdivision
(1) for which the commission instituted a formal investigation on
its own motion or commission staff initiated an enforcement action.
SECTION 19. Section 39.155(d), Utilities Code, is amended
to read as follows:
(d) In a qualifying power region, the report [reports]
required by Subsection (c) [Subsections (b) and (c)] shall be
submitted by the independent organization or organizations having
authority over the power region or discrete areas thereof.
SECTION 20. Section 39.157(f), Utilities Code, is amended
to read as follows:
(f) Following review of the annual report [reports]
submitted to it under Section 39.155(c) [Sections 39.155(b) and
(c)], the commission shall determine whether specific transmission
or distribution constraints or bottlenecks within this state give
rise to market power in specific geographic markets in the state.
The commission, on a finding that specific transmission or
distribution constraints or bottlenecks within this state give rise
to market power, may order reasonable mitigation of that potential
market power by ordering, under Section 39.203(e), one or more
electric utilities or transmission and distribution utilities to
construct additional transmission or distribution capacity, or
both, subject to the certification provisions of this title.
SECTION 21. The heading to Section 39.159, Utilities Code,
as added by Chapter 426 (S.B. 3), Acts of the 87th Legislature,
Regular Session, 2021, is amended to read as follows:
Sec. 39.159. POWER REGION RELIABILITY AND DISPATCHABLE
GENERATION.
SECTION 22. Section 39.159, Utilities Code, as added by
Chapter 426 (S.B. 3), Acts of the 87th Legislature, Regular
Session, 2021, is amended by adding Subsections (d) and (e) to read
as follows:
(d) The commission shall require the independent
organization certified under Section 39.151 for the ERCOT power
region to develop and implement an ancillary services program to
procure dispatchable reliability reserve services on a day-ahead
and real-time basis to account for market uncertainty. Under the
required program, the independent organization shall:
(1) determine the quantity of services necessary based
on historical variations in generation availability for each season
based on a targeted reliability standard or goal, including
intermittency of non-dispatchable generation facilities and forced
outage rates, for dispatchable generation facilities;
(2) develop criteria for resource participation that
require a resource to:
(A) be capable of running for at least four hours
at the resource's high sustained limit;
(B) be online and dispatchable not more than two
hours after being called on for deployment; and
(C) have the dispatchable flexibility to address
inter-hour operational challenges; and
(3) reduce the amount of reliability unit commitment
by the amount of dispatchable reliability reserve services procured
under this section.
(e) Notwithstanding Subsection (d)(2)(A), the independent
organization certified under Section 39.151 for the ERCOT power
region may require a resource to be capable of running for more than
four hours as the organization determines is needed.
SECTION 23. Subchapter D, Chapter 39, Utilities Code, is
amended by adding Sections 39.1591, 39.1592, 39.1593, 39.1594, and
39.1595 to read as follows:
Sec. 39.1591. REPORT ON DISPATCHABLE AND NON-DISPATCHABLE
GENERATION FACILITIES. Not later than December 1 of each year, the
commission shall file a report with the legislature that:
(1) includes:
(A) the estimated annual costs incurred by
load-serving entities under this subchapter associated with
backing up dispatchable and non-dispatchable electric generation
facilities to guarantee that a firm amount of electric energy will
be available to the ERCOT power grid; and
(B) as calculated by the independent system
operator, the cumulative annual costs that have been incurred in
the ERCOT market to facilitate the transmission of dispatchable and
non-dispatchable electricity to load and to interconnect
transmission level loads, including a statement of the total
cumulative annual costs and of the cumulative annual costs incurred
for each type of activity described by this paragraph; and
(2) documents the status of the implementation of this
subchapter, including whether the rules and protocols adopted to
implement this subchapter have materially improved the
reliability, resilience, and transparency of the electricity
market.
Sec. 39.1592. GENERATION RELIABILITY REQUIREMENTS. (a)
This section applies only to an electric generation facility in the
ERCOT power region for which a standard generator interconnection
agreement is signed on or after January 1, 2027, that has been in
operation for at least one year, and that is not a self-generator.
(b) Not later than December 1 of each year, an owner or
operator of an electric generation facility, other than a battery
energy storage resource, shall demonstrate to the commission the
ability of the owner or operator's portfolio to operate or be
available to operate when called on for dispatch at or above the
seasonal average generation capability during the times of highest
reliability risk, as determined by the commission, due to low
operation reserves, as determined by the commission. The owner or
operator must be allowed to meet the performance requirements
described by this subsection by supplementing or contracting with
on-site or off-site resources, including battery energy storage
resources. The commission shall determine the average generation
capability based on expected resource availability and
seasonal-rated capacity on a standalone basis.
(c) The commission shall require the independent
organization certified under Section 39.151 for the ERCOT power
region to:
(1) enforce the requirements of Subsection (b) by
imposing financial penalties, as determined by the commission, for
failing to comply with the performance requirements described by
that subsection; and
(2) provide financial incentives, as determined by the
commission, for exceeding the performance requirements described
by that subsection.
(d) The independent organization certified under Section
39.151 for the ERCOT power region may not impose penalties under
Subsection (c):
(1) for resource unavailability due to planned
maintenance outages or transmission outages;
(2) on resources that are already subject to
performance obligations during the highest reliability risk hours
under the day-ahead market rules or other ancillary or reliability
services established by the commission or the independent
organization; or
(3) during hours outside a baseline established by the
commission that includes morning and evening ramping periods.
Sec. 39.1593. COST ALLOCATION OF RELIABILITY SERVICES. (a)
The commission shall direct the independent organization certified
under Section 39.151 for the ERCOT power region to evaluate with
input from a technical advisory committee established under the
bylaws of the independent organization that includes market
participants whether allocating the costs of ancillary and
reliability services, including those procured under Section
39.159, as added by Chapter 426 (S.B. 3), Acts of the 87th
Legislature, Regular Session, 2021, using a methodology described
by Subsection (b) would result in a net savings to consumers in the
ERCOT power region compared to allocating all costs of ancillary
and reliability services to load to ensure reliability.
(b) The commission shall evaluate whether to allocate the
cost of ancillary and reliability services:
(1) on a semiannual basis among electric generation
facilities and load-serving entities in proportion to their
contribution to unreliability during the times of highest
reliability risk due to low operating reserves by season, as
determined by the commission based on a number of hours adopted by
the commission for that season; or
(2) using another method identified by the commission.
(c) The evaluation must:
(1) use historical ancillary and reliability services
data;
(2) consider the causes for ancillary services
deployments; and
(3) consider the design, procurement, and cost
allocation of ancillary services required by Section 35.004(h).
(d) Not later than December 1, 2026, the commission shall
submit a report on the evaluation to the legislature.
Sec. 39.1594. RELIABILITY PROGRAM. (a) Under Section
39.159(b), as added by Chapter 426 (S.B. 3), Acts of the 87th
Legislature, Regular Session, 2021, or other law, the commission
may not require retail customers or load-serving entities in the
ERCOT power region to purchase credits designed to support a
required reserve margin or other capacity or reliability
requirement unless the commission ensures that:
(1) the net cost to the ERCOT market of the credits
does not exceed $1 billion annually, less the cost of any interim or
bridge solutions that are lawfully implemented, except that the
commission may adjust the limit:
(A) proportionally according to the highest net
peak demand year-over-year with a base year of 2026; and
(B) for inflation with a base year of 2026;
(2) credits are available only for dispatchable
generation;
(3) the independent organization certified under
Section 39.151 for the ERCOT power region is required to procure the
credits centrally in a manner designed to prevent market
manipulation by affiliated generation and retail companies;
(4) a generator cannot receive credits that exceed the
amount of generation bid into the forward market by that generator;
(5) an electric generating unit can receive a credit
only for being available to perform in real time during the tightest
intervals of low supply and high demand on the grid, as defined by
the commission on a seasonal basis;
(6) a penalty structure is established, resulting in a
net benefit to load, for generators that bid into the forward market
but do not meet the full obligation;
(7) any program reliability standard reasonably
balances the incremental reliability benefits to customers against
the incremental costs of the program based on an evaluation by the
wholesale electric market monitor;
(8) a single ERCOT-wide clearing price is established
for the program and does not differentiate payments or credit
values based on locational constraints;
(9) any market changes implemented as a bridge
solution for the program are removed not later than the first
anniversary of the date the program was implemented;
(10) the independent organization certified under
Section 39.151 for the ERCOT power region begins implementing real
time co-optimization of energy and ancillary services in the ERCOT
wholesale market before the program is implemented;
(11) all elements of the program are initially
implemented on a single starting date;
(12) the terms of the program and any associated
market rules do not assign costs, credit, or collateral for the
program in a manner that provides a cost advantage to load-serving
entities who own, or whose affiliates own, generation facilities;
(13) secured financial credit and collateral
requirements are adopted for the program to ensure that other
market participants do not bear the risk of nonperformance or
nonpayment; and
(14) the wholesale electric market monitor has the
authority and necessary resources to investigate potential
instances of market manipulation by program participants,
including financial and physical actions, and recommend penalties
to the commission.
(b) This section does not require the commission to adopt a
reliability program that requires an entity to purchase capacity
credits.
