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

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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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-Comm_Sub.html

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By: Holland, et al. (Senate Sponsor - Schwertner) H.B. No. 1500
(In the Senate - Received from the House April 19, 2023;
April 20, 2023, read first time and referred to Committee on
Business & Commerce; May 23, 2023, reported adversely, with
favorable Committee Substitute by the following vote: Yeas 11,
Nays 0; May 23, 2023, sent to printer.)
Click here to see the committee vote
COMMITTEE SUBSTITUTE FOR H.B. No. 1500 By: Schwertner

A BILL TO BE ENTITLED
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 may 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. 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 9. 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 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 10. 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;
(3) a memorandum; or
(4) a written order.
(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;
(2) establish the conditions under which a commission
vote is required before issuing a directive;
(3) 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
(4) 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 11. Section 39.1515, Utilities Code, is amended by
amending Subsection (f) and adding Subsection (i) to read as
follows:
(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 12. 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 13. 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 14. 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 15. 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 16. 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 under
this subchapter by dispatchable and non-dispatchable generators to
guarantee that a firm amount of electric energy will be provided for
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;
(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; and
(3) includes recommendations for any additional
legislative measures needed to empower the commission to implement
market reforms to ensure that market signals are adequate to
preserve existing dispatchable generation and incentivize the
construction of new dispatchable generation sufficient to maintain
reliability standards for at least five years after the date of the
report.
Sec. 39.1592. GENERATION RELIABILITY REQUIREMENTS FOR
CERTAIN FACILITIES. (a) This section applies only to an electric
generation facility that is interconnected in the ERCOT power
region on or after December 1, 2026, and has been in operation for
at least one year.
(b) Not later than December 1 each year, the owner or
operator of each electric generation facility in the ERCOT power
region shall demonstrate to the commission the ability of the
facility to comply in the following calendar year with the
requirements of Subsection (c).
(c) The commission shall require:
(1) each electric generation facility operating in the
ERCOT power region to generate power when called upon for dispatch
for at least 15 hours during the highest net load hours during each
six-month period designated by the commission;
(2) each dispatchable generation facility operating
in the ERCOT power region to be capable of operating during at least
90 percent of the highest net load hours each year, excluding
planned outage hours; and
(3) each non-dispatchable generation facility to
provide during the highest net load hours each year at least 90
percent of the facility's average generation, as measured without
the use of energy storage or dispatchable generation for firming.
(d) The owner or operator of an electric generation facility
may comply with Subsection (c) by owning or acquiring through a
power purchase agreement or other means resources that are capable
of providing energy continuously at maximum capability for at
least:
(1) six hours; or
(2) a number of hours that is more than six adopted by
the commission by rule.
(e) The commission may establish an ancillary service
market or a separate reliability service to implement this section.
Sec. 39.1593. COST ALLOCATION OF RELIABILITY SERVICES. (a)
The commission shall hold hearings and perform an evaluation to
determine whether allocating costs under the methodology described
by Subsection (c) 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. The commission shall make the
determination required by this subsection not later than December
1, 2027.
(b) The commission shall implement Subsection (c) only if
the commission determines under Subsection (a) that the cost
allocation method described by Subsection (c) 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.
If the commission makes that determination, the commission shall
implement Subsection (c) as soon as possible after making the
determination.
(c) The cost of all ancillary services and reliability
services procured under Section 39.159, as added by Chapter 426
(S.B. 3), Acts of the 87th Legislature, Regular Session, 2021,
shall be allocated on a semiannual basis among dispatchable
generation facilities, non-dispatchable generation facilities, and
load-serving entities in proportion to their contribution to
unreliability during the highest net load hours in the preceding
six months, as determined by the commission based on a number of
hours adopted by the commission for that six-month period, as
follows:
(1) for each dispatchable generation facility, the
difference between the forced outage rate of the facility and the
forced outage rate of the facility during the corresponding season
for the three years prior to the current season, multiplied by the
installed capacity of the facility;
(2) for non-dispatchable generation facilities, the
difference between the mean of the lowest quartile generation for
each non-dispatchable generation facility and the mean generation
of the facility; and
(3) for each load-serving entity, the difference
between the mean of the highest quartile of total ERCOT load and the
mean of total ERCOT load, multiplied by the load ratio share of each
load-serving entity.
(d) Subsection (c) applies only to a generation facility or
load-serving entity that has participated in the ERCOT market for
at least one year, including a load-serving entity whose parent
company or affiliate has participated in the ERCOT market for at
least one year.
(e) Subsection (c) does not apply to electric energy
storage.
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 cost to the ERCOT market of the credits does
not exceed $1 billion annually;
(2) credits are available only for dispatchable
generation, excluding load resources and electric energy storage;
(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) If the commission adopts a program described by
Subsection (a), not later than January 1, 2029, 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.
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 17. (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 39.904(k);
(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 18. (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 39.904(k);
(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 19. Section 39.203(i), Utilities Code, is amended
to read as follows:
(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 20. 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 21. Section 39.408(g), Utilities Code, is amended
to read as follows:
(g) This section expires September 1, 2029 [2023].
SECTION 22. Section 39.4525(g), Utilities Code, is amended
to read as follows:
(g) This section expires September 1, 2029 [2023].
SECTION 23. Section 39.504(g), Utilities Code, is amended
to read as follows:
(g) This section expires September 1, 2029 [2023].
SECTION 24. Section 39.904(k), Utilities Code, is amended
to read as follows:
(k) The commission and the independent organization
certified under Section 39.151 for the ERCOT power region [for
ERCOT] 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 [and may be filed
as a part of the report required by Subsection (j)].
SECTION 25. 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 26. 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 27. 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 28. 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 29. (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(j), Utilities Code; and
(5) Section 52.006, Utilities Code.
(b) Section 34, Chapter 426 (S.B. 3), Acts of the 87th
Legislature, Regular Session, 2021, is repealed.
SECTION 30. (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 31. 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 32. (a) The Public Utility Commission of Texas
shall prepare the portions of the report required by Sections
39.1591(2) and (3), 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) 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 December 1, 2027.
(d) The Public Utility Commission of Texas and the
independent organization certified under Section 39.151, Utilities
Code, for the ERCOT power region shall conduct a study to assess the
total cost to consumers of different methods of cost allocation of
reliability and ancillary services procured under Section 39.159,
Utilities Code, as added by Chapter 426 (S.B. 3), Acts of the 87th
Legislature, Regular Session, 2021, including the method of cost
allocation provided by Section 39.1593(c), Utilities Code, as added
by this Act. The study must include an assessment of cost
allocation methods for the ERCOT Contingency Reserve Service. The
Public Utility Commission of Texas shall report the results of the
study to the legislature not later than December 1, 2024.
(e) 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 33. 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 34. This Act takes effect September 1, 2023.
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