Bill Text: TX SB1378 | 2023-2024 | 88th Legislature | Introduced

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Bill Title: Relating to the procurement and operation of backup generation facilities for the ERCOT power region.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2023-03-16 - Referred to Business & Commerce [SB1378 Detail]

Download: Texas-2023-SB1378-Introduced.html

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88R13225 JXC-D
By: Parker S.B. No. 1378

A BILL TO BE ENTITLED
AN ACT
relating to the procurement and operation of backup generation
facilities for the ERCOT power region.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 31.002, Utilities Code, is amended by
adding Subdivision (3-a) to read as follows:
(3-a) "Backup generation facility" means an electric
generation facility operated under Subchapter O, Chapter 39.
SECTION 2. Section 35.004(b), Utilities Code, is amended to
read as follows:
(b) The commission shall ensure that an electric utility or
transmission and distribution utility provides nondiscriminatory
access to wholesale transmission service for qualifying
facilities, exempt wholesale generators, power marketers, power
generation companies, retail electric providers, backup generation
facility operators, and other electric utilities or transmission
and distribution utilities.
SECTION 3. Section 35.005(a), Utilities Code, is amended to
read as follows:
(a) The commission may require an electric utility to
provide transmission service at wholesale to another electric
utility, a qualifying facility, an exempt wholesale generator, a
backup generation facility operator, or a power marketer and may
determine whether terms for the transmission service are
reasonable.
SECTION 4. Chapter 39, Utilities Code, is amended by adding
Subchapter O to read as follows:
SUBCHAPTER O. BACKUP GENERATION FACILITIES
Sec. 39.701. PURPOSE; LIMITATION. (a) The purpose of this
subchapter is to establish a program to allow the comptroller, in
consultation with the commission, to contract with entities for the
construction and operation of at least 5,000 megawatts of
generating capacity powered by nuclear energy or natural gas for
the ERCOT power region.
(b) Not later than January 31, 2024, the commission shall
determine whether market participants have contracted for the
installation of at least 5,000 megawatts of new generation capacity
for the ERCOT power region compared to the amount of installed
generation capacity on January 1, 2023.
(c) If the commission determines under Subsection (b) that
market participants have contracted for the installation of at
least 5,000 megawatts of new generation capacity for the ERCOT
power region, the comptroller may not enter into a contract under
this subchapter.
Sec. 39.702. CONSTRUCTION AND OPERATION OF BACKUP
GENERATION FACILITY. (a) The comptroller may contract with one or
more entities to construct or operate backup generation facilities
in the manner provided by this subchapter. The comptroller may use
any procurement method that provides the best value to the state,
including a method authorized by Chapter 2267, Government Code.
(b) A contract must provide that an entity that constructs
or operates a backup generation facility:
(1) is entitled to payments from the state for the
construction or operation of a backup generation facility equal to
103 percent of the actual costs of constructing or operating the
facility;
(2) is not entitled to sell electric energy from the
backup generation facility;
(3) may not sell the backup generation facility
without the permission of the comptroller; and
(4) shall provide electric energy for the ERCOT power
region as directed by the independent system operator in times of
high demand and low supply.
(c) A backup generation facility constructed under this
subchapter:
(1) is the property of the state; and
(2) is not considered to be installed generation
capacity for the purposes of Sections 39.154 and 39.158.
(d) An entity is eligible to operate a backup generation
facility under this subchapter only if the entity is authorized by
this title to generate electric energy at wholesale.
(e) If a backup generation facility is constructed under
this subchapter, the commission shall:
(1) annually evaluate the reserve margin for the ERCOT
power region; and
(2) determine whether the reserve margin equals at
least 15 percent of peak electric demand over the preceding two
years.
(f) If the condition under Subsection (e)(2) is met, the
comptroller shall sell each backup generation facility constructed
under this subchapter.
SECTION 5. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2023.