(c) The commission and the independent organization
certified under Section 39.151 for the ERCOT power region shall
consider comments and recommendations from a technical advisory
committee established under the bylaws of the independent
organization that includes market participants when adopting and
implementing a program described by Subsection (a), if any.
(d) Before the commission adopts a program described by
Subsection (a), the commission shall require the independent
organization certified under Section 39.151 for the ERCOT power
region and the wholesale electric market monitor to complete an
updated assessment on the cost to and effects on the ERCOT market of
the proposed reliability program and submit to the commission and
the legislature a report on the costs and benefits of continuing the
program. The assessment must include:
(1) an evaluation of the cost of new entry and the
effects of the proposed reliability program on consumer costs and
the competitive retail market;
(2) a compilation of detailed information regarding
cost offsets realized through a reduction in costs in the energy and
ancillary services markets and use of reliability unit commitments;
(3) a set of metrics to measure the effects of the
proposed reliability program on system reliability;
(4) an evaluation of the cost to retain existing
dispatchable resources in the ERCOT power region;
(5) an evaluation of the planned timeline for
implementation of real time co-optimization for energy and
ancillary services in the ERCOT power region; and
(6) anticipated market and reliability effects of new
and updated ancillary service products.
(e) If the commission adopts a program described by
Subsection (a), the commission by rule shall prohibit a generator
that receives credits through the program for a dispatchable
electric generating unit operated by the generator from
decommissioning or removing from service that unit while the
generator participates in the program unless the decommissioning or
removal from service begins after September 1, 2028, or the
commission finds that the decommissioning or removal from service:
(1) is required by or is a result of federal law; or
(2) would alleviate significant financial hardship
for the generator.
(f) If the commission adopts a program described by
Subsection (a), the wholesale electric market monitor described by
Section 39.1515 biennially shall:
(1) evaluate the incremental reliability benefits of
the program for consumers compared to the costs to consumers of the
program and the costs in the energy and ancillary services markets;
and
(2) report the results of each evaluation to the
legislature.
Sec. 39.1595. GRID RELIABILITY LEGISLATIVE OVERSIGHT
COMMITTEE. (a) In this section, "committee" means the Grid
Reliability Legislative Oversight Committee established under this
section.
(b) The Grid Reliability Legislative Oversight Committee is
created to oversee the commission's implementation of legislation
related to the regulation of the electricity market in this state
enacted by the 87th and 88th Legislatures.
(c) The committee is composed of eight members as follows:
(1) three members of the senate, appointed by the
lieutenant governor;
(2) three members of the house of representatives,
appointed by the speaker of the house of representatives;
(3) the chair of the committee of the senate having
primary jurisdiction over matters relating to the generation of
electricity; and
(4) the chair of the committee of the house having
primary jurisdiction over matters relating to the generation of
electricity.
(d) An appointed member of the committee serves at the
pleasure of the appointing official.
(e) The committee members described by Subsections (c)(3)
and (4) serve as presiding co-chairs.
(f) A member of the committee may not receive compensation
for serving on the committee but is entitled to reimbursement for
travel expenses incurred by the member while conducting the
business of the committee as provided by the General Appropriations
Act.
(g) The committee shall meet at least twice each year at the
call of either co-chair and shall meet at other times at the call of
either co-chair, as that officer determines appropriate.
(h) Chapter 551, Government Code, applies to the committee.
SECTION 24. (a) This section takes effect only if the Act
of the 88th Legislature, Regular Session, 2023, relating to
nonsubstantive additions to and corrections in enacted codes
becomes law.
(b) Subchapter D, Chapter 39, Utilities Code, is amended by
adding Sections 39.166, 39.167, and 39.168 to read as follows:
Sec. 39.166. ELECTRIC INDUSTRY REPORT. (a) Not later than
January 15 of each odd-numbered year, the commission, in
consultation with the independent organization certified under
Section 39.151 for the ERCOT power region, shall prepare and submit
to the legislature an electric industry report.
(b) Each electric industry report submitted under this
section must:
(1) identify existing and potential transmission and
distribution constraints and system needs within the ERCOT power
region, alternatives for meeting system needs, and recommendations
for meeting system needs;
(2) summarize key findings from:
(A) the grid reliability assessment conducted
under Section 39.165; and
(B) the report required by Section 39.9112;
(3) outline basic information regarding the electric
grid and market in this state, including generation capacity,
customer demand, and transmission capacity currently installed on
the grid and projected in the future; and
(4) be presented in plain language that is readily
understandable by a person with limited knowledge of the electric
industry.
Sec. 39.167. CONFLICTS OF INTEREST REPORT. The commission
and the independent organization certified under Section 39.151 for
the ERCOT power region annually shall review statutes, rules,
protocols, and bylaws that apply to conflicts of interest for
commissioners and for members of the governing body of the
independent organization and submit to the legislature a report on
the effects the statutes, rules, protocols, and bylaws have on the
ability of the commission and the independent organization to
fulfill their duties.
Sec. 39.168. RETAIL SALES REPORT. (a) Each retail electric
provider that offers electricity for sale shall report to the
commission:
(1) its annual retail sales in this state;
(2) the annual retail sales of its affiliates by
number of customers, kilowatts per hour sold, and revenue from
kilowatts per hour sold by customer class; and
(3) any other information the commission requires
relating to affiliations between retail electric providers.
(b) The commission by rule shall prescribe the nature and
detail of the reporting requirements. The commission may accept
information reported under other law to satisfy the requirements of
this section. Information reported under this section is
confidential and not subject to disclosure if the information is
competitively sensitive information. The commission shall
administer the reporting requirements in a manner that ensures the
confidentiality of competitively sensitive information.
SECTION 25. (a) This section takes effect only if the Act of
the 88th Legislature, Regular Session, 2023, relating to
nonsubstantive additions to and corrections in enacted codes does
not become law.
(b) Subchapter D, Chapter 39, Utilities Code, is amended by
adding Sections 39.166, 39.167, and 39.168 to read as follows:
Sec. 39.166. ELECTRIC INDUSTRY REPORT. (a) Not later than
January 15 of each odd-numbered year, the commission, in
consultation with the independent organization certified under
Section 39.151 for the ERCOT power region, shall prepare and submit
to the legislature an electric industry report.
(b) Each electric industry report submitted under this
section must:
(1) identify existing and potential transmission and
distribution constraints and system needs within the ERCOT power
region, alternatives for meeting system needs, and recommendations
for meeting system needs;
(2) summarize key findings from:
(A) the grid reliability assessment conducted
under Section 39.159, as added by Chapter 876 (S.B. 1281), Acts of
the 87th Legislature, Regular Session, 2021; and
(B) the report required by Section 39.9112;
(3) outline basic information regarding the electric
grid and market in this state, including generation capacity,
customer demand, and transmission capacity currently installed on
the grid and projected in the future; and
(4) be presented in plain language that is readily
understandable by a person with limited knowledge of the electric
industry.
Sec. 39.167. CONFLICTS OF INTEREST REPORT. The commission
and the independent organization certified under Section 39.151 for
the ERCOT power region annually shall review statutes, rules,
protocols, and bylaws that apply to conflicts of interest for
commissioners and for members of the governing body of the
independent organization and submit to the legislature a report on
the effects the statutes, rules, protocols, and bylaws have on the
ability of the commission and the independent organization to
fulfill their duties.
Sec. 39.168. RETAIL SALES REPORT. (a) Each retail electric
provider that offers electricity for sale shall report to the
commission:
(1) its annual retail sales in this state;
(2) the annual retail sales of its affiliates by
number of customers, kilowatts per hour sold, and revenue from
kilowatts per hour sold by customer class; and
(3) any other information the commission requires
relating to affiliations between retail electric providers.
(b) The commission by rule shall prescribe the nature and
detail of the reporting requirements. The commission may accept
information reported under other law to satisfy the requirements of
this section. Information reported under this section is
confidential and not subject to disclosure if the information is
competitively sensitive information. The commission shall
administer the reporting requirements in a manner that ensures the
confidentiality of competitively sensitive information.
SECTION 26. Sections 39.203(e) and (i), Utilities Code, are
amended to read as follows:
(e) The commission may require an electric utility or a
transmission and distribution utility to construct or enlarge
facilities to ensure safe and reliable service for the state's
electric markets and to reduce transmission constraints within
ERCOT in a cost-effective manner where the constraints are such
that they are not being resolved through Chapter 37 or the ERCOT
transmission planning process. [The commission shall require an
electric utility or a transmission and distribution utility to
construct or enlarge transmission or transmission-related
facilities for the purpose of meeting the goal for generating
capacity from renewable energy technologies under Section
39.904(a).] In any proceeding brought under Chapter 37, an
electric utility or transmission and distribution utility ordered
to construct or enlarge facilities under this subchapter need not
prove that the construction ordered is necessary for the service,
accommodation, convenience, or safety of the public and need not
address the factors listed in Sections 37.056(c)(1)-(3) and (4)(E).
Notwithstanding any other law, including Section 37.057, in any
proceeding brought under Chapter 37 by an electric utility or a
transmission and distribution utility related to an application for
a certificate of public convenience and necessity to construct or
enlarge transmission or transmission-related facilities under this
subsection, the commission shall issue a final order before the
181st day after the date the application is filed with the
commission. If the commission does not issue a final order before
that date, the application is approved.
(i) The commission, in cooperation with transmission and
distribution utilities and the ERCOT independent system operator,
shall study whether existing transmission and distribution
planning processes are sufficient to provide adequate
infrastructure for seawater desalination projects. If the
commission determines that statutory changes are needed to ensure
that adequate infrastructure is developed for projects of that
kind, the commission shall include recommendations in the report
required by Section 12.203 [31.003].
SECTION 27. Section 39.206(q), Utilities Code, is amended
to read as follows:
(q) The commission shall, in conjunction with the Nuclear
Regulatory Commission, investigate the development of a mechanism
whereby the State of Texas could ensure that funds for
decommissioning will be obtained when necessary in the same manner
as if the State of Texas were the licensee under federal law. [The
commission shall file legislative recommendations regarding any
changes in law that may be necessary to carry out the purposes of
this subsection prior to January 15, 2009, which may be combined
with the report required by Section 31.003.]
SECTION 28. Section 39.402(a), Utilities Code, is amended
to read as follows:
(a) Until the date on which an electric utility subject to
this subchapter is authorized by the commission to implement
customer choice, the rates of the utility shall be regulated under
traditional cost of service regulation and the utility is subject
to all applicable regulatory authority prescribed by this subtitle
and Subtitle A, including Chapters 14, 32, 33, 36, and 37. Until the
date on which an electric utility subject to this subchapter
implements customer choice, the provisions of this chapter, other
than this subchapter, Sections 39.1516[, 39.904,] and 39.905, and
the provisions relating to the duty to obtain a permit from the
Texas Commission on Environmental Quality for an electric
generating facility and to reduce emissions from an electric
generating facility, shall not apply to that utility. That portion
of any commission order entered before September 1, 2001, to comply
with this subchapter shall be null and void.
SECTION 29. Section 39.408(g), Utilities Code, is amended
to read as follows:
(g) This section expires September 1, 2029 [2023].
SECTION 30. Section 39.452(d), Utilities Code, is amended
to read as follows:
(d) Until the date on which an electric utility subject to
this subchapter implements customer choice:
(1) the provisions of this chapter do not apply to that
electric utility, other than this subchapter, Sections 39.1516[,
39.904,] and 39.905, the provisions relating to the duty to obtain a
permit from the Texas Commission on Environmental Quality for an
electric generating facility and to reduce emissions from an
electric generating facility, and the provisions of Subchapter G
that pertain to the recovery and securitization of hurricane
reconstruction costs authorized by Sections 39.458-39.463; and
(2) the electric utility is not subject to a rate
freeze and, subject to the limitation provided by Subsection (b),
may file for rate changes under Chapter 36 and for approval of one
or more of the rate rider mechanisms authorized by Sections 39.454
and 39.455.
SECTION 31. Section 39.4525(g), Utilities Code, is amended
to read as follows:
(g) This section expires September 1, 2029 [2023].
SECTION 32. Section 39.502(b), Utilities Code, is amended
to read as follows:
(b) Until the date on which an electric utility subject to
this subchapter implements customer choice, the provisions of this
chapter, other than this subchapter and Sections 39.1516[, 39.904,]
and 39.905, do not apply to that utility.
SECTION 33. Section 39.504(g), Utilities Code, is amended
to read as follows:
(g) This section expires September 1, 2029 [2023].
SECTION 34. Section 39.552(b), Utilities Code, is amended
to read as follows:
(b) Until the date on which an electric utility subject to
this subchapter implements customer choice, the provisions of this
chapter, other than this subchapter and Sections 39.1516[, 39.904,]
and 39.905, do not apply to that utility.
SECTION 35. Section 39.9055, Utilities Code, is amended to
read as follows:
Sec. 39.9055. EXAMINATION OF DEMAND RESPONSE POTENTIAL OF
SEAWATER DESALINATION PROJECTS. The commission and the ERCOT
independent system operator shall study the potential for seawater
desalination projects to participate in existing demand response
opportunities in the ERCOT market. To the extent feasible, the
study shall determine whether the operational characteristics of
seawater desalination projects enable projects of that kind to
participate in ERCOT-operated ancillary services markets or other
competitively supplied demand response opportunities. The study
shall also determine the potential economic benefit to a seawater
desalination project if the project is able to reduce its demand
during peak pricing periods. The commission shall include the
results of the study in the report required by Section 12.203
[31.003].
SECTION 36. Section 39.908, Utilities Code, is amended to
read as follows:
Sec. 39.908. EFFECT OF SUNSET PROVISION. [(a)] If the
commission is abolished under Section 12.005 or other law, the [and
the other provisions of this title expire as provided by Chapter
325, Government Code (Texas Sunset Act), this subchapter, including
the provisions of this title referred to in this subchapter,
continues in full force and effect and does not expire.
[(b) The] authorities, duties, and functions of the
commission under this chapter shall be performed and carried out by
a successor agency to be designated by the legislature before
abolishment of the commission or, if the legislature does not
designate the successor, by the secretary of state.
SECTION 37. Subchapter Z, Chapter 39, Utilities Code, is
amended by adding Sections 39.9111, 39.9112, and 39.9113 to read as
follows:
Sec. 39.9111. RULES RELATED TO RENEWABLE POWER FACILITIES.
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.
Sec. 39.9112. REPORT ON TRANSMISSION AND GENERATION
CAPACITY. The commission and the independent organization
certified under Section 39.151 for the ERCOT power region shall
study the need for increased transmission and generation capacity
throughout this state and report to the legislature the results of
the study and any recommendations for legislation. The report must
be filed with the legislature not later than December 31 of each
even-numbered year.
Sec. 39.9113. RENEWABLE ENERGY CREDITS. To facilitate
voluntary contractual obligations and verify claims regarding
environmental attributes of renewable energy production in this
state, the independent organization certified under Section 39.151
for the ERCOT power region shall maintain an accreditation and
banking system to award and track voluntary renewable energy
credits generated by eligible facilities.
SECTION 38. Section 39.916(a), Utilities Code, is amended
by amending Subdivision (1) and adding Subdivision (4) to read as
follows:
(1) "Distributed renewable generation" means electric
generation with a capacity of not more than 2,000 kilowatts
provided by a renewable energy technology[, as defined by Section
39.904,] that is installed on a retail electric customer's side of
the meter.
(4) "Renewable energy technology" means any
technology that relies exclusively on an energy source that is
naturally regenerated over a short time and is derived from the sun
directly or indirectly or from moving water or other natural
movements or mechanisms of the environment. The term includes a
technology that relies on energy derived from the sun directly, on
wind, geothermal, hydroelectric, wave, or tidal energy, or on
biomass or biomass-based waste products, including landfill gas.
The term does not include a technology that relies on an energy
resource derived from a fossil fuel, a waste product from a fossil
fuel, or a waste product from an inorganic source.
SECTION 39. The heading to Section 39.918, Utilities Code,
is amended to read as follows:
Sec. 39.918. UTILITY FACILITIES FOR POWER RESTORATION AFTER
SIGNIFICANT [WIDESPREAD] POWER OUTAGE.
SECTION 40. Section 39.918, Utilities Code, is amended by
amending Subsections (a) and (b) and adding Subsection (a-1) to
read as follows:
(a) In this section, "significant ["widespread] power
outage" means an event that [results in]:
(1) results in a loss of electric power that:
(A) affects a significant number of distribution
customers of a transmission and distribution utility[;] and
[(B)] has lasted or is expected to last for at
least six [eight] hours;
(B) affects distribution customers of a
transmission and distribution utility in an area for which the
governor has issued a disaster or emergency declaration;
(C) affects distribution customers served by a
radial transmission or distribution facility, creates a risk to
public health or safety, and has lasted or is expected to last for
at least 12 hours; or
(D) creates [and
[(2)] a risk to public health or safety because it
affects a critical infrastructure facility that serves the public
such as a hospital, health care facility, law enforcement facility,
fire station, or water or wastewater facility; or
(2) causes the independent system operator to order a
transmission and distribution utility to shed load.
(a-1) The Texas Division of Emergency Management, the
independent organization certified under Section 39.151 for the
ERCOT power region, or the executive director of the commission may
determine that a power outage other than an outage described by
Subsection (a) is a significant power outage for the purposes of
this section.
(b) Notwithstanding any other provision of this subtitle, a
transmission and distribution utility may:
(1) lease and operate facilities that provide
temporary emergency electric energy to aid in restoring power to
the utility's distribution customers during a significant
[widespread] power outage in which:
(A) the independent system operator has ordered
the utility to shed load; or
(B) the utility's distribution facilities are
not being fully served by the bulk power system under normal
operations; and
(2) procure, own, and operate, or enter into a
cooperative agreement with other transmission and distribution
utilities to procure, own, and operate jointly, transmission and
distribution facilities that have a lead time of at least six months
and would aid in restoring power to the utility's distribution
customers following a significant [widespread] power outage. In
this section, long lead time facilities may not be electric energy
storage equipment or facilities under Chapter 35, Utilities Code.
SECTION 41. Section 40.001(a), Utilities Code, is amended
to read as follows:
(a) Notwithstanding any other provision of law, except
Sections 39.155, 39.157(e), and 39.203, [and 39.904,] this chapter
governs the transition to and the establishment of a fully
competitive electric power industry for municipally owned
utilities. With respect to the regulation of municipally owned
utilities, this chapter controls over any other provision of this
title, except for sections in which the term "municipally owned
utility" is specifically used.
SECTION 42. Section 40.004, Utilities Code, is amended to
read as follows:
Sec. 40.004. JURISDICTION OF COMMISSION. Except as
specifically otherwise provided in this chapter, the commission has
jurisdiction over municipally owned utilities only for the
following purposes:
(1) to regulate wholesale transmission rates and
service, including terms of access, to the extent provided by
Subchapter A, Chapter 35;
(2) to regulate certification of retail service areas
to the extent provided by Chapter 37;
(3) to regulate rates on appeal under Subchapters D
and E, Chapter 33, subject to Section 40.051(c);
(4) to establish a code of conduct as provided by
Section 39.157(e) applicable to anticompetitive activities and to
affiliate activities limited to structurally unbundled affiliates
of municipally owned utilities, subject to Section 40.054;
(5) to establish terms and conditions for open access
to transmission and distribution facilities for municipally owned
utilities providing customer choice, as provided by Section 39.203;
(6) to administer [the renewable energy credits
program under Section 39.904(b) and] the natural gas energy credits
program under Section 39.9044(b);
(7) to require reports of municipally owned utility
operations only to the extent necessary to:
(A) enable the commission to determine the
aggregate load and energy requirements of the state and the
resources available to serve that load; or
(B) enable the commission to determine
information relating to market power as provided by Section 39.155;
and
(8) to evaluate and monitor the cybersecurity
preparedness of a municipally owned utility described by Section
39.1516(a)(3) or (4).
SECTION 43. Section 41.001, Utilities Code, is amended to
read as follows:
Sec. 41.001. APPLICABLE LAW. Notwithstanding any other
provision of law, except Sections 39.155, 39.157(e), and 39.203,
[and 39.904,] this chapter governs the transition to and the
establishment of a fully competitive electric power industry for
electric cooperatives. Regarding the regulation of electric
cooperatives, this chapter shall control over any other provision
of this title, except for sections in which the term "electric
cooperative" is specifically used.
SECTION 44. Section 52.060, Utilities Code, is amended to
read as follows:
Sec. 52.060. ADMINISTRATIVE FEE OR ASSESSMENT. The
commission may prescribe and collect a fee or assessment from local
exchange companies necessary to recover the cost to the commission
and to the office of activities carried out and services provided
under this subchapter and Section 12.203 [52.006].
SECTION 45. Section 13.4132, Water Code, is amended by
adding Subsection (b-1) to read as follows:
(b-1) Notwithstanding Section 5.505, the term of an
emergency order issued under this section by the utility commission
or the commission may not exceed 360 days. The emergency order may
be renewed:
(1) once for a period not to exceed 360 days; or
(2) if the utility is undergoing a sale, transfer,
merger, consolidation, or acquisition required to be reported to
the utility commission under Section 13.301, for a reasonable time
until the sale, transfer, merger, consolidation, or acquisition is
complete.
SECTION 46. (a) The following provisions are repealed:
(1) Section 304.201, Business & Commerce Code;
(2) Section 31.003, Utilities Code;
(3) Section 39.155(b), Utilities Code;
(4) Section 39.904, Utilities Code;
(5) Section 39.916(g), Utilities Code;
(6) Section 39.918(k), Utilities Code; and
(7) Section 52.006, Utilities Code.
(b) Section 34, Chapter 426 (S.B. 3), Acts of the 87th
Legislature, Regular Session, 2021, is repealed.
SECTION 47. The Public Utility Commission of Texas is not
required to conduct the first review of an allowance under Section
35.004(d-3), Utilities Code, as added by this Act, until the fifth
year after the adoption of the rules required by Section
35.004(d-1), Utilities Code, as added by this Act.
SECTION 48. The Public Utility Commission of Texas shall
adopt rules as necessary to implement the changes in law made by
this Act to Section 35.004, Utilities Code, not later than the 180th
day after the effective date of this Act.
SECTION 49. The changes in law made by this Act to Section
35.004, Utilities Code, apply only to an electric generation
facility that executes a standard generator interconnection
agreement with a transmission-owning utility after December 31,
2025.
SECTION 50. (a) The presiding officer of the Public Utility
Commission of Texas shall designate a commissioner to serve a term
on the governing body of the independent organization certified
under Section 39.151, Utilities Code, for the ERCOT power region
that begins January 1, 2024, to comply with Section 39.151(g-1),
Utilities Code, as amended by this Act.
(b) Except as provided by Subsection (c) of this section,
Section 12.059, Utilities Code, as amended by this Act, applies to a
member of the Public Utility Commission of Texas appointed before,
on, or after the effective date of this Act.
