Bill Text: TX HB185 | 2023 | 88th Legislature 3rd Special Session | Introduced
Bill Title: Relating to allocating the cost of ancillary and reliability services procured in the ERCOT power region.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2023-10-19 - Filed [HB185 Detail]
Download: Texas-2023-HB185-Introduced.html
| By: Harrison | H.B. No. 185 | |
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| relating to allocating the cost of ancillary and reliability | ||
| services procured in the ERCOT power region. | ||
| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
| SECTION 1. The legislature finds that: | ||
| (1) the welfare of the residents and the economic | ||
| security of the state depend on the reliability and resilience of | ||
| the electric power supply; | ||
| (2) the increased deployment of non-dispatchable wind | ||
| and solar electricity generation has exposed the bulk power system | ||
| to significant weather dependence and will continue to erode the | ||
| reliability and resilience of the grid unless reforms are | ||
| instituted to more adequately value reliability and resilience; | ||
| (3) the current system of grid operation and | ||
| regulatory oversight has failed to ensure the reliability and | ||
| resilience of the grid for a number of reasons, including: | ||
| (A) market rules developed by the Electric | ||
| Reliability Council of Texas and overseen by the Public Utility | ||
| Commission of Texas have so far failed to adequately value | ||
| reliability and resilience of the grid; and | ||
| (B) direct and indirect subsidies for wind and | ||
| solar electricity generation have led to overinvestment in those | ||
| forms of electricity generation and undervaluation of | ||
| dispatchable, reliable, and resilient power plants, which has | ||
| resulted in the retirement of several such plants, inhibited the | ||
| addition of such plants, and inhibited weatherization expenditures | ||
| to increase the reliability and resilience of the grid; | ||
| (5) several recent federal policy announcements | ||
| mandating and incentivizing further deployment of significant | ||
| non-dispatchable electricity sources such as wind and solar without | ||
| providing sufficient resilient backup power will impose | ||
| reliability and resilience penalties on the bulk power system | ||
| relied on by the residents and industries of the state; and | ||
| (6) it is essential that the legislature immediately | ||
| provide further direction to the Public Utility Commission of Texas | ||
| regrading reliability standards for the ERCOT market and new | ||
| mechanisms to address the reliability and resilience shortcomings | ||
| of the grid. | ||
| SECTION 2. Chapter 39, Utilities Code, is amended by adding | ||
| Subchapter M to read as follows: | ||
| SUBCHAPTER M. RELIABILITY STANDARD FOR NON-DISPATCHABLE | ||
| GENERATORS | ||
| Sec. 39.601. DEFINITIONS. In this subchapter: | ||
| (1) "Dispatchable generator" means a source of | ||
| electricity that: | ||
| (A) is available for use on demand; | ||
| (B) may be dispatched on the request of a power | ||
| grid operator; | ||
| (C) may have its power output adjusted, according | ||
| to market need; and | ||
| (D) does not derive its power output primarily | ||
| from sources that inherently change from minute to minute, such as | ||
| those dependent on local weather conditions to be present. | ||
| (2) "Expected availability factor" means the average | ||
| generation of a non-dispatchable generator, divided by its | ||
| installed capacity, during the highest 100 net load hours each year | ||
| in an average of two or more immediately preceding calendar years, | ||
| as determined by the commission. | ||
| (3) "Firming requirement" is a requirement for a | ||
| non-dispatchable generator to ensure that its hourly availability | ||
| factor during at least 95 hours of the highest 100 net load hours | ||
| equals or exceeds its expected availability factor by continuing to | ||
| operate, constructing, or acquiring through a power purchase | ||
| agreement or other means sufficient resources that are eligible to | ||
| act as ancillary service reserves according to ERCOT protocols. | ||
| (4) "Hourly availability factor" means the hourly | ||
| average generation of a non-dispatchable generator, divided by its | ||
| installed capacity. | ||
| (5) "Non-dispatchable generator" means a source of | ||
| electricity that does not meet the definition of a dispatchable | ||
| generator in Paragraph (1). | ||
| Sec. 39.602. FIRMING REQUIREMENT FOR NON-DISPATCHABLE | ||
| GENERATORS. | ||
| (a) Each non-dispatchable generator in the market shall, on | ||
| an annual basis, acquire the necessary resources to meet its | ||
| firming requirement. | ||
| (b) Beginning on December 1, 2024 and not later than | ||
| December 1 of every year thereafter, each non-dispatchable | ||
| generator in the market shall demonstrate to the commission, in a | ||
| manner provided by the commission, that the non-dispatchable | ||
| generator has secured sufficient firming capacity for the upcoming | ||
| calendar year. | ||
| (c) The commission shall adopt any rules necessary to | ||
| implement this section, including rules that establish an ancillary | ||
| service market or a separate reliability service to implement this | ||
| section. | ||
| SECTION 3. Chapter 39, Utilities Code, is amended by adding | ||
| Subchapter M to read as follows: | ||
| Sec. 39.603. TRANSPARENCY REQUIRED FOR THE COST OF FIRMING | ||
| AND TRANSMISSION ASSOCIATED WITH NON-DISPATCHABLE GENERATORS. | ||
| (a) The commission shall prepare a report by December 1, | ||
| 2024 and thereafter on an annual basis, that includes the estimated | ||
| annual firming costs required to be incurred under this subchapter | ||
| by non-dispatchable generators, as well as the cumulative annual | ||
| transmission costs that have been incurred in order to facilitate | ||
| the transmission of non-dispatchable electricity to load. | ||
| (b) No later than December 1, 2024, and annually thereafter, | ||
| the Public Utility Commission shall prepare a report to the | ||
| Legislature that documents the status of implementation of this | ||
| subchapter, whether the rules and protocols put in place to | ||
| implement this Act have materially improved the reliability, | ||
| resilience, and transparency of the electricity market, and whether | ||
| any additional measures need to be taken by the legislature to | ||
| empower the Commission to implement additional market reforms to | ||
| ensure that market signals are adequate to preserve existing | ||
| dispatchable generation and incent the construction of new | ||
| dispatchable generation sufficient to maintain the reliability | ||
| standard for at least 5 years from the date of the report. | ||
| SECTION 4. 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 on the 91st day after the last day of the | ||
| legislative session. | ||
