Supplement: TX SB2012 | 2023-2024 | 88th Legislature | Fiscal Note (Introduced)
For additional supplements on Texas SB2012 please see the Bill Drafting List
Bill Title: Relating to the implementation of a program to meet the reliability needs of the ERCOT power region.
Status: 2023-05-23 - Postponed 6/1/23 10:00 AM [SB2012 Detail]
Download: Texas-2023-SB2012-Fiscal_Note_Introduced_.html
Bill Title: Relating to the implementation of a program to meet the reliability needs of the ERCOT power region.
Status: 2023-05-23 - Postponed 6/1/23 10:00 AM [SB2012 Detail]
Download: Texas-2023-SB2012-Fiscal_Note_Introduced_.html
| TO: |
Honorable Charles Schwertner, Chair, Senate Committee on Business & Commerce |
| FROM: |
Jerry McGinty, Director, Legislative Budget Board
|
| IN RE: |
SB2012 by Schwertner (Relating to electricity services; increasing an administrative penalty.), As Introduced |
Estimated Two-year Net Impact to General Revenue Related Funds for SB2012, As Introduced : a negative impact of ($965,176) through the biennium ending August 31, 2025. The bill would have a positive, but indeterminate, fiscal impact on state revenues due to the increase in administrative penalty maximums as described in the bill. However, the amounts and timing of these increases are unknown; therefore, the fiscal impact to the state for this portion of the bill's provisions cannot be estimated.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
General Revenue-Related Funds, Five- Year Impact:
| Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
|---|---|
| 2024 | ($482,588) |
| 2025 | ($482,588) |
| 2026 | ($241,294) |
| 2027 | ($241,294) |
| 2028 | ($241,294) |
All Funds, Five-Year Impact:
| Fiscal Year | Probable (Cost) from General Revenue Fund 1 | Change in Number of State Employees from FY 2023 |
|---|---|---|
| 2024 | ($482,588) | 4.0 |
| 2025 | ($482,588) | 4.0 |
| 2026 | ($241,294) | 2.0 |
| 2027 | ($241,294) | 2.0 |
| 2028 | ($241,294) | 2.0 |
Fiscal Analysis
This bill would amend the Utilities Code to increase the maximum administrative penalty for electric utilities from $25,000 to $1,000,000 and require voluntary mitigation plans be updated at least once every two years.
The bill would place requirements on agency implementation of a credit-based reliability program for the Energy Reliability Council of Texas (ERCOT) power region. The bill would establish the Grid Reliability Legislative Oversight Committee to oversee PUC implementation of certain programs as defined in the bill, including the reliability program.
The bill would limit the market share of a retail electric provider, together with its parent corporation, to not more than 20 percent of customers in the competitive electric retail market. The bill would require the PUC, no later than January 31, 2027, to evaluate whether 5,000 megawatts of dispatchable generation was installed in ERCOT between June 1, 2023, and December 31, 2026, and would require transmission and distribution utilities (TDUs) to install enough generation capacity to reach 5,000 megawatts. TDUs could recover their costs in their utility rates.
The bill would take effect September 1, 2023.
The bill would place requirements on agency implementation of a credit-based reliability program for the Energy Reliability Council of Texas (ERCOT) power region. The bill would establish the Grid Reliability Legislative Oversight Committee to oversee PUC implementation of certain programs as defined in the bill, including the reliability program.
The bill would limit the market share of a retail electric provider, together with its parent corporation, to not more than 20 percent of customers in the competitive electric retail market. The bill would require the PUC, no later than January 31, 2027, to evaluate whether 5,000 megawatts of dispatchable generation was installed in ERCOT between June 1, 2023, and December 31, 2026, and would require transmission and distribution utilities (TDUs) to install enough generation capacity to reach 5,000 megawatts. TDUs could recover their costs in their utility rates.
The bill would take effect September 1, 2023.
Methodology
Based on the analysis of the PUC, the agency would require 4.0 additional full time equivalent (FTEs) positions in fiscal year 2024 and 2025 to implement the bill's provisions. This includes two Attorneys III positions ($90,000 per year with estimated benefits of $27,297) for rulemaking that would guide reporting requirements by retail electric providers to the agency concerning the market share cap, rules concerning buildout of dispatchable generation, and revisions to related administrative penalties. The agency anticipates and this estimate assumes that only 2.0 FTEs would be necessary beyond the 2024-25 biennium, as a majority of the rulemaking and implementation of the market share cap for retail electric providers would be completed.
Based on analysis by the Comptroller of Public Accounts, the amounts and timing of any increased administrative penalty revenue are unknown; therefore, the fiscal impact to the state cannot be determined.
Technology
The Public Utility Commission of Texas estimate a technology impact to be $8,000 in fiscal years 2024 and 2025 then starting in fiscal year 2026, the impact to be $4,000.
Local Government Impact
No significant fiscal implication to units of local government is anticipated.
| Source Agencies: | 304 Comptroller of Public Accounts, 473 Public Utility Commission of Texas |
| LBB Staff: | JMc, SZ, GDZ, JBel |
