Bill Text: TX SB2112 | 2023-2024 | 88th Legislature | Comm Sub

NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Relating to resources used to ensure the continuous provision of power.

Spectrum: Partisan Bill (Democrat 3-0)

Status: (Engrossed - Dead) 2023-05-15 - Left pending in committee [SB2112 Detail]

Download: Texas-2023-SB2112-Comm_Sub.html
  By: Johnson  S.B. No. 2112
         (In the Senate - Filed March 9, 2023; March 21, 2023, read
  first time and referred to Committee on Business & Commerce;
  April 18, 2023, reported adversely, with favorable Committee
  Substitute by the following vote:  Yeas 10, Nays 0; April 18, 2023,
  sent to printer.)
Click here to see the committee vote
  relating to resources used to ensure the continuous provision of
         SECTION 1.  Subchapter C, Chapter 382, Health and Safety
  Code, is amended by adding Section 382.069 to read as follows:
         Sec. 382.069.  TEXAS BACKUP POWER PACKAGE. (a) In this
  section, "Texas backup power package" has the meaning assigned by
  Section 418.401, Government Code.
         (b)  The commission by rule shall adopt a process to expedite
  the permitting of a Texas backup power package for which a permit is
  required under this chapter.
         SECTION 2.  Chapter 418, Government Code, is amended by
  adding Subchapter K to read as follows:
         Sec. 418.401.  DEFINITIONS. In this subchapter:
               (1)  "Fund" means the Texas power resiliency fund
  established by Section 49-q, Article III, Texas Constitution.
               (2)  "Texas backup power package" means a stand-alone,
  behind-the-meter, multiday backup power source that can be used for
               (3)  "Trust company" means the Texas Treasury
  Safekeeping Trust Company.
         Sec. 418.402.  PURPOSE. The purpose of this subchapter is to
  facilitate and provide funding for: 
               (1)  the design, procurement, installation, and use of
  Texas backup power packages for facilities on which communities
  rely for health, safety, and well-being; and
               (2)  the procurement and use of mobile sources of
  backup power to ensure the health, safety, and well-being of
         Sec. 418.403.  DIVISION DUTIES. (a) The division shall
  convene an advisory committee in the manner provided by Chapter
  2110, Government Code.
         (b)  The advisory committee shall recommend criteria for the
  division to employ in making a grant or loan under this subchapter.
         (c)  The division shall contract with a research entity that
  has experience in microgrid design to analyze critical facility
  characteristics and requirements in this state and develop for
  Texas backup power packages:
               (1)  sets of specifications for standard backup power
  packages of various sizes that can serve most critical facilities
  in this state; and
               (2)  specifications for standard interconnection,
  communications, and controls for Texas backup power packages.
         Sec. 418.404.  TEXAS BACKUP POWER PACKAGES. (a) A grant or
  loan made under this subchapter may be provided only for the
  operation of a Texas backup power package that:
               (1)  is engineered to minimize operation costs;
               (2)  uses interconnection technology and controls that
  enable immediate islanding from the power grid and stand-alone
  operation for the host facility;
               (3)  is capable of operating for at least 48 continuous
  hours without refueling or connecting to a separate power source;
               (4)  is designed so that one or more Texas backup power
  packages can be aggregated on-site to serve not more than 2.5
  megawatts of load at the host facility;
               (5)  provides power sourced from:
                     (A)  a combination of natural gas or propane with
  photovoltaic panels and battery storage; or
                     (B)  battery storage on an electric school bus;
               (6)  is not used by the owner or host facility for the
  sale of energy or ancillary services.
         (b)  Texas backup power packages may be aggregated and
  operated to support the power grid under emergency conditions if
  the operation does not compromise a Texas backup power package's
  capability to provide power to its host facility for at least 24
  hours of operation without refueling or connecting to a separate
  power source.
         Sec. 418.405.  GRANTS AND LOANS. (a) The division may
  provide grants and loans under this subchapter.
         (b)   The division by rule may establish procedures for:
               (1)  the application for and award of a grant or loan
  under this subchapter; and
               (2)  the administration of the fund.
         (c)  The amount of a grant provided under this subchapter may
  not exceed $500 per kilowatt of capacity.
         (d)  The division may provide a loan under this subchapter
  for procurement and operating costs.
         (e)  The division shall maintain and publish a list of
  approved vendors eligible to assist with the sale, installation,
  operation, and ongoing maintenance of Texas backup power packages.
         (f)  The division may not provide a grant or loan under this