(c) A member of the Public Utility Commission of Texas who,
before the effective date of this Act, completed the training
program required by Section 12.059, Utilities Code, as that law
existed before the effective date of this Act, is only required to
complete additional training on the subjects added by this Act to
the training program required by Section 12.059, Utilities Code. A
commission member described by this subsection may not vote,
deliberate, or be counted as a member in attendance at a meeting of
the commission held on or after December 1, 2023, until the member
completes the additional training.
SECTION 51. The Public Utility Commission of Texas shall
require the independent organization certified under Section
39.151, Utilities Code, for the ERCOT power region to implement the
program required by Section 39.159(d), Utilities Code, as added by
this Act, not later than December 1, 2024.
SECTION 52. (a) The Public Utility Commission of Texas
shall prepare the portions of the report required by Section
39.1591(2), Utilities Code, as added by this Act, only for reports
due on or after December 1, 2024.
(b) The Public Utility Commission of Texas shall implement
Section 39.1592, Utilities Code, as added by this Act, not later
than December 1, 2027.
(c) Notwithstanding Subsection (b) of this section and the
deadline provided by Section 39.1592(b), Utilities Code, as added
by this Act, an owner or operator of an electric generation facility
to which Section 39.1592(b), Utilities Code, as added by this Act,
applies shall make the first demonstration required by that
subsection not later than January 1, 2028.
(d) The Public Utility Commission of Texas and the
independent organization certified under Section 39.151, Utilities
Code, for the ERCOT power region shall:
(1) conduct a study on whether implementing an
alternative to the single market clearing price for energy,
ancillary services, and other products would reduce costs to
residential and small commercial customers or their load-serving
entities, such as paying generators the price bid and not the
additional amounts up to the highest cost generator needed to clear
the market;
(2) analyze:
(A) whether cost savings can be achieved for
consumers, or load-serving entities serving residential and small
commercial consumers, by:
(i) limiting generators that have received
state or federal subsidies to receiving the price bid by that type
of generator; or
(ii) limiting a generator to receiving the
price bid by that generator; and
(B) if a pay as bid mechanism is used or a single
market clearing price mechanism is retained, whether
non-dispatchable and dispatchable generation facilities should bid
into separate markets for ERCOT power region products such that the
generation facilities are directly competing against technologies
with similar attributes; and
(3) report the results of the study and analysis
conducted under this subsection to the legislature not later than
December 1, 2025.
SECTION 53. (a) Except as provided by Subsection (b) of
this section, notwithstanding the repeal by this Act of Section
39.904, Utilities Code, the Public Utility Commission of Texas by
rule shall adopt a program to apply that section as it existed
immediately before the effective date of this Act, and to apply
other statutes that referred to that section immediately before the
effective date of this Act, as if that section had not been repealed
by this Act and the other statutes that referred to that section had
not been repealed or amended by this Act.
(b) Under Subsection (a) of this section, the statutes
described in that subsection must be applied as if Section 39.904
were applicable only to renewable energy technologies that
exclusively rely on an energy source that is naturally regenerated
over a short time and derived directly from the sun.
(c) This section expires September 1, 2025, and the Public
Utility Commission of Texas shall phase out the program required by
Subsection (a) of this section so that it terminates on that date.
SECTION 54. The changes in law made by this Act to Section
15.023, Utilities Code, apply only to a violation committed on or
after the effective date of this Act. A violation committed before
the effective date of this Act is governed by the law in effect when
the violation was committed, and the former law is continued in
effect for that purpose.
SECTION 55. It is the intent of the 88th Legislature,
Regular Session, 2023, that the amendments made by this Act be
harmonized with another Act of the 88th Legislature, Regular
Session, 2023, relating to nonsubstantive additions to and
corrections in enacted codes.
SECTION 56. This Act takes effect September 1, 2023.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 1500 was passed by the House on April
19, 2023, by the following vote: Yeas 140, Nays 1, 1 present, not
voting; that the House refused to concur in Senate amendments to
H.B. No. 1500 on May 25, 2023, and requested the appointment of a
conference committee to consider the differences between the two
houses; and that the House adopted the conference committee report
on H.B. No. 1500 on May 28, 2023, by the following vote: Yeas 140,
Nays 1, 2 present, not voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 1500 was passed by the Senate, with
amendments, on May 24, 2023, by the following vote: Yeas 30, Nays
0; at the request of the House, the Senate appointed a conference
committee to consider the differences between the two houses; and
that the Senate adopted the conference committee report on H.B. No.
1500 on May 28, 2023, by the following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
APPROVED: __________________
Date
__________________
Governor