  subchapter for:
               (1)  a commercial energy system, a private school, or a
  for-profit entity that does not directly serve public safety and
  human health; or
               (2)  a source of backup power that does not follow the
  design and use standards of a Texas backup power package.
         Sec. 418.406.  MOBILE BACKUP POWER FLEET. The division may
  use money from the fund to procure and deploy mobile sources of
  backup power to ensure the health, safety, and well-being of
         Sec. 418.407.  FUND. (a) The Texas power resiliency fund is
  a special fund in the state treasury outside the general revenue
  fund to be administered and used, without further appropriation, by
  the division.
         (b)  The fund and the fund's accounts are kept and held by the
  trust company for and in the name of the division.
         (c)  Money deposited to the credit of the fund may be used
  only as provided by this subchapter.
         (d)  The fund consists of:
               (1)  money credited, appropriated, or transferred to
  the fund by the legislature;
               (2)  revenue that the legislature dedicates for deposit
  to the credit of the fund;
               (3)  the returns received from the investment of money
  in the fund; and
               (4)  gifts, grants, and donations contributed to the
         Sec. 418.408.  MANAGEMENT AND INVESTMENT OF FUND. (a) The
  trust company shall hold and invest the fund, taking into account
  the purposes for which money in the fund may be used. The fund may
  be invested with the state treasury pool or pooled with other state
  assets for purposes of investment.
         (b)  The overall objective for the investment of the fund is
  to maintain sufficient liquidity to meet the needs of the fund while
  striving to preserve the purchasing power of the fund over a full
  economic cycle.
         (c)  In managing the assets of the fund, the trust company
  may acquire, exchange, sell, supervise, manage, or retain any kind
  of investment that a prudent investor, exercising reasonable care,
  skill, and caution, would acquire or retain in light of the
  purposes, terms, distribution requirements, and other
  circumstances of the fund then prevailing, taking into
  consideration the investment of all the assets of the fund rather
  than a single investment.
         (d)  The reasonable expenses of managing the fund shall be
  paid from the fund.
         (e)  The trust company annually shall provide a written
  report to the division with respect to the investment of the fund.
         (f)  The trust company shall adopt a written investment
  policy that is appropriate for the fund. The trust company shall
  present the investment policy to the investment advisory board
  established under Section 404.028. The investment advisory board
  shall submit to the trust company recommendations regarding the
         (g)  The division annually shall provide to the trust company
  a forecast of the cash flows into and out of the fund. The division
  shall provide updates to the forecasts as appropriate to ensure
  that the trust company is able to achieve the objective specified by
  Subsection (b).
         (h)  The trust company shall disburse money from the fund as
  directed by the division.
         SECTION 3.  Section 38.076, Utilities Code, is amended by
  adding Subsection (c-1) to read as follows:
         (c-1)  The commission shall require transmission and
  distribution utilities to use good faith efforts to ensure that no
  distribution feeder is subject to load shedding for more than four
  consecutive hours in a six-hour period.
         SECTION 4.  Subchapter D, Chapter 38, Utilities Code, is
  amended by adding Section 38.078 to read as follows:
  (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 extensive numbers of
  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.
         (e)  If the commission determines that the implementation of
  circuit segmentation engineering and investments as provided by a
  transmission and distribution utility's circuit segmentation study
  report would facilitate better outage management in the ERCOT power
  region, investments made by the utility for such purposes shall be
  presumed just, reasonable, and appropriate for rate-based cost
         SECTION 5.  Subchapter Z, Chapter 39, Utilities Code, is
  amended by adding Section 39.919 to read as follows:
         Sec. 39.919.  TEXAS BACKUP POWER PACKAGES. (a) In this
  section, "Texas backup power package" has the meaning assigned by
  Section 418.401, Government Code.
         (b)  The commission by rule shall adopt procedures to
  expedite electric cooperative, municipally owned utility, and
  electric utility interconnection requests for Texas backup power
         SECTION 6.  This Act takes effect on the date on which the
  constitutional amendment proposed by the 88th Legislature, Regular
  Session, 2023, providing for the creation of the Texas power
  resiliency fund to finance backup power sources takes effect. If
  that amendment is not approved by the voters, this Act has no